Document:

<PAGE>   1
                                                                    EXHIBIT 10.8

                       SUMMARY OF BASIC LEASE INFORMATION

         This Summary of Basic Lease Information (the "Summary") is hereby
incorporated into and made a part of the attached Office Lease (this Summary and
the Office Lease to be known collectively as the "Lease") which pertains to the
multi-office building project described in Section 6.1 below (the "Project").
Each reference in the Office Lease to any term of this Summary shall have the
meaning as set forth in this Summary for such term. In the event of a conflict
between the terms of this Summary and the Office Lease, the terms of the Office
Lease shall prevail. Any initially capitalized terms used herein and not
otherwise defined herein shall have the meaning as set forth in the Office
Lease.

<TABLE>
<CAPTION>
                 TERMS OF LEASE
               (References are to
                the Office Lease)                                             DESCRIPTION
               -------------------                                            -----------
<S> <C>                                                 <C>
1.  Dated as of:                                        March 31, 2000.

2.  Landlord:                                           CST WATER GARDEN II, L.L.C., a Delaware limited
                                                        liability company

3.  Address of Landlord
    (Section 29.14):                                    5757 Wilshire Boulevard
                                                        Penthouse 30
                                                        Los Angeles, California  90036
                                                        Attention:  Mr. Clifford P. Goldstein

                                                        with a copy to:

                                                        Allen, Matkins, Leck, Gamble & Mallory
                                                        1999 Avenue of the Stars
                                                        Suite 1800
                                                        Los Angeles, California  90067
                                                        Attention:  Anton N. Natsis, Esq.

4.  Tenant:                                             TRI-ENERGY PRODUCTIONS, INC.,
                                                        a California corporation.
</TABLE>

                                      -i-
<PAGE>   2

<TABLE>
<S> <C>                                                 <C>
5.  Address of Tenant
    (Section 29.14):                                    c/o Getty Images, Inc.
                                                        701 North 34th Street
                                                        Suite 410
                                                        Seattle, Washington  98103
                                                        Attention:  Ms. Susan Page
                                                                    Paul Ocampo, Esq.

                                                        with a copy to:

                                                        Greenwald, Pauly, Foster & Miller
                                                        1299 Ocean Avenue, Suite 400
                                                        Santa Monica, California  90401-1007
                                                        Attention: Richard L. Miller, Esq.
                                                        (Prior to Lease Commencement Date)

                                                                        and

                                                        2450 Colorado Avenue
                                                        Suite 500 East
                                                        Santa Monica, California 90404
                                                        Attention:  Mr. Adam Ainley

                                                        with a copy to:

                                                        Greenwald, Pauly, Foster & Miller
                                                        1299 Ocean Avenue, Suite 400
                                                        Santa Monica, California  90401-1007
                                                        Attention: Richard L. Miller, Esq.
                                                        (After Lease Commencement Date)

6.  Premises (Article 1).

    6.1      Project:                                   As defined in Section 1.1 of the Lease.

    6.2      Building:                                  2450 Colorado Avenue, Santa Monica, California,
                                                        consisting of approximately 260,000 rentable square
                                                        feet of office space.

    6.3      Premises:                                  Approximately 25,193 rentable (23,009  usable) square
                                                        feet of space located on the fifth (5th) floor of the
                                                        East Tower of the Building, as set forth in Exhibit A
                                                        attached hereto, known as Suite 500 East.

7.  Term (Article 2).

    7.1      Lease Term:                                Ten (10) years.
</TABLE>

                                      -ii-
<PAGE>   3

<TABLE>
<S> <C>                                                 <C>
    7.2      Lease Commencement Date:                   The earlier of (i) the date Tenant commences to
                                                        business operation from all or a portion of the
                                                        Premises, and (ii) the date that the Premises are Ready
                                                        For Occupancy, which Lease Commencement Date
                                                        is anticipated to be October 1, 2000.

    7.3      Lease Expiration Date:                     The last day of the month in which the 10th anniversary
                                                        of the Lease Commencement Date occurs.
</TABLE>

8.  Base Rent (Article 3):

<TABLE>
<CAPTION>
                                                  Monthly Installment
    Months of Lease Term     Annual Base Rent        of Base Rent
    --------------------     ----------------     -------------------
<S>                          <C>                  <C>
             1-30              $1,012,758.60         $ 84,396.55

            31-60              $1,088,337.60         $ 90,694.80

            61-90              $1,169,962.90         $ 97,496.91

           91-120              $1,257,634.50         $104,802.88
</TABLE>

<TABLE>
<S> <C>                                                 <C>
9.  Additional Rent
    (Article 4).

    9.1      Base Year:                                 The calendar year of 2000.

    9.2      Tenant's Share of Direct Expenses:         9.69%.

10. Security Deposit; Letter of Credit                  Security Deposit - $104,802.88; Letter of Credit -
    (Article 21):                                       $1,000,000.00

11. Number of Parking Passes (Article 28):              Four (4) unreserved parking passes per each 1,000
                                                        rentable square feet of the Premises, of which up to
                                                        five (5) passes may be for the use of a reserved
                                                        parking space.
</TABLE>

                                     -iii-
<PAGE>   4

<TABLE>
<S> <C>                                                 <C>
12. Brokers
    (Section 29.19):                                    JSG Realty, Inc.
                                                        5757 Wilshire Boulevard
                                                        Penthouse 30
                                                        Los Angeles, California  90036

                                                                        and

                                                        Julien J. Studley, Inc.
                                                        777 South Figueroa Street, Suite 2500
                                                        Los Angeles, California  90017

13. Permitted Use                                       General office use and uses incidental thereto,
    (Section 5):                                        including customer service phone center, and typical
                                                        office lunchroom, all consistent with a first-class
                                                        office building project.
</TABLE>

                                      -iv-
<PAGE>   5

<TABLE>
<S>          <C>                                                                                        <C>
ARTICLE 1    PREMISES, BUILDING, PROJECT, AND COMMON AREAS, AND THE ADJACENT PROJECT...................    1
ARTICLE 2    LEASE TERM; OPTION TERM...................................................................    3
ARTICLE 3    BASE RENT.................................................................................    7
ARTICLE 4    ADDITIONAL RENT...........................................................................    7
ARTICLE 5    USE OF PREMISES...........................................................................   19
ARTICLE 6    SERVICES AND UTILITIES....................................................................   20
ARTICLE 7    REPAIRS...................................................................................   24
ARTICLE 8    ADDITIONS AND ALTERATIONS.................................................................   26
ARTICLE 9    COVENANT AGAINST LIENS....................................................................   28
ARTICLE 10   INSURANCE.................................................................................   28
ARTICLE 11   DAMAGE AND DESTRUCTION....................................................................   32
ARTICLE 12   NONWAIVER.................................................................................   34
ARTICLE 13   CONDEMNATION..............................................................................   35
ARTICLE 14   ASSIGNMENT AND SUBLETTING.................................................................   36
ARTICLE 15   SURRENDER OF PREMISES; REMOVAL OF TRADE FIXTURES..........................................   42
ARTICLE 16   HOLDING OVER..............................................................................   43
ARTICLE 17   ESTOPPEL CERTIFICATES.....................................................................   43
ARTICLE 18   SUBORDINATION.............................................................................   44
ARTICLE 19   DEFAULTS; REMEDIES........................................................................   45
ARTICLE 20   ATTORNEYS' FEES...........................................................................   49
ARTICLE 21   SECURITY DEPOSIT; LETTER OF CREDIT........................................................   49
ARTICLE 22   INTENTIONALLY DELETED.....................................................................   51
ARTICLE 23   SIGNS.....................................................................................   51
ARTICLE 24   COMPLIANCE WITH LAW.......................................................................   52
ARTICLE 25   LATE CHARGES..............................................................................   53
ARTICLE 26   LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT......................................   53
ARTICLE 27   ENTRY BY LANDLORD.........................................................................   53
ARTICLE 28   TENANT PARKING............................................................................   54
ARTICLE 29   MISCELLANEOUS PROVISIONS..................................................................   55
</TABLE>

EXHIBITS

A        OUTLINE OF PREMISES

B        RULES AND REGULATIONS

C        NOTICE OF LEASE TERM DATES

D        TENANT WORK LETTER

E        FORM OF TENANT'S ESTOPPEL CERTIFICATE

F        FORM OF LETTER OF CREDIT

G        FORM OF GUARANTY OF LEASE

                                      -v-
<PAGE>   6
                                  OFFICE LEASE

        This Office Lease, which includes the preceding Summary of Basic Lease
Information (the "Summary") attached hereto as pages (ii) through (iv) and
incorporated herein by this reference (the Office Lease and Summary to be known
sometimes collectively hereafter as the "Lease"), dated as of the date set forth
in Section 1 of the Summary, is made by and between "Landlord" and "Tenant" as
those terms are defined in Sections 2 and 4 of the Summary, respectively.

                                    ARTICLE 1

                 PREMISES, BUILDING, PROJECT, AND COMMON AREAS,
                            AND THE ADJACENT PROJECT

        1.1    Premises, Building, Project and Common Areas.

               1.1.1 The Premises. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord the premises set forth in Section 6.3 of the Summary
(the "Premises"). The outline of the Premises is set forth in Exhibit A attached
hereto and each floor or floors of the Premises has the number of rentable
square feet as set forth in Section 6.3 of the Summary. Subject to Landlord's
reasonable regulations, restrictions and guidelines, Tenant may also use the
electrical and telephone rooms and the ceilings and floors above and below the
Premises to install wire, conduit and cable that service Tenant's equipment in
the Premises in accordance with, and subject to, the other terms and provisions
of this Lease and Landlord's rights hereunder with respect to such areas. The
parties hereto agree that the lease of the Premises is upon and subject to the
terms, covenants and conditions herein set forth, and Tenant covenants as a
material part of the consideration for this Lease to keep and perform each and
all of such terms, covenants and conditions by it to be kept and performed. The
parties hereto hereby acknowledge that the purpose of Exhibit A is to show the
approximate location of the Premises in the "Building," as that term is defined
in Section 1.1.2, below, only, and such Exhibit is not meant to constitute an
agreement, representation or warranty as to the construction of the Premises,
the precise area thereof or the specific location of the "Common Areas," as that
term is defined in Section 1.1.3, below, or the elements thereof or of the
accessways to the Premises or the "Project," as that term is defined in Section
1.1.2, below. Except as specifically set forth in this Lease and in the Tenant
Work Letter attached hereto as Exhibit D (the "Tenant Work Letter"), Landlord
shall not be obligated to provide or pay for any improvement work or services
related to the improvement of the Premises. Tenant also acknowledges that
neither Landlord nor any agent of Landlord has made any representation or
warranty regarding the condition of the Premises, the Building or the Project or
with respect to the suitability of any of the foregoing for the conduct of
Tenant's business, except as specifically set forth in this Lease and the Tenant
Work Letter.

               1.1.2 The Building and The Project. The Premises shall be a part
of the building set forth in Section 6.2 of the Summary (the "Building"). The
Building shall be part of an office project known as "Water Garden II." The term
"Project," as used in this Lease, shall mean (i) the Building and the Common
Areas, (ii) the land (which is improved with landscaping,

<PAGE>   7
subterranean parking facilities and other improvements) upon which the Building
and the Common Areas are located, (iii) the other office building known as 1601
Cloverfield Boulevard which shall be located adjacent to the Building and the
land upon which such adjacent office building is located, and (iv) at Landlord's
discretion, any additional real property, areas, land, buildings or other
improvements added thereto outside of the Project; provided that,
notwithstanding anything to the contrary contained in this Lease, the Project
shall not be expanded to include more than the land located in Santa Monica,
California, which has Olympic Boulevard as its Southern boundary, Cloverfield
Boulevard as its Western boundary, Colorado Avenue as its Northern boundary, and
26th Street as its Eastern boundary, and subject to the restrictions in Section
1.1.3 applicable to Common Areas which shall also apply to the added space;
provided further, however, that any such additions shall not materially increase
Tenant's monetary obligations under this Lease unless such additions are
required by "Applicable Laws," as that term is defined in Article 24, or
intended to help improve the security and/or safety of the tenants of, or the
visitors to, the Project.

               1.1.3 Common Areas. Tenant shall have the non-exclusive right to
use in common with other tenants in the Project, and subject to the rules and
regulations referred to in Article 5 of this Lease, those portions of the
Project which are provided, from time to time, for use in common by Landlord,
Tenant and any other tenants of the Project (such areas, together with such
other portions of the Project designated by Landlord, in its good faith
discretion, including certain areas designated for the exclusive use of certain
tenants, or to be shared by Landlord and certain tenants, are collectively
referred to herein as the "Common Areas"). The manner in which the Common Areas
are maintained and operated shall be at the sole discretion of Landlord,
provided that Landlord shall maintain and operate the same in a manner
consistent with other, first class, mid-rise office buildings, including the
"Water Garden," as that term is defined in Section 1.3, below, in the Santa
Monica, California area, which are comparable in terms of size, quality of
construction, appearance and services and amenities. The use of the Common Areas
shall be subject to such rules, regulations and restrictions as Landlord may
make from time to time. Landlord reserves the right to close temporarily, make
alterations or additions to, or change the location of elements of the Project
and the Common Areas, so long as such changes do not change the nature of the
Project to something other than a first class office building project or
materially, adversely effect Tenant's use of the Premises for the Permitted Use,
or Tenant's ingress to or egress from the Project, Building, the Premises or the
parking areas servicing the same. Except when and where Tenant's right of access
is specifically excluded as the result of (i) an emergency, (ii) a requirement
by Applicable Laws, or (iii) a specific provision set forth in this Lease,
Tenant shall have the right of access to the Premises, the Building, and the
Project parking facility twenty-four (24) hours per day, seven (7) days per week
during the "Lease Term," as that term is defined in Section 2.1 of this Lease.

        1.2 The Adjacent Project. The Project is located in the same city block
with, and is adjacent to, another office project known as the "Water Garden."
All references in this Lease to the "Adjacent Project" shall be deemed to refer
to the neighboring Water Garden project.

        1.3 Verification of Square Footages.

               1.3.1 Rentable Square Footage of Premises. Landlord and Tenant
hereby acknowledge and agree that the rentable square footage of the Premises,
as set forth in Section

                                       2
<PAGE>   8
6.3 of the Summary, shall be conclusive for all purposes under this Lease, and
that the same shall not be subject to remeasurement or modification.

               1.3.2 Rentable Square Footage of Building. For purposes of this
Lease, "rentable square feet" and "usable square feet" of the Building shall be
calculated pursuant to Standard Method for Measuring Floor Area in Office
Buildings, ANSI Z65.1 - 1996 ("BOMA"). Within ninety (90) days after the Lease
Commencement Date, the rentable and usable square footage of the Building shall
be measured by Landlord's planner/designer in accordance with the provisions of
this Section 1.3. Tenant's architect may consult with Landlord's
planner/designer regarding such measurements. In the event that Tenant's
architect disagrees with the determination of Landlord's planner/designer with
respect to any such measurement, the question of the measurement to be used for
purposes of this Lease shall be submitted to arbitration in accordance with
Section 29.29 of this Lease. If through such process, whether by acceptance of
the measurements of Landlord's planner/designer or by arbitration, it is
determined that the amounts thereof shall be different from those used for
purposes of setting amounts, percentages and figures appearing or referred to in
this Lease based upon such incorrect amount shall be modified in accordance with
such determination retroactive to the date when such amounts, percentages and
figures commenced to be used under this Lease, and any payments and credits
previously made or given based upon the incorrect amount shall be reconciled
between the parties within thirty (30) days after the corrected measurement has
been determined. If such determination is made, it will be confirmed in writing
by Landlord and Tenant.

                               ARTICLE 2

                        LEASE TERM; OPTION TERM

               2.1 In General. The terms and provisions of this Lease shall be
effective as of the date of this Lease. The term of this Lease (the "Lease
Term") shall be as set forth in Section 7.1 of the Summary and Section 5 of the
Tenant Work Letter and shall commence on the date (the "Lease Commencement
Date") set forth in Section 7.2 of the Summary, and shall terminate on the date
(the "Lease Expiration Date") set forth in Section 7.3 of the Summary, unless
this Lease is sooner terminated as hereinafter provided. For purposes of this
Lease, the term "Lease Year" shall mean each consecutive twelve (12) month
period during the Lease Term; provided, however, that the last Lease Year shall
end on the Lease Expiration Date. Within six (6) months following the Lease
Commencement Date, Landlord shall deliver to Tenant a notice (the "Notice of
Lease Term Dates") in the form as set forth in Exhibit C, attached hereto, which
Notice Tenant shall execute and return to Landlord within ten (10) business days
of receipt thereof (provided that if said notice is not factually correct, then
Tenant shall make such changes as are necessary to make the notice factually
correct and shall thereafter execute and return such notice to Landlord within
such ten (10) business day period), and thereafter the dates set forth on such
notice shall be conclusive and binding upon Tenant and Landlord, unless Landlord
within fifteen (15) business days following receipt of Tenant's changes sends a
notice to Tenant rejecting Tenant's changes, whereupon this procedure shall be
repeated until the parties either (a) mutually agree upon the contents of
Exhibit C, or (b) the contents are determined by arbitration pursuant to Section
29.29, below. In the event Landlord shall fail to send Tenant notice of the
occurrence of the Lease Commencement Date within six (6) months following the
Lease Commencement Date, Tenant may send to Landlord notice of the occurrence of
the Lease Commencement Date

                                       3
<PAGE>   9
substantially in the form of the attached hereto as Exhibit C, which notice
Landlord shall acknowledge by executing a copy of the notice and returning it to
Tenant (provided that if said notice is not factually correct, the Landlord
shall make such changes to the notice as are necessary to make such notice
factually correct, which revised notice shall thereafter be subject to the
procedure for finalization set forth in this Article 2).

        2.2    Option Term.

               2.2.1 Option Right. Landlord hereby grants the Tenant named in
this Lease (the "Original Tenant") or an assignee permitted pursuant to the
terms of Section 14.6 of this Lease (a "Permitted Assignee"), one (1) option to
extend the Lease Term for a period of five (5) years (the "Option Term"), which
option shall be exercisable only by written notice delivered by Tenant to
Landlord as provided below, provided that, as of the date of delivery of such
notice, Tenant is not in default under this Lease beyond any applicable notice
and cure period set forth herein. Upon the proper exercise of such option to
extend, and provided that, at Landlord's option, as of the end of the initial
Lease Term, Tenant is not in default under this Lease beyond any applicable
notice and cure period set forth herein, the Lease Term, for the entire
Premises, shall be extended for a period of five (5) years. The rights contained
in this Section 2.2 shall be personal to the Original Tenant or a Permitted
Assignee, and may only be exercised by the Original Tenant or a Permitted
Assignee (and not any other assignee, sublessee or other transferee of the
Original Tenant's interest in this Lease) if the Original Tenant or a Permitted
Assignee, as the case may be, occupies sixty percent (60%) of the Premises.

               2.2.2 Option Rent. The rent payable by Tenant during the Option
Term (the "Option Rent") shall be equal to the "Fair Market Rental Rate," as
that term is defined in Section 2.5.5, below, but the base rent component of the
Option Rent on an annual, per rentable square foot, basis shall in no event be
less than the sum of (i) $49.92, and (ii) the amount of Tenant's Share of Direct
Expenses payable by Tenant on an annual, per rentable square foot basis for the
Premises immediately prior to the commencement of the Option Term (the "Prior
Base Rent"). In the event that the base rent component for the Option Term is
the Prior Base Rent, then (A) the new Base Year for the Option Term shall be the
calendar year in which the Option Term commences, and (B) the concessions
provided to Tenant shall be equal to the "Concessions," as that term is defined
in Section 2.2.5, below.

               2.2.3 Exercise of Option. The option contained in this Section
2.2 shall be exercised by Tenant, if at all, only in the following manner: (i)
Tenant shall deliver written notice to Landlord not more than sixteen (16)
months nor less than fifteen (15) months prior to the expiration of the initial
Lease Term, stating that Tenant may be interested in exercising its option; (ii)
Landlord, after receipt of Tenant's notice, shall deliver notice (the "Option
Rent Notice") to Tenant not less than thirteen (13) months prior to the
expiration of the initial Lease Term, setting forth the Option Rent; and (iii)
if Tenant wishes to exercise such option, Tenant shall, on or before the date
occurring twelve (12) months prior to the expiration of the initial Lease Term,
exercise the option by delivering written notice thereof to Landlord, and upon,
and concurrent with, such exercise, Tenant may, at its option, object to the
Option Rent contained in the Option Rent Notice, in which case the parties shall
follow the procedure, and the Option Rent shall be determined, as set forth in
Section 2.2.4 below.

                                       4
<PAGE>   10
               2.2.4 Determination of Option Rent. In the event Tenant timely
and appropriately objects to the Option Rent, Landlord and Tenant shall attempt
to agree upon the Fair Market Rental Rate for the Premises, using reasonable
good-faith efforts. If Landlord and Tenant fail to reach agreement within thirty
(30) days following Tenant's objection to the Option Rent (the "Outside
Agreement Date"), then each party shall make a separate determination of the
Fair Market Rental Rate, as the case may be, within ten (10) days, and such
determinations shall be submitted to arbitration in accordance with Sections
2.2.4.1 through 2.2.4.7 below.

                      2.2.4.1 Landlord and Tenant shall each appoint one
arbitrator who shall by profession be a real estate broker, appraiser or
attorney who shall have been active over the five (5) year period ending on the
date of such appointment in the leasing (or appraisal, as the case may be) of
first class office properties in the Los Angeles County, California area. The
determination of the arbitrators shall be limited solely to the issue area of
whether Landlord's or Tenant's submitted Fair Market Rental Rate, is the closest
to the actual Fair Market Rental Rate as determined by the arbitrators, taking
into account the requirements of Section 2.2.5 of this Lease. Each such
arbitrator shall be appointed within fifteen (15) days after the applicable
Outside Agreement Date. Landlord and Tenant may consult with their selected
arbitrators prior to appointment and may select an arbitrator who is favorable
to their respective positions. The arbitrators so selected by Landlord and
Tenant shall be deemed "Advocate Arbitrators."

                      2.2.4.2 The two Advocate Arbitrators so appointed shall be
specifically required pursuant to an engagement letter within ten (10) days of
the date of the appointment of the last appointed Advocate Arbitrator to agree
upon and appoint a third arbitrator ("Neutral Arbitrator") who shall be
qualified under the same criteria set forth hereinabove for qualification of the
two Advocate Arbitrators except that neither the Landlord or Tenant or either
parties Advocate Arbitrator may, directly or indirectly, consult with the
Neutral Arbitrator prior or subsequent to his or her appearance. The Neutral
Arbitrator shall be retained via an engagement letter jointly prepared by
Landlord's counsel and Tenant's counsel.

                      2.2.4.3 The three arbitrators shall within thirty (30)
days of the appointment of the Neutral Arbitrator reach a decision as to Fair
Market Rental Rate and determine whether the Landlord's or Tenant's
determination of Fair Market Rental Rate as submitted pursuant to Section 2.2.4,
above, is closest to Fair Market Rental Rate as determined by the arbitrators
and simultaneously publish a ruling ("Award") indicating whether Landlord's or
Tenant's submitted Fair Market Rental Rate is closest to the Fair Market Rental
Rate as determined by the arbitrators. Following notification of the Award, the
Landlord's or Tenant's submitted Fair Market Rental Rate determination,
whichever is selected by the arbitrators as being closest to Fair Market Rental
Rate, shall become the then applicable Fair Market Rental Rate.

                      2.2.4.4 The Award issued by the majority of the three
arbitrators shall be binding upon Landlord and Tenant.

                      2.2.4.5 If either Landlord or Tenant fail to appoint an
Advocate Arbitrator within fifteen (15) days after the applicable Outside
Agreement Date, either party may petition the presiding judge of the Superior
Court of Los Angeles County to appoint such Advocate Arbitrator subject to the
criteria in Section 2.2.4.1 of this Lease, or if he or she refuses to act,

                                       5
<PAGE>   11
either party may petition any judge having jurisdiction over the parties to
appoint such Advocate Arbitrator.

                      2.2.4.6 If the two Advocate Arbitrators fail to agree upon
and appoint the Neutral Arbitrator, then either party may petition the presiding
judge of the Superior Court of Los Angeles County to appoint the Neutral
Arbitrator, subject to criteria in Section 2.2.4.1 of this Lease, or if he or
she refuses to act, either party may petition any judge having jurisdiction over
the parties to appoint such arbitrator.

                      2.2.4.7 The cost of arbitration shall be paid by Landlord
and Tenant equally.

               2.2.5 Fair Market Rental Rate. The "Fair Market Rental Rate"
shall be equal to the rent (including additional rent and considering any "base
year" or "expense stop" applicable thereto), including all escalations, at which
tenants, pursuant to leases or related agreements (i) which are executed prior
to, but no more than nine (9) months prior to the commencement of the Option
Term, and (ii) which have a term which is anticipated to commence within the
nine (9) month period immediately preceding the commencement of the Option Term,
are leasing non-sublease, non-encumbered, non-equity space comparable in size,
location and quality to the Premises, for a similar lease term, in an arms
length transaction, which comparable space is located in the Project, or, if
there are not at least two (2) current comparable transactions ("Comparable
Transactions") in the Project, then in "Comparable Buildings," as that term is
defined, below, in either case taking into consideration the following
concessions (the "Concessions"): (a) rental abatement concessions, if any, being
granted such tenants in connection with such comparable space, (b) tenant
improvements or allowances provided or to be provided for such comparable space,
taking into account, and deducting the value of, the existing improvements in
the Premises, such value to be based upon the age, design, quality of finishes,
and layout of the improvements and the extent to which the same could be
utilized by a general office user as contrasted with this specific Tenant, and
(c) all other monetary concessions, if any, being granted such tenants in
connection with such comparable space; provided, however, that notwithstanding
anything to the contrary herein, no consideration shall be given to (1) the fact
that Landlord is or is not required to pay a real estate brokerage commission in
connection with the applicable term or the fact that the Comparable Transactions
do or do not involve the payment of real estate brokerage commissions, and (2)
any period of rental abatement, if any, granted to tenants in Comparable
Transactions in connection with the design, permitting and construction of
tenant improvements in such comparable spaces. In analyzing such comparable
spaces, the arbitrators shall give due consideration to the method by which the
square footage of such space has been calculated. The Fair Market Rental Rate
shall additionally include a determination as to whether, and if so to what
extent, Tenant must provide Landlord with financial security, such as a letter
of credit or guaranty, for Tenant's Rent obligations during the Option Term.
Such determination shall be made by reviewing the extent of financial security
then generally being imposed in Comparable Transactions from tenants of
comparable financial condition and credit history to the then existing financial
condition and credit history of Tenant (with appropriate adjustments to account
for differences in the then-existing financial condition of Tenant and such
other tenants). If in determining the Fair Market Rental Rate, Tenant is deemed
to be entitled to a tenant improvement or comparable allowance for the
improvement of the Premises (the total dollar value of such allowance, the
"Option Term

                                       6
<PAGE>   12
TI Allowance"), Landlord may, at Landlord's sole option, elect any or a portion
of the following: (A) to grant some or all of the Option Term TI Allowance to
Tenant as a lump sum payment to Tenant, and/or (B) in lieu of making a lump sum
payment (or portion thereof) to Tenant, to reduce the rental rate component of
the Fair Market Rental Rate to be an effective rental rate which takes into
consideration that Tenant will not receive a payment of such Option Term TI
Allowance, or portion thereof (in which case the Option Term TI Allowance, or
portion thereof, evidenced in the effective rental rate shall not be paid to
Tenant). For purposes of this Lease, the "Comparable Buildings" shall mean
first-class, mid-rise office buildings (including the office buildings
constructed adjacent to the Project as "Phase I" of The Water Garden ("Water
Garden Phase I")), in the Santa Monica, California area, which are comparable in
terms of size, quality of construction, appearance, and services and amenities.

                                    ARTICLE 3

                                    BASE RENT

        3.1 In General. Tenant shall pay, without notice or demand, to Landlord
at the management office of the Project, or at such other place as Landlord may
from time to time designate in writing, in the form of a check (which is drawn
upon a bank which is located in the State of California), base rent ("Base
Rent") as set forth in Section 8 of the Summary, payable in equal monthly
installments as set forth in Section 8 of the Summary in advance on or before
the first day of each and every calendar month during the Lease Term, without
any setoff or deduction whatsoever (except as specifically set forth in this
Lease). The Base Rent for the first full calendar month of the Lease Term which
occurs following the expiration of any free rent period shall be paid at the
time of Tenant's execution of this Lease. If any Rent, payment date (including
the Lease Commencement Date) falls on a day of a calendar month other than the
first day of such calendar month or if any Rent payment is for a period which is
shorter than one calendar month such as during the last month of the Lease Term,
the Rent for any fractional calendar month shall accrue on a daily basis for the
period from the date such payment is due to the end of such calendar month or to
the end of the Lease Term at a rate per day which is equal to 1/365 of the Rent.
All other payments or adjustments required to be made under the terms of this
Lease that require proration on a time basis shall be prorated on the same
basis.

        3.2 Free Base Rent. Notwithstanding anything in Section 3.1 of this
Lease to the contrary, provided that Tenant is not then in default of this Lease
beyond any applicable cure period set forth herein, Tenant shall not be
obligated to pay the Base Rent attributable to the first two (2) months of the
Lease Term.

                                    ARTICLE 4

                                 ADDITIONAL RENT

        4.1 Additional Rent. In addition to paying the Base Rent specified in
Article 3 of this Lease, at all times during the Lease term on and after first
(1st) anniversary of the Lease Commencement Date, Tenant shall pay as additional
rent "Tenant's Share" of the annual "Direct Expenses," as those terms are
defined in Sections 4.2.6 and 4.2.2 of this Lease, respectively, which are in
excess of the amount of Direct Expenses applicable to the "Base Year," as that
term

                                       7
<PAGE>   13
is defined in Section 4.2.1 of this Lease. Such additional rent, together with
any and all other amounts payable by Tenant to Landlord, as additional rent or
otherwise, pursuant to the terms of this Lease, shall be hereinafter
collectively referred to as the "Additional Rent." The Base Rent and Additional
Rent are herein collectively referred to as the "Rent." All amounts due under
this Article 4 as Additional Rent shall be payable in the same manner, time and
place as the Base Rent. Without limitation on other obligations of Tenant and
Landlord which shall survive the expiration of the Lease Term, the obligations
of Tenant to pay the Additional Rent attributable to the period of time prior to
the Lease Expiration Date or earlier termination of this Lease, and Landlord's
obligation to refund to Tenant any overpayments of such Additional Rent shall
survive the expiration of the Lease Term; provided, however, that any such
payments made by Tenant of any Additional Rent or any refund to Tenant by
Landlord of any overpayments of such Additional Rent shall not constitute a
waiver by either Tenant or Landlord, as the case may be, of any amount that
Tenant or Landlord (as the case may be) contend are in dispute to the extent
that any such payments or refunds are made "under protest" and are designated as
such concurrently with any such payment and/or refund.

        4.2 Definitions. As used in this Article 4, the following terms shall
have the meanings hereinafter set forth:

               4.2.1 "Base Year" shall mean the period set forth in Section 9.1
of the Summary.

               4.2.2 "Direct Expenses" shall mean "Operating Expenses" and "Tax
Expenses."

               4.2.3 "Expense Year" shall mean each calendar year in which any
portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires.

               4.2.4 "Operating Expenses" shall mean all expenses, costs and
amounts of every kind and nature which Landlord shall pay or incur during any
Expense Year because of or in connection with the ownership, management,
maintenance, repair, replacement, restoration or operation of the Project or any
portion thereof, all as determined in accordance with sound real estate
management practices consistently applied, including, without limitation, any
amounts paid or incurred for (i) the cost of supplying all utilities, the cost
of operating, maintaining, repairing, replacing, renovating, complying with
conservation measures in connection with, and managing the utility systems,
mechanical systems, plumbing, sanitary and storm drainage systems, landscaping,
communication systems, and escalator and elevator systems, and the cost of
supplies, tools, equipment, maintenance, and service contracts incurred in
connection therewith; (ii) the cost of licenses, certificates, permits and
inspections, the cost of contesting the validity or applicability of any
governmental enactments which are reasonably anticipated to reduce Operating
Expenses, the costs incurred in connection with the implementation and operation
of any governmentally mandated transportation management program or similar
program or a municipal or public shuttle service or parking program, and any
traffic or transportation-related fee imposed by any governmental authority, and
the cost of contesting any fees or other charges imposed by any governmental
authority in connection with any governmentally mandated transportation
management or similar program; (iii) the cost of all insurance carried in
connection with the Project, or any portion thereof; (iv) the cost of
landscaping, relamping, and all supplies, tools, equipment and materials used in
the operation,

                                       8
<PAGE>   14
repair and maintenance of the Project, or any portion thereof; (v) the cost of
parking area operation, repair, restoration, and maintenance, including, but not
limited to, resurfacing, repainting, restriping, and cleaning; (vi) fees,
charges and other costs reasonably incurred, including management fees (or
amounts in lieu thereof), consulting fees (including but not limited to any
consulting fees incurred in connection with the procurement of insurance), legal
fees and accounting fees, for all persons, contractors and consultants engaged
by Landlord or otherwise reasonably incurred by Landlord in connection with the
management, operation, administration, maintenance and repair of the Project;
(vii) payments under any equipment rental agreements or management agreements
(including the cost of any management fee and the fair rental value of any
office space provided thereunder); (viii) wages, salaries and other compensation
and benefits of all persons to the extent that such persons are engaged in the
operation, maintenance, or security of the Project (provided that such persons
hold a title generally considered to be no higher in rank than Project manager),
or any portion thereof, including, but not limited to, employer's Social
Security taxes, unemployment taxes or insurance, and any other taxes which may
be levied on such wages, salaries, compensation and benefits; provided, that if
any employees of the Project provide services for other projects, then a
prorated portion of such employees' wages, benefits and taxes shall be included
in Operating Expenses based on the portion of their working time devoted to the
Project; (ix) payments, fees or charges under any present and future easement,
license, operating agreement, declaration, development agreement, covenants,
conditions and restrictions, restrictive covenant, Underlying Documents (as
defined in Section 5.2 hereof) or other instruments (including any amendments
and modifications to any such instruments) pertaining to the sharing of costs by
the Project(or any portion thereof) or otherwise, and any costs and expenses of
any governmentally mandated assessments, impositions or charges affecting the
Project including, but not limited to, any sewer connection and/or reconnection
fees or assessments; (x) the cost of operation, repair, maintenance and
replacement of all systems and equipment and components thereof; (xi) the cost
of janitorial services, alarm and security service, window cleaning, trash
removal, repair of wall and floor coverings, ceiling tiles and fixtures in
lobbies, corridors, restrooms and other common or public areas or facilities,
maintenance and replacement of curbs and walkways, repair to roofs and
re-roofing; (xii) amortization (including interest on the unamortized cost at a
rate equal to the "Interest Rate," as that term is defined below) of the cost of
acquiring or the rental expense of personal property used in the maintenance,
operation and repair of the Project, or any portion thereof; (xiii) the cost of
Landlord's office and office operation for the Project and all supplies and
materials used in connection therewith; (xiv) the cost of any capital repairs,
replacements or other improvements made to the Project or other costs incurred
in connection with the Project (A) which are intended to reduce Operating
Expenses in connection with the operation or maintenance of the Project, or any
portion thereof, to the extent of cost savings reasonably anticipated by
Landlord at the time of such expenditure to be incurred in connection therewith,
or (B) that are required under any governmental law or regulation except for
capital repairs, replacements or other improvements to remedy a condition
existing prior to the Lease Commencement Date which an applicable governmental
authority, if it had knowledge of such condition prior to the Lease Commencement
Date and if such condition was not subject to a variance or a
grandfathered/grandmothered code waiver exception, would have then required to
be remedied pursuant to then-current Applicable Laws, in their form existing as
of the Lease Commencement Date; provided, however, that any such permitted
capital expenditure shall be amortized (with interest at a rate equal to the
floating commercial loan rate announced from time

                                       9
<PAGE>   15
to time by Bank of America, a national banking association, or its successor, as
its prime rate, plus 2% per annum (the "Interest Rate")) over its reasonable
useful life; (xv) costs, fees, charges or assessments imposed by any federal,
state or local government for fire and police protection, trash removal,
community services, or other services, or street and other traffic improvements,
which do not constitute "Tax Expenses", as that term is defined in Section
4.2.5, below; and (xvi) the cost of operations, maintenance, repairs, rent
credits, subsidies, and other expenditures (whether capital or non-capital in
nature) with respect to the "Child Care Facilities," as that term is defined in
Section 29.15 below, and any lease therefor at the Project or the Adjacent
Project. Only as provided hereinafter in this Section 4.2.4 below in items [i],
[ii] and [iii], in the event and to the extent Landlord incurs costs or expenses
associated with or relating to separate items or categories or subcategories of
Operating Expenses which were not part of Operating Expenses during the entire
Base Year, Operating Expenses for the Base Year shall be deemed increased by the
amounts Landlord would have incurred during the Base Year with respect to such
costs and expenses had such separate items or categories or subcategories of
Operating Expenses been included in Operating Expenses during the entire Base
Year. The foregoing shall only apply as follows: [i] in the event and to the
extent any portion of the Project is covered by a warranty or service agreement
which provides warranty-type protection at any time during the Base Year and is
not covered by such warranty or such warranty-type protection under such service
agreement in a subsequent Expense Year to the same extent, Operating Expenses
for the Base Year shall be deemed increased by the amount Landlord would have
incurred during the Base Year with respect to the items or matters covered by
the subject warranty or warranty-type protection, had such warranty or such
service agreement not been in effect during the Base Year; [ii] any insurance
premium resulting from any new forms of insurance, including earthquake
insurance, shall be deemed to be included in Operating Expenses for the Base
Year; and [iii] parking garage expenses relating to the operation of the Project
parking facility. If Landlord is not furnishing any particular work or service
(the cost of which, if performed by Landlord, would be included in Operating
Expenses) to a tenant who has undertaken to perform such work or service in lieu
of the performance thereof by Landlord, Operating Expenses shall be deemed to be
increased by an amount equal to the additional Operating Expenses which would
reasonably have been incurred during such period by Landlord if it had at its
own expense furnished such work or service to such tenant. If the Project is not
ninety-five percent (95%) occupied during all or a portion of the Base Year or
any Expense Year (with all tenants paying 100% of the rental due and owing by
such tenants), Landlord shall make an appropriate adjustment to the variable
components of Operating Expenses for the Base Year or such Expense Year as
reasonably determined by Landlord employing sound accounting and management
principles, to determine the amount of Operating Expenses that would have been
paid had the Project been ninety-five percent (95%) occupied, and the amount so
determined shall be deemed to have been the amount of Operating Expenses for the
Base Year or such Expense Year. Notwithstanding the foregoing, for purposes of
this Lease, Operating Expenses shall not, however, include (A) except as
otherwise set forth above in this Section 4.2.4, bad-debt expenses, rent loss,
depreciation, interest and amortization on mortgages, reserves of any kind or
ground lease payments, if any; (B) real estate brokers' leasing commissions; (C)
the cost of providing any service directly to and paid directly by any tenant;
(D) any costs expressly excluded from Operating Expenses elsewhere in this
Lease; (E) costs of any items to the extent Landlord receives reimbursement or
would have received reimbursement if Landlord had carried the insurance Landlord
is required to carry pursuant to this Lease or would have been reimbursed if
Landlord had used commercially reasonable efforts

                                       10
<PAGE>   16
to collect such amounts, from insurance proceeds (such proceeds to be excluded
from Operating Expenses in the year in which received, except that any
deductible amount under any insurance policy shall be included within Operating
Expenses) or from Tenant or a third party; (F) costs of capital improvements,
except those set forth in items (xii), (xiv) and (xvi); (G) marketing costs,
including leasing commissions, space planning costs and attorneys' fees in
connection with the negotiation and preparation of letters, deal memos, letters
of intent, leases, and subleases and/or assignments incurred in connection with
present or future tenants or other occupants of the Project, including
attorneys' fees and other costs and expenditures incurred in connection with
disputes with present or prospective tenants or other occupants of the Project;
(H) costs, including permit, license and inspection costs, incurred with respect
to the installation of other tenants' or occupants' improvements made for
tenants or other occupants in the Project or incurred in renovating or otherwise
improving, decorating, painting or redecorating vacant space for tenants or
other occupants in the Project; (I) rentals and other related expenses for
leasing a heating, ventilation and air conditioning system, elevators, or other
items (except when needed in connection with normal repairs and maintenance of
the Project) which if purchased, rather than rented, would constitute a capital
improvement not included in Operating Expenses pursuant to this Lease; (J)
depreciation, amortization and interest payments, except as specifically
included in Operating Expenses pursuant to the terms of this Lease and except on
materials, tools, supplies and vendor-type equipment purchased by Landlord to
enable Landlord to supply services Landlord might otherwise contract for with a
third party, where such depreciation, amortization and interest payments would
otherwise have been included in the charge for such third party's services, all
as determined in accordance with sound real estate management principles, and
when depreciation or amortization is permitted or required, the item shall be
amortized over its reasonably anticipated useful life; (K) expenses in
connection with services or other benefits which are not offered to Tenant or
for which Tenant is charged for directly but which are provided to another
tenant or occupant of the Project, without charge; (L) overhead and profit
increment paid to Landlord or to subsidiaries or affiliates of Landlord for
goods and/or services in the Project to the extent the same exceeds the costs of
such by unaffiliated third parties on a competitive basis; (M) advertising and
promotional expenditures, and costs of signs in or on the Project identifying
the owner of the Project or other tenants' signs; (N) to the extent applicable,
electric power costs or other utility costs for which any tenant directly
contracts with the local public service company (but Landlord shall have the
right to "gross up" as if the floor was vacant); (O) tax penalties incurred as a
result of Landlord's negligence, inability or unwillingness to make payments or
file returns when due; (P) costs arising from Landlord's charitable or political
contributions; (Q) costs incurred in connection with the original construction
of the Project or in connection with any major change in the Project, such as
adding or deleting floors; (R) costs associated with the operation of the
business of the partnership or entity which constitutes the Landlord, as the
same are distinguished from the costs of operation of the Project, including
partnership accounting and legal matters, costs of defending any lawsuits with
any mortgagee (except as the actions of the Tenant may be in issue), costs of
selling, syndicating, financing, mortgaging or hypothecating any of the
Landlord's interest in the Project, and costs incurred in connection with any
disputes between Landlord and its employees, between Landlord and Project
management, or between Landlord and other tenants or occupants; (S) the wages
and benefits of any employee who does not devote substantially all of his or her
employed time to the Project unless such wages and benefits are prorated to
reflect time spent on operating and managing the Project vis-a-vis time spent on
matters unrelated to operating and

                                       11
<PAGE>   17
managing the Project; provided, that in no event shall Operating Expenses for
purposes of this Lease include wages and/or benefits attributable to personnel
above the level of Project manager or Project engineer; (T) except as set forth
in items (xii) and (xiv), above, late charges, penalties, liquidated damages,
and interest and principal payments on mortgages; (U) amount paid as ground
rental or as rental for the Project by the Landlord; (V) any compensation paid
to clerks, attendants or other persons in commercial concessions (other than the
parking operations) operated by or on behalf of the Landlord; (W) costs, other
than those incurred in ordinary maintenance and repair, for sculpture,
paintings, fountains or other objects of art; (X) fees and reimbursements
payable to Landlord (including its parent organization, subsidiaries and/or
affiliates) or by Landlord for management of the Project (including the
management of the Project parking facilities) which materially exceed the amount
which would normally be paid to a company, in connection with the management of
comparable buildings and/or the parking facilities of such comparable buildings,
with a general reputation for excellence and integrity used at "arms length" and
which is not, directly or indirectly, affiliated with Landlord ("Independent
Company Test"); (Y) rent for any office space occupied by Project management
personnel to the extent the size or rental rate of such office space exceeds the
size or fair market rental value of office space occupied by management
personnel of comparable buildings in the vicinity of the Building, with
adjustment where appropriate for the size of the applicable project; (Z)
Landlord's general corporate overhead and corporate administrative expenses;
(AA) all governmental assessments which are not specifically charged to Tenant
because of what Tenant has done, which can be paid by Landlord in installments,
shall be paid by Landlord in the maximum number of installments permitted by law
(except to the extent inconsistent with the general practice of comparable
buildings) and shall be included as Operating Expenses in the year in which the
assessment installment is actually paid; (BB) costs arising from the gross
negligence or willful misconduct of Landlord or "Landlord Parties," as that term
is defined in Section 10.1 of this Lease; (CC) costs incurred to comply with
Applicable Laws with respect to "Hazardous Material," as that term is defined in
Section 29.27 of this Lease, which was in existence in the Building or on the
Project prior to the Lease Commencement Date, and was of such a nature that a
federal, state or municipal governmental or quasi-governmental authority, if it
had then had knowledge of the presence of such Hazardous Material, in the state,
and under the conditions that it then existed in the Building or on the Project,
would have then required the removal, remediation or other action with respect
to such Hazardous Material; and costs incurred with respect to Hazardous
Material, which Hazardous Material is brought into the Building or onto the
Project after the date hereof by Landlord or any other tenant of the Project or
by anyone other than Tenant or Tenant Parties and is of such a nature, at that
time, that a federal, state or municipal governmental or quasi-governmental
authority, if it had then had knowledge of the presence of such Hazardous
Material, in the state, and under the conditions, that it then exists in the
Building or on the Project, would have then required the removal, remediation or
other action with respect to such Hazardous Material; (DD) any finders fees,
brokerage commissions, job placement costs or job advertising cost, other than
with respect to a receptionist or secretary in the Project office, once per
year; (EE) any above Building standard construction cleanup; (FF) in-house legal
and/or accounting (as opposed to office building bookkeeping) fees; (GG) in the
event any facilities, services or utilities used in connection with the Project
are provided from another building owned or operated by Landlord or vice versa,
the costs incurred by Landlord in connection therewith shall be allocated to
Operating Expenses by Landlord on a reasonably equitable basis; (HH) legal fees
and costs, settlements, judgments or awards paid or incurred

                                       12
<PAGE>   18
because of disputes between Landlord and Tenant, Landlord and other tenants or
prospective occupants or prospective tenants/occupants or providers of goods and
services to the Project; (II) costs associated with material portions of the
Common Areas dedicated for the exclusive use of other tenants of the Project,
except to the extent Tenant is given its pro-rata share (rentable square feet in
the Premises in relation to rentable square feet in the Project) of comparable
Common Areas; (JJ) legal fees and costs concerning the negotiation and
preparation of this Lease or any litigation between Landlord and Tenant; (KK)
costs of signs in or on the Building identifying the owner of the Building or
other tenants' signs; (LL) any entertainment, dining or travel expenses for any
purpose; (MM) costs covered by any warranties; (NN) during the initial Lease
Term only, costs of correcting defects in the initial design and construction of
the Project; (OO) costs of magazine and newspaper subscriptions to the extent
not customary purchased at buildings comparable to and in the vicinity of the
Building; and (PP) costs due to violations of the Underlying Documents.

               4.2.5 "Tax Expenses" shall mean all federal, state, county, or
local governmental or municipal taxes, fees, charges or other impositions of
every kind and nature, whether general, special, ordinary or extraordinary
(including, without limitation, real estate taxes, general and special
assessments, transit taxes or charges, business or license taxes or fees, annual
or periodic license or use fees, open space charges, housing fund assessments,
leasehold taxes or taxes based upon the receipt of rent, including gross
receipts or sales taxes applicable to the receipt of rent, unless required to be
paid by Tenant, personal property taxes imposed upon the fixtures, machinery,
equipment, apparatus, systems and equipment, appurtenances, furniture and other
personal property used in connection with the Project), which Landlord shall pay
or incur during any Expense Year (without regard to any different fiscal year
used by such governmental or municipal authority) because of or in connection
with the ownership, leasing and operation of the Project.

                      4.2.5.1 Tax Expenses shall include, without limitation:

                             (i) Any assessment, tax, fee, levy or charge in
        addition to, or in substitution, partially or totally, of any
        assessment, tax, fee, levy or charge previously included within the
        definition of real property tax, it being acknowledged by Tenant and
        Landlord that Proposition 13 was adopted by the voters of the State of
        California in the June 1978 election ("Proposition 13") and that
        assessments, taxes, fees, levies and charges may be imposed by
        governmental agencies for such services as fire protection, street,
        sidewalk and road maintenance, conservation, refuse removal and for
        other governmental services formerly provided without charge to property
        owners or occupants, and, in further recognition of the decrease in the
        level and quality of governmental services and amenities as a result of
        Proposition 13, Tax Expenses shall, except as otherwise expressly
        provided below, also include any governmental or private assessments or
        other charges, costs or impositions or the Project's contribution
        towards a governmental or private cost-sharing agreement for the purpose
        of augmenting or improving the quality of services and amenities
        normally provided by governmental agencies. It is the intention of
        Tenant and Landlord that all such new and increased assessments, taxes,
        fees, levies and charges be included within the definition of Tax
        Expenses for purposes of this Lease;

                                       13
<PAGE>   19

                             (ii) Any assessment, tax, fee, levy, or charge
        allocable to or measured by the area of the Premises or the rent payable
        hereunder, including, without limitation, any business or gross income
        tax or excise tax with respect to the receipt of such rent, or upon or
        with respect to the possession, leasing, operating, management,
        maintenance, alteration, repair, use or occupancy by Tenant of the
        Premises, or any portion thereof; and

                             (iii) Any assessment, tax, fee, levy or charge,
        upon this transaction or any document to which Tenant is a party,
        creating or transferring an interest or an estate in the Premises.

                      4.2.5.2 Subject to the terms of Section 4.2.5.3, below any
expenses incurred by Landlord in attempting to protest, reduce or minimize Tax
Expenses if Landlord has a reasonable expectation of achieving a reduction in
excess of the expenses incurred shall be included in Operating Expenses in the
Expense Year such expenses are paid. Subject to the terms of Section 4.2.5.3,
below, tax refunds shall be deducted from Tax Expenses in the Expense Year to
which the same are applicable. All special assessments which may be paid in
installments shall be paid by Landlord in the maximum number of installments
permitted by law and not included in Tax Expenses except in the year in which
the assessment is actually paid; provided, however, that if the prevailing
practice in comparable buildings located in the vicinity of the Project is to
pay such assessments on an early basis, and Landlord pays the same on such
basis, such assessments shall be included in Tax Expenses in the year paid by
Landlord. Subject to the terms of Section 4.2.5.3, below, if Tax Expenses for
the Base Year or any Expense Year are decreased or increased after payment
thereof, in either event for any reason, including, without limitation, error or
reassessment by applicable governmental or municipal authorities, Tenant shall
pay Landlord within thirty (30) days following written demand any resulting
increase and Landlord shall credit Tenant with any resulting decrease in the
amount of Tenant's Share of Direct Expenses for any Expense Year affected by
such change, as applicable.

                      4.2.5.3 Notwithstanding anything to the contrary set forth
in this Lease, the amount of Tax Expenses for the Base Year and any Expense Year
shall be calculated without taking into account any decreases in real estate
taxes obtained in connection with Proposition 8, and, therefore, the Tax
Expenses in the Base Year and/or an Expense Year may be greater than those
actually incurred by Landlord, but shall, nonetheless, be the Tax Expenses due
under this Lease; provided that (i) any reasonable costs and expenses incurred
by Landlord in securing any Proposition 8 reduction shall not be deducted from
Tax Expenses nor included in Direct Expenses for purposes of this Lease, and
(ii) tax refunds under Proposition 8 shall not be deducted from Tax Expenses nor
refunded to Tenant, but rather shall be the sole property of Landlord. Landlord
and Tenant acknowledge this Section 4.2.5.3 is not intended to in any way affect
(A) the inclusion in Tax Expenses of the statutory two percent (2.0%) annual
increase in Tax Expenses (as such statutory increase may be modified by
subsequent legislation) or (B) the inclusion or exclusion of Tax Expenses
pursuant to the terms of Proposition 13. Notwithstanding the foregoing, upon a
reassessment of the Building and/or Project pursuant to the terms of Proposition
13 (a "Reassessement") occurring after the Base Year which results in a decrease
in Tax Expenses, the component of Tax Expenses for the Base Year which is
attributable to the assessed value of the Building and/or Project under
Proposition 13 prior to the Reassessment (without taking into account any
Proposition 8 reductions) shall be reduced, if at

                                       14
<PAGE>   20
all, for the purposes of comparison to all subsequent Expense Years (commencing
with the Expense Year in which the Reassessment takes place) to an amount equal
to the real estate taxes based upon such Reassessment.

                      4.2.5.4 For purposes of this Lease, Tax Expenses shall be
calculated as if the tenant improvements in the Project were fully constructed
(at a Building standard amount) and the Project (including the land upon which
the Project is located), and all tenant improvements in the Project were fully
assessed for real estate tax purposes, and accordingly, during the portion of
any Expense Year or the Base Year, Tax Expenses shall be deemed to be increased
appropriately.

                      4.2.5.5 Notwithstanding anything to the contrary contained
in this Section 4.2.5 (except as set forth in Section 4.2.5.1 or levied in whole
or part in lieu of Tax Expenses), there shall be excluded from Tax Expenses (i)
all excess profits taxes, franchise taxes, gift taxes, capital stock taxes,
inheritance and succession taxes, estate taxes, federal and state income taxes,
and other taxes to the extent applicable to Landlord's general or net income (as
opposed to rents, receipts or income attributable to operations at the Project),
(ii) any items included as Operating Expenses, and (iii) any items paid by
Tenant under Section 4.5 of this Lease, and (iv) any tax penalties.

               4.2.6 "Tenant's Share" of the Premises shall mean the percentage
set forth in Section 9.2 of the Summary. Tenant's Share was calculated by
multiplying the number of rentable square feet of the Premises by 100 and
dividing the product by the total rentable square feet of office space in the
Building. Subject to the terms of Section 1.3 of this Lease, in the event either
the Premises and/or the Building is expanded or reduced, Tenant's Share shall be
appropriately adjusted, and, as to the Expense Year in which such change occurs,
Tenant's Share for such year shall be determined on the basis of the number of
days during such Expense Year that each such Tenant's Share was in effect.

        4.3 Calculation and Payment of Additional Rent.

               4.3.1 Calculation of Excess. If for any Expense Year following
the Base Year ending or commencing within the Lease Term, Tenant's Share of
Direct Expenses for such Expense Year exceeds Tenant's Share of the amount of
Direct Expenses applicable to the Base Year, then Tenant shall pay to Landlord,
in the manner set forth in Section 4.3.2, below, and as Additional Rent, an
amount equal to the excess (the "Excess"), if any.

               4.3.2 Statement of Actual Direct Expenses and Payment by Tenant.
On or before the first day of April following the end of each Expense Year,
Landlord shall use commercially reasonable efforts to give to Tenant a statement
(the "Statement"), which Statement shall be derived from an audit conducted by
an independent certified public accountant (which accountant is a member of a
nationally recognized accounting firm), which shall state, on a line-item by
line-item basis, the Direct Expenses incurred or accrued for the Base Year or
such preceding Expense Year, as applicable, and which shall indicate the amount,
if any, of any Excess. Upon receipt of the Statement for each Expense Year
ending during the Lease Term, if an Excess is present, Tenant shall pay, with
its next installment of Base Rent due, but in no event longer than thirty (30)
days after receipt of such Statement, the full amount of the

                                       15
<PAGE>   21
Excess for such Expense Year, less the amounts, if any, paid during such Expense
Year as "Estimated Excess," as that term is defined in Section 4.3.3, below, and
if Tenant has paid more as Estimated Excess than the Excess (an "Overage"),
Tenant shall receive a credit in the amount of the Overage against the Rent next
coming due under the Lease. The failure of Landlord to timely furnish the
Statement for any Expense Year shall not prejudice Landlord (provided that in
the event that such failure continues for a period of six (6) months following
receipt of notice from Tenant, Tenant may elect to seek specific performance)
from enforcing its rights under this Article 4. Notwithstanding anything above
to the contrary, the failure by Landlord to provide a Statement within
twenty-four (24) months after the expiration of any Expense Year for which such
Statement applies shall be deemed a waiver by Landlord of Landlord's right to
require Tenant to pay any additional Direct Expenses (except as to Tax Expenses,
utility charges, or other governmental charges) for such year to which the
Statement was to have applied. Even though the Lease Term has expired and Tenant
has vacated the Premises, when the final determination is made of Tenant's Share
of the Direct Expenses for the Expense Year in which this Lease terminates,
taking into consideration that the Lease Expiration Date may have occurred prior
to the final day of the applicable Expense Year, if an Excess is present, Tenant
shall pay to Landlord an amount as calculated pursuant to the provisions of
Section 4.3.1 of this Lease within thirty (30) days of Tenant's receipt of an
invoice therefore from Landlord, and if an Overage is present, Landlord shall
refund the amount of the Overage to Tenant within thirty (30) days following
Landlord's determination. The provisions of this Section 4.3.2 shall survive the
expiration or earlier termination of the Lease Term. Notwithstanding the
immediately preceding sentence, Tenant shall not be responsible for Tenant's
Share of any Direct Expenses attributable to any Expense Year which are first
billed to Tenant more than two (2) calendar years after the earlier of the
expiration of the applicable Expense Year or the Lease Expiration Date, provided
that in any event Tenant shall be responsible for Tenant's Share of Direct
Expenses levied by any governmental authority or by any public utility companies
at any time following the Lease Expiration Date which are attributable to any
Expense Year (provided that Landlord delivers Tenant a bill (a "Supplemental
Statement") for such amounts within two (2) years following Landlord's receipt
of the bill therefor).

               4.3.3 Statement of Estimated Direct Expenses. In addition,
Landlord shall use commercially reasonable efforts to give Tenant a yearly
expense estimate statement (the "Estimate Statement") which shall, on a
line-item by line-item basis, set forth Landlord's reasonable and good faith
estimate (the "Estimate") of what the total amount of Direct Expenses for the
then-current Expense Year shall be, the amount thereof to be allocated to
tenants of the Building, and the estimated excess (the "Estimated Excess") as
calculated by comparing Direct Expenses, which shall be based upon the Estimate,
to the amount of Direct Expenses applicable to the Base Year, which Estimate
Statement may be revised and reissued by Landlord from time to time. The failure
of Landlord to timely furnish the Estimate Statement for any Expense Year shall
not preclude Landlord from enforcing its rights to collect any Estimated Excess
under this Article 4 (provided that in the event that such failure continues for
a period of six (6) months following receipt of notice from Tenant, Tenant may
elect to seek specific performance), nor shall Landlord be prohibited from
revising any Estimate Statement or Estimated Excess theretofore delivered to the
extent necessary; provided however, any such subsequent revision shall set forth
on a reasonably specific basis any particular expense increase. If pursuant to
the Estimate Statement (or a revision thereof) an Estimated Excess is calculated
for the then-current

                                       16
<PAGE>   22
Expense Year, Tenant shall pay, upon the later to occur of its next installment
of Base Rent due or thirty (30) days after receipt of the Estimate Statement, a
fraction of the Estimated Excess (or the increase in the Estimated Excess if
pursuant to a revised Estimate Statement) for the then-current Expense Year
(reduced by any amounts paid pursuant to the last sentence of this Section
4.3.3). Such fraction shall have as its numerator the number of months which
have elapsed in such current Expense Year to the month of such payment, both
months inclusive, and shall have twelve (12) as its denominator. Until a new
Estimate Statement is furnished, Tenant shall pay monthly, with the monthly Base
Rent installments, an amount equal to one-twelfth (1/12) of the total Estimated
Excess set forth in the previous Estimate Statement delivered by Landlord to
Tenant.

        4.4 Allocation of Direct Expenses.

               4.4.1 In General. Notwithstanding anything to the contrary set
forth in this Article 4, when calculating the Direct Expenses for the Base Year,
such Direct Expenses shall include any increase in Tax Expenses attributable to
special assessments, charges, costs, or fees, or due to modifications or changes
in governmental laws or regulations, including but not limited to the
institution of a split tax roll, and Operating Expenses shall include
market-wide labor-rate increases due to extraordinary circumstances, including,
but not limited to, boycotts and strikes, and utility rate increases due to
extraordinary circumstances including, but not limited to, conservation
surcharges, boycotts, embargoes or other shortages and amortized costs relating
to capital improvements; provided however, that at such time as any such
particular assessments, charges, costs, fees or increases are not longer
included in Operating Expenses, such particular assessments, charges, costs,
fees or increases shall be excluded from the Base Year calculation of Operating
Expenses. Landlord shall (i) not make a profit by charging items to Operating
Expenses that are otherwise also charged to separately to others, and (ii)
Landlord shall not collect Operating Expenses from Tenant and all other
tenants/occupants in the Building in an amount in excess of what Landlord
incurred for the items included in Operating Expenses. Furthermore, in no event
shall the components of Direct Expenses for any Expense Year related to
electrical costs be less than the components of Direct Expenses related to
electrical costs in the Base Year. Any refunds or discounts actually received by
Landlord for any category of Operating Expenses shall reduce Operating Expenses
in the applicable Expense Year (pertaining to such category of Operating
Expenses).

               4.4.2 Cost Pools. Landlord shall have the right, from time to
time, to equitably allocate some or all of the Direct Expenses for the Project
among different portions or occupants of the Project (the "Cost Pools"), in
Landlord's discretion. Such Cost Pools may include, but shall not be limited to,
the office space tenants of a building in the Project or of the Project, and the
retail space tenants of a building in the Projector of the Project. The Direct
Expenses within each such Cost Pool shall be allocated and charged to the
tenants within such Cost Pool in an equitable manner.

               4.4.3 Method of Allocation. The parties acknowledge that the
Building is a part of a multi-building project and that the costs and expenses
incurred in connection with the Project (i.e. the Direct Expenses) should be
shared between the tenants of the Building and the tenants of the other
buildings in the Project. Accordingly, as set forth in Section 4.2 above, Direct
Expenses (which consists of Operating Expenses and Tax Expenses) are determined

                                       17
<PAGE>   23
annually for the Project as a whole, and a portion of the Direct Expenses, which
portion shall be determined by Landlord on an equitable basis, shall be
allocated (based upon the square footage of the Building as compared to the
total square footage of the Project) to the tenants of the Building (as opposed
to the tenants of any other buildings in the Project) and such portion shall be
the Direct Expenses for purposes of this Lease. Such portion of Direct Expenses
allocated to the tenants of the Building shall only include Direct Expenses
attributable solely to the Building and an equitable portion of the Direct
Expenses attributable to the Project as a whole.

        4.5 Taxes and Other Charges for Which Tenant Is Directly Responsible.
Tenant shall reimburse Landlord, as Additional Rent, upon demand for any and all
taxes required to be paid by Landlord (except to the extent included in Tax
Expenses by Landlord), excluding state, local and federal personal or corporate
income taxes measured by the net income of Landlord from all sources and estate
and inheritance taxes, whether or not now customary or within the contemplation
of the parties hereto, when:

               4.5.1 Said taxes are measured by or reasonably attributable to
the cost or value of Tenant's equipment, furniture, fixtures and other personal
property located in the Premises, or by the cost or value of any leasehold
improvements made in or to the Premises by or for Tenant, to the extent the cost
or value of such leasehold improvements exceeds Thirty-Five Dollars ($35.00) per
rentable square foot of the Premises so improved;

               4.5.2 Said taxes are assessed upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises, or any portion of the Project
(including, but not limited to, the Project parking facility); or

               4.5.3 Said taxes are assessed upon this transaction or any
document to which Tenant is a party creating or transferring an interest or an
estate in the Premises.

        4.6 Landlord's Book and Records. Any objection by Tenant to any annual
Statement or Supplemental Statement, or to any information reported therein,
shall be deemed waived if not raised by notice to Landlord within two (2) years
following delivery of such annual Statement or Supplemental Statement. Following
the giving of such notice, Tenant shall have the right during Landlord's regular
business hours and on reasonable prior notice, to inspect, at the location of
Landlord's accounting records, at Tenant's sole cost, Landlord's general ledger
with respect to Direct Expenses for the Expense Year to which such annual
Statement or Supplemental Statement relates. The inspection of Landlord's
general ledger may be conducted by an employee of Tenant, or a reputable
certified public accountant (which accountant is a member of a reputable
independent nationally or regionally recognized certified public accounting
firm, who has had previous experience in reviewing financial operating records
of landlords of office buildings; provided that such accountant is not retained
by Tenant on a contingency fee basis). Any accounting firm retained by Tenant in
connection with this Section 4.6 shall not already be providing primary
accounting services to Tenant, nor shall it have provided primary accounting
services to Tenant within the three (3) calendar years prior to the date of such
audit pursuant to this Section 4.6. The inspection of Landlord's general ledger
must be completed not later than thirty (30) days after the date such general
ledger is made available to Tenant, and any audit report prepared by Tenant's
auditors shall be delivered concurrently to Landlord and Tenant

                                       18
<PAGE>   24
within such thirty (30) day period. If, after such inspection of Landlord's
general ledger, Tenant disputes the amount of Direct Expenses for the Expense
Year to which such annual Statement or Supplemental Statement relates, Landlord
and Tenant shall meet and attempt in good faith to resolve the dispute. If the
parties are unable to resolve the dispute within sixty (60) days after
completion of Tenant's inspection, then Tenant shall have the right to submit
the dispute to arbitration pursuant to Section 29.29, below, which right shall
be exercised, if at all, by delivering a notice of election to arbitrate to
Landlord not later than the last day of said sixty (60) day period. The decision
of the "Arbitrator," as that term is defined in Section 29.29.2, below,
including any "Arbitration Award," as that term is defined in Section 29.29.3.2,
below, shall be delivered simultaneously to Landlord and Tenant, and shall be
final and binding upon Landlord and Tenant. If the arbitrator determines that
the amount of Direct Expenses billed to Tenant was incorrect, the appropriate
party shall pay to the other party the deficiency or overpayment, as applicable,
within thirty (30) days following delivery of the decision of the Arbitrator,
with interest at the Interest Rate. All costs and expenses of the arbitration
shall be paid by Tenant unless the final determination in such arbitration is
that Landlord overstated Direct Expenses for the applicable Expense Year by more
than four percent (4%) of the originally reported Direct Expenses, in which case
Landlord shall pay all costs and expenses of the arbitration. Tenant shall keep
any information gained from its inspection of Landlord's general ledger
confidential and shall not disclose it to any other party, except as required by
law. If requested by Landlord, Tenant shall require its employees or agents
inspecting Landlord's general ledger to sign a confidentiality agreement as a
condition of Landlord making Landlord's general ledger available to them. Tenant
understands and agrees that the confidentiality provision set forth herein is of
material importance to Landlord and that any violation thereof shall result in
immediate and irreparable harm to Landlord. Tenant's exercise of its audit
rights shall not relieve Tenant of its obligation to pay disputed amounts, and
Tenant's rights under this section may only be exercised by Tenant if Tenant is
not in default under this Lease beyond any applicable cure period set forth
herein, during the period that Tenant is exercising its rights hereunder. The
payment by Tenant of its Direct Expense payment, or any amount on account
thereof, shall not preclude Tenant from exercising its rights under this
section, but if Tenant fails to timely exercise its audit rights in accordance
with this Section 4.6 (i.e. within two (2) years of Tenant's receipt of such
Statement or Supplemental Statement (as the case may be)), such failure shall be
conclusively deemed to constitute Tenant's approval of Landlord's annual
Statement or Supplemental Statement for the Expense Year in question. There
shall be no more than one (1) audit and/or review by Tenant of Direct Expenses
for any twelve (12) month period. Landlord shall maintain its accounting records
with respect to Direct Expenses during the review period for each Expense Year
and during the pendency of any audit. In no event shall this Section 4.6 be
deemed to allow any review of any of Landlord's records by any subtenant of
Tenant. Tenant agrees that this Section 4.6 shall be the sole method to be used
by Tenant to dispute the amount of any Direct Expenses payable or not payable by
Tenant pursuant to the terms of this Lease, and Tenant hereby waives any other
rights at law or in equity relating thereto.

                                    ARTICLE 5

                                 USE OF PREMISES

        5.1 Permitted Use. Tenant shall use the Premises solely for the
"Permitted Use," as that term is defined in Section 13 of the Summary, and
Tenant shall not use or permit the

                                       19
<PAGE>   25
Premises to be used for any other purpose or purposes whatsoever without the
prior written consent of Landlord, which may be withheld in Landlord's sole
discretion.

        5.2 Prohibited Uses. The uses prohibited under this Lease shall include,
without limitation, use of the Premises or a portion thereof for (i) offices of
any agency or bureau of the United States or any state or political subdivision
thereof; (ii) offices or agencies of any foreign governmental or political
subdivision thereof; (iii) offices of any health care professionals or service
organization; (iv) schools or other training facilities which are not ancillary
to corporate, executive or professional office use; (v) retail (except for
"e-commerce" retail sales) or restaurant uses; or (vi) communications firms such
as radio and/or television stations. Tenant further covenants and agrees that
Tenant shall not use, or suffer or permit any person or persons to use, the
Premises or any part thereof for any use or purpose contrary to the Rules and
Regulations, or in violation of the laws of the United States of America, the
State of California, or the ordinances, regulations or requirements of the local
municipal or county governing body or other lawful authorities having
jurisdiction over the Project. Tenant shall faithfully observe and comply with
the Rules and Regulations set forth in Exhibit B attached hereto. Landlord shall
not be responsible to Tenant for the nonperformance of any of such Rules and
Regulations by or otherwise with respect to the acts or omissions of any other
tenants or occupants of the Project; provided, however, that Landlord shall use
commercially reasonable efforts (but not including the institution of legal
proceedings) to enforce such non-performance against the other occupants and
tenants of the Project, to the extent such non-performance has a material
adverse effect on Tenant's use of or access to the Premises. Tenant shall comply
with, and this Lease shall be subject to, all recorded covenants, conditions,
and restrictions, declarations, development agreements, easements, operating
agreements or other instruments (including any amendments and modifications to
any such instruments) now or hereafter affecting the Project (collectively, the
"Underlying Documents"). Following notice to Tenant, Tenant agrees that Landlord
may, without Tenant's prior consent, modify the terms of the Underlying
Documents without affecting Tenant's subordination of this Lease thereto, so
long as such modifications do not materially, adversely affect Tenant's rights
or materially, adversely increase Tenant's obligations thereunder. Tenant shall
not use or allow another person or entity to use any part of the Premises for
the storage, use, treatment, manufacture or sale of hazardous materials or
substances as defined pursuant to any applicable federal, state or local
governmental or quasi-governmental law, code, ordinance, rule, or regulation.
Landlord acknowledges, however, that Tenant will maintain products in the
Premises which are incidental to the operation of its offices, such as photocopy
supplies, secretarial supplies and limited janitorial supplies, which products
contain chemicals which are categorized as hazardous materials. Landlord agrees
that the use of such products in the Premises in compliance with all applicable
laws and in the manner in which such products are designed to be used shall not
be a violation by Tenant of this Article 5.

                                    ARTICLE 6

                             SERVICES AND UTILITIES

        6.1 Standard Tenant Services. Landlord shall provide the following
services on all days at all times during the Lease Term, unless otherwise stated
below.

                                       20
<PAGE>   26
               6.1.1 Subject to all governmental rules, regulations and
guidelines applicable thereto, Landlord shall provide heating and air
conditioning ("HVAC") when necessary for normal comfort for normal office use in
the Premises, from Monday through Friday, during the period from 8:00 a.m. to
6:00 p.m., and on Saturdays during the period from 9:00 a.m. to 1:00 p.m.
(collectively, the "Building Hours"), except for Sundays and New Year's Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day and
any other nationally and locally recognized holidays as designated by Landlord
(collectively, the "Holidays").

               6.1.2 Landlord shall provide adequate electrical wiring and
facilities for connection to Tenant's lighting fixtures and incidental use
equipment, provided that the connected electrical load of the incidental use
equipment and lighting fixtures does not exceed an average of five (5) watts per
rentable square foot of the Premises during the Building Hours, calculated on a
monthly basis, and the electricity so furnished will be at a nominal one hundred
twenty (120) volts and no electrical circuit for the supply of such incidental
use equipment will require a current capacity exceeding twenty (20) amperes.
Tenant will design Tenant's electrical system serving any equipment producing
nonlinear electrical loads to accommodate such nonlinear electrical loads,
including, but not limited to, oversizing neutral conductors, derating
transformers and/or providing power-line filters. Engineering plans shall
include a calculation of Tenant's fully connected electrical design load with
and without demand factors and shall indicate the number of watts of unmetered
and submetered loads. Tenant shall bear the cost of replacement of lamps,
starters and ballasts for non-Building standard lighting fixtures within the
Premises.

               6.1.3 Landlord shall provide city water from the regular Building
outlets for drinking, lavatory and toilet purposes.

               6.1.4 Landlord shall provide janitorial services Monday through
Friday except the date of observation of the Holidays, in and about the
Premises, and window washing services, in a matter at least materially
consistent with buildings comparable to and in the vicinity of the Building.

               6.1.5 Landlord shall provide nonexclusive freight elevator
service, subject to scheduling by Landlord.

               6.1.6 Landlord shall provide reasonable access control services
for the Building seven (7) days per week, twenty-four (24) hours per day, in a
manner consistent with other buildings comparable to and in the vicinity of the
Building. Notwithstanding the foregoing, Landlord shall in no case be liable for
personal injury or property damage for any error with regard to the admission to
or exclusion from the Building or Project of any person. Tenant may, at its own
expense, install its own security system ("Tenant's Security System") in the
Premises; provided, however, that Tenant shall coordinate the installation and
operation of Tenant's Security System with Landlord to assure that Tenant's
Security System is compatible with Landlord's security system and the Building
systems and equipment, and to the extent that Tenant's Security System is not
compatible with Landlord's security system and the Building systems and
equipment, Tenant shall not be entitled to install or operate the Tenant's
Security System. Tenant shall be solely responsible, at Tenant's sole cost and
expense, for the

                                       21
<PAGE>   27
installation, monitoring, operation and removal of Tenant's Security System.
Tenant's Security System shall be installed by Tenant in accordance with terms
of Article 8 of this Lease.

               6.1.7 Landlord shall provide nonexclusive automatic elevator
service at all times.

        6.2 Overstandard Tenant Use. Tenant shall not, without Landlord's prior
written consent (which consent shall not be unreasonably withheld), use
heat-generating machines, machines other than normal office machines, or
equipment or lighting other than task lighting and building standard lights in
the Premises, to the extent same may materially adversely affect the temperature
otherwise maintained by the air conditioning system or materially increase the
water (unless Tenant agrees to pay for such excess water) normally furnished for
the Premises by Landlord pursuant to the terms of Section 6.1 of this Lease. If
such consent is given, Landlord shall have the right to install supplementary
air conditioning units or other facilities in the Premises, including
supplementary or additional metering devices, and the "Actual Cost," as that
term is defined below, thereof, including the cost of installation, operation
and maintenance, increased wear and tear on existing equipment and other similar
charges, shall be paid by Tenant to Landlord within thirty (30) days following
receipt of Landlord's bill therefor. If Tenant uses water, electricity, heat or
air conditioning in excess of that supplied by Landlord pursuant to Section 6.1
of this Lease, Tenant shall pay to Landlord, within thirty (30) days following
the receipt of a bill therefore, the Actual Cost of such excess consumption
(except with respect to excess HVAC use, in connection with which Tenant shall
pay the amount determined pursuant to the remaining terms of this Section 6.2),
the Actual Cost of the installation, operation, and maintenance of equipment
which is installed in order to supply such excess consumption, and the Actual
cost of the increased wear and tear on existing equipment caused by such excess
consumption; and Landlord may install devices to separately meter any increased
use and in such event Tenant shall pay the increased Actual Cost directly to
Landlord within thirty (30) days following receipt of Landlord's bill therefor,
including, if such metering devices indicate any excess consumption, the Actual
Cost of such additional metering devices. Tenant's use of electricity shall
never exceed the capacity of the feeders to the Project or the risers or wiring
installation, and Tenant may install or use or permit the installation or use of
any computer or electronic data processing equipment in the Premises, without
the prior written consent of Landlord as long as a Design Problem is not
created. If Tenant desires to use heat, ventilation or air conditioning during
hours other than those for which Landlord is obligated to supply such utilities
pursuant to the terms of Section 6.1 of this Lease, Tenant shall give Landlord
reasonable prior notice, of Tenant's desired use and, notwithstanding anything
in this Section 6.2 to the contrary, Landlord shall supply such utilities to
Tenant at the "After Hours HVAC Charge," as that term is defined, below. As used
herein, (i) the "Actual Cost" shall mean the actual cost incurred by Landlord,
as reasonably determined by Landlord, without, however, any charge for profit,
overhead or administration, and (ii) the "After Hours HVAC Charge" shall equal
an amount equal to the sum of (i) $85.00 per hour per floor, and (ii) the amount
of any actual increase in the cost per floor per hour in Landlord providing
Tenant with after hours HVAC which occurs following the date of this Lease.
Amounts payable by Tenant to Landlord for such use of additional utilities shall
be deemed Additional Rent hereunder.

        6.3 Interruption of Use. Tenant agrees that Landlord shall not be liable
for damages, by abatement of Rent (except as provided in Section 19.5.2 of this
Lease) or otherwise, for

                                       22
<PAGE>   28
failure to furnish or delay in furnishing any service (including telephone and
telecommunication services), or for any diminution in the quality or quantity
thereof, when such failure or delay or diminution is occasioned, in whole or in
part, by repairs, replacements, or improvements, by any strike, lockout or other
labor trouble, by inability to secure electricity, gas, water, or other fuel at
the Project after reasonable effort to do so, by any accident or casualty
whatsoever, by act or default of Tenant or other parties; and such failures or
delays or diminution shall never be deemed to constitute an eviction or
disturbance of Tenant's use and possession of the Premises or relieve Tenant
from paying Rent (except as provided in Section 19.5.2 of this Lease) or
performing any of its obligations under this Lease. Furthermore, Landlord shall
not be liable under any circumstances for a loss of, or injury to, property or
for injury to, or interference with, Tenant's business, including, without
limitation, loss of profits, however occurring, through or in connection with or
incidental to a failure to furnish any of the services or utilities as set forth
in this Article 6. Landlord may comply with voluntary controls or guidelines
promulgated by any governmental entity relating to the use or conservation of
energy, water, gas, light or electricity or the reduction of automobile or other
emissions ("Voluntary Compliance") without creating any liability of Landlord to
Tenant under this Lease, provided that (i) the Premises are not thereby rendered
untenantable and (ii) such controls or guidelines do not materially interfere
with the conduct of Tenant's Permitted Use from the Premises and (iii)
Landlord's compliance with such controls or guidelines is generally consistent
with the practice of landlords of comparable buildings.

        6.4 Tenant HVAC System. Tenant, at its sole expense, may install a
supplemental HVAC system in the Premises, for the purpose of servicing the
Premises during hours other than Building Hours or to serve any other particular
Tenant need (the "Tenant HVAC System"). Any such installation shall be in
accordance with the terms of Article 8 of this Lease. If required for such
purpose, Tenant may connect into the Building's condensor water system, if and
to the extent that (i) Tenant's use of condensor water pursuant to this Section
6.4 will not adversely affect the condensor water system or the use thereof by
other tenants of the Project, and (ii) such connection is otherwise approved by
Landlord, which approval shall not be unreasonable withheld, conditioned or
delayed unless a "Design Problem," as that term is defined in Section 8.1,
below, exists. If Tenant connects into the Building's condensor water system
pursuant to the terms of the foregoing sentence, (x) Landlord may install, at
Tenant's reasonable expense, a meter to measure Tenant's use of condensor water,
and (y) Tenant shall reimburse Landlord for Tenant's use of condensor water at
Landlord's actual cost therefor. Tenant shall coordinate the installation and
operation of Tenant's HVAC System with Landlord to ensure that Tenant's HVAC
System is compatible with the systems and equipment of the Building, and to the
extent that Tenant's HVAC System is not compatible with the systems and
equipment of the Building, Tenant shall not be entitled to install or operate
the same. Tenant shall be solely responsible, at Tenant's sole cost and expense,
for the monitoring, operation, replacement and repair of Tenant's HVAC System.
In connection with the Tenant HVAC System, (a) Landlord may, at Tenant's sole
cost and expense, separately meter the electricity utilized by the Tenant HVAC
System, and (b) Tenant shall be responsible for the cost of all electricity
utilized by the Tenant HVAC System. At Landlord's sole option, which option
shall be exercised (if at all) at the time Landlord grants its consent to
Tenant's installation of the Tenant HVAC System (provided that Tenant's request
for approval requests such a designation), Tenant shall remove the Tenant HVAC
System prior to the expiration or earlier termination of this Lease, and repair
any

                                       23
<PAGE>   29
damages to the Building caused by such removal, or leave same in the Premises,
in which event the same shall become a part of the realty and belong to Landlord
and shall be surrendered with the Premises upon the expiration or earlier
termination of this Lease.

                                    ARTICLE 7

                                     REPAIRS

        7.1 In General. Landlord shall maintain in first-class condition and
operating order and keep in good repair and condition the structural portions of
the Building, including the foundation, floor/ceiling slabs, roof, curtain wall,
exterior glass and mullions, columns, beams, shafts (including elevator shafts),
stairs, parking areas, stairwells, escalators, elevator cabs, plazas, pavement,
sidewalks, curbs, entrances, landscaping, art work, sculptures, men's and
women's public washrooms, Building mechanical, electrical and telephone closets,
and all common and public areas (collectively, "Building Structure") and the
Base Building mechanical, electrical, life safety, plumbing, sprinkler systems
and HVAC systems which were not constructed by Tenant Parties (collectively, the
"Building Systems"). Notwithstanding anything in this Lease to the contrary,
Tenant shall be required to repair the Building Structure and/or the Building
Systems to the extent required because of (i) Tenant's use of the Premises for
other than other than normal and customary business office operations, or (ii)
the negligence or willful misconduct of Tenant or the Tenant Parties, unless and
to the extent such damage is covered by insurance carried or required to be
carried by Landlord pursuant to Article 10 and to which the waiver of
subrogation is applicable (such obligation to the extent applicable to Tenant as
qualified and conditioned will hereinafter be defined as the "BS/BS Exception").
Tenant shall, at Tenant's own expense, pursuant to the terms of this Lease,
including without limitation Article 8 hereof, keep the Premises, including all
"Tenant Improvements," as that term is defined in Section 2.1 of the Tenant Work
Letter, and "Alterations," as that term is defined in Section 8.1, below,
fixtures, and the floor or floors of the Building on which the Premises are
located, in good order, repair and condition at all times during the Lease Term
(but such obligation shall not extend to the Building Structure and the Building
Systems, except pursuant to the BS/BS exception). In addition, except as
provided as part of Landlord's repair obligations set forth above or elsewhere
in this Lease, Tenant shall, at Tenant's own expense, but under the supervision
and subject to the prior approval of Landlord, and within any reasonable period
of time specified by Landlord, pursuant to the terms of this Lease, including
without limitation Article 8 hereof, promptly and adequately repair all damage
to the Premises and replace or repair all damaged, broken, or worn fixtures and
appurtenances (but such obligation shall not extend to the Building Structure
and the Building Systems, except pursuant to the BS/BS Exception); provided
however, that, at Landlord's option, but only if Tenant fails to make such
repairs and replacements, Landlord may, but need not, make such repairs and
replacements, and Tenant shall pay Landlord the cost thereof, sufficient to
reimburse Landlord for all overhead, general conditions, fees and other costs or
expenses arising from Landlord's involvement with such repairs and replacements,
to the extent not duplicative of Direct Expenses and to the extent the work is
not performed by people whose salaries are paid out of Direct Expenses,
forthwith upon being billed for same. Landlord may, but shall not be required
to, enter the Premises (but except during emergencies, Landlord may not enter
"Secured Areas," as that term is defined in Article 27 of this Lease) at all
reasonable times to make such repairs, alterations, improvements or additions to
the Premises or to the Project or to any equipment located in the Project as
Landlord

                                       24
<PAGE>   30
shall desire or deem necessary or as Landlord may be required to do by
Applicable Laws; provided, however, except for emergencies, any such entry into
the Premises by Landlord shall be performed in a manner so as not to materially
or adversely interfere with Tenant's use of, or ingress or egress to, the
Premises. Tenant hereby waives any and all rights under and benefits of Section
1 of Section 1932 and Sections 1941 and 1942 of the California Civil Code or
under any similar law, statute, or ordinance now or hereafter in effect.

        7.2 Tenant's Right to Make Repairs. Notwithstanding any of the terms and
conditions set forth in this Lease to the contrary, if Tenant provides notice to
Landlord of an event or circumstance which requires the action of Landlord with
respect to repair and/or maintenance of any portion of the Premises which
constitutes a full floor of the Building, including the Building Structure
and/or Building Systems on such floor, which event or circumstance with respect
to the Building Structure or Building Systems materially or adversely affects
the conduct of Tenant's business from the Premises, and Landlord fails to
commence corrective action within a reasonable period of time, given the
circumstances, after the receipt of such notice, but in any event not later than
thirty (30) days after receipt of such notice, then Tenant may proceed to take
the required action upon delivery of an additional ten (10) business days'
notice to Landlord specifying that Tenant is taking such required action, and if
such action was required under the provisions of this Lease to be taken by
Landlord and was not commenced by Landlord within such ten (10) business day
period and thereafter diligently pursued to completion, then Tenant shall be
entitled to prompt reimbursement by Landlord of Tenant's reasonable costs and
expenses in taking such action plus interest thereon at the Interest Rate. In
the event Tenant takes such action, Tenant shall use only those contractors used
by Landlord in the Building for work unless such contractors are unwilling or
unable to perform, or timely perform, such work, in which event Tenant may
utilize the services of any other qualified contractor which normally and
regularly performs similar work in buildings comparable to and in the vicinity
of the Building. Promptly following completion of any work taken by Tenant
pursuant to the provisions of this Section 7.2, Tenant shall deliver a detailed
invoice of the work completed, the materials used and the costs relating
thereto. If Landlord does not deliver a detailed written objection to Tenant
within thirty (30) days after receipt of an invoice from Tenant, then Tenant
shall be entitled to deduct from Rent payable by Tenant under this Lease, the
amount set forth in such invoice. If, however, Landlord delivers to Tenant,
within thirty (30) days after receipt of Tenant's invoice, a written objection
to the payment of such invoice, setting forth with reasonable particularity
Landlord's reasons for its claim that such action did not have to be taken by
Landlord pursuant to the provisions of this Lease or that the charges are
excessive (in which case Landlord shall pay the amount it contends would not
have been excessive), then Tenant shall not then be entitled to such deduction
from Rent and the matter shall proceed to resolution by the selection of an
arbitrator to resolve the dispute, which arbitrator shall be selected and
qualified pursuant to the procedures set forth in Section 29.29 of this Lease.
If Tenant prevails in the arbitration, the amount of the Award (which shall
include interest at the Interest Rate from the time of each expenditure by
Tenant until the date Tenant receives such amount by payment or offset and
attorneys' fees and related costs) may be deducted by Tenant from the Rent next
due and owing under this Lease if Landlord fails to pay such Award within thirty
(30) days after it is so awarded.

                                       25
<PAGE>   31
                                    ARTICLE 8

                            ADDITIONS AND ALTERATIONS

        8.1 Landlord's Consent to Alterations. Tenant shall have the right,
without Landlord's consent but upon five (5) business days prior notice to
Landlord, to make strictly cosmetic, non-structural additions and alterations
("Cosmetic Alterations") to the Premises that do not (i) involve the expenditure
of more than Thirty-Five Thousand Dollars ($35,000.00) in the aggregate in any
Lease Year; (ii) affect the exterior appearance of the Building or (iii) affect
the Building Systems or the Building Structure. Except in connection with
Cosmetic Alterations, Tenant may make improvements, alterations, additions or
changes to the Premises (collectively, the "Alterations") only upon first
procuring the prior written consent of Landlord to such Alterations, which
consent shall be requested by Tenant not less than ten (10) business days prior
to the commencement thereof, and which consent or approval shall not be
withheld, conditioned or delayed by Landlord, unless a Design Problem exists. A
"Design Problem" is defined as, and will be deemed to exist if such Alteration
will (i) affect the exterior appearance of the Building; (ii) adversely affect
the Building Structure; (iii) adversely affect the Building Systems; (iv)
unreasonably interfere with any other occupant's normal and customary office
operation or (v) fail to comply with Applicable Laws. The construction of the
Tenant Improvements shall be governed by the terms of the Tenant Work Letter,
attached hereto as Exhibit D, and not the terms of this Article 8.

        8.2 Manner of Construction. Landlord may impose, as a condition of its
consent to all Alterations or repairs of the Premises or about the Premises,
reasonable requirements (provided that the same shall in any event be consistent
with the terms and conditions of this Lease). If any Alterations will involve
the use of or disturb any Hazardous Material existing in the Premises, Tenant
shall comply with Landlord's rules and regulations concerning such Hazardous
Material; provided, however, if such Hazardous Material existed in the Premises
prior to the Lease Commencement Date, and same was not put therein by Tenant,
Landlord shall pay any incremental extra costs incurred by Tenant in connection
with the Alteration resulting from the presence of the Hazardous Materials.
Tenant shall construct such Alterations and perform such repairs (i) using
licensed and reasonably available contractors selected by Landlord and
reasonably approved by Tenant; (ii) in conformance with any Applicable Laws and
pursuant to a valid building permit, issued by the applicable governmental
authorities, and (iii) in conformance with Landlord's reasonable written
construction rules and regulations. In the event Tenant performs any Alterations
in the Premises which require or give rise to governmentally required changes to
the Base Building pursuant to the terms of Article 24 of the Lease, Landlord
shall make such changes, at Tenant's expense. The "Base Building" shall include
the Building Structure and the Building Systems (inclusive of public restrooms).
All work with respect to any Alterations must be done in a good and workmanlike
manner and diligently prosecuted to completion to the end that the Premises
shall at all times be a complete unit except during the period of work. In
performing the work of any such Alterations, Tenant shall have the work
performed in such manner as not to obstruct access to the Building, the Project,
or the Common Areas for any other tenant of the Project, and as not to obstruct
the business of Landlord or other tenants in the Building and/or the Project.
Tenant shall not use (and upon notice from Landlord shall cease using)
contractors, services, workmen, labor, materials or equipment that, in
Landlord's reasonable judgment, would disturb labor harmony with the workforce
or trades

                                       26
<PAGE>   32
engaged in performing other work, labor or services in or about the Building or
the Project Common Areas. Upon completion of any Alterations, at Landlord's
request, Tenant agrees to prepare and Landlord shall execute if factually
correct, and Tenant shall cause a timely Notice of Completion to be recorded in
the office of the Recorder of the County of Los Angeles in accordance with the
terms of Section 3093 of the Civil Code of the State of California or any
successor statute, and Tenant shall deliver to the Project management office a
reproducible copy of the "as built" drawings of the Alterations as well as all
permits, approvals and other documents issued by any governmental agency in
connection with the Alterations.

        8.3 Payment for Improvements. Tenant shall reimburse Landlord for
Landlord's reasonable out-of-pocket costs and expenses reasonably incurred in
connection with Landlord's review of any Alterations to the extent such
Alterations could materially adversely affect the Building Structure or the
Building Systems.

        8.4 Construction Insurance. In the event that Tenant makes any
Alterations, Tenant shall provide Landlord with evidence that Tenant or Tenant's
contactor carries "Builder's All Risk" insurance in an amount reasonably
approved by Landlord covering the construction of such Alterations, and such
other insurance as Landlord may reasonably require, it being understood and
agreed that all of such Alterations shall be insured by Tenant pursuant to
Article 10 of this Lease immediately upon completion thereof. In addition, in
the event (i) a Transferee of Tenant (other than an Affiliate) makes any
Alterations, or (ii) Tenant makes any Alterations, other than Cosmetic
Alterations, which are reasonably anticipated to cost in excess of One Hundred
Thousand and No/100 Dollars ($100,000.00), Landlord may, in its reasonable
discretion, require Tenant or its Transferee, as the case may be, to obtain a
lien and completion bond or some alternate form of security satisfactory to
Landlord in an amount reasonably sufficient to ensure the lien-free completion
of such Alterations and naming Landlord as a co-obligee.

        8.5 Landlord's Property. All Alterations, improvements, fixtures and/or
equipment which may be installed or placed in or about the Premises, and all
signs installed in, on or about the Premises, from time to time, shall be at the
sole cost of Tenant and shall be and become the property of Landlord, except
that Tenant may remove any Alterations, improvements, fixtures and/or equipment
which Tenant can substantiate to Landlord have not been paid for with any tenant
improvement allowance funds provided to Tenant by Landlord, provided Tenant
repairs any damage to the Premises and Building caused by such removal.
Furthermore, if Landlord, as a condition to Landlord's consent to any
Alteration, requires that Tenant remove any Alteration upon the expiration or
early termination of the Lease Term, Landlord may, by written notice to Tenant
prior to the end of the Lease Term, or given upon any earlier termination of
this Lease, require Tenant at Tenant's expense to remove such Alterations and to
repair any damage to the Premises and Building caused by such removal and to
return that portion of the Premises to a Building-standard condition as
reasonably determined by Landlord; provided, however, that Landlord may only
require the removal of any Alterations and other improvements (including the
Tenant Improvements) to the extent the same relate to a non-general office use
of space. If Tenant fails to complete such removal and/or to repair any damage
caused by the removal of any Alterations, Landlord may do so and may charge the
Actual Cost thereof to Tenant.

                                       27
<PAGE>   33
                                    ARTICLE 9

                             COVENANT AGAINST LIENS

        Tenant has no authority or power to cause or permit any lien or
encumbrance of any kind whatsoever, whether created by act of Tenant, operation
of law or otherwise, to attach to or be placed upon the Project, Building or
Premises, and any and all liens and encumbrances created by Tenant shall attach
to Tenant's interest only. Landlord shall have the right at all times to post
and keep posted on the Premises any notice which it deems necessary for
protection from such liens. Tenant covenants and agrees not to suffer or permit
any lien of mechanics or materialmen or others to be placed against the Project,
the Building or the Premises with respect to work or services claimed to have
been performed for or materials claimed to have been furnished to Tenant or the
Premises, and, in case of any such lien attaching or notice of any lien, Tenant
reserves the right to contest such lien, provided that Tenant shall, at its sole
cost and expense, provide a bond in accordance with the California Civil Code,
Section 3143. If Tenant does not timely exercise its right to contest such lien,
Tenant covenants and agrees to cause it to be immediately released and removed
of record. Notwithstanding anything to the contrary set forth in this Lease, in
the event that such lien is not released and removed on or before the date
occurring fifteen (15) days after notice of such lien is delivered by Landlord
to Tenant, Landlord, at its sole option, may immediately take all action
necessary to release and remove such lien, without any duty to investigate the
validity thereof, and all sums, costs and expenses, including reasonable
attorneys' fees and costs, incurred by Landlord in connection with such lien
shall be deemed Additional Rent under this Lease and shall be due and payable by
Tenant within thirty (30) days following receipt of Landlord's bill therefor.

