Document:

<PAGE>

                      NAVIANT TECHNOLOGY SOLUTIONS, INC.

                                      LEASE

                               650 TOWNSEND STREET
                                  SAN FRANCISCO

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                               <C>
1.       SALIENT LEASE TERMS..................................................................     1
2.       DEFINITIONS..........................................................................     3
3.       PREMISES.............................................................................     9
4.       TERM.................................................................................    10
5.       PRE-TERM POSSESSION..................................................................    10
6.       DELAY IN DELIVERY OF POSSESSION......................................................    11
7.       MINIMUM RENT.........................................................................    11
8.       ADDITIONAL RENT......................................................................    11
9.       ACCORD AND SATISFACTION..............................................................    13
10.      SECURITY DEPOSIT.....................................................................    13
11.      USE..................................................................................    14
12.      COMPLIANCE WITH LAWS AND REGULATIONS.................................................    16
13.      SERVICE AND EQUIPMENT................................................................    22
14.      WASTE................................................................................    24
15.      ALTERATIONS..........................................................................    24
16.      PROPERTY INSURANCE...................................................................    26
17.      INDEMNIFICATION, WAIVER OF CLAIMS AND SUBROGATION....................................    28
18.      LIABILITY INSURANCE..................................................................    29
19.      INSURANCE POLICY REQUIREMENTS........................................................    30
20.      LESSEE INSURANCE DEFAULT.............................................................    30
21.      FORFEITURE OF PROPERTY AND LESSOR'S LIEN.............................................    30
22.      MAINTENANCE AND REPAIRS..............................................................    31
23.      DESTRUCTION..........................................................................    32
24.      CONDEMNATION.........................................................................    33
25.      ASSIGNMENT AND SUBLETTING............................................................    35
26.      ABANDONMENT..........................................................................    38
27.      ENTRY BY LESSOR......................................................................    39
28.      SIGNS................................................................................    39
29.      DEFAULT..............................................................................    39
30.      REMEDIES UPON DEFAULT................................................................    40
31.      BANKRUPTCY...........................................................................    42
32.      SURRENDER OF LEASE...................................................................    45
33.      LESSOR'S EXCULPATION.................................................................    46
34.      ATTORNEYS' FEES......................................................................    46
35.      NOTICES..............................................................................    47
36.      SUBORDINATION........................................................................    47
37.      ESTOPPEL CERTIFICATES................................................................    48
38.      WAIVER...............................................................................    48
</TABLE>

                                       i.
<PAGE>

<TABLE>
<S>                                                                                               <C>
39.      HOLDING OVER.........................................................................    49
40.      SUCCESSORS AND ASSIGNS...............................................................    49
41.      TIME.................................................................................    49
42.      EFFECT OF LESSOR'S CONVEYANCE........................................................    49
43.      COMMON AREAS.........................................................................    49
44.      TRANSFER OF SECURITY.................................................................    49
45.      LATE CHARGES.........................................................................    50
46.      CORPORATE AUTHORITY..................................................................    50
47.      MORTGAGEE PROTECTION.................................................................    50
48.      MISCELLANEOUS PROVISIONS.............................................................    50
49.      WAIVER OF CALIFORNIA CODE SECTIONS...................................................    53
50.      SHUTTLE SERVICE......................................................................    53
</TABLE>

                                      ii.
<PAGE>

  _________ dated for reference purposes only this ______day of________ 1999.

                            1. SALIENT LEASE TERMS

1.1    Payment:               ZORO, LLC
                              650 Townsend Street
                              San Francisco, CA 94103
                              Attn.:  Building Management Office
                              Fax No.:  (415) 487-4056

1.2    Address and Notice     Lessor:  ZORO, LLC,
       Address:                        a California limited liability company
                                       650 Townsend Street
                                       San Francisco, CA 94103
                                       Attn.:  Building Management Office
                                       Fax No.:  (415) 487-4056

                              Lessee:  NAVIANT TECHNOLOGY
                                       SOLUTIONS, INC.,
                                       a _________________ corporation

                              (If more than one party, then the obligations
                              hereunder shall be joint and several.)

                              Until commencement of the Term:

                                   Naviant Technology Solutions
                                   14 Campus Boulevard, Suite 200
                                   Newtown Square, PA 19073-3279

                              After commencement of the Term, Notices shall be
                              sent to Lessee at the Leased Premises.

                                                                  (Section 35.1)

1.3    Premises:              (A)  Name and Location of Complex:
                                   Townsend Center
                                   650 Townsend Street
                                   San Francisco, CA 94103

                              (B)  Leased Premises:  Third Floor, Quadrant A
                                                     Suite 300

                                   Usable Area:  3,180 square feet
                                   Adjusted Rentable Area:  4,134 square feet*
                                   Rentable Area:  4,654 square feet
                                   Load Factor:  1.3

                                      1.
<PAGE>

                                              (*Based On Usable Area multiplied
                                              by a load factor of 1.3)

1.4    Term:                (A)  Estimated Delivery Date:  __________________
                            (B)  Initial Term:  Four (4) years
                            (C)  Renewal Term:  None
                                                                  (Section. 4.1)

1.5    Rent:                (A)  Minimum Rent:
                                       Annual Rental            Monthly Rental
                            Years 1-4     $136,422             $11,368.50
                                         ($33.00/ARSF)         ($2.75/ARSF)
                                                                   (Section 7.1)

                            (B)  Advance Rent:
                                  Eleven Thousand Three Hundred Sixty-Eight and
                                  Fifty ($11,368.50)
                                                                   (Section 7.2)

1.6    Security Deposit:    One Hundred Fifty-Three Thousand Dollars
                            ($153,000)
                                                                  (Section 10.1)

1.7    Use:                 Multimedia, software development, marketing, sales,
                            customer service and administrative functions
                                                                  (Section 11.1)

1.8    Initial Pro Rata     .69% (4,654/672,788 rsf)
       Percent:
                                                                   (Section 2.1)
                                                                  (Section 16.3)

1.9    Base Operating Cost  (A) Base Expense Year:     2000
       for the Complex:     (B) Base Tax Year:         1999-2000
                                                                   (Section 8.2)
                                                                  (Section 16.3)

1.10   Real Estate          Cushman & Wakefield of California, Inc. and
       Brokers:             Polatnick Properties (Lessor's Brokers)
                            CB Richard Ellis, Inc. (Lessee's Broker)
                                                                 (Section 48.14)

1.11   Rentable Area of     672,788 square feet
       Building at
       Commencement:

                                      2.
<PAGE>

1.12   Parking                Three (3) stalls

1.13   Contents:              This Lease consists of:
                              Pages 1 through 59
                              Sections 1 through 50 Addenda (if any)
                              Exhibits:
                                   A   -  Legal Description of Complex
                                   B   -  Plan of the Complex
                                   C   -  Floor Plan of the Leased Premises
                                   D   -  Work Letter Agreement
                                   E   -  Acknowledgment of Commencement
                                   F   -  Rules and Regulations
                                   G   -  Building Standards
                                   H   -  Janitorial Specifications
                                   I   -  Subordination Agreement
                                   J   -  Letter of Credit Terms

                         2.   DEFINITIONS

     2.1  The terms defined in this Article 2 shall, for all purposes of this
Lease and all agreements supplemental hereto, have the meanings herein specified
unless expressly stated otherwise.

          "Adjusted Rentable Area" means the Usable Area multiplied by 1.2
           ----------------------
except on the 2nd and 3rd floors for which the multiplicand shall be 1.3.

          "Alterations" means any alterations, additions, improvements or
           -----------
installations performed by Lessee.

          "Atrium" means the central Atrium on floors 2 through 6 of the
           ------
Building so identified on Exhibits B and C, if applicable.

          "Base Building Work" is defined in the Work Letter Agreement,
           ------------------
attached hereto as Exhibit D.

          "Base Operating Cost" means the sum set forth in Section 1.9
           -------------------
hereof.

          "BOMA" means the standards of measurement adopted by the Building
           ----
Owners and Managers Association, American National Standard, ANSI/BOMA 2.65.1 -
1996 ("BOMA") as modified by Lessor for uniform use in the Complex.

          "Building" shall mean the structure which contains the Leased
           --------
Premises.

          "Building Standards" shall mean Lessor's standard specifications for
           ------------------
construction in the Building as set forth in Exhibit G, attached hereto, and as
may be established by Lessor from time to time.

                                      3.
<PAGE>

          "Commencement Date" shall mean the earlier of the following dates:
           -----------------

               (i)    The day upon which Lessee takes possession of the Leased
Premises; or

               (ii)   The date upon which the Tenant Improvements, including the
Lessee's Work (as herein defined), have been substantially completed as
determined by Lessor's project architect; or

               (iii)  Sixty (60) days following the Delivery Date (as herein
defined).

          "Common Areas" shall mean all areas and facilities outside the
           ------------
Leased Premises within the exterior boundaries of the Complex of which the
Leased Premises form a part, that are provided and designated by Lessor from
time to time for the general use and convenience of Lessee and of other tenants
of Lessor having the common use of such areas, and their respective authorized
representatives and invitees. Common Areas include, without limitation,
corridors, stairways, elevator shafts, janitor rooms, driveways, parking areas,
and landscaped areas all as generally described on Exhibit B, attached hereto.
Exhibit B is tentative and Lessor reserves the right to make alterations thereto
from time to time. Other areas may be designated by Lessor from time to time as
for the exclusive use of certain lessees, and shall cease being Common Areas.

          "Complex" is the real property of which the Leased Premises
           -------
forms a part, including, but not limited to, the Building, parking facility and
landscaping, which property is described with particularity in Exhibit A,
attached hereto and made a part hereof by reference.

          "Delivery Date" shall mean the earlier of the following dates:
           ------------
(i) the date upon which Lessee takes possession of the Leased Premises (provided
possession shall not mean Lessee's possession of and entry to the Leased
Premises for the purpose set forth in Section 5.1), or (ii) the date upon which
Lessor's Work with respect to the Leased Premises has been substantially
completed in accordance with Exhibit D; provided, however, in the event
completion of Lessor's Work is delayed by Lessee's Work or other acts of Lessee
or its agents ("Lessee Delay") any such Lessee Delay shall thereupon effect a
postponement of the date at which Lessor is obliged to deliver the Leased
Premises to Lessee by the number of days of Lessee Delay. However, the Delivery
Date and the Commencement Date as would otherwise be established had Lessee
Delay not occurred shall not be postponed by the number of days of Lessee Delay.

          "Force Majeure" shall mean event(s) beyond the reasonable control of
           -------------
the obligated party such as, for example only, strikes, riots, governmental act
or failure to act, shortage of materials, weather and other such matters over
which the party does not have reasonable control (except matters resulting from
financial insufficiency).

          "Lease Year" means any calendar year, or portion thereof, following
           ----------
the commencement hereof, the whole or any part of which period is included
within the Term.

          "Leased Premises" shall mean the portion of space leased to Lessee
           ---------------
hereunder.

                                      4.
<PAGE>

          "Lessee's Work" shall mean the work of improvement to the Leased
           -------------
Premises to be performed by Lessee in accordance with the Work Letter Agreement.

          "Lessor's Work" shall mean the work to be performed by Lessor in
           -------------
accordance with the Work Letter Agreement.

          "Lines" shall mean domestic water, chilled water and waste pipes and
           -----
lines, exhaust pipes and vents, communications, computer, audio and video,
security and electrical (other than electrical wiring within the Leased Premises
terminating at or connected to Building check meters), cables, wires, lines,
duct work, sensors, switching equipment, control boxes, risers and related
improvements at the Complex, Building or the Leased Premises.

          "Major Vertical Penetrations" shall mean stairs, elevator shafts,
           ---------------------------
flues, pipe shafts, vertical ducts, and the like, and their enclosing walls,
which serve more than one floor of the Building, but shall not include stairs,
dumbwaiters, lifts, and the like, exclusively serving a lessee occupying space
on more than one floor.

          "Occupied Floor Area" means that portion of the Rentable Area of the
           -------------------
Complex which is leased and occupied.

          "Operating Costs" means the total amounts paid or payable, whether by
           ---------------
Lessor or others on behalf of Lessor, in connection with the ownership,
maintenance, repair, replacement and operations of the Complex (including,
without limitation, all areas and facilities within the exterior boundaries of
the Complex) as determined in a manner consistent with generally accepted
accounting principles ("GAAP"). Operating Costs shall include, but not be
limited to, the aggregate of the amount paid for all electricity and fuel used
in heating and air conditioning of the Building; the amount paid or payable for
all electricity furnished by Lessor to the Complex; the cost of periodic
relamping and reballasting of Building Standard lighting fixtures; the amount
paid or payable for all hot and cold water (other than that chargeable to
lessees by reason of their extraordinary consumption of water); the amount paid
or payable for all labor and/or wages and other payments including cost to
Lessor of workers' compensation and disability insurance, payroll taxes, welfare
and fringe benefits made to janitors, caretakers, and other employees,
contractors and subcontractors of Lessor (including wages of the Building
manager) involved in the operation, maintenance and repair of the Complex;
painting for exterior walls of the buildings in the Complex; managerial and
administrative expenses; the total charges of any independent contractors
employed in the repair, care, operation, maintenance, and cleaning of the
Complex; the amount paid or payable for all supplies occasioned by everyday wear
and tear; the costs of VAC (as defined in Section 13.1) of the Complex, (except
to the extent paid by Lessee, or other lessees, for VAC provided to the Leased
Premises, or other leased premises, in respect of VAC provided outside the
Climate Control Hours defined in Section 13.1), window and exterior wall
cleaning, telephone and utility costs; the cost of accounting services necessary
to compute the rents and charges payable by lessees and keep the books of the
Complex; fees for management, legal, accounting, inspection and consulting
services; the cost of operating, repairing and maintaining and replacing the
Building escalators and elevators and the utility systems, including Lines, of
the Complex including the cost of inspection and service contracts; the cost of
porters, guards and other protection services; the cost of establishing and
maintaining the Building's directory board; payments for general

                                      5.
<PAGE>

maintenance and repairs to the plant and equipment supplying climate control;
the cost of supplying all services pursuant to Article 13 hereof to the extent
such services are not paid by individual lessees; amortization of the costs,
including repair and replacement, of all maintenance and cleaning equipment and
master utility meters and of the costs incurred for repairing or replacing all
other fixtures, equipment and facilities serving or comprising the Complex which
by their nature require periodic or substantial repair or replacement, and which
are not charged fully in the year in which they are incurred, at rates on the
various items determined from time to time by Lessor in accordance with GAAP;
the cost of the Shuttle Service described in Article 50 hereof; the cost of
operating the parking facility in the Complex and the cost of parking fees and
rents paid to the owner of another parcel for use of certain parking spaces
therein (collectively "Parking Costs") net of parking fees and rents collected
by Lessor in connection herewith provided, however, Lessor shall not be
obligated to credit any sums received in excess of the actual Parking Costs; the
cost and expenses for insurance for which Lessor is responsible hereunder or
which Lessor reasonably deems necessary in connection with the operation of the
Complex (including, without limitation, self-insurance and the payment of
deductible amounts under insurance policies); community association dues or
assessments and property owners' association dues and assessments which may be
imposed upon Lessor by virtue of any recorded instrument affecting title to the
complex; and costs of complying with all governmental regulations, rules, laws,
ordinances and codes, including Environmental Laws as such term is defined in
Article 12. In addition, Operating Costs shall include any Real Estate Taxes as
defined in Paragraph 2.1 hereof. Operating Costs shall also include, without
limitation, the repair and replacement, resurfacing and repaving of any paved
areas, curbs, gutters or other surfaces or areas within the Complex, the repair
and replacement of any equipment or facilities located within or serving the
Complex, and the cost of any capital repairs, replacements or improvements made
by Lessor to the Complex ("Capital Costs"). However, certain Capital Costs (the
"Restricted Capital Costs") shall be includable in Operating Costs each year
only to the extent of that fraction allocable to the year in question calculated
by amortizing such Restricted Capital Costs over the reasonably useful life of
the improvement resulting therefrom, as determined by Lessor, with interest on
the unamortized balance at the higher of (i) ten percent (10%) per annum; or
(ii) the interest rate as may have been paid by Lessor for the funds borrowed
for the purpose of performing the work for which the Restricted Capital Costs
have been expended, but in no event to exceed the highest rate permissible by
law. The Restricted Capital Costs subject to such amortization procedure are the
following: (x) those costs for capital improvements to the Complex of a type
which do not normally recur more frequently than every five (5) years in the
normal course of operation and maintenance of facilities such as the Complex
(specifically excluding painting of all or a portion of the Complex); (y) costs
incurred for the purpose of reducing other operating expenses or utility costs,
from which Lessee can expect a reduction in the amounts it would otherwise
expend, or reimburse Lessor, and (z) expenditures by Lessor that are required by
governmental law, ordinance, regulation or mandate, including, without
limitation, any Environmental Laws (as such term is defined in Article 12),
which were not applicable to the Complex at the time of the original
construction. Operating Costs shall not include legal or accounting expenses
incurred expressly for negotiating a lease with a particular lessee, or as a
result of a default of a specific lessee, which negotiation or default does not
affect the operation of the Complex.

          "Proportionate Share" or "Pro Rata Percent" shall be that fraction
           -------------------
(converted to a percentage) the numerator of which is the Rentable Area of the
Leased Premises and the

                                      6.
<PAGE>

denominator of which is the number of square feet of Rentable Area of all floors
(or leased premises if the Complex is on a single floor) rentable to lessees in
the Complex. Lessee's Proportionate Share as of the commencement of the Term
hereof is specified in Section 1.8. Said Proportionate Share shall be
recalculated as may be required effective as at the commencement of any period
to which the calculation is applicable in this Lease. Notwithstanding the
preceding provisions of this Section, Lessee's Proportionate Share as to certain
expenses may be calculated differently to yield a higher percentage share for
Lessee as to certain expenses in the event Lessor permits other lessees in the
Complex to directly incur such expenses rather than have Lessor incur the
expense in common for the Complex (such as, by way of illustration, wherein a
lessee performs its own janitorial services). In such case Lessee's
Proportionate Share of the applicable expense shall be calculated as having as
its denominator the Rentable Area of all floors (or leased premises if the
Complex is on a single floor) rentable to lessees in the Complex less the
Rentable Area of lessees who have incurred such expense directly. Furthermore,
in the event Lessee consumes extraordinary amounts of any provided utility or
other service as determined in Lessor's good faith judgment, Lessee's
Proportionate Share for such utility or service may, at Lessor's election, be
based on usage as opposed to Rentable Area, that is, Lessee's Proportionate
Share of such a utility or service would be calculated as having as its
denominator the total usage of such utility or service in the Complex (or
Building as the case may be), and having as its numerator Lessee's usage of such
utility or service, as determined by Lessor in its sole good faith judgment. In
any case in which Lessee, with Lessor's consent, -incurs such expenses directly,
Lessee's Proportionate Share will be calculated specially so that expenses of
the same character which are incurred by Lessor for the benefit of other lessees
in the Complex shall not be prorated to Lessee. If repairs are required for
systems exclusively serving the Leased Premises (whether within or outside of
said Leased Premises), Lessee shall pay one hundred percent (100%) of such
repair costs. Nothing herein shall imply that Lessor will permit Lessee or any
other lessee of the Complex to incur any Common Area Costs or Operating Costs.
Any such permission shall be in the sole discretion of the Lessor, which Lessor
may grant or withhold in its arbitrary judgment.

          "Quadrant." Floors 2-6 of the Building are centered around the central
           --------
Atrium with Rentable Area being approximately divided into four unequal parts
known as "Quadrant(s)" and commonly carrying identifying letters as follows:

               Quadrant A:  Southeast of Atrium
               Quadrant B:  Northeast of Atrium
               Quadrant C:  Northwest of Atrium
               Quadrant D:  Southwest of Atrium

          "R/U Ratio" (an abbreviation for Rentable/Usable Ratio) shall mean
           --------
that fraction the numerator of which is Rentable Area and the denominator of
which is Usable Area.

          "Real Estate Taxes" or "Taxes" shall mean and include all general and
           -----------------      -----
special taxes, assessments, fees of every kind and nature, duties and levies,
charged and levied upon or assessed by any governmental authority against the
Complex including the land, the Building, any other improvements situated on the
land other than the Building, the various estates in the land and the Building,
any Tenant Improvements, fixtures, installations, additions and equipment,
whether owned by Lessor or Lessee; except that it shall exclude any taxes of the
kind

                                      7.
<PAGE>

covered by Section 8.1 hereof to the extent Lessor is reimbursed therefor by any
lessee in the Building. Real Estate Taxes shall also include the reasonable cost
to Lessor of contesting the amount, validity, or the applicability of any Taxes
mentioned in this Section. Further included in the definition of Taxes herein
shall be general and special assessments, license fees, commercial rental tax,
levy, penalty or tax (other than inheritance or estate taxes) imposed by any
authority having the direct or indirect power to tax, as against any legal or
equitable interest of Lessor in the Leased Premises or in the Complex or on the
act of entering into this Lease or, as against Lessor's right to rent or other
income therefrom, or as against Lessor's business of leasing the Leased Premises
or the Complex, any tax, fee, or charge with respect to the possession, leasing,
transfer of interest, operation, management, maintenance, alteration, repair,
use, or occupancy by Lessee, of the Leased Premises or any portion thereof or
the Complex, or any tax imposed in substitution, partially or totally, for any
tax previously included within the definition of Taxes herein, or any additional
tax, the nature of which may or may not have been previously included within the
definition of Taxes. Further, if at any time during the Term of this Lease the
method of taxation or assessment of real estate or the income therefrom
prevailing at the time of execution hereof shall be, or has been altered so as
to cause the whole or any part of the Taxes now or hereafter levied, assessed or
imposed on real estate to be levied, assessed or imposed upon Lessor, wholly or
partially, as a capital levy, business tax, fee, permit or other charge, or on
or-measured by the Rents received therefrom, then such new or altered taxes,
regardless of their nature, which are attributable to the land, the Building or
to other improvements on the land shall be deemed to be included within the term
Real Estate Taxes for purposes of this Section, whether in substitution for, or
in addition to any other Real Estate Taxes, save and except that such shall not
be deemed to include any enhancement of said tax attributable to other income of
Lessor. With respect to any general or special assessments which may be levied
upon or against the Leased Premises, the Complex, or the underlying realty, or
which may be evidenced by improvement or other bonds, and may be paid in annual
or semi-annual installments, only the amount of such installment, prorated for
any partial year, and statutory interest shall be included within the
computation of Taxes for which Lessee is responsible hereunder.

          "Rent," "rent" or "rental" means Minimum Rent (as defined in Section
           ----    ----      ------
7.1 herein) and all other sums required to be paid by Lessee pursuant to the
terms of this Lease.

          "Rentable Area." The Rentable Area means the Rentable Area determined
           -------------
by BOMA, subject to such adjustments as Lessor may incorporate from time to
time. The Rentable Area of a floor shall mean all areas available or held for
the exclusive use and occupancy of occupants or future occupants of the Complex,
calculated in accordance with BOMA. No deductions shall be made for columns and
projections necessary to the Building. The Rentable Area of that portion of a
lessee's premises located on a floor shall be computed by multiplying the Usable
Area of such premises by the R/U Ratio. The Rentable Area of the Building is the
aggregate of the Rentable Area on all floors.

          "Structural" as herein used shall mean any portion of the Leased
           ----------
Premises or Complex which provides bearing support to any other integral member
of the Complex such as, by limitation, the roof structure (trusses, joists,
beams), posts, load bearing walls, foundations, girders, floor joists, footings,
and other load bearing members constructed by Lessor.

                                      8.
<PAGE>

          "Tenant Improvements" shall mean the Lessee's Work in accordance with
           -------------------
the Work Letter Agreement and all subsequent Alterations (as defined in Section
15.2 herein) to the Leased Premises made by Lessee.

          "Term" shall mean the term of the lease as specified in Article 4
           ----
hereof, including any partial month at the commencement of the Term.

          "Usable Area." The Usable Area of any individual leased premises shall
           -----------
be the number of square feet calculated in accordance with BOMA, subject to such
adjustments as Lessor may incorporate from time to time; provided, however, that
the term Usable Area shall include toilet rooms in each Quadrant if such toilet
rooms are for the exclusive use of a lessee occupying such Quadrant. The Usable
Area of a floor shall be equal to the sum of all Usable Areas on that floor.

          "Work Letter Agreement." That certain Agreement for performance of
           ---------------------
improvements to the Premises, Building or Complex set forth in Exhibit D,
attached hereto and made a part herein by reference.

                                  3. PREMISES

     3.1  Demising Clause. Both Lessee and Lessor acknowledge that the
effectiveness of this Lease and of the obligations of Lessor to lease the Leased
Premises to Lessee are contingent upon the release of the Leased Premises from a
lease currently held by another tenant. Accordingly, contingent upon the
delivery to Lessor by the current tenant of a written release from its lease of
the Leased Premises, Lessor hereby leases to Lessee, and Lessee hires from
Lessor a portion of the complex as hereinafter defined.

     3.2  Description. The Complex, as defined in Section 2.1, is described
generally in Section 1.3(A) hereof. The premises leased herein are described in
Section 1.3(B) and delineated on Exhibit C, which is attached hereto and made a
part hereof by reference, consisting of the approximate amount of square footage
as specified in Section 1.3(B) hereof. The term "Building" shall refer to the
Building in which the Leased Premises are located. The portion leased herein to
Lessee is hereinafter referred to as the "Leased Premises." Lessee acknowledges
that Lessor may change the shape, size, location, number and extent of the
improvements to any portion of the Complex without consent of Lessee and without
affecting Lessee's obligations hereunder. Lessor reserves the area beneath and
above the Leased Premises, as well as the exterior thereof, together with the
right to install, maintain, use, repair and replace Lines, pipes, ducts,
conduits, wires, and structural elements leading through the Leased Premises
serving other parts of the Complex, including, but not limited to, vertical
risers, so long as such items are concealed by walls, flooring or ceilings. Such
reservation in no way affects the maintenance obligations imposed herein, nor
shall such reservation alter the parties' responsibilities and obligations set
forth in this Lease regarding Hazardous Materials (as defined in Section 12.3
(a) below).

     3.3  Substituted Premises. In the event the Leased Premises consist of less
than six thousand (6,000) square feet, Lessor shall have the right, at any time
during the Term hereof, upon not less than ninety (90) days' prior written
notice to Lessee, to substitute for the Leased

                                      9.
<PAGE>

Premises such other space in the Complex as shall be substantially the same size
as the Leased Premises (the "Substituted Premises"), provided that Lessor shall
pay all expenses of Lessee incidental to Lessee's relocation to the Substituted
Premises and that Lessor, shall improve the Substituted Premises for Lessee's
use and occupancy at least to the same extent as the Leased Premises occupied by
Lessee prior to such relocation.

     3.4  Covenants, Conditions and Restrictions. The parties agree that this
Lease is subject to the effect of: (a) any covenants, conditions, restrictions,
easements, mortgages or deeds of trust, ground leases, rights of way of record,
and any other matters or documents of record; (b) any zoning laws of the city,
county and state where the Complex is situated; and (c) general and special
taxes not delinquent. Lessee agrees that as to its leasehold estate, Lessee and
all persons in possession or holding under Lessee will conform to and will not
violate the terms of any covenants, conditions or restrictions of record which
may now or hereafter encumber the property (hereinafter the "Restrictions").
This Lease is subordinate to the Restrictions and any amendments or
modifications thereto.

                                    4. TERM

     4.1  Commencement Date. The Term of this Lease shall commence on the
Commencement Date defined in Section 2.1 and shall be for the Term specified in
Section 1.4(B) hereof, plus any partial month at the commencement of the Term
(but in no event shall this Lease expire on a date later than December 31,
2004.).

     4.2  Acknowledgment of Commencement. After delivery of the Leased Premises
to Lessee, Lessee shall execute a written acknowledgment of the date of
commencement in the form attached hereto as Exhibit E, and by this reference it
shall be incorporated herein.

                            5. PRE-TERM POSSESSION

     5.1  Pre-Term Possession.

          (a)  Conditions of Entry. In the event the Leased Premises are to be
constructed or remodeled by Lessor, Lessor may notify Lessee when the Leased
Premises are ready for Lessee's fixturing or Lessee's Work, which may be prior
to substantial completion of the Leased Premises by Lessor. Lessee may thereupon
enter the Leased Premises for such purposes at its own risk, to make such
improvements as Lessee shall have the right to make, to install fixtures,
supplies, inventory and other property. Lessee agrees that it shall not in any
way interfere with the progress of Lessor's Work by such entry. Should such
entry prove an impediment to the progress of Lessor's Work, in Lessor's
judgment, Lessor may demand that Lessee forthwith vacate the Leased Premises
until such time as Lessor's work is complete, and Lessee shall immediately
comply with this demand.

          (b)  Lease Terms Apply. During the course of any pre-term possession,
whether such pre-term period arises because of an obligation of construction on
the part of Lessor, or otherwise, all terms and conditions of this Lease, except
for rent and Commencement Date, shall apply, particularly with reference to
indemnity by Lessee of Lessor under Article 17 herein for all occurrences within
or about the Leased Premises.

                                      10.
<PAGE>

                      6. DELAY IN DELIVERY OF POSSESSION

     6.1   Delay. If Lessor, for any reason whatsoever, cannot deliver
possession of the Leased Premises to Lessee at the Estimated Delivery Date, this
Lease shall not be void or voidable, nor shall Lessor be liable for any loss or
damage resulting therefrom, but in that event, there shall be no accrual of Rent
for the period between the Estimated Delivery Date and the Commencement Date. In
the event Lessor cannot deliver the Leased Premises to Lessee within six (6)
months beyond the Estimated Delivery Date, then Lessor may elect to terminate
this Lease. In the event the Leased Premises are not delivered within three (3)
years from the date of execution, this Lease shall automatically terminate.

                                7. MINIMUM RENT

     7.1   Payment. Lessee shall pay to Lessor at the address specified in
Section 1.1, or at such other place as Lessor may otherwise designate, as
"Minimum Rent" for the Leased Premises the amount specified in Section 1.5(A)
hereof, payable in advance on the first day of each month during the Term. If
the Term commences on other than the first day of a calendar month, the rent for
the first partial month shall be prorated accordingly.

     All payments of Minimum Rent (including sums defined as rent in Section
2.1) shall be in lawful money of the United States, and payable without
deduction, setoff, offset, counterclaim, recoupment, notice or demand.

     7.2   Advance Rent. The amount specified in Section 1.5($) hereof is paid
herewith to Lessor upon execution of this Lease as advance rent, receipt of
which is hereby acknowledged, provided, however, that such amount shall be held
by Lessor as a "Security Deposit" pursuant to Section 10.1 hereof until it is
applied by Lessor to the first Minimum Rent due hereunder.

     7.3   Late Payment. If during any twelve (12) month period Lessee fails on
more than one occasion to make any payment of Minimum Rent to Lessor on the date
when it is due, then Lessor may, by giving written notice to Lessee, require
that Lessee pay the Minimum Rent to Lessor quarterly in advance.

                              8. ADDITIONAL RENT

     8.1   Personal Property, Gross Receipts, Leasing Taxes. This Section 8.1 is
intended to deal with impositions or taxes directly attributed to Lessee or this
transaction, as distinct from taxes attributable to the Complex which are to be
allocated among various lessees and others and which are included in Operating
Costs. In addition to the Minimum Rent and additional charges to be paid by
Lessee hereunder, Lessee shall reimburse Lessor upon demand for any and all
taxes required to be paid by Lessor (excluding state, local or federal personal
and corporate income taxes measured by the income of Lessor from all sources,
and estate and inheritance taxes) whether or not now customary or within the
contemplation of the parties hereto:

          (a) Upon, measured by, or reasonably attributable to the cost or value
of Lessee's equipment, furniture, fixtures and other personal property located
in the Leased

                                      11.
<PAGE>

Premises or by the cost or value of any Tenant Improvements made in or to the
Leased Premises by or for Lessee, regardless of whether title to such
improvements shall be in Lessee or Lessor;

          (b) Upon or with respect to the possession, leasing, operation,
management, maintenance, Alteration, repair, use or occupancy by Lessee of the
Leased Premises or any portion thereof to the extent such taxes are not included
as Real Estate Taxes as defined in Section 2.1;

          (c) Upon this transaction or any document to which Lessee is a party
creating or transferring an interest or an estate in the Leased Premises; and

          (d) In connection with any testing, investigation, abatement,
remediation, removal, transportation and/or disposal of any Hazardous Materials
by Lessee (or by Lessor, pursuant to any provision of this Lease granting to
Lessor the right to do any of the foregoing and to bill Lessee therefor).

     For purposes of this Section 8.1, the term "taxes" shall include, but not
be limited to, any fees, charges, fines, penalties and costs (including, without
limitation, permit, approval or licensing fees, charges or costs).

     In the event that it shall not be lawful for Lessee so to reimburse Lessor,
the Minimum Rent payable to Lessor under this Lease shall be increased to net
Lessor (i.e., after payment of the Taxes for which Lessor may not receive
reimbursement from Lessee) the amount of Minimum Rent plus reimbursement for
Taxes which would have been receivable by Lessor if such tax had not been
imposed. All Taxes payable by Lessee under this Section shall be deemed to be,
and shall be paid as, additional Rent.

     8.2   Operating Costs.

           (a) During each calendar year or part thereof subsequent to the Base
Expense Year, Lessee shall pay to Lessor as additional Rent, in accordance with
Section 8.3 hereof, Lessee's Proportionate Share (computed in accordance with
Section 2.1 above) of the total dollar increase, if any, in all Operating Costs
for such calendar year over the Operating Costs for the Base Expense Year.
During each tax year (July 1 through June 30) or part thereof subsequent to the
Base Tax Year ending June 30, Lessee shall pay to Lessor as additional Rent, in
accordance with Section 8.3 hereof, Lessee's Proportionate Share of the total-
dollar increases, if any, in all Real Estate Taxes for such tax year over the
Real Estate Taxes for the Base Tax Year. Lessee's Proportionate Share shall be
calculated on the basis of the greater of (i) actual Operating Costs; or (ii) as
if the Complex were at least ninety-five percent (95%) occupied and operational
for the whole of such Lease Year.

           (b) If any Lease Year of less than twelve (12) months is included
within the Term, the amount payable by Lessee for such period shall be prorated
on a per diem basis (utilizing a three hundred sixty (360) day year).

           (c) Lessor shall exercise good faith efforts to equitably allocate
those Operating Costs that are incurred for the direct benefit of specific types
of lessees or users in the Complex to and among those specific lessees and/or
users ("Cost Pools"). Such Cost Pools may

                                      12.
<PAGE>

include, but shall not be limited to, the office and showroom space, the second
floor Atrium, the lower level exhibition hall, and any retail space lessees of
the Complex. Lessor's determination of such allocations shall be made in a
manner consistent with the terms and conditions of this Section 8.2(c) and shall
be subject to reconciliation per Section 8.3(c). Lessee acknowledges that the
allocation of Operating Costs among Cost Pools does not affect all Operating
Costs and is limited to specific items which Lessor determines, in good faith,
should be shared among the lessees and/or users of a certain Cost Pool.

     8.3   Method of Payment. Any additional Rent payable by Lessee under
Sections 8.1 and 8.2 hereof shall be paid as follows, unless otherwise provided:

           (a) During the Term, Lessee shall pay to Lessor monthly in advance
with its payment of Minimum Rent, one-twelfth (1/12) of the amount of such
additional Rent as estimated by Lessor in advance, in good faith, to be due from
Lessee.

           (b) Annually, as soon as is reasonably possible after the expiration
of each Lease Year, Lessor shall prepare in good faith and deliver to Lessee a
comparative statement, which statement shall be conclusive between the parties
hereto, setting forth: (i) the Operating Costs for such Lease Year; and (ii) the
amount of additional Rent as determined in accordance with the provisions of
this Article 8.

           (c) If the aggregate amount of such estimated additional Rent
payments made by Lessee in any Lease Year should be less than the additional
Rent due for such year, then Lessee shall pay to Lessor as additional Rent upon
demand the amount of such deficiency. If the aggregate amount of such additional
Rent payments made by Lessee in any Lease Year of the Term should be greater
than the additional Rent due for such year, then should Lessee not be otherwise
in default hereunder, the amount of such excess will be applied by Lessor to the
next succeeding installments of such additional Rent due hereunder; and if there
is any such excess for the last year of the Term, the amount thereof will be
refunded by Lessor to Lessee, provided Lessee is not otherwise in default under
the terms of this Lease.

                          9. ACCORD AND SATISFACTION

     9.1   Acceptance of Payment. No payment by Lessee or receipt by Lessor of a
lesser amount of Minimum Rent or any other sum due hereunder, shall be deemed to
be other than on account of the earliest due rent or payment, nor shall any
endorsement or statement on any check or any letter accompanying any such check
or payment be deemed an accord and satisfaction, and Lessor may accept such
check or payment without prejudice to Lessor's right to recover the balance of
such rent or payment or pursue any other remedy available in this Lease, at law
or in equity. Lessor may accept any partial payment from Lessee without
invalidation of any contractual notice required to be given herein (to the
extent such contractual notice is required) and without invalidation of any
notice required to be given pursuant to California Code of Civil Procedure
Section 1161, et seq., or of any successor statute thereto.

                             10. SECURITY DEPOSIT

     10.1  Payment on Lease Execution. Lessee shall pay Lessor upon execution
hereof the sum specified in Section 1.6 which may, at Lessor's sole option, be
entirely or partially in the

                                      13.
<PAGE>

form of a Letter of Credit. This sum, in whatever form or combination of forms,
is designated as a Security Deposit and shall remain the sole and separate
property of Lessor until actually repaid to Lessee (or at Lessor's option the
last assignee, if any, of Lessee's interest hereunder), said sum not being
earned by Lessee until all conditions precedent for its payment to Lessee have
been fulfilled. As this sum both in equity and at law is Lessor's separate
property for Lessor's benefit in the event of default, Lessor shall not be
required to: (i) keep said deposit separate from its general accounts; or (ii)
pay interest or other increment for its use. If Lessee fails to pay rent or
other charges when due hereunder, or otherwise defaults with respect to any
provision of this Lease, including and not limited to Lessee's obligation to
restore or clean the Leased Premises following vacation thereof, Lessee, at
Lessor's election, shall be deemed not to have earned the right to repayment of
the Security Deposit, or those portions thereof used or applied by Lessor for
the payment of any rent or other charges in default, or for the payment of any
other sum to which Lessor may become obligated by reason of Lessee's default, or
to compensate Lessor for any loss or damage which Lessor may suffer thereby.
Lessor may retain such portion of the Security Deposit as it reasonably deems
necessary to restore or clean the Leased Premises following vacation by Lessee.
The Security Deposit is not to be characterized as rent until and unless so
applied in respect of a default by Lessee. In the event a portion or all of the
Security Deposit is paid pursuant to a Letter of Credit, the terms specified in
Exhibit J, attached hereto, shall apply.

     10.2  Restoration of Deposit. If Lessor elects to use or apply all or any
portion of the Security Deposit as provided in Section 10.1, Lessee shall within
ten (10) days after written demand therefor pay to Lessor in cash, an amount
equal to that portion of the Security Deposit used or applied by Lessor, and
Lessee's failure to so do shall be a material breach of this Lease. The ten (10)
day notice specified in the preceding sentence shall insofar as not prohibited
by law, constitute full satisfaction of notice of default provisions required by
law or ordinance.

     10.3  Use and Transferability of Security Deposit. Lessee acknowledges and
agrees that, notwithstanding any provision of law purporting to limit a lessor's
rights with respect to tenant security deposits, the Security Deposit may be
used by Lessor to compensate Lessor for any foreseeable or unforeseeable loss or
damage caused by the act or omission of Lessee or Lessee's officers, agents,
employees, independent contractors or invitees and that the amounts Lessor may
claim from the Security Deposit are not limited to sums reasonably necessary to
remedy defaults in payment of rent, other charges in default or repair of
damages caused by Tenant, or to clean the Premises. Should Lessor dispose of its
interest in the Building, Lessor may deliver or credit the Security Deposit to
lessor's successor-in-interest in the Building and thereupon be relieved of
further responsibility with respect to the Security Deposit. Lessee may not
transfer, encumber or assign the Security Deposit. Lessor shall have the
absolute right to treat the Security Deposit as it sees fit, including but not
limited to the right to transfer, assign, encumber, pledge, or hypothecate all
or any portion of the Security Deposit.

                                    11. USE

     11.1  Permitted Use.

           (a) The Leased Premises may be used and occupied only for the
purposes specified in Section 1.7 hereof, and for no other purpose or purposes.
Lessee shall promptly

                                      14.
<PAGE>

comply with all laws, ordinances, orders and regulations affecting the Leased
Premises, their cleanliness, safety, occupation and use.

           (b) Lessee acknowledges that, under the current M-2 zoning of the
Building, office uses are restricted and that any and all office uses require
approval by the City and County of San Francisco. Lessee agrees that the
percentage of the Leased Premises designated as "Office", as defined in Section
313.1(24) or 314.1(p) of the San Francisco City Planning Code, or equivalent
ordinance, (the "Office Use"), shall not exceed either twenty percent (20%) of
Lessee's Adjusted Rentable Area (the "Permitted Office Use"), or (ii) an amount
which would increase the aggregate office use of the Complex above Two Hundred
Sixty-Nine Thousand Six Hundred Eighty (269,680) square feet. In the event
Lessee violates the covenant contained in this Section 11.1 and does not cure
same within five (5) days of notice by Lessor, Lessee shall be in default.

           (c) Nothing herein shall permit the Lessee to build space for Office
Use in the Leased Premises in excess of that which is legally permissible under
the laws of the City arid County of San Francisco and approved by Lessor. If, as
a result of Lessee's addition of Office Use, as specified in this subparagraph
(b), a Planning Commission or other City hearing is required, the Office Uses
shall not be implemented until the successful completion of any such procedure
and Lessee has agreed to pay Lessor for costs which Lessor incurs as a result
thereof.

     11.2  Safes, Heavy Equipment. Lessee shall not place a load upon any floor
of the Leased Premises which exceeds fifty (50) pounds per square foot live
load. Lessor reserves the right to prescribe the weight and position of all
safes and heavy installations which Lessee wishes to place in the Leased
Premises so as properly to distribute the weight thereof, or to require plans
prepared by a qualified structural engineer at Lessee's sole cost and expense
for such heavy objects. Notwithstanding the foregoing, Lessor shall have no
liability for any damage caused by the installation of such heavy equipment or
safes.

     11.3  Machinery. Business machines and mechanical equipment belonging to
Lessee which cause noise and/or vibration that may be transmitted to the
structure of the Building or to any other leased space to such a degree as to be
objectionable to Lessor or to any lessees in the Complex shall be placed and
maintained by the party possessing the machines or equipment, at such party's
expense, in settings of cork, rubber or spring type noise and/or vibration
eliminators, and Lessee shall take such other measures as needed to eliminate
vibration and/or noise. If the noise or vibrations cannot be eliminated, Lessee
must remove such equipment within ten (10) days following written notice from
Lessor.

     11.4  Hazardous Activities. Lessee shall not engage in any activities or
permit to be kept, used, or sold in or about the Leased Premises, any article
which may be prohibited by the standard form of fire insurance policies. Lessee
shall, at its sole cost and expense, comply with any and all requirements,
pertaining to the Leased Premises, of any insurance organization or company,
necessary for the maintenance of reasonable fire and public liability insurance
covering the Building and appurtenances.

                                      15.
<PAGE>

                   12. COMPLIANCE WITH LAWS AND REGULATIONS

     12.1  Lessee's Obligations. Lessee, shall, at its sole cost and expense,
comply with all of the requirements of all municipal, state and federal
authorities now in force, or which may hereafter be in force, pertaining to the
Leased Premises, and shall faithfully observe in the use of the Leased Premises
all municipal ordinances and state and federal statutes and regulations now in
force or which may hereafter be in force, including, without limitation,
Environmental Laws (as hereinafter defined), and the Americans with Disabilities
Act, 42 U.S.C. (s)(s) 12101-12213 (and any rules, regulations, restrictions,
guidelines, requirements or publications promulgated or published pursuant
thereto, collectively herein referred to as the "ADA"), whether or not any of
the foregoing were foreseeable or unforeseeable at the time of the execution of
this Lease. The judgment of any court of competent jurisdiction, or the
admission of Lessee in any action or proceeding against Lessee, whether Lessor
be a party thereto or not, that any such requirement, ordinance, statute or
regulation pertaining to the Leased Premises has been violated, shall be
conclusive of that fact as between Lessor and Lessee. Within five (5) days after
receipt of notice or knowledge of any violation or alleged violation of any
Environmental Law(s), and/or the ADA pertaining to the Complex, any governmental
or regulatory proceedings, investigations, sanctions and/or actions threatened
or commenced with respect to any such violation or alleged violation, and any
claim made or commenced with respect to such violation or alleged violation,
Lessee shall notify Lessor thereof and provide Lessor with copies of any written
notices or information in Lessee's possession. Lessee shall make, at Lessee's
sole cost and expense, any and all Alterations, improvements or non-structural
changes that are required by laws, statutes, ordinances and governmental
regulations or requirements as a result of Lessee's specific use of the Leased
Premises or any Alterations, additions or improvements made by Lessee. If any
alterations, improvements or structural changes are required to be made to the
Building in general or are applicable to substantially all lessees in the
Building without regard to Lessee's specific use of the Leased Premises or any
Alterations, additions or improvements made by Lessee, then Lessor shall make
such alterations, additions or improvements and the costs thereof shall be
included within Operating Costs pursuant to Section 2.1.

     12.2  Condition of Leased Premises. Subject to Lessor's Work, if any, as
referred to in Exhibit D to this Lease, Lessee hereby accepts the Leased
Premises in the condition existing as of the date of occupancy, subject to all
applicable zoning, municipal, county and state laws, ordinances, rules,
regulations, orders, restrictions of record, and requirements in effect during
the Term or any part of the Term hereof regulating the Leased Premises, and
without representation, warranty or covenant by Lessor, express or implied, as
to the condition, habitability or safety of the Leased Premises, the suitability
or fitness thereof for their intended purposes, or any other matter. Lessor
covenants that the Lessor's Work pursuant to Exhibit D shall be in material
compliance with applicable local and state building codes and ordinances in such
manner that any violations or conditions of non-compliance will not result in
the inability of Lessee to be issued a building permit for Lessee's Work
pursuant to Exhibit D ("Code Compliance").

     12.3  Hazardous Materials.

           (a) Hazardous Materials Defined. As used herein, the term "Hazardous
               ---------------------------
Materials" shall mean any wastes, materials or substances (whether in the form
of liquids, solids or gases, and whether or not air-borne), which are or are
deemed to be pollutants or

                                      16.
<PAGE>

contaminants, or which are or are deemed to be hazardous, toxic, ignitable,
reactive, corrosive, dangerous, harmful or injurious, or which present a risk,
to public health or to the environment, or which are or may become regulated by
or under the authority of any applicable local, state or federal laws,
judgments, ordinances, orders, rules, regulations, codes or other governmental
restrictions, guidelines or requirements, any amendments or successors) thereto,
replacements thereof or publications promulgated pursuant thereto (collectively
"Environmental Laws"), including, without limitation, any waste, material or
substance which is:

               (i)    defined as "hazardous waste," "extremely hazardous waste,"
or "restricted hazardous waste" under Sections 25115, 25117 or 25122.7, or
listed pursuant to Section 25140, of the California Health and Safety Code,
Division 20, Chapter 6.5 (Hazardous Waste Control Law);

               (ii)   defined as a "hazardous substance" under Section 25316 of
the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-
Presley-Tanner Hazardous Substance Account Act);

               (iii)  defined as a "hazardous material," "hazardous substance,"
or "hazardous waste" under Section 25501 of the California Health and Safety
Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and
Inventory);

               (iv)   defined as a "hazardous substance" under Section 25281 of
the California Health and Safety Code, Division 20, Chapter 6.7 (Underground
Storage of Hazardous Substances);

               (v)    defined as a "waste" or "hazardous substance" under
Section 13050 of the California Water Code, Division 7, Chapter 2 (Porter-
Cologne Water Quality Control Act);

               (vi)   listed as a chemical known to the State of California to
cause cancer or reproductive toxicity pursuant to Section 25249.8 of the
California Health and Safety Code, Division 20, Chapter 6.6 (Safe Drinking Water
and Toxic Enforcement Act of 1986);

               (vii)  defined as a "hazardous substance" or "pollutant or
contaminant" pursuant to Section 101 of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. (s) 9601
et seq.;

               (viii) listed as an "extremely hazardous substance," "hazardous
chemical;" or "toxic chemical" pursuant to the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. ss. 11001 et seq.;

               (ix)   listed as a "hazardous substance" in the United States
Department of Transportation Table, 49 C.F.R. 172.101 and amendments thereto, or
by the Environmental Protection Agency (or any successor agency) in 40 C.F.R.
Part 302 and amendments thereto;

               (x)    defined, listed or designated by regulations promulgated
pursuant to any Environmental Law; or

                                      17.
<PAGE>

               (xi)   any of the following: pesticide; flammable explosive;
petroleum, including crude oil or any fraction thereof; asbestos or asbestos-
containing material; polychlorinated biphenyl; radioactive material; or urea
formaldehyde.

     In addition to the foregoing, the term Environmental Laws shall be deemed
to include, without limitation, local, state and federal laws, judgments,
ordinances, orders, rules, regulations, codes and other governmental
restrictions, guidelines and requirements, any amendments and successors
thereto, replacements thereof and publications promulgated pursuant thereto,
which deal with, or otherwise in any manner relate to, air or water quality, air
emissions, soil or ground conditions or other environmental matters of any kind.

          (b) Use, etc. of Hazardous Materials. Lessee agrees that during the
Term, there shall be no use, presence, disposal, storage, generation, leakage,
treatment, manufacture, import, handling, processing, release or threatened
release of Hazardous Materials on, from or under the Leased Premises except to
the extent that, and in accordance with such conditions as, Lessor may have
previously approved in writing. The use, presence, disposal, storage,
generation, leakage, treatment, manufacture, import, handling, processing,
release or threatened release of Hazardous Materials are sometimes hereinafter
individually or collectively referred to as "Hazardous Use." It is further
agreed that Lessee shall be entitled to use and store only those Hazardous
Materials which are necessary for Lessee's business, provided that such usage
and storage is in full compliance with Environmental Laws, and all judicial and
administrative decisions pertaining thereto. Lessee shall not be entitled to
install any tanks under, on or about the Leased Premises for the storage of
Hazardous Materials without the express written consent of Lessor, which may be
given or withheld in Lessor's sole arbitrary judgment. For the purposes of this
Section 12.3, the term Hazardous Use shall include Hazardous Use(s) on, from or
under the Leased Premises by any and all lessees, occupants, and/or users of the
Leased Premises (except Lessor), whether known or unknown to Lessee, and whether
occurring and/or existing during or prior to the commencement of the Term.

          (c) Hazardous Materials Report; When Required. Lessee shall submit to
              ------------------------------------------
Lessor a written report with respect to Hazardous Materials ("Report") in the
form prescribed in subparagraph (d) below on the following dates:

              (i)     Within ten (10) days after the Commencement Date,

              (ii)    Within ten (10) days after each anniversary of the
Commencement Date during the Term,

              (iii)    any time within ten (10) days after written request by
Lessor, and

              (iv)     At any time when there has been or is planned any
condition which constitutes or would constitute a change in the information
submitted in the most recent Report, including any notice of violation as
referred to in subparagraph (d)(vii) below.

          (d) Hazardous Materials Report; Contents. The Report shall contain,
              -------------------------------------
without limitation, the following. information:

                                      18.
<PAGE>

              (i)      Whether on the date of the Report and (if applicable)
during the period since the last Report there has been any Hazardous Use on,
from or under the Leased Premises.

              (ii)     If there was such Hazardous Use, the exact identity of
the Hazardous Materials, the dates upon which such materials were brought upon
the Leased Premises, the dates upon which the Hazardous Materials were removed
therefrom, and the quantity, location, use and purpose thereof.

              (iii)    If there was such Hazardous Use, any governmental permits
maintained by Lessee with respect to such Hazardous Materials, the issuing
agency, original date of issue, renewal dates (if any) and expiration date.
Copies of any such permits and applications therefor shall be attached.

              (iv)     If there was such Hazardous Use, any governmental
reporting or inspection requirements with respect to such Hazardous Materials,
the governmental agency to which reports are made and/or which conducts
inspections, and the dates of all such reports and/or inspections (if
applicable) since the last Report. Copies of any such reports shall be attached.

              (v)      If there was such Hazardous Use, identification of any
operation or business plan prepared for any government agency with respect to
Hazardous Use.

              (vi)     Any liability insurance carried by Lessee with respect to
Hazardous Materials, the insurer, policy number, date of issue, coverage
amounts, and date of expiration. Copies of any such policies or certificates of
coverage shall be attached.

              (vii)    Any notices of violation of Environmental Laws, written
or oral, received by Lessee from any governmental agency since the last Report,
the date, name of agency, and description of violation. Copies of any such
written notices shall be attached.

              (viii)   Any knowledge, information or communication which Lessee
has acquired or received relating to: (x) any enforcement, cleanup, removal or
other governmental or regulatory action threatened or commenced against Lessee
or with respect to the Leased Premises pursuant to any Environmental Laws; (y)
any claim made or threatened by any person or entity against Lessee or the
Leased Premises on account of any alleged loss or injury claimed to result from
any alleged Hazardous Use on or about the Leased Premises; or (z) any report,
notice or complaint made to or filed with any governmental agency concerning any
Hazardous Use on or about the Leased Premises. The Report shall be accompanied
by copies of any such claim, report, complaint, notice, warning or other
communication that is in the possession of or is available to Lessee.

              (ix)     Such other pertinent information or documents as are
requested by Lessor in writing.

          (e) Release of Hazardous Materials: Notification and Cleanup. If at
any time during the Term Lessee knows or believes that any release of any
Hazardous Materials has come or will come to be located upon, about or beneath
the Leased Premises, then Lessee shall

                                      19.
<PAGE>

immediately, either prior to the release or following the discovery thereof by
Lessee, give verbal and-follow-up written notice of that condition to Lessor.
Lessee covenants to investigate, clean up and otherwise remediate any release of
Hazardous Materials at Lessee's cost and expense; such investigation, clean-up
and remediation shall be performed only after Lessee has obtained Lessor's
written consent, which shall not be unreasonably withheld; provided, however,
that Lessee shall be entitled to respond immediately to an emergency without
first obtaining Lessor's written consent. All clean-up and remediation shall be
done in compliance with Environmental Laws and to the reasonable satisfaction of
Lessor. Notwithstanding the foregoing, whether or not such work is prompted by
the foregoing notice from Lessee or is undertaken by Lessor for any other reason
whatsoever, Lessor shall have the right, but not the obligation, in Lessor's
sole and absolute discretion, exercisable by written notice to Lessee at any
time, to undertake within or outside the Leased Premises all or any portion of
any investigation, clean-up or remediation with respect to Hazardous Materials
(or, once having undertaken any of such work, to cease same, in which case
Lessee shall perform the work), all at Lessee's cost and expense, which shall be
paid by Lessee as additional rent within ten (10) days after receipt of written
request therefor by Lessor (and which Lessor may require to be paid prior to
commencement of any work by Lessor). No such work by Lessor shall create any
liability on the part of Lessor to Lessee or any other party in connection with
such Hazardous Materials or constitute an admission by Lessor of any
responsibility with respect to such Hazardous Materials. It is the express
intention of the parties hereto that Lessee shall be liable under this Section
12.3(e) for any and all conditions covered hereby which were caused or created
by any person or entity whatsoever (except Lessor) whether such condition
occurred, was created or caused or existed prior to or after the execution of
this Lease and/or prior to or after Lessee's possession of the Leased Premises.
Lessee shall not enter into any settlement agreement, consent decree or other
compromise with respect to any claims relating to any Hazardous Materials in any
way connected to the Leased Premises without first: (i) notifying Lessor of
Lessee's intention to do so and affording Lessor the opportunity to participate
in any such proceedings; and (ii) obtaining Lessor's written consent.

          (f) Inspection and Testing by Lessor. Lessor shall have the right at
all times during the Term to: (i) inspect the Leased Premises, as well as
Lessee's books and records; and (ii) conduct tests and investigations to
determine whether Lessee is in compliance with the provisions of this Section.
Except in case of emergency, Lessor shall give reasonable notice to Lessee
before conducting any inspections, tests, or investigations. The cost of all
such inspections, tests and investigations shall be borne by Lessee, if Lessor
reasonably believes them to be necessary. Neither any action nor inaction on the
part of Lessor pursuant to this Section 12.3(f) shall be deemed in any way to.
release Lessee from, or in any way modify or alter, Lessee's responsibilities,
obligations, and/or liabilities incurred pursuant to Section 12.3 hereof.

     12.4  Indemnity. Lessee shall indemnify, hold harmless, and, at Lessor's
option (with such attorneys as Lessor may approve in advance and in writing),
defend Lessor and Lessor's officers, directors, shareholders, trustees,
partners, employees, contractors, agents and mortgagees or other lien holders,
from and against any and all claims, demands, expenses, actions, judgments,
damages (whether consequential, direct or indirect, known or unknown, foreseen
or unforeseen), penalties, fines, liabilities, losses of every kind and nature
(including, without limitation, property damage, diminution in value of Lessor's
interest in the Leased Premises or the Complex, damages for the loss or
restriction on use of any space or amenity

                                      20.
<PAGE>

within the Leased Premises or the Complex, damages arising from any adverse
impact on marketing space in the Complex, sums paid in settlement of claims and
any costs and expenses associated with injury, illness or death to or of any
person), suits, administrative proceedings, costs and fees, including, but not
limited to, attorneys' and consultants' fees and expenses, and the costs of
cleanup, remediation, removal and restoration (all of the foregoing being
hereinafter sometimes collectively referred to as "Losses"), arising from or
related to any violation or alleged violation of any of the requirements,
ordinances, statutes, regulations or other laws referred to in this Article,
including, without limitation, Environmental Laws, any breach of the provisions
of this Article, or any Hazardous Use on, about or from the Leased Premises
caused by the acts or omissions of any persons or entities whatsoever, whether
related or unrelated to Lessee, including without limitation any Hazardous Use
or release of Hazardous Materials arising, occurring or existing prior to the
execution of this Lease and/or Lessee's possession of the Leased Premises.
Lessee warrants that it is leasing the Leased Premises "as-is, where-is," that
it has thoroughly inspected the Leased Premises prior to execution of this
Lease, and that it intends to act as an insurer with respect to any Hazardous
Use on, under or about the Leased Premises.

     12.5 Release and Assumption of Risk.

          (a)  Lessee, for itself, and its officers, directors, shareholders,
partners, agents, contractors, attorneys, brokers, servants, employees,
sublessees, lessees, invitees, concessionaires, licensees and representatives
(hereinafter referred to as "Releasors"), hereby waives, releases, acquits and
forever discharges Lessor and its officers, directors, trustees, shareholders,
partners, agents, contractors, attorneys, brokers, servants, employees, lessees,
invitees, licensees and representatives (hereinafter referred to as "Releasees")
of and from any and all Losses, which are in any way connected with, based upon,
related to or arising out of (i) any Hazardous Use or Hazardous Materials on or
about the Leased Premises or the Complex, (ii) any violation by or relating to
the Leased Premises or the Complex (or the ownership, use, condition, occupancy
or operation thereof), or by the Releasors or any other persons or entities, of
any Environmental or Wetlands Laws affecting the Leased Premises or the Complex,
or (iii) any investigation, inquiry, order, hearing, action or other proceeding
by or before any governmental agency or any court in connection with any of the
matters referred to in clauses (i) or (ii) above (collectively, the "Released
Matters"), except to the extent caused by the gross negligence or willful
misconduct of the Releasees. Releasors hereby expressly assume any and all risk
of Losses based on or arising out of or pertaining to the Released Matters.

          (b)  Lessee agrees, represents and warrants that the Released Matters
are not limited to matters which are known, disclosed or foreseeable, and Lessee
waives any and all rights and benefits which are conferred upon Lessee by virtue
of the provisions of Section 1542 of the California Civil Code, which provides:

          A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
          CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR
          AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY
          HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH
          THE DEBTOR.

                                      21.
<PAGE>

          (c)  Lessee agrees, represents and warrants that it is familiar with,
has read, understands, and has consulted legal counsel of its choosing with
respect to California Civil Code Section 1542 and Lessee realizes and
acknowledges that factual matters now unknown to it may have given, or may
hereinafter give, rise to Losses which are presently unknown, unanticipated and
unsuspected. Lessee further agrees, represents and warrants that the provisions
of this Section 12.5 have been negotiated and agreed upon in light of that
realization and that Lessee nevertheless hereby intends to release, discharge
and acquit the Releasees from any such unknown Losses which are in any way
related to this Lease or the Complex.

     12.6 Indoor Air Quality. To prevent the generation, growth or deposit of
any mold, mildew, bacillus, virus, pollen or other microorganism (collectively,
"Biologicals") and the deposit, release or circulation of any indoor
contaminants, including, but not limited to, emissions from paint, carpet and
drapery treatments, cleaning, maintenance and construction materials and
supplies, pesticides, pressed wood products, insulation, tobacco and other
materials and products (collectively with Biologicals, "Contaminants"), that
could adversely affect the health, safety or welfare of any tenant, employee, or
other occupant of the Complex or their invitees (each, an "Occupant"), Lessee
shall, at Lessee's sole cost and expense, at all times during the Term: (i)
maintain, operate and repair the HVAC system servicing the Leased Premises (to
the extent that Lessee is otherwise obligated to perform such maintenance,
operation and repair pursuant to this Lease) in a manner consistent with
preventing or minimizing the generation, growth, circulation, release or deposit
of any Contaminants; (ii) maintain the humidity level and the air exchange rate
within the Leased Premises (to the extent that Lessee has control thereof) at a
level recommended to prevent or minimize the growth of any Biologicals and -the
circulation of any other Contaminants; (iii) maintain, operate and repair the
Leased Premises in such a manner to prevent or minimize the accumulation of
stagnant water and moisture in planters, kitchen appliances and vessels,
carpeting, insulation, water coolers and any other locations where stagnant
water and moisture could accumulate; and (iv) otherwise maintain, operate and
repair the Leased Premises to prevent the generation, growth, deposit, release
or circulation of any Contaminants. If any governmental entity or any Occupant
alleges that health, safety or welfare has been or could be adversely affected
by any such Contaminants, Lessee shall notify Lessor in writing within twenty-
four (24) hours of the time the allegation is made. Lessor may then elect to
engage the services of an industrial hygiene testing laboratory (or
alternatively or concurrently require Lessee to do the same) to determine
whether the cause of any alleged adverse health effect is or could be
attributable to any Contaminants present within the Leased Premises. Lessee
shall be responsible for all such testing costs and for any consequential
damages and costs (including, without limitation, any third-party claims, loss
of rental, remediation, removal and/or abatement costs, and increases in
insurance premiums) resulting from Lessee's failure to comply in whole or in
part with the terms of this Section 12.7. The indemnity set forth in Section
12.5 above shall apply to Lessee's failure to comply with any of the terms of
this Section.

                           13. SERVICE AND EQUIPMENT

     13.1 Climate Control. Lessor shall provide as part of Operating Costs
ventilating and air conditioning ("VAC") to the Leased Premises from 8:00 a.m.
to 6:00 p.m., Monday through Friday and 8:00 a.m. to 1:00 p.m. Saturday (the
"Climate Control Hours") provided that Lessor shall have no responsibility or
liability for failure to supply VAC service when making repairs,

                                      22.
<PAGE>

alterations or improvements or when prevented from so doing by strikes or any
cause beyond Lessor's reasonable control. Any VAC provided to the Leased
Premises at Lessee's request after the Climate Control Hours shall be at
Lessee's sole cost and expense in accordance with rate schedules promulgated by
Lessor from time to time. Lessee acknowledges that Lessor has installed in .the
Building a system for the purpose of climate control. Initially, the use of fans
to circulate outside air or in conjunction with the climate control equipment
outside of the Climate Control Hours shall be charged at Twenty-Four Dollars
($24) per hour for each additional fan, and the use of chillers outside of the
Climate Control Hours shall be charged at One Hundred Fifty Dollars ($150) per
hour, with an additional overtime charge for Sundays and holidays, each prorated
among those lessees requiring such additional hours of climate control. Any use
of the Leased Premises which exceeds the Building design load standards may
require changes or alterations in the system or ducts through which the climate
control system operates. Any changes or alterations so occasioned, if such
changes can be accommodated by Lessor's equipment, shall be made by Lessee at
its cost and expense but only with the written consent of Lessor first had and
obtained, and in accordance with drawings and specifications and by a contractor
first approved in writing by Lessor. If Lessee's use of the Leased Premises
exceeds the Building design load standards, such excess use may necessitate the
re-balancing of the climate control equipment in the Leased Premises. In such
event, the same will be performed by Lessor at Lessee's expense. Any charges to
be paid by Lessee hereunder shall be due within ten (10) days of receipt of an
invoice from Lessor, which invoice may precede Lessor's expenditure for the
benefit of Lessee.

     13.2 Elevator Service. Subject to Section 13.6, Lessor shall provide
reasonable elevator service (which may be with or without operator at Lessor's
option) on a twenty-four (24) hour basis, three hundred sixty-five (365) days
per year.

     13.3 Cleaning Public Areas. Lessor shall maintain and keep clean the street
level lobbies, sidewalks, truck dock, public corridors and other public portions
of the Building.

     13.4 Refuse Disposal. Lessee shall pay Lessor, within ten (10) days of
being billed therefor, for the removal from the Leased Premises and the Building
of such refuse and rubbish of Lessee as shall exceed that ordinarily accumulated
daily in the routine of business office occupancy.

     13.5 Janitorial Service. Lessor shall provide cleaning and janitorial
service in and about the Complex and Leased Premises in accordance with Exhibit
H, attached hereto.

     To the extent that Lessee shall require cleaning and/or janitorial service
in excess of that set forth in Exhibit H (hereinafter referred to as "Special
Cleaning Service") Lessor may, upon reasonable advance notice from Lessee, elect
to furnish such Special Cleaning Service and Lessee agrees to pay Lessor, within
ten (10) days of being billed therefor, Lessor's reasonable charge for providing
such additional service. If Lessor does not elect to provide said Special
Cleaning Service, Lessee may perform or provide for said Special Cleaning
Service, at Lessee's sole cost and expense.

     13.6 Interruptions. Lessor does not warrant that any of the services
referred to above or any other services and/or utilities which Lessor may supply
or are supplied will be free from

                                      23.
<PAGE>

interruption and/or the need for maintenance and repairs or replacement. Lessee
acknowledges that any one or more such services may be suspended or reduced by
reason of repairs, alterations or improvements necessary to be made, by strikes
or accidents, by any cause beyond the reasonable control of Lessor, or by orders
or regulations of any federal, state, county or municipal authority. In
addition, Lessor shall have no liability for damages arising from, and Lessor
does not warrant that Lessee's use of any Lines will be free from: (i) any
eavesdropping or wire-tapping by unauthorized parties; (ii) any failure of any
Lines to satisfy Lessee's requirements; or (iii) any shