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                                                                   EXHIBIT 10.5

                       AVISTAR COMMUNICATIONS CORPORATION

                            INDEMNIFICATION AGREEMENT

        This Indemnification Agreement ("Agreement") is effective as of
___________, 2000 by and between Avistar Communications Corporation, a Delaware
corporation (the "Company"), and ______________ ("Indemnitee").

        WHEREAS, the Company desires to attract and retain the services of
highly qualified individuals, such as Indemnitee, to serve the Company and its
related entities;

        WHEREAS, in order to induce Indemnitee to continue to provide services
to the Company, the Company wishes to provide for the indemnification of, and
the advancement of expenses to, Indemnitee to the maximum extent permitted by
law;

        WHEREAS, the Company and Indemnitee recognize the continued difficulty
in obtaining liability insurance for the Company's directors, officers,
employees, agents and fiduciaries, the significant increases in the cost of such
insurance and the general reductions in the coverage of such insurance;

        WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, agents and fiduciaries to expensive litigation risks at the same time
as the availability and coverage of liability insurance has been severely
limited; and

        WHEREAS, in connection with the Company's initial public offering, the
Company and Indemnitee desire to continue to have in place the additional
protection provided by an indemnification agreement, with such changes as are
required to conform the existing agreement to Delaware law and to provide
indemnification and advancement of expenses to the Indemnitee to the maximum
extent permitted by Delaware law;

        WHEREAS, in view of the considerations set forth above, the Company
desires that Indemnitee shall be indemnified and advanced expenses by the
Company as set forth herein;

        NOW, THEREFORE, the Company and Indemnitee hereby agree as set forth
below.

        1. Certain Definitions.

           a. "Change in Control" shall mean, and shall be deemed to have
occurred if, on or after the date of this Agreement, (i) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended), other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company acting in such capacity or a corporation
owned directly or indirectly by the stockholders of the Company in substantially
the same

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proportions as their ownership of stock of the Company, becomes the "beneficial
owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing more than 50% of the total voting power
represented by the Company's then outstanding Voting Securities, (ii) during any
period of two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Company and any new director whose
election by the Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof, (iii) the stockholders of
the Company approve a merger or consolidation of the Company with any other
corporation other than a merger or consolidation which would result in the
Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least 80% of the total voting
power represented by the Voting Securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or (iv) the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of (in one
transaction or a series of related transactions) all or substantially all of the
Company's assets.

           b. "Claim" shall mean with respect to a Covered Event: any
threatened, pending or completed action, suit, proceeding or alternative dispute
resolution mechanism, or any hearing, inquiry or investigation that Indemnitee
in good faith believes might lead to the institution of any such action, suit,
proceeding or alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other.

           c. References to the "Company" shall include, in addition to Avistar
Communications Corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger to which
Avistar Communications Corporation (or any of its wholly owned subsidiaries) is
a party which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees, agents or
fiduciaries, so that if Indemnitee is or was a director, officer, employee,
agent or fiduciary of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee, agent
or fiduciary of another corporation, partnership, joint venture, employee
benefit plan, trust or other enterprise, Indemnitee shall stand in the same
position under the provisions of this Agreement with respect to the resulting or
surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued. Company shall also include
Avistar Systems Corporation, a Nevada corporation, the predecessor of Avistar
Communications Corporation, a Delaware corporation.

           d. "Covered Event" shall mean any event or occurrence related to the
fact that Indemnitee is or was a director, officer, employee, agent or fiduciary
of the Company, or any subsidiary of the Company, or is or was serving at the
request of the Company as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust or other enterprise, or
by reason of any action or inaction on the part of Indemnitee while serving in
such capacity.

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           e. "Expenses" shall mean any and all expenses (including attorneys'
fees and all other costs, expenses and obligations incurred in connection with
investigating, defending, being a witness in or participating in (including on
appeal), or preparing to defend, to be a witness in or to participate in, any
action, suit, proceeding, alternative dispute resolution mechanism, hearing,
inquiry or investigation), judgments, fines, penalties and amounts paid in
settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) of any Claim and any federal,
state, local or foreign taxes imposed on the Indemnitee as a result of the
actual or deemed receipt of any payments under this Agreement.

           f. "Expense Advance" shall mean a payment to Indemnitee pursuant to
Section 3 of Expenses in advance of the settlement of or final judgement in any
action, suit, proceeding or alternative dispute resolution mechanism, hearing,
inquiry or investigation which constitutes a Claim.

           g. "Independent Legal Counsel" shall mean an attorney or firm of
attorneys, selected in accordance with the provisions of Section 2(d) hereof,
who shall not have otherwise performed services for the Company or Indemnitee
within the last three years (other than with respect to matters concerning the
rights of Indemnitee under this Agreement, or of other Indemnitees under similar
indemnity agreements).

           h. References to "other enterprises" shall include employee benefit
plans; references to "fines" shall include any excise taxes assessed on
Indemnitee with respect to an employee benefit plan; and references to "serving
at the request of the Company" shall include any service as a director, officer,
employee, agent or fiduciary of the Company which imposes duties on, or involves
services by, such director, officer, employee, agent or fiduciary with respect
to an employee benefit plan, its participants or its beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan, Indemnitee shall be deemed to have acted in a manner "not opposed to the
best interests of the Company" as referred to in this Agreement.

           i. "Reviewing Party" shall mean, subject to the provisions of Section
2(d), any person or body appointed by the Board of Directors in accordance with
applicable law to review the Company's obligations hereunder and under
applicable law, which may include a member or members of the Company's Board of
Directors, Independent Legal Counsel or any other person or body not a party to
the particular Claim for which Indemnitee is seeking indemnification.

           j. "Section" refers to a section of this Agreement unless otherwise
indicated.

           k. "Voting Securities" shall mean any securities of the Company that
vote generally in the election of directors.

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        2. Indemnification.

           a. Indemnification of Expenses. Subject to the provisions of Section
2(b) below, the Company shall indemnify Indemnitee for Expenses to the fullest
extent permitted by law if Indemnitee was or is or becomes a party to or witness
or other participant in, or is threatened to be made a party to or witness or
other participant in, any Claim (whether by reason of or arising in part out of
a Covered Event), including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses.

           b. Review of Indemnification Obligations. Notwithstanding the
foregoing, in the event any Reviewing Party shall have determined (in a written
opinion, in any case in which Independent Legal Counsel is the Reviewing Party)
that Indemnitee is not entitled to be indemnified hereunder under applicable
law, (i) the Company shall have no further obligation under Section 2(a) to make
any payments to Indemnitee not made prior to such determination by such
Reviewing Party, and (ii) the Company shall be entitled to be reimbursed by
Indemnitee (who hereby agrees to reimburse the Company) for all Expenses
theretofore paid to Indemnitee to which Indemnitee is not entitled hereunder
under applicable law; provided, however, that if Indemnitee has commenced or
thereafter commences legal proceedings in a court of competent jurisdiction to
secure a determination that Indemnitee is entitled to be indemnified hereunder
under applicable law, any determination made by any Reviewing Party that
Indemnitee is not entitled to be indemnified hereunder under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expenses theretofore paid in indemnifying Indemnitee until a
final judicial determination is made with respect thereto (as to which all
rights of appeal therefrom have been exhausted or lapsed). Indemnitee's
obligation to reimburse the Company for any Expenses shall be unsecured and no
interest shall be charged thereon.

           c. Indemnitee Rights on Unfavorable Determination; Binding Effect. If
any Reviewing Party determines that Indemnitee substantively is not entitled to
be indemnified hereunder in whole or in part under applicable law, Indemnitee
shall have the right to commence litigation seeking an initial determination by
the court or challenging any such determination by such Reviewing Party or any
aspect thereof, including the legal or factual bases therefor, and, subject to
the provisions of Section 15, the Company hereby consents to service of process
and to appear in any such proceeding. Absent such litigation, any determination
by any Reviewing Party shall be conclusive and binding on the Company and
Indemnitee.

           d. Selection of Reviewing Party; Change in Control. If there has not
been a Change in Control, any Reviewing Party shall be selected by the Board of
Directors, and if there has been such a Change in Control (other than a Change
in Control which has been approved by a majority of the Company's Board of
Directors who were directors immediately prior to such Change in Control), any
Reviewing Party with respect to all matters thereafter arising concerning the
rights of Indemnitee to indemnification of Expenses under this Agreement or any
other agreement or under the Company's Certificate of Incorporation or Bylaws as
now or hereafter in effect, or under any other applicable law, if desired by
Indemnitee, shall be Independent Legal Counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld).

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Such counsel, among other things, shall render its written opinion to the
Company and Indemnitee as to whether and to what extent Indemnitee would be
entitled to be indemnified hereunder under applicable law and the Company agrees
to abide by such opinion. The Company agrees to pay the reasonable fees of the
Independent Legal Counsel referred to above and to indemnify fully such counsel
against any and all expenses (including attorneys' fees), claims, liabilities
and damages arising out of or relating to this Agreement or its engagement
pursuant hereto. Notwithstanding any other provision of this Agreement, the
Company shall not be required to pay Expenses of more than one Independent Legal
Counsel in connection with all matters concerning a single Indemnitee, and such
Independent Legal Counsel shall be the Independent Legal Counsel for any or all
other Indemnitees unless (i) the employment of separate counsel by one or more
Indemnitees has been previously authorized by the Company in writing, or (ii) an
Indemnitee shall have provided to the Company a written statement that such
Indemnitee has reasonably concluded that there may be a conflict of interest
between such Indemnitee and the other Indemnitees with respect to the matters
arising under this Agreement.

           e. Mandatory Payment of Expenses. Notwithstanding any other provision
of this Agreement other than Section 10 hereof, to the extent that Indemnitee
has been successful on the merits or otherwise, including, without limitation,
the dismissal of an action without prejudice, in defense of any Claim,
Indemnitee shall be indemnified against all Expenses incurred by Indemnitee in
connection therewith.

        3. Expense Advances.

           a. Obligation to Make Expense Advances. Upon receipt of a written
undertaking by or on behalf of the Indemnitee to repay such amounts if it shall
ultimately be determined that the Indemnitee is not entitled to be indemnified
therefore by the Company hereunder under applicable law, the Company shall make
Expense Advances to Indemnitee.

           b. Form of Undertaking. Any obligation to repay any Expense Advances
hereunder pursuant to a written undertaking by the Indemnitee shall be unsecured
and no interest shall be charged thereon.

           c. Determination of Reasonable Expense Advances. The parties agree
that for the purposes of any Expense Advance for which Indemnitee has made
written demand to the Company in accordance with this Agreement, all Expenses
included in such Expense Advance that are certified by affidavit of Indemnitee's
counsel as being reasonable shall be presumed conclusively to be reasonable.

        4. Procedures for Indemnification and Expense Advances.

           a. Timing of Payments. All payments of Expenses (including without
limitation Expense Advances) by the Company to the Indemnitee pursuant to this
Agreement shall be made to the fullest extent permitted by law as soon as
practicable after written demand by Indemnitee therefor is presented to the
Company, but in no event later than thirty (30) business days after such written
demand by Indemnitee is presented to the Company, except in the case of Expense

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Advances, which shall be made no later than ten (10) business days after such
written demand by Indemnitee is presented to the Company.

           b. Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition
precedent to Indemnitee's right to be indemnified or Indemnitee's right to
receive Expense Advances under this Agreement, give the Company notice in
writing as soon as practicable of any Claim made against Indemnitee for which
indemnification will or could be sought under this Agreement. Notice to the
Company shall be directed to the Chief Executive Officer of the Company at the
address shown on the signature page of this Agreement (or such other address as
the Company shall designate in writing to Indemnitee). In addition, Indemnitee
shall give the Company such information and cooperation as it may reasonably
require and as shall be within Indemnitee's power.

           c. No Presumptions; Burden of Proof. For purposes of this Agreement,
the termination of any Claim by judgment, order, settlement (whether with or
without court approval) or conviction, or upon a plea of nolo contendere, or its
equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by this Agreement or applicable
law. In addition, neither the failure of any Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by any
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by Indemnitee
to secure a judicial determination that Indemnitee should be indemnified under
this Agreement under applicable law, shall be a defense to Indemnitee's claim or
create a presumption that Indemnitee has not met any particular standard of
conduct or did not have any particular belief. In connection with any
determination by any Reviewing Party or otherwise as to whether the Indemnitee
is entitled to be indemnified hereunder under applicable law, the burden of
proof shall be on the Company to establish that Indemnitee is not so entitled.

           d. Notice to Insurers. If, at the time of the receipt by the Company
of a notice of a Claim pursuant to Section 4(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such Claim in
accordance with the terms of such policies.

           e. Selection of Counsel. In the event the Company shall be obligated
hereunder to provide indemnification for or make any Expense Advances with
respect to the Expenses of any Claim, the Company, if appropriate, shall be
entitled to assume the defense of such Claim with counsel approved by Indemnitee
(which approval shall not be unreasonably withheld) upon the delivery to
Indemnitee of written notice of the Company's election to do so. After delivery
of such notice, approval of such counsel by Indemnitee and the retention of such
counsel by the Company, the Company will not be liable to Indemnitee under this
Agreement for any fees or expenses of separate counsel subsequently retained by
or on behalf of Indemnitee with respect to the same

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Claim; provided that, (i) Indemnitee shall have the right to employ Indemnitee's
separate counsel in any such Claim at Indemnitee's expense and (ii) if (A) the
employment of separate counsel by Indemnitee has been previously authorized by
the Company, (B) Indemnitee shall have reasonably concluded that there may be a
conflict of interest between the Company and Indemnitee in the conduct of any
such defense, or (C) the Company shall not continue to retain such counsel to
defend such Claim, then the fees and expenses of Indemnitee's separate counsel
shall be Expenses for which Indemnitee may receive indemnification or Expense
Advances hereunder.

        5. Additional Indemnification Rights; Nonexclusivity.

           a. Scope. The Company hereby agrees to indemnify the Indemnitee to
the fullest extent permitted by law, notwithstanding that such indemnification
is not specifically authorized by the other provisions of this Agreement, the
Company's Certificate of Incorporation, the Company's Bylaws or by statute. In
the event of any change after the date of this Agreement in any applicable law,
statute or rule which expands the right of a Delaware corporation to indemnify a
member of its board of directors or an officer, employee, agent or fiduciary, it
is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits afforded by such change. In the event of any
change in any applicable law, statute or rule which narrows the right of a
Delaware corporation to indemnify a member of its board of directors or an
officer, employee, agent or fiduciary, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties' rights and obligations
hereunder except as set forth in Section 10(a) hereof.

           b. Nonexclusivity. The indemnification and the payment of Expense
Advances provided by this Agreement shall be in addition to any rights to which
Indemnitee may be entitled under the Company's Certificate of Incorporation, its
Bylaws, any other agreement, any vote of stockholders or disinterested
directors, the General Corporation Law of the State of Delaware, or otherwise.
The indemnification and the payment of Expense Advances provided under this
Agreement shall continue as to Indemnitee for any action taken or not taken
while serving in an indemnified capacity even though subsequent thereto
Indemnitee may have ceased to serve in such capacity.

        6. No Duplication of Payments. The Company shall not be liable under
this Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, provision of the Company's Certificate of
Incorporation, Bylaws or otherwise) of the amounts otherwise payable hereunder.

        7. Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses incurred in connection with any Claim, but not, however, for
all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

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        8. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge
that in certain instances, federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees, agents or
fiduciaries under this Agreement or otherwise. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.

        9. Liability Insurance. To the extent the Company maintains liability
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnitee shall be covered by such policies in such a manner as to provide
Indemnitee the same rights and benefits as are provided to the most favorably
insured of the Company's directors, if Indemnitee is a director; or of the
Company's officers, if Indemnitee is not a director of the Company but is an
officer; or of the Company's key employees, agents or fiduciaries, if Indemnitee
is not an officer or director but is a key employee, agent or fiduciary.

        10. Exceptions. Notwithstanding any other provision of this Agreement,
the Company shall not be obligated pursuant to the terms of this Agreement:

            a. Excluded Action or Omissions. To indemnify or make Expense
Advances to Indemnitee with respect to Claims arising out of acts, omissions or
transactions for which Indemnitee is prohibited from receiving indemnification
under applicable law.

            b. Claims Initiated by Indemnitee. To indemnify or make Expense
Advances to Indemnitee with respect to Claims initiated or brought voluntarily
by Indemnitee and not by way of defense, counterclaim or cross-claim, except (i)
with respect to actions or proceedings brought to establish or enforce a right
to indemnification under this Agreement or any other agreement or insurance
policy or under the Company's Certificate of Incorporation or Bylaws now or
hereafter in effect relating to Claims for Covered Events, (ii) in specific
cases if the Board of Directors has approved the initiation or bringing of such
Claim, or (iii) as otherwise required under Section 145 of the Delaware General
Corporation Law, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, Expense Advances, or insurance recovery, as
the case may be.

            c. Lack of Good Faith. To indemnify Indemnitee for any Expenses
incurred by the Indemnitee with respect to any action instituted (i) by
Indemnitee to enforce or interpret this Agreement, if a court having
jurisdiction over such action determines as provided in Section 13 that each of
the material assertions made by the Indemnitee as a basis for such action was
not made in good faith or was frivolous, or (ii) by or in the name of the
Company to enforce or interpret this Agreement, if a court having jurisdiction
over such action determines as provided in Section 13 that each of the material
defenses asserted by Indemnitee in such action was made in bad faith or was
frivolous.

            d. Claims Under Section 16(b). To indemnify Indemnitee for Expenses
and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.

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        11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.

        12. Binding Effect; Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), spouses, heirs and
personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect, and whether by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part, of
the business or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place. This Agreement
shall continue in effect regardless of whether Indemnitee continues to serve as
a director, officer, employee, agent or fiduciary (as applicable) of the Company
or of any other enterprise at the Company's request.

        13. Expenses Incurred in Action Relating to Enforcement or
Interpretation. In the event that any action is instituted by Indemnitee under
this Agreement or under any liability insurance policies maintained by the
Company to enforce or interpret any of the terms hereof or thereof, Indemnitee
shall be entitled to be indemnified for all Expenses incurred by Indemnitee with
respect to such action (including without limitation attorneys' fees),
regardless of whether Indemnitee is ultimately successful in such action, unless
as a part of such action a court having jurisdiction over such action makes a
final judicial determination (as to which all rights of appeal therefrom have
been exhausted or lapsed) that each of the material assertions made by
Indemnitee as a basis for such action was not made in good faith or was
frivolous; provided, however, that until such final judicial determination is
made, Indemnitee shall be entitled under Section 3 to receive payment of Expense
Advances hereunder with respect to such action. In the event of an action
instituted by or in the name of the Company under this Agreement to enforce or
interpret any of the terms of this Agreement, Indemnitee shall be entitled to be
indemnified for all Expenses incurred by Indemnitee in defense of such action
(including without limitation costs and expenses incurred with respect to
Indemnitee's counterclaims and cross-claims made in such action), unless as a
part of such action a court having jurisdiction over such action makes a final
judicial determination (as to which all rights of appeal therefrom have been
exhausted or lapsed) that each of the material defenses asserted by Indemnitee
in such action was made in bad faith or was frivolous; provided, however, that
until such final judicial determination is made, Indemnitee shall be entitled
under Section 3 to receive payment of Expense Advances hereunder with respect to
such action.

        14. Period of Limitations. No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.

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        15. Notice. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and signed for by the party addressed, on the date of such
delivery, or (ii) if mailed by domestic certified or registered mail with
postage prepaid, on the third business day after the date postmarked. Addresses
for notice to either party are as shown on the signature page of this Agreement,
or as subsequently modified by written notice.

        16. Consent to Jurisdiction. The Company and Indemnitee each hereby
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Court of
Chancery of the State of Delaware in and for New Castle County, which shall be
the exclusive and only proper forum for adjudicating such a claim.

        17. Severability. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including without limitation each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.

        18. Choice of Law. This Agreement, and all rights, remedies,
liabilities, powers and duties of the parties to this Agreement, shall be
governed by and construed in accordance with the laws of the State of Delaware
as applied to contracts between Delaware residents entered into and to be
performed entirely in the State of Delaware without regard to principles of
conflicts of laws.

        19. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.

        20. Amendment and Termination. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless it is in writing
signed by both the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed to be or shall constitute a waiver of any other
provisions hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver.

        21. Integration and Entire Agreement. This Agreement sets forth the
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.

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        22. No Construction as Employment Agreement. Nothing contained in this
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries or affiliated entities.

                  [Remainder of Page Intentionally Left Blank]

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        IN WITNESS WHEREOF, the parties hereto have executed this
Indemnification Agreement as of the date first above written.

AVISTAR COMMUNICATIONS CORPORATION

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

Name:
     ---------------------------

Title:
      --------------------------

Address: 555 Twin Dolphin Drive, Suite 360
         Redwood Shores, California 94063

                                               AGREED TO AND ACCEPTED
                                               INDEMNITEE:

                                               -----------------------------
                                               (signature)

                                               -----------------------------
                                               Name

                                               -----------------------------
                                               Address

                                      -12-<PAGE>   1

                                                                    Exhibit 10.6

                            BASIC LEASE INFORMATION
                                   OFFICE NET

LEASE DATE:                             August 10, 1998

TENANT:                                 Entex Information Services, Inc.,
                                        a Delaware corporation

TENANT'S NOTICE ADDRESS:                6 International Drive
                                        Rye Brook NY 10573
                                        Attn: Facility Manager

TENANT'S BILLING ADDRESS:               6 International Drive
                                        Rye Brook, NY 10573
                                        Attn: Facility Manager
TENANT CONTACT:     Bobbie McGowan      PHONE NUMBER:  (650) 525-4811
                                        FAX NUMBER:    (651) 525-4804

LANDLORD:                               Spicker Properties, L.P.,
                                        a California limited partnership

LANDLORD'S  NOTICE ADDRESS:             Spicker Properties
                                        555 Twin Dolphin Drive, Suite 125
                                        Redwood Shores, CA 94065

LANDLORD'S REMITTANCE ADDRESS:          Spicker Properties L.P.
                                        Department 11511
                                        PO Box 45587
                                        San Francisco, CA 94145-0587

Project Description:                    That certain land and improvements
                                        commonly known as 555 Twin Dolphin
                                        Drive, Redwood City, California.

Building Description:                   That certain six-story, multi-tenant
                                        office building commonly known as
                                        555 Twin Dolphin Drive, Redwood City,
                                        California.

Premises:                               Approximately 17,414 rentable square
                                        feet known as Suite 360 at 555 Twin
                                        Dolphin Drive, Redwood Shores, CA

Permitted Use:                          General office and administration,
                                        and/or sales and service operations.

Occupancy Density:                      6 persons per 1,000 rentable square
                                        feet.

Parking Density:                        4 spaces per 1,000 rentable square feet.

Parking and Parking Charge:             70 non-exclusive spaces at $0 per space
                                        per month which includes 11 executive
                                        spaces in the parking structure.

Scheduled Term Commencement Date:       October 1, 1998

Scheduled Length of Term:               60 months

Scheduled Term Expiration Date:         September 30, 2003

Rent:

     Base Rent:                         $52,067.86 per month
                                        (subject to adjustment as provided in
                                        Addendum #1 of Paragraph 39 hereof)

     Estimated First Year
       Operating Expenses:              $13,234.64 per month

Security Deposit:                       $15,000.00

Tenant's Proportionate Share:

     Of Building:                       8.773%

     Of Project:                        8.773%
<PAGE>   2

The foregoing Basic Lease Information is incorporated into and made a part of
this Lease. Each reference in this Lease to any of the Basic Lease Information
shall mean the respective information above and shall be construed to
incorporate all of the terms provided under the particular Lease paragraph
pertaining to such information. In the event of any conflict between the Basic
Lease Information and the Lease, the latter shall control.

LANDLORD                                        TENANT

Spicker Properties, L.P.,                       Entex Information Services Inc.,
a California limited partnership                a Delaware corporation
                                                ________________________________

By:  Spicker Properties, Inc.,
     a Maryland corporation                     By:  [SIGNATURE]
                                                     ---------------------------
     its general partner                             Dale Allandyce
                                                Its: Executive Vice President,
                                                     Operations
     By:  [SIGNATURE]
          ----------------------
          Peter H. Schnugg
     Its: Senior Vice President

                                       2
<PAGE>   3
                               TABLE OF CONTENTS

                                                                            PAGE
     Basic Lease Information.................................................  1
     Table of Contents.......................................................  2
1.   Premises................................................................  4
2.   Possession and Lease Commencement.......................................  4
3.   Term....................................................................  4
4.   Use.....................................................................  4
5.   Rules and Regulations...................................................  5
6.   Rent....................................................................  5
7.   Operating Expenses......................................................  5
8.   Insurance and Indemnification...........................................  7
9.   Waiver of Subrogation...................................................  8
10.  Landlord's Repairs and Maintenance......................................  8
11.  Tenant's Repairs and Maintenance........................................  9
12.  Alterations.............................................................  9
13.  Signs...................................................................  9
14.  Inspection/Posting Notices.............................................. 10
15.  Services and Utilities.................................................. 10
16.  Subordination........................................................... 11
17.  Financial Statements.................................................... 11
18.  Estoppel Certificate.................................................... 11
19.  Security Deposit........................................................ 11
20.  Limitation of Tenant's Remedies......................................... 11
21.  Assignment and Subletting............................................... 11
22.  Authority of Tenant..................................................... 12
23.  Condemnation............................................................ 12
24.  Casualty Damage......................................................... 13
25.  Holding Over............................................................ 13
26.  Default................................................................. 14
27.  Liens................................................................... 15
28.  Substitution............................................................ 15
29.  Transfers by Landlord................................................... 15
30.  Right of Landlord to Perform Tenant's Covenants......................... 15
31.  Waiver.................................................................. 15
32.  Notices................................................................. 16
33.  Attorney's Fees......................................................... 16
34.  Successors and Assigns.................................................. 16
35.  Force Majeure........................................................... 16
36.  Surrender of Premises................................................... 16
37.  Parking................................................................. 16
38.  Miscellaneous........................................................... 17
39.  Additional Provisions................................................... 18
40.  Jury Trial Waiver....................................................... 20
     Signatures.............................................................. 20

Exhibits:
     Exhibit A............................................ Rules and Regulations
     Exhibit B.........................................................Site Plan
     Exhibit C............................Tenant Improvements and Specifications

                                          3

<PAGE>   4
                                     LEASE

THIS LEASE is made as of the thirtieth day of July, 1998, by and between
Spicker Properties, L.P., a California limited partnership (hereinafter called
"LANDLORD"), and Entex Information Services, Inc., a Delaware corporation
(hereinafter called "TENANT").

                                  1. PREMISES

     Landlord leases to Tenant and Tenant leases from Landlord, upon the terms
and conditions hereinafter set forth, those premises (the "PREMISES") outlined
in red on Exhibit B and described in the Basic Lease Information. The Premises
shall be all or part of a building (the "BUILDING") and of a project (the
"PROJECT"), which may consist of more than one building and additional
facilities, as described in the Basic Lease Information. Landlord and Tenant
acknowledge that physical changes may occur from time to time in the Premises,
Building or Project, and that the number of buildings and additional facilities
which constitute the Project may change from time to time, which may result in
an adjustment in Tenant's Proportionate Share, as defined in the Basic Lease
Information, as provided in Paragraph 7.A.

                      2. POSSESSION AND LEASE COMMENCEMENT

B.   CONSTRUCTION OF IMPROVEMENTS. The term commencement date ("TERM
COMMENCEMENT DATE") shall be the earlier of the date on which: (1) Tenant takes
possession of the Premises, provided, however, that Tenant's entry to the
Premises in accordance with Paragraph 6 of Exhibit C shall not constitute
Tenant's taking possession of the Premises; or (2) the improvements to be
constructed or performed in the Premises by Landlord (if any) shall have been
substantially completed in accordance with the plans and specifications, if any,
described on Exhibit C and Tenant's taking of possession of the Premises or any
part thereof shall constitute Tenant's confirmation of substantial completion
for all purposes hereof, whether or not substantial completion of the Building
or Project shall have occurred. If for any reason Landlord cannot deliver
possession of the Premises to Tenant on the scheduled Term Commencement Date,
Landlord shall not be subject to any liability therefor, nor shall Landlord be
in default hereunder nor shall such failure effect the validity of this Lease,
and Tenant agrees to accept possession of the Premises at such time as such
improvements have been substantially completed, which date shall then be deemed
the Term Commencement Date. Tenant shall not be liable for any Rent for any
period prior to the Term Commencement Date (but without affecting any
obligations of Tenant under any improvement agreement appended to this Lease).
In the event of any dispute as to substantial completion of work performed or
required to be performed by Landlord, the certificate of Landlord's architect or
general contractor shall be conclusive. Substantial completion shall have
occurred notwithstanding Tenant's submission of a punchlist to Landlord, which
Tenant shall submit, if at all, within seven (7) business days after the Term
Commencement Date or otherwise in accordance with any improvement agreement
appended to this Lease. Upon Landlord's request, Tenant shall promptly execute
and return to Landlord a "Start-Up Letter" in which Tenant shall agree, among
other things, to acceptance of the Premises and to the determination of the Term
Commencement Date, in accordance with the terms of this Lease, but Tenant's
failure or refusal to do so shall not negate Tenant's acceptance of the Premises
or affect determination of the Term Commencement Date.

                                    3. TERM

     The term of this Lease (the "TERM") shall commence on the Term Commencement
Date and continue in full force and effect for the number of months specified as
the Length of Term in the Basic Lease Information or until this Lease is
terminated as otherwise provided herein. If the Term Commencement Date is a date
other than the first day of the calendar month, the Term shall be the number of
months of the Length of Term in addition to the remainder of the calendar month
following the Term Commencement Date.

                                     4. USE

A.   GENERAL. Tenant shall use the Premises for the permitted use specified in
the Basic Lease Information ("PERMITTED USE") and for no other use or purpose.
Tenant shall control Tenant's employees, agents, customers, visitors, invitees,
licensees, contractors, assignees and subtenants (collectively, "TENANT'S
PARTIES") in such a manner that Tenant and Tenant's Parties cumulatively do not
exceed the occupant density (the "OCCUPANCY DENSITY") or the parking density
(the "PARKING DENSITY") specified in the Basic Lease Information at any time.
Tenant shall pay the Parking Charge specified in the Basic Lease Information as
Additional Rent (as hereinafter defined) hereunder. So long as Tenant is
occupying the Premises, Tenant and Tenant's Parties shall have the nonexclusive
right to use, in common with other parties occupying the Building of Project,
the parking areas, driveways and other common areas of the Building and
Project, subject to the terms of this Lease and such rules and regulations as
Landlord may from time to time prescribe. Landlord reserves the right, without
notice or liability to Tenant, and without the same constituting an actual or
constructive eviction, to alter or modify the common areas from time to time,
including the location and configuration thereof, and the amenities and
facilities which Landlord may determine to provide from time to time, provided
that such alterations or modifications do not materially interfere with
Tenant's use of the Premises in the manner intended.

B.   LIMITATIONS. Tenant shall not permit any odors, smoke, dust, gas,
substances, noise or vibrations to emanate from the Premises or from any
portion of the common areas as a result of Tenant's or any Tenant's Party's use
thereof, nor take any action which would

                                       4
<PAGE>   5
constitute a nuisance or would unreasonably disturb, obstruct or endanger any
other tenants or occupants of the Building or Project or elsewhere, or
interfere with their use of their respective premises or common areas. Storage
outside the Premises of materials, vehicles or any other items is prohibited.
Tenant shall not use or allow the Premises to be used for any immoral, improper
or unlawful purpose, not shall Tenant cause or maintain or permit any nuisance
in, on or about the Premises. Tenant shall not commit or suffer the commission
of any waste in, on or about the Premises. Tenant shall not allow any sale by
auction upon the Premises, or place any loads upon the floors, walls or
ceilings which could endanger the structure, or place any harmful substances
in the drainage system of the Building or Project. No waste, materials or
refuse shall be dumped upon or permitted to remain outside the Premises.
Landlord shall not be responsible to Tenant for the non-compliance by any other
tenant or occupant of the Building or Project with any of the above-referenced
rules or any other terms or provisions of such tenant's or occupant's lease or
other contract.