                                   ARTICLE 10

                                    INSURANCE

        10.1 Indemnification and Waiver. Because Tenant is required to insure
all of its Tenant Improvements and Alterations and its furniture, fixtures and
equipment and because of the requirements to provide waivers of subrogation,
Tenant hereby assumes all risk of damage to property in its Premises, subject to
the provisions of the waiver of subrogation set forth below. Tenant hereby
assumes all risk of injury to persons in, upon or about the Premises from any
cause whatsoever except to the extent caused by the negligence or willful
misconduct of the Landlord Parties. To the extent not prohibited by law,
Landlord, its partners, trustees, ancillary trustees and their respective
officers, directors, shareholders, beneficiaries, agents, servants, employees,
and independent contractors (collectively, the "Landlord Parties") shall not be
liable for any damage either to person or property or resulting from the loss of
use thereof, which damage is sustained by Tenant or by other persons claiming
through Tenant, except for damage to property which Landlord insures or is
required to insure pursuant to the terms and conditions of this Lease and except
for injury to persons to the extent caused by the negligence or willful
misconduct of the Landlord Parties. Tenant shall indemnify, defend, protect, and
hold harmless Landlord Parties from any and all loss, cost, damage, expense and
liability (including without limitation court costs and reasonable attorneys'
fees) (collectively, "Claims") incurred in connection with or arising from any
cause in, on or about the Premises, any acts, omissions or negligence of Tenant
or of any person claiming by, through or under Tenant, partners,

                                       28
<PAGE>   34
subpartners, parent organization, affiliate, subsidiary and their respective
officers, directors, contractors, agents, servants, employees, invitees, valets,
guests, or licensees of Tenant and each of them (collectively, "Tenant Parties")
or any such person, in or on the Project, either prior to, during, or after the
expiration of the Lease Term, provided that the terms of the foregoing indemnity
shall not apply to any Claims by any person, company or entity resulting from
the negligence or willful misconduct of the Landlord Parties in connection with
the Landlord Parties' activities in the Building or the Project (except for
damage to the Tenant Improvements, Alterations, and/or Tenant's personal
property, fixtures, furniture and equipment in the Premises, to the extent
Tenant is required to obtain the requisite insurance coverage pursuant to this
Lease for any such Tenant Improvements, Alterations or personal property,
fixtures, furniture or equipment), and Landlord hereby so indemnifies, defends,
protects and holds Tenant and Tenant Parties harmless from any such Claims;
provided further that because Landlord is required to maintain insurance on the
Building and the Project and Tenant compensates Landlord for such insurance as
part of Tenant's Share of Direct Expenses and because of the existence of
waivers of subrogation set forth in Section 10.4 of this Lease, Landlord hereby
indemnifies, defends, protects and holds Tenant harmless from any Claim to any
property to the extent such Claim is covered by such insurance (or would have
been covered if Landlord had carried the insurance required hereunder), even if
resulting from the negligent acts, omissions, or willful misconduct of the
Tenant Parties. Similarly, since Tenant must carry insurance pursuant to this
Article 10 to cover its personal property within the Premises, the Tenant
Improvements, and the Alterations, Tenant hereby indemnifies and holds Landlord
harmless from any Claim to any property within the Premises, to the extent such
Claim is covered by such insurance (or would have been covered if Tenant had
carried the insurance required hereunder), even if resulting from the negligent
acts, omissions or willful misconduct of the Landlord Parties. Pursuant to this
Article 10, Tenant's agreement to indemnify, defend, protect and hold Landlord
harmless, and Landlord's agreement to indemnify, defend, protect and hold Tenant
harmless are not intended to and shall not relieve any insurance carrier of its
obligations under policies required to be carried by Landlord or Tenant,
respectively, pursuant to this Lease to the extent such policies cover the
results of such acts, omissions or willful misconduct. The provisions of this
Section 10.1 shall survive the expiration or sooner termination of this Lease
with respect to any claims or liability occurring prior to such expiration or
termination. Notwithstanding anything in this Lease to the contrary, nothing in
this Lease shall impose any obligations upon Landlord or Tenant to be
responsible or liable for, and each hereby releases the other from all liability
for, consequential damages, other than those consequential damages incurred by
Landlord in connection with a holdover of the Premises by Tenant after the
expiration or earlier termination of this Lease or incurred by Landlord in
connection with any repair, physical construction or improvement work performed
by or on behalf of Tenant in the Project, but Tenant shall not be responsible
for any consequential damages resulting from Landlord's or its contractor's acts
in connection with the completion by Landlord of the tenant improvements in the
Premises pursuant to the Tenant Work Letter.

        10.2 Landlord's Fire and Casualty Insurance. Landlord shall insure the
Building (including the Building Structure and Building Systems) and the Project
during the Lease Term against loss or damage due to fire and other casualties
covered within the classification of fire and extended coverage, vandalism
coverage and malicious mischief, sprinkler leakage, water damage and special
extended coverage. Such coverage shall be in such amounts, from such

                                       29
<PAGE>   35
companies, and on such other terms and conditions, as Landlord may from time to
time reasonably determine, provided that to the extent consistent with the
practices of landlords of comparable buildings, such coverage shall (i) be for
full replacement of the Building and the Project in compliance with all then
existing Applicable Laws; (ii) provide for rent continuation insurance equal to
not less than twelve (12) months' rent; and (iii) be with companies and have
policies meeting the criteria set forth in Section 10.3.4(iii) in this Lease.
Additionally, at the sole option of Landlord, such insurance coverage may
include the risks of earthquakes and/or flood damage and additional hazards, a
rental loss endorsement and one or more loss payee endorsements in favor of the
holders of any mortgages or deeds of trust encumbering the interest of Landlord
in the Building or the ground or underlying lessors of the Building, or any
portion thereof. Notwithstanding the foregoing provisions of this Section 10.2,
the coverage and amounts of insurance carried by Landlord in connection with the
Building shall at a minimum be comparable to the coverage and amounts of
insurance which are carried by reasonably prudent landlords of comparable
buildings, and Worker's Compensation and Employee's Liability coverage as
required by Applicable Laws. Tenant shall, at Tenant's expense, comply with all
insurance company requirements pertaining to the use of the Premises. If
Tenant's conduct or use of the Premises other than for the Permitted Use causes
any increase in the premium for any insurance policies carried by Landlord, then
Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant's
expense, shall comply with all rules, orders, regulations or requirements of the
American Insurance Association (formerly the National Board of Fire
Underwriters) and with any similar body.

        10.3 Tenant's Insurance. Tenant shall maintain the following coverages
in the following amounts.

               10.3.1 Commercial General Liability Insurance covering the
insured against claims of bodily injury, personal injury and property damage
arising out of Tenant's operations, assumed liabilities or use of the Premises,
including a Commercial General Liability endorsement covering the insuring
provisions of this Lease and the performance by Tenant of the indemnity
agreements set forth in Section 10.1 of this Lease, for limits of liability not
less than: (i) Bodily Injury and Property Damage Liability - $3,000,000 each
occurrence and $3,000,000 annual aggregate, and (ii) Personal Injury Liability -
$3,000,000 each occurrence and $3,000,000 annual aggregate.

               10.3.2 Physical Damage Insurance covering (i) all office
furniture, trade fixtures, office equipment, merchandise and all other items of
Tenant's property on the Premises installed by, for, or at the expense of
Tenant, (ii) the "Tenant Improvements," as that term is defined in the Tenant
Work Letter, and (iii) all other improvements, alterations and additions to the
Premises. Such insurance shall be written on an "all risks" of physical loss or
damage basis, for the guaranteed replacement cost value new without deduction
for depreciation of the covered items and in amounts that meet any co-insurance
clauses of the policies of insurance and shall include a vandalism and malicious
mischief endorsement, sprinkler leakage coverage and earthquake sprinkler
leakage coverage.

               10.3.3 Intentionally Deleted

                                       30
<PAGE>   36
               10.3.4 Form of Policies. The minimum limits of policies of
insurance required of Tenant under this Lease shall in no event limit the
liability of Tenant under this Lease. Such insurance shall (i) name Landlord,
Landlord's Building manager(s) and/or the manager(s) of the Project common
areas, and any other party it so specifies, as an additional insured; (ii)
specifically cover the liability assumed by Tenant under this Lease, including,
but not limited to, Tenant's obligations under Section 10.1 of this Lease; (iii)
be issued by an insurance company having a rating of not less than A-XII in
Best's Insurance Guide or which is otherwise acceptable to Landlord and licensed
to do business in the State of California; (iv) be primary insurance as to all
claims thereunder and provide that any insurance carried by Landlord is excess
and is non-contributing with any insurance requirement of Tenant; (v) provide
that said insurance shall not be canceled or coverage changed unless thirty (30)
days' prior written notice shall have been given to Landlord and any mortgagee
of Landlord; and (vi) contain a cross-liability endorsement or severability of
interest clause acceptable to Landlord. Tenant shall deliver said policy or
policies or certificates thereof to Landlord on or before the Lease Commencement
Date and at least thirty (30) days before the expiration dates thereof.

        10.4 Subrogation. Landlord and Tenant agree to have their respective
insurance companies issuing property damage insurance waive any rights of
subrogation that such companies may have against Landlord or Tenant, as the case
may be, so long as the insurance carried by Landlord and Tenant, respectively,
is not invalidated thereby. As long as such waivers of subrogation are contained
in their respective insurance policies, Landlord and Tenant hereby waive any
right that either may have against the other on account of any loss or damage to
their respective property to the extent such loss or damage is insurable under
policies of insurance for fire and all risk coverage, theft, or other similar
insurance. If either party fails to carry the amounts and types of insurance
required to be carried by it pursuant to this Article 10, in addition to any
remedies the other party may have under this Lease, such failure shall be deemed
to be a covenant and agreement by such party to self-insure with respect to the
type and amount of insurance which such party so failed to carry, with full
waiver of subrogation with respect thereto.

        10.5 Additional Insurance Obligations. Tenant shall carry and maintain
during the entire Lease Term, at Tenant's sole cost and expense, increased
amounts of the insurance required to be carried by Tenant pursuant to this
Article 10, and such other reasonable types of insurance coverage and in such
reasonable amounts covering the Premises and Tenant's operations therein, as may
be reasonably requested by Landlord, but in no event shall such increased
amounts of insurance or such other reasonable types of insurance be in excess of
that required by landlords of comparable buildings located in the vicinity of
the Project from tenants comparable in size to Tenant. Notwithstanding anything
to the contrary contained in this Lease, in the event of any termination of this
Lease pursuant to Article 11 or Article 13 below, Tenant shall assign and
deliver to Landlord (or to any party designated by Landlord) all insurance
proceeds payable to Tenant under Tenant's insurance required under Section
10.3.2(ii) of this Lease for the unamortized value of the Tenant Improvements
(amortized on a straight-line basis throughout the Lease Term).

                                       31
<PAGE>   37
                                   ARTICLE 11

                             DAMAGE AND DESTRUCTION

        11.1 Repair of Damage to Premises by Landlord. To the extent Landlord
does not have actual knowledge of same, Tenant shall promptly notify Landlord of
any damage to the Premises resulting from fire or any other casualty or any
condition existing in the Premises as a result of a fire or other casualty that
would give rise to the terms of this Article 11. If the Premises, the Building
Structure, the Building Systems, or any Common Areas of the Project serving or
providing access to the Premises shall be damaged by fire or other casualty or
be subject to a condition existing as a result of a fire or other casualty,
Landlord shall promptly and diligently, subject to reasonable delays for
insurance adjustment or other matters beyond Landlord's reasonable control, and
subject to all other terms of this Article 11, restore the base, shell, and core
of the Premises (inclusive of the Buildings Structure and Building Systems) and
such Common Areas to substantially the same condition as existed prior to the
casualty, except for modifications required by zoning and building codes and
other Applicable Laws or by the holder of a mortgage on the Building or Project
or any other modifications to the Common Areas reasonably deemed desirable by
Landlord, provided access to the Premises, the Project parking facility, and any
common restrooms serving the Premises shall not be materially impaired.
Notwithstanding any other provision of this Lease, upon the occurrence of any
damage to the Premises, upon notice (the "Landlord Repair Notice") to Tenant
from Landlord, Tenant shall assign to Landlord (or to any party designated by
Landlord) all insurance proceeds payable to Tenant under Tenant's insurance
required under Section 10.3.2(ii) of this Lease, and Landlord shall repair any
injury or damage to the Tenant Improvements installed in the Premises and shall
return such Tenant Improvements to their original condition; provided that if
the cost of such repair by Landlord exceeds the amount of insurance proceeds
received by Landlord from Tenant's insurance carrier, as assigned by Tenant, the
cost of such repairs shall be paid by Tenant to Landlord prior to Landlord's
repair of the damage. Tenant's insurance proceeds shall be disbursed for all
costs and expenses incurred by Landlord in connection with the repair of any
such damage pursuant to a disbursement procedure mutually approved by Landlord
and Tenant. As long as the Tenant Improvements in the Premises are rebuilt,
Tenant shall be entitled to retain any portion of the proceeds of the insurance
described in Sections 10.3.2 (ii) in excess of the cost of such restoration, or
if this Lease terminates, subject to the terms of Section 10.5, above, Tenant
shall receive all such insurance proceeds. In the event that Landlord does not
deliver the Landlord Repair Notice within sixty (60) days following the date the
casualty becomes known to Landlord, Tenant shall, at its sole cost and expense,
repair any injury or damage to the Tenant Improvements installed in the Premises
and shall return such Tenant Improvements to their original condition. Whether
or not Landlord delivers a Landlord Repair Notice, prior to the commencement of
construction, if this Lease does not terminate pursuant to Section 11.2 below or
for any other reason, Tenant shall submit to Landlord, for Landlord's review and
approval, all plans, specifications and working drawings relating thereto, and
Landlord shall select, subject to Tenant's reasonable approval, non-affiliated
independent third party contractors to perform such improvement work. Such
submittal of plans and construction of improvements shall be performed in
substantial compliance with the terms of the Tenant Work Letter as though such
construction of improvements were the initial construction of the Tenant
Improvements. Landlord shall not be liable for any inconvenience or annoyance to
Tenant Parties, or injury to

                                       32
<PAGE>   38
Tenant's business resulting in any way from such damage or the repair thereof;
provided however, that if such fire or other casualty shall have damaged the
Premises or Common Areas necessary for Tenant to reasonably conduct Tenant's
Permitted Use, Landlord shall allow Tenant a proportionate abatement of Rent,
during the time and to the extent the Premises are unfit for occupancy for the
Permitted Use under this Lease, and not occupied by Tenant as a result thereof;
provided, further, if the Premises is damaged such that the remaining portion
thereof is not sufficient to allow Tenant to conduct its business operations
from such remaining portion and Tenant does not conduct its business operations
therefrom, Landlord shall allow Tenant a total abatement of Rent during the time
and to the extent the Premises are unfit for occupancy for the Permitted Use,
and not occupied by Tenant as a result of the subject damage. In the event that
Landlord shall not deliver the Landlord Repair Notice, Tenant's right to rent
abatement pursuant to the preceding sentence shall terminate as of the date
Tenant should have completed repairs to the Premises assuming Tenant used
reasonable due diligence in connection therewith.

        11.2 Landlord's Option to Repair. Notwithstanding the terms of Section
11.1 of this Lease, Landlord may elect not to rebuild and/or restore the
Premises, the Building and/or the Project, and instead terminate this Lease by
notifying Tenant in writing of such termination within forty-five (45) days
after Landlord's discovery of the damage, such notice to include a termination
date giving Tenant ninety (90) days to vacate the Premises which period will be
extended by any "Force Majeure," as that term is defined in Section 29.13,
below, on a day-for-day basis, but Landlord may so elect only if (a) the
Building or Project shall be damaged by fire or other casualty or cause or be
subject to a condition existing as a result of such a fire or other casualty or
cause, whether or not the Premises are affected, and (b) one or more of the
following conditions in (i), (ii), (iii) or (iv), immediately below, is present:
(i) in Landlord's reasonable judgment, repairs cannot reasonably be completed
within two hundred forty (240) days of the date of discovery of the damage (when
such repairs are made without the payment of overtime or other premiums); (ii)
the holder of any mortgage on the Building and/or the Project, or ground lessor
with respect to the Project and/or the Building shall require that the insurance
proceeds or any portion thereof in excess of the "Landlord Contribution," as
that term is defined, below, be used to retire the mortgage debt, or shall
terminate the ground lease, as the case may be, and (a) Tenant does not agree to
fund the amount in excess of Landlord's Contribution required to complete the
appropriate repairs, (b) Landlord elects not to commence rebuilding or
reconstructing within one (1) year from the date of such damage and destruction,
and (c) Landlord elects to terminate the leases of all other tenants of the
Project similarly affected by the damage and destruction; (iii) the damage is
caused by an earthquake and is not fully covered, except for the Landlord
Contribution, by Landlord's insurance policies (or by the insurance Landlord is
required to carry under this Lease) and Landlord elects not to commence
rebuilding or reconstructing within one (1) year from the date of such damage
and destruction and elects to terminate the leases of all other tenants of the
Project similarly affected by the damage and destruction; or (iv) the damage
occurs during the last twelve (12) months of the Lease Term; provided, however,
that if Landlord does not elect to terminate this Lease pursuant to Landlord's
termination right as provided above, and the repairs cannot, in the reasonable
judgment of a licensed architect or contractor mutually and reasonably agreed
upon by Landlord and Tenant, be completed within two hundred forty (240) days
after the damage or destruction is discovered (which period shall not be subject
to extension as a result of any Force Majeure), Tenant may elect, no earlier
than forty-five (45) days after the date of the damage and not later than ninety

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<PAGE>   39
(90) days after the date of such damage, to terminate this Lease by written
notice to Landlord effective as of the date specified in the notice. At any
time, from time to time, after the date occurring forty-five (45) days after the
date the damage is discovered, Tenant may request that Landlord provide Tenant
with a certificate from the architect or contractor described above setting
forth such architect's or contractor's reasonable opinion of the date of
completion of the repairs and Landlord shall respond to such request within five
(5) business days. For purposes of this Section 11.2, the "Landlord
Contribution" shall initially mean Two Million Dollars ($2,000,000.00);
provided, however, that such amount shall be reduced by an amount equal to
Sixteen Thousand Six Hundred Sixty-Seven and No/100 Dollars ($16,667.00) on the
first day of each month during the Lease Term.

        11.3 Waiver of Statutory Provisions. The provisions of this Lease,
including this Article 11, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building, or the Project, and any statute or regulation of
the State of California, including, without limitation, Sections 1932(2) and
1933(4) of the California Civil Code, with respect to any rights or obligations
concerning damage or destruction in the absence of an express agreement between
the parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all or
any part of the Premises, the Building, or the Project.

        11.4 Damage Near End of Term. In the event that the Premises or the
Building is destroyed or damaged to any substantial extent during the last
twelve (12) months of the Lease Term and, in the reasonable judgment of
Landlord, the damage or destruction to the Premises or Building cannot be
repaired by the date which is six (6) months prior to the Lease Expiration Date,
then notwithstanding anything contained in this Article 11, either Landlord or
Tenant shall have the option to terminate this Lease by giving written notice to
the other party of the exercise of such option within thirty (30) days after
such damage or destruction, in which event this Lease shall cease and terminate
sixty (60) days after the date of such notice, Tenant shall pay the Base Rent
and Additional Rent, properly apportioned up to such date of damage, and both
parties hereto shall thereafter be freed and discharged of all further
obligations hereunder, except as provided for in provisions of this Lease which
by their terms survive the expiration or earlier termination of the Lease Term.

                                   ARTICLE 12

                                    NONWAIVER

        Except as otherwise provided for herein as a "deemed waiver," no
provision of this Lease shall be deemed waived by either party hereto unless
expressly waived in a writing signed by such waiving party, and no express
waiver shall affect any provision other than the one specified in such waiver
and that one only for the time and in the manner specifically stated. No receipt
of monies by Landlord from Tenant after the termination of this Lease shall in
any way alter the length of the Lease Term or of Tenant's right of possession
hereunder or after the giving of any notice shall reinstate, continue or extend
the Lease Term or affect any notice given Tenant prior to the receipt of such
monies, it being agreed that after the service of notice or the commencement of
a suit or after final judgment for possession of the Premises, Landlord may

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<PAGE>   40
receive and collect any Rent due, and the payment of said Rent shall not waive
or affect said notice, suit or judgment. Tenant's payment of any Rent hereunder
shall not constitute a waiver by Tenant of any breach or default by Landlord
under this Lease nor shall Landlord's payment of monies due Tenant hereunder
constitute a waiver by Landlord of any breach or default by Tenant under this
Lease. No payment by Tenant or receipt or acceptance by Landlord of a lesser
amount than the correct Rent due shall be deemed to be other than a payment on
account, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment be deemed an accord and satisfaction, and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance, treat such partial payment as a default or pursue any
other remedy provided in this Lease or at law.

                                   ARTICLE 13

                                  CONDEMNATION

        If the whole or any material portion of the Premises, Building, or
Project shall be taken by power of eminent domain or condemned by any competent
authority for any public or quasi-public use or purpose, or if Landlord shall
grant a deed or other instrument in lieu of such taking by eminent domain or
condemnation, Landlord shall have the option to terminate this Lease upon ninety
(90) days' notice, provided such notice is given no later than one hundred
eighty (180) days after the date of such taking, condemnation, reconfiguration,
vacation, deed or other instrument. If more than twenty-five percent (25%) of
the rentable square feet of the Premises is taken, or if access to the Premises
is substantially impaired, or if Tenant cannot conduct its business operations
in substantially the same manner such business operations were conducted prior
to such taking while still retaining substantially the same material rights and
benefits it bargained to receive under this Lease, then Tenant shall have the
option to terminate this Lease upon ninety (90) days' notice, provided such
notice is given no later than one hundred eighty (180) days after the date of
such taking. Landlord shall be entitled to receive the entire award or payment
in connection therewith, except that Tenant shall have the right to file any
separate claim available to Tenant for any taking of Tenant's personal property
and fixtures belonging to Tenant and removable by Tenant upon expiration of the
Lease Term pursuant to the terms of this Lease, and for moving expenses, so long
as such claim is payable separately to Tenant or is otherwise separately
identifiable. Notwithstanding anything in this Article 13 to the contrary,
Landlord and Tenant shall each be entitled to receive fifty percent (50%) of the
"bonus value" of the leasehold estate in connection therewith, which bonus value
shall be equal to the difference between the Rent payable under this Lease and
the sum established by the condemning authority as the award for compensation
for this Lease. All Rent shall be apportioned as of the date of such
termination, or the date of such taking, whichever shall first occur. If any
part of the Premises shall be taken, and this Lease shall not be so terminated,
the Rent shall be proportionately abated. Tenant hereby waives any and all
rights it might otherwise have pursuant to Section 1265.130 of the California
Code of Civil Procedure.

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<PAGE>   41
                                   ARTICLE 14

                            ASSIGNMENT AND SUBLETTING

        14.1 Transfers. Tenant shall not, without the prior written consent
(except as provided in Section 14.6, below) of Landlord, which consent shall not
be unreasonably withheld, conditioned or delayed, assign, mortgage, pledge,
hypothecate, encumber, or permit any lien to attach to, or otherwise transfer,
this Lease or any interest hereunder, permit any assignment or other such
foregoing transfer of this Lease or any interest hereunder by operation of law,
sublet the Premises or any part thereof, or permit the use of the Premises by
any persons other than Tenant and its employees and contractors other than on a
temporary, occasional basis by persons or entities having a business
relationship with Tenant (all of the foregoing are hereinafter sometimes
referred to collectively as "Transfers" and any person to whom any Transfer is
made or sought to be made is hereinafter sometimes referred to as a
"Transferee"). If Tenant shall desire Landlord's consent to any Transfer, Tenant
shall notify Landlord in writing, which notice (the "Transfer Notice") shall
include (i) the proposed effective date of the Transfer, which shall not be less
than fifteen (15) days after the date of delivery of the Transfer Notice, (ii) a
description of the portion of the Premises to be transferred (the "Subject
Space"), (iii) all of the terms of the proposed Transfer and the consideration
therefor, the name and address of the proposed Transferee, and a copy of all
existing and/or proposed documentation pertaining to the proposed Transfer (but
not any documentation relating solely to the sale (if any) of Tenant's business
to such Transferee), including all existing operative documents to be executed
to evidence such Transfer or the agreements incidental or related to such
Transfer, and, upon request from Landlord, Tenant's good faith estimated
calculation of the "Transfer Premium," if any, as that term is defined in
Section 14.3, below, in connection with such Transfer, (iv) financial
information of the proposed Transferee certified by an officer, partner or owner
thereof, reasonably necessary to determine if such Transferee is a party of
reasonable financial worth and/or financial stability in light of the
responsibilities to be undertaken in connection with the proposed Transfer on
the date consent is requested, business credit, bank and personal references and
history of the proposed Transferee, (v) information with regard to the nature of
the business such proposed Transferee intends to operate in the Subject Space
and how long the proposed Transferee has operated such business, and (vi) an
executed estoppel certificate from Tenant in the form attached hereto as Exhibit
E. Landlord shall approve or disapprove of the proposed Transfer in accordance
with Section 14.2, below, within fifteen (15) days (the "Review Period") after
Landlord's receipt of the applicable Transfer Notice. In the event that Landlord
fails to notify Tenant in writing of such approval or disapproval within such
Review Period Landlord shall be deemed to have approved such Transfer. Any
Transfer requiring Landlord's consent hereunder which is made without Landlord's
prior written consent shall, at Landlord's option, be null, void and of no
effect. Whether or not Landlord shall grant consent, Tenant shall , within
thirty (30) days after written request by Landlord, reimburse Landlord for all
reasonable and actual out-of-pocket costs and expenses incurred by Landlord in
connection with its review of a proposed Transfer, provided that such cost and
expenses shall not exceed One Thousand Five Hundred Dollars ($1,500.00) for a
Transfer in the ordinary course of business.

        14.2 Landlord's Consent. Landlord shall not unreasonably withhold,
condition or delay its consent to any proposed Transfer of the Subject Space to
the Transferee on the terms specified in the Transfer Notice. The parties hereby
agree that it shall be deemed to be

                                       36
<PAGE>   42
reasonable under this Lease and under any Applicable Law for Landlord to
withhold consent to any proposed Transfer where one or more of the following
apply, without limitation as to other reasonable grounds for withholding
consent:

               14.2.1 The Transferee is of a character or reputation or engaged
in a business which is not consistent with the quality of the Project as
reflected by the then-existing tenants of the Project with respect to comparable
space;

               14.2.2 The Transferee is either a governmental agency or
instrumentality thereof (i) which is that of a foreign country, (ii) which is of
a character or reputation, is engaged in a business, or is of, or is associated
with, a political orientation or faction, which is inconsistent with the quality
of the Project, or which would otherwise reasonably offend a landlord of a
comparable building located in the vicinity of the Project, (iii) which is
capable of exercising the power of eminent domain or condemnation, or (iv) which
would significantly increase the human traffic in the Premises, the Building,
and/or the Project;

               14.2.3 The Transferee's intended use of the Premises is
inconsistent with the Permitted Use;

               14.2.4 The Transfer occurs during the period from the Lease
Commencement Date until the earlier of (i) the second (2nd) anniversary of the
Lease Commencement Date or (ii) the date at least ninety percent (90%) of the
rentable square feet of the Project is leased, and the rent charged by Tenant to
such Transferee during the term of such Transfer (the "TRANSFEREE'S RENT"),
calculated using a present value analysis, is less than ninety percent (90%) of
the rent being quoted by Landlord at the time of such Transfer for comparable
space in the Project for a comparable term (the "QUOTED RENT"), calculated using
a present value analysis, provided that Landlord has space in the Project
reasonably capable of satisfying the proposed Transferee's space requirement;

               14.2.5 The Transferee is not a party of reasonable financial
worth and/or financial stability in light of the responsibilities involved
pursuant to the Transfer on the date consent is requested;

               14.2.6 The proposed Transfer would cause Landlord to be in
violation of an exclusive right granted by Landlord in good faith in another
lease or agreement to which Landlord is a party, or would give an occupant of
the Project a right to cancel its lease as a result of the proposed use to be
made of the space by the sublessee or assignee, provided that upon request from
Tenant, Landlord shall provide notice of all applicable exclusive rights; or

               14.2.7 Either the proposed Transferee, or any person or entity
which directly or indirectly, controls, is controlled by, or is under common
control with, the proposed Transferee, (i) occupies space in the Project at the
time of the request for consent, (ii) is negotiating with Landlord to lease
space in the Project at such time, or (iii) has negotiated with Landlord during
the three (3)-month period immediately preceding the Transfer Notice.

        Notwithstanding anything to the contrary in this Lease, if Tenant or any
proposed Transferee claims that Landlord has unreasonably withheld, conditioned,
or delayed its consent

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<PAGE>   43
under Section 14.2 or otherwise has breached or acted unreasonably under this
Article 14, Tenant hereby waives any right and law or in equity to terminate
this Lease, on its own behalf and, to the extent permitted under all applicable
laws, on behalf of the proposed Transferee, but Tenant retains the right to sue
Landlord for any damages suffered by Tenant and/or for specific performance if
Landlord unreasonably withholds, conditions or delays it consent to a proposed
Transfer (other than damages or injury to, or interference with, Tenant's
business, including without limitation, loss of profits, however occurring, but
not excluding loss of profits Tenant would have been able to claim pursuant to
Section 14.3 of this Lease). If Landlord consents to any Transfer pursuant to
the terms of this Section 14.2 (and does not exercise any recapture rights
Landlord may have under Section 14.4 of this Lease), Tenant may within nine (9)
months after Landlord's consent, but not later than the expiration of said
nine-month period, enter into such Transfer of the Premises or portion thereof,
upon substantially the same terms and conditions as are set forth in the
Transfer Notice furnished by Tenant to Landlord pursuant to Section 14.1 of this
Lease, provided that if there are any changes in the terms and conditions from
those specified in the Transfer Notice (i) such that Landlord would initially
have been entitled to refuse its consent to such Transfer under this Section
14.2, or (ii) which would cause the proposed Transfer to be materially more
favorable to the Transferee than the terms set forth in Tenant's original
Transfer Notice, Tenant shall again submit the Transfer to Landlord for its
approval and other action under this Article 14 (including Landlord's right of
recapture, if any, under Section 14.4 of this Lease).

        14.3 Transfer Premium. If Landlord consents to a Transfer, as a
condition thereto which the parties hereby agree is reasonable, Tenant shall pay
to Landlord fifty percent (50%) of any "Transfer Premium," as that term is
defined in this Section 14.3, actually received by Tenant from such Transferee.
"TRANSFER PREMIUM" shall mean all rent, additional rent or other consideration
payable (in lieu of or in addition to rent) by such Transferee in connection
with the Transfer (as opposed to the sale of Tenant's business) in excess of the
Rent and Additional Rent payable by Tenant under this Lease during the term of
the Transfer, on a per rentable square foot basis if less than all of the
Premises is transferred, after deducting the reasonable expenses incurred by
Tenant for (i) any changes, alterations and improvements to the Premises in
connection with the Transfer, (ii) any brokerage commissions in connection with
the Transfer, (iii) any costs to buy-out or takeover the previous lease of a
Transferee; (iv) any improvement allowance or other economic concessions (space
planning allowance, moving expenses, etc.) paid by Tenant to Transferee in
connection with such Transfer; (v) reasonable attorneys' fees incurred by Tenant
(including attorneys' fees paid to Landlord) in connection with the Transfer;
and (vi) the aggregate amount of Base Rent and Additional Rent paid by Tenant
during the period prior to the commencement of the term of the transfer during
which Tenant does not occupy the subject space, commencing on and after the
Downtime State Date (as defined below) (collectively, "Subleasing Costs"). The
"Downtime Start Date" shall mean the later of (A) the date which Tenant vacates
and does not reoccupy the subject space and delivers notice of the same to
Landlord, and (B) the date Tenant enters into a listing agreement for the
subject space with a reputable broker, and provides Landlord with notice
thereof; provided, however, in no event will Subleasing Costs for space not yet
occupied by Tenant (and not occupied by Tenant merely as a subterfuge of this
provision) include any Base Rent and Additional Rent paid by Tenant to Landlord
for a period of time in excess of six (6) months. "Transfer Premium" shall also
include, but not be limited to, key money and bonus money or other cash
consideration for

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<PAGE>   44
rent or in lieu of rent paid by Transferee to Tenant in connection with such
Transfer, and any payment in excess of fair market value for services rendered
by Tenant to Transferee or for assets, fixtures, inventory, equipment, or
furniture transferred by Tenant to Transferee in connection with such Transfer.
In the calculations of the Rent (as it relates to the Transfer Premium
calculated under this Section 14.3), and the Transferee's Rent and Quoted Rent
under Section 14.2 of this Lease, the Rent paid during each annual period for
the Subject Space, and the Transferee's Rent and the Quoted Rent, shall be
computed after adjusting such rent to the actual effective rent to be paid,
taking into consideration any and all leasehold concessions granted in
connection therewith, including, but not limited to, any rent credit and tenant
improvement allowance. For purposes of calculating any such effective rent, all
such concessions shall be amortized on a straight-line basis over the relevant
term. Notwithstanding anything contained herein to the contrary, under no
circumstances shall Landlord be paid any Transfer Premium until Tenant has
recovered all Subleasing Costs for such Transferred Space, it being understood
that if in any year the gross revenues, less the deductions set forth and
included in Subleasing Costs, are less than any and all costs actually paid in
assigning or subletting the affected space (collectively, "Transaction Costs"),
the amount of the excess Transaction Costs shall be carried over to the next
year and then deducted from net revenues with the procedure repeated until a
Transfer Premium is achieved.

        14.4 Landlord's Option as to Subject Space. Notwithstanding anything to
the contrary contained in this Article 14, in the event Tenant contemplates a
Transfer of all or a portion of the Premises, Tenant shall give Landlord notice
(the "Intention to Transfer Notice") of such contemplated Transfer (whether or
not the contemplated Transferee or the terms of such contemplated Transfer have
been determined). The Intention to Transfer Notice shall specify the portion of
and amount of rentable square feet of the Premises which Tenant intends to
Transfer (the "Contemplated Transfer Space"), the contemplated date of
commencement of the Contemplated Transfer (the "Contemplated Effective Date"),
and the contemplated length of the term of such contemplated Transfer, and shall
specify that such Intention to Transfer Notice is delivered to Landlord pursuant
to this Section 14.4 in order to allow Landlord to elect to recapture the
Contemplated Transfer Space for the term set forth in the Intention to Transfer
Notice. Thereafter, Landlord shall have the option, by giving written notice to
Tenant within fifteen (15) days after receipt of any Intention to Transfer
Notice, to recapture the Contemplated Transfer Space. Such recapture shall
cancel and terminate this Lease with respect to such Contemplated Transfer Space
as of the Contemplated Effective Date until the last day of the term of the
contemplated Transfer as set forth in the Intention to Transfer Notice. In the
event of a recapture by Landlord, if this Lease shall be canceled with respect
to less than the entire Premises, the Rent reserved herein shall be prorated on
the basis of the number of rentable square feet retained by Tenant in proportion
to the number of rentable square feet contained in the Premises, and this Lease
as so amended shall continue thereafter in full force and effect, and upon
request of either party, the parties shall execute written confirmation of the
same. If Landlord declines, or fails to elect in a timely manner, to recapture
such Contemplated Transfer Space under this Section 14.4, then, subject to the
other terms of this Article 14, for a period of nine (9) months (the "Nine Month
Period") commencing on the last day of such fifteen (15) day period, Landlord
shall not have any right to recapture the Contemplated Transfer Space with
respect to any Transfer made during the Nine Month Period, provided that any
such Transfer is substantially on the terms set forth in the Intention to
Transfer Notice; provided however, that

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<PAGE>   45
any such Transfer shall be subject to the remaining terms of this Article 14. If
such a Transfer is not so consummated within the Nine Month Period (or if a
Transfer is so consummated, then upon the expiration of the term of any Transfer
of such Contemplated Transfer Space consummated within such Nine Month Period),
Tenant shall again be required to submit a new Intention to Transfer Notice to
Landlord with respect any contemplated Transfer, as provided above in this
Section 14.4. If such a Transfer is not so consummated within the Nine Month
Period (or if a Transfer is so consummated, then upon the expiration of the term
of any Transfer of such Contemplated Transfer Space consummated within such Nine
Month Period), Tenant shall again be required to submit a new Intention to
Transfer Notice to Landlord with respect any contemplated Transfer, as provided
above in this Section 14.4. If Landlord exercises its option to recapture any
such space from Tenant, (i) Landlord shall be responsible for the construction
of any partitions which Landlord reasonably deems necessary to separate such
space from the remainder of the Premises, (ii) Landlord and any transferee of
Landlord with respect to such space shall have the right to use, in common with
Tenant, all lavatories, corridors and lobbies which are within the Premises and
which are reasonably required for the use of such space, and (iii) in the case
of a recapture by Landlord with respect to less than the entire Premises for
less than the entire remaining Lease Term, Landlord shall, upon the expiration
of the term of such recapture, return such recaptured space to Tenant in
substantially the same (or better) condition as received by Landlord, reasonable
wear and tear and damage by casualty and condemnation excepted.

        14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the
terms and conditions of this Lease shall in no way be deemed to have been waived
or modified, (ii) such consent shall not be deemed consent to any further
Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver to
Landlord, promptly after execution, an original executed copy of all
documentation pertaining to the Transfer in form reasonably acceptable to
Landlord, (iv) Tenant shall furnish upon Landlord's request a complete
statement, certified by an independent certified public accountant, or Tenant's
chief financial officer, setting forth in detail the computation of any Transfer
Premium Tenant has derived and shall derive from such Transfer, and (v) no
Transfer relating to this Lease or agreement entered into with respect thereto,
whether with or without Landlord's consent, shall relieve Tenant or any
guarantor of the Lease from liability under this Lease. Landlord or its
authorized representatives shall have the right at all reasonable times to audit
the books, records and papers of Tenant relating to any Transfer, and shall have
the right to make copies thereof. If the Transfer Premium respecting any
Transfer shall be found understated, Tenant shall, within thirty (30) days after
demand, pay the deficiency and, if understated by more than four percent (4%),
pay Landlord's costs of such audit.

        14.6 Non-Transfers. Notwithstanding anything to the contrary contained
in this Article 14, an assignment or subletting of all or a portion of the
Premises to (a) an affiliate of Tenant (an entity which is controlled by,
controls or is under common control, as such term is defined in California
General Corporations Code ("CGCC") Sections 160 and 5045, with, Tenant); (b) an
entity which merges with or acquires or is acquired by, Tenant or a parent of
Tenant, as defined in CGCC Sections 175 and 5064, or a subsidiary, as defined in
CGCC Sections 189 and 5073, of Tenant's parent or Affiliate, (c) a transferee of
substantially all of the assets of Tenant , or (d) any transaction or series of
transactions in which more than 50% of the voting power of Tenant is disposed of
in connection with venture capital or similar funding arrangements (a, b c and d
to be collectively be referred to herein as an "Affiliate") along with

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<PAGE>   46
any other entity which will qualify as an "affiliate" under CGCC 150 and 5031,
shall not be deemed a Transfer under this Article 14 (and shall not entitle
Landlord to any Transfer Premium), provided that at least five (5) business days
prior to such assignment or sublease (i) Tenant provides Landlord with
reasonable evidence, including a certified audit opinion of an independent
certified public accountant with a regional or national reputation, that any
such entity maintains a net worth, calculated in accordance with generally
accepted accounting principals, consistently applied ("Net Worth"), equal to or
greater than the Net Worth of Tenant either immediately prior to the time of
such assignment or sublease; or at the time this Lease is executed; (ii) Tenant
notifies Landlord of any such assignment or sublease and promptly supplies
Landlord with any documents or information requested by Landlord regarding such
assignment or sublease or such Affiliate; and (iii) such assignment or sublease
is not a subterfuge by Tenant to avoid its obligations under this Lease.

        14.7 Permitted Subleases. Notwithstanding any contrary provision of this
Article 14, Tenant shall have the right without the payment of a Transfer
Premium and without the receipt of Landlord's consent, but on prior written
notice to Landlord, to sublease up to ten thousand (10,000) rentable square feet
of the Premises, in the aggregate, subject to the following conditions: (i) all
such individuals or entities shall be of a character and reputation consistent
with the quality of the Building and the Project (and shall not violate the
terms of Section 14.2.6, above); and (ii) such sublease shall not be a
subterfuge by Tenant to avoid its obligations under this Lease or the
restrictions on Transfers pursuant to this Article 14. Tenant shall promptly
supply Landlord with any documents or information reasonably requested by
Landlord regarding any such sublease. Any sublease permitted under this Section
14.8 shall not be deemed a Transfer under this Article 14. Notwithstanding the
foregoing, no such sublease shall relieve Tenant from any liability under this
Lease.

        14.8 Landlord's Recognition of Transfers Upon Lease Termination. At
Tenant's request, Landlord shall, concurrently with the granting of Landlord's
consent to the Sublease, as that term is defined below, execute a commercially
reasonable recognition agreement (the "Recognition Agreement") in favor of a
Transferee who is a subtenant of Tenant for all of the Premises (the
"Subtenant"), which provides that in the event this Lease is terminated,
Landlord shall recognize the sublease between such Subtenant and Tenant (the
"Sublease") and not disturb such Subtenant's possession of the Premises or
applicable portion thereof (the "Sublease Space"), due to such termination;
provided that (i) at the time of Tenant's request for Landlord's execution of
the Recognition Agreement, such Transfer contains the same economic Rent set
forth in this Lease, or the Sublease provides that upon a default by Tenant
under this Lease which results in the termination of this Lease, the Subtenant
receiving the Recognition Agreement shall be subject to the same terms and
conditions set forth in this Lease; provided, however, the economic terms of
such Transfer may be more favorable to Landlord than those set forth in this
Lease; (ii) the Sublease Space consists of not less than the entire rentable
area of the Premises; (iii) Landlord shall not be liable for any act or omission
of Tenant; (iv) Landlord shall not be subject to any offsets or defenses which
the Subtenant might have as to Tenant or to any claims for damages against
Tenant, nor shall Landlord be obligated to fund to, or for the benefit of,
Subtenant, any undisbursed tenant improvement or refurbishment allowance or
other allowances or monetary concessions unless same has been granted to Tenant
and transferred to Subtenant; (v) Landlord shall not be required or obligated to
credit the Subtenant with any rent or additional rent paid by the Subtenant to
Tenant; (vi) Landlord shall not be bound by any provisions of the

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<PAGE>   47
Sublease which are inconsistent with the terms and conditions of this Lease;
(vii) such recognition shall be effective upon, and Landlord shall be
responsible for performance of only those covenants and obligations of Tenant
pursuant to the Sublease accruing after, the termination of this Lease; (viii)
as a condition to Landlord's obligation to enter into the Recognition Agreement,
Landlord shall have the right to reasonably approve the creditworthiness and
financial strength of the Subtenant, which reasonable approval shall be based
upon the creditworthiness and financial strength then generally required by
Landlord and landlords of comparable buildings of a new tenant who is leasing
space of a rentable area comparable to the rentable area of the Sublease Space
for a term equal to the remaining Lease Term, who is granted concessions
comparable to the concessions, if any, granted to the Subtenant, and who is
assuming the monetary obligations under the Sublease; and (ix) the Subtenant
shall make full and complete attornment to Landlord, as lessor, pursuant to a
written agreement executed by Landlord and the Subtenant, so as to establish
direct privity of contract between Landlord and the Subtenant with the same
force and effect as though the Sublease was originally made directly between
Landlord and the Subtenant. Upon Landlord's written request given any time after
the termination of this Lease, the Subtenant shall execute a lease for the space
subject to the applicable Sublease upon the same terms and conditions as set
forth in the Recognition Agreement. In the event Landlord enters into a
Recognition Agreement with any particular Subtenant pursuant to the provisions
of this Section 14.8, Tenant hereby acknowledges and agrees that, for purposes
of calculating the damages due Landlord following Tenant's breach and Landlord's
termination of this Lease, with respect to any such Sublease Space, Landlord
shall be deemed to have adequately mitigated its damages in accordance with
Applicable Laws for the portion of the Premises covered by an applicable
Recognition Agreement.

                                   ARTICLE 15

                             SURRENDER OF PREMISES;
                            REMOVAL OF TRADE FIXTURES

        15.1 Surrender of Premises. No act or thing done by any Landlord Parties
or Tenant Parties during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in a writing signed by Landlord. The delivery of keys
to the Premises to any Landlord Parties shall not constitute a surrender of the
Premises or effect a termination of this Lease, whether or not the keys are
thereafter retained by Landlord, and notwithstanding such delivery Tenant shall
be entitled to the return of such keys at any reasonable time upon request until
this Lease shall have been terminated. The voluntary or other surrender of this
Lease by Tenant, whether accepted by Landlord or not, or a mutual termination
hereof, shall not work a merger, and at the option of Landlord shall operate as
an assignment to Landlord of all subleases or subtenancies affecting the
Premises.

        15.2 Removal of Tenant Property by Tenant. All articles of personal
property and all business and trade fixtures, machinery and equipment, furniture
and movable partitions owned by Tenant or installed by Tenant at its expense in
the Premises, which items are not a part of the tenant improvements installed in
the Premises, shall remain the property of Tenant, and may be removed by Tenant
at any time during the Lease Term as long as Tenant is not in default under this
Lease with any applicable cure period having expired. Upon the expiration of the
Lease

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<PAGE>   48
Term, or upon any earlier termination of this Lease, Tenant shall, subject to
the provisions of this Article 15, quit and surrender possession of the Premises
to Landlord in as good order and condition as when Tenant took possession and as
thereafter improved by Landlord and/or Tenant, reasonable wear and tear, damage
by casualty, and repairs which are specifically made the responsibility of
Landlord hereunder excepted. Upon such expiration or termination, Tenant shall,
without expense to Landlord, remove or cause to be removed from the Premises all
debris and rubbish, and such items of furniture, equipment, free-standing
cabinet work, and other articles of personal property owned by Tenant or
installed or placed by Tenant at its expense in the Premises, and such similar
articles of any other persons claiming under Tenant, as Landlord may, in its
sole discretion, require to be removed, and Tenant shall repair at its own
expense all damage to the Premises and Building resulting from such removal.
Landlord and Tenant acknowledge and agree that nothing in this Section 15.2
shall prohibit Tenant from removing any furniture, free-standing equipment,
free-standing cabinet work and other articles of personal property owned by
Tenant or installed or placed by Tenant at its expense in the Premises, at any
time throughout the Lease Term.

                                   ARTICLE 16

                                  HOLDING OVER

        If Tenant holds over after the expiration of the Lease Term or earlier
termination thereof, such tenancy shall be from month-to-month only, and shall
not constitute a renewal hereof or an extension for any further term, and in
such case Base Rent shall be payable at a monthly rate equal to the product of
(i) the Base Rent applicable during the last rental period of the Lease Term
under this Lease, and (ii) one hundred fifty percent (150%). Such month-to-month
tenancy shall be subject to every other term, covenant and agreement contained
herein. Nothing contained in this Article 16 shall be construed as consent by
Landlord to any holding over by Tenant, and Landlord expressly reserves the
right to require Tenant to surrender possession of the Premises to Landlord as
provided in this Lease upon the expiration or other termination of this Lease.
The provisions of this Article 16 shall not be deemed to limit or constitute a
waiver of any other rights or remedies of Landlord provided herein or at law.
Tenant acknowledges that if Tenant holds over without Landlord's consent, such
holding over may compromise or otherwise affect Landlord's ability to enter into
new leases with prospective tenants regarding the Premises. Therefore, if Tenant
fails to surrender the Premises upon the termination or expiration of this
Lease, in addition to any other liabilities to Landlord accruing therefrom,
Tenant shall protect, defend, indemnify and hold Landlord harmless from all
loss, costs (including reasonable attorneys' fees) and liability resulting from
such failure, including, without limiting the generality of the foregoing, any
claims made by any succeeding tenant founded upon such failure to surrender, and
any losses suffered by Landlord, including lost profits, resulting from such
failure to surrender.

                                   ARTICLE 17

                              ESTOPPEL CERTIFICATES

        Within ten (10) business days following a request in writing by Landlord
or Tenant, Tenant or Landlord, as the case may be, shall execute and deliver to
the requesting party (the

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<PAGE>   49
"Requesting Party") an estoppel certificate, which shall be substantially in the
form of Exhibit E, attached hereto, (or such other commercially reasonable form
as may be required by any prospective mortgagee or purchaser of the Building,
the Project, or any portion thereof, or any assignee or sublessee), indicating
therein any exceptions thereto that may exist at that time, and shall also
contain any other information reasonably requested by the Requesting Party or
Landlord's mortgagee or prospective mortgagee or Tenant's Transferee, as the
case may be. Appropriate modification shall be made to Exhibit E when Tenant is
the Requesting Party. Landlord or Tenant shall execute and deliver whatever
other instruments may be reasonably required for such purposes. The failure of
Landlord or Tenant, as the case may be, to timely execute, acknowledge and
deliver such estoppel certificate or other instruments upon five (5) additional
business days notice from the Requesting Party advising the other party of the
consequences of a non-response, shall constitute an acceptance of the Premises
and an acknowledgment by the other party that statements included in the
estoppel certificate are true and correct, without exception. At any time during
the Lease Term, Landlord may require Tenant to provide Landlord with a current
financial statement and financial statements of the two (2) years prior to the
current financial statement year; provided, however, as a condition precedent to
Tenant's delivery, Landlord or the Landlord Party requesting such information
shall execute a commercially reasonable form of confidentiality agreement with
respect thereto. Such statements shall be prepared in accordance with generally
accepted accounting principles and, if such is the normal practice of Tenant,
shall be audited by an independent certified public accountant.

                                   ARTICLE 18

                                  SUBORDINATION

        Subject to Tenant's receipt of an appropriate non-disturbance
agreement(s) as set forth below, this Lease is subject and subordinate to all
present and future ground or underlying leases of the Project and/or the
Building, and to the lien of any mortgages or trust deeds, now or hereafter in
force against the Project and/or the Building, if any, and to all renewals,
extensions, modifications, consolidations and replacements thereof, and to all
advances made or hereafter to be made upon the security of such mortgages or
trust deeds, unless the holders of such mortgages or trust deeds, or the lessors
under such ground lease or underlying leases, require in writing that this Lease
be superior thereto. Landlord shall use commercially reasonable efforts to
provide Tenant, within thirty (30) days after execution and delivery of this
Lease by Landlord and Tenant, a commercially reasonable non-disturbance
agreement from Landlord's presently existing lenders holding deeds of trust on
the Building and/or Project. In consideration of, and as a condition precedent
to, Tenant's agreement to permit its interest pursuant to this Lease to be
subordinated to any particular future ground or underlying lease of the Building
or the Project or to the lien of any mortgage or trust deed, hereafter enforced
against the Building or the Project and to any renewals, extensions,
modifications, consolidations and replacements thereof, Landlord shall deliver
to Tenant a commercially reasonable non-disturbance agreement executed by the
landlord under such ground lease or underlying lease or the holder of such
mortgage or trust deed. Such commercially reasonable non-disturbance
agreement(s), shall include the obligation of any such successor ground lessor,
mortgage holder or deed of trust holder to recognize Tenant's rights
specifically set forth in this Lease to offset certain amounts against Rent due
hereunder and Landlord's obligations to comply with the provisions of this
Lease, or to

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<PAGE>   50
otherwise receive certain credits against Rent as set forth herein. Subject to
Tenant's receipt of the non-disturbance agreement(s) described above, Tenant
covenants and agrees in the event any proceedings are brought for the
foreclosure of any such mortgage, to attorn to the purchaser upon any such
foreclosure sale and to recognize such purchaser as the lessor under this Lease,
provided such lienholder or purchaser or ground lessor shall agree to accept
this Lease and not disturb Tenant occupancy, so long as Tenant is not in default
of this Lease. Tenant shall, within fifteen (15) days of request by Landlord,
execute such further instruments or assurances as Landlord may reasonably deem
necessary to evidence or confirm the subordination or superiority of this Lease
to any such mortgages, trust deeds, ground leases or underlying leases in
accordance with the provisions of this Article 18.

                                   ARTICLE 19

                               DEFAULTS; REMEDIES

        19.1 Defaults. The occurrence of any of the following shall constitute a
default of this Lease by Tenant:

               19.1.1 Any failure by Tenant to pay any Rent or any other charge
required to be paid under this Lease, or any part thereof, when due unless such
failure is cured within five (5) business days after notice that the same was
not paid when due; or

               19.1.2 Any failure by Tenant to observe or perform any other
provision, covenant or condition of this Lease to be observed or performed by
Tenant where such failure continues for thirty (30) days after written notice
thereof from Landlord to Tenant; provided that if the nature of such failure is
such that the same cannot reasonably be cured within a thirty (30) day period,
Tenant shall not be deemed to be in default if it diligently commences such cure
within such period and thereafter diligently proceeds to rectify and cure such
failure as soon as possible; or

               19.1.3 Tenant's failure to observe or perform according to the
provisions of Articles 17 or 18 of this Lease where such failure continues for
more than five (5) business days after notice from Landlord that such failure to
so observe or perform shall constitute a default.

        The notice periods provided herein are in addition to, and not in lieu
of, any notice periods provided by Applicable Laws.

        19.2 Remedies Upon Default. Upon the occurrence of a default by Tenant,
Landlord shall have, in addition to any other remedies available to Landlord at
law or in equity, the option to pursue any one or more of the following
remedies, each and all of which shall be cumulative and, subject to the express
terms hereof, nonexclusive, without any notice or demand whatsoever.

               19.2.1 Terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord, and if Tenant fails to do so,
Landlord may, without prejudice to any other remedy which it may have for
possession or arrearages in rent, enter upon and take possession of the Premises
and expel or remove Tenant and any other person who may be

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<PAGE>   51
occupying the Premises or any part thereof, without being liable for prosecution
or any claim or damages therefor; and Landlord may recover from Tenant the
following:

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

                             (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 rental loss that
        Tenant proves could have been reasonably avoided; plus

                             (iii) The worth at the time of award of the amount
        by which the unpaid rent for the balance of the Lease Term after the
        time of award exceeds the amount of such rental loss that Tenant proves
        could have been reasonably avoided; plus

                             (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 as allowed under all Applicable
        Laws; and

                             (v) At Landlord's election, such other amounts in
        addition to or in lieu of the foregoing as may be permitted from time to
        time by Applicable Law.

        The term "rent" as used in this Section 19.2 shall be deemed to be and
to mean all sums of every nature required to be paid by Tenant pursuant to the
terms of this Lease, whether to Landlord or to others. As used in Paragraphs
19.2.1(i) and (ii), above, the "worth at the time of award" shall be computed by
allowing interest at the rate set forth in Article 25 of this Lease, but in no
case greater than the maximum amount of such interest permitted by law. As used
in Paragraph 19.2.1(iii) above, the "worth at the time of award" shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).

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

        19.3 Subleases of Tenant. If Landlord elects to terminate this Lease on
account of any default by Tenant, as set forth in this Article 19, Landlord
shall have the right to terminate any and all subleases, licenses, concessions
or other consensual arrangements for possession entered into by Tenant and
affecting the Premises or may, in Landlord's sole discretion, succeed to
Tenant's interest in such subleases, licenses, concessions or arrangements. In
the event of Landlord's election to succeed to Tenant's interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date
of notice by Landlord of such election, have no further right to or interest in
the rent or other consideration receivable thereunder.

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<PAGE>   52
        19.4 No Waiver of Redemption by Tenant. Nothing herein shall be deemed
to constitute a waiver of Tenant's right to redeem, by order or judgment of any
court or by any legal process or writ, Tenant's right of occupancy of the
Premises after any termination of this Lease.

        19.5 Landlord Default.

               19.5.1 General. Notwithstanding anything to the contrary set
forth in this Lease, Landlord shall be in default in the performance of any
obligation required to be performed by Landlord pursuant to this Lease if (i) in
the event a failure by Landlord is with respect to the payment of money,
Landlord fails to pay such unpaid amounts within five (5) business days of
notice from Tenant that the same was not paid when due; (ii) the failure of
Landlord to perform according to the provisions of Article 17 of this Lease for
more than ten (10) business days after notice from Tenant or (iii) in the event
a failure by Landlord is other than (i) and (ii) above, Landlord fails to
perform such obligation within a reasonable time period with the expenditure of
diligent efforts, but in no event more than thirty (30) days after the receipt
of notice from Tenant specifying in detail Landlord's failure to perform;
provided, however, if the nature of Landlord's obligation is such that more than
thirty (30) days are required for its performance, then Landlord shall not be in
default under this Lease if Landlord commences such performance within such
thirty (30) day period and thereafter diligently pursue the same to completion.
Upon any such default by Landlord under this Lease, Tenant may, except as
otherwise specifically provided in this Lease to the contrary, exercise any of
its rights provided at law or in equity.

               19.5.2 Abatement of Rent. In the event that Tenant is prevented
from using, and does not use, the Premises or any portion thereof, as a result
of (i) any repair, maintenance or alteration performed by Landlord (including
repairs, maintenance and alterations required or permitted by Landlord
hereunder), or which Landlord failed to perform, after the Lease Commencement
Date and required by this Lease, which substantially interferes with Tenant's
use of or ingress to or egress from the Building, Project, or Premises or the
parking facility; (ii) any failure to provide services, utilities or ingress to
and egress from the Building, Project, or Premises or the Project parking
facility as required by this Lease; (iii) damage and destruction of or eminent
domain proceedings in connection with the Premises, Building, the Project or the
parking facility servicing the Project, or (iv) the presence of Hazardous
Materials (not brought on the Premises by Tenant Parties) in violation of
Applicable Laws which poses a material health risk to the environment or the
Premises (any such set of circumstances as set forth in items (i) through (iv),
above, to be known as an "Abatement Event"), then Tenant shall give Landlord
notice of such Abatement Event, and if such Abatement Event continues for five
(5) consecutive business days after Landlord's receipt of any such notice, or
occurs for ten (10) non-consecutive business days in a twelve (12) month period
(provided Landlord is sent a notice pursuant to Section 29.13 of this Lease of
each of such Abatement Event) (in either of such events, the "Eligibility
Period"), then the Base Rent and Tenant's Share of Direct Expenses and Tenant's
parking charges shall be abated or reduced, as the case may be, after expiration
of the Eligibility Period for such time that Tenant continues to be so prevented
from using, and does not use, the Premises, or a portion thereof, in the
proportion that the rentable area of the portion of the Premises that Tenant is
prevented from using, and does not use ("Unusable Area"), bears to the total
rentable area of the Premises and Landlord shall pay to Tenant, to the extent
covered (except for any deductible amount) by insurance retained by Landlord,
any incremental reasonable, out of pocket expense that the Tenant incurs in
relocating the functions previously

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<PAGE>   53
performed in the Unusable Area to a different location. For this purpose, an
incremental expense shall be any expense that the Tenant incurs in relocating
from the Unusable Area to a temporary location and then relocating back to the
Unusable Area (after such area has been made fit for Tenant's Permitted Use)
that Tenant would not have had to incur but for such relocation; provided,
however, in the event that Tenant is prevented from using, and does not use, the
Unusable Area for a period of time in excess of the Eligibility Period and the
remaining portion of the Premises is not sufficient to allow Tenant to
effectively conduct its business therein, and if Tenant does not conduct its
business from such remaining portion, then for such time after expiration of the
Eligibility Period during which Tenant is so prevented from effectively
conducting its business therein, the Base Rent and Tenant's Share of Direct
Expenses and Tenant's parking charges for the entire Premises shall be abated
for such time as Tenant continues to be so prevented from using, and does not
use, the Premises. If, however, Tenant reoccupies any portion of the Premises
during such period, the Rent allocable to such reoccupied portion, based on the
proportion that the rentable area of such reoccupied portion of the Premises
bears to the total rentable area of the Premises, shall be payable by Tenant
from the date Tenant reoccupies such portion of the Premises. Such right to
abate Base Rent, Tenant's Share of Direct Expenses and Tenant's parking charges
shall be Tenant's sole and exclusive remedy at law or in equity for an Abatement
Event; provided, however, that (a) nothing in this Section 19.5.2, shall impair
Tenant's rights under Section 19.5.1, above, and (b) if Landlord has not cured
such Abatement Event within two hundred ten (210) days after receipt of notice
from Tenant (or, in the event that the Premises or the Building are rendered
inaccessible to Tenant by a casualty or act of Landlord, two hundred ten (210)
days following the date of Landlord's actual knowledge of the occurrence of the
Abatement Event), Tenant shall have the right to terminate this Lease during the
first ten (10) business days of each calendar month following the end of such
210-day period until such time as Landlord has cured the Abatement Event, which
right may be exercised only by delivery of thirty (30) days' notice to Landlord
(the "Abatement Event Termination Notice") during such ten (10) business-day
period, and shall be effective as of a date set forth in the Abatement Event
Termination Notice (the "Abatement Event Termination Date"), which Abatement
Event Termination Date shall not be less than thirty (30) days, and not more
than one (1) year, following the delivery of the Abatement Event Termination
notice. Notwithstanding anything contained in this Section 19.5.2 to the
contrary, Tenant's Abatement Event Termination Notice shall be null and void
(but only in connection with the first notice sent by Tenant with respect to
each separate Abatement Event) if Landlord cures such Abatement Event within
such thirty (30) day period following receipt of the Abatement Event Termination
Notice. If Tenant's right to abatement occurs because of an eminent domain
taking, condemnation and/or because of damage or destruction to the Premises,
the Project's parking facility, and/or the Project, Tenant's abatement period
shall continue until Tenant has been given sufficient time, and sufficient
ingress to, and egress from the Premises, to rebuild such portion it is required
to rebuild, to install its property, furniture, fixtures, and equipment to the
extent the same shall have been removed as a result of such damage or
destruction or temporary taking and to move in over a weekend. To the extent
Tenant is entitled to abatement because of an event covered by Articles 11 or 13
of this Lease, then the Eligibility Period shall not be applicable.
Notwithstanding the foregoing, Tenant shall not have the right to terminate this
Lease pursuant to the terms of this Section 19.5.2, if, as of the date of
delivery by Tenant of the Abatement Event Termination Notice, (A) the first
trust deed holder of the Building (the "Bank") has recorded a notice of default
on the Building or filed a notice evidencing a legal action by the

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<PAGE>   54
Bank against Landlord on the Building, and (B) the Bank diligently proceeds to
gain possession of the Premises and, to the extent Bank does gain possession of
the Premises, the Bank diligently proceeds to cure such Abatement Event. Except
as provided in this Section 19.5.2, nothing contained herein shall be
interpreted to mean that Tenant is excused from paying Rent due hereunder.

        19.6 Landlord Bankruptcy Proceeding. In the event that the obligations
of Landlord under this Lease are not performed during the pendency of a
bankruptcy or insolvency proceeding involving Landlord as the debtor, or
following the rejection of this Lease in accordance with Section 365 of the
Bankruptcy Code, then notwithstanding any provision of this Lease to the
contrary, Tenant shall have the right to set off against the Rent next due and
owing under this Lease (a) any and all damages caused by such non-performance of
Landlord's obligations under this Lease by Landlord, debtor-in-possession, or
the bankruptcy trustee, and (b) any and all damages caused by the
non-performance of Landlord's obligations under this Lease following any
rejection of this Lease in accordance with Section 365 of the Bankruptcy Code.

        19.7 Efforts to Relet. For the purposes of this Article 19, Tenant's
right to possession shall not be deemed to have been terminated by efforts of
Landlord to relet the Premises, by its acts of maintenance or preservation with
respect to the Premises, or by appointment of a receiver to protect Landlord's
interests hereunder. The foregoing enumeration is not exhaustive, but merely
illustrative of acts which may be performed by Landlord without terminating
Tenant's right to possession.

                                   ARTICLE 20

                                 ATTORNEYS' FEES

        If either party commences litigation against the other for the specific
performance of this Lease, for damages for the breach hereof or otherwise for
enforcement of any remedy hereunder, the parties hereto agree to and hereby do
waive any right to a trial by jury (as set forth in Section 29.18, below) and,
in the event of any such commencement of litigation, the prevailing party shall
be entitled to recover from the other party such costs and reasonable attorneys'
fees as may have been incurred.

                                   ARTICLE 21

                       SECURITY DEPOSIT; LETTER OF CREDIT

        21.1 Security Deposit. Concurrent with Tenant's execution of this Lease,
Tenant shall deposit with Landlord a security deposit (the "Security Deposit")
in the amount set forth in Section 10 of the Summary. The Security Deposit shall
be held by Landlord as security for the faithful performance by Tenant of all
the terms, covenants, and conditions of this Lease to be kept and performed by
Tenant during the Lease Term. If Tenant defaults with respect to any provisions
of this Lease beyond any applicable cure period set forth herein, including, but
not limited to, the provisions relating to the payment of Rent, Landlord may,
but shall not be required to, use, apply or retain all or any part of the
Security Deposit for the payment of any

                                       49
<PAGE>   55
Rent or any other sum in default, or for the payment of any amount that Landlord
may spend or become obligated to spend by reason of Tenant's default, or to
compensate Landlord for any other loss or damage that Landlord may suffer by
reason of Tenant's default. If any portion of the Security Deposit is so used or
applied, Tenant shall, within ten (10) days after written demand therefor,
deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to its original amount, and Tenant's failure to do so shall be a default
under this Lease. If Tenant shall fully and faithfully perform every provision
of this Lease to be performed by it, the Security Deposit, or any balance
thereof, shall be returned to Tenant, or, at Landlord's option, to the last
assignee of Tenant's interest hereunder, within thirty (30) days following the
expiration of the Lease Term. Tenant shall not be entitled to any interest on
the Security Deposit. Tenant hereby waives the provisions of Section 1950.7 of
the California Civil Code, and all other provisions of law, now or hereafter in
force, which provide that Landlord may claim from a security deposit only those
sums reasonably necessary to remedy defaults in the payment of rent, to repair
damage caused by Tenant or to clean the Premises, it being agreed that Landlord
may, in addition, claim those sums reasonably necessary to compensate Landlord
for any other loss or damage, foreseeable or unforeseeable, caused by the act or
omission of Tenant or any officer, employee, agent or invitee of Tenant.

        21.2 Letter of Credit.

               21.2.1 Delivery of Letter of Credit. Tenant shall deliver to
Landlord concurrent with Tenant's execution of this Lease, an unconditional,
clean, irrevocable letter of credit (the "L-C") in the initial amount of
$1,000,000.00 (the "LC Amount"), which L-C shall be issued by a money-center
bank (a bank which accepts deposits, maintains accounts, has a local Los Angeles
office which will negotiate a letter of credit and whose deposits are insured by
the FDIC) reasonably acceptable to Landlord, and which L-C shall be in a form
and content as set forth on Exhibit-F, or otherwise reasonably acceptable to
Landlord. Tenant shall pay all expenses, points and/or fees incurred by Tenant
in obtaining the L-C. Tenant shall be permitted, at its option, from to time to
substitute a new L-C for the L-C initially provided under this Lease, provided
that such substitute L-C satisfies all of the terms and conditions of this
Section 21.2.

               21.2.2 Application of Letter of Credit. The L-C shall be held by
Landlord as security for the faithful performance by Tenant of all the terms,
covenants, and conditions of this Lease to be kept and performed by Tenant
during the initial Lease Term. The L-C shall not be mortgaged, assigned or
encumbered in any manner whatsoever by Tenant without the prior written consent
of Landlord. If Tenant defaults with respect to any provisions of this Lease,
including, but not limited to, the provisions relating to the payment of Rent,
or if Tenant fails to renew the L-C at least thirty (30) days before its
expiration, Landlord may, but shall not be required to, draw upon all or any
portion of the L-C for payment of any Rent or any other sum in default, or for
the payment of any amount that Landlord may reasonably spend or may become
obligated to spend by reason of Tenant's default, or to compensate Landlord for
any other loss or damage that Landlord may suffer by reason of Tenant's default.
The use, application or retention of the L-C, or any portion thereof, by
Landlord shall not (a) prevent Landlord from exercising any other right or
remedy provided by this Lease or by law, it being intended that Landlord shall
not first be required to proceed against the L-C, nor (b) operate as a
limitation on any recovery to which Landlord may otherwise be entitled. Any
amount of the L-C which is drawn upon by Landlord, but is not used or applied by
Landlord shall be held by Landlord and deemed a

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<PAGE>   56
security deposit (the "L-C Security Deposit"). If any portion of the L-C is
drawn upon, Tenant shall, within ten (10) days after written demand therefor,
either (i) deposit cash with Landlord (which cash shall be applied by Landlord
to the L-C Security Deposit) in an amount sufficient to cause the sum of the L-C
Security Deposit and the amount of the remaining L-C to be equivalent to the
amount of the L-C then required under this Lease or (ii) reinstate the L-C to
the amount then required under this Lease, and if any portion of the L-C
Security Deposit is used or applied, Tenant shall, within ten (10) days after
written demand therefor, deposit cash with Landlord (which cash shall be applied
by Landlord to the L-C Security Deposit) in an amount sufficient to restore the
L-C Security Deposit to the amount then required under this Lease, and Tenant's
failure to do so shall be a default under this Lease. Tenant acknowledges that
Landlord has the right to transfer or mortgage its interest in the Project and
the Building and in this Lease and Tenant agrees that in the event of any such
transfer or mortgage, Landlord shall have the right to transfer or assign the
L-C Security Deposit and/or the L-C to the transferee or mortgagee, and in the
event of such transfer, Tenant shall look solely to such transferee or mortgagee
for the return of the L-C Security Deposit and/or the L-C. If Tenant is not in
default as of each "Adjustment Date," as that term is defined, below, the L-C
Amount shall, as of each such Adjustment Date, be reduced by an amount equal to
$200,000.00. For purposes of this Section 21.2, an "Adjustment Date" shall mean
each anniversary of the Lease Commencement Date commencing with and following
the second (2nd) anniversary of the Lease Commencement Date. If Tenant shall
fully and faithfully perform every provision of this Lease to be performed by
it, the L-C Security Deposit and/or the L-C, or any balance thereof, shall be
returned to Tenant within thirty (30) days following the expiration of the Lease
Term.

                                   ARTICLE 22

                              INTENTIONALLY DELETED

                                   ARTICLE 23

                                      SIGNS

        23.1 Full Floor Tenants. Subject to Landlord's prior written approval,
in its reasonable discretion, and provided all signs are in keeping with the
quality, design and style of the Building and Project, Tenant, if the Premises
comprise an entire floor of the Building, at its sole cost and expense, may
install identification signage anywhere in the Premises including in the
elevator lobby of the Premises, provided that such signs must not be visible
from the exterior of the Building.

        23.2 Multi-Tenant Floor Tenants. If Tenant occupies less than the entire
floor on which the Premises is located, Tenant's identifying signage shall be
provided by Landlord and such signage shall be comparable to that used by
Landlord for other similar floors in the Building and shall comply with
Landlord's Building standard signage program. Any additions, deletions or
modifications to such Building standard signage shall be at Tenant's sole
expense and subject to the prior written approval of Landlord, in its sole
discretion.

        23.3 Prohibited Signage and Other Items. Any signs, notices, logos,
pictures, names or advertisements which are installed and that have not been
individually approved by Landlord

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<PAGE>   57
may be removed without notice by Landlord at the sole expense of Tenant. Tenant
may not install any signs on the exterior or roof of the Project or the Common
Areas of the Project. Any signs, window coverings, or blinds (even if the same
are located behind the Landlord approved window coverings for the Building), or
other items visible from the exterior of the Premises or Building are subject to
the prior written approval of Landlord, in its sole discretion.

        23.4 Building Directory. A building directory will be located in the
lobby of the Building. Tenant shall have the right to one (1) strip for each
1,000 rentable square feet of the Premises to display the names of Tenant and
its employees. Tenant's initial identifying strips on the Building directory
located in the lobby of the Building shall be provided by Landlord, at
Landlord's cost. Any identifying strips required to be provided by Landlord
after the Lease Commencement Date shall be provided by Landlord at Tenant's sole
cost and expense. Landlord acknowledges and agrees that all such identifying
strips on the Building directory shall not be personal to the tenant originally
named herein and shall be provided by Landlord, subject to the terms hereof, to
any Transferee of Tenant permitted under Article 14 of this Lease.

                                   ARTICLE 24

                               COMPLIANCE WITH LAW

        Tenant shall not do anything or suffer anything to be done in or about
the Premises or the Project which will in any way conflict with any law,
statute, ordinance, decrees, codes, common law, judgments, orders, rulings,
awards or other governmental or quasi-governmental rule, regulation or
requirement now in force or which may hereafter be enacted or promulgated
including any "Environmental Laws," as that term is defined in Section 29.27.1
of this Lease (collectively, "APPLICABLE LAWS"). At its sole cost and expense,
Tenant shall, except as otherwise expressly provided in this Lease, promptly
comply with all such Applicable Laws to the extent that such Applicable Laws
relate to (i) Tenant's use of the Premises, (ii) the Tenant Improvements located
in the Premises or any Alterations thereof, and (iii) the Base Building, but as
to the Base Building, only to the extent such obligations are triggered by
Alterations made by Tenant to the Premises, or the Tenant Improvements, or
Tenant's use of the Premises for a non-general office use. Tenant shall be
responsible, at its sole cost and expense, to make all alterations to the
Premises as are required to comply with the governmental rules, regulations,
requirements or standards described in this Article 24. The judgment of any
court of competent jurisdiction or the admission of either party hereto in any
judicial action, regardless of whether the other party is a party thereto, that
such party has violated any of said governmental measures, shall be conclusive
of that fact as between Landlord and Tenant. Landlord shall comply with all
Applicable Laws relating to the Project, Base Building and Building Systems,
provided that compliance with such Applicable Laws is not the responsibility of
Tenant under this Lease, and provided further that Landlord's failure to comply
therewith would prohibit Tenant from obtaining or maintaining a certificate of
occupancy for the Premises, or would unreasonably and materially affect the
safety of Tenant's Parties or create a significant health hazard for Tenant's
Parties or otherwise materially interfere with or materially affect Tenant's
Permitted Use and enjoyment of the Premises. Landlord shall be permitted to
include in Operating Expenses any costs or expenses incurred by Landlord under
this Article 24 to the extent consistent with, and amortized to the extent
required by, the provisions of Section 4.2.4 of this Lease.

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<PAGE>   58
                                   ARTICLE 25

                                  LATE CHARGES

        If any installment of Rent or any other sum due from Tenant shall not be
received by Landlord or Landlord's designee within five (5) business days after
notice that said amount was not paid when due, then Tenant shall pay to Landlord
a late charge equal to three percent (3%) of the overdue amount, plus any
reasonable attorneys' fees incurred by Landlord by reason of Tenant's failure to
pay Rent and/or other charges when due hereunder. The late charge shall be
deemed Additional Rent and the right to require it shall be in addition to all
of Landlord's other rights and remedies hereunder or at law and shall not be
construed as liquidated damages or as limiting Landlord's remedies in any
manner. In addition to the late charge described above, any Rent or other
amounts owing hereunder which are not paid on or before the date they are due
shall thereafter bear interest until paid at a rate per annum equal to the
lesser of (i) the Interest Rate or (ii) the highest rate permitted by applicable
law.

                                   ARTICLE 26

              LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT

        26.1 Landlord's Cure. All covenants and agreements to be kept or
performed by Tenant under this Lease shall be performed by Tenant at Tenant's
sole cost and expense and without any reduction of Rent, except to the extent
otherwise expressly provided in this Lease. If Tenant shall fail to perform any
of its obligations under this Lease, and such failure shall continue in excess
of the time allowed under Section 19.1.2, above, then upon five (5) additional
days notice from Landlord, Landlord may, but shall not be obligated to, after
reasonable prior notice to Tenant, make any such payment or perform any such act
on Tenant's part without waiving its right based upon any default of Tenant and
without releasing Tenant from any obligations hereunder.

        26.2 Tenant's Reimbursement. Except as may be specifically provided to
the contrary in this Lease, Tenant shall pay to Landlord, within thirty (30)
days after delivery by Landlord to Tenant of statements therefor, sums equal to
expenditures reasonably made and obligations incurred by Landlord in connection
with the remedying by Landlord of Tenant's defaults pursuant to the provisions
of Section 26.1, above.

                                   ARTICLE 27

                                ENTRY BY LANDLORD

        Subject to Tenant's reasonable security requirements, Landlord reserves
the right at all reasonable times and upon reasonable notice to the Tenant to
enter the Premises to (i) inspect them; (ii) show the Premises to prospective
purchasers, mortgagees or ground or underlying lessors, or, during the last
twelve (12) months of the Lease Term, prospective tenants; (iii) post notices of
nonresponsibility; or (iv) alter, improve or repair the Premises, the Building,
or the Project if necessary to comply with current building codes or other
applicable laws, or for structural alterations, repairs or improvements to the
Building or the Project as required or

                                       53
<PAGE>   59
permitted under this Lease. Notwithstanding anything to the contrary contained
in this Article 27, Landlord may enter the Premises at any time to (A) perform
services required of Landlord; (B) take possession due to any default by Tenant
in the manner provided herein; and (C) subject to the terms of Section 26.1,
above, perform any covenants of Tenant which Tenant fails to perform. Landlord
may make any such entries without the abatement of Rent, except as expressly
provided in Section 19.5.2, above, and may take such steps as required to
accomplish the stated purposes; provided, however, except for emergencies, any
such entry shall be performed in an expeditious manner so as not to unreasonably
interfere with Tenant's use of the Premises. Even in emergency situation,
Landlord shall use commercially reasonable efforts to minimize any disruption to
Tenant's business operations. Tenant hereby waives any claims for damages or for
any injuries or inconvenience to or interference with Tenant's business, lost
profits, any loss of occupancy or quiet enjoyment of the Premises, and any other
loss occasioned thereby. For each of the above purposes, Landlord shall at all
times have a key with which to unlock all the doors in the Premises, excluding
Tenant's vaults, safes and special security areas designated in advance by
Tenant. In an emergency, Landlord shall have the right to use any means that
Landlord may deem proper to open the doors in and to the Premises; provided,
however, that Landlord shall, subject to Section 10.1 of this Lease and to the
extent that such damage is not covered by insurance required to be carried by
Tenant under this Lease or caused by any governmental agencies, repair any
damage to the Premises caused by any such emergency entry into the Premises by
Landlord. Notwithstanding anything to the contrary set forth in this Article 27,
Tenant may designate certain areas of the Premises as "Secured Areas" should
Tenant require such areas for the purpose of securing certain valuable property
or confidential information. In connection with the foregoing, Landlord shall
not enter such Secured Areas except in the event of an emergency. Landlord need
not clean any area designated by Tenant as a Secured Area and shall only
maintain or repair such secured areas to the extent (i) such repair or
maintenance is required in order to maintain and repair the Building Structure
and/or the Building Systems; (ii) as required by Applicable Laws, or (iii) in
response to specific requests by Tenant and in accordance with a schedule
reasonably designated by Tenant, subject to Landlord's reasonable approval. Any
entry into the Premises by Landlord in the manner hereinbefore described shall
not be deemed to be a forcible or unlawful entry into, or a detainer of, the
Premises, or an actual or constructive eviction of Tenant from any portion of
the Premises.

                                   ARTICLE 28

                                 TENANT PARKING

        Tenant shall rent from Landlord parking passes on a monthly basis
throughout the Lease Term in the amount set forth in Section 11 of the Summary;
provided, however, that during the first (1st) Lease Year of the initial Lease
Term, Tenant shall only be required to rent two (2) unreserved parking passes
for each 1000 rentable square feet of the Premises. All of Tenant's passes shall
be applicable to the P-2 and P-3 levels of the Project parking facility. Tenant
shall pay to Landlord for automobile parking passes on a monthly basis the
prevailing rate charged for parking passes at the location of such passes. In
addition, Tenant shall be responsible for any taxes imposed by any governmental
authority in connection with the renting of such parking passes by Tenant or the
use of the parking facility by Tenant. Tenant's continued right to use the
parking passes is conditioned upon Tenant abiding by all reasonable,
non-discriminatory rules

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<PAGE>   60
and regulations which are prescribed from time to time for the orderly operation
and use of the parking facility where the passes are located and upon Tenant's
cooperation in seeing that Tenant's employees and visitors also comply with such
rules and regulations. Landlord specifically reserves the right to change the
location, size, configuration, design, layout and all other aspects of the
parking facility in question (provided that Tenant's parking rights are not
reduced or materially changed as a result thereof and so long as Tenant's
obligations are not materially or unreasonably increased as a result thereof and
such change(s) do not create a material safety risk for Tenant), including the
discontinuance of any reserved parking spaces, at any time and Tenant
acknowledges and agrees that Landlord may, without incurring any liability to
Tenant and without any abatement of Rent under this Lease (except as provided in
Section 19.5.2 of this Lease), from time to time, close-off or restrict access
to the parking facility in question for purposes of permitting or facilitating
any such construction, alteration or improvements, provided that any such
closures or restrictions are required by Applicable Laws to are reasonably
necessary on a temporary basis. Landlord shall use commercially reasonable
efforts to cause any such work to be conducted in a manner which minimizes any
inconvenience to the Tenant Parties and to provide alternative parking (if
necessary), at no cost to Tenant. Landlord may totally or partially delegate its
responsibilities hereunder to a parking operator in which case such parking
operator shall have all the rights of control delegated by Landlord. The parking
passes rented by Tenant pursuant to this Article 28 are provided to Tenant
solely for use by Tenant's own personnel (not including Tenant's invitees and
guests) and such passes may not be transferred, assigned, subleased or otherwise
alienated by Tenant, except on a pro-rata basis in connection with an assignment
or subletting of the Premises permitted or approved in accordance with the terms
of Article 14 of this Lease.

                                   ARTICLE 29

                            MISCELLANEOUS PROVISIONS

        29.1 Binding Effect. Each of the provisions of this Lease shall extend
to and shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective successors or assigns,
provided this clause shall not permit any assignment by Tenant contrary to the
provisions of Article 14 of this Lease.

        29.2 No Air Rights. No rights to any view or to light or air over any
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease. If at any time any windows of the Premises are temporarily
darkened or the light or view therefrom is obstructed by reason of any repairs,
improvements, maintenance or cleaning in or about the Project, the same shall be
without liability to Landlord and without any reduction or diminution of
Tenant's obligations under this Lease.

        29.3 Modification of Lease. Should any current or prospective mortgagee
or ground lessor for the Building or Project require a modification or
modifications of this Lease, which modification or modifications will not cause
an increased cost or expense to Tenant or (other than in a de minimus manner)
adversely change the rights and obligations of Tenant hereunder, then and in
such event, Tenant agrees that this Lease may be so modified and agrees to
execute whatever documents are required therefor and deliver the same to
Landlord within twenty (20) days following the request therefor. Landlord shall
reimburse to Tenant the actual, documented

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<PAGE>   61
and reasonable attorneys' fees incurred by Tenant in reviewing such documents,
not to exceed Five Hundred Dollars ($500.00). Should Landlord or any such
prospective mortgagee or ground lessor require execution of a short form of
Lease for recording, containing, among other customary provisions, the names of
the parties, a description of the Premises and the Lease Term, Tenant agrees to
execute such short form of Lease memorandum and to deliver the same to Landlord
within twenty (20) days following the request therefore, the recordation of
which shall be at the sole cost and expense of Landlord.

        29.4 Transfer of Landlord's Interest. Tenant acknowledges that Landlord
has the right to transfer all or any portion of its interest in the Project
and/or the Building and in this Lease so long as such transfer is not a
subterfuge to avoid Landlord's obligations under this Lease, and Tenant agrees
that in the event of any such transfer and a transfer of the Security Deposit,
and if the transferee assumes the applicable obligations, Landlord shall
automatically be released from all liability (to the extent such obligations are
assumed by the transferee) under this Lease not accrued as of the date of the
transfer and Tenant agrees to look solely to such transferee for the performance
of Landlord's obligations hereunder after the date of transfer. Tenant further
acknowledges that Landlord may assign its interest in this Lease to a mortgage
lender as additional security. Such transfer shall not release Landlord from its
obligations hereunder and that Tenant shall continue to look to Landlord for the
performance of its obligations hereunder.

        29.5 Prohibition Against Recording. Except as provided in Section 29.3
of this Lease, neither this Lease, nor any memorandum, affidavit or other
writing with respect thereto, shall be recorded by Tenant or by anyone acting
through, under or on behalf of Tenant, and the recording thereof in violation of
this provision shall make this Lease null and void at Landlord's election.

        29.6 Captions. The captions of Articles and Sections are for convenience
only and shall not be deemed to limit, construe, affect or alter the meaning of
such Articles and Sections. Notwithstanding the foregoing, whenever in this
Lease a reference is made to an Article, such reference shall include all
Sections in such Article and whenever a reference is made to a Section, all such
references shall include all subsections with the same pre-numeric
identification. The term "Lease" shall include all Exhibits which are attached
to this Lease which are by this reference deemed incorporated into this Lease.

        29.7 Relationship of Parties. Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant, it being expressly understood and
agreed that neither the method of computation of Rent nor any act of the parties
hereto shall be deemed to create any relationship between Landlord and Tenant
other than the relationship of landlord and tenant.

        29.8 Time of Essence. Time is of the essence of this Lease and each of
its provisions. Whenever in this Lease a payment is required to be made by one
party to the other, but a specific date for payment is not set forth or a
specific number of days within which payment is to be made is not set forth, or
the words "immediately," "promptly," and/or "on demand," or their equivalent,
are used to specify when such payment is due, then such payment shall be due
thirty (30) days after the date that the party which is entitled to such payment
sends notice to the other party demanding such payment.

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<PAGE>   62
        29.9 Partial Invalidity. If any term, provision or condition contained
in this Lease shall, to any extent, be invalid or unenforceable, the remainder
of this Lease, or the application of such term, provision or condition to
persons or circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.

        29.10 Landlord Exculpation. It is expressly understood and agreed that
notwithstanding anything in this Lease to the contrary, and notwithstanding any
applicable law to the contrary, the liability of Landlord and the Landlord
Parties hereunder (including any successor landlord) and any recourse by Tenant
against Landlord or the Landlord Parties shall be limited solely and exclusively
to the interest of Landlord in and to the Building and Project (together with
any insurance proceeds and condemnation proceeds actually received by Landlord
and not subject to any rights of third parties), and neither Landlord, nor any
of its members, shall have any personal liability therefor, and Tenant, on
behalf of itself and all persons claiming by, through or under Tenant, hereby
expressly waives and releases Landlord and such members from any and all
personal liability. Landlord acknowledges and agrees that in no event shall
Tenant's obligations under this Lease constitute the personal obligations of
Tenant's officers, directors and employees and Landlord, on behalf of itself and
all persons claiming by, through or under Landlord, expressly waives and
releases such individuals from any and all personal liability for Tenant's
obligations hereunder.

        29.11 Entire Agreement. It is understood and acknowledged that there are
no oral agreements between the parties hereto affecting this Lease and this
Lease supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease. This Lease, the
exhibits and schedules attached hereto, and any side letter or separate
agreement executed by Landlord and Tenant in connection with this Lease and
dated of even date herewith contain all of the terms, covenants, conditions,
warranties and agreements of the parties relating in any manner to the rental,
use and occupancy of the Premises, shall be considered to be the only agreement
between the parties hereto and their representatives and agents, and none of the
terms, covenants, conditions or provisions of this Lease can be modified,
deleted or added to except in writing signed by the parties hereto.

        29.12 Right to Lease. Landlord reserves the absolute right to effect
such other tenancies in the Project and/or the Building as Landlord in the
exercise of its sole business judgment shall determine to best promote the
interests of the Project and/or the Building. Tenant does not rely on the fact,
nor does Landlord represent, that any specific tenant or type or number of
tenants shall, during the Lease Term, occupy any space in the Project and/or the
Building.

        29.13 Force Majeure. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform (collectively, the "Force Majeure"),
except with respect to the obligations imposed upon Tenant with regard to Rent
or other charges to be paid by Tenant or Landlord pursuant to this Lease, and
except as to Tenant's obligations

                                       57
<PAGE>   63
under Articles 5 and 24 of this Lease notwithstanding anything to the contrary
contained in this Lease, shall excuse the performance of such party for a period
equal to any such prevention, delay or stoppage and, therefore, if this Lease
specifies a time period for performance of an obligation of either party, that
time period shall be extended by the period of any delay in such party's
performance caused by a Force Majeure.

        29.14 Notices. All notices, demands, statements, approvals or
communications (collectively, "Notices") given or required to be given by either
party to the other hereunder shall be in writing, shall be sent by United States
certified or registered mail, postage prepaid, return receipt requested, or a
reputable overnight courier service (such as Federal Express) or delivered
personally (i) to Tenant at the appropriate address set forth in Section 5 of
the Summary, or to such other place as Tenant may from time to time designate in
a Notice to Landlord; or (ii) to Landlord at the addresses set forth in Section
3 of the Summary, or to such other firm or to such other place as Landlord may
from time to time designate in a Notice to Tenant. Any Notice will be deemed
given on the date it is mailed as provided in this Section 29.14, the date
overnight courier delivers, or upon the date personal delivery is made or
attempted to be made. If Tenant is notified of the identity and address of
Landlord's mortgagee or ground or underlying lessor, Tenant shall give to such
mortgagee or ground or underlying lessor written notice of any default by
Landlord under the terms of this Lease by registered or certified mail, and such
mortgagee or ground or underlying lessor shall be given a reasonable opportunity
to cure such default prior to Tenant's exercising any remedy available to
Tenant.

        29.15 Child Care Facilities. Tenant acknowledges that any child care
facilities located in the Project or the Adjacent Project (the "Child Care
Facilities") which are available to Tenant and Tenant's employees are provided
by a third party (the "Child Care Provider") which is leasing or otherwise
managing space in the Project or the Adjacent Project, as the case may be, and
not by Landlord. If Tenant or its employees choose to use the Child Care
Facilities, Tenant acknowledges that Tenant and Tenant's employees are not
relying upon any investigation which Landlord may have conducted concerning the
Child Care Provider or any warranties or representation with respect thereto, it
being the sole responsibility of Tenant and the individual user of the Child
Care Facilities to conduct any and all investigations of the Child Care
Facilities prior to making use thereof. Accordingly, Landlord shall have no
responsibility with respect to the quality or care provided by the Child Care
Facilities, or for any acts or omissions of the Child Care Provider.
Furthermore, Tenant, for Tenant and for Tenant's employees, hereby agrees that
Landlord, its members and their respective partners, subpartners, officers,
agents, servants, employees, and independent contractors shall not be liable
for, and are hereby released from any responsibility for any loss, cost, damage,
expense or liability, either to person or property, arising from the use of the
Child Care Facilities by Tenant or Tenant's employees. Tenant hereby covenants
that Tenant shall inform all of Tenant's employees of the provisions of this
Section 29.15 prior to such employees' use of the Child Care Facilities.

        29.16 Joint and Several. If there is more than one Tenant, the
obligations imposed upon Tenant under this Lease shall be joint and several.

        29.17 Authority. If Tenant is a corporation or partnership, each
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in California and that Tenant has full right and authority

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<PAGE>   64
to execute and deliver this Lease and that each person signing on behalf of
Tenant is authorized to do so.

        29.18 Governing Law; WAIVER OF TRIAL BY JURY. This Lease shall be
construed and enforced in accordance with the laws of the State of California.
IN ANY ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT
TO (I) THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF CALIFORNIA,
(II) SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) IN
THE INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE
OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S
USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY
EMERGENCY OR STATUTORY REMEDY.

        29.19 Submission of Lease. Submission of this instrument for examination
or signature by Tenant does not constitute a reservation of or an option for
lease, and it is not effective as a lease or otherwise until execution and
delivery by both Landlord and Tenant.

        29.20 Brokers. Landlord and Tenant hereby warrant to each other that
they have had no dealings with any real estate broker or agent in connection
with the negotiation of this Lease, excepting only the real estate brokers or
agents specified in Section 12 of the Summary and Landlord's designated
representative (the "Brokers"), and that they know of no other real estate
broker or agent who is entitled to a commission in connection with this Lease.
Landlord shall pay the brokerage commissions owing to the Brokers in connection
with the transaction contemplated by this Lease pursuant to the terms of a
separate written agreement between Landlord and the Brokers (the "Written
Agreements"). If Landlord fails to pay to Brokers their commission pursuant to
the terms of the Written Agreements, Tenant may send written notice to Landlord
of such failure and if Landlord fails to pay such amounts or object to the
payment thereof within thirty (30) days after said notice, Tenant shall be
entitled to make such payment and to then offset such payment against Tenant's
next rental obligations which may become due under this Lease. Any amounts
offset from Tenant's rental obligations hereunder shall no longer be owed from
Landlord to Brokers, but will become due from Tenant to Brokers. Each party
agrees to indemnify and defend the other party against and hold the other party
harmless from any and all claims, demands, losses, liabilities, lawsuits,
judgments, and costs and expenses (including without limitation reasonable
attorneys' fees) with respect to any leasing commission or equivalent
compensation alleged to be owing on account of the indemnifying party's dealings
with any real estate broker or agent other than the Brokers. The terms of this
Section 29.20 shall survive the expiration or earlier termination of the Lease
Term.

        29.21 Independent Covenants. This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord's expense or, except as expressly provided herein, to any setoff of
the Rent or other amounts owing hereunder against Landlord; provided, however,
that

                                       59
<PAGE>   65
the foregoing shall in no way impair the right of Tenant to commence a separate
action against Landlord for any violation by Landlord of the provisions hereof
so long as notice is first given to Landlord and any holder of a mortgage or
deed of trust covering the Building, the Project, or any portion thereof, of
whose address Tenant has theretofore been notified, and an opportunity is
granted to Landlord and such holder to correct such violations as provided
above.

        29.22 Project or Building Name and Signage. Landlord shall have the
right at any time to change the name of the Project and/or the Building and to
install, affix and maintain any and all signs on the exterior and on the
interior of the Project and/or the Building as Landlord may, in Landlord's sole
discretion, desire. Tenant shall not use the name of the Project and/or the
Building or use pictures or illustrations of the Project and/or the Building in
advertising or other publicity, without the prior written consent of Landlord.

        29.23 Transportation Management. Tenant shall fully comply with all
present or future governmentally mandated programs intended to manage parking,
transportation or traffic in and around the Project, the Building, and/or the
Adjacent Project, and in connection therewith, Tenant shall take responsible
action for the transportation planning and management of all employees located
at the Premises by working directly with Landlord, any governmental
transportation management organization or any other transportation-related
committees or entities. Such programs may include, without limitation: (i)
restrictions on the number of peak-hour vehicle trips generated by Tenant; (ii)
increased vehicle occupancy; (iii) implementation of an in-house ridesharing
program and an employee transportation coordinator; (iv) working with employees
and any Project, Building or area-wide ridesharing program manager; (v)
instituting employer-sponsored incentives (financial or in-kind) to encourage
employees to rideshare; and (vi) utilizing flexible work shifts for employees.

        29.24 No Discrimination. Tenant covenants by and for itself, its heirs,
executors, administrators and assigns, and all persons claiming under or through
Tenant, and this Lease is made and accepted upon and subject to the following
conditions: that there shall be no discrimination against or segregation of any
person or group of persons, on account of race, color, creed, sex, religion,
marital status, ancestry or national origin in the leasing, subleasing,
transferring, use, or enjoyment of the Premises, nor shall Tenant itself, or any
person claiming under or through Tenant, establish or permit such practice or
practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy, of tenants, lessees, sublessees, subtenants
or vendees in the Premises.

        29.25 Successors. Except as otherwise expressly provided herein, the
obligations of this Lease shall bind and benefit the successors and assigns of
the parties hereto; provided, however, that no assignment, sublease or other
transfer in violation of the provisions of Article 14 shall operate to vest any
rights in any putative assignee, subtenant or transferee of Tenant.

