Document:

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                                                                   EXHIBIT 10.4

                              - 111 SUTTER STREET -

                            - OFFICE BUILDING LEASE -

                             BASIC LEASE INFORMATION

DATE OF LEASE:               August 5, 1999

LANDLORD:                    CEP INVESTORS XII LLC

LANDLORD'S ADDRESS:          c/o Ellis Partners, Inc.
                             433 California Street, Sixth Floor
                             San Francisco, California 94104
                             Attn: Mr. James F. Ellis

TENANT:                      FORT POINT PARTNERS, INC.

TENANT'S ADDRESS:            111 Sutter Street
                             San Francisco, California 94104
                             Attn: Mr. Kelly Green

BUILDING:                    111 Sutter Street, San Francisco, California

LEASED PREMISES:             Approximately 27,899 square feet consisting of the
                             entire 20th (approximately 9,514 rentable square
                             feet), 21st (approximately 9,561 rentable square
                             feet), and 22nd (approximately 8,824 rentable
                             square feet) floors of the Building

RENTABLE AREA:               Approximately 27,899 rentable square feet

TERM COMMENCEMENT DATE:      The date the Tenant Improvements for the 20th floor
                             are Substantially Complete (estimated to be October
                             15, 1999)

TERM EXPIRATION DATE:        The last day of the ninety-sixth (96th) full
                             calendar month after the Term Commencement Date

OPTION TO EXTEND:

        Number of Extension Periods: One (1)
        Years per Extension Period: Five (5)

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BASE RENT:                   Months 1 to 36 = $43.00 per rentable square foot of
                             Rentable Area per annum (notwithstanding the
                             foregoing, Tenant shall not pay Base Rent for the
                             21st floor or 22nd floor until the Tenant
                             Improvements for the 21st floor and 22nd (delivered
                             together) are Substantially Complete, estimated to
                             be December 1, 1999 for both the 21st and 22nd
                             floors).

                             Months 37 to 60 = $46.00 per rentable square foot
                             of Rentable Area per annum

                             Months 61 to 96 = $49.00 per rentable square foot
                             of Rentable Area per annum

BASE YEAR:                   2000

TENANT'S PROPORTIONATE SHARE (BUILDING): approximately 10.69%

SECURITY DEPOSIT:            $1,660,100.00

GUARANTOR:                   None

LANDLORD'S BROKER:           The CAC Group

TENANT'S BROKER:             Cushman & Wakefield

     [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE TO FOLLOW.]

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        The foregoing BASIC LEASE INFORMATION is incorporated herein and made a
part of the LEASE to which it is attached. If there is any conflict between the
BASIC LEASE INFORMATION and the LEASE, the BASIC LEASE INFORMATION shall
control.

                                      "LANDLORD":

                                      CEP INVESTORS XII LLC,
                                      a Delaware limited liability company

                                      By: EPI Investors XII LLC,
                                          a California limited liability company
                                          Its Manager

                                             By: Ellis Partners, Inc.,
                                                 a California corporation,
                                                 Its Manager

                                                 By: /s/ JAMES F. ELLIS
                                                    -------------------------
                                                 Typed Name: James F. Ellis
                                                            -----------------
                                                 Title:  Vice President
                                                       ----------------------

                                      "TENANT":

                                      FORT POINT PARTNERS, INC.
                                      a California corporation

                                      By:  /s/ MATTHEW ROCHE
                                         ---------------------------------
                                      Typed Name:  Matthew Roche
                                                 -------------------------
                                      Title:   President
                                            ------------------------------

                                      By:   /s/  JAMES T. ROCHE
                                         ---------------------------------
                                      Typed Name:  James Roche
                                                 -------------------------
                                      Title:   CEO
                                            ------------------------------

                                      iii

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                              OFFICE BUILDING LEASE

        THIS LEASE, made as of the date specified in the BASIC LEASE INFORMATION
sheet, by and between the landlord specified in the BASIC LEASE INFORMATION
sheet ("Landlord") and the tenant specified in the BASIC LEASE INFORMATION sheet
("Tenant").

                                   ARTICLE 1.
                                   DEFINITIONS

        1.1 DEFINITIONS: Terms used herein shall have the following meanings:

        1.2 "ADDITIONAL RENT" shall mean all monetary obligations of Tenant
under this Lease other than the obligation for payment of Gross Rent.

        1.3 "BASE EXPENSES" [intentionally deleted]

        1.4 "BASE RENT" shall mean the sums due from time to time as rental for
the Leased Premises.

        1.5 "BASE YEAR" shall mean the calendar year specified on the Basic
Lease Information sheet.

        1.6 "BASIC OPERATING COST" shall have the meaning given in Section 3.05.

        1.7 "BUILDING" shall mean the building and other improvements associated
therewith identified on the Basic Lease Information sheet.

        1.8 "BUILDING STANDARD IMPROVEMENTS" shall mean the standard materials
ordinarily used by Landlord in the improvement of the Leased Premises.

        1.9 "COMMON AREAS" shall mean (a) the areas on individual floors of the
Building devoted to non-exclusive uses such as common corridors, lobbies, fire
vestibules, elevator foyers, stairways, elevators, electric and telephone
closets, restrooms, mechanical closets, janitor closets and other similar
facilities for the benefit of all tenants (and invitees) on the particular floor
and other floors and (b) other areas of the Project available for the use and
benefit of all tenants (and invitees).

        1.10 "COMPUTATION YEAR" shall mean a fiscal year consisting of the
calendar year commencing January 1st of each year during the Term, commencing in
the Base Year and continuing through the Term, with a short or stub fiscal year
in any partial fiscal year in which the Lease expires or is terminated for the
period between January 1 of such year and the date of lease termination or
expiration.

        1.11 "GROSS RENT" shall mean the total of Base Rent and Tenant's
Proportionate Share of Increased Basic Operating Cost.

        1.12 "LANDLORD'S BROKER" shall mean the individual or corporate broker
identified on the Basic Lease Information sheet as the broker for Landlord.

        1.13 "LANDLORD'S CONTRIBUTION" shall have the meaning given in EXHIBIT
B.

        1.14 "LANDLORD'S IMPROVEMENTS" shall have the meaning given in EXHIBIT
B.

        1.15 "LEASED PREMISES" shall mean the floor area more particularly shown
on the floor plan attached hereto as EXHIBIT A, containing the Rentable Area (as
such term is defined in Section 1.18 below) specified on the Basic Lease
Information sheet.

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        1.16 "PERMITTED USE" shall mean general office, and any other related
lawful use; provided, however, that Permitted Use shall not include (a) offices
or agencies of any foreign government or political subdivision thereof; (b)
offices of any agency or bureau of any state, county or city government; (c)
offices of any health care professionals; (d) schools or other training
facilities which are not ancillary to corporate, executive or professional
office use; or (e) retail or restaurant uses.

        1.17 "PROJECT" shall mean the Building and common areas affiliated
therewith, and the real property on which the Building and common areas are
located.

        1.18 "RENT" shall mean Gross Rent plus Additional Rent.

        1.19 "RENTABLE AREA" shall mean the area or areas of space in the
Building determined in accordance with the Standard Method for Measuring Floor
Area in Office Buildings published by the Building Owners and Managers
Association International (ANSI-Z65.1-1996) and including a proportionate
allocation of the square footage of the Building's elevator and mechanical
equipment areas, telephone and electrical rooms, loading dock, janitorial
service areas, public lobbies and corridors. The Rentable Area of the Leased
Premises has been calculated on the basis of the foregoing definition and is
agreed for all purposes of this Lease to be the amount stated on the Basic Lease
Information sheet, subject to remeasurement by Landlord within sixty (60) days
of the date of this Lease. Such remeasurement, if any, shall be made by
Landlord's architect in accordance with this Section 1.19. Tenant's architect
may consult with Landlord's architect regarding such remeasurement.

        1.20 "SECURITY DEPOSIT" shall mean the amount specified on the Basic
Lease Information sheet to be paid by Tenant to Landlord and held and applied
pursuant to Section 5.14.

        1.21 "SUBSTANTIAL COMPLETION" shall mean (and the Leased Premises shall
be deemed "Substantially Complete") when (i) installation of the Tenant
Improvements and the Landlord's Improvements (as defined in EXHIBIT B) by the
Contractor has occurred; (ii) Tenant has direct access from the street to the
elevator lobby on the floor (or floors) where the Leased Premises are located;
(iii) basic services (as described in Section 4.01) are available to the Leased
Premises; (iv) Tenant's architect has issued a certificate of Substantial
Completion with respect to the Leased Premises; and (v) a certificate of
occupancy or its equivalent for the Leased Premises has been issued by
appropriate governmental authorities. Substantial Completion shall be deemed to
have occurred notwithstanding a requirement to complete "punchlist" items or
similar corrective work.

        1.22 [intentionally deleted.]

        1.23 "TENANT IMPROVEMENTS" shall have the meaning given in EXHIBIT B.

        1.24 "TENANT'S BROKER" shall mean the individual or corporate broker
identified on the Basic Lease Information sheet as the broker for Tenant.

        1.25 "TENANT'S PHYSICAL POSSESSION DATE" shall mean October 1, 1999 for
the 20th floor and November 15, 1999 for the 21st and 22nd floors.

        1.26 "TENANT'S PROPORTIONATE SHARE" is specified on the Basic Lease
Information sheet and is based on the percentage which the Rentable Area of the
Leased Premises bears to the total Rentable Area of the Project, subject to
adjustment in the event of the remeasurement of the Building or the Project as
permitted under Section 1.19 above.

        1.27 "TERM" shall mean the period commencing with the Term Commencement
Date and ending at midnight on the Term Expiration Date.

        1.28 "TERM COMMENCEMENT DATE" shall be the date set forth on the Basic
Lease Information sheet.

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        1.29 "TERM EXPIRATION DATE" shall be the date set forth on the Basic
Lease Information sheet, unless sooner terminated pursuant to the terms of this
Lease or unless extended pursuant to the provisions of Section 8.01.

        1.30 OTHER TERMS. Other terms used in this Lease and on the Basic Lease
Information sheet shall have the meanings given to them herein and thereon.

                                   ARTICLE 2.
                                 LEASED PREMISES

        2.1 LEASE. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the Leased Premises upon all of the terms, covenants and
conditions set forth in this Lease.

        2.2 ACCEPTANCE OF LEASED PREMISES. Tenant acknowledges that: (a) it has
been advised by Landlord, Landlord's Broker and Tenant's Broker, if any, to
satisfy itself with respect to the condition of the Leased Premises (including,
without limitation, the heating, ventilation, electrical, plumbing and other
mechanical installations, fire sprinkler systems, security, environmental
aspects, and compliance with applicable laws, ordinances, rules and regulations)
and the present and future suitability of the Leased Premises for Tenant's
intended use; (b) Tenant has made such inspection and investigation as it deems
necessary with reference to such matters and assumes all responsibility therefor
as the same relate to Tenant's occupancy of the Leased Premises and the term of
this Lease; and (c) neither Landlord nor Landlord's Broker nor any of Landlord's
agents has made any oral or written representations or warranties with respect
to the condition, suitability or fitness of the Leased Premises other than as
may be specifically set forth in this Lease. Subject to completion of the
Landlord's Improvements and the Tenant Improvements set forth in EXHIBIT B
attached hereto, Tenant accepts the Leased Premises in its AS IS condition
existing on the date Tenant executes this Lease, subject to all matters of
record and applicable laws, ordinances, rules and regulations. Tenant
acknowledges that neither Landlord nor Landlord's Broker nor any of Landlord's
agents has agreed to undertake any alterations or additions or to perform any
maintenance or repair of the Leased Premises except for the routine maintenance
and janitorial work specified herein and except as may be expressly set forth in
EXHIBIT B.

        2.3 RIGHT TO RELOCATE LEASED PREMISES. [intentionally Deleted].

        2.4 RESERVATION OF RIGHTS. Landlord reserves the right from time to
time, so long as reasonable access and basic services to the Leased Premises
remain available, to install, use, maintain, repair, relocate and/or replace
pipes, conduits, wires and equipment within and around the Building and to do
and perform such other acts and make such other changes in, to or with respect
to the Building or the Project (including without limitation with respect to the
driveways, parking areas (if any), walkways and entrances to the Project) as
Landlord may, in the exercise of sound business judgment, deem to be
appropriate. In connection therewith, Landlord shall have the right to close
temporarily any of the Common Areas so long as reasonable access to the Leased
Premises remains available. If any construction, installation, repair,
replacement, relocation, remodeling or other activity is performed in or around
the Building by Landlord (or by other tenants of the Building acting with
Landlord's consent), Landlord shall undertake such activities (or cause them to
be undertaken, if done by others) so as to prevent unreasonable interference
with Tenant's business at the Leased Premises.

                                   ARTICLE 3.
                               TERM, USE AND RENT

        3.1 TERM. Except as otherwise provided in this Lease, the Term shall
commence upon the Term Commencement Date, and shall continue in full force for
the Term. Tenant shall be given access to the

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Leased Premises starting on the Tenant's Physical Possession Date in order for
Tenant and other consultants and/or Tenant's contractors to install, if any,
furniture, telephone networks, and computer networks as long as such work does
not interfere with the construction of the Tenant Improvements and the
Landlord's Improvements. From the date Tenant has access to the Leased Premises
through the Term Commencement Date, Tenant shall be subject to all of the
covenants in this Lease, except that Tenant's obligation to pay Rent shall
commence in accordance with Section 3.03 below. When the Term Commencement Date
and the Term Expiration Date have been ascertained, the parties shall promptly
execute a Confirmation of Term of Lease substantially in the form attached as
EXHIBIT C.

        3.2 USE. Tenant shall use the Leased Premises solely for the Permitted
Use and for no other use or purpose, except as permitted by Landlord pursuant to
Landlord's written consent, which consent will not be unreasonably withheld,
conditioned or delayed. It shall not be deemed unreasonable for Landlord to
withhold its consent to a proposed change of use if the proposed use is one set
forth in Section 1.16 (a) through (e).

        3.3 BASE RENT.

                (a) Tenant shall pay the Base Rent to Landlord in accordance
with the schedule set forth on the Basic Lease Information sheet and in the
manner described below. Tenant shall pay the Base Rent for the first month of
the Term upon execution of this Lease. Commencing with the first day of the
second full calendar month of the Term, Tenant shall pay the Gross Rent
(consisting of Base Rent plus, when applicable in accordance with Section 3.04
below, Tenant's Proportionate Share of Increased Basic Operating Cost) in
monthly installments on or before the first day of each calendar month during
the Term and any extensions or renewals thereof, in advance without demand and
without any reduction, abatement, counterclaim or setoff, except as otherwise
provided herein, in lawful money of the United States at Landlord's address
specified on the Basic Lease Information sheet or at such other address as may
be designated by Landlord in the manner provided for giving notice under Section
9.11 hereof.

                (b) If the Term commences on other than the first day of a
month, then the Base Rent provided for such partial month shall be prorated
based upon a thirty (30)-day month and the prorated installment shall be paid on
the first day of the calendar month next succeeding the Term Commencement Date
together with the other amounts payable on that day. If the Term terminates on
other than the last day of a calendar month, then the Gross Rent provided for
such partial month shall be prorated based upon a thirty (30)-day month and the
prorated installment shall be paid on the first day of the calendar month in
which the date of termination occurs.

        3.4 TENANT'S PROPORTIONATE SHARE OF INCREASED BASIC OPERATING COST.

                (a) Commencing in the 2001 Computation Year and continuing
through the remainder of the Term, Tenant shall pay to Landlord Tenant's
Proportionate Share of the total dollar increase, if any, in Basic Operating
Cost attributable to each Computation Year over Base Year expenses.

                (b) During the 2001 Computation Year, on or before the first day
of each month during such year, Tenant shall pay to Landlord one-twelfth
(1/12th) of Landlord's estimate of the amount payable by Tenant under Section
3.04(a) as set forth in Landlord's written notice to Tenant delivered on or
before the Term Commencement Date. Commencing in the 2000 Computation Year and
continuing thereafter through the remainder of the Term, during the last month
of each Computation Year (or as soon thereafter as practicable), Landlord shall
give Tenant notice of Landlord's estimate of the amount payable (as well as
reasonable documentation of its estimate) by Tenant under Section 3.04(a) for
the following Computation Year. On or before the first day of each month during
the following Computation Year, Tenant shall pay to Landlord one-twelfth (1/12)
of such estimated amount, provided that if Landlord fails to give such notice in
the last month of the prior year, then Tenant shall continue to pay on the basis
of the prior year's estimate until the first day of the calendar month next
succeeding the date such notice is given by Landlord; and from the first day of
the calendar month following the date such notice is given, Tenant's payments
shall be adjusted so that the estimated amount for that Computation Year will be
fully paid by the end of that Computation Year. If at any time or times Landlord
determines that the amount payable under

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Section 3.04(a) for the current Computation Year will vary from its estimate
given to Tenant, Landlord, by not less than ten (10) business days' notice to
Tenant, may revise its estimate for such Computation Year, and subsequent
payments by Tenant for such Computation Year shall be based upon such revised
estimate.

                (c) Following the end of each Computation Year (beginning with
the 2001 Computation Year), Landlord shall deliver to Tenant a statement of
amounts payable under Section 3.04(a) for such Computation Year prepared by
Landlord's agent. If such statement shows an amount owing by Tenant that is less
than the payments for such Computation Year previously made by Tenant, and if no
event of default (as defined below) is outstanding at the time such statement is
delivered, Landlord shall credit such amount to the next payment(s) of Gross
Rent falling due under this Lease, or if an event of default is outstanding,
Landlord shall apply such amount against any amounts owed by Tenant. If such
statement shows an amount owing by Tenant that is more than the estimated
payments for such Computation Year previously made by Tenant, Tenant shall pay
the deficiency to Landlord within ten (10) business days after delivery of such
statement. If, within one hundred twenty (120) days of Tenant's receipt of
Landlord's statement, Tenant notifies Landlord that Tenant desires to audit or
review Landlord's statement, Landlord shall cooperate with Tenant to permit such
audit or review during normal business hours. Landlord shall make available in
the San Francisco Bay Area at Landlord's, or at Landlord's election at
Landlord's property manager's, place of business, such books and records as are
reasonably necessary for Tenant to conduct and complete such audit. Tenant shall
have the right to make copies of such books and records at Tenant's sole cost
and expense. Tenant shall bear all other costs and expenses associated with
Tenant's audit (including fees of Tenant's auditor). Within five (5) business
days of completion of the audit, if Tenant desires to challenge Landlord's
statement, then Tenant shall provide Landlord with a copy of Tenant's auditor's
report. Within thirty (30) days of Landlord's receipt of Tenant's auditor's
report, Landlord shall notify Tenant as to whether Landlord agrees or disagrees
with the conclusions reached in Tenant's auditor's report. Landlord's failure to
respond shall be deemed to constitute a disagreement with the Tenant's auditor's
report. After Landlord's notice, Landlord and Tenant shall endeavor to resolve
any disagreements regarding Tenant's auditor's report. If Landlord and Tenant
are unable to resolve such disagreement regarding Tenant's auditor's report
within twenty (20) business days of the completion of such audit, then Landlord
and Tenant shall submit the matter to an independent audit conducted by an
independent nationally recognized accounting firm or a nationally recognized
real estate management or consulting firm that has been mutually selected by
Tenant and Landlord. The results of such independent audit shall be conclusive
and binding upon Landlord and Tenant. In the event such audit reveals a
discrepancy in Tenant's favor, and/or Landlord agrees with the conclusions of
Tenant's auditor, then Landlord shall credit the amount of such discrepancy to
the next payment(s) of Gross Rent falling due under this Lease. In the event
such audit reveals a discrepancy in Landlord's favor, Tenant shall pay the
amount of the discrepancy to Landlord within ten (10) business days of
completion of the audit. The failure of Tenant to notify Landlord that Tenant
desires an audit within one hundred twenty (120) days of Tenant's receipt of
Landlord's statement under this Section 3.04(c) shall constitute an acceptance
by Tenant of Landlord's statement and a waiver by Tenant of its right to audit
for such Computation Year. If Tenant commences an audit in accordance with this
Section 3.04(c), then such audit and the Tenant's auditor's report must be
completed within sixty (60) days of Tenant's notice to Landlord of Tenant's
desire to audit. Failure of Tenant to complete the audit within such sixty (60)
day period shall constitute an acceptance by Tenant of Landlord's statement for
such Computation Year. The respective obligations of Landlord and Tenant under
this Section 3.04(c) shall survive the Term Expiration Date, and, if the Term
Expiration Date is a day other than the last day of a Computation Year, the
adjustment in Tenant's Proportionate Share of Increased Basic Operating Cost
pursuant to this Section 3.04(c) for the Computation Year in which the Term
Expiration Date occurs shall be prorated in the proportion that the number of
days in such Computation Year preceding the Term Expiration Date bears to three
hundred sixty-five (365).

                (d) Landlord shall have the same remedies for a default in the
payment of Tenant's Proportionate Share of Increased Basic Operating Cost as for
a default in the payment of Base Rent.

        3.5 BASIC OPERATING COST.

                (a) Basic Operating Cost shall mean all expenses and costs (but
not specific costs which are separately billed to and paid by particular tenants
of the Building) of every kind and nature which Landlord

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shall pay or become obligated to pay because of or in connection with the
management, ownership, maintenance, repair, preservation and operation of the
Project and its supporting facilities directly servicing the Project (determined
in accordance with generally accepted accounting principles, consistently
applied) including, but not limited to, the following:

                        (1) Wages, salaries and related expenses and benefits of
all on-site and off-site employees and personnel engaged in the operation,
maintenance, repair and security of the Project, to the extent such charges are
directly allocable to services rendered by the employees and personnel for the
benefit of the Project.

                        (2) Costs of Landlord's office located in the Building
(including the property management office) and office operation in the Project,
as well as the costs of operation of a room for delivery and distribution of
mail to tenants of the Building.

                        (3) All supplies, materials, equipment and equipment
rental used in the operation, maintenance, repair and preservation of the
Project.

                        (4) Utilities, including water, sewer and power,
telephone, communication and cable television facilities, lighting, heating and
ventilating the entire Project.

                        (5) All maintenance, janitorial and service agreements
for the Project and the equipment therein, including, without limitation, alarm
and/or security service, window cleaning, elevator maintenance, sidewalks,
landscaping, Building exterior and service areas.

                        (6) A property management fee in an amount not to exceed
five percent (5%) of all Rent (excluding such management cost recovery) derived
from the Building; provided, however, such property management fee shall not
exceed the current "market" rate during a particular Computation Year.

                        (7) Legal and accounting services for the Project,
including the costs of audits by certified public accountants; provided,
however, that legal expenses shall not include the cost of lease negotiations,
termination of leases, extension of leases or legal costs incurred in
proceedings by or against any specific tenant.

                        (8) All insurance costs, including, but not limited to,
the cost of all risk property and liability coverage and rental income and
earthquake insurance (for earthquake insurance, only increases in premiums over
the Base Year shall be included; if earthquake insurance is not carried in the
Base Year, then only increases in premiums over the first year earthquake
insurance is carried shall be included) applicable to the Project and Landlord's
personal property used in connection therewith, as well as commercially
reasonable deductible amounts applicable to such insurance; provided, however,
that Landlord may, but shall not be obligated to, carry earthquake insurance.

                        (9) Repairs, replacements and general maintenance
(except for repairs paid by proceeds of insurance or by Tenant or other tenants
of the Building or third parties, and alterations attributable solely to tenants
of the Project other than Tenant).

                        (10) All real estate or personal property taxes,
possessory interest taxes, business or license taxes or fees, service payments
in lieu of such taxes or fees, annual or periodic license or use fees, excises,
transit charges, housing fund assessments, open space charges, assessments,
bonds, levies, fees or charges, general and special, ordinary and extraordinary,
unforeseen as well as foreseen, of any kind which are assessed, levied, charged,
confirmed or imposed by any public authority upon the Project (or any portion or
component thereof), its operations, this Lease, or the Rent due hereunder (or
any portion or component thereof), except: (i) inheritance or estate taxes
imposed upon or assessed against the Project, or any part thereof or interest
therein, and (ii) Landlord's personal or corporate income, gift or franchise
taxes.

                        (11) Amortization (together with reasonable financing
charges) of capital

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improvements made to the Project subsequent to the Term Commencement Date which
are designed to improve the operating efficiency of the Project, or which may be
required by governmental authorities, including those improvements required for
energy conservation and for the benefit of individuals with disabilities ("ADA
Improvements"), in relation to new laws or changes in existing laws, applicable
to the Building, which arise or take affect after the date of this Lease;
provided, however, that no new expense shall be included as a Basic Operating
Cost during Tenant's last twelve (12) months of the Term (if Tenant does not
exercise its option to renew) or the Option Term (as defined in Section 8.01),
as the case may be.

                (b) In the event any of the Basic Operating Costs are not
allocable solely to the Building or are not provided on a uniform basis,
Landlord shall make an appropriate and equitable adjustment, in Landlord's sole
and absolute discretion, to the relevant cost allocations to the Building and
Tenant shall pay its proportionate share of such Basic Operating Costs allocable
solely to the Building and 100% of such Basic Operating Costs allocable solely
to the Leased Premises.

                (c) Notwithstanding any other provision of this Lease to the
contrary, in the event that the Project is not fully occupied during any year of
the Term, an adjustment shall be made in computing Basic Operating Cost for such
year (including the Base Year) so that Basic Operating Cost shall be computed as
though the Building had been 95% occupied during such year.

                (d) The following items shall be excluded from Basic Operating
Costs: (i) depreciation on the Building and the Project; (ii) debt service;
(iii) rental under any ground or underlying lease; (iv) attorneys' fees and
expenses incurred in connection with lease negotiations with prospective Project
tenants or alleged defaults with other Project tenants; (v) the cost of any
improvements or equipment which would be properly classified as capital
expenditures (except for any capital expenditures expressly included in Section
3.05(a), including, without limitation, Section 3.05(a)(11)); the cost of
decorating, improving for tenant occupancy, painting or redecorating portions of
the Building to be demised to tenants; (vii) advertising expenses relating to
vacant space; (viii) real estate brokers' or other leasing commissions; (ix)
interest or penalties due as a result of Landlord's late payment of any of the
costs included within Basic Operating Costs; (x) fees paid to any affiliates of
Landlord to the extent such fees exceed market rates charged for such service
provided; (xi) any costs for making the Building comply with federal, state and
local laws, regulations and directives applicable to the Building as of the date
of this Lease, including any costs, penalties or fines imposed upon Landlord by
any governmental authority as a result of the violation of any such laws,
regulations and directives by Landlord, or its employees, agents, contractors or
assigns; and (xii) except as otherwise provided in ARTICLE 6 of this Lease, the
cost of any hazardous materials cleanup, detoxification, or similar action
undertaken by Landlord, whether or not required by any governmental or
quasi-governmental agency, including, without limitation asbestos removal from
the Premises or any other area of the Building.

                                   ARTICLE 4.
                              LANDLORD'S COVENANTS

        4.1 BASIC SERVICES. Landlord shall operate the Project to a standard of
quality consistent with that of other similar-class office projects in the
immediate geographical area, and shall:

                (a) Administer improvement of the Leased Premises in accordance
with EXHIBIT B (if any).

                (b) Furnish Tenant during Tenant's occupancy of the Leased
Premises the following basic services:

                     (i) Hot and cold water at those points of supply provided
        for general use of other tenants in the Project; steam heating and
        ventilating during the Building hours of operation specified in the
        rules and regulations for the Project adopted pursuant to Section 5.17
        and at such temperatures, during such seasons, and in such amounts as
        are standard for the comfortable use and occupancy of similar Class A
        office buildings and the Leased Premises or, in all events, as may be

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<PAGE>   11

        permitted or controlled by applicable laws, ordinances, rules and
        regulations. Notwithstanding the foregoing, the Building does not have
        central air conditioning; however, a condenser water loop serves each
        floor of the Building for access to condensed water for Tenant's air
        conditioning needs (Tenant, at its sole cost, shall be responsible for
        the installation, operation and maintenance of such air conditioning
        units, if needed).

                     (ii) Structural and exterior maintenance (including
        exterior glass and glazing) and routine maintenance, repairs and
        electric lighting service for all public areas and service areas of the
        Project.

                     (iii) Janitorial service on a five (5) day per week basis,
        excluding holidays.

                     (iv) Electric lighting service throughout the Leased
        Premises and electrical facilities to provide sufficient power for
        typewriters, standard size personal computers and other standard office
        machines of similar low electrical consumption twenty-four (24) hours
        per day, seven (7) days per week, but not including electricity required
        for electronic data processing equipment, special lighting in excess of
        Building Standard Improvements, and any other item of electrical
        equipment which consumes electricity in amounts in excess of standard
        office equipment.

                     (v) Building Standard lamps, bulbs, starters and ballasts
        used in the Leased Premises.

                     (vi) Public elevator service serving the floors on which
        the Leased Premises are situated twenty-four (24) hours per day, seven
        (7) days per week, including freight elevator service when prearranged
        with Landlord, subject to such rules and regulations as Landlord shall
        promulgate from time to time.

                (c) Landlord shall not be liable for damages to either person or
property, nor shall Landlord be deemed to have evicted Tenant, nor shall there
be any abatement of Rent, nor shall Tenant be relieved from performance of any
covenant on its part to be performed under this Lease by reason of any (i)
deficiency in the provision of basic services; (ii) breakdown of equipment or
machinery utilized in supplying services; or (iii) curtailment or cessation of
services due to causes or circumstances beyond the reasonable control of
Landlord or by the making of the necessary repairs or improvements, unless such
deficiency, breakdown, curtailment or cessation is due to the negligence or
willful misconduct of Landlord. Landlord shall use reasonable diligence to make
such repairs as may be required to machinery or equipment within the Project to
provide restoration of services and, where the cessation or interruption of
service has occurred due to circumstances or conditions beyond Project
boundaries, to cause the same to be restored, by diligent application or request
to the provider thereof. In no event shall any mortgagee or the beneficiary
under any deed of trust referred to in Section 5.12 be or become liable for any
default of Landlord under this Section 4.01(c).

        4.2 EXTRA SERVICES. Landlord shall provide to Tenant at Tenant's sole
cost and expense (and subject to the limitations hereinafter set forth) the
following extra services:

                (a) Such extra cleaning and janitorial services if requested by
Tenant;

                (b) Additional ventilating capacity required by reason of any
electrical, data processing or other equipment, facilities or services required
to support the same, in excess of that which would be required for Building
Standard Improvements, when prearranged with Landlord;

                (c) Heating, ventilation, or extra electrical service (for
electrical equipment which consumes electricity in excess of the standard
amounts set forth in Section 4.01(b)(iv) above), provided by Landlord to Tenant
(i) during hours other than the Building hours of operation specified in the
rules and regulations for the Project adopted pursuant to Section 5.17, which
shall provide for Building hours of operation of 7:00 A.M. to 6:00 P.M., Monday
through Friday (excluding holidays), or (ii) on Saturdays,

                                       8
<PAGE>   12

Sundays, or holidays, all said heating, ventilation or extra electrical service
to be furnished solely upon the prior written request of Tenant submitted during
business hours to Landlord at least 24 hours in advance of the time such service
is needed, or pursuant to such other procedures as may be established from time
to time by Landlord for the Building or the Project (such after-hour heating,
ventilation and lighting charge shall be billed at Landlord's actual cost basis
prorated with the similar use of other tenants of the Building);

                (d) Maintaining and replacing non-Building Standard lamps,
bulbs, starters and ballasts (whether or not the light fixtures were installed
by Landlord as part of the Tenant Improvements);

                (e) Upon Tenant's request or otherwise as permitted by the
provisions herein, repair and maintenance service which is the obligation of
Tenant under this Lease;

                (f) To the extent not covered by insurance either carried or
required to be carried by Landlord hereunder, and subject to the waiver of
subrogation rights set forth in Section 7.05, repair, maintenance or janitorial
service to the Leased Premises or the Common Areas which is required as a result
of the acts or omissions of Tenant, its agents, employees, contractors, invitees
or licensees; and

                (g) Any basic service in amounts reasonably determined by
Landlord to exceed the amounts required to be provided under Section 4.01(b),
but only if Landlord elects to provide such additional or excess service.

                For the purposes of this Section 4.02, if, in Landlord's
reasonable opinion, Tenant's use of electrical and/or water service at the
Leased Premises is excessive, Landlord may install a separate meter(s) at the
Leased Premises to measure the amount of electricity and/or water consumed by
Tenant therein. The cost of such installation and of such excess electricity
and/or water (at the rates charged for such services by the local public
utility) shall be paid by Tenant to Landlord upon receipt by Tenant of a bill
therefor, which cost shall not be included within the computation of Basic
Operating Costs.

                The cost chargeable to Tenant for all extra services shall
constitute Additional Rent and shall include an amount equal to Landlord's
actual out-of-pocket expenses for administering such extra services. Additional
Rent shall be paid monthly by Tenant to Landlord concurrently with the payment
of Base Rent.

        4.3 WINDOW COVERINGS. All window coverings for the Leased Premises shall
be those provided by Landlord (with the actual cost of such blinds to be
deducted from Landlord's Contribution) as Building Standard Improvements. Tenant
shall not place or maintain any window coverings, blinds, curtains or drapes
other than those supplied by Landlord on any exterior window without Landlord's
prior written approval, which Landlord shall have the right to grant or withhold
in its absolute and sole discretion.

        4.4 GRAPHICS AND SIGNAGE. Landlord shall provide identification (the
size of such identification shall be approximately its pro rata share) of
Tenant's name and suite numerals on a building directory in the Building lobby.
All signs, notices, advertisements and graphics of every kind or character,
visible in or from the Common Areas or the exterior of the Leased Premises shall
be subject to Landlord's prior written approval, not to be unreasonably
withheld, conditioned or delayed. Landlord may remove, without notice to and at
the expense of Tenant, any sign, notice, advertisement or graphic of any kind
inscribed, displayed or affixed in violation of the foregoing requirement. All
approved signs, notices, advertisements or graphics shall be printed, affixed or
inscribed at Tenant's expense by a person selected by Landlord. Landlord shall
be entitled to revise the Project graphics and signage standards at any time.