C.  COMPLIANCE WITH REGULATIONS. By occupying the Premises, Tenant accepts the
Premises in the condition existing as of the date of such entry subject to
latent defects, Landlord's work obligations and Landlord's other obligations set
forth herein. Tenant shall at its sole cost and expense strictly comply with all
existing or future applicable municipal, state and federal and other
governmental statutes, rules, requirements, regulations, laws and ordinances,
including zoning ordinances and regulations, and covenants, easements and
restrictions of record governing and relating to the specific use, occupancy or
possession of the Premises by Tenant, to Tenant's specific use of the common
areas, or to the use, storage, generation or disposal of Hazardous Materials
(hereinafter defined)(collectively "Regulations"). Tenant shall at its sole cost
and expense obtain any and all licenses or permits necessary for Tenant's use of
the Premises. Tenant shall at its sole cost and expense promptly comply with the
requirements of any board of fire underwriters or other similar body now or
hereafter constituted. Tenant shall not do or permit anything to be done in, on,
under or about the Project or bring or keep anything which will in any way
increase the rate of any insurance upon the Premises, Building or Project or
upon any contents therein or cause a cancellation of said insurance or otherwise
affect paid insurance in any manner. Tenant shall indemnify, defend (by counsel
reasonably acceptable to Landlord), protect and hold Landlord harmless from and
against any loss, cost, expense, damage, reasonable attorneys' fees or liability
arising out of the failure of Tenant to comply with any Regulation. Tenant's
obligations pursuant to the foregoing indemnity shall survive the expiration or
earlier termination of this Lease.

D. HAZARDOUS MATERIALS. As used in this Lease, "HAZARDOUS MATERIALS" shall
include, but not be limited to, hazardous, toxic and radioactive materials and
those substances defined as "hazardous substances," "hazardous materials,"
"hazardous wastes," "toxic substances," or other similar designations in any
Regulation. Tenant shall not cause, or allow any of Tenant's Parties to cause,
any Hazardous Materials to be handled, used, generated, stored, released or
disposed of in, on, under or about the Premises, the Building or the Project or
surrounding land or environment in violation of any Regulations. Tenant must
obtain Landlord's written consent prior to the introduction of any Hazardous
Materials onto the Project. Notwithstanding the foregoing, Tenant may handle,
store, use and dispose of products containing small quantities of Hazardous
Materials for "general office purposes" (such as toner for copiers) to the
extent customary and necessary for the Permitted Use of the Premises; provided
that Tenant shall always handle, store, use, and dispose of any such Hazardous
Materials in a safe and lawful manner and never allow such Hazardous Materials
to contaminate the Premises, Building, or Project or surrounding land or
environment. Tenant shall immediately notify Landlord in writing of any
Hazardous Materials' contamination of any portion of the Project of which Tenant
becomes aware, whether or not caused by Tenant. Landlord shall have the right at
all reasonable times to inspect the Premises and to conduct tests and
investigations to determine whether Tenant is in compliance with the foregoing
provisions. The costs of all such inspections, tests and investigations shall be
borne by Landlord, unless Tenant is found to not be in compliance with this
Paragraph 4, in which case such costs shall be borne by Tenant. Tenant shall
indemnify, defend (by counsel reasonably acceptable to Landlord), protect and
hold Landlord harmless from and against any and all claims, liabilities, losses,
costs, loss of rents, liens, damages, injuries or expenses (including reasonable
attorneys' and consultants' fees and court costs), demands, causes of action, or
judgments directly or indirectly arising out of or related to the use,
generation, storage, release, or disposal of Hazardous Materials by Tenant or
any of Tenant's Parties in, on, under or about the Premises, the Building or the
Project or surrounding land or environment, which indemnity shall include,
without limitation, damages for personal or bodily injury, property damage,
damage to the environment or natural resources occurring on or off the Premises,
losses attributable to diminution in value or adverse effects on marketability,
the cost of any investigation, monitoring, government oversight, repair,
removal, remediation, restoration, abatement, and disposal, and the preparation
of any closure or other required plans, whether such action is required or
necessary prior to or following the expiration or earlier termination of this
Lease. Neither the consent by Landlord to the use, generation, storage, release
or disposal of Hazardous Materials nor the strict compliance by Tenant with all
laws pertaining to Hazardous Materials shall excuse Tenant from Tenant's
obligation of indemnification pursuant to this Paragraph 4.D. Tenant's
obligations pursuant to the foregoing indemnity shall survive the expiration or
earlier termination of this Lease.

                              5. RULES AND REGULATIONS

     Tenant shall faithfully observe and comply with the building rules and
regulations attached hereto as EXHIBIT A and any other rules and regulations and
any modifications or additions thereto which Landlord may from time to time
reasonably prescribe in writing for the purpose of maintaining the proper care,
cleanliness, safety, traffic flow and general order of the Premises or the
Building or Project. Tenant shall cause Tenant's Parties to comply with such
rules and regulations. Landlord shall not be responsible to Tenant for the
non-compliance by any other tenant or occupant of the Building or Project with
any of such rules and regulations, any other tenant's or occupant's lease or any
Regulations. Landlord shall enforce such rules in a non-discriminatory manner.

                              6. RENT

A.     BASE RENT. Tenant shall pay to Landlord and Landlord shall receive,
without notice or demand throughout the Term, Base Rent as specified in the
Basic Lease Information, payable in monthly installments in advance on or
before the first day of each calendar month, in lawful money of the United
States, without deduction or offset whatsoever, at the Remittance Address
specified in the Basic Lease Information or to such other place as Landlord may
from time to time designate in writing. Base Rent for the first full month of
the Term shall be paid by Tenant upon Tenant's execution of this Lease. If the
obligation for payment of Base Rent commences on a day other than the first day
of a month, then Base Rent shall be prorated and the prorated installment shall
be paid on the first day of the calendar month next succeeding the Term
Commencement Date. The Base Rent payable by Tenant hereunder is subject to
adjustment as provided elsewhere in this Lease, as applicable. As used herein,
the term "Base Rent" shall mean the Base Rent specified in the Basic Lease
Information as it may be so adjusted from time to time.

B.     ADDITIONAL RENT. All monies other than Base Rent required to be paid by
Tenant hereunder, including, but not limited to, Tenant's Proportionate Share
of Operating Expenses, as specified in Paragraph 7 of this Lease, charges to be
paid by Tenant under Paragraph 15, the interest and late charge described in
Paragraphs 26.C. and D., and any monies spent by Landlord pursuant to Paragraph
30, shall be considered additional rent ("Additional Rent"). "Rent" shall mean
Base Rent and Additional Rent.

                              7. OPERATING EXPENSES

A.    OPERATING EXPENSES. In addition to the Base Rent required to be paid
hereunder, Tenant shall pay as Additional Rent, Tenant's Proportionate Share of
the Building and/or Project (as applicable), as defined in the Basic Lease
Information, of Operating Expenses (defined below) in the manner set forth
below. Tenant shall pay the applicable Tenant's Proportionate Share of each such
Operating Expenses. Landlord and Tenant acknowledge that if the number of
buildings which constitute the Project increases or decreases, or if

                              5
<PAGE>   6
physical changes are made to the Premises, Building or Project or the
configuration of any thereof, Landlord may at its discretion reasonably adjust
Tenant's Proportionate Share of the Building or Project to reflect the change.
Landlord's determination of Tenant's Proportionate Share of the Building and of
the Project shall be conclusive so long as it is reasonably and consistently
applied. "Operating Expenses" shall mean all expenses and costs of every kind
and nature which Landlord shall pay or become obligated to pay, because of or in
connection with the ownership, management, maintenance, repair, preservation,
replacement and operation of the Building 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 (as determined in a reasonable manner) other than those expenses and
costs which are specifically attributable to Tenant or which are expressly made
the financial responsibility of Landlord or specific tenants of the Building or
Project pursuant to this Lease. Operating Expenses shall include, but are not
limited to, the following:

     (1)  TAXES. All real property taxes and assessments, possessory interest
     taxes, sales taxes, business or license taxes or fees, gross receipts
     taxes, service payments in lieu of such taxes or fees, annual or periodic
     license or use fees, excises, transit charges, and other impositions,
     general and special, ordinary and extraordinary, unforeseen as well as
     foreseen, of any kind (including fees "in-lieu" of any such tax or
     assessment) which are now or hereafter assessed, levied, charged,
     confirmed, or imposed by any public authority upon the Building or Project,
     its operations or the Rent (or any portion or component thereof), or any
     tax, assessment or fee imposed in substitution, partially or totally, of
     any of the above. Assessments shall be paid over the longest time permitted
     without penalty or interest being incurred. Operating Expenses shall also
     include any taxes, assessments, reassessments, or other fees or impositions
     with respect to the development, leasing, management, maintenance,
     alteration, repair, use or occupancy of the Premises, Building or Project
     or any portion thereof, including, without limitation, by or for Tenant,
     and all increases therein or reassessments thereof whether the increases or
     reassessments result from increased rate and/or valuation (whether upon a
     transfer of the Building or Project or any portion thereof or any interest
     therein or for any other reason). Operating Expenses shall not include
     inheritance or estate taxes imposed upon or assessed against the interest
     of any person in the Project, or taxes computed upon the basis of the net
     income of any owners of any interest in the Project or franchise taxes. If
     it shall not be lawful for Tenant to reimburse Landlord for all or any part
     of such taxes, the monthly rental payable to Landlord under this Lease
     shall be revised to net Landlord the same net rental after imposition of
     any such taxes by Landlord as would have been payable to Landlord prior to
     the payment of any such taxes.

     (2)  INSURANCE. All insurance premiums and costs, including, but not
     limited to, any deductible amounts, premiums and other costs of insurance
     incurred by Landlord, including for the insurance coverage set forth in
     Paragraph 8.A. herein.

     (3)  Common Area Maintenance.

          (a)  Repairs, replacements, and general maintenance of and for the
          Building and Project and public and common areas and facilities of and
          comprising the Building and Project, including, but not limited to,
          the roof and roof membrane, windows, elevators, restrooms, conference
          rooms, health club facilities, lobbies, mezzanines, balconies,
          mechanical rooms, building exteriors, alarm systems, pest
          extermination, landscaped areas, parking and service areas, driveways,
          sidewalks, loading areas, fire sprinkler systems, sanitary and storm
          sewer lines, utility services, heating/ventilation/air conditioning
          systems, electrical, mechanical or other systems, telephone equipment
          and wiring servicing, plumbing, lighting, and any other items or areas
          which affect the operation or appearance of the Building or Project,
          which determination shall be at Landlord's reasonable discretion,
          except for: those items expressly made the financial responsibility of
          Landlord pursuant to Paragraph 10 hereof; those items to the extent
          paid for by the proceeds of insurance; and those items attributable
          solely or jointly to specific tenants of the Building or Project.

          (b)  Repairs, replacements, and general maintenance shall include the
          cost of any capital improvements made to or capital assets acquired
          for the Project or Building that in Landlord's discretion may reduce
          any other Operating Expenses, including present or future repair work,
          are reasonably necessary for the health and safety of the occupants of
          the Building or Project, or are required to comply with any
          Regulation, such costs or allocable portions thereof to be amortized
          over such reasonable period (taking into consideration the useful life
          of the improvement) as Landlord shall reasonably determine, together
          with interest on the unamortized balance at the publicly announced
          "prime rate" charged by Wells Fargo Bank, N.A. (San Francisco) or its
          successor at the time such improvements or capital assets are
          constructed or acquired, plus two (2) percentage points, or in the
          absence of such prime rate, then at the U.S. Treasury six-month market
          note (or bond, if so designated) rate as published by any national
          financial publication selected by Landlord, plus four (4) percentage
          points, but in no event more than the maximum rate permitted by law,
          plus reasonable financing charges.

          (c)  Payment under or for any easement, license, permit, operating
          agreement, declaration, restrictive covenant or instrument relating to
          the Building or Project.

          (d)  All expenses and rental related to services and costs of
          supplies, materials and equipment used in operating, managing and
          maintaining the Premises, Building and Project, the equipment therein
          and the adjacent sidewalks, driveways, parking and service areas,
          including, without limitation, expenses related to service agreements
          regarding security, fire and other alarm systems, janitorial services,
          window cleaning, elevator maintenance, Building exterior maintenance,
          landscaping and expenses related to the administration, management and
          operation of the Project, including without limitation salaries, wages
          and benefits and management office rent no greater than market value.

          (e)  The cost of supplying any services and utilities which benefit
          all of a portion of the Premises, Building or Project, including
          without limitation services and utilities provided pursuant to
          Paragraph 15 hereof.

          (f)  Legal expenses and the cost of audits by certified public
          accountants; provided, however, that legal expenses chargeable as
          Operating Expenses shall not include the cost of negotiating leases,
          collecting rents, evicting tenants nor shall it include costs incurred
          in legal proceedings with or against any tenant or to enforce the
          provisions of any lease.

          (g)  A management and accounting cost recovery fee equal to five
          percent (5%) of the sum of the Project's base rents and Operating
          Expenses (other than such management and accounting fee).

     If the rentable area of the Building and/or Project is not fully occupied
during any fiscal year of the Term as determined by Landlord, an adjustment may
be made in Landlord's discretion in computing the Operating Expenses for such
year so that Tenant pays an equitable portion of all variable items (e.g.
utilities, janitorial services and other component expenses that are affected
by variations in occupancy levels) of Operating Expenses, as reasonably
determined by Landlord; provided, however, that in no event shall Landlord be
entitled to collect in excess of one hundred percent (100%) of the total
Operating Expenses from all of the tenants in the Building or Project, as the
case may be.

     Operating Expenses shall not include the cost of providing tenant
improvements or other specific costs incurred for the account of, separately
billed to and paid by specific tenants of the Building or Project, the initial
construction cost of the Building, or debt service

                                       6
<PAGE>   7
on any mortgage or deed of trust recorded with respect to the Project other than
pursuant to Paragraph 7.A.(3)(b) above. Notwithstanding anything herein to the
contrary, in any instance wherein Landlord, in Landlord's reasonable discretion,
deems Tenant to be responsible for any amounts greater than Tenant's
Proportionate Share (for example, the level of service required by Tenant is in
excess of that of other tenants in the Building), Landlord shall have the right
to allocate costs in any manner Landlord reasonably deems appropriate.

     The above enumeration of services and facilities shall not be deemed to
impose an obligation on Landlord to make available or provide such services or
facilities except to the extent if any that Landlord has specifically agreed
elsewhere in this Lease to make the same available or provide the same. Without
limiting the generality of the foregoing, Tenant acknowledges and agrees that
it shall be responsible for providing adequate security for its use of the
Premises, the Building and the Project and that Landlord shall have no
obligation or liability with respect thereto, except to the extent if any that
Landlord has specifically agreed elsewhere in this Lease to provide the same.

B.   PAYMENT OF ESTIMATED OPERATING EXPENSES. "Estimated Operating Expenses" for
any particular year shall mean Landlord's reasonable estimate of the Operating
Expenses for such fiscal year made with respect to such fiscal year as
hereinafter provided. Landlord shall have the right from time to time to revise
its fiscal year and interim accounting periods so long as the periods as so
revised are reconciled with prior periods in a reasonable manner. During the
last month of each fiscal year during the Term, or as soon thereafter as
practicable, Landlord shall give Tenant written notice of the Estimated
Operating Expenses for the ensuing fiscal year. Tenant shall pay Tenant's
Proportionate Share of the Estimated Operating Expenses with installments of
Base Rent for the fiscal year to which the Estimated Operating Expenses applies
in monthly installments on the first day of each calendar month during such
year, in advance. Such payment shall be construed to be Additional Rent for all
purposes hereunder. If at any time during the course of the fiscal year,
Landlord determines that Operating Expenses are projected to vary from the then
Estimated Operating Expenses by more than five percent (5%), Landlord may, by
written notice to Tenant, revise the Estimated Operating Expenses for the
balance of such fiscal year, and Tenant's monthly installments for the remainder
of such year shall be adjusted so that by the end of such fiscal year Tenant has
paid to Landlord Tenant's Proportionate Share of the revised Estimated Operating
Expenses for such year, such revised installment amounts to be Additional Rent
for all purposes hereunder.

C.   COMPUTATION OF OPERATING EXPENSE ADJUSTMENT. "Operating Expense Adjustment"
shall mean the difference between Estimated Operating Expenses and actual
Operating Expenses for any fiscal year determined as hereinafter provided.
Within one hundred twenty (120) days after the end of each fiscal year, or as
soon thereafter as practicable, Landlord shall deliver to Tenant a statement of
actual Operating Expenses for the fiscal year just ended, accompanied by a
computation of Operating Expense Adjustment. If such statement shows that
Tenant's payment based upon Estimated Operating Expenses is less than Tenant's
Proportionate Share of Operating Expenses, then Tenant shall pay to Landlord the
difference within twenty (20) days after receipt of such statement, such payment
to constitute Additional Rent for all purposes hereunder. If such statement
shows that Tenant's payments of Estimated Operating Expenses exceed Tenant's
Proportionate Share of Operating Expenses, then (provided that Tenant is not in
monetary default under this Lease beyond any applicable grace period) Landlord
shall pay to Tenant the difference within twenty (20) days after delivery of
such statement to Tenant. If this Lease has been terminated or the Term hereof
has expired prior to the date of such statement, then the Operating Expense
Adjustment shall be paid by the appropriate party within twenty (20) days after
the date of delivery of the statement. Should this Lease commence or terminate
at any time other than the first day of the fiscal year, Tenant's Proportionate
Share of the Operating Expense Adjustment shall be prorated based on a month of
30 days and the number of calendar months during such fiscal year that this
Lease is in effect. Notwithstanding anything to the contrary contained in
Paragraph 7.A or 7.B., Landlord's failure to provide any notices or statements
within the time periods specified in those paragraphs shall in no way excuse
Tenant from its obligation to pay Tenant's Proportionate Share of Operating
Expenses.

D.   NET LEASE. This shall be a triple net Lease and 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
Operating Expenses and the Operating Expense Adjustment are intended to pass on
to Tenant and reimburse Landlord for all costs and expenses of the nature
described in Paragraph 7.A. 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.

E.   TENANT AUDIT. If Tenant shall dispute the amount set forth in any
statement provided by Landlord under Paragraph 7.B. or 7.C. above, Tenant shall
have the right, not later than ninety (90) days following receipt of such
statement and upon the condition that Tenant shall first deposit with Landlord
the full amount in dispute, to cause Landlord's books and records with respect
to Operating Expenses for such fiscal year to be audited by certified public
accountants selected by Tenant and subject to Landlord's reasonable right of
approval. The Operating Expense Adjustment shall be appropriately adjusted on
the basis of such audit. If such audit discloses a liability for a refund in
excess of five percent (5%) of Tenant's Proportionate Share of the Operating
Expenses previously reported, the cost of such audit shall be borne by
Landlord; otherwise the cost of such audit shall be paid by Tenant. If Tenant
shall not request an audit in accordance with the provisions of this Paragraph
7.E. within ninety (90) days after receipt of Landlord's statement provided
pursuant to Paragraph 7.B. or 7.C., such statement shall be final and binding
for all purposes hereof.

                       8.  INSURANCE AND INDEMNIFICATION

A.   LANDLORD'S INSURANCE. All insurance maintained by Landlord shall be for the
sole benefit of Landlord and under Landlord's sole control.

     (1)  PROPERTY INSURANCE. Landlord agrees to maintain property insurance
insuring the Building against damage or destruction due to risk including
fire, vandalism, and malicious mischief in an amount not less than the
replacement cost thereof; in the form and with deductibles and endorsements as
selected by Landlord. At its election, Landlord may instead (but shall have no
obligation to) obtain "All Risk" coverage, and may also obtain earthquake,
pollution, and/or flood insurance in amounts selected by Landlord.

     (2)  OPTIONAL INSURANCE. Landlord, at Landlord's option, may also (but
shall have no obligation to) carry insurance against loss of rent, in an amount
equal to the amount of Base Rent and Additional Rent that Landlord could be
required to abate to all Building tenants in the event of condemnation or
casualty damage for a period of twelve (12) months. Landlord may also (but
shall have no obligation to) carry such other insurance as Landlord may deem
prudent or advisable, including, without limitation, liability insurance in
such amounts and on such terms as Landlord shall determine. Landlord shall not
be obligated to insure, and shall have no responsibility whatsoever for any
damage to, any furniture, machinery, goods, inventory or supplies, or other
personal property or fixtures which Tenant may keep or maintain in the
Premises, or any leasehold improvements, additions or alterations within the
Premises.

B.   TENANT'S INSURANCE.

     (1)  PROPERTY INSURANCE. Tenant shall procure at Tenant's sole cost and
expense and keep in effect from the date of this Lease and at all times until
the end of the Term, insurance on all personal property and fixtures of Tenant
and all improvements,

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<PAGE>   8
     additions or alterations made by or for Tenant to the Premises on an "All
     Risk" basis, insuring such property for the full replacement value of such
     property.

     (2) LIABILITY INSURANCE. Tenant shall procure at Tenant's sole cost and
     expense and keep in effect from the date of this Lease and at all times
     until the end of the Term Commercial General Liability insurance covering
     bodily injury and property damage liability occurring in or about the
     Premises or arising out of the use and occupancy of the Premises and the
     Project, and any part of either, and any areas adjacent thereto, and the
     business operated by Tenant or by any other occupant of the Premises. Such
     insurance shall include contractual liability insurance coverage insuring
     all of Tenant's indemnity obligations under this Lease. Such coverage shall
     have a minimum combined single limit of liability of at least Two Million
     Dollars ($2,000,000.00), and a minimum general aggregate limit of Three
     Million Dollars ($3,000,000.00), with an "Additional Insured -- Managers or
     Lessors of Premises Endorsement." All such policies shall be written to
     apply to all bodily injury (including death), property damage or loss,
     personal and advertising injury and other covered loss, however occasioned,
     occurring during the policy term, shall be endorsed to add Landlord and any
     party holding an interest to which this Lease may be subordinated as an
     additional insured, and shall provide that such coverage shall be "primary"
     and non-contributing with any insurance maintained by Landlord, which shall
     be excess insurance only. Such coverage shall also contain endorsements
     including employees as additional insureds if not covered by Tenant's
     Commercial General Liability Insurance. All such insurance shall provide
     for the severability of interests of insureds; and shall be written on an
     "occurrence" basis, which shall afford coverage for all claims based on
     acts, omissions, injury and damage, which occurred or arose (or the onset
     of which occurred or arose) in whole or in part during the policy period.

     (3) WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE. Tenant shall
     carry Workers' Compensation Insurance as required by any Regulation,
     throughout the Term at Tenant's sole cost and expense. Tenant shall also
     carry Employers' Liability Insurance in amounts not less than One Million
     Dollars ($1,000,000) each accident for bodily injury by accident; One
     Million Dollars ($1,000,000) policy limit for bodily injury by disease; and
     One Million Dollars ($1,000,000) each employee for bodily injury by
     disease, throughout the Term at Tenant's sole cost and expense.

     (4) GENERAL INSURANCE REQUIREMENTS. All coverages described in this
     Paragraph 8.B. shall be endorsed to (i) provide Landlord with thirty (30)
     days' notice of cancellation or change in terms; and (ii) waive all rights
     of subrogation by the insurance carrier against Landlord. If at any time
     during the Term the amount or coverage of insurance which Tenant is
     required to carry under this Paragraph 8.B. is, in Landlord's reasonable
     judgment, materially less than the amount or type of insurance coverage
     typically carried by owners or tenants of properties located in the general
     area in which the Premises are located which are similar to and operated
     for similar purposes as the Premises or if Tenant's use of the Premises
     should change with or without Landlord's consent, Landlord shall have the
     right to required Tenant to increase the amount or change the types of
     insurance coverage required under this Paragraph 8.B. All insurance polices
     required to be carried by Tenant under this Lease shall be written by
     companies rated A X or better in "Best's Insurance Guide" and authorized to
     do business in the State of California. In any event deductible amounts
     under all insurance policies required to be carried by Tenant under this
     Lease shall not exceed Five Thousand Dollars ($5,000.00) per occurrence.
     Tenant shall deliver to Landlord on or before the Term Commencement Date,
     and thereafter at least thirty (30) days before the expiration dates of the
     expired policies, certified copies of Tenant's insurance policies, or a
     certificate evidencing the same issued by the insurer thereunder; and, if
     Tenant shall fail to procure such insurance, or to deliver such policies or
     certificates, Landlord may, after ten (10) days prior written notice at
     Landlord's option and in addition to Landlord's other remedies in the event
     of a default by Tenant hereunder, procure the same for the account of
     Tenant, and the cost thereof shall be paid to Landlord as Additional Rent.

C. INDEMNIFICATION. Tenant shall indemnify, defend by counsel reasonably
acceptable to Landlord, protect and hold Landlord harmless from and against any
and all claims, liabilities, losses, costs, loss of rents, liens, damages,
injuries or expenses, including reasonable attorney's and consultants' fees and
court costs, demands, causes of action, or judgments, arising out of or related
to: (1) claims of injury to or death of persons or damage to property occurring
or resulting from the use or occupancy of the Premises, Building or Project by
Tenant or Tenant's Parties, or from activities or failures to act (in those
instances where Tenant has a duty or obligation to act) of Tenant or Tenant's
Parties; (2) claims arising from work or labor performed, or for materials or
supplies furnished to or at the request or for the account of Tenant in
connection with performance of any work done for the account of Tenant within
the Premises or Project other than the initial work and work done at request of
Landlord or it's agents; (3) claims arising from any breach or default on the
part of Tenant in the performance of any covenant contained in this Lease after
applicable notice and grace period; and (4) claims arising from the negligence
or intentional acts or omissions of Tenant or Tenant's Parties. The foregoing
indemnity by Tenant shall not be applicable to claims to the extent arising from
the gross negligence or willful misconduct of Landlord. Landlord shall not be
liable to Tenant and Tenant hereby waives all claims against Landlord for any
injury or damage to any person or property in or about the Premises, Building or
Project by or from any cause whatsoever (other than Landlord's gross negligence
or willful misconduct) and, without limiting the generality of the foregoing,
whether caused by water leakage of any character from the roof, walls, basement
or other portion of the Premises, Building or Project, or caused by gas, fire,
oil or electricity in, on or about the Premises, Building or Project. The
provisions of this Paragraph shall survive the expiration or earlier termination
of this Lease.

                            9. WAIVER OF SUBROGATION

     To the extent permitted by law and without affecting the coverage provided
by insurance to be maintained hereunder or any other rights or remedies,
Landlord and Tenant each waive any right to recover against the other for: (a)
damages for injury to or death of persons; (b) damages to property, including
personal property; (c) damages to the Premises or any part thereof; and (d)
claims arising by reason of the foregoing due to hazards covered by insurance
maintained or required to be maintained pursuant to this Lease to the extent of
proceeds recovered therefrom, or proceeds which would have been recoverable
therefrom in the case of the failure of any party to maintain any insurance
coverage required to be maintained by such party pursuant to this Lease. This
provision is intended to waive fully, any rights and/or claims arising by reason
of the foregoing, but only to the extent that any of the foregoing damages
and/or claims referred to above are covered or would be covered, and only to the
extent of such coverage, by insurance actually carried or required to be
maintained pursuant to this Lease by either Landlord or Tenant. This provision
is also intended to waive fully, and for the benefit of each party, any rights
and/or claims which might give rise to a right of subrogation on any insurance
carrier. Subject to all qualifications of this Paragraph 9, Landlord waives its
rights as specified in this Paragraph 9 with respect to any subtenant that it
has approved pursuant to Paragraph 21 but only in exchange for the written
waiver of such rights to be given by such subtenant to Landlord upon such
subtenant taking possession of the Premises or a portion thereof. Each party
shall cause each insurance policy obtained by it to provide that the insurance
company waives all right of recovery by way of subrogation against either party
in connection with any damage covered by any policy.

                     10. LANDLORD'S REPAIRS AND MAINTENANCE

     Landlord shall at Landlord's expense maintain in good repair, reasonable
wear and tear excepted, the structural soundness of the roof, foundations, and
exterior walls of the Building. The term "exterior walls" as used herein shall
not include windows, glass or plate glass, doors, special store fronts or office
entries. Landlord shall also maintain and repaid the Building systems pursuant
to Paragraph 7, the cost of which shall be Operating Expenses. Any damage caused
by or repairs necessitated by any negligence or act of Tenant or Tenant's
Parties may be repaired by Landlord at Landlord's option and Tenant's expense.
Tenant shall immediately give Landlord written

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<PAGE>   9
notice of any defect or need of repairs in such components of the Building for
which Landlord is responsible, after which Landlord shall have a reasonable
opportunity and the right to enter the Premises at all reasonable times upon
reasonable notice to repair same, and shall use best effort to minimize
interference with Tenant. Landlord's ability with respect to any defects,
repairs, or maintenance for which Landlord is responsible under any of the
provisions of this Lease shall be limited to the cost of such repairs or
maintenance, and there shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant's business
arising from the making of repairs, alterations or improvements in or to any
portion of the Premises, the Building or the Project or to fixtures,
appurtenances or equipment in the Building, except as provided in paragraph 24.
By taking possession of the Premises, Tenant accepts them "as is," as being in
good order, condition and repair and the condition in which Landlord is
obligated to deliver them and suitable for the Permitted Use and Tenant's
intended operations in the Premises, whether or not any notice of acceptance is
given, but subject to completion of punchlist items.

                      11. TENANT'S REPAIRS AND MAINTENANCE

     Tenant shall at all times during the Term at Tenant's expense maintain all
parts of the Premises and such portions of the Building as are within the
exclusive control of Tenant (as of the date of this Lease, there are no portions
of the Building under Tenant's exclusive control) in a first-class, good, clean
and secure condition and promptly make all necessary repairs and replacements,
as reasonably determined by Landlord, with materials and workmanship of the same
character, kind and quality as the original. Notwithstanding anything to the
contrary contained herein, Tenant shall, at its expense, promptly repair any
damage to the Premises or the Building or Project resulting from or caused by
any negligence or act of Tenant or Tenant's Parties.

                                12. ALTERATIONS

A.     Tenant shall not make, or allow to be made, any alterations, physical
additions, improvements or partitions, including without limitation the
attachment of any fixtures or equipment, in, about or to the Premises
("Alterations") without obtaining the prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed with respect to proposed
Alterations which: (a) comply with all applicable Regulations; (b) are, in
Landlord's opinion, compatible with the Building or the Project and its
mechanical, plumbing, electrical, heating/ventilation/air conditioning systems,
and will not cause the Building or Project or such systems to be required to be
modified to comply with any Regulations (including, without limitation, the
Americans With Disabilities Act); and (c) will not interfere with the use and
occupancy of any other portion of the Building or Project by any other tenant
or its invitees. Notwithstanding the preceding sentence, Tenant may make
improvements which are entirely decorative in nature, including painting and
recarpeting, without Landlord's consent if the total cost of such improvements
is five thousand dollars ($5,000) or less and such improvements will not affect
in any way the structural, exterior or roof elements of the Building or the
mechanical, electrical, plumbing or life safety systems of the Building, but
Tenant shall give prior written notice of any such improvements to Landlord.
Specifically, but without limiting the generality of the foregoing, Landlord
shall have the right of written consent for all plans and specifications for
the proposed Alterations, construction means and methods, all appropriate
permits and licenses, any contractor or subcontractor to be employed on the
work of Alterations, and the time for performance of such work, and may impose
rules and regulations for contractors and subcontractors performing such work.
Tenant shall also supply to Landlord any documents and information reasonably
requested by Landlord in connection with Landlord's consideration of a request
for approval hereunder. Tenant shall cause all Alterations to be accomplished
in a first-class, good and workmanlike manner, and to comply with all
applicable Regulations and Paragraph 27 hereof. Tenant shall at Tenant's sole
expense, perform any additional work required under applicable Regulations due
to the Alterations hereunder. No review or consent by Landlord of or to any
proposed Alteration or additional work shall constitute a waiver of Tenant's
obligations under this Paragraph 12, nor constitute any warranty or
representation that the same complies with all applicable Regulations, for
which Tenant shall at all times be solely responsible. Tenant shall reimburse
Landlord for all reasonable costs which Landlord may incur in connection with
granting approval to Tenant for any such Alterations, including any costs or
expenses which Landlord may incur in needing to have outside architects and
engineers review said plans and specifications, and shall pay Landlord an
administration fee of ten percent (10%) of the cost of the Alterations as
Additional Rent hereunder. All such Alterations shall remain the property of
Tenant until the expiration or earlier termination of this Lease, at which time
they shall be and become the property of Landlord; provided, however, that
Landlord may, upon written notification prior to commencement of construction,
at Landlord's option, require that Tenant, at Tenant's expense, remove any or
all Alterations made by Tenant and restore the Premises by the expiration or
earlier termination of this Lease, to their condition existing prior to the
construction of any such Alterations. All such removals and restoration shall
be accomplished in a first-class and good and workmanlike manner so as not to
cause any damage to the Premises or Project whatsoever. If Tenant fails to
remove such Alterations or Tenant's trade fixtures or furniture or other
personal property, Landlord may keep and use them or remove any of them and
cause them to be stored or sold in accordance with applicable law, at Tenant's
sole expense. In addition to and wholly apart from Tenant's obligation to pay
Tenant's Proportionate Share of Operating Expenses, Tenant shall be responsible
for and shall pay prior to delinquency any taxes or governmental service fees,
possessory interest taxes, fees or charges in lieu of any such taxes, capital
levies, or other charges imposed upon, levied with respect to or assessed
against its fixtures or personal property, on the value of Alterations within
the Premises other than the initial work, and on Tenant's interest pursuant to
this Lease, or any increase in any of the foregoing based on such Alterations.
To the extent that any such taxes are not separately assessed or billed to
Tenant, Tenant shall pay the amount thereof as invoiced to Tenant by Landlord.

     Notwithstanding the foregoing, at Landlord and Tenant's option (but
without obligation by either party), all or any portion of the Alterations
shall be performed by Landlord for Tenant's account and Tenant shall pay
Landlord's estimate of the cost thereof (including a reasonable charge for
Landlord's overhead and profit) prior to commencement of the work. In addition,
at Landlord's election and notwithstanding the foregoing, however, Tenant shall
pay to Landlord the cost of removing any such Alterations and restoring the
Premises to their original condition such cost to include a reasonable charge
for Landlord's overhead and profit as provided above, and such amount may be
deducted from the Security Deposit or any other sums or amounts held by
Landlord under this Lease.

B.     In compliance with Paragraph 27 hereof, at least ten (10) business days
before beginning construction of any Alteration, Tenant  shall give Landlord
written notice of the expected commencement date of that construction to permit
Landlord to post and record a notice of non-responsibility. Upon substantial
completion of construction, if the law so provides, Tenant shall cause a timely
notice of completion to be recorded in the office of the recorder of the county
in which the Building is located.

                                   13. SIGNS

     Tenant shall not place, install, affix, paint or maintain any signs,
notices, graphics or banners whatsoever or any window decor which is visible in
or from public view or corridors, the common areas or the exterior of the
Premises or the Building, in or on any exterior window or window fronting upon
any common areas or service area without Landlord's prior written approval which
Landlord shall have the right to withhold in its absolute and sole discretion;
provided that Tenant's name shall be included in any Building-standard door and
directory signage at Landlord's expense, in accordance with Landlord's
Building signage program, including without limitation, payment by Tenant of any
fee charged by Landlord for maintaining such signage, which fee shall constitute
Additional Rent hereunder. Any installation of signs, notices, graphics or
banners on or about the Premises or Project approved by Landlord shall be
subject to any Regulations and to any other requirements imposed by Landlord.
Tenant shall remove all such signs, except for signage installed by Landlord, or
graphics by the expiration or any earlier termination of this Lease. Such
installations and removals shall be made in such

                                       9
<PAGE>   10
manner as to avoid injury to or defacement of the Premises, Building or Project
and any other improvements contained therein, and Tenant shall repair any
injury or defacement including without limitation discoloration caused by such
installation or removal.

                         14. INSPECTION/POSTING NOTICES

     After reasonable notice of reasonable times, except in emergencies where no
such notice shall be required, Landlord and Landlord's agents and
representatives, shall have the right to enter the Premises to inspect the same,
to clean, to perform such work as may be permitted or required hereunder, to
make repairs, improvements or alterations to the premises, Building or Project
or to other tenant spaces therein, to deal with emergencies, to post such
notices as may be permitted or required by law to prevent the perfection of
liens against Landlord's interest in the Project or to exhibit the Premises to
prospective tenants, purchasers, encumbrancers or to others, or for any other
purpose as Landlord may deem necessary or desirable; provided, however, that
Landlord shall use reasonable efforts not to unreasonably interfere with
Tenant's business operations. Tenant shall not be entitled to any abatement of
Rent by reason of the exercise of any such right of entry. Tenant waives any
claim for damages for any injury or inconvenience to or interference with
Tenant's business, any loss of occupancy or quiet enjoyment of the Premises, and
any other loss occasioned thereby. Landlord shall at all times have and retain a
key with which to unlock all of the doors in, upon and about the premises,
excluding Tenant's vaults and safes or special security areas (designated in
advance), and Landlord shall have the right to use any and all means which
Landlord may deem necessary or proper to open said doors in an emergency, in
order to obtain entry to any portion of the Premises, and any entry to the
Premises or portions thereof obtained by Landlord by any of said means, or
otherwise, shall not be construed to be a forcible or unlawful entry into, or a
detainer of,  the Premises, or an eviction, actual or constructive, of Tenant
from the Premises or any portions thereof. At any time within six (6) months
prior to the expiration of the Term or following any earlier termination of this
Lease or agreement to terminate this Lease, Landlord shall have the right to
erect on the Building and/or Project a suitable sign indicating that the
Premises are available for lease.

                           15. SERVICES AND UTILITIES

A.   Provided Tenant shall not be in default (beyond applicable notice and
grace periods) hereunder, and subject to the provisions elsewhere herein
contained and to the rules and regulations of the Building, Landlord shall
furnish to the Premises during ordinary business hours of generally recognized
business days, to be determined by Landlord (but exclusive, in any event, of
Saturdays, Sundays and legal holidays), furnish at all times water for lavatory
and drinking purposes and electricity, heat and air conditioning as usually
furnished or supplied for use of the Premises for reasonable and normal office
use as of the date Tenant takes possession of the Premises as determined by
Landlord (but not including above-standard or continuous cooling for excessive
heat-generating machines, excess lighting or equipment), janitorial services
during the times and in the manner that such services are, in Landlord's
judgment, customarily furnished in comparable office buildings in the immediate
market area, and elevator services, which shall mean service either by
nonattended automatic elevators or elevators with attendants, or both, at the
option of Landlord. Tenant acknowledges that Tenant has inspected and accepts
the water, electricity, heat and air conditioning and other utilities and
services being supplied or furnished to the Premises as of the date Tenant takes
possession of the Premises, as being sufficient for use of the Premises for
reasonable and normal office use in their present condition, "as is," and
suitable for the Permitted Use, and for Tenant's intended operations in the
Premises. Landlord shall have no obligation to provide additional or
after-hours electricity, heating or air conditioning if Tenant is in default
hereunder or has failed to pay for prior usage, but if Landlord elects to
provide such services at Tenant's request, Tenant shall pay to Landlord a
reasonable charge for such services as determined by Landlord. The current
charge for such services is $45.00 per hour. Tenant agrees to keep and cause to
be kept closed all window covering when necessary because of the sun's
position, and Tenant also agrees at all times to cooperate fully with Landlord
and to abide by all of the regulations and requirements which Landlord may
prescribe for the proper functioning and protection of electrical, heating,
ventilating and air conditioning systems. Wherever heat-generating machines,
excess lighting or equipment are used in the Premises which affect the
temperature otherwise maintained by the air conditioning system, Landlord
reserves the right to install supplementary air conditioning units in the
Premises and the cost thereof, including the cost of installation and the cost
of operation and maintenance thereof, shall be paid by Tenant to Landlord upon
demand by Landlord.

B.   Tenant shall not without written consent of Landlord, which consent shall
not be unreasonably withheld or delayed, use any apparatus, equipment or device
in the Premises, including without limitation, computers, electronic data
processing machines, copying machines, and other machines, using excess
lighting or using electric current, water, or any other resource in excess of
or which will in any way increase the amount of electricity, water, or any
other resource being furnished or supplied for the use of the Premises for
reasonable and normal office use (including those resources required pursuant
to the Tenant Improvements constructed by Landlord pursuant to Exhibit C), in
each case as of the date Tenant takes possession of the Premises as determined
by Landlord, or which will require additions or alterations to or interfere
with the Building power distribution systems; nor connect with electric
current, except through existing electrical outlets in the Premises or water
pipes, any apparatus, equipment or device for the purpose of using electrical
current, water, or any other resource. If Tenant shall require water or
electric current or any other resource in excess of that being furnished or
supplied for the use of the Premises, pursuant to the Tenant Improvements
constructed by Landlord pursuant to Exhibit C, as of the date Tenant takes
possession of the Premises as determined by Landlord, Tenant shall first
procure the written consent of Landlord which Landlord may refuse, to the use
thereof, and Landlord may cause a special meter to be installed in the Premises
so as to measure the amount of water, electric current or other resource
consumed for any such other use. Tenant shall pay directly to Landlord as an
addition to and separate from payment of Operating Expenses the cost of all
such additional resources, energy, utility service and meters (and of
installation, maintenance and repair thereof and of any additional circuits or
other equipment necessary to furnish such additional resources, energy, utility
or service). Landlord may add to the separate or metered charge a recovery of
additional expense incurred in keeping account of the excess water, electric
current or other resource so consumed. Landlord shall not be liable for any
damages directly or indirectly resulting from nor shall the rent or any monies
owed Landlord under this Lease herein reserved be abated by reason of: (a) the
installation, use or interruption of use of any equipment used in connection
with the furnishing of any such utilities or services, or any change in the
character or means of supplying or providing any such utilities or services or
any supplier thereof; (b) the failure to furnish or delay in furnishing any
such utilities or services when such failure or delay is caused by acts of God
or the elements, labor disturbances of any character, or any other accidents or
other conditions beyond the reasonable control of Landlord or because of any
interruption of service due to Tenant's use of water, electric current or other
resource in excess of that being supplied or furnished for the use of the
Premises as of the date Tenant takes possession of the Premises; (c) the
inadequacy, limitation, curtailment, rationing or restriction on use of water,
electricity, gas or any other form of energy or any other service or utility
whatsoever serving the Premises or Project, whether by Regulation or otherwise;
or (d) the partial or total unavailability of any such utilities or services to
the Premises or the Building, whether by Regulation or otherwise; nor shall any
such occurrence constitute an actual or constructive eviction of Tenant.
Landlord shall further have no obligation to protect or preserve any apparatus,
equipment or device installed by Tenant in the Premises, including without
limitation by providing additional or after-hours heating or air conditioning.
Landlord shall be entitled to cooperate voluntarily and in a reasonable manner
with the efforts of national, state or local governmental agencies or utility
suppliers in reducing energy or other resource consumption. The obligation to
make services available hereunder shall be subject to the limitations of any
such voluntary, reasonable program. In addition, Landlord reserves the right to
change the supplier or provider of any such utility or service from time to
time. Tenant shall have no right to contract with or otherwise obtain any
electrical or other such service for or with respect to the premises or
Tenant's operations therein from any supplier or provider of any such service.
Tenant shall cooperate with Landlord and any supplier or provider of such
services designated by Landlord from time to time to facilitate the delivery of
such services to Tenant at the Premises and to the Building and Project,
including without limitation allowing Landlord and Landlord's suppliers or
providers, and their respective agents and contractors, reasonable access to
the Premises for the purpose of installing, maintaining, repairing, replacing
or upgrading such service or any equipment or machinery associated therewith.

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<PAGE>   11

C.   Tenant shall pay, upon demand, for all utilities furnished to the
Premises, or if not separately billed to or metered to Tenant. Tenant's
Proportionate Share of all charges jointly serving the Project in accordance
with Paragraph 7. All sums payable under this Paragraph 15 shall constitute
Additional Rent hereunder.

                              16.  SUBORDINATION

     Without the necessity of any additional document being executed by Tenant
for the purpose of effecting a subordination, the Lease shall be and is hereby
declared to be subject and subordinate at all times to: (a) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Premises and/or the land upon which the Premises and Project are situated, or
both; and (b) any mortgage or deed of trust which may now exist or be placed
upon the Building, the Project and/or the land upon which the Premises or the
Project are situated, or said ground leases or underlying leases, or Landlord's
interest or estate in any of said items which is specified as security.
Notwithstanding the foregoing, Landlord shall have the right to subordinate or
cause to be subordinated any such ground leases or underlying leases or any such
liens to this Lease. If any ground lease or underlying lease terminates for any
reason or any mortgage or deed of trust is foreclosed or a conveyance in lieu of
foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination, attorn to and become the Tenant of the successor in interest to
Landlord provided that Tenant shall not be disturbed in its possession under
this Lease by such successor in interest so long as Tenant is not in default
under this Lease. Within ten business (10) days after request by Landlord,
Tenant shall execute and deliver any additional documents evidencing Tenant's
attornment or the subordination of this Lease with respect to any such ground
leases or underlying leases or any such mortgage or deed of trust, in the form
reasonably requested by Landlord or by any ground landlord, mortgagee, or
beneficiary under a deed of trust, subject to such nondisturbance requirement.
If requested in writing by Tenant, Landlord shall use commercially reasonable
efforts to obtain a subordination, nondisturbance and attornment agreement for
the benefit of Tenant reflecting the foregoing from any ground landlord,
mortgages or beneficiary, at Tenant's expense, subject to such other terms and
conditions as the ground landlord, mortgagee or beneficiary may require.

                           17.  FINANCIAL STATEMENTS

     At the request of Landlord from time to time, and provided Landlord
executes a reasonable confidentiality agreement, Tenant shall provide to
Landlord Tenant's and any guarantor's current financial statements or other
information discussing financial worth of Tenant and any guarantor, which
Landlord shall use solely for purposes of this Lease and in connection with the
ownership, management, financing and disposition of the Project.

                           18.  ESTOPPEL CERTIFICATE

     Tenant agrees from time to time, within ten (1) business days after
request of Landlord, to deliver to Landlord, or Landlord's designee, an
estoppel certificate stating that this Lease is in full force and effect, that
this Lease has not been modified (or stating all modifications, written or
oral, to this Lease), the date to which Rent has been paid, the unexpired
portion of this Lease, that there are no current defaults by Landlord or Tenant
under this Lease (or specifying any such defaults), that the leasehold estate
granted by this Lease is the sole Interest of Tenant in the Premises and/or the
land at which the Premises are situated, and such other matters pertaining to
this Lease as may be reasonably requested by Landlord or any mortgagee,
beneficiary, purchaser or prospective purchaser of the Building or Project or
any interest therein. Failure by Tenant to execute and deliver such certificate
shall constitute an acceptance of the Premises and acknowledgment by Tenant
that the statements included are true and correct without exception. Landlord
and Tenant intend that any statement delivered pursuant to this Paragraph may
be relied upon by any mortgagee, beneficiary, purchaser or prospective
purchaser of the Building or Project or any interest therein. The parties agree
that Tenant's obligation to furnish such estoppel certificates in a timely
fashion is a material inducement for Landlord's execution of the Lease, and
shall be an event of default (without any cure period that might be provided
under Paragraph 26.A(3) of this Lease) if Tenant makes any material misstatement
in any such certificate.

                             19.  SECURITY DEPOSIT

     Tenant agrees to deposit with Landlord upon execution of this Lease, a
security deposit as stated in the Basic Lease Information (the "Security
Deposit"), which sum shall be held and owned by Landlord, without obligation to
pay interest, as security for the performance of Tenant's covenants and
obligations under this Lease. The Security Deposit is not an advance rental
deposit or a measure of damages incurred by Landlord in case of Tenant's
default. Upon the occurrence of any event of default by Tenant, Landlord may
from time to time, without prejudice to any other remedy provided herein or by
law, use such fund as a credit to the extent necessary to credit against any
arrears of Rent or other payments due to Landlord hereunder, and any other
damage, injury, expense or liability caused by such event of default, and Tenant
shall pay to Landlord, on demand, the amount so applied in order to restore the
Security Deposit to its original amount. Although the Security Deposit shall be
deemed the property of Landlord, any remaining balance of such deposit shall be
returned by Landlord to Tenant at such time after termination of this Lease that
all of Tenant's obligations under this Lease have been fulfilled, reduced by
such amounts as may be required by Landlord to remedy defaults on the part of
Tenant in the payment of Rent or other obligations of Tenant under this Lease,
to repair damage to the Premises, Building or Project caused by Tenant or any
Tenant's Parties and to clean the Premises. Landlord may use and commingle the
Security Deposit with other funds of Landlord.

                      20.  LIMITATION OF TENANT'S REMEDIES

     The obligations and liability of Landlord to Tenant for any default by
Landlord under the terms of this Lease are not personal obligations of Landlord
or of the individual or other partners of Landlord or its or their partners,
directors, officers, or shareholders, and Tenant agrees to look solely to
Landlord's interest in the Project for the recovery of any amount from
Landlord, and shall not look to other assets of Landlord nor seek recourse
against the assets of the individual or other partners of Landlord or its or
their partners, directors, officers or shareholders. Any lien obtained to
enforce any such judgment and any levy of execution thereon shall be subject
and subordinate to any lien, mortgage or deed of trust on the Project. Under no
circumstances shall Tenant have the right to offset against or recoup Rent or
other payments due and to become due to Landlord hereunder except as expressly
provided in Paragraph 23.B. below, which Rent and other payments shall be
absolutely due and payable hereunder in accordance with the terms hereof.

                         21.  ASSIGNMENT AND SUBLETTING

A.   (1)  GENERAL. This lease has been negotiated to be and is granted as an
     accommodation to Tenant. Accordingly, this Lease is personal to Tenant, and
     Tenant's rights granted hereunder do not include the right to assign this
     Lease or sublease the Premises, or to receive any excess, either in
     installments or lump sum, over the Rent which is expressly reserved by
     Landlord as hereinafter provided, except as otherwise expressly hereinafter
     provided. Tenant shall not assign or pledge this Lease or sublet the
     Premises or any part thereof, whether voluntarily or by operation of law,
     or permit the use or occupancy of the Premises or any part thereof by
     anyone other than Tenant, or suffer or permit any such assignment, pledge,
     subleasing or occupancy, without Landlord's prior written consent, except
     Tenant may assign or sublease to a related entity without Landlord's
     consent, except as provided herein. If Tenant desires to assign this Lease
     or sublet any or all of the Premises, Tenant shall give Landlord written
     notice (the "Transfer Notice") at least thirty (30) days prior to the
     anticipated effective date of the proposed assignment or

                                       11

<PAGE>   12
     sublease, which shall contain all of the information reasonably requested
     by Landlord to address Landlord's decision criteria specified hereinafter.
     Landlord shall then have a period of twenty one (21) days following receipt
     of the Transfer Notice to notify Tenant in writing that Landlord elects
     either: (i) to terminate this Lease, only if assigned and not for sublease
     but only for the balance of the Lease Term, as to the space so affected as
     of the date so requested by Tenant; or (ii) to consent to the proposed
     assignment or sublease, subject, however, to Landlord's prior written
     consent which shall not be unreasonably withheld or delayed of the proposed
     assignee or subtenant and of any related documents or agreements associated
     with the assignment or sublease. If Landlord should fail to notify Tenant
     in writing of such election within said period, Landlord shall be deemed to
     have waived option (i) above, but written consent by Landlord of the
     proposed assignee or subtenant shall still be required. If Landlord does
     not exercise option (i) above, Landlord's consent to a proposed assignment
     or sublease shall not be unreasonably withheld or delayed. Consent to any
     assignment or subletting shall not constitute consent to any subsequent
     transaction to which this Paragraph 21 applies.

     (2)  CONDITIONS OF LANDLORD'S CONSENT. Without limiting the other instances
     in which it my be reasonable for Landlord to withhold Landlord's consent to
     an assignment or subletting, Landlord and Tenant acknowledge that it shall
     be reasonable for Landlord to withhold Landlord's consent in the following
     instances: If the proposed assignee does not agree to be bound by and
     assume the obligations of Tenant under this Lease in form and substance
     satisfactory to Landlord; the use of the Premises by such proposed assignee
     or subtenant would not be a Permitted Use or would violate any exclusivity
     or other arrangement which Landlord has with any other tenant or occupant
     or any Regulation or would increase the Occupancy Density or Parking
     Density of the Building or Project, or would otherwise result in an
     undesirable tenant mix for the Project as determined by Landlord; the
     proposed assignee or subtenant is not of sound financial condition as
     determined by Landlord in Landlord's reasonable discretion; the proposed
     assignee or subtenant is a governmental agency; that Landlord has knowledge
     that the proposed assignee or subtenant does not have a good reputation as
     a tenant of property or a good business reputation; the proposed assignee
     or subtenant is a person with whom Landlord is negotiating to lease space
     in the Project; the assignment or subletting would entail any Alterations
     which would lessen the value of the leasehold improvements in the Premises
     or use of any Hazardous Materials or other noxious use or use which may
     disturb other tenants of the Project; or Tenant is in default of any
     obligation of Tenant under this Lease, or Tenant has defaulted under this
     Lease on three (3) or more occasions during any twelve (12) months
     preceding the date that Tenant shall request consent. Failure by or refusal
     of Landlord to consent to a proposed assignee or subtenant shall not cause
     a termination of this Lease. Upon a termination under Paragraph
     21.A.(I)(i), Landlord may lease the Premises to any party, including
     parties with whom Tenant has negotiated an assignment or sublease, without
     incurring any liability to Tenant. At the option of Landlord, a surrender
     and termination of this Lease shall operate as an assignment to Landlord of
     some or all subleases or subtenancies. Landlord shall exercise this option
     by giving notice of that assignment in such subtenants on or before the
     effective date of the surrender and termination. In connection with each
     request for assignment or subletting, Tenant shall pay to Landlord
     Landlord's standard fee, such fee not to exceed five hundred and 00/100
     dollars ($500.00) for approving such requests, as well as all costs
     incurred by Landlord or any mortgagee or ground lessor in approving each
     such request and effecting any such transfer, including, without
     limitation, reasonable attorneys' fees.

B.   BONUS RENT. Any Rent or other consideration realized by Tenant under any
such sublease or assignment in excess of the Rent payable hereunder, after
amortization of a reasonable brokerage commission incurred by Tenant, shall be
divided and paid, fifty percent (50%) to Tenant, fifty percent (50%) to
Landlord. In any subletting or assignment undertaken by Tenant, Tenant shall
diligently seek to obtain the maximum rental amount available in the
marketplace for comparable space available for primary leasing.

C.   CORPORATION. Notwithstanding the provisions of this Paragraph 21, Tenant
may assign this Lease or sublet any portion of the Premises to any corporation
which controls, is controlled by or is under common control with Tenant (each,
a "Permitted Tenant Affiliate"), provided that the Permitted Tenant Affiliate
assumes, in full, the obligations of Tenant under this Lease (or assumes, in
the case of a sublease of a portion of the Term of the Premises, the
obligations of Tenant with respect to such portion) and has a net worth at
least equal to Tenant's net worth immediately before the assignment or
subletting. If Tenant is a corporation, a dissolution of the corporation or a
transfer (by one (1) or more transactions) of a majority of the voting stock of
Tenant shall be deemed to be an assignment of this Lease subject to the
provisions of this Paragraph 21; provided, however, that the provisions of this
sentence shall not apply to transactions with a corporation into or with which
Tenant is merged or consolidated or to which substantially all of Tenant's
assets are transferred (each a "surviving corporation") where (i) the surviving
corporations has a net worth at least equal to Tenant's net worth immediately
before the merger, consolidation or asset transfer and (ii) the surviving
corporation assumes, in full, the obligations of Tenant with respect to such
portion).

D.   UNINCORPORATED ENTITY. If Tenant is a partnership, joint venture,
unincorporated limited liability company or other unincorporated business form,
a transfer of the interest of persons, firms or entities responsible for
managerial control of Tenant by sale, assignment, bequest, inheritance,
operation of law or other disposition, so as to result in a change in the
present control of said entity and/of the underlying beneficial interests of
said entity and/or a change in the identity of the persons responsible for the
general credit obligations of said entity shall constitute an assignment for
all purposes of this Lease.

E.   LIABILITY. No assignment or subletting by Tenant, permitted or otherwise,
shall relieve Tenant of any obligation under this Lease or alter the primary
liability of the Tenant named herein for the payment of Rent or for the
performance of any other obligations to be performed by Tenant, including
obligations contained in Paragraph 25 with respect to any assignee or
subtenant. Landlord may collect rent or other amounts or any portion thereof
from any assignee, subtenant, or other occupant of the Premises, permitted or
otherwise, and apply the net rent collected to the Rent payable hereunder, but
no such collection shall be deemed to be a waiver of this Paragraph 21, or the
acceptance of the assignee, subtenant or occupant as tenant, or a release of
Tenant from the further performance by Tenant of the obligations of Tenant
under this Lease. Any assignment or subletting which conflicts with the
provisions hereof shall be void.

                                 22.  AUTHORITY

     Landlord represents and warrants that it has full right and authority to
enter into this Lease and to perform all of Landlord's obligations hereunder and
that all persons signing this Lease on its behalf are authorized to do. Tenant
and the person or persons, if any, signing on behalf of Tenant, jointly and
severally represent and warrant that Tenant has full right and authority to
enter into this Lease, and to perform all of Tenant's obligations hereunder,
and that all persons signing this Lease on its behalf are authorized to do so.

                               23.  CONDEMNATION

A.   CONDEMNATION RESULTING IN TERMINATION. If the whole or any substantial part
of the Premises should be taken or condemned for any public use under any
Regulation, or by right of eminent domain, or by private purchase in lieu
thereof, and the taking would prevent or materially interfere with the
Permitted Use of the Premises, either party shall have the right to terminate
this Lease at its option. If any material portion of the Building or Project is
taken or condemned for any public use under any Regulation, or by right of
eminent

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<PAGE>   13

domain, or by private purchase in lieu thereof, Landlord may terminate this
Lease at its option. In either of such events, the Rent shall be abated during
the unexpired portion of this Lease, effective when the physical taking of said
Premises shall have occurred.

B.   CONDEMNATION NOT RESULTING IN TERMINATION. If a portion of the Project of
which the Premises are a part should be taken or condemned for any public use
under any Regulation, or by right of eminent domain, or by private purchase in
lieu thereof, and the taking prevents or materially interferes with the
Permitted Use of the Premises, and this Lease is not terminated as provided in
Paragraph 23.A. above, the Rent payable hereunder during the unexpired portion
of the Lease shall be reduced, beginning on the date when the physical taking
shall have occurred, to such amount as may be fair and reasonable under all of
the circumstances, but only after giving Landlord credit for all sums received
or to be received by Tenant by the condemning authority. Notwithstanding
anything to the contrary contained in this Paragraph, if the temporary use or
occupancy of any part of the Premises shall be taken or appropriated under
power of eminent domain during the Term, this Lease shall be and remain
unaffected by such taking or appropriation and Tenant shall continue to pay in
full all Rent payable hereunder by Tenant during the Term, in the event of any
such temporary appropriation or taking, Tenant shall be entitled to receive
that portion of any award which represents compensation for the use of or
occupancy of the Premises during the Term, and Landlord shall be entitled
to receive that portion of any award represents the cost of restoration of the
Premises and the use and occupancy of the Premises.

C.   AWARD. Landlord shall be entitled to (and Tenant shall assign to Landlord)
any and all payment, income, rent, award or any interest therein whatsoever
which may be paid or made in connection with such taking or conveyance and
Tenant shall have no claim against Landlord or otherwise for any sums paid by
virtue of such proceedings, whether or not attributable to the value of any
unexpired portion of this Lease, except as expressly provided in this Lease.
Notwithstanding the foregoing, any compensation specifically and separately
awarded Tenant for Tenant's personal property and moving costs, shall be and
remain the property of Tenant.

D.   WAIVER OF CCP SECTION 1265.130. Each party waives the provisions of
California Civil Code Procedure Section 1265.130 allowing either party to
petition the superior court to terminate this Lease as a result of a partial
taking.

                              24.  CASUALTY DAMAGE

A.   GENERAL. If the Premises should be damaged or destroyed by fire, tornado,
or other casualty (collectively, "CASUALTY"), Tenant shall give immediate
written notice thereof to Landlord. Within thirty (30) days after Landlord's
receipt of such notice, Landlord shall notify Tenant whether in Landlord's
estimation material restoration of the Premises can reasonably be made within
one hundred eighty (180) days from the date of such notice and receipt of
required permits for such restoration. Landlord's determination shall be
binding on Tenant.

B.   WITHIN 180 DAYS. If the Premises or Building should be damaged by Casualty
to such extent that material restoration can in Landlord's estimation be
reasonably completed within one hundred eighty (180) days after the date of
such notice and receipt of required permits for such restoration, this Lease
shall not terminate. Provided that insurance proceeds are received by Landlord
to fully repair the damage, Landlord shall proceed to rebuild and repair the
Premises in the manner determined by Landlord,except that Landlord shall not be
required to rebuild, repair or replace any part of the Alterations which may
have been placed on or about the Premises by Tenant. If the Premises are
untenantable in whole or in part following such damage, the Rent payable
hereunder during the period in which they are untenantable shall be abated
proportionately, but only to the extent of rental abatement insurance proceeds
received by Landlord during the time and to the extent the Premises are unfit
for occupancy.

C.   GREATER THAN 180 DAYS. If the Premises or Building should be damaged by
Casualty to such extent that rebuilding or repairs cannot in Landlord's
estimation be reasonably completed within one hundred eighty (180) days after
the date of such notice and receipt of required permits for such rebuilding or
repair, then Landlord shall have the option of either: (1) terminating this
Lease effective upon the date of the occurrence of such damage, in which event
the Rent shall be abated during the unexpired portion of this Lease; or (2)
electing to rebuild or repair the Premises diligently and in the manner
determined by Landlord. Landlord shall notify Tenant of its election within
thirty (30) days after Landlord's receipt of notice of the damage or
destruction. Notwithstanding the above, Landlord shall not be required to
rebuild, repair or replace any part of any Alterations which may have been
placed, on or about the Premises by Tenant. If the Premises are untenantable in
whole or in part following such damage, the Rent payable hereunder during the
period in which they are untenantable shall be abated proportionately, but only
to the extent of rental abatement insurance proceeds received by Landlord
during the time and to the extent the Premises are unfit for occupancy.

D.   TENANT'S FAULT. Notwithstanding anything herein to the contrary, if the
Premises or any other portion of the Building are damaged by Casualty resulting
from the fault, negligence, or breach of this Lease by Tenant or any of
Tenant's Parties, Base Rent and Additional Rent shall not be diminished during
the repair of such damage and Tenant shall be liable to Landlord for the cost
and expense of the repair and restoration of the Premises caused thereby to the
extent such cost and expense is not covered by insurance proceeds.

E.   INSURANCE PROCEEDS. Notwithstanding anything herein to the contrary, if
the Premises or Building are damaged or destroyed and are not fully covered by
the insurance proceeds received by Landlord or if the holder of any
indebtedness secured by a mortgage or deed of trust covering the Premises
requires that the insurance proceeds be applied to such indebtedness, then in
either case Landlord shall have the right to terminate this Lease by delivering
written notice of termination to Tenant within thirty (30) days after the date
of notice to Landlord that said damage or destruction is not fully covered by
insurance or such requirement is made by any such holder, as the case may be,
whereupon this Lease shall terminate.

F.   WAIVER. This Paragraph 24 shall be Tenant's sole and exclusive remedy in
the event of damage or destruction to the Premises or the Building. As a
material inducement to Landlord entering into this Lease, Tenant hereby waives
any rights it may have under Sections 1932, 1933(4), 1941 or 1942 of the Civil
Code of California with respect to any destruction of the Premises, Landlord's
obligation for tenantability of the Premises and Tenant's right to make repairs
and deduct the expenses of such repairs, or under any similar law, statute or
ordinance now or hereafter in effect.

G.   TENANT'S PERSONAL PROPERTY. In the event of any damage or destruction of
the Premises or the Building, under no circumstances shall Landlord be required
to repair any injury or damage to, or make any repairs to or replacements of,
Tenant's personal property other than such repairs or replacements are the
direct result of Landlord's sole and gross negligence.

                               25.  HOLDING OVER

     Unless Landlord expressly consents in writing to Tenant's holding over,
Tenant shall be unlawfully and illegally in possession of the Premises, whether
or not Landlord accepts any rent from Tenant or any other person while Tenant
remains in possession of the Premises without Landlord's written consent. If
Tenant shall retain possession of the Premises or any portion thereof without
Landlord's consent following the expiration of this Lease or sooner
termination for any reason, then Tenant shall pay to Landlord for each day of
such retention two hundred percent (200%) of the amount of daily rental as of
the last month prior to the date of expiration or earlier termination. Tenant
shall also indemnify, defend, protect and hold Landlord harmless from any loss,
liability or cost, including

                                      -13-
<PAGE>   14
consequential and incidental damages and reasonable attorneys' fees, incurred by
Landlord resulting from delay by Tenant in surrendering the Premises, including,
without limitation, any claims made by the succeeding tenant founded on such
delay. Acceptance of Rent by Landlord following expiration or earlier
termination of this Lease, or following demand by Landlord for possession of the
Premises, shall not constitute a renewal of this Lease, and nothing contained in
this Paragraph 25 shall waive Landlord's right of reentry or any other right.
Additionally, if upon expiration or earlier termination of this Lease, or
following demand by Landlord for possession of the Premises, Tenant has not
fulfilled its obligation with respect to repairs and cleanup of the Premises or
any other Tenant obligations as set forth in this Lease, then Landlord shall
have the right to perform any such obligations as it deems necessary at Tenant's
sole cost and expense, and any time required by Landlord to complete such
obligations shall be considered a period of holding over the terms of this
Paragraph 25 shall apply. The provisions of this Paragraph 25 shall survive any
expiration or earlier termination of this Lease.

                                  26. DEFAULT

 A.  EVENTS OF DEFAULT. The occurrence of any of the following shall
     constitute an event of default on the part of Tenant:

     (1) ABANDONMENT. Abandonment or vacation of the Premises for a continuous
     period in excess of three (3) months, Tenant waives any right to notice
     Tenant may have under Section 1951.3 of the Civil Code of the State of
     California, the terms of this Paragraph 26.A. being deemed such notice to
     Tenant as required by Section 1951.3.

     (2) NONPAYMENT OF RENT. Failure to pay any installment of Rent or any other
     amount due and payable hereunder upon the date when said payment is due, as
     to which time is of the essence.

     (3) OTHER OBLIGATIONS. Failure to perform any obligation, agreement or
     covenant under this Lease other than those matters specified in
     subparagraphs (1) and (2) of this Paragraph 26.A., such failure continuing
     for thirty (30) days after written notice of such failure, as to which time
     is of the essence. If such failure cannot be cured within the prescribed
     time frame and provided Tenant has commenced and is diligently pursuing to
     cure such default, Tenant shall not be in default hereunder.

     (4) GENERAL ASSIGNMENT. A general assignment by Tenant for the benefit of
     creditors.

     (5) BANKRUPTCY. The filing of any voluntary petition in bankruptcy by
     Tenant, or the filing of an involuntary petition by Tenant's creditors,
     which involuntary petition remains undischarged for a period of thirty (30)
     days. If under applicable law, the trustee in bankruptcy or Tenant has the
     right to affirm this Lease and continue to perform the obligations of
     Tenant hereunder, such trustee or Tenant shall, in such time period as may
     be permitted by the bankruptcy court having jurisdiction, cure all defaults
     of Tenant hereunder outstanding as of the date of the affirmance of this
     Lease and provide to Landlord such adequate assurance as may be necessary
     to ensure Landlord of the continued performance of Tenant's obligations
     under this Lease.

     (6) RECEIVERSHIP. The employment of a receiver to take possession of
     substantially all of Tenant's assets or Tenant's leasehold of the Premises,
     if such appointment remains undismissed or undischarged for a period of
     fifteen (15) days after the order therefor.

     (7) ATTACHMENT. The attachment, execution or other judicial seizure of all
     or substantially all of Tenant's assets or Tenant's leasehold of the
     Premises, if such attachment or other seizure remains undismissed or
     undischarged for a period of fifteen (15) days after the levy thereof.

     (8) INSOLVENCY. The admission by Tenant in writing of its inability to pay
     its debts as they become due.

B.   REMEDIES UPON DEFAULT.

     (1) TERMINATION. In the event of the occurrence of any event of default,
     Landlord shall have the right to give a written termination notice to
     Tenant, and on the date specified in such notice, Tenant's right to
     possession shall terminate, and this Lease shall terminate unless on or
     before such date all Rent in arrears and all costs and expenses incurred by
     or on behalf of Landlord hereunder shall have been paid by Tenant and all
     other events of default of this Lease by Tenant at the time existing shall
     have been fully remedied to the satisfaction of Landlord. At any time after
     such termination, Landlord may recover possession of the Premises or any
     part thereof and expel and remove therefrom Tenant and any other person
     occupying the same, including any subtenant or subtenants notwithstanding
     Landlord's consent to any sublease, by any lawful means and again repossess
     and enjoy the Premises without prejudice to any of the remedies that
     Landlord may have under this Lease, or at law or equity by any reason of
     Tenant's default or of such termination. Landlord hereby reserves the
     right, but shall not have the obligation, to recognize the continued
     possession of any subtenant. The delivery or surrender to Landlord by or on
     behalf of Tenant of keys, entry codes, or other means to bypass security at
     the Premises shall not terminate this Lease.

     (2) CONTINUATION AFTER DEFAULT. Even though an event of default may have
     occurred, this Lease shall continue in effect for so long as Landlord does
     not terminate Tenant's right to possession under Paragraph 26.B.(1) hereof,
     and Landlord may enforce all of the Landlord's rights and remedies under
     this Lease and at law or in equity, including without limitation, the right
     to recover Rent as it becomes due, and Landlord, without terminating this
     Lease, may exercise all of the rights and remedies of a landlord under
     Section 1951.4 of the Civil Code of the State of California or any
     successor code section. Acts of maintenance, preservation or efforts to
     lease the Premises or the appointment of a receiver under application of
     Landlord to protect Landlord's interest under this Lease or other entry by
     Landlord upon the Premises shall not constitute an election to terminate
     Tenant's right to possession.

C.   DAMAGES AFTER DEFAULT. Should Landlord terminate this Lease pursuant to the
     provisions of Paragraph 26.B.(1) hereof, Landlord shall have the rights and
     remedies of a Landlord provided by Section 1951.2 of the Civil Code of the
     State of California, or any successor code sections. Upon such termination,
     in addition to any other rights and remedies to which Landlord may be
     entitled under applicable law or at equity. Landlord shall be entitled to
     recover from Tenant: (1) the worth at the time of award of the unpaid Rent
     and other amounts which had been earned at the time of termination; (2) the
     worth at the time of award of the amount by which the unpaid Rent and other
     amounts that would have been earned after the date of termination until the
     time of award exceeds the amount of such Rent loss that could have been
     reasonably avoided; (3) the worth at the time of award of the amount by
     which the unpaid Rent and other amounts for the balance of the Term after
     the time of award exceeds the amount of such Rent loss that could be
     reasonably avoided; and (4) any other amount and court costs necessary to
     compensate Landlord for all loss or damage proximately caused by Tenant's
     failure to perform Tenant's obligations under this Lease. The "worth at the
     time of award" as used in (1) and (2) above shall be computed at the
     Applicable Interest

                                       14
<PAGE>   15
Rate (defined below). The "worth at the time of award" as used in (3) above
shall be computed by discounting such amount at the Federal Discount Rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%). If this Lease provides for any periods during the Term during which
Tenant is not required to pay Base Rent or if Tenant otherwise receives a Rent
concession, then upon the occurrence of an event of default, Tenant shall owe to
Landlord the full amount of such Base Rent or value of such Rent concession,
plus interest at the Applicable Interest Rate, calculated from the date that
such Base Rent or Rent concession would have been payable.

D.     LATE CHARGE.  In addition to its other remedies, Landlord shall have the
right without notice or demand to add to the amount of any payment required to
be made by Tenant hereunder, and which is not paid and received by Landlord on
or before the fifth day of each calendar month, an amount equal to ten percent
(10%) of the delinquency for each month or portion thereof that the delinquency
remains outstanding to compensate Landlord for the loss of the use of the amount
not paid and the administrative costs caused by the delinquency, the parties
agreeing that Landlord's damage by virtue of such delinquencies would be
extremely difficult and impracticable to compute and the amount stated herein
represents a reasonable estimate thereof. Any waiver by Landlord of any late
charges or failure to claim the same shall not constitute a waiver of other late
charges or any other remedies available to Landlord.

E.     INTEREST.  Interest shall accrue on all sums not paid when due hereunder
at the greater of twelve percent (12%) per annum or the maximum interest rate
allowed by law ("Applicable Interest Rate") from the due date until paid.

F.     REMEDIES CUMULATIVE.  All rights, privileges and elections or remedies of
the parties are cumulative and not alternative, to the extent permitted by law
and except as otherwise provided herein.

                                   27. LIENS

     Tenant shall at all times keep the Premises and the Project free from liens
arising out of or related to work or services performed, materials or supplies
furnished or obligations incurred by or on behalf of Tenant or in connection
with work made, suffered or done by or on behalf of Tenant in or on the Premies
or Project. If Tenant shall not, within ten (10) business days following the
imposition of any such lien, cause the same to be released of record by payment
or posting of a proper bond, Landlord shall have, in addition to all other
remedies provided herein and by law, the right, but not the obligation, to cause
the same to be released by such means as Landlord shall deem proper, including
payment of the claim giving rise to such lien. All sums paid by Landlord on
behalf of Tenant and all expenses incurred by Landlord in connection therefor
shall be payable to Landlord by Tenant on demand with interest at the Applicable
Interest Rate as Additional Rent. Landlord shall have the right at all times to
post and keep posted on the Premises any notices permitted or required by law,
or which Landlord shall reasonably deem proper, for the protection of Landlord,
the Premises, the Project and any other party having an interest therein, from
mechanics' and materialmen's liens, and Tenant shall give Landlord not less than
ten (10) business days prior written notice of the commencement of any work in
the Premises or Project which could lawfully give rise to a claim for mechanics'
or materialmen's liens to permit Landlord to post and record a timely notice of
non-responsibility, as Landlord may elect to proceed or as the law may from time
to time provide, for which purpose, if Landlord shall so determine, Landlord may
enter the Premises. Tenant shall not remove any such notice posted by Landlord
without Landlord's consent, and in any event not before completion of the work
which could lawfully give rise to a claim for mechanics' or materialmen's liens.

                                28. SUBSTITUTION

                           29. TRANSFERS BY LANDLORD

     In the event of a sale or conveyance by Landlord of the Building or a
foreclosure by any creditor of Landlord, the same shall operate to release
Landlord from any liability upon any of the covenants or conditions, express or
implied, herein contained in favor of Tenant, to the extent required to be
performed after the passing of title to Landlord's successor-in-interest. In
such event, Tenant agrees to look solely to the responsibility of the
successor-in-interest of Landlord under this Lease with respect to the
performance of the covenants and duties of "Landlord" to be performed after the
passing of title to Landlord's successor-in-interest. This Lease shall not be
affected by any such sale and Tenant agrees to attorn to the purchaser or
assignee. Landlord's successor(s)-in-interest shall not have liability to Tenant
with respect to the failure to perform any of the obligations of "Landlord," to
the extent required to be performed prior to the date such
successor(s)-in-interest became the owner of the Building.

              30. RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS

     All covenants and agreements to be performed by Tenant under any of the
terms of this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any abatement of Rent. If Tenant shall fail to pay any sum
of money, other than Base Rent, required to be paid by Tenant hereunder or shall
fail to perform any other act on Tenant's part to be performed hereunder,
including Tenant's obligations under Paragraph 11 hereof, and such failure shall
continue for fifteen (15) days after notice thereof by Landlord, in addition to
the other rights and remedies of Landlord, Landlord may make any such payment
and perform any such act on Tenant's part. In the case of an emergency, no prior
notification by Landlord shall be required. Landlord may take such actions
without any obligation and without releasing Tenant from any of Tenant's
obligations. All sums so paid by Landlord and all incidental costs incurred by
Landlord and interest thereon at the Applicable Interest Rate, from the date of
payment by Landlord, shall be paid to Landlord on demand as Additional Rent.

                                   31. WAIVER

     If either Landlord or Tenant waives the performances of any term,
covenant,or condition contained in this Lease, such waiver shall not be deemed
to be a waiver of any subsequent breach of the same or any other term, covenant
or condition contained herein, or constitute a course of dealing contrary to the
expressed terms of this Lease. The acceptance of Rent by Landlord shall not
constitute a waiver of any preceding breach by Tenant of any term, covenant or
condition of this Lease, regardless of Landlord's knowledge of such preceding
breach at the time Landlord accepted such Rent. Failure by Landlord to enforce
any of the terms, covenants or conditions of this Lease for any length of time
shall not be deemed to waive or decrease the right of Landlord to insist
thereafter upon strict performance by Tenant.

                                       15

<PAGE>   16
Waiver by Landlord of any term, covenant or condition contained in this Lease
may only be made by a written document signed by Landlord, based upon full
knowledge of the circumstances.

                                  32. NOTICES

     Each provision of this Lease or of any applicable governmental laws,
ordinances, regulations and other requirements with reference to sending,
mailing, or delivery of any notice or the making of any payment by Landlord or
Tenant to the other shall be deemed to be complied with when and if the
following steps are taken:

A.   RENT. All Rent and other payments required to be made by Tenant to
Landlord hereunder shall be payable to Landlord at Landlord's Remittance
Address set forth in the Basic Lease Information, or at such other address as
Landlord may specify from time to time by written notice delivered in
accordance herewith. Tenant's obligation to pay Rent and any other amounts to
Landlord under the terms of this Lease shall not be deemed satisfied until such
Rent and other amounts have been actually received by Landlord.

B.   OTHER. All notices, demands, consents and approvals which may or are
required to be given by either party to the other hereunder shall be in writing
and either personally delivered, sent by commercial overnight courier, mailed,
certified or registered, postage prepaid or sent by facsimile with confirmed
receipt (and with an original sent by commercial overnight courier), and in
each case addressed to the party to be notified at the Notice Address for such
party as specified in the Basic Lease Information or to such other place as the
party to be notified may from time to time designate by at least fifteen (15)
days notice to the notifying party. Notices shall be deemed served upon receipt
or refusal to accept delivery. Tenant appoints as its agent to receive the
service of all default notices and notice of commencement of unlawful detainer
proceedings the general manager or such other person in charge of or apparently
in charge of occupying the Premises at the time, and, if there is no such
person, then such service may be made by attaching the same on the main
entrance of the Premises.

C.   REQUIRED NOTICES. Tenant shall immediately notify Landlord and Landlord
shall immediately notify Tenant in writing of any notice of a violation or a
potential or alleged violation of any Regulation that relates to the Premises,
or of any inquiry, investigation, enforcement or other action that is instituted
or threatened by any government or regulatory agency against Tenant or any other
occupant of the Premises, or any claim that is instituted or threatened by any
third party that relates to the Premises.

                              33. ATTORNEYS' FEES

     If Landlord places the enforcement of this Lease, or any part thereof, or
the collection of any Rent due, or to become due hereunder, or recovery of
possession of the Premises in the hands of an attorney, Tenant shall pay to
Landlord, upon demand, Landlord's reasonable attorneys' fees and court costs,
whether incurred without trial, at trial, appeal or review. This provision
shall not apply in the event that Tenant was not in default of the Lease in
connection with Landlord's enforcement of same. In any action which Landlord or
Tenant brings to enforce its respective rights hereunder, the unsuccessful
party shall pay all costs incurred by the prevailing party including
reasonable attorneys' fees, to be fixed by the court, and said costs and
attorneys' fees shall be a part of the judgment in said action.

                           34. SUCCESSORS AND ASSIGNS

     This Lease shall be binding upon and inure to the benefit of Landlord, its
successors and assigns, and shall be binding upon and inure to the benefit of
Tenant, its successors, and to the extent assignment is approved by Landlord as
provided hereunder, Tenant's assigns.

                               35. FORCE MAJEURE

     If performance by a party of any portion of this Lease is made impossible
by any prevention, delay, or stoppage caused by strikes, lockouts, labor
disputes, acts of God, inability to obtain services, labor, or materials or
reasonable substitutes for those items, government actions, civil commotions,
fire or other casualty, or other causes beyond the reasonable control of the
party obligated to perform, performance by that party for a period equal to the
period of that prevention, delay, or stoppage is excused. Tenant's obligation
to pay Rent, however, is not excused by this Paragraph 35.

                           36. SURRENDER OF PREMISES

     Tenant shall, upon expiration or sooner termination of this Lease,
surrender the Premises to Landlord in the same condition as existed on the date
Tenant originally took possession thereof, normal wear and tear excepted,
including, but not limited to, all interior walls cleaned, all holes in walls
(other than minimal, customary holes resulting from display of routine types of
artwork) repaired, and all floors cleaned, and free of any Tenant-introduced
marking or painting, all to the reasonable satisfaction of Landlord. Tenant
shall remove all of its debris from the Project. At or before the time of
surrender, Tenant shall comply with the terms of Paragraph 12.A. hereof with
respect to Alterations to the Premises and all other matters addressed in such
Paragraph. If the Premises are not so surrendered at the expiration or sooner
termination of this Lease, the provisions of Paragraph 25 hereof shall apply.
All keys to the Premises or any part thereof shall be surrendered to Landlord
upon expiration or sooner termination of the Term. Tenant shall give written
notice to Landlord at least thirty (30) days prior to vacating the Premises and
shall meet with Landlord for a joint inspection of the Premises at the time of
vacating, but nothing contained herein shall be construed as an extension of the
Term or as a consent by Landlord to any holding over by Tenant. In the event of
Tenant's failure to give such notice or participate in such joint inspection,
Landlord's inspection at or after Tenant's vacating the Premises shall
conclusively be deemed correct for purposes of determining Tenant's
responsibility for repairs and restoration. Any delay caused by Tenant's failure
to carry out its obligations under this Paragraph 36 beyond the term hereof,
shall constitute unlawful and illegal possession of Premises under Paragraph 25
hereof.

                                  37. PARKING

     So long as Tenant is occupying the Premises, Tenant and Tenant's parties
shall have the right to use up to the number of parking spaces, if any,
specified in the Basic Lease Information on an unreserved, nonexclusive, first
come, first served basis, for passenger-size automobiles, in the parking areas
in the Project designated from time to time by Landlord for use in common by
tenants of the Building.

     Tenant may request additional parking spaces from time to time and if
Landlord in its sole discretion agrees to make such additional spaces available
for use by Tenant, such spaces shall be provided on a month-to-month unreserved
and nonexclusive basis (unless otherwise agreed in writing by Landlord), and
subject to such parking charges as Landlord shall reasonably determine, and
shall otherwise be subject to such terms and conditions as Landlord may require.

     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.

                                       16
<PAGE>   17
     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 unless such damage is the result of Landlord's sole and gross
negligence. 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 right 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 reasonably approve, at the validation rate from
time to time generally applicable to visitor parking. Landlord also reserves the
right to alter, modify, relocate or close all or any portion of the parking
areas 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, Regulations or for any other reason deemed reasonable by Landlord, Landlord
shall use reasonable efforts to minimize interference with Tenant's parking
rights.

     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
areas (which shall initially be the charge specified in the Basic Lease
Information, as applicable). Such parking charges shall be payable in advance
with Tenant's payment of Basic Rent. 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.

                              38. MISCELLANEOUS

A.     GENERAL. The term "TENANT" or any pronoun used in place thereof shall
indicate and include the masculine or feminine, the singular or plural number,
individuals, firms or corporations, and their respective successors, executors,
administrators and permitted assigns, according to the context hereof.

B.     TIME. Time is of the essence regarding this Lease and all of its
provisions.

C.     CHOICE OF LAW. This Lease shall in all respects be governed by the laws
of the State of California.

D.     ENTIRE AGREEMENT. This Lease, together with its Exhibits, addenda and
attachments and the Basic Lease Information, contains all the agreements of the
parties hereto and supersedes any previous negotiations. There have been no
representations made by the Landlord or understandings made between the parties
other than those set forth in this Lease and its Exhibits, addenda and
attachments and the Basic Lease Information.

E.     MODIFICATION. This Lease may not be modified except by a written
instrument signed by the parties hereto. Tenant accepts the area of the
Premises as specified in the Basic Lease Information as the approximate area of
the Premises for all purposes under this Lease, and acknowledges and agrees
that no other definition of the area (rentable, usable or otherwise) of the
Premises shall apply. Tenant shall in no event be entitled to a recalculation
of the square footage of the Premises, rentable, usable or otherwise, and no
recalculation, if made, irrespective of its purpose, shall reduce Tenant's
obligations under this Lease in any manner, including without limitation the
amount of Base Rent payable by Tenant or Tenant's Proportionate Share of the
Building and of the Project.

F.     SEVERABILITY. If, for any reason whatsoever, any of the provisions hereof
shall be unenforceable or ineffective, all of the other provisions shall be and
remain in full force and effect.

G.     RECORDATION. Tenant shall not record this Lease or a short form
memorandum hereof.

H.     EXAMINATION OF LEASE. Submission of this Lease to Tenant does not
constitute an option or offer to lease and this Lease is not effective
otherwise until execution and delivery by both Landlord and Tenant.

I.     ACCORD AND SATISFACTION. No payment by Tenant of a lesser amount than
the total Rent due nor any endorsement on any check or letter accompanying any
check or payment of Rent shall be deemed an accord and satisfaction of full
payment of Rent, and Landlord may accept such payment without prejudice to
Landlord's right to recover the balance of such Rent or to pursue other
remedies. All offers by or on behalf of Tenant of accord and satisfaction are
hereby rejected in advance.

J.     EASEMENTS. Landlord may grant easements on the Project and dedicate for
public use portions of the Project without Tenant's consent; provided that no
such grant or dedication shall materially interfere with Tenant's Permitted Use
of the Premises or other rights of Tenant hereunder. Upon Landlord's request,
Tenant shall execute, acknowledge and deliver to Landlord reasonable documents,
instruments, maps and plans necessary to effectuate Tenant's covenants
hereunder, at Landlord's sole cost and expense.

K.     DRAFTING AND DETERMINATION PRESUMPTION. The parties acknowledge that
this Lease has been agreed to by both the parties, that both Landlord and
Tenant have consulted with attorneys with respect to the terms of this Lease
and that no presumption shall be created against Landlord because Landlord
drafted this Lease. Except as otherwise specifically set forth in this Lease,
with respect to any consent, determination or estimation of Landlord required
or allowed in this Lease or requested of Landlord, Landlord's consent,
determination or estimation shall be given or made by Landlord in Landlord's
good faith opinion, whether or not objectively reasonable. If Landlord fails to
respond to any request for its consent within the time period, if any,
specified in this Lease, Landlord shall be deemed to have disapproved such
request.

L.     EXHIBITS. The Basic Lease Information, and the Exhibit, addenda and
attachments attached hereto are hereby incorporated herein by this reference
and made a part of this Lease as though fully set forth herein.

M.     NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting of light,
air or view by any structure which may be erected on lands adjacent to or in
the vicinity of the Building shall in no way affect this Lase or impose any
liability on Landlord.

N.     NO THIRD PARTY BENEFIT. This Lease is a contract between Landlord and
Tenant and nothing herein is intended to create any third party benefit.

O.     QUIET ENJOYMENT. Upon payment by Tenant of the Rent, and upon the
observance and performance of all of the other covenants, terms and conditions
on Tenant's part to be observed and performed, Tenant shall peaceably and
quietly hold and enjoy the Premises for the term hereby demised without
hindrance or interruption by Landlord or any other person or persons lawfully
or equitably claiming by, through or under Landlord, subject, nevertheless, to
all of the other terms and conditions of this Lease. Landlord shall not be

                                        17
<PAGE>   18
liable for any hindrance, interruption, interference or disturbance by other
tenants or third persons, not shall Tenant be released from any obligations
under this Lease because of such hindrance, interruption, interference or
disturbance.

P. COUNTERPARTS. This Lease may be executed in any number of counterparts, each
of which shall be deemed an original.

Q. MULTIPLE PARTIES. If more than one person or entity is named herein as
Tenant, such multiple parties shall have joint and several responsibility to
comply with the terms of this Lease.

R. PRORATIONS. Any Rent or other amounts payable to Landlord by Tenant hereunder
for any fractional month shall be prorated based on a month of 30 days. As used
herein, the term "fiscal year" shall mean the calendar year or such other fiscal
year as Landlord may reasonably deem appropriate.

                           39. ADDITIONAL PROVISIONS

ADDENDUM #1 -- RENT

Rent for the Premises shall be as follows:

MONTHS 1-12    $52,067.86 per month plus operating expenses per Paragraph 7 of
               this Lease. Operating Expenses through December 1998 are
               estimated to be $13,234.64 per month. Direct operating expenses
               are estimated a year in advance and collected on a monthly basis.
               Any adjustment necessary (up or down) will be made at the end of
               the operating year.

MONTHS 13-24   $54,150.57 per month plus operating expenses per Paragraph 7 of
               this Lease.

MONTHS 25-36   $56,316.60 per month plus operating expenses per Paragraph 7 of
               this Lease.

MONTHS 37-48   $58,569.26 per month plus operating expenses per Paragraph 7 of
               this Lease.

MONTHS 49-60   $60,912.03 per month plus operating expenses per Paragraph 7 of
               this Lease.

ADDENDUM #2 -- OPTION TO EXTEND

Provided that Tenant is not, and has not been, in default of any of it's
obligations under this Lease, Tenant shall have an option to extend (the "Option
to Extend") the Term ("Extended Term") in an "as-is" condition for a period of
five (5) years commencing at the expiration of the Term. The Base Rent for the
Extended Term shall be at the then-prevailing fair market value for comparable
space in the Redwood Shores area. However, in no event shall the Base Rent for
the Extended Term be less than the Base Rent for the last month of the Term.

Tenant shall give to Landlord written notice of it's intent to exercise this
Option to Extend no sooner than one hundred eight (180) days prior to the
expiration of the Lease Term and no later than one hundred twenty (120) days
prior to the expiration of the Lease Term. Within (15) days from receipt of such
written notice to exercise by Tenant, Landlord will provide to Tenant the fair
market rent, as reasonably determined by Landlord, as well as terms and
conditions (collectively, the "Determination") for the Extended Term. Tenant
shall have fifteen (15) days from receipt of the Determination to accept
Landlord's Determination. If Landlord does not receive written acceptance from
Tenant of Landlord's Determination by the end of such fifteen (15) day period,
this Option to Extend shall be null and void and Landlord shall have no further
obligation to Tenant and Landlord may enter into a lease for the Premises with a
third party.

This Option to Extend is for the exclusive and sole benefit of Tenant and may
not be conveyed, made part of a sublease, assigned or otherwise transferred
other than to a Permitted Tenant Affiliate.

ADDENDUM #3 -- RIGHT OF FIRST OFFER

Provided that Tenant is not, and has not been, in default of any of it's
obligations under this Lease, Tenant shall have a right of first offer (the
"Right of First Offer") on any space that becomes available on the third (3rd)
floor of the Building during the Term of this Lease subject to any and all
existing rights of any other tenants in existence at the time of execution of
this Lease. If and when any such space becomes available for lease, Landlord
shall notify Tenant and Tenant shall have ten (10) days in which to respond to
Landlord. Should Tenant fail to respond within the allotted ten (10) day period,
then such right shall be deemed null and void and Landlord shall have no further
obligation to Tenant on such space. This Right of First Offer is for the
exclusive and sole benefit of Tenant and may not be conveyed, made part of a
sublease, assigned or otherwise transferred.

ADDENDUM #4 -- SATELLITE DISH

a) Subject to Tenant's receipt of all necessary approvals from any and all
appropriate regulatory agencies, Landlord's review and approval of Tenant's
proposed plans and specifications, and the availability of adequate space and
structural support on the roof of the Building, Tenant shall have the right to
install and maintain a satellite dish or antenna on the roof of the Building at
a location designated by Landlord at no charge. As of the date of this Lease,
Landlord has leased to or allowed other tenants of the Building and third
parties portions of the roof of the Building for the operation of a satellite
dish or antenna. Accordingly, Landlord's ability to grant this right to Tenant
is subject to the pre-existing rights of these parties and the ability of the
Building to accommodate additional satellite dishes or antennae without
endangering the structure of the Building or interfering with the existing
dishes or antennae.

                                       18

<PAGE>   19

b)   All installation, repair, maintenance and removal costs for the satellite
dish or antennae, including the cost of any screening required by any and all
appropriate regulatory agencies, shall be paid by Tenant. The contractors for
the installation and maintenance of the satellite dish or antenna shall be
subject to the prior approval of Landlord. Tenant shall be permitted to access
the roof of the Building only for the purpose of installing, maintaining,
repairing and removing Tenant's satellite dish or antenna. Tenant shall be
permitted to access the roof during normal business hours only and shall be
accompanied by the Landlord's Building Engineer (or other such Building
Representative), except in the event of an emergency or equipment malfunction,
in which Tenant shall use diligent efforts to notify Landlord in advance of
Tenant's intended entry. If at any time Tenant intends to replace or make
substantial repairs to the satellite dish and antenna, Tenant shall notify
Landlord in writing at least five (5) days prior to the commencement of such
work. Tenant shall remove the satellite dish or antenna from the roof or
balcony upon the expiration or earlier termination of the Lease and shall
repair, to Landlord's satisfaction, at Tenant's sole expense, any damage to the
Building caused by the installation and/or removal of the satellite dish or
antenna.

c)   Tenant shall indemnify, defend and hold harmless Landlord from and against
any liability, loss, damage or expense arising from Tenant's use of the roof or
balcony or installation, maintenance, repair or operation of Tenant's satellite
dish or antenna except to the extent any such liability, loss, damage or expense
arises from the gross negligence or willful misconduct of Landlord, it's agents
or employees. This Satellite Dish clause is for the exclusive and sole benefit
of Tenant and may not be conveyed, made part of a sublease, assigned or
otherwise transferred.

ADDENDUM #5 -- BROKERAGE

Tenant and Landlord each represent that the parties have dealt directly with
(and only with) John Barsocchini of BT Commercial and Barbara Holdgrafer of CB
Commercial in connection with this Lease and that no other broker negotiated
this Lease or is entitled to any commission in connection herewith. Landlord
shall pay its standard leasing commission to John Barsocchini of BT Commercial
and Barbara Holdgrafer of CB Commercial in connection with this Lease.

                                       19
<PAGE>   20

                             40.  JURY TRIAL WAIVER

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 BUILDING IS LOCATED, AND AGREES AND CONSENTS TO PERSONAL JURISDICTION OF
THE COURTS OF THE STATE IN WHICH THE PROPERTY IS LOCATED, 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. EACH PARTY REPRESENTS THAT IT HAS HAD THE OPPORTUNITY TO
CONSULT WITH LEGAL COUNSEL CONCERNING THE EFFECT OF THIS PARAGRAPH 40. THE
PROVISIONS OF THE PARAGRAPH 40 SHALL SURVIVE THE EXPIRATION OR EARLIER
TERMINATION OF THIS LEASE.

IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day
and the year first above written.

                         LANDLORD

                         Spieker Properties, L.P.
                         a California limited partnership

                         By: Spieker Properties, Inc.,
                             a Maryland corporation,
                             its general partner

                             By: /s/ Peter H. Schnugg
                                 ----------------------------------------------
                                 Peter H. Schnugg
                                 Its: Senior Vice President

                         Date: 9/4/98

                         TENANT

                         Entex Information Services, Inc.

                         a Delaware corporation

                         By: /s/ Dale Allandyce
                             --------------------------------------------------
                             Dale Allandyce
                             Its: Executive Vice President, Operations

                         Date: 8/31/98

                                       20

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