        29.26 Landlord Renovations. It is specifically understood and agreed
that Landlord has made no representation or warranty to Tenant and has no
obligation to alter, remodel, improve, renovate, repair or decorate the
Premises, Building, Project, or any part thereof and that no representations
respecting the condition of the Premises, the Building, or the Project have been
made by Landlord to Tenant except as specifically set forth herein or in the
Tenant Work Letter. However, Tenant acknowledges that Landlord may during the
Lease Term renovate, improve,

                                       60
<PAGE>   66
alter, or modify (collectively, the "Renovations") the Building, Project and/or
Premises, including without limitation the parking structure, Common Areas,
systems and equipment, roof, and structural portions of the same, which
Renovations may include, without limitation, (i) installing sprinklers in the
Common Areas and tenant spaces, (ii) modifying the Common Areas and tenant
spaces to comply with applicable laws and regulations, including regulations
relating to the physically disabled, seismic conditions, and building safety and
security, and (iii) installing new floor covering, lighting, and wall coverings
in the Common Areas, and in connection with any Renovations, Landlord may, among
other things, erect scaffolding or other necessary structures in the Project or
the Building, limit or eliminate access to portions of the Building or Project,
including portions of the Common Areas, or perform work in the Project or the
Building, which work may create noise, dust or leave debris in the Project or
the Building. Tenant hereby agrees that such Renovations and Landlord's actions
in connection with such Renovations shall in no way constitute a constructive
eviction of Tenant nor entitle Tenant to any abatement of Rent (except as
specifically set forth in Section 19.5.2 of this Lease). Landlord shall have no
responsibility or for any reason be liable to Tenant for any direct or indirect
injury to or interference with Tenant's business arising from the Renovations,
nor shall Tenant be entitled to any compensation or damages from Landlord for
loss of the use of the whole or any part of the Premises or of Tenant's personal
property or improvements resulting from the Renovations or Landlord's actions in
connection with such Renovations, or for any inconvenience or annoyance
occasioned by such Renovations or Landlord's actions in connection with such
Renovations.

        29.27 Hazardous Substances.

               29.27.1 Definitions. For purposes of this Lease, the following
definitions shall apply: "Hazardous Material(s)" shall mean any substance or
material that is described as a toxic or hazardous substance, waste, material,
pollutant, contaminant or infectious waste, or any matter that in certain
specified quantities would be injurious to the public health or welfare, or
words of similar import, in any of the Environmental Laws or any other words
which are intended to define, list or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity or reproductive toxicity and includes, without
limitation, asbestos, petroleum (including crude oil or any fraction thereof,
natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable
for fuel, or any mixture thereof), petroleum products, polychlorinated
biphenyls, urea formaldehyde, radon gas, radioactive matter, medical waste, and
chemicals which may cause cancer or reproductive toxicity. "Environmental Laws"
shall mean all federal, state, local and quasi-governmental laws (whether under
common law, statute or otherwise), ordinances, decrees, codes, rulings, awards,
rules, regulations and guidance documents now or hereafter be enacted or
promulgated as amended from time to time, in any way relating to or regulating
Hazardous Materials.

               29.27.2 Compliance with Environmental Laws. Landlord covenants
that during the Lease Term, Landlord shall comply with all Environmental Laws in
accordance with, and as required by, the terms of Article 24 of this Lease.

        29.28  Development of the Project.

                                       61
<PAGE>   67
               29.28.1 Subdivision. Tenant acknowledges that the Project has
been subdivided. Landlord reserves the right to further subdivide all or a
portion of the buildings and Common Areas in the Project. Tenant agrees to
execute and deliver, within twenty (20) days after Landlord's written demand and
in the form reasonably requested by Landlord, any additional documents needed to
conform this Lease to the circumstances resulting from a subdivision and any all
maps in connection therewith. Landlord shall reimburse to Tenant the actual,
documented and reasonable attorneys' fees incurred by Tenant in reviewing such
documents, not to exceed Five Hundred Dollars ($500.00). Notwithstanding
anything to the contrary set forth in this Lease, the separate ownership of any
buildings and/or Common Areas of the Project by an entity other than Landlord
shall not affect the calculation of Direct Expenses or Tenant's payment of
Tenant's Share of Direct Expenses.

               29.28.2 The Other Improvements. If portions of the Project or
property adjacent to the Project (including, but not limited to, the Adjacent
Project) (collectively, the "Other Improvements") are owned by an entity other
than Landlord, Landlord, at its option, may enter into an agreement with the
owner or owners of any of the Other Improvements to provide (i) for reciprocal
rights of access, use and/or enjoyment of the Project and the Other
Improvements, (ii) for the common management, operation, maintenance,
improvement and/or repair of all or any portion of the Project and all or any
portion of the Other Improvements, (iii) for the allocation of a portion of the
Direct Expenses to the Other Improvements and the allocation of a portion of the
operating expenses and taxes for the Other Improvements to the Project, (iv) for
the use or improvement of the Other Improvements and/or the Project in
connection with the improvement, construction, and/or excavation of the Other
Improvements and/or the Project, and (v) for any other matter which Landlord
deems reasonably necessary so long as any other matter does not materially
interfere with Tenant's use of the Premises for the Permitted Use (including
Tenant's use of the project parking facilities) or materially increase Tenant's
monetary obligations under this Lease. Nothing contained herein shall be deemed
or construed to limit or otherwise affect Landlord's right to sell all or any
portion of the Project or any other of Landlord's rights described in this
Lease.

               29.28.3 Construction of Project and Other Improvements. Tenant
acknowledges that portions of the Project and/or the Other Improvements may be
under construction following Tenant's occupancy of the Premises, and that such
construction may result in levels of noise, dust, obstruction of access, etc.
which are in excess of that present in a fully constructed project. Subject to
Section 19.5.2 hereof, Tenant hereby waives any and all rent offsets or claims
of constructive eviction which may arise in connection with such construction.

        29.29  Arbitration.

               29.29.1 General Submittals to Arbitration. The submittal of all
matters to arbitration in accordance with the provisions of this Section 29.29
is the sole and exclusive method, means and procedure to resolve any and all
claims, disputes or disagreements arising under this Lease, including, but not
limited to any matter relating to Landlord's failure to approve an assignment,
sublease or other transfer of Tenant's interest in the Lease under Article 14 of
this Lease, any other defaults by Landlord, or any Tenant default, except for
(i) all claims by either party which (A) seek anything other than enforcement of
rights under this Lease, or (B) are primarily founded upon matters of fraud,
willful misconduct, bad faith or any other allegations of

                                       62
<PAGE>   68
tortious action, and seek the award of punitive or exemplary damages, and (ii)
claims relating to Landlord's exercise of any unlawful detainer rights pursuant
to California law or rights or remedies used by Landlord to gain possession of
the Premises or terminate Tenant's right of possession to the Premises, which
disputes shall be resolved by suit filed in the Superior Court of Los Angeles
County, California, the decision of which court shall be subject to appeal
pursuant to Applicable Laws. The parties hereby irrevocably waive any and all
rights to the contrary and shall at all times conduct themselves in strict,
full, complete and timely accordance with the provisions of this Section 29.29
and all attempts to circumvent the terms and conditions of this Section 29.29
shall be absolutely null and void and of no force or effect whatsoever. As to
any matter submitted to arbitration (except with respect to the payment of
money) to determine whether a matter would, with the passage of time, constitute
a default, such passage of time shall not commence to run until any such
affirmative arbitrated determination, as long as it is simultaneously determined
in such arbitration that the challenge of such matter as a potential Tenant
default or Landlord default was made in good faith. As to any matter submitted
to arbitration with respect to the payment of money, to determine whether a
matter would, with the passage of time, constitute a default, such passage of
time shall not commence to run in the event that the party which is obligated to
make the payment does in fact make the payment to the other party. Such payment
can be made "under protest," which shall occur when such payment is accompanied
by a good faith notice stating the reasons that the party has elected to make a
payment under protest. Such protest will be deemed waived unless the subject
matter identified in the protest is submitted to arbitration as set forth in
this Section 29.29.

               29.29.2 JAMS. Any dispute to be arbitrated pursuant to the
provisions of this Section 29.29 shall be determined by binding arbitration
before a retired judge of the Superior Court of the State of California (the
"Arbitrator") under the auspices of Judicial Arbitration & Mediation Services,
Inc. ("JAMS"). Such arbitration shall be initiated by the parties, or either of
them, within ten (10) days after either party sends notice (the "Arbitration
Notice") of a demand to arbitrate to the other party and to JAMS. The
Arbitration Notice shall contain a description of the subject matter of the
arbitration, the dispute with respect thereto, the amount involved, if any, and
the remedy or determination sought. The parties may agree on a retired judge
from the JAMS panel. If they are unable to promptly agree, JAMS will provide a
list of three available judges who, to the extent available, have had extensive
experience in handling real estate commercial lease transactions as
practitioners and each party may strike one. The remaining judge (or if there
are two, the one selected by JAMS) will serve as the Arbitrator. In the event
that JAMS shall no longer exist or if JAMS fails or refuses to accept submission
of such dispute, then the dispute shall be resolved by binding arbitration
before the American Arbitration Association ("AAA") under the AAA's commercial
arbitration rules then in effect.

               29.29.3  Arbitration Procedure.

                      29.29.3.1 Pre-Decision Actions. The Arbitrator shall
schedule a pre-hearing conference to resolve procedural matters, arrange for the
exchange of information, obtain stipulations, and narrow the issues. The parties
will submit proposed discovery schedules to the Arbitrator at the pre-hearing
conference. The scope and duration of discovery will be within the sole
discretion of the Arbitrator. The Arbitrator shall have the discretion to order
a pre-hearing exchange of information by the parties, including, without
limitation, production of requested documents, exchange of summaries of
testimony of proposed witnesses, and examination by

                                       63
<PAGE>   69
deposition of parties and third-party witnesses. This discretion shall be
exercised in favor of discovery reasonable under the circumstances.

                      29.29.3.2 The Decision. The arbitration shall be conducted
in Los Angeles, California. Any party may be represented by counsel or other
authorized representative. In rendering a decision(s), the Arbitrator shall
determine the rights and obligations of the parties according to the substantive
and procedural laws of the State of California and the provisions of this Lease.
The Arbitrator's decision shall be based on the evidence introduced at the
hearing, including all logical and reasonable inferences therefrom. The
Arbitrator may make any determination, and/or grant any remedy or relief (an
"Arbitration Award") that is just and equitable. The decision must be based on,
and accompanied by, a written statement of decision explaining the factual and
legal basis for the decision as to each of the principal controverted issues.
The decision shall be conclusive and binding, and it may thereafter be confirmed
as a judgment by the Superior Court of the State of California, subject only to
challenge on the grounds set forth in the California Code of Civil Procedure
Section 1286.2. The validity and enforceability of the Arbitrator's decision is
to be determined exclusively by the California courts pursuant to the terms and
conditions of this Lease. The Arbitrator shall award costs, including without
limitation attorneys' fees, and expert and witness costs, to the prevailing
party as defined in California Code of Civil Procedure Section 1032 ("Prevailing
Party"), if any, as determined by the Arbitrator in his discretion. The
Arbitrator's fees and costs shall be paid by the non-prevailing party as
determined by the Arbitrator in his discretion. A party shall be determined by
the Arbitrator to be the prevailing party if its proposal for the resolution of
dispute is the closer to that adopted by the Arbitrator.

        29.30 Calendar Days. All references made in this Lease to the word
"days," whether for notices, schedules or other miscellaneous time limits, shall
at all times herein be deemed to mean calendar days, unless specifically
references as "business" or "working" days. Business or working days shall mean
the days Monday-Friday, excluding Holidays.

        29.31 Covenants and Conditions. It is agreed that each of the provisions
of this Lease shall be terms, covenants, as well as conditions, and the failure
of Tenant or Landlord to comply with any of the terms, covenants or conditions
of this Lease shall entitle Tenant or Landlord to exercise the remedies of
Tenant on default or Landlord on default as set forth in this Lease.

        29.32 Survival of Provisions Upon Termination of Lease. Any term,
covenant or condition of this Lease which requires the performance of
obligations or forbearance of an act by either party hereto after the
termination of this Lease shall survive such termination of this Lease. Such
survival shall be to the extent reasonably necessary to fulfill the intent
thereof, or if specified, to the extent of such specification, as same is
reasonably necessary to perform the obligations and/or forbearance of an act set
forth in such term, covenant or condition. Notwithstanding the foregoing in the
event a specific term, covenant or condition is expressly provided for in such a
clear fashion as to indicate that such performance of an obligation or
forbearance of an act is no longer required, then the specific shall govern over
this general provision of this Lease.

        29.33 Good Faith. Except (i) for matters for which there is a standard
of consent or discretion specifically set forth in this Lease; (ii) matters
which could have an adverse effect on

                                       64
<PAGE>   70
the Building Structure or the Building Systems, or which could affect the
exterior appearance of the Building, or (iii) matters covered by Article 4
(Additional Rent), Article 10 (Insurance), or Article 19 (Defaults; Remedies) of
this Lease (collectively, the "Excepted Matters"), any time the consent of
Landlord or Tenant is required under this Lease, such consent shall not be
unreasonably withheld or delayed, and, except with regard to the Excepted
Matters, whenever this Lease grants Landlord or Tenant the right to take action,
exercise discretion, establish Rules and Regulations or make an allocation or
other determination, Landlord and Tenant shall act reasonably and in good faith.

        29.34 Counterparts. This Lease may be executed in counterparts with the
same effect as if both parties hereto had executed the same document. Both
counterparts shall be construed together and shall constitute a single lease.

        29.35 Professional Fees. The prevailing party in any action or
proceeding brought under or pursuant to this Lease shall be entitled to recover
from the losing party any costs or expenses incurred by the prevailing party in
connection with such action or proceeding, including, without limitation,
reasonable attorneys' fees.

        29.36 Telecommunications Equipment. At any time during the Lease Term,
subject to the terms of this Section 29.36 and Applicable Law, Tenant may
install, at Tenant's sole cost and expense, one (1) satellite dish or antennae,
not to exceed thirty-six (36) inches in diameter (the "Telecommunications
Equipment"), upon the roof of the Building. The physical appearance and
specifications of the Telecommunications Equipment shall be subject to
Landlord's approval, the location of any such installation of the
Telecommunications Equipment shall be designated by Landlord subject to Tenant's
reasonable approval, and Landlord may require Tenant to install screening around
such Telecommunications Equipment, at Tenant's sole cost and expense, as
reasonably designated by Landlord. Tenant shall pay to Landlord, in the same
manner and pursuant to the same timing and conditions as Base Rent, the
prevailing rate charged by Landlord from time to time with respect to space
utilized by Tenant on the roof of the Building, provided that in no event shall
such rate materially exceed that charged for rooftop space by landlords of the
Comparable Buildings. Tenant shall maintain such Telecommunications Equipment,
at Tenant's sole cost and expense. In the event Tenant elects to exercise its
right to install the Telecommunication Equipment, which right must be exercised,
if at all, prior to the expiration of the expiration of the first day of the
seventh (7th) month of the second (2nd) Lease Year of the initial Lease Term,
then Tenant shall give Landlord prior written notice thereof and Landlord and
Tenant shall execute a commercially reasonable form of rooftop equipment
agreement covering Tenant's installation, maintenance, repair, and compliance
with law of such Telecommunications Equipment, Tenant's indemnification of
Landlord with respect to the Telecommunications Equipment, Tenant's obligation
to remove such Telecommunications Equipment upon the expiration or earlier
termination of this Lease and repair any resulting damage to the Building, and
other related matters.

        29.37 Guaranty. This Lease is subject to and conditioned upon Tenant's
delivery to Landlord, concurrently with Tenant's execution and delivery of this
Lease, a guaranty fully executed by and binding upon Getty Images, Inc., a
Delaware corporation, as guarantor. Said guaranty shall be in the form of and
upon the terms contained in the Guaranty of Lease attached hereto as EXHIBIT G.

                                       65
<PAGE>   71
        IN WITNESS WHEREOF, Landlord and Tenant have caused their duly
authorized representatives to execute this Lease as of the day and date first
above written.

                                       "Landlord":

                                       CST WATER GARDEN II, L.L.C.,
                                       a Delaware limited liability company

                                       By: Snyder TAFC Development, LLC,
                                           a California limited
                                           liability company
                                           Its:  Manager Member

                                           By:  J.H. Snyder Company, LLC
                                                a California limited
                                                liability company
                                                Its:  Manager

                                                By:
                                                    ----------------------------
                                                    Its: Authorized Member

                                       "Tenant":

                                       TRI-ENERGY PRODUCTIONS, INC.,
                                       a California corporation

                                       By:
                                           -------------------------------------
                                           Its:
                                                --------------------------------

                                       By:
                                           -------------------------------------
                                           Its:
                                                --------------------------------

                                       66<PAGE>   1
                                                                    EXHIBIT 10.9

********************************************************************************

                         LEASE DATED AS OF APRIL 1, 2000
                                 BY AND BETWEEN
                    THE RECTOR, CHURCH-WARDENS AND VESTRYMEN
             OF TRINITY CHURCH IN THE CITY OF NEW YORK, AS LANDLORD

                                       AND

                           PHOTODISC, INC., AS TENANT

88******************************************************************************

               **************************************************
               ENTIRE 4TH AND 6TH FLOORS AND PORTION OF 5TH FLOOR
                                75 VARICK STREET
                               NEW YORK, NEW YORK
               **************************************************

                PARISH OF TRINITY CHURCH IN THE CITY OF NEW YORK
                             REAL ESTATE DEPARTMENT
                                74 TRINITY PLACE
                          NEW YORK, NEW YORK 10006-2088

<PAGE>   2

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S>                                                                                                     <C>
ARTICLE ONE TERM; RENT; FREE RENT........................................................................2
ARTICLE TWO USE..........................................................................................3
ARTICLE THREE REPAIRS; NOISE AND VIBRATION...............................................................4
ARTICLE FOUR ALTERATIONS AND FIXTURES....................................................................5
ARTICLE FIVE COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS..........................................8
ARTICLE SIX RULES AND REGULATIONS........................................................................8
ARTICLE SEVEN PLATE GLASS................................................................................9
ARTICLE EIGHT CARE OF SIDEWALKS..........................................................................9
ARTICLE NINE LANDLORD'S ACCESS TO THE PREMISES...........................................................9
ARTICLE TEN ELECTRIC CURRENT; LIVE STEAM................................................................10
ARTICLE ELEVEN CONDEMNATION AND DEMOLITION..............................................................11
ARTICLE TWELVE MECHANIC'S LIENS.........................................................................12
ARTICLE THIRTEEN SUBORDINATION..........................................................................12
ARTICLE FOURTEEN CERTIFICATE OF OCCUPANCY...............................................................14
ARTICLE FIFTEEN VAULTS..................................................................................14
ARTICLE SIXTEEN FIRE AND OTHER CASUALTY.................................................................14
ARTICLE SEVENTEEN CHANGE IN USE OF PREMISES, SUBLETTING AND ASSIGNMENT..................................16
ARTICLE EIGHTEEN WAIVER AND SURRENDER; REMEDIES CUMULATIVE..............................................22
</TABLE>

                                      -ii-

<PAGE>   3

<TABLE>
<CAPTION>

<S>                                                                                                    <C>
ARTICLE NINETEEN NO REPRESENTATIONS AS TO PREMISES, CERTIFICATE OF OCCUPANCY AND USE....................23
ARTICLE TWENTY LIMITATION OF LANDLORD'S LIABILITY.......................................................23
ARTICLE TWENTY-ONE INDEMNITY BY TENANT..................................................................24
ARTICLE TWENTY-TWO NOTICES..............................................................................25
ARTICLE TWENTY-THREE INSOLVENCY.........................................................................25
ARTICLE TWENTY-FOUR REMEDIES OF THE LANDLORD ON DEFAULT IN PERFORMANCE BY THE TENANT....................27
ARTICLE TWENTY-FIVE DEFAULT.............................................................................27
ARTICLE TWENTY-SIX REMEDIES AND DAMAGES.................................................................29
ARTICLE TWENTY-SEVEN SURRENDER AT EXPIRATION............................................................30
ARTICLE TWENTY-EIGHT QUIET ENJOYMENT....................................................................31
ARTICLE TWENTY-NINE SECURITY DEPOSIT....................................................................31
ARTICLE THIRTY REAL ESTATE TAX AND OPERATING EXPENSE ESCALATION.........................................33
ARTICLE THIRTY-ONE SERVICES.............................................................................35
ARTICLE THIRTY-TWO INSURANCE............................................................................37
ARTICLE THIRTY-THREE DEFAULT UNDER OTHER LEASES.........................................................38
ARTICLE THIRTY-FOUR WORK TO BE DONE BY LANDLORD.........................................................38
ARTICLE THIRTY-FIVE CONSENT TO JURISDICTION.............................................................38
ARTICLE THIRTY-SIX TENANT LIABILITY.....................................................................38
</TABLE>

                                     -iii-

                                       37
<PAGE>   4

<TABLE>
<CAPTION>

<S>                                                                                                    <C>
ARTICLE THIRTY-SEVEN ADJACENT EXCAVATION-SHORING........................................................39
ARTICLE THIRTY-EIGHT FAILURE TO GIVE POSSESSION.........................................................39
ARTICLE THIRTY-NINE BROKER..............................................................................39
ARTICLE FORTY RENT RESTRICTIONS.........................................................................40
ARTICLE FORTY-ONE CERTIFICATES BY TENANT................................................................40
ARTICLE FORTY-TWO RESTRICTIONS ON TENANT'S USE..........................................................40
ARTICLE FORTY-THREE HAZARDOUS MATERIALS.................................................................41
ARTICLE FORTY-FOUR MISCELLANEOUS........................................................................41
ARTICLE FORTY-SIX LANDLORD'S CONTRIBUTION...............................................................43
ARTICLE FORTY-SIX GENERATOR.............................................................................47
SCHEDULE A RULES AND REGULATIONS........................................................................(i)
SCHEDULE B CLEANING SPECIFICATIONS......................................................................(v)
EXHIBIT A - FLOOR PLANS
EXHIBIT B - CERTIFICATE OF OCCUPANCY
EXHIBIT C - WORK LETTER
</TABLE>

<PAGE>   5

THIS LEASE made as of the 1st day of April, 2000 between THE RECTOR,
CHURCH-WARDENS AND VESTRYMEN OF TRINITY CHURCH IN THE CITY OF NEW YORK, a
religious corporation (hereafter referred to as "the Landlord"), having its
offices at 74 Trinity Place, Borough of Manhattan, City, County and State of New
York, and PHOTODISC, INC. (hereafter referred to as "the Tenant"), a corporation
organized under the laws of the state of Washington, having an address at 701
North 34th Street, Suite 400, Seattle, Washington 98103

                              W I T N E S S E T H :

         That the Landlord hereby lets and leases to the Tenant, and the Tenant
hereby takes and hires from the Landlord, the following described spaces in the
building known as 1 Hudson Square, having a street address of 75 Varick Street,
in the Borough of Manhattan, City, County and State of New York (hereafter
referred to as "the building"), with the privilege to the Tenant of using
(subject to such reasonable rules and regulations as the Landlord shall from
time to time prescribe) the necessary entrances and appurtenances to the
premises, reserving to the Landlord all other portions of the building not
herein specifically demised:

<TABLE>
<CAPTION>

                                     Shown By
                                 Cross-Hatching
Unit  of Space                     on Exhibit             Referred to as
--------------                   --------------           --------------
<S>                              <C>                  <C>
Portion of Basement                    A-1            the "Basement Space"
Portion of 4th Floor                   A-2            the "4th Floor Initial Space"
Portion of 4th Floor                   A-3            the "Europadisk Space"
Portion of 4th Floor                   A-4            the "Dean Witter Space"
Portion of 5th Floor                   A-5            the "5th Floor Initial Space"
Portion of 6th Floor                   A-6            the "6th Floor Initial Space"
Portion of 6th Floor                   A-7            the "Tri-Don Space"
Portion of 6th Floor                   A-8            the "Astoria Space"
Portion of 6th Floor                   A-9            the "Power Color Space"
Portion of 5th Floor                   A-10           the "Mason Tender Space"
</TABLE>

         The Basement Space, 4th Floor Initial Space, the 5th Floor Initial
Space, and the 6th Floor Initial Space are hereinafter collectively referred to
as the "Initial Premises"; all other spaces described above are hereinafter
collectively referred to as "Additional Space"; and all of the units of space
described above are hereinafter referred to the "Premises". At such time as
Tenant occupies the entire 4th Floor or entire 6th Floor, the Premises shall
include that portion of the 4th or 6th Floors, as the case may be, which is
presently a common corridor, so that, with respect to such floor, the Premises
shall be as shown by hatching on Exhibit A-11, which is a typical floor plan.
The several portions of the Premises shall become available at different times.
The Commencement Date and proportionate share for the Initial Premises and each
portion of Additional Space are set forth below. Other than the Initial
Premises, the Commencement Date for each portion of Additional Space is an
estimate and the Commencement Date for each such portion shall be as set forth
in Article One. Subject to paragraph (g) of Article One below, Tenant's right to
occupy the various units of space constituting the Premises, and the obligation
to pay rent, additional rent and other charges with respect to the various units
of space shall commence as of the later of (a) the Commencement Date indicated
below or (b) the date upon which possession is delivered to Tenant.

      Unit of              Commencement                   Proportionate
       Space                   Date                           Share

Initial Premises           April 1, 2000                       8.64%
Europadisk Space           July 1, 2000*                       3.56%
Dean Witter Space          February 1, 2002                    1.14%
Tri-Don Space              August 1, 2000*                     2.25%
Astoria Space              June 1, 2000*                       1.38%
Power Color Space          July 1, 2000*                       1.19%
Mason Tender Space         October 1, 2007                     1.01%

<PAGE>   6

         * Landlord is negotiating with the tenants occupying these units of
space in order to obtain early lease terminations so that Landlord may deliver
the spaces on or before the dates set forth above. Tenant has been advised of
the actual lease expiration dates applicable to each portion of space, and
Tenant acknowledges that Landlord cannot guaranty delivery of such portions of
the Premises by the estimated Commencement Date stated above. As more fully set
forth in Article Thirty-Eight hereof, Landlord shall have no liability to Tenant
if Landlord is unable to deliver one or more of such portions of the Premises to
Tenant by the dates set forth above, Tenant agreeing to accept the risk of such
non-delivery by Landlord. Landlord shall continue to negotiate in good faith
with these tenants to bring the negotiations to a successful conclusion to meet
the estimated Commencement Date.

         This letting is upon the following covenants and conditions, each and
every one of which the Tenant covenants and agrees with the Landlord to keep and
perform, and the Tenant agrees that the covenants herein contained on the part
of the Tenant to be performed, shall be deemed conditional limitations, as well
as covenants and conditions.

                                   ARTICLE ONE
                              TERM; RENT; FREE RENT

         (a) The term shall commence (1) with respect to the Initial Premises,
April 1, 2000 (the "Initial Premises Commencement Date"), and (2) with respect
to the other portions of the Premises, upon delivery to Tenant of vacant
possession of such Premises (such delivery dates being referred to hereinafter
as the "_______ Space Commencement Date,"), and shall expire on March 31, 2015
(or until such term shall sooner cease and expire or be terminated as
hereinafter provided) (the "Expiration Date"), at an annual rent ( the "fixed
rent") of :

<TABLE>
<CAPTION>

      Unit of               Fixed Rent              Fixed Rent              Fixed Rent
       Space             4/1/00-3/31/05           4/1/05-3/31/10          4/1/10-3/31/15
<S>                      <C>                      <C>                     <C>
Initial Premises           $2,861,552                $2,944,857              $3,157,285
Europadisk Space           $1,218,985                $1,255,427              $1,348,354
Dean Witter Space          $  390,261                $  401,928              $  431,679
Tri-Don Space              $  771,123                $  794,176              $  852,961
Astoria Space              $  470,909                $  484,987              $  520,886
Power Color Space          $  406,217                $  418,361              $  449,328
Mason Tender Space         $  346,475                $  356,833              $  383,246

Total Fixed Rent           $6,465,522                $6,656,569              $7,143,739
</TABLE>

         (b) Fixed rent shall be payable in advance on the first day of each
month during the term of this lease at the offices of the Landlord or at such
other place as the Landlord may designate. The Tenant shall pay the fixed rent
without demand therefor and without any set-off, deduction, abatement or offset
whatsoever, except that the Tenant shall pay the first monthly installment of
fixed rent (with respect to the Initial Premises only) upon the execution of
this lease. If the Commencement Date applicable to any portion of the Premises
occurs on a day other than the first day of a calendar month, the fixed rent for
such calendar month shall be pro-rated based on the number of days in the month.
All rent payments shall be paid in lawful money of the United States of America,
which shall be legal tender in payment of any debts and dues, public and
private, at the time of payment by good and sufficient check subject to
collection and drawn on a New York City bank or trust company which is a member
of the New York Clearinghouse Association.

         (c) All sums and charges other than fixed rent due and payable by the
Tenant pursuant to this lease, including, without limitation, charges for
electricity (as defined in Article TEN), escalation charges (as defined in
Article THIRTY) and late charges assessed pursuant to this lease are called
"additional rent". All regularly recurring items of additional rent, including,
without limitation, escalation charges which are payable on a monthly basis
pursuant to the provisions of Article

                                       2
<PAGE>   7

THIRTY, shall be due and payable together with the fixed rent on the first day
of each month during the term of this lease. All other items of additional rent
shall be paid to the Landlord within fifteen days after delivery of a notice or
demand therefor, unless otherwise set forth herein. Fixed rent and additional
rent are collectively referred to herein as "rent". The failure of the Tenant to
make any payment of additional rent shall entitle the Landlord to exercise all
of the rights and remedies provided herein for the non-payment of fixed rent.

         (d) Intentionally omitted.

         (e) If any installment of rent shall not be paid within ten (10) days
following the date on which the same shall be due and payable pursuant to this
lease then, in addition to, and without waiving or releasing any other rights
and remedies of the Landlord, the Tenant shall pay to the Landlord a late charge
of one and one-half (1 1/2%) percent per month computed (on the basis of a
30-day month) from the date on which each such installment became due and
payable to the date of payment of the installment on the amount of each such
installment or installments, as liquidated damages for the Tenant's failure to
make prompt payment, and the same may be collected on demand.

         (f) In the event any check issued by the Tenant is dishonored for any
reason, the Tenant shall submit a replacement check within three (3 ) business
days following notice from the Landlord that the check was dishonored. Tenant's
failure to submit a replacement check within such time period shall constitute
an Event of Default under this lease.

         (g) Notwithstanding the foregoing, provided no Event of Default shall
have occurred which shall remain uncured, the Tenant shall not be required to
pay fixed rent with respect to a particular portion of the Premises (i) subject
to the last sentence of this paragraph (g), for the period beginning on the
Commencement Date for that portion of the Premises and ending three months after
the completion of the Landlord's Initial Work applicable to such Premises (as
described in the Work Sheet attached hereto and made a part hereof) and (ii) for
the seventeenth, eighteenth, nineteenth and twentieth calendar months following
completion of such Landlord's Initial Work; provided, however, that the Tenant
shall during such abatement period pay all other amounts due under this lease
including, but not limited to, any additional rent payable pursuant to Article
THIRTY of this lease and any service charges for electric current, and overtime
elevator, air-conditioning or heat services. Upon the occurrence of an Event of
Default, the fixed rent at the monthly rate set forth in this lease shall be
payable during the period in which the Tenant would otherwise be entitled to the
use of the Premises free of fixed rent. Any such rent payment shall be paid
within five days after demand therefore and shall constitute additional rent
under this lease. After the date on which any existing tenant shall surrender
its portion of the Premises and prior to the Commencement Date applicable to
that portion of the Premises, Landlord shall afford to Tenant access to such
portion of the Premises for the purpose of taking measurements and planning its
initial alterations. Notwithstanding the first sentence of this paragraph (g),
with respect to the Initial Premises, the free rent period shall be one full
month following the completion of Landlord's Initial Work with respect to the
Initial Premises, and for the second month following the completion of
Landlord's Initial Work, Tenant shall pay the sum of $11,537.33.

                                   ARTICLE TWO
                                       USE

         (a) The Tenant shall use the Premises (other than the Basement Space)
only for executive and general offices in connection with Tenant's business of
providing high-quality photography, moving images, art prints and related
products, except that if all or a portion of the Premises (other than the
Basement Space) shall be sublet in accordance with the terms of this lease, or
if this lease shall be assigned in accordance with the terms of this lease, then
the use shall be for executive and general offices in connection with the
business of the permitted subtenant or permitted assignee. The Basement Space
shall be used solely for "dead" storage purposes.

                                       3
<PAGE>   8

         (b) If any portion of the Premises consists of basement space, such
portion shall be used only for storage purposes.

         (c) No auction sale and no other sale of all or substantially all of
the Tenant's property, stock, fixtures and machinery, except a sale made in
connection with an assignment of this lease to another tenant for which the
Landlord's consent shall have been obtained, shall be held at the Premises
unless the provisions of Article THIRTY-ONE (g) of this lease shall have been
complied with.

         (d) Tenant shall take reasonable steps to limit the number of
messengers having access to the Premises, including, but not limited to,
installing a messenger center on the Canal Street side of the ground floor of
the building in a location to be designated by the Landlord. Construction of the
messenger center shall be subject to the provisions of Article Four hereof.

                                  ARTICLE THREE
                          REPAIRS; NOISE AND VIBRATION

         (a) The Tenant shall take good care of the Premises and the fixtures,
appurtenances, equipment and facilities therein and shall make, as and when
needed, all repairs in and about the Premises required to keep them in good
order and condition; such repairs to be equal in quality to the original work
provided that the Tenant shall not be obligated for structural or exterior
repairs to the building or for repairs to the systems and facilities of the
building for the use or service of tenants generally, except where structural or
exterior repairs or repairs to such systems and facilities are made necessary by
reason of one or more of the occurrences described below in clauses (i) through
(iv) of this Article THREE (a). All repairs for which the Tenant is responsible
pursuant to this Article shall be made by a contractor reasonably approved by
the Landlord. Should the Tenant fail to repair any condition in or about the
Premises or the fixtures, appurtenances, equipment and facilities therein which
is of such a nature that its neglect would result in damage or danger to the
building, its fixtures, appurtenances, facilities and equipment, or to its
occupants (of which Landlord's judgment, reasonably exercised, shall be
conclusive) or, in the case of repairs of any other nature, should the Tenant
have failed to make the required repairs or to have begun in good faith, the
work necessary to make them within five business days after notice from the
Landlord of the condition requiring repair, the Landlord may, in either such
case, immediately enter the Premises and make the required repairs at the
expense of the Tenant. The Landlord may make, at the expense of the Tenant, any
repairs to the building or to its fixtures, appurtenances, facilities or
equipment, whether of a structural or any other nature, which are required by
reason of damage or injury due (i) to the negligence or willful misconduct of
the Tenant or its employees, agents, licensees or visitors; (ii) to the moving
into or out of the building, of property being delivered to the Tenant or taken
from the Premises by or on behalf of the Tenant; (iii) to the installation,
repair or removal, use or operation of the property of the Tenant in the
Premises; or (iv) to the faulty operation of any machinery, equipment, or
facility installed in the Premises by or for the Tenant. The Tenant will pay the
cost of any repairs made by the Landlord pursuant to this paragraph within
fifteen days after presentation of bills therefor, or the Landlord may, at its
option, add such amounts to any installment or installments of rent due under
this lease and collect the same as additional rent. The liability of the Tenant
under this Article THREE shall survive the expiration or other termination of
this lease for a period of one year.

         (b) Except to the extent hereinabove set forth, and subject to the
provisions of Article SIXTEEN, the Landlord shall maintain in working order and
repair the exterior and the structural portions of the building, including the
structural portions of the Premises, and the public portions of the building
interior and the building plumbing, electrical, heating, fire protection, life
safety, sprinkler and ventilating systems, (excluding all ductwork, diffusers,
thermostat controls and any other part of the ventilating system located outside
of the machine room, if any, on the floor) serving the Premises. The Tenant
shall give prompt notice of any defective condition in the Premises for which
the Landlord may be responsible hereunder. There shall be no allowance to the
Tenant for diminution in rental value and no liability on the part of the
Landlord by reason of inconvenience, annoyance or injury to business arising
from the Landlord or others making repairs, alterations, additions or
improvements in or to any portion of the building or the Premises or in and to
the

                                       4
<PAGE>   9

fixtures, appurtenances or equipment thereof. It is specifically agreed that the
Tenant shall not be entitled to any set off or reduction of rent by reason of
any failure of the Landlord to comply with the provisions of this or any other
Article of the lease. Landlord shall use reasonable commercial efforts to
minimize any interference with the conduct of Tenant's business on account of
the work undertaken by Landlord in accordance with this Article Three, but
Landlord shall not be required to perform any such work on an overtime basis.

         (c) Tenant shall not install or maintain equipment, machinery or
manufacturing equipment of any description in the Premises, the operation of
which produces noise or vibration which is transmitted beyond the Premises. If
the Tenant does install such equipment or machinery and the Landlord deems it
necessary that the noise or vibration of such machinery or equipment be
diminished, eliminated, prevented or confined to the Premises, the Landlord may,
at its election, give written notice to the Tenant, requiring that the Tenant
provide and install rubber or other approved settings for absorbing, preventing
or decreasing the noise or vibration of such machinery or equipment within
fifteen days and if such measures are unsuccessful that the Tenant immediately
remove said equipment from the Premises within fifteen days. The judgment of the
Landlord of the necessity of such installation shall be conclusive, and the
installation shall be made in such manner and of such material as the Landlord
may direct. Should the Tenant fail to comply with such request within fifteen
days, the Landlord may do the work necessary to absorb, prevent or decrease the
noise or vibration of such machinery or equipment and the Tenant will pay to the
Landlord the cost of such work within fifteen days after demand or such cost
may, at the option of the Landlord, be added to any installment or installments
of rent under this lease and shall be payable by the Tenant as additional rent.

                                  ARTICLE FOUR
                            ALTERATIONS AND FIXTURES

         (a) The Tenant shall not make any alteration, addition or improvement
in or upon the Premises, nor incur any expense therefor, without having first
obtained the written consent of the Landlord therefor. The Tenant shall not be
required to obtain the Landlord's consent for alterations, additions or
improvements which are decorative in nature, such as painting or carpeting
(although the Tenant shall give the Landlord prior written notice of the
performance of such work). If the Tenant shall desire to make alterations,
additions or improvements to fit out the Premises for the Tenant's use which
will not affect the exterior of the building or adversely affect the structure
of the building or the operation of any of the systems or facilities of the
building for the use of any tenant or violate the requirements of government
hereafter referred to, the Landlord's approval will not be unreasonably withheld
or delayed. In no event shall the Tenant make any alteration at any time when an
Event of Default is outstanding. Any and all alterations may be made only
subject to and in compliance with the following, as well as all other reasonable
rules and regulations promulgated by the Landlord with respect to the
performance of alterations:

         (i) Prior to the commencement of any alteration, the Tenant shall,
         except in an emergency, give at least 30 days' notice to Landlord for
         all alterations and shall obtain the Landlord's prior approval of the
         licensed architect and/or licensed professional engineer and the
         contractors and/or mechanics selected by the Tenant, as well as the
         Landlord's prior written approval of detailed plans and specifications
         prepared by the approved architect and/or engineer and shall reimburse
         the Landlord for its out-of-pocket expenses for outside consultants to
         review such plans and specifications; and no alterations shall be made
         except as are in all material respects in accordance with such plans
         and specifications or any approved changes thereto. If requested by the
         Landlord, the Tenant shall submit a copy of the general contractor's
         contract or other contract for the alterations which shall show the
         cost thereof.

         (ii) No alteration shall be commenced until the Tenant shall have
         obtained and paid for all required permits and authorizations of any
         City, State or Federal governmental agency or any board, bureau,
         department or body thereof, having or asserting jurisdiction, copies of
         which shall be supplied to the Landlord. Landlord shall reasonably and
         diligently cooperate with

                                       5
<PAGE>   10

         Tenant in connection with the performance of its alterations, additions
         or improvements, and with respect to alterations approved by Landlord,
         shall cooperate (but at no expense to Landlord) with Tenant and execute
         such documents as may be reasonably required by Tenant to obtain such
         permits and authorizations, including, without limitation, alteration
         applications.
         (iii) Prior to the commencement of any alteration, the Tenant shall
         submit to the Landlord duplicate original policies or certificates
         thereof of worker's compensation insurance covering all persons
         employed in connection with the work, and builder's all risk and
         comprehensive general public liability insurance in such reasonable and
         customary amounts and with such companies as may be reasonably approved
         by the Landlord and such coverage shall be maintained until all such
         alterations have been completed. Such policies shall name the Landlord
         and any mortgagee or holder of any ground or underlying lease as
         additional named insureds.

         (iv) Upon completion of the alterations, the Tenant, at the Tenant's
         expense shall obtain certificates of final approval as may be required
         by any governmental agency, board, bureau, department or body thereof,
         and shall deliver such approvals to the Landlord, together with
         "as-built" plans and specifications for such alterations. In addition,
         one copy of final drawings shall be delivered to the Landlord in
         AutoCad, Release 14 format, either on a 3 1/2" disk or CD Rom, or such
         other format as shall from time to time be reasonably designated by the
         Landlord.

         (v) The cost of all alterations shall be paid when due so that the
         Premises shall at all times be free of liens for labor and materials
         supplied or claimed to have been supplied to the Premises and free from
         any encumbrances, or security interests.

         (vi) All alterations, additions or improvements shall be made and
         installed in a good and workmanlike manner and shall comply with all
         requirements, by law, regulation or rule, of the Federal, State and
         City Governments and all subdivisions and agencies thereof, and with
         the requirements of the New York Fire Insurance Exchange, New York
         Board of Fire Underwriters and all other bodies exercising similar
         functions, and shall conform to any particular reasonable requirements
         of the Landlord expressed in its consent for the making of any such
         alterations, additions, and improvements. The Landlord's review and
         approval of the Tenant's plans shall not constitute, nor be deemed to
         constitute a representation or agreement by the Landlord that such
         plans and specifications comply with such requirements. Such compliance
         shall be the sole responsibility of the Tenant.

         Any such work once begun shall be completed with all reasonable
dispatch, but shall be done at such time and in such manner as not to interfere
unreasonably with the occupancy of any other tenant or the progress of any work
being performed by or on account of the Landlord. If requested to do so by the
Tenant in connection with the Landlord's approval of any alteration, addition or
improvement, the Landlord will advise the Tenant whether the alteration,
addition or improvement will be required to be removed by the Tenant at the
expiration or earlier termination of this lease or may remain upon the Premises
to become the property of the Landlord. If no such advice is given by the
Landlord, the provision of subdivision (b) of this Article shall apply.

         (b) All alterations, additions or improvements, which may be made or
installed in or upon the Premises (whether made during or prior to the term of
this lease or during the term of any prior lease of the Premises by the
Landlord, the Tenant or any previous tenant), except the furniture, trade
fixtures, stock in trade, and like personal property of the Tenant, shall be
conclusively deemed to be part of the freehold and the property of the Landlord,
and shall remain upon the Premises, and, upon the expiration or any termination
of the term of this lease, shall be surrendered therewith as a part thereof,
except for any Specialty Alterations which shall, unless the Landlord advises
the Tenant to the contrary, be removed by the Tenant, at the Tenant's expense,
upon the expiration or earlier termination of this lease, provided, however,
that alterations, additions and improvements installed by the Tenant at Tenant's
expense shall remain the property of Tenant until the expiration or earlier
termination of this lease, but Tenant shall not remove, destroy or alter such
alterations, additions and improvement without Landlord's consent and, in any
event, shall replace such alterations, additions

                                       6
<PAGE>   11

and improvements with alterations, additions or improvements of equal or greater
value. A "Specialty Alteration" shall mean an alteration which is in excess of
standard office installations such as kitchens, cafeterias, vaults, sloping,
terraced or raised floors, internal staircases, and other slab penetrations,
data centers, fire suppression or uninterrupted power supply systems,
generators, fuel tanks, dumbwaiters, and other improvements of a similar nature.
The Tenant, at or prior to the expiration or any termination of the term of this
lease shall, at its own expense, remove all its furniture, trade fixtures, stock
in trade and like personal property. The Tenant shall restore and repair, at its
own cost and expense, any damage or disfigurement of the Premises occasioned by
any such removals or remaining after such removals, so as to leave the Premises
in good order and condition or, the Landlord, at its option, may do such
restoration and repair and the Tenant will pay the reasonable cost thereof upon
demand. If any furniture, trade fixtures, stock in trade or other personal
property of the Tenant shall not be removed at the expiration or any termination
of this lease, the Landlord, at the Landlord's option, may treat the same as
having been irrevocably abandoned, in which the Tenant shall have no further
right, title or interest therein and the Landlord may remove the same from the
Premises, disposing of them in any way which the Landlord sees fit to do, and
the Tenant shall, on demand, pay to the Landlord the expense incurred by the
Landlord for the removal thereof, as well as the cost of any restoration of the
Premises above provided. The Tenant's obligations under this subdivision (b) of
this Article FOUR shall survive the expiration of this lease for a period of one
year.

         (c) The Landlord may at any time during the term of this lease, change
the arrangement or location of the entrance or passageways, doors and doorways,
and the corridors, elevators, stairs, toilets or other parts of the building
used by the public or in common by the Tenant and other tenants (including,
without limitation, the conversion of elevators from a manually-operated to an
automatic self-service basis) and may alter staffing of the building and the
scale and manner of the operation thereof, provided that the services to which
the Tenant is entitled as specified in this lease are not diminished and may
alter the facilities, fixtures, appurtenances and equipment of the building as
it may deem the same advisable, or as it may be required so to do by any
governmental authority, law, rule or regulation, and provided further that
Landlord shall use commercially reasonable efforts to minimize interference with
the conduct of Tenant's business in making such changes and provided that such
changes do not materially reduce the accessibility of the Premises. The Landlord
may change the name, street number or designation by which the building is
commonly known.

         (d) The Tenant shall not at any time prior to or during the term of
this lease, directly or indirectly, employ or permit the employment of any
contractor, mechanic or laborer in or about the Premises, whether in connection
with any alteration or improvement or the providing of any services or
otherwise, if such employment would, in the reasonable judgment of the Landlord,
disrupt, or interfere or cause any conflict with, any other contractors,
mechanics, or laborers engaged by the Landlord or any other tenant in the
building. In the event of any such disruption, interference or conflict, the
Tenant, upon demand of the Landlord, shall immediately cause all contractors,
mechanics or laborers causing such disruption, interference or conflict to leave
the building.

         (e) The Tenant, at its own sole cost and expense, shall defend the
Premises and the Landlord against all suits for the enforcement of any mechanics
lien or any bond in lieu of such lien, and the Tenant hereby indemnifies the
Landlord and the Premises against any and all damages, expenses, or liabilities
resulting from any such lien or suit. Should the Tenant fail to commence or
diligently proceed to timely discharge any such lien, the Landlord may do so by
payment, bond, or otherwise on thirty days' prior written notice to the Tenant
and the amount paid or incurred therefor by the Landlord shall be payable by the
Tenant as additional rent. Tenant represents and warrants that it has not
performed any alterations in the Premises prior to the Initial Premises
Commencement Date.

         (f) If, in connection with the performance of any alterations,
additions or improvements to the Premises, there is any violation against the
building, the curing of which shall be the responsibility of Landlord, which
shall result in actual delay to Tenant or prevent Tenant from obtaining any
governmental permits, consents, approvals or other documentation to commence or
complete Tenant's alterations, additions or improvements, or prevent the
physical (as opposed to legal) occupancy of the Premises, or if any governmental
agency with jurisdiction orders Tenant not

                                       7
<PAGE>   12

to occupy the Premises, then Landlord shall promptly and diligently proceed to
cure and remove of record such violations and Tenant shall be entitled to an
abatement of rent equal to the fixed rent and additional rent allocable to the
portion of the Premises in which such alterations, additions or improvements are
prevented from being performed or completed, or with respect to which Tenant has
been ordered not to occupy, for the period during which Tenant shall be so
prevented from performing such alterations, additions or improvements. Such
abatement period shall not commence any earlier than the date which is ten
business days following notice from Tenant to Landlord of a violation which
prevents Tenant from proceeding with its alterations, additions or improvements,
and such abatement period shall only commence if Landlord has not cured such
violation within the ten-business-day period following Tenant's notice.

                                  ARTICLE FIVE
               COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS

         The Tenant shall promptly comply, at the Tenant's own expense, with all
laws, ordinances, regulations and requirements now or hereinafter enacted, of
the City, State and Federal Government, and all subdivisions and agencies
thereof, and the New York Fire Insurance Exchange, the New York Board of Fire
Underwriters, and of any fire insurance rating organization, and of all other
departments, bureaus, officials, boards and commissions with regard to the
Premises or the use thereof by the Tenant, and (if the Premises are situated on
the ground floor) the sidewalks adjoining the same in so far as such compliance
is made necessary by the Tenant's use of the sidewalks, provided that the Tenant
shall not be required to make structural alterations or additions to the
Premises, alterations to any building systems servicing the Premises, or
alterations to any common areas in the building utilized by Tenant and other
tenants, except where the same are required by reason of the nature of the
Tenant's use of the Premises, the alterations performed in the Premises by the
Tenant, the manner in which its business is carried on in the Premises, or a
failure on the part of the Tenant to conform to the provisions of this lease.
Tenant shall not be required to comply with any such laws, ordinances,
regulations and requirements for so long as Tenant shall be contesting,
diligently and in good faith, Tenant's obligation to comply therewith through
appropriate proceedings brought in accordance with applicable law, provided that
Tenant's failure to comply shall have no adverse effect on Landlord or on other
tenants in the building. The Tenant will not permit the maintenance of any
nuisance upon the Premises or permit its employees, licensees or visitors to do
any illegal act therein, or in and about the building after notice thereof from
the Landlord. If any such law, ordinance, regulation or requirement shall not be
promptly complied with by the Tenant, then the Landlord may, at its option,
enter upon the Premises to comply therewith, and should any fine or penalty be
imposed for failure to comply therewith or by reason of any such illegal act,
the Tenant agrees that the Landlord may, at its option, pay such fine or
penalty, which the Tenant agrees to repay to the Landlord, with interest (as set
forth in Article Twenty-Four) from the date of payment, as additional rent.

                                   ARTICLE SIX
                              RULES AND REGULATIONS

         The Tenant and the Tenant's employees, and any other persons subject to
the control of the Tenant, shall well and faithfully observe all the rules and
regulations annexed hereto as SCHEDULE A, and also any and all reasonable rules
and regulations affecting the Premises, the building or the equipment,
appurtenances, facilities and services thereof, hereafter promulgated by the
Landlord. The Landlord may at any time, and from time to time, prescribe and
regulate the placing of safes, machinery and other things, and regulate which
elevator and entrance shall be used by the Tenant's employees, and for the
Tenant's shipping; and may make such other and further rules and regulations as
in its reasonable judgment may, from time to time, be needed or desirable for
the safety, care or cleanliness of the building and for the preservation of good
order therein. The Landlord shall not be liable to the Tenant for violations of
any rules and regulations by any other tenant, its servants, employees, agents,
visitors or licensees. Notwithstanding the foregoing, the Landlord agrees that
it shall not discriminate against the Tenant in the enforcement of the rules and
regulations promulgated by the Landlord for the building.

                                       8
<PAGE>   13

                                  ARTICLE SEVEN
                                   PLATE GLASS

         The Landlord may, at its option, either (i) at the Tenant's expense,
keep the plate glass, if any, in the Premises insured in the name of the
Landlord against loss or damage, the premium for which, whether by separate
policy or as a part of a schedule of another policy, shall be paid by the Tenant
to the Landlord, upon demand, or (ii) require the Tenant, at the Tenant's
expense, to keep the plate glass, if any, in the Premises insured in the name of
the Landlord against loss or damage, in which event, the Tenant shall deliver
such policy and evidence of due payment of the premium therefor to the Landlord.
The Tenant shall promptly replace, at its own expense, any and all plate and
other glass damaged or broken from any cause whatsoever in and about the
Premises. If the Tenant fails to do so, the Landlord shall have the right to
replace such glass at the Tenant's expense.

                                  ARTICLE EIGHT
                                CARE OF SIDEWALKS

         If the Premises, or any part thereof, consist of a first floor or any
part thereof, the Tenant shall, at the Tenant's own expense, keep the sidewalk,
gutter and curb in front thereof in a clean condition, but Tenant shall not be
responsible for removal of snow and ice from the sidewalk.

                                  ARTICLE NINE
                        LANDLORD'S ACCESS TO THE PREMISES

         (a) The Tenant shall, without in any way affecting the Tenant's
obligations hereunder, and without constituting any eviction, permit the
Landlord and its agents and designees: (i) at all reasonable hours, upon
reasonable notice, to enter the Premises and have access thereto, for the
purpose of inspecting or examining them and to show them to other persons; or
(ii) to enter the Premises (including, specifically, all mechanical and air
conditioning rooms located therein) to make repairs and alterations, and to do
any work on the Premises or any adjoining premises and any work in connection
with excavation or construction on any adjoining premises or property
(including, but not limited to, the shoring up of the building) and to take in
any of the foregoing instances, any space needed therefor, provided that any
space so taken shall not be material to the conduct of Tenant's business in the
Premises. The Tenant shall permit the Landlord to erect and maintain ducts,
pipes and conduits in and through the Premises. In the exercise of the rights of
the Landlord reserved under this Article NINE, the Landlord will do so in a
manner which minimizes, so far as is practicable, the interference with the
Tenant's use of the Premises or Tenant's wiring or improvements to the Premises
and where ducts, pipes or conduits are to be erected through the Premises will
locate them along walls or ceilings wherever practicable.

         (b) In the event that the Premises shall, in the Landlord's reasonable
judgment, become substantially vacated before the expiration of this lease, or
in the event the Tenant shall be removed by summary proceedings or in the event
that, during the last month of the term, the Tenant shall have removed all or
substantially all of the Tenant's property therefrom, the Landlord may
immediately enter into and upon said Premises for the purpose of decorating,
renovating or otherwise preparing same for a new tenant, without thereby causing
any abatement of rent or liability on the Landlord's part for other
compensation, and such acts shall have no effect upon this lease.

         (c) If the Tenant or an officer or authorized employee of the Tenant
shall not be personally present to open and permit an entry into said Premises,
at any time, when for any reason an entry therein shall be necessary or
permissible hereunder, the Landlord or the Landlord's agents, may enter the same
by a master key, or may forcibly enter the same without rendering the Landlord
or such agents liable therefor (if during such entry the Landlord shall accord
reasonable care to the Tenant's property) and without in any manner affecting
the obligations and covenants of this lease and in no event shall any such entry
by the Landlord or its agents be deemed an acceptance of a surrender of this
lease, either expressed or implied, nor a waiver by the Landlord of any covenant
of this lease on the part of the Tenant to be performed.

                                   ARTICLE TEN

                                       9
<PAGE>   14

                          ELECTRIC CURRENT; LIVE STEAM

         (a) So long as electric current is to be supplied by the Landlord, the
Tenant covenants and agrees to purchase the Tenant's requirements therefor at
the Premises from the Landlord or the Landlord's designated agent at a price
equal to 108% of the Rates (as hereinafter defined) set forth in the rate
schedule of Consolidated Edison Company of New York, Inc. applicable to the
building (or the conjunctional group in which the building is included), plus an
amount equal to all sales, use and gross receipt taxes and other governmental
charges or levies, generally applicable to the purchase and sale of electricity
in New York City (and without regard to whether the Landlord is exempt from
paying or collecting any such tax, charge or levy), including any adjustment for
time-of-day for either demand or consumption. As used herein, the term "Rates"
shall mean the rates for all components of the aggregate cost of purchasing
electricity for the building, including, without limitation, all charges related
to the generation, transmission, distribution and service and all charges for
consumption and demand (including, without limitation, all seasonal and
time-of-day adjustments and fuel escalation charges relating to such consumption
and demand charges). All amounts payable under this Article TEN shall constitute
additional rent for the purpose of the enforcement of the Landlord's rights.

         (b) Where more than one meter measures the service of the Tenant in the
building, the service rendered through each meter may be computed and billed
separately in accord with the rates herein provided for. No current shall be
furnished until the equipment of the Tenant has been approved by the proper
authorities, and after such approval, no changes shall be made in such equipment
without the written consent of the Landlord. The Tenant shall pay, upon demand,
the bills for electric current furnished and the use of meters or the Landlord
may, at its option, add such amounts to any installment or installments of fixed
rent due under this lease and collect the same as additional rent. The Tenant
shall comply with such rules, regulations and contract provisions as are
customarily prescribed by public service corporations supplying such services,
for consumption similar to that of the Tenant.

         (c) The Landlord may discontinue the supply of electric current under
subdivision (a) at any time on sixty (60) days' notice to the Tenant without
being liable to the Tenant therefor or without in any way affecting this lease
or the liability of the Tenant hereunder or causing the diminution of rent, and
the same shall not be deemed to be a lessening or diminution of services within
the meaning of any law, rule, or regulation now or hereafter enacted,
promulgated, or issued. Should the Landlord give such notice of discontinuance,
the Tenant shall make the Tenant's own arrangements to receive such service
direct from such public utility corporation serving the building and the
Landlord shall permit the Landlord's wires, conduits and meters, to the extent
to which they are safely available for such use and to the extent to which they
may be used under any applicable governmental regulations or the regulations of
such public utility, to be used for the purpose. Should any additional or other
wiring, conduits, meters or any other or different distribution equipment be
required in order to permit the Tenant to receive such service directly from the
public utility, the same will be installed, as the Landlord shall elect, either
by the Landlord or by the Tenant, the cost of which shall be shared equally by
Landlord and Tenant. In the case of central distribution equipment which is used
in connection with the distribution or metering of current supplied to the
Tenant and other tenants of the building, and which is required to be installed
under governmental regulations or the regulations of such utility, the cost of
installation thereof will be prorated among the several tenants, serviced
through the distribution facility in the proportion which their average
consumption of electric current over the next preceding period of not less than
six month's duration bears to the total consumption of electric current by all
tenants during such period, and the Tenant shall pay to the Landlord the fifty
percent (50%) of Tenant's share of such cost of installation, apportioned as
above, within five (5) days following receipt of a statement showing the cost of
the distribution equipment and the manner in which the cost has been allocated
to the Tenant. (The costs described in the immediately preceding sentence are
not intended to include the costs of the upgrading of the building by Landlord
currently in progress.) All such facilities installed by the Tenant shall be
installed in a workmanlike manner which complies with applicable governmental
regulations and the regulations of the public utility. The Landlord will in any
such case permit any pipe-chases or channels available in the building to be
used by the Tenant for the Tenant's cables and conduits, to the extent that the
same may be available and may be safely used for the purpose.

                                       10
<PAGE>   15

         (d) The Landlord shall not in any way be liable or responsible to the
Tenant for any loss or damage or expense which the Tenant may sustain or incur
if either the quantity or character or electric service is changed or is no
longer available or suitable for the Tenant's requirements, nor shall the
Landlord be in any way responsible for any interruption of service due to
breakdowns, repairs, malfunction of electrical equipment or any other cause
relating to electrical service which is beyond the Landlord's reasonable
control. The Tenant covenants and agrees that at all times its use of electric
current shall never exceed the capacity of existing feeders to the Tenant's
floor(s) or space (if less than an entire floor) or the capacity of the risers
or wiring installation in the building. The Tenant agrees not to connect any
additional electrical equipment to the building electrical distribution system,
other than lamps, typewriters, computers, scanners, printers, servers, copiers,
and other small office machines which consume comparable amounts of electricity,
without the Landlord's prior written consent. If, in the Landlord's sole
judgment, reasonably exercised, the Tenant's electrical requirements necessitate
installation of an additional riser, risers or other necessary equipment, the
same may be installed by the Landlord at the sole cost and expense of the Tenant
(together with Tenant's Proportionate Share of any electrical panels which are
required to be installed as a result of the installation of such additional
risers), which shall be chargeable and collectible as additional rent. If the
Tenant makes written request to install a riser or risers to supply the Tenant's
electrical requirements, such request shall be subject to the prior written
consent of the Landlord in each instance, and such riser, risers or other
equipment shall be installed by the Landlord at the sole cost and expense of the
Tenant, if in the Landlord's sole judgment, reasonably exercised, the same are
necessary and will not 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. If the Tenant is not utilizing the
full electrical capacity available to the Premises, the Landlord shall have the
right to make such excess capacity available to other occupants of the building.
Prior to taking such excess capacity, Landlord shall notify Tenant of its
intention to do so, and Tenant shall have two weeks in which to demonstrate that
Tenant has an impending need for such electrical capacity. If in Landlord's
reasonable judgment, Tenant fails to demonstrate an impending need for such
electrical capacity, Landlord shall be entitled to proceed to make such excess
capacity available to other occupants of the building.

         (e) If there be any facilities for the supply of live steam in the
building, such steam shall be supplied to the Tenant only if separate agreements
are made therefor and pursuant to such arrangements. In the event that such
separate agreements shall be made, the appropriate provisions of this Article
TEN shall be applicable thereto.

                                 ARTICLE ELEVEN
                           CONDEMNATION AND DEMOLITION

         If the Premises or any part thereof, shall be taken or condemned for
any public or quasi public use (other than for temporary use or occupancy), this
lease and the term hereby granted shall terminate as of the date of vesting of
title by reason of such taking. If any other part of the building shall be so
taken and such taking shall, in the reasonable judgment of the Landlord, make
the operation of the building impractical, unprofitable or uneconomical or would
make substantial structural alterations or reconstruction of the building
necessary (even though no part of the Premises be taken), the Landlord may, at
its option, give to the Tenant, at any time after the vesting of title and prior
to the actual taking of possession, thirty (30) days' notice of intention to
terminate this lease, and upon the date designated in such notice, this lease
and the term hereby granted shall terminate. Anything herein to the contrary
notwithstanding, if ten (10%) percent or less of the Premises shall be so
acquired or condemned, the Landlord, at its option, may elect not to terminate
this lease and, in such case, the Landlord shall, at its expense, restore that
part of the Premises not so acquired or condemned to a self-contained rental
unit exclusive of the Tenant's alterations. In no event shall any condemnation
award be apportioned, and the Tenant hereby assigns to the Landlord all right
and claim to any part of such award, but the rent, and all other sums payable by
the Tenant, shall be apportioned as of the date of any such termination of this
lease with respect to all or part of the

                                       11
<PAGE>   16

Premises, as the case may be, and in the case of a partial taking, prospective
rent obligations which are based on square footage shall be adjusted
accordingly. Nothing contained in the foregoing portion of this Article ELEVEN
shall be deemed to prevent the Tenant's making claim for and retaining an award
for the damage to or loss of value of its trade fixtures and such of the
installations made by the Tenant as remain the Tenant's property or from making
claim for and retaining any award which may be made to the Tenant for the
Tenant's moving expenses if, and to the extent that, the award to be claimed and
retained by the Tenant is independent of and does not result in a diminution of
the award, and is not payable out of the award to the Landlord for the taking of
the land, building and the Landlord's other property.

                                 ARTICLE TWELVE
                                MECHANIC'S LIENS

         The Tenant will not permit, during the term hereby granted, any
mechanic's or other lien or order for payment of work, labor, services, or
materials furnished or to be furnished to attach to or affect the Premises or
any portion thereof, and agrees that no such lien or order shall under any
circumstances attach to or affect the fee, leasehold or other estate of the
Landlord herein, or the building. The Tenant's obligation to keep the Premises
in repair, and its right to make alterations therein, if any, shall not be
construed as the consent of the Landlord to the furnishing of any such work,
labor or materials within the meaning of any present or future lien law. Notice
is hereby given that the Tenant has no power, authority or right to do any act
or to make any contract which may create, or be the foundation for, any lien
upon the fee or leasehold estate of the Landlord in the Premises or upon the
land or building of which they are a part or the improvements now erected or
hereafter to be erected upon the Premises or the land, or building of which the
Premises are a part; and if any such mechanic's or other lien or order shall be
filed against the Premises or the land or building of which the Premises are a
part, the Tenant shall, within sixty (60) days thereafter, discharge said lien
or order by payment, deposit or by bond fixed in a proper proceeding according
to law. If the Tenant shall fail to take such action, or shall not cause such
lien or order to be discharged within sixty (60) days after the filing thereof,
the Landlord may, after five (5) days' notice to Tenant, pay the amount of such
lien or discharge the same by deposit or by bond or in any other manner
according to law, and pay any judgment recovered in any action to establish or
foreclose such lien or order, and any amount so paid, together with the expenses
incurred by the Landlord, including all reasonable attorneys' fees and
disbursements incurred in any defense of any such action, bonding or other
proceeding, shall be deemed additional rent. Any reasonable expenses incurred by
the Landlord in connection with the examination of title to the Premises in
order to ascertain the existence of any lien or encumbrance and the discharge of
record thereof, shall be payable by the Tenant to the Landlord on demand,
together with interest as aforesaid as additional rent.

                                ARTICLE THIRTEEN
                                  SUBORDINATION

         (a) Subject to the Tenant obtaining a non-disturbance agreement as
provided in paragraph (d) of this Article THIRTEEN from any existing or future
mortgagee(s) or underlying lessors, this lease, and all the rights of the Tenant
hereunder, are and shall be subject and subordinate to any and all mortgages now
or hereafter liens either in whole or in part on the building, or the land on
which it stands, and also to any and all other mortgages covering other lands or
lands and buildings, which may now or hereafter be consolidated with any
mortgage or mortgages upon the building and the land on which it stands or which
may be consolidated and spread to cover the building and such land and any such
other lands or lands and buildings, and any extension, renewal or modification
of any such mortgages, and to any and all ground or underlying leases which may
now or hereafter affect the buildings or the land on which it stands, and any
extensions, renewals or modifications thereof. This clause shall be
self-operative and no further instrument of subordination (other than the
non-disturbance agreement referred to above and in paragraph (d) below) shall be
required by any ground or underlying lessor or by any mortgagee, affecting any
lease or the building or the land on which it stands. In confirmation of such
subordination, the Tenant shall execute promptly any certificate, in recordable
form, that the Landlord may reasonably request.

                                       12
<PAGE>   17

         (b) The Tenant hereby agrees that, in the event that any mortgagee
shall succeed to the rights of the Landlord, or if any Landlord of any
underlying lease shall succeed to the position of the Landlord under this lease,
then the Tenant will recognize such successor Landlord as the Landlord of this
lease and pay the rent and attorn to and perform the provisions of this lease
for the benefit of any such successor Landlord. No documentation other than this
lease shall be necessary to evidence such attornment but the Tenant agrees to
execute any documents, in recordable form, reasonably requested by the successor
Landlord to confirm such attornment or to otherwise carry out the intent and
purposes of this Article THIRTEEN.

         (c) If, in connection with obtaining financing or refinancing for the
building of which the Premises form a part, a lender shall request modifications
to this lease as a condition to such financing or refinancing, the Tenant will
not unreasonably withhold, delay or defer its consent thereto, provided that
such modifications do not increase the obligations of the Tenant hereunder or
adversely affect the Tenant's leasehold interest. A provision requiring the
Tenant to give notices of any defaults by the Landlord to such lender and/or
permit the curing of such defaults by such lender together with the granting of
such additional time for such curing as may be reasonably required for such
lender to get possession of the building shall not be deemed to increase the
Tenant's obligations or adversely affect the Tenant's leasehold interest. In no
event shall a requirement that the consent (not to be unreasonably withheld) of
any such lender be given for any modification, termination or surrender of this
lease be deemed to materially adversely affect the leasehold interest hereby
created.

         (d) Anything herein to the contrary notwithstanding, the Landlord
represents and warrants to the Tenant that as of the date of this lease there is
no mortgage or superior lease encumbering the Premises. The Landlord, at no cost
to Tenant, shall obtain from any future mortgagee or from any future lessor of
any underlying lease, an agreement to the effect that, so long as no Event of
Default shall at the time have occurred and be continuing hereunder, the Tenant
shall not be made party to any proceeding to foreclose the mortgage or to
terminate the underlying lease; that the Tenant's possession of the Premises
under the term of this lease, shall not be terminated or disturbed as a result
of the foreclosure of any mortgage or termination of any underlying lease; that
such mortgagee or underlying lessor, as the case may be, will recognize the
Tenant as the direct tenant of such mortgagee or lessor on all of the terms and
conditions of this lease subject to the provisions hereinafter set forth;
together with such other terms as are customarily contained in a subordination,
non-disturbance and attornment agreement (any such agreement from a mortgagee or
lessor is called a "Nondisturbance Agreement"). The Tenant agrees it will
execute any agreement consistent with the foregoing provisions which may be
required to confirm the subordination of this lease subject to the
non-disturbance provisions above outlined. In any such agreement the Tenant
shall agree that, in the event that the mortgagee shall succeed to the rights of
the Landlord herein named, or if any landlord of any underlying lease shall
succeed to the position of the Landlord under this lease, then the Tenant will
recognize such successor landlord as the Landlord of this lease and pay the rent
and attorn to and perform the provisions of this lease for the benefit of any
such successor Landlord.

         (e) Any Nondisturbance Agreement may be made on the condition that, and
the Tenant hereby agrees that, neither the mortgagee nor the lessor, as the case
may be, nor anyone claiming by, through or under such mortgagee or lessor, as
the case may be, including a purchaser at a foreclosure sale, shall be:

         (i) liable for any previous act or omission of the Landlord under this
lease, except to the extent that a default continues after the date of
foreclosure or purchase of the Premises (in which case such default shall be
deemed to have occurred on the date of transfer of title to the Premises); or

         (ii) subject to any credit, claim, counterclaim, demand, defense or
offset that previously accrued to the Tenant against the Landlord under the
lease; or

         (iii) bound by any previous modification of this lease (after notice to
Tenant of the existence of such mortgage or underlying lease), or by any
previous prepayment of rent for a period greater than one month, unless such
modification or prepayment shall have been expressly approved in

                                       13
<PAGE>   18

writing by any lessor or any mortgagee who shall have succeeded to the rights of
the Landlord under this lease; or

         (iv) obligated to perform any alteration or improvements of the
Premises not expressly required under this lease; or

         (v) be responsible for (1) the performance or completion of any
construction work to be performed by the Landlord under the lease, or (2) any
reimbursement or payment required by the Landlord to the Tenant or its designees
pursuant to the Lease on account of work performed by, or for the account of,
the Tenant; or

         (vi) be liable for the repayment of any monies owed by the Landlord to
the Tenant; or

         (vii) have any obligation with respect to any security deposited under
the lease unless and to the extent such security shall have been transferred to
the mortgagee or lessor, as the case may be, or anyone claiming by, through or
under such party.

         (f) The provisions of paragraph (e) shall not be deemed to vitiate the
obligations of any mortgagee or lender succeeding to the Landlord's obligations
hereunder from and after the date such party succeeds to the Landlord's interest
under this lease.

                                ARTICLE FOURTEEN
                            CERTIFICATE OF OCCUPANCY

         (a) A true copy of the Certificate of Occupancy of the building is
annexed hereto as EXHIBIT B.

         (b) The Tenant shall immediately discontinue any use of the Premises,
which may, at any time, be claimed or declared by the City or State of New York
or other governmental authority to be in violation of or contrary to the
Certificate of Occupancy of the building, or by reason of which any attempt may
be made to penalize the Landlord or require the Landlord to secure any
Certificate of Occupancy other than the one, if any, now issued for the
building.

                                 ARTICLE FIFTEEN
                                     VAULTS

         Notwithstanding anything herein contained, or shown on any sketch, plan
or schedule hereto attached, to the contrary, if any vault space forms a part of
the Premises, or adjoins the same, or any part or portion of the Premises is not
within the property line of the building or Premises, and if the use of the said
space shall hereafter be prevented or curtailed by exercise of any governmental
authority, the Tenant shall have no claim whatever upon the Landlord for the
loss of such space, by any abatement of the rent, or otherwise, nor shall the
Tenant be relieved from any obligations under this lease, and the Landlord's
covenant of quiet enjoyment hereinafter contained, shall not be deemed to apply
to any such space. The Landlord makes no representation as to the location of
the property line of the building. The Tenant shall reimburse the Landlord for
the vault charge or tax, if any, imposed by the City of New York in respect of
any such vault space.

                                 ARTICLE SIXTEEN
                             FIRE AND OTHER CASUALTY

         (a) If the Premises shall be damaged by fire, action of the elements or
other casualty or cause which is within the risks covered by standard fire and
extended coverage insurance, the Tenant shall give immediate notice thereof to
the Landlord, and said damage shall be repaired by the Landlord, at the
Landlord's expense, with all reasonable speed, making due allowance for delay
due to labor troubles, settlement of loss and other causes beyond the control of
the Landlord, and the Tenant shall, in every reasonable way, facilitate the
making of such repairs, and the rent shall be suspended

                                       14
<PAGE>   19

during such period as the Premises shall have been rendered wholly untenantable
until five (5) days after the Landlord notifies the Tenant that the Premises are
substantially ready for the Tenant's occupancy (or the Premises are sooner
occupied by the Tenant) and, in the event that the Premises are rendered
partially untenantable, the rent shall be abated during such period, in the
proportion which the area of the Premises which is rendered untenantable bears
to the area of the whole Premises. In addition to the foregoing rental
abatement, provided that (i) Tenant promptly commences and diligently prosecutes
such alterations to the Premises as are necessary for Tenant to recommence
operations within the Premises, and (ii) Landlord continues to be reimbursed by
Landlord's insurance company for its rental loss, then Tenant shall be entitled
to a further abatement of rent during Tenant's refixturing of the Premises,
which abatement shall be coextensive with the rental loss reimbursement received
by Landlord from Landlord's insurance company. The decision of Landlord's
insurance company shall be conclusive and Landlord shall have no obligation to
contest the same, by litigation or otherwise. No damage to the Premises or the
building by fire, or other cause, however extensive, shall terminate this lease,
or give the Tenant the right to quit and surrender the Premises, or impair any
obligations of the Tenant hereunder, except with respect to the payment of rent
(and with respect thereto to the extent above provided) and except that (i) if
the damage shall be so extensive that the Landlord shall determine to demolish
or substantially alter the building, whether or not the Premises are affected,
the Landlord may at any time within one hundred twenty (120) days following the
occurrence of the damage give to the Tenant thirty (30) days' notice of
intention to terminate this lease; (ii) if the damage to the Premises is
substantial so that the whole or substantially the whole of the Premises is
rendered untenantable by the Tenant or if 50% or more of the common areas of the
building are destroyed or substantially damaged and the Landlord does not within
60 days following the occurrence of the damage notify the Tenant of the
Landlord's intention to repair the damage to the Premises so that the Premises
are again useable by the Tenant within a period of not more than 180 days
following the occurrence of the damage subject to delays due to settlement of
loss or causes of the kinds described in Article THIRTY-FOUR of this lease, the
Tenant may cancel this lease by notice given within 10 days following the
expiration of the said 60-day period for the Landlord's notice of election to
repair, time being of the essence; (iii) if the Landlord has given notice of its
intention to restore the Premises, but fails to substantially complete such
restoration within 180 days following the occurrence of the damage, subject to
delays due to settlement of loss or delays of the kind described in Article
THIRTY-FOUR of this lease, the Tenant may cancel this lease by notice given
within 10 days following the expiration of the said 180-day period, time being
of the essence; and (iv) in the event of the occurrence of damage to the
Premises of the degree described above in clause (ii) of this paragraph (a), the
Landlord may also elect to terminate this lease by notice of election to do so
given within 60 days following the occurrence of the damage. If notice of
election to terminate this lease shall be given as above provided, then, upon
the date for termination designated in any such notice, this lease and the term
hereby granted shall terminate and the rent shall be apportioned as of the date
of the damage or as of such later date as the Tenant may actually surrender
possession. Nothing herein contained shall be deemed to obligate the Landlord to
restore the Tenant's trade fixtures, equipment, stocks, furnishings,
improvements or other property remaining the property of the Tenant. The Tenant
acknowledges that the Landlord will not carry insurance on the Tenant's
furniture or any fixtures or equipment, improvements or appurtenances removable
by Tenant and agrees that the Landlord will not be obligated to repair any
damage thereto or replace the same. The Tenant hereby waives the provisions of
Section 227 of the Real Property Law and agrees that the provisions of this
Article SIXTEEN shall govern and control in lieu thereof.

         (b) The Tenant shall conduct its business and use the Premises in such
a manner and so as not to increase the rate of fire insurance applicable to the
building or any property located therein over the rates in effect prior to the
commencement of the Tenant's occupancy, and the Tenant shall install and
maintain all its furniture, fixtures, equipment, stocks and materials in such a
manner as to accomplish the foregoing purposes. The Tenant further agrees not to
permit any act to be done or anything brought into or kept upon the Premises
which will void or avoid the insurer's liability under any contract of fire
insurance on the building or its contents. Should the fire insurance rate on the
building be increased beyond the present rate, by reason of the Tenant's
occupancy or character of its business, or the Tenant's failure to comply with
the terms hereof, the Tenant agrees to pay to the Landlord, on demand, the
additional cost of such insurance, or, at the option of the Landlord, the same
may be added to any installment of rent and be payable as additional rent. The

                                       15
<PAGE>   20

schedule of the makeup of a rate issued by an authorized rating organization
shall be conclusive evidence of the facts therein stated and of the items in the
rate applicable to the Premises.

         (c) The Landlord, as to the Premises, and the Tenant, as to the
improvements made therein at the Tenant's expense and all of the Tenant's stock,
trade fixtures and other property in the Premises shall each 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, the Landlord and the Tenant each hereby release one another or
any one claiming through or under each of them by way of subrogation or
otherwise from all liability for any loss or damage caused by fire or any of the
risks enumerated in standard extended coverage insurance. This 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, and also provided that such a policy can be obtained without
additional premiums. The Landlord and Tenant agree that their respective
insurance policies will include the aforesaid clause so long as the same is
obtainable without extra cost or if extra cost be charged, so long as the party
for whose benefit the clause is obtained shall pay such extra cost. If extra
cost shall be chargeable therefor the party so affected shall advise the other
thereof, of the amount of the extra cost and the other party at its election may
pay the same or decline to so pay, in which event the release from liability
given to said party by this Article SIXTEEN shall be deemed to be withdrawn and
of no force and effect.

         (d) The Landlord shall keep in full force and effect a policy of
insurance against loss or damage by fire and such other risks and hazards as are
insurable under standard forms of "all risk" insurance policies, with extended
coverage, covering the building, in an amount sufficient to avoid the effects of
co-insurance, in such amounts as the Landlord, acting reasonably, may deem
appropriate.

         (e) If notwithstanding the recovery of insurance proceeds by the Tenant
for loss, damage or destruction to its property, the Landlord is liable to the
Tenant with respect thereto or is obligated under this lease to repair or
restore such damage to Tenant's property, the amount of the net proceeds paid to
the Tenant shall either be offset against the Landlord's liability to the
Tenant, or shall be made available to the Landlord to pay for the cost of such
repair or restoration.

                                ARTICLE SEVENTEEN
              CHANGE IN USE OF PREMISES, SUBLETTING AND ASSIGNMENT

         (a) The use to be made of the Premises by the Tenant and the identity
of the Tenant being among the inducements to the making of this lease by the
Landlord, the Tenant shall not (except as otherwise permitted herein), without
first having obtained the Landlord's prior written consent thereto, and
otherwise in accordance with the terms of this lease, (i) sublet or underlet, or
permit the subletting or underletting of the Premises or any part thereof; (ii)
assign or transfer, by operation of law or transfer of stock or otherwise, this
lease or any interest therein; (iii) use or permit the Premises or any part
thereof to be used for any purposes other than those specified in the lease;
(iv) permit the Premises or any part thereof to be occupied by anyone other than
the Tenant or its officers or employees; or (v) mortgage or encumber this lease
or any interest therein.

         (b) If the Tenant shall desire to assign this lease or to sublet the
Premises, in whole or in part, the Tenant shall send to the Landlord a written
notice (the "Tenant's Notice") stating (i) the action which the Tenant proposes;
(ii) the portion of the Premises with respect to which the Tenant proposes to
take such action (the "Affected Premises"); (iii) the principal terms and
conditions of the desired assignment or subletting, including without
limitation, the rent payable, the proposed commencement and expiration dates of
the terms of the desired subletting, or the effective date of the desired
assignment; and (iv) such other information as the Landlord shall reasonably
request. The Tenant's Notice shall also contain a statement directing the
Landlord's attention to the provisions of Article SEVENTEEN (c) of the lease.

                                       16
<PAGE>   21

         (c) Within sixty (60) days after receipt of Tenant's Notice which
contains all the information required in paragraph (b) above, the Landlord shall
notify the Tenant (the "Landlord's Notice") whether it elects to (i) terminate
the lease in its entirety, if the desired transaction is an assignment of lease
or a subletting of all or substantially all of the Premises or (ii) terminate
the lease as to the Affected Premises only if the desired transaction is a
subletting of less than substantially all of the Premises. For purposes of this
Article SEVENTEEN, a Tenant shall be deemed to be subletting "substantially all
of the Premises" if the Affected Premises constitutes seventy five (75%) percent
or more of the rentable square footage of the Premises. Landlord's recapture
rights specified above shall not apply (y) to any subletting of five years or
less (unless such term exceeds 75% of the remaining term of this lease), or (z)
to any subletting where the subtenant's space is not separately demised (this
does not include sublettings of all or substantially all of Tenant's space on a
given floor), provided in either case that Tenant is subletting not more than
one third of the total rentable area of the Premises.

         (d) If the Landlord exercises the option set forth in paragraph (c) (i)
above to terminate this lease in its entirety, then (i) the term of this lease
shall end and expire with respect to the entire Premises on the ninetieth (90th)
day following the date of Landlord's Notice and (ii) the Tenant shall surrender
the entire Premises to the Landlord on such date, in the same manner and
condition as is required by this lease, as if such date were the Expiration Date
set forth in this lease, and (iii) fixed rent and additional rent shall be
apportioned as of such expiration date. Instead of terminating the lease, the
Landlord may, at its option, elect to have the Tenant assign all of its right,
title and interest in and to this lease to the Landlord, such assignment to be
effective as of the date such lease termination would be effective and otherwise
on the terms and conditions set forth in this paragraph (d). Upon such
assignment, the Tenant shall be relieved of all liability accruing under this
lease after the effective date of such assignment, and the Landlord may
thereafter further assign this lease or sublet all or part of the Premises to
any party and the Tenant shall have no right to any proceeds derived from such
assignment or subletting. In no event shall the provisions of this paragraph (d)
relieve the Tenant of any obligations which accrued prior to the termination of
this lease or the assignment to the Landlord, as the case may be.

         (e) If the Landlord exercises the option set forth in paragraph (c)(ii)
above to terminate the lease with respect to the Affected Premises, then (i) the
term of this lease shall end and expire with respect to the Affected Premises on
the ninetieth (90th) day following the date of the Landlord's Notice and (ii)
the Tenant shall surrender the Affected Premises to the Landlord on such date,
in the same manner and condition as is required by this lease, as if such date
were the Expiration Date set forth in this lease and (iii) fixed rent and
additional rent with respect to the Affected Premises shall be apportioned as of
such Expiration Date and the Tenant's prospective rent obligations which are
based on square footage (including, without limitation, fixed rent and
additional rent payable pursuant to Article THIRTY of this lease) shall be
reduced accordingly, and (iv) at the Landlord's election, either the Landlord,
at the Tenant's expense, or the Tenant, at its own expense, shall erect the
partitioning required to separate the Affected Premises from the remainder of
the Premises, create any doors required to provide an independent means of
access to the Affected Premises from elevators and lavatories and segregate the
wiring and meters and electric current facilities, so that the Affected Premises
may be used as a unit for commercial purposes, separate from the remainder of
the Premises. If the remaining Premises contain the core lavatories, the
occupant of the Affected Premises shall have the right to use such lavatories in
common with the Tenant. If the Tenant performs such work, it shall commence such
work promptly upon receipt of Landlord's Notice and shall proceed to complete
such work in a diligent and workmanlike manner. Instead of terminating the lease
with respect to the Affected Premises, the Landlord may, at its option, elect to
have the Tenant assign all of its right, title and interest with respect to the
Affected Premises to the Landlord, such assignment to be effective as of the
date such lease termination would be effective and otherwise on the terms and
conditions set forth in this paragraph (e). Upon the assignment of the lease to
the Landlord with respect to the Affected Premises, the Landlord may further
assign the lease or sublet all or part of the Affected Premises to any party and
the Tenant shall have no right to any proceeds derived from such assignment or
subletting. In no event shall the provisions of this paragraph (e) relieve the
Tenant of any obligations with respect to the Affected Premises which accrued
with respect to the Affected Premises prior to the termination of the lease or
the assignment to the Landlord, as the case may be.

                                       17
<PAGE>   22

         (f) In the event the Landlord does not elect either of the alternatives
set forth in paragraph (c) (i) or (ii) above, or in the event the Landlord fails
to timely deliver the Landlord's Notice, the Landlord agrees not to unreasonably
withhold or delay its consent to any proposed assignment or subletting,
provided, however, that the Landlord shall have the right to condition its
consent to any proposed assignment or sublease on the following:

         (1) No Event of Default shall have theretofore occurred and be
         continuing under this lease beyond any applicable notice or cure
         period.

         (2) The Tenant shall have delivered to the Landlord the Tenant's Notice
         as required by paragraph (b) above.

         (3) With respect to a sublease, the Tenant shall collaterally assign to
         the Landlord, and grant the Landlord a security interest in, the
         sublease and the rents payable thereunder and shall take all necessary
         steps required to perfect such assignment and security interest.

         (4) The sublease shall include provisions to the effect that (i) if the
         Landlord shall notify the sublessee that the Tenant is in default in
         the payment of rent or in the performance of its other obligations
         under this lease, the subtenant shall, if so requested by the Landlord,
         pay all rent and other amounts due under the sublease directly to the
         Landlord, (ii) notwithstanding any such payment by the subtenant
         directly to the Landlord, the term of the sublease shall terminate
         simultaneously with the termination of the term of this lease and the
         subtenant shall surrender the subleased premises upon such termination,
         (iii) the sublease shall be subject and subordinate to this lease and
         to all matters to which this lease is or shall be subordinate, and (iv)
         any act or omission by the subtenant which, if performed by the Tenant
         would constitute an Event of Default under the lease, shall also
         constitute an Event of Default under the sublease provided notice
         thereof shall have been provided to the Tenant named herein.

         (5) The proposed subtenant or assignee shall have a financial standing,
         be of a character, be engaged in a business, and propose to use the
         Premises in a manner, which in the Landlord's reasonable judgment, is
         in keeping with the Landlord's standards in such respect of the other
         office tenancies in the building. The parties acknowledge that the
         Landlord, as a religious institution, may have special considerations
         in determining if the business or proposed use of a proposed subtenant
         or assignee is objectionable, and the parties agree that the Landlord's
         judgment in such matters shall be conclusive.

         (6) The proposed assignee or subtenant shall not then be a tenant,
         subtenant or assignee of any space in the building or any other
         building then owned, directly or indirectly, by the Landlord, provided
         that Landlord then has comparable space available in any of its
         buildings, nor shall the proposed subtenant or assignee be a person or
         entity with whom the Landlord is then negotiating to lease space in the
         building or any other building then owned, directly or indirectly, by
         the Landlord.

         (7) The Premises shall not, without the Landlord's prior consent, have
         been publicly advertised (but may be listed with brokers) for
         subletting at a rental rate less than the prevailing asking rental rate
         then set by the Landlord for comparable space in the building, and if
         no comparable space is then available, at the prevailing rental rate
         set by the Landlord.

         (8) The character of the business to be conducted or the proposed use
         of the Premises by the proposed assignee or subtenant shall not (i) be
         likely to increase the Landlord's operating expenses beyond that which
         would be incurred for use by the Tenant or for use in accordance with
         the standards of use of other tenancies in the

                                       18
<PAGE>   23

         building, (ii) materially increase the burden on elevators over the
         burden prior to such proposed assignment or subletting, (iii)
         unreasonably interfere with the use and enjoyment by other tenants in
         the building of their premises, or (iv) violate or be likely to violate
         any provisions or restrictions contained herein relating to the use or
         occupancy of the Premises.

         (9) Any proposed sublease shall provide that in the event of the
         termination of this lease, or the re-entry or dispossession of the
         Tenant by the Landlord under this lease, such subtenant shall, at the
         Landlord's option, attorn to the Landlord as its sublessor pursuant to
         the then applicable terms of such sublease for the remaining term
         thereof, except that the Landlord shall not be (i) liable for any
         previous act or omission of Tenant as sublessor under such sublease,
         (ii) subject to any offset which theretofore accrued to such subtenant
         against the Tenant, (iii) bound by any modification of such sublease
         not consented to in writing by the Landlord or by any prepayment of
         rent more than one month in advance, (iv) bound to return such
         subtenant's security deposit until it has come into its actual
         possession and the subtenant would be entitled to its return pursuant
         to the terms of the sublease, and (v) bound by any obligation to make
         any payment to any subtenant or perform any work in the Premises.

         (10) The proposed assignee or subtenant is not entitled, directly or
         indirectly, to diplomatic or sovereign immunity, and/or is subject to
         the service or process in, and the jurisdiction of the courts of New
         York.

         (11) At any time during the term of the lease, there shall be no more
         than three (3) occupants in the Premises on any floor where Tenant has
         leased half or more than half of the rentable area of such floor, or
         two (2) occupants in the Premises on any floor where Tenant has leased
         less than half the rentable area of such floor, in both such cases,
         "occupants" includes Tenant if Tenant is actually occupying any portion
         of such floor.

         (12) The subletting shall end no later than one (1) day before the
         Expiration Date and shall be for a term of no less than two (2) years,
         unless it commences less than two (2) years before the Expiration Date
         of the term.

         (13) Intentionally omitted.

         (14) The assignee shall assume, in writing, all obligations of the
         Tenant under this lease from and after the date of such assignment.

         (15) A fully executed counterpart of the assignment or sublease shall
         be delivered to the Landlord within five (5) days after execution
         thereof.

         (g) In the event the Landlord waives its rights set forth in paragraph
(c) (i) and (ii) above, or consents to any assignment or subletting pursuant to
this Article SEVENTEEN, and the Tenant fails to execute and deliver an
assignment or sublease document, as approved by the Landlord, within six (6)
months after the date of Landlord's Notice, then the Tenant shall again comply
with all of the requirements of this Article SEVENTEEN before assigning its
interest in this lease, or subletting all or part of the Premises, respectively.

         (h) The Tenant shall pay all of the reasonable Landlord's costs
(including, without limitation, attorneys' fees and expenses) related to the
Landlord's review of a proposed sublease or assignment and the preparation,
review and approval of any assignment of rents, financing statement and other
documents related to such sublease or assignment, irrespective of whether
consent is granted or the transaction is ultimately consummated. The Tenant
shall also pay the cost of recording or filing any assignment of rents and
financing statements.

                                       19
<PAGE>   24

         (i) Provided no Event of Default shall have theretofore occurred and be
continuing under this lease beyond any applicable notice or cure period, the
Tenant named herein is authorized to (1) assign the lease to any entity
succeeding to the business and assets of the Tenant, whether by way of merger or
consolidation or by way of acquisition of all or substantially all of the assets
of the Tenant, provided that the acquiring entity shall have assumed in writing
the Tenant's obligations under this lease; or (2) to sublease all or a portion
of the Premises or assign the lease to an entity which shall (x) control, (y) be
under the control of, or (z) be under common control with the Tenant (an entity
described in (x), (y) or (z) being a "Related Entity"). "Control" shall mean
direct or indirect ownership of more than fifty percent (50%) of each class of
stock which is authorized to vote of a corporation or other majority equity and
control interest if not a corporation, or the possession, directly or
indirectly, of power to direct or cause the direction of the management and
policy of such corporation or other entity, whether through the ownership of
voting securities, by statute or according to the provisions of a contract. Upon
making a sublease or assignment to any Related Entity, the Tenant shall notify
the Landlord and certify to the Landlord the manner in which such Related Entity
is related to the Tenant and the purposes for which the Premises will be used.
Any subletting or assignment described in this paragraph (i) shall be on notice
to Landlord but shall not require the prior written consent of the Landlord and
may only be made on the condition that (a) the subtenant or assignee shall
continue to use the Premises for executive and general offices (except for the
Basement Space, which shall only be used for the specific purpose set forth
herein), and (ii) the principal purpose of such sublease or assignment is not
the acquisition of the Tenant's interest in this lease, or to circumvent the
provisions of paragraph (a) of this Article SEVENTEEN. In the event of an
assignment pursuant to the provisions of clause (1) of this paragraph (i), the
successor entity, after giving effect to such merger, consolidation or
acquisition, shall have a tangible net worth, exclusive of good will, computed
in accordance with generally accepted accounting principles ("Net Worth") at
least equal to the Net Worth of the Tenant as of the date of this lease. The
provisions of paragraph (c) of this Article and the provisions of paragraph (k)
of this Article shall not apply to a subleasing or assignment made pursuant to
the provisions of this paragraph (i).

         (j) For purposes of this Article SEVENTEEN, an "assignment" shall be
deemed to include, whether occurring at one time or over a period of time
through a series of transfers, a sale or transfer of fifty (50%) percent or more
of beneficial interest in the Tenant (whether stock, partnership or otherwise),
or of any guarantor of the Tenant's obligations under this lease, or the
issuance of additional stock where the issuance of such additional stock will
result in a change of "control" (as defined in paragraph (i)) in the Tenant or
guarantor, if applicable. The transfer of shares or issuance of additional stock
of the Tenant or any guarantor for purposes of this Article SEVENTEEN shall not
include the sale of shares by persons other than those deemed "insiders" within
the meaning of the Securities and Exchange Act of 1934, as amended, which sale
is effected through the "over-the-counter market" or through any nationally
recognized exchange.

         (k) In the event the Landlord, in its sole discretion, authorizes the
Tenant to assign the lease or to sublet all or a portion of the Premises (other
than an assignment or subleasing authorized by paragraph (i) above), the Tenant
named herein shall pay to the Landlord, monthly, as additional rent, 50% of all
Tenant's Profit. "Tenant's Profit" shall mean all consideration received by the
Tenant (other than rental or consideration received by the Tenant under a
sublease or assignment entered into pursuant to paragraph (i) of this Article),
less (i) the rent, payable by the Tenant under this lease for the period in
question (exclusive of any amount payable by the Tenant under this subparagraph
(k)), such rent to be pro-rated if less than all of the Premises are sublet,
(ii) any brokerage commissions (not exceeding 110% of those set forth in
Landlord's brokerage commission schedule as published from time to time) and
reasonable legal fees paid by the Tenant in connection with such subletting or
assignment, (iii) any sums payable by the Tenant to the Landlord pursuant to the
provisions of paragraph (h) of this Article, (iv) any payments made by the
Tenant in connection with
         the assignment of its interest in this lease pursuant to Article 31-B
of the Tax Law of the State of New York or any real property transfer tax of the
United States or the City or State of New York (other than income taxes), (v)
free rent granted to the assignee or subtenant, and (vi) the cost of work or
alterations or payment therefor to separate the subleased space from the balance
of the Premises or to prepare the Affected Premises for the assignee's or
subtenant's occupancy. In the case of a sublease, the expenses set forth in (ii)
and (iii) shall be amortized on a straight-line basis over the term of the
sublease. In the case of an assignment, if the consideration to be paid to the
Tenant shall

                                       20
<PAGE>   25

be paid in installments, the expenses set forth in (ii) through (iv) shall be
amortized over the period during which the installments are to be paid.

         (l) No consent given by the Landlord shall be deemed to permit any act
except the act to which it specifically refers, or to render unnecessary any
subsequent consent, and any assignment or subletting of the Premises shall not
relieve the Tenant or any mesne assignee from any obligations, duty or covenant
under this lease. No assignment, transfer, mortgage, encumbrance, subletting or
arrangement in respect of the occupancy of the Premises shall create any right
in the assignee, transferee, mortgagee, subtenant or occupant, unless the
consent of the Landlord shall first have been obtained, in accordance with the
provisions of this Article SEVENTEEN (except as provided in paragraph (i)
above). Any assignee by accepting an assignment shall nevertheless be
conclusively deemed to have assumed this lease and all obligations already
accrued or to accrue thereunder and further to have agreed to fully and duly
perform all the Tenant's covenants herein contained. If the Tenant shall, at any
time, be in default in the payment of rent, the Landlord shall have the right to
collect rent from any assignee or subtenant, and credit the same to the account
of the Tenant, and no such collection shall constitute a waiver of the foregoing
covenant or the acceptance of anyone other than the Tenant, as tenant, or shall
otherwise release, impair or otherwise affect any obligation of the Tenant under
this lease.

         (m) The Tenant shall remain fully liable for the performance of all of
the Tenant's obligations hereunder notwithstanding anything provided for herein,
and without limiting the generality of the foregoing, shall remain fully
responsible and liable to the Landlord for all acts and omissions of any
subtenant or assignee or anyone claiming under or through any such person which
shall be in violation of any of the obligations of this lease and any such
violation shall be deemed to be a violation by the Tenant. Provided that the
Tenant named herein shall have provided Landlord with an address for notices, if
such address is different from the Premises, Landlord shall send copies of any
default notices given to an assignee or subtenant to the Tenant named herein,
and the Tenant named herein shall have the same cure period with respect to such
default as provided herein with respect to Tenant's own defaults. Landlord may
not terminate this lease for a default of an assignee or subtenant until the
Tenant named herein is given copies of such default notices and the cure period
to cure such default shall have expired. Upon any termination of this lease, it
is expressly agreed that the Tenant shall deliver to the Landlord all subleases,
security deposits (including interest), contracts, documents, rent rolls and
other records used in the operation of the Premises and, unless the sublease
shall have previously terminated and the security deposit returned to subtenant
or applied as provided by the sublease, all security deposits held by the
Tenant.

         (n) With respect to any present or future subleases, the Tenant shall
not accept prepayment of rent prior to its due date in excess of one month (but
the provisions of the foregoing shall not prohibit the Tenant from collecting
from any subtenant a security deposit provided such security deposit is
delineated in the sublease as being not advance rent, but security, returnable
to the subtenant after the termination of the term of the sublease). The Tenant
agrees to indemnify and save the Landlord harmless from and against any claim or
lien against the Landlord or the Premises for the return of any security under
any subleases with a subtenant which was not previously delivered to the
Landlord and agrees further that all subleases hereafter made with subtenants
shall provide that the lease security deposited by the subtenant shall not be a
lien or claim against the interest of the Landlord.

         (o) (i) If the Tenant assumes this lease and proposes to assign the
same pursuant to the provisions of 11 U.S.C. Section 101 et. seq (the
"Bankruptcy Code") to any person or entity who shall have made a bona fide offer
to accept an assignment of this lease on terms acceptable to the Tenant, then
notice of such proposed assignment shall be given to the Landlord by the Tenant
no later than twenty (20) days after receipt by the Tenant of such bona fide
offer, but in any event no later than ten (10) days prior to the date that the
Tenant shall make application to a court of competent jurisdiction for authority
and approval to enter into such assignment and assumption. Such notice shall set
forth (x) the name and address of such person, (y) all of the terms and
conditions of such offer, and (z) adequate assurance of future performance by
such person under this lease, including, without limitation, the assurance
referred to in Section 365 (b)(3) of the Bankruptcy Code. The Landlord shall
have the prior right and option, to be exercised by notice to the Tenant

                                       21
<PAGE>   26

given at any time prior to the effective date of such proposed assignment, to
accept an assignment of this lease upon the same terms and conditions and for
the same consideration, if any, as the bona fide offer made by such person, less
any brokerage commission which would be payable in connection with such
assignment.

         (ii) The term "adequate assurance of future performance" as used in
this lease shall mean that any proposed assignee shall, among other things: (a)
deposit with the Landlord on the assumption of this lease an amount equal to the
then-fixed rent and additional rent as security for the faithful performance and
observance by such assignee of the terms and obligations of this lease, which
sum shall be held in accordance with the provisions of Article TWENTY-NINE
hereof; (b) furnish the Landlord with financial statements of such assignee for
the prior three (3) fiscal years, as finally determined after an audit and
certified as correct by a certified public accountant, which financial
statements shall show a Net Worth of at least two (2) times the Net Worth of the
Tenant named herein as of the date of this lease for each of such three (3)
years; (c) grant to the Landlord a security interest in such property of the
proposed assignee as the Landlord shall deem necessary to secure such assignee's
future performance under this lease; and (d) provide such other information or
take such action as the Landlord, in its reasonable judgment, shall determine is
necessary to provide adequate assurance of the performance by such assignee of
its obligations under this lease.

         (p) Notwithstanding anything to the contrary contained herein, no
assignment or subletting by the Tenant, nor any other transfer or vesting of the
Tenant's interest hereunder (whether by merger, operation of law or otherwise),
shall be permitted if the proposed assignment or sublease (i) provides for a
rental or other payment for the leasing, use, occupancy or utilization of all or
any part of the Premises based, in whole or in part, on the income or profits
derived by any person from the property so leased, used, occupied or utilized
other than an amount based on a fixed percentage or percentages of gross
receipts or sales or (ii) does not provide that such assignee or subtenant shall
not enter into any lease, sublease, license, concession or other agreement for
the use, occupancy or utilization of all or any portion of the Premises which
provides for a rental or other payment for such use, occupancy or utilization
based, in whole or in part, on the income or profits derived by any person from
the property so leased, used, occupied or utilized other than an amount based on
a fixed percentage or percentages of gross receipts or sales.

                                       22
<PAGE>   27

                                ARTICLE EIGHTEEN
                    WAIVER AND SURRENDER; REMEDIES CUMULATIVE

         No consent or waiver of any provision hereof or acceptance of any
surrender shall be implied from any act or forbearance by the Landlord. No
agreement purporting to accept a surrender of this lease, or to modify, alter,
amend or waive any term or provision thereof, shall have any effect or validity
whatever, unless the same shall be in writing, and executed by the Landlord and
by the Tenant (or, in the case of a waiver, by the party waiving such term or
provision), and be duly delivered, nor shall the delivery of any keys to anyone
have any legal effect, any rule or provision of law to the contrary
notwithstanding. Any consent, waiver or acceptance of surrender, in writing, and
properly executed and delivered as aforesaid, shall be limited to the special
instance for which it is given, and no superintendent or employee, other than an
officer of the Landlord or of its managing agent, and no renting representative
shall have any authority to accept a surrender of the Premises, or to make any
agreement or modification of this lease, or any of the terms and provisions
hereof. No provision of any lease made by the Landlord to any other tenant of
the building shall be taken into consideration in any manner whatever in
determining the rights of the Tenant herein. No payment by the Tenant or receipt
by the Landlord of a lesser amount than the monthly rent herein stipulated shall
be deemed to be other than on account of the stipulated rent, nor shall any
endorsement on any check, nor any letter accompanying any such payment of rent
be deemed an accord and satisfaction (unless an agreement to accept a lesser
amount be signed by the Landlord), but the Landlord may accept such payment
without prejudice to the Landlord's full right to recover the balance of such
rent and to institute summary proceedings therefor. If the Tenant is in arrears
in the payment of fixed rent or additional rent or any other sum which may
become payable under this lease, the Tenant waives its right, if any, to
designate the items in arrears against which any payments made by Tenant are to
be credited and Landlord may apply any of such payments to any such items in
arrears as the Landlord, in its sole discretion, shall determine, irrespective
of any such designation or request by the Tenant as to the items against which
any such payments shall be credited. The receipt by the Landlord of any fixed
rent, or additional rent or of any other sum of money which may be payable under
this lease, or of any portion thereof, shall not be deemed a waiver of the right
of the Landlord to enforce the payment of any sum of any kind previously due or
which may thereafter become due under this lease, or of the right to forfeit
this lease by such remedies as may be appropriate, or to terminate this lease or
to exercise any of the rights and remedies reserved to the Landlord hereunder,
and the failure of the Landlord to enforce any covenant or condition (although
the Tenant shall have repeatedly or continuously broken the same without
objection from the Landlord) shall not estop the Landlord at any time from
taking any action with respect to such breach which may be authorized by this
lease, or by law, or from enforcing said covenant or any other covenant or
condition on the occasion of any subsequent breach or default. The various
rights, remedies, powers and elections of the Landlord, as provided in this
lease or created by law, are cumulative, and none of them shall be deemed to be
exclusive of the others, or of such other rights, remedies, powers or elections
as are now or may hereafter be conferred upon the Landlord by law or equity.

                                ARTICLE NINETEEN
                       NO REPRESENTATIONS AS TO PREMISES,
                        CERTIFICATE OF OCCUPANCY AND USE

         The Tenant represents to the Landlord that the Tenant has made, or
caused to be made, a careful inspection of the Premises and that the Tenant has
made an examination of the certificate of occupancy of the building and that the
area and present condition of the Premises are in all respects satisfactory to
the Tenant, except (if at all) as may herein otherwise be expressly stated in
the Work Sheet (Exhibit C) annexed hereto. The Tenant acknowledges that no
representations or promises have been made by the Landlord or the Landlord's
agents with respect to the Premises or the building or the Certificate of
Occupancy thereof, except as in this lease set forth, and no rights, easements
or licenses are acquired by the Tenant except as expressly set forth herein. The
statements contained in this lease regarding the use of the Premises by the
Tenant shall not be deemed a representation or warranty by the Landlord that
such use is lawful or permitted by the Certificate of Occupancy of the building.

                                       23
<PAGE>   28

                                 ARTICLE TWENTY
                       LIMITATION OF LANDLORD'S LIABILITY

         (a) The Tenant shall make no claim upon the Landlord for abatement of
rent, constructive eviction, rescission, or otherwise, and the Landlord shall be
exempt from all liability, except for injuries to the Tenant's person or
property which are due to the negligence of the Landlord, its agents, servants
or employees in the management of the Premises or the real property of which the
Premises are a part, for or on account of any annoyance, inconvenience,
interference with business, or other damage, caused by: (i) any interruption,
malfunction or curtailment of the operation of the elevator service, heating
plant, sprinkler system, gas, water, sewer or steam supply, plumbing, machinery,
electric equipment or other appurtenances, facilities, equipment and
conveniences in the building, whether such interruption, malfunction or
curtailment be due to breakdowns, or repairs, or strikes or inability to obtain
electricity, fuel or water due to any such cause or any other cause beyond the
Landlord's control; (ii) any work of repair, alteration, renovation or
replacement done by or on behalf of the Landlord or any other tenant; (iii) any
water, rain, snow, steam, gas, electricity or other element, which may enter,
flow from or into the Premises or any part of the building, or any noise or
vibration audible in, or transmitted to the Premises; (iv) any vermin; (v) any
falling paint, plaster or cement; (vi) any interference with light or with other
easements or incorporeal hereditaments; (vii) any latent defect or deterioration
in the building or the appurtenances thereof, whether or not the Landlord shall
have been notified of any condition allegedly causing same; (viii) any zoning
ordinance or other acts of governmental or public authority now or hereafter in
force; and (ix) any act or omission of any other occupant of the building or
other person temporarily therein. The Tenant will not hold the Landlord liable
for any loss or theft of, or damage to, any property in the Premises done or
caused by any employee, servant, or agent of the Landlord who is invited into
the Premises by the Tenant for purposes outside the normal scope of such
employee's, servant's or agent's duties, nor for the loss, damage or theft of
any property stored or left in the basement or in any other part of the
building, which is not enclosed within the Premises or of any property, left
with any employee of the Landlord, notwithstanding such theft, loss or damage
may occur through carelessness or negligence of the Landlord's employees; and
the Tenant agrees that any employee in entering the Premises at the invitation
of the Tenant for purposes outside the normal scope of such employee's,
servant's or agent's duties or accepting custody of property shall be then
deemed agent of the Tenant or other person at whose instance he may be acting,
and not agent of the Landlord. Employees are not permitted to receive or accept
packages or property for account of Tenants. The use of storerooms or storage
space for personal property (if provided) shall be at the Tenant's risk and the
Tenant will not hold the Landlord liable for any loss of or damage to person or
property therein or thereby. Nothing in this lease contained shall impose any
obligation upon the Landlord with respect to any real property other than the
building, whether said other real property be owned by the Landlord or
otherwise, or shall in any way limit the Landlord's right to build upon or
otherwise use said other real property in such manner as the Landlord may see
fit. The Tenant shall make no claim upon the Landlord for abatement of rent,
constructive eviction or rescission, and the Landlord shall have no liability by
reason of the Landlord's failure to enforce the provisions of the lease to any
other tenant against such other tenant.

         (b) Any right and authority reserved by and granted to the Landlord
under this lease, to enter upon and make repairs in the Premises shall not be
taken as obligating the Landlord to inspect and to repair the Premises and the
Landlord hereby assumes no responsibility or liability for the care, inspection,
maintenance, supervision, alteration or repair of the Premises except as herein
specifically provided. The Tenant assumes possession and control of the Premises
and exclusively the whole duty of care and repair thereof, except as herein
specifically provided, and the duty of care, if any, owed by the Tenant to the
persons on the sidewalks or in the corridors of the building.

         (c) The officers, directors, employees, partners, shareholders, and
principals, direct or indirect, comprising the Landlord (collectively, the
"Parties") shall not be liable for the performance of the Landlord's obligations
under this lease. The Tenant shall look solely to the Landlord to enforce the
Landlord's obligations under this lease and shall not seek any damages against
any of the Parties. The liability of the Landlord for the Landlord's obligations
under this lease shall be limited to Landlord's Equity in the building.
"Landlord's Equity" as used herein means the lesser of (i) the interest of the
Landlord in and to the building and (ii) the interest the Landlord would have

                                       24
<PAGE>   29

in the building if it were encumbered by an indebtedness held by a person not a
party to this lease in an amount equal to 75% of the then-current fair market
value of the building (as such value of such interest is determined in good
faith by the Landlord). The Tenant shall not look to any other property or
assets of the Landlord, other than Landlord's Equity, or the property or assets
of any of the Parties in seeking either to enforce the Landlord's obligations
under this lease or to satisfy a judgment for the Landlord's failure to perform
such obligations.

         (d) The term "Landlord" as used in this lease, means only the owner for
the time being of the Premises. If the Landlord shall hereafter sell, exchange
or lease the entire building or the land and building wherein the Premises are
located, or, being the lessee thereof, shall assign its lease, the grantee,
lessee, or assignee thereof, as the case may be, shall, without further
agreement by any party, be conclusively deemed to be the Landlord of this lease
and to have assumed and undertaken to carry out all of the obligations hereof on
the part of the Landlord to be performed, and the Tenant does hereby release the
above-named Landlord from any claim or liability arising or accruing hereunder
subsequent to such transfer of ownership or possession, for breach of the
covenant of quiet enjoyment, or otherwise.

         (e) If the lease provides that the Landlord's consent is not to be
unreasonably withheld or delayed, and it is the final order of any court having
jurisdiction thereof that the Landlord has been unreasonable, the only effect
shall be that the Landlord shall be deemed to have given such consent; but in no
event shall the Landlord be liable to the Tenant for any monetary damages by
reason of the withholding or delaying of its consent.

                               ARTICLE TWENTY-ONE
                               INDEMNITY BY TENANT

         The Tenant hereby indemnifies and agrees forever to save harmless the
Landlord against any and all liabilities, penalties, claims, damages, expenses
(including, without limitation, attorneys' fees whether in a proceeding between
the Landlord and the Tenant or between the Landlord and any third party) or
judgments, arising from injury to person or property of any kind, occasioned
wholly or in part by the Tenant's failure to perform or abide by any of the
covenants of this lease or occasioned wholly or in part by any act or acts,
omission or omissions of the Tenant, or of the employees, customers, agents,
assigns, invitees or licensees or under-tenants of the Tenant, or based on any
matter or thing growing out of the Tenant's use or occupation of the Premises or
any part of the building. The Tenant shall not do or permit any act or thing to
be done upon the Premises which may subject the Landlord to any liability or
responsibility for injury, damages to persons or property or to any liability by
reason of any violations of any requirements of law with which the Tenant is
obligated to comply under this lease, and the Tenant shall exercise such control
over the Premises as to protect the Landlord against any such liability. In case
any claim, action or proceeding is made or brought against the Landlord by
reason of any such claim, the Tenant, upon written notice from the Landlord,
shall, at the Tenant's sole cost and expense, resist or defend such action or
proceeding by counsel approved by the Landlord in writing. The Landlord agrees
that counsel for the Tenant's insurance carrier shall be deemed satisfactory. If
the damages sought by the party asserting such claim exceed the limits of the
Tenant's insurance coverage, the Landlord shall be entitled to have its own
counsel participate with the Tenant's counsel in resisting or defending such
action and the Tenant shall reimburse the Landlord for any reasonable cost it
incurs in connection therewith. The provisions of this Article TWENTY-ONE shall
survive the expiration or sooner termination of this Lease.

                               ARTICLE TWENTY-TWO
                                     NOTICES

         Any notice which is to be given by either party to the other pursuant
to this lease shall be in writing and shall be given as follows: (a) if such
notice is to be given by the Landlord to the Tenant, such notice may be given
personally by delivering the same to the Tenant, or if the Tenant be a
corporation or partnership, to any officer, partner or other employee of the
Tenant, at the Premises or at any other place, or by registered or certified
mail, postage prepaid, return receipt requested, or by nationally recognized
overnight service providing evidence of delivery, addressed to the Tenant

                                       25
<PAGE>   30

at its address given in this lease or at the Premises, or such other address as
the Tenant shall hereafter designate in writing, provided, however, that notices
of default may not be given solely by personal delivery, but shall be given by
mail or overnight service as set forth above, with a copy of such default notice
sent to Marshall J. Cohen, Esq., Stadtmauer Bailkin LLP, 850 Third Avenue, New
York, NY 10022; (b) if such notice is to be given by the Tenant to the Landlord,
such notice shall be given by registered or certified mail, postage prepaid,
return receipt requested, or by nationally recognized overnight service
providing evidence of delivery, addressed to the Landlord at 74 Trinity Place,
New York, New York, 10006, Attention: Director of Commercial Real Estate
Leasing, or at such other address as the Landlord shall hereafter designate in
writing. Notices given by overnight service shall be specified for next business
day delivery. Any notice shall be deemed to have been given on the date when
same shall have been delivered, in the case of personal delivery, or two days
after the same shall have been properly mailed in the case of certified or
registered mail, or on the first following business day if sent by overnight
mail service. The attorneys for either party shall have the right, but not the
obligation, to send notices on behalf of their respective clients.
Notwithstanding the foregoing, all bills may be sent directly to the Tenant by
regular mail.

                              ARTICLE TWENTY-THREE
                                   INSOLVENCY

         (a)  Each of the following shall be a "Bankruptcy Event" hereunder:

         (1) if the Tenant shall generally not, or shall be unable to, or shall
         admit its inability to, pay its debts as they become due; or

         (2) if the Tenant shall make a general assignment for the benefit of
         creditors; or

         (3) if the Tenant shall commence or institute any case, proceeding or
         other action (i) seeking relief on its behalf as debtor, or to
         adjudicate it a bankrupt or insolvent, or seeking reorganization,
         arrangement, adjustment, winding-up, liquidation, dissolution,
         composition or other relief with respect to it or its debts under any
         existing or future law of any jurisdiction, domestic or foreign,
         relating to bankruptcy, insolvency, reorganization or relief of
         debtors, or (ii) seeking appointment of a receiver, trustee, custodian
         or other similar official for it or for all or any substantial part of
         its property; or

         (4) if any case, proceeding or other action shall be commenced against
         or instituted against the Tenant (i) seeking an order for relief
         entered against the debtor or to adjudicate it a bankrupt or insolvent,
         or seeking reorganization, arrangement, adjustment, winding-up,
         liquidation, dissolution, composition or other relief with respect to
         its debts under any existing or future law of any jurisdiction,
         domestic or foreign, relating to bankruptcy, insolvency, reorganization
         or relief of debtors, or (ii) seeking appointment of a receiver,
         trustee, custodian or other similar official for it or for all or any
         substantial part of its property, which in either case (x) results in
         the entry of any order for relief, adjudication of bankruptcy or
         insolvency, or such an appointment or the issuance or entry of any
         other order having a similar effect or (y) remains undismissed for a
         period of sixty (60) days; or

         (5) if any case, proceeding or other action shall be commenced or
         instituted against the Tenant seeking issuance of a warrant of
         attachment, execution, distraint or similar process against all or any
         substantial part of the Tenant's property which results in the entry of
         an order for such relief which is not vacated, discharged, or stayed or
         bonded pending appeal within sixty (60) days from the entry thereof; or

         (6) if the Tenant shall take shall take any action in furtherance of,
         or indicating its consent to, approval of, or acquiescence in, any of
         the acts set forth in any of clauses (2) through (5) above; or

         (7) if a trustee, receiver or other custodian is appointed for any
         substantial part of the assets of the Tenant and such appointment is
         not vacated or stayed within seven days.

                                       26
<PAGE>   31

         (b) If at any time (i) the Tenant shall be comprised of two or more
people; or (ii) the Tenant's obligations under this lease have been guaranteed
by any party other than the Tenant, or (iii) the Tenant's interest in this lease
has been assigned, the word "Tenant" as used in this Article TWENTY-THREE shall
be deemed to mean any one or more of the persons primarily or secondarily liable
for the Tenant's obligations under this lease. Any moneys received by the
Landlord from or on behalf of the Tenant during the pendency of any Bankruptcy
Event shall be deemed paid as compensation for the use and occupation of the
Premises and the acceptance of any such compensation by the Landlord shall not
be deemed an acceptance of rent or a waiver by the Landlord of any rights under
Articles TWENTY-THREE or TWENTY-FIVE.

         (c) If a Bankruptcy Event occurs at any time after the execution and
delivery of this lease, whether such event occurs prior or subsequent to the
Commencement Date or the Tenant's entry into possession, such an event shall be
deemed an Event of Default and the Landlord shall have the right to terminate
this lease in the manner hereinafter provided. In the event of such termination,
the Tenant or any person claiming under, by or through the Tenant, by virtue of
any statute or of an order of any court, shall not be entitled to possession or
to remain in possession of the Premises but shall forthwith quit and surrender
same. Exclusive of and in addition to any other rights or remedies the Landlord
may have through any other portion or provision of this lease or by virtue of
any rule of law or statute, said Landlord may keep and retain, as damages, any
rent, security, deposit or other moneys or consideration received by the
Landlord from the Tenant, or others on behalf of the Tenant. Also, in the event
of termination of this lease as aforesaid, the Landlord shall be entitled, as
and for liquidated damages, and not as a penalty, from the Tenant for breach of
the unexpired term of this lease, to a sum equal to the amount by which the rent
for the period of the unexpired portion of the lease term exceeds the then fair
and reasonable rental value for the same period, both discounted to present
value at six percent (6%). If at any time within a reasonable period following
the date of the termination of the lease, as aforesaid, the Premises should be
re-rented by the Landlord, the rent realized by any re-letting shall be deemed
prima facie to be the rental value. In the event of the occurrence of any
Bankruptcy Event occasioned solely through the invocation by the Tenant or by
third parties of the laws of the State of New York, judicial or statutory, as
distinguished from the invocation of Federal laws relating to bankruptcy,
reorganization, or otherwise, the Landlord, in addition to the foregoing, may
accelerate the full amount of rent reserved for the remainder of the lease,
discounted to present value at 6%, and the same shall forthwith become due and
payable to the Landlord. Nothing herein provided shall be deemed to prevent or
restrict the Landlord from proving and receiving as damages herein the maximum
permitted by any rule of law or statute prevailing when such damages are to be
proved, whether they be greater or less than those referred to above.

                                       27
<PAGE>   32

                               ARTICLE TWENTY-FOUR
                            REMEDIES OF THE LANDLORD
                     ON DEFAULT IN PERFORMANCE BY THE TENANT

         (a) If the Tenant shall default in the full and due performance of any
covenant of this lease, the Landlord shall have the right, upon ten (10) days'
notice to the Tenant (except in an emergency or unless a shorter period of
notice or provision for the performance of such work without notice is elsewhere
established), to perform the same for the account of the Tenant, and in such
event all workman employed by the Landlord shall be deemed the agents of the
Tenant, and any reasonable payment made, and expense incurred, by the Landlord
in this connection, shall become due and payable by the Tenant to the Landlord
within fifteen (15) days after receipt of invoices for same. If the Landlord is
compelled to incur any expenses or incur any obligation for the payment of
money, including, without limitation, reasonable attorneys' fees in instituting,
prosecuting or defending any action or proceeding instituted by the Tenant or
any third party by reason of any Event of Default hereunder, the sum or sums so
paid by the Landlord with all interest, costs and damages, shall be deemed
immediately due to the Landlord upon demand as additional rent. Any and all sums
payable by the Tenant to the Landlord shall bear interest at the lesser of (x)
one and one-half per cent (1_%) per month or (y) the maximum rate permitted by
applicable law from the due date to the date of actual payment, and any and all
such sums (except the fixed rent hereinabove expressly reserved) shall be deemed
to be additional rent for the period prior to such due date, and the Landlord
shall have the same remedies for default in the payment of such additional rent
as for default in the payment of the rent expressly reserved. If the Tenant's
term shall have expired at the time of the making of such expenditures or
incurring such obligations, such sums shall be recoverable by the Landlord as
damages.

         (b) In the event that under the provisions of this lease the Landlord
shall have the privilege of performing any covenant in respect of which the
Tenant may be in default and of recovering the expenses so involved from the
Tenant as additional rent or otherwise, such remedy shall not be the exclusive
remedy of the Landlord but the Landlord may, at its option, treat such default
as a breach of substantial obligation of this lease and shall have all the other
remedies in respect thereof provided in this or any other Article of this lease.

                               ARTICLE TWENTY-FIVE
                                     DEFAULT

         (a) Each of the following events shall be an "Event of Default"
         hereunder:

         (1) if the Tenant shall default in the payment when due of any
         installment of fixed rent or any item of additional rent when same
         shall be due and such default shall continue for a period of five
         business days after notice to Tenant; provided, however, that if
         Landlord shall give such notice two or more times in any twelve-month
         period, Tenant shall not thereafter be entitled to any such notice; or

         (2) if the Tenant shall default in the observance or performance of any
         term, covenant or condition of any other lease with the Landlord or the
         Landlord's predecessor in interest beyond the expiration of any grace
         period set forth in such other lease; or

         (3) if the Premises shall be abandoned or deserted; or

         (4) if a Bankruptcy Event shall occur; or

         (5) if the conduct of the Tenant or any of its employees, agents or
         visitors or any occupant of the Premises shall reasonably be deemed
         objectionable by the Landlord or the Landlord's managing agent; or

         (6) if the Tenant's interest or any portion thereof in this lease shall
         devolve upon or pass to any person, whether by operation of law or
         otherwise, except as expressly permitted by Article SEVENTEEN hereof;
         or

                                       28
<PAGE>   33

         (7) if the lease is assigned, or all or part of the Premises are
         sublet, to a Related Entity and such Related Entity shall no longer (x)
         control, (y) be under the control of, or (z) be under common control
         with the Tenant (except for a permitted successor by merger,
         consolidation or purchase as may be permitted by Article SEVENTEEN) and
         such Related Entity has not vacated or been approved by Landlord within
         six months following the date on which it ceases to be a Related
         Entity; or

         (8) if the Tenant's obligations under this lease have been guaranteed
         by any party and if the guarantor shall default in the observance or
         performance of any of the terms of the guaranty or if the guarantor
         shall repudiate the guaranty, or if the guaranty shall terminate or be
         terminated for any reason without the prior written consent of the
         Landlord or in accordance with the terms thereof; or

         (9) if the Tenant shall default in the observance or performance of any
         other term, covenant or condition of this lease and the Tenant shall
         fail to remedy such default within thirty (30) days after notice from
         the Landlord to the Tenant of such default, except that if the default
         is of such a nature that it cannot with due diligence by remedied
         within such thirty-day period, the Tenant shall not be in default if
         the Tenant shall commence within said thirty-day period and thereafter
         diligently proceed to complete all steps necessary to remedy such
         default, and further, so long as the extension of such cure period
         shall not (i) subject the Landlord or any superior lessor or mortgagee
         to prosecution for a crime or any other fine or charge, (ii) subject
         the Premises, the building or the land upon which the building is
         located to being condemned or vacated, (iii) subject the land or the
         building to any lien or encumbrance, or (iv) result in the termination
         of any superior lease or mortgage.

         (b) If an Event of Default shall occur, the Landlord may, at any time
thereafter and at its option, give the Tenant ten (10) days written notice of
its intention to terminate this lease, and in such event, on the tenth day
following the giving of such notice, this lease and the term and all rights of
the Tenant under this lease shall expire and terminate as if that were the
Expiration Date and the Tenant shall immediately quit and surrender the
Premises, but the Tenant shall nonetheless be liable for all of its obligations
hereunder, as provided for in Article TWENTY-SIX.

         (c) Notwithstanding the foregoing, if such termination is stayed by
order of any court having jurisdiction over any proceeding which constitutes a
Bankruptcy Event, or by federal or state statute, then, following the expiration
of any such stay, or if the trustee appointed in any such proceeding, the Tenant
or the Tenant as debtor-in-possession shall fail to assume the Tenant's
obligations under this lease within the period provided therefor by law or
within one hundred twenty (120) days after entry of the order for relief or as
may be allowed by the court, or if the trustee, the Tenant or the Tenant as
debtor-in-possession shall fail to provide adequate assurance of the complete
and continuous future performance of the Tenant's obligations under this lease
as provided in Article SEVENTEEN (o), the Landlord, to the extent permitted by
law or by leave of the court having jurisdiction over the proceeding
constituting the Bankruptcy Event, shall have the right, as its election, to
terminate this lease on five (5) days' notice to the Tenant, the Tenant as
debtor-in-possession or said trustee and upon the expiration of said five (5)
day period this lease shall cease and expire as aforesaid the Tenant, the Tenant
as debtor-in-possession or said trustee shall immediately quit and surrender the
Premises as aforesaid.

         (d) If an Event of Default described in clause (a)(1) shall occur, or
if this lease shall be terminated in accordance with the provisions of clauses
(b) and (c) above, the Landlord, without notice, may reenter and repossess the
Premises using such force for that purpose as may be necessary without being
liable to indictment, prosecution or damages therefor and may dispossess the
Tenant by summary proceedings or otherwise.

         (e) If an Event of Default shall occur prior to the date fixed as the
commencement of any renewal or extension of this lease, and shall remain uncured
as of such date, the Landlord may cancel and terminate such right of renewal or
extension by written notice to the Tenant.

                                       29
<PAGE>   34

                               ARTICLE TWENTY-SIX
                              REMEDIES AND DAMAGES

         (a) If an Event of Default shall occur and if this lease shall be
terminated as provided in Article TWENTY-FIVE:

         (i) The Landlord and its agents may immediately, or at any time
         thereafter, re-enter the Premises and remove all persons and property
         therefrom, either by summary dispossess proceedings, or by any suitable
         action or proceeding at law, or by force or otherwise, without being
         liable to indictment, prosecution or damages therefor, and repossess
         and enjoy the Premises, together with all additions, alterations,
         installations and improvements, and no entry by the Landlord shall be
         deemed an acceptance of surrender.

         (ii) The Landlord may, at its option, re-let the Premises in whole or
         in part, for such term or terms and for such rentals and upon such
         other conditions, which may include concessions and free rent periods
         as the Landlord, in its sole discretion, determine, even though the
         same may extend beyond the Expiration Date. The Landlord shall have no
         liability to the Tenant to re-let the Premises and the failure or
         refusal of the Landlord to re-let the Premises or any part thereof, or
         if the Premises are re-let, the failure of the Landlord to collect the
         rent under such re-letting, shall not relieve the Tenant of any
         liability under this lease. The Landlord may, at its option, make such
         repairs, replacements, alterations, additions, improvements and other
         physical changes in and to the Premises as the Landlord, in its sole
         discretion, considers advisable or necessary in connection with any
         such re-letting. Any such re-letting shall, as the Landlord's option,
         be either for the Landlord's own account, or as the agent for the
         Tenant.

         (b) The Tenant, on its behalf and on behalf of all persons claiming
through or under the Tenant, including all creditors, hereby expressly waives
(i) any and all right to regain possession of the Premises or to reinstate or
redeem this lease under any present or future law; (ii) the service of any
notice demanding rent or stating an intention to re-enter or to institute legal
proceedings to that end which may otherwise be required to be given under any
present or future law; and (iii) any and all rights of redemption and all other
rights to regain possession or to reinstate this lease, after (x) the Tenant
shall have been dispossessed by a judgment or by warrant of any court or judge,
or (y) any re-entry by the Landlord, or (z) any expiration or termination of
this lease, whether such dispossess, re-entry, expiration or termination shall
be by operation of law or pursuant to the provisions of this lease. Except as
otherwise provided by law, the Tenant and Landlord waive and will waive all
right to trial by jury in any summary proceedings and in any other proceeding or
action at law hereafter instituted by the Landlord against the Tenant in respect
of this lease, and also in any action or proceeding between the parties hereto
for any cause; and it is hereby agreed, that in any of such events, the matter
in dispute shall be tried before a judge without a jury. In the event the
Landlord shall commence any action or summary proceeding for non-payment of
rent, or other breach of any of the terms, covenants or conditions of this
lease, the Tenant agrees not to interpose any counterclaim of whatever nature or
description in any such action or proceeding, other than compulsory
counterclaims which would be deemed waived if not asserted by the Tenant. The
words "re-enter" and "re-entry" as used in this lease are not restricted to
their technical legal meaning. In the event of a breach or threatened breach by
the Tenant, or anyone claiming by, through or under the Tenant, of any of the
covenants or provisions hereof, the Landlord shall have the right to obtain an
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.
The remedies set forth herein are cumulative and the mention in this lease of
any remedy shall not preclude the Landlord from exercising any other remedy
allowed at law or in equity.

         (c) If this lease and the term shall expire as provided in Article
TWENTY-FIVE, or by or under any summary proceeding or any other action or
proceeding by the Landlord against the Tenant or any person claiming by, through
or under the Tenant, or if the Landlord shall re-enter the Premises as provided
in paragraph (a) above, or by or under any summary proceeding or any other
action or proceeding, then, in any of said events:

                                       30
<PAGE>   35

         (i) The Tenant shall pay to the Landlord all fixed rent and additional
         rent and other charges payable under this lease by the Tenant to the
         Landlord to the date upon which this lease and the term shall have
         expired or has been terminated by the Landlord;

         (ii) The Tenant shall also be liable for and shall pay to the Landlord,
         as liquidated damages, any deficiency (the "Deficiency") between the
         fixed rent and additional rent reserved in this lease for the period
         which would have constituted the unexpired portion of the term
         (including any renewal term exercised by the Tenant prior to the
         termination of this lease or re-entry by the Landlord, and in such case
         the additional rent for the renewal term shall be assumed to be the
         same as was payable for the year immediately preceding such termination
         or re-entry) and the net amount, if any, actually received by the
         Landlord from any re-letting of the Premises pursuant to paragraph
         (a)(ii) above. The Landlord shall be entitled to deduct from the
         rentals actually collected under any re-letting all of the expenses
         which Landlord incurred by reason of the Tenant's default and in
         connection with such re-entry and re-letting, including, but not
         limited to, all repossession costs, legal expenses, brokerage
         commissions, attorneys' fees, court costs and disbursements, the cost
         of repairs, re-decoration and alterations in preparing the Premises for
         re-letting, and the amount of rent concessions and work allowances and
         the like granted in connection with such re-letting. The Deficiency
         shall be paid in monthly installments by the Tenant on the days
         specified in this lease for payment of installments of fixed rent, and
         the Tenant shall not be entitled to withhold any such payment until the
         Expiration Date set forth in this Lease. The Landlord shall be entitled
         to recover from the Tenant each monthly Deficiency as the same arises,
         and no suit to collect the amount of the Deficiency for any month shall
         prejudice the Landlord's right to collect the Deficiency for any
         subsequent month by a similar proceeding.

         (iii) Whether or not the Landlord shall have collected any monthly
         Deficiency, the Landlord shall be entitled to recover from the Tenant,
         and the Tenant shall pay to the Landlord on demand, in lieu of any
         further Deficiency as and for liquidated and agreed final damages, and
         not as a penalty, a sum equal to the amount by which the rent for the
         period of the unexpired portion of the lease term (commencing on the
         date immediately succeeding the last day with respect to which a
         Deficiency payment, if any, was collected) exceeds the then fair and
         reasonable rental value of the Premises for the same period, both
         discounted to present value at six percent (6%). If, before
         presentation of proof of such liquidated damages to any court, the
         Premises, or any part thereof, shall have been relet by the Landlord
         for the period which would have constituted the unexpired portion of
         the term, or any part thereof, the amount of rent reserved upon such
         reletting shall be deemed, prima facie, to be the fair and reasonable
         rental value for the part or the whole of the Premises so relet.

         (d) The liability of the Tenant shall survive the issuance of a final
order and warrant of dispossess, and re-entry by the Landlord, and any other
termination of this lease as a result of an Event of Default, and the granting
by the Landlord of a new lease upon the Premises to another tenant, and the
Tenant hereby waives any defense which might be predicated upon any of said acts
or events. If the Premises are re-let together with any other space in the
building, the rental collected and the expenses incurred in connection with such
re-letting shall be apportioned as reasonably determined by the Landlord. In no
event shall the Tenant be entitled to receive any rents collected or payable
under any re-letting, whether or not such rents exceed the fixed rent reserved
under this lease. Nothing contained in Articles TWENTY-FIVE or TWENTY-SIX shall
be deemed to limit or preclude the recovery by the Landlord from the Tenant of
the maximum amount allowed to be obtained as damages by any statute or rule of
law, or of any sums or damages to which the Landlord may be entitled in addition
to the damages set forth in paragraph (c) above.

                              ARTICLE TWENTY-SEVEN
                             SURRENDER AT EXPIRATION

         Upon the expiration or any termination of the term of this lease, the
Tenant shall quit and surrender the Premises, together with any fixtures,
equipment or appurtenances installed in the Premises at the commencement of this
lease, and any alterations, decorations, additions and improvements which are
not to be removed in compliance with the provisions of Article FOUR

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<PAGE>   36

hereof, to the Landlord, in good order and condition, ordinary wear excepted.
The Tenant shall remove all its furnishings, trade fixtures, stock in trade and
like personal property in accord with the requirements of Article FOUR, so as to
leave the Premises broom-clean and in an orderly condition. If the last day of
the term of this lease falls on Saturday or Sunday, this lease shall expire on
the business day immediately preceding. The Tenant's obligation to observe and
perform this covenant shall survive the expiration or other termination of the
term of this lease. The Tenant expressly waives, for itself and for any person
claiming by, through or under the Tenant, any rights which the Tenant or any
such person may have under the provisions of Section 2201 of the New York Civil
Practice Law and Rules or any law of like import then in force in connection
with any holdover summary proceedings when the Landlord may institute to enforce
the provisions of this Article. The Tenant acknowledges that possession of the
Premises must be surrendered to the Landlord on the Expiration Date. The parties
recognize that the damage to the Landlord resulting from any failure by the
Tenant to timely surrender possession of the Premises will be substantial, will
exceed the amount of the monthly installments of the fixed rent and additional
rent payable hereunder and will be impossible to accurately measure. The Tenant
agrees that if possession of the Premises is not delivered to the Landlord on
the Expiration Date (or any sooner termination date), in addition to any other
rights or remedies the Landlord may have hereunder or in equity or at law, and
without in any manner limiting the Landlord's right to demonstrate and collect
any damages suffered by the Landlord, the Tenant shall pay to the Landlord on
account of use and occupancy of the Premises for each month and for each portion
of any month during which the Tenant holds over in the Premises after the
Expiration Date, (a) for the first month following the Expiration Date, a sum
equal to 125% of the aggregate of the fixed rent and additional rent which was
payable under this lease during the last month of the term, (b) for the second
month following the Expiration Date, a sum equal to 150% of the aggregate of the
fixed rent and additional rent which was payable under this lease during the
last month of the term, and (c) for any month thereafter, a sum equal to 200% of
the aggregate of the fixed rent and additional rent which was payable under this
lease during the last month of the term, provided, however, that in no event
shall the amount payable in any month be less than the fair market value of the
Premises. In addition, and without in any manner limiting the Landlord's right
to demonstrate and collect any damages suffered by the Landlord and arising from
the Tenant's failure to surrender the Premises as provided herein, the Tenant
shall indemnify and hold the Landlord harmless from and against all cost,
liability, damages and expenses (including, without limitation, reasonable
attorneys' fees and disbursements) resulting from a delay of three months or
more by the Tenant in so surrendering the Premises, including, without
limitation, any claims made by any succeeding or prospective tenant as a result
of such delay. Nothing herein contained shall be deemed to permit the Tenant to
retain possession of the Premises after the Expiration Date (or sooner
termination) of this lease or to limit in any manner the Landlord's right to
regain possession of the Premises through summary proceedings, or otherwise, and
no acceptance by the Landlord of payments from the Tenant after the Expiration
Date shall be deemed to be other than on account of the amount to be paid by the
Tenant in accordance with the provisions of this Article. The provisions of this
Article shall survive the expiration of the term of this lease.

                              ARTICLE TWENTY-EIGHT
                                 QUIET ENJOYMENT

         The Landlord covenants that, if the Tenant shall duly keep and perform
all the terms and conditions hereof, the Tenant shall peaceably and quietly
have, hold and enjoy the Premises for the term aforesaid, free from interference
from the Landlord or anyone claiming by, through or under the Landlord, subject
however to ground leases, underlying leases and mortgages as hereinbefore
described, and to the lien, rights and estate by virtue of unpaid taxes of any
government having jurisdiction of the Premises of which the herein Premises are
a part.

                               ARTICLE TWENTY-NINE
                                SECURITY DEPOSIT

         (a) The Tenant has deposited with the Landlord the sum of Five Million,
Seven Hundred Ninety-six Thousand and no/100 Dollars ($5,796,000) to secure the
faithful performance by the Tenant of all the terms, conditions, covenants and
agreements of this lease, and to make good to the Landlord any damage which it
may sustain by reason of any act or omission of the Tenant. The

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<PAGE>   37

Landlord shall segregate the said security deposit as a trust fund not to be
mingled with other funds of the Landlord, and if, during the term of this lease,
the Landlord shall sell, exchange or lease the entire building, subject to this
lease, or, being the lessee thereof, shall assign its lease, the Landlord shall
have the right to pay or transfer the said deposit to such grantee, lessee, or
assignee, as the case may be, and, in such event, the Landlord shall be released
from all responsibility and liability in connection therewith, and the Tenant
will look solely to said grantee, lessee, or assignee for its return. Tenant may
request that cash security be invested in Treasury Securities with a maturity of
not more than 92 days. If the aforesaid security deposit shall be deposited with
a bank or trust company, savings bank or savings and loan association, the
Landlord shall advise the Tenant of the name and address thereof. The Tenant
shall not be entitled to the payment of any interest on the aforesaid security
deposit unless earned and any interest earned upon such deposit, less the amount
equal to the lesser of $5,000 or 1% of the deposit, which shall be paid to
Landlord as an administration expense, shall, at Tenant's request, be paid
annually to Tenant. The Tenant's interest in said deposit shall not be assigned
or encumbered without the written consent of the Landlord and neither the
Landlord nor its successors or assigns shall be bound by any such attempted
assignment or attempted encumbrance, and within sixty (60) days after the
expiration of the term, the amount of said deposit shall be repaid to the
Tenant, less any proper charges against the same, as hereinabove or hereinafter
provided. If the Tenant shall at any time be in default with respect to any
payment of rent or of additional rent or of any other payment due from the
Tenant to the Landlord under this lease, or if the Landlord shall be damaged by
any act or omission of the Tenant the Landlord may, at its option, apply such
portion of said deposit as may be adequate to cure such default or to make good
such damage, including, but not by way of limitation, interest, costs, fees and
other expenses, paid or incurred by the Landlord, and thereafter such portion so
applied shall be free from any claim by the Tenant for its return. If the
Landlord shall re-enter, pursuant to the provisions of this lease (other than in
the event of insolvency in which event the provisions of Article TWENTY-THREE of
the lease shall apply), the Landlord shall continue to hold the said deposit, as
security for the performance of the Tenant's obligations, until the date herein
expressly fixed for the expiration of the term, and apply the same from time to
time to the unpaid obligations of the Tenant, under the same terms and
conditions as if the said lease were still in full force and effect. No
termination of this lease or re-entry by the Landlord for default of the Tenant
shall entitle the Tenant to the return of any part of said deposit, nor shall
the retention of such deposit, after such re-entry, impair or otherwise affect
the Tenant's liability to the Landlord during the balance of the term originally
provided for. If, at any time, the said deposit shall be diminished, by reason
of the Landlord's having applied any part thereof in accordance with the
provisions of this paragraph, the Tenant shall pay over to the Landlord upon
demand, the equivalent of such decrease, to be added to said deposit and to be
held and applied in accordance with the provisions of this paragraph.

         Provided that no Event of Default has occurred and is continuing at the
time of the scheduled reduction hereinafter set forth, then the security deposit
shall be reduced on anniversaries of the Initial Premises Rent Commencement Date
in accordance with the following schedule:

         Through June 30, 2001                          $5,796,000
         Thereafter until June 30, 2002                 $5,071,500
         Thereafter until June 30, 2003                 $4,347,000
         Thereafter until June 30, 2004                 $3,622,500
         Thereafter until the Expiration Date           $2,898,000

         (b) In lieu of delivering cash as the security deposit, the Tenant may
deliver to the Landlord an unconditional, irrevocable and transferable letter of
credit (such letter of credit or any extension or replacement thereof, being
hereinafter referred to as the "Letter of Credit") issued for the account of the
Landlord by a New York Clearing House bank acceptable to the Landlord, in
substance reasonably satisfactory to the Landlord, which Letter of Credit is to
be held by Landlord in accordance with the terms of this Article TWENTY-NINE.
The Letter of Credit shall permit the Landlord or its duly authorized
representative (1) to draw thereon up to the full amount of the credit evidenced
thereby upon presentation of the Letter of Credit and a sight draft in the
amount to be drawn and (2) to draw the full amount thereof to be held as cash
security pursuant to this Article if for any reason the Letter of Credit is not
renewed within sixty (60) days prior to its expiration date.

                                       33
<PAGE>   38

The Letter of Credit shall be fully transferable by the Landlord and its
successors and assigns without charge to the Landlord. In the event that the
expiration date of the Letter of Credit is prior to sixty (60) days after the
Expiration Date (or sixty days after any subsequent date through which the term
of this lease may be extended), if the Landlord receives notice from the bank or
the Tenant that the Letter of Credit is not being renewed or in the event that
the Tenant has not delivered a replacement cash security deposit or Letter of
Credit to the Landlord by thirty (30) days before the expiration of the Letter
of Credit, then the Landlord, acting through one of its duly authorized
representatives, shall be entitled to present the Letter of Credit for immediate
payment of the then potential amount available pursuant to the Letter of Credit,
and the amount of the Letter of Credit shall become the Deposit hereunder and
shall be held, applied and returned by the Landlord in accordance with the terms
provided by the lease for the holding, application and return of the Deposit. If
the Letter of Credit is not being renewed but the Tenant does deliver a
replacement Deposit or a similar Letter of Credit by thirty (30) days before
expiration of the Letter of Credit, then the Landlord shall not thereafter be
entitled to present the expiring Letter of Credit for payment of any amounts.

                                 ARTICLE THIRTY
                REAL ESTATE TAX AND OPERATING EXPENSE ESCALATION

         (a) REAL ESTATE TAXES ESCALATION. In order to adjust, during the term
of this lease, for increases in the expenses of the Landlord for Real Estate
Taxes, the Tenant, commencing on April 1, 2001 and in each year thereafter,
shall pay to the Landlord, as additional rent, the Tenant's Proportionate Share
of any Increase in such Real Estate Taxes, all in accordance with paragraphs (c)
through (g) below.

         (b) OPERATING EXPENSE ESCALATION. In order to adjust, during the term
of this lease, for increases in the expenses of the Landlord in operating the
building, the Tenant shall pay to the Landlord, as additional rent, commencing
on April 1, 2001 and on each April 1 thereafter, the amount indicated in
Schedule 1 as the Operating Expense Payment, such amount to be paid (in addition
to the annual fixed rent) in twelve equal monthly installments.

         (c) DEFINITIONS. As used in this Article the following capitalized
words or expressions shall have the meaning ascribed to them below:

         1. "REAL ESTATE TAXES" shall mean and include all expenditures of the
         Landlord for taxes or assessments payable by the Landlord, as finally
         determined, upon or with respect to the building and the land upon
         which it is located, imposed by Federal, State or local government
         (plus all reasonable expenditures for fees and expenses incurred in the
         course of obtaining a reduction in any tentative assessed valuation),
         but shall not include income, franchise, inheritance or capital stock
         or like taxes.

         2. "INCREASE IN REAL ESTATE TAXES" shall mean the amount by which Real
         Estate Taxes in any Subsequent Year, exceed the real estate taxes in
         the Base Year (the "Base Real Estate Taxes").

         3. "PROJECTED REAL ESTATE TAXES" shall mean the Landlord's reasonable
         estimate of Real Estate Taxes for the particular Subsequent Year.

         4. "COMPARATIVE STATEMENT" shall mean a statement, in writing signed by
         the Landlord, or on its behalf by an officer of any corporation acting
         as its managing agent, showing (i) a comparison of (a) Real Estate
         Taxes for the Base Year with (b) Projected Real Estate Taxes for the
         upcoming Subsequent Year, (ii) if the Tenant paid additional rent
         pursuant to this Article with respect to the immediately preceding
         Subsequent Year as a result of Increase in Real Estate Taxes, any
         adjustment necessitated by a variance between Projected Real Estate
         Taxes for such immediately preceding Subsequent Year (as shown in the
         current Comparative Statement) and the actual Real Estate Taxes for
         such immediately preceding Subsequent Year (as shown in the last
         Comparative Statement) and (iii) the Operating Expense Payment for the
         then current Subsequent Year. At the request of

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<PAGE>   39

         the Tenant, the Comparative Statement shall be accompanied by a copy of
         the most recent statement for real estate taxes for the Premises
         received by Landlord from the City of New York.

         5. "TENANT'S PROPORTIONATE SHARE" shall mean 8.64% initially and shall
         be adjusted appropriately as additional space is added.

         6. "BASE YEAR" shall mean the calendar year 2000. The Base Real Estate
         Taxes shall be computed as the average of the Real Estate Taxes for the
         1999/2000 and 2000/2001 fiscal years.

         7. "SUBSEQUENT YEAR" shall mean each twelve-month period commencing
         April 1, starting with the period commencing April 1, 2001.

         (d) STATEMENTS FOR THE TENANT. Prior to April 1, 2001, and on or before
that day in each Subsequent Year, the Landlord will furnish a Comparative
Statement to the Tenant. The failure of the Landlord to furnish a Comparative
Statement shall be without prejudice to the right of the Landlord to furnish a
Comparative Statement at any time in the future.

         Every Comparative Statement furnished by the Landlord pursuant to this
Article shall be conclusive and binding upon Tenant unless within the later of
(i) ninety (90) days after the receipt of such Comparative Statement, or (ii)
ninety (90) days after the Tenant has received a copy of the tax bill if the
Tenant has requested a copy of the tax bill within ninety days after receipt of
the Comparative Statement, Tenant shall notify Landlord that it disputes the
correctness thereof, specifying the particular respects in which such
Comparative Statement is claimed to be incorrect. Pending the determination of
such dispute, Tenant shall pay additional rent in accordance with such
Comparative Statement and such payment shall be without prejudice to Tenant's
position and to the Tenant's rights to a refund of any overpayment. If the
dispute shall be determined in Tenant's favor, Landlord shall within five
business days after Landlord's receipt of the notice of such determination, pay
Tenant the amount of Tenant's overpayment of additional rent resulting from
compliance with such Comparative Statement. This provision shall survive the
expiration or termination of the lease and shall be binding on the successors of
each party.

         (e) COMPUTATION OF INCREASES IN RENT PAYABLE BY TENANT. When the
Landlord shall furnish the Tenant with any Comparative Statement in accordance
with this Article which shall show an Increase in Projected Real Estate Taxes,
then commencing April 1, 2001, and on April 1 of each Subsequent Year in
question, in addition to the increase in rent attributable to the Operating
Expense Payment for such Subsequent Year, the rent payable under the lease shall
be increased by the Tenant's Proportionate Share of the increase in the
Projected Real Estate Taxes. Such increases shall be payable (with payment on
account of such increases) as follows: on the first day for the payment of rent
under this lease following the receipt of the Comparative Statement, the Tenant
shall pay to the Landlord the sum equal to (1) the aggregate of one-twelfth of
the Tenant's Proportionate Share of the increase in Projected Real Estate Taxes,
plus or minus, as the case may be, (2) any adjustment necessitated by a variance
between (x) the Projected Real Estate Taxes for such immediately preceding
Subsequent Year and (y) the actual Real Estate Taxes for such immediately
preceding Subsequent Year, plus (3) one-twelfth of the Tenant's Operating
Expenses payment. Until a different Comparative Statement shall be submitted as
above provided, the monthly installments or rent payable under this lease due to
an Increase in Projected Real Estate Taxes shall continue to be increased by
such amount; however, notwithstanding any other provision herein, the failure of
the Landlord to submit a Comparative Statement in any Subsequent Year shall not
affect the amounts payable by Tenant as Operating Expense Payment in such
Subsequent Year.

         With respect to the Comparative Statement furnished to the Tenant in
the Subsequent Year following the year in which the term of this lease
terminates, if such Comparative Statement shall indicate an adjustment
necessitated by a variance of the type referred to in clauses (x) and (y) in the
immediately preceding paragraph, then the Tenant shall promptly pay to the
Landlord, or the Landlord promptly shall pay to the Tenant, as the case may be,
the amount of any such adjustment as indicated in such Comparative Statement.

                                       35
<PAGE>   40

         (f) INSPECTION OF BOOKS. The Tenant or its authorized representative
shall have a right to examine the books of the Landlord showing the Real Estate
Taxes with respect to the building during regular business hours for the purpose
of verifying the information set forth in any Comparative Statement relating to
any Increase in Real Estate Taxes shown in such Comparative Statement; provided
that a written request for such inspection is made by the Tenant within 120 days
of the receipt of any such Comparative Statement.

         (g) DECREASES IN REAL ESTATE TAXES. In no event shall any decrease in
the Real Estate Taxes in any way reduce the fixed rent or additional rent
payable by the Tenant under this lease, except to the extent to which a decrease
in Real Estate Taxes shall result in a decrease in the additional rent payable
pursuant to paragraph (a) of this Article; provided, however, that no decrease
in Real Estate taxes shall in any way reduce any additional rent payable on
account of any Operating Expense Payment.

                               ARTICLE THIRTY-ONE
                                    SERVICES

         (a) For purposes of this lease, "Business Hours" shall mean normal
building operation hours of eight a.m. to six p.m. and "Business Days" shall
mean Monday through Friday, except for those days designated as legal holidays
by the Federal or State government or by the unions now or hereafter
representing the Landlord's building personnel.

         (b) During the term of this lease, the Landlord shall furnish during
Business Hours on Business Days passenger and freight elevator service with the
elevators now or hereafter in the building sufficient heat during the cold
season to heat the Premises, and condenser water from the Landlord's cooling
tower equipment located on the roof of the building. The Landlord shall maintain
in service and available for the non-exclusive use of the Tenant at least one
passenger elevator at all times. If the Tenant requires freight elevator
service, heat on non-Business Days or during non-Business Hours on Business
Days, the Landlord will furnish the additional requested service upon notice of
the Tenant's need therefor. Such notice may be written or oral and shall be
given prior to 2 p.m. on the day upon which such service is requested or by 2
p.m. of the last preceding Business Day if service is requested on other than a
Business Day. The Tenant will pay for any overtime freight elevator service,
heat at the prevailing rate per hour as established from time to time by the
Landlord for such services at the building or in the buildings of the Landlord,
generally, for each hour during which the additional service is supplied. All
charges for such overtime service shall constitute additional rent and shall be
payable within fifteen (15) days after presentation of a bill, and in the event
of default of payment therefor, the Landlord may refuse further service and the
Landlord shall have all remedies available to it for collection herein specified
with respect to rent. The failure on the part of the Landlord to furnish
elevator service, heat or condenser water, if due to breakdowns, repairs,
maintenance, strikes or other causes beyond the control of the Landlord, shall
involve no liability on the part of the Landlord and shall not constitute an
actual or constructive eviction, nor relieve the Tenant from any of its
obligations under this lease nor entitle the Tenant to an abatement of rent.

         (c) The Landlord shall provide 190 tons of condenser water service per
floor to the 4th and 6th floors of the premises (and a pro rata share to the
fifth floor) (the "Base Condenser Water Service") from the Landlord's cooling
tower equipment located on the roof of the building, such service to be
available 24 hours a day, 365 days a year. The Tenant shall pay an annual charge
for the provision of Base Condenser Water Service at the rate of $750 per ton
per year, such rate to increase 3% each year, commencing May 1, 2001. Such
charges shall constitute additional rent. The Tenant shall, at its own expense,
maintain all supplemental air-conditioning systems now or hereafter installed in
the Premises in good condition and repair, using a contractor approved by the
Landlord. The Landlord shall maintain in good order and repair those portions of
the building air-conditioning system serving the Premises, excluding all
ductwork, diffusers, thermostat controls, and any other part of the air-

                                       36
<PAGE>   41

conditioning system located outside of the machine room within the Premises. In
all events, the Tenant shall be responsible for any repairs required to be made
to any part of the air-conditioning system when the need for such repairs arises
from the causes set forth in clauses (i) through (iv) of Article THREE (a).

         Upon written request of the Tenant, the Landlord shall provide up to a
maximum of forty additional tons of condenser water service above the Base
Condenser Water Service for the Premises, at an annual cost per ton in effect at
the time such additional condenser water service is provided. Tenant shall also
reimburse Landlord for the hard and soft costs actually incurred by Landlord in
providing condenser water service in excess of the Base Condenser Water Service.

         (d) Provided the Tenant shall keep the Premises in order, the Landlord,
at the Landlord's expense, shall cause the Premises, excluding any portions
thereof used for the storage, preparation, service or consumption of food or
beverages, to be cleaned on Business Days substantially in accordance with the
Specifications set forth as SCHEDULE B annexed hereto. The Tenant, at the
Tenant's sole cost and expense, shall cause all portions of the Premises used
for the storage, preparation, service or consumption of food or beverages to be
cleaned daily in a manner reasonably satisfactory to the Landlord, and to be
exterminated against infestation by vermin, rodents or roaches regularly and, in
addition, whenever there shall be evidence of any infestation. Any such
extermination shall be done at the Tenant's sole cost and expense and by
contractors reasonably approved by the Landlord. If the Tenant shall perform any
additional cleaning services in addition to the services provided by the
Landlord, the Tenant shall employ such cleaning contractor providing services to
the building on behalf of the Landlord or such other cleaning contractor as
shall be approved by the Landlord. The Tenant shall, at its sole cost and
expense, comply with all present and future laws, ordinances, regulations and
requirements of the City, State or Federal Government or any agency having
jurisdiction over the building, or any rules which the Landlord may reasonably
impose, with respect to the recycling or sorting of refuse and rubbish. The
Landlord reserves the right to refuse to collect or accept from the Tenant any
refuse or rubbish which is not separated and sorted as required and to require
the Tenant to arrange for such collection, at the Tenant's sole cost and
expense, using a contractor reasonably satisfactory to the Landlord. The Tenant
shall indemnify the Landlord from all liability arising from the Tenant's
failure to comply with the provisions of this Article. The Tenant shall pay to
the Landlord the cost of removal of any of the Tenant's refuse and rubbish from
the building which exceeds normal office requirements.

         (e) The Landlord shall provide to the Premises hot and cold water for
ordinary drinking, cleaning and lavatory purposes. If the Tenant uses or
consumes water for any other purposes or in unusual quantities (of which fact
the Landlord shall be the sole judge), the Landlord may, at the Tenant's
expense, install a water meter or require the Tenant to install a meter. The
Tenant shall thereafter maintain the meter in good working order at the Tenant's
expense and the Tenant shall pay for water consumed as shown on said meter as
additional rent as and when bills are rendered at 110% of the Landlord's cost
therefor. In default in making such payment, the Landlord may pay such charges
and collect the same from the Tenant. The Tenant shall pay the New York City
sewer rents, charges or any other tax apportioned to the Tenant's metered
consumption of water at the Premises. The apportionment of the sewer rent to the
Premises shall be made in accord with the measurement or apportionment of water
consumed at the Premises as provided herein. The sewer rents shall be billed
with the water charges and shall constitute additional rent.

         (f) The Landlord may suspend any service which it is required to
provide hereunder, if it should become necessary or proper so to do, at any
time. The Landlord shall restore such service within a reasonable time, making
due allowance for labor troubles, acts of God, or any cause beyond the
Landlord's control. Should the Tenant be in default in the payment of any rent
hereunder, the Landlord may, upon not less than three days' notice, and without
diminution of the liability of the Tenant hereunder, and without constituting an
eviction, constructive or otherwise, suspend or refuse the Tenant freight
elevator service and should the Tenant, after notice, violate the provisions of
Rule 11, the Landlord may, without any diminution of such liability or
constituting such eviction, suspend or refuse the Tenant freight elevator
service until the conditions in violation of Rule 11 have been fully remedied.

         (g) The Landlord shall be entitled to refuse to furnish passenger or
freight elevator service in connection with any sale at auction of the Tenant's
fixtures, machinery, stock in trade and other

                                       37
<PAGE>   42

property or a sale in any other manner of all or substantially all of such
property unless the Landlord shall have been given not less than two days'
notice of the intention to hold the auction or other sale and unless the
Landlord shall be given an undertaking by a person, firm or corporation of
satisfactory financial resources wherein the Landlord shall be indemnified
against (i) all expense incurred by the Landlord in connection with the removal
by purchasers of any property sold to them at the auction or other sale, (ii)
all expense for removal or storage of any property sold at the auction or other
sale which is not removed by the purchaser within two days following the sale,
and (iii) all expenses which the Landlord may incur for the removal of property
not sold and waste and rubbish from the Premises.

         (h) The Tenant shall have access to and the main entry to the building
shall be open and staffed by a doorman, security guard, concierge or attendant
twenty-four (24) hours a day, seven (7) days a week. During Business Hours on
Business Days, messengers shall have access to the Premises through the
passenger elevators, or, if bulky packages are being delivered, through the
freight elevator. During non-Business Hours or on non-Business Days, messengers
shall have access to the Premises. The Landlord reserves the right, during the
term of this lease, to designate an area in the building for packages to be
delivered, either for transmittal to the Tenant, or notification to the Tenant
of the delivery of same.

                               ARTICLE THIRTY-TWO
                                    INSURANCE

         (a) The Tenant shall obtain and keep in full force and effect during
the term of this lease, at the Tenant's sole cost and expense, (i) a policy of
comprehensive general public liability and property damage insurance on an
occurrence basis, with a broad form contractual liability endorsement and a
completed operations endorsement with minimum limits with a combined single
limit with respect to each occurrence in an amount of not less than $5,000,000
for injury (or death) to persons and damage to property; (ii) an "all risk"
insurance policy, with extended coverage, covering all of Tenant's personal
property and alterations for 100% of the replacement cost thereof, as well as
business interruption insurance adequate to cover the Tenant's loss of income as
a result of a loss sustained by a peril covered under the policy; (iii) Worker's
Compensation Insurance, as required by law; and (iv) such other insurance in
such amounts as Landlord may reasonably require from time to time. Such policies
shall provide that the Tenant is named as the insured. Landlord and any managing
agent, lessors and mortgagees (whose names have been furnished to the Tenant)
shall be named as additional insureds, as their respective interests may appear.
The Tenant shall have the right to insure and maintain the insurance coverages
required under this Article under blanket insurance policies covering other
premises occupied by the Tenant so long as such blanket policies comply as to
terms and amounts with the requirements set forth in this Article; provided
that, upon request, the Tenant shall deliver to the Landlord a certificate from
the Tenant's insurer evidencing the portion of such blanket insurance allocable
to the Premises.

         (b) All insurance required to be carried by Tenant hereunder shall be
written in form and substance reasonably satisfactory to the Landlord and issued
by a reputable and independent insurer permitted to do business in the State of
New York, and rated in Best's Insurance Guide (or any successor thereto) as
having a general policyholder rating of not less than "A" and a financial rating
of at least "XIII". The policy required to be carried pursuant to paragraph (a)
(i) above shall contain a provision that (1) the policy shall be non-cancelable
with respect to the Landlord and such managing agents, lessors and mortgagees
(whose names and addresses have been furnished to the Tenant) unless thirty (30)
days' prior written notice shall be given to the Landlord by certified mail,
return receipt requested, which notice shall contain the policy number and the
name of the insured and additional insureds, and (2) no act or omission of the
Tenant shall affect or limit the obligation of the insurer to pay the amount of
any loss sustained. Certificates of insurance (including endorsements and
evidence of the waivers of subrogation required pursuant to Article SIXTEEN
hereof), or evidence of renewal of such coverage, shall be delivered to the
Landlord prior to the Commencement Date (or any earlier entry upon the Premises
by the Tenant or any of the Tenant's employees, agents or contractors prior to
the Commencement Date), and at least thirty (30) days prior

                                       38
<PAGE>   43

to the expiration of such policy. If the Tenant fails to obtain or keep in force
the insurance required by this Article, or to pay the premiums thereof, provided
the Tenant is afforded written notice of the Landlord's intention to pay such
premium ten (10) days prior thereto, in addition to all other rights the
Landlord may have under this lease, the Landlord may, from time to time, and as
often as such failure shall occur, pay the premiums therefor, and any and all
sums so paid for insurance by the Landlord shall be and become, and are hereby
declared to be, additional rent under this lease and shall be due and payable
within fifteen (15) days after rendition of a bill therefor.

                              ARTICLE THIRTY-THREE
                           DEFAULT UNDER OTHER LEASES

         Intentionally omitted.

                               ARTICLE THIRTY-FOUR
                           WORK TO BE DONE BY LANDLORD

         If work of any nature is agreed herein to be done by the Landlord, the
Tenant agrees that it may be done after the Commencement Date and that no rebate
of rent or allowance will be granted therefor, except as set forth in paragraph
(g) of Article One hereof. The Landlord shall not be required to furnish any
work or materials to the Premises, except as expressly provided in the Work
Letter attached to this lease EXHIBIT C. In case the Landlord is prevented from
making any repairs, improvements, decorations or alterations, installing any
fixtures or articles of equipment, furnishing any services or performing any
other covenant herein contained to be performed on the Landlord's part, due to
the Landlord's inability to obtain, or difficulty in obtaining, labor or
materials necessary therefor, or due to any governmental rules and regulations
relating to the priority of national defense requirements or strikes, or due to
labor troubles, accident or due to any other cause beyond the Landlord's
control, the Landlord shall not be liable to the Tenant for damages resulting
therefrom, nor (except as expressly otherwise provided in Article SIXTEEN hereof
in respect of damage to the Premises due to fire), shall the Tenant be entitled
to any abatement or reduction of rent by reason thereof, nor shall the same give
rise to a claim in the Tenant's favor that such failure constitutes actual or
constructive, total or partial, eviction from the Premises.

                               ARTICLE THIRTY-FIVE
                             CONSENT TO JURISDICTION

         This lease shall be governed in all respects by the laws of the State
of New York. The Tenant irrevocably consents and submits to the jurisdiction of
any Federal, State, or county court sitting in the State of New York in any
action or proceeding arising out of this lease and/or the use and occupation of
the Premises. The Tenant agrees that any action or proceeding brought by the
Tenant against the Landlord in respect of any matters arising out of or relating
to this lease may only be brought in the State of New York, County of New York.
The Tenant hereby irrevocably designates Colby Attorneys Service Co., Inc., 41
State Street, Suite 106, Albany, New York 12207 to accept service of process on
the Tenant's behalf and agrees that such service shall be deemed sufficient. If
the Tenant is not a New York partnership or corporation or a foreign corporation
qualified to do business in the State of New York, it shall designate in
writing, an agent in New York County for service under the laws of the State of
New York.

                               ARTICLE THIRTY-SIX
                                TENANT LIABILITY

         (a) If more than one tenant is named as the tenant under this lease,
each of the named tenants shall be jointly and severally liable for the
performance of all of the terms, covenants and agreements on the Tenant's part
to be performed under this lease.

         (b) If the Tenant (or any permitted assignee of Tenant) is a
partnership (or is comprised of two or more persons, individually or as
co-partners of a partnership or shareholders of a professional corporation) the
following provisions shall apply to each tenant: (i) the liability of each of
the partners comprising the Tenant shall be joint and several; (ii) each of the
parties comprising the Tenant hereby consents in advance to, and agrees to be
bound by, any modification, termination,

                                       39
<PAGE>   44

discharge or surrender of this lease which may hereafter be made and by any
notices, or other communications which may hereafter be given by the Tenant or
any of the parties comprising the Tenant; (iii) all statements, notices or other
communications given to the Tenant or to any of the parties comprising the
Tenant shall be deemed given to the Tenant and all parties; (iv) if the Tenant
shall admit new partners, all such new partners shall, by their admission to the
Tenant, be deemed to have assumed performance of all of the terms, covenants and
conditions of this lease on Tenant's part to be observed and performed, and (v)
the Tenant shall give to the Landlord notice of the admission of any new
partners, and upon demand of the Landlord, such new partners shall execute and
deliver to the Landlord an agreement in form satisfactory to the Landlord,
wherein each new partner shall assume performance of all of the terms, covenants
and conditions of this lease on Tenant's part to be performed (but the
Landlord's failure to request such an agreement nor the partners failure to
deliver such an agreement shall relieve the partner of its liability hereunder).

         (c) If the Tenant is a partnership, it shall not convert to or become a
corporation, limited liability company, registered limited liability partnership
or any other form of business organization (such entity being referred to as a
"Successor Entity") , without the Landlord's prior written consent. The Landlord
shall not unreasonably withhold its consent to the Tenant's conversion to a
Successor Entity provided that (i) the Tenant shall cause each partner of the
Tenant to execute and deliver to the Landlord an agreement, in a form reasonably
satisfactory to the Landlord, pursuant to which each partner of the Tenant
agrees to remain personally liable jointly and severally for all of the terms,
covenants and conditions of the lease that are to be performed by the Successor
Entity; (ii) the Successor Entity shall have a Net Worth (as hereinbefore
defined) of not less than the Net Worth of the Tenant on the date of execution
of the lease; (iii) no Event of Default has occurred and is continuing
hereunder; (iv) the Successor Entity succeeds to all of the business and assets
of the Tenant; (v) the Tenant shall deliver to the Landlord such documentation
as may be reasonably required by the Landlord to evidence compliance with the
requirements set forth above; and (vi) the Tenant shall reimburse the Landlord
for all reasonable costs and expenses, including, without limitation, attorneys'
fees, that may be incurred by the Landlord in connection with the conversion of
the Tenant to a Successor Entity.

                              ARTICLE THIRTY-SEVEN
                           ADJACENT EXCAVATION-SHORING

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

                              ARTICLE THIRTY-EIGHT
                           FAILURE TO GIVE POSSESSION

         In the event the Landlord, for any reason, shall be unable to give
possession of the Premises by the date set forth in this lease for the
commencement of the term, this lease shall nevertheless continue in full force
and effect and the Landlord shall tender and the Tenant shall take possession of
said Premises under the terms of this lease as soon as the Landlord shall have
tendered possession thereof to the Tenant; the rent, however, to begin on the
date upon which such possession is tendered to the Tenant, subject to the free
rent provisions of paragraph (g) of Article One. This is intended to constitute
an "express provision to the contrary" within the meaning of Section 223-a of
the New York Real Property Law. No such failure to give possession on the date
set forth in this lease for the commencement of this term shall affect the
validity of this lease or give rise to any claim for damages by the Tenant or
claim for rescission of this lease, nor shall the same be construed in any way
to extend the term of this lease. In the event that any tenant holds over in
Premises demised to the Tenant hereunder, Landlord shall use reasonably
commercial efforts, including the institution of summary proceedings, to obtain
possession of such Premises.

                               ARTICLE THIRTY-NINE

                                       40
<PAGE>   45

                                     BROKER

         The Tenant represents and warrants to the Landlord that all of the
Tenant's negotiations respecting this lease which were conducted with or through
any person, firm or corporation, other than the officers of the Landlord, were
conducted through Plymouth Partners, Ltd. (the "Broker"). The Landlord agrees to
pay the commission due to the Broker pursuant to the terms of a separate
agreement. Landlord and Tenant agree to indemnify and hold one another harmless
from and against all demands, liabilities, losses, causes of action, damages,
costs and expenses (including, without limitation, attorneys' fees and
disbursements) suffered or incurred in connection with any claims for a
brokerage commission, finder's fee, consultation fees or other compensation
arising out of any conversations or negotiations had by the party against whom
indemnification is claimed with any broker or other party except for the Broker.

                                  ARTICLE FORTY
                                RENT RESTRICTIONS

         If at the commencement of, or at any time or times during the term of
this lease, the fixed rent or additional rent reserved in this lease shall be or
become uncollectible by virtue of any law, governmental order or regulation, the
Tenant shall enter into such agreements and take such other steps (without
additional expense to the Tenant) as the Landlord may reasonably request and as
may be legally permissible to permit the Landlord to collect the maximum amounts
which may from time to time be legally collectible while such restrictions are
in effect (and not in excess of the amounts reserved for under this lease). Upon
the termination of such rent restrictions (a) the fixed rent and additional rent
shall become and thereafter be payable in accordance with the terms of this
lease, and (b) the Tenant shall pay to the Landlord, if legally permissible, an
amount equal to (i) the rent which would have been paid during the period had
such restrictions not been in effect, less (ii) the rents which were paid by the
Tenant to the Landlord during the period such restrictions were in effect.

                                ARTICLE FORTY-ONE
                             CERTIFICATES BY TENANT

         At any time and from time to time, the Tenant, for the benefit of the
Landlord or any other entity specified by the Landlord, within fifteen business
days after request, shall deliver to the Landlord a duly executed and
acknowledged certificate, 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 of the lease; the dates to which rent and
additional rent have been paid; whether or not, to the best knowledge of the
Tenant, there are any existing defaults on the part of either the Landlord or
the Tenant in the performance of the terms, covenants and conditions of the
lease to be performed by such party, and if so, specifying the default; and such
other information as the Landlord may reasonably request with respect to this
lease.

                                ARTICLE FORTY-TWO
                          RESTRICTIONS ON TENANT'S USE

         (a) The Tenant agrees that the value of the Premises and the building
of which the Premises form a part and the reputation of the Landlord will be
seriously injured if the Premises are used for any obscene or pornographic
purposes or any sort of commercial sex establishment. The Tenant covenants and
agrees not to sell, display or post, or knowingly allow to be sold, displayed or
posted any obscene or pornographic material on the Premises. The Tenant agrees
that if at any time the Tenant violates any of the provisions of this Article,
such violation shall be deemed a breach of a substantial obligation of the terms
of this lease.

         (b) The Tenant covenants and agrees that during the term of this lease,
it will not use the Premises or any part thereof, or permit the Premises or any
part thereof to be used (1) for banking, trust company or safe deposit business;
(2) as or by a commercial or savings bank, a trust company, a savings and loan
association, a loan company, or a credit union; (3) for the sale or travelers
checks, money orders and/or foreign exchange; (4) as a restaurant and/or bar
and/or for the sale of soda

                                       41
<PAGE>   46

and/or beverage and/or sandwiches and/or ice cream and/or baked goods; (5) by
the United States Government, the City or State of New York, any foreign
government, the United Nations or any agency or department of any of the
foregoing, or any other person or entity having sovereign or diplomatic
immunity; (6) as an employment agency, search firm or similar enterprise, school
or vocational training center (except for the training of employees of the
Tenant intended to be employed at the Premises); (7) as a barber shop or beauty
salon; or (8) as a diagnostic medical center and/or for the practice of
medicine.

                               ARTICLE FORTY-THREE
                               HAZARDOUS MATERIALS

         The Tenant shall not cause or permit any Hazardous Materials to be
used, stored, transported, released, handled, produced or installed in, on or
from the Premises or the building. "Hazardous Materials" shall mean any
flammable, explosives, radioactive materials, hazardous wastes, hazardous and
toxic substances, asbestos or any material containing asbestos, or any other
substance or material which would be defined as a hazardous or toxic substance,
contaminant, or pollutant, or otherwise regulated by any Federal, state or local
environmental law, rule or regulation, including without limitation, the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended. In the event of a violation of the foregoing provisions of this
Article, the Landlord may, without notice and without regard to any grace period
contained in this lease, take all remedial action deemed necessary by the
Landlord to correct such condition and the Tenant shall reimburse the Landlord
for the cost thereof, upon demand, as additional rent. Nothing contained herein
shall prevent the Tenant from maintaining customary and normal cleaning supplies
and office equipment and supplies, provided such items are used and stored in
compliance with the requirements of all applicable laws.

                               ARTICLE FORTY-FOUR
                                  MISCELLANEOUS

         (a) This lease contains the entire agreement between the parties and
all prior negotiations and agreements are merged into this lease.

         (b) This lease may not be recorded.

         (c) The covenants, conditions and agreements contained in this lease
shall bind and inure to the benefit of the Landlord and the Tenant and their
respective heirs, executors, administrators, successors and permitted assigns.

         (d) If any term, covenant or provision of this lease, or the
application thereof, shall be held invalid or unenforceable, the remainder of
this lease, or the application thereof to situations other than that as to which
it is invalid or unenforceable, shall not be affected thereby, and each term,
covenant and provision shall be valid and enforceable to the fullest extent
permitted by law.

         (e) The submission of this lease for execution by the Tenant shall not
be binding upon the Landlord or the Tenant unless and until both the Landlord
and the Tenant have executed and unconditionally delivered a fully executed copy
of this lease to each other.

         (f) The captions in this lease are inserted for convenience only and
shall not define, limit or describe the scope of the provisions to which any of
them apply. The use of any pronoun referring to either of the parties to this
lease shall be construed to include any or no gender and any number.

         (g) If the Tenant is a corporation, the person executing this lease on
behalf of the Tenant represents and warrants that the Tenant is duly
incorporated and, if applicable, is duly qualified and authorized to conduct
business in the State of New York, and the person executing this lease on behalf
of the Tenant has been duly authorized to do so. The Tenant shall provide the
Landlord with a copy of a resolution to this effect, and evidence of its due
incorporation and qualification, if applicable, upon request of the Landlord.

                                       42
<PAGE>   47

                               ARTICLE FORTY-FIVE
                            TENANT'S OPTION TO EXPAND

         (a) Fifth Floor Expansion Space.

         (i)The remainder of the 5th floor, other than the Fifth Floor Initial
Space and the Mason Tenders Space (such remainder is referred to hereinafter as
the "5th Floor Expansion Space"), is presently leased to the Trustees of Home
Care Industry Local 32B/32J ("32B/32J") which occupies the Fifth Floor Expansion
Space pursuant to a lease (the "32B/32J Lease") which expires January 5, 2008.
If the Tenant wishes to lease the Fifth Floor Expansion Space, it shall give
written notice (the "First Notice") to the Landlord no later than March 31,
2007. Time shall be of the essence with respect to the delivery of the First
Notice. If the Tenant timely delivers the First Notice, the parties shall
endeavor to agree on a rental therefor. If the parties are unable to agree on a
rental for such Fifth Floor Expansion Space by six months prior to the
expiration date of the 32B/32J Lease for such space, or if the Tenant fails to
timely deliver the First Notice for such space, the Landlord shall be free to
lease such Fifth Floor Expansion Space to any unaffiliated third party free of
the rights of the Tenant hereunder, and the Landlord shall have no further
obligation under this Article Forty-Five with respect to the Fifth Floor
Expansion Space, except as set forth in the balance of this paragraph (a). If
the parties are unable to agree on a rental for such Fifth Floor Expansion Space
and the Landlord thereafter offers to lease such space to a third party, the
Landlord shall give the Tenant written notice of the financial terms upon which
it is offering to lease the space to the third party (the "Third Party Offer").
If the present value of the net effective rent set out in the Third Party Offer
(discounted at the rate of 2% over the prime rate then announced by Chase
Manhattan Bank, N.A., or any successor thereto), is less than 90% of the present
value of the net effective rent last offered by the Landlord to the Tenant for
such space, the Tenant shall have a period of five (5) business days in which to
notify the Landlord as to whether it wishes to lease the relevant Fifth Floor
Expansion Space on the terms set forth in the Third Party Offer, (such notice
from Tenant being referred to as the "Second Notice") time being of the essence
with respect to the delivery of the Second Notice. If the Tenant timely delivers
the Second Notice, the Landlord shall promptly prepare an amendment to this
lease reflecting the addition of the Fifth Floor Expansion Space upon the terms
set forth in the Third Party Offer and the Tenant shall then have a period of
fifteen (15) days in which to execute and return the lease amendment to the
Landlord. If the Tenant does not execute and return the lease amendment to the
Landlord within 15 days, or if the Tenant fails to timely deliver the Second
Notice, the Landlord may thereafter lease the relevant Fifth Floor Expansion
Space to a third party at any terms it wishes, free of the Tenant's rights
hereunder and thereafter, the Landlord shall have no further obligation to the
Tenant under paragraph (a) of this Article with respect to such Fifth Floor
Expansion Space.

         (ii) If the 32B/32J Lease is terminated prior to its present expiration
date, the Landlord will notify the Tenant of the date such Fifth Floor Expansion
Space will be available for lease. The Tenant shall notify the Landlord within
thirty (30) days after receipt of the Landlord's notice as to whether it wishes
to lease the Fifth Floor Expansion Space, time being of the essence with respect
to the delivery of such notice. If the Tenant notifies the Landlord that it
wishes to lease such space, the parties shall endeavor to agree on a rental
therefor. If the parties are unable to agree on a rental for such Fifth Floor
Expansion Space within sixty (60) days after the date of the Tenant's notice, or
if the Tenant fails to timely deliver such notice, the Landlord shall be free to
lease such Fifth Floor Expansion Space to any unaffiliated third party free of
the rights of the Tenant hereunder, and the Landlord shall have no further
obligation with respect to the Fifth Floor Expansion Space under this Article
Forty-Five, except that the Landlord shall be obligated to send the Tenant a
Third Party Offer for such space and the Tenant shall have the same rights as
set forth in paragraph (a) above if the net effective rent as set out in the
Third Party Offer is less than 90% of the net effective rent last offered by the
Landlord to the Tenant for such space.

         (iii) The Fifth Floor Expansion Space shall be leased for a term
expiring on the Expiration Date, and otherwise on the terms and conditions set
forth in this lease (with a current Base Year for computing Real Estate Tax
Escalation and with Operating Expense escalation calculated in accordance with
Schedule 2 attached hereto), except as otherwise agreed between the parties or
as set forth in the Third Party Offer.

                                       43
<PAGE>   48

         (b) Third Floor Expansion Space.

         (i) The entire 3rd floor of the building (the "Third Floor Expansion
Space") is presently leased to the same tenant ("Dean Witter") which occupies
the Dean Witter Premises on the 4th floor pursuant to a lease (the "Dean Witter
Lease") which expires January 31, 2002. Unlike the Dean Witter Premises, the
Third Floor Expansion Space is subject to a renewal option. If the Tenant wishes
to lease the Third Floor Expansion Space (which right shall be subject, in all
events, to the right of renewal contained in the Dean Witter lease), it shall
give written notice (the "First Notice") to the Landlord no later than April 30,
2001. If Dean Witter exercises its option to renew, Tenant shall have no further
rights under this Article Forty-Five with respect to the Third Floor Expansion
Space. Time shall be of the essence with respect to the delivery of the First
Notice. If the Tenant timely delivers the First Notice, the parties shall
endeavor to agree on a rental therefor. If the parties are unable to agree on a
rental for such Third Floor Expansion Space by six months prior to the
expiration date of the Dean Witter Lease for such space, or if the Tenant fails
to timely deliver the First Notice for such space, the Landlord shall be free to
lease such Third Floor Expansion Space to any unaffiliated third party free of
the rights of the Tenant hereunder, and the Landlord shall have no further
obligation under this Article Forty-Five with respect to the Third Floor
Expansion Space, except as set forth in the balance of this paragraph (a). If
the parties are unable to agree on a rental for such Third Floor Expansion Space
and the Landlord thereafter offers to lease such space to a third party, the
Landlord shall give the Tenant written notice of the financial terms upon which
it is offering to lease the space to the third party (the "Third Party Offer").
If the present value of the net effective rent set out in the Third Party Offer
(discounted at the rate of 2% over the prime rate then announced by Chase
Manhattan Bank, N.A., or any successor thereto), is less than 90% of the present
value of the net effective rent last offered by the Landlord to the Tenant for
such space, the Tenant shall have a period of five (5) business days in which to
notify the Landlord as to whether it wishes to lease the relevant Third Floor
Expansion Space on the terms set forth in the Third Party Offer, (such notice
from Tenant being referred to as the "Second Notice") time being of the essence
with respect to the delivery of the Second Notice. If the Tenant timely delivers
the Second Notice, the Landlord shall promptly prepare an amendment to this
lease reflecting the addition of the Third Floor Expansion Space upon the terms
set forth in the Third Party Offer and the Tenant shall then have a period of
fifteen (15) days in which to execute and return the lease amendment to the
Landlord. If the Tenant does not execute and return the lease amendment to the
Landlord within 15 days, or if the Tenant fails to timely deliver the Second
Notice, the Landlord may thereafter lease the relevant Third Floor Expansion
Space to a third party at any terms it wishes, free of the Tenant's rights
hereunder and thereafter, the Landlord shall have no further obligation to the
Tenant under paragraph (a) of this Article with respect to such Third Floor
Expansion Space.

         (ii) If the Dean Witter Lease is terminated prior to its present
expiration date, the Landlord will notify the Tenant of the date such Third
Floor Expansion Space will be available for lease. The Tenant shall notify the
Landlord within fifteen (15) business days after receipt of the Landlord's
notice as to whether it wishes to lease the Third Floor Expansion Space, time
being of the essence with respect to the delivery of such notice. If the Tenant
notifies the Landlord that it wishes to lease such space, the parties shall
endeavor to agree on a rental therefor. If the parties are unable to agree on a
rental for such Third Floor Expansion Space within sixty (60) days after the
date of the Tenant's notice, or if the Tenant fails to timely deliver such
notice, the Landlord shall be free to lease such Third Floor Expansion Space to
any unaffiliated third party free of the rights of the Tenant hereunder, and the
Landlord shall have no further obligation under this Article Forty-Five with
respect to the Third Floor Expansion Space, except that the Landlord shall be
obligated to send the Tenant a Third Party Offer for such space and the Tenant
shall have the same rights as set forth in paragraph (a) above if the net
effective rent as set out in the Third Party Offer is less than 90% of the net
effective rent last offered by the Landlord to the Tenant for such space.

         (iii) The Third Floor Expansion Space shall be leased for a term
expiring on the Expiration Date, and otherwise on the terms and conditions set
forth in this lease, except as otherwise agreed between the parties or as set
forth in the Third Party Offer.

                                ARTICLE FORTY-SIX

                                       44
<PAGE>   49

                             LANDLORD'S CONTRIBUTION

         It is agreed that the Tenant will modify and improve the Premises to
make them better suited for use as offices, and that the Landlord will reimburse
the Tenant for the cost of improving the specific portions of the Premises
listed in the schedule below only up to the maximum amounts listed in the
schedule (and the Tenant will pay the cost of any modifications or improvements,
in excess of such amount), all in accordance with, and subject to the
limitations set forth in subparagraphs (a) through (d) below:

                                       45
<PAGE>   50

                      Unit of                       Maximum
                       Space                      Contribution

                Initial Premises                   $1,429,150
                Europadisk Space                   $  728,840
                Dean Witter Space                  $  233,340
                Tri-Don Space                      $  230,530
                Astoria Space                      $  140,780
                Power Color Space                  $  121,440
                Mason Tenders Space                $  103,580

In addition, Landlord shall reimburse Tenant an amount not to exceed $75,000 for
Tenant's improvements to the public corridors, in lieu of Landlord's creating
new common corridors.

         (a) The Tenant will select an architect to design the office
improvements for the Premises (which improvements, for purposes of calculating
Tenant's reimbursable costs, shall not include any furniture, or telephone,
computer or other office systems or equipment (other than cables for any
telephone or data processing systems), or any furniture or decorations (other
than carpeting, wall coverings and window blinds)) (the "Improvements"). As soon
as practicable after the Commencement Date applicable to each portion of the
Premises listed above, the Tenant shall submit to the Landlord for review and
approval plans and specifications (including all necessary mechanical,
electrical, engineering and working drawings) for the Improvements and such
plans shall be sufficient (i) to comply with all applicable laws, rules,
regulations and requirements of any governmental authority having jurisdiction
over the building, (ii) to permit the Tenant to apply for and obtain all
necessary permits, licenses and approvals necessary in connection with the
Improvements, and (iii) to permit the contractor to commence and complete the
work relating to the Improvements. The Landlord shall review and approve or
comment on such plans within twenty (20) business days of receipt thereof, and
the Tenant shall pay the reasonable fees, expenses and charges of the Landlord
paid to Landlord's outside consultants in connection with such review. As soon
as practical thereafter, the Tenant shall submit to the Landlord for approval
complete and final plans and specifications (including all necessary mechanical,
electrical, engineering and working drawings) for the Improvements, sufficient
to meet the requirements set forth in clauses (i) through (iii) above (such
plans as approved by the Landlord are hereinafter referred to as the "Final
Plans"). The Tenant agrees to reimburse the Landlord for its reasonable fees and
expenses for reviewing plans and specifications.

         (b) All professional fees (including those for architectural and design
costs and appraisals) and the cost of all permits, licenses and approvals
required in connection with the construction and installation of the
Improvements shall be borne solely by the Tenant.

         (c) The Landlord shall reimburse the Tenant from time-to-time (but not
more often than monthly) for work done in connection with the installation and
construction of the Improvements, up to an aggregate maximum specified for each
portion of the Premises listed above, provided that the Landlord's obligation to
make any such or reimbursement shall be subject to the satisfaction of the
following conditions:

                  (i)      the work done must conform to the design set forth in
                           the Final Plans in all material respects and the
                           quality and workmanship of the work done must be
                           reasonably satisfactory to the Landlord and the
                           Tenant (and the Tenant shall have so stated in its
                           request for reimbursement);

                  (ii)     with respect to the reimbursement of any partial
                           payment made on the basis of the percentage of
                           completion of any work, the Landlord shall have been
                           furnished a form by the Tenant's architect indicating
                           the percentage of completion of the work in question;

                  (iii)    the Landlord shall have been furnished with invoices
                           from the vendors, supplier, or contractor evidencing
                           the amount for which payment or

                                       46
<PAGE>   51

                           reimbursement is sought, such invoices, if submitted
                           for reimbursement, to be marked "paid in full" by
                           such vendor, supplier or contractor (or, in lieu
                           thereof, the Landlord shall be furnished other
                           documentation satisfactory to the Landlord evidencing
                           payment in full); and

                  (iv)     the Landlord shall have received, with respect to the
                           work done for which payment or reimbursement is
                           claimed hereunder, a written waiver from the
                           contractor or vendor in question (and all
                           subcontractors and subvendors involved in the work in
                           question) waiving any right to assert any vendor's,
                           mechanic's or other lien on the building, the
                           Premises or any fixtures, machinery, equipment or
                           other installation therein.

         If so requested by the Tenant, in lieu of reimbursing the Tenant, the
Landlord will make payment directly to the Tenant's vendors, suppliers and
contractors (no more often than monthly and not for amounts which aggregate less
than $50,000), provided that the Landlord's obligation to make any such payment
shall be subject to the conditions set forth above (except that the invoices to
be paid need not be marked "paid in full").

         (d) It is understood and agreed that the Landlord shall have no
responsibility for the performance of the contractor installing the Improvements
(including matters of quality or timeliness), and in the event that for any
reason the Improvements are not completed in a timely fashion and/or there is
any delay in the date on which the Premises are ready for occupancy by the
Tenant for the purposes of conducting business, this lease shall nevertheless
continue in full force and effect, and the Tenant shall have no right, remedy or
claim (including any claim for actual, punitive or consequential damages)
against the Landlord.

                                ARTICLE FORTY-SIX
                                    GENERATOR

         (a) The Tenant has advised the Landlord that it may wish to install a
standby generator with associated equipment. Provided that Landlord is able to
provide space on the roof to Tenant, Tenant shall have the right to install a
generator with a capacity of no more than 250 kVA, and related equipment
(colllectively, the "Generator") on the roof of the building in an area to be
designated by the Landlord (the "Roof Space"). The Landlord shall have no
obligation to provide the Roof Space until it has completed construction of the
additional floors on the building, and shall have no obligation at all to
provide Roof Space if, in good faith, Landlord determines that there is no
suitable Roof Space available. As of the date the Landlord delivers the Roof
Space to the Tenant, (i) the Roof Space shall be added to and be deemed to be
part of the premises upon all of the terms of the lease, except as otherwise set
forth herein; (ii) the Landlord shall have no obligation to perform any work on
the Roof Space and shall deliver the same in its then "as-is" condition, (iii)
the annual fixed rent shall be increased by a sum equal to $50 per rentable
square foot (the "Roof Rent"), which rent shall be increased as of the first
anniversary of the date on which the Roof Space was added to the premises and on
each succeeding anniversary thereafter, by 3% over the Roof Rent payable during
the immediately preceding twelve-month period.

         (b) Pending the delivery of the Roof Space, Tenant shall be permitted
to install the Generator on the 4th floor, provided that the Generator may only
be vented through louvers located in the two windows directly above the louvers
used by Dean Witter on the 3rd floor, and only through January 31, 2002. On or
before January 31, 2002, Tenant shall remove the Generator from the 4th floor
and remove the louvers installed in the windows, restoring the windows so as to
maintain a uniform appearance of the building. In the event that Landlord has
not been able to provide Roof Space, Tenant shall have no right to maintain a
Generator at the Premises. If Tenant has previously installed a Generator in the
Premises and Landlord subsequently provides Roof Space, Tenant shall be
responsible, at Tenant's cost, to move the Generator from the 4th floor to the
Roof Space.

                                       47
<PAGE>   52

         (c) The Generator shall be installed and maintained at the sole cost
and expense of the Tenant and shall be installed and maintained in compliance
with all Legal Requirements, including, without limitation, all Environmental
Laws. The Landlord's written approval of the plans and specifications for the
Generator installation must be obtained before the Tenant may proceed with any
work in connection with the Generator installation. The Generator installation
shall be governed by the provisions of this lease. The Landlord and its agents
and employees shall have reasonable access to the Roof Space as required for the
maintenance, repair or operation of the building or building systems. The Tenant
shall be responsible for any taxes which may be now or hereafter levied on the
Generator. The Landlord may require that its personnel or contractor be present
during the installation and removal of the Generator, and any maintenance and
repair thereof, and the Tenant shall reimburse the Landlord for the charges
incurred by the Landlord in connection therewith. If the Generator is to be
connected to any building system or equipment, the Landlord may, at is option,
either require that the Landlord's contractor physically connect the wiring from
the Generator to such system or equipment, or require its personnel or
contractor to be present when such work is done, and in either case, the Tenant
shall reimburse the Landlord for the costs incurred by the Landlord in
connection therewith.

         IN WITNESS WHEREOF, this agreement has been signed and sealed by the
parties hereto as of the date set forth above.

                                    THE RECTOR, CHURCH-WARDENS AND
                                    VESTRYMEN OF TRINITY CHURCH IN THE
                                    CITY OF NEW YORK

                                    By:
                                       -----------------------------------------
                                        Daniel Paul Matthews, Rector

                                    By:
                                       -----------------------------------------
                                        Director of Leasing

                                    By:
                                       -----------------------------------------
                                        Executive Vice President of Real Estate

                                    By:
                                       -----------------------------------------
                                        Finance Department

Attest:                             PHOTODISC, INC.
As to the Tenant:

                                    By:                                   (L.S.)
--------------------------             -----------------------------------
                                              An Authorized Officer

                                      (i)

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