        4.5 [Intentionally deleted.]

        4.6 REPAIR OBLIGATION. Landlord's obligation with respect to maintenance
and repair shall be limited to (i) the structural portions of the Building; (ii)
the exterior walls of the Building, including exterior glass and glazing; (iii)
the exterior roof; (iv) mechanical, electrical, plumbing and life safety
systems; (v) the Common Areas; and (vi) landscaped areas. However, Landlord
shall not have any obligation to repair damage caused by Tenant, its agents,
employees, contractors, invitees or licensees. Landlord shall have the right,
but

                                       9
<PAGE>   13

not the obligation, to undertake work of repair which Tenant is required to
perform under this Lease and which Tenant fails or refuses to perform within the
notice and cure periods permitted hereunder. Tenant shall reimburse Landlord
upon demand, as Additional Rent, for all costs incurred by Landlord in
performing any such repair for the account of Tenant, together with an amount
equal to ten percent (10%) of such costs to reimburse Landlord for its
administration and managerial effort. Except as specifically set forth in this
Lease, Landlord shall have no obligation whatsoever to maintain or repair the
Leased Premises or the Project. The parties intend that the terms of this Lease
govern their respective maintenance and repair obligations. Tenant expressly
waives the benefit of any statute now or hereafter in effect to the extent it is
inconsistent with the terms of this Lease with respect to such obligations or
which affords Tenant the right to make repairs at the expense of Landlord or
terminate this Lease by reason of the condition of the Leased Premises or any
needed repairs. Subject to the provisions of Section 5.04 below, Landlord shall,
at all times during the Term, keep and maintain all portions of the Project,
including the Building (other than the interior of the Leased Premises), in the
condition and repair maintained by landlords of similar Class A office space in
the financial district of San Francisco. Without limiting the foregoing and
except as otherwise provided herein, Landlord shall be responsible for causing
the Building to comply with all applicable federal, state and local laws,
statutes, ordinances, rules or regulations.

        4.7 PEACEFUL ENJOYMENT. Landlord covenants with Tenant that upon Tenant
paying the Rent and all other charges required under this Lease and performing
all of Tenant's covenants and agreements herein contained, Tenant shall
peacefully have, hold and enjoy the Leased Premises subject to all of the terms
of this Lease and to any deed of trust, mortgage, ground lease or other
agreement to which this Lease may be subordinate. This covenant and the other
covenants of Landlord contained in this Lease shall be binding upon Landlord and
its successors only with respect to breaches occurring during its or their
respective ownerships of Landlord's interest hereunder.

                                   ARTICLE 5.
                               TENANT'S COVENANTS

        5.1 PAYMENTS BY TENANT. Tenant shall pay Rent at the times and in the
manner provided in this Lease. All obligations of Tenant hereunder to make
payments to Landlord shall constitute Rent and failure to pay the same when due
shall give rise to the rights and remedies provided for in Section 7.08. If
there is more than one Tenant, the obligations imposed under this Lease upon
Tenant shall be joint and several.

        5.2 TENANT IMPROVEMENTS. The Tenant Improvements shall be installed and
constructed by the Contractor pursuant to EXHIBIT B. All Tenant Improvements
shall become the property of Landlord upon installation and shall be surrendered
to Landlord without compensation to Tenant upon termination of this Lease by
lapse of time or otherwise.

        5.3 TAXES ON PERSONAL PROPERTY. In addition to, and wholly apart from
its obligation to pay Tenant's Proportionate Share of Increased Basic Operating
Costs, Tenant shall be responsible for, and shall pay prior to delinquency, all
taxes or governmental service fees, possessory interest taxes, fees or charges
in lieu of any such taxes, capital levies, and any other charges imposed upon,
levied with respect to, or assessed against Tenant's personal property and on
its interest pursuant to this Lease. 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, which invoice shall include a copy of a tax bill
or signed statement from the applicable taxing authority which shall state that
such tax is directly attributable to Tenant's interest in this Lease or personal
property located at the Premises.

        5.4 REPAIRS BY TENANT. Tenant shall be obligated to maintain and repair
the Leased Premises, to keep the same at all times in good order, condition and
repair, and, upon expiration of the Term, to surrender the same to Landlord in
the same condition as on the Term Commencement Date, reasonable wear and tear,
taking by condemnation, and damage by casualty excepted. Tenant's obligations
shall include, without limitation, the obligation to maintain and repair all
non-structural portions of the walls, floors, ceilings and fixtures and to
repair all damage caused by Tenant, its agents, employees, contractors, invitees
and others

                                       10
<PAGE>   14

using the Leased Premises with Tenant's expressed or implied permission, to the
extent not covered by insurance either carried or required to be carried by
Landlord hereunder, and subject to the waiver of subrogation rights set forth in
Section 7.05. At the request of Tenant, Landlord shall perform the work of
maintenance and repair constituting Tenant's obligation under this Section 5.04
at Tenant's sole cost and expense and as an extra service to be rendered
pursuant to Section 4.02(e). Any work of repair and maintenance performed by or
for the account of Tenant by persons other than Landlord shall be performed by
contractors approved by Landlord and in accordance with reasonable procedures
Landlord shall from time to time establish. Tenant shall give Landlord prompt
notice of any damage to or defective condition in any part of the Building's
mechanical, electrical, plumbing, life safety or other system servicing, located
in or passing through the Leased Premises of which Tenant is or becomes aware.

        5.5 WASTE. Tenant shall not commit or allow any waste or damage to be
committed in any portion of the Leased Premises or the Project.

        5.6 ASSIGNMENT OR SUBLEASE.

                (a) Tenant shall not voluntarily or by operation of law assign,
transfer or encumber (collectively "Assign") or sublet all or any part of
Tenant's interest in this Lease or in the Leased Premises without Landlord's
prior written consent, which shall not be unreasonably withheld, given under and
subject to the terms of this Section 5.06. Notwithstanding the foregoing, the
Tenant may, upon written notice to the Landlord, in whole or in part, sublet the
Leased Premises, or Assign this Lease to an affiliate, parent or subsidiary of
the Tenant which retains at least a fifty percent (50%) interest in the Tenant,
so long as Tenant shall remain responsible in case of default, and, provided,
further, no such permitted subletting or assignment shall relieve the Tenant of
liability under this Lease. An assignment of this Lease to an entity arising as
a result of merger, acquisition or consolidation shall be permitted as long as
the entity's financial condition is at least equivalent to the greater of (i)
the financial condition of Tenant as of the date of this Lease, or (ii) the
financial condition of Tenant as of the date of the proposed merger, acquisition
or consolidation.

                (b) Except as permitted in Section 5.06(a), if Tenant desires to
Assign this Lease or any interest herein or sublet the Leased Premises or any
part thereof, Tenant shall give Landlord written notice of such intent. Tenant's
notice shall specify the date the proposed assignment or sublease would be
effective and be accompanied by information pertinent to Landlord's
determination as to the financial and operational responsibility and
appropriateness of the proposed assignee or subtenant, including, without
limitation, its name, business and financial condition, financial details of the
proposed transfer, the intended use (including any modification) of the Leased
Premises, and exact copies of all of the proposed agreement(s) between Tenant
and the proposed assignee or subtenant. Tenant shall promptly provide Landlord
with (i) such other or additional information or documents reasonably requested
(within ten (10) days after receiving Tenant's notice) by Landlord, and (ii) an
opportunity to meet and interview the proposed assignee or subtenant, if
requested by Landlord.

                (c) Landlord shall have a period of twenty (20) days following
such interview and receipt of such additional information (or thirty (30) days
from the date of Tenant's original notice if Landlord does not request
additional information or an interview) within which to notify Tenant in writing
that Landlord elects either (i) to terminate this Lease as to the space so
affected as of the effective date specified by Tenant, in which event Tenant
will be relieved of all further obligations hereunder as to such space (Landlord
shall recapture such space in its "as is" condition with all costs of such
recapture being borne by Landlord), or (ii) to permit Tenant to Assign this
Lease or sublet such space, subject, however, to prior written approval of the
proposed assignee or sublessee by Landlord, such consent not to be unreasonably
withheld, conditioned or delayed so long as the use of the Leased Premises by
such proposed assignee or sublessee would be a Permitted Use, the proposed
assignee or sublessee is of sound financial condition as determined by Landlord
in its reasonable discretion, the proposed assignee or sublessee executes such
reasonable assumption documentation as Landlord shall require, and the proposed
assignee or sublessee is not a party with whom Landlord has been discussing the
leasing of space in the Building. Notwithstanding the foregoing, if Landlord
elects option (i) above, Tenant may elect to withdraw Tenant's request to sublet
or assign such portion of the Premises by written notice to Landlord given on or
before the date which is five (5) business days following

                                       11
<PAGE>   15

Landlord's notice to Tenant of its intent to recapture such space. Upon such
notice by Tenant, Landlord's election to recapture the subject space in that
instance shall be null and void and Tenant shall retain possession of such
subject space. If Landlord fails to notify Tenant in writing of such election
within said period, Landlord shall be deemed to have waived option (i) above,
but written approval by Landlord of the proposed assignee or sublessee shall
still be required. Failure by Landlord to approve a proposed subtenant or
assignee shall not cause a termination of this Lease.

                (d) In the event Tenant shall request the consent of Landlord to
any assignment or subletting hereunder, Tenant shall pay Landlord a processing
fee of $250.00 and shall reimburse Landlord for Landlord's reasonable attorneys'
fees incurred in connection therewith. All such fees shall be deemed Additional
Rent under this Lease.

                (e) Any rent or other consideration realized by Tenant under any
such sublease or assignment in excess of (i) the Rent payable hereunder, (ii)
any reasonable tenant improvement allowance or other economic concession (e.g.,
space planning allowance, moving expenses, free or reduced rent periods, etc.),
(iii) any advertising costs and brokerage commissions associated with such
assignment or sublease, and (iv) any reasonable legal fees associated with such
assignment or sublease ("Profit"), shall be divided and paid as follows: fifty
percent (50%) to Tenant and fifty percent (50%) to Landlord; provided, however,
that if Tenant is in default hereunder beyond any applicable cure period,
Landlord shall be entitled to all such excess rent.

                (f) In any subletting undertaken by Tenant, Tenant shall
diligently seek to obtain not less than fair market sublease rent for the space
to sublet. In any assignment of this Lease in whole or in part, Tenant shall
seek to obtain from the assignee consideration reflecting a value of not less
than fair market assignment rent for the space subject to such assignment.

                (g) The consent of Landlord to any assignment or subletting
shall not constitute a consent to any subsequent assignment or subletting by
Tenant or to any subsequent or successive assignment or subletting by the
assignee or subtenant. However, Landlord may consent to subsequent assignments
and sublettings of the Lease or sublease or amendments or modifications thereto,
without notifying Tenant or any other party liable on the Lease or sublease and
without obtaining their consent. Such action shall not relieve Tenant or any
such other party from liability under this Lease or a sublease.

                (h) No assignment or subletting by Tenant shall relieve Tenant
of any obligation under this Lease. In the event of default by an assignee or
subtenant of Tenant or any successor of Tenant in the performance of any of the
terms hereof, Landlord may proceed directly against Tenant without the necessity
of exhausting remedies against such assignee, subtenant or successor. Any
assignment or subletting which conflicts with the provisions hereof shall be
void and, at Landlord's option, shall constitute a default under this Lease.

                (i) Notwithstanding anything to the contrary contained within
this Section 5.06, Landlord acknowledges that, although Tenant anticipates that
its space needs will encompass the total of the Leased Premises at some point in
the near future, a portion of the space which Tenant is currently accepting and
leasing may be initially determined to be in excess of Tenant's current short
term space planning needs. As a result, should Tenant submit a request to
Landlord for Landlord's consent to Tenant's sublease of a portion of the Leased
Premises, at any time during the first thirty (30) months of the Term, such
request shall not be subject to Landlord's right of recapture pursuant to
Subsection 5.06(c) above. After the thirtieth (30th) month of the Term, should
Tenant submit a request to Landlord for Landlord's consent to Tenant's sublease
of a portion of the Leased Premises and such sublease along with all other
current subleases and assignments, in the aggregate, do not exceed 9,561
rentable square feet, such request shall not be subject to Landlord's right of
recapture pursuant to Subsection 5.06(c) above.

        5.7 ALTERATIONS, ADDITIONS AND IMPROVEMENTS.

                (a) Tenant shall not make or allow to be made any alterations or
additions in or to the

                                       12
<PAGE>   16
Leased Premises without first obtaining the written consent of Landlord.
Landlord's consent will not be unreasonably withheld, conditioned or delayed
with respect to proposed alterations and additions which (i) comply with all
applicable laws, ordinances, rules and regulations; (ii) are compatible with and
does not adversely affect the Building and its mechanical, electrical, heating,
ventilation and life safety systems; (iii) will not affect the structural
portions of the Building; (iv) will not unreasonably interfere with the use and
occupancy of any other portion of the Building by any other tenant, its
employees or invitees; and (v) will not trigger any additional costs to
Landlord. Specifically, but without limiting the generality of the foregoing,
Landlord's right of consent shall encompass plans and specifications for the
proposed alterations or additions, construction means and methods, the identity
of any contractor or subcontractor to be employed on the work of alterations or
additions, and the time for performance of such work. Tenant shall supply to
Landlord any additional documents and information requested by Landlord in
connection with Tenant's request for consent hereunder. For the purposes herein,
the Landlord Improvements and Tenant Improvements set forth in EXHIBIT B hereto
shall not constitute alterations, additions or improvements.

                (b) Any consent given by Landlord under this Section 5.07 shall
be deemed conditioned upon: (i) Tenant's acquiring all applicable permits
required by governmental authorities; (ii) Tenant's furnishing to Landlord
copies of such permits, together with copies of the approved plans and
specifications, prior to commencement of the work thereon; and (iii) the
compliance by Tenant with the conditions of all applicable permits and approvals
in a prompt and expeditious manner.

                (c) Tenant shall provide Landlord with not less than fifteen
(15) days prior written notice of commencement of the work so as to enable
Landlord to post and record appropriate notices of non-responsibility. All
alterations and additions permitted hereunder shall be made and performed by
Tenant without cost or expense to Landlord. Tenant shall pay the contractors and
suppliers all amounts due to them when due and keep the Leased Premises and the
Project free from any and all mechanics', materialmen's and other liens and
claims arising out of any work performed, materials furnished or obligations
incurred by or for Tenant. Landlord may require, at its sole option, that Tenant
provide to Landlord, at Tenant's expense, a lien and completion bond in an
amount equal to the total estimated cost of any alterations, additions or
improvements to be made in or to the Leased Premises, to protect Landlord
against any liability for mechanics', materialmen's and other liens and claims
related to such alterations, additions or improvements, and to ensure timely
completion of the work. In the event any alterations or additions to the Leased
Premises are performed by Landlord hereunder, whether by prearrangement or
otherwise, Landlord shall be entitled to charge Tenant a ten percent (10%)
administration fee in addition to the actual costs of labor and materials
provided. No administration fee, however, shall be charged on the costs of and
installation of wall and floor coverings and finishes. Such costs and fees shall
be deemed Additional Rent under this Lease, and may be charged and payable prior
to commencement of the work.

                (d) Any and all alterations, additions or improvements made to
the Leased Premises by Tenant shall become the property of Landlord upon
installation and shall be surrendered to Landlord without compensation to Tenant
upon the termination of this Lease by lapse of time or otherwise unless (i)
Landlord conditioned its approval of such alterations, additions or improvements
on Tenant's agreement to remove them, or (ii) if Tenant did not provide a
Removal Determination Request (as defined below), Landlord notifies Tenant prior
to (or promptly after) the Term Expiration Date that the alterations, additions
and/or improvements must be removed, in which case Tenant shall, by the Term
Expiration Date (or promptly thereafter), remove such alterations, additions and
improvements, repair any damage resulting from such removal and restore the
Leased Premises to their condition existing prior to the date of installation of
such alterations, additions and improvements, normal wear, tear and damage by
casualty excepted. Prior to making any alterations, additions or improvements to
the Leased Premises, Tenant may make a written request that Landlord determine
in advance whether or not Tenant must remove such alterations, additions or
improvements on the Term Expiration Date ("Removal Request Determination").
Notwithstanding anything to the contrary set forth above, this clause shall not
apply to movable equipment or furniture owned by Tenant. Tenant shall repair at
its sole cost and expense all damage caused to the Leased Premises and the
Project by removal of Tenant's movable equipment or furniture and such other
alterations, additions and improvements as Tenant shall be required or allowed
by Landlord to remove from the Leased Premises; provided, such repair shall not
include painting of walls or replacement of carpeting.

                                       13
<PAGE>   17

                (e) All alterations, additions and improvements permitted under
this Section 5.07 shall be constructed diligently, in a good and workmanlike
manner with new, good and sufficient materials and in compliance with all
applicable laws, ordinances, rules and regulations (including, without
limitation, building codes and those related to accessibility and use by
individuals with disabilities). Tenant shall, promptly upon completion of the
work, furnish Landlord with "as built" drawings for any alterations, additions
or improvements performed under this Section 5.07.

        5.8 COMPLIANCE WITH LAWS AND INSURANCE STANDARDS. Tenant shall not
occupy or use, or permit any portion of the Leased Premises to be occupied or
used in a manner that violates any applicable law, ordinance, rule, regulation,
order, permit, covenant, easement or restriction of record, or the
recommendations of Landlord's engineers or consultants, relating in any manner
to the Project, or for any business or purpose which is disreputable,
objectionable or productive of fire hazard. Tenant shall not do or permit
anything to be done which would result in the cancellation, or in any way
increase the cost, of the all risk property insurance coverage on the Project
and/or its contents. Landlord represents and warrants to the best of its
knowledge that office use of the Leased Premises permitted hereunder is not
prohibited by, nor does it conflict with, any covenant, easement or restriction
encumbering the Project, and further represents and warrants that the office use
of the Leased Premises will not increase or affect the existing rate of any fire
or other insurance policy covering damage to the Project, or cause cancellation
of any such insurance policy. If Tenant does or permits anything to be done
which increases the cost of any insurance covering or affecting the Project,
then Tenant shall reimburse Landlord, upon demand, as Additional Rent, for such
additional costs. Landlord shall deliver to Tenant a written statement setting
forth the amount of any such insurance cost increase and showing in reasonable
detail the manner in which it has been computed, which statement shall be signed
by Landlord's insurance carrier setting forth that the increase in insurance
premiums is directly attributable to Tenant's acts or omissions. Tenant shall,
at Tenant's sole cost and expense, comply with all laws, ordinances, rules,
regulations and orders (state, federal, municipal or promulgated by other
agencies or bodies having or claiming jurisdiction) related to Tenant's
particular use of the Leased Premises now in effect or which may hereafter come
into effect including, but not limited to, (a) accessibility and use by
individuals with disabilities, and (b) environmental conditions in, on or about
the Leased Premises. If anything done by Tenant in its use or occupancy of the
Leased Premises shall create, require or cause imposition of any requirement by
any public authority for structural or other upgrading of or alteration or
improvement to the Project, Tenant shall, at Landlord's option, either perform
the upgrade, alteration or improvement at Tenant's sole cost and expense or
reimburse Landlord upon demand, as Additional Rent, for the cost to Landlord of
performing such work. The judgment of any court of competent jurisdiction or the
admission by Tenant in any action against Tenant, whether Landlord is a party
thereto or not, that Tenant has violated any law, ordinance, rule, regulation,
order, permit, covenant, easement or restriction shall be conclusive of that
fact as between Landlord and Tenant. Landlord represents and warrants that a
path of travel, as that term is used in Title 24 and the Americans With
Disabilities Act (collectively "ADA"), which is compliant with the requirements
of the ADA either (i) currently exists, or (ii) Landlord has obtained a hardship
waiver for certain areas, extending from the entry of the Building through the
entry of the Leased Premises.

        5.9 NO NUISANCE; NO OVERLOADING. Tenant shall use and occupy the Leased
Premises, and control its agents, employees, contractors, invitees and visitors
in such manner so as not to create any nuisance, or unreasonably interfere with,
annoy or disturb (whether by noise, odor, vibration or otherwise) any other
tenant or occupant of the Project or Landlord in its operation of the Project.
Tenant shall not place or permit to be placed any loads upon the floors, walls
or ceilings in excess of the maximum designed load specified by Landlord or
which might damage the Leased Premises, the Building, or any portion thereof.

        5.10 FURNISHING OF FINANCIAL STATEMENTS; TENANT'S REPRESENTATIONS. In
order to induce Landlord to enter into this Lease, Tenant agrees that it shall
promptly furnish Landlord, from time to time, within ten (10) business days of
receipt of Landlord's written request therefor, with financial statements in
form and substance reasonably satisfactory to Landlord reflecting Tenant's
current financial condition as of the end of Tenant's previous fiscal year;
provided, such financial statements may not be requested more frequently than
once annually. Tenant represents and warrants that to Tenant's knowledge all
financial statements, records and information furnished by Tenant to Landlord in
connection with this Lease are true, correct and complete

                                       14
<PAGE>   18

in all respects.

        5.11 ENTRY BY LANDLORD. Landlord, its employees, agents and consultants,
shall have the right to enter the Leased Premises at any time, in cases of an
emergency, and otherwise at reasonable times to inspect the same, to clean, to
perform such work as may be permitted or required under this Lease, to make
repairs to or alterations of the Leased Premises or other portions of the
Project or 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 show the Leased Premises
to prospective tenants during the last six (6) months of the Term, purchasers or
encumbrancers; provided, however, that Landlord shall use its best efforts to
minimize interference with Tenant's business operations in the Leased Premises.
Tenant shall not be entitled to any abatement of Rent or damages by reason of
the exercise of any such right of entry.

        5.12 NONDISTURBANCE AND ATTORNMENT.

                (a) This Lease and the rights of Tenant hereunder shall be
subject and subordinate to the lien of any deed of trust, mortgage or other
hypothecation or security instrument (collectively, "Security Device") now or
hereafter placed upon, affecting or encumbering the Project or any part thereof
or interest therein, and to any and all advances made thereunder, interest
thereon or costs incurred and any modifications, renewals, supplements,
consolidations, replacements and extensions thereof. With respect to any
Security Device entered into by Landlord after execution of this Lease, such
subordination is conditioned on Landlord obtaining assurance in a commercially
reasonable form (a "nondisturbance agreement") from the holder of or beneficiary
under such encumbrance that Tenant's possession will not be disturbed so long as
Tenant is not in default under this Lease and attorns to the record owner of the
Leased Premises. Landlord shall obtain and deliver to Tenant a nondisturbance
agreement from Fleet National Bank in the form attached hereto as EXHIBIT E
within ten (10) business days of full execution of this Lease. Without the
consent of Tenant, the holder of any such Security Device or the beneficiary
thereunder shall have the right to elect to be subject and subordinate to this
Lease, such subordination to be effective upon such terms and conditions as such
holder or beneficiary may direct which are not inconsistent with the provisions
hereof. Tenant agrees to attorn to and recognize as the Landlord under this
Lease the holder or beneficiary under a Security Device or any other party that
acquires ownership of the Leased Premises by reason of a foreclosure or sale
under any Security Device (or deed in lieu thereof). The new owner following
such foreclosure, sale or deed shall not be (i) liable for any act or omission
of any prior landlord or with respect to events occurring prior to acquisition
of ownership; (ii) subject to any offsets or defenses which Tenant might have
against any prior landlord; (iii) bound by prepayment of more than one (1)
month's Rent; or (iv) liable to Tenant for any security deposit not actually
received by such new owner.

                (b) Tenant shall not unreasonably withhold its consent to
changes or amendments to this Lease requested by the holder of a Security Device
so long as these changes do not alter the basic business terms of this Lease or
otherwise materially diminish any rights or materially increase any obligations
of Tenant hereunder. If, within fifteen (15) days after notice from Landlord,
Tenant fails or unreasonably refuses to execute with Landlord the amendment(s)
to this Lease accomplishing the reasonable change(s) or amendment(s) which are
requested by such holder such amendments shall be deemed accepted and shall be
enforceable by Landlord and such lender and binding upon Tenant, its successors
and assigns as if agreed to in writing, without need of further action or
documentation.

        5.13 ESTOPPEL CERTIFICATE. Within fifteen (15) days following either
party's request, the other party shall execute, acknowledge and deliver written
estoppel certificates addressed to the persons or parties identified in such
request, on a form specified by such requesting party, certifying as to such
facts (if true) and agreeing to such notice provisions and other matters as such
mortgagee(s) or purchaser(s) may reasonably require, including, without
limitation, the following: (a) that this Lease is unmodified and in full force
and effect (or in full force and effect as modified, and stating the
modifications); (b) the amount of, and date to which Rent and other charges have
been paid in advance; (c) the amount of any Security Deposit; and (d)
acknowledging that neither party is in default under this Lease (or, if a party
is claimed to be in default, stating the nature of the alleged default).
However, in no event shall any such estoppel certificate require an

                                       15
<PAGE>   19

amendment of the provisions of this Lease or otherwise affect or abridge a
party's rights hereunder. Any such estoppel certificate may be relied upon by
any such person or party designated in such request. Failure by a party to
execute and deliver any such estoppel certificate within the time requested
shall be conclusive upon such party that (1) this Lease is in full force and
effect and has not been modified except as represented by the requesting party;
(2) not more than one month's Rent has been paid in advance; and (3) neither
party is in default under this Lease.

        5.14 SECURITY DEPOSIT.

                (a) Concurrently with the execution hereof, Tenant shall pay to
Landlord the agreed upon Security Deposit as security for the full and faithful
performance of Tenant's obligations under this Lease. If at any time during the
Term, Tenant shall be in default in the payment of Rent or in default for any
other reason, Landlord may use, apply or retain such part of the Security
Deposit as necessary for cure of Tenant's failure to make payment of any amount
due Landlord or to cure such default or to reimburse or compensate Landlord for
any liability, loss, cost, expense or damage (including attorneys' fees) which
Landlord may suffer or incur by reason of Tenant's defaults. If Landlord uses or
applies all or any part of the Security Deposit, Tenant shall, on demand, pay to
Landlord a sum sufficient to restore the Security Deposit to the full amount
required by this Lease. Upon expiration of the Term or earlier termination of
this Lease and after Tenant has vacated the Leased Premises, Landlord shall
return the Security Deposit to Tenant, reduced by such amounts as may be
required by Landlord to remedy defaults on the part of Tenant in the payment of
Rent and to perform Tenant's obligations hereunder. The portion of the deposit
not so required shall be paid over to Tenant (or, at Landlord's option, to the
last assignee of Tenant's interest in this Lease) within thirty (30) days after
expiration of the Term or earlier termination hereof. Landlord shall hold the
Security Deposit for the foregoing purposes and shall segregate the Security
Deposit from its general funds in an interest bearing account. No part of the
Security Deposit shall be considered to be held in trust, or to be prepayment of
any monies to be paid by Tenant under this Lease.

                (b) In lieu of a cash deposit, Tenant may deliver the Security
Deposit to Landlord in the form of a clean and irrevocable letter of credit (the
"Letter of Credit") issued by and drawable upon (said issuer being referred to
as the "Issuing Bank" (Tenant shall have the right to change the Issuing Bank
during the term of this Lease)) a financial institution which is approved by
Landlord in its sole discretion, provided that Landlord shall not unreasonably
withhold its consent to an Issuing Bank which has outstanding unsecured,
uninsured and unguaranteed indebtedness, or shall have issued a letter of credit
or other credit facility that constitutes the primary security for any
outstanding indebtedness (which is otherwise uninsured and unguaranteed), that
is then rated, without regard to qualification of such rating by symbols such as
"+" or "-" or numerical notation, "Aa" or better by Moody's Investors Service
and "AA" or better by Standard & Poor's Rating Service, and has combined
capital, surplus and undivided profits of not less than $100,000,000. Such
Letter of Credit shall (a) name Landlord as beneficiary, (b) be in the amount of
the Security Deposit, (c) have a term of not less than one year, (d) permit
multiple drawings, (e) be fully transferable by Landlord, and (f) otherwise be
in form and content reasonably satisfactory to Landlord. If upon any transfer of
the Letter of Credit, any fees or charges shall be so imposed, then such fees or
charges shall be payable solely by Tenant and the Letter of Credit shall so
specify. The Letter of Credit shall provide that it shall be deemed
automatically renewed, without amendment, for consecutive periods of one year
each thereafter during the Term unless the Issuing Bank sends a notice (the
"Non-Renewal Notice") to Landlord by certified mail, return receipt requested,
not less than 45 days next preceding the then expiration date of the Letter of
Credit stating that the Issuing Bank has elected not to renew the Letter of
Credit. Landlord shall have the right, upon receipt of the Non-Renewal Notice,
to draw the full amount of the Letter of Credit, by sight draft on the Issuing
Bank, and shall thereafter hold or apply the cash proceeds of the Letter of
Credit pursuant to the terms of this Article. The Issuing Bank shall agree with
all drawers, endorsers and bona fide holders that drafts drawn under and in
compliance with the terms of the Letter of Credit will be duly honored upon
presentation to the Issuing Bank at an office location in San Francisco. The
Letter of Credit shall be subject in all respects to the Uniform Customs and
Practice for Documentary Credits (1993 revision), International Chamber of
Commerce Publication No. 500.

                (c) Notwithstanding anything in this Section 5.14 to the
contrary, on the third (3rd)

                                       16
<PAGE>   20

anniversary of the Term Commencement Date, the amount of the Security Deposit
shall be reduced by $200,000; on the fourth (4th) anniversary of the Term
Commencement Date, the amount of the Security Deposit shall be reduced by an
additional $200,000; on the fifth (5th) anniversary of the Term Commencement
Date, the amount of the Security Deposit shall be reduced by an additional
$200,000; and on the sixth (6th) anniversary of the Term Commencement Date, the
amount of the Security Deposit shall be reduced by an additional $200,000. In
addition, on the sixth (6th) anniversary of the Term Commencement Date or any
time thereafter, if Tenant has achieved an audited net worth (as defined by
GAAP) of $50,000,000 or greater, the Security Deposit shall be reduced by an
additional $200,000. Upon any reduction of the amount of the Security Deposit,
such amount reduced shall be returned to Tenant, or a reduction shall be made to
the Letter of Credit, as the case may be.

        5.15 SURRENDER. Subject to the provisions of Section 5.07 hereof, on the
Term Expiration Date (or earlier termination of this Lease), Tenant shall quit
and surrender possession of the Leased Premises to Landlord in as good order and
condition as they were in on the Term Commencement Date, reasonable wear and
tear, taking by condemnation and damage by casualty excepted. Reasonable wear
and tear shall not include any damage or deterioration that would have been
prevented by good maintenance practice or by Tenant performing all of its
obligations under this Lease. Tenant shall, without cost to Landlord, remove all
furniture, equipment, trade fixtures, debris and articles of personal property
owned by Tenant in the Leased Premises, and shall repair any damage to the
Project resulting from such removal, provided such repair shall not include
either repainting or recarpeting of the Leased Premises. Any such property not
removed by Tenant by the Term Expiration Date (or earlier termination of this
Lease) shall be considered abandoned, and Landlord may remove any or all of such
items and dispose of same in any lawful manner or store same in a public
warehouse or elsewhere for the account and at the expense and risk of Tenant. If
Tenant shall fail to pay the cost of storing any such property after storage for
thirty (30) days or more, Landlord may sell any or all of such property at
public or private sale, in such manner and at such times and places as Landlord
may deem proper, without notice to or demand upon Tenant. Landlord shall apply
the proceeds of any such sale as follows: first, to the costs of such sale;
second, to the costs of storing any such property; third, to the payment of any
other sums of money which may then or thereafter be due to Landlord from Tenant
under any of the terms of this Lease; and fourth, the balance, if any, to
Tenant.

        5.16 TENANT'S REMEDIES. Landlord shall not be deemed in breach of this
Lease unless Landlord fails within a reasonable time to perform an obligation
required to be performed by Landlord. For purposes of this Section 5.16, a
reasonable time shall in no event, be less than thirty (30) days after receipt
by Landlord (except in the event of an emergency, in which case Landlord's
response time must be reasonable in light of the emergency), and by the holders
of any ground lease, deed of trust or mortgage covering the Leased Premises
whose name and address shall have been furnished Tenant in writing for such
purpose, of written notice specifying wherein such obligation of Landlord has
not been performed; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days after such notice are
reasonably required for its performance, then Landlord shall not be in breach of
this Lease if performance is commenced within said thirty (30)-day period and
thereafter diligently pursued to completion. If Landlord fails to cure such
default within the time provided for in this Lease, the holder of any such
ground lease, deed of trust or mortgage shall have an additional thirty (30)
days to cure such default (except in the case of an emergency); provided that if
such default cannot reasonably be cured within that thirty (30) day period, then
such holder shall have such additional time to cure the default as is reasonably
necessary under the circumstances. Tenant shall look solely to Landlord's
interest in the Project for recovery of any judgment from Landlord. Except with
respect to Landlord's interest in the Building and proceeds therefrom, neither
Landlord nor any of its trustees, directors, officers, agents, employees or
representatives (or, if Landlord is a partnership, its partners, whether general
or limited) shall ever be personally liable for any such judgment. Any lien
obtained to enforce any such judgment and any levy of execution thereon shall be
subject and subordinate to any lien, deed of trust or mortgage to which Section
5.12 applies or may apply. Tenant shall not have the right to terminate this
Lease or withhold, reduce or offset any amount against any payments of Rent due
and payable under this Lease by reason of a breach of this Lease by Landlord.

        5.17 RULES AND REGULATIONS. Tenant shall comply with the rules and
regulations for the Project attached as EXHIBIT D and such reasonable amendments
thereto as Landlord may adopt from time to time

                                       17
<PAGE>   21

with prior notice to Tenant.

                                   ARTICLE 6.
                              ENVIRONMENTAL MATTERS

        6.1 HAZARDOUS MATERIALS PROHIBITED.

                (a) Except for a battery back-up system (for emergency power)
provided by Tenant, at its sole cost and expense, and subject to Landlord's
reasonable approval, Tenant shall not cause or permit any Hazardous Material (as
defined in Section 6.01(c) below) to be brought, kept, used, generated, released
or disposed in, on, under or about the Leased Premises or the Project by Tenant,
its agents, employees, contractors or invitees; provided, however, that Tenant
may use, store and dispose of, in accordance with applicable Laws, limited
quantities of standard office and janitorial supplies, but only to the extent
reasonably necessary for Tenant's operations in the Leased Premises. Tenant
hereby indemnifies Landlord from and against (i) any breach by Tenant of the
obligations stated in the preceding sentence, (ii) any breach of the obligations
stated in Section 6.01(b) below, or (iii) any claims or liability resulting from
Tenant's use of Hazardous Materials. Tenant hereby agrees to defend and hold
Landlord harmless from and against any and all claims, liability, losses,
damages, costs and/or expenses (including, without limitation, diminution in
value of the Project, or any portion thereof, damages for the loss or
restriction on use of rentable or usable space or of any amenity of the Project,
damages arising from any adverse impact on marketing of space in the Project,
and sums paid in settlement of claims, fines, penalties, attorneys' fees,
consultants' fees and experts' fees) which arise during or after the Term as a
result of any breach of the obligations stated in Sections 6.01(a) or 6.01(b) or
otherwise resulting from Tenant's use of Hazardous Materials. This
indemnification of Landlord by Tenant includes, without limitation, death of or
injury to person, damage to any property or the environment and costs incurred
in connection with any investigation of site conditions or any cleanup,
remedial, removal, or restoration work required by any federal, state or local
governmental agency or political subdivision because of any Hazardous Material
present in, on, under or about the Leased Premises or the Project (including
soil and ground water contamination) which results from such a breach. Without
limiting the foregoing, if the presence of any Hazardous Material in, on, under
or about the Leased Premises or the Project caused or permitted by Tenant
results in any contamination of the Leased Premises or the Project, Tenant shall
promptly take all actions at its sole expense as are necessary to return the
same to the condition existing prior to the introduction of such Hazardous
Material; provided that Landlord's approval of such actions, and the contractors
to be used by Tenant in connection therewith, shall first be obtained. This
indemnification of Landlord by Tenant shall survive the expiration or sooner
termination of this Lease.

                (b) Tenant covenants and agrees that Tenant shall at all times
be responsible and liable for, and be in compliance with, all federal, state,
local and regional laws, ordinances, rules, codes and regulations, as amended
from time to time ("Governmental Requirements"), relating to health and safety
and environmental matters, arising, directly or indirectly, out of Tenant's use
of Hazardous Materials (as defined in Section 6.01(c) below) in the Project.
Health and safety and environmental matters for which Tenant is responsible
under this paragraph include, without limitation (i) notification and reporting
to governmental agencies, (ii) the provision of warnings of potential exposure
to Hazardous Materials to Landlord and Tenant's agents, employees, licensees,
contractors and others, (iii) the payment of taxes and fees, (iv) the proper
off-site transportation and disposal of Hazardous Materials, and (v) all
requirements, including training, relating to the use of equipment. Immediately
upon discovery of a release of Hazardous Materials associated with Tenant's
activities, Tenant shall give written notice to Landlord, whether or not such
release is subject to reporting under Governmental Requirements. The notice
shall include information on the nature and conditions of the release and
Tenant's planned response. Tenant shall be liable for the cost of any clean-up
of the release of any Hazardous Materials by Tenant on the Project.

                (c) As used in this Lease, the term "Hazardous Material" means
any hazardous or toxic substance, material or waste which is or becomes
regulated by any local governmental authority, the State of California or the
United States Government. The term "Hazardous Material" includes, without
limitation, any substance, material or waste which is (i) defined as a
"hazardous waste" or similar term under the laws of the

                                       18
<PAGE>   22
jurisdiction where the Project is located; (ii) designated as a "hazardous
substance" pursuant to Section 311 of the Federal Water Pollution Control Act
(33 U.S.C. Section 1317); (iii) defined as a "hazardous waste" pursuant to
Section 1004 of the Federal Resource, Conservation and Recovery Act, 42 U.S.C.
Section 6901 et seq. (42 U.S.C. Section 6903); (iv) defined as a "hazardous
substance" pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C.
Section 9601); (v) hydrocarbons, petroleum, gasoline, crude oil or any products,
by-products or fractions thereof; or (vi) asbestos in any form or condition.

                (d) As used in this Article 6, the term "Laws" means any
applicable federal, state or local laws, ordinances, rules or regulations
relating to any Hazardous Material affecting the Project, including, without
limitation, the specific laws, ordinances and regulations referred to in Section
6.01(c) above. References to specific Laws shall also be references to any
amendments thereto and to any applicable successor Laws.

                (e) To the best of Landlord's knowledge, except as disclosed in
the environmental reports (the "Environmental Reports") provided to Tenant by
Landlord (at Landlord's sole cost and expense) (i) there are no Hazardous
Materials in the Building, and (ii) the Building is in compliance with all Laws
relating to any Hazardous Material. Landlord's knowledge is limited to the
matters contained in the Environmental Reports. Tenant acknowledges its receipt
and review of the Environmental Reports prior to entering into this Lease.
Landlord represents and warrants that (i) during the period of its ownership of
the Project prior to entering into this Lease, it has not released any Hazardous
Materials on the Project, and (ii) after entering into this Lease, Landlord will
not release any Hazardous Materials on the Project. Landlord hereby agrees to
indemnify, protect, defend and hold the Tenant harmless of and from any and all
claims, liability, costs, penalties, fines, damages, injury, judgments,
forfeiture, losses or expenses (including without limitation reasonable
attorneys' fees) arising out of or in any way related to any breach by Landlord
of its representations and warranties in this Section 6.01(e) and Landlord shall
be liable for the cost of any clean-up of the release of any Hazardous Materials
by Landlord on the Project. Landlord, at its sole expense, shall cause to be
removed any asbestos or other Hazardous Materials discovered in the Leased
Premises (except any Hazardous Materials installed by Tenant or part of the
Tenant Improvements) during the term of this Lease required by Government
Requirements to be removed and Landlord shall restore the Leased Premises to its
condition prior to the removal of such Hazardous Materials. Landlord hereby
agrees to indemnify, protect, defend and hold the Tenant harmless of and from
any and all claims, liability, costs, penalties, fines, damages, injury,
judgments, forfeiture, losses or expenses (including without limitation
reasonable attorneys' fees) arising out of or in any way related to or resulting
from any Hazardous Materials discovered in the Leased Premises or on the Project
with were not brought, kept, used, generated, released or disposed in, on, under
or about the Leased Premises or the Project by Tenant, its agents, employees,
contractors or invitees.

        6.2 LIMITATIONS ON ASSIGNMENT AND SUBLETTING. It shall not be
unreasonable for Landlord to withhold its consent to any proposed assignment or
subletting of the Leased Premises if (i) the proposed transferee's anticipated
use of the Leased Premises involves the generation, storage, use, treatment, or
disposal of Hazardous Material (excluding standard office and janitorial
supplies; in limited quantities as hereinabove provided); (ii) the proposed
transferee has been required by any prior landlord, lender or governmental
authority to take remedial action in connection with Hazardous Material
contaminating a property if the contamination resulted from such transferee's
actions or use of the property in question; or (iii) the proposed transferee is
subject to an enforcement order issued by any governmental authority in
connection with the generation, storage, use, treatment or disposal of a
Hazardous Material.

        6.3 RIGHT OF ENTRY. Landlord, its employees, agents and consultants,
shall have the right to enter the Leased Premises at any time, in case of an
emergency, and otherwise during reasonable hours and upon reasonable notice to
Tenant, in order to conduct periodic environmental inspections and tests to
determine whether any Hazardous Materials are present. The costs and expenses of
such inspections shall be paid by Landlord unless a default or breach of this
Lease, violation of Laws or contamination caused or permitted by Tenant is found
to exist. In such event, Tenant shall reimburse Landlord upon demand, as
Additional Rent, for the costs and expenses of such inspections.

                                       19
<PAGE>   23

        6.4 NOTICE TO LANDLORD. Tenant shall immediately notify Landlord in
writing of: (i) any enforcement, clean-up, removal or other governmental or
regulatory action instituted or threatened regarding the Leased Premises or the
Project pursuant to any Laws; (ii) any claim made or threatened by any person
against Tenant or the Leased Premises relating to damage, contribution, cost
recovery, compensation, loss or injury resulting from or claimed to result from
any Hazardous Material; and (iii) any reports made to or received from any
governmental agency arising out of or in connection with any Hazardous Material
in or removed from the Leased Premises or the Project, including any complaints,
notices, warnings or asserted violations in connection therewith. Tenant shall
also supply to Landlord as promptly as possible, and in any event within three
(3) business days after Tenant first receives or sends the same, copies of all
claims, reports, complaints, notices, warnings, asserted violations or other
communications relating in any way to the Leased Premises or Tenant's use
thereof.

                                   ARTICLE 7.
             INSURANCE, INDEMNITY, CONDEMNATION, DAMAGE AND DEFAULT

        7.1 LANDLORD'S INSURANCE. Landlord shall secure and maintain policies of
insurance for the Project (including the Leased Premises) covering loss of or
damage to the Project, including the Tenant Improvements, but excluding all
subsequent alterations, additions and improvements to the Leased Premises, with
loss payable to Landlord and to the holders of any deeds of trust, mortgages or
ground leases on the Project. Landlord shall not be obligated to obtain
insurance for Tenant's trade fixtures, equipment, furnishings, machinery or
other property. Such policies shall provide protection against fire and extended
coverage perils and such additional perils as Landlord deems suitable, and with
such deductible(s) as Landlord shall deem reasonably appropriate. Landlord shall
further secure and maintain commercial general liability insurance with respect
to the Project in such amount as Landlord shall determine, such insurance to be
in addition to, and not in lieu of, the liability insurance required to be
maintained by Tenant. In addition, Landlord may secure and maintain rental
income insurance. If the annual cost to Landlord for any such insurance exceeds
the standard rates because of the nature of Tenant's operations, Tenant shall,
upon receipt of appropriate invoices together with a statement signed by
Landlord's insurance carrier setting forth that the increase in insurance
premiums is directly attributable to Tenant's operations at the Leased Premises,
reimburse Landlord for such increases in cost, which amounts shall be deemed
Additional Rent hereunder. Tenant shall not be named as an additional insured on
any policy of insurance maintained by Landlord. The proceeds from any property
damage insurance maintained by Landlord hereunder shall be used in repair and
restoration of the Building.

        7.2 TENANT'S LIABILITY INSURANCE.

                (a) Tenant (with respect to both the Leased Premises and the
Project) shall secure and maintain, at its own expense, at all times during the
Term, a policy or policies of commercial general liability insurance protecting
Tenant and naming Landlord, the holders of any deeds of trust, mortgages or
ground leases on the Project, and Landlord's representatives (which term,
whenever used in this Article 7, shall be deemed to include Landlord's partners,
trustees, ancillary trustees, officers, directors, shareholders, beneficiaries,
agents, employees and independent contractors) as additional insureds against
claims for bodily injury, personal injury, advertising injury and property
damage (including attorneys' fees) based upon, involving or arising out of
Tenant's operations, assumed liabilities or Tenant's use, occupancy or
maintenance of the Leased Premises and the Common Areas of the Project. Such
insurance shall provide for a minimum amount of Two Million Dollars
($2,000,000.00) for property damage or injury to or death of one or more than
one person in any one accident or occurrence, with an annual aggregate limit of
at least Four Million Dollars ($4,000,000.00). The coverage required to be
carried shall include fire legal liability, blanket contractual liability,
personal injury liability (libel, slander, false arrest and wrongful eviction),
broad form property damage liability, products liability and completed
operations coverage (as well as owned, non-owned and hired automobile liability
if an exposure exists) and the policy shall contain an exception to any
pollution exclusion which insures damage or injury arising out of heat, smoke or
fumes from a hostile fire. Such insurance shall be written on an occurrence
basis and contain a separation of insureds provision or cross-liability
endorsement

                                       20
<PAGE>   24

acceptable to Landlord. Tenant shall provide Landlord with a certificate
evidencing such insurance coverage. The certificate shall indicate that the
insurance provided specifically recognizes the liability assumed by Tenant under
this Lease (including without limitation performance by Tenant under Section
7.04) and that Tenant's insurance is primary to and not contributory with any
other insurance maintained by Landlord, whose insurance shall be considered
excess insurance only. Not more frequently than every two (2) years, if, in the
opinion of any mortgagee of Landlord or of the insurance broker retained by
Landlord, the amount of liability insurance coverage at that time is not
adequate, then Tenant shall increase its liability insurance coverage as
required by either any mortgagee of Landlord or Landlord's insurance broker.

                (b) Tenant shall, at Tenant's expense, comply with (i) all
insurance company requirements pertaining to the use of the Leased Premises and
(ii) all rules, orders, regulations or requirements of the American Insurance
Association (formerly the National Board of Fire Underwriters) and with any
similar body.

        7.3 TENANT'S ADDITIONAL INSURANCE REQUIREMENTS.

                (a) Tenant shall secure and maintain, at Tenant's expense, at
all times during the Term, a policy of physical damage insurance on all of
Tenant's fixtures, furnishings, equipment, machinery, merchandise and personal
property in the Leased Premises and on any alterations, additions or
improvements made by or for Tenant upon the Leased Premises, all for the full
replacement cost thereof without deduction for depreciation of the covered items
and in amounts that meet any co-insurance clauses of the policies of insurance.
Such insurance shall insure against those risks customarily covered in an "all
risk" policy of insurance covering physical loss or damage. Tenant shall use the
proceeds from such insurance for the replacement of fixtures, furnishings,
equipment and personal property and for the restoration of any alterations,
additions or improvements to the Leased Premises. In addition, Tenant shall
secure and maintain, at all times during the Term, loss of income, business
interruption and extra expense insurance in such amounts as will reimburse
Tenant for direct or indirect loss of earnings and incurred costs attributable
to all perils commonly insured against by prudent tenants or attributable to
prevention of access to the Leased Premises or to the Building as a result of
such perils; such insurance shall be maintained with Tenant's property insurance
carrier. Further, Tenant shall secure and maintain at all times during the Term
workers' compensation insurance in such amounts as are required by law,
employer's liability insurance in the amount of One Million Dollars
($1,000,000.00) per occurrence, and all such other insurance as may be required
by applicable law or as may be reasonably required by Landlord. In the event
Tenant makes any alterations, additions or improvements to the Leased Premises,
prior to commencing any work in the Leased Premises, Tenant shall secure
"builder's all risk" insurance which shall be maintained throughout the course
of construction, such policy being an all risk builder's risk completed value
form, in an amount approved by Landlord, but not less than the total contract
price for the construction of such alterations, additions or improvements and
covering the construction of such alterations, additions or improvements, and
such other insurance as Landlord may reasonably require, it being understood and
agreed that all of such alterations, additions or improvements shall be insured
by Tenant pursuant to this Section 7.03 immediately upon completion thereof.
Tenant shall provide Landlord with certificates of all such insurance. The
property insurance certificate shall confirm that the waiver of subrogation
required to be obtained pursuant to Section 7.05 is permitted by the insurer.
Tenant shall, prior to the expiration of any policy of insurance required to be
maintained by Tenant under this Lease, furnish Landlord with an "insurance
binder" or other satisfactory evidence of renewal thereof.

                (b) All policies required to be carried by Tenant under this
Lease shall be issued by and binding upon a reputable insurance company of good
financial standing licensed or authorized to do business in the State of
California with a rating of at least A-VII, or such other rating as may be
required by a lender having a lien on the Project, as set forth in the most
current issue of "Best's Insurance Reports." Tenant shall not do or permit
anything to be done that would invalidate the insurance policies referred to in
this Article 7. Evidence of insurance provided to Landlord shall include an
endorsement showing that Landlord, its representatives and the holders of any
deeds of trust, mortgages or ground leases on the Project are included as
additional insureds on general liability insurance, and as loss payees for
property insurance, to the extent required hereunder, and an endorsement whereby
the insurer agrees not to cancel, non-renew or materially

                                       21
<PAGE>   25

alter the policy without at least thirty (30) days prior written notice to
Landlord, its representatives and any mortgagee of Landlord.

                (c) In the event that Tenant fails to provide evidence of
insurance required to be provided by Tenant under this Lease, prior to
commencement of the Term, and thereafter during the Term, within thirty (30)
days following Landlord's request therefor, and prior to the expiration date of
any such coverage, Landlord shall be authorized (but not required) to procure
such coverage in the amounts stated with all costs thereof (plus a ten percent
(10%) administrative fee) to be chargeable to Tenant and payable upon written
invoice therefor, which amounts shall be deemed Additional Rent hereunder.

                (d) The minimum limits of insurance required by this Lease, or
as carried by Tenant, shall not limit the liability of Tenant nor relieve Tenant
of any obligation hereunder.

        7.4 INDEMNITY AND EXONERATION.

                (a) Except for the negligence or willful misconduct of Landlord
and Landlord's representatives, Landlord and Landlord's representatives shall
not be liable for any loss, injury or damage to person or property of Tenant,
Tenant's agents, employees, contractors, invitees or any other person, whether
caused by theft, fire, act of God, acts of the public enemy, riot, strike,
insurrection, war, court order, requisition or order of governmental body or
authority or which may arise through repair, alteration or maintenance of any
part of the Project or failure to make any such repair or from any other cause
whatsoever, except as expressly otherwise provided in Sections 7.06 and 7.07.
Landlord shall not be liable for any loss, injury or damage arising from any act
or omission of any other tenant or occupant of the Project, nor shall Landlord
be liable under any circumstances for damage or inconvenience to Tenant's
business or for any loss of income or profit therefrom.

                (b) Tenant shall indemnify, protect, defend and hold the
Project, Landlord and its representatives, harmless of and from any and all
claims, liability, costs, penalties, fines, damages, injury, judgments,
forfeiture, losses (including without limitation diminution in the value of the
Leased Premises) or expenses (including without limitation attorneys' fees,
consultant fees, testing and investigation fees, expert fees and court costs)
arising out of or in any way related to or resulting directly or indirectly from
(i) the use or occupancy of the Leased Premises, (ii) the activities of Tenant,
its agents, employees, contractors or invitees in or about the Leased Premises
or the Project (where not covered by Landlord's insurance), (iii) any failure of
Tenant to comply with any applicable law, and (iv) any default or breach by
Tenant in the performance of any obligation of Tenant under this Lease;
provided, however, that the foregoing indemnity shall not be applicable to
claims arising by reason of the negligence or willful misconduct of Landlord or
Landlord's representative or are related to any Landlord default under this
Lease.

                (c) Tenant shall indemnify, protect, defend and hold the
Project, Landlord and its representatives, harmless of and from any and all
claims, liability, costs, penalties, fines, damages, injury, judgments,
forfeiture, losses (including without limitation diminution in the value of the
Leased Premises) or expenses (including without limitation attorneys' fees,
consultant fees, testing and investigation fees, expert fees and court costs)
arising out of or in any way related to or resulting directly or indirectly from
work or labor performed, materials or supplies furnished to or at the request of
Tenant or in connection with obligations incurred by or performance of any work
done for the account of Tenant in the Leased Premises or the Project, with the
exception of any such work, labor, materials or supplies directly related to any
Landlord Improvements or Tenant Improvements constructed pursuant to EXHIBIT B
attached hereto.

                (d) The provisions of this Section 7.04 shall survive the
expiration or sooner termination of this Lease. BY SIGNING ITS INITIALS BELOW,
TENANT ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS THE MEANING AND
RAMIFICATIONS OF THE PROVISIONS SET FORTH IN THIS SECTION 7.04 AND FURTHER
ACKNOWLEDGES THAT SUCH PROVISIONS WERE SPECIFICALLY NEGOTIATED.

------------------------
TENANT'S INITIALS

                                       22
<PAGE>   26

        7.5 WAIVER OF SUBROGATION. Anything in this Lease to the contrary
notwithstanding, Landlord and Tenant each waives all rights of recovery, claim,
action or cause of action against the other, its agents (including partners,
both general and limited), trustees, officers, directors, and employees, for any
loss or damage that may occur to the Leased Premises, or any improvements
thereto, or the Project or any personal property of such party therein, by
reason of any cause required to be insured against under this Lease to the
extent of the coverage required, regardless of cause or origin, including
negligence of the other party hereto, provided that such party's insurance is
not invalidated thereby; and each party covenants that, to the fullest extent
permitted by law, no insurer shall hold any right of subrogation against such
other party. Tenant shall advise its insurers of the foregoing and such waiver
shall be a part of each policy maintained by Tenant which applies to the Leased
Premises, any part of the Project or Tenant's use and occupancy of any part
thereof.

        7.6 CONDEMNATION.

                (a) If the Leased Premises are taken under the power of eminent
domain or sold under the threat of the exercise of such power (all of which are
referred to herein as "condemnation"), this Lease shall terminate as to the part
so taken as of the date the condemning authority takes title or possession,
whichever first occurs (the "date of taking"). If the Leased Premises or any
portion of the Project is taken by condemnation to such an extent as to render
the Leased Premises untenantable as reasonably determined by Landlord and
Tenant, this Lease shall, at the option of either party to be exercised in
writing within thirty (30) days after receipt of written notice of such taking,
forthwith cease and terminate as of the date of taking. All proceeds from any
condemnation of the Leased Premises shall belong and be paid to Landlord,
subject to the rights of any mortgagee of Landlord's interest in the Project or
the beneficiary of any deed of trust which constitutes an encumbrance thereon;
provided that Tenant shall be entitled to any compensation separately awarded to
Tenant for Tenant's relocation expenses or, loss of Tenant's trade fixtures. If
this Lease continues in effect after the date of taking pursuant to the
provisions of this Section 7.06(a), Landlord shall proceed with reasonable
diligence to repair, at its expense, the remaining parts of the Project and the
Leased Premises to substantially their former condition to the extent that the
same is feasible (subject to reasonable changes which Landlord shall deem
desirable) and so as to constitute a complete and tenantable Project and Leased
Premises. Gross Rent shall abate to the extent appropriate during the period of
restoration, and Gross Rent shall thereafter be equitably adjusted according to
the remaining Rentable Area of the Leased Premises and the Building.

                (b) In the event of a temporary taking of all or a portion of
the Leased Premises, there shall be no abatement of Rent and Tenant shall remain
fully obligated for performance of all of the covenants and obligations on its
part to be performed pursuant to the terms of this Lease. All proceeds awarded
or paid with respect thereto shall belong to Tenant.

        7.7 DAMAGE OR DESTRUCTION. In the event of a fire or other casualty in
the Leased Premises, Tenant shall immediately give notice thereof to Landlord.
The following provisions shall then apply:

                (a) If the damage is limited solely to the Leased Premises and
the Leased Premises can, in Landlord's opinion, be made tenantable with all
damage repaired within six (6) months from the date of damage, then Landlord
shall be obligated to rebuild the same to substantially their former condition
to the extent that the same is feasible (subject to reasonable changes which
Landlord shall deem desirable and such changes as may be required by applicable
law) and shall proceed with reasonable diligence to do so and this Lease shall
remain in full force and effect.

                (b) If portions of the Project outside the boundaries of the
Leased Premises are damaged or destroyed (whether or not the Leased Premises are
also damaged or destroyed) and the Leased Premises and the Project can, in
Landlord's reasonable opinion, both be made tenantable with all damage repaired
within six (6) months from the date of damage or destruction, and provided that
Landlord determines that it is economically feasible, then Landlord shall be
obligated to rebuild the same to substantially their former condition to the
extent that the same is feasible (subject to reasonable changes which Landlord
shall

                                       23
<PAGE>   27

reasonably deem desirable and such changes as may be required by applicable law)
and shall proceed with reasonable diligence to do so and this Lease shall remain
in full force and effect.

                (c) Notwithstanding anything to the contrary contained in
Sections 7.07(a) or 7.07(b) above, Landlord shall not have any obligation
whatsoever to repair, reconstruct or restore the Leased Premises when any damage
thereto or to the Project occurs during the last twelve (12) months of the Term
and Tenant has not effectively exercised any option granted to Tenant to extend
the Term. Under such circumstances, Landlord shall promptly notify Tenant of its
decision not to rebuild, whereupon the Lease shall terminate as of the date of
such notice.

                (d) If neither Section 7.07(a) nor 7.07(b) above applies,
Landlord shall so notify Tenant within sixty (60) days after the date of the
damage or destruction and either Tenant or Landlord may terminate this Lease
within thirty (30) days after the date of such notice, such termination notice
to be immediately effective; provided, however, that Landlord shall have the
right to elect to reconstruct the Project and the Leased Premises, in which
event (i) Landlord shall notify Tenant of such election within said sixty (60)
day period and Tenant shall thereupon have no right to terminate this Lease, and
(ii) Landlord shall proceed with reasonable diligence to rebuild the Project and
the Leased Premises to substantially their former condition to the extent that
the same is feasible (subject to reasonable changes which Landlord shall deem
desirable and such changes as may be required by applicable law).

                (e) During any period when Tenant's use of the Leased Premises
is significantly impaired by damage or destruction, Gross Rent shall abate in
proportion to the degree to which Tenant's use of the Leased Premises is
impaired until such time as the Leased Premises are made tenantable as
reasonably determined by Landlord; provided that no such rental abatement shall
be permitted if the casualty is the result of the negligence or willful
misconduct of Tenant or Tenant's employees, agents, contractors or invitees.

                (f) The proceeds from any insurance paid by reason of damage to
or destruction of the Project or any part thereof insured by Landlord shall
belong to and be paid to Landlord, subject to the rights of any mortgagee of
Landlord's interest in the Project or the beneficiary of any deed of trust which
constitutes an encumbrance thereon. Tenant shall be responsible at its sole cost
and expense for the repair, restoration and replacement of (i) its fixtures,
furnishings, equipment, machinery, merchandise and personal property in the
Leased Premises, and (ii) its alteration, additions and improvements; provided,
however, that Landlord shall have the option of requiring Tenant to assign to
Landlord (or any party designated by Landlord) some or all of the proceeds
payable to Tenant under this Article 7, whereupon Landlord shall be responsible
for the repair or restoration of such insured property.

                (g) Landlord's repair and restoration obligations under this
Section 7.07 shall not impair or otherwise affect the rights and obligations of
the parties set forth elsewhere in this Lease. Subject to Section 7.07(e),
Landlord shall not be liable for any inconvenience or annoyance to Tenant, its
employees, agents, contractors or invitees, or injury to Tenant's business
resulting in any way from such damage or the repair thereof. Landlord and Tenant
agree that the terms of this Lease shall govern the effect of any damage to or
destruction of the Leased Premises or the Project with respect to the
termination of this Lease and hereby waive the provisions of any present or
future statute or law to the extent inconsistent therewith.

        7.8 DEFAULT BY TENANT.

                (a) Events of Default. The occurrence of any of the following
shall constitute an event of default on the part of Tenant:

                        (1) Abandonment. Vacating the Leased Premises without
the intention to reoccupy same, or abandonment of the Leased Premises for a
continuous period of six (6) months.

                        (2) Nonpayment Of Rent. Failure to pay any installment
of Rent due and payable hereunder on the date when payment is due, such failure
continuing for a period of three (3) business days after written notice of such
failure; provided, however, that Landlord shall not be required to provide

                                       24
<PAGE>   28

such notice more than one (1) time during any Computation Year of the Term with
respect to non-payment of Gross Rent or Additional Rent, the third such
non-payment constituting default without requirement of notice; furthermore, if
Tenant shall be served with a demand for the payment of past due Rent, any
payment(s) tendered thereafter to cure any default by Tenant shall be made only
by cashier's check, wire-transfer or direct deposit of immediately available
funds;

                        (3) Other Obligations. Failure to perform any
obligation, agreement or covenant under this Lease other than those matters
specified in subsections 7.08(a)(1) and 7.08(a)(2), such failure continuing for
a period of fifteen (15) business days after written notice of such failure (or
such longer period as is reasonably necessary to remedy such default, provided
that Tenant commences the remedy within such fifteen (15)-day period and
continuously and diligently pursues such remedy at all times until such default
is cured);

                        (4) General Assignment. Any general arrangement or
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 against Tenant,
which involuntary petition remains undischarged for a period of sixty (60) days.
In the event that 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, within 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 assurances as may be necessary to ensure
Landlord of the continued performance of Tenant's obligations under this Lease;

                        (6) Receivership. The appointment of a trustee or
receiver to take possession of all or substantially all of Tenant's assets or
the Leased Premises, where possession is not restored to Tenant within ten (10)
business days;

                        (7) Attachment. The attachment, execution or other
judicial seizure of all or substantially all of Tenant's assets or the Leased
Premises, if such attachment or other seizure remains undismissed or
undischarged for a period of ten (10) business days after the levy thereof;

                        (8) Insolvency. The admission by Tenant in writing of
its inability to pay its debts as they become due; the filing by Tenant of a
petition seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation; the filing by Tenant of an answer admitting or failing timely
to contest a material allegation of a petition filed against Tenant in any such
proceeding; or, if within sixty (60) days after the commencement of any
proceeding against Tenant seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, such proceeding shall not have been
dismissed;

                        (9) Guarantor. If the performance of Tenant's
obligations under this Lease is guaranteed: (i) the death of a guarantor; (ii)
the termination of a guarantor's liability with respect to this Lease other than
in accordance with the terms of such guaranty; (iii) a guarantor's becoming
insolvent or the subject of a bankruptcy filing; (iv) a guarantor's refusal to
honor the guaranty; or (v) a guarantor's breach of its guaranty obligation on an
anticipatory breach basis, and Tenant's failure, within sixty (60) days
following written notice by or on behalf of Landlord to Tenant of any such
event, to provide Landlord with written alternative assurance or security,
which, when coupled with the then existing resources of Tenant, equals or
exceeds the combined financial resources of Tenant and the guarantor(s) that
existed at the time of execution of this Lease; or

                        (10) Partner. If Tenant is a partnership or consists of
more than one (1) person or entity, if any partner of the partnership or any
person or entity constituting Tenant is involved in any of the events or acts
described in subsections 7.08(a)(4) through (8).

                                       25
<PAGE>   29

                        (11) Misrepresentation. The discovery by Landlord that
any representation, warranty or financial statement given to Landlord by Tenant
or any guarantor of Tenant's obligations under this Lease was materially false
or misleading.

                (b) Remedies Upon Default:

                        (1) Termination. If an event of default occurs, Landlord
shall have the right, with or without notice or demand, immediately (after
expiration of any applicable grace period specified herein) to terminate this
Lease, and at any time thereafter recover possession of the Leased Premises or
any part thereof and expel and remove therefrom Tenant and any other person
occupying the same, by any lawful means, and again repossess and enjoy the
Leased Premises without prejudice to any of the remedies that Landlord may have
under this Lease, or at law or in equity by reason of Tenant's default or of
such termination.

                        (2) Continuation After Default. Even though Tenant has
breached this Lease and/or abandoned the Leased Premises, this Lease shall
continue in effect for so long as Landlord does not terminate Tenant's right to
possession under subsection 7.08(b)(1) hereof in writing, and Landlord may
enforce all of its rights and remedies under this Lease, including (but 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 amended or successor code section. Acts of maintenance or preservation,
efforts to relet the Leased Premises or the appointment of a receiver upon
application of Landlord to protect Landlord's interest under this Lease shall
not constitute an election to terminate Tenant's right to possession. If
Landlord elects to relet the Leased Premises for the account of Tenant, the rent
received by Landlord from such reletting shall be applied as follows: first, to
the payment of any indebtedness other than Rent due hereunder from Tenant to
Landlord; second, to the payment of any costs of such reletting; third, to the
payment of the cost of any alterations or repairs to the Leased Premises;
fourth, to the payment of Rent due and unpaid hereunder; and the balance, if
any, shall be held by Landlord and applied in payment of future Rent as it
becomes due. If that portion of rent received from the reletting which is
applied against the Rent due hereunder is less than the amount of the Rent due,
Tenant shall pay the deficiency to Landlord promptly upon demand by Landlord.
Such deficiency shall be calculated and paid monthly. Tenant shall also pay to
Landlord, as soon as determined, any costs and expenses incurred by Landlord in
connection with such reletting or in making alterations and repairs to the
Leased Premises, which are not covered by the rent received from the reletting.

                (c) Damages Upon Termination. Should Landlord terminate this
Lease pursuant to the provisions of subsection 7.08(b)(1) hereof, Landlord shall
have all the rights and remedies of a landlord provided by Section 1951.2 of the
Civil Code of the State of California. Upon such termination, in addition to any
other rights and remedies to which Landlord may be entitled under applicable
law, Landlord shall be entitled to recover from Tenant: (i) the worth at the
time of award of the unpaid Rent and other amounts which had been earned at the
time of termination; (ii) the worth at the time of award of the amount by which
the unpaid Rent which would have been earned after termination until the time of
award exceeds the amount of such Rent loss that Tenant proves could have been
reasonably avoided; (iii) the worth at the time of award of the amount by which
the unpaid Rent for the balance of the Term after the time of award exceeds the
amount of such Rent loss that Tenant proves could be reasonably avoided; and
(iv) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which, in the ordinary course of things, would be likely to result
therefrom. The "worth at the time of award" of the amounts referred to in
clauses (i) and (ii) shall be computed with interest at the lesser of twelve
percent (12%) per annum or the maximum rate then allowed by law. The "worth at
the time of award" of the amount referred to in clause (iii) shall be computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of the award plus one percent (1%).

                (d) Computation of Rent for Purposes of Default. For purposes of
computing unpaid Rent which would have accrued and become payable under this
Lease pursuant to the provisions of

                                       26
<PAGE>   30

Section 7.08(c), unpaid Rent shall consist of the sum of:

                        (1) the total Base Rent for the balance of the Term,
plus

                        (2) a computation of Tenant's Proportionate Share of
Increased Basic Operating Cost for the balance of the Term, the assumed amount
for the Computation Year of the default and each future Computation Year in the
Term to be equal to Tenant's Proportionate Share of Increased Basic Operating
Cost for the Computation Year immediately prior to the year in which default
occurs, compounded at a per annum rate equal to the mean average rate of
inflation for the preceding five (5) calendar years as determined by the United
States Department of Labor, Bureau of Labor Statistics Consumer Price Index (All
Urban Consumers, all items (1982-84=100)) for the Metropolitan Area or Region in
which the Project is located. If such Index is discontinued or revised, the
average rate of inflation shall be determined by reference to the index
designated as the successor or substitute index by the government of the United
States.

                (e) Late Charge. If any payment required to be made by Tenant
under this Lease is not received by Landlord on or before the date the same is
due after expiration of all applicable notice and cure periods, Tenant shall pay
to Landlord an amount equal to ten percent (10%) of the delinquency. The parties
agree that Landlord would incur costs not contemplated by this Lease by virtue
of such delinquencies, including without limitation administrative, collection,
processing and accounting expenses, the amount of which would be extremely
difficult to compute, and the amount stated herein represents a reasonable
estimate thereof. Acceptance of such late charge by Landlord shall in no event
constitute a waiver of Tenant's breach or default with respect to such
delinquency, or prevent Landlord from exercising any of Landlord's other rights
and remedies.

                (f) Interest on Past-Due Obligations. Except as expressly
otherwise provided in this Lease, any Rent due Landlord hereunder, other than
late charges, which is not received by Landlord on the date on which it was due,
shall bear interest from the day after it was due at the maximum rate then
allowed by law, in addition to the late charge provided for in Section 7.08(e).

                (g) Landlord's Right to Perform. Notwithstanding anything to the
contrary set forth elsewhere in this Lease, in the event Tenant fails to perform
any affirmative duty or obligation of Tenant under this Lease, then after
expiration of all applicable notice and cure periods (except without notice in
case of an emergency) Landlord may (but shall not be obligated to) perform such
duty or obligation on Tenant's behalf, including, without limitation, the
obtaining of insurance policies or governmental licenses, permits or approvals.
Tenant shall reimburse Landlord upon demand for the costs and expenses of any
such performance (including penalties, interest and attorneys' fees incurred in
connection therewith). Such costs and expenses incurred by Landlord shall be
deemed Additional Rent hereunder.

                (h) Remedies Cumulative. All rights, privileges and elections or
remedies of Landlord are cumulative and not alternative with all other rights
and remedies at law or in equity to the fullest extent permitted by law.

                (i) Waiver. Tenant waives any right of redemption or relief from
forfeiture under California Code of Civil Procedure Sections 1174 and 1179, or
under any other present or future law in the event Tenant is evicted and
Landlord takes possession of the Leased Premises by reason of a default.

                                   ARTICLE 8.
                                 OPTION TO RENEW

        8.1 OPTION TO RENEW.

                (a) Landlord hereby grants to Tenant one (1) option (the
"Option") to extend the term of this Lease for an additional period of five (5)
years (the "Option Term"), all on the following terms and conditions:

                                       27
<PAGE>   31

                        (1) The Option must be exercised, if at all, by written
notice irrevocably exercising the Option ("Option Notice") delivered by Tenant
to Landlord not later than twelve (12) months prior to the Term Expiration Date.
Further, the Option shall not be deemed to be properly exercised if, as of the
date of the Option Notice or at the Term Expiration Date, (i) Tenant is in
default under this Lease, (ii) Tenant has assigned this Lease or its interest
therein (other than to an affiliate or subsidiary of Tenant), or (iii) Tenant,
or Tenant's affiliate or subsidiary, is in possession of less than fifty percent
(50%) of the square footage of the Leased Premises. Provided Tenant has properly
and timely exercised the Option, the term of this Lease shall be extended for
the period of the Option Term, and all terms, covenants and conditions of this
Lease shall remain unmodified and in full force and effect, except that the Base
Rent shall be modified as set forth in subsection 8.01(a)(2) below.

                        (2) The Base Rent payable for the Option Term shall be
the greater of (i) the Base Rent payable on the Term Expiration Date, or (ii)
the then-current rental rate per rentable square foot (as further defined below,
"FMRR") being agreed to in new leases by the Landlord and other landlords of
buildings in the San Francisco, California area which are comparable in quality,
location and prestige to the Building ("Comparable Buildings") and tenants
leasing space in the Building or Comparable Buildings. As used herein, "FMRR"
shall mean the rental rate per rentable square foot for which Landlord and other
landlords are entering into new leases within the time period of fifteen (15) to
twelve (12) months prior to the Term Expiration Date ("Market Determination
Period"), with new tenants leasing from Landlord and other landlords office
space in the Building and Comparable Buildings ("Comparative Transactions"). To
the extent such other Comparable Buildings have historically received lower or
higher rents from the rents in the Building, then for the purpose of arriving at
the FMRR, such rates when used to establish the FMRR in the Building shall be
increased or decreased as appropriate to reflect such historical differences.
Landlord shall provide its determination of the FMRR to Tenant within twenty
(20) days after Landlord receives the Option Notice. Tenant shall have fifteen
(15) days ("Tenant's Review Period") after receipt of Landlord's notice of the
FMRR within which to accept such FMRR or to reasonably object thereto in
writing. In the event Tenant objects to the FMRR submitted by Landlord, Landlord
and Tenant shall attempt to agree upon such FMRR. If Landlord and Tenant fail to
reach agreement on such FMRR within fifteen (15) days following Tenant's Review
Period (the "Outside Agreement Date"), then each party shall place in a separate
sealed envelope its final proposal as to FMRR and such determination shall be
submitted to arbitration in accordance with subparagraph 8.01(b) below.

                (b) Landlord and Tenant shall meet with each other within five
(5) business days of the Outside Agreement Date and exchange the sealed
envelopes and then open such envelopes in each other's presence. If Landlord and
Tenant do not mutually agree upon the FMRR within one (1) business day of the
exchange and opening of envelopes, then, within ten (10) business days of the
exchange and opening of envelopes, Landlord and Tenant shall agree upon and
jointly appoint one arbitrator who shall be by profession be a real estate
appraiser or broker who shall have been active over the five (5) year period
ending on the date of such appointment in the leasing of comparable commercial
properties in the vicinity of the Building. Neither Landlord nor Tenant shall
consult with such broker or appraiser as to his or her opinion as to FMRR prior
to the appointment. The determination of the arbitrator shall be limited solely
to the issue of whether Landlord's or Tenant's submitted FMRR for the Premises
is the closer to the actual rental rate per rentable square foot for new leases
within the Market Determination Period for Comparative Transactions. Such
arbitrator may hold such hearings and require such briefs as the arbitrator, in
his or her sole discretion, determines is necessary. In addition, Landlord or
Tenant may submit to the arbitrator with a copy to the other party within five
(5) business days after the appointment of the arbitrator any data and
additional information that such party deems relevant to the determination by
the arbitrator ("Data") and the other party may submit a reply in writing within
five (5) business days after receipt of such Data.

                        (1) The arbitrator shall, within thirty (30) days of his
or her appointment, reach a decision as to whether the parties shall use
Landlord's or Tenant's submitted FMRR, and shall notify Landlord and Tenant of
such determination.

                        (2) The decision of the arbitrator shall be binding upon
Landlord and Tenant.

                                       28
<PAGE>   32

                        (3) If Landlord and Tenant fail to agree upon and
appoint such arbitrator, then the appointment of the arbitrator shall be made by
the American Arbitration Association.

                        (4) The cost of arbitration shall be paid by Landlord
and Tenant equally.

                        (5) The arbitration proceeding and all evidence given or
discovered pursuant thereto shall be maintained in confidence by all parties.

                                   ARTICLE 9.
                              MISCELLANEOUS MATTERS

        9.1 PARKING. None.

        9.2 BROKERS. Landlord has been represented in this transaction by
Landlord's Broker. Tenant has been represented in this transaction by Tenant's
Broker. Upon full execution of this Lease by both parties, Landlord shall pay to
Landlord's Broker and Tenant's Broker a fee for brokerage services rendered by
it in this transaction provided for in separate written agreements between
Landlord and Landlord's Broker and Landlord's Broker and Tenant's Broker. Tenant
represents and warrants to Landlord that the brokers named in the Basic Lease
Information sheet are the only agents, brokers, finders or other similar parties
with whom Tenant has had any dealings in connection with the negotiation of this
Lease and the consummation of the transaction contemplated hereby. Tenant hereby
agrees to indemnify, defend and hold Landlord free and harmless from and against
liability for compensation or charges which may be claimed by any agent, broker,
finder or other similar party by reason of any dealings with or actions of
Tenant in connection with the negotiation of this Lease and the consummation of
this transaction, including any costs, expenses and attorneys' fees incurred
with respect thereto.

        9.3 NO WAIVER. No waiver by either party of the default or breach of any
term, covenant or condition of this Lease by the other shall be deemed a waiver
of any other term, covenant or condition hereof, or of any subsequent default or
breach by the other of the same or of any other term, covenant or condition
hereof. Landlord's consent to, or approval of, any act shall not be deemed to
render unnecessary the obtaining of Landlord's consent to, or approval of, any
subsequent or similar act by Tenant, or be construed as the basis of an estoppel
to enforce the provision or provisions of this Lease requiring such consent.
Regardless of Landlord's knowledge of a default or breach at the time of
accepting Rent, the acceptance of Rent by Landlord shall not be a waiver of any
preceding default or breach by Tenant of any provision hereof, other than the
failure of Tenant to pay the particular Rent so accepted. Any payment given
Landlord by Tenant may be accepted by Landlord on account of monies or damages
due Landlord (with the exception of any such amounts in dispute) notwithstanding
any qualifying statements or conditions made by Tenant in connection therewith,
which statements and/or conditions shall be of no force or effect whatsoever
unless specifically agreed to in writing by Landlord at or before the time of
deposit of such payment.

        9.4 RECORDING. Neither this Lease nor a memorandum thereof shall be
recorded without the prior written consent of Landlord, which consent may be
withheld in Landlord's sole discretion.

        9.5 HOLDING OVER. If Tenant holds over after expiration or termination
of this Lease without the written consent of Landlord, Tenant shall pay for each
month of hold-over tenancy 150% of the Gross Rent which Tenant was obligated to
pay for the month immediately preceding the end of the Term for each month or
any part thereof of any such hold-over period, together with such other amounts
as may become due hereunder. Any holding over shall constitute a lease from
month-to-month, terminable upon thirty (30) days' notice from either party on
the terms of this Lease except that monthly rental shall be 150% of the Gross
Rent which Tenant was obligated to pay for the month immediately preceding the
end of the Term, together with such other amounts as may become due hereunder.

        9.6 TRANSFERS BY LANDLORD. The term "Landlord" as used in this Lease
shall mean the owner(s) at

                                       29
<PAGE>   33

the time in question of the fee title to the Leased Premises or, if this is a
sublease, of the Tenant's interest in the master lease. If Landlord transfers,
in whole or in part, its rights and obligations under this Lease or in the
Project, upon its transferee's assumption of Landlord's obligations hereunder
and delivery to such transferee of any unused Security Deposit then held by
Landlord, no further liability or obligations shall thereafter accrue against
the transferring or assigning person as Landlord hereunder. Subject to the
foregoing, the obligations and/or covenants in this Lease to be performed by the
Landlord shall be binding only upon the Landlord as defined in this Section
9.06.

        9.7 ATTORNEYS' FEES. In the event either party places the enforcement of
this Lease, or any part of it, or the collection of any Rent due, or to become
due, hereunder, or recovery of the possession of the Leased Premises, in the
hands of an attorney, or files suit upon the same, the prevailing party shall
recover its reasonable attorneys' fees, costs and expenses, including those
which may be incurred on appeal. Such fees may be awarded in the same suit or
recovered in a separate suit, whether or not suit is filed or any suit that may
be filed is pursued to decision or judgment. The term "prevailing party" shall
include, without limitation, a party who substantially obtains or defeats the
relief sought, as the case may be, whether by compromise, settlement, judgment,
or the abandonment by the other party of its claim or defense. The attorneys'
fee award shall not be computed in accordance with any court fee schedule, but
shall be such as to fully reimburse all attorneys' fees reasonably incurred.

        9.8 TERMINATION; MERGER. No act or conduct of Landlord, including,
without limitation, the acceptance of keys to the Leased Premises, shall
constitute an acceptance of the surrender of the Leased Premises by Tenant
before the scheduled Term Expiration Date. Only a written notice from Landlord
to Tenant shall constitute acceptance of the surrender of the Leased Premises
and accomplish a termination of this Lease. Unless specifically stated otherwise
in writing by Landlord, the voluntary or other surrender of this Lease by
Tenant, the mutual termination or cancellation hereof, or a termination hereof
by Landlord for default by Tenant, shall automatically terminate any sublease or
lesser estate in the Leased Premises; provided, however, Landlord shall, in the
event of any such surrender, termination or cancellation, have the option to
continue any one or all of any existing subtenancies. Landlord's failure within
thirty (30) days following any such event to make any written election to the
contrary by written notice to the holder of any such lesser interest, shall
constitute Landlord's election to have such event constitute the termination of
such interest.

        9.9 AMENDMENTS; INTERPRETATION. This Lease may not be altered, changed
or amended, except by an instrument in writing signed by the parties in interest
at the time of the modification. The captions of this Lease are for convenience
only and shall not be used to define or limit any of its provisions.

        9.10 SEVERABILITY. If any term or provision of this Lease, or the
application thereof to any person or circumstances, shall to any extent be
invalid or unenforceable, the remainder of this Lease, or the application of
such provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each provision of
this Lease shall be valid and shall be enforceable to the fullest extent
permitted by law.

        9.11 NOTICES. All notices, demands, consents and approvals which are
required or permitted by this Lease to be given by either party to the other
shall be in writing and shall be deemed to have been fully given by personal
delivery or by recognized overnight courier service or when deposited in the
United States mail, certified or registered, with postage prepaid, and addressed
to the party to be notified at the address for such party specified on the Basic
Lease Information sheet, 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 given in accordance with this Section 9.11, except that upon
Tenant's taking possession of the Leased Premises, the Leased Premises shall
constitute Tenant's address for notice purposes. A copy of all notices given to
Landlord under this Lease shall be concurrently transmitted to such party or
parties at such addresses as Landlord may from time to time hereafter designate
by notice to Tenant.

        Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt
card, or if no delivery date is shown, the postmark thereon. Notices delivered
by nationally recognized overnight courier shall be deemed given twenty-four
(24) hours

                                       30
<PAGE>   34

after delivery of the same to the courier. If notice is received on a Saturday,
Sunday or legal holiday, it shall be deemed received on the next business day.
Tenant hereby appoints as its agent to receive the service of all default
notices and notice of commencement of unlawful detainer proceedings the person
in charge of or apparently in charge of or occupying the Leased 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 Leased Premises.

        9.12 FORCE MAJEURE. Any prevention, delay or stoppage of work to be
performed by Landlord or Tenant which is due to strikes, labor disputes,
inability to obtain labor, materials, equipment or reasonable substitutes
therefor, acts of God, governmental restrictions or regulations or controls,
judicial orders, enemy or hostile government actions, civil commotion, or other
causes beyond the reasonable control of the party obligated to perform
hereunder, shall excuse performance of the work by that party for a period equal
to the duration of that prevention, delay or stoppage. Nothing in this Section
9.12 shall excuse or delay Tenant's obligation to pay Rent or other charges due
under this Lease.

        9.13 GUARANTOR. If there are to be any guarantors of this Lease, the
guarantee shall be on a form provided by Landlord, and each such guarantor shall
have the same obligations as Tenant under this Lease, including, but not limited
to, the obligation to provide the estoppel certificate and information called
for by Section 5.13. It shall constitute a default of Tenant under this Lease if
any such guarantor fails or refuses, upon reasonable request by Landlord, to
give: (a) evidence of the due execution of the guarantee called for by this
Lease, including the authority of the guarantor (and of the party signing on
guarantor's behalf) to obligate such guarantor on said guarantee, and including,
in the case of a corporate guarantor, a certified copy of a resolution of the
board of directors of guarantor authorizing the making of such guarantee,
together with a certificate of incumbency showing the signatures of the persons
authorized to sign on its behalf; (b) current financial statements of guarantor
as may, from time to time, be requested by Landlord; (c) an estoppel
certificate; or (d) written confirmation that the guarantee is still in effect.

        9.14 SUCCESSORS AND ASSIGNS. This Lease shall be binding upon and inure
to the benefit of Landlord, its successors and assigns (subject to the
provisions hereof, including, without limitation, Section 5.15), and shall be
binding upon and inure to the benefit of Tenant, its successors, and to the
extent assignment or subletting, may be approved or deemed approved by Landlord
hereunder, Tenant's assigns or subtenants.

        9.15 FURTHER ASSURANCES. Landlord and Tenant each agree to promptly sign
all documents reasonably requested to give effect to the provisions of this
Lease.

        9.16 INCORPORATION OF PRIOR AGREEMENTS. This Lease, including the
exhibits and addenda attached to it, contains all agreements of Landlord and
Tenant with respect to any matter referred to herein. No prior agreement or
understanding pertaining to such matters shall be effective.

        9.17 APPLICABLE LAW. This Lease shall be governed by, construed and
enforced in accordance with the laws of the State of California.

        9.18 TIME OF THE ESSENCE. Time is of the essence of each and every
covenant of this Lease. Each and every covenant, agreement or other provision of
this Lease on Tenant's part to be performed shall be deemed and construed as a
separate and independent covenant of Tenant, not dependent on any other
provision of this Lease or on any other covenant or agreement set forth herein.

        9.19 NO JOINT VENTURE. This Lease shall not be deemed or construed to
create or establish any relationship of partnership or joint venture or similar
relationship or arrangement between Landlord and Tenant hereunder.

        9.20 AUTHORITY. If Tenant is a corporation, trust or general or limited
partnership, each individual executing this Lease on behalf of Tenant represents
and warrants that he or she is duly authorized to execute and deliver this Lease
on Tenant's behalf and that this Lease is binding upon Tenant in accordance with
its terms. If Tenant is a corporation, trust or partnership, Tenant shall,
within ten (10) business days after

                                       31
<PAGE>   35

request by Landlord, deliver to Landlord evidence satisfactory to Landlord of
such authority.

        9.21 [intentionally deleted].

        9.22 OFFER. Preparation of this Lease by Landlord or Landlord's agent
and submission of same to Tenant shall not be deemed an offer to lease to
Tenant. This Lease is not intended to be binding and shall not be effective
until fully executed by both Landlord and Tenant.

     [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE TO FOLLOW.]

                                       32
<PAGE>   36

        9.23 EXHIBITS; ADDENDA. The following Exhibits and addenda are attached
to, incorporated in and made a part of this Lease: EXHIBIT A Floor Plan of the
Leased Premises; EXHIBIT B Initial Improvement of the Leased Premises; EXHIBIT C
Confirmation of Term of Lease; EXHIBIT D Building Rules and Regulations; and
EXHIBIT E Form of Fleet National Bank's Lease Subordination, Non-Disturbance and
Attornment Agreement.

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

                                     "LANDLORD":

                                     CEP INVESTORS XII LLC,
                                     a Delaware limited liability company

                                     By: EPI Investors XII LLC,
                                         a California limited liability company
                                         Its Manager

                                         By: Ellis Partners, Inc.,
                                             a California corporation
                                             Its Manager

                                             By:  /s/ JAMES F. ELLIS
                                                -------------------------
                                             Typed Name:  James F. Ellis
                                                        -----------------
                                             Title:
                                                   ----------------------

                                     "TENANT":

                                     FORT POINT PARTNERS, INC.,
                                     a California corporation

                                     By:  /s/ MATTHEW ROCHE
                                        ---------------------------------
                                     Typed Name:  Matthew Roche
                                                -------------------------
                                     Title:  President
                                           ------------------------------

                                     By:  /s/  JAMES T. ROCHE
                                        ---------------------------------
                                     Typed Name:  James Roche
                                                -------------------------
                                     Title:   CEO
                                           ------------------------------

                                       33
<PAGE>   37

                                    EXHIBIT A

                                   FLOOR PLAN
                                     OF THE
                                 LEASED PREMISES

                                       1

<PAGE>   38

                                    EXHIBIT B

                   INITIAL IMPROVEMENT OF THE LEASED PREMISES

        1. Tenant Improvements and Landlord Improvements. Landlord shall cause
Pankow Builders (the "Contractor") to construct and install the Tenant
Improvements (as defined below) and the Landlord Improvements (as defined
below). The Contractor shall construct and install the tenant improvements (the
"Tenant Improvements") in the Leased Premises, substantially in accordance with
plans, working drawings and specifications ("Tenant's Plans") prepared by
Landlord's architects and electrical, structural, mechanical, HVAC and other
engineers and consultants and approved by Landlord and Tenant, which approval
shall not be unreasonably withheld, conditioned or delayed by either party. The
contract between Landlord and Landlord's architect shall be subject to Tenant's
approval, which approval shall not be unreasonably withheld. The costs of
preparing Tenant's Plans and performing the Tenant Improvements shall be
allocated between, and paid by, Landlord and Tenant as set forth in this EXHIBIT
B.

                (a) Landlord shall enter into a construction contract with
Contractor for the construction of the Tenant Improvements in accordance with
Tenant's Plans. The construction contract shall be in a form and shall contain
such terms and conditions as may be approved by Tenant, which approval shall not
be unreasonably withheld. Tenant shall have three (3) days to review the first
draft of the proposed construction contract and two (2) business days to respond
to any revision of the construction contract thereafter. The construction
contract shall provide that Tenant is a third party beneficiary of the contract
and shall be entitled to enforce all warranties directly against the Contractor.
The construction contract shall also provide that the work to be performed shall
be performed for cost plus a fixed fee of fifteen percent (15%) (which fee shall
include the Contractor's overhead, general conditions and profit) to a
guaranteed maximum price with all savings to accrue to the Tenant. The
guaranteed price may include a contingency of up to five percent (5%) of the
total amount of bids received from subcontractors and materialmen for the work
and the use of such contingency shall require the consent of the Tenant. Any
unused contingency shall be credited to Tenant. The construction contract shall
include allowances only for those items for which Tenant approves allowances,
which approval shall not be unreasonably withheld. The Contractor shall be
responsible for any costs due to its negligence or breach and for overtime
required to complete the work (unless approved by Tenant) on time and for any
changes due to governmental or other requirements which are not properly
addressed or included in the Tenant's Plans.

                (b) Landlord shall require Contractor to competitively bid major
subcontracts and materials purchases. With the exception of mechanical,
electrical and fire safety subcontractors (whose charges shall not exceed those
generally charged in other similar buildings in the vicinity for tenant
improvement projects of the sort described in the Tenant's Plans), at least
three bids shall be secured for each subcontract and material contract. All bids
shall be on a fixed price basis. Tenant shall have the right to select which of
the bids will be acceptable.

                (c) Landlord shall supervise the completion of the Tenant
Improvements in accordance with Tenant's Plans and shall use best efforts to
secure Substantial Completion of such work by October 15, 1999, as to the 20th
floor, and by December 1, 1999, as to the balance of the Leased Premises.
Landlord and Tenant acknowledge that completion of the 20th floor by October 15,
1999 may require overtime and Tenant will not unreasonably withhold its approval
for use of overtime labor.

        2. Tenant's Plans. Tenant and Landlord shall mutually approve Tenant's
Plans in writing, each party's approval shall not be unreasonably withheld. When
the Tenant's Plans are completed, they shall be submitted to Tenant for review
together with a preliminary estimate of costs prepared by Contractor broken down
by category and trade, so that Tenant may review the Tenant's Plans and make
reasonable decisions concerning costs. Tenant's Plans shall also be submitted by
Landlord to the appropriate governmental body for plan checking and a building
permit. Landlord shall, at Landlord's sole cost and expense, make any changes to
Tenant's Plans required to obtain a building permit. Tenant shall have ten (10)
days from its receipt of Tenant's Plans and preliminary cost estimates to
approve or disapprove Tenant's Plans in writing. If

                                       1
<PAGE>   39

Tenant disapproves Tenant's Plans, Landlord shall cause Tenant's Plans to be
revised and new preliminary estimates of costs to be prepared to reflect the
changes requested by Tenant and revised Tenant's Plans and revised preliminary
cost estimates shall be submitted to Tenant for its approval or disapproval. The
process of review, revision and submission to Tenant for approval or disapproval
shall be continued until Tenant's Plans and the preliminary costs are approved
by Landlord and Tenant. Tenant shall be deemed to have disapproved Tenant's
Plans if Tenant fails to reply within such ten-day period, but such failure to
reply shall constitute a Tenant Delay. Landlord shall use commercially
reasonable efforts to ensure that the Tenant's Plans comply with all applicable
codes, laws, ordinances, rules and regulations, not adversely affect the
Building shell or core or any systems, components or elements of the Building,
are in a form sufficient to secure the approval of all government authorities
with jurisdiction over the Building, and are otherwise satisfactory to Landlord
and Tenant in their reasonable discretion. Tenant's Plans shall be complete
plans, working drawings and specifications for the layout, improvement and
finish of the Leased Premises consistent with the construction of the Building,
including mechanical and electrical drawings and decorating plans, showing at a
minimum, all of the following:

                (1) Location and type of all partitions;

                (2) Location and type of all doors, with hardware and keying
schedule;

                (3) Ceiling plans, including light fixtures;

                (4) Location of telephone equipment room, with all special
electrical and cooling requirements;

                (5) Location and type of all electrical outlets, switches,
telephone outlets, and lights;

                (6) Location of all sprinklers (on a design build basis or in
consultation with a sprinkler engineer);

                (7) Location and type of all equipment requiring special
electrical requirements;

                (8) Location, weight per square foot and description of any
heavy equipment or filing system exceeding fifty (50) pounds per square foot
live and dead load;

                (9) Requirements for air conditioning or special ventilation;

                (10) Location, type and color of floor covering;

                (11) Location, type and color of wall covering;

                (12) Location, type and color of paint or finishes;

                (13) Location and type of plumbing;

                (14) Location, brands, model numbers and type of kitchen
equipment;

                (15) Indicate critical dimensions necessary for construction;

                (16) Details showing all millwork with verified dimensions and
dimensions of all equipment to be built in, corridor entrances, bracing or
support of special walls or glass partitions, and any other items or information
requested by Landlord;

                (17) Location of all cabling; and

                (18) Location and design of Tenant's server room and battery
back-up system and other

                                       2
<PAGE>   40

systems and all special electrical and heating and ventilation requirements.

        3. Landlord's review and approval of Tenant's Plans shall not
constitute, and Landlord shall not be deemed to have made, any representation or
warranty as to the suitability of the Leased Premises or the Tenant Improvements
for Tenant's needs, except as expressly provided in this Lease.

        4. Construction.

                (a) The Tenant Improvements and the Landlord Improvements in the
Leased Premises and in the Building shall be diligently completed substantially
in accordance with Tenant's Plans by the Contractor in a good and workmanlike
manner. Notwithstanding anything in the Lease to the contrary, "Substantial
Completion" of the Tenant Improvements on any floor shall not be deemed to have
occurred until Tenant's receipt of a factually correct notice from Landlord's
architect certifying to Tenant that each of the following is true and correct:
(a) the Tenant Improvements on the floor in question are substantially complete
except for minor details which will not adversely affect Tenant's ability to
conduct its business operations on such floor; (b) Landlord's Improvements on or
affecting the floor in question have been substantially completed; and (c) all
mechanical and electrical systems serving the floor in question are functioning
in a normal manner, consistent with their design. Landlord shall have no
liability to Tenant if the Leased Premises is not suitable for Tenant's
occupancy or if Tenant or Landlord has not obtained all the necessary permits
for Tenant to occupy the Leased Premises by October 15, 1999, as to the 20th
floor, and by December 1, 1999, as to the balance of the Leased Premises.

                (b) Landlord, at its sole cost and expense, shall provide or
construct the following (collectively, "Landlord's Improvements") in the Leased
Premises and the Building (if applicable), in accordance with all applicable
laws, rules, codes and ordinances, including without limitation, the Americans
with Disabilities Act, the disability access requirements of California Title
24, and building codes:

                        (i) Floor Coverings: All existing floor coverings shall
be removed.

                        (ii) Elevator: The elevator systems serving, and the
elevator lobbies located on, the 20th, 21st and 22nd floors shall be restored
and refurbished using first-class materials, including, without limitation,
incandescent lighting and carpeting or high-quality tiling and wood paneling.

                        (iii) Partitions/Ceilings: All existing partitions shall
be demolished.

                        (iv) Sprinkler System: Landlord shall provide the tap
into the main sprinkler riser and install the main sprinkler loop around the
core area of the Leased Premises in compliance with all requirements of Section
403.24.1, et. seq., of the San Francisco Building Code as the same exist as of
the date of this Lease regardless of when such requirements will become
effective, including the installation of sprinkler drops and heads.

                        (v) Life Safety Systems: Landlord shall provide Class
"E" and strobe panels with adequate connection points on the floors of the
Leased Premises for code-required speaker and strobe lights as well as flow and
tamper switches for the sprinkler systems, in accordance with existing code. The
panels are to be installed in proximity to the Leased Premises. Landlord shall
provide life safety systems in all common areas on the floors of the Leased
Premises, if any, in accordance with all applicable laws, codes and ordinances,
including, without limitation, ADA compliant strobe/horn units ad addressable
manual pull stations at all exits, exit stairways, and in common area corridors
of the floors of the Leased Premises, if any. Landlord shall supply the capacity
to the base building fire alarm system to add all tenant fire alarm devices
required by all applicable laws, codes and ordinances in the Leased Premises.
The point of connection shall for such wiring shall be a junction box in the
base building electrical room of each floor. Landlord shall provide a power
supply connected to the base building fire alarm system to power ADA-compliant
strobe lights required by code in the Leased Premises. The power supply shall
provide four outputs of 1.5 amps maximum each or 4 amps maximum total.

                        (vi) Bathrooms and Common Corridors: All restrooms (one
for each sex on each

                                       3
<PAGE>   41

floor) on the floors of the Leased Premises shall be brought to meet all local
codes, as well as ADA. Cosmetically, Landlord shall refurbish the restrooms in a
manner consistent with a Class "A" San Francisco office tower including, without
limitation, ceramic floor and wall tiles (up to ceiling), new fixtures similar
in style to those found in other restrooms in the Building. Landlord shall also
correct all existing code violations, if any, in the common areas on the floors
of the Leased Premises, if any.

                        (vii) Electrical Load Requirements: Landlord shall
provide an average of 6.5 watts per usable square foot of the Leased Premises
(1.5 watts of the 6.5 watts shall be for lighting), peak demand load, of
electrical power per floor stubbed to electrical closets on each floor of the
Leased Premises each located at either end of the core area of the Leased
Premises. Notwithstanding the foregoing, Tenant may use more electrical power as
long as Tenant's use does not adversely affect any other Tenant of the Building.

                        (viii) Telephone Requirements: Landlord shall provide to
Tenant 200 pairs of copper phone wire per floor stubbed to the telephone closet
(with capacity to add fiber optic cable) of each floor located at the core area
of the Leased Premises.

                        (ix) Condenser Water Loop: Landlord shall provide a
condenser water loop stubbed to each of the floors of the Leased Premises for
access to condensed water for Tenant's air conditioning needs (however, Tenant,
at its sole cost, shall be responsible for the installation, operation and
maintenance of such air conditioning units).

                        (x) Exterior: Complete weather-tight exterior.

                        (xi) Heating and Ventilating Control System: Any
Building management system for control of the heating and ventilating system as
may be required by the Landlord.

                        (xii) Security System: Any security systems required by
the Landlord.

                        (xiii) Structural: A structural system in compliance
with all seismic and other codes.

                        (xiv) Asbestos Abatement: Removal (if accessible) or
encapsulation of all asbestos containing materials located in the Leased
Premises.

        5. Landlord's and Tenant's Contributions. Landlord shall give Tenant an
allowance in the maximum amount of (i) $30.00 per square foot of Rentable Area
as to the 20th floor ($285,420 based upon 9,514 rentable square feet), (ii)
$30.00 per square foot of Rentable Area as to the 21st floor ($286,830 based
upon 9,561 rentable square feet), and (iii) $38.00 per square foot of Rentable
Area as to the 22nd floor ($335,312 based upon 8,824 rentable square feet),
which equals $907,562.00 ("Landlord's Contribution"). A maximum of $2.00 per
square foot of Rentable Area may be used by Tenant towards communications
equipment and cabling. Landlord shall pay Landlord's Contribution directly to
Landlord's architects and engineers and to the Contractor for the account of
Tenant, in installments as professional services for Tenant's Plans are
rendered, and Tenant Improvements are completed, upon Landlord's receipt of a
written request for payment accompanied by written invoices and other written
evidence reasonably satisfactory to Landlord showing the costs incurred, until
Landlord's Contribution is exhausted. Tenant shall pay to Landlord (or Landlord
may deduct from Landlord's Contribution), a construction management fee of $1.00
per square foot of rentable Area, which equals $27,899.00, based upon 27,899
rentable square feet (the "Construction Management Fee").

                (a) If the Improvement Costs (as defined below) for which Tenant
is responsible are reasonably estimated to exceed Landlord's Contribution, then
Tenant shall contribute, within ten (10) days after request from the Landlord
its share of each progress payment or other Improvement Cost paid by Landlord
which share shall be the percentage derived by dividing the amount by which the
Improvement Costs, in excess of Landlord's Contribution, for which Tenant is
responsible by the total Improvement Costs.

                                       4
<PAGE>   42

When the work in the Leased Premises is completed, then Landlord shall, as soon
as reasonably practicable, furnish Tenant with an accounting of all Improvement
Costs and Tenant's share of such costs for Tenant's approval, which approval
shall not be unreasonably withheld or delayed (in no event shall Tenant's
approval take longer than ten (10) days). Any amounts owing to either party
shall be settled in cash within ten (10) days after the accounting has been
approved by Tenant. If Landlord's Contribution is not expended for the Tenant
Improvements within three months after substantial completion of the Tenant
Improvements, then the amount not expended shall be given to Tenant as a credit
against Base Rent next coming due under the Lease.

                (b) Landlord's Contribution shall be expended only for
"Improvement Costs", which shall consist only of the following to the extent
expended for Tenant Improvements (and the preparation of Tenant's Plans):

                        (i) all amounts paid to the Contractor, pursuant to
Landlord's general construction contract therewith, for costs of the work,
subject to the guaranteed maximum price in the general contract;

                        (ii) all costs paid to the Contractor with respect to
any changes which have been requested by Tenant and which are not required as a
result of any errors or omissions by Landlord;

                        (iii) fees, charges, and levies by any governmental
agencies for authorizations, licenses, and permits required in connection with
the Tenant Improvements;

                        (iv) all utility connection charges and payments;

                        (v) sales and use taxes;

                        (vi) testing and inspection costs;

                        (vii) costs paid to contractors installing Tenant's
cabling, telephone, furniture systems and other work designated by Tenant or to
other contractors which Landlord and Landlord agree shall perform any work of
improvement at the Leased Premises;

                        (viii) all reasonable amounts paid to Landlord's
architects and to prepare Tenant's Plans, but excluding any changes thereto
which are required as a result of any errors or omissions by Landlord; and

                        (ix) the Construction Management Fee.

                (c) All costs other than Improvement Costs which are incurred by
Landlord in connection with the design and construction of work in the Leased
Premises or the Building shall be borne by Landlord, which excluded items shall
include, without limitation, the following:

                        (i) all costs to complete Landlord's Improvements and
the Building core and shell including, without limitation, all costs of plans,
permits and engineering associated therewith;

                        (ii) costs for any improvements which are not described
in the final Tenant's Plans;

                        (iii) accountants' fees and attorneys' fees incurred by
Landlord;

                        (iv) other than as agreed to by Tenant in the guaranteed
maximum price contract or an approved change order, costs for overtime labor in
excess of any reasonable amount provided for in the general contract or any
subcontract or material supply contract if not previously approved by Tenant;

                        (v) except to the extent caused by Tenant delays, costs
incurred as a

                                       5
<PAGE>   43

consequence of delay, errors or omissions, or construction defects caused by
Landlord;

                        (vi) the costs of correcting or replacing any work for
which monies are payable under any warranty or insurance; and

                        (vii) charges for the use of elevators, hoists, parking
or other Building facilities, services or equipment during construction.

        6. Changes. Except for minor and immaterial changes, if Tenant requests
any change in Tenant's Plans, Tenant shall request such change in a written
notice to Landlord. Any such Tenant requested change ("Change Request") in
materials or change in specifications in the Tenant's Plans after the approval
thereof by Landlord and Tenant, shall be made only after the approval of
Landlord which shall not be unreasonably withheld, conditioned or delayed. No
Change Request shall be incorporated into the Tenant's Improvements unless
Landlord has submitted an estimate to Tenant in writing of the increased cost
thereof, and Landlord and Tenant have agreed in writing on such Change Request
in excess of such item which would have been provided in accordance with
Tenant's Plans. If Tenant approves such estimate it shall notify Landlord in
writing within seven (7) days and the Contractor shall process such work. If
Tenant shall fail to timely approve such estimate, such failure shall be deemed
a disapproval and the Contractor shall proceed with the work as set forth in
Tenant's Plans. Savings resulting from any Change Request incorporated into the
Tenant Improvements shall reduce the guaranteed maximum price. The net
additional cost any Change Request incorporated into the Tenant Improvements
shall increase the guaranteed price and shall be an Improvement Cost.

        7. Other Work by Tenant. The furnishing and installing of furniture,
telephone equipment (excluding wiring and cabling to the extent a part of the
Landlord's Improvements), office equipment and wiring, shall be furnished and
installed by Tenant at Tenant's expense. Subject to the provisions of the Lease
and subject to the approval of the Contractor, Tenant shall have the right to
install computer cabling, telephone cabling and other telecommunications cabling
and equipment during construction of the Tenant Improvements so that they are
integrated with the Tenant Improvements. Subject to the provisions of the Lease
and subject to the approval of the Contractor, Tenant shall also have the right
to have its equipment and furniture systems installed during continuation of the
work on the Tenant Improvements so that they are integrated with the other work
being performed on the Leased Premises. Landlord shall make reasonable efforts
to accommodate such work by Tenant and shall keep Tenant informed of scheduling
and other information reasonably required so that Tenant may schedule such work
and its move into the Leased Premises.

        8. Requirements for Other Work Performed by Tenant. All other work
performed at the Building or in the Project by Tenant or Tenant's contractor or
subcontractors shall be subject to the following additional requirements:

                (a) Such work shall not proceed until Landlord has reasonably
approved in writing: (i) Tenant's contractor, (ii) the amount and coverage of
public liability and property damage insurance, with Landlord named as an
additional insured, carried by Tenant's contractor, (iii) complete and detailed
plans and specifications for such work, and (iv) a schedule for the work.
Landlord shall provide its approval or disapproval (and specifying the reasons
for any disapproval) within two (2) business days after request by Tenant. If
Landlord fails to respond to any request within such two-day period, Landlord
shall be deemed to have disapproved such requested matters.

                (b) All work shall be done in conformity with a valid permit
when required, a copy of which shall be furnished to Landlord before such work
is commenced. In any case, all such work shall be performed in accordance with
all applicable laws. Notwithstanding any failure by Landlord to object to any
such work, Landlord shall have no responsibility for Tenant's failure to comply
with applicable laws.

                (c) Tenant or Tenant's contractor shall arrange for necessary
utility, hoisting and freight elevator service, on a nonexclusive basis, with
Landlord for which Landlord shall not charge Tenant. Landlord

                                       6
<PAGE>   44

shall have the right to require any necessary movement of large, heavy or bulky
materials requiring the use of a freight elevator to be done after regular
working hours.

                (d) Tenant shall be responsible for cleaning the Leased
Premises, the Building and the Project and removing all debris in connection
with work by Tenant or its contractors. All completed work shall be subject to
inspection and acceptance by Landlord. Tenant shall reimburse Landlord for the
cost all extra reasonable expense incurred by Landlord by reason of faulty work
done by Tenant or Tenant's contractor or by reason of inadequate cleanup by
Tenant or Tenant's contractor. Landlord will provide Tenant with copies of third
party consultant invoices within five (5) business days of Tenant's request for
such invoices.

        9. Tenant Delay. If the completion of the Tenant Improvements is delayed
(i) at the written request of Tenant, (ii) by Tenant's failure to comply with
the foregoing provisions (including failure to pay any sums payable by Tenant
within the time periods specified herein), (iii) by changes in the Tenant's
Plans ordered by Tenant or by extra work ordered by Tenant, (iv) because Tenant
chooses to have additional work performed by Landlord, or (v) because of any
other act or omission of Tenant (collectively, "Tenant Delay"), then Tenant
shall be responsible for all costs and any expenses occasioned by such Tenant
Delay including, without limitation, any costs and expenses attributable to
increases in labor or materials. Notwithstanding the foregoing, and except as
provided for in paragraph 2 above, no Tenant Delay shall be deemed to have
occurred unless and until Landlord has provided notice to Tenant, in compliance
with the Lease, specifying the action or inaction by Tenant which Landlord
contends constitutes a Tenant Delay. If such action or inaction is not cured by
Tenant within one (1) business day after receipt of such notice and if such
action actually causes a delay in the Substantial Completion of the work in the
Leased Premises, then a Tenant Delay, as set forth in such notice, shall be
deemed to have occurred commencing as of the second (2nd) business day following
receipt of such notice and continuing for the number of days Landlord was in
fact delayed in the Substantial Completion of the Tenant Improvements in the
Leased Premises. If a Tenant Delay actually causes the delay of Substantial
Completion and the Term Commencement Date, then Tenant shall pay Lessor the Base
Rent for the portion of the Leased Premises affected for the entire period of
such delay.

        10. Punch List. Substantial Completion shall be October 15, 1999 for the
20th floor and December 1, 1999 for the 21st and 22nd floors unless Landlord
provides Tenant with a written notice that Substantial Completion of the Tenant
Improvements will be a later date. Except as otherwise specified by Tenant in
the punch list described, and except for latent defects, Tenant shall be deemed
to have accepted the Leased Premises upon Substantial Completion. If Tenant
discovers minor deviations or variations from the plans and specifications for
Tenant's improvements which do not materially and adversely affect Tenant's use
of the Leased Premises and are of a nature commonly found on a "punch list" (as
that term is used in the construction industry), Tenant shall, within fifteen
(15) days of Substantial Completion, notify Landlord in writing ("Punch List")
of such deviations. Landlord shall promptly repair all Punch List items. The
existence of such Punch List items, and Landlord's correction and repair of the
same, shall not postpone the Term Commencement Date or Tenant's obligation to
pay Rent. All Punch List items shall be completed as soon as reasonably
practicable, but not later than thirty (30) days after the Punch List is given
to the Landlord by the Tenant.

                                       7
<PAGE>   45

                                    EXHIBIT C

                          CONFIRMATION OF TERM OF LEASE

        This Confirmation of Term of Lease is made by and between _____, a
_____, as Landlord, and _____, a _____, as Tenant, who agree as follows:

        1. Landlord and Tenant entered into a Lease dated ____________________,
19_____ (the "Lease"), in which Landlord leased to Tenant and Tenant leased from
Landlord the Leased Premises described in the Basic Lease Information sheet of
the Lease (the "Leased Premises").

        2. Pursuant to Section 3.01 of the Lease, Landlord and Tenant agree to
confirm the commencement date and expiration date of the Term of the Lease as
follows:

                a. _________________________, 19_____, is the Term Commencement
                   Date;

                b. _________________________, 19_____, is the Term Expiration
                   Date;

                c. _________________________, 19_____, is the commencement date
                   of Rent under the Lease.

        3. Tenant hereby confirms that the Lease is in full force and effect
and:

                a. It has accepted possession of the Leased Premises as provided
                   in the Lease;

                b. The improvements and space required to be furnished by
                   Landlord under the Lease have been furnished;

                c. Landlord has fulfilled all its duties of an inducement
                   nature;

                d. The Lease has not been modified, altered or amended, except
                   as follows:__________________________________________________
                   _____; and

                e. There are no setoffs or credits against Rent and no security
                   deposit has been paid except as expressly provided by the
                   Lease.

     [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE TO FOLLOW.]

                                       1

<PAGE>   46

        4. The provisions of this Confirmation of Term of Lease shall inure to
the benefit of, or bind, as the case may require, the parties and their
respective successors, subject to the restrictions on assignment and subleasing
contained in the Lease.

        DATED: _________________________, 19_____

"LANDLORD":                                      "TENANT":

CEP INVESTORS XII LLC,                           FORT POINT PARTNERS, INC.,
a Delaware limited liability company             a California corporation

By: EPI Investors XII LLC,                       By:____________________________
    a California limited liability company
    Its Manager                                  Typed Name:____________________

                                                 Title:_________________________

    By: Ellis Partners, Inc.,
        a California corporation,
        Its Manager

        By:______________________________

        Typed Name:______________________

        Title:___________________________

                                       2

<PAGE>   47

                                    EXHIBIT D
                         BUILDING RULES AND REGULATIONS

        1. The sidewalks, doorways, halls, stairways, vestibules and other
similar areas shall not be obstructed by Tenant or used by it for any purpose
other than ingress to and egress from the Leased Premises, and for going from
one part of the Building to another part. Corridor doors, when not in use, shall
be kept closed. Before leaving the Building, Tenant shall ensure that all doors
to the Leased Premises are securely locked and all water faucets and electricity
are shut off.

        2. Plumbing fixtures shall be used only for their designated purpose,
and no foreign substances of any kind shall be deposited therein. Damage to any
such fixtures resulting from misuse by Tenant or any employee or invitee of
Tenant shall be repaired at the expense of Tenant.

        3. Nails, screws and other attachments to the Building require prior
written consent from Landlord, except for the routine hanging of pictures and
diplomas or certifications. Tenant shall not mar or deface the Leased Premises
in any way. Tenant shall not place anything on or near the glass of any window,
door or wall which may appear unsightly from outside the Leased Premises.

        4. All contractors and technicians rendering any installation service to
Tenant shall be subject to Landlord's approval and supervision prior to
performing services. This applies to all work performed in the Building,
including, but not limited to, installation of telephones, telegraph equipment,
wiring of any kind, and electrical devices, as well as all installations
affecting floors, walls, woodwork, windows, ceilings and any other physical
portion of the Building.

        5. Movement in or out of the Building of furniture, office equipment,
safes or other bulky material which requires the use of elevators, stairways, or
the Building entrance and lobby shall be restricted to hours established by
Landlord. All such movement shall be under Landlord's supervision, and the use
of an elevator for such movements shall be restricted to the Building's freight
elevator. Arrangements shall be made at least 24 hours in advance with Landlord
regarding the time, method, and routing of such movements. Tenant shall pay for
the services of the employees of the elevator service company employed when
safes and other heavy articles are moved into or from the Building, and Tenant
shall assume all risks of damage and pay the cost of repairing or providing
compensation for damage to the Building, to articles moved and injury to persons
or property resulting from such moves. Landlord shall not be liable for any acts
or damages resulting from any such activity.

        6. Landlord shall have the right to limit the weight and size of, and to
designate the location of, all safes and other heavy property brought into the
Building.

        7. Tenant shall cooperate with Landlord in maintaining the Leased
Premises. Tenant shall not employ any person for the purpose of cleaning the
Leased Premises other than the Building's cleaning and maintenance personnel.
Window cleaning shall be done only by Landlord's agents at such times and during
such hours as Landlord shall elect. Janitorial services will not be furnished on
nights when rooms are occupied after 7:00 P.M.

        8. Deliveries of water, soft drinks, newspapers or other such items to
the Leased Premises shall be restricted to hours established by Landlord and
made by use of the freight elevator if Landlord so directs.

        9. Nothing shall be swept or thrown into the corridors, halls, elevator
shafts or stairways. No birds, fish or animals of any kind shall be brought into
or kept in, on or about the Leased Premises, with the exception of guide dogs
where necessary.

        10. No cooking shall be done in the Leased Premises except in connection
with a convenience lunch room for the sole use of employees and guests (on a
non-commercial basis) in a manner which complies with all of the provisions of
the Lease and which does not produce fumes or odors.

                                       2
<PAGE>   48

        11. Food, soft drink or other vending machines shall not be placed
within the Leased Premises without Landlord's prior written consent.

        12. Tenant shall not install or operate on the Leased Premises any
electric heater, stove or similar equipment without Landlord's prior written
consent. Tenant shall not use or keep on the Leased Premises any kerosene,
gasoline, or inflammable or combustible fluid or material other than limited
quantities reasonably necessary for the operation and maintenance of office
equipment utilized at the Leased Premises. No explosives shall be brought onto
the Project at any time.

        13. Tenant shall not waste electricity or water and agrees to cooperate
fully with Landlord to assure the most effective operation of the Building's
heating and to comply with any governmental energy-saving rules, laws or
regulations of which Tenant has actual notice.

        14. [Intentionally deleted]

        15. Tenant, its employees, agents and invitees shall each comply with
all requirements necessary for the security of the Leased Premises, including,
if implemented by Landlord, the use of service passes issued by Landlord for
after-hours movement of office equipment/packages, and the signing of a security
register in the Building lobby after hours. Landlord reserves the right to
refuse entry to the Building after normal business hours to Tenant, its
employees, agents or invitees, or any other person without satisfactory
identification showing his or her right of access to the Building at such time.
Landlord shall not be liable for any damages resulting from any error in regard
to any such identification or from such admission to or exclusion from the
Building. Landlord shall not be liable to Tenant for losses due to theft or
burglary, or for damage by unauthorized persons in, on or about the Project, and
Tenant assumes full responsibility for protecting the Leased Premises from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry closed.

        16. Landlord will furnish Tenant with a reasonable number of initial
keys for entrance doors into the Leased Premises, and may charge Tenant for
additional keys thereafter. All such keys shall remain the property of Landlord.
No additional locks are allowed on any door of the Leased Premises without
Landlord's prior written consent and Tenant shall not make any duplicate keys.
Upon termination of this Lease, Tenant shall surrender to Landlord all keys to
the Leased Premises, and give to Landlord the combination of all locks for safes
and vault doors, if any, in the Leased Premises.

        17. Tenant shall not bring into (or permit to be brought into) the
Building any bicycle or other type of vehicle.

        18. Landlord retains the right at any time, without liability to Tenant,
to change the name and street address of the Building, except as otherwise
expressly provided in the Lease with respect to signage.

        19. Canvassing, peddling, soliciting, and distribution of handbills in
or at the Project are prohibited and Tenant will cooperate to prevent these
activities.

        20. The Building hours of operation are 7:00 A.M. to 6:00 P.M., Monday
through Friday, excluding holidays. Landlord reserves the right to close and
keep locked all entrance and exit doors of the Building on Saturdays, Sundays
and legal holidays, and between the hours of 6:01 P.M. of any day and 6:59 A.M.
of the following day, and during such other hours as Landlord may deem advisable
for the protection of the Building and the tenants thereof.

        21. The requirements of Tenant will be attended to only upon application
to the Project manager. Employees will not perform any work or do anything
outside of their regular duties unless under specific instruction from the
Project manager.

        22. Tenant shall cooperate fully with the life safety program of the
Building as established and administered by Landlord. This shall include
participation by Tenant and its employees in exit drills, fire inspections, life
safety orientations and other programs relating to fire and life safety that may
be established

                                       3

<PAGE>   49

by Landlord.

        23. No smoking shall be permitted in the Building.

        24. Landlord reserves the right to rescind any of these rules and
regulations and to make future rules and regulations required for the safety,
protection and maintenance of the Project, the operation and preservation of the
good order thereof, and the protection and comfort of the tenants and their
employees and visitors. Such rules and regulations, when made and written notice
thereof given to Tenant, shall be binding as if originally included herein.
Landlord shall not be responsible to Tenant for the non-observance or violation
of these rules and regulations by any other tenant of the Building. Landlord
reserves the right to exclude or expel from the Project any person who, in
Landlord's judgment, is under the influence of liquor or drugs, or who shall in
any manner do any act in violation of any of these rules and regulations

                                       4

<PAGE>   50

                                       5

<PAGE>   51

LANDLORD REPRESENTS AND WARRANTS THAT TO THE BEST OF ITS KNOWLEDGE ANY HANDLING,
TRANSPORTATION, STORAGE, TREATMENT OR USE OF HAZARDOUS MATERIALS, AS DEFINED
BELOW, THAT HAVE OCCURRED IN, ON, UNDER OR IN THE VICINITY OF THE PREMISES OR
THE BUILDING PRIOR TO THE COMMENCEMENT DATE HAVE BEEN IN COMPLIANCE WITH ALL
APPLICABLE LAWS; THAT NO LEAK, SPILL, RELEASE, DISCHARGE, EMISSION OR DISPOSAL
OF HAZARDOUS MATERIALS HAS OCCURRED IN, ON, UNDER OR IN THE VICINITY OF THE
PREMISES OR THE BUILDING PRIOR TO THE COMMENCEMENT DATE; THAT THE SOIL,
GROUNDWATER, AND SOIL VAPOR IN, ON, UNDER OR IN THE VICINITY OF THE PREMISES AND
THE BUILDING ARE FREE OF TOXIC OR HAZARDOUS MATERIALS AS OF THE COMMENCEMENT
DATE AND THAT AS OF THE COMMENCEMENT DATE THE PREMISES, DOES NOT CONTAIN ANY
ASBESTOS, LEAD PAINT RADON OR PCB'S.

Landlord covenants and agrees that, as between Tenant and Landlord, Landlord
shall at all times be responsible and liable for, and be in compliance with all
Governmental Requirements relating to health and safety and environmental
matters, arising, directly or indirectly, out of use of Hazardous Materials in
the Project, with the exception of any such use of Hazardous Materials by
Tenant. Landlord shall be liable for, and shall promptly perform, all clean-up,
remediation and monitoring of any release of Hazardous Materials within the
Project, with the exception of any release for which Tenant is responsible
pursuant to Subsection 6.01(b) above, and the cost of such clean-up, remediation
and monitoring shall not be included within Basic Operating Costs.

                                       6
<PAGE>   52

                                   EXHIBIT E

                      LEASE SUBORDINATION, NON-DISTURBANCE
                            AND ATTORNMENT AGREEMENT

        This agreement ("Lease Subordination,, Non-Disturbance and Attornment
Agreement" or "Agreement") is made as of the _______ day of
_______________________, 199_, among FLEET NATIONAL BANK, a national banking
association organized under the laws of the United States, and having a place of
business at Suite 800, 111 Westminster Street, Providence, Rhode Island 02903,
as Agent (the "Agent") for the Lenders (as that term is defined in a certain
Loan Agreement by and between the hereinafter defined Borrower, the Agent and
the Lenders), ___________________, a ____________________, having a place of
business at ________________________ ("Landlord" or "Borrower"), and
_____________________________________ ("Tenant").

                             Introductory Provisions

        A. Agent and the Lenders are relying on this Agreement as an inducement
to Lenders in making and maintaining a loan ("Loan") secured by, among other
things, a [Mortgage and Security Agreement] [Deed of Trust and Security
Agreement] ("Mortgage") given by Borrower to Agent covering property commonly
known as and numbered __________________________, ___________________,
__________________ and further described in Exhibit A attached hereto
("Property"). Agent is also the "Assignee" under an Assignment of Leases and
Rents ("Assignment") from Borrower with respect to the Property.

        B. Tenant is the tenant under that certain lease ("Lease") dated
________________, 19__, made with [Landlord] [Landlord's predecessor in title],
covering certain premises ("Premises") at the Property as more particularly
described in the Lease [and in the "Notice of Lease" dated
______________________, 19__ which has been recorded at __________________ in
Book _____________, Page __________].

        C. Lenders require, as a condition to the making and maintaining of the
Loan, that the Mortgage be and remain superior to the Lease and that Agent's
rights under the Assignment be recognized.

        D. Tenant requires as a condition to the Lease being subordinate to the
Mortgage that its rights under the Lease be recognized.

        E. Agent, Landlord, and Tenant desire to confirm their understanding
with respect to the Mortgage and the Lease.

<PAGE>   53

        NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements contained herein, and other valuable consideration, the receipt
and adequacy of which are hereby acknowledged, and with the understanding by
Tenant that Lenders shall rely hereon in making and maintaining the Loan, Agent,
Landlord, and Tenant agree as follows:

        1. Subordination. The Lease and the rights of Tenant thereunder are
subordinate and inferior to the Mortgage and any amendment, renewal,
substitution, extension or replacement thereof and each advance made thereunder
as though the Mortgage, and each such amendment, renewal, substitution,
extension or replacement were executed and recorded, and the advance made,
before the execution of the Lease.

        2. Non-Disturbance. So long as Tenant is not in default (beyond any
period expressed in the Lease within which Tenant may cure such default) in the
payment of rent or in the performance or observance of any of the terms,
covenants or conditions of the Lease on Tenant's part to be performed or
observed, (i) Tenant's occupancy of the Premises shall not be disturbed by
Agent in the exercise of any of its rights under the Mortgage during the term of
the Lease, or any extension or renewal thereof made in accordance with the terms
of the Lease, and (ii) Agent will not join Tenant as a party defendant in any
action or proceeding for the purpose of terminating Tenant's interest and estate
under the Lease because of any default under the Mortgage.

        3. Attornment and Certificates. In the event Agent succeeds to the
interest of Borrower as Landlord under the Lease, or if the Property or the
Premises are sold pursuant to any foreclosure of the Mortgage, Tenant shall
attorn to Agent, or a purchaser upon any such foreclosure sale, and shall
recognize Agent, or such purchaser, thereafter as the Landlord under the Lease.
Such attornment shall be effective and self-operative without the execution of
any further instrument. Tenant agrees, however, to execute and deliver at any
time and from time to time, upon the request of any holder(s) of any of the
indebtedness or other obligations secured by the Mortgage, or upon request of
any such purchaser, (a) any instrument or certificate which, in the reasonable
judgment of such holder(s), or such purchaser, may be necessary or appropriate
in any such foreclosure proceeding or otherwise to evidence such attornment, and
(b) an instrument or certificate regarding the status of the Lease, consisting
of statements, if true (and if not true, specifying in what respect), (i) that
the Lease is in full force and effect, (ii) the date through which rentals have
been paid, (iii) the duration and date of the commencement of the term of the
Lease, (iv) the nature of any amendments or modifications to the Lease, (v) that
no default, or state of facts, which with the passage of time, or notice, or
both, would constitute a default, exists on the part of either party to the
Lease, and (vi) the dates on which payments of additional rent, if any, are due
under the Lease.

                                       2
<PAGE>   54
        4. Limitations. If Agent exercises any of its rights under the
Assignment or the Mortgage, or if Agent shall succeed to the interest of
Landlord under the Lease in any manner, or if any purchaser acquires the
Property, or the Premises, upon or after any foreclosure of the Mortgage, or any
deed in lieu thereof, Agent or such purchaser, as the case may be, shall have
the same remedies by entry, action or otherwise in the event of any default by
Tenant (beyond any period expressed in the Lease within which Tenant may cure
such default) in the payment of rent or in the performance or observance of any
of the terms, covenants and conditions of the Lease on Tenant's part to be paid,
performed or observed that the Landlord had or would have had if Agent or such
purchaser had not succeeded to the interest of the present Landlord. From and
after any such attornment, Agent or such purchaser shall be bound to Tenant
under all the terms, covenants and conditions of the Lease, and Tenant shall,
from and after such attornment to Agent, or to such purchaser, have the same
remedies against Agent, or such purchaser, for the breach of an agreement
contained in the Lease that Tenant might have had under the Lease against
Landlord, if Agent or such purchaser had not succeeded to the interest of
Landlord. Provided, however, that Agent or such purchaser shall only be bound
during the period of its ownership, and that in the case of the exercise by
Agent of its rights under the Mortgage, or the Assignment, or any combination
thereof, or a foreclosure, or deed in lieu of foreclosure, all Tenant claims
shall be satisfied only out of the interest, if any, of Agent, or such
purchaser, in the Property, and Agent and such purchaser shall not be (a) liable
for any act or omission of any prior landlord (including the Landlord); or (b)
liable for or incur any obligation with respect to the construction of the
Property or any improvements of the Premises or the Property; or (c) subject to
any offsets or defenses which Tenant might have against any prior landlord
(including the Landlord); or (d) bound by any rent or additional rent which
Tenant might have paid for more than the then current rental period to any prior
landlord (including the Landlord); or (e) bound by any amendment or modification
of the Lease, or any consent to any assignment or sublet, made without Agent's
prior written consent; or (f) bound by or responsible for an security deposit
not actually received by Agent; or (g) liable for or incur any obligation with
respect to any breach of warranties or representations of any nature under the
Lease or otherwise including without limitation any warranties or
representations respecting use, compliance with zoning, landlord's title,
landlord's authority, habitability and/or fitness for any purpose, or
possession; or (h) liable for consequential damages. The foregoing shall not,
however: (i) relieve Agent or such purchaser, of the obligation to remedy or
cure any conditions at the Premises the existence of which constitutes a
Landlord default under the Lease and which continue at the time of such
succession or acquisition, or (ii) deprive the Tenant of the right to terminate
the Lease for a breach of Landlord covenant which is not cured as provided for
herein and in the Lease and as

                                       3
<PAGE>   55

a result of which there is a material interference with Tenant's permitted use
and occupation of the Premises or any permitted business conducted therein.

        5. Rights Reserved. Nothing herein contained is intended nor shall it
be construed, to abridge or adversely affect any right or remedy of: (a) the
Landlord under the Lease, or any subsequent Landlord, against the Tenant in the
event of any default by Tenant (beyond any period expressed in the Lease within
which Tenant may cure such default) in the payment of rent or in the performance
or observance of any of the terms, covenants or conditions of the Lease on
Tenant's part to be performed or observed; or (b) the Tenant under the Lease
against the original or any prior Landlord in the event of any default by the
original Landlord to pursue claims against such original or prior Landlord
whether or not such claim is barred against Agent or a subsequent purchaser.

        6. Notice and Right to Cure. Tenant agrees to provide Agent with a copy
of each notice of default given to Landlord under the Lease, at the same time as
such notice of default is given to the Landlord, and that in the event of any
default by the Landlord under the Lease, Tenant will take no action to terminate
the Lease (a) if the default is not curable by Agent (so long as the default
does not interfere with Tenant's use and occupation of the Premises), or (b) if
the default is curable by Agent, unless the default remains uncured for a period
of thirty (30) days after written notice thereof shall have been given, postage
prepaid, to Agent at the address provided in Section 7 below; provided, however,
that if any such default is such that it reasonably cannot be cured within such
thirty (30) day period, such period shall be extended for such additional period
of time as shall be reasonably necessary (including, without limitation, a
reasonable period of time to obtain possession of the Property and to foreclose
the Mortgage), if Agent gives Tenant written notice within such thirty (30) day
period of Agent's election to undertake the cure of the default and if curative
action (including, without limitation, action to obtain possession and
foreclose) is instituted within a reasonable period of time and is thereafter
diligently pursued. Agent shall have no obligation to cure any default under the
Lease.

        7. Notices. Any notice or communication required or permitted hereunder
shall be in writing, and shall be given or delivered: (i) by United States mail,
registered or certified, postage fully prepaid, return receipt requested, or
(ii) by recognized courier service or recognized overnight delivery service; and
in any event addressed to the party for which it is intended at its address set
forth below:

               To Agent:   Fleet National Bank, as Agent
                           111 Westminster Street
                           Suite 800
                           Providence, Rhode Island 02903

                                       4
<PAGE>   56

                           Attention: Commercial Real Estate Department

               To Tenant:  ___________________________________________
                           ___________________________________________
                           ___________________________________________
                           ___________________________________________

or such other address as such party may have previously specified by notice
given or delivered in accordance with the foregoing. Any such notice shall be
deemed to have been given and received on the date delivered or tendered for
delivery during normal business hours as herein provided.

        8. No Oral Change. This Agreement may not be modified orally or in any
manner than by an agreement in writing signed by the parties hereto or their
respective successors in interest.

        9. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties hereto, their respective heirs, personal
representatives, successors and assigns, and any purchaser or purchasers at
foreclosure of the Property or any portion thereof, and their respective heirs,
personal representatives, successors and assigns.

        10. Payment of Rent To Agent. Tenant acknowledges that it has notice
that the Lease and the rent and all sums due thereunder have been assigned to
Agent as part of the security for the obligations secured by the Mortgage. In
the event Agent notifies Tenant of a default under the Loan and demands that
Tenant pay its rent and all other sums due under the Lease to Agent, Tenant
agrees that it will honor such demand and pay its rent and all other sums due
under the Lease to Agent, or Agent's designated agent, until otherwise notified
in writing by Agent. Borrower unconditionally authorizes and directs Tenant to
make rental payments directly to Agent following receipt of such notice and
Borrower further agrees that Tenant may rely upon such notice without any
obligation to further inquire as to whether or not any default exists under the
Mortgage or the Assignment and notwithstanding any notice from or claim of
Borrower to the contrary. Borrower shall have no right or claim against Tenant
for or by reason of any payments of rent or other charges made by Tenant to
Agent following Tenant's receipt of any such notice.

        11. No Amendment or Cancellation of Lease. As long as the Mortgage
remains undischarged of record, Tenant shall not agree to amend or modify the
Lease in any material respect, or agree to cancel or terminate the Lease or
agree to subordinate the Lease to any other mortgage or deed of trust, without
Agent's prior written consent in each instance.

        12. No Waiver. This Agreement does not:

        (a)     constitute a waiver by Agent of any of its rights under the
                Mortgage or any of the other Loan Documents (as defined in the
                Mortgage); or

                                       5
<PAGE>   57

        (b)     in any way release Borrower from its obligations to comply with
                the terms, provisions, conditions, covenants and agreements and
                clauses of the Mortgage and other Loan Documents.

        13. Borrower Compliance. The provisions of the Mortgage remain in full
force and effect and must be complied with by Borrower.

        14. Captions. Captions and headings of sections are not parts of this
Agreement and shall not be deemed to affect the meaning or construction of any
of the provisions of this Agreement.

        15. Counterparts. This Agreement may be executed in several counterparts
each of which when executed and delivered is an original, but all of which
together shall constitute one instrument.

        16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of ____________________.

        17. Parties Bound. The provisions of this Agreement shall be binding
upon and inure to the benefit of Tenant, Agent, Lenders and Borrower and their
respective successors and assigns.

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as a sealed instrument, as of the date first above written.

