Document:

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                                                                   EXHIBIT 10.13

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                          STANDARD FORM OF OFFICE LEASE
                     THE REAL ESTATE BOARD OF NEW YORK, INC.
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Agreement of Lease, made as of this ____________________ day of June 1998,
between TRUSTEES OF THE MASONIC HALL AND ASYLUM FUND, having an address at 71
West 23rd Street, New York, New York 10010 party of the first part, hereinafter
referred to as OWNER, and ORGANIC ONLINE, INC., having an address at 71 West
23rd Street, New York, New York 10010 from and after the Commencement Date,
party of the second part, hereinafter referred to as TENANT,

Witnesseth: Owner hereby leases to Tenant and Tenant hereby hires from Owner the
entire fourteenth (14th) and fifteenth (15th) floors and the Additional
Designated Floor as shown on Exhibit A annexed hereto (the "demised premises")
in the building known as 71 West 23rd Street (the "Building") in the Borough of
Manhattan, City of New York, for the term of ten (10) years and five (5) months
(or until such term shall sooner cease and expire as hereinafter provided) to
commence on the Commencement Date (hereinafter defined), and to end on the
Expiration Date (hereinafter defined) both dates inclusive, at an annual rental
rate as set forth in Article 37b hereof which Tenant agrees to pay in lawful
money of the United States which shall be legal tender in payment of all debts
and dues, public and private, at the time of payment, in equal monthly
installments in advance on the first day of each month during said term, at the
office of Owner or such other place as Owner may designate, without any set off
or deduction whatsoever, except that Tenant shall pay the first ______ monthly
installment(s) on the execution hereof (unless this lease be a renewal).

In the event that, at the commencement of the term of this lease, or thereafter,
Tenant shall be in default in the payment of rent to Owner pursuant to the terms
of another lease with Owner or with Owner's predecessor in interest, Owner may
at Owner's option and without notice to Tenant add the amount of such arrears to
any monthly installment of rent payable hereunder and the same shall be payable
to Owner as additional rent.

The parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors and assigns, hereby covenant
as follows:

Rent:         1. Tenant shall pay the rent as above and as hereinafter provided.
Occupancy:    2. Tenant shall use and occupy demised premises for general and
                 administrative offices only and for no other purpose.

Tenant Alterations:

3. Tenant shall make no changes in or to the demised premises of any nature
without Owner's prior written consent. Subject to the prior written consent of
Owner, and to the provisions of this article, Tenant, at Tenant's expense, may
make alterations, installations, additions or improvements which are
non-structural and which do not affect utility services or plumbing and
electrical lines, in or to the interior of the demised premises by using
contractors or mechanics first approved in each instance by Owner. [Insert 3.1]
Tenant shall, before making any alterations, additions, installations or

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improvements, at its expense, obtain all permits, approvals and certificates
required by any governmental or quasi-governmental bodies and (upon completion)
certificates of final approval thereof and shall deliver promptly duplicates of
all such permits, approvals and certificates to Owner and Tenant agrees to carry
and will cause Tenant's contractors and sub-contractors to carry such workman's
compensation, general liability, personal and property damage insurance as Owner
may require. If any mechanic's lien [Insert 3.2] is filed against the demised
premises, or the building of which the same forms a part, for work claimed to
have been done for, or materials furnished to, Tenant, whether or not done
pursuant to this article, the same shall be discharged by Tenant within thirty
days thereafter, at Tenant's expense, by payment or filing the bond required by
law. [Insert 3.3] All fixtures and all paneling, partitions, railings and like
installations, installed in the premises at any time, either by Tenant or by
Owner on Tenant's behalf, shall, upon installation, become the property of Owner
and shall remain upon and be surrendered with the demised premises unless Owner,
by notice to Tenant [Insert 3.4] elects to relinquish Owner's right thereto and
to have them removed by Tenant, in which event the same shall be removed from
the premises by Tenant prior to the expiration of the lease, at Tenant's
expense. Nothing in this Article shall be construed to give Owner title to or to
prevent Tenant's removal of trade fixtures, moveable office furniture and
equipment, but upon removal of any such from the premises or upon removal of
other installations as may be required by Owner, Tenant shall immediately and at
its expense, repair and restore the premises to the condition existing prior to
installation and repair any damage to the demised premises or the building due
to such removal. All property permitted or required to be removed, by Tenant at
the end of the term remaining in the premises after Tenant's removal shall be
deemed abandoned and may, at the election of Owner, either be retained as
Owner's property or may be removed from the premises by Owner, at Tenant's
expense.

Maintenance and Repairs:

4. Tenant shall, throughout the term of this lease, take good care of the
demised premises and the fixtures and appurtenances therein. Tenant shall be
responsible for all damage or injury to the demised premises or any other part
of the building and the systems and equipment thereof, whether requiring
structural or nonstructural repairs caused by or resulting from carelessness,
omission, neglect or improper conduct of Tenant, Tenant's subtenants, agents,
employees, invitees or licensees, or which arise out of any work, labor, service
or equipment done for or supplied to Tenant or any subtenant or arising out of
the installation, use or operation of the property or equipment of Tenant or any
subtenant. Tenant shall also repair all damage to the building and the demised
premises caused by the moving of Tenant's fixtures, furniture and equipment.
Tenant shall promptly make, at Tenant's expense, all repairs in and to the
demised premises for which Tenant is responsible, using only the contractor for
the trade or trades in question, selected from a list of at least two
contractors per trade submitted by Owner. Any other repairs in or to the
building or the facilities and systems thereof for which Tenant is responsible
shall be performed by Owner at the Tenant's expense. Owner shall maintain in
good working order and repair the exterior and the structural portions of the
building, including the structural portions of [Insert 4.1] demised premises,
and the public

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portions of the building interior and [Insert 4.2] (to the extent such systems
presently exist) serving the demised premises. Tenant agrees to give prompt
notice of any defective condition in the premises for which Owner may be
responsible hereunder. There shall be no allowance to Tenant for diminution of
rental value and no liability on the part of Owner by reason of inconvenience,
annoyance or injury to business arising from Owner or others making repairs,
alterations, additions or improvements in or to any portion of the building or
the demised premises or in and to the fixtures, appurtenances or equipment
thereof. It is specifically agreed that Tenant shall not be entitled to any
setoff or reduction of rent by reason of any failure of Owner to comply with the
covenants of this or any other article of this Lease. Tenant agrees that
Tenant's sole remedy at law in such instance will be by way of an action for
damages for breach of contract. The provisions of this Article 4 shall not apply
in the case of fire or other casualty which are dealt with in Article 9 hereof.

Window Cleaning:

5. Tenant will not clean nor require, permit, suffer or allow any window in the
demised premises to be cleaned from the outside in violation of Section 202 of
the Labor Law or any other applicable law or of the Rules of the Board of
Standards and Appeals, or of any other Board or body having or asserting
jurisdiction.

Requirements of Law, Fire Insurance, Floor Loads:

6. Prior to the commencement of the lease term, if Tenant is then in possession,
and at all times thereafter, Tenant, at Tenant's sole cost and expense, shall
promptly comply with all present and future laws, orders and regulations of all
state, federal, municipal and local governments, departments, commissions and
boards and any direction of any public officer pursuant to law, and all orders,
rules and regulations of the New York Board of Fire Underwriters, Insurance
Services Office, or any similar body [Insert 6.1] which shall impose any
violation, order or duty upon Owner or Tenant with respect to the demised
premises, whether or not arising out of Tenant's use or manner of use thereof,
(including Tenant's permitted use) or, with respect to the building if arising
out of Tenant's use or manner of use of the premises or the building (including
the use permitted under the lease). Nothing herein shall require Tenant to make
structural repairs or alterations unless Tenant has, by its manner of use of the
demised premises or method of operation therein, violated any such laws,
ordinances, orders, rules, regulations or requirements with respect thereto.
Tenant may, after securing Owner to Owner's satisfaction against all damages,
interest, penalties and expenses, including, but not limited to, reasonable
attorney's fees, by cash deposit or by surety bond in an amount and in a company
satisfactory to Owner, contest and appeal any such laws, ordinances, orders,
rules, regulations or requirements provided same is done with all reasonable
promptness and provided such appeal shall not subject Owner to prosecution for a
criminal offense or constitute a default under any lease or mortgage under which
Owner may be obligated, or cause the demised premises or any part thereof to be
condemned or vacated. Tenant shall not do or permit any act or thing to be done
in or to the demised premises which is contrary to law, or which will invalidate
or be in conflict with public liability, fire or

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other policies of insurance at any time carried by or for the benefit of Owner
with respect to the demised premises or the building of which the demised
premises form a part, or which shall or might subject Owner to any liability or
responsibility to any person or for property damage. Tenant shall not keep
anything in the demised premises except as now or hereafter permitted by the
Fire Department, Board of Fire Underwriters, Fire Insurance Rating Organization
or other authority having jurisdiction, and then only in such manner and such
quantity so as not to increase the rate for fire insurance applicable to the
building, nor use the premises in a manner which will increase the insurance
rate for the building or any property located therein over [Insert 6.2] Tenant
shall pay all costs, expenses, fines, penalties, or damages, which may be
imposed upon Owner by reason of Tenant's failure to comply with the provisions
of this article and if by reason of such failure the fire insurance rate shall,
at the beginning of this lease or at any time thereafter, be higher than it
otherwise would be, then Tenant shall reimburse Owner, as additional rent
hereunder, for that portion of all fire insurance premiums thereafter paid by
Owner which shall have been charged because of such failure by Tenant. In any
action or proceeding wherein Owner and Tenant are parties, a schedule or
"make-up" of rate for the building or demised premises issued by the New York
Fire Insurance Exchange, or other body making fire insurance rates applicable to
said premises shall be conclusive evidence of the facts therein stated and of
the several items and charges in the fire insurance rates then applicable to
said premises. Tenant shall not place a load upon any floor of the demised
premises exceeding the floor load per square foot area which it was designed to
carry and which is allowed by law. Owner reserves the right to prescribe the
weight and position of all safes, business machines and mechanical equipment.
Such installations shall be placed and maintained by Tenant, at Tenant's
expense, in settings sufficient, in Owner's judgement, to absorb and prevent
vibration, noise and annoyance.

Subordination:

7. This lease is subject and subordinate to all ground or underlying leases and
to all mortgages which may now or hereafter affect such leases or the real
property of which demised premises are a part and to all renewals,
modifications, consolidations, replacements and extensions of any such
underlying leases and mortgages. This clause shall be self-operative and no
further instrument of subordination shall be required by any ground or
underlying lessor or by any mortgagee, affecting any lease or the real property
of which the demised premises are a part. In confirmation of such subordination,
Tenant shall from time to time execute promptly any certificate that Owner may
request.

Property Loss, Damage Reimbursement Indemnity:

8. Owner or its agents shall not be liable for any damage to property of Tenant
or of others entrusted to employees of the building, nor for loss of or damage
to any property of Tenant by theft or otherwise, nor for any injury or damage to
persons or property resulting from any cause of whatsoever nature, unless caused
by or due to the negligence of Owner, its agents, servants or employees. Owner
or its agents will not be liable for any such damage caused by other tenants or
persons in, upon or about said building or caused by operations in construction
of any private, public or quasi public work. If at any

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time any windows of the demised premises are temporarily closed, darkened or
bricked up (or permanently closed, darkened or bricked up, if required by law)
for any reason whatsoever including, but not limited to Owner's own acts, Owner
shall not be liable for any damage Tenant may sustain thereby and Tenant shall
not be entitled to any compensation therefor nor abatement or diminution of rent
nor shall the same release Tenant from its obligations hereunder nor constitute
an eviction. Tenant shall indemnify and save harmless Owner against and from all
liabilities, obligations, damages, penalties, claims, costs and expenses for
which Owner shall not be reimbursed by insurance, including reasonable attorneys
fees, paid, suffered or incurred as a result of any breach by Tenant, Tenant's
agents, contractors, employees, invitees, or licensees, of any covenant or
condition of this lease, or the carelessness, negligence or improper conduct of
the Tenant, Tenant's agents, contractors, employees, invitees or licensees.
Tenant's liability under this lease extends to the acts and omissions of any
sub-tenant, and any agent, contractor, employee, invitee or licensee of any
sub-tenant. In case any action or proceeding is brought against Owner by reason
of any such claim, Tenant, upon written notice from Owner, will, at Tenant's
expense, resist or defend such action or proceeding by counsel approved by Owner
in writing, such approval not to be unreasonably withheld.

Destruction, Fire and Other Casualty:

9. (a) If the demised premises or any part thereof shall be damaged by fire or
other casualty, Tenant shall give immediate notice thereof to Owner and this
lease shall continue in full force and effect except as hereinafter set forth.
(b) If the demised premises are partially damaged or rendered partially unusable
RIDER [9.1] by fire or other casualty, the damages thereto shall be repaired by
and at the expense of Owner and the rent and other items of additional rent,
until such repair shall be substantially completed, shall be apportioned from
the day following the casualty according to the part of the premises which is
useable. (c) If the demised premises are totally damaged or rendered wholly
unusable by fire or other casualty, then the rent and other items of additional
rent as hereinafter expressly provided shall be proportionately paid up to the
time of the casualty and thenceforth shall cease until the date when the
premises shall have been repaired and restored by Owner (or sooner reoccupied in
part by Tenant then rent shall be apportioned as provided in subsection (b)
above), subject to Owner's right to elect not to restore the same as hereinafter
provided. (d) If the demised premises are rendered wholly unusable or (whether
or not the demised premises are damaged in whole or in part) if the building
shall be so damaged that Owner shall decide to demolish it or to rebuild it,
then, in any of such events, Owner may elect to terminate this lease by written
notice to Tenant, given within 90 days after such fire or casualty, or 30 days
after adjustment of the insurance claim for such fire or casualty, whichever is
sooner, specifying a date for the expiration of the lease, which date shall
[rider to be added if necessary] not be more than 60 days after the giving of
such notice, and upon the date specified in such notice the term of this lease
shall expire as fully and completely as if such date were the date set forth
above for the termination of this lease and Tenant shall forthwith quit,
surrender and vacate the premises without prejudice however, to Landlord's
rights and remedies against Tenant under the lease provisions in effect prior to
such termination, and any rent owing shall be paid up to such date and any
payments of rent made by Tenant which were on

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account of any period subsequent to such date shall be returned to Tenant.
Unless Owner shall serve a termination notice as provided for herein, Owner
shall make the repairs and restorations under the conditions of (b) and (c)
hereof, with all reasonable expedition, subject to delays due to adjustment of
insurance claims, labor troubles and causes beyond Owner's control. After any
such casualty, Tenant shall cooperate with Owner's restoration by removing from
the premises as promptly as reasonably possible, all of Tenant's salvageable
inventory and moveable equipment, furniture, and other property. Tenant's
liability for rent shall resume five (5) days after written notice from Owner
that the premises are substantially ready for Tenant's occupancy. (e) Nothing
contained hereinabove shall relieve Tenant from liability that may exist as a
result of damage from fire or other casualty. Notwithstanding the foregoing,
including Owner's obligation to restore under subparagraph (b) above, each party
shall look first to any insurance in its favor before making any claim against
the other party for recovery for loss or damage resulting from fire or other
casualty, and to the extent that such insurance is in force and collectible and
to the extent permitted by law, Owner and Tenant each hereby releases and waives
all right of recovery with respect to subparagraphs (b), (d), and (e) above,
against the other or any one claiming through or under each of them by way of
subrogation or otherwise. The release and waiver herein referred to shall be
deemed to include any loss or damage to the demised premises and/or to any
personal property, equipment, trade fixtures, goods and merchandise located
therein. The foregoing release and waiver shall be in force only if both
releasors' insurance policies contain a clause providing that such a release or
waiver shall not invalidate the insurance. If, and to the extent, that such
waiver can be obtained only by the payment of additional premiums, then the
party benefiting from the waiver shall pay such premium within ten days after
written demand or shall be deemed to have agreed that the party obtaining
insurance coverage shall be free of any further obligation under the provisions
hereof with respect to waiver of subrogation. Tenant acknowledges that Owner
will not carry insurance on Tenant's furniture and/or furnishings or any
fixtures or equipment, improvements, or appurtenances removable by Tenant and
agrees that Owner will not be obligated to repair any damage thereto or replace
the same. (f) Tenant hereby waives the provisions of Section 227 of the Real
Property Law and agrees that the provisions of this article shall govern and
control in lieu thereof.

Eminent Domain:

10. If the whole or any part of the demised premises shall be acquired or
condemned by Eminent Domain for any public or quasi public use or purpose, then
and in that event, the term of this lease shall cease and terminate from the
date of title vesting in such proceeding and Tenant shall have no claim for the
value of any unexpired term of said lease and assigns to Owner, Tenant's entire
interest in any such award. Tenant shall have the right to make an independent
claim to the condemning authority for the value of Tenant's moving expenses and
personal property, trade fixtures and equipment, provided Tenant is entitled
pursuant to the terms of the lease to remove such property, trade fixture and
equipment at the end of the term and provided further such claim does not reduce
Owner's award.

Assignment, Mortgage, Etc.:

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11. Tenant, for itself, its heirs, distributees, executors, administrators,
legal representative, successor and assigns, expressly covenants that it shall
not assign, mortgage or encumber this agreement, nor underlet, or suffer or
permit the demised premises or any part thereof to be used by others, without
the prior written consent of Owner in each instance. [insert 11.1] Transfer of
the majority of the stock of a corporate Tenant or the majority partnership
interest of a partnership Tenant shall be deemed an assignment. If this lease be
assigned, or if the demised premises or any part thereof be underlet or occupied
by anybody other than Tenant, Owner may, after default by Tenant, collect rent
from the assignee, under-tenant or occupant, and apply the net amount collected
to the rent herein reserved, but no such assignment, underletting, occupancy or
collection shall be deemed a waiver of this covenant, or the acceptance of the
assignee, under-tenant or occupant as tenant, or a release of Tenant from the
further performance by Tenant of covenants on the part of Tenant herein
contained. The consent by Owner to an assignment or underletting shall not in
any wise be construed to relieve Tenant from obtaining the express consent in
writing of Owner to any further assignment or underletting.

Electric Current:

12. Rates and conditions in respect to submetering or rent inclusion, as the
case may be, to be added in RIDER attached hereto. Tenant covenants and agrees
that at all times its use of electric current shall not exceed the capacity of
existing feeders to the building or the risers or wiring installation and Tenant
may not use any electrical equipment which, in Owner's opinion, reasonably
exercised, will overload such installations or interfere with the use thereof by
other tenants of the building. The change at any time of the character of
electric service shall in no wise make Owner liable or responsible to Tenant,
for any loss, damages or expenses which Tenant may sustain.

Access to Premises:

13. Owner or Owner's agents shall have the right (but shall not be obligated) to
enter the demised premises in any emergency at any time, and, at other
reasonable times, to examine the same and to make such repairs, replacements and
improvements as Owner may deem necessary and reasonably desirable to the demised
premises or to any other portion of the building or which Owner may elect to
perform. Tenant shall permit Owner to use and maintain and replace pipes and
conduits in and through the demised premises and to erect new pipes and conduits
therein provided they are concealed within the walls, floor, or ceiling. Owner
may, during the progress of any work in the demised premises, take all necessary
materials and equipment into said premises without the same constituting an
eviction nor shall the Tenant be entitled to any abatement of rent while such
work is in progress nor to any damages by reason of loss or interruption of
business or otherwise. Throughout the term hereof Owner shall have the right to
enter the demised premises at reasonable hours for the purpose of showing the
same to prospective purchasers or mortgagees of the building, and during the
last six months of the term for the purpose of showing the same to prospective
tenants. If Tenant is not present to open and permit an entry into the demised
premises, Owner or Owner's agents may enter the

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same whenever such entry may be necessary or permissible by master key or
forcibly and provided reasonable care is exercised to safeguard Tenant's
property, such entry shall not render Owner or its agents liable therefor, nor
in any event shall the obligations of Tenant hereunder be affected. If during
the last month of the term Tenant shall have removed all or substantially all of
Tenant's property therefrom Owner may immediately enter, alter, renovate or
redecorate the demised premises without limitation or abatement of rent, or
incurring liability to Tenant for any compensation and such act shall have no
effect on this lease or Tenant's obligations hereunder.

Vault, Vault Space, Area:

14. No Vaults, vault space or area, whether or not enclosed or covered, not
within the property line of the building is leased hereunder, anything contained
in or indicated on any sketch, blue print or plan, or anything contained
elsewhere in this lease to the contrary notwithstanding. Owner makes no
representation as to the location of the property line of the building. All
vaults and vault space and all such areas not within the property line of the
building, which Tenant may be permitted to use and/or occupy, is to be used
and/or occupied under a revocable license, and if any such license be revoked,
or if the amount of such space or area be diminished or required by any federal,
state or municipal authority or public utility, Owner shall not be subject to
any liability not shall Tenant be entitled to any compensation or diminution or
abatement of rent, nor shall such revocation, diminution or requisition be
deemed constructive or actual eviction. Any tax, fee or charge of municipal
authorities for such vault or area shall be paid by Tenant.

Occupancy:

15. Tenant will not at any time use or occupy the demised premises in violation
of the certificate of occupancy issued for the building of which the demised
premises are a part. Tenant has inspected the premises and accepts them as is,
subject to the riders annexed hereto with respect to Owner's work, if any. In
any event, Owner makes no representation as to the condition of the premises and
Tenant agrees to accept the same subject to violations, whether or not of
record.

See paragraph 37C(5) for substitution

Bankruptcy:

16. [(a) Anything elsewhere in this lease to the contrary notwithstanding, this
lease may be cancelled by Owner by the sending of a written notice to Tenant
within a reasonable time after the happening of any one or more of the following
events: (1) the commencement of a case in bankruptcy or under the laws of any
state naming Tenant as the debtor; or (2) the making by Tenant of an assignment
or any other arrangement for the benefit of creditors under any state statute.]
Neither Tenant nor any person claiming through or under Tenant, or by reason of
any statute or order of court, shall thereafter be entitled to possession of the
premises demised but shall forthwith quit and surrender the premises. If this
lease shall be assigned in accordance with its terms, the provisions of

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this Article 16 shall be applicable only to the party then owning Tenant's
interest in this lease.

(b) it is stipulated and agreed that in the event of the termination of this
lease pursuant to (a) hereof, Owner shall forthwith, notwithstanding any other
provisions of this lease to the contrary, be entitled to recover from Tenant as
and for liquidated damages an amount equal to the difference between the rent
reserved hereunder for the unexpired portion of the term demised and the fair
and reasonable rental value of the demised premises for the same period. In the
computation of such damages the difference between any installment of rent
becoming due hereunder after the date of termination and the fair and reasonable
rental value of the demised premises for the period for which such installment
was payable shall be discounted to the date of termination at the rate of four
percent (4%) per annum. If such premises or any part thereof be re-let by the
Owner for the unexpired term of said lease, or any part thereof, before
presentation of proof of such liquidated damages to any court, commission or
tribunal, the amount of rent reserved upon such re-letting shall be deemed to be
the fair and reasonable rental value for the part or the whole of the premises
so re-let during the term of the re-letting. Nothing herein contained shall
limit or prejudice the right of the Owner to prove for and obtain as liquidated
damages by reason of such termination, an amount equal to the maximum allowed by
any statute or rule of law in effect at the time when, and governing the
proceedings in which, such damages are to be proved, whether or not such amount
be greater, equal to, or less than the amount of the difference referred to
above.

Default:

17. (1) If Tenant defaults in fulfilling any of the covenants of this lease
[other than the covenants for the payment of rent or additional rent]; or if the
demised premises become vacant or deserted [insert 7.2]; or if any execution or
attachment shall be issued against Tenant or any of Tenant's property whereupon
the demised premises shall be taken or occupied by someone other than Tenant; or
if this lease be rejected under Section 235 [insert 17.1] of Title 11 of the
U.S. Code (bankruptcy code); or if Tenant shall fail to move into or take
possession of the premises within thirty (30) days after the commencement of the
term of this lease, then, in any one or more of such events, upon Owner serving
a written fifteen (15) days notice upon Tenant specifying the nature of said
default and upon the expiration of said fifteen (15) days, if Tenant shall have
failed to comply with or remedy such default, or if the said default or omission
complained of shall be of a nature that the same cannot be completely cured or
remedied within said fifteen (15) day period, and if Tenant shall not have
diligently commenced curing such default within such fifteen (15) day period,
and shall not thereafter with reasonable diligence and in good faith, proceed to
remedy or cure such default, then Owner may serve a written five (5) days'
notice of cancellation of this lease upon Tenant, and upon the expiration of
said five (5) days this lease and the term thereunder shall end and expire as
fully and completely as if the expiration of such five (5) day period were the
day herein definitely fixed for the end and expiration of this lease and the
term thereof and Tenant shall then quit and surrender the demised premises to
Owner but Tenant shall remain liable as hereinafter provided.

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(2) If the notice provided for in (1) hereof shall have been given, and the term
shall expire as aforesaid; or if Tenant shall make default in the payment of the
rent reserved herein or any item of additional rent herein mentioned or any part
of either or in making any other payment herein required; then and in any of
such events Owner may without notice, re-enter the demised premises either by
force or otherwise, and dispossess Tenant by summary proceedings or otherwise,
and the legal representative of Tenant or other occupant of demised premises and
remove their effects and hold the premises as if this lease had not been made,
and Tenant hereby waives the service of notice of intention to re-enter or to
institute legal proceedings to that end. If Tenant shall make default hereunder
prior to the date fixed as the commencement of any renewal or extension of this
lease, Owner may cancel and terminate such renewal or extension agreement by
written notice.

Remedies of Owner and Waiver of Redemption:

18. In case of any such default, re-entry, expiration and/or dispossess by
summary proceedings or other wise, (a) the rent shall become due thereupon and
be paid up to the time of such re-entry, dispossess and/or expiration, (b) Owner
may re-let the premises or any part or parts thereof, either in the name of
Owner or otherwise, for a term or terms, which may at Owner's option be less
than or exceed the period which would otherwise have constituted the balance of
the term of this lease and may grant concessions or free rent or charge a higher
rental than that in this lease, and/or (c) Tenant or the legal representatives
of Tenant shall also pay Owner as liquidated damages for the failure of Tenant
to observe and perform said Tenant's covenants herein contained, any deficiency
between the rent hereby reserved and/or covenanted to be paid and the net
amount, if any, of the rents collected on account of the lease or leases of the
demised premises for each month of the period which would otherwise have
constituted the balance of the term of this lease. The failure of Owner to
re-let the premises or any part or parts thereof shall not release or affect
Tenant's liability for damages. In computing such liquidated damages there shall
be added to the said deficiency such expenses as Owner may incur in connection
with re-letting, such as legal expenses, reasonable attorneys' fees, brokerage,
advertising and for keeping the demised premises in good order or for preparing
the same for re-letting. Any such liquidated damages shall be paid in monthly
installments by Tenant on the rent day specified in this lease and any suit
brought to collect the amount of the deficiency for any month shall not
prejudice in any way the rights of Owner to collect the deficiency for any
subsequent month by a similar proceeding. Owner, in putting the demised premises
in good order or preparing the same for re-rental may, at Owner's option, make
such alterations, repairs, replacements, and/or decorations in the demised
premises as Owner, in Owner's sole judgment, considers advisable and necessary
for the purpose of re-letting the demised premises, and the making of such
alterations, repairs, replacements, and/or decorations shall not operate or be
construed to release Tenant from liability hereunder as aforesaid. Owner shall
in no event be liable in any way whatsoever for failure to re-let the demised
premises, or in the event that the demised premises are re-let, for failure to
collect the rent thereof under such re-letting, and in no event shall Tenant be
entitled to receive any excess, if any, of such net rents collected over the
sums payable by Tenant to Owner hereunder. In the event of a breach or
threatened breach by Tenant of any of the covenants or provisions hereof, Owner
shall

<PAGE>   11

have the right of injunction and the right to invoke any remedy allowed at law
or in equity as if re-entry, summary proceedings and other remedies were not
herein provided for. Mention in this lease of any particular remedy, shall not
preclude Owner from any other remedy, in law or in equity. Tenant hereby
expressly waives any and all rights of redemption granted by or under any
present or future laws in the event of Tenant being evicted or dispossessed for
any cause, or in the event of Owner obtaining possession of demised premises, by
reason of the violation by Tenant of any of the covenants and conditions of this
lease, or otherwise.

Fees and Expenses:

19. If Tenant shall default in the observance or performance of any term or
covenant on Tenant's part to be observed or performed under or by virtue of any
of the terms or provisions in any article of this lease, after notice if
required and upon expiration of any applicable grace period, if any (except in
an emergency), then, unless otherwise provided elsewhere in this lease, Owner
may immediately or at any time thereafter and without notice perform the
obligation of Tenant thereunder. If Owner, in connection with the foregoing or
in connection with any default by Tenant in the covenant to pay rent hereunder,
makes any expenditures or incurs any obligations for the payment of money,
including but not limited to reasonable attorneys' fees, in instituting,
prosecuting or defending any action or proceeding, and prevails in any such
action or proceeding then Tenant will reimburse Owner for such sums so paid or
obligations incurred with interest and costs. The foregoing expenses incurred by
reason of Tenant's default shall be deemed to be additional rent hereunder and
shall be paid by Tenant to Owner within ten (10) days of rendition of any bill
or statement to Tenant therefor. If Tenant's lease term shall have expired at
the time of making of such expenditures or incurring of such obligations, such
sums shall be recoverable by Owner, as damages.

Building Alterations and Management:

20. Owner shall have the right at any time without the same constituting an
eviction and without incurring liability to Tenant therefor to change the
arrangement and/or location of public entrances, passageways, doors, doorways,
corridors, elevators, stairs, toilets or other public parts of the building and
to change the name, number or designation by which the building may be known.
There shall be no allowance to Tenant for diminution of rental value and no
liability on the part of Owner by reason of inconvenience, annoyance or injury
to business arising from Owner or other Tenants making any repairs in the
building or any such alterations, additions and improvements. Furthermore,
Tenant shall not have any claim against Owner by reason of Owner's imposition of
such controls of the manner of access to the building by Tenant's social or
business visitors as the Owner may deem necessary for the security of the
building and its occupants.

No Representations by Owner:

21. [Neither] [Insert 21.1] Owner nor Owner's agents have made any
representations or promises with respect to the physical condition of the
building, the land upon which it

<PAGE>   12

is erected or the demised premises, the rents, leases, expenses of operation or
any other matter or thing affecting or related to the premises except as herein
expressly set forth and no rights, easements or licenses are acquired by Tenant
by implication or otherwise except as expressly set forth in the provisions of
this lease. Tenant has inspected the building and the demised premises and is
thoroughly acquainted with their condition and agrees to take the same "as is"
[Insert 21.2] and acknowledges that the taking of possession of the demised
premises by Tenant shall be conclusive evidence that the said premises and the
building of which the same form a part were in good and satisfactory condition
at the time such possession was so taken, except as to latent defects. All
understandings and agreements heretofore made between the parties hereto are
merged in this contract, which alone fully and completely expresses the
agreement between Owner and Tenant and any executory agreement hereafter made
shall be ineffective to change, modify, discharge or effect an abandonment of it
in whole or in part, unless such executory agreement is in writing and signed by
the party against whom enforcement of the change, modification, discharge or
abandonment is sought.

End of Term:

22. Upon the expiration or other termination of the term of this lease, Tenant
shall quit and surrender to Owner the demised premises, broom clean, in good
order and condition, ordinary wear [Insert 22.1] and damages which Tenant is not
required to repair as provided elsewhere in this lease excepted, and Tenant
shall remove all its property. Tenant's obligation to observe or perform this
covenant shall survive the expiration or other termination of this lease. If the
last day of the term of this Lease or any renewal thereof, falls on Sunday, this
lease shall expire at noon on the preceding Saturday unless it be a legal
holiday in which case it shall expire at noon on the preceding business day.

Quiet Enjoyment:

23. Owner covenants and agrees with Tenant that upon Tenant paying the rent and
additional rent and observing and performing all the terms, covenants and
conditions, on Tenant's part to be observed and performed, Tenant may peaceably
and quietly enjoy the premises hereby demised, subject, nevertheless, to the
terms and conditions of this lease including, but not limited to, Article 31
hereof and to the ground leases, underlying leases and mortgages hereinbefore
mentioned.

Failure to Give Possession:

24. If Owner is unable to give possession of the demised premises on the date of
the commencement of the term hereof, because of the holding-over or retention of
possession of any tenant, undertenant or occupants or if the demised premises
are located in a building being constructed, because such building has not been
sufficiently completed to make the premises ready for occupancy or because of
the fact that a certificate of occupancy has not been procured or for any other
reason, Owner shall not be subject to any liability for failure to give
possession on said date and the validity of the lease shall not be impaired
under such circumstances, nor shall the same be construed in any wise to extend
the term of this lease, but the rent payable hereunder shall be abated (provided

<PAGE>   13

Tenant is not responsible for Owner's inability to obtain possession or complete
construction) until after Owner shall have given Tenant written notice that the
Owner is able to deliver possession in condition required by this lease. If
permission is given to Tenant to enter into the possession of the demised
premises or to occupy premises other than the demised premises prior to the date
specified as the commencement of the term of this lease, Tenant covenants and
agrees that such possession and/or occupancy shall be deemed to be under all the
terms, covenants, conditions and provisions of this lease except the obligation
to pay the fixed annual rent set forth in the preamble to this lease. The
provisions of this article are intended to constitute "an express provision to
the contrary" within the meaning of Section 223-a of the New York Real Property
Law.

No Waiver:

25. The failure of Owner to seek redress for violation of, or to insist upon the
strict performance of any covenant or condition of this lease or of any of the
Rules or Regulations, set forth or hereafter adopted by Owner, shall not prevent
a subsequent act which would have originally constituted a violation from having
all the force and effect of an original violation. The receipt by Owner of rent
and/or additional rent with knowledge of the breach of any covenant of this
lease shall not be deemed a waiver of such breach and no provision of this lease
shall be deemed to have been waived by Owner unless such waiver be in writing
signed by Owner. No payment by Tenant or receipt by Owner of a lesser amount
than the monthly rent herein stipulated shall be deemed to be other than on
account of the earliest stipulated rent, nor shall any endorsement or statement
of any check or any letter accompanying any check or payment as rent be deemed
an accord and satisfaction, and Owner may accept such check or payment without
prejudice to Owner's right to recover the balance of such rent or pursue any
other remedy in this lease provided. No act or thing done by Owner or Owner's
agents during the term hereby demised shall be deemed an acceptance of a
surrender of said premises, and no agreement to accept such surrender shall be
valid unless in writing signed by Owner. No employee of Owner or Owner's agent
shall have any power to accept the keys of said premises prior to the
termination of the lease and the delivery of keys to any such agent or employee
shall not operate as a termination of the lease or a surrender of the premises.

Waiver of Trial by Jury:

26. It is mutually agreed by and between Owner and Tenant that the respective
parties hereto shall and they hereby do waive trial by jury in any action
proceeding or counterclaim brought by either of the parties hereto against the
other (except for personal injury or property damage) on any matters whatsoever
arising out of or in any way connected with this lease, the relationship of
Owner and Tenant, Tenant's use of or occupancy of said premises, and any
emergency statutory or any other statutory remedy. It is further mutually agreed
that in the event Owner commences any proceeding or action for possession
including a summary proceeding for possession of the premises, Tenant will not
interpose any counterclaim of whatever nature or description in any such
proceeding including a counterclaim under Article 4 except for statutory
mandatory counterclaims.

<PAGE>   14

Inability to Perform:

27. This Lease and the obligation of Tenant to pay rent hereunder and perform
all of the other covenants and agreements hereunder on part of Tenant to be
performed shall in no wise be affected, impaired or excused because Owner is
unable to fulfill any of its obligations under this lease or to supply or is
delayed in supplying any service expressly or impliedly to be supplied or is
unable to make, or is delayed in making any repair, additions, alterations or
decorations or is unable to supply or is delayed in supplying any equipment,
fixtures, or other materials if Owner is prevented or delayed from so doing by
reason of strike or labor troubles [or any cause whatsoever including, but not
limited to,] government preemption or restrictions or by reason of any rule,
order or regulation of any department or subdivision thereof of any government
agency or by reason of the conditions which have been or are affected, either
directly or indirectly, by war or other emergency. [Insert 27.1]

Bills and Notices:

28. Except as otherwise in this lease provided, a bill, statement, notice or
communication which Owner may desire or be required to give to Tenant, shall be
deemed sufficiently given or rendered if, in writing, delivered to Tenant
personally or sent by registered or certified mail [Insert 28.1] addressed to
Tenant at the [Rider to be added if necessary.] building of which the demised
premises form a part or at the last known residence address or business address
of Tenant or left at any of the aforesaid premises addressed to Tenant, and the
time of the rendition of such bill or statement and of the giving of such notice
or communication shall be deemed to be the time when the same is delivered to
Tenant, mailed, or left at the premises as herein provided. Any notice by Tenant
to Owner must be served by registered or certified mail [Insert 28.1] addressed
to Owner at the address first hereinabove given or at such other address as
Owner shall designate by written notice.

Services Provided by Owners:

29. As long as Tenant is not in default under any of the covenants of this lease
beyond the applicable grace period provided in this lease for the curing of such
defaults, Owner shall provide: (a) necessary elevator facilities on business
days from 8 a.m. to 6 p.m. and have one elevator subject to call at all other
times; (b) heat to the demised premises when and as required by law, on business
days from 8 a.m. to 6 p.m.; (c) water for ordinary lavatory [Inset 29.1]
purposes, but if Tenant uses or consumes water for any other purposes or in
unusual quantities (of which fact Owner shall be the sole judge), Owner may
install a water meter at Tenant's expense which Tenant shall thereafter maintain
at Tenant's expense in good working order and repair to register such water
consumption and Tenant shall pay for water consumed as shown on said meter as
additional rent as and when bills are rendered; (d) cleaning service for the
demised premises on business days at Owner's expense provided that the same are
kept in order by Tenant. If, however, said premises are to be kept clean by
Tenant, it shall be done at Tenant's sole expense, in a manner reasonably
satisfactory to Owner and no one other than persons approved by Owner shall be
permitted to enter said premises or the building of which they are a part

<PAGE>   15

for such purpose. Tenant shall pay Owner the cost of removal of any of Tenant's
refuse and rubbish from the building; (e) If the demised premises are serviced
by Owner's air conditioning/cooling and ventilating system, air
conditioning/cooling will be furnished to Tenant from May 15th through September
30th on business days (Mondays through Fridays, holidays excepted) from 8:00
a.m. to 6:00 p.m. [Insert 29.2], and ventilation will be furnished on business
days during the aforesaid hours except when air conditioning/cooling is being
furnished as aforesaid. If Tenant requires air conditioning/cooling or
ventilation for more extended hours or on Saturdays, Sundays or on holidays, as
defined under Owner's contract with Operating Engineers Local 94-94A, Owner will
furnish the same at Tenant's expense [Insert 29.3] [RIDER to be added in respect
to rates and conditions for such additional service]; (f) Owner reserves the
right to stop services of the heating, elevators, plumbing, air-conditioning,
electric, power systems or cleaning or other services, if any, when necessary by
reason of accident or for repairs, alterations, replacements or improvements
necessary or desirable in the judgment of Owner for as long as may be reasonably
required by reason thereof. If the building of which the demised premises are a
part supplies manually operated elevator service, Owner at any time may
substitute automatic control elevator service and proceed diligently with
alterations necessary therefor without in any wise affecting this lease or the
obligation of Tenant hereunder.

Captions:

30. The Captions are inserted only as a matter of convenience and for reference
and in no way define, limit or describe the scope of this lease nor the intent
of any provisions thereof.

Definitions:

31. The term "office," or "offices," wherever used in this lease, shall not be
construed to mean premises used as a store or stores, for the sale or display,
at any time, of goods, wares or merchandise, of any kind, or as a restaurant,
shop, booth, bootblack or other stand, barber shop, or for other similar
purposes or for manufacturing. The term "Owner" means a landlord or lessor, and
as used in this lease means only the owner, or the mortgagee in possession, for
the time being of the land and building (or the owner of a lease of the building
or of the land and building) of which the demised premises form a part, so that
in the event of any sale or sales of said land and building or of said lease, or
in the event of a lease of said building, or of the land and building, the said
Owner shall be and hereby is entirely freed and relieved of all covenants and
obligations of Owner hereunder, and it shall be deemed and construed without
further agreement between the parties or their successors in interest, or
between the parties and the purchaser, at any such sale, or the said lessee of
the building, or of the land and building, that the purchaser or the lessee of
the building has assumed and agreed to carry out any and all covenants and
obligations of Owner, hereunder. The words "re-enter" and "re-entry" as used in
this lease are not restricted to their technical legal meaning. The term
"business days" as used in this lease shall exclude Saturdays, Sundays and all
days as observed by the State or Federal Government as legal holidays and those
designated as holidays by the applicable building service union employees
service contract or by the applicable Operating

<PAGE>   16

Engineers contract with respect to HVAC service. Wherever it is expressly
provided in this lease that consent shall not be unreasonably withheld, such
consent shall not be unreasonably delayed.

Adjacent Excavation-Shoring:

32. If an excavation shall be made upon land adjacent to the demised premises,
or shall be authorized to be made, Tenant shall afford to the person causing or
authorized to cause such excavation, license to enter upon the demised premises
for the purpose of doing such work as said person shall deem necessary to
preserve the wall or the building of which demised premises form a part from
injury or damage and to support the same by proper foundations without any claim
for damages or indemnity against Owner, or diminution or abatement of rent.

Rules and Regulations:

33. Tenant and Tenant's servants, employees, agents, visitors, and licensees
shall observe faithfully, and comply strictly with, the Rules and Regulations
[Insert 33.1] and such other and further reasonable Rules and Regulations as
Owner or Owner's agents may from time to time adopt. Notice of any additional
rules or regulations shall be given in such manner as Owner may elect. In case
Tenant disputes the reasonableness of any additional Rule or Regulation
hereafter made or adopted by Owner or Owner's agents, the parties hereto agree
to submit the question of the reasonableness of such Rule or Regulation for
decision [Insert 33.2] [to the New York office of the American Arbitration
Association, whose determination shall be final and conclusive upon the parties
hereto]. The right to dispute the reasonableness of any additional Rule or
Regulation upon Tenant's part shall be deemed waived unless the same shall be
asserted by service of a notice, in writing upon Owner within fifteen (15) days
after the giving of notice thereof. Nothing in this lease contained shall be
construed to impose upon Owner any duty or obligation to enforce the Rules and
Regulations or terms, covenants or conditions in any other lease, as against any
other tenant and Owner shall not be liable to Tenant for violation of the same
by any other tenant, its servants, employees, agents, visitors or licensees.

See paragraph 55 for substitution

Security:

<PAGE>   17

[Insert 34.1]

Estoppel Certificate:

35. Tenant, at any time, and from time to time, upon at least 10 days' prior
notice by Owner, shall execute, acknowledge and deliver to Owner, and/or to any
other person, firm or corporation specified by Owner, a statement certifying
that this Lease is unmodified and in full force and effect (or, if there have
been modifications, that the same is in full force and effect (as modified and
stating the modifications), stating the dates to which the rent and additional
rent have been paid, and stating whether or not there exists any default by
Owner under this Lease, and, if so, specifying each such default.

Successors and Assigns:

36. The covenants, conditions and agreements contained in this lease shall bind
and inure to the benefit of Owner and Tenant and their respective heirs,
distributees, executors, administrators, successors, and except as otherwise
provided in this lease, their assigns. Tenant shall look only to Owner's estate
and interest in the land and building, for the satisfaction of Tenant's remedies
for the collection of a judgment (or other judicial process) against Owner in
the event of any default by Owner hereunder, and no other property or assets of
such Owner (or any partner, member, officer or director thereof, disclosed or
undisclosed), shall be subject to levy, execution or other enforcement procedure
for the satisfaction of Tenant's remedies under or with respect to this lease,
the relationship of Owner and Tenant hereunder, or Tenant's use and occupancy of
the demised premises.

                 See Rider Annexed Hereto and Made a Part Hereof

In Witness Whereof, Owner and Tenant have respectively signed and sealed this
lease as of the day and year first above written.

Witness for Owner:                           TRUSTEES OF THE MASONIC HALL AND
                                             ASYLUM FUND

<PAGE>   18

___________________________________          BY:________________________________

Witness for Tenant:                          ORGANIC ONLINE, INC.

___________________________________          BY:________________________________

                                ACKNOWLEDGEMENTS

<TABLE>
<S>                                            <C>
CORPORATE OWNER                                CORPORATE TENANT
STATE OF NEW YORK, ss.:                        STATE OF NEW YORK, ss.:
County of                                      County of

On this _______ day of ____________, 1999__,   On this _______ day of ____________,
before me personally came ______               1999__, before me personally came ______
___________________, to me known, who being    ___________________, to me known, who
by me duly sworn, did depose and say that he   being by me duly sworn, did depose and
resides in _________________                   say that he resides in _________________
_________________; that he is the _____        _________________; that he is the _____
___________________ of ____________            ___________________ of ____________
______________ the corporation described in    ______________ the corporation described
and which executed the foregoing instrument,   in and which executed the foregoing
as OWNER; that he knows the seal of said       instrument, as TENANT; that he knows the
corporation; the seal affixed to said          seal of said corporation; the seal
instrument is such corporate seal; that it     affixed to said instrument is such
was so affixed by order of the Board of        corporate seal; that it was so affixed by
Directors of said corporation, and that he     order of the Board of Directors of said
signed his name thereto by like order.         corporation, and that he signed his name
                                               thereto by like order.

    ____________________________                   ____________________________

INDIVIDUAL OWNER                               INDIVIDUAL TENANT
STATE OF NEW YORK, ss.:                        STATE OF NEW YORK, ss.:
County of                                      County of

On this _______ day of ____________, 1999__,   On this _______ day of ____________,
before me personally came ______               1999__, before me personally came ______
___________________, to be known and known     ___________________, to be known and
to me to be the individual described in and    known to me to be the individual
who, as OWNER, executed the foregoing          described in and who, as TENANT, executed
instrument and acknowledged to me that         the foregoing instrument and acknowledged
_________________________ he executed          to me that _________________________ he
                                               executed
</TABLE>

<PAGE>   19

<TABLE>
<S>                                            <C>
the same.                                      the same.

    ____________________________                   ____________________________
</TABLE>

<PAGE>   20

                                    GUARANTY

        FOR VALUE RECEIVED, and in consideration for, and as an inducement to
Owner making the within lease with Tenant, the undersigned guarantees to Owner,
Owner's successors and assigns, the full performance and observance of all the
covenants, conditions and agreements, therein provided to be performed and
observed by Tenant, including the "Rules and Regulations" as therein provided,
without requiring any notice of non-payment, non-performance, or non-observance,
or proof, or notice, or demand, whereby to charge the undersigned therefor, all
of which the undersigned hereby expressly waives and expressly agrees that the
validity of this agreement and the obligations of the guarantor hereunder shall
in no wise be terminated, affected or impaired by reason of the assertion by
Owner against Tenant of any of the rights or remedies reserved to Owner pursuant
to the provisions of the within lease. The undersigned further covenants and
agrees that this guaranty shall remain and continue in full force and effect as
to any renewal, modification or extension of this lease and during any period
when Tenant is occupying the premises as a "statutory tenant." As a further
inducement to Owner to make this lease and in consideration thereof, Owner and
the undersigned covenant and agree that in any action or proceeding brought by
either Owner or the undersigned against the other on any matters whatsoever
arising out of, under, or by virtue of the terms of this lease or of this
guarantee that Owner and the undersigned shall and do hereby waive trial by
jury.

Dated:_______________________________________        19______

_____________________________________________
Guarantor

_____________________________________________
Witness

                             IMPORTANT - PLEASE READ
                      RULES AND REGULATIONS ATTACHED TO AND
                            MADE A PART OF THIS LEASE
                         IN ACCORDANCE WITH ARTICLE 33.

1. The sidewalks, entrances, driveways, passages, courts, elevators, vestibules,
stairways, corridors or halls shall not be obstructed or encumbered by any
Tenant or used for any purpose other than for ingress or egress from the demised
premises and for delivery of merchandise and equipment in a prompt and efficient
manner using elevators and passageways designated for such delivery by Owner.
There shall not be used in any space, or in the public hall of the building,
either by any Tenant or by jobbers or others in the delivery or receipt of
merchandise, any hand trucks, except those equipped with rubber tires and
sideguards. If said premises are situated on the ground floor of the building,
Tenant thereof shall further, at Tenant's expense, keep the sidewalk and curb in
front of said premises clean and free from ice, snow, dirt and rubbish.

<PAGE>   21

2. The water and wash closets and plumbing fixtures shall not be used for any
purposes other than those for which they were designed or constructed and no
sweepings, rubbish, rags, acids or other substances shall be deposited therein,
and the expense of any breakage, stoppage, or damage resulting from the
violation of this rule shall be borne by the Tenant who, or whose clerks,
agents, employees or visitors, shall have caused it.

3. No carpet, rug, or other article shall be hung or shaken out of any window of
the building and no Tenant shall sweep or throw or permit to be swept or thrown
from the demised premises any dirt or other substances into any of the corridors
or halls, elevators, or out of the doors or windows or stairways of the building
and Tenant shall not use, keep or permit to be used or kept any foul or noxious
gas or substance in the demised premises, or permit or suffer the demised
premises to be occupied or used in a manner offensive or objectionable to Owner
or other occupants of the building by reason of noise, odors, and/or vibrations,
or interfere in any way with other Tenants or those having business therein, nor
shall any bicycles, vehicles, animals, fish, or birds be kept in or about the
building. Smoking or carrying lighted cigars or cigarettes in the elevators of
the building is prohibited.

4. No awnings or other projections shall be attached to the outside walls of the
building without the prior written consent of Owner.

5. No sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by any Tenant on any part of the outside of the
demised premises or the building or on the inside of the demised premise if the
same is visible from the outside of the premises without the prior written
consent of Owner, except that the name of Tenant may appear on the entrance door
of the premises. In the event of the violation of the foregoing by any Tenant,
Owner may remove same without any liability, and may charge the expense incurred
by such removal to Tenant or Tenants violating this rule. Interior signs on
doors and directory tablet shall be inscribed, painted or affixed for each
Tenant by Owner at the expense of such Tenant, and shall be of a size, color and
style acceptable to Owner.

6. No Tenant shall mark, paint, drill into, or in any way deface any part of the
demised premises or the building of which they form a part. No boring, cutting
or stringing of wires shall be permitted, except with the prior written consent
of Owner, and as Owner may direct. No Tenant shall lay linoleum, or other
similar floor covering, so that the same shall come in direct contact with the
floor of the demised premises, and, if linoleum or other similar floor covering
is desired to be used an interlining of builder's deadening felt shall be first
affixed to the floor, by a paste or other material, soluble in water, the use of
cement or other similar adhesive material being expressly prohibited.

7. No additional locks or bolts of any kind shall be placed upon any of the
doors or windows by any Tenant, nor shall any changes be made in existing locks
or mechanism thereof. Each Tenant must, upon the termination of his Tenancy,
restore to Owner all keys of stores, offices and toilet rooms, either furnished
to, or otherwise procured by,

<PAGE>   22

such Tenant, and in the event of the loss of any keys, so furnished, such Tenant
shall pay to Owner the cost thereof.

8. Freight, furniture, business equipment, merchandise and bulky matter of any
description shall be delivered to and removed from the premises only on the
freight elevators and through the service entrances and corridors, and only
during hours and in a manner approved by Owner. Owner reserves the right to
inspect all freight to be brought into the building and to exclude from the
building all freight which violates any of these Rules and Regulations of the
lease or which these Rules and Regulations are a part.

9. Canvassing, soliciting and peddling in the building is prohibited and each
Tenant shall cooperate to prevent the same.

10. Owner reserves the right to exclude from the building all persons who do not
present a pass to the building signed by Owner. Owner will furnish passes to
persons for whom any Tenant requests same in writing. Each Tenant shall be
responsible for all persons for whom he requests such pass and shall be liable
to Owner for all acts of such persons. Tenant shall not have a claim against
Owner by reason of Owner excluding from the building any person who does not
present such pass.

11. Owner shall have the right to prohibit any advertising by any Tenant which,
in Owner's opinion, tends to impair the reputation of the building or its
desirability as a building for offices, and upon written notice from Owner,
Tenant shall refrain from or discontinue such advertising.

12. Tenant shall not bring or permit to be brought or kept in or on the demised
premises, any inflammable, combustible, explosive, or hazardous fluid, material,
chemical or substance, or cause or permit any odors of cooking or other
processes, or any unusual or other objectionable odors to permeate in or emanate
from the demised premises.

13. If the building contains central air conditioning and ventilation, Tenant
agrees to keep all windows closed at all times and to abide by all rules and
regulations issued by Owner with respect to such services. If Tenant requires
air conditioning or ventilation after the usual hours, Tenant shall give notice
in writing to the building superintendent prior to 3:00 p.m. in the case of
services required on week days, and prior to 3:00 p.m. on the day prior in case
of after hours service required on weekends or on holidays. Tenant shall
cooperate with Owner in obtaining maximum effectiveness of the cooling system by
lowering and closing venetian blinds and/or drapes and curtains when the sun's
rays fall directly on the windows of the demised premises.

14. Tenant shall not move any safe, heavy machinery, heavy equipment, bulky
matter, or fixtures into or out of the building without Owner's prior written
consent. If such safe, machinery, equipment, bulky matter or fixtures requires
special handling, all work in connection therewith shall comply with the
Administrative Code of the City of
<PAGE>   23
New York and all other laws and regulations applicable thereto and shall be done
during such hours as Owner may designate.

15 Refuse and Trash. (1) Compliance by Tenant. Tenant covenants and agrees, at
its sole cost and expense, to comply with all present and future laws, orders,
and regulations of all state, federal, municipal, and local governments,
departments, commissions and boards regarding the collection, sorting,
separation and recycling of waste products, garbage, refuse and trash. Tenant
shall sort and separate such waste products, garbage, refuse and trash into such
categories as provided by law. Each separately sorted category of waste
products, garbage, refuse and trash shall be placed in separate receptacles
reasonably approved by Owner. Such separate receptacles may, at Owner's option,
be removed from the demised premises in accordance with a collection schedule
prescribed by law. Tenant shall remove, or cause to be removed by a contractor
acceptable to Owner, at Owner's sole discretion, such items as Owner may
expressly designate. (2) Owner's Rights in Event of Noncompliance. Owner has the
option to refuse to collect or accept from Tenant waste products, garbage,
refuse or trash (a) that is not separated and sorted as required by law or (b)
which consists of such items as Owner may expressly designate for Tenant's
removal, and to require Tenant to arrange for such collection at Tenant's sole
cost and expense, utilizing a contractor satisfactory to Owner. Tenant shall pay
all costs, expenses, fines, penalties, or damages that may be imposed on Owner
or Tenant by reason of Tenant's failure to comply with the provisions of this
Building Rule 15, and, at Tenant's sole cost and expense, shall indemnity,
defend and hold Owner harmless (including reasonable legal fees and expenses)
from and against any actions, claims and suits arising from such noncompliance,
utilizing counsel reasonably satisfactory to Owner.

<PAGE>   24

              INSERTS TO AGREEMENT OF LEASE BETWEEN TRUSTEES OF THE
              MASONIC HALL AND ASYLUM FUND, AS OWNER, AND ORGANIC
               ONLINE, INC., AS TENANT, DATED AS OF JUNE __, 1998

(3.1)   Anything contained in this Article 3 or in Section 37C(3) of this lease
        to the contrary notwithstanding, Owner's consent shall not be
        unreasonably withheld or delayed with respect to any cosmetic,
        networking, telephone, nonstructural Tenant's Changes, provided that (x)
        consent for such Tenant's Change is not required by any third party
        (such as, by way of example, a mortgagee or ground lessor), and (y) such
        Tenant's Change (i) is not visible from the outside of the Building,
        (ii) does not affect any part of the Building other than the demised
        premises, (iii) does not affect any services required to be furnished by
        Owner to any other tenant or occupant of the Building, (iv) does not
        affect the proper functioning of any Building Systems (hereinafter
        defined), (v) does not impair or diminish the value or utility of the
        Building, and (vi) does not affect the certificate of occupancy for the
        Building or the demised premises. Owner's consent shall not be required
        with respect to those nonstructural Tenant's Changes which are merely
        cosmetic or decorative in nature, comply with the provisions of clauses
        (1) - (vi) above, and the cost of which are less than twenty thousand
        dollars ($20,000), provided, however, that such Tenant's Changes shall
        otherwise be performed in accordance with the provisions of this lease.
        With respect to mere cosmetic and/or decorative Tenant's Changes, Tenant
        shall only be required to submit to Owner a reasonably detailed
        schematic design or description and such other information as shall be
        reasonably requested by Owner. The term "Building Systems" shall mean
        the mechanical, gas, electrical, sanitary, heating, air-conditioning,
        ventilating, elevator, plumbing, life-safety and other service systems
        of the Building.

(3.2)   or U.C.C. financing statement

(3.3)   or otherwise

(3.4)   given together with Owner's consent to Tenant's alterations (provided,
        however, that Tenant's request for consent for such alterations must
        specifically state that if Owner does not require removal of the
        alterations when giving its consent thereto, Owner shall have waived its
        right to have Tenant remove the same prior to the expiration of the term
        of this lease),

(4.1)   the

(4.2)   Building Systems

(6.1)   (collectively, "Requirements")

(6.2)   that which would otherwise be in effect.

(9.1)   or totally inaccessible

                                  Inserts - i
<PAGE>   25

(11.1)  , which consent to a sublease or to an assignment shall be governed by
        the terms of Article 47 hereof.

(17.1)  Section 365

(17.2)  for a period in excess of thirty (30) days

(21.1)  Except as expressly provided herein, neither

(21.2)  subject to the performance by Owner of the work ("Owner's Work") set
        forth on Exhibit "B" annexed hereto and made a part hereof,

(22.1)  and damage by fire or other insurable casualty

(27.1)  or by reason of any other cause beyond Owner's reasonable control

(28.1)  or by overnight mail or courier service

(29.1)  and drinking

(29.1)  and drinking

(29.2)  and on Saturdays from 8:00 a.m. to 1:00 p.m., upon Tenant's prior
        request

(29.3) For overtime air-conditioning, the following rates shall apply:

<TABLE>
<S>                                                          <C>
        Sundays and holidays from 8:00 a.m. to 4:00 p.m.     $150.00 (flat rate)
        Saturdays after 1:00 p.m.                            $25.00/hour
</TABLE>

(33.1)  hereinafter set forth and annexed hereto and made a part hereof as
        Exhibit "C"

(33.2)  by informal arbitration pursuant to Article 46 hereof.

                                  Inserts - ii
<PAGE>   26

RIDER ATTACHED TO AND FORMING PART OF LEASE DATED AS OF JUNE _, 1998 BETWEEN
TRUSTEES OF THE MASONIC HALL AND ASYLUM FUND, OWNER, AND ORGANIC ONLINE, INC.,
TENANT

PREMISES:      71 WEST 23RD STREET
               NEW YORK, NEW YORK
               ENTIRE 14TH AND 15TH FLOORS AND THE ADDITIONAL DESIGNATED FLOOR

                          I. APPLICATION OF THIS RIDER

        A. Rider Provisions Paramount. If and to the extent that any of the
provisions of this Rider conflict or are otherwise inconsistent with any of the
preceding printed provisions of this lease, or of the Rules and Regulations
attached to this lease as Exhibit "C", whether or not such inconsistency is
expressly noted in this Rider, the provisions of this Rider shall prevail, and
in case of inconsistency with said Rules and Regulations, shall be deemed a
waiver of such Rules and Regulations with respect to Tenant to the extent of
such inconsistency.

        B. Additional Definitions. For the purpose of this lease and all
agreements supplemental to this lease, and all communications with respect
thereto, unless the context otherwise requires:

               1. The term "The Additional Designated Floor" shall mean the
eighth floor or other floor in the Building for which Owner is able to deliver
possession to Tenant, provided, however, that such possession is delivered by
Owner to Tenant on or before July 1, 1999 pursuant to written notice given by
Owner to Tenant not later than 30 days prior to such delivery of possession.

               2. The term "fixed rent" shall mean rent consisting of base rent
at the annual rate of:

   a.   Six Hundred Seventy Six Thousand Dollars and 00/100 ($676,000.00) per
        annum (i.e., $56,333.33 per month) for the period commencing on the
        Commencement Date and ending on the earlier of (a) delivery to Tenant of
        possession of the Additional Designated Floor and (b) the day
        immediately preceding the fifth anniversary of the Commencement Date; on
        the day immediately preceding the fifth anniversary of the Commencement
        Date; and

   b.   One Million Fourteen Thousand Dollars and 00/100 ($1,014,000.00) per
        annum (i.e. $84,500.00 per month) for the period commencing upon
        delivery to Tenant of possession of the Additional Designated Floor and
        ending on the day immediately preceding the fifth anniversary of the
        Commencement Date; and

   c.   One Million Ninety Two Thousand Dollars and 00/100 ($1,092,000.00) per
        annum (i.e. $91,000.00 per month) for the period commencing on the
        fifth

                                       1
<PAGE>   27

        anniversary of the Commencement Date and ending on the Expiration Date
        provided, however, that in the event Owner shall have been unable to
        deliver to Tenant possession of the Additional Designated Floor, the
        base rent for the period commencing on the fifth anniversary of the
        Commencement Date and ending on the Expiration Date shall be Seven
        Hundred Twenty Eight Thousand and 00/100 ($728,000.00) per annum (i.e.
        $60,666.67 per month).

The rentable area of the demised premises is agreed to be 26,000 square feet for
all purposes of this lease until Owner shall have delivered to Tenant possession
of the Additional Designated Floor at which time the rentable area of the
demised premises is agreed to be 39,000 square feet for all purposes of this
lease.

               3. The term "additional rent" shall mean all sums of money, other
than fixed rent, as shall become due and payable from Tenant to Owner hereunder,
and Owner shall have the same remedies therefor as for a default in payment of
fixed rent.

               4. The terms "rent" and "rents" shall mean and include fixed rent
and/or additional rent and/or escalation rent hereunder.

               5. The term "Commencement Date" shall mean the date of full
execution and delivery of this lease, and the term "Expiration Date" shall mean
the last day of the calendar month in which the ten (10) year five (5) month
anniversary of the Commencement Date occurs.

               6. Any provision in this lease that one party or the other or
both shall do or not do or shall cause or permit or not cause or permit a
particular act, condition or circumstance shall be deemed to mean that such
party so covenants or both parties so covenant, as the case may be. Tenant's
obligations hereunder shall be construed in every instance as conditions as well
as covenants. Such provisions shall be deemed to mean that if the performance of
the covenant will involve incurrence of expense such expense shall be borne by
the party responsible for such performance except where this lease expressly
provides otherwise.

               7. The term "Tenant" shall mean Tenant herein named or any
permitted assignee or other successor in interest (immediate or remote) of
Tenant herein named, when Tenant herein named or such assignee or other
successor in interest as the case may be is in possession of the demised
premises as owner of the Tenant's estate and interest granted by this lease, and
also, if Tenant is not an individual or corporation, all of the individuals,
firms and/or corporations or other entities comprising Tenant.

               8. Any transfer by operation of law or otherwise, of Tenant's
interest in this lease or of any subtenant's interest in a sublease hereunder,
or, unless Tenant or the subtenant is an entity the securities of which are
registered under appropriate statutory authority and listed and traded on a
national exchange, of a 50% or greater interest in Tenant, or in a subtenant
hereunder (whether stock, partnership interest or otherwise), in a single
transaction or a related series of transactions, shall be deemed an assignment
of

                                       2
<PAGE>   28

this lease within the meaning of Article 11 or an assignment of the sublease
within the meaning of Article 47, as the case may be.

               9. All references in this lease to numbered Articles and lettered
Exhibits are references to Articles of this lease and Exhibits annex ed to (and
thereby made part of) this lease, as the case may be, unless expressly otherwise
designated in the context.

               10. The words "include", "including" and "such as" shall each be
construed as if followed by the phrase "without being limited to". The words
"herein", "hereof", "hereby", "hereunder" and words of similar import shall be
construed to refer to this lease as a whole and not to any particular Article or
subdivision thereof unless expressly so stated. The rule of ejusdem generis
shall not be applicable to limit a general statement following or referable to
an enumeration of specific matters, to matters similar to the matters
specifically mentioned. Words and phrases used in the singular shall be deemed
to include the plural and vice versa and nouns and pronouns used in any
particular gender shall be deemed to include any other gender, as the sense of
the context may permit.

               11. The term "Specialty Alterations" shall mean Tenant's Changes
(hereinafter defined) consisting of kitchens, executive bathrooms, raised
computer floors, computer installations, vaults, libraries, internal staircases,
dumbwaiters, pneumatic tubes, vertical and horizontal transportation systems,
and other Tenant's Changes of a similar character.

               12. The term "Initial Tenant's Changes" shall mean the changes
made by Tenant to initially prepare the demised premises for Tenant's occupancy.

               13. The terms "substantial completion" or "substantially
completed" or words of similar import shall mean that Owners Work has been
substantially completed, it being agreed that Owner's Work shall be deemed
substantially complete notwithstanding the fact that minor or insubstantial
details of construction or demolition and/or mechanical adjustment and/or
decorative items remain to be performed.

               14. The term "Applicable Rate" shall mean the lesser of (a) two
(2) percentage points above the then current rate of interest publicly announced
from time to time by The Chase Manhattan Bank, or its successor, as its "prime
lending rate" (or such other term as may be used by The Chase Manhattan Bank,
from time to time, for the rate presently referred to as its "prime lending
rate"), and (b) the maximum rate permitted by applicable law.

        C. Some Qualifications of Certain Preceding Printed Articles.

               1. Notwithstanding Tenant's agreement to pay the fixed rent in
lawful money which shall be legal tender, Owner shall accept, subject to
collection, and Tenant shall pay all fixed rent and additional rent falling due
under this lease by currently dated, unendorsed check of Tenant, payable to
Owner or its designed agent and drawn on a bank or trust company which is a
member of the New York Clearing House. If Tenant shall default in timely payment
of any rent twice in any period of twenty-four (24) months, and

                                       3
<PAGE>   29

whether or not such default shall be cured, Owner, may by notice given to Tenant
at any time thereafter, require Tenant to make all further rent payments by
currently dated, unendorsed certified or official bank check payable to Owner on
a bank or trust company that is a member of the New York Clearing House.

               2. The use of the demised premises for the purposes specified in
Article 2 shall not in any event be deemed to include, and Tenant shall not use,
or permit the use of the demised premises or any part thereof for:

   i.   the conduct of a public auction of any kind or of any gaming or gambling
        activities, or of any political or club activities, whether private or
        public;

   ii.  the conduct of a school of any kind (other than a training center for
        employees of Tenant);

   iii. the conduct of a cafeteria or restaurant other than private dining
        facilities for Tenant's officers, employees and business guests;

   iv.  the conduct of any business, occupation or activity which, in the
        reasonable judgment of Owner, may (i) create or foster an unusual risk
        to the security of the Building or of any of its tenants or occupants,
        (ii) impair the reputation of the Building for the highest class of
        office and commercial uses, or (iii) interfere with or disturb the
        occupancy of other tenants in the Building; or

   v.   the conduct of meetings, shows or exhibits for the general public.

        In no event shall the demised premises be used or occupied by anyone (as
assignee of this lease or as subtenant or licensee), who shall not have a
financial standing, or shall not be of a character, or shall not be engaged in a
business, or shall not use the demised premises in a manner, which shall be in
keeping with the standards in such respects of the other tenancies in the
Building.

        In no event shall Tenant cause or permit, as the result of any
intentional or unintentional act or omission on the part of Tenant, its agents,
employees, tenants, subtenants or other occupants of the demised premises to
release Hazardous Substances (hereinafter defined) in or from any portion of the
demised premises in violation of any Environmental Laws (hereinafter defined).
Tenant shall indemnify, defend and hold harmless Owner and any property
manager(s) engaged by Owner, their successors, assigns, and each of their
affiliated companies, partners, shareholders, agents, directors, officers and
employees (collectively, "Indemnitees") from and against any and all claims,
demands, penalties, fines, liabilities, settlements, suits, damages, losses,
injuries, costs and expenses of whatever kind or nature, known or unknown,
contingent or otherwise, including, without limitations, attorneys' and
consultants' fees and disbursements and investigation and laboratory fees
arising out of, or in any way related to: (i) the presence, disposal, release or
threat of release of any Hazardous Substance as a result of any act or omission
of Tenant, its agents, employees, tenants, subtenants, invitees or other
occupants of the demised premises, in or from or affecting the demised premises;
(ii) any personal injury (including wrongful death) or property damage (real or
personal) arising

                                       4
<PAGE>   30

out of related to any such Hazardous Substance; (iii) any lawsuit brought or
threatened, settlement reached or government order relating to such Hazardous
Substance; and (iv) any violations of any Environmental Laws. As used herein the
term "Hazardous Substance" shall mean solid waste, hazardous waste, hazardous
substance, petroleum product or similar term as used and defined in the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation and Liability Act, the Hazardous Material Transportation Act, the
Federal Water Pollution Control Act, the Superfund Amendments and
Reauthorization Act of 1986, any laws relating to underground storage tanks, and
any similar or successor federal law, state law or local statutes or ordinances
and any rules, regulations and policies promulgated thereunder, as any of the
same may be amended from time to time (collectively, "Environmental Laws").
Tenant's indemnity hereunder shall survive the expiration or sooner termination
of this lease.

               3. Supplementing Article 3:

   i.   Tenant shall cause any permitted alterations, decorations,
        installations, additions or improvements (herein called "Tenant's
        Changes"; Tenant's Changes shall also include Initial Tenant's Changes)
        in or about the demised premises, referred to in Article 3, to be
        performed in compliance with all applicable Requirements, and in such
        manner as not to interfere with, delay, or impose any additional expense
        upon Owner in the construction, maintenance or operation of the
        Building, or interfere with or disturb the occupancy of other tenants in
        the Building, and so as to maintain harmonious labor relations in the
        Building. Tenant with diligence and dispatch, shall procure the
        cancellation or discharge of all notices of violation arising from or
        otherwise connected with Tenant's Changes which shall be issued by the
        Department of Buildings or any other public authority having or
        asserting jurisdiction.

   ii.  Owner shall not unreasonably withhold or delay any consent or approval
        required under Article 3 to Tenant's contractor for the construction of
        the Tenant's Changes, provided that such contractors are licensed and
        experienced in the nature of the Tenant's Changes being performed, and
        provided further that Owner may require that any and all mechanical,
        electrical and air-conditioning work on behalf of Tenant shall be
        supervised by Owner's in-house personnel, if appropriate personnel are
        available or by the contractors regularly employed by Owner for such
        work in the Building. Any such supervision by Owner's personnel shall be
        reasonable in scope, taking into account the type of work being done on
        behalf of Tenant. Owner may require submission to it of plans and
        specifications for any proposed Tenant's Changes and in granting its
        consent to any Tenant's Changes may impose such conditions (in addition
        to those expressly provided in this lease) as to guaranty of completion
        and payment and of restoration and otherwise as Owner may consider
        desirable. In no event shall Owner be required to consent to any
        Tenant's Changes which could physically affect any part of the Building
        outside of the demised premises or might adversely affect the proper
        functioning of any of the Building Systems. In the event that Owner does
        not

                                       5
<PAGE>   31

        have appropriate in-house personnel available, Owner may require Tenant
        to reimburse Owner for Owner's reasonable out-of-pocket costs and
        expenses to unrelated third parties for (x) review of Tenant's plans and
        specifications for such Tenant's Changes, and (y) supervision of
        compliance with the requirements of this lease in the performance of
        such Tenant's Changes.

   iii. All counters, screens, grilles, railings, suspended lighting fixtures,
        panelling, business machines and equipment which are installed in the
        demised premises by or for the account of Tenant, and can be removed
        without structural damage to or defacement of the Building, and all
        furniture, furnishings and other articles of personal property owned by
        Tenant and located in the demised premises (all of which are herein
        called "Tenants Property") shall be and remain the property of Tenant
        and may be removed by it at any time during the term of this lease.
        However, if any of Tenants Property is removed, or upon the removal of
        Tenant's Changes and/or Specialty Alterations, Tenant shall repair or
        pay the cost of repairing any damage to the Building resulting from such
        removal. Any items of Tenants Property which shall remain In the demised
        premises after Tenant surrenders the demised premises, at the option of
        Owner, may be deemed to have been abandoned, and in such case either may
        be retained by Owner as Its property or may be disposed of at Tenant's
        cost, without accountability, In such manner as Owner may see fit.

   iv.  Within thirty (30) days after the completion of any Tenant's Changes
        (including the Initial Tenant's Changes), Tenant shall deliver to Owner
        a full set of architectural, structural, mechanical and electrical
        drawings and specifications showing the demised premises "as built" by
        the performance of such Tenant's Changes.

               4. Supplementing and modifying Article 13, entry upon the demised
premises pursuant to Article 13 shall be accomplished at such times and in such
manner, and (except in the case of emergency) upon such reasonable notice, which
notice may be oral, as to minimize to the extent practicable (without the
necessity of incurring any additional monetary expense) under the circumstances
interference with Tenant's use of the demised premises or inconvenience to
Tenant.

               5. Supplementing Article 16, insert at the beginning thereof in
place of the first sentence thereof, the following: "If, at or before the date
fixed as the Commencement Date of the term of this lease or if at any time
during the term hereby demised:

   a.   Tenant shall file a petition commencing a voluntary case under the
        Federal Bankruptcy Code (Title 11 of the United States Code), as now or
        hereafter in effect, or under similar law, or file a petition in
        bankruptcy or for reorganization or for an arrangement pursuant to any
        state bankruptcy law or any similar state law or, if Tenant is then a
        banking organization, shall file an application for voluntary
        liquidation or dissolution applicable to banking organizations; or

                                       6
<PAGE>   32

   b.   an involuntary case against Tenant as debtor is commenced by a petition
        under the Federal Bankruptcy Code (Title 11 of the United States Code),
        as now or hereafter in effect, or under similar law, or a petition or
        answer proposing the adjudication of Tenant as a bankrupt or its
        reorganization pursuant to any state bankruptcy law or any similar state
        law shall be filed in any court and shall not be dismissed, discharged
        or denied within sixty (60) days after the filing thereof, or if Tenant
        shall consent or acquiesce in the filing thereof; or

   c.   a custodian, receiver, United States Trustee, trustee or liquidator of
        Tenant or of all or substantially all of Tenant's property or of
        Tenant's property in the demised premises shall be appointed in any
        proceedings brought by Tenant; or if any such custodian, receiver,
        United States Trustee, trustee or liquidator shall be appointed in any
        proceedings brought against Tenant and shall not be discharged within
        sixty (60) days after such appointment, or if Tenant shall consent to or
        acquiesce in such appointment; or

   d.   if Tenant shall generally not pay Tenant's debts as such debts become
        due, or shall make an assignment for the benefit of creditors, or shall
        admit in writing its inability to pay its debts generally as they become
        due; or

   e.   if Tenant is then a banking organization, if the Superintendent of Banks
        of the State of New York or any other public officer having like
        authority and power over Tenant as a banking organization shall take
        possession of the business and property of Tenant at the demised
        premises;

then, Owner may, at its option, cancel or terminate this lease by giving Tenant
written notice to such effect within a reasonable time after receipt of notice
of the happening of any one or more of such events."

               6. Notwithstanding the specific provisions of Article 17:

   i.   In case of default in the payment of fixed rent, additional rent or
        escalation rent reserved herein, Tenant shall have a grace period of
        five (5) days after notice of the existence of such default from Owner
        within which to cure such default and if such payment is not made before
        the expiration of such five (5) day grace period, Owner may serve a five
        (5) day notice of cancellation of this lease as, and with the effects,
        provided in Article 17(1).

   ii.  In case of any other default referred to in Article 17(1) the Tenant
        shall be given ten (10) days (instead of five (5) days) after notice of
        the existence of such default from Owner within which to cure such
        default, except where failure to cure within a shorter period may
        subject Owner to criminal action or penalty, or where such default can
        be cured by payment of money, in either of which cases the provisions of
        Article 17(1), as written shall govern and except, further, that where
        any other such default can be completely cured or remedied in the
        exercise of due diligence but not within such grace period of ten (10)
        days, such grace period shall be deemed extended to such period as may
        be

                                       7
<PAGE>   33

        reasonably necessary to do the work or take such other steps as shall be
        required to correct such default, provided Tenant shall have diligently
        commenced curing such default promptly after receipt of notice thereof
        and shall thereafter proceed diligently to remedy the same completely.

   iii. Nothing in subparagraph (a) of this paragraph shall be deemed to require
        Owner to give the notices provided for therein prior to the commencement
        of a summary proceeding for nonpayment of rent or a plenary action for
        the recovery of rent on account of any default in the payment of rent,
        it being acknowledged and agreed by both parties that the sole purpose
        of such notices is to create a conditional limitation hereunder, and in
        the event such notices are given by Owner, Tenant shall become a
        holdover tenant and this lease shall terminate forthwith at the
        expiration of the applicable notice period with the effects provided in
        Article 17(1).

               7. Supplementing Articles 17 and 18:

   i.   Tenant expressly recognizes that Tenant's due and punctual performance
        of all its obligations under this lease throughout the term hereof is of
        paramount importance to Owner and, without limiting the provisions of
        Articles 17 and 37C(7), Tenant agrees that, if Tenant (i) shall fail to
        pay for five (5) business days after it becomes due an installment of
        fixed rent or additional rent for two (2) consecutive months or for a
        total of three (3) months in any period of twelve (12) months, or (ii)
        shall default in the timely performance of any other obligation of
        Tenant under this lease with respect to which Owner shall have given
        Tenant notice of default, and such default shall occur more than two (2)
        times in any period of twelve (12) months, then notwithstanding that
        such failure or other default shall have been cured within the
        applicable grace period provided in said Articles, any further similar
        default shall be deemed to be deliberate and Owner thereafter may,
        without further notice of default, serve a five (5) day notice of
        cancellation of this lease as and with the effects provided in
        subparagraph (1) of Article 17.

   ii.  Instead of the liquidated damages determined pursuant to Article 18(c),
        Owner may, at its election, recover from Tenant as liquidated damages an
        amount determined pursuant to Article 16(b).

               8. The parties recognize and agree that the damage to Owner
resulting from Tenant's failure to timely surrender the demised premises to
Owner will be substantial, will exceed the amount of fixed rent, additional rent
and escalation rent theretofore payable hereunder and will be impossible to
accurately measure. Tenant therefore agrees that if possession of the demised
premises is not surrendered to Owner within one (1) day after the Expiration
Date or the sooner expiration of the term of this lease, Tenant shall pay Owner
as liquidated damages for each day during which Tenant holds over in the demised
premises after the Expiration Date or earlier expiration of the term of this
lease, a sum equal to one and one half (1-1/2) times the greater of (a) the then
fair market rental value of the demised premises (on a per diem basis) and (b)
the average

                                       8
<PAGE>   34

fixed rent, additional rent and escalation rent which was payable on a per diem
basis under this lease on the last day of the term thereof. Tenant's obligations
hereunder shall survive the Expiration Date or earlier expiration of the term of
this lease.

               9. Supplementing Article 28, "requests" or "approvals" by Owner
or Tenant under this lease shall be deemed to be notices. All notices shall be
in writing.

               10. If Tenant shall fail to pay any installment of fixed rent or
any amount of additional rent for more than five (5) business days after it
shall have become due and payable, then, whether or not a notice of default has
been given therefor pursuant to the provisions of Section 37C(6)(a), Tenant
shall pay Owner a late charge and as additional rent a sum equal to interest at
the Applicable Rate on the amount unpaid, computed from the date such payment
was due through and including the date of payment. Such late charge shall be
without prejudice to any of Owner's rights and remedies hereunder or at law for
nonpayment or late payment of rent and shall be in addition thereto.

               11. In the event that Tenant and Owner have entered into a
stipulation, whether entered into in court or otherwise, for the repayment of
any of Tenant's rent arrears, any monies received pursuant to said stipulation
shall first be applied to current rent and then any arrears. Further, until such
time as Tenant has fully and completely complied with the terms and provisions
of the stipulation, Tenant shall not be in good standing pursuant to the terms
and provisions of this lease and may not exercise any rights or remedies which
it has, or may have, under or pursuant to this lease.

                                II. ELECTRICITY

        A. For purposes of this Article, the following terms shall have the
following meanings:

               1. The term "Owner's Cost", shall mean, the average cost per
kilowatt hour and average cost per kilowatt demand, by time of day, if
applicable, to Owner of purchasing electricity for the building, including,
without limitation, fuel adjustment charges (as determined for each month of the
relevant period and not averaged) rate adjustment charges, sales tax, and/or any
other factors, used by the public utility company (the "Utility" servicing the
building in computing its charges to Owner applied to the kilowatt hours of
energy and kilowatts of demand purchased by Owner during a given period, and
further including transmission and transformer losses (to be determined by Owner
if such losses are not measured by the Submeter, as defined herein); and

               2. The term "Owner's Statement", shall mean an instrument
containing a computation (or estimate thereof), of Owner's Cost (hereinabove
defined), or any other computation to be made by Owner pursuant to the
provisions of this Article.

        B. Subject to the provisions of subdivision 4 of paragraph C hereof,
Tenant agrees that Owner may furnish electricity to Tenant on a "rent inclusion"
basis or on a "submetering" basis. On the Commencement Date, electricity will be
furnished pursuant to subdivision (2).

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<PAGE>   35

               1. Submetering. Owner may, at Tenant's sole reasonable cost and
expense, install a meter or meters (collectively, the "Submeter"), at a location
designated by Owner, connections from the risers and/or circuits servicing the
demised premises to the Submeter and perform all other work necessary for the
furnishing of electric current by Owner to the demised premises in the manner
provided for in this subdivision (1). If and so long as electric current is
supplied by Owner to the demised premises to service Tenant's office equipment
and the machinery and mechanical equipment for the air conditioning units
utilized by Tenant, if any, Tenant will pay Owner or Owner's designated agent,
as additional rent for such service, the amounts, as determined by the Submeter,
for the purpose of measuring Tenant's consumption and demand. In the event said
air conditioning units are used by other tenants of the Building, the electric
charges for such units shall be allocated by Owner proportionately, on the basis
of the respective amount of rentable square feet occupied by such tenants,
including Tenant. The additional rent payable by Tenant pursuant to this
subdivision (1), shall be computed in the same manner as that for computation of
Owner's Cost, as applied to the demised premises, plus a fee (the "Overhead
Charge") equal to twelve (12%) percent of such charge to Owner, representing
administrative/overhead costs to Owner. The amounts computed from the Submeter
together with the Overhead Charge, are herein collectively called the
"Electricity Additional Rent", and such amounts computed from the Submeter shall
be binding and conclusive on Tenant. If the Submeter should fail to properly
register or operate at any time during the term of this lease for any reason
whatsoever, Owner may estimate the Electricity Additional Rent, and when the
Submeter is again properly operative, an appropriate reconciliation shall be
made, by Tenant paying any deficiency to Owner within ten (10) days after demand
therefor, or by Owner crediting Tenant with the amount of any overpayment, as
the case may be. Owner, at its option, may from time to time, increase the
Electricity Additional Rent based upon, among other things, any increase in
Owner's Cost. The periods to be used for the aforesaid computation shall be as
Owner, in its sole discretion, reasonably exercised, may from time to time
elect. Where more than one meter measures the electric service to Tenant
(including such electric energy as is consumed in connection with the operation
of the ventilation and air conditioning equipment servicing the demised
premises), the electric service rendered through each meter may be computed and
billed at Owner's option, separately as above set forth, or cumulatively. Bills
for the Electricity Additional Rent ("Bills"), shall be rendered to Tenant at
such time as Owner may elect.

        Owner and Tenant agree, that the Submeter might be installed subsequent
to the date (the "Initial Occupancy Date") that Tenant, or anyone (including,
without limitation, any contractors or other workmen) claiming under or through
Tenant first enters the demised premises. In such event, Owner, at Owner's sole
option, may either (x) reasonably estimate the Electricity Additional Rent
payable by Tenant for the period commencing on the Initial Occupancy Date and
ending on the Occupancy Reading Date (hereinafter defined), and Tenant shall pay
to Owner, within ten (10) days after demand therefor, the amount set forth on
Owner's estimate and, after rendition of a subsequent Owner's Statement, an
appropriate reconciliation shall be made for any deficiency owed by Tenant, or
any overage paid by Tenant, or (y) render a Owner's Statement to Tenant, after a
reading of the installed Submeter is made (said date upon which the Submeter is
read, being herein called the "Occupancy Reading Date") on or about the date
upon

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<PAGE>   36

which Tenant shall have completed the Initial Tenant's Changes, if any, and
commenced normal business operations in the demised premises, and the amount
calculated from the Submeter on the Occupancy Reading Date shall be determined
on a per diem basis and then multiplied by the number of days from the Initial
Occupancy Date through the Occupancy Reading Date to arrive at the amount due
for said period, and Tenant shall pay the Electricity Additional Rent on the
basis of such Submeter reading within ten (10) days after rendition of Owner's
Statement detailing such computation.

        2. Rent Inclusion. Tenant acknowledges and agrees that if electric
current is furnished to the demised premises on a rent-inclusion basis, then (i)
the fixed rent set forth in this lease shall be increased by the "Electricity
Rent Inclusion Factor" (hereinafter defined and sometimes called the "ERIF") to
compensate Owner for the electrical wiring and other installations necessary
for, and for its obtaining and making available to Tenant the redistribution of
electric current to the demised premises as additional service, and (ii) the
ERIF shall be subject to periodic adjustments as hereinafter provided. The
Electricity Rent Inclusion Factor shall mean (x) the amount determined by
multiplying Owner's Cost by Tenant's average kilowatt hour and average kilowatt
demand usage (determined by the most recent survey under this subdivision (2),
or (y) if no such survey has yet been made, the average on a per rentable square
foot basis of the charges for electric current to the demised premises pursuant
to subdivision (1) of this Section B (exclusive of the Overhead Charge) for the
twelve (12) full calendar months preceding the month in which the provisions of
this subdivision (2) shall become effective, multiplied by number of square feet
of rentable area of the demised premises, plus twelve (12%) percent of the
resulting total. If the provisions of this subdivision (2) shall be effective
prior to the expiration of a period of twelve (12) full consecutive months
during which Tenant is paying for electric energy to the demised premises
pursuant to said subdivision (1) of this Article (and no survey has yet been
made under this subdivision (2)), so that the ERIF cannot be determined in the
manner described in the preceding sentence, then the Electricity Rent Inclusion
Factor shall mean the amount determined by multiplying Owner's Cost by Tenant's
average kilowatt hour and average kilowatt demand usage determined by the
estimate of an electrical consultant selected by Owner, plus twelve (12%)
percent of the resulting total. When a survey has been made by the electrical
consultant selected by Owner (the "Consultant"), the parties shall make
adjustment for any deficiency owed by Tenant or any overage paid by Tenant. If
after the first day of any relevant period for which either of the aforesaid
computations is made there is an increase or decrease in Owner's Cost then, the
ERIF for such relevant period shall be recomputed, effective on and after the
change in Owner's Cost, by applying such changed rate and/or charges to the
aforedescribed consumption and demand. Notwithstanding the foregoing, on the
Commencement Date, the ERIF shall be $2.50 per square foot of rentable area in
the demised premises.

        The parties agree that the Consultant shall determine (i) the ERIF in
accordance with the provisions of this subdivision (2), and (ii) the changes in
the ERIF due to changes in Owner's Cost. The Consultant may from time to time
make surveys in the demised premises of the electrical equipment and fixtures
and use of current therein, and the ERIF, effective as of the date of the
survey, shall be redetermined by the Consultant in accordance with the survey
results and the provisions of this subdivision (2).

                                       11
<PAGE>   37

        The determination by the Consultant shall be binding and conclusive on
Owner and Tenant from and after the delivery of copies of such determinations to
Owner and Tenant, unless within fifteen (15) days after the delivery of such
copies, Tenant disputes such determinations by having an independent reputable
electrical consultant selected and paid for by Tenant, consult with Owner or its
consultant as to said determinations. If they shall both agree upon the same,
their said agreement shall be binding upon the parties, or if the difference
between them is seven (7%) percent or less of the determinations made by the
Consultant then the determinations made by the Consultant shall be binding upon
the parties. If Owner or the Consultant and Tenant's consultant can not agree
within the said seven (7%) percent of each other, they shall jointly select a
third duly qualified independent, reputable electrical consultant who shall
determine the matter and whose decision shall be binding upon both parties with
the same force and effect as if a non-appealable judgment had been entered by a
court of competent jurisdiction. If Owner or the Consultant and Tenant's
consultant cannot agree upon such a third electrical consultant, the matter
shall be submitted to arbitration in accordance with Article 46. Any charges of
such third consultant shall be borne equally by both parties. When the amount of
such increase has been determined, the parties shall execute an agreement
supplementary hereto to reflect such adjustment in the amount of fixed rent
effective from the date determined by such electrical consultant as aforesaid.
Notwithstanding the foregoing, until such final determination, Tenant shall pay
fixed rent to Owner in accordance with the determinations made by the
Consultant. After such final determinations, the parties shall make adjustment
for any deficiency owed by Tenant or any overage paid by Tenant.

        C. General Conditions

               1. Owner shall not be liable in any way to Tenant for any failure
or defect in the supply or character of electric service furnished to the
demised premises by reason of any requirement, act or omission of the Utility or
for any other reason not attributable to the gross negligence of Owner, whether
electricity is provided by public or private utility or by any electricity
generation system owned and operated by Owner.

               2. Tenant shall at all times comply with the rules, regulations,
terms and conditions applicable to service, equipment, wiring and requirements
of the Utility. Tenant shall not use any electrical equipment which, in Owner's
reasonable judgment, would exceed the capacity of the existing risers serving
the demised premises (the "Basic Capacity"), or interfere with the electrical
service to other tenants of the Building. Tenant agrees not to connect any
additional electrical equipment to the Building electric distribution system,
other than lamps, personal computers, copiers, typewriters and other small
office machines which consume comparable amounts of electricity, without Owner's
prior consent. In the event that, in Owner's sole judgment, reasonably
exercised, Tenant's electrical requirements require in excess of the Basic
Capacity and necessitate installation of an additional riser, risers or other
proper and necessary equipment, Owner shall so notify Tenant of same. Within
five (5) business days after receipt of such notice, Tenant shall either cease
such use of such additional electricity or shall request that additional
electrical capacity (specifying the amount requested) be made available to
Tenant. Owner, in its sole judgment, reasonably exercised, shall

                                       12
<PAGE>   38

determine whether to make available such additional electrical capacity to
Tenant and the amount of such additional electrical capacity to be made
available. If Owner shall agree to make available additional electrical capacity
and the same necessitates installation of an additional riser, risers or other
proper and necessary equipment, including, without limitation, any switchgear,
the same shall be installed by Owner. Any such installation shall be made at
Tenant's sole cost and expense, and shall be chargeable and collectible as
additional rent and paid within ten (10) days after the rendition of a bill to
Tenant therefor. Tenant shall furnish and install, at its expense, all original
and replacement lighting tubes, lamps, bulbs and ballasts required in the
demised premises.

               3. The parties acknowledge that they understand that it is
anticipated that electric rates, charges, etc. may be changed by virtue of
time-of-day rates or other methods of billing, and that the references in the
foregoing subdivisions to changes in methods of or rules on billing are intended
to include any such changes.

               4. If required due to changes in requirements of law or the
Utility, Owner shall have the right at any time, and from time to time, during
the term of this lease, upon forty-five (45) days prior written notice to
Tenant, to change the furnishing of electricity to Tenant from a rent inclusion
basis to a submetering basis, or visa versa. In addition, if Owner shall elect
to terminate furnishing electricity to a majority of the tenants in the Building
then receiving electricity from Owner, Owner shall have the right to terminate
the furnishing of electricity to the demised premises on a rent-inclusion,
submetering, or any other basis at any time, upon forty-five (45) days' written
notice to the Tenant in which event Tenant may make application directly to the
Utility for Tenant's entire separate supply of electric current to the demised
premises and Owner shall permit its wires and conduits, to the extent available
and safely capable in Owner's sole judgment, reasonably exercised, to be used
for such purpose. Any meters, risers or other equipment or connections necessary
to enable Tenant to obtain electric current directly from the Utility shall be
installed at Tenant's sole cost and expense, subject to the provisions of this
lease. Rigid conduit only will be allowed. Owner, upon the expiration of the
aforesaid forty-five (45) days' written notice to the Tenant may discontinue
furnishing the electric current but this lease shall otherwise remain in full
force and effect. Owner will permit Tenant to continue to receive electricity
from Owner on a redistribution basis for such period of time as is reasonably
required by Tenant to arrange to obtain electricity service directly from the
Utility. Commencing when Tenant receives such direct service and as long as
Tenant shall continue to receive such service, the fixed rent payable under this
lease shall be reduced where electricity rent inclusion is discontinued, by a
sum equal to what the ERIF portion of the fixed rent was at the time of such
discontinuance (the parties acknowledge that in the case of termination of
redistribution by submetering, the fixed rent payable under this lease would not
be affected thereby).

               5. In the event that pursuant to any of the provisions of this
Article, any initial determinations, statements or estimates are made by or on
behalf of Owner (whether such initial determinations, statements or estimates
are subject to dispute or not pursuant to the provisions of this Article),
Tenant shall pay to Owner the amount(s) set forth on such initial
determinations, statements or estimates, as the case may be, until subsequent
determinations, statements or estimates are rendered, at which time, the

                                       13
<PAGE>   39

parties shall make adjustment for any deficiency owed by Tenant, or any overage
paid by Tenant.

               6. Notwithstanding any provisions of this Article and regardless
of the manner of service of electric current to the demised premises (whether by
rent inclusion or submetering), in no event shall the cost to Tenant for
electric energy to the demised premises be less or more than one hundred twelve
(112%) percent of Owners Cost unless otherwise provided herein.

               7. If any tax is imposed upon Owner's receipts from the sale or
resale of electric current to Tenant by any Federal, state or municipal
authority, Tenant agrees that, unless prohibited by law, a portion of such taxes
(based on the amount of the Electricity Additional Rent as applied to the
appropriate tax rate) shall be passed on to, and included in the bill of, and
paid by Tenant to Owner as additional rent.

        D. The provisions of this Article are subject to any requirements or
demands imposed by the Utility.

                       III. SUPERIOR LEASES AND MORTGAGES

        A. For the purposes of this Article a "Mortgagee" shall mean the holder
of a mortgage affecting the Building and "Lessor" shall mean the holder of a
superior lease affecting the Building.

        B. If the date of expiration of any superior lease shall be the same day
as the Expiration Date, the term shall end and expire twelve (12) hours prior to
the expiration of the superior lease. If, in connection with the financing of
the Land, the Building or the interest of the lessee under any superior lease,
or if in connection with the entering into of a superior lease, any lending
institution or Lessor shall request reasonable modifications of this lease that
do not increase Tenant's monetary obligations under this lease, or materially
adversely affect or diminish the rights, or materially increase the other
obligations of Tenant under this lease, Tenant shall make such modifications.

               1. Neither the Mortgagee nor the Lessor, as the case may be, nor
anyone claiming by, through or under such Mortgagee or Lessor, as the case may
be, including a purchaser at a foreclosure sale, shall be:

   a.   liable for any act or omission of any prior landlord (including, without
        limitation, the then defaulting Owner), or

   b.   subject to any defense or offsets which Tenant may have against any
        prior landlord (including, without limitation, the then defaulting
        Owner), or

   c.   bound by any payment of rental which Tenant may have made to any prior
        landlord (including, without limitation, the then defaulting Owner) more
        than thirty (30) days in advance of the date upon which such payment was
        due, or

                                       14
<PAGE>   40

   d.   bound by any obligation to make any payment to or on behalf of Tenant,
        or

   e.   bound by any obligation to perform any work or to make improvements to
        the demised premises, except for (i) repairs and maintenance pursuant to
        the provisions of Article 4 hereof, the need for which repairs and
        maintenance first arises after the date upon which such owner, Lessor,
        or Mortgagee shall be entitled to possession of the demised premises,
        (ii) repairs to the demised premises or any part thereof as a result of
        damage by fire or other casualty pursuant to Article 9 hereof, but only
        to the extent that such repairs can be reasonably made from the net
        proceeds of any Insurance actually made available to such Lessor or
        Mortgagee, and (iii) repairs to the demised premises as a result of a
        partial condemnation pursuant to Article 10 hereof, but only to the
        extent that such repairs can be reasonably made from the net proceeds of
        any award made available to such Lessor or Mortgagee, or

   f.   bound by any amendment or modification of this lease made without its
        consent, or

   g.   bound to return Tenant's security deposit, if any, until such deposit
        has come into its actual possession and Tenant would be entitled to such
        security deposit pursuant to the terms of this lease.

        C. If at any time prior to the expiration of the term, any superior
lease shall terminate or be terminated for any reason or any Mortgagee comes
into possession of the Land or the Building or the estate created by any
superior lease by receiver or otherwise, Tenant agrees, at the election and upon
demand of any owner of the Land or the Building, or of the Lessor, or of any
Mortgagee in possession of the Land or the Building, to attorn, from time to
time, to any such owner, Lessor or Mortgagee or any person acquiring the
interest of Owner as a result of any such termination, or as a result of a
foreclosure of such Mortgage or the granting of a deed in lieu of foreclosure,
upon the then executory terms and conditions of this lease, subject to the
provisions of Section 39B hereof, for the remainder of the term, provided that
such owner, Lessor or Mortgagee, as the case may be, or receiver caused to be
appointed by any of the foregoing, shall then be entitled to possession of the
demised premises. The provisions of this Section 39C shall enure to the benefit
of any such owner, Lessor or Mortgage, shall apply notwithstanding that, as a
matter of law, this lease may terminate upon the termination of any superior
lease, and shall be self-operative upon any such demand, and no further
instrument shall be required to give effect to said provisions. Tenant, however,
upon demand of any such owner, Lessor or Mortgagee, shall execute, at Tenant's
expense, from time to time, instruments, in recordable form, in confirmation of
the foregoing provisions of this Section 39C, satisfactory to any such owner,
Lessor or Mortgagee, acknowledging such attornment and setting forth the terms
and conditions of its tenancy. Nothing contained in this Section 39C shall be
construed to impair any right otherwise exercisable by any such owner, Lessor or
Mortgagee.

        D. As long as any superior lease or mortgage shall exist, Tenant shall
not seek to terminate this lease by reason of any act or omission of Owner until
Tenant shall have

                                       15
<PAGE>   41

given written notice of such act or omission to all Lessors and Mortgagees at
their addresses provided to Tenant, and if any such Lessor or Mortgagee, as the
case may be, shall have notified Tenant within ten (10) business days following
receipt of such notice of its intention to remedy such act or omission, until a
reasonable period of time shall have elapsed following the giving of such
notice, during which period such Lessors and Mortgagees shall have the right,
but not the obligation, to remedy such act or omission.

        E. Owner represents that, as of the date of this lease, there are no
superior leases or mortgages affecting the Building. Owner agrees that it shall
use reasonable efforts to obtain a non-disturbance and attornment agreement from
any future Mortgagees or Lessors, provided, however, that the failure to obtain
such agreement(s) shall not be deemed a default on the part of Owner.

                            IV. ESTOPPEL CERTIFICATE

        Each party shall, at any time and from time to time, at the request of
the other party, upon not less than five (5) days' notice, if given in person,
or ten (10) days' notice, if given by mail, execute and deliver to the other a
statement certifying that this lease is unmodified and in full force and effect
[or if there has been any modification, that the same is in full force and
effect as modified and stating the modification(s)], certifying the dates to
which the fixed rent, additional rent and escalation rent have been paid, and
stating whether or not, to the best knowledge of the signer, the other party is
in default in performance of any of its obligations under this lease, and, if
so, specifying each such default of which the signer may have knowledge, it
being intended that any such statement delivered pursuant hereto may be relied
upon by others with whom the party requesting such certificate may be dealing.

                   V. INDEMNIFICATION AND LIABILITY OF OWNER

        A. Tenant shall indemnify and save harmless Owner against and from (a)
any and all claims (i) arising from (x) the conduct of business in or management
(other than by Owner or any of its employees, agents or contractors) of the
demised premises or (y) any work or thing whatsoever done, or any condition
created (other than by Owner or any of its employees, agents or contractors) in
or about the demised premises during the term of this lease or during the period
of time, if any, prior to the Commencement Date that Tenant may have been given
access to the demised premises pursuant to this lease, or (ii) arising from any
act or omission of Tenant or any of its subtenants or licensees or its or their
employees, agents or contractors, and (b) all costs, expenses and liabilities
incurred in or in connection with each such claim or action or proceeding
brought thereon. Tenant's indemnity hereunder shall survive the expiration or
sooner termination of this lease. In case any action or proceeding be brought
against Owner by reason of any such claim, Tenant, upon notice from Owner, shall
resist and defend such action or proceeding by counsel chosen by Tenant who
shall be reasonably satisfactory to Owner. Tenant or its counsel shall keep
Owner fully apprised at all times of the status of such defense. Counsel for
Tenant's insurer shall be deemed satisfactory to Owner.

                                       16
<PAGE>   42

        B. Tenant shall look only to Owner's estate(s) in the Land and Building
(or the proceeds thereof) for the satisfaction of Tenant's remedies for the
collection of any judgment (or other judicial process) requiring the payment of
money by Owner in the event of any default by Owner under this lease, and no
other property or other assets of Owner shall be subject to levy, execution or
other enforcement procedure for the satisfaction of Tenant's remedies under or
with respect to this lease, the relationship of landlord and tenant hereunder or
Tenant's use and occupancy of the demised premises.

                              VI. RENT ESCALATION

        A. Real Estate Taxes

               1. In the event that at any time during the term of this lease,
the Owner shall be required to pay real estate taxes levied by the City of New
York against the Building and the Land, the taxes imposed for the first fiscal
year in which such obligation commences (the "Base Tax Year") shall be deemed
the "basic taxes". If during any fiscal year of the City of New York during the
term of this lease subsequent to the Base Tax Year, the real estate taxes levied
by the City of New York against the Land and Building shall be greater then the
basic taxes, Tenant agrees to pay to Owner, as additional rent, the product of
the following: (i) the amount of the excess of such real estate taxes over the
basic taxes; and (ii) a fraction, the numerator of which is the number of
rentable square feet of the demised premises, and the denominator of which is
the number of rentable square feet in the Building subject to real estate taxes.
However, in no event shall Tenant have any obligation under this Section in the
event that real estate taxes for any fiscal year are less than the basic taxes.

               2. In the event that as a result of administrative or court
proceedings, the real estate taxes for any fiscal year after the Base Tax Year
shall be reduced, Owner shall make an appropriate payment to the Tenant upon
receiving a refund or a tax bill reflecting such reduction from the City of New
York, so that the aggregate payment from Tenant to Owner with reference to such
fiscal year of the City of New York pursuant to the provisions of this Article
shall be brought to the amount which it would have been if the reduced taxes for
such fiscal year were the original taxes levied upon the Land and Building.
Owner's obligation to make such payments shall survive the end or termination of
the term of this lease.

   (a)  In the event that as a result of administrative or court proceedings,
        the real estate taxes for the Base Tax Year shall be reduced, Tenant
        shall promptly, upon demand, make appropriate payment(s) to Owner
        reflecting such reduction from the City of New York, so that the
        aggregate payment from Tenant to Owner with reference to the following
        fiscal years of the City of New York pursuant to the provisions of this
        Article shall be brought to the amount which it would have been if the
        reduced taxes for such Base Tax Year were the original taxes levied upon
        the Land and Building. Tenant's obligation to make such payments shall
        survive the end or termination of the term of this lease.

                                       17
<PAGE>   43

               3. If the term of this lease shall end or be terminated (for any
reason other than the Tenant's default) on a day other than the end of a fiscal
year of the City of New York and such end or termination shall be during a
fiscal year of the City of New York as to which a payment is agreed to be made
by Tenant pursuant to the provisions of this Article, then such payment shall be
reduced by the proportion thereof which the number of days elapsed from the end
or termination of the term hereof to the end of the then current fiscal year of
the City of New York bears to 365.

               4. Any sum payable by Tenant in accordance with this Article
shall be paid on or before the last day of the fourth month of the fiscal year
of the City of New York to which such payment is applicable. At least thirty
(30) days prior to such due date, Owner shall furnish Tenant with a certified
statement of such sum and the calculations on which it is based. The obligation
to make such payment shall survive the end or termination of this lease. Tenant
shall not be required to anticipate payment of its proportionate share of any
special Borough-wide assessment levied against the Land and Building unless
Owner shall, in its sole discretion, elect to anticipate payment thereof.

               5. All mention herein of "real estate taxes levied by the City of
New York" shall be deemed to refer to the aggregate of all Borough-wide levies
against the Land and Building, whether called City taxes, City and Borough
assessments or by any other term.

               6. If the attorneys for Owner in any administrative or court
proceedings succeed or shall have succeeded in reducing the assessed valuation
for real estate tax purposes of the real estate known as 71 West 23rd Street,
the Borough of Manhattan, City of New York, for any fiscal year of the City of
New York subsequent to the Base Tax Year, the whole or any part of which shall
be included within the term of this lease, and as a result of such attorneys'
services there shall be payment by Owner to Tenant or a saving of additional
rent payable pursuant to this Article, Tenant agrees to pay to Owner as
additional rent, upon demand, that portion of such saving of additional rent or
payment by Owner to Tenant resulting from such services shall bear to the total
tax savings or refund from the City of New York on the entire real estate
resulting from their services. The obligation to make the payment required by
this Article shall survive the end or termination of the term of this lease.

               7. Any dispute arising under this Article shall be submitted to
arbitration in accordance with Article 46. The right to dispute the amount of
any sum payable under this Article upon Tenant's part shall be deemed waived
unless the same shall be asserted by service of a notice upon Owner within
twenty (20) days of rendition of a bill or statement therefor.

        B. Porter's Wage Increase

               1. For the purposes of this Article:

   i.   The term "Base Wage Year" shall mean the calendar year ending December
        31, 1998.

                                       18
<PAGE>   44

   ii.  The term "Escalation Year" shall mean each calendar year which shall
        include any part of the term of this lease commencing after the Base
        Wage Year.

   iii. The term "R.A.B." shall mean the Realty Advisory Board on Labor
        Relations, Incorporated, or its successor.

   iv.  The term "Local 32B" shall mean Local 32B-32J of the Building Service
        Employees International Union, AFL-CIO, or its successor.

   v.   The term "Class A Office Buildings" shall mean office buildings in the
        same class or category as the building under any building operating
        agreement between R.A.B. and Local 32B, regardless of the designation
        given to such office buildings in any such agreement.

   vi.  The term "Wage Rates" with respect to the Base Wage Year or any
        Escalation Year shall mean the regular average hourly wage rate required
        to be paid to Porters in Class A Office Buildings pursuant to any
        agreement between R.A.B. and Local 32B in effect during such Escalation
        Year, provided that if any such agreement shall require Porters to be
        regularly employed on days or during hours when overtime or other
        premium pay rates are in effect, then the term "regular average hourly
        wage rate" shall mean the regular average hourly wage rate for the hours
        in a calendar week which Porters are required to be regularly employed
        (whether or not actually at work in the building), e.g., if, for
        example, an agreement between R.A.B. and Local 32B would require the
        regular employment of Porters for forty (40) hours during a calendar
        week at a regular hourly wage rate of $4.00 for the first thirty (30)
        hours and at an overtime hourly average wage of $5.00 for the remaining
        ten (10) hours, then the regular average hourly wage rate under this
        subsection would be the sum arrived at by dividing the total weekly
        average wages of $170.00 by the total number of required hours of
        employment which is forty (40) and resulting in a regular average hourly
        wage rate of $4.25. The computation of the regular average hourly wage
        rate shall be on the same basis whether based on an hourly or other pay
        scale but predicated on the number of hours in such respective work
        weeks, whether paid by landlord or any independent contractor. Such
        regular average hourly wage rate shall not include any so called "fringe
        benefits". If there is no such agreement in effect as of the date of
        Owner's Statement on which such regular average hourly wage rate is
        determinable, the computations shall be made on the basis of the regular
        average hourly wage rate being paid by Owner or by the contractor
        performing porter or cleaning services for Owner as of the date of such
        Owner's Statement and appropriate retroactive adjustments shall be made
        when the regular average hourly wage rate paid as of such Owner's
        Statement is finally determined. If length of service shall be a factor
        in determining any element of wages, it shall be conclusively presumed
        that all employees have two (2) years of service. The terms hereof shall
        be effective whether or not the Building is a Class A office building or
        employs such a Porter, as Wage Rate is intended to be a substitute
        comparative index as opposed to an actual operating expense

                                       19
<PAGE>   45

        calculation and is not intended to reflect the actual cost of wages and
        other expenses for the Building and increases or decreases thereto.

   vii. The term "Porters" shall mean that classification of employee engaged in
        the general maintenance and operation of Class A Office Buildings most
        nearly comparable to the classification now applicable to porters in the
        current agreements between R.A.B. and Local 32B (which classification is
        presently termed "others" in said agreement).

               2.

   i.   For each Escalation Year commencing during the term of this lease,
        Tenant shall pay ("Tenant's Operating Payment") a sum equal to the
        number of square feet of rentable area in the demised premises
        multiplied by the number of cents (inclusive of any fractions of a cent)
        of any increase in Wage Rates above those in effect as of December 31 of
        the Base Wage Year. Any such payment shall be effective as of, and
        retroactive to, if necessary, the date of such increase in Wage Rates.

   ii.  Owner shall furnish to Tenant, prior to the commencement of each
        Escalation Year, a written statement setting forth Owner's estimate of
        Tenant's Operating Payment for such Escalation Year. Tenant shall pay to
        Owner on the first day of each month during any Escalation Year, an
        amount equal to one-twelfth (1/12th) of Owner's estimate of Tenant's
        Operating Payment for such Escalation Year. If, however, Owner shall
        furnish any such estimate for an Escalation Year subsequent to the
        commencement thereof, then (a) until the first day of the month
        following the month in which such estimate is furnished to Tenant,
        Tenant shall pay to Owner on the first day of each month an amount equal
        to the monthly sum payable by Tenant to Owner under this subparagraph
        (b) in respect of the last month of the preceding Escalation Year; (b)
        promptly after such estimate is furnished to Tenant or together
        therewith, Owner shall give notice to Tenant stating whether the
        installments of Tenant's Operating Payment previously made for such
        Escalation Year were greater or less than the installments of the
        Tenant's Operating Payment to be made for such Escalation Year in
        accordance with such estimate, and (i) if there shall be a deficiency,
        Tenant shall pay the amount thereof within thirty (30) days after demand
        therefor, or (ii) if there shall have been an overpayment, Owner shall
        either refund to Tenant with reasonable promptness the amount thereof or
        permit Tenant to credit the amount thereof against subsequent payments
        under this Section; and (c) on the first day of the month following the
        month in which such estimate is furnished to Tenant, and monthly
        thereafter throughout the remainder of such Escalation Year, Tenant
        shall pay to Owner an amount equal to one-twelfth (1/12th) of Tenant's
        Operating Payment shown on such estimate. Owner may at any time or from
        time to time furnish to Tenant a revised statement of Owner's estimate
        of Tenant's Operating Payment for such Escalation Year; and in such
        case, Tenant's Operating Payment for such

                                       20
<PAGE>   46

        Escalation Year shall be adjusted and paid or refunded, as the case may
        be, substantially in the same manner as provided in the preceding
        sentence.

   iii. After the end of each Escalation Year Owner shall furnish to Tenant an
        Owner's Statement for such Escalation Year. If the Owner's Statement
        shall show that the sums paid by Tenant under this Section exceeded
        Tenant's Operating Payment paid by Tenant for such Escalation Year,
        Owner shall either refund to Tenant the amount of such excess or permit
        Tenant to credit the amount of such excess against subsequent payments
        under this Section; and if the Owner's Statement for such Escalation
        Year shall show that the sums so paid by Tenant were less than Tenant's
        Operating Payment paid by Tenant for such Escalation Year, Tenant shall
        pay the amount of such deficiency within thirty (30) days after demand
        thereof.

   iv.  The computation under this Article is intended to constitute a formula
        for an agreed rental escalation and may or may not constitute an actual
        reimbursement to Owner for its costs and expenses paid by Owner with
        respect to the Building.

   v.   If the Commencement Date or the Expiration Date shall occur on a date
        other than January 1 or December 31, respectively, any additional rent
        under this Article for the Escalation Year in which such Commencement
        Date or Expiration Date shall occur shall be apportioned in that
        percentage which the number of days in the period from the Commencement
        Date to December 31 or from January 1 to the Expiration Date, as the
        case may be, both inclusive, shall bear to the total number of days in
        such Escalation Year. In the event of a termination of this lease, any
        additional rent under this Article shall be paid or adjusted within
        thirty (30) days after submission of a Owner's Statement. In no event
        shall fixed rent ever be reduced by operation of this Article and the
        rights and obligations of Owner and Tenant under the provisions of this
        Article with respect to any additional rent shall survive the
        termination of this lease.

               3. Owner's failure to render Owner's Statements with respect to
any Escalation Year shall not prejudice Owner's right to thereafter render a
Owner's Statement with respect thereto or with respect to any subsequent
Escalation Year. Nothing herein contained shall restrict Owner from issuing
Owner's Statements at any time there is an increase in Wage Rates during any
Escalation Year or any time thereafter.

                             VII. ABATEMENT OF RENT

        Provided Tenant is not in default (beyond any applicable grace and cure
periods) of the terms and conditions of this lease, the fixed rent payable
hereunder shall be abated (i) with respect to the fourteenth (14th) floor
portion of the demised premises for the fifth (5th), sixth (6th), thirteenth
(13th) and fourteenth (14th) months of the term, (ii) with respect to the
fifteenth (15th) floor portion of the demised premises for the period commencing
on the date of substantial completion of Owner's Work (hereinafter defined)

                                       21
<PAGE>   47

and ending on the date which is five (5) months thereafter and with respect to
the Designated Additional Floor for the seventh, eighth and ninth months and the
sixteenth and seventeenth months of the term. Notwithstanding the foregoing,
Tenant shall be required to pay for its consumption of electricity commencing on
the Commencement Date and there shall be no abatement therefor.

                          VIII. RESTRICTIONS ON SIGNS

        A. No lettering, sign, advertisement, notice, or object shall be
displayed in or on the windows or doors, or on the outside of the demised
premises, or at any point inside the demised premises, where the same might be
visible outside of the demised premises, except that the name and logotype of
Tenant and its subtenants may be displayed on or next to the entrance doors of
the demised premises, subject to the approval of Owner (which shall not be
unreasonably withheld) as to the size, color, material, style and location of
such display.

        B. Owner shall make available to six (6) listings in the lobby
directories of the Building. The initial listings shall be without charge to
Tenant. From time to time, but not more frequently than once every three (3)
months, Owner shall make changes to the lobby directory to reflect such changes
in the listings therein as Tenant shall request, and Tenant promptly after
request shall pay to Owner Owner's out-of-pocket costs for each change Tenant
requests.

                                  IX. CONSENTS

        A. Wherever in this lease it is provided that either party shall not
unreasonably withhold consent or approval or shall exercise its judgment
reasonably, such consent or approval or exercise of judgment (hereinafter
referred to collectively as "consent") shall also not be unreasonably delayed.
If a party considers that the other party has unreasonably withheld or delayed a
consent it shall so notify the other party within ten (10) days after receipt of
notice of denial of the requested consent, or in case notice of denial is not
received within twenty (20) days after making its request for the consent,
within ten (10) days after the expiration of such twenty (20) day period; and
within ten (10) days after giving the first mentioned notice it may submit the
question of whether the withholding or delaying of such consent is unreasonable
to determination by informal arbitration in the manner provided in Article 46.
Failure to give such first mentioned notice or to make such submission to
arbitration within the period hereinabove provided therefor shall preclude any
further right to dispute the reasonableness of such withholding of consent. A
consent shall not be deemed to have been unreasonably withheld or delayed unless
the aggrieved party complies with the foregoing procedure and it shall be so
determined by arbitration as aforesaid, in the event of such determination, the
requested consent shall be deemed to have been granted for all purposes of this
lease; however, except to the extent otherwise provided below in this Section A,
the party who shall have refused or failed to give such consent shall not have
any liability to the other party therefor and the only remedy for an
unreasonable withholding or delaying of consent by either party shall be as
provided in this Article. Notwithstanding the

                                       22
<PAGE>   48

foregoing, the party in whose favor such a determination has been made and has
become final shall be entitled to recover from the other party its reasonable
counsel fees and arbitration fees paid and court costs awarded in connection
with such determination.

        B. Wherever in this lease or any Exhibit it is provided that the
approval of a representative of either party (such as Owner's engineer or
architect or Tenant's designer or engineer) is required for any particular
matter, such approval shall be deemed to be a consent of the party for the
purposes of Section A of this Article, provided that a true copy of the notice
requesting such approval is given to the party so represented before the other
party may claim that such approval has been unreasonably withheld or delayed.

        C. Whenever Tenant shall submit to Owner any plan, agreement or other
document for Owner's consent or approval and Owner shall require the expert
opinion of Owner's counsel, architect, engineer or other representative or agent
of Owner as to the form or substance thereof, Tenant shall pay to Owner, Owner's
out-of-pocket cost of obtaining such expert opinion with ten (10) days after
Owner's demand therefor.

                            X. INFORMAL ARBITRATION

        A. Every dispute between the parties which is specifically provided in
this lease to be determined by informal arbitration shall be submitted to
Chairman of the Board of Directors of the Management Division of the Real Estate
Board of New York, Inc. (or to such officer of said Real Estate Board or of any
similar organization then successor thereto, having like authority or duties),
for determination by him or by such other, impartial person or persons as he may
designate, and such determination, when made and rendered to the parties in
writing, shall be final and conclusive on the parties. Such submission may be
made by either party on notice to the other ("Notice of Dispute") and the other
party may then, within ten (10) days after receipt of the Notice of Dispute
present its statement of the matter in dispute (the "Reply") to such arbitrator,
upon notice to the first party. The expenses of such informal arbitration shall
be borne by the parties equally.

        B. If at the time such dispute is to be submitted neither the Real
Estate Board of New York, Inc. nor any such successor organization shall exist,
or if at such time the appropriate officer of said Real Estate Board or of such
successor organization shall be unwilling or unable to accept the submission, or
if despite diligent efforts made in good faith by either party, the arbitrator
is not appointed or does not commence hearing the matter within thirty (30) days
after the receipt of the Reply, or if the arbitrator to whom the matter is
submitted shall fail to render his decision to the parties in writing within
sixty (60) days after the receipt of the Reply, then in any such event, at the
instance of either party, if the event shall not be due to its fault or neglect,
the matter in dispute shall be determined by arbitration in the City and County
of New York in accordance with the Commercial Arbitration Rules then obtaining
of the American Arbitration Association (or any organization then successor
thereto). The expenses of such procedure shall be borne by the parties equally.

                                       23
<PAGE>   49

                         XI. ASSIGNMENT AND SUBLETTING

        Notwithstanding the provisions of Articles 11 and 37B(7), and in
modification and amplification thereof:

        A. If this lease be assigned, whether or not in violation of the
provisions of this lease, Owner, may collect rent from the assignee. If the
demised premises or any part thereof be sublet or be used or occupied by anybody
other than Tenant whether or not in violation of this lease, Owner may, after
default by Tenant and expiration of Tenant's time to cure such default, if any,
collect rent from the undertenant or occupant. In either event, Owner may apply
the net amount collected to the rents herein reserved, but no such assignment,
underletting, occupancy or collection shall be deemed a waiver of any of the
provisions of Article 11 or of this Article, or the acceptance of the assignee,
undertenant or occupant as a tenant, or a release of Tenant from the further
performance by Tenant of Tenant's obligations under this lease. The consent by
Owner to assignment, mortgaging, underletting or use or occupancy by others
shall not in any way be considered to relieve Tenant from obtaining the express
consent of Owner to any other or further assignment, mortgaging or underletting
or use or occupancy by others not expressly permitted by this Article.
References in this lease to use or occupancy by others, that is anyone other
than Tenant, shall not be construed as limited to subtenants and those claiming
under or through subtenants but as including also licensees and others claiming
under or through Tenant, immediately or remotely.

        B.

               1. Tenant may, without Owner's consent (provided Tenant complies
with Section D below), assign this lease for the use set forth in Article 2 to a
corporation or other business entity (herein sometimes called a "successor
corporation") into or with which Tenant shall be merged, or consolidated, or to
which substantially all of Tenant's assets may be transferred, provided that (a)
the successor corporation shall have assumed substantially all of Tenant's
obligations and liabilities, including all obligations under this lease, by
operation of law or appropriate instruments of merger, consolidation or
transfer, (b) the successor corporation shall have a net worth and annual
income, and cash flow, determined in accordance with generally accepted
accounting principles, consistently applied, after giving effect to such
assignment, equal to the greater of Tenant's net worth and annual income and
cash flow, as so determined, on (i) the date immediately preceding the date of
such assignment, and (ii) the Commencement Date, and (c) the purpose of such
merger, consolidation or transfer is not to effect a transfer of Tenant's
leasehold interest in the demised premises in circumvention of the requirements
set forth elsewhere in this lease. In case of an assignment by merger or in
consolidation, a true copy of the instrument of merger or consolidation
containing the successor corporation's assumption of Tenant's obligations and
liabilities, assuming Tenant's liabilities under this lease, shall be acceptable
to Owner in lieu of the agreement mentioned in the first sentence of Section G
below.

               2. Tenant may, without Owner's consent (provided Tenant complies
with Section D below), sublet any part or parts of the demised premises for the
use set forth in

                                       24
<PAGE>   50

Article 2 to a corporation or other business entity (herein sometimes called a
"related corporation") which shall control, be controlled by or be under common
control with Tenant, provided (i) Tenant shall comply with Section E below, and
(ii) such subtenant shall continue to be a related corporation of Tenant. Any
related corporation may use and occupy a part of the demised premises for any of
the purposes permitted by this lease, subject to compliance with Tenant's
obligations under this lease, provided Tenant shall notify Owner with reasonable
promptness of (i) the name of the related corporation, (ii) the manner in which
the related corporation is related to Tenant, and (iii) the period of time
during which the related corporation will use the demised premises. However such
use shall not be deemed to vest in any such related corporation any right or
interest in this lease or the demised premises. As used herein in defining a
related corporation, control shall be deemed established by the right to
exercise, directly or indirectly, more than 50% of the voting rights
attributable to the controlled corporation, and with respect to an entity which
is not a corporation, the possession, directly or indirectly, of the power to
direct or cause the direction of the management policies of the controlled
entity.

        C.

               1. If Tenant shall desire to assign this lease or to sublet the
demised premises, in whole or in part, to anyone other than a related or
successor corporation, only for the use set forth in Article 2, Tenant shall
submit to Owner a request for Owner's consent to such assignment or subletting,
which request shall contain or be accompanied by the following information: (i)
the name and address of the proposed assignee or subtenant; (ii) a description
identifying the space to be sublet and Tenant's improvements included therein;
(iii) the basic terms and conditions, including the effective date of the
proposed assignment or subletting; (iv) the nature and character of the business
of the proposed assignee or subtenant and of its proposed use of the demised
premises or part thereof; and (v) current financial information and any other
information Owner may reasonably request with respect to the proposed assignee
or subtenant.

               2. Upon receiving such request, Owner shall have the option, in
the case of a proposed sublease, to sublet from Tenant the area proposed for the
term proposed and upon all the applicable covenants, agreements, terms,
provisions and conditions contained in this lease, at a rental rate with
provisions for additional rent as provided in this lease for the entire demised
premises or, if less than the whole is sublet, equal to an equitable
apportionment on square foot basis of such rent and additional rent. In the
event Owner fails to exercise such option by notice to Tenant, in writing, given
by certified mail, return receipt requested, within thirty (30) days of the date
of mailing of the aforesaid request from Tenant, such option shall terminate
with respect to the particular subletting as to which consent shall have been
requested by Tenant. If, however, said option is exercised, Owner, as such
subtenant, shall have the right to further sublet the premises covered by such
option without the consent of Tenant and shall also have the right to make any
change, alterations and improvements in such sublet space, provided, however,
that if such sublease resulting from the exercise of such option shall terminate
more than one (1) year prior to the end of the term of this lease, Owner shall
restore the sublet premises to substantially their previous condition,
reasonable wear and tear excepted.

                                       25
<PAGE>   51

               3. Anything in this Article 47 contained to the contrary
notwithstanding, Owner shall have the right, within thirty (30) days after
receipt of Tenant's request for consent to a proposed subtenant for the entire
demised premises or of an assignment of this lease to notify Tenant, in writing,
of its intention to recapture the demised premises as of the effective
commencement date of the proposed sublease or assignment and, in that event: (a)
Tenant shall vacate and surrender to Owner the demised premises as if said date
were the date herein set forth as the termination date of this lease; and (b)
upon Tenant's vacating and surrendering the demised premises, Owner and Tenant
shall have no further liability to each other as of said date, except with
respect to any unpaid accrued rent and/or additional rent and except with
respect to any other obligation or matter which, by the terms of this lease,
survives the termination of this lease.

        D. If Tenant requests Owner's consent to a sublet and Owner does not
exercise either of its options set forth in Sections C(2) and (3) of this
Article, as applicable, Owner shall not unreasonably withhold its consent to the
proposed subletting referred to in Tenant's notice given pursuant to Section C,
provided that:

               1. The proposed subtenant is (i) of a financial standing
satisfactory to Owner, (ii) engaged in a business reasonably satisfactory to
Owner, and (iii) will use the demised premises as permitted under Article 2 (and
otherwise in accordance with this lease) and in such a manner so as to not
violate any negative covenants as to use contained in any other lease made
between Owner and other tenant(s) of the Building.

               2. The proposed subtenant is a reputable entity.

               3. The proposed subtenant is not then a tenant or occupant of any
part of the Building or a corporation or other entity which controls or is
controlled by such tenant or occupant or is under common control with such
tenant or occupant.

               4. If Owner should have, or within six (6) months will have,
suitable space available in the Building, the proposed subtenant shall not then
be a prospective tenant with whom Owner shall have been negotiating for the
leasing of space in the Building.

               5. The subletting shall be expressly subject to all of the
obligations of Tenant under this lease and the further condition and restriction
that the sublease shall not be assigned, encumbered or otherwise transferred or
the subleased premises further sublet by the sublessee in whole or in part, or
any part thereof suffered or permitted by the sublessee to be used or occupied
by others, without the prior consent of Owner in each instance.

               6. No subletting shall end later than one day before the
Expiration Date of this lease.

               7. The subletting is subject to the express condition, and by
accepting a sublease hereunder each subtenant shall be conclusively deemed to
have agreed, that if this lease should be terminated prior to the Expiration
Date or if Owner should succeed to Tenant's estate in the demised premises,
then, at Owner's election, the subtenant shall

                                       26
<PAGE>   52

attorn to and recognize Owner as the subtenant's landlord under the sublease and
the subtenant shall promptly execute and deliver any instrument Owner may
reasonably request to evidence such attornment.

               8. If the demised premises are to be divided, the areas to be
sublet shall have direct access to the public corridor, elevators, stairwells
and toilets on the same floor of the Building. All access corridors shall not be
less than six feet in width and shall be constructed in compliance with all
applicable laws and requirements of public authorities.

               9. There shall be no more than three (3) entities (including
Tenant) in the demised premises as a result of any subletting.

               10. Tenant is not in default under this lease or any other lease
at the time in effect between Owner and Tenant with respect to premises in the
Building.

               11. Tenant shall reimburse Owner for any reasonable expenses that
may be incurred by Owner in connection with the proposed sublease including,
without limitation, the reasonable costs of making investigations as to the
acceptability of a proposed subtenant and reasonable legal expenses incurred in
connection with the granting of any requested consent to the sublease.

        E. Tenant shall furnish Owner with a counterpart (which may be a
conformed or reproduced copy) of each sublease or assignment made hereunder
promptly after the date of its execution. Tenant shall remain fully liable for
the performance of all of Tenant's obligations hereunder notwithstanding any
subletting provided for herein, and without limiting the generality of the
foregoing, shall remain fully responsible and liable to Owner for all acts and
omissions of any subtenant or anyone claiming under or through any subtenant
which shall be in violation of any of the obligations of this lease and any such
violation shall be deemed to be a violation by Tenant.

        F. Notwithstanding any assignment and assumption by the assignee of the
obligations of Tenant hereunder, Tenant herein named, and each immediate or
remote successor in interest of Tenant herein named, shall remain liable jointly
and severally (as a primary obligor) with its assignee and all subsequent
assignees for the performance of Tenant's obligations hereunder, and, without
limiting the generality of the foregoing, shall remain fully and directly
responsible and liable to Owner for all acts and omissions on the part of any
assignee subsequent to it in violation of any of the obligations of this lease.

        G. Notwithstanding anything to the contrary hereinabove set forth, no
assignment of this lease shall be binding upon Owner unless the assignee shall
execute and deliver to Owner an agreement, in recordable form, whereby such
assignee agrees unconditionally to be personally bound by and to perform all of
the obligations of Tenant hereunder and further expressly agrees that
notwithstanding such assignment the provisions of this Article shall continue to
be binding upon such assignee with respect to all future assignments and
transfers. A failure or refusal of such assignee to execute or deliver such

                                       27
<PAGE>   53

an agreement in recordable form shall not release the assignee from its
liability for the obligations of Tenant hereunder assumed by acceptance of the
assignment of this lease.

        H.

               1. If Tenant shall receive any consideration from its assignee
for or in consideration of Tenant's interests in the Tenant's Changes, other
than from a related or successor corporation, then, Tenant shall account to
Owner therefor and shall pay over to Owner such consideration as and when such
consideration is received, and from which shall be deducted the reasonable
expenses incurred by Tenant in connection with such assignment, including
(without limitation) brokerage commissions, advertising costs, reasonable
attorneys' fees and disbursements and decorating and remodeling costs, to be
amortized over the then remaining term of this lease.

               2. If Tenant shall receive any rents and/or consideration from
its subtenant, other then from a related corporation, which for any period,
shall exceed the per square foot rates of the fixed rent and all additional rent
and escalation rent payable under this lease for the same period; or if Tenant
shall receive from its subtenant any consideration for the sale or use of
Tenant's Property or Tenant's right to use the Tenant's Changes; then, in each
instance Tenant shall account to Owner therefor and shall pay over to Owner such
excess rents and such other consideration, as and when received, and from which
shall be deducted the reasonable expenses incurred by Tenant in connection with
such subletting, including (without limitation) brokerage commissions,
advertising costs, reasonable attorneys' fees and disbursements and decorating
and remodeling costs, to be amortized over the then remaining term of this
lease.

                                 XII. BROKERAGE

        Each party represents and warrants to the other that it has not dealt
with any broker or person in connection with this lease except Newmark Company
Real Estate, Inc. and Julien J. Studley, Inc. and Stone Company (a California
Licensed Real Estate Broker), which brokers shall be paid their commissions in
connection with this lease by Owner. The execution and delivery of this lease by
each party shall be conclusive evidence that such party has relied upon the
foregoing representation and warranty. Tenant shall indemnify and hold Owner
harmless from and against any and all claims for commission, fee or other
compensation by any other person who shall claim to have dealt with Tenant in
connection with this lease and for any and all costs incurred by Owner in
connection with such claims, including, without limitation, reasonable
attorneys' fees and disbursements. Owner shall indemnify and hold Tenant
harmless from and against any and all claims for commission, fee or other
compensation by any person who shall claim to have dealt with Owner in
connection with this lease and for any and all costs incurred by Tenant in
connection with such claims, including, without limitation, reasonable
attorneys' fees and disbursements. The provisions of this Article shall survive
the expiration or prior termination of this lease.

                                       28
<PAGE>   54

                               XIII. RENT CONTROL

        If at the commencement of, or at any time(s) during the term of this
lease, the rent(s) reserved in this lease shall not be fully collectible for
reason of any Federal, State, County or City law, proclamation, order or
regulation, or direction of a public officer or body pursuant to law, Tenant
shall enter into such agreement(s) and take such other steps (without additional
expense to Tenant) as Owner may request and as may be legally permissible to
permit Owner to collect the maximum rents which may from time to time during the
continuance of such legal rent restriction be legally permissible (and not in
excess of the amounts reserved therefor under this lease). Upon the termination
of such legal rent restriction prior to the expiration of the term of this
lease, (a) the rents shall become and thereafter be payable hereunder in
accordance with the amounts reserved in this lease for the periods following
such termination, and (b) Tenant shall pay to Owner, if legally permissible, an
amount equal to (i) the rents which would have been paid pursuant to this lease
but for such legal rent restriction, less (ii) the rents paid by Tenant to Owner
during the period(s) such legal rent restriction was in effect. Any security
deposited by Tenant may be retained by Owner for one year after such termination
of this lease, to secure collection of any amount Owner may be entitled to
receive pursuant to clause (b) above.

                     XIV. CONDITION OF THE DEMISED PREMISES

        A. Tenant has inspected the demised premises and shall take possession
of the demised premises "as is" (except for latent defects, provided Tenant
gives Owner prompt notice thereof), and Owner shall have no obligation to alter,
improve, decorate or otherwise prepare the demised premises for Tenant's
occupancy, except for Owner's Work as set forth on Exhibit "B". Owner has made
no representations as to the date on which it will complete Owner's Work and
Owner shall be under no penalty or liability to Tenant whatsoever by reason of
any delay in such performance and this lease and the Commencement Date shall not
be affected thereby. If, for any reason whatsoever, Owner's Work is not
substantially completed by the Commencement Date, Owner shall have the right to
enter the demised premises subsequent to the Commencement Date to complete
Owner's Work and the payment of fixed rent, additional rent and escalation rent
shall not be affected thereby or by the failure to substantially complete
Owner's Work by the Work Date. Tenant, in compliance with the further provisions
of this Article, Building regulations and procedures, and other applicable
provisions of this lease, shall perform the Initial Tenant's Changes. In
addition, Tenant shall make any and all modifications and additions and
replacements to the existing sprinkler and alarm systems as may be necessitated
by the Initial Tenant's Changes.

        B. Tenant shall prepare and shall submit to Owner for its approval
(which shall not be unreasonably withheld) complete, finished, detailed and
fully dimensioned architectural, electric and engineering plans and drawings,
and specifications for the Initial Tenant's Changes ("Tenant's Plans"),
employing engineers approved by Owner (which approval, subject to the provisions
of Section 37C(3), shall not be unreasonably withheld). Tenant's Plans shall be
practicable and shall conform to the existing physical condition of the
Building, the filed plans and specifications for the Building, and all

                                       29
<PAGE>   55

Requirements. In the event Owner refuses to approve Tenant's Plans it shall
advise Tenant of those revisions or corrections Owner requires, and Tenant shall
promptly thereafter cause revised Tenant's Plans to be submitted to Owner for
its approval.

        C. Upon Owner's approval of Tenant's Plans, Tenant shall cause Tenant's
Plans (including mechanical plans and specifications) to be filed with the
governmental agencies having jurisdiction thereof, in order to obtain, and shall
obtain, all governmental permits, approvals, licenses, authorizations, waivers,
consents and certificates (collectively, "Permits") which may be required in
connection with the performance of the Initial Tenant's Changes. Owner shall
with reasonable promptness sign the applications for such Permits prepared by
Tenant which require Owner's signature and Tenant shall indemnify and hold Owner
harmless against any claim, cost, liability or expense resulting from any error,
omission or other impropriety or deficiency in any such application. The Initial
Tenant's Changes shall be governed by the provisions of Article 3 and Section
37C(3) with respect to Tenant's Changes as if the Initial Tenant's Changes were
Tenant's Changes as modified and supplemented by this Article. Tenant shall
employ, as its general contractor for the performance of the Initial Tenant's
Changes, such contractor as Tenant may select and Owner shall, in the reasonable
exercise of its judgment (and subject to the provisions of Section 37C(3)),
approve. Owner shall permit Tenant's contractors and suppliers to move
construction materials, supplies and equipment for the Initial Tenant's Changes
to the demised premises and to remove construction waste and debris therefrom,
by an elevator to be designated by Owner, at times appointed by Owner after
normal business hours or on other than business days, giving effect to other
previously made appointments. Tenant's contractors and suppliers shall pay
Owner's actual cost basis for the use of such elevator except for use during (i)
the hours of 8:00 a.m. and 6:00 p.m. Mondays through Fridays or (ii) Tenant's
initial move into the demised premises. Such elevator use shall be subject to
reasonable scheduling and supervision by Owner. Tenant shall, and shall cause
its contractors and suppliers to, comply with Owner's rules and regulations, and
Owner's directions for the coordination and control of construction activities
in the Building and the protection and security of the Building and its systems
and occupants.

        D. Throughout the performance of any Tenant's Changes (including the
Initial Tenant's Changes) in or about the demised premises, Tenant shall
maintain, or cause to be maintained:

   a.   Worker's Compensation insurance coverage in statutory limits for all
        eligible workmen engaged in the Tenant's Changes;

   b.   Public Liability insurance, of which Owner shall be a named insured, in
        limits of $1,000,000/$1,000,000 for bodily injury and death,
        $500,000/$1,000,000 for property damage and $2,000,000 umbrella coverage
        for bodily injury, death and property damage, which shall also include
        blanket contract liability coverage for Tenant's indemnity obligations
        to Owner under this lease; and

   c.   Builder's All-Risk insurance in an amount equal to the value of the
        Tenant's Changes on the completion thereof.

                                       30
<PAGE>   56

Tenant shall submit to Owner, before commencement of any Tenant's Changes in or
about the demised premises, certificates of such Worker's Compensation, Public
Liability and Builder's All-Risk insurance.

        E. Tenant represents and warrants that its use of the demised premises
and any Alterations made by or on behalf of Tenant to the demised premises will
conform to all Requirements, including (without limitation) the Americans With
Disabilities Act ("ADA") of July 26, 1990, Publ. L. No. 101-336, 104 Stat. 327,
42 U.S.C. Section 12101, et seq., as amended from time to time, and the
regulations promulgated pursuant thereto. Tenant hereby indemnifies and holds
Owner harmless from and against any and all claims, damages, suits, liabilities
and attorneys' fees (including, but not limited to appellate attorneys' fees)
asserted against or suffered by Owner in any way relating to or arising from, in
whole or in part, an actual or asserted claim that the demised premises, or any
portion thereof, is in violation of any Requirements, including (without
limitation) the ADA, or any regulations promulgated pursuant thereto.

        F.

               1. Subject to the provisions of this Section, Owner shall
contribute an amount not to exceed Three Hundred Twenty Five Thousand and 00/100
($325,000.00) Dollars (the "Tenant Fund") for each of the fifteenth floor and
the Designated Additional Floor toward (i) first, the cost of the performance of
the Initial Tenant's Changes (other than Soft Costs, as defined below) on the
fifteenth (15th) floor portion and the Designated Additional Floor of the
demised premises only; and (ii) second, to the extent that the Tenant Fund
exceeds the costs of the Initial Tenant's Changes (exclusive of Soft Costs), the
fees of architects, engineers, expediters and consultants incurred in connection
with the performance of the Initial Tenant's Changes (the costs in this clause
(ii) being collectively referred to herein as "Soft Costs").

               2. Owner shall disburse a portion of the Tenant Fund to Tenant or
as Tenant may direct from time to time, within thirty (30) days after receipt of
the receipt of the items set forth in Section 50F(3) hereof, provided that on
the date of disbursement from the Tenant Fund, no event of default shall have
occurred and be continuing. Disbursements from the Tenant Fund shall not be made
more frequently than monthly, and shall be in an amount equal to the aggregate
amounts theretofore paid or payable (as certified by an executive officer of
Tenant and by Tenant's independent, licensed architect) to Tenant's contractors,
subcontractors, subcontractors and materialmen with respect to the Initial
Tenant's Changes, or on account of Soft Costs, which in either case have not
been the subject of a previous disbursement from the Tenant Fund; provided,
however, that in no event shall Tenant be entitled to a disbursement from the
Tenant Fund on account of any Soft Costs unless and until the performance of the
Initial Tenant's Changes have been completed, and all of the costs incurred in
connection therewith (other than Soft Costs) shall have been paid in full.

               3. Owner's obligation to make disbursements from the Tenant Fund
shall be subject Owner's receipt of: (i) a request for such disbursement
certified by Tenant's architect in accordance with Section 50F(2) hereof, (ii)
copies of all receipts, invoices

                                       31
<PAGE>   57

and bills for the work completed and materials furnished in connection with the
Initial Tenant's Changes and incorporated in the demised premises, or with
respect to Soft Costs, which in either case are to be paid from the requested
disbursement or which have been paid by Tenant and for which Tenant is seeking
reimbursement, (iii) copies of all contracts, work orders, change orders and
other materials relating to the work or materials, or Soft Costs, which in
either case are the subject of the requested disbursements or reimbursement;
(iv) with respect to disbursements of the Tenant Fund to cover costs other than
Soft Costs, a certificate of Tenant's independent licensed architect stating
that (A) that, in his opinion, the portion of the Initial Tenant's Changes
theretofore completed and for which the disbursement is requested was performed
in a good and workmanlike manner and substantially in accordance with the final
detail plans and specifications for such Initial Tenant's Changes, as approved
by Owner, (B) the percentage of completion of the Initial Tenant's Changes as of
the date of such certificate, and (C) the estimated total costs to complete the
performance of the Initial Tenant's Changes, and (v) with respect to the first
disbursement of the Tenant Fund to cover Soft Costs, the general releases and
waivers of lien, and architect's certificate, described in Section 50F(5)
hereof.

               4. In no event shall the aggregate amount paid by Owner to Tenant
under this Section 50F exceed the amount of the Tenant Fund. Upon the completion
of the Initial Tenant's Changes and payment of Soft Costs, and satisfaction of
the conditions set forth in Section 50F(5) hereof, any amount of the Tenant Fund
which has not been previously disbursed shall be retained by Owner. Upon the
disbursement of the entire Tenant Fund, Owner shall have no further obligation
or liability whatsoever to Tenant for further disbursement of any portion of the
Tenant Fund to Tenant. It is expressly understood and agreed that Tenant shall
promptly commence and diligently prosecute to completion, at its sole cost and
expense, the Initial Tenant's Changes and pay Soft Costs, whether or not the
Tenant Fund is sufficient to fund such completion and Soft Costs. Any costs to
complete the Initial Tenant's Changes and pay Soft Costs in excess of the Tenant
Fund shall be the sole responsibility and obligation of the Tenant.

               5. Within thirty (30) days after completion of the Initial
Tenant's Changes, Tenant shall deliver to Owner general releases and waivers of
lien from all contractors, subcontractors and material men involved in the
performance of the Initial Tenant's Changes, and the materials furnished in
connection therewith, and a certificate from Tenant's independent licensed
architect certifying that (i) in his opinion the Initial Tenant's Changes, have
been performed in a good and workmanlike manner and completed substantially in
accordance with the final detailed plans and specifications for such Initial
Tenant's Changes, as approved by Owner and (ii) to his knowledge all
contractors, subcontractors and materialmen have been paid for the Initial
Tenant's Changes, and materials furnished through such date.

               6. The Tenant Fund shall be available to Tenant until December
31, 1999 with respect to the fifteenth (15) floor and July 31, 2000 with respect
to the Designated Additional Floor.

                                       32
<PAGE>   58

               7. Owner shall in no way whatsoever be obligated to contribute
any sums toward the cost of the Initial Tenant's Changes except as expressly
provided herein.

        G. Tenant shall indemnify and save harmless Owner and its agents from
and against any and all claims, actions, liabilities and obligations arising
from any work in connection with, or other matters related to, the Initial
Tenant Changes and all other Tenant Changes.

                                 XV. INSURANCE

        A. Tenant shall at all times keep Tenant's Property and all other
alterations, installations and improvements made by Tenant in the demised
premises now or hereafter included in the demised premises insured under an "all
risk" insurance policy and against such other hazards and risks as Owner may
from time to time reasonably designate, for the "full replacement cost" thereof.
Such full replacement cost shall be determined from time to time but not more
frequently than once in any twelve (12) calendar month period at the request of
Owner or any superior Mortgagee or Lessee by an appraiser, engineer, architect
or contractor designated by Owner or such Mortgagee or Lessee.

        B. In addition to fire, lightning and extended coverage insurance,
Tenant will maintain personal injury or property damage insurance, under a
policy of general public liability insurance, with such limits as may reasonably
be requested by Owner from time to time, but not less than $2,000,000/$2,000,000
in respect to bodily injury or death and $500,000/$1,000,000 for property
damage, and $2,000,000 umbrella coverage for bodily injury, death and property
damage, and the policy or policies evidencing such insurance shall include Owner
as an additional insured, but only with respect to liability arising out of the
ownership, maintenance or use of the demised premises.

        C. All policies required to be maintained pursuant to the provisions of
this lease shall be issued by a responsible insurance company or companies
authorized to do business in the State of New York and approved by Owner. All
policies required to be maintained pursuant to the provisions of this lease
shall have a written undertaking from the insurer to notify all insureds
thereunder at least thirty (30) days prior to cancellation thereof. Tenant may
provide any insurance required pursuant to the provisions of this lease under a
so-called blanket policy or policies covering other parties and locations so
long as the coverage under such policy or policies is not thereby diminished.
Upon request, Tenant shall furnish Owner with a certificate of insurance
evidencing any such policy or a certificate naming Owner as an additional
insured.

        D. Neither party to this lease shall be liable for any damage by fire or
other peril includable in the coverage afforded by the standard form of fire
insurance policy with extended coverage endorsement attached (whether or not
such coverage is in effect), no matter how caused, it being understood that the
damaged party will look solely to its insurer for reimbursement. Any waiver of
rights contained in this paragraph shall be ineffective if such waiver shall be
unobtainable, or result in an increase in the cost of insurance of the waiving
party, unless the other party shall pay such increase within ten (10) days after
notice thereof.

                                       33
<PAGE>   59

                             XVI. OPTION TO EXPAND

        A. Provided that (i) Tenant named herein or a corporation or partnership
which controls, is controlled by, or is under common control with the Tenant
named herein is the tenant under the lease, (ii) Tenant is not in default under
this lease either as of the date of the giving of Tenant's Notice (hereinafter
defined) or the Inclusion Date (hereinafter defined), (iii) this lease is
otherwise in full force and effect, (iv) no other tenant under a lease (existing
as of the date hereof, except as provided below) for premises in the building
has a right of first offer or refusal or other contractual right for the
Additional Space (hereinafter defined) then Tenant shall have the option to
include any space on the sixteenth (16th) floor of the Building (the "Additional
Space"), upon the same terms and subject to the conditions of this lease
including, without limitation, the base year factors set forth herein and to
such additional terms and conditions as are hereinafter set forth.
Notwithstanding the foregoing, the portion of the Additional Space consisting of
Suite 1610 may first be offered to other tenant(s) of the Building, and in the
event that none of such tenants exercises any right which it may have pursuant
to their leases (whether or not such leases exist as of the date hereof) to
lease Suite 1610, Tenant shall have the option to include Suite 1610 as part of
the demised premises as set forth herein.

        B. In the event that all or any portion of Additional Space shall become
or is about to become available for leasing, Owner shall give notice thereof to
Tenant (the "Availability Notice") stating (i) the portion of Additional Space
which has become or is about to become available for leasing and (ii) the
expected date such Additional Space will be available for leasing (the
"Inclusion Date") and, in such event, Tenant shall have the option, exercisable
only by notice ("Tenant's Notice") given to Owner within five (5) business days
next following the date of the giving of such Availability Notice, to add such
Additional Space to the demised premises. In the event that such Additional
Space shall become available for leasing sooner than the applicable Inclusion
Date because of the earlier termination of the term of the lease affecting such
Additional Space, Owner shall have the right to accelerate the Inclusion Date by
not less than fifteen (15) days' prior notice to Tenant. In the event Tenant
shall send a Tenant's Notice to Owner the applicable Additional Space shall be
added to and included in the demised premises effective as of the Inclusion
Date.

        C. The fixed rent for the Additional Space shall be equal to 90% of the
fair market annual rental value for the demised premises determined as of the
date of the Availability Notice as determined pursuant to the provisions of this
Article, but in no event less than the fixed rent (on a per square foot basis)
then being paid for the balance of the demised premises. Owner shall give Tenant
written notice (the "Additional Space Determination Notice") of Owner's
determination of the fixed rent payable for the Additional Space no later than
thirty (30) days after its receipt of the Tenant's Notice.

        D. In the event Tenant disputes the annual fair market rental value as
determined by Owner in the Additional Space Determination Notice, then within
ten (10) days after the giving of the Additional Space Determination Notice,
Tenant may request that such annual fair market rental value shall be determined
by arbitration, as set forth in Article 53 hereof.

                                       34
<PAGE>   60

        E. Notwithstanding anything contained herein to the contrary, if Owner
is unable to give Tenant possession of all or any portion of any applicable
Additional Space on the applicable Inclusion Date by reason of the holding over
or retention of possession of any tenant or other occupant, (a) the Inclusion
Date applicable to such Additional Space shall be the date Owner shall give
Tenant possession of such Additional Space, (b) the expiration date hereof shall
not be affected thereby, (c) the validity of this lease shall not be affected in
such circumstances, and (d) Tenant waives any rights under Section 223-a of the
Real Property Law of New York or any successor statue of similar import to
rescind this lease and further waives the rights to recover any damages which
may result from the failure of Owner to deliver possession of such Additional
Space.

        F. Tenant shall accept any Additional Space in its "as is" condition and
state of repair existing as of the Inclusion Date (excluding any latent defects,
provided Tenant gives Owner prompt notice thereof) and understands and agrees
that Owner shall perform no work and incur no expense in connection with the
preparation of such Additional Space for Tenant's occupancy.

        G. The expiration or earlier termination of this lease shall terminate
and render void all of Tenant's options of or elections under this Article
whether or not the same shall have been exercised and nothing contained in this
Article shall prevent Owner from exercising any right or action granted to or
reserved by Owner in this lease to terminate this lease. None of Tenant's
options or elections set forth in this Article may be severed from this lease or
separately sold, assigned or transferred.

        H. If Tenant does not send Tenant's Notice with respect to any
Additional Space which is the subject of an Availability Notice pursuant to the
provisions of this Article within the applicable time period, time being of the
essence, then this Article shall have no further force and effect with respect
to the such Additional Space, and Tenant shall have forever waived and
relinquished its right to such Additional Space and Owner shall at any and all
times thereafter be entitled to lease such Additional Space to any other person
or entity at such rental and upon such terms and conditions as Owner in its sole
discretion may desire.

        I. If by the commencement of the Extended Term the annual fair market
rental value of demised premises has not yet been determined, Tenant shall,
until such determination, pay fixed rent for the demised premises as determined
by Owner in its Fair Market Determination Notice, and when the determination has
actually been made by the arbitrator, an appropriate adjustment, if any, shall
be made retroactive to the commencement of the Extended Term.

        J. Time shall be of the essence with respect to the delivery of all
notices provided for in this Article.

                             XVII. OPTION TO RENEW

        A. Provided that (i) Tenant named herein or a corporation or partnership
which controls, is controlled by, or is under common control with the Tenant
named herein is

                                       35
<PAGE>   61

the tenant under this lease, (ii) Tenant is not in default under this lease
either as of the Inclusion Date or as of the date of the giving of Renewal
Notice (as hereinafter defined), beyond any applicable notice and applicable
grace period, and (iii) this lease is otherwise in full force and effect, then
Tenant shall have the right to extend the term of this lease for an additional
three (3) years commencing on the date which is the day after the Expiration
Date and expiring on such date which is three (3) years from the Expiration Date
(the "Extended Term"). Tenant's right hereunder shall be exercised by Tenant by
written notice (the "Renewal Notice") (by certified mail, return receipt
requested) not earlier than 360 days, nor later than 240 days, prior to the
Expiration Date, time being of the essence with respect thereto. In the event
that Tenant's option is not properly exercised in a timely manner, Tenant shall
have no further rights to extend or renew this lease and in no event shall
Tenant have any right to extend the term of this lease for more than three (3)
years from the Expiration Date. Any exercise by Tenant under this Article shall
be irrevocable. In the event that the lease shall be extended pursuant to this
Article, then, upon request of Owner, Tenant shall execute and deliver to Owner
an agreement confirming such extension.

        B.

   i.   The fixed rent for the Extended Term shall be ninety (90%) percent of
        the fair market annual rental value for the demised premises determined
        as of the date of the Renewal Notice as determined pursuant to the
        provisions of this Article. Owner shall give Tenant written notice (the
        "Extended Term Determination Notice") of Owner's determination of the
        fixed rent payable for the Extended Term no later than thirty (30) days
        after its receipt of the Renewal Notice.

   ii.  In the event Tenant disputes the annual fair market rental value as
        determined by Owner in the Extended Term Determination Notice, then
        within twenty (20) days after the giving of the Extended Term
        Determination Notice, Tenant may request that such annual fair market
        rental value shall be determined by arbitration, as follows:

 b.     Within thirty (30) days after notice by Tenant requesting arbitration of
        the issue the parties shall agree upon a single arbitrator to determine
        such annual fair market rental value. If Owner and Tenant shall have
        failed to agree upon such single arbitrator within such period of thirty
        (30) days, then such single arbitrator shall be appointed by the Real
        Estate Board of New York, or its successor pursuant to its rules, or if
        at such time such association is not in existence and has no successor,
        then by the presiding Justice of the Appellate Division, First
        Department, of the Supreme Court of the State of New York, or any
        successor court, upon request of either Owner or Tenant as the case may
        be. The arbitrator selected or appointed shall be a real estate
        appraiser or broker having at lease ten (10) years of experience in
        acting as a broker or appraiser of office space in high rise office
        building in the Borough of Manhattan, City of New York.

                                       36
<PAGE>   62

 c.     Within ten (10) days following the selection or appointment of the
        single arbitrator, each party shall deliver to the arbitrator a
        determination (the "Fair Market Determination") of what it believes is
        the annual fair market rental value of the demised premises as of the
        date of the Renewal Notice. Time shall be of the essence with respect to
        the delivery of the Fair Market Determination to the arbitrator.

 d.     The arbitrator, selected or appointed, shall determine the issue and
        render its decision as promptly as practicable choosing either Owner's
        or Tenant's Fair Market Determination, and if only one (1) party submits
        a Fair Market Determination to the arbitrator then it shall choose the
        Fair Market Determination so submitted to it. The decision of such
        arbitrator shall be in writing and shall be final and binding upon Owner
        and Tenant whether or not a judgment shall be entered in any court.
        Duplicate original counterparts of such decision shall be sent by the
        arbitrator to both Owner and Tenant.

        C. The term "annual fair market rental value" shall mean the amount
which Owner would have received from leasing the demised premises for the period
of the Extended Term to an unaffiliated person or entity which is not then a
tenant in the Building, assuming that such space were to be delivered in "as is"
condition, and taking into account the rental which such other tenant would most
likely have paid for such space. Moreover, in making such determinations,
neither the parties nor the arbitrator shall reduce such annual fair market
rental value by reason of any costs or expenses (including brokerage
commissions, cost of improvements necessary to prepare the space for such
tenant's occupancy, rent concession, or lost rental income during any vacancy
period) saved by Owner by reason of Owner's not having to find a new tenant for
such space. Accordingly, relevant factors which may be considered in determining
such annual fair market rental value may include:

        (ii) Owner and the prospective tenant are typically motivated.

        (iii) Owner and the prospective tenant are well informed and well
        advised and each is acting in what it considers its own best interest.

        (iv) A reasonable time under then existing market conditions would have
        been allowed for exposure of the demised premises on the open market.

        (v) That if the demised premises or any portion thereof have been
        destroyed or damaged by fire or other casualty, such damage would have
        been fully restored by Owner before the term of the prospective tenant's
        lease commenced.

        (vi) Market rents then being charged under leases entered into not more
        than ninety (90) days before the date of the Renewal Notice for similar
        space in similar office buildings in the Borough of Manhattan, City of
        New York that contain similar structural and technological features
        (including market rents being charged at the Building for comparable
        space under leases entered into not more than ninety (90) days before
        the date of the Renewal Notice).

                                       37
<PAGE>   63

        (vii) The age and condition of the Building and the number of rentable
        square feet in the demised premises.

        D. If by the commencement of the Extended Term the annual fair market
rental value of demised premises has not yet been determined, Tenant shall,
until such determination, pay fixed rent for the demised premises as determined
by Owner in its Fair Market Determination Notice, and when the determination has
actually been made by the arbitrator, an appropriate adjustment, if any, shall
be made retroactive to the commencement of the Extended Term.

        E. Time shall be of the essence with respect to the delivery of all
notices provided for in this Article.

                             XVIII. ADVANCE RENTAL

        Owner acknowledges receipt from Tenant of $56,333.33 to be applied by
Owner against the rent first becoming due hereunder. Owner further acknowledges
receipt from Tenant of $400,000 to be applied, if Tenant shall faithfully
perform all obligations imposed under this Lease, pro tanto by Owner against the
fixed rent becoming due in the 20th, 21st, 22nd 23rd and 24th months of the
term. If Tenant shall fail to perform such obligations, Owner shall be entitled
to apply the advance rental, pro tanto, against any damages which it may sustain
by reason of Tenant's failure to perform such obligations, but such application
shall not preclude Owner from recovering greater damages if the same can be
established.

                                 XIX. SECURITY

        Tenant shall deposit a "clean", unconditional, irrevocable and
transferable letter of credit in the amount of $600,000.00 (the "Letter of
Credit"), satisfactory to Owner, issued by and drawn on a bank satisfactory to
Owner, having its principal place of business or its duly licensed branch in the
State of New York and which is a member of the New York Clearing House
Association, for the account of Owner, for a term of not less than one (1) year,
as security for the faithful performance and observance by Tenant of the terms,
covenants and conditions of this Lease, including, without limitation, the
surrender of possession of the demised premises to Owner as herein provided. If
a default shall occur and be continuing, Owner may present the Letter of Credit
for payment and apply the whole or any part of the proceeds thereof (i) toward
the payment of any fixed rent or additional rent as to which Tenant is in
default, (ii) toward any sum which Owner may expend or be required to expend by
reason of Tenant's default in respect of any of the terms, covenants and
conditions of this Lease, including, without limitation, any damage, liability
or expense (including, without limitation, reasonable attorneys' fees and
disbursements) incurred or suffered by Owner, and (iii) toward any damage or
deficiency incurred or suffered by Owner in the reletting of the demised
premises, whether such damages or deficiency accrue or accrues before or after
summary proceedings or other re-entry by Owner. If Owner applies or retains any
part of the proceeds of the Letter of Credit, Tenant, upon demand, shall
promptly deposit with

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<PAGE>   64

Owner the amount so applied or retained so that Owner shall have the full
deposit on hand at all times during the term of this Lease. In the event of a
sale or leasing of the Building, Owner shall have the right to transfer the
Letter of Credit to such vendee or lessee and Owner shall thereupon be released
by Tenant from all liability for the return of the Letter of Credit, and Tenant
shall cause the bank which issued the Letter of Credit to issue an amendment to
the Letter of Credit naming such vendee or lessee as the beneficiary thereunder.
Tenant shall look solely to the new landlord for the return of the Letter of
Credit. The provisions hereof shall apply to every transfer or assignment of the
Letter of Credit made to a new landlord. Tenant shall renew any Letter of Credit
from time to time, at least thirty (30) days prior to the expiration thereof,
and deliver to Owner a new Letter of Credit or an endorsement to the Letter of
Credit, and any other evidence required by Owner that the Letter of Credit has
been renewed for a period of at least one (1) year. If Tenant shall fail to
renew the Letter of Credit as aforesaid, Owner may present the Letter of Credit
for payment and retain the proceeds thereof as security in lieu of the Letter of
Credit.

                    XX. MISCELLANEOUS ADDITIONAL PROVISIONS

        A. This lease is offered for signature by Tenant and it is understood
that this lease shall not be binding upon Owner or Tenant unless and until Owner
and Tenant shall each have executed and unconditionally delivered a fully
executed copy of this lease to the other.

        B. This lease shall be deemed to have been made in New York County, New
York, and shall be construed in accordance with the laws of the State of New
York. All actions or proceedings relating, directly or indirectly, to this lease
shall be litigated only in courts located within the County of New York. Tenant,
and its successors and assigns hereby subject themselves to the jurisdiction of
any state or federal court located within such county, waive the personal
service of any process upon them in any action or proceeding therein and consent
that such process be served by certified or registered mail, return receipt
requested, directed to the Tenant and any successor at Tenant's address
hereinabove set forth, and to any assignee at the address set forth in the
instrument of assignment. Such service shall be deemed made two (2) business
days after such process is so mailed.

        C. All agreements provided for in this lease, whether between the
parties or between either or both of the parties hereto and one or more other
parties shall be in writing.

        D. Tenant represents and warrants to Owner as follows:

        (viii) It has full power and authority to execute and deliver this lease
        and all documents pertaining thereto and to perform all obligations on
        its part to be performed hereunder.

        (ix) It is a duly formed and validly existing sole proprietorship,
        limited partnership, general partnership or corporation (as the case may
        be) in good

                                       39
<PAGE>   65

        standing in the State of New York, and, if different, in the state in
        which it is organized.

        (x) It is authorized to transact business in the State of New York.

        (xi) The execution and delivery of this lease and the performance of all
        transactions contemplated thereby have been duly authorized by all
        necessary action required under the circumstances, and will not result
        in a violation of any of the agreements under which it is organized and
        operating or to which it is a party or otherwise bound.

        (xii) The party or parties executing this lease on its behalf are duly
        authorized to do so.

        (xiii) It is aware of no fact or condition which would prevent this
        Lease, when executed, by Owner and Tenant, from becoming the valid and
        binding obligation of Owner and Tenant, enforceable in accordance with
        its terms.

                                       40
<PAGE>   66

                                        TRUSTEES OF THE MASONIC HALL
                                        AND ASYLUM FUND

                                        By:
                                           -------------------------------------

                                        ORGANIC ONLINE, INC.

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

                                       41
<PAGE>   67

                                    EXHIBIT B

                                  OWNER'S WORK

        Owner will, at its expense, perform the following work and installations
all of which shall be of material, design, capacity, finish and color (if
applicable) to the standard adopted by Owner for the Building (but in no event
more than the type and quantity of work set forth below):

        The fourteenth (14th) floor portion of the demised premises is being
delivered "as is" (excluding any latent defects, provided Tenant gives Owner
prompt notice thereof).

        The fifteenth (15th) floor portion of the demised premises shall be
delivered as a clean, open shell, with the existing installation demolished and
removed.

        The Additional Designated Floor portion of the demised premises shall be
delivered as a clean, open shell, with the existing installation demolished and
removed.

                                       42

<PAGE>   68

                                    EXHIBIT C

                              RULES AND REGULATIONS

        (1) The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors, or halls, in each case, outside the demised premises shall
not be obstructed or encumbered by Tenant or used for any purpose other than
ingress and egress to and from the demised premises. Tenant shall use the
freight elevators for delivery of bulky merchandise and equipment which shall be
performed in a prompt and efficient manner.

        (2) The exterior windows that reflect or admit light and air into the
demised premises or the halls, passageways of the Building shall not be covered
or obstructed by Tenant, other than by window treatments.

        (3) The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags, acids or other substances shall be deposited therein.

        (4) Tenant, or any of Tenant's employees, agents, invitees or licensees,
shall not at any time bring or keep upon the demised premises any inflammable,
combustible or explosive fluid, chemical or substance except such as are
incidental to usual office occupancy.

        (5) Tenant shall promptly provide Owner with a master key or card or the
keys to all additional locks or bolts of any kind which shall be placed upon any
of the doors or windows of the demised premises by Tenant.

        (6) No bicycles, vehicles or animals of any kind except for seeing eye
dogs shall be brought into or kept by Tenant in or about the demised premises or
the Building.

        (7) Tenant shall, at its expense, provide artificial light for the
employees of Owner while doing janitor service or other cleaning, and in making
repairs or alterations in the demised premises.

        (8) Canvassing, soliciting and peddling in the Building is prohibited
and Tenant shall cooperate to prevent the same, other than by employees of
Tenant conducted within the demised premises.

        (9) There shall not be used in any space outside of the demised
premises, either by Tenant or by jobbers or others, the delivery or receipt of
merchandise, any hand trucks, except those equipped with rubber tires and side
guards.

        (10) Owner shall have the right to require that all messengers and other
persons delivering packages, papers and other materials to Tenant (i) be
directed to deliver such packages, papers and other materials to a person
designated by Owner who will promptly distribute the same to Tenant or (ii) be
promptly escorted by a person designated by Owner to deliver the same to Tenant.

                                       43<PAGE>   1

                                                                   EXHIBIT 10.15

                                      LEASE

                                     BETWEEN

                    BAKER HAMILTON PROPERTIES, LLC (LANDLORD)

                                       AND

                             ORGANIC, INC. (TENANT)

                           THE BAKER HAMILTON BUILDING

                               601 TOWNSEND STREET

                            SAN FRANCISCO, CALIFORNIA

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                            <C>
Article 1 BASIC LEASE PROVISIONS..................................................................................1

Article 2 PREMISES, TERM AND FAILURE TO GIVE POSSESSION...........................................................8

Article 3 RENT...................................................................................................11

Article 4 ADDITIONAL RENT........................................................................................11

Article 5 SECURITY DEPOSIT.......................................................................................13

Article 6 SERVICES...............................................................................................14

Article 7 POSSESSION, USE AND CONDITION OF PREMISES..............................................................17

Article 8 MAINTENANCE............................................................................................19

Article 9 ALTERATIONS AND IMPROVEMENTS...........................................................................20

Article 10 ASSIGNMENT AND SUBLETTING.............................................................................22

Article 11 DEFAULT AND REMEDIES..................................................................................26

Article 12 SURRENDER OF PREMISES.................................................................................30

Article 13 HOLDING OVER..........................................................................................31

Article 14 DAMAGE BY FIRE OR OTHER CASUALTY......................................................................31

Article 15 EMINENT DOMAIN........................................................................................33

Article 16 INSURANCE.............................................................................................33

Article 17 WAIVER OF CLAIMS AND INDEMNITY........................................................................35

Article 18 RULES AND REGULATIONS.................................................................................36

Article 19 LANDLORD'S RESERVED RIGHTS............................................................................37

Article 20 ESTOPPEL CERTIFICATE..................................................................................37

Article 21 REAL ESTATE BROKERS...................................................................................38

Article 22 MORTGAGEE PROTECTION..................................................................................38

Article 23 NOTICES...............................................................................................40
</TABLE>

                                       i

<PAGE>   3

<TABLE>
<S>                                                                                                              <C>
Article 24 MISCELLANEOUS.........................................................................................40

Article 25 LETTER OF CREDIT......................................................................................45

Article 26 RIGHT OF FIRST OFFER..................................................................................47

Article 27 ROOF RIGHTS...........................................................................................47

Article 28 SIGNAGE...............................................................................................49

Article 29 PARKING...............................................................................................51

Article 30 BASEMENT..............................................................................................52

Article 31 GENERATOR SPACE.......................................................................................52
</TABLE>

                                       ii

<PAGE>   4

                                  OFFICE LEASE

                                   ARTICLE 1

                             BASIC LEASE PROVISIONS

         1.1 BASIC LEASE PROVISIONS

         In the event of any conflict between these Basic Lease Provisions and
any other Lease provision, such other Lease provision shall control.

         (1)      BUILDING AND ADDRESS:

                  The Baker Hamilton Building
                  601 Townsend Street
                  San Francisco, California

         (2)      LANDLORD AND ADDRESS:

                  Notices to Landlord shall be addressed to:

                  Baker Hamilton Properties, LLC
                  c/o Ronaldo Cianciarulo
                  700 Seventh Street, #107
                  San Francisco, CA 94107

                  With a copy to:

                  Shartsis, Friese & Ginsburg LLP
                  One Maritime Plaza, 18th Floor
                  San Francisco, California 94901
                  Attention:  Adam Elsesser, Esq.

         (3)      TENANT AND CURRENT ADDRESS:

                  (a)      Name:   Organic, Inc.

                  (b)      State of incorporation:   Delaware

                  Notices to Tenant shall be addressed:

                  Organic, Inc.
                  601 Townsend Street
                  San Francisco, California
                  Attention:  Chief Financial Officer

                  With a copy to:

                  Coblentz, Patch, Duffy & Bass, LLP
                  222 Kearny Street

                                       1
<PAGE>   5

                  San Francisco, CA 94108-4510
                  Attention:  Barbara A. Milanovich, Esq.

         (4)      DATE OF LEASE:   as of November 8, 1999

         (5)      LEASE TERM:   Ten (10) years

         (6)      PROJECTED DELIVERY DATE:   June 1, 2000

         (7)      PROJECTED COMMENCEMENT DATE:   September 1, 2000

         (8)      PROJECTED EXPIRATION DATE:   120 months after the Commencement
                                               Date

         (9)      MONTHLY AND ANNUAL BASE RENT:

<TABLE>
<CAPTION>
                                                                    ANNUAL RATE/SF
PERIOD FROM/TO                    MONTHLY             ANNUAL        OF RENTABLE AREA
<S>                            <C>                <C>                    <C>
Commencement Date - 1st        $  705,106.66      $ 8,461,280.00         $40.00
Full 12 calendar months
Months 13-24                   $  733,310.93      $ 8,799,731.20         $41.60
Months 25-36                   $  762,572.85      $ 9,150,874.30         $43.26
Months 37-48                   $  793,245.00      $ 9,518,940.00         $45.00
Months 49-60                   $  824,798.51      $ 9,897,582.20         $46.79
Months 61-72                   $  857,938.50      $10,295,262.00         $48.67
Months 73-84                   $  892,136.16      $10,705,634.00         $50.61
Months 85-96                   $  927,920.33      $11,135,044.00         $52.64
Months 97-108                  $  964,939.41      $11,579,261.00         $54.74
Months 109-120                 $1,003,543.00      $12,042,516.00         $56.93
</TABLE>

<TABLE>
<S>                                                  <C>
         (10)     RENTABLE AREA OF THE PREMISES:     211,532 square feet

         (11)     RENTABLE AREA OF THE BUILDING:     211,532 square feet, subject to
                                                     adjustment pursuant to the Lease

         (12)     SECURITY DEPOSIT: $0 Cash
                                    $10,000,000 Letter of Credit

         (13)     TENANT'S USE OF PREMISES: General office use

         (14)     BROKERS:

                  Landlord's Broker:        CB Richard Ellis

                  Tenant's Broker:          Julien J. Studley, Inc.
</TABLE>

                                       2
<PAGE>   6

         1.2 ENUMERATION OF EXHIBITS, RIDER(S) AND ADDENDUM

         The Exhibits, Rider(s) and Addendum set forth below and attached to
this Lease are incorporated in this Lease by this reference:

EXHIBIT A    Plan of Premises
EXHIBIT B    Work Letter Agreement
EXHIBIT C    Rules and Regulations
EXHIBIT D    Signage
EXHIBIT E    Site Plan for Adjacent Building
RIDER 1      Commencement Date Agreement

         1.3 DEFINITIONS

         For purposes hereof, the following terms shall have the following
meanings:

         AFFILIATE: Any corporation or other business entity (i) in which Tenant
has more than a 50% ownership interest, or (ii) a successor to Tenant by merger,
consolidation or reorganization, or (iii) an entity which acquires all or
substantially all of the assets or stock of Tenant.

         ANNUAL BASE RENT: The annual rent specified in Section 1.1(9).

         BUILDING: The office building located at the address specified in
Section 1.1(1).

         COMMENCEMENT DATE: The date specified in Section 1.1(6) as the
Projected Commencement Date, unless changed by operation of Article Two.

         COMMON AREAS: All areas of the Project made available by Landlord from
time to time for the general common use or benefit of the tenants of the
Building, and their employees and invitees, or the public, as such areas
currently exist and as they may be reasonably changed from time to time;
provided Landlord provides advance notice to Tenant thereof.

         DECORATION: Tenant Alterations which do not require a building permit
and which do not involve any of the structural elements of the Building, or any
of the Building's systems, including its electrical, mechanical, plumbing,
security, heating, ventilating, air-conditioning, communication, and fire and
life safety systems.

         DEFAULT RATE: Two (2) percentage points above the rate then most
recently announced by Bank of America N.T.&S.A. at its San Francisco main office
as its base lending reference rate, from time to time announced, but in no event
higher than the maximum rate permitted by Law.

         DELIVERY DATE: The date that Landlord delivers the Premises to Tenant
with the portion of Landlord's Work Substantially Complete so as to enable
Tenant to commence full-time performance of Tenant's Work without interference.

                                       3
<PAGE>   7

         DIRECT EXPENSES: The following costs and expenses of maintaining and
operating the Premises which are paid to the utility provider or service
provider directly by Tenant. Direct Expenses shall be paid by Tenant from and
after the Commencement Date of the Lease. No Direct Expenses shall be included
in Operating Expenses.

         ENVIRONMENTAL LAWS: All Laws governing the use, storage, disposal or
generation of any Hazardous Material, including, without limitation, the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended, and the Resource Conservation and Recovery Act of 1976, as amended.

         EXPIRATION DATE: The date specified in Section 1.1(7) unless changed by
operation of Article Two.

         FORCE MAJEURE: Any accident, casualty, act of God, war or civil
commotion, strike or labor troubles, or any cause whatsoever beyond the
reasonable control of Landlord or Tenant, including water shortages, energy
shortages or governmental preemption in connection with an act of God, a
national emergency, or by reason of Law, or by reason of the conditions of
supply and demand which have been or are affected by act of God, war or other
emergency.

         HAZARDOUS MATERIAL: Such substances, material and wastes which are or
become regulated under any Environmental Law; or which are classified as
hazardous or toxic under any Environmental Law; and explosives and firearms,
radioactive material, asbestos, polychlorinated biphenyls, and petroleum
products.

         INDEMNITEES: Collectively, Landlord, any Mortgagee or ground lessor of
the Property, the property manager and the leasing manager for the Property and
their respective partners, members, directors, officers, agents and employees.

         LAND: The parcel(s) of real estate on which the Building and Project
are located.

         LANDLORD DELAY: Any event that actually delays the completion of Tenant
s Work that is caused by (i) Landlord's failure to approve plans and other
submittals within the time periods specified in the Work Letter, or (ii)
Landlord's failure to fund the Tenant Improvement Allowance as specified in the
Work Letter, or (iii) or any other act or omission of Landlord, its employees,
agents, or contractors; provided however, that with respect to clause (iii),
Tenant shall provide Landlord with written notice of any alleged Landlord Delay
and no Landlord Delay shall be deemed to have occurred if Landlord cures such
Landlord Delay within one (1) business day of receipt of Tenant's notice.

         LANDLORD WORK: The construction or installation of improvements to the
Premises, to be furnished by Landlord, specifically described in Schedule 1 of
the Work Letter.

         LAWS OR LAW: All laws, ordinances, rules, regulations, other
requirements, orders, rulings or decisions adopted or made by any governmental
body, agency, department or judicial authority having jurisdiction over the
Property, the Premises or Tenant's activities at the Premises and any covenants,
conditions or restrictions of record which affect the Property.

                                       4
<PAGE>   8

         LEASE YEAR: Each calendar year during the Term, provided the first
Lease Year shall be the partial year commencing on the Commencement Date and
ending on the first December 31st following the Commencement Date, and the last
Lease Year shall be the partial year commencing on the last January 1st of the
Term and ending on the Expiration Date.

         MONTHLY BASE RENT: The monthly rent specified in Section 1.1(9).

         MORTGAGEE: Any holder of a mortgage, deed of trust or other security
instrument encumbering the Property.

         NATIONAL HOLIDAYS: New Year's Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day and other holidays recognized by
the Landlord and the employees servicing the Building in accordance with their
contracts.

         OPERATING EXPENSES: All actual commercially reasonable costs, expenses
and disbursements of every kind and nature which Landlord shall pay or become
obligated to pay in connection with the ownership, management, operation,
maintenance, replacement and repair of the Building which are not Direct
Expenses. Operating Expenses shall include but not be limited to (i) wages,
salaries, benefits and fees of all personnel or entities engaged in the
operation, repair, maintenance, management, or safekeeping of the Building
prorated to reflect time spent working on the Building; the costs of all
supplies and materials (including work clothes and uniforms) used in the
operation, repair, maintenance and security; (ii) cost of performance by
Landlord's personnel of, or of all service agreements for, maintenance,
janitorial services, access control, alarm service, window cleaning, elevator
maintenance and landscaping (such cost shall include the rental of personal
property used by Landlord's personnel in the maintenance and repair); (iii) cost
of utilities, including water, sewer, power, electricity, gas, fuel, lighting
and all air-conditioning, heating and ventilating costs to the Building which
are not Direct Expenses; (iv) accounting costs and reasonable legal fees
actually incurred by Landlord or paid by Landlord to third parties (exclusive of
legal fees with respect to disputes with individual tenants, negotiations of
tenant leases, none of which shall be included as an Operating Expense), and all
association dues; (v) cost of repairs and general maintenance for any portion of
the Building; (vi) cost of improvements or equipment which are capital in nature
and which are for the purpose of reducing Operating Expenses (provided Landlord
makes a commercially reasonable determination the same are likely to reduce
Operating Expenses) or complying with applicable Laws enacted after the
Commencement Date, all such costs, including interest thereon, shall be
amortized on a straight-line basis over the useful life of the capital
investment items, as reasonably determined by Landlord; (vii) the Building
management office rent or rental value consistent with comparable buildings in
the area; (viii) the cost of premiums and commercially reasonable deductibles
for insurance obtained by Landlord in connection with this Building; (ix) a
fixed management fee of four percent (4%) of the Annual Base Rent (whether or
not Landlord engages a manager for the Building or manages the Building with
Landlord's personnel), such fee and all items reimbursable to the Building
manager, if any, pursuant to any management contract for the Building; (x)
amounts payable to any associations created under any conditions, covenants and
restriction governing the Building. Notwithstanding the foregoing, Operating
Expenses shall not include, (i) costs of alterations of the premises of tenants
of the Building, (ii) costs of capital improvements or capital repairs or
capital equipment to the Building (except for amortized portion of capital
improvements installed for the purpose of

                                       5
<PAGE>   9

reducing or controlling Operating Expenses or complying with applicable Laws),
(iii) depreciation charges, (iv) interest and principal payments on loans
(except for loans for capital improvements which Landlord is allowed to include
in Operating Expenses as provided above), (v) ground rental payments, (vi) real
estate brokerage and leasing commissions, (vii) advertising and marketing
expenses, (viii) costs of Landlord reimbursed by insurance proceeds or other
third parties, (ix) expenses incurred in negotiating leases of tenants in the
Building or enforcing lease obligations of tenants in the Building, (x)
Landlord's or Landlord's property manager's corporate general overhead or
corporate general administrative expenses, (xi) deductibles under any earthquake
policy in excess of the commercially reasonable deductible under Landlord's
casualty policy of insurance, (xii) costs of repairs resulting from any faulty
workmanship or defect in the design or construction of Landlord's Work, (xiii)
costs of traffic studies or environmental reports, or other costs associated
with converting the Building to office use, (xiv) costs, taxes and fees assessed
by or payable to public authorities in connection with the construction,
renovation, and/or, expansion of the Project, including, without limitation,
costs, taxes and fees for transit, housing, schools, child care and art work;
(xv) costs associated with providing parking, (xvi) costs arising from the
presence of Hazardous Materials existing on the Delivery Date, including,
without limitation, the presence of Hazardous Materials in the soil or
groundwater, (xvii) costs for sculpture, paintings or other objects of art;
(xviii) penalties, fines, late payment charges or interest incurred as a result
of Landlord's failure to make any payment when due, and (xix) costs associated
with the operation of the business of the limited liability company or other
entity which constitutes Landlord, as distinguished from the costs of operation
of the Building, including accounting and legal costs. If any Operating Expense,
though paid in one year, relates to more than one calendar year, at the option
of Landlord, such expense may be proportionately allocated among such related
calendar years.

         PREMISES: The space located in the Building on floors 1, 2 and 3 and
depicted on Exhibit A attached hereto.

         PROJECT or PROPERTY: The Project consists of the office building
located at the street address specified in Section 1.1.1(1) in San Francisco,
California, landscaping and improvements, together with the Land, any associated
interests in real property, and the personal property, fixtures, machinery,
equipment, systems and apparatus located thereon.

         REAL PROPERTY: The Property excluding any personal property.

         RENT: Collectively, Monthly Base Rent, Operating Expenses, Taxes and
Direct Expenses, and all other charges, payments, late fees or other amounts
required to be paid by Tenant under this Lease.

         ADDITIONAL RENT: Any amounts owed by Tenant for payment of Operating
Expenses or Taxes. The Additional Rent shall be determined and paid as provided
in Article Four.

         ADDITIONAL RENT DEPOSIT: An amount equal to Landlord's reasonable
estimate of the Additional Rent owed by Tenant for any Lease Year. As soon as
the budget for the first year of the Term is determined, Landlord shall submit
the same to Tenant for Tenant's review, and Landlord shall make available to
Tenant, within ten (10) days after request, the bids, contracts,

                                       6
<PAGE>   10

and other backup information used to prepare such budget. On or before the
beginning of each Lease Year or with Landlord's Statement (defined in Article
Four), Landlord may reasonably estimate and notify Tenant in writing of its
estimate of the (i) Taxes for such year and (ii) Operating Expenses for such
year. Prior to the first determination by Landlord of the actual amount of Taxes
and Operating Expenses, Landlord may reasonably estimate such amounts in the
foregoing calculation. The last estimate by Landlord shall remain in effect as
the applicable Additional Rent Deposit unless and until Landlord notifies Tenant
in writing of a change, which notice may be given by Landlord from time to time.
Within ten (10) days after request by Tenant, Landlord shall provide a written
explanation of the cause for any revision in Landlord's estimate of the
Additional Rent.

         RENTABLE AREA OF THE PREMISES: The amount of square footage set forth
in Section 1.1(10).

         RENTABLE AREA OF THE BUILDING: The amount of square footage set forth
in Section 1.1 (11) which represents the sum of the rentable area of all space
intended for office occupancy in the Project, as determined by Landlord from
time to time. Landlord shall notify Tenant of any adjustments in such rentable
area and any corresponding change in Tenant's Share.

         SECURITY DEPOSIT: The funds specified in Section 1.1(12), if any,
deposited by Tenant with Landlord as security for Tenant's performance of its
obligations under this Lease.

         STANDARD OPERATING HOURS: Monday through Friday from 8:00 A.M. to 6:00
P.M. and Saturdays from 9:00 A.M. to 1:00 P.M., excluding National Holidays.

         SUBSTANTIALLY COMPLETE: The completion of the Landlord Work or Tenant
Work, as the case may be, except for minor insubstantial details of
construction, decoration or mechanical adjustments which remain to be done.

         TAXES: All federal, state and local governmental taxes, assessments and
charges of every kind or nature, whether general, special, ordinary or
extraordinary, which Landlord shall pay or become obligated to pay because of or
in connection with the ownership, leasing, management, control or operation of
the Property or any of its components (including any personal property used in
connection therewith), which may also include any rental or similar taxes levied
in lieu of or in addition to general real and/or personal property taxes. For
purposes hereof, Taxes for any year shall be Taxes which are assessed for any
period of such year, whether or not such Taxes are billed and payable in a
subsequent calendar year. There shall be included in Taxes for any year the
amount of all fees, costs and expenses (including reasonable attorneys' fees)
paid by Landlord during such year in seeking or obtaining any refund or
reduction of Taxes. Taxes for any year shall be reduced by the net amount of any
tax refund received by Landlord attributable to such year. If a special
assessment payable in installments is levied against any part of the Property,
Taxes for any year shall include only the installment of such assessment and any
interest payable or paid during such year. Taxes shall not include any transfer
taxes, federal or state inheritance, general income, gift or estate taxes,
except that if a change occurs in the method of taxation resulting in whole or
in part in the substitution of any

                                       7
<PAGE>   11

such taxes, or any other assessment, for any Taxes as above defined, such
substituted taxes or assessments shall be included in the Taxes.

         TENANT ADDITIONS: Collectively, Tenant Work and Tenant Alterations.

         TENANT ALTERATIONS: Any alterations, improvements, additions,
installations or construction in or to the Premises or any Building systems
serving the Premises (excluding Landlord Work or Tenant Work); and any
supplementary air-conditioning systems installed by Landlord or by Tenant at
Landlord's request pursuant to Section 6.1(b).

         TENANT WORK: All work furnished to the Premises by Tenant under the
Work Letter.

         TENANT'S SHARE: The percentage that represents the ratio of the
Rentable Area of the Premises to the Rentable Area of the Office Portion of the
Project, as determined by Landlord from time to time.

         TERM: The term of this Lease commencing on the Commencement Date and
expiring on the Expiration Date.

         TERMINATION DATE: The Expiration Date or such earlier date as this
Lease terminates or Tenant's right to possession of the Premises terminates.

         WORK LETTER: The Agreement regarding the Landlord Work and Tenant Work
set forth on Exhibit B attached hereto.

                                   ARTICLE 2

                 PREMISES, TERM AND FAILURE TO GIVE POSSESSION

         2.1 LEASE OF PREMISES

         Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
the Premises for the Term and upon the terms, covenants and conditions provided
in this Lease.

         2.2 TERM

             (a) The Commencement Date shall be the earlier of (i) Tenant's
Substantial Completion of Tenant's Work, or (ii) the date that is ninety (90)
days following the Delivery Date as the same may be extended due to Landlord
Delay.

             (b) Within thirty (30) days following the occurrence of the
Commencement Date, Landlord and Tenant shall enter into an agreement in the form
attached hereto as Rider I confirming the Commencement Date and the Expiration
Date. If Tenant fails to enter into such agreement, then the Commencement Date
and the Expiration Date shall be the dates designated by Landlord in such
agreement.

             (c) Landlord shall use diligent efforts to obtain financing
adequate to pay for the cost of Landlord's Work and the Tenant Improvement
Allowance on or before March 1, 2000. If Landlord fails to obtain such financing
or reasonable evidence of Landlord's ability to

                                       8
<PAGE>   12

pay for Landlord's Work and the Tenant Improvement Allowance on or before March
1, 2000, Tenant shall thereafter have the right to terminate this Lease upon
written notice to Landlord.

         2.3 FAILURE TO GIVE POSSESSION

         If despite its diligent efforts the Landlord shall be unable to give
possession of the Premises on the Projected Delivery Date by reason of the
following: (i) the portion of Landlord Work necessary to enable Tenant to
commence full-time performance of Tenant's Work is not Substantially Complete,
(ii) the holding over or retention of possession of any tenant, tenants or
occupants, or (iii) for any other reason, then Landlord shall not be subject to
any liability for the failure to give possession on said date. Under such
circumstances the rent reserved and covenanted to be paid herein shall not
commence until the Commencement Date as specified in Section 2.2(a). No such
failure to give possession on the Projected Delivery Date shall affect the
validity of this Lease or the obligations of the Tenant hereunder; provided,
however, this Lease shall be amended so that the Term shall be extended by the
period of time possession is delayed. In the event of any dispute as to whether
the Landlord Work is Substantially Complete, the decision of Landlord's
architect shall be final and binding on the parties. In the event that Landlord
fails to deliver possession of the Premises to Tenant by December 31, 2000,
Tenant shall have the right, which must be exercised no later than January 15,
2001, to terminate this Lease and upon receipt of such notice, this Lease shall
be terminated and of no further force and effect.

         2.4 CONDITION OF PREMISES

         Tenant shall notify Landlord in writing within thirty (30) days after
the later of Substantial Completion of the Landlord Work or when Tenant takes
possession of the Premises of any defects in the Premises claimed by Tenant or
in the materials or workmanship furnished by Landlord in completing the Landlord
Work. Except for defects stated in such notice, Tenant shall be conclusively
deemed to have accepted the Premises "AS IS" in the condition existing on the
date Tenant first takes possession, and to have waived all claims relating to
the condition of the Premises except for latent defects. Landlord shall proceed
diligently to correct the defects stated in such notice unless Landlord disputes
the existence of any such defects. In the event of any dispute as to the
existence of any such defects, the decision of Landlord's architect shall be
final and binding on the parties. No agreement of Landlord to alter, remodel,
decorate, clean or improve the Premises or the Real Property and no
representation regarding the condition of the Premises or the Real Property has
been made by or on behalf of Landlord to Tenant, except as may be specifically
stated in this Lease or in the Work Letter.

         2.5 OPTION TO EXTEND

             (a) Landlord hereby grants Tenant options to extend the term of the
Lease for two (2) additional periods of five (5) years each, the first of which
shall commence immediately after the expiration of the initial term and if the
first option term is properly exercised, the second of which shall commence
immediately after the expiration of the first option term, upon the same
material terms and conditions contained herein, except that (i) the Monthly Base
Rent for the Premises shall be equal to the fair market rent for the Premises
determined in the manner set forth in subparagraph (b) below, (ii) Tenant shall
accept the Premises in an "as is" condition

                                       9
<PAGE>   13

without any obligation of Landlord to repaint, remodel, repair, improve or alter
the Premises, and (iii) there shall be no further options to extend the term of
the Lease.

             (b) Tenant's election to exercise the option granted herein must be
given to Landlord in writing no less than 18 months prior to expiration of the
initial term and if Tenant properly exercises the first option, Tenant's
election to exercise the second option granted herein must be given to Landlord
in writing no less than 18 months prior to the expiration of the first option
term. If Tenant properly exercises the option granted herein, references in the
Lease to the term shall be deemed to mean the option term unless the context
clearly provides otherwise. Notwithstanding anything to the contrary contained,
herein, all option rights of Tenant pursuant to this Section 2.5 shall
automatically terminate without notice and shall be of no further force and
effect, whether or not Tenant has timely exercised the option granted herein, if
(i) a Default exists at the time of exercise of the option or at the time of
commencement of the option term, or (ii) Tenant has subleased 50% or more of the
Premises or has assigned the Lease other than to an Affiliate.

             (c) If Tenant properly exercises its option to extend the term of
the Lease, the Monthly Base Rent during such option term shall be determined in
the following manner. The Monthly Base Rent shall be increased to an amount
equal to the fair market rent for the Premises as of the commencement of the
option term for a term equal to the option term, as specified by Landlord by
notice to Tenant not less than ninety (90) days prior to commencement of the
option term, subject to Tenant's right of arbitration as set forth below. If
Tenant believes that the fair market rent specified by Landlord exceeds the
actual fair market rent for the Premises as of commencement of the option term,
then Tenant shall so notify Landlord within ten (10) business days following
receipt of Landlord's notice. If Tenant fails to so notify Landlord within said
ten (10) business days, Landlord's determination of the fair market rent for the
Premises shall be final and binding upon the parties.

             (d) If the parties are unable to agree upon the fair market rent
for the Premises within ten (10) days after Landlord's receipt of notice of
Tenant's objection, the amount of Monthly Base Rent as of commencement of the
option term shall be determined as follows:

                 (i) Within 20 days after receipt of Landlord's notice
         specifying fair market rent, Tenant, at its sole expense, shall obtain
         and deliver in writing to Landlord a determination of the fair market
         rent for the Premises for a term equal to the option term from a broker
         ("Tenant's Broker") licensed in the State of California and engaged in
         the office brokerage business in the south of Market Street area of San
         Francisco for at least the immediately preceding five (5) years
         ("Broker Qualifications"). If Landlord accepts such determination, the
         Monthly Base Rent for the option term shall be increased to an amount
         equal to of the amount determined by Tenant's broker.

                 (ii) If Landlord does not accept such determination, within 15
         days after receipt of the determination of Tenant's Broker, Landlord
         shall, at its sole expense, designate a broker ("Landlord's Broker")
         with the Broker Qualifications who shall deliver in writing to Tenant
         its determination of the fair market rent for the Premises for a term
         equal to the option term within twenty (20) days after appointment.

                                       10
<PAGE>   14

                 (iii) Landlord's Broker and Tenant's Broker shall name a third
         broker with the Broker Qualifications ("Third Broker"). The Third
         Broker shall choose one of the two estimates of fair market rent
         submitted by Landlord's Broker and Tenant's Broker, which must be the
         one that is closer to the fair market rent as determined by the third
         broker. The Third Broker's determination of fair market rent shall be
         binding upon Landlord and Tenant. If the Third Broker believes that
         expert advice would materially assist him/her, he/she may retain one or
         more qualified persons, including but not limited to legal counsel,
         brokers, architects or engineers, to provide such expert advice.

                 (iv) Landlord shall pay the costs and fees of Landlord's Broker
         in connection with any determination hereunder, and Tenant shall pay
         the costs and fees of Tenant's Broker in connection with such
         determination. The costs and fees of the Third Broker shall be paid
         one-half by Landlord and one-half by Tenant.

             (e) If the amount of the fair market rent is not known as of the
commencement of the option term, then Tenant shall continue to pay the Monthly
Base Rent in effect at the expiration of the initial Term until the amount of
the fair market basic rent is determined. When such determination is made,
Tenant shall pay any deficiency to Landlord upon demand.

             (f) Notwithstanding any provision of this Section 1, in no event
shall the Monthly Base Rent payable during either option term be less than the
Monthly Base Rent in effect immediately prior to the expiration of the initial
term or the first option term as the case may be.

                                   ARTICLE 3

                                      RENT

         Tenant agrees to pay to Landlord at the office specified in Section
1.1(2), or to such other persons, or at such other places designated by
Landlord, without any prior demand therefor in immediately available funds and
without any deduction or offset whatsoever, Rent, including Monthly Base Rent
and Additional Rent in accordance with Article Four, during the Term. Monthly
Base Rent shall be paid monthly in advance on the first day of each month of the
Term, except that the first installment of Monthly Base Rent shall be paid by
Tenant to Landlord concurrently with execution of this Lease.* Monthly Base Rent
shall be prorated for partial months within the Term. Unpaid Rent shall bear
interest at the Default Rate from the date due until paid. Tenant's covenant to
pay Rent shall be independent of every other covenant in this Lease.

                                   ARTICLE 4

                                ADDITIONAL RENT

         4.1 ADDITIONAL RENT

         Tenant shall pay to Landlord Additional Rent with respect to each Lease
Year as follows:

-------------
* If this Lease terminates prior to the Commencement Date for any reason,
Landlord shall return the first installment of Monthly Base Rent to Tenant
within ten (10) days after such termination.

                                       11
<PAGE>   15

                 (i) The Additional Rent Deposit representing Tenant's Share of
         Operating Expenses for the applicable Lease Year monthly during the
         Term with the payment of Monthly Base Rent; and

                 (ii) The Additional Rent Deposit representing Tenant's Share of
         Taxes for the applicable Lease Year monthly during the Term with the
         payment of Monthly Base Rent.

         4.2 STATEMENT OF LANDLORD

         As soon as feasible after the expiration of each Lease Year, Landlord
will furnish Tenant a statement ("Landlord's Statement") showing the following:

                 (i) Operating Expenses and Taxes for the applicable Lease Year;

                 (ii) The amount of Additional Rent due Landlord for the last
         Lease Year, less credit for Additional Rent Deposits paid, if any; and

                 (iii) Any change in the Rent Adjustment Deposit due monthly in
         the current Lease Year, including the amount or revised amount due for
         months preceding any such change pursuant to Landlord's Statement.

Tenant shall pay to Landlord within ten (10) days after receipt of such
statement any amounts for Additional Rent then due in accordance with Landlord's
Statement. Any amounts due from Landlord to Tenant pursuant to this Section
shall be credited to the Additional Rent Deposit next coming due, or refunded to
Tenant if the Term has already expired provided Tenant is not in default
hereunder. No interest or penalties shall accrue on any amounts that Landlord is
obligated to credit or refund to Tenant by reason of this Section 4.2.
Landlord's failure to deliver Landlord's Statement or to compute the amount of
the Rent Adjustments shall not constitute a waiver by Landlord of its right to
deliver such items nor constitute a waiver or release of Tenant's obligations to
pay such amounts. The Additional Rent Deposit shall be credited against
Additional Rent due for the applicable Lease Year. During the last complete
calendar year or during any partial calendar year in which the Lease terminates,
Landlord may include in the Additional Rent Deposit its estimate of Additional
Rent which may not be finally determined until after the termination of this
Lease. Tenant's obligation to pay Additional Rent and Landlord's obligation to
refund any overpayment of Additional Rent survives the expiration or termination
of the Lease.

         4.3 BOOKS AND RECORDS

         Landlord shall maintain books and records showing Operating Expenses
and Taxes in accordance with sound accounting and management practices,
consistently applied. The Tenant or its representative (which representative
shall be a certified public accountant licensed to do business in the state in
which the Property is located and whose primary business is certified public
accounting) shall have the right, for a period of thirty (30) days following the
date upon which Landlord's Statement is delivered to Tenant, to examine the
Landlord's books and records with respect to the items in the foregoing
statement of Operating Expenses and Taxes during normal business hours, upon
written notice, delivered at least three (3) business days in advance.

                                       12
<PAGE>   16

If Tenant does not object in writing to Landlord's Statement within sixty (60)
days of Tenant's receipt thereof, specifying the nature of the item in dispute
and the reasons therefor, then Landlord's Statement shall be considered final
and accepted by Tenant. Any amount due to the Landlord as shown on Landlord's
Statement, whether or not disputed by Tenant as provided herein shall be paid by
Tenant when due as provided above, without prejudice to any such written
exception.

         4.4 NET LEASE

         This shall be a triple net Lease and Monthly Base Rent shall be paid to
Landlord absolutely net of all costs and expenses, except as specifically
provided to the contrary in this Lease. The provisions for payment of Direct
Expenses and Operating Expenses and Taxes are intended to pass on to Tenant and
reimburse Landlord for all costs and expenses of the nature described in Article
4 incurred in connection with the ownership, management, maintenance, repair,
preservation, replacement and operation of the Building and/or Project and its
supporting facilities and such additional facilities now and in subsequent years
as may be determined by Landlord to be necessary or desirable to the Building
and/or Project.

         4.5 TENANT OR LEASE SPECIFIC TAXES

         In addition to Monthly Base Rent, Additional Rent and other charges to
be paid by Tenant, Tenant shall pay to Landlord, upon demand, any and all taxes
payable by Landlord (other than federal or state inheritance, general income,
gift or estate taxes) whether or not now customary or within the contemplation
of the parties hereto: (a) upon, allocable to, or measured by the Rent payable
hereunder, including any gross receipts tax or excise tax levied by any
governmental or taxing body with respect to the receipt of such rent; or (b)
upon or with respect to the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof; (c) upon the measured value of Tenant's personal property
located in the Premises or in any storeroom or any other place in the Premises
or the Property, or the areas used in connection with the operation of the
Property, it being the intention of Landlord and Tenant that, to the extent
possible, such personal property taxes shall be billed to and paid directly by
Tenant; (d) resulting from Tenant Work or Tenant Alterations to the Premises,
whether title thereto is in Landlord or Tenant; or (e) upon this transaction.

         4.6 PROTEST OF TAXES

         In the event Tenant desires to contest with the applicable authorities
the amount of Taxes assessed against the Building and Landlord declines to
initiate such contest, Tenant, at its sole cost and expense, shall have the
right to contest such Taxes, and Landlord shall cooperate with Tenant in such
contest.

                                   ARTICLE 5

                                SECURITY DEPOSIT

         Tenant concurrently with the execution of this Lease shall pay to
Landlord in immediately available funds the Security Deposit. The Security
Deposit may be applied by

                                       13
<PAGE>   17

Landlord to cure, in whole or part, any Default of Tenant under this Lease, and
upon notice by Landlord of such application, Tenant shall replenish the Security
Deposit in full by paying to Landlord within ten (10) days of demand the amount
so applied. Landlord's application of the Security Deposit shall not constitute
a waiver of Tenant's default to the extent that the Security Deposit does not
fully compensate Landlord for all losses, damages, costs and expenses incurred
by Landlord in connection with such default and shall not prejudice any other
rights or remedies available to Landlord under this Lease or by Law. Landlord
shall not pay any interest on the Security Deposit. Landlord shall not be
required to keep the Security Deposit separate from its general accounts. The
Security Deposit shall not be deemed an advance payment of Rent or a measure of
damages for any default by Tenant under this Lease, nor shall it be a bar or
defense of any action that Landlord may at any time commence against Tenant. In
the absence of evidence satisfactory to Landlord of an assignment of the right
to receive the Security Deposit or the remaining balance thereof, Landlord may
return the Security Deposit to the original Tenant, regardless of one or more
assignments of this Lease. Upon the transfer of Landlord's interest under this
Lease, Landlord's obligation to Tenant with respect to the Security Deposit
shall terminate upon transfer to the transferee of the Security Deposit, or any
balance thereof. If Tenant shall fully and faithfully comply with all the terms,
provisions, covenants, and conditions of this Lease, the Security Deposit, or
any balance thereof, shall be returned to Tenant within thirty (30) days after
Landlord recovers possession of the Premises. Tenant hereby waives any and all
rights of Tenant under the provisions of Section 1950.7 of the California Civil
Code or other Law regarding security deposits.

                                   ARTICLE 6

                                    SERVICES

         6.1 LANDLORD'S GENERAL SERVICES

             (a) So long as the Lease is in full force and effect and Tenant has
paid all Rent then due, Landlord shall furnish the following services, the
quality of which shall be consistent with comparable buildings:

                 (i) heat, ventilation and air-conditioning ("HVAC") during
         Standard Operating Hours as necessary in Landlord's reasonable judgment
         for the comfortable occupancy of the Building under normal business
         office operations, subject to compliance with all applicable voluntary
         and mandatory regulations and Laws;

                 (ii) tempered and cold water for use in lavatories in common
         with other tenants from the regular supply of the Building;

                 (iii) customary cleaning and janitorial services five (5) days
         per week, excluding National Holidays;

                 (iv) washing of the outside windows in the Premises weather
         permitting at intervals determined by Landlord; and

                                       14
<PAGE>   18

                 (v) automatic passenger and swing/freight elevator service in
         common with other tenants of the Building. Freight elevator service
         will be subject to reasonable scheduling by Landlord.

             (b) Landlord shall not enter into any service contracts to provide
the foregoing services, the cost of which are above the market cost for
comparable services in comparable buildings.

             (c) If Tenant uses heat generating machines or equipment in the
Premises to an extent which adversely affects the temperature otherwise
maintained by the air-cooling system or whenever the occupancy or electrical
load adversely affects the temperature otherwise maintained by the air-cooling
system, Landlord reserves the right to install or to require Tenant to install
supplementary air-conditioning units in the Premises. Tenant shall bear all
costs and expenses related to the installation, maintenance and operation of
such units.

         6.2 ELECTRICAL SERVICES

         The Premises shall be separately metered for the provision of
electricity and Tenant shall pay such charges directly to the utility providing
such electricity, as Direct Expenses. Tenant's use of electric current shall at
no time exceed the capacity of the wiring, feeders and risers providing electric
current to the Premises or the Building. The consent of Landlord to the
installation of electric equipment shall not relieve Tenant from the obligation
to limit usage of electricity to no more than such capacity.

         6.3 TELEPHONE SERVICES

         All telegraph, telephone, and communication connections which Tenant
may desire shall be subject to Landlord's prior written approval, in Landlord's
reasonable discretion, and the location of all wires and the work in connection
therewith shall be performed by contractors approved by Landlord and shall be
subject to the direction of Landlord, except that such approval is not required
as to Tenant's telephone equipment (including cabling) within the Premises and
from the Premises in a route designated by Landlord to any telephone cabinet or
panel provided (as existing or as installed as part of Landlord's Work or
Tenant's Work) for Tenant's connection to the telephone cable serving the
Building so long as Tenant's equipment does not require connections different
than or additional to those to the telephone cabinet or panel provided. Tenant
shall be entitled to its equitable share of space within any such shared
telephone cabinet or panel. If Tenant fails to maintain all telephone cables and
communication wiring in the Premises and such failure affects or interferes with
the operation or maintenance of any other telephone cables or communication
wiring serving the Building, Landlord or any vendor hired by Landlord may enter
into and upon the Premises forthwith and perform such repairs, restorations or
alterations as Landlord deems necessary in order to eliminate any such
interference (and Landlord may recover from Tenant all of Landlord's costs in
connection therewith). If required by Landlord, no later than the Termination
Date Tenant shall remove all telephone cables and communication wiring installed
by Tenant for and during Tenant's occupancy. Tenant agrees that neither Landlord
nor any of its agents or employees shall be liable to Tenant, or any of Tenant's
employees, agents, customers or invitees or anyone claiming through, by or under
Tenant, for any damages, injuries, losses, expenses, claims or causes of

                                       15
<PAGE>   19

action because of any interruption, diminution, delay or discontinuance at any
time for any reason in the furnishing of any telephone or other communication
service to the Premises and the Building.

         6.4 DELAYS IN FURNISHING SERVICES

         Tenant agrees that Landlord shall not be in breach of this Lease nor be
liable to Tenant for damages or otherwise, for any failure to furnish, or a
delay in furnishing, or a change in the quantity or character of any service
when such failure, delay or change is occasioned, in whole or in part, by
repairs, improvements or mechanical breakdowns by the act or default of Tenant
or other parties or by an event of Force Majeure. No such failure, delay or
change shall be deemed to be an eviction or disturbance of Tenant's use and
possession of the Premises, or relieve Tenant from paying Rent or from
performing any other obligations of Tenant under this Lease, without any
deduction or offset. Failure to any extent to make available, or any slowdown,
stoppage, or interruption of, the specified utility services resulting from any
cause, including changes in service provider or Landlord's compliance with any
voluntary or similar governmental or business guidelines now or hereafter
published or any requirements now or hereafter established by any governmental
agency, board, or bureau having jurisdiction over the operation of the Property
shall not render Landlord liable in any respect for damages to either persons,
property, or business, nor be construed as an eviction of Tenant or work an
abatement of Rent, nor relieve Tenant of Tenant's obligations for fulfillment of
any covenant or agreement hereof. Should any equipment or machinery furnished by
Landlord break down or for any cause cease to function properly, Landlord shall
use reasonable diligence to repair same promptly, but Tenant shall have no claim
for abatement of Rent or damages on account of any interruption of service
occasioned thereby or resulting therefrom.

         6.5 CHOICE OF SERVICE PROVIDER

         Tenant acknowledges that Landlord may, at Landlord's sole option (after
consultation with Tenant), to the extent permitted by applicable law, elect to
change, from time to time, the company or companies which provide services
(including electrical service, gas service and water services) to the Building,
the Premises and/or its occupants. Notwithstanding anything to the contrary set
forth in this Lease, Tenant acknowledges that Landlord has not and does not make
any representations or warranties concerning the identity or identities of the
company or companies which provide services to the Building and the Premises or
its occupants and Tenant acknowledges that the choice of service providers and
matters concerning the engagement and termination thereof shall be solely that
of Landlord. The foregoing provision is not intended to modify, amend, change or
otherwise derogate any provision of this Lease concerning the nature or type of
service to be provided or any specific information concerning the amount thereof
to be provided. Tenant agrees to cooperate with Landlord and each of its service
providers in connection with any change in service or provider.

                                       16
<PAGE>   20

                                   ARTICLE 7

                   POSSESSION, USE AND CONDITION OF PREMISES

         7.1 POSSESSION AND USE OF PREMISES

             (a) Tenant shall occupy and use the Premises only for the Use
specified in Section 1.1(13) to conduct Tenant's business. Tenant hereby
acknowledges that Landlord is pursuing certification of the Building as a
National Historic Landmark and will fully cooperate with Landlord in that
process. Tenant further acknowledges that the Tenant Work, Tenant Alteration or
Decoration will not violate the Historic Guidelines attached as Schedule 2 to
the Work Letter. Landlord represents and warrants that it has obtained the
necessary approvals from the San Francisco Planning Department for using the
Premises as office space.

             (b) Tenant shall not occupy or use the Premises (or permit the use
or occupancy of the Premises) for any purpose or in any manner which: (1) is
unlawful or in violation of any Law or Environmental Law; (2) may be dangerous
to persons or property or which may increase the cost of, or invalidate, any
policy of insurance carried on the Building or covering its operations; (3) is
contrary to or prohibited by the terms and conditions of this Lease or the Rules
and Regulations; or (4) would create or continue a nuisance.

             (c) Tenant shall comply with all Environmental Laws pertaining to
Tenant's occupancy and use of the Premises and concerning the proper storage,
handling and disposal of any Hazardous Material introduced to the Premises, the
Building or the Property by Tenant or other occupants of the Premises, or their
employees, servants, agents, contractors, customers or invitees. Landlord shall
comply with all Environmental Laws applicable to the Property other than those
to be complied with by Tenant pursuant to the preceding sentence. Tenant shall
not generate, store, handle or dispose of any Hazardous Material in, on, or
about the Property without the prior written consent of Landlord, which may be
withheld in Landlord's sole discretion, except that such consent shall not be
required to the extent of Hazardous Material packaged and contained in office
products for consumer use in general business offices in quantities for ordinary
day to day use provided such use does not give rise to, or pose a risk of,
exposure to or release of Hazardous Material. In the event that Tenant is
notified of any investigation or violation of any Environmental Law arising from
Tenant's activities at the Premises, Tenant shall immediately deliver to
Landlord a copy of such notice. In such event or in the event Landlord
reasonably believes that a violation of Environmental Law exists, Landlord may
conduct such tests and studies relating to compliance by Tenant with
Environmental Laws or the alleged presence of Hazardous Materials upon the
Premises as Landlord deems desirable, all of which shall be completed at
Tenant's expense. Landlord's inspection and testing rights are for Landlord's
own protection only, and Landlord has not, and shall not be deemed to have
assumed any responsibility to Tenant or any other party for compliance with
Environmental Laws, as a result of the exercise, or non-exercise of such rights.
Tenant hereby indemnifies, and agrees to defend, protect and hold harmless, the
Indemnitees from any and all loss, claim, demand, action, expense, liability and
cost (including attorneys' fees and expenses) arising out of or in any way
related to the presence of any Hazardous Material introduced to the Premises
during the Lease Term by any party other than Landlord, or its employees or
agents. In case of any action or proceeding brought against the Indemnitees by
reason of any such claim, upon notice from Landlord, Tenant covenants to defend
such action or proceeding by counsel

                                       17
<PAGE>   21

reasonably approved by Landlord. Landlord reserves the right to settle,
compromise or dispose of any and all actions, claims and demands related to the
foregoing indemnity on commercially reasonable terms. If any Hazardous Material
is released, discharged or disposed of on or about the Property and such
release, discharge or disposal is not caused by Tenant or other occupants of the
Premises, or their employees, servants, agents, contractors customers or
invitees, such release, discharge or disposal shall be deemed casualty damage
under Article Fourteen to the extent that the Premises are affected thereby; in
such case, Landlord and Tenant shall have the obligations and rights respecting
such casualty damage provided under such Article.

             (d) Landlord and Tenant acknowledge that the Americans With
Disabilities Act of 1990 (42 U.S.C. Section 12101 et seq.) and regulations and
guidelines promulgated thereunder, as all of the same may be amended and
supplemented from time to time (collectively referred to herein as the "ADA")
establish requirements for business operations, accessibility and barrier
removal, and that such requirements may or may not apply to the Premises, the
Building and the Project depending on, among other things: (1) whether Tenant's
business is deemed a "public accommodation" or "commercial facility", (2)
whether such requirements are "readily achievable", and (3) whether a given
alteration affects a "primary function area" or triggers "path of travel"
requirements. The parties hereby agree that: (a) Landlord shall be responsible
for ADA Title III compliance in the Common Areas, except as provided below, (b)
Tenant shall be responsible for ADA Title III compliance in the Premises,
including any leasehold improvements or other work to be performed in the
Premises under or in connection with this Lease, (c) Landlord may perform, or
require that Tenant perform, and Tenant shall be responsible for the cost of,
ADA Title III "path of travel" requirements triggered by Tenant Additions in the
Premises, and (d) Landlord may perform, or require Tenant to perform, and Tenant
shall be responsible for the cost of, ADA Title III compliance in the Common
Areas necessitated by the Building being deemed to be a "public accommodation"
instead of a "commercial facility" as a result of Tenant's use of the Premises.
Tenant shall be solely responsible for requirements under Title I of the ADA
relating to Tenant's employees.

         7.2 LANDLORD ACCESS TO PREMISES, APPROVALS

             (a) Tenant shall permit Landlord to erect, use and maintain pipes,
ducts, wiring and conduits in and through the Premises, so long as Tenant's use,
layout or design of the Premises is not materially affected or altered. Subject
to notification as provided in Section 7.2(b) below, Landlord or Landlord's
agents shall have the right to enter upon the Premises in the event of an
emergency, or to inspect the Premises, to perform services, to conduct safety
and other testing in the Premises and to make such repairs, alterations,
improvements or additions to the Premises or the Building or other parts of the
Property as Landlord may deem necessary or desirable (including all alterations,
improvements and additions in connection with a change in service provider or
providers). Janitorial and cleaning services shall be performed after normal
business hours. Any entry or work by Landlord may be during normal business
hours and Landlord shall use reasonable efforts to ensure that any entry or work
shall not materially interfere with Tenant's occupancy of the Premises.

             (b) If Tenant shall not be personally present to permit an entry
into the Premises when for any reason an entry therein shall be necessary or
permissible, Landlord (or Landlord's agents), after giving Tenant reasonable
prior notice (unless Landlord believes an

                                       18
<PAGE>   22

emergency situation exists), may enter the Premises (accompanied by a
representative of Tenant if Tenant desires) without rendering Landlord or its
agents liable therefor, and without relieving Tenant of any obligations under
this Lease. Tenant shall have the right to restrict access to certain areas in
the Premises, which Landlord shall only have the right to enter in an emergency
or to perform its obligations under the Lease.

             (c) Subject to notification as provided in Section 7.2(b) above,
Landlord may enter the Premises for the purpose of conducting such inspections,
tests and studies as Landlord may deem desirable or necessary to confirm
Tenant's compliance with all Laws and Environmental Laws or for other purposes
necessary in Landlord's reasonable judgment to ensure the sound condition of the
Property and the systems serving the Property. Landlord's rights under this
Section 7.2(c) are for Landlord's own protection only, and Landlord has not, and
shall not be deemed to have assumed, any responsibility to Tenant or any other
party as a result of the exercise or non-exercise of such rights, for compliance
with Laws or Environmental Laws or for the accuracy or sufficiency of any item
or the quality or suitability of any item for its intended use.

             (d) Landlord may do any of the foregoing, or undertake any of the
inspection or work described in the preceding paragraphs without such action
constituting an actual or constructive eviction of Tenant, in whole or in part,
or giving rise to an abatement of Rent by reason of loss or interruption of
business of the Tenant, or otherwise.

             (e) The review, approval or consent of Landlord with respect to any
item required or permitted under this Lease is for Landlord's own protection
only, and Landlord has not, and shall not be deemed to have assumed, any
responsibility to Tenant or any other party, as a result of the exercise or
non-exercise of such rights, for compliance with Laws or Environmental Laws or
for the accuracy or sufficiency of any item or the quality or suitability of any
item for its intended use.

         7.3 QUIET ENJOYMENT

         Landlord covenants, in lieu of any implied covenant of quiet possession
or quiet enjoyment, that so long as Tenant is in compliance with the covenants
and conditions set forth in this Lease, Tenant shall have the right to quiet
enjoyment of the Premises without hindrance or interference from Landlord or
those claiming through Landlord, and subject to the covenants and conditions set
forth in the Lease and to the rights of any Mortgagee or ground lessor.

                                   ARTICLE 8

                                  MAINTENANCE

         8.1 LANDLORD'S MAINTENANCE

         Subject to the provisions of Articles Four and Fourteen, Landlord shall
maintain in good order, condition and repair and in accordance with all Laws and
Environmental Laws and make necessary repairs to the foundations, roofs,
exterior walls, doors, windows and the structural elements of the Building,
elevators, the electrical, plumbing, heating, ventilating, air-conditioning,
mechanical, communication, security and the fire and life safety systems of the

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<PAGE>   23

Building and those corridors, washrooms and lobbies which are Common Areas of
the Building, except that: (a) Landlord shall not be responsible for the
maintenance or repair of any floor or wall coverings in the Premises or any such
supplemental or special systems to the Building's standard systems and of any
corridors, washrooms and lobbies which are part of the Premises; and (b) the
cost of performing any of said maintenance or repairs whether to the Premises or
to the Building caused by the negligence of Tenant, its employees, agents,
servants, licensees, subtenants, contractors or invitees, shall be paid by
Tenant, subject to the waivers set forth in Section 16.4. Landlord shall not be
liable to Tenant for any expense, injury, loss or damage resulting from work
done in or upon, or in connection with the use of, any adjacent or nearby
building, land, street or alley.

         8.2 TENANT'S MAINTENANCE

         Subject to the provisions of Article Fourteen, Tenant, at its expense,
shall keep and maintain the Premises and all Tenant Additions in good order,
condition and repair and in accordance with all Laws and Environmental Laws.
Tenant shall not permit waste and shall promptly and adequately repair all
damages to the Premises and replace or repair all damaged or broken glass in the
interior of the Premises, fixtures or appurtenances. Any repairs or maintenance
shall be completed with materials of similar quality to the original materials.
Any such repairs or maintenance shall be performed only by contractors or
mechanics approved by Landlord, which approval shall not be unreasonably
withheld, and whose work will not cause or threaten to cause disharmony or
interference with Landlord or other tenants in the Building and their respective
agents and contractors performing work in or about the Building. If Tenant fails
to perform any of its obligations set forth in this Section 8.2, Landlord may,
in its sole discretion after ten (10) days written notice to Tenant (except
without notice in the case of emergencies), perform the same, and Tenant shall
pay to Landlord any costs or expenses incurred by Landlord upon demand.

                                   ARTICLE 9

                          ALTERATIONS AND IMPROVEMENTS

         9.1 TENANT ALTERATIONS

             (a) Except for completion of Tenant Work undertaken by Tenant
pursuant to the Work Letter, the following provisions shall apply to the
completion of any Tenant Alterations:

                 (i) Tenant shall not, except as provided herein, without the
         prior written consent of Landlord, which consent shall not be
         unreasonably withheld make or cause to be made any Tenant Alterations
         in or to the Premises. Notwithstanding the foregoing, Landlord shall
         have the right in its discretion to approve any Tenant Alterations that
         affect the structure of the Building or its systems. Prior to making
         any Tenant Alterations, Tenant shall give Landlord ten (10) days prior
         written notice (or such earlier notice as would be necessary pursuant
         to applicable Law) to permit Landlord sufficient time to post
         appropriate notices of nonresponsibility. Subject to all other
         requirements of this Article Nine, Tenant may undertake Decoration work
         without Landlord's prior written consent. Tenant shall furnish Landlord
         with the names and

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<PAGE>   24

         addresses of all contractors and subcontractors and copies of all
         contracts. All Tenant Alterations shall be completed at such time and
         in such manner as Landlord may from time to time designate, and only by
         contractors or mechanics approved by Landlord, which approval shall not
         be unreasonably withheld, provided, however, that Landlord may, in its
         sole discretion, specify the engineers and contractors to perform all
         work relating to the Building's systems (including the mechanical,
         heating, plumbing, security, ventilating, air-conditioning, electrical,
         communication and the fire and life safety systems in the Building).
         Tenant acknowledges that all contractors or mechanics must be union
         affiliated. The contractors, mechanics and engineers who may be used
         are further limited to those whose work will not cause or threaten to
         cause disharmony or interference with Landlord or other tenants in the
         Building and their respective agents and contractors performing work in
         or about the Building. Landlord may further condition its consent upon
         Landlord approving prior to the commencement of any work or delivery of
         materials to the Premises related to the Tenant Alterations such of the
         following as specified by Landlord: architectural plans and
         specifications, opinions from Landlord's engineers stating that the
         Tenant Alterations will not in any way adversely affect the Building's
         systems, necessary permits and licenses, certificates of insurance, and
         such other documents in such form reasonably requested by Landlord.
         Landlord may, in the exercise of reasonable judgment, request that
         Tenant provide Landlord with appropriate evidence of Tenant's ability
         to complete and pay for the completion of the Tenant Alterations such
         as a performance bond or letter of credit. Upon completion of the
         Tenant Alterations, Tenant shall deliver to Landlord an as-built mylar
         and digitized (if available) set of plans and specifications for the
         Tenant Alterations.

                 (ii) Tenant shall pay the cost of all Tenant Alterations and
         the cost of decorating the Premises and any work to the Property
         occasioned thereby. Upon completion of Tenant Alterations, Tenant shall
         furnish Landlord with contractors' affidavits and full and final
         waivers of lien and receipted bills covering all labor and materials
         expended and used in connection therewith and such other documentation
         reasonably requested by Landlord or Mortgagee. In addition, Tenant
         shall pay Landlord immediately following completion of the Tenant
         Alterations a supervisory fee of 5% of the total cost of the Tenant
         Alterations, except for Decoration work.

                 (iii) Tenant agrees to complete all Tenant Alterations (i) in
         accordance with all Laws, Environmental Laws, all requirements of
         applicable insurance companies and in accordance with Landlord's
         standard construction rules and regulations, and (ii) in a good and
         workmanlike manner with the use of good grades of materials. Tenant
         shall notify Landlord immediately if Tenant receives any notice of
         violation of any Law in connection with completion of any Tenant
         Alterations and shall immediately take such steps as are necessary to
         remedy such violation. In no event shall such supervision or right to
         supervise by Landlord nor shall any approvals given by Landlord under
         this Lease constitute any warranty by Landlord to Tenant of the
         adequacy of the design, workmanship or quality of such work or
         materials for Tenant's intended use or of compliance with the
         requirements of this Section or impose any liability upon Landlord in
         connection with the performance of such work.

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<PAGE>   25

             (b) All Tenant Additions whether installed by Landlord or Tenant,
shall without compensation or credit to Tenant, become part of the Premises and
the property of Landlord at the time of their installation and shall remain in
the Premises, unless pursuant to Article Twelve, Tenant may remove them or is
required to remove them at Landlord's request.

         9.2 LIENS

         Tenant shall not permit any lien or claim for lien of any mechanic,
laborer or supplier or any other lien to be filed against the Building, the
Land, the Premises, or any other part of the Property arising out of work
performed by, or at the direction of, or on behalf of Tenant. If any such lien
or claim for lien is filed, Tenant shall within ten (10) days of receiving
notice of such lien or claim (a) have such lien or claim for lien released of
record or (b) deliver to Landlord a bond in form, content, amount, and issued by
surety, satisfactory to Landlord, indemnifying, protecting, defending and
holding harmless the Indemnitees against all costs and liabilities resulting
from such lien or claim for lien and the foreclosure or attempted foreclosure
thereof. If Tenant fails to take any of these actions, Landlord, in addition to
its rights and remedies under Article Eleven, without investigating the validity
of such lien or claim for lien, may pay or discharge the same and Tenant shall,
as payment of additional Rent hereunder, reimburse Landlord upon demand for the
amount so paid by Landlord, including Landlord's expenses and attorneys' fees.

                                   ARTICLE 10

                           ASSIGNMENT AND SUBLETTING

         10.1 ASSIGNMENT AND SUBLETTING

              (a) Without the prior written consent of Landlord, which may be
granted or withheld in Landlord's reasonable discretion (and subject to
Landlord's right of Recapture under Section 10.2), Tenant may not sublease,
assign, mortgage, pledge, hypothecate or otherwise transfer or permit the
transfer of this Lease or the encumbering of Tenant's interest therein in whole
or in part, by operation of Law or otherwise or permit the use or occupancy of
the Premises, or any part thereof, by anyone other than Tenant. Tenant agrees
that the provisions governing sublease and assignment set forth in this Article
Ten shall be deemed to be reasonable. If Tenant desires to enter into any
sublease of the Premises or assignment of this Lease, Tenant shall deliver
written notice thereof to Landlord ("Tenant's Notice"), together with the
identity of the proposed subtenant or assignee and the proposed principal terms
thereof and financial and other information sufficient for Landlord to make an
informed judgment with respect to such proposed subtenant or assignee at least
thirty-five (35) days prior to the commencement date of the term of the proposed
sublease or assignment. If Tenant proposes to sublease less than all of the
Rentable Area of the Premises, the space proposed to be sublet and the space
retained by Tenant must each be a marketable unit as reasonably determined by
Landlord and otherwise in compliance with all Laws. Landlord shall notify Tenant
in writing of its approval or disapproval of the proposed sublease or assignment
or its decision to exercise its rights under Section 10.2 as soon as reasonably
possible and in any event within thirty (30) days after receipt of Tenant's
Notice (and all required information). Tenant shall submit for Landlord's
approval (which approval shall not be unreasonably withheld) any advertising
which Tenant or its agents intend to use with respect to the space proposed to
be sublet.

                                       22
<PAGE>   26

              (b) With respect to Landlord's consent to an assignment or
sublease, Landlord may take into consideration any factors that Landlord may
deem relevant, and the reasons for which Landlord's denial shall be deemed to be
reasonable shall include, without limitation, the following:

                  (i) the business reputation or creditworthiness of any
         proposed subtenant or assignee is not acceptable to Landlord; or

                  (ii) in Landlord's reasonable judgment the proposed assignee
         or sublessee would diminish the value or reputation of the Building or
         Landlord; or

                  (iii) any proposed assignee's or sublessee's use of the
         Premises would violate Section 7.1 of the Lease or would violate the
         provisions of any other leases of tenants in the Project; or

                  (iv) the proposed sublessee or assignee is an existing tenant
         of Landlord in the Building or a prospective tenant of Landlord in the
         Project as demonstrated by a written proposal dated within ninety (90)
         days prior to the date of Tenant's request, provided Landlord within
         five (5) days upon request of Tenant shall provide Tenant a list of all
         such existing or prospective tenants; or

                  (v) the proposed sublessee or assignee would materially
         increase the estimated pedestrian and vehicular traffic to and from the
         Premises and the Building;

                  (vi) the proposed assignee or subtenant is a governmental
         authority or agency, an organization or person enjoying sovereign or
         diplomatic immunity, a medical or dental practice or any user that will
         attract a volume, frequency or type of visitor or employee to the
         Building which is not, in Landlord's judgment, consistent with the
         standards of the Building;

                  (vii) in Landlord's reasonable judgment, the use of the
         Premises by the proposed assignee or subtenant would entail any
         alterations which would lessen the value of the leasehold improvements
         in the Premises or make the Premises more difficult to re-lease at the
         expiration of the Term;

                  (viii) Landlord (or any affiliate of Landlord) has experienced
         previous default by or is in litigation with the proposed assignee or
         subtenant;

                  (ix) Tenant is in default past any applicable notice and cure
         period of any obligation of Tenant under this Lease; or

                  (x) in the case of a subletting of less than the entire
         Premises, if the subletting would result in a division of the Premises
         into more than four (4) subparcels (in addition to the remaining
         balance of the Premises) or would require access to be provided through
         space leased or held for lease to another tenant or improvements to be
         made outside of the Premises.

                                       23
<PAGE>   27

         With respect to clause (iv) above, Landlord shall keep Tenant apprised
of any additions or deletions from the list. In addition, if Landlord falls to
successfully conclude negotiations with any existing or prospective tenants
within sixty (60) days after the name of such existing or prospective tenant
first appears on Landlord's list, Tenant shall thereafter have the right to
sublease the Premises or assign this Lease to any such persons.

              (c) Any sublease or assignment shall be expressly subject to the
terms and conditions of this Lease. Any subtenant or assignee shall execute such
documents as Landlord may reasonably require to evidence such subtenant or
assignee's assumption of the obligations and liabilities of Tenant under this
Lease. Tenant shall deliver to Landlord a copy of all agreements executed by
Tenant and the proposed subtenant and assignee with respect to the Premises.
Landlord's approval of a sublease, assignment, hypothecation, transfer or third
party use or occupancy shall not constitute a waiver of Tenant's obligation to
obtain Landlord's consent to further assignments or subleases, hypothecations,
transfers or third party use or occupancy.

              (d) If Tenant is a corporation, limited liability company,
partnership or similar entity, Landlord's consent shall not be required with
respect to an assignment or subletting of this Lease to an Affiliate of Tenant,
provided that (i) the assignee is a reputable entity of good character, (ii) a
duplicate original instrument of assignment or sublease agreement in form and
substance reasonably satisfactory to Landlord, duly executed by Tenant and such
assignee or subtenant, shall have been delivered to Landlord promptly following
the effective date of any such assignment or subletting, (iii) in the case of an
assignment, an instrument in form and substance satisfactory to Landlord, duly
executed by the assignee, in which such assignee assumes observance and
performance of, and agrees to be personally bound by, all of the terms,
covenants and conditions of this lease on Tenant's part to be performed and
observed shall have been delivered to Landlord promptly following the effective
date of such assignment, (iv) in the case of an assignment, such assignment is
for a legitimate business purpose and not principally for the purpose of
avoiding the restrictions on assignment otherwise applicable under this Article
8 and (v) in the case of an assignment, such assignee has a Net Worth (as
hereinafter defined), computed in accordance with generally accepted accounting
principles (excluding goodwill and intangible assets) at least equal to or
greater than the greater of (a) Tenant's Net Worth as of the date of this Lease
and (b) Tenant's Net Worth immediately preceding such assignment. "Net Worth" of
Tenant for purposes of this Article shall be the net worth of Tenant (excluding
any guarantors) established under generally accepted accounting principles
consistently applied. Transfers of stock in a corporation whose shares are sold
in an initial public offering or traded in the "over-the-counter" market or any
recognized national securities exchange shall not constitute an assignment for
purposes of this Lease, provided that the principal purpose of such transfer or
transfers is not to avoid the restrictions on assignment otherwise applicable
under this Article.

         10.2 RECAPTURE

         Landlord shall have the option to exclude from the Premises covered by
this Lease ("Recapture") the space proposed to be sublet or subject to the
assignment, effective as of the proposed commencement date of such sublease or
assignment. If Landlord elects to Recapture, Tenant shall surrender possession
of the space proposed to be subleased or subject to the

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<PAGE>   28

assignment to Landlord on the effective date of Recapture of such space from the
Premises, such date being the Termination Date for such space. Effective as of
the date of Recapture of any portion of the Premises pursuant to this section,
the Monthly Base Rent, Rentable Area of the Premises and Tenant's Share shall be
adjusted accordingly. Notwithstanding the foregoing, Landlord's right of
Recapture shall not apply to (i) Subleases for a term (together with any option
to extend) of four (4) years or less, or (ii) an assignment or sublease to an
Affiliate as defined under (ii) or (iii) in the definition of Affiliate in
Section 1.3.

         10.3 EXCESS RENT

         Tenant shall pay Landlord on the fifth day of each month during the
term of the sublease or assignment, fifty percent (50%) of the amount by which
the sum of all rent and other consideration (direct or indirect) received from
the subtenant or assignee for such month exceeds: (i) that portion of the
Monthly Base Rent and Additional Rent due under this Lease for said month which
is allocable to the space sublet or assigned; and (ii) the following costs and
expenses for the subletting or assignment of such space: (1) brokerage
commissions and attorneys' fees and expenses, (2) the actual costs paid in
making any improvements or substitutions in the Premises required by any
sublease or assignment, and (3) the actual costs of moving costs or other out of
pocket expenses paid to subtenant or assignee. All such costs and expenses shall
be amortized over the term of the sublease or assignment pursuant to sound
accounting principles.

         10.4 TENANT LIABILITY

         In the event of any sublease or assignment, whether or not with
Landlord's consent, Tenant shall not be released or discharged from any
liability, whether past, present or future, under this Lease, including any
liability arising from the exercise of any renewal or expansion option, to the
extent such exercise is expressly permitted by Landlord. Tenant's liability
shall remain primary, and in the event of default by any subtenant, assignee or
successor of Tenant in performance or observance of any of the covenants or
conditions of this Lease, Landlord may proceed directly against Tenant without
the necessity of exhausting remedies against said subtenant, assignee or
successor. After any assignment, Landlord may consent to subsequent assignments
or subletting of this Lease, or amendments or modifications of this Lease with
assignees of Tenant, without notifying Tenant, or any successor of Tenant, and
without obtaining its or their consent thereto, and such action shall not
relieve Tenant or any successor of Tenant of liability under this Lease. If
Landlord grants consent to such sublease or assignment, Tenant shall pay all
reasonable attorneys' fees and expenses incurred by Landlord with respect to
such assignment or sublease. In addition, if Tenant has any options to extend
the term of this Lease or to add other space to the Premises, such options shall
not be available to any subtenant or assignee, directly or indirectly without
Landlord's express written consent, which may be withheld in Landlord's sole
discretion.

         10.5 ASSUMPTION AND ATTORNMENT

         If Tenant shall assign this Lease, the assignee shall expressly assume
all of the obligations of Tenant in a written instrument satisfactory to
Landlord and furnished to Landlord prior to the effective date of the
assignment. If Tenant shall sublease the Premises as permitted

                                       25
<PAGE>   29

herein, Tenant shall, at Landlord's option, within fifteen (15) days following
any request by Landlord, obtain and furnish to Landlord the written agreement of
such subtenant on Landlord's standard form to the effect that the subtenant will
attorn to Landlord and will pay all subrent directly to Landlord upon a Default
by Tenant.

                                   ARTICLE 11

                              DEFAULT AND REMEDIES

         11.1 EVENTS OF DEFAULT

         The occurrence or existence of any one or more of the following shall
constitute a "Default" by Tenant under this Lease:

                  (i) Tenant fails to pay any installment or other payment of
         Rent including Additional Rent within five (5) days after written
         notice of such delinquency;

                  (ii) Tenant fails to observe or perform any of the other
         covenants, conditions or provisions of this Lease or the Work Letter
         and fails to cure such default within thirty (30) days after written
         notice thereof to Tenant (unless such cure reasonably requires
         additional time to cure and then only to the extent Tenant is
         diligently pursuing such cure), unless the default involves a hazardous
         condition, which shall be cured forthwith or unless the failure to
         perform is a Default for which this Lease specifies there is no cure or
         grace period;

                  (iii) the interest of Tenant in this Lease is levied upon
         under execution or other legal process;

                  (iv) a petition is filed by or against Tenant to declare
         Tenant bankrupt or seeking a plan of reorganization or arrangement
         under any Chapter of the Bankruptcy Act, or any amendment, replacement
         or substitution therefor, or to delay payment of, reduce or modify
         Tenant's debts, which in the case of an involuntary action is not
         discharged within thirty (30) days; or, Tenant is declared insolvent by
         Law or any assignment of Tenant's property is made for the benefit of
         creditors; or a receiver is appointed for Tenant or Tenant's property,
         which appointment is not discharged within thirty (30) days; or any
         action taken by or against Tenant to reorganize or modify Tenant's
         capital structure in a materially adverse way which in the case of an
         involuntary action is not discharged within thirty (30) days; or

                  (v) upon the dissolution of Tenant.

         11.2 LANDLORD'S REMEDIES

              (a) A Default shall constitute a breach of the Lease for which
Landlord shall have the rights and remedies set forth in this Section 11.2 and
all other rights and remedies set forth in this Lease or now or hereafter
allowed by Law, whether legal or equitable, and all rights and remedies of
Landlord shall be cumulative and none shall exclude any other right or remedy.

                                       26
<PAGE>   30

              (b) With respect to a Default, at any time Landlord may terminate
Tenant's right to possession by written notice to Tenant stating such election.
Any written notice required pursuant to Section 11.1 shall constitute notice of
unlawful detainer pursuant to California Code of Civil Procedure Section 1161
if, at Landlord's sole discretion, it states Landlord's election that Tenant's
right to possession is terminated after expiration of any period required by Law
or any longer period required by Section 11.1. Upon the expiration of the period
stated in Landlord's written notice of termination (and unless such notice
provides an option to cure within such period and Tenant cures the Default
within such period), Tenant's right to possession shall terminate and this Lease
shall terminate, and Tenant shall remain liable as hereinafter provided. Upon
such termination in writing of Tenant's right to possession, Landlord shall have
the right, subject to applicable Law, to reenter the Premises and dispossess
Tenant and the legal representatives of Tenant and all other occupants of the
Premises by unlawful detainer or other summary proceedings, or otherwise as
permitted by Law, regain possession of the Premises and remove their property
(including their trade fixtures, personal property and those Tenant Additions
which Tenant is required or permitted to remove under Article Twelve), but
Landlord shall not be obligated to effect such removal, and such property may,
at Landlord's option, be stored elsewhere, sold or otherwise dealt with as
permitted by Law, at the risk of, expense of and for the account of Tenant, and
the proceeds of any sale shall be applied pursuant to Law. Landlord shall in no
event be responsible for the value, preservation or safekeeping of any such
property. Tenant hereby waives all claims for damages that may be caused by
Landlord's removing or storing Tenant's personal property pursuant to this
Section or Section 12.1, and Tenant hereby indemnifies, and agrees to defend,
protect and hold harmless, the Indemnitees from any and all loss, claims,
demands, actions, expenses, liability and cost (including attorneys' fees and
expenses) arising out of or in any way related to such removal or storage. Upon
such written termination of Tenant's right to possession and this Lease,
Landlord shall have the right to recover damages for Tenant's Default as
provided herein or by Law, including the following damages provided by
California Civil Code Section 1951.2:

                  (i) the worth at the time of award of the unpaid Rent which
         had been earned at the time of termination;

                  (ii) the worth at the time of award of the amount by which the
         unpaid Rent which would have been earned after termination until the
         time of award exceeds the amount of such Rent loss that Tenant proves
         could reasonably have been avoided;

                  (iii) the worth at the time of award of the amount by which
         the unpaid Rent for the balance of the term of this Lease after the
         time of award exceeds the amount of such Rent loss that Tenant proves
         could be reasonably avoided; and

                  (iv) any other amount necessary to compensate Landlord for all
         the detriment proximately caused by Tenant's failure to perform its
         obligations under this Lease or which in the ordinary course of things
         would be likely to result therefrom, including, without limitation,
         Landlord's unamortized costs of tenant improvements, leasing
         commissions and legal fees incurred in connection with entering into
         this Lease. The word "rent" as used in this Section 11.2 shall have the
         same meaning as the defined term Rent in this Lease. The "worth at the
         time of award" of the amount referred to in clauses (1) and (2) above
         is computed by allowing interest at the Default Rate. The

                                       27
<PAGE>   31

         worth at the time of award of the amount referred to in clause (3)
         above is 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%). For the purpose of determining unpaid Rent under clause
         (3) above, the monthly Rent reserved in this Lease shall be deemed to
         be the sum of the Monthly Base Rent, monthly storage space rent, if
         any, parking charges, and the amounts last payable by Tenant as
         Additional Rent for the calendar year in which Landlord terminated this
         Lease as provided hereinabove.

              (c) Even if Tenant is in Default, this Lease shall continue in
effect for so long as Landlord does not terminate Tenant's right to possession
by written notice as provided in Section 11.2(b) above, and Landlord may enforce
all its rights and remedies under this Lease, including the right to recover
Rent as it becomes due under this Lease. In such event, Landlord shall have all
of the rights and remedies of a landlord under California Civil Code Section
1951.4 (lessor may continue Lease in effect after Tenant's Default and
abandonment and recover Rent as it becomes due, if Tenant has the right to
sublet or assign, subject only to reasonable limitations), or any successor
statute. During such time as Tenant is in Default, if Landlord has not
terminated this Lease by written notice and if Tenant requests Landlord's
consent to an assignment of this Lease or a sublease of the Premises, subject to
Landlord's option to recapture pursuant to Section 10.2, Landlord shall not
unreasonably withhold its consent to such assignment or sublease. Tenant
acknowledges and agrees that the provisions of Article Ten shall be deemed to
constitute reasonable limitations of Tenant's right to assign or sublet. Tenant
acknowledges and agrees that in the absence of written notice pursuant to
Section 11.2(b) above terminating Tenant's right to possession, no other act of
Landlord shall constitute a termination of Tenant's right to possession or an
acceptance of Tenant's surrender of the Premises, including acts of maintenance
or preservation or efforts to relet the Premises or the appointment of a
receiver upon initiative of Landlord to protect Landlord's interest under this
Lease or the withholding of consent to a subletting or assignment, or
terminating a subletting or assignment, if in accordance with other provisions
of this Lease.

              (d) Tenant hereby waives any and all rights to relief from
forfeiture, redemption or reinstatement granted by Law (including California
Civil Code of Procedure Sections 1174 and 1179) in the event of Tenant being
evicted or dispossessed or in the event of Landlord obtaining possession of the
Premises;

              (e) Notwithstanding any other provision of this Lease, a notice to
Tenant given under this Article or given pursuant to California Code of Civil
Procedure Section 1161, and any notice served by mail shall be deemed served,
and the requisite waiting period deemed to begin under said Code of Civil
Procedure Section upon mailing, without any additional waiting requirement under
Code of Civil Procedure Section 1011 et seq. or by other Law. For purposes of
Code of Civil Procedure Section 1162, Tenant's "place of residence", "usual
place of business", "the property" and "the place where the property is
situated" shall mean and be the Premises, whether or not Tenant has vacated same
at the time of service.

              (f) The voluntary or other surrender or termination of this Lease,
or a mutual termination or cancellation, shall not constitute a merger and shall
terminate all or any existing assignments or subleases, except if and as
otherwise specified in writing by Landlord.

                                       28
<PAGE>   32

              (g) No delay or omission in the exercise of any right or remedy of
Landlord upon any default by Tenant, and no exercise by Landlord of its rights
pursuant to Section 25.13 to perform any duty which Tenant fails timely to
perform, shall impair any right or remedy or be construed as a waiver, unless
such waiver is in writing signed by Landlord. The waiver by Landlord of any
breach of this Lease shall not be deemed a waiver of any subsequent breach of
the same or any other provision of this Lease.

         11.3 ATTORNEY'S FEES

         In the event any party brings any suit or other proceeding with respect
to the subject matter or enforcement of this Lease, the prevailing party (as
determined by the court, agency or other authority before which such suit or
proceeding is commenced) shall, in addition to such other relief as may be
awarded, be entitled to recover reasonable attorneys' fees, expenses and costs
of investigation, including court. costs, expert witness fees, costs and
expenses of investigation, and all attorneys' fees, costs and expenses in any
such suit or proceeding (including in any action or participation in or in
connection with any case or proceeding under the Bankruptcy Code, 11 United
States Code Section 101 et seq., or any successor statutes, in establishing or
enforcing the right to indemnification, in appellate proceedings, or in
connection with the enforcement or collection of any judgment obtained in any
such suit or proceeding).

         11.4 BANKRUPTCY

         The following provisions shall apply in the event of the bankruptcy or
insolvency of Tenant:

              (a) In connection with any proceeding under Chapter 7 of the
Bankruptcy Code where the trustee of Tenant elects to assume this Lease for the
purposes of assigning it, such election or assignment, may only be made upon
compliance with the provisions of this Article. In the event the trustee rejects
this Lease then Landlord shall immediately be entitled to possession of the
Premises without further obligation to Tenant or the trustee.

              (b) Any election to assume this Lease under Chapters 11 or 13 of
the Bankruptcy Code by Tenant as debtor-in-possession or by Tenant's trustee
(the "Electing Party") must provide for the Electing Party to cure or provide to
Landlord adequate assurance that it will cure all monetary defaults under this
Lease within fifteen (15) days from the date of assumption and it will cure all
nonmonetary defaults under this Lease within thirty (30) days from the date of
assumption. Landlord and Tenant acknowledge such condition to be commercially
reasonable.

              (c) If the Electing Party has assumed this Lease or elects to
assign Tenant's interest under this Lease to any other person, such interest may
be assigned only if the intended assignee has provided adequate assurance of
future performance (as herein defined), of all of the obligations imposed on
Tenant under this Lease. For the purposes hereof, "adequate assurance of future
performance" means that Landlord has ascertained that the following conditions
has been satisfied: (i) The assignee has submitted a current financial
statement, certified by its chief financial officer, which shows a net worth and
working capital in amounts sufficient to assure the future performance by the
assignee of Tenant's obligations under this Lease; and (ii) Landlord has
obtained consents or waivers from any third parties that may be required under a
lease,

                                       29
<PAGE>   33

mortgage, financing arrangement, or other agreement by which Landlord is bound,
to enable Landlord to permit such assignment.

              (d) Landlord's acceptance of rent or any other payment from any
trustee, receiver, or other entity will not be deemed a waiver of Landlord's
right to terminate this Lease for any transfer of Tenant's interest under this
Lease without its consent, or Landlord's claim for any amount of Rent due from
Tenant.

         11.5 LANDLORD'S DEFAULT

         Landlord shall be in default hereunder in the event Landlord has not
begun and pursued with reasonable diligence the cure of any failure of Landlord
to meet its obligations hereunder within thirty (30) days after the receipt by
Landlord of written notice from Tenant of the alleged failure to perform. In no
event shall Tenant have the right to terminate or rescind this Lease as a result
of Landlord's default as to any covenant or agreement contained in this Lease.
Tenant hereby waives such remedies of termination and rescission and hereby
agrees that Tenant's remedies for default hereunder and for breach of any
promise or inducement shall be limited to a suit for damages and/or injunction.

                                   ARTICLE 12

                             SURRENDER OF PREMISES

         12.1 IN GENERAL

         Upon the Termination Date, Tenant shall surrender and vacate the
Premises immediately and deliver possession thereof to Landlord in a clean, good
and tenantable condition, ordinary wear and tear, and damage caused by Landlord
excepted. Tenant shall deliver to Landlord all keys to the Premises. Tenant
shall remove from the Premises all movable personal property of Tenant and
Tenant's trade fixtures, including, subject to Section 6.4, cabling for any of
the foregoing. Tenant shall be entitled to remove such Tenant Alterations, which
at the time of their installation Landlord and Tenant agreed may be removed by
Tenant. Tenant shall also remove such other Tenant Alterations as required by
Landlord (provided Landlord notifies Tenant at the time Tenant requests
Landlord's approval that such Tenant Alterations must be removed), including any
Tenant Alterations containing Hazardous Materials. Tenant immediately shall
repair all damage resulting from removal of any of Tenant's property,
furnishings or Tenant Alterations installed or created by Tenant. If any of the
Tenant Alterations which were installed by Tenant involved the lowering of
ceilings or raising of floors, then Tenant shall also be obligated to return
such surfaces to their condition prior to the commencement of this Lease. In the
event Tenant shall fail to remove those items described above, Landlord may (but
shall not be obligated to), at Tenant's expense, remove any of such property and
store, sell or otherwise deal with such property as provided in Section 11.2(b).

         12.2 LANDLORD'S RIGHTS

         All property which may be removed from the Premises by Landlord shall
be conclusively presumed to have been abandoned by Tenant and Landlord may deal
with such property as provided in Section 11.2(b), including the waiver and
indemnity obligations provided in that

                                       30
<PAGE>   34

Section. Tenant shall also reimburse Landlord for all costs and expenses
incurred by Landlord in removing any of Tenant Additions and in restoring the
Premises to the condition required by this Lease at the Termination Date.

                                   ARTICLE 13

                                  HOLDING OVER

         In the event that Tenant holds over in possession of the Premises after
the Termination Date, Tenant shall pay Landlord two hundred percent (200%) of
the monthly Rent payable for the month immediately preceding the holding over
(including increases for Rent Adjustments which Landlord may reasonably
estimate. Tenant shall also pay all damages sustained by Landlord by reason of
such retention of possession. The provisions of this Article shall not
constitute a waiver by Landlord of any reentry rights of Landlord and Tenant's
continued occupancy of the Premises shall be as a tenancy in sufferance.

                                   ARTICLE 14

                        DAMAGE BY FIRE OR OTHER CASUALTY

         14.1 SUBSTANTIAL UNTENANTABILITY

              (a) If any fire or other casualty (whether insured or uninsured)
renders all or a substantial portion of the Premises or the Building
untenantable, Landlord shall, within sixty (60) days after the occurrence of
such damage, estimate the length of time that will be required to substantially
complete the repair and restoration and shall by notice advise Tenant of such
estimate ("Landlord's Notice"). If Landlord reasonably estimates that the amount
of time required to substantially complete such repair and restoration will
exceed one year from the date such damage occurred, then Landlord shall notify
Tenant and this Lease shall terminate as of the date of such damage.

              (b) Unless this Lease is terminated as provided in the preceding
subparagraph, Landlord shall proceed with reasonable promptness to repair and
restore the Building and Premises to its condition as existed prior to such
casualty, subject to reasonable delays for insurance adjustments and Force
Majeure delays, and also subject to zoning Laws and building codes then in
effect. Landlord shall have no liability to Tenant, and Tenant shall not be
entitled to terminate this Lease if such repairs and restoration are not in fact
completed within the time period estimated by Landlord so long as Landlord shall
proceed with reasonable diligence to complete such repairs and restoration.

              (c) Tenant acknowledges that Landlord shall be entitled to the
full proceeds of any insurance coverage, whether carried by Landlord or Tenant,
for damages to the Premises, except for those proceeds of Tenant's insurance of
its own personal property and equipment which would be removable by Tenant at
the Termination Date. All such insurance proceeds shall be payable to Landlord
whether or not the Premises are to be repaired and restored, provided, however,
if this Lease is not terminated and the parties proceed to repair and restore
Tenant Additions at Tenant's cost, to the extent Landlord received proceeds of
Tenant's insurance covering Tenant Additions, such proceeds shall be applied to
reimburse Tenant for its cost of repairing and restoring Tenant Additions.

                                       31
<PAGE>   35

              (d) Notwithstanding anything to the contrary herein set forth: (i)
Landlord shall have no duty pursuant to this Section to repair or restore any
portion of any Tenant Additions or to expend for any repair or restoration of
the Premises or Building amounts in excess of insurance proceeds paid to
Landlord and available for repair or restoration, except for the amount of the
deductible under Landlord's standard casualty policy of insurance (provided that
Tenant shall have the right to pay the difference between the deductible under
Landlord's earthquake insurance policy and the deductible under Landlord's
standard casualty policy of insurance and if paid, such amortized amount
(amortized on a straight line basis over the remaining Term together with
interest at the prime rate plus 1%) shall be credited against the Monthly Base
Rent; and (ii) Tenant shall not have the night to terminate this Lease pursuant
to this Section if any damage or destruction was caused by the act or negligence
of Tenant, its agent or employees. Whether or not the Lease is terminated
pursuant to this Article Fourteen, in no event shall Tenant be entitled to any
compensation or damages for loss of the use of the whole or any part of the
Premises or for any inconvenience or annoyance occasioned by any such damage,
destruction, rebuilding or restoration of the Premises or the Building.

              (e) Tenant shall perform any repair or restoration of the Premises
in accordance with the provisions of Article Nine.

         14.2 INSUBSTANTIAL UNTENANTABILITY

         If the Premises or the Building is damaged by a casualty but neither is
rendered substantially untenantable and Landlord estimates that the time to
substantially complete the repair or restoration will not exceed one year from
the date such damage occurred, then Landlord shall proceed to repair and restore
the Building or the Premises other than Tenant Additions, with reasonable
promptness, unless such damage is to the Premises and occurs during the last six
(6) months of the Term, in which event either Tenant or Landlord shall have the
right to terminate this Lease as of the date of such casualty by giving written
notice thereof to the other within thirty (30) days after the date of such
casualty. Notwithstanding the aforesaid, Landlord's obligation to repair shall
be limited in accordance with the provisions of Section 14.1 above.

         14.3 RENT ABATEMENT

         Except for the casualty caused by the negligence or willful act of
Tenant or its agents, employees, contractors or invitees which is not covered by
Landlord's rent interruption insurance, if all or any part of the Premises are
rendered untenantable by casualty and this Lease is not terminated, Monthly Base
Rent and Additional Rent shall abate for that part of the Premises which is
untenantable (and which Tenant does not occupy) on a per them basis from the
date of the casualty until the repair and restoration work in the Premises is
Substantially Complete.

         14.4 WAIVER OF STATUTORY REMEDIES

The  provisions of this Lease,  including this Article  Fourteen,  constitute an
express  agreement  between  Landlord  and Tenant with  respect to damage to, or
destruction of, the Premises or the Property or any part of either, and any Law,
including Sections 1932(2), 1933(4), 1941 and 1942 of the California Civil Code,
with respect to any rights or obligations concerning

                                       32
<PAGE>   36

damage or destruction shall have no application to this Lease or to any damage
to or destruction of the Premises or the Property, and are hereby waived.

                                   ARTICLE 15

                                 EMINENT DOMAIN

         15.1 TAKING OF WHOLE OR SUBSTANTIAL PART

         In the event the whole or any substantial part of the Building or of
the Premises is taken or condemned by any competent authority for any public use
or purpose (including a deed given in lieu of condemnation) and is thereby
rendered untenantable, this Lease shall terminate as of the date title or
possession vests in such authority, and Monthly Base Rent and Additional Rent
shall be apportioned as of the Termination Date. Notwithstanding anything to the
contrary herein set forth, in the event the taking is temporary (for less than
the remaining term of the Lease), Landlord may elect either (i) to terminate
this Lease or (ii) permit Tenant to receive the entire award attributable to the
Premises in which case Tenant shall continue to pay Rent and this Lease shall
not terminate.

         15.2 TAKING OF PART

         In the event a part of the Building or the Premises is taken or
condemned by any competent authority (or a deed is delivered in lieu of
condemnation) and this Lease is not terminated, the Lease shall be amended to
reduce or increase, as the case may be, the Monthly Base Rent and Tenant's
Proportionate Share to reflect the Rentable Area of the Premises or Building, as
the case may be, remaining after any such taking or condemnation. Landlord, upon
receipt and to the extent of the award in condemnation (or proceeds of sale)
shall make necessary repairs and restorations to the Premises (exclusive of
Tenant Additions) and to the Building to the extent necessary to constitute the
portion of the Building not so taken or condemned as a complete architectural
and economically efficient unit.

         15.3 COMPENSATION

Landlord  shall be entitled to receive the entire award (or sale  proceeds) from
any such taking,  condemnation or sale without any payment to Tenant, and Tenant
hereby assigns to Landlord Tenant's interest,  if any, in such award;  provided,
however, Tenant shall have the right separately to pursue against the condemning
authority a separate  award in respect of the loss, if any, to Tenant  Additions
paid for by Tenant  without  any credit or  allowance  from  Landlord so long as
there is no diminution of Landlord's award as a result.

                                   ARTICLE 16

                                   INSURANCE

         16.1 TENANT'S INSURANCE

         Tenant, at Tenant's expense, agrees to maintain in force, with a
company or companies acceptable to Landlord, during the Term: (a) Commercial
General Liability Insurance on a primary basis and without any right of
contribution from any insurance carried by Landlord covering the Premises on an
occurrence basis against all claims for personal injury, bodily injury,

                                       33
<PAGE>   37

death and property damage, including contractual liability covering the
indemnification provisions in this Lease, and such insurance shall be for such
limits that are reasonably required by Landlord from time to time but not less
than a combined single limit of Three Million and No/100 Dollars
($3,000,000.00); (b) Workers' Compensation and Employers' Liability Insurance to
the extent required by and in accordance with the Laws of the State of
California; (c) "All Risks" property insurance in an amount adequate to cover
the full replacement cost of all Tenant Additions, equipment, installations,
fixtures and contents of the Premises in the event of loss; (d) in the event a
motor vehicle is to be used by Tenant in connection with its business operation
from the Premises, Comprehensive Automobile Liability Insurance coverage with
limits of not less than One Million and No/100 Dollars ($1,000,000.00) combined
single limit coverage against bodily injury liability and property damage
liability arising out of the use by or on behalf of Tenant, its agents and
employees in connection with this Lease, of any owned, non-owned or hired motor
vehicles; and (e) such other insurance or coverages as Landlord reasonably
requires.

         16.2 FORM OF POLICIES

         Each policy referred to in 16.1 shall satisfy the following
requirements. Each policy shall (i) name Landlord and the Indemnitees as
additional insureds (except "All Risks" property insurance and Workers'
Compensation and Employers' Liability Insurance), (ii) be issued by one or more
responsible insurance companies licensed to do business in the State of
California reasonably satisfactory to Landlord, (iii) where applicable, provide
for deductible amounts satisfactory to Landlord and not permit coinsurance, (iv)
shall provide that such insurance may not be canceled or amended without thirty
(30) days' prior written notice to the Landlord, and (v) each policy of
"All-Risks" property insurance shall provide that the policy shall not be
invalidated should the insured waive in writing prior to a loss, any or all
rights of recovery against any other party for losses covered by such policies.
Tenant shall deliver to Landlord, certificates of insurance and at Landlord's
request, copies of all policies and renewals thereof to be maintained by Tenant
hereunder, not less than ten (10) days prior to the Commencement Date and not
less than ten (10) days prior to the expiration date of each policy.

         16.3 LANDLORD'S INSURANCE

         Landlord agrees to purchase and keep in full force and effect during
the Term hereof, including any extensions or renewals thereof, insurance under
policies issued by insurers of recognized responsibility, qualified to do
business in the State of California on the Building in amounts not less than the
then full replacement cost (without depreciation) of the Building (above
foundations and excluding Tenant Additions), against fire and such other risks
as may be included in standard forms of all risk coverage insurance reasonably
available from time to time together with twelve months rental interruption
insurance and insurance against earthquakes. At Tenant's election, at Tenant's
expense, Landlord's earthquake policy shall include coverage for Tenant
Additions. Landlord agrees to maintain in force during the Term Commercial
General Liability Insurance covering the Building on an occurrence basis against
all claims for personal injury, bodily injury, death, and property damage. Such
insurance shall be for a combined single limit of not less than Two Million and
No/100 Dollars ($2,000,000.00). Neither Landlord's obligation to carry such
insurance nor the carrying of such insurance shall be deemed to be an indemnity
by Landlord with respect to any claim, liability, loss, cost or expense due, in
whole or

                                       34
<PAGE>   38

in part, to Tenant's negligent acts or omissions or willful misconduct. Without
obligation to do so, Landlord may, in its sole discretion from time to time,
carry insurance in amounts greater and/or for coverage additional to the
coverage and amounts set forth above.

         16.4 WAIVER OF SUBROGATION

              (a) Each party agrees that, if obtainable at no, or minimal,
additional cost, and so long as the same is permitted under the laws of the
State of California, it will include in its "All Risks" policies required under
this Lease, appropriate clauses pursuant to which the insurance companies (i)
waive all right of subrogation against the other party with respect to losses
payable under such policies and/or (ii) agree that such policies shall not be
invalidated should the insured waive in writing prior to a loss any or all right
of recovery against any party for losses covered by such policies.

              (b) Provided that Landlord's right of full recovery under its
policy or policies aforesaid is not adversely affected or prejudiced thereby,
Landlord hereby waives any and all right of recovery which it might otherwise
have against Tenant, its servants, agents and employees, for loss or damage
occurring to the Real Property and the fixtures, appurtenances and equipment
therein, to the extent the same is covered by Landlord's insurance,
notwithstanding that such loss or damage may result from the negligence or fault
of Tenant, its servants, agents or employees. Provided that Tenant's right of
full recovery under its aforesaid policy or policies is not adversely affected
or prejudiced thereby, Tenant hereby waives any and all right of recovery which
it might otherwise have against Landlord, its servants, and employees and
against every other tenant of the Real Property who shall have executed a
similar waiver as set forth in this Section 16.4 for loss or damage to Tenant
Additions and to Tenant's furniture, furnishings, fixtures and other property of
Tenant to the extent the same is coverable by Tenant's insurance required under
this Lease, notwithstanding that such loss or damage may result from the
negligence or fault of Landlord, its servants, agents or employees, or such
other tenant and the servants, agents or employees thereof.

         16.5 NOTICE OF CASUALTY

         Tenant shall give Landlord notice in case of a fire or accident in the
Premises promptly after Tenant is aware of such event.

                                   ARTICLE 17

                         WAIVER OF CLAIMS AND INDEMNITY

         17.1 WAIVER OF CLAIMS

         To the extent permitted by Law, Tenant releases the Indemnitees from,
and waives all claims for, damage to person or property sustained by the Tenant
or any occupant of the Premises or the Property resulting directly or indirectly
from any existing or future condition, defect, matter or thing in and about the
Premises or the Property or any part of either or any equipment or appurtenance
therein, or resulting from any accident in or about the Premises or the
Property, or resulting directly or indirectly from any act or neglect of any
tenant or occupant of the Property or of any other person, including Landlord's
agents and servants, except to the

                                       35
<PAGE>   39

extent caused by the gross negligence or willful misconduct of any of the
Indemnitees. To the extent permitted by Law, Tenant hereby waives any
consequential damages, compensation or claims for inconvenience or loss of
business, rents, or profits as a result of such injury or damage.
Notwithstanding the foregoing, Tenant shall not be liable for any such damage
caused by its acts or neglect if Landlord or a tenant has recovered the full
amount of the damage from proceeds of insurance policies and the insurance
company has waived its right of subrogation against Tenant.

         17.2 INDEMNITY BY TENANT

         To the extent permitted by Law, Tenant hereby indemnifies, and agrees
to protect, defend and hold the Indemnitees harmless, against any and all
actions, claims, demands, liability, costs and expenses, including attorneys'
fees and expenses for the defense thereof, arising from Tenant's occupancy of
the Premises, from the undertaking of any Tenant Additions or repairs to the
Premises, from the conduct of Tenant's business on the Premises, or from any
breach or default on the part of Tenant in the performance of any covenant or
agreement on the part of Tenant to be performed pursuant to the terms of this
Lease, or from any willful act or negligence of Tenant, its agents, contractors,
servants, employees, customers or invitees, in or about the Premises or the
Property or any part of either. In case of any action or proceeding brought
against the Indemnitees by reason of any such claim, upon notice from Landlord,
Tenant covenants to defend such action or proceeding by counsel chosen by
Landlord, in Landlord's reasonable discretion. Landlord reserves the night to
settle, compromise or dispose of any and all actions, claims and demands related
to the foregoing indemnity. The foregoing indemnity shall not operate to relieve
Indemnitees of liability to the extent such liability is caused by their willful
or wrongful act. Further, the foregoing indemnity is subject to and shall not
diminish any waivers in effect in accordance with Section 16.4 by Landlord or
its insurers to the extent of amounts, if any, paid to Landlord under its
"All-Risks" property insurance.

         17.3 INDEMNITY BY LANDLORD

         To the extent permitted by Law, Landlord hereby indemnifies Tenant, and
agrees to protect, defend and hold Tenant harmless, against any and all actions,
claims, demands, liability, costs and expenses, including attorneys' fees and
expenses for the defense thereof, arising from any willful act or gross
negligence of Landlord, its agents, contractors, servants, employees, customers
or invitees, in or about the Building or from any breach or default on the part
of Landlord in the performance of any covenant or agreement on the part of
Landlord to be performed pursuant to the terms of this Lease.

                                   ARTICLE 18

                             RULES AND REGULATIONS

         18.1 RULES

         Tenant agrees for itself and for its subtenants, employees, agents, and
invitees to comply with the Rules and Regulations listed on Exhibit C attached
hereto and with all reasonable modifications and additions thereto which
Landlord may make from time to time.

                                       36
<PAGE>   40

         18.2 ENFORCEMENT

         Nothing in this Lease shall be construed to impose upon the Landlord
any duty or obligation to enforce the Rules and Regulations or as hereafter
adopted and Landlord shall not be liable to Tenant for violation of the same by
any other tenant, its servants, employees, agents, visitors or licensees.
Landlord shall use reasonable efforts to enforce the rules and regulations of
the Project in a uniform and nondiscriminatory manner.

                                   ARTICLE 19

                           LANDLORD'S RESERVED RIGHTS

         Landlord shall have the following rights exercisable without notice to
Tenant and without liability to Tenant for damage or injury to persons, property
or business and without giving rise to any claim for offset or abatement of
Rent: (1) to change the Building's name or street address upon thirty (30) days'
prior written notice to Tenant; (2) subject to the terms of Article 28 below, to
install and maintain all signs on the exterior and/or interior of the Building;
(3) to designate and/or approve prior to installation, all types of signs,
window shades, blinds, drapes, or other similar items, and all internal lighting
that may be visible from the exterior of the Premises; (4) upon reasonable
notice to Tenant, to display the Premises to prospective purchasers and lenders
at reasonable hours at any time during the Term and to prospective tenants at
reasonable hours during the last twelve (12) months of the Term; (5) to grant to
any party the exclusive right to conduct any business or render any service in
or to the Building, provided such exclusive right shall not operate to prohibit
Tenant's permitted use of the Premises; (6) to change the arrangement and/or
location of entrances or passageways, doors and doorways, corridors, elevators,
stairs, washrooms or public portions of the Building, provided that such action
shall first be discussed with Tenant and shall not materially and adversely
interfere with Tenant's access to the Premises or the Building; and (7) to close
the Building after Standard Operating Hours, except that Tenant and its
employees and invitees shall be entitled to admission at all times, under such
regulations as Landlord prescribes for security purposes.

                                   ARTICLE 20

                              ESTOPPEL CERTIFICATE

         20.1 IN GENERAL

              (a) Within ten (10) days after request therefor by Landlord,
Mortgagee or any prospective mortgagee or owner, Tenant agrees as directed in
such request to execute an Estoppel Certificate in recordable form, binding upon
Tenant, certifying (i) that this Lease is unmodified and in full force and
effect (or if there have been modifications, a description of such modifications
and that this Lease as modified is in full force and effect); (ii) the dates to
which Rent has been paid; (iii) that Tenant is in the possession of the Premises
if that is the case; (iv) to Tenant's knowledge that Landlord is not in default
under this Lease, or, if Tenant believes Landlord is in default, the nature
thereof in detail; (v) that Tenant has no offsets or defenses to the performance
of its obligations under this Lease (or if Tenant believes there are any offsets
or defenses, a full and complete explanation thereof); (vi) that the Premises
have been completed in accordance with the terms and provisions hereof or the
Work Letter, that Tenant has accepted the Premises and the condition thereof and
of all improvements thereto and has no claims against

                                       37
<PAGE>   41

Landlord or any other party with respect thereto; (vii) that if an assignment of
rents or leases has been served upon the Tenant by a Mortgagee, Tenant will
acknowledge receipt thereof and agree to be bound by the provisions thereof,
(viii) that Tenant will give to the Mortgagee copies of all notices required or
permitted to be given by Tenant to Landlord; and (ix) to any other information
reasonably requested.

              (b) Within ten (10) days after request therefor by Tenant,
Landlord agrees as directed in such request to execute an Estoppel Certificate
in recordable form, binding upon Landlord, certifying (i) that this Lease is
unmodified and in full force and effect (or if there, have been modifications, a
description of such modifications and that this Lease as modified is in full
force and effect); (ii) the dates to which Rent has been paid; (iii) that Tenant
is in the possession of the Premises if that is the case; (iv) to Landlord's
knowledge that Tenant is not in default under this Lease, or, if Landlord
believes Tenant is in default, the nature thereof in detail; and (v) that the
Premises have been completed in accordance with the terms and provisions hereof
or the Work Letter.

         20.2 ENFORCEMENT

         In the event that Tenant fails to deliver an Estoppel Certificate, then
such failure shall be a Default. In addition to any other remedy available to
Landlord, Landlord may impose a charge equal to $500.00 for each day that Tenant
fails to deliver an Estoppel Certificate and Tenant shall be deemed to have
irrevocably appointed Landlord as Tenant's attorney-in-fact to execute and
deliver such Estoppel Certificate.

                                   ARTICLE 21

                              REAL ESTATE BROKERS

         Tenant represents that, except for the broker(s) listed in Section
1.1(14), Tenant has not dealt with any real estate broker, sales person, or
finder in connection with this Lease, and no such person initiated or
participated in the negotiation of this Lease, or showed the Premises to Tenant.
Tenant hereby agrees to indemnify, protect, defend and hold Landlord and the
Indemnitees, harmless from and against any and all liabilities and claims for
commissions and fees arising out of a breach of the foregoing representation.

         Landlord agrees to pay any commission to which the broker(s) listed in
Section 1.1(14) is entitled in connection with this Lease pursuant to Landlord's
written agreement with such broker(s).

                                   ARTICLE 22

                              MORTGAGEE PROTECTION

         22.1 SUBORDINATION, NONDISTURBANCE AND ATTORNMENT

         Subject to Tenant's obtaining a nondisturbance agreement from future
lenders as provided below, this Lease is and shall be expressly subject and
subordinate at all times to (i) any ground or underlying lease of the Real
Property, now or hereafter existing, and all amendments, extensions, renewals
and modifications to any such lease, and (ii) the lien of any mortgage or

                                       38
<PAGE>   42

trust deed now or hereafter encumbering fee title to the Real Property and/or
the leasehold estate under any such lease, and all amendments, extensions,
renewals, replacements and modifications of such mortgage or trust deed and/or
the obligation secured thereby, unless such ground lease or ground lessor, or
mortgage, trust deed or Mortgagee, expressly provides or elects that the Lease
shall be superior to such lease or mortgage or trust deed. If any such mortgage
or trust deed is foreclosed (including any sale of the Real Property pursuant to
a power of sale), or if any such lease is terminated, upon request of the
Mortgagee or ground lessor, as the case may be, Tenant shall attorn to the
purchaser at the foreclosure sale or to the ground lessor under such lease, as
the case may be, and such purchaser or ground lessor shall recognize Tenant's
rights under this Lease, provided, however, that such purchaser or ground lessor
shall not be (i) bound by any payment of Rent for more than one month in advance
except payments in the nature of security for the performance by Tenant of its
obligations under this Lease; (ii) subject to any offset, defense or damages
arising out of a default of any obligations of any preceding Landlord; or (iii)
bound by any amendment or modification of this Lease made without the written
consent of the Mortgagee or ground lessor; or (iv) liable for any security
deposits not actually received in cash by such purchaser or ground lessor. With
respect to any future lender, Tenant shall execute promptly any reasonable
certificate or instrument that Landlord or any mortgagee may request to evidence
such subordination provided that such document provides that so long as an Event
of Default has not occurred with respect to Tenant, such mortgagee shall grant
Tenant nondisturbance and recognize Tenant's rights under this Lease. In
confirmation of such subordination and nondisturbance, however, Tenant shall
execute promptly any reasonable certificate or instrument that Landlord,
Mortgagee or ground lessor may request. Tenant hereby constitutes Landlord as
Tenant's attorney-in-fact to execute such certificate or instrument for and on
behalf of Tenant upon Tenant's failure to do so within fifteen (15) days of a
request to do so. Upon request by such successor in interest, Tenant shall
execute and deliver reasonable instruments confirming the attornment provided
for herein. Landlord shall use its commercially reasonable efforts to obtain a
non-disturbance agreement from its current lender.

         22.2 MORTGAGEE PROTECTION

         Tenant agrees to give any Mortgagee or ground lessor, by registered or
certified mail, a copy of any notice of default served upon the Landlord,
provided that prior to such notice Tenant has received notice (by way of service
on Tenant of a copy of an assignment of rents and leases, or otherwise) of the
address of such Mortgagee or ground lessor. Tenant further agrees that if
Landlord shall have failed to cure such default within the time provided for in
this Lease, then the Mortgagee or ground lessor shall have an additional thirty
(30) days after receipt of notice thereof within which to cure such default or
if such default cannot be cured within that time, then such additional notice
time as may be necessary, if, within such thirty (30) days, any Mortgagee or
ground lessor has commenced and is diligently pursuing the remedies necessary to
cure such default (including commencement of foreclosure proceedings or other
proceedings to acquire possession of the Real Property, if necessary to effect
such cure). Until the time allowed as aforesaid for Mortgagee or ground lessor
to cure such defaults has expired without cure, Tenant shall have no night to,
and shall not, terminate this Lease on account of default. This Lease may not be
modified or amended so as to reduce the Rent or shorten the Term, or so as to
adversely affect in any other respect to any material extent the rights of the
Landlord, nor shall this Lease be canceled or surrendered, without the prior
written consent, in each instance, of the ground lessor or the Mortgagee.

                                       39
<PAGE>   43

         22.3 MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE

         If Mortgagee of Landlord requires a modification of this Lease which
shall not result in any increased cost or expense to Tenant or in any other
substantial and adverse change in the rights and obligations of Tenant
hereunder, then Tenant agrees that the Lease may be so modified.

         22.4 FINANCIALS

         At the reasonable request of Landlord from time to time, Tenant shall
provide to Landlord Tenant's financial statements or other information
discussing financial worth of Tenant which Landlord shall use solely for
purposes of this Lease and in connection with the ownership, management,
financing and disposition of the Building.

                                   ARTICLE 23

                                    NOTICES

              (a) All notices, demands or requests provided for or permitted to
be given pursuant to this Lease must be in writing and shall be personally
delivered, sent by Federal Express or other reputable overnight courier service,
or mailed by first class, registered or certified United States mail, return
receipt requested, postage prepaid, addressed to the parties hereto at their
respective addresses listed in Sections 1.1(2) and (3).

              (b) Notices, demands or requests sent by mail or overnight courier
service as described above shall be effective upon deposit in the mail or with
such courier service. However, the time period in which a response to any such
notice, demand or request must be given shall commence to ran from (i) in the
case of delivery by mail, the date of receipt on the return receipt of the
notice, demand or request by the addressee thereof, or (ii) in the case of
delivery by Federal Express or other overnight courier service, the date of
acceptance of delivery by an employee, officer, director or partner of Landlord
or Tenant. Rejection or other refusal to accept or the inability to deliver
because of changed address of which no notice was given, as indicated by advice
from Federal Express or other overnight courier service or by mail return
receipt, shall be deemed to be receipt of notice, demand or request sent.
Notices may also be served by personal service upon any officer, director or
partner of Landlord or Tenant, and shall be effective upon such service.

              (c) By giving to the other party at least thirty (30) days written
notice thereof, either party shall have the right from time to time during the
term of this Lease to change their respective addresses for notices, statements,
demands and requests, provided such new address shall be within the United
States of America.

                                   ARTICLE 24

                                 MISCELLANEOUS

         24.1 LATE CHARGES

              (a) All payments required hereunder (other than the Monthly Base
Rent and Additional Rent which shall be due as provided herein) to Landlord
shall be paid within thirty

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<PAGE>   44

(30) days after Landlord's demand therefor. All such amounts (including Monthly
Base Rent and Additional Rent) not paid when due shall bear interest from the
date due until the date paid at the Default Rate in effect on the date such
payment was due.

              (b) In the event Tenant is more than two (2) days late after
receipt of written notice of delinquency from Landlord in paying any installment
of Monthly Base Rent due under this Lease (provided after three (3) such notices
during any calendar year, no such notice shall be required), Tenant shall pay
Landlord a late charge equal to five percent (5%) of the delinquent installment
of Rent. The parties agree that (i) such delinquency will cause Landlord to
incur costs and expenses not contemplated herein, the exact amount of which will
be difficult to calculate, including the cost and expense that will be incurred
by Landlord in processing each delinquent payment of rent by Tenant, (ii) the
amount of such late charge represents a reasonable estimate of such costs and
expenses and that such late charge shall be paid to Landlord for each delinquent
payment in addition to all Rent otherwise due hereunder. The parties further
agree that the payment of late charges and the payment of interest provided for
in subparagraph (a) above are distinct and separate from one another in that the
payment of interest is to compensate Landlord for its inability to use the money
improperly withheld by Tenant, while the payment of late charges is to
compensate Landlord for its additional administrative expenses in handling and
processing delinquent payments.

              (c) Payment of interest at the, Default Rate and/or of late
charges shall not excuse or cure any default by Tenant under this Lease, nor
shall the foregoing provisions of this Article or any such payments prevent
Landlord from exercising any right or remedy available to Landlord upon Tenant's
failure to pay Rent when due, including the right to terminate this Lease.

         24.2 NO JURY TRIAL; VENUE, JURISDICTION

         Each party hereto (which includes any assignee, successor, heir or
personal representative of a party) shall not seek a jury trial, hereby waives
trial by jury, and hereby further waives any objection to venue in the County in
which the Project is located, and agrees and consents to personal jurisdiction
of the courts of the State of California, in any action or proceeding or
counterclaim brought by any party hereto against the other on any matter
whatsoever arising out of or in any way connected with this Lease, the
relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises,
or any claim of injury or damage, or the enforcement of any remedy under any
statute, emergency or otherwise, whether any of -the foregoing is based on this
Lease or on tort law. No party will seek to consolidate any such action in which
a jury has been waived with any other action in which a jury trial cannot or has
not been waived. It is the intention of the parties that these provisions shall
be subject to no exceptions. By execution of this Lease the parties agree that
this provision may be filed by any party hereto with the clerk or judge before
whom any action is instituted, which filing shall constitute the written consent
to a waiver of jury trial pursuant to and in accordance with Section 631 of the
California Code of Civil Procedure. No party has in any way agreed with or
represented to any other party that the provisions of this Section will not be
fully enforced in all instances. The provisions of this Section shall survive
the expiration or earlier termination of this Lease.

                                       41
<PAGE>   45

         24.3 TENANT AUTHORITY

         Each party represents and warrants to the other, that it has full
authority and power to enter into and perform its obligations under this Lease,
that the person executing this Lease is fully empowered to do so, and that no
consent or authorization is necessary from any third party. Landlord may request
that Tenant provide Landlord evidence of Tenant's authority.

         24.4 ENTIRE AGREEMENT

              (a) This Lease, the Exhibits attached hereto and the Work Letter
contain the entire agreement between Landlord and Tenant concerning the Premises
and there are no other agreements, either oral or written, and no other
representations or statements, either oral or written, on which Tenant has
relied.

              (b) This Lease shall not be modified except by a writing executed
by Landlord and Tenant.

         24.5 EXCULPATION

              (a) Tenant agrees, on its behalf and on behalf of its successors
and assigns, that any liability or obligation under this Lease shall only be
enforced against Landlord's equity interest in the Property and all sales
proceeds, insurance proceeds, or condemnation awards and in no event against any
other assets of the Landlord, or Landlord's officers or directors or partners,
and that any liability of Landlord with respect to this Lease shall be so
limited and Tenant shall not be entitled to any judgment in excess of such
amount; provided that the foregoing limitation shall not apply in the event of
fraud on the part of Landlord.

              (b) In the event of any sale or other transfer of the Building,
Landlord shall be entirely freed and relieved of all agreements and obligations
of Landlord hereunder accruing or to be performed after the date of such sale or
transfer.

         24.6 ACCORD AND SATISFACTION

         No payment by Tenant or receipt by Landlord of a lesser amount than any
installment or payment of Rent due shall be deemed to be other than on account
of the amount due, and no endorsement or statement on any check or any letter
accompanying any check or payment of Rent shall be deemed an accord and
satisfaction. Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such installment or payment of Rent
or pursue any other remedies available to Landlord. No receipt of money by
Landlord from Tenant after the termination of this Lease or Tenant's right of
possession of the Premises shall reinstate, continue or extend the Term. Receipt
or acceptance of payment from anyone other than Tenant, including an assignee of
Tenant, is not a waiver of any breach of Article Ten, and Landlord may accept
such payment on account of the amount due without prejudice to Landlord's right
to pursue any remedies available to Landlord.

                                       42
<PAGE>   46

         24.7 BINDING EFFECT

         Subject to the provisions of Article Ten, this Lease shall be binding
upon and inure to the benefit of Landlord and Tenant and their respective heirs,
legal representatives, successors and permitted assigns.

         24.8 CAPTIONS

         The Article and Section captions in this Lease are inserted only as a
matter of convenience and in no way define, limit, construe, or describe the
scope or intent of such Articles and Sections.

         24.9 TIME, APPLICABLE LAW, CONSTRUCTION

         Time is of the essence of this Lease and each and all of its
provisions. This Lease shall be construed in accordance with the Laws of the
State of California. If more than one person signs this Lease as Tenant, the
obligations hereunder imposed shall be joint and several. If any term, covenant
or condition of this Lease or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable, the remainder of
this Lease, or the application of such term, covenant or condition to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each item, covenant or condition of this Lease
shall be valid and be enforced to the fullest extent permitted by Law. Wherever
the term "including" or "includes" is used in this Lease, it shall have the same
meaning as if followed by the phrase "but not limited to". The language in all
parts of this Lease shall be construed according to its normal and usual meaning
and not strictly for or against either Landlord or Tenant.

         24.10 ABANDONMENT

         In the event Tenant vacates or abandons the Premises, Landlord shall
(i) have the right to enter into the Premises in order to show the space to
prospective tenants, (ii) have the right to reduce the services provided to
Tenant pursuant to the terms of this Lease to such levels as Landlord reasonably
determines to be adequate services for an unoccupied premises and (iii) during
the last six (6) months of the Term, have the right to prepare the Premises for
occupancy by another tenant upon the end of the Term. Tenant expressly
acknowledges that in the absence of written notice pursuant to Section 11.2(b)
or pursuant to California Civil Code Section 1951.3 terminating Tenant's right
to possession, none of the foregoing acts of Landlord or any other act of
Landlord shall constitute a termination of Tenant's right to possession or an
acceptance of Tenant's surrender of the Premises, and the Lease shall continue
in effect.

         24.11 LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES

         If Tenant fails timely to perform any of its duties under this Lease or
the Work Letter after notice and expiration of applicable cure period (except in
the case of an emergency), Landlord shall have the right (but not the
obligation), to perform such duty on behalf and at the expense of Tenant without
further notice to Tenant, and all sums expended or expenses incurred by Landlord
in performing such duty shall be deemed to be additional Rent under this Lease
and shall be due and payable upon demand by Landlord.

                                       43
<PAGE>   47

         24.12 SECURITY SYSTEM

         Landlord shall not be obligated to provide or maintain any security
patrol or security system. Landlord shall not be responsible for the quality of
any such patrol or system which may be provided hereunder or for damage or
injury to Tenant, its employees, invitees or others due to the failure, action
or inaction of such patrol or system. Tenant shall be entitled to install its
own card reader access system for the Premises; provided that if such system is
installed on the exterior doors of the Premises, Tenant shall make such system
available for use by Landlord and any other tenant of the Building, subject to
reasonable terms and conditions.

         24.13 NO LIGHT, AIR OR VIEW EASEMENTS

         Any diminution or shutting off of light, air or view by any structure
which may be erected on lands of or adjacent to the Project shall in no way
affect this Lease or impose any liability on Landlord.

         24.14 CONSENT

         Except as expressly provided to the contrary in the Lease, any time the
consent of Landlord or Tenant is required, such consent shall not be
unreasonably withheld, conditioned or delayed. Whenever the Lease grants
Landlord or Tenant the right to take action, exercise discretion, establish
rules and regulations or make allocations or other determinations, Landlord and
Tenant shall act reasonably and in good faith.

         24.15 SURVIVAL

         The waivers of the right of jury trial, the other waivers of claims or
rights, the releases and the indemnification obligations shall survive the
expiration or termination of this Lease, and so shall all other obligations or
agreements which by their terms survive expiration or termination of the Lease.

         24.16 MEMORANDUM OF LEASE

         Tenant shall have the right to have a Memorandum of Lease recorded in
the Official Records of the County of San Francisco.

         24.17 LIABILITY

         Notwithstanding anything to the contrary contained in this Lease,
Landlord shall be responsible for any damages, costs, liabilities or claims
caused by the gross negligence of Landlord, its employees, agents or
contractors.

                                       44
<PAGE>   48

                                   ARTICLE 25

                                LETTER OF CREDIT

         25.1 DELIVERY OF LETTER OF CREDIT

         In lieu of depositing a security deposit with Landlord, Tenant shall,
on execution of this Lease, deliver to Landlord and cause to be in effect during
the Lease Term an unconditional, irrevocable letter of credit ("LOC") in the
amount specified for the Letter of Credit in the Basic Lease Information, as it
may be increased as provided in this Lease (the "LOC Amount") for an initial
term of one (1) year and which shall thereafter renew automatically from year to
year, unless the LOC bank notifies Landlord at least thirty (30) days prior to
such expiration date of the LOC. The LOC shall be in a form reasonably
acceptable to Landlord and shall be issued by an LOC bank selected by Tenant and
acceptable to Landlord. An LOC bank is a bank that accepts deposits, maintains
accounts, has a local office that will negotiate a letter of credit, and the
deposits of which are insured by the Federal Deposit Insurance Corporation.
Tenant shall pay all expenses, points, or fees incurred by Tenant in obtaining
the LOC. The LOC shall not be mortgaged, assigned or encumbered in any manner
whatsoever by Tenant without the prior written consent of Landlord. Tenant
acknowledges that Landlord has the right to transfer or mortgage its interest in
the Project the Building and in this Lease and Tenant agrees that in the event
of any such transfer or mortgage, Landlord, at its cost, shall have the right to
transfer or assign the LOC and/or the LOC Security Deposit (as defined below) to
the transferee or mortgagee, and in the event of such transfer, Tenant shall
look solely to such transferee or mortgagee for the return of the LOC and/or the
LOC Security Deposit.*

         25.2 REPLACEMENT OF LETTER OF CREDIT

         Tenant may, from time to time, replace any existing LOC with a new LOC
if the new LOC (a) becomes effective at least thirty (30) days before expiration
of the LOC that it replaces; (b) is in the required LOC amount; (c) is issued by
an LOC bank acceptable to Landlord; and (d) otherwise complies with the
requirements of this Paragraph.

         25.3 LANDLORD'S RIGHT TO DRAW ON LETTER OF CREDIT

         Landlord shall hold the LOC as security for the performance of Tenant's
obligations under this Lease. If, after notice and failure to cure within any
applicable period provided in this Lease, Tenant defaults on any provision of
this Lease, Landlord may, without prejudice to any other remedy it has, draw on
that portion of the LOC necessary to (a) pay Rent or other sum in default; (b)
pay or reimburse Landlord for any amount that Landlord may spend or become
obligated to spend in exercising Landlord's rights under Paragraph 24.12 (Right
of Landlord to Perform Tenant's Covenant); and/or (c) compensate Landlord for
any expense, loss, or damage that Landlord may suffer because of Tenant's
default. If Tenant fails to renew or replace the LOC at least twenty (20) days
before its expiration, Landlord may, without prejudice to any other remedy it
has, draw on the entire amount of the LOC.

------------
* Upon termination of this Lease for any reason (other than a Default on the
part of Tenant), Landlord shall return the LOC to Tenant within ten (10) days
after such termination.

                                       45
<PAGE>   49

         25.4 LOC SECURITY DEPOSIT

         Any amount of the LOC that is drawn on by  Landlord  but not applied by
Landlord shall be held by Landlord as a security deposit (the "LOC Security
Deposit") in accordance  with  Paragraph 5 of this Lease.  Tenant shall
thereafter  have the right to replace the LOC Security Deposit with a LOC
meeting the requirements of this Article 25.

         25.5 RESTORATION OF LETTER OF CREDIT AND LOC SECURITY DEPOSIT

         If Landlord draws on any portion of the LOC and/or applies all or any
portion of such draw, Tenant shall, within five (5) business days after demand
by Landlord, either (a)  deposit  cash with  Landlord  in an amount  that,  when
added to the amount remaining under the LOC and the amount of any LOC Security
Deposit, shall equal the LOC Amount then required  under this  Paragraph;  or
(b) reinstate the LOC to the full LOC Amount.

         25.6 REDUCTION OF LETTER OF CREDIT

              (a) At any time after the end of the 12th month of the Term
hereof, and only in the event Tenant satisfies each of the following conditions
to Landlord's reasonable satisfaction, the LOC Amount may be reduced to an
amount equal to $8,000,000: (i) Tenant is not and has not been in default under
the terms of this Lease beyond any applicable cure period; (ii) Tenant maintains
a tangible net worth in excess of $125,000,000 which amount shall be determined
by Landlord to its satisfaction prior to any reduction in the LOC Amount, and in
connection with such determination, Tenant shall deliver to Landlord for review
Tenant's financial statements prepared in accordance with generally accepted
accounting principles and audited by a nationally recognized public accounting
firm acceptable to Landlord, and any other financial information reasonably
requested by Landlord ("Tenant's Financial Information"); (iii) Tenant provides
to Landlord ten (10) days prior written notice of any such reduction; and (iv)
the LOC provides that the issuing bank shall notify Landlord in writing at least
five (5) business days prior to any such reduction. In the event that such
reduction to the LOC is made, and, subsequently, Tenant falls to meet any of the
above conditions for a period of thirty (30) days following delivery by Landlord
of written notice of any such failure, Tenant shall within forty-eight (48)
hours, increase the face amount of the LOC to an amount equal to $10,000,000.

              (b) At any time after the sixtieth (60th) month of the Term
hereof, and only in the event Tenant satisfies all of the following conditions
to Landlord's reasonable satisfaction, the LOC Amount may be reduced to an
amount equal to $6,000,000: (i) Tenant is not and has not been in default under
the terms of this Lease beyond any applicable cure period; (ii) Tenant maintains
a tangible net worth in excess of $200,000,000 which amount shall be determined
by Landlord to its satisfaction prior to any reduction in the LOC Amount, and in
connection with such determination, Tenant shall deliver to Landlord for review
Tenant's Financial Information; (iii) Tenant provides to Landlord ten (10) days
prior written notice of any such reduction; and (iv) the LOC provides that the
issuing bank shall notify Landlord in writing at least five (5) business days
prior to any such reduction. In the event that such reduction to the LOC is made
and, subsequently, Tenant fails to meet any of the above conditions for a period
of thirty (30) days following delivery by Landlord of written notice of any such
failure, Tenant shall within forty-eight (48) hours, increase the face amount of
the LOC to an amount equal to $7,000,000.

                                       46
<PAGE>   50

                                   ARTICLE 26

                              RIGHT OF FIRST OFFER

         Provided Tenant is not, and has not been, in default of any terms and
conditions of this Lease, Tenant shall have a one-time right of first offer to
lease or purchase the entire building or site of approximately 55,000 square
feet (the "Expansion Space") that is adjacent to the Building, as shown on
Exhibit E at such time as such Expansion Space is made available for lease or
purchase by Landlord. Upon notification by Landlord in writing of the
availability of the Expansion Space and the terms and conditions on which
Landlord is willing to lease such Expansion Space to Tenant, Tenant shall have
five (5) business days to notify Landlord in writing of Tenant's desire to
exercise Tenant's right of first offer on the terms and conditions. In the event
Tenant fails to give Landlord notice of Tenant's election to lease such
Expansion Space within such time period, Tenant shall have no further right,
title or interest in such Expansion Space and this right of first offer shall
terminate. If, on the other hand, Tenant exercises its right of first offer in
the manner prescribed, Tenant shall immediately deliver to Landlord payment for
the first month's rent for such Expansion Space (in the same manner as provided
for in this Lease), and the lease for such Expansion Space shall be consummated
without delay in accordance with the terms and conditions set forth in
Landlord's notice. Notwithstanding anything to the contrary herein contained,
Tenant's right to the Expansion Space shall be conditioned upon the following:
(i) at the time Tenant agrees to accept the Expansion Space and at the time of
the commencement of the term for the Expansion Space, Tenant or its Affiliates
shall be in possession of and occupying the primary premises for the conduct of
its business therein and the same shall not be occupied by any assignee,
subtenant or licensee and, provided further, that the option for additional
space shall be applicable hereunder only in the Expansion Space will actually be
occupied by Tenant and (ii) the agreement of acceptance shall constitute a
representation by Tenant to Landlord, effective as of the date of the agreement
of acceptance and as of the date of commencement of the lease for the Expansion
Space, that Tenant does not intend to assign the lease for the Expansion Space,
in whole or in part or sublet all or any portion of the Premises, the election
to expand being for the purpose of utilizing the Expansion Space for Tenant's
purposes in the conduct of Tenant's business therein.

                                   ARTICLE 27

                                  ROOF RIGHTS

              (a) During the Term, Tenant shall have the nonexclusive right to
install on the roof of the Building antennas, supplemental HVAC, microwaves,
satellites or DDS dishes in a area designated by Landlord that is not greater
than ten (10) feet in diameter and does not exceed two hundred (200) pounds
installed, which shall be enclosed by a screen and the nonexclusive right to run
connecting lines or cables thereto from the Premises (such satellite
dish/antennae and such connecting lines and related equipment herein referred to
collectively as the "Equipment"). Tenant shall not penetrate the roof in
connection with any installation or reinstallation of the Equipment without
Landlord's prior written consent, which may be withheld in Landlord's sole
discretion. The plans and specifications for all the Equipment shall be
delivered by Tenant to Landlord for Landlord's review and approval. Such plans
and specifications, including, without limitation, the location of the
Equipment, shall be approved by Landlord in writing prior to any installation.
In no event shall the Equipment or any portion thereof be visible from street
level. Prior to the commencement of any installation or other work performed on
or about the Building,

                                       47
<PAGE>   51

Landlord shall approve all contractors and subcontractors which shall perform
such work. Tenant shall be responsible for any damage to the roof, conduit
systems or other portions of the Building or Building systems as a result of
Tenant's installation, maintenance and/or removal of the Equipment.

              (b) Tenant, at Tenant's sole cost and expense, shall comply with
all Laws regarding the installation, construction, operation, maintenance and
removal of the Equipment and shall be solely responsible for obtaining and
maintaining in force all permits, licenses and approvals necessary for such
operations.

              (c) Tenant shall be responsible for and promptly shall pay all
taxes, assessments, charges, fees and other governmental impositions levied or
assessed on the Equipment or based on the operation thereof.

              (d) Landlord may require Tenant, at Landlord's sole cost and
expense, to relocate the Equipment during the Term to a location approved by
Tenant, which approval shall not be unreasonably withheld, conditioned or
delayed. Tenant shall not change the location of, or alter or install additional
Equipment or paint any of the other Equipment without Landlord's prior written
consent.

              (e) Operation of the Equipment shall not interfere in any manner
with equipment systems or utility systems of other tenants of the Project,
including without limitation, telephones, dictation equipment, lighting, heat
and air conditioning, computers, electrical systems and elevators. If operation
of the Equipment causes such interference, Tenant agrees to cooperate with such
other tenants to eliminate such interference.

              (f) Tenant shall maintain the Equipment in good condition and
repair, at Tenant's sole cost and expense. Landlord may from time to time
require that Tenant repaint the satellite dishes at Tenant's expense to keep the
same in an attractive condition. In the event that Tenant fails to repair and
maintain the Equipment in accordance with this Lease, Landlord may, but shall
not be obligated to, make any such repairs or perform any maintenance to the
Equipment and Tenant shall reimburse Landlord upon demand for all costs and
expenses incurred by Landlord in connection therewith, plus a reasonable
administrative fee.

              (g) Tenant may access the roof for repair and maintenance of the
Equipment, only during normal business hours, on not less than 24 hours prior
written notice to Landlord, except in emergency. Tenant shall designate in
writing to Landlord all persons whom Tenant authorizes to have access to the
roof for such purposes. Upon such designation and prior identification to
Landlord's building security personnel, such authorized persons shall be granted
access to the roof by Landlord's building engineer. Tenant shall be responsible
for all costs and expenses incurred by Landlord in connection with Tenant's
access to the roof pursuant to this Paragraph. Landlord or Landlord's agent may
accompany Tenant during such access.

              (h) Tenant shall indemnify, defend, protect and hold harmless
Landlord from and against any and all claims related to the Equipment or
operation of the same as if the Equipment were located wholly within the
Premises. Tenant shall provide evidence satisfactory to Landlord that Tenant's
property and liability insurance policies required under this Lease

                                       48
<PAGE>   52

include coverage for the Equipment and any claim, loss, damage, or liability
relating to the Equipment.

              (i) Landlord shall have no responsibility or liability whatsoever
relating to (i) maintenance or repair of the Equipment, (ii) damage to the
Equipment; (iii) damage to persons or property relating to the Equipment or the
operation thereof, or (iv) interference with use of the Equipment arising out of
utility interruption or any other cause, except for injury to persons or damage
to property caused solely by the active negligence or intentional misconduct of
Landlord, its agents or any other parties related to Landlord. In no event shall
Landlord be responsible for consequential damages. Upon installation of the
Equipment, Tenant shall accept the area where the Equipment is located in its
"as is" condition. Tenant acknowledges that the roof location of the Equipment
is suitable for Tenant's needs, and acknowledges that Landlord shall have no
obligation whatsoever to improve, maintain or repair the area in which the
Equipment will be installed.

              (j) Tenant shall use the Equipment solely for Tenant's operations
associated with the Permitted Use and within Tenant's Premises and shall not use
or allow use of the Equipment, for consideration or otherwise, for the benefit
of other tenants in the Building or any other person or entity.

Tenant  shall,  at Tenant's  sole cost and expense,  remove such portions of the
Equipment as Landlord may designate upon the  expiration or earlier  termination
of this Lease,  and  restore  the  affected  areas to their  condition  prior to
installation  of the  Equipment.  If Tenant  fails to so remove  the  Equipment,
Landlord  reserves  the right to do so,  and the  expense  of the same  shall be
immediately due and payable from Tenant to Landlord as additional rent, together
with  interest  and late  charges as provided in this Lease,  plus a  reasonable
administrative fee.

                                   ARTICLE 28

                                    SIGNAGE

         Tenant shall be entitled to the exterior signs to be located as shown
on Exhibit D attached hereto, which Tenant must exercise by May 1, 2000. Any
locations for exterior signs not elected by Tenant by May 1, 2000, shall be
available for Landlord for its own use, including, without limitation, leasing
to third parties. Such signage rights are subject to the following terms and
conditions:

              (a) Tenant shall submit plans and drawings for such signage to the
City of San Francisco and to any other public authorities having jurisdiction
and shall obtain written approval from each such jurisdiction prior to
installation, and shall fully comply with all applicable Laws (Tenant
acknowledges that as of the date of this Lease, Landlord does not have approval
for any signage).

              (b) Tenant shall, at Tenant's sole cost and expense, design,
construct and install such.

              (c) All signs shall be subject to Landlord's prior written
approval, which Landlord shall have the right to withhold in its absolute and
sole discretion.

                                       49
<PAGE>   53

              (d) Tenant shall maintain its signage in good condition and
repair, and all costs of maintenance and repair shall be borne by Tenant.
Maintenance shall include, without limitation, cleaning and, if such signage is
illuminated, relamping at reasonable intervals. Tenant shall be responsible for
any electrical energy used in connection with its signs.

              (e) Tenant's signage rights granted hereby shall be deemed revoked
and terminate upon occurrence of any of the following events:

                  (i) Tenant shall be in default and shall not have cured said
         default for a period of ninety (90) days after notice.

                  (ii) Except with respect to Affiliates, Tenant shall assign
         this Lease or sublet any portion of the Premises without Landlord's
         prior written consent in accordance with Article 10, or Tenant occupies
         less than fifty (50%) of the Premises.

                  (iii) This Lease shall terminate or otherwise no longer be in
         effect.

              (f) Upon the expiration or earlier termination of this Lease or at
such other time that Tenant's signage rights are terminated pursuant to the
terms hereof, Landlord shall cause Tenant's signage to be removed from the
Building and the Building to be repaired and restored to the condition which
existed prior to the installation of Tenant's signage (including, if necessary,
the replacement of any precast concrete panels), all at the sole cost and
expense of Tenant and otherwise in accordance with Article 9 of this Lease,
without further notice from Landlord notwithstanding anything to the contrary
contained in this Lease. Tenant shall pay all costs and expenses for such
removal and restoration within thirty (30) days following delivery of an invoice
therefor.

              (g) Tenant shall pay, on a monthly basis, the charges for each
such sign set forth in Exhibit D.

              (h) If Tenant shall fail to exercise the foregoing option by May
1, 2000, and exterior signage on the Building subsequently becomes available for
lease after the initial leasing thereof, prior to granting rights to such
exterior signage to a third party, Landlord shall notify Tenant of the
availability of such signage and the terms and conditions on which Landlord is
willing to offer such signage to third parties. Tenant shall have five (5)
business days to notify Landlord in writing of Tenant's desire to accept such
signage rights upon the terms and conditions set forth in Landlord's notice. If
Tenant fails to give such notice to Landlord within said five (5) business days,
Landlord shall thereafter have the right to offer such signage to third parties
on terms and conditions determined in Landlord's sole discretion, provided that
if signage becomes available again more than twenty-four (24) months after
Landlord's offer of such signage to Tenant, Landlord shall thereafter re-offer
signage rights to Tenant in accordance with this Article 28.

              (i) Landlord agrees that it will not enter into any agreement for
signage rights with Scient, Viant, or any of the top 20 ranked Interactive
Agencies as measured by Advertising Age for the preceding year (or if
Advertising Age shall no longer be published, as measured by an equivalent
publication). This restriction shall terminate if Tenant shall (except with
respect to Affiliates) assign this Lease or sublet any portion of the Premises
without Landlord's prior

                                       50
<PAGE>   54

written consent in accordance with Article 10, or Tenant occupies less than
fifty (50%) of the Premises.

                                   ARTICLE 29

                                    PARKING

         During the Term, Tenant shall lease 212 parking spaces on an
unreserved, nonexclusive, first come, first served basis, for passenger-size
automobiles, in the parking garage adjacent to the Building.

         Tenant shall at all times comply and shall cause all Tenant's Parties
and visitors to comply with all Regulations and any rules and regulations
established from time to time by Landlord relating to parking at the Project,
including any keycard, sticker or other identification or entrance system, and
hours of operation, as applicable.

         Landlord shall have no liability for any damage to property or other
items located in the parking areas of the Project, nor for any personal injuries
or death arising out of the use of parking areas in the Project by Tenant or any
Tenant's Parties. Without limiting the foregoing, if Landlord arranges for the
parking areas to be operated by an independent contractor not affiliated with
Landlord, Tenant acknowledges that Landlord shall have no liability for claims
arising through acts or omissions of such independent contractor. In all events,
Tenant agrees to look first to its insurance carrier and to require that
Tenant's Parties look first to their respective insurance carriers for payment
of any losses sustained in connection with any use of the parking areas.

         Landlord reserves the night to assign specific spaces, and to reserve
spaces for visitors, small cars, disabled persons or for other tenants or
guests, and Tenant shall not park and shall not allow Tenant's Parties to park
in any such assigned or reserved spaces. Tenant may validate visitor parking by
such method as Landlord may approve, at the validation rate from time to time 60
generally applicable to visitor parking. Landlord may utilize a valet system of
parking in such garage and Tenant shall comply with such rules established
therefor. Landlord also reserves the right to alter, modify, relocate or close
all or any portion of the parking area in order to make repairs or perform
maintenance service, or to restripe or renovate the parking areas, or if
required by casualty, condemnation, act of God, Laws or for any other reason
deemed reasonable by Landlord.

         Tenant shall pay to Landlord (or Landlord's parking contractor, if so
directed in writing by Landlord), as Additional Rent hereunder, the monthly
charges established from time to time by Landlord for parking in such parking
garage, based on the prevailing market rate for covered standard parking in the
vicinity of the Building. Such parking charges shall be payable in advance with
Tenant's payment of Monthly Base Rent and are considered as a material part of
the rental received by Landlord hereunder. In the event the parking spaces are
unavailable for use for a period in excess of five (5) days, Tenant shall be
entitled to an abatement of rent for such spaces from and after the fifth day
until such time as the spaces are available. Tenant may sublease such spaces at
the same charge that Tenant is paying Landlord for the spaces. No deductions
from the monthly parking charge shall be made for days on which the Tenant does
not use any of the parking spaces entitled to be used by Tenant.

                                       51
<PAGE>   55

                                   ARTICLE 30

                                    BASEMENT

         Tenant acknowledges that Landlord may convert the storage space in the
basement of the Building to office space. Any such conversion shall be at no
cost to Tenant and shall be performed in a manner so as not to interrupt or
interfere with the conduct of Tenant's business. Further, any such conversion
shall not reduce the size of the Premises (except in an immaterial amount to
accommodate the entryway to the basement and ducts in locations reasonably
approved by Tenant), or interfere with or adversely affect Tenant's access to or
use of the Premises, or impair the security of the Premises. Without limiting
the generality of the foregoing, Tenant's cabling and the security of its server
and other equipment shall not be impaired. Landlord shall cause any such
additional tenants to pay their pro rata share of Operating Expenses, and
Tenant's Share shall be reduced accordingly.

                                   ARTICLE 31

                                GENERATOR SPACE

         31.1 GENERALLY

         During the Term, Tenant shall have the right, subject to applicable
codes, rules and regulations, to install a diesel-operated generator, together
with transformer and fuel tank, together with related wining, vents and
equipment as well as conduits (collectively, the "Generator"), to provide
emergency additional electrical capacity to the Premises. The Generator shall be
placed in a location reasonably designated by Landlord (the "Generator Space").

         31.2 INSTALLATION

         Prior to commencing the installation of the Generator and any related
equipment and materials located on the Generator Space or in other parts of the
Building, including, but not limited to all switch gear and wiring,
(collectively, the "Related Equipment"), Tenant shall submit plans and
specifications regarding the installation of the Generator and any Related
Equipment to Landlord for Landlord's review and approval, which will not be
unreasonably withheld, conditioned or delayed. Tenant's right to install the
Generator shall be subject to Landlord's prior written approval of the manner in
which the Generator is installed and the measures that will be taken to
eliminate interference with other tenants and any vibrations or sound
disturbances from the operation of the Generator. Landlord shall have the right
to require an acceptable enclosure (e.g. wood fencing and landscaping) to hide
or disguise the existence of the Generator and to minimize any adverse effect
that the installation of the Generator may have on the appearance of the
Building and Property. Tenant shall be solely responsible for obtaining all
necessary governmental and regulatory approvals of, and for the cost of
installing, operating, maintaining and removing, the Generator and all Related
Equipment. Tenant shall also be responsible for the cost of all utilities
consumed in the operation of the Generator.

                                       52
<PAGE>   56

         31.3 MAINTENANCE, REMOVAL

         The Generator and Related Equipment shall remain the personal property
of Tenant, and shall be removed by Tenant at its own expense at the termination
of this Lease. Tenant shall repair any damage caused by such removal, including
the patching of any holes to match, as closely as possible, the color
surrounding the area where the Generator and appurtenance were attached. Tenant
agrees to maintain the Generator, including without limitation, any enclosure
installed around the Generator, in good condition and repair, and any such
maintenance shall be performed in a manner to avoid any unreasonable
interference with any other tenants or Landlord.

         31.4 ACCESS

         Tenant, subject to the reasonable rules and regulations enacted by
Landlord, to Force Majeure and events of casualty, shall have access to the
Generator and its surrounding area for the purpose of installing, operating,
repairing, maintaining and removing the Generator and Related Equipment at all
times.

         31.5 USE

         Tenant agrees that it will not refuel the storage tank during Normal
Business Hours and will only run the Generator during emergency circumstances.
The Generator shall be tested only before or after Normal Business Hours, and
only upon at least 24 hours prior written notice to Landlord. Any spills or
leaks from the Generator or any use of the Generator which results in a release
of Hazardous Materials of any kind must be immediately reported to Landlord and
the costs for any such clean-up shall be borne solely by the Tenant. Landlord
shall not be liable in-any way for any claims, damages, fines, judgments,
penalties, costs, expenses, liabilities, or losses relating to any violation by
Tenant of any environmental laws incurred by or assessed against Landlord
arising in connection with the Generator.

                                       53
<PAGE>   57

         IN WITNESS WHEREOF, this Lease has been executed as of the date set
forth in Section 1.1(4) hereof.

TENANT:                                      LANDLORD:

ORGANIC, INC.                                BAKER HAMILTON PROPERTIES, LLC.
a Delaware corporation

By:________________________________          By:________________________________

Print Name:________________________          Print Name:________________________

Its:_______________________________          Its:_______________________________

By:________________________________

Print Name:________________________

Its:_______________________________

                                       54
<PAGE>   58

                                    EXHIBIT B

                              WORK LETTER AGREEMENT

         This Work Letter ("Work Letter") is made and entered into as of
November 8, 1999, by and between Baker Hamilton Properties, LLC ("Landlord"),
and Organic, Inc. ("Tenant").

                                    RECITALS

         A. Pursuant to the terms of that certain Lease of even date herewith
(the "Lease"), Landlord leased to Tenant, and Tenant hired from Landlord, those
certain premises consisting of approximately 213,000 square feet of space (the
"Premises"), located at 601 Townsend Street, San Francisco, California (the
"Building"), as more particularly described in the Lease.

         B. Subject to the terms and provisions hereof, Landlord has agreed that
Tenant may construct certain tenant improvements in the Premises. Accordingly,
Landlord and Tenant now desire to set forth the terms and conditions upon which
Tenant shall construct the tenant improvements in the Premises, as more
particularly set forth hereinbelow. Capitalized terms used but not defined
herein shall have the meaning ascribed to them in the Lease.

         NOW THEREFORE, the parties agree as follows:

         1. General Requirements for Construction

            1.1. Landlord's Work. Landlord shall diligently complete Landlord's
Work in a good and workmanlike manner, in compliance with all applicable Laws.

            1.2. Tenant's Obligation to Construct. Tenant shall construct and
install, in a good and workmanlike manner, first-class tenant improvements and
fixtures (the "Tenant Improvements") in accordance with the Final Plans (as
defined in Section 2.2 below) and otherwise in strict compliance with this Work
Letter. Tenant shall be solely responsible for all cost and expenses related to
the construction and installation of the Tenant Improvements, subject to
reimbursement by Landlord pursuant to Section 4 below.

            1.3. Tenant's Access to the Premises. Tenant shall coordinate with
the Landlord for access to the Premises and the scheduling of construction work
therein. Landlord agrees to permit Tenant and its contractor and subcontractors
access to the Premises as soon as reasonably possible prior to the Delivery
Date, so long as such access shall not interfere with the performance of
Landlord Work. Any damage to the Building caused by Tenant or its contractor or
subcontractors in connection with the construction of the Tenant Improvements
shall be immediately repaired at Tenant's sole cost and expense.

         2. Development of Plans

            2.1. Preliminary Plans. Prior to Tenant's commencement of the
construction and installation of the Tenant Improvements, Tenant shall prepare
and deliver to Landlord preliminary plans and specifications (the "Preliminary
Plans") setting forth the Tenant Improvements to be constructed in the Premises.
Within five (5) business days following

                               Exhibit B - Page 1
<PAGE>   59

delivery of the Preliminary Plans, Landlord shall approve the Preliminary Plans
or deliver to Tenant written notice of Landlord's disapproval of the Preliminary
Plans. Such notice shall specify all changes that must be made to the
Preliminary Plans as a condition of Landlord's approval thereof. Promptly
following receipt of Landlord's notice of disapproval, Tenant shall deliver a
revised set of Preliminary Plans to Landlord, which Preliminary Plans shall
incorporate all changes specified in Landlord's notice of disapproval. Landlord
shall reasonably approve or disapprove the revised Preliminary Plans within two
(2) business days after receipt thereof.

            2.2 Final Plans. As soon as the Preliminary Plans are approved by
Landlord, Tenant shall prepare final plans, specifications and working drawings
for the Tenant Improvements (the "Final Plans") that are consistent with and
logical evolutions of the approved Preliminary Plans and shall deliver the same
to Landlord for approval. Concurrently with the delivery of the Final Plans,
Tenant shall deliver to Landlord for Landlord's approval a schedule of values
("Schedule of Values") allocating costs to the various portions of the work
involved in the construction and installation of the Tenant Improvements and
setting forth Tenant's reasonable, good faith estimate of the timing of
Landlord's disbursements of the Tenant Improvement Allowance (as defined in
Section 4.1 below) and the amount of each such disbursement. If Landlord
disapproves the Final Plans and/or the Schedule of Values, Landlord shall
deliver to Tenant, as soon as reasonably possible but within five (5) business
days following receipt thereof, written notice of such disapproval. Such notice
shall specify all changes that must be made to the Final Plans and/or the
Schedule of Values as a condition of Landlord's approval thereof. Promptly
following receipt of Landlord's notice of disapproval, Tenant shall deliver a
revised set of Final Plans and/or Schedule of Values to Landlord, which Final
Plans and/or Schedule of Values shall incorporate all changes specified in
Landlord's notice of disapproval. Landlord shall approve or disapprove revised
Final Plans and/or the Schedule Values within two (2) business days after
receipt thereof. As soon as Landlord approves the Final Plans and the Schedule
of Values submitted by Tenant, Landlord and Tenant shall each sign the same.
Except as otherwise specifically provided in this Work Letter, the term "Final
Plans" as hereinafter used shall mean the final plans, specifications, working
drawings and Schedule of Values approved by Landlord for the construction of the
Tenant Improvements.

            2.3. Form of Final Plans, Approval of Architect. The Final Plans
shall include tracings and other reproducible drawings, shall be in a form
satisfactory for filing with appropriate governmental authorities and shall
conform to all applicable codes, rules, regulations and ordinances of all
governing authorities. All plans submitted by Tenant to Landlord shall be
prepared by an architect selected by Tenant and approved by Landlord. Landlord
hereby approves Gensler Architecture Design & Planning as Tenant's architect.
Landlord's approval of Tenant's architect shall not constitute Landlord's
warranty that said architect is professionally qualified.

            2.4. Landlord's Approval. If the Final Plans otherwise conform to
the Preliminary Plans and this Work Letter, Landlord's approval thereof shall
not be unreasonably withheld. If the Final Plans show work requiring a
modification or change to the shell of the Building, Landlord shall not be
deemed unreasonable if Landlord disapproves such Final Plans. Landlord may, at
Landlord's option, have the Preliminary Plans or the Final Plans reviewed by
Landlord's architect, engineer and/or construction manager; provided, however,
that any such review shall be performed within the time periods set forth above
for Landlord's review of the

                               Exhibit B - Page 2
<PAGE>   60

Preliminary Plans and the Final Plans. In no event shall the approval by
Landlord (or Landlord's architect, engineer or construction manager) of the
Preliminary Plans or the Final Plans constitute a representation or warranty by
Landlord (or Landlord's architect, engineer or construction manager) of (i) the
accuracy or completeness thereof, (ii) the absence of design defects or
construction flaws therein, or (ill) the compliance thereof with applicable
laws; and the parties agree that Landlord (and Landlord's architect, engineer
and construction manager) shall incur no liability by reason of such approval.

            2.5. Changes. There shall be no material changes to the Final Plans
without the prior written consent of Landlord. All change orders requested by
Tenant shall be made in writing and shall specify any added or reduced cost
resulting therefrom. Any change proposed by Tenant shall be approved or
disapproved by Landlord as soon as reasonably possible and `in any event within
two (2) business days following Landlord's receipt of plans and specifications
therefor. Landlord's failure to approve any proposed change within said two (2)
day period shall be deemed Landlord's approval thereof.

         3. Construction of Tenant Improvements

            3.1. Permits and Approvals. Tenant shall submit the Final Plans to
all appropriate governmental agencies for approval and shall not commence
construction or installation of the Tenant Improvements described therein unless
and until Tenant has obtained all necessary permits and approvals required for
the construction and installation of the same and has delivered a copy or copies
thereof to Landlord.

            3.2. Construction Documents. Prior to the commencement of
construction and installation of the Tenant Improvements, Tenant shall submit to
Landlord, for Landlord's approval, the following (collectively, the
"Construction Documents"): (a) the name of the proposed general contractor and a
copy of the proposed construction contract for the Tenant Improvements, which
shall be consistent with the terms hereof, (b) a written assignment of such
construction contract containing the written consent of Tenant's general
contractor to such assignment provided that Landlord assumes in writing all
obligations of Tenant under said contract, (c) a copy of the architect's
contract for the Tenant Improvements, which shall be consistent with the terms
hereof, (d) a written assignment of such architect's contract containing the
written consent of Tenant's architect to such assignment provided that Landlord
assumes in writing all obligations of Tenant under said contract, and (e) a list
of all subcontractors and materials suppliers proposed to be used by Tenant in
connection with the construction of the Tenant Improvements. Within five (5)
business days following the delivery of all of the Construction Documents,
Landlord shall approve such information or deliver to Tenant written notice of
Landlord's disapproval of all or any information contained therein, provided
Landlord shall not have approval rights over Tenant's architect's contract or
the general contractor's contract. If Landlord disapproves the general
contractor, any subcontractor or materials supplier, the parties shall negotiate
in good faith to select another contractor, subcontractor or materials supplier
mutually acceptable to the parties. Landlord shall be entitled to withhold its
approval of the general contractor, any subcontractor, or any materials
supplier, who, in Landlord's determination, is financially or otherwise
professionally unqualified to construct the Tenant Improvements. In addition,
Landlord may condition its approval of a general contractor upon Tenant
obtaining a performance bond and labor and materials payment bond, each in an
amount

                               Exhibit B - Page 3
<PAGE>   61

equal to one hundred percent (100%) of the estimated cost of the Tenant
Improvements and in a form acceptable to Landlord, in the event Landlord
reasonably determines that such bonds are necessary to ensure lien-free
completion of the Tenant Improvements. Landlord's failure to disapprove a
contractor, subcontractor or materials supplier shall not constitute Landlord's
warranty that any contractor, subcontractor or supplier not so disapproved is in
fact qualified. Following approval by Landlord, Tenant shall not materially
amend or consent to the material amendment of the construction contract or the
bonds, if the same are required, without Landlord's prior written approval.

            3.3. Commencement and Completion of Construction. Following Tenant's
satisfaction of all of the requirements of Section 2 above and this Section 3,
Tenant shall commence construction and installation of the Tenant Improvements
in accordance with the Final Plans and shall pursue the same diligently to
completion. Tenant covenants to give Landlord at least ten (10) days' prior
written notice of its commencement of construction or delivery of materials
related thereto to enable Landlord to post a notice of nonresponsibility
respecting the Tenant Improvements to be constructed in the Premises.

            All work done in connection with the Tenant Improvements shall be
performed in compliance with all applicable laws, ordinances, rules, orders and
regulations of all federal, state, county and municipal governments or agencies
now in force or that may be enacted hereafter, with the requirements and
standards of any insurance underwriting board, inspection bureau or insurance
carrier insuring the Premises pursuant to the terms of the Lease, and with all
directives, rules and regulations of the fire marshal, health officer, building
inspector, or other proper officers of any governmental agency now having or
hereafter acquiring jurisdiction.

            3.4. Building Systems. In no event shall Tenant interfere with the
provision of heating, plumbing, electrical or mechanical system services to the
Building, make any structural changes to the Building, make any changes to the
heating, plumbing, electrical or mechanical systems of the Building, or make any
changes to the Premises which would weaken or impair the structural integrity of
the Building, alter the aesthetic appearance of the Building exterior, or which
would affect any warranties applicable to the Building or any improvements
constructed or installed by Landlord therein, without Landlord's prior written
consent, which consent may be withheld in Landlord's sole discretion.

            3.5. Inspections. In addition to any right of Landlord under the
Lease and this Work Letter to enter the Premises for the purpose of posting
notices of nonresponsibility, Landlord and its officers, agents or employees
shall have the right at all reasonable times to enter upon the Premises and
inspect the Tenant Improvements and to determine that the same are in conformity
with the Final Plans and all of the requirements of this Work Letter. Landlord,
however, is under no obligation to supervise, inspect or inform Tenant of the
progress of construction and Tenant shall not rely upon Landlord therefor.
Neither the right herein granted to Landlord to make such inspections, nor the
making of such inspections by Landlord, shall operate as a waiver of any rights
of Landlord to require that the construction and installation of the Tenant
Improvements conform with the Final Plans and all the requirements of this Work
Letter.

                               Exhibit B - Page 4
<PAGE>   62

            3.6. Protection Against Lien Claims. Subject to timely payment of
the Tenant Improvement Allowance, Tenant agrees to fully pay and discharge all
claims for labor done and materials and services furnished in connection with
the construction of the Tenant Improvements, to diligently file or procure the
filing of a valid notice of completion within ten (10) days following completion
of construction of the Tenant Improvements, to diligently file or procure the
filing of a notice of cessation upon any cessation of labor on the Tenant
Improvements for a continuous period of thirty (30) days or more, and to take
all reasonable steps to forestall the assertion of claims of lien against the
Premises or the Project, or any part thereof, or any right or interest
appurtenant thereto. Upon the request of Landlord, Tenant shall provide Landlord
with satisfactory evidence of the release or removal (including removal by
appropriate surety bond) of all liens recorded against the Premises, the
Project, or any portion thereof, and all stop notices received by Tenant.

            3.7. Insurance

                 (a) At least five (5) days prior to the date Tenant commences
construction of the Tenant Improvements, Tenant shall submit to Landlord
evidence of the following insurance coverage: (i) general liability insurance as
required by Paragraph 19 of the Lease, which shall include contractor's
protective liability coverage; (ii) workers' compensation insurance as required
by Paragraph 19 of the Lease, with limits in accordance with the statutory
requirements of the State of California; and (iii) broad form "Builder's Risk"
property damage insurance with limits of not less than one hundred percent
(100%) of the estimated value of the Tenant Improvements (which insurance may be
carried by Tenant's contractor). All such policies shall provide that thirty
(30) days' written notice must be given to Landlord prior to termination or
cancellation. The insurance specified in (i) and (iii) above shall name Landlord
and Landlord's property manager as additional insureds and shall provide that
Landlord, although an additional insured, may recover for any loss suffered by
Landlord or Landlord's agents by reason of the negligence of Tenant or Tenant's
contractors, subcontractors and/or employees. Tenant hereby waives, and Tenant
shall use commercially reasonable efforts to cause each of its contractors and
subcontractors to waive, all rights to recover against Landlord and its agents,
contractors and employees for any loss or damage arising from a cause covered by
insurance required to be carried by Tenant hereunder to the extent of such
coverage and shall cause each property insurer to waive all rights of
subrogation against Landlord and its agents, contractors and employees in
connection therewith to the same extent.

                 (b) At least five (5) days prior to the date Tenant commences
construction of the Tenant Improvements, Tenant shall deliver to Landlord
certificates of insurance from the carrier(s) providing insurance to Tenant's
contractor(s) evidencing the following types of coverage in such amounts as are
reasonably determined by Landlord to be necessary: (i) commercial general
liability insurance; (ii) business automobile liability insurance; (iii)
workers' compensation insurance; and (iv) umbrella liability insurance. The
insurance specified in (i), (ii) and (iv) above shall name Landlord and
Landlord's property manager as additional insureds, and all such policies shall
provide that thirty (30) days' written notice must be given to Landlord prior to
termination or cancellation.

            3.8. Final Documents. Following completion of the Tenant
Improvements, Tenant shall comply with the following: (a) Tenant shall obtain
and deliver to Landlord a copy

                               Exhibit B - Page 5
<PAGE>   63

of the certificate of occupancy for the Tenant Improvements from the
governmental agency having jurisdiction thereof; (b) Tenant shall promptly cause
a notice of completion to be validly recorded for the Tenant Improvements; (c)
Tenant shall furnish Landlord with unconditional waivers of lien in statutory
form from all parties performing labor and/or supplying equipment and/or
materials in connection with the Tenant Improvements, including Tenant's
architect(s); (d) Tenant shall deliver to Landlord a certificate of Tenant's
architect(s) certifying completion of the Tenant Improvements in substantial
accordance with the Final Plans; (e) Tenant shall deliver to Landlord a
certificate of Tenant's contractor(s) certifying completion of the Tenant
Improvements in substantial accordance with the construction contract(s)
approved by Landlord; (f) Tenant shall deliver to Landlord a full set of
reproducible as-built drawings (signed and dated by the general contractor and
each responsible subcontractor) for the Tenant Improvements; and (g) Tenant
shall deliver to Landlord copies of all written construction and equipment
warranties and manuals related to the Tenant Improvements.

            3.9. Indemnification. Tenant shall, at Tenant's sole cost and
expense, defend, indemnify, save and hold Landlord harmless from and against any
and all claims, liabilities, demands, losses, expenses, damages or causes of
actions (whether legal or equitable in nature) asserted by any person, firm,
corporation, governmental body or agency or entity arising out of the
construction of the Tenant Improvements, except to the extent caused by the
gross negligence or willful misconduct of Landlord, its employees, agents,
contractors, subcontractors or material suppliers. Tenant shall pay to Landlord
upon demand all claims, judgments, damages, losses or expenses (including
attorneys' fees) incurred by Landlord as a result of any legal action arising
out of the construction of the Tenant Improvements, except to the extent caused
by the gross negligence or willful misconduct of Landlord, its employees,
agents, contractors, subcontractors or material suppliers.

         4. Tenant Improvement Allowance

            4.1. Amount of Allowance. Subject to the terms and conditions of
this Work Letter, Landlord shall pay to Tenant an amount not in excess of
$5,288,300 (the "Tenant Improvement Allowance") on account of all construction
costs, space planning and design fees, architecture and engineering fees, permit
fees and construction management fees (including Landlord's construction
management fee) incurred by Tenant in designing and constructing the Tenant
Improvements in the Premises. In no event shall Tenant be entitled to any cash
payment, credit, offset or other benefit whatsoever based on any excess of the
Tenant Improvement Allowance over the actual costs of the construction and
installation of the Tenant Improvements.

            4.2. Tenant's Cost. Any cost incurred in the design or construction
of the Tenant Improvements in excess of the Tenant Improvement Allowance shall
be borne by Tenant in accordance with the terms and conditions set forth below.
Prior to the construction of the Tenant Improvements, Tenant shall cause its
general contractor to submit an estimate of the total cost of constructing the
Tenant Improvements. In the event that the aggregate of the cost estimated by
Tenant's general contractor and the cost of designing the Tenant Improvements
(collectively, the "Improvements Cost") exceeds the Tenant Improvement
Allowance, Landlord and Tenant shall determine Landlord's share of the
Improvements Cost ("Landlord's Share") and Tenant's share of the Improvements
Cost ("Tenant's Share") as follows:

                               Exhibit B - Page 6
<PAGE>   64

                 (a) Landlord's Share shall be a fraction, the numerator of
which is the Tenant Improvement Allowance, and the denominator of which is the
Improvements Cost.

                 (b) Tenant's Share shall be a fraction, the numerator of which
is the portion of the Improvements Cost that exceeds the Tenant Improvement
Allowance, and the denominator of which is the Improvements Cost.

                 (c) If Tenant has not sold its shares in an initial public
offering prior to the commencement of construction of the Tenant Improvements,
Tenant shall deposit in a separate bank account ("Tenant's Construction
Account') funds equal to Tenant's Share of the Improvements Cost and shall
deliver to Landlord reasonable evidence of the establishment of Tenant's
Construction Account and the deposit therein of Tenant's Share of the
Improvements Cost. Tenant's Construction Account shall be used only for the
purpose of funding Tenant's Share of the Improvements Cost, and Tenant shall
instruct the bank maintaining Tenant's Construction Account to send to Landlord
duplicate statements of each disbursement or withdrawal from Tenant's
Construction Account. In the event of any change order or other event which
would increase the Improvements Cost, Tenant's Share shall be appropriately
adjusted to reflect the increase in the Improvements Cost, and Tenant shall
promptly deposit sufficient funds into Tenant's Construction Account to equal
the then outstanding unpaid amount of Tenant's Share of such increased
Improvements Cost.

            4.3. Procedure for Disbursement of the Tenant Improvement Allowance.
Landlord shall reimburse Tenant for architectural fees and other approved "soft"
costs within thirty-five (35) days of receipt of invoices. During the
construction of the Tenant Improvements, Landlord shall make progress payments
of the Tenant Improvement Allowance as follows: on or before the twenty-fifth
(25th) day of each calendar month during the construction of the Tenant
Improvements, but in no event more frequently than once every thirty (30) days,
Tenant shall deliver to Landlord: (i) an application for payment from Tenant's
contractor, which application shall be approved by Tenant's architect, showing
the schedule, by trade, of the percentage of completion of the Tenant
Improvements, and detailing the portion of the work completed and not completed;
(ii) invoices; and (iii) executed conditional mechanic's lien releases from
Tenant's contractor and all of its subcontractors and materialmen, which lien
releases shall comply with the appropriate provisions of California Civil Code
Section 3262(d). Tenant's submission of said documents shall be deemed to be
Tenant's payment request for the amount approved by Tenant's architect. Thirty
(30) days after receipt of the foregoing documents, Landlord shall deliver to
Tenant a check made payable to Tenant or the contractor directly in an amount
equal to the lesser of (a) Landlord's Share of the application for payment, and
(b) the balance of the Tenant Improvement Allowance, provided that Landlord does
not reasonably dispute any request for payment. If Landlord reasonably disputes
any request for payment, Landlord shall promptly notify Tenant in writing of the
grounds for such disapproval, and Landlord shall pay the undisputed portion of
the request for payment. Following substantial completion of the Tenant
Improvements and prior to Landlord's final disbursement of the Tenant
Improvement Allowance (which shall include a retention of ten percent (10%) of
the Tenant Improvement Allowance), Tenant shall comply with the requirements set
forth in Section 3.8 above, together with the following: (a) Tenant shall have
submitted to Landlord a cost breakdown of Tenant's final and total construction
costs incurred in connection with the Tenant Improvements, together with
receipted invoices showing evidence of full payment therefor; (b) Tenant shall
have completed

                               Exhibit B - Page 7
<PAGE>   65

Landlord's punchlist items, which list shall be provided by Landlord to Tenant
in accordance with Section 5 below; and (c) the Lease shall be in full force and
effect and there shall exist no event of default under the Lease or this Work
Letter, and no condition, event or act which, with the passage of time or the
giving of notice, or both, would constitute an event of default under the Lease
or this Work Letter. Landlord shall pay the final disbursement of the Tenant
Improvement Allowance within thirty (30) days after satisfaction of the
foregoing requirements.

            4.4 Construction Management. Landlord shall retain a third party to
supervise Tenant's construction of the Tenant Improvements (but not to provide
construction management services for such work), the cost of which shall be
payable in monthly installments out of the Tenant Improvement Allowance, not to
exceed $75,000. Tenant shall have the right to rely on the acts of such third
party as if such third party were the Landlord.

         5. Walk-Through of Tenant Improvements. Within two (2) business days
following the completion of the Tenant Improvements, Tenant shall notify
Landlord of the completion thereof and shall provide Landlord an opportunity to
inspect the Tenant Improvements. Within three (3) business days following
Tenant's notice, Landlord (or its representative) shall walk-through and inspect
Tenant's work on the Tenant Improvements and shall either approve Tenant's work
or advise Tenant in writing of any defects or uncompleted items. Tenant shall
promptly repair such defects or uncompleted items to Landlord's reasonable
satisfaction. Landlord's approval of the Tenant Improvements, or Landlord's
failure to advise Tenant of any defects or uncompleted items in the Tenant
Improvements, shall not relieve Tenant of responsibility for constructing and
installing the Tenant Improvements in accordance with the Final Plans and this
Work Letter, and in compliance with all applicable laws.

         6. Default. Each of the following events shall constitute an event of
default ("Default") under this Work Letter:

                 (a) Failure to comply with those conditions set forth in this
Work Letter which are required to be fulfilled by Tenant prior to the
commencement and installation of Tenant Improvements, which failure shall not be
cured within fifteen (15) days after Tenant's receipt of written notice thereof
from Landlord (or such longer period as may be reasonably required);

                 (b) Failure to commence and/or complete construction of the
Tenant Improvements in compliance with this Work Letter, which failure shall not
be cured within fifteen (15) days after Tenant's receipt of written notice
thereof from Landlord (or such longer period as may be reasonably required); and

                 (c) The default or breach by Tenant of any provision of the
Lease, which continues after Tenant's receipt of notice and expiration of the
applicable cure period set forth in the Lease.

         7. Remedies. In the event of a Default by Tenant hereunder, Landlord
shall thereafter have no further obligation to disburse any portion of the
Tenant Improvement Allowance unless and until such Default is cured. In
addition, upon the occurrence of a Default by Tenant hereunder, Landlord shall
have the right (but not the obligation), at Tenant's sole cost

                               Exhibit B - Page 8
<PAGE>   66

and expense, to enter upon the Premises and take over and complete construction
and installation only as to those areas where the construction or installation
of the Tenant Improvements has been commenced and such other areas to the extent
necessary to relet the Premises, and to make disbursements from the Tenant
Improvement Allowance toward completion of the Tenant Improvements. In
connection therewith, Landlord may discharge or replace the contractors or
subcontractors performing such work. In no event shall Landlord be required to
expend its own funds to complete the Tenant Improvements if the Tenant
Improvement Allowance is insufficient. Where substantial deviations from the
Final Plans have occurred which have not been approved by Landlord, or defective
or unworkmanlike labor or materials are being used in construction of the Tenant
Improvements, Landlord shall have the right to demand that such labor or
materials be corrected, and if the same are not so corrected, shall have the
right to immediately order the stoppage of all construction until such condition
is corrected. After issuance of such an order in writing, no further work shall
be done on the Tenant Improvements without the prior written consent of Landlord
unless and until said condition has been fully corrected.

         8. Miscellaneous. Time is of the essence of this Work Letter. The
invalidity or unenforceability of any one or more provisions of this Work Letter
will in no way affect the validity or enforceability of any other provision.
This Work Letter and the Lease to which this Work Letter is attached constitute
the entire agreement of the parties with respect to the subject matter hereof.
This Work Letter may not be modified or amended except by a written agreement
signed by Landlord and Tenant. The captions of the paragraphs of this Work
Letter are for convenience and reference only, and in no way modify, amplify or
interpret the provisions of this Work Letter.

         9. Attorneys' Fees. If any action or proceeding is commenced to enforce
the provisions of this Work Letter, the prevailing party in such action or
proceeding will have the right to recover from the other party its reasonable
attorneys' fees and costs and expenses of litigation.

         10. Conflict. In the event of any conflict between the terms of the
Lease and the terms of this Work Letter concerning the construction of the
Tenant Improvements, the terms of this Work Letter shall prevail.

         11. Consents. Any time that the consent or approval of Landlord is
required pursuant to this Work Letter, such consent or approval shall not be
unreasonably withheld, conditioned or delayed, unless such consent or approval
relates to matters affecting the Building structure or Building systems.
Landlord and Tenant agree to act reasonably and in good faith under this Work
Letter, so as to minimize any delays in the construction of Landlord Work and
the Tenant Improvements.

         12. Historical Significance . Any actual delay in the design and
construction of the Tenant Improvements resulting from Landlord's application
for certification of the Building as a National Historic Landmark shall
constitute a Landlord Delay; provided, however, that Tenant must comply with the
Historic Guidelines attached hereto as Schedule 2 and any delay caused by
Landlord requiring Tenant to comply with such guidelines shall not constitute a
Landlord Delay.

                               Exhibit B - Page 9
<PAGE>   67

Landlord, at its expense, shall be responsible for submitting all applications
and coordinating such certification.

                              Exhibit B - Page 10
<PAGE>   68

                                   SCHEDULE 1

                                 LANDLORD'S WORK

1.       Base building main sprinkler loop including sprinkler heads at a
         minimum density required by code. Tenant, at Tenant's expense, may
         elect to have Landlord install rapid response sprinkler heads.

2.       Fire alarms, smoke detectors, strobe lights, exit door lights, and
         supporting power panel requirements installed per code in the common
         areas.

3.       HVAC: Approximately six rooftop package units (totaling approximately
         630 tons or a minimum of one ton per 350 square feet) of cooling to the
         Premises. The system to be designed for VAV modulation utilizing
         variable speed drives. Supply air delivered to each floor shall be not
         less than 0.15 cfm per square foot.

4.       Subject to PG&E engineering, the building electrical power design
         provides approximately 3500 amp service, 480/277 volt, 3-phase, 4-wire
         service with provisions for an additional 3500 amp future service (if
         Tenant desires, at its expense). The main electrical room is located in
         the basement and conduits are provided from the main electrical room to
         the stacked core electrical rooms at each floor. The tenant will be
         responsible for all panels, feeders, boards, etc. The building is
         designed to easily accommodate up to three standby 400 KW
         rooftop-mounted generators should tenant(s) wish to provide and
         maintain them. There are six 4-inch conduits for PacBell service and
         eight 4-inch conduits for alternate service providers from separate
         boxes (one for PacBell and one for alternate service providers) outside
         the building connected to the main telephone room in the basement.
         Secondary raceways and distribution wiring for power and lighting shall
         be paid for by the tenant.

5.       New men's and women's restrooms on each floor of the leased Premises
         pursuant to the drawings listed as Exhibit A to Schedule 1, which shall
         be ADA compliant.

6.       Main ground floor lobby finished to building standard, or at Tenant's
         election, Tenant shall receive an allowance equal to Landlord's
         budgeted amount for such work. And drywall installation in the core
         shall be taped and textured and ready for Tenant' finishes.

7.       Finished fire stairs designed to meet current governmental codes
         pursuant to the drawings listed as Exhibit A to Schedule 1.

8.       Two new traction passenger elevators will be installed to service the
         office floors pursuant to the drawings listed as Exhibit A to Schedule
         1.

9.       Construction of a structured parking garage adjacent to the Building.

10.      The Building is required to conform to the 1994 seismic code. However,
         the Landlord intends to upgrade the Building to the 1997 seismic code.

11.      Existing floors to be sheathed in plywood.

                                     page 1
<PAGE>   69

12.      Windows and perimeter walls will be repaired, as necessary, sealed and
         finished to a water-tight condition (to the extent possible consistent
         with the Historic Guidelines).

13.      All finishes shall be consistent with a first-class office building.

         The final plans for Landlord's Work are being completed as of the date
of this Lease and therefore the exact plans together with specific
specifications and plans are subject to changes based upon all governmental
requirements and physical limitations.

                                     page 2
<PAGE>   70

                            Tanner Leddy Maytum Stacy

                  Drawings for the Baker & Hamilton Development

<TABLE>
<CAPTION>
<S>          <C>                                             <C>
BH A2.1      Basement Floor Plan dated 5 November 1999       Issued for Lease

BH A2.2      First Floor Plan dated 5 November 1999          Issued for Lease

BH A2.3      Second Floor Plan dated 5 November 1999         Issued for Lease

BH A2.4      Third Floor Plan dated 5 November 1999          Issued for Lease

BH A2.5      Roof Plan dated 5 November 1999                 Issued for Lease

BH A3.1      Elevations dated 5 November 1999                Issued for Lease

BH A3.2      Elevations dated 5 November 1999                Issued for Lease
</TABLE>

                                     page 3
<PAGE>   71

                                   SCHEDULE 2

                          THE BAKER & HAMILTON BUILDING

                       TENANT IMPROVEMENTS DESIGN CRITERIA

         The building owner has established the following special criteria as a
guide to the tenant for the design and construction of tenant improvements in
the historic Baker & Hamilton Building.

         The Baker & Hamilton Building has been designated Landmark Structure
No. 193 in the Planning Code of the City and County of San Francisco. Certain
tenant improvements may require special review and approval for a Certificate of
Appropriateness by the San Francisco Landmark Preservation Advisory Board.

         As an official city landmark, the building is a "qualified historic
building", as defined by the State Historic Building Code. All tenant
improvements are required to comply with the State Historic Building Code, in
conjunction with the current editions of the San Francisco Building Codes. The
building is classified as Type IV Heavy Timber construction in the San Francisco
Building Code.

         The building owner has applied for certification of the historic
building and its rehabilitation by the State Historic Preservation Office and
the National Park Service. Once certified, the rehabilitation will qualify for
preservation tax incentives for the owner. To preserve these tax incentives, any
modifications including tenant improvements made within a five year period after
occupancy of the rehabilitated building must comply with the Secretary of
Interior Standards for Rehabilitation. Design and construction documents for
tenant improvements will be reviewed by the State Historic Preservation Office
and the National Park Service for certification compliance. All tenant
improvements will be required to comply with these certification requirements
including the Secret airy of Interior Standards for Rehabilitation.

         In addition, the building owner has established the following general
design criteria for tenant improvements:

1.       The historic timber structural components (columns, beams, trusses,
         decking) shall remain unpainted and exposed to view. Suspended ceilings
         and furring of columns are discouraged.

2.       The historic masonry walls shall remain unpainted and exposed to view.
         Furring of masonry walls is discouraged.

3.       The uninterrupted quality of the interior spaces shall be maintained.
         New interior partitions shall be kept to a reasonable minimum. Where
         necessary, partitions shall be designed to minimize view obstruction of
         the ceiling structure and preserve natural light reaching interior
         spaces.

4.       Historic construction shall be maintained and preserved. Penetrations
         and attachments to historic construction shall be minimized and shall
         be designed to be reversible without significant damage.

<PAGE>   72

5.       New partitions and ceilings shall not subdivide or cross directly
         behind historic windows so as to be visible from the exterior.

6.       New mechanical and electrical systems shall be carefully designed and
         exposed to view where possible. Exposed wiring, conduit, piping and
         ducts shall be designed and installed in neatly organized layouts using
         attractive components.

7.       Window shading systems are discouraged. Where allowed, shading systems
         shall be compatible with the historic windows.

8.       Impact sound attenuating flooring materials such as carpet and pad
         shall be used where the tenant is located over another tenant's space.
         Where hard flooring materials are required, impact sound dampening
         underlayments shall be used.

<PAGE>   73

                                    EXHIBIT C

                              RULES AND REGULATIONS

         1. No sidewalks, entrance, passages, courts, elevators, vestibules,
stairways, corridors or halls shall be obstructed or encumbered by Tenant or
used for any purpose other than ingress and egress to and from the Premises.

         2. No awning or other projection shall be attached to the outside walls
or windows of the Project without the prior written consent of Landlord. No
curtains, blinds, shades, drapes or screens visible from outside the Building
shall be attached to or hung in, or used in connection with any window or door
of the Premises, without the prior written consent of Landlord. Such awnings,
projections, curtains, blinds, shades, drapes, screens and other fixtures must
be of a quality, type, design, color, material and general appearance approved
by Landlord, and shall be attached in the manner approved by Landlord. All
lighting fixtures visible from outside the Building hung in offices or spaces
along the perimeter of the Premises must be of a quality, type, design, bulb
color, size and general appearance approved by Landlord.

         3. No sign, advertisement, notice, lettering, decoration or other thing
shall be exhibited, inscribed, painted or affixed by Tenant on any part of the
outside or inside of the Premises or of the Project visible from outside the
Building, without the prior written consent of Landlord. In the event of the
violation of the foregoing by Tenant, Landlord may remove same without any
liability, and may charge the expense incurred by such removal to Tenant.

         4. The sashes, sash doors, skylights, windows and doors that reflect or
admit light or air into the halls, passageways or other public places in the
Project shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the window sills or in the public
portions of the Project.

         5. No showcases or other articles shall be put in front of or affixed
to any part of the exterior of the Project, nor placed in public portions
thereof without the prior written consent of Landlord.

         6. The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags or other substances shall be thrown therein. All
damages resulting from any misuse of the fixtures shall be borne by Tenant to
the extent that Tenant or Tenant's agents, servants, employees, contractors,
visitors or licensees shall have caused the same.

         7. Tenant shall not mark, paint, drill into (except in connection with
the hanging of art work or similar items) or in any way deface any part of the
Premises or the Project. No boring, cutting or stringing of wires shall be
permitted, except with the prior written consent of Landlord, and as Landlord
may direct.

         8. Prior to leaving the Premises for the day, Tenant shall extinguish
all lights.

         9. Tenant shall not make, or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of the Project, or
neighboring buildings or premises, or those

                               Exhibit C - Page 1
<PAGE>   74

having business with them. Tenant shall not throw anything out of the doors,
windows or skylights or down the passageways.

         10. Except as expressly permitted in the Lease, neither Tenant nor any
of Tenant's agents, servants, employees, contractors, visitors or licensees
shall at any time bring or keep upon the Premises any flammable, combustible or
explosive fluid, chemical or substance.

         11. No additional locks, bolts or mail slots of any kind shall be
placed upon any of the doors or windows by Tenant, nor shall any change be made
in existing locks or the mechanism thereof. Tenant must, upon the termination of
the tenancy, restore to Landlord all keys of stores, offices and toilet rooms,
either furnished to, or otherwise procured by Tenant.

         12. All removals, or the carrying in or out of any safes, freight,
furniture, construction material, bulky matter or heavy equipment of any
description must take place during the hours which Landlord or its agent may
reasonably determine from time to time. Landlord reserves the right to prescribe
the weight and position of all safes, which must be placed upon two-inch thick
plank strips to distribute the weight. The moving of safes, freight, furniture,
fixtures, bulky matter or heavy equipment of any kind must be made upon previous
notice to the Building Manager and in a manner and at times reasonably
prescribed by him, and the persons employed by Tenant for such work are subject
to Landlord's prior reasonable approval. Landlord reserves the right to inspect
all safes, freight or other bulky articles to be brought into the Project and to
exclude from the Project all safes, freight or other bulky articles which
violate any of these Rules and Regulations or the Lease of which these Rules and
Regulations are a part.

         13. Tenant shall not purchase spring water, towels, janitorial or
maintenance or other like service from any company or persons not approved by
Landlord. Landlord shall approve a sufficient number of sources of such services
to provide Tenant with a reasonable selection, but only in such instances and to
such extent as Landlord in its reasonable judgment shall consider consistent
with security and proper operation of the Project.

         14. Landlord shall have the night to prohibit any advertising or
business conducted by Tenant referring to the Project which, in Landlord's
reasonable opinion, tends to impair the reputation of the Project or its
desirability as a first class building for offices and/or commercial services
and upon notice from Landlord, Tenant shall refrain from or discontinue such
advertising.

         15. Landlord reserves the right to exclude from the Project between the
hours of 6:00 p.m. and 8:00 a.m. Monday through Friday, after 1:00 p.m. on
Saturdays and at all hours Sundays and legal holidays, all persons who do not
present a pass to the Project issued by Landlord. Landlord may furnish passes to
Tenant so that Tenant may validate and issue same. Tenant shall safeguard said
passes and shall be responsible for all acts of persons in or about the Project
who possess a pass issued to Tenant.

         16. Tenant's contractors shall, while in the Premises or elsewhere in
the Project, be subject to and under the control and direction of the Building
Manager (but not as agent or servant of said Building Manager or of Landlord).

                               Exhibit C - Page 2
<PAGE>   75

         17. If the Premises is or becomes infested with vermin as a result of
the use or any misuse or neglect of the Premises by Tenant, its agents,
servants, employees, contractors, visitors or licensees, Tenant shall forthwith
at Tenant's expense cause the same to be exterminated from time to time to the
satisfaction of Landlord and shall employ such licensed exterminators as shall
be approved in writing in advance by Landlord.

         18. The requirements of Tenant will be attended to only upon
application at the office of the Project. Project personnel shall not perform
any work or do anything outside of their regular duties unless under special
instructions from the office of the Landlord.

         19. Canvassing, soliciting and peddling in the Project are prohibited
and Tenant shall cooperate to prevent the same.

         20. No air conditioning unit or system or other apparatus shall be
installed or used by Tenant without the written consent of Landlord.

         21. There shall not be used in any premises, or in the public halls,
plaza areas, lobbies, or elsewhere in the Project, either by Tenant or by
jobbers or others, in the delivery or receipt of merchandise, any hand trucks or
doilies, except those equipped with rubber tires and sideguards.

         22. If required by applicable laws, Tenant shall install and maintain,
at Tenant's sole cost and expense, an adequate visibly marked (at all times
properly operational) fire extinguisher next to any duplicating or photocopying
machine or similar heat producing equipment, which may or may not contain
combustible material, in the Premises.

         23. Tenant shall not use the name of the Project for any purpose other
than as the address of the business to be conducted by Tenant in the Premises,
nor shall Tenant use any picture of the Project in its advertising, stationery
or in any other manner without the prior written permission of Landlord.
Landlord expressly reserves the right at any time to change said name without in
any manner being liable to Tenant therefor.

         24. Tenant shall not prepare any food nor do any cooking, operate or
conduct any restaurant, luncheonette or cafeteria for the sale or service of
food or beverages to its employees or to others, except that food and beverage
preparation by Tenant's employees using microwave ovens or coffee makers shall
be permitted provided no odors of cooking or other processes emanate from the
Premises. Tenant shall not install or permit the installation or use of any
vending machine or permit the delivery of any food or beverage to the Premises
except by such persons and in such manner as are reasonably approved in advance
in writing by Landlord.

         25. The Premises shall not be used as an employment agency, a public
stenographer or typist, a labor union office, a physician's or dentist's office,
a dance or music studio, a school, a beauty salon, or barber shop, the business
of photographic, multilith or multigraph reproductions or offset printing (not
precluding using any part of the Premises for photographic, multilith or
multigraph reproductions solely in connection with Tenant's own business and/or
activities), a restaurant or bar, an establishment for the sale of
confectionery, soda, beverages, sandwiches, ice cream or baked goods, an
establishment for preparing, dispensing or consumption of food or beverages of
any kind in any manner whatsoever, or news or cigar stand,

                               Exhibit C - Page 3
<PAGE>   76

or a radio, television or recording studio, theatre or exhibition hall, or
manufacturing, or the storage or sale of merchandise, goods, services or
property of any kind at wholesale, retail or auction, or for lodging, sleeping
or for any immoral purposes.

         26. Business machines and mechanical equipment shall be placed and
maintained by Tenant at Tenant's expense in settings sufficient in Landlord's
judgment to absorb and prevent vibration, noise and annoyance. Tenant shall not
install any machine or equipment which causes noise, heat, cold or vibration to
be transmitted to the structure of the building in which the Premises are
located without Landlord's prior written consent, which consent may be
conditioned on such terms as Landlord may require. Tenant shall not place a load
upon any floor of the Premises exceeding the floor load per square foot that
such floor was designed to carry and which is allowed by Law.

         27. Smoking is prohibited in the Premises, the Building and all
enclosed Common Areas of the Project, including all lobbies, all hallways, all
elevators and all lavatories.

         28. In the event of any conflict between the provisions of the Lease
and the Rules and Regulations, the Lease shall govern.

                               Exhibit C - Page 4
<PAGE>   77

                                     RIDER 1

                           COMMENCEMENT DATE AGREEMENT

         Baker Hamilton Properties, LLC ("Landlord"), and Organic, Inc., a
_____________ corporation ("Tenant"), have entered into a certain Lease, dated
as of November _, 1999 (the "Lease").

         WHEREAS, Landlord and Tenant wish to confirm and memorialize the
Commencement Date and Expiration Date of the Lease as provided for in Section
2.2(b) of the Lease;

         NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein and in the Lease, Landlord and Tenant agree as
follows:

         1. Unless otherwise defined herein, all capitalized terms shall have
the same meaning ascribed to them in the Lease.

         2. The Commencement Date (as defined in the Lease) of the Lease is
_______________.

         3. The Expiration Date (as defined in the Lease) of the Lease is
_________________.

         4. Tenant hereby confirms the following:

            (a)  That it has accepted possession of the premises pursuant to the
                 terms of the Lease;

            (b)  That the Landlord Work is Substantially Complete; and

            (c)  That the Lease is in full force and effect.

         5. Except as expressly modified hereby, all terms and provisions of the
Lease are hereby ratified and confirmed and shall remain in full force and
effect and binding on the parties hereto.

         6. The Lease and this Commencement Date Agreement contain all of the
terms, covenants, conditions and agreements between the Landlord and the Tenant
relating to the subject matter herein. No prior other agreements or
understandings pertaining to such matters are valid or of any force and effect.

                               Exhibit C - Page 5
<PAGE>   78

TENANT:                                      LANDLORD:

ORGANIC, INC.                                BAKER HAMILTON PROPERTIES, LLC.
a Delaware corporation

By:________________________________          By:________________________________

Print Name_________________________          Print Name:________________________

Its:_______________________________          Its:_______________________________

By:________________________________

Print Name_________________________

Its:_______________________________

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