                                            AGENT:

                                            FLEET NATIONAL BANK, as Agent

                                            By:_________________________________
                                               Name:____________________________
                                               Title:___________________________

                                            Date executed by Agent:

                                            TENANT:

                                            [insert name]

                                            BY:_________________________________
                                               Name:____________________________
                                               Title:___________________________

                                            Date executed by Tenant:____________

                                       6
<PAGE>   58

                                            LANDLORD:

                                            [insert name]

                                            BY:_________________________________
                                               Name:____________________________
                                               Title:___________________________
                                               Date executed by Landlord:_______

           [INSERT APPLICABLE STATE ACKNOWLEDGEMENTS FOR All PARTIES)

                                       7<PAGE>   1
                                                                    EXHIBIT 10.5
                  -------------------------------------------
                          STANDARD FORM OF LOFT LEASE
                    THE REAL ESTATE BOARD OF NEW YORK, INC.
                  -------------------------------------------

AGREEMENT OF LEASE, made as of this 26 day of April 1999, between 162 Associates
LLC, having an address at Helmsley-Spear, Inc., 60 East 42nd Street, New York,
New York 10165, party of the first part, hereinafter referred to as OWNER, and
Fort Point Partners, Inc., having an address at 55 Broad Street, New York, New
York 10004, party of the second part, hereinafter referred to as TENANT,

WITNESSETH: Owner hereby leases to Tenant and Tenant hereby hires from Owner the
entire eighth (8th) floor in the building known as 162 Fifth Avenue in the
Borough of Manhattan, City of New York, for the term of ten (10) years (or until
such term shall sooner cease and expire as hereinafter provided) to commence on
the 1st day of May nineteen hundred and ninety-nine, and to end on the 30th day
of April, 2009 and both dates inclusive, at an annual rental rate of See Rider

which Tenant agrees to pay in lawful money of the United States which shall be
legal tender in payment of all debts and dues, public and private, at the time
of payment, in equal monthly installments in advance on the first day of each
month during said term, at the office of Owner or such other place as Owner may
designate, without any set off or deduction whatsoever, except that Tenant shall
pay the first monthly installment(s) on the execution hereof (unless this lease
be a renewal).

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

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

RENT:

1.   Tenant shall pay the rent as above and as hereinafter provided.

OCCUPANCY:

2.   Tenant shall use and occupy demised premises for executive and general
offices provided such use is in accordance with the certificate of occupancy for
the building, if any, and for no other purpose.

ALTERATIONS:

3.   Tenant shall make no changes in or to the demised premises of any nature
without Owner's prior written consent. Subject to the prior written consent of
Owner, and to the provisions of this article, Tenant, at Tenant's expense, may
make alterations, installations, additions or improvements which are
nonstructural and which do not affect utility services or plumbing and
electrical lines, in or to the interior of the demised premises using
contractors or mechanics first approved in each instance by Owner. Tenant
shall, at its expense, before making any alterations, additions, installations
or improvements obtain all permits, approval and certificates required by any
governmental or quasi-governmental bodies and (upon completion) certificates
of final approval thereof and shall deliver promptly duplicates of all such
permits, approvals and certificates to Owner. Tenant agrees to carry and will
cause Tenant's contractors and sub-contractors to carry such workman's
compensation, general liability, personal and property damage insurance as
Owner may require. If any mechanic's lien is filed against the demised
premises, or the building of which the same forms a part, for work claimed to
have been done for, or materials furnished to, Tenant, whether or not done
pursuant to this article, the same shall be discharged by Tenant within thirty
days thereafter, at Tenant's expense, by payment or filing the bond required by
law or otherwise. All fixtures and all paneling, partitions, railings and like
installations, installed in the premises at any time, either by tenant or by
Owner on Tenant's behalf, shall, upon installation, become the property of
Owner and shall remain upon and be surrendered with the demised premises unless
Owner, by notice to Tenant no later than twenty days prior to the date fixed as
the termination of this lease, elects to relinquish Owner's right thereto and
to have them removed by Tenant, in which event the same shall be removed from
the demised premises by Tenant prior to the expiration of the lease, at
Tenant's expense. Nothing in this Article shall be construed to give Owner
title to or to prevent Tenant's removal of trade fixtures, moveable office
furniture and equipment, but upon removal of any such from the premises or upon
removal of other installations as may be required by Owner, Tenant shall
immediately and at its expense, repair and restore the premises to the
condition existing prior to installation and repair any damage to the demised
premises or the building due to such removal. All property permitted or
required to be removed by Tenant at the end of the term remaining in the
premises after Tenant's removal shall be deemed abandoned and may, at the
election of Owner, either be retained as Owner's property or removed from the
premises by Owner, at Tenant's expense.

REPAIRS:

4.   Owner shall maintain and repair the exterior of and the public portions of
the building. Tenant shall, throughout the term of this lease, take good care
of the demised premises including the bathrooms and lavatory facilities (if the
demised premises encompass the entire floor of the building) and the windows
and window frames and, the fixtures and appurtenances therein and at Tenant's
sole cost and expense promptly make all repairs thereto and to the building,
whether structural or non-structural in nature, caused by or resulting from the
carelessness, omission, neglect or improper conduct of Tenant, Tenant's
servants, employees, invitees, or licensees, and whether or not arising from
such Tenant conduct or omission, when required by other provisions of this
lease, including Article 6. Tenant shall also repair all damage to the building
and the demised premises caused by the moving of Tenant's fixtures, furniture
or equipment. All the aforesaid repairs shall be of quality or class equal to
the original work or construction. If Tenant fails, after ten days notice, to
proceed with due diligence to make repairs required to be made by Tenant, the
same may be made by the Owner at the expense of Tenant, and the expenses thereof
incurred by Owner shall be collectible, as additional rent, after rendition of
a bill or statement therefor. If the demised premises be or become invested
with vermin, Tenant shall, at its expense, cause the same to be exterminated.
Tenant shall give Owner prompt notice of any defective condition in any
plumbing, heating system or electrical lines located in the demised premises
and following such notice, Owner shall remedy the condition with due diligence,
but at the expense of Tenant, if repairs are necessitated by damage or injury
attributable to Tenant, Tenant's servants, agents, employees, invitees or
licensees as aforesaid. Except as specifically provided in Article 9 or
elsewhere in this lease, there shall be no allowance to the Tenant for a
diminution of rental value and no liability on the part of Owner by reason of
inconvenience, annoyance or injury to business arising from Owner, Tenant or
others making or failing to make any repairs, alterations, additions or
improvements in or to any portion of the building or the demised premises or in
and to the fixtures, appurtenances or equipment thereof. It is specifically
agreed that Tenant shall not be entitled to any set off or reduction of rent by
reason of any failure of Owner to comply with the covenants of this or any
other article of this lease. Tenant agrees that Tenant's sole remedy at law in
such instance will be by way of any action for damages for breach of contract.
The provisions of this Article 4 with respect to the making of repairs shall
not apply in the case of fire or other casualty with regard to which Article 9
hereof shall apply.

WINDOW CLEANING:

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

REQUIREMENTS OF LAW, FIRE INSURANCE:

6.   prior to the commencement of the lease term, if Tenant is then in
possession, and at all times thereafter Tenant shall, at Tenant's sole cost and
expense, promptly comply with all present and future laws, orders and
regulations of all state, federal, municipal and local governments,
departments, commissions and boards and any direction of any public officer
pursuant to law, and all orders, rules and regulations of the New York Board of
Fire Underwriters, or the Insurance Services Office, or any similar body which
shall impose any violation, order or duty upon Owner or Tenant with respect to
the demised premises, whether or not arising out of Tenant's use or manner of
use thereof, or, with respect to the building, if arising out of Tenant's use
or manner of use of the demised premises of the building (including the use
permitted under the lease). Except as provided in Article 30 hereof, nothing
herein shall require Tenant to make structural repairs or alterations unless
Tenant has, by its manner of use of the demised premises or method of operation
therein, violated any such laws, ordinances, orders, rules, regulations or
requirements with respect thereto. Tenant shall not do or

<PAGE>   2
permit any act or thing to be done in or to the demised premises which is
contrary to law, or which will invalidate or be in conflict with public
liability, fire or other policies of insurance at any time carried by or for the
benefit of Owner. Tenant shall not keep anything in the demised premises except
as now or hereafter permitted by the Fire Department, Board of Fire
Underwriters, Fire Insurance Rating Organization and other authority having
jurisdiction, and then only in such manner and such quantity so as not to
increase the rate for fire insurance applicable to the building, nor use the
premises in a manner which will increase the insurance rate for the building or
any property located therein over than in effect prior to the commencement of
Tenant's occupancy. If by reason of failure to comply with the foregoing the
first insurance rate shall, at the beginning of this lease or at any time
thereafter, be higher than it otherwise would be, then Tenant shall reimburse
Owner, as addition rent hereunder, for that portion of all fire insurance
premiums thereafter paid by Owner which shall have been charged because of such
failure by Tenant. In any action or proceeding wherein Owner and Tenant are
parties, a schedule or "make-up" or rate for the building or demised premises
issued by a body making fire insurance rates applicable to said premises shall
be conclusive evidence of the facts therein stated and of the several items and
charges in the fire insurance rates then applicable to said premises. Tenant
shall not place a loan upon any floor of the demised premises exceeding the
floor load per square foot area which it was designed to carry and which is
allowed by law. Owner reserves the right to prescribe the weight and position of
all safes, business machines and mechanical equipment. Such installations shall
be placed and maintained by Tenant, at Tenant's expense, in settings sufficient,
in Owner's judgement, to absorb and prevent vibration, noise and annoyance.

SUBORDINATION:

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

TENANT'S LIABILITY INSURANCE PROPERTY LOSS, DAMAGE, INDEMNITY:

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

DESTRUCTION, FIRE AND OTHER CASUALTY:

9.  (a) If the demised premises or any part thereof shall be damaged by fire or
other casualty, Tenant shall give immediate notice thereof to Owner and this
lease shall continue in full force and effect except as hereinafter set forth.
(b) If the demised premises are partially damaged or rendered partially unusable
by fire or other casualty, the damages thereto shall be repaired by and at the
expense of Owner and the rent and other items of additional rent, until such
repair shall be substantially completed, shall be apportioned from the day
following the casualty according to the part of the premises which is usable.
(c) If the demised premises are totally damaged or rendered wholly unusable by
fire or other casualty, then the rent and other items of additional rent as
hereinafter expressly provided shall be proportionately paid up to the time of
the casualty and thenceforth shall cease until the date when the premises shall
have been repaired and restored by Owner (or sooner reoccupied in part by Tenant
then rent shall be apportioned as provided in subsection (b) above), subject to
Owner's right to elect not to restore the same as hereinafter provided. (d) If
the demised premises are rendered wholly unusable or (whether or not the demised
premises are damaged in whole or in part) if the building shall be so damaged
that Owner shall decide to demolish it or to rebuild it, then, in any of such
events, Owner may elect to terminate this lease by written notice to Tenant,
given within 90 days after such fire or casualty, or 30 days after adjustment of
the insurance claim for such fire or casualty, whichever is sooner, specifying a
date for the expiration of the lease, which date shall not be more than 60 days
after the giving of such notice, and upon the date specified in such notice the
term of this lease shall expire as fully and completely as if such date were the
date set forth above for the termination of this lease and Tenant shall
forthwith quit, surrender and vacate the premises without prejudice however, to
Owner's rights and remedies against Tenant under the lease provisions in effect
prior to such termination, and any rent owing shall be paid up to such date and
any payments of rent made by Tenant which were on account of any period
subsequent to such date shall be returned to Tenant. Unless Owner shall serve a
termination notice as provided for herein, Owner shall make the repairs and
restorations under the conditions of (b) and (c) hereof, with all reasonable
expedition, subject to delays due to adjustment of insurance claims, labor
troubles and causes beyond Owner's control. After any such casualty, Tenant
shall cooperate with Owner's restoration by removing from the premises as
promptly as reasonably possible, all of Tenant's salvageable inventory and
movable equipment, furniture, and other property. Tenant's liability for rent
shall resume five (5) days after written notice form Owner that the premises are
substantially ready for Tenant's occupancy. (e) Nothing contained hereinabove
shall relieve Tenant from liability that may exist as a result of damage from
fire or other casualty. Notwithstanding the foregoing, including Owner's
obligation to restore under subparagraph (b) above, each party shall look first
to any insurance in its favor before making any claim against the other party
for recovery for loss or damage resulting from fire or other casualty, and to
the extent that such insurance is in force and collectible and to the extent
permitted by law, Owner and Tenant each hereby releases and waives all right of
recovery with respect to subparagraphs (b), (d) and (e) above, against the other
or any one claiming through or under each of them by way of subrogation or
otherwise. The release and waiver herein referred to shall be deemed to include
any loss or damage to the demised premises and/or to any personal property,
equipment, trade fixtures, goods and merchandise located therein. The foregoing
release and waiver shall be in force only if both releasors' insurance policies
contain a clause providing that such a release or waiver shall not invalidate
the insurance. If, and to the extent, that such waiver can be obtained only by
the payment of additional premiums, then the party benefitting from the waiver
shall pay such premium within ten days after written demand or shall be deemed
to have agreed that the party obtaining insurance coverage shall be free of any
further obligation under the provisions hereof with respect to waiver of
subrogation. Tenant acknowledges that Owner will not carry insurance on Tenant's
furniture and/or furnishings or any fixtures or equipment, improvements, or
appurtenances removable by Tenant and agrees that Owner will not be obligated to
repair any damage thereto or replace the same. (f) Tenant hereby waives the
provisions of Section 227 of the Real Property Law and agrees that the
provisions of this article shall govern and control in lieu thereof.

EMINENT DOMAIN:

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

ASSIGNMENT, MORTGAGE, ETC.:

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

ELECTRIC CURRENT:

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

ACCESS TO PREMISES:

13. Owner or Owner's agents shall have the right (but shall not be obligated) to
enter the demised premises in any emergency at any time, and, at other
reasonable times, to examine the same and to make such repairs, replacements and
improvements as Owner may deem necessary and reasonably desirable to any portion
of the building or which Owner may elect to perform in the premises after
Tenant's failure to make repairs or perform any work which Tenant is obligated
to perform under this lease, or for the purpose of complying with laws,
regulations and other directions of governmental authorities. Tenant shall
permit Owner to use and maintain and replace pipes and conduits in and through
the demised premises and to erect new pipes and conduits therein provided,
wherever possible, they are within walls or otherwise concealed. Owner may,
during the progress of any work in the demised premises, take all necessary
materials and equipment into said premises without the same constituting an
eviction nor shall the Tenant be entitled to any abatement of rent while such
work is in progress nor to any damages by reason of loss or interruption of
business or otherwise. Throughout the term hereof Owner shall have the right to
enter the demised premises at reasonable hours for the purpose of showing the
same to prospective purchasers or mortgagees of the building, and during the
last six months of the term for the purpose of showing the same to prospective
tenants and may, during said six months period, place upon
<PAGE>   3
the demised premises the usual notice "To Let" and "For Sale" which notices
Tenant shall permit to remain thereon without molestation. If Tenant is not
present to open and permit an entry into the demised premises, Owner or Owner's
agents may enter the same whenever such entry may be necessary or permissible by
master key or forcibly and provided reasonable care is exercised to safeguard
Tenant's property, such entry shall not render Owner or its agents liable
therefor, nor in any event shall the obligations of Tenant hereunder be
affected. If during the last month of the term Tenant shall have removed all or
substantially all of Tenant's property therefrom. Owner may immediately enter,
alter, renovate or redecorate the demised premises without limitation or
abatement of rent, or incurring liability to Tenant for any compensation and
such act shall have no effect on this lease or Tenant's obligation hereunder.

VAULT, VAULT SPACE, AREA:

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

OCCUPANCY:

15.  Tenant will not at any time use or occupy the demised premises in
violation of the certificate of occupancy issued for the building of which the
demised premises are a part. Tenant has inspected the premises and accepts them
as is, subject to the riders annexed hereto with respect to Owner's work, if
any. In any event, Owner makes no representation as to the condition of the
premises and Tenant agrees to accept the same subject to violations, whether or
not of record. If any governmental license or permit shall be required for the
proper and lawful conduct of Tenant's business, Tenant shall be responsible for
and shall procure and maintain such license or permit.

BANKRUPTCY:

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

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

DEFAULT:

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

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

REMEDIES OF OWNER AND WAIVER OF REDEMPTION:

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

FEES AND EXPENSES:

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

BUILDING ALTERATIONS AND MANAGEMENT:

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

<PAGE>   4
NO REPRESENTATIONS BY OWNER:

21. Neither Owner nor Owner's agents have made any representations or promises
with respect to the physical condition of the building, the land upon which it
is erected or the demised premises, the rents, leases, expenses of operation or
any other matter or thing affecting or related to the demised premises or the
building except as herein expressly set forth and no rights, easements or
licenses are acquired by Tenant by implication or otherwise except as expressly
set forth in the provisions of this lease. Tenant has inspected the building and
the demised premises and is thoroughly acquainted with their condition and
agrees to take the same "as is" on the date possession is tendered and
acknowledges that the taking of possession of the demised premises by Tenant
shall be conclusive evidence that the said premises and the building of which
the same form a part were in good and satisfactory condition at the time such
possession was so taken, except as to latent defects. All understandings and
agreements heretofore made between the parties hereto are merged in this
contract, which alone fully and completely expresses the agreement between Owner
and Tenant and any executory agreement hereafter made shall be ineffective to
change, modify, discharge or effect an abandonment of it in whole or in part,
unless such executory agreement is in writing and signed by the party against
whom enforcement of the change, modification, discharge or abandonment is
sought.

END OF TERM:

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

QUIET ENJOYMENT:

23. Owner covenants and agrees with Tenant that upon Tenant paying the rent and
additional rent and observing and performing all the terms, covenants and
conditions, on Tenant's part to be observed and performed, Tenant may peaceably
and quietly enjoy the premises hereby demised, subject, nevertheless, to the
terms and conditions of this lease including, but not limited to, Article 34
hereof and to the ground leases, underlying leases and mortgages hereinbefore
mentioned.

FAILURE TO GIVE POSSESSION:

24. If Owner is unable to give possession of the demised premises on the date of
the commencement of the term hereof, because of the holding-over or retention of
possession of any tenant, undertenant or occupants or if the demised premises
are located in a building being constructed, because such building has not been
sufficiently completed to make the premises ready for occupancy or because of
the fact that a certificate of occupancy has not been procured or if Owner has
not completed any work required to be performed by Owner, or for any other
reason, Owner shall not be subject to any liability for failure to give
possession on said date and the validity of the lease shall not be impaired
under such circumstances, nor shall the same be construed in any wise to extend
the term of this lease, but the rent payable hereunder shall be abated (provided
Tenant is not responsible for Owner's inability to obtain possession or complete
any work required) until after Owner shall have given Tenant notice that Owner
is able to deliver possession in the condition required by this lease. If
permission is given to Tenant to enter into the possession of the demised
premises or to occupy premises other than the demised premises prior to the date
specified as the commencement of the term of this lease, Tenant covenants and
agrees that such possession and/or occupancy shall be deemed to be under all the
terms, covenants, conditions and provisions of this lease, except the obligation
to pay the fixed annual rent set forth in page one of this lease. The provisions
of this article are intended to constitute "an express provision to the
contrary" within the meaning of Section 223-a of the New York Real Property Law.

NO WAIVER:

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

WAIVER OF TRIAL BY JURY:

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

INABILITY TO PERFORM:

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

BILLS AND NOTICES:

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

WATER CHARGES:

29. If Tenant requires, uses or consumes water for any purpose in addition to
ordinary lavatory purposes (of which fact Tenant constitutes Owner to be the
sole judge) Owner may install a water meter and thereby measure Tenant's water
consumption for all purposes. Tenant shall pay Owner for the cost of the meter
and the cost of the installation, thereof and throughout the duration of
Tenant's occupancy Tenant shall keep said meter and installation equipment in
good working order and repair at Tenant's own cost and expense in default of
which Owner may cause such meter and equipment to be replaced or repaired and
collect the cost thereof from Tenant, as additional rent. Tenant agrees to pay
for water consumed, as shown on said meter as and when bills are rendered, and
on default in making such payment Owner may pay such charges and collect the
same from Tenant, as additional rent. Tenant covenants and agrees to pay, as
additional rent, the sewer rent, charge or any other tax, rent, levy or charge
which now or hereafter is assessed, imposed or a lien upon the demised premises
or the realty of which they are part pursuant to law, order or regulation made
or issued in connection with the use, consumption, maintenance or supply of
water, water system or sewage or sewage connection or system. If the building or
the demised premises or any part thereof is supplied with water through a meter
through which water is also supplied to other premises Tenant shall pay to
Owner, as additional rent, on the first day of each month, ($200.00) of the
total meter charges as Tenant's portion. Independently and in addition to any of
the remedies reserved to Owner hereinabove or elsewhere in this lease, Owner may
sue for and collect any monies to be paid by Tenant or paid by Owner for any of
the reasons or purposes hereinabove set forth.

SPRINKLERS:

30. Anything elsewhere in this lease to the contrary notwithstanding, if the New
York Board of Fire Underwriters or the New York Fire Insurance Exchange or any
bureau, department or official of the federal, state or city government
recommend or require the installation of a sprinkler system or that any changes,
modifications, alterations, or additional sprinkler heads or other equipment be
made or supplied in an existing sprinkler system by reason of Tenant's business,
or the location of partitions, trade fixtures, or other contents of the demised
premises, or for any other reason, of if any such sprinkler system
installations, modifications, alterations, additional sprinkler heads or other
such equipment, become necessary to prevent the imposition of a penalty or
charge against the full allowance for a sprinkler system in the fire insurance
rate set by any said Exchange or by any fire insurance company, Tenant shall, at
Tenant's expense, promptly make such sprinkler system installations, changes,
modifications, alterations, and supply additional sprinkler heads or other
equipment as required whether the work involved shall be structural or
non-structural in nature. Tenant shall pay to Owner as additional rent the sum
of $100.00, on the first day of each month during the term of this lease, as
Tenant's portion of the contract price for sprinkler supervisory service.

ELEVATORS, HEAT, CLEANING:

31. As long as Tenant is not in default under any of the covenants of this lease
beyond the applicable grace period provided in this lease for the curing of such
defaults, Owner shall: (a) provide necessary passenger elevator facilities on
business days from 8 a.m. to 6 p.m. and on Saturdays from 8 a.m. to 1 p.m.; (b)
if freight elevator service is provided, same shall be provided only on regular
business days Monday through Friday inclusive, and on those days only between
the hours of 9 a.m. and 12 noon and between 1 p.m. and 5 p.m.; (c) furnish heat,
water and other services supplied by Owner to the demised premises, when and as
required by law, on business days from 8 a.m. to 6 p.m. and on Saturdays from 8
<PAGE>   5
\a.m. to 1 p.m.; (d) clean the public halls and public portions of the building
which are used in common by all tenants. Tenant shall, at Tenant's expense,
keep the demised premises, including the windows, clean and in order, to the
reasonable satisfaction of Owner, and for that purpose shall employ the person
or persons, or corporation approved by Owner. Tenant shall pay to Owner the
cost of removal of any of Tenant's refuse and rubbish from the building. Bills
for the same shall be rendered by Owner to Tenant at such time as Owner may
elect and shall be due and payable hereunder, and the amount of such bills
shall be deemed to be, and be paid as, additional rent. Tenant shall, however,
have the option of independently contracting for the removal of such rubbish
and refuse in the event that Tenant does not wish to have same done by
employees of Owner. Under such circumstances, however, the removal of such
refuse and rubbish by others shall be subject to such rules and regulations as,
in the judgment of Owner, are necessary for the proper operation of the
building. Owner reserves the right to stop service of the heating, elevator,
plumbing and electrical systems, when necessary, by reason of accident, or
emergency, or for repairs, alterations, replacements or improvements, in the
judgment of Owner desirable or necessary to be made, until said repairs,
alterations, replacements or improvements shall have been completed. If the
building of which the demised premises are a part supplies manually operated
elevator service, Owner may proceed diligently with alterations necessary to
substitute automatic control elevator service without in any way affecting
the obligations of Tenant hereunder.

SECURITY: See Rider

CAPTIONS:

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

DEFINITIONS:

34.  The term "Owner" as used in this lease means only the owner of the fee or
of the leasehold of the building, or the mortgagee in possession, for the time
being of the land and building (or the owner of a lease of the building or of
the land and building) of which the demised premises form a part, so that in
the event of any sale or sales of said land and building or of said lease, or
in the event of a lease of said building, or of the land and building, the said
Owner shall be and hereby is entirely freed and relieved of all covenants and
obligations of Owner hereunder, and it shall be deemed and construed without
further agreement between the parties or their successors in interest, or
between the parties and the purchaser, at any such sale, or the said lessee of
the building, or of the land and building, that the purchaser or the lessee of
the building has assumed and agreed to carry out any and all covenants and
obligations of Owner hereunder. The words "re-enter" and "re-entry" as used in
this lease are not restricted to their technical legal meaning. The term "rent"
includes the annual rental rate whether so expressed or expressed in monthly
installments, and "additional rent." "Additional rent" means all sums which
shall be due to Owner from Tenant under this lease, in addition to the annual
rental rate. The term "business days" as used in this lease, shall exclude
Saturdays, Sundays and all days observed by the State or Federal Government as
legal holidays and those designated as holidays by the applicable building
service union employees service contract or by the applicable Operating
Engineers contract with respect to HVAC service. Wherever it is expressly
provided in this lease that consent shall not be unreasonably withheld, such
consent shall not be unreasonably delayed.

ADJACENT EXCAVATION-SHORING:

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

RULES AND REGULATIONS:

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

GLASS:

     37.  Owner shall replace, at the expense of the Tenant, any and all plate
and other glass damaged or broken from any cause whatsoever in and about the
demised premises. Owner may insure, and keep insured, at Tenant's expense, all
plate and other glass in the demised premises for and in the name of Owner.
Bills for the premiums therefor shall be rendered by Owner to Tenant at such
times as Owner may elect, and shall be due from, and payable by, Tenant when
rendered and the amount thereof shall be deemed to be, and be paid, as
additional rent.

ESTOPPEL CERTIFICATE:

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

DIRECTORY BOARD LISTING:

     39.  If, at the request of and as accommodation to Tenant, Owner shall
place upon the directory board in the lobby of the building, one or more names
of persons other than Tenant, such directory board listing shall not be
construed as the consent by Owner to an assignment or subletting by Tenant to
such person or persons.

SUCCESSORS AND ASSIGNS:

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

----------------
SPACE TO BE FILLED IN OR DELETED.

               See Rider annexed hereto and made a part thereof.

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

                                       162 Associates LLC

Witness for Owner:                     By: Helmsley-Spear, Inc., as agent [SEAL]
                                          -------------------------------

--------------------------------       By: [SIGNATURE ILLEGIBLE]          [L.S.]
                                          -------------------------------

Witness for Tenant:                    Fort Point Partners, Inc.          [SEAL]
                                       ----------------------------------

--------------------------------       By: /s/ James Roche                [L.S.]
                                          -------------------------------
<PAGE>   6
                                ACKNOWLEDGEMENTS

<TABLE>
<S>                                                          <C>
CORPORATE TENANT                                             INDIVIDUAL TENANT
STATE OF NEW YORK,     ss.:                                  STATE OF NEW YORK,     ss.:
COUNTY OF                                                    COUNTY OF

   On this       day of            , 19   , before              On this       day of            , 19   , before
me personally came                                           me personally came
to me known, who being by me duly sworn, did depose and      to be known and known to me to be the individual
say that he resides in                                       described in and who, as TENANT, executed the
that he is the                of                             foregoing instrument and acknowledged to me
the corporation described in and which executed the          that                          he executed
following instrument, as TENANT, that he knows the           the same.
seal of said corporation; that the seal affixed to said                  --------------------------------------
instrument is such corporate seal; that it was so
affixed by order of the Board of Directors of said
corporation, and that he signed his name thereto by
like order.
                    ------------------------------------
</TABLE>

                            IMPORTANT -- PLEASE READ

                     RULES AND REGULATIONS ATTACHED TO AND
                          MADE A PART OF THIS LEASE IN
                          ACCORDANCE WITH ARTICLE 36.

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

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

     3.  No carpet, rug or other article shall be hung or shaken out of any
window of the building; and no Tenant shall sweep or throw or permit to be swept
or thrown from the demised premises any dirt or other substances into any of the
corridors of the halls, elevators, or out of the doors or windows or stairways
of the building and Tenant shall no use, keep or permit to be used or kept any
foul or noxious gas or substance in the demised premises, or permit or suffer
the demised premises to be occupied or used in a manner offensive or
objectionable to Owner or other occupants of the buildings by reason of noise,
odors, and or vibrations, or interfere in any way, with other Tenants or those
having business therein, nor shall any bicycles, vehicles, animals, fish, or
birds be kept in or about the building. Smoking or carrying lighted cigars or
cigarettes in the elevators of the building is prohibited.

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

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

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

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

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

     9.  No Tenant shall obtain for use upon the demised premises ice, drinking
water, towel and other similar services, or accept barbering or bootblacking
services in the demised premises, except from persons authorized by Owner, and
at hours and under regulations fixed by Owner. Canvassing, soliciting and
peddling in the building is prohibited and each Tenant shall cooperate to
prevent the same.

     10. Owner reserves the right to exclude from the building all persons who
do not present a pass to the building signed by Owner. Owner will furnish passes
to persons for whom any Tenant requests same in writing. Each Tenant shall be
responsible for all persons for whom he requests such pass and shall be liable
to Owner for all acts of such persons. Notwithstanding the foregoing, Owner
shall not be required to allow Tenant or any person to enter or remain in the
building, except on business days from 8:00 a.m. to 6:00 p.m. and on Saturdays
from 8:00 a.m. to 1:00 p.m. Tenant shall not have a claim against Owner by
reason of Owner excluding from the building any person who does not present such
a pass.

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

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

     13. Tenant shall not use the demised premises in a manner which disturbs or
interferes with other Tenants in the beneficial use of their premises.

Address

Premises

=============================================

                      TO

=============================================

               STANDARD FORM OF

   [SEAL]            LOFT           [SEAL]
                    LEASE

   THE REAL ESTATE BOARD OF NEW YORK, INC.

   (c) Copyright 1994. All rights Reserved.
Reproduction in whole or in part prohibited.

=============================================

Dated                                   19

Rent Per Year

Rent Per Month

Term
From
To

Drawn by
         ------------------------------------
Checked by
           ----------------------------------

Entered by
           ----------------------------------
Approved by
            ---------------------------------

============================================='
<PAGE>   7
                                                                       EXHIBIT A

               [HELMSLEY-SPEAR FLOOR PLAN OF 9TH FLR. BATHROOMS]
<PAGE>   8
RIDER ANNEXED TO LEASE DATED APRIL 26, 1999 BETWEEN 162 ASSOCIATES LLC, AS
LANDLORD, AND FORT POINT PARTNERS, INC. AS TENANT, FOR THE ENTIRE EIGHTH FLOOR
AT 162 FIFTH AVENUE, NEW YORK, NEW YORK.

41.     PROVISION OF RIDER

        This rider is annexed to and made a part of the printed part of the
Lease to which it is attached and in each instance in which the provisions of
this Rider shall contradict or be inconsistent with the provisions of the
printed portion of this Lease, as constituted without this Rider, the provisions
of this Rider shall prevail and govern and the contradicted or inconsistent
provisions of the printed portion of this Lease shall be deemed amended
accordingly.

42.     CERTIFICATES BY TENANT

        At any time and from time to time, Tenant, for the benefit of Landlord
and the lessor under any ground lease or underlying lease or the holder of any
leasehold mortgage affecting any ground lease or underlying lease, or of any fee
mortgage covering the building containing the demised premises (the "Building")
and the land (the "Land") upon which the Building is erected, on at least five
(5) days' prior written request by Landlord, will deliver to Landlord a
statement certifying that this Lease is not modified and is in full force and
effect (or if there shall have been modifications, that the same is in full
force and effect as modified, and stating the modifications), the commencement
and expiration dates hereof, the dates to which the fixed rent, additional rent
and other charges have been paid, and whether or not, to the best knowledge of
the signer of such statement, there are then any existing defaults on the part
of either Landlord or Tenant in the performance of the terms, covenants and
conditions of this Lease, and if so, specifying the default of which the signer
of such statement has knowledge.

43.     LIMITATION OF LIABILITY

        (a) Notwithstanding anything to the contrary in this Lease, none of the
Landlord Parties (defined below) shall be liable to Tenant or its partners,
principals, directors, officers, contractors, agents, employees, invitees,
sublessees, assignees, licensees or any other person or entity claiming through
or under Tenant for any loss, injury or damage to Tenant or to any other person
or entity, or to its or their property, or for any inconvenience, annoyance,
interruption or injury to business arising from (i) Landlord performing any
maintenance, repairs, alterations, additions or improvements in or to any
portion of the Building or the demised premises or in or to the fixtures,
equipment or appurtenances of the Building or the demised premises (nor shall
Tenant or any other person or entity be entitled to any abatement or suspension
of its obligation to pay fixed annual rent or any additional rent or any other
obligations hereunder or be construed to be constructively or otherwise evicted
on account of the foregoing), irrespective of the cause of such loss, injury,
damage, inconvenience, annoyance, interruption or injury unless caused by or
resulting from the gross negligence or willful misconduct of Landlord or its
agents or employees; provided, however, that even if due to any such gross
negligence or willful misconduct of Landlord, its agents or employees, Tenant
waives, to the full extent permitted by law, any claim for any indirect,
consequential or punitive damages, including loss of profits in connection
therewith and (ii) (notwithstanding whether the loss, injury or damage is caused
by the gross negligence or willful misconduct of any Landlord Party) any injury
or damage for which Tenant would have been reimbursed under policies of
insurance required to be maintained by Tenant by the terms of this Lease had
Tenant (A) not failed to procure or maintain such policies of insurance and (B)
not failed to procure or maintain such policies of insurance with at least the
limits specified herein.

        (b) Tenant shall look solely to the estate and property of Landlord in
the Land and Building for the satisfaction of Tenant's remedies for the
collection of a judgment or judicial process or arbitration award requiring the
payment of money by Landlord and no other property or assets of Landlord,
Landlord's agents, shareholders, officers, directors, partners, members,
principals (disclosed or undisclosed) or affiliates, whether directly or
indirectly through Landlord or through any receiver,

<PAGE>   9

assignee, trustee in bankruptcy or through any other person or entity shall be
subject to levy, lien, execution, attachment or other enforcement procedure for
any liability of Landlord to Tenant under this Lease or under law.

        (c) In no event shall Landlord be liable for any loss, injury or damage
(including indirect, consequential or punitive damages) claimed by Tenant or any
person or entity claiming through or under Tenant in connection with the failure
or refusal by Landlord to grant its consent or approval with respect to any
matter as to which it is entitled to give its consent or approval pursuant to
this Lease. If Landlord withholds or delays its consent or conditions its
consent and Tenant believes that Landlord did so unreasonably, Tenant may
prosecute an action for declaratory relief to determine if Landlord properly
withheld, delayed or conditioned its consent, but Tenant waives and discharges
any claims it may have against Landlord for damages arising from Landlord's
withholding, delaying or conditioning its consent. In any such action, the
non-prevailing party shall bear all reasonable attorneys' fees incurred by the
parties in connection therewith.

44.     INSURANCE

        To the extent any injury, loss, claim, or damage to any person or
property is not covered by insurance, Tenant shall save Landlord harmless and
indemnify it from and against all injury, loss, claims or damage to any person
or property while on the demised premises arising out of the manner of use of
the demised premises by Tenant and from and against all injury, loss, claim or
damage to any person or property anywhere occasioned by the acts or omissions of
Tenant or Tenant's servants, employees or licensees.

        Tenant covenants and agrees that during the term of this Lease it will
provide and keep in force (a) general public liability insurance covering and
indemnifying persons and property in or about the demised premises and in the
connecting corridor in a limit of not less than three million ($3,000,000)
dollars in respect of any one occurrence, (b) broad form commercial general
liability insurance written on a per occurrence basis with a per occurrence
limit of not less than three hundred thousand ($300,000) dollars, (c) business
interruption insurance in a face amount of not less than the aggregate amount,
for a period of twelve (12) months following the insured against peril, of 100%
of all rent and additional rent to be paid by Tenant hereunder, (d) worker's
compensation insurance and employer's liability coverage in statutory limits,
and New York State disability insurance as required by law, covering all
employees, and (e) such other coverage, and with such other limits, that
Landlord may reasonably require.

        All such insurance to be obtained by Tenant in connection with this
Lease shall be effected in standard form under valid enforceable policies issued
by insurers licensed to do business in the State of New York as shall be
reasonably acceptable to Landlord and shall, except in the case of workmen's
compensation insurance, name Landlord and Tenant as the insureds as their
respective interests may appear. Certificates of such insurance shall be
delivered to Landlord prior to the commencement date hereof and from time to
time during the term of this Lease at least ten (10) days prior to the
expiration date of the previous policy together with certificates evidencing the
renewal of such policy with satisfactory evidence of payment of the premium on
such policy. To the extent obtainable, all such policies shall contain
agreements by the insurers that (i) such policies shall not be canceled except
upon thirty (30) days' prior written notice to each name insured and (ii) the
coverage afforded thereby shall not be affected by the performance of any work
upon, in or about the demised premises. Nothing in this paragraph shall prevent
Tenant from taking out such insurance under a blanket insurance policy or
policies which also can cover other properties, or parts thereof, owned, leased
or operated by Tenant as well as the demised premises, provided the insurance
applicable to the demised premises is not less than the amounts required herein.

        Tenant agrees to pay all premiums and charges for such insurance, and in
the event of its failure to make any such payment when due, or in the event of
its failure to provide such insurance or renewal thereof, Landlord may procure
the same and/or pay the premium thereon (but in no event shall Landlord be
obligated so to do), and Tenant agrees to pay such premiums to Landlord upon
demand as additional rent.

                                       2
<PAGE>   10
        Neither Landlord nor Tenant shall be liable to the other or to any
insurance company (by way of subrogation or otherwise) insuring any of the other
parties, and each hereby waive their entire right of recovery against the other,
for any loss or damage arising out of or incident to the perils insured, or
required pursuant to this Lease to be insured even though such loss or damage
might have been occasioned by the negligence of Landlord, Tenant, or their
respective agents, employees, contractors, invitees and/or permitted subtenants.
The foregoing waiver is subject, however, to the amount of insurance obtained or
required to be obtained (whichever is greater) by the other party and to the
extent such insurance is collectible. Each of Landlord and Tenant (i) shall give
notice to their respective insurers that the foregoing mutual waiver of recovery
is contained in this Lease and, if required by any such insurer, shall obtain
such insurer's prior consent to the foregoing waiver of its and its insured's
right of recovery, and (ii) shall endeavor to obtain from their respective
insurers an appropriate clause in, or an endorsement upon, each such insurance
policy pursuant to which each such insurer shall agree that the foregoing waiver
shall not affect the validity or enforceability of its insured's coverage. If
such a clause or endorsement is obtainable only upon payment of an additional
premium, each party shall pay such additional premium. If Tenant's insurer shall
refuse to issue such clause or endorsement even with an additional premium, then
Landlord shall have the right to designate another insurer who would be prepared
to permit such clause or endorsement and Tenant shall use such other insurer. If
it is not possible to obtain a clause or endorsement of the type described in
clause (ii) above, then the party unable to obtain such clause or endorsement
shall notify the other party of this fact and such party shall no longer be
obligated hereunder to endeavor to obtain such a clause or endorsement in its
insurance policies. The provisions of this subparagraph shall be applicable to
any new or renewal insurance policies which Tenant may obtain during the term
hereof.

45.     COMPLIANCE WITH LAW

        (a) If at any time during the term of this Lease, the fire and life
safety law requirements of the City of New York pursuant to Local Law #5 of
1973, Local Law # 16 of 1984 or otherwise ("Fire Requirements") or the masonry
or exterior wall requirements of the City of New York pursuant to Local Law #10
of 1980 or otherwise ("Masonry Requirements") or any other laws or requirements
of the City of New York or any agency having jurisdiction ("Other Requirements")
shall impose any obligations or requirements upon Landlord to perform any
alterations, installations, changes or improvements (collectively "changes") to
the Building and/or the demised premises, then Tenant shall pay to Landlord as
additional rent, 9.1 % ("Tenant's Payment") of all costs and expenses incurred
by Landlord in complying with the Fire, Masonry or Other Requirements during the
term hereof. Tenant's payment shall be due and payable to Landlord within thirty
(30) days after rendition of a bill therefor accompanied by a statement setting
forth the changes performed by Landlord. The obligation of Tenant in respect of
such additional rent shall survive the expiration of this Lease.

        (b) (i) Tenant covenants and agrees, at its sole cost and expense, to
comply with all present and future laws, orders, and regulations of all state,
federal, municipal and local governments, departments, commissions and boards
regarding the collection, sorting, separation and recycling of waste products,
garbage, refuse and trash. Tenant or Tenant's cleaning contractor shall sort and
separate such waste products, garbage, refuse and trash into such categories as
provided by law. Each separately sorted category of waste products, garbage,
refuse and trash shall be placed in separate receptacles reasonably approved by
Landlord. Such separate receptacles may, at Landlord's option, be removed from
the demised premises in accordance with a collection schedule prescribed by law.

            (ii) Landlord reserves the right to prohibit the removal of refuse
or to collect or accept from Tenant any waste products, garbage, refuse or trash
that are not separated and sorted as required by law, and to require Tenant to
arrange for such collection at Tenant's sole cost and expense, utilizing a
contractor satisfactory to Landlord. Tenant shall pay all costs, expenses,
fines, penalties or damages that may be imposed on Landlord or Tenant by reason
of Tenant's failure to comply with the provisions of this Article and, at
Tenant's sole cost and expense, shall indemnify, defend and hold Landlord
harmless from and against any actions, claims, suits, costs and expenses
(including legal fees and expenses) arising from such noncompliance, utilizing
counsel reasonably satisfactory to Landlord.

                                       3
<PAGE>   11

        (c) (i) Tenant shall, at Tenant's expense, comply with all laws now or
hereafter existing, whether or not such compliance requires work which is
structural or non-structural, ordinary or extraordinary, foreseen or unforeseen,
that impose any obligation, order or duty on Landlord or Tenant: (i) with
respect to the demised premises; or (ii) with respect to the Building or any
part thereof (including the demised premises) if such obligation, order or duty
arises from: (A) the manner of conduct of Tenant's business or operation of its
equipment therein; (B) any cause or condition created by or at the instigation
of Tenant, including, without limitation, any improvement or alteration; (C) the
default in any of Tenant's obligations hereunder beyond the expiration of any
applicable grace or cure period; or (D) any Hazardous Material (defined below)
brought into the Building by Tenant, any assignee or subtenant of Tenant or any
of their agents, contractors or invitees. Tenant shall promptly forward to
Landlord any notice it receives of the violation of any law involving the
demised premises. Tenant shall pay, within twenty (20) days after demand
therefor, all actual, out of pocket costs and expenses, and all fines, penalties
and damages that may be imposed upon Landlord by reason of or arising out of
Tenant's failure to comply with the provisions of this Article.

            (ii) Tenant shall promptly comply with all requirements relating to
the Americans with Disabilities Act, 42 U.S.C. Sections 12,101 et seq. and the
regulations promulgated thereunder as in effect from time to time ("ADA
Requirements") to the extent same applies to the demised premises only. Tenant
shall have exclusive responsibility for compliance with ADA Requirements
pertaining to the interior of the demised premises, including for the design and
construction of the access thereto and egress therefrom. Landlord shall have
responsibility for compliance with ADA Requirements which affect the common
areas of the Building to the extent same is not necessitated by the acts or
omissions of Tenant, its employees or agents or is otherwise the obligation of
another tenant. Tenant shall comply with any reasonable plan adopted by Landlord
which is designed to comply with ADA Requirements.

46.     BINDING EFFECT

        The submission by Landlord of this Lease in draft form shall be deemed
solely for Tenant's consideration and not for acceptance and execution. Such
submission shall have no binding force or effect and shall confer no rights nor
impose any obligation, including brokerage obligations, on either party unless
and until both Landlord and Tenant shall have executed this Lease and duplicate
originals hereof shall have been delivered to the respective parties.

47.     REAL ESTATE TAXES

        Tenant shall pay to Landlord, as additional rent, real estate tax
escalations based on increases in Real Estate Taxes (defined below) in
accordance with this Paragraph:

        (a) Definitions: For the purpose of this Paragraph, the following
definitions shall apply:

                (i) The term "Base Tax Year" as hereinafter set forth for the
determination of real estate tax escalation, shall mean the New York City real
estate tax year commencing July 1, 1999 and ending June 30, 2000.

                (ii) The term "The Percentage" shall mean 9.1%.

                (iii) The term "The Building Project" shall mean all of the Land
together with improvements thereon known as 162 Fifth Avenue, New York, New
York.

                (iv) The term "Comparative Year" shall mean the twelve months
following the Base Tax Year and each subsequent period of twelve months.

                (v) The term "Real Estate Taxes" shall mean the total of all
taxes and special or other assessments levied, assessed or imposed at any time
by any governmental authority upon or against the Building Project, and also any
tax or assessment levied, assessed or imposed at any time by any governmental
authority in connection with the receipt of income or rents from said Building
Project to the extent that same shall be in lieu of all or a portion of any of
the aforesaid taxes or

                                       4
<PAGE>   12
assessments, or additions or increases thereof, upon or against said Building
Project. If, due to a future change in the method of taxation or in the taxing
authority or for any other reason, a franchise, income, transit, profit or other
tax or governmental imposition, however designated, shall be levied against
Landlord in substitution in whole or in part for the Real Estate Taxes or in
lieu of or additions to or increases of said Real Estate Taxes" then such
franchise, income, transit, profit or other tax or governmental imposition shall
be deemed to be included within the definition of "Real Estate Taxes" for the
purpose hereof. As to special assessments which are payable over a period of
time extending beyond the term of this Lease, only a pro rata portion thereof,
covering the portion of the term of this Lease unexpired at the time of the
imposition of such assessment, shall be included in "Real Estate Taxes". If, by
law, any assessment may be paid in installments, then, for the purposes hereof
(a) such assessment shall be deemed to have been payable in the maximum number
of installments permitted by law and (b) there shall be included in Real Estate
Taxes for each Comparative Year in which such installments may be paid, the
installments of such assessment so becoming payable during such Comparative
Year, together with interest payable during such Comparative Year.

                (vi) The phrase "Real Estate Taxes payable during the Base Tax
Year" shall mean the Real Estate Taxes payable for the Base Tax Year.

                (vii) In addition to the foregoing, Tenant will be responsible
to pay to Landlord, within ten (10) days of being billed therefor, The
Percentage of any business improvement district or similar tax imposed against
the Building Project or Landlord.

        (b) Real Estate Taxes:

                1. In the event that the Real Estate Taxes payable for any
Comparative Year shall exceed the amount of such Real Estate Taxes payable
during the Base Tax Year, Tenant shall pay to Landlord, as additional rent for
such Comparative Year, an amount equal to The Percentage of the excess.
Following the expiration of each Tax Year, Landlord shall submit to Tenant a
statement, certified by Landlord, setting forth the Real Estate Tax escalation
due for the current Comparative Year and the payment, if any, due to Landlord
from Tenant for such Comparative Year. The rendition of such statement to Tenant
together with a copy of the tax bill shall constitute prima facie proof of the
accuracy thereof and, if such statement shows a payment due from Tenant to
Landlord with respect to such current Comparative Year, then (i) Tenant shall
make payment of any unpaid portion thereof within ten (10) days after receipt of
such statement; and (ii) Tenant shall also pay to Landlord, as additional rent,
within ten (10) days after receipt of such statement, an amount equal to the
product obtained by multiplying the total payment due for the current
Comparative Year by a fraction, the denominator of which shall be 12 and the
numerator of which shall be the number of months or any portion thereof in the
current Comparative Year which shall have elapsed prior to the first day of the
month immediately following the rendition of such statement; and (iii) Tenant
shall also pay to Landlord, as additional rent, commencing as of the first day
of the month immediately following the rendition of such statement and on the
first day of each month thereafter until a new statement is rendered, 1/12th of
the total payment for the current Comparative Year. The aforesaid monthly
payments based on the total payment due for the current Comparative Year may be
adjusted to reflect, if Landlord can reasonably so estimate, known increases in
rates for the subsequent Comparative Year, whenever such increases become known
during such current Comparative Year. The payments required to be made under
(ii) and (iii) above shall be credited toward the payment due from Tenant for
the subsequent Comparative Year, subject to adjustment as and when the statement
for such subsequent Comparative Year is rendered by Landlord.

                2. Should the Real Estate Tax payable during the Base Tax Year
be reduced by final determination of legal proceedings, settlement or otherwise,
then the Real Estate Taxes payable hereunder for all Comparative Years shall be
recomputed on the basis of such reduction, and Tenant shall pay to Landlord, as
additional rent, within ten (10) days after being billed therefor, any
deficiency between the amount of such additional rent as theretofore computed
and the amount thereof due as the result of such recomputations. Should the Real
Estate Taxes payable during the Base Tax Year be increased by such final
determination of legal proceedings, settlement or otherwise, then appropriate
recomputation and adjustment also shall be made.

                                       5
<PAGE>   13

                3. If, after Tenant shall have made a payment of additional rent
under this subdivision (b), Landlord shall receive a refund of any portion of
the Real Estate Taxes payable during any Comparative Year after the Base Tax
Year on which such payment of additional rent shall have been based, as a result
of a reduction of such Real Estate Taxes by final determination of legal
proceedings, settlement or otherwise, Landlord shall, within ten (10) days after
receiving the refund, pay to Tenant The Percentage of the refund less The
Percentage of reasonable expenses (including reasonable attorneys' and
appraisers' fees) incurred by Landlord in connection with any such application
or proceeding. If, prior to the payment of taxes for any Comparative Year,
Landlord shall have obtained a reduction of that Comparative Year's assessed
valuation of the Building Project, and therefore of said taxes, then the term
"Real Estate Taxes" for that Comparative Year shall be deemed to include the
amount of Landlord's reasonable expenses in obtaining such reduction in assessed
valuation, including reasonable attorneys' and appraisers' fees.

        (c) In no event shall the fixed annual rent under this Lease be reduced
by virtue of this Paragraph.

        (d) Upon the date of any expiration or termination of this Lease,
whether the same be the date hereinabove set forth for the expiration of the
term (hereinafter called the "lease expiration date") or any prior or subsequent
date, a proportionate share of the additional rent for the Comparative Year
during which such expiration or termination occurs shall become due and payable
by Tenant to Landlord. The said proportionate share shall be based upon the
length of time that this Lease shall have been in existence during such
Comparative Year. Promptly after said expiration or termination, Landlord shall
compute the additional rent from Tenant, as aforesaid, which computations shall
either be based on that Comparative Year's actual figures or be an estimate
based upon the most recent statements theretofore prepared by Landlord and
furnished to Tenant under subdivisions (b) and (c) above. If an estimate is
used, then Landlord shall promptly cause statements to be prepared on the basis
of that Comparative Year's actual figures and within ten (10) days after such
statement or statements are prepared by Landlord and furnished to Tenant,
Landlord and Tenant shall make appropriate adjustments of any estimated payments
theretofore made.

        (e) Notwithstanding any expiration or termination of this Lease prior to
the Lease expiration date (except in the case of a cancellation by mutual
agreement, casualty or condemnation), Tenant's obligation to pay any and all
additional rent under this Lease shall continue and shall cover all periods up
to the Lease expiration or termination date. Landlord's and Tenant's obligation
to make the adjustments referred to in subdivision (d) above shall survive any
expiration or termination of this Lease.

        (f) Any delay or failure of Landlord in billing for any additional rent
payable as hereinabove provided shall not constitute a waiver of or in any way
impair the continuing obligation of Tenant to pay such additional rent
hereunder.

48.     COST OF LIVING ADJUSTMENTS

        The annual rent reserved in this Lease and payable hereunder shall be
adjusted, as of the times and in the manner set forth in this Paragraph.

        (a) Definitions: For the purposes of this Paragraph the following
definitions shall apply:

                (i) The term "Base Year" shall mean the month of May, 1999.

                (ii) The term "Price Index" shall mean the Consumer Price Index
published by the Bureau of Labor Statistics of the U.S. Department of Labor, All
Items, U.S. city average, all urban consumers (presently denominated "CPI-U"),
or a successor or substitute index appropriately adjusted.

                (iii) The term "Price Index for the Base Year" shall mean the
monthly All Items Price Index for the Base Year.

                                       6
<PAGE>   14

        (b) Effective as of each January and July subsequent to the Base Year,
there shall be made a cost of living adjustment of the annual rent payable
hereunder. The July adjustment shall be based on one hundred (100%) percent of
the percentage difference between the Price Index for the preceding month of
June and the Price Index for the Base Year. The January adjustment shall be
based on one hundred (100%) percent of the percentage difference between the
Price Index for the preceding month of December and the Price Index for the Base
Year.

                (i) In the event the Price Index for June in any calendar year
during the term of this Lease reflects an increase over the Price Index for the
Base Year, then the annual rent herein provided to be paid as of the July 1st
following such month of June, i.e., fixed annual rent originally provided to be
paid for in this Lease (unchanged by any adjustments under this Lease), shall
be multiplied by one hundred (100%) percent of the percentage difference between
the Price Index for June and the Price Index for the Base Year, and the
resulting sum shall be added to such annual rent, effective as of such July 1st.
Said adjusted annual rent shall thereafter be payable hereunder, in equal
monthly installments, until it is readjusted pursuant to the terms of this
Lease.

                (ii) In the event the Price Index for December in any calendar
year during the term of this Lease reflects an increase over the Price Index for
the Base Year, then the annual rent herein provided to be paid as of the January
lst following such month of December, i.e., fixed annual rent originally
provided to be paid for in this Lease (unchanged by any adjustments under this
Article), shall be multiplied by one hundred (100%) percent of the percentage
difference between the Price Index for December and the Price Index for the Base
Year, and the resulting sum shall be added to such annual rent, effective as of
such January lst. Said adjusted annual rent shall thereafter be payable
hereunder, in equal monthly installments, until it is readjusted pursuant to the
terms of this Lease.

        The following illustrates the intentions of the parties hereto as to the
computation of the aforementioned cost of living adjustment in the annual rent
payable hereunder:

                        Assuming that said annual rent is $10,000, that the
                Price Index for the Base Year was 102.0 and that the Price Index
                for the month of June in a calendar year following the Base Year
                was 105.0, then the percentage increase thus reflected, i.e.,
                2.941% (3.0/102.0) would be multiplied by one hundred (100%)
                percent and then by $10,000, and said annual rent would be
                increased by $294.10, which would be divided by 12. Such
                resulting dividend, $24.51, would be added to the base monthly
                rent provided to be paid under this Lease, effective as of July
                1st of said calendar year, until such time that a new adjustment
                is provided to be made pursuant to the terms of this article.

        In the event that the Price Index ceases to use 1982/84 = 100 as the
basis of calculation, or if a substantial change is made in the terms or number
of items contained in the Price Index, then the Price Index shall be adjusted to
the figure that would have been arrived at had the manner of computing the Price
in effect at the date of this Lease not been altered. In the event such Price
Index (or a successor or substitute index) is not available, a reliable
governmental or other non-partisan publication evaluating the information
heretofore used in determining the Price Index shall be used.

        No adjustments or recomputations, retroactive or otherwise, shall be
made due to any revision which may later be made in the first published figure
of the Price Index for any month.

        (c) Landlord will cause statements of the cost of living adjustments
provided in subdivision (b) to be prepared in reasonable detail and delivered to
Tenant.

        (d) In no event shall the annual rent originally provided to be paid
under this Lease (exclusive of the adjustments under this Paragraph) be reduced
by virtue of this Paragraph.

        (e) Any delay or failure of Landlord, beyond July or January of any
year, in computing or billing for the rent adjustments hereinabove provided,
shall not constitute a waiver of or in any way impair the continuing obligation
of Tenant to pay such rent adjustments hereunder.

                                       7
<PAGE>   15

        (f) Notwithstanding any expiration or termination of this Lease prior to
the lease expiration date (except in the case of a cancellation by mutual
agreement), Tenant's obligation to pay rent as adjusted under this Paragraph
shall continue and shall cover all periods up to the lease expiration date, and
shall survive any expiration or termination of this Lease.

        (g) Tenant shall not be obligated to make any payments arising under
this Article until July, 2000.

49.     ALTERATIONS

        Anything in Article 3 to the contrary notwithstanding, Landlord shall
not unreasonably withhold or delay approval of written requests of Tenant to
make non-structural interior alterations, decorations, additions and
improvements (herein referred to as "alterations") in the demised premises,
provided that such alterations do not affect utility services or plumbing and
electrical lines or other systems of the Building, and provided that all such
alterations shall be performed in accordance with the following conditions:

        (a) All such alterations costing more than $10,000 shall be performed in
accordance with plans and specifications first submitted to Landlord for its
prior written approval.

        (b) All alterations shall be performed in a good and workmanlike manner.
All alterations shall be performed in compliance with all other applicable
provisions of this Lease and with all applicable laws, ordinances, directions,
rules and regulations of governmental authorities having jurisdiction; and
Tenant shall, prior to the commencement of any such alterations, at its sole
cost and expense, obtain and exhibit to Landlord any governmental permit
required in connection with such alterations.

        (c) All work in connection with alterations shall be performed with
union labor having the proper jurisdictional qualifications.

        (d) Tenant shall keep the Building and the demised premises free and
clear of all liens for any work or material claimed to have been furnished to
Tenant or to the demised premises.

        (e) Prior to the commencement of any work by or for Tenant, Tenant shall
furnish to Landlord certificates evidencing the existence of the following
insurance:

                (i) Workmen's compensation insurance covering all persons
employed for such work and with respect to whom death or bodily injury claims
could be asserted against Landlord, Tenant or the demised premises.

                (ii) General liability insurance naming Tenant as insured and
Landlord and its designees as additional insured, with limits of not less than
$500,000 in the event of bodily injury to one person and not less than
$1,000,000 in the event of bodily injury to any number of persons in any one
occurrence, and with limits of not less than $500,000 for property damage.

                        Tenant, at its sole cost and expense, shall cause all
such insurance to be maintained at all times when the work to be performed for
or by Tenant is in progress. All such insurance shall be obtained from a company
authorized to do business in New York and reasonably satisfactory to Landlord,
and all policies, or certificates therefor, issued by the insurer and bearing
notations evidencing the payment of premiums, shall be delivered to Landlord.

        (f) All work to be performed by Tenant shall be performed in a manner
which will not unreasonably interfere with or disturb other tenants and
occupants of the Building.

        (g) Tenant shall not be required to remove any fixtures, panelling,
partitions, railings or other installations presently constituting a part of the
demised premises, constituting a part of the initial fitting up of the demised
premises for Tenant's occupancy, installed by Landlord at its expense or
subsequently installed by Tenant and reasonably usable for an ordinary office
tenancy.

                                       8
<PAGE>   16

        (h) All trade fixtures and other movable property installed by Tenant in
the demised premises shall remain Tenant's property and shall be removed by
Tenant on or before the lease expiration date or upon the sooner termination of
this Lease, provided only that Tenant shall repair any damage to the demised
premises resulting from such removal.

        (i) Any alterations to be made by Tenant (other than plumbing and
electrical work) may be performed by any reputable contractor or mechanic
(collectively, the "Contractor") selected by Tenant and approved by Landlord,
which approval Landlord agrees it will not unreasonably withhold or delay,
provided the Contractor's performance of the alterations would not result in any
labor discord in the Building. In connection with any alteration performed by
Tenant, Landlord shall not be entitled to any supervisory fees but Tenant shall
reimburse Landlord, within ten (10) days of request therefor, for all actual
out-of-pocket costs incurred by Landlord in connection with such alterations.

        (j) Tenant may, at any time during the Term, remove any alteration made
by Tenant which is not otherwise prohibited by the terms of this Lease, solely
at its expense, provided Tenant promptly repairs any damage resulting from such
removal.

        (k) Any restoration or repair which Tenant is required to make (whether
structural or non-structural) shall be of quality or class equal to the then
Building standard, as determined by Landlord.

50.     SUBLETTING AND ASSIGNMENT

        Supplementing the provisions of Article 11 hereof, Landlord shall not
unreasonably withhold or delay its consent to an assignment of this Lease or to
a subletting of all or part of the demised premises, provided that any such
assignment or subletting shall be made solely upon the following terms and
conditions:

        1. No assignment and no subletting shall become effective unless and
until Tenant shall have given Landlord at least thirty (30) business days' prior
written notice of such proposed assignment or proposed bona fide subletting,
together with a statement containing the name and address of the proposed
sublessee or assignee, adequate information as to its reputation and financial
condition and the intended use of the demised premises along with a copy of the
proposed sublease or assignment. The parties agree that if there is a proposed
assignment or a proposed subletting of all of the demised premises for all or
substantially all of the balance of the term of this Lease, then Landlord shall
thereupon have the option, exercisable by written notice within thirty (30)
business days after receipt of the notice from Tenant, to terminate this Lease
effective as of the effective date of the proposed assignment or the
commencement date of the term of such proposed subletting. If there is a
proposed subletting of all of the demised premises for less than substantially
all of the balance of the term of this Lease or of part but not all of the
demised premises, then Landlord shall thereupon have the option, exercisable
by written notice within thirty (30) business days after the receipt of the
notice from Tenant, to delete the space proposed to be subleased from the
demised premises (with a prorated adjustment in all payments due hereunder for
the period of such proposed subletting) effective as of the commencement date of
the term of such proposed subletting and for the period of such proposed
subletting. If Landlord shall so terminate this Lease or delete portions of
space therefrom, then Tenant shall vacate and surrender the demised premises or
the deleted portions of space, to Landlord, on or before the effective date
pursuant hereto.

        2. If (i) Landlord shall delete any space (the "Space") to be subleased
constituting a portion of the demised premises or shall terminate this Lease in
the event of any assignment or subletting of all of the demised premises (also
the "Space") in accordance with the provisions of paragraph 1 of this Article
50, or (ii) Landlord shall not elect to terminate this Lease or delete portions
of Space herefrom pursuant to the provisions of paragraph 1 and the Space is
sublet or assigned by Tenant in accordance with the provisions thereof, then all
rent and additional rent payable by (a) the assignee or any new tenant to whom
Landlord rents the demised premises shall be paid to Landlord, and (b) the
sublessee to whom Tenant subleases the demised premises or any portion thereof
shall be paid to Tenant. Upon receipt of such rent and additional rent for any
month, Landlord or Tenant, as the case may be, shall disburse the rent and
additional rent received from such new Tenant or

                                       9
<PAGE>   17

sublessee as follows: (i) if received by Landlord, first to Landlord until
Landlord has received the monthly rent and additional rent which would have been
paid to Landlord pursuant to this Lease by Tenant for the Space (which rent is
the "Original Rent"), including, but not limited to, fixed annual rent,
escalation rent for taxes or other additional rent, including electricity, water
and sprinkler charges; (ii) if received by Tenant, first to Tenant until Tenant
has been reimbursed for the amount of the monthly Original Rent paid by Tenant
to Landlord; (iii) then, to Landlord or Tenant, whichever is appropriate, an
amount equal to the amount by which such rent and additional rent from the
assignee, subtenant or new tenant exceeds the Original Rent (which amount is
hereinafter "The Excess") until it recoups the entire cost of brokerage
commissions, installations and other costs of renting to such assignee, new
tenant or subtenant; (iv) then, to Tenant, out of The Excess, an amount equal to
Tenant's unrecouped Installation Cost (as hereinafter defined). Tenant's
unrecouped Installation Cost equals Tenant's Installation Cost times a fraction,
the numerator of which is the number of months remaining in the term of this
Lease from and after the date of the assignment or subletting as if it were not
terminated or the Space sublet or assigned and the denominator of which is the
number of months during the term of this Lease (as extended by any exercised
option), less payments previously made hereunder therefor. In the event Landlord
shall not have deleted any space or terminated this Lease, any remaining portion
of The Excess received shall be distributed 50% to Landlord and 50% to Tenant.
Tenant shall not be entitled to any payment hereunder from Landlord for any
period beyond the date this Lease would have expired or terminated, as provided
herein, had Landlord not terminated this Lease with respect to the Space
pursuant to this Article 50. If Tenant or Landlord, as the case may be, shall
receive a payment to which the other is entitled hereunder, payment to the party
entitled thereto shall be made within ten (10) days of receipt thereof and that
portion payable by Tenant hereunder shall be paid as additional rent in
accordance with the terms hereof.

        3. There shall be no default (after notice and the expiration of any
applicable grace period) by Tenant under any of the terms, covenants and
conditions of this Lease at the time that Landlord's consent to any such
subletting or assignment is requested and on the date of the commencement of the
term of any such proposed sublease or the effective date of any such proposed
assignment.

        4. Upon receiving Landlord's written consent, a duly executed copy of
the sublease or assignment shall be delivered to Landlord within thirty (30)
days after execution thereof. Any such sublease shall provide that the sublease
is subject and subordinate to this Lease. Any such assignment of Lease shall
contain an assumption by the assignee of all of the terms, covenants and
conditions of this Lease thereafter to be performed by Tenant.

        5. Anything herein contained to the contrary notwithstanding:

                (a) Tenant shall not publicly advertise the availability of the
demised premises for assignment or subletting at a rental rate lower than the
rental rate at which Landlord is then offering to lease comparable space in the
Building (but Tenant shall not be prohibited from assigning or subletting for
less than such rental rate).

                (b) No assignment or subletting shall be made:

                        (i) by the legal representatives of Tenant or by any
person to whom Tenant's interest under this Lease passes by operation of law,
except in compliance with the provisions of this Article and Article 11 hereof;

                        (ii) to any school, governmental office or agency;
messenger service, personnel or employment agency; medical facility or
counseling service of any kind; or to any person or entity for the conduct of a
business which is not in keeping with the standards for and general character of
the Building (to be determined in Landlord's sole discretion); and

                        (iii) to any party which is then a tenant, subtenant,
licensee, or occupant of any part of the Building.

                                       10
<PAGE>   18

        6. Anything hereinabove contained to the contrary notwithstanding,
Landlord herewith consents to an assignment of this Lease or sublease of all or
part of the demised premises to any entity in which Tenant or its stockholders
own at least 51% of the beneficial interest or the parent of Tenant or to any
corporation into or with which Tenant may be merged or consolidated or to which
substantially all of its assets or stock may be transferred, provided that any
such assignment of Lease shall contain an assumption by the assignee of all of
the terms, covenants and conditions of this Lease thereafter to be performed by
Tenant. Tenant agrees that no such assignment or subletting shall be effective
unless and until Tenant gives Landlord written notice thereof, together with a
true copy of the assignment or sublease.

        7. "Installation Cost" shall mean the costs and expenses incurred and
paid for by Tenant in performing alterations in accordance with plans and
specifications approved by Landlord for its initial occupancy, as evidenced by
paid receipts for materials supplied and services rendered by independent
contractors.

        8. In no event shall any permitted sublessee assign or encumber its
sublease or further sublet all or any portion of its sublet space or otherwise
suffer or permit the sublet space or any part thereof to be used or occupied by
others without Landlord's prior written consent in each instance. Similarly, in
no event shall permitted assigns be permitted to sublet any portion of the
demised premises or further assign this Lease without the prior written consent
of Landlord.

51.     ELECTRICAL AND PLUMBING SYSTEMS

        When in this Lease, Tenant shall take or be required to take any action
which may affect or alter the plumbing or electrical facilities or services
furnished by Landlord in the Building, the demised premises, or any portion
thereof, Tenant shall only be entitled to have such work performed by the
Building contractor designated from time to time by Landlord, in its sole and
absolute discretion, to perform such alteration and Landlord shall not be
required to permit, and Tenant shall not be entitled to use, any contractor not
designated as Landlord's selected contractor.

52.     EXTRA HEAT

        If Tenant shall request heat for the demised premises at any time other
than when Landlord is required to furnish heat as provided herein, Landlord
shall furnish heat and shall be entitled to receive, as additional rent
hereunder and in consideration therefor, an amount computed in accordance with
Landlord's standard Building rates from time to time for supplying heat. Tenant
shall be required to give reasonable prior notice to Landlord in accordance with
Landlord's standard procedure if such heat is required. Payment of the
additional rent shall be made within ten (10) days of Tenant being notified and
billed therefor by Landlord.

53.     CASUALTY DAMAGE

        Anything in Article 9 to the contrary notwithstanding, in the event of
damage or destruction to the demised premises by fire or other casualty
(collectively, "Casualty") then, if it is determined by Landlord's architect or
engineer that the demised premises cannot be restored to substantially its
condition immediately prior to the Casualty within twelve (12) months after the
occurrence of the Casualty, or if the demised premises are not so restored
within such twelve (12) month period, or if Landlord shall not have commenced
the restoration work six (6) months after the occurrence of the Casualty then,
in any such circumstance, Tenant may terminate this Lease, by written notice
sent to Landlord within thirty (30) days after the expiration of such twelve
(12) month period or of the six (6) month period if Landlord shall not have
commenced the restoration work, whichever is earlier, in which event this Lease
shall terminate as of the date set forth in such notice. Fixed annual rent,
additional rent and all other amounts payable under this Lease shall be
apportioned as of such date and the parties shall have no liability for
subsequently accruing obligations hereunder, except to the extent otherwise
provided herein.

                                       11
<PAGE>   19

54.     TENANTS CONDEMNATION CLAIM

        Anything in Article 10 to the contrary notwithstanding, Tenant shall
have the right to make a claim against the condemning authority for the value of
its trade fixtures and business machines and equipment taken in the condemnation
and for reimbursement of its resultant moving expenses provided such claim does
not diminish or otherwise adversely affect Landlord's award.

55.     ACCESS TO THE DEMISED PREMISES

        Supplementing the provisions of Article 13, Landlord's right to enter
the demised premises and its access thereto to make repairs and alterations and
to erect and maintain pipes and conduits therein (except in the event of any
emergency, in which event such right and access shall be unrestricted), shall be
subject to the following conditions:

        A. Landlord shall give Tenant reasonable advance notice of proposed
entry or access;

        B. All such pipes and conduits shall, to the extent reasonably possible,
be concealed in a building standard manner;

        C. Landlord shall use its reasonable efforts to effect all such repairs
and alterations and erect and maintain all such pipes and conduits so as to
minimize interference with Tenant's normal business operations, but no provision
hereof shall obligate Landlord to perform such work other than during normal
business hours; and

        D. Landlord shall retain the right to change the arrangement and/or
location of public entrances, passageways, doors, doorways, corridors,
elevators, stairs, toilets or other public parts of the Building, and such work
shall be performed at Landlord's sole cost and expense. If the demised premises
or the means of access thereto are materially adversely affected, such changes
shall be subject to Tenant's prior written consent, which consent shall not be
unreasonably withheld provided, however, that if such change is made in
compliance with any law, order or regulation of any governmental authority
having jurisdiction, the New York Board of Fire Underwriters or similar
organization, or any insurer of the Building and/or Landlord's interest therein,
Tenant's consent shall not be required.

56.     LANDLORD'S PERFORMANCE OF TENANT'S OBLIGATIONS

        Supplementing the provisions of Article 19, except in the event of an
emergency, Landlord shall not perform any obligation of Tenant under this Lease
nor incur any expenditure for such purpose until after the expiration of any
applicable grace period.

57.     TENANT'S TAKING POSSESSION OF THE DEMISED PREMISES

        Anything in Article 21 to the contrary notwithstanding, Tenant's taking
possession of the demised premises shall be conclusive evidence that the demised
premises and the Building were in good and satisfactory condition at the time
such possession was so taken, except as to latent defects and to any items as to
which Tenant notifies Landlord within thirty (30) days after initially taking
possession.

58.     TENANT'S ACCESS

        Tenant shall be entitled to have access to the demised premises 24 hours
a day, 7 days a week, without additional charge provided, however, that Landlord
shall be entitled to charge Tenant for any heating services supplied to Tenant
other than during hours and on days during which Landlord has the obligation to
supply such services pursuant to Articles 31 and 52 hereof.

                                       12
<PAGE>   20

59.     HOLIDAYS

                Heat and/or manual elevator facilities shall not be provided on
holidays deemed to be commercial building contract holidays of Local 32B-32J of
Services Employees Union.

60.     SQUARE FOOTAGE

                Tenant does hereby acknowledge that no representations have been
made by Landlord or anyone acting on behalf of Landlord as to the amount of
square footage in the demised premises. Tenant has inspected the demised
premises and relies upon its own judgement in computing the square footage.

61.     BUILDING CODE COMPLIANCE

        Following is a list of steps involved in the processing of Tenant plans
which Tenant herein must comply with by engaging such firm as may be designated
by Landlord from time to time to insure proper code compliance:

        1. Architectural and mechanical plans are reviewed for compliance with
the Building standard and New York City Building Code.

        2. Insertion of appropriate standard Building Department notes and
details.

        3. Certification by a professional engineer as to compliance with the
Building Code.

        4. Filing plans and specifications with the Department of Buildings and
processing to approval.

        5. Making controlled inspection of air conditioning system, completion
inspection of entire installation and filing of forms 10E and 23A indicating
proper completion of installation with the Department of Buildings.

        A Tenant installation will not be considered complete until an approved
Completion Certificate is filed with the Department of Buildings and an amended
Certificate of Occupancy reflecting Tenant's use of the demised premises has
been obtained, which Tenant shall hereby agree to obtain if required to permit
Tenant's legal use of the demised premises.

62.     FLAMMABLE MATERIALS

        Neither Tenant nor any of Tenant's servants, employees, agents, visitors
or licensees shall bring, keep or use in or upon the demised premises or the
Building, any solvent having a flash point below 110 degrees F, nor shall any
liquid which emits volatile vapors below the temperature of 100 degrees F be
brought, kept or used in or upon the demised premises or the Building, except as
follows:

        A. The process using such liquids shall be conducted in a room of fire
resistant construction, as the same is or may hereafter be defined by the Fire
Insurance Rating Organization;

        B. If more than one but not more than two gallons of such liquids are
kept on the demised premises, they shall be stored in safety cans. If more than
two but less than ten gallons of such liquids are kept on the demised premises,
they must be stored in safety cans and kept in a cabinet constructed by Tenant
in a manner approved by the fire insurance rating organization. Reasonable
amounts in excess of ten gallons may be kept provided they are stored in a vault
constructed by Tenant in a manner approved by said Organization; and

        C. Any use or storage of such liquids shall at all times be in
accordance with the requirements of the Fire Department, Board of Fire
Underwriters and the Fire Insurance Rating Organization.

                                       13
<PAGE>   21

A breach of the aforesaid regulations shall be deemed a default of this Lease
under Article 17 hereof.

63.     SECURITY

        Tenant shall, upon its execution and delivery of this Lease, deliver to
Landlord an irrevocable commercial letter of credit in the amount of
$231,000.00, such letter of credit to be in form and substance satisfactory to
Landlord, and issued by a member bank of the New York Clearing House
Association, or such other bank with assets and reserves substantially
equivalent to any of such member banks and acceptable to Landlord, payable upon
the presentation by Landlord to such bank of a sight-draft, without presentation
of any other documents, statements or authorizations, which letter of credit
shall provide (i) for the continuance of such credit for the period of at least
one (1) year from the date hereof, (ii) for the automatic extension of such
letter of credit for additional periods of one (1) year from the initial and
each future expiration date thereof (the last such extension to provide for the
continuance of such letter of credit for at least thirty (30) days beyond the
expiration date of this Lease) unless such bank gives Landlord notice of its
intention not to renew such letter of credit, not less than 45 days prior to the
initial or any future expiration date of such letter of credit and (iii) that in
the event such notice is given by such bank, Landlord shall have the right to
draw on such bank at sight for the balance remaining in such letter of credit
and hold and apply the proceeds thereof in accordance with the provisions of
this Article and this Lease. Each letter of credit to be deposited and
maintained with Landlord (or the proceeds thereof) shall be held by Landlord as
security for the faithful performance and observance by Tenant of the terms,
provisions and conditions of this Lease, and in the event that (x) any default
by Tenant beyond any applicable notice and cure periods occurs under this Lease,
or (y) Landlord transfers its right, title and interest under this Lease to a
third party and, after ten (10) days notice from Landlord, the bank issuing such
letter of credit does not consent to the transfer of such letter of credit to
such third party, or (z) notice is given by the bank issuing such letter of
credit that it does not intend to renew the same, as above provided, and a
substitute letter of credit in form and substance satisfactory to Landlord and
otherwise complying with the terms of this Article is not received by Landlord
within ten (10) days after such notice is given, then, in any such event,
Landlord may draw on such letter of credit, and the proceeds of such letter of
credit shall then be held and applied as security (and be replenished, if
necessary) as provided in this Article and this Lease. In the event Landlord
shall use, apply or retain the whole or any part of the security deposit
hereunder, Tenant shall immediately deliver to Landlord an amount equal to the
sum used, applied or retained by Landlord in accordance therewith so that at all
times during the term hereof, Landlord shall have as the security hereunder an
amount equal to the security deposit. Provided Tenant is not then in default
beyond any applicable notice and cure periods hereunder, and provided Tenant
shall have timely delivered possession of the demised premises to Landlord, any
letter of credit, or any remaining portion of any sum drawn by Landlord on any
such letter of credit under this Article, together with any other portion of or
sum held by Landlord as security hereunder, shall be returned to Tenant promptly
following the expiration of this Lease (or, provided Tenant is not then in
default beyond any applicable notice and cure periods hereunder, the earlier
termination of this Lease).

64.     EXTERMINATION

        Tenant, at its sole cost and expense, shall maintain such extermination
services as are necessary to keep the demised premises free of pests and vermin
at all times.

65.     ODORS

        Tenant shall not cause or permit any unusual or objectionable odors,
by-products or waste material to permeate from the demised premises. Tenant
covenants that it will hold Landlord harmless against all claims, damages or
causes of action for damages arising after the commencement of the term of this
Lease and will indemnify Landlord for all such suits, orders or decrees and
judgments entered therein, resulting from the use of said unusual or
objectionable odors, by-products or waste material, and, in addition, Tenant
covenants to pay any attorneys' fees and other legal expenses made necessary in
connection with any claim or suit as aforesaid, all provided, however, that
Tenant is given immediate written notice thereof with the opportunity to defend
by attorneys of its designation

                                       14
<PAGE>   22

        For the purpose of eliminating any such odors, waste material or
by-products, Tenant may erect and maintain such facilities and appurtenances as
may be necessary to eliminate any such odors, by-products or waste materials.
All such facilities or appurtenances shall be erected at Tenant's sole cost and
expense, shall be in accordance with applicable laws, orders and regulations of
all governmental authorities and the New York Board of Fire underwriters as set
forth in Article 6 of this Lease, and shall be subject to Landlord's reasonable
approval.

66.     FLOOR LOADS

        Tenant shall not place a load upon any floor of the demised premises
exceeding the floor load per square foot area which it was designed to carry and
which is allowed by law. Tenant agrees to position all machines, safes,
business machines, printing equipment or other mechanical equipment in such
locations as to minimize noise and vibration emanating therefrom. All of such
installations shall be placed and maintained by Tenant, at Tenant's sole cost
and expense, in settings sufficient, in Landlord's sole judgment, to absorb and
prevent vibration, noise and annoyance to other tenants in the Building.

        All of such machines and/or equipment installed by Tenant in the demised
premises shall not at any time be in violation of existing laws affecting the
demised premises or in violation of the Certificate of Occupancy issued for the
Building.

67.     LANDLORD'S COSTS BY TENANT'S DEFAULTS

        If Landlord, as a result of a default by Tenant of any of the provisions
of this Lease, including the covenants to pay rent and/or additional rent, makes
any expenditure or incurs any obligations for the payment of money including,
but not limited to, reasonable attorney's fees, in instituting, prosecuting or
defending any action or proceeding, such sums so paid or obligations so incurred
with interest (at the prime rate then being charged by Citibank, N.A. plus five
(5 %) percent) and costs shall be deemed to be additional rent hereunder and
shall be paid by Tenant to Landlord within five (5) days of rendition of any
bill or statement to Tenant therefor, and if any expenditure is incurred in
collecting such obligations, such sum shall also be recoverable by Landlord as
additional damages.

69.     LOBBY ATTENDANT

        For the purpose of maintaining lobby attendant service in the passenger
lobby of the Building, Tenant agrees to pay to Landlord a sum equal to 10% of
Landlord's total cost of maintaining such lobby attendant service. This sum
shall be payable as additional rent due under this Lease. As the cost of
maintaining such lobby attendant shall increase or decrease, so shall the above
mentioned charge be adjusted proportionate to the increase or decrease in the
total cost of maintaining such lobby attendant service.

69.     PLATE GLASS

        Tenant, at its own cost and expense, shall replace all damaged or broken
plate glass or other glass in or about the demised premises.

70.     BROKER

        Tenant warrants that it has dealt with no real estate broker other than
Helmsley-Spear, Inc. and Cushman & Wakefield, Inc. (collectively the "Brokers"),
in negotiating this Lease and agrees to indemnify and hold harmless Landlord in
the event that any claims for a brokerage commission are made by any party other
than the Brokers. This provision shall survive the expiration or sooner
termination of this Lease.

                                       15
<PAGE>   23

71.     SUBORDINATION AND ATTORNMENT

        Supplementing Article 7 hereof:

        (a) This Lease, and all rights of Tenant under it, are subordinate and
subject to all present and future ground, master or operating leases of the Land
and the Building and any and all present and future mortgages, security
interests or other security documents upon or affecting the Land and the
Building and to all advances thereunder and all renewals, replacements,
modifications, amendments, consolidations and extensions thereof (all of the
foregoing, collectively, the "Senior Interests", and the holders of Senior
Interests, collectively, "Senior Interest Holders"), unless any Senior Interest
Holder elects, by written notice to Tenant, that this Lease shall be superior
to its lease or mortgage. This Article shall be self-operative and no further
instrument of subordination shall be required. In confirmation of such
subordination, Tenant shall, within twenty (20) days of demand therefor,
execute, acknowledge and deliver any instrument that Landlord, any Senior
Interest Holder or any of their respective successors in interest may (in the
form required by the Senior Interest Holder requesting the same) request to
evidence such subordination.

        (b) Any Senior Interest Holder who succeeds to the rights of Landlord
under this Lease is sometimes referred to herein as a "Successor Landlord".
Tenant acknowledges and agrees that, upon a Successor Landlord's succession to
the rights of Landlord under this Lease, Tenant shall, at the option of such
Successor Landlord, fully and completely attorn to and recognize the Successor
Landlord as Tenant's landlord hereunder and shall promptly execute and deliver
to such Successor Landlord any additional instrument that such Successor
Landlord may request to evidence such attornment. Upon attornment, this Lease
shall continue in full force and effect as a direct Lease between Tenant and the
Successor Landlord upon all of the terms, covenants and conditions contained
herein except that the Successor Landlord shall not be: (a) liable for any
previous act or omission of Landlord under this Lease, (b) subject to any offset
which had occurred to Tenant against any prior Landlord, (c) obligated to
complete any construction of the Building or the demised premises, (d) obligated
to make any payment to or on behalf of Tenant, (e) required to account for any
security deposit except to the extent of any security deposit actually delivered
to the Successor Landlord, or (f) bound by any previous modification of this
Lease or by any prepayment of more than one month's fixed annual rent or
additional rent unless such modification or prepayment was expressly approved in
writing by the Successor Landlord. Nothing contained in this Article shall be
construed to impair any right otherwise exercisable by a Senior Interest Holder.

72.     USE AND OCCUPANCY

        Supplementing Article 2 hereof:

        (a) Subject to and in accordance with all rules, regulations, laws,
ordinances, statutes and requirements of all governmental authorities and any
bodies having jurisdiction thereof, Tenant covenants and agrees that it shall
use the demised premises solely for executive, administrative and general
offices and for no other purpose.

        (b) Tenant covenants that Tenant will (i) not use or suffer or permit
any person to use the demised premises for any unlawful purpose and (ii) obtain
and maintain at Tenant's sole cost and expense all licenses and permits from any
and all governmental authorities having jurisdiction of the demised premises
which may be necessary for the conduct of Tenant's business therein. Tenant
further covenants to comply with all applicable laws, resolutions, codes, rules
and regulations of any department, bureau, agency or any governmental authority
having jurisdiction over the operation occupancy, maintenance and use of the
demised premises for the purpose set forth herein. Tenant indemnifies and saves
Landlord harmless from and against any claims, penalties, loss, damage, cost or
expense imposed by reason of a violation of any applicable law or the rules and
regulations of governmental authorities having jurisdiction thereof relating to
Tenant's use and occupancy of the demised premises.

        (c) Tenant shall not, and shall not direct, suffer or permit any of its
agents, contractors, employees, licensees or invitees to at any time handle,
use, manufacture, store or dispose of in or

                                       16
<PAGE>   24

about the demised premises or the Building, any (collectively "HAZARDOUS
MATERIALS) flammable materials, explosives, radioactive materials, hazardous
wastes or materials, toxic wastes or materials, or other similar substances,
petroleum products or derivatives or any substance subject to regulation by or
under any federal, state and local laws and ordinances relating to the
protection of the environment or the keeping, use or disposition of
environmentally hazardous materials, substances, or wastes, presently in effect
or hereafter adopted, all amendments to any of them, and all rules and
regulations issued pursuant to any of such laws or ordinances (collectively
"Environmental Laws"), nor shall Tenant suffer or permit any Hazardous Materials
to be used in any manner not fully in compliance with all Environmental Laws in
the demised premises or the Building or allow the environment to become
contaminated with any Hazardous Materials. Notwithstanding the foregoing, and
subject to Landlord's prior consent, Tenant may handle, store, use or dispose of
products containing small quantities of Hazardous Materials (such as aerosol
cans containing insecticides, toner for copiers, paints, paint remover and the
like) to the extent customary and necessary for the use of the demised premises
as permitted herein; 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 demised premises, Building or
the environment. Tenant shall protect, defend, indemnify and hold each and all
of the Landlord Parties harmless from and against any and all loss, claims,
liability or costs (including court costs and attorney's fees) incurred by
reason of any failure of Tenant to fully comply with all applicable
Environmental Laws, or the presence, handling, use or disposition in or from the
demised premises of any Hazardous Materials (even though permissible under all
applicable Environmental Laws or the provisions of this Lease), or by reason of
any actual or asserted failure of Tenant to keep, observe, or perform any
provision hereof.

73.     AIR CONDITIONING

        Tenant agrees that the payment for cost of electric power consumed by
the air conditioning system shall be the responsibility of Tenant.

        During the term of this Lease, the air conditioning system shall be
owned by Landlord and shall be surrendered to Landlord at the expiration or
sooner termination of this Lease in good working condition, reasonable wear and
tear excepted. Tenant agrees to maintain the system and provide periodic service
thereto but not less than once per year at its sole cost and expense make
replacements of parts to the air conditioning unit as they may become necessary
during the term of this Lease.

74.     HOLDING OVER

        If Tenant holds over in possession after the expiration or sooner
termination of the original term or of any extended term of this Lease, such
holding over shall not be deemed to extend the term of or constitute a renewal
of this Lease, but such holding shall be upon the covenants and conditions
herein set forth, except that the charge for use and occupancy of the demised
premises for each calendar month or part thereof (even if such part shall be a
small fraction of a calendar month) that Tenant so holds over shall be equal to
the sum of:

        a. 1/12 of the highest annual rent rate set forth in this Lease, times
2.0, plus

        b. l/ 12 of the net increase, if any, in fixed annual rent due solely to
increase in the cost of the value of electric service furnished to the demised
premises in effect on the last day of the term of this Lease, plus

        c. 1/12 of all other items of annual additional rent (including, but not
limited to, real estate tax escalations), which annual additional rent would
have been payable pursuant to this Lease had this Lease not expired, plus

        d. those other items of additional rent (not annual additional rent)
which would have been payable monthly pursuant to this Lease, had this Lease
not expired, which total sum Tenant agrees to pay to Landlord promptly upon
demand, in full, without set-off or deduction. Neither the billing nor the
collection of use and occupancy in the above amount shall be deemed a waiver of
any right of Landlord to collect damages for Tenant's failure to vacate the
demised premises after the expiration

                                       17
<PAGE>   25

or sooner termination of this Lease. The aforesaid provisions of this Article
shall survive the expiration or sooner termination of this Lease.

75.     SIGNAGE

        Tenant shall be allowed three (3) listings in the Building lobby
directory, for which it agrees to pay to Landlord a one time charge which shall
not exceed Landlord's cost, per listing requested. No other signs or advertising
of any kind will be permitted in the Building lobby.

        Tenant will be permitted to display upon the entrance door to the
demised premises a sign of size, material and design subject to Building
standard. Tenant further agrees to submit the text and design of such door sign
to Landlord for Landlord's reasonable approval. Upon approval by Landlord,
Landlord shall cause such sign to be prepared and installed, the cost for which
Tenant agrees to reimburse Landlord within five (5) days of receipt of request
by Landlord for payment.

        Landlord reserves right to change Building standard from time to time
and to change the signs and listings to comply with the Building standard. In no
instance will Tenant he permitted to display any signs or advertising in the
windows of the Building.

76.     ELECTRIC CURRENT

        Tenant acknowledges that its consumption of electrical energy at the
demised premises during the term hereof shall be measured by a separate meter
servicing the demised premises and Landlord shall have no responsibility in
connection therewith. Tenant shall make all necessary arrangements and pay all
charges for the installation and maintenance of such meter. Tenant shall make
application directly to the public utility and/or other providers for Tenant's
entire separate supply of electric current and Landlord shall permit its wires
and conduits, to the extent available and safely capable, to be used for such
purpose, but only to the extent of Tenant's then authorized load.

        Landlord shall not be liable to Tenant for any loss or damage or expense
which Tenant may sustain or incur if either the quantity or character of
electric service is changed or is no longer available or suitable for Tenant's
requirements. Tenant covenants and agrees that at all times its use of electric
current shall never exceed the capacity of existing feeders to the Building or
wiring installation. Any riser or risers to supply Tenant's electrical
requirements, upon written request of Tenant, will. be installed by Landlord, at
the sole cost and expense of Tenant, if, in Landlord's sole judgment, the same
are necessary and will not cause permanent damage or injury to the Building or
demised premises or cause or create a dangerous or hazardous condition or entail
excessive or unreasonable alterations, repairs or expense or interfere with or
disturb other tenants or occupants. in addition to the installation of such
riser or risers, Landlord will also at the sole cost and expense of Tenant,
install all meters and other equipment proper and necessary in connection
therewith subject to the aforesaid terms and conditions. Only rigid conduit or
electricity metal tubing (EMT) will be allowed.

        77. EFFECT OF GOVERNMENTAL LIMITATION ON RENTS AND OTHER CHARGES

        If any law, decision, order, rule or regulation (collectively called
"Limiting Law") of any governmental authority shall have the effect of limiting
for any period of time the amount of rent or other amounts payable by Tenant to
any amount less than the amount required by this Lease, then:

        A. throughout the period of limitation, Tenant shall remain liable for
the maximum amount of rent and other amounts which are legally payable; and

        B. when the period of limitation ends, or if the Limiting Law is
repealed, or following any order or ruling that substantially restrains or
prohibits enforcement of the Limiting Law, Tenant shall pay to Landlord, on
demand (to the extent that payment of such amounts is not prohibited by law),
all amounts that would have been due from Tenant to Landlord during the period
of limitation but which were not paid because of the Limiting Law; and
thereafter Tenant shall pay to Landlord rent

                                       18
<PAGE>   26

and all other amounts due pursuant to this Lease, all calculated as though there
had been no intervening period of limitation.

78.     LATE PAYMENTS

        Tenant acknowledges that monthly fixed rent and additional rent payments
are due on or before the first (1st) day of each month. Tenant shall herein be
permitted to make such payments up to the fifth (5th) day of each month without
additional charge. In the event that, during any calendar year, Tenant fails to
make such payments of any portion of rents due by the fifth (5th) day of each
month, Landlord shall, for each lateness after the first occurrence, be
permitted to charge Tenant, as additional rent, the sum of one thousand two
hundred and fourteen ($1,214.00) Dollars as liquidated damages and not as a
penalty, which Tenant agrees to pay within fifteen (15) days of receipt of
invoice.

79.     FURTHER PROVISIONS AS TO DEFAULT

        All sums of money, other than the fixed annual rent reserved in this
Lease, which shall become due from and payable by Tenant to Landlord hereunder,
shall constitute additional rent, the default in the payment of which Landlord
shall have the same remedies as for a default in the payment of fixed annual
rent.

        If Tenant is late in making any payments due to Landlord from Tenant
under this Lease for thirty (30) or more days, then interest shall become due
and owing to Landlord on such payment from the date thirty (30) days after which
it was due, which interest shall be computed at the following rates:

        (i) for an individual or partnership tenant, computed at the maximum
lawful rate of interest;

        (ii) for a corporate tenant, computed at the rate of two and 00/100
(2.00%) percent per month, but in no event in excess of the maximum lawful rate
of interest chargeable to corporations in the State of New York.

        Bills for any expenses incurred by Landlord in connection with any
performance by it for the account of Tenant after a default hereunder beyond the
applicable grace period, and bills for all costs, expenses and disbursements of
every kind and nature whatsoever including, but not limited to, reasonable
counsel fees, involved in collecting or endeavoring to collect the fixed annual
rent or any additional rent or any part thereof, enforcing or endeavoring to
enforce any rights against Tenant or any of Tenant's obligations against Tenant,
under or in connection with this Lease, or pursuant to law, including any such
cost, expense and disbursement involved in instituting and prosecuting summary
proceedings, as well as bills for any property, material, labor, or services
provided, furnished, or rendered, by Landlord at Tenant's instance to or for the
benefit of Tenant, may be sent by Landlord to Tenant monthly, or immediately, at
Landlord's option, and shall be due and payable in accordance with the terms of
such bills.

80.     TERM: CONDITION OF DEMISED PREMISES; LANDLORD'S WORK

        (a) The term of this Lease (the "Term") shall commence on May 1, 1999
(the "Commencement Date") and shall expire on April 30, 2009 (the "Expiration
Date"), unless sooner terminated pursuant to any provision hereof or by law. The
taking of occupancy or possession of the whole or any portion of the demised
premises by Tenant shall be conclusive evidence that the demised premises and
the Building were in good and satisfactory condition as of such date. Tenant
covenants and agrees that if permission is given to Tenant to enter into
possession of all or any portion of the demised premises prior to the
Commencement Date, then Tenant shall pay all charges for water, sewage disposal,
heating, cooling, electricity, lighting and any other utilities attributable to
the demised premises which are payable by Tenant hereunder from the date upon
which the demised premises are delivered to Tenant. Any such charges which may
be paid by Landlord shall be reimbursed to Landlord by Tenant within fifteen
(15) days of rendition of a bill therefor. In addition, from such date

                                       19
<PAGE>   27

of delivery through and including the Commencement Date, Tenant shall perform
all of its obligations hereunder (other than the obligation to pay fixed annual
rent) including, without limitation, its indemnity and insurance obligations.

        (b) Tenant acknowledges that has made or been given the opportunity to
make a thorough examination and inspection of the demised premises. Tenant
agrees that it is entering into this Lease without any representations or
warranties by Landlord, its employees, agents, representatives or servants or
any other person as to the condition of the demised premises or the
appurtenances thereof or any improvements therein or thereon, or any other
matters pertinent thereto or to this Lease, except to the extent specifically
set forth herein. Tenant agrees to accept the demised premises in "as is'
condition at the time possession is given to Tenant, without requiring any
alterations, improvements, repairs or decorations to be made by Landlord or at
Landlord's expense, other than the performance of Landlord's Work (defined
below).

        (c) Tenant agrees to accept the demised premises in "as is" condition,
with the exception of the following work ("Landlord's Work") to be performed by
Landlord:

                (i)     remove any asbestos in the demised premises in
                        compliance with applicable law and deliver to Tenant an
                        ACP-5 certificate for the demised premises;

                (ii)    construct two (2) new bathrooms in compliance with the
                        Americans with Disabilities Act in accordance with the
                        plan attached as Exhibit A;

                (iii)   provide adequate electrical power (400 amp service);

                (iv)    install a 30 ton tenant-controlled air conditioning unit
                        without duct work;

                (v)     the demised premises shall be sprinklered to the extent
                        required by applicable law;

                (vi)    sand wood floors in the demised premises and apply one
                        (1) coat of polyurethane; and

                (vii)   deliver the demised premises in broom clean condition.

        81. RENT

                (a) Beginning on the Commencement Date and continuing thereafter
throughout the term of this Lease, Tenant shall pay to Landlord fixed annual
rent as follows:

                        1.      for the period commencing on the Commencement
                                Date and ending on the last day of the sixtieth
                                month of the term hereof, $291,500.00 per annum,
                                payable in consecutive equal monthly
                                installments of $24,291.67 on the first day of
                                each calendar month during such period; and

                        2.      for the period commencing on the first day of
                                the sixty-first month of the term hereof and
                                ending on the last day of the one hundred and
                                twentieth month of the term hereof, $313,500.00
                                per annum, payable in consecutive equal monthly
                                installments of $26,125,00 on the first day of
                                each calendar month during such period;

provided, however, that if Tenant shall not be in default on any of its
obligations hereunder, Landlord shall waive the monthly installments of fixed
annual rent for the first three (3) months of the term hereof. Notwithstanding
the foregoing, if Landlord's work shall not have been substantially completed
within three (3) months from the Commencement Date, Tenant's free rent period
will be extended until the day that Landlord's Work is substantially completed

                                       20
<PAGE>   28

        (b) Beginning on the Commencement Date, Tenant shall pay to Landlord as
additional rent all sums payable by Tenant under the provisions of this Lease
other than fixed annual rent including, without limitation, all interest that
may accrue thereon in the event of Tenant's failure to pay such amounts when
due, and all damages, costs and expenses which Landlord may incur by reason of
any default of Tenant or failure on Tenant's part to comply with the terms of
this Lease, all of which shall be due and payable within twenty (20) days of
demand therefor unless another time is expressly provided for in this Lease.
Landlord shall have the same remedies for failure to pay additional rent as for
non-payment of fixed annual rent.

        (c) Tenant shall pay the fixed annual rent and additional rent when due,
without notice or demand, and without any abatement, deduction or set-off,
except for any notices, demands, abatements, deductions or set-offs expressly
provided for elsewhere in this Lease. Tenant shall pay such amounts to Landlord
in lawful money of the United States by check or other method of payment so that
in any case the funds are "available" on the due date for payment thereof at the
address of Landlord or such other place Landlord may designate by notice to
Tenant.

        (d) The rent payable for any portion of a calendar month included in the
term shall be prorated in the ratio that the number of days in such portion
bears to the actual number of days in such month.

        (e) The first monthly installment of Rent payable hereunder shall be
paid upon Tenant's execution and delivery of this Lease.

82.     INDEMNIFICATION Tenant shall defend, indemnify and hold harmless

        Landlord, its agents, officers, directors, shareholders, partners,
members and principals (whether disclosed or undisclosed) (hereinafter the
"Landlord Parties") from and against any and all claims, demands, liability,
loss, damage, costs and expenses (including reasonable attorneys' fees and
disbursements) arising from or in connection with: (a) any breach or default
beyond the expiration of any applicable grace or cure period by Tenant in the
full and prompt payment and performance of Tenant's obligations hereunder; (b)
the use or occupancy or manner of use or occupancy of the demised premises by
Tenant or any person. claiming under or through Tenant; (c) any act, omission or
negligence of Tenant or any of its subtenants, assignees or licensees or its or
their partners, principals, directors, officers, agents, invitees, employees,
guests, customers or contractors during the term hereof; (d) any accident,
injury or damage occurring in or about the demised premises during the term
hereof; (e) the performance of any alteration in the demised premises including,
without limitation, Tenant's failure to obtain any permit, authorization or
license or failure to pay in full any contractor, subcontractor or materialmen
performing work on such alteration; and (f) any mechanics lien filed, claimed or
asserted in connection with any alteration or any other work, labor, services or
materials done for or supplied to, or claimed to have been done for or supplied
to, Tenant, or any person claiming through or under Tenant provided, however,
that same shall not have been caused by the gross negligence or willful
misconduct of Landlord, its agents, contractors, principals, officers,
directors, employees or assigns. If any claim, action or proceeding is brought
against any of the Landlord Parties for a matter covered by this indemnity,
Tenant, upon notice from the indemnified person or entity, shall defend such
claim, action or proceeding with counsel reasonably satisfactory to Landlord and
the indemnified person or entity.

83.     LANDLORD'S APPROVALS

        Whenever Tenant shall submit to Landlord any plan, agreement or other
document for Landlord's consent or approval, and Landlord shall require the
expert opinion of Landlord's counsel or architect as to the form or substance
thereof, Tenant agrees to pay the reasonable fee of such architect and/or
counsel for reviewing the said plan, agreement or document.

84.     intentionally omitted.

                                       21
<PAGE>   29

85.     ACCESS TO FREIGHT ELEVATOR

        Tenant will be permitted non-exclusive access to the Building's freight
elevators at no charge during normal business hours, but Tenant's use thereof
shall be in compliance with all of the provisions of this Lease including,
without limitation, the Building's Rules and Regulations.

86.     VENTING

        Subject to the reasonable rules of Landlord and to Landlord's
requirements regarding its location and manner of venting, Tenant shall be
permitted to vent any special equipment installed in the demised premises
(including, but not limited to, any air-cooled supplemental HVAC units) through
the Building's windows (other than on the Fifth Avenue side of the Building)
provided Tenant otherwise complies with the provisions of this Lease, including,
but not limited to, the Building's Rules and Regulations.

                                            162 ASSOCIATES LLC

                                            By: Helmsley-Spear, Inc., as Agent

                                            By [SIGNATURE ILLEGIBLE]
                                               ---------------------------------

                                            FORT POINT PARTNERS, INC.

                                            By James Roche
                                               ---------------------------------

                                       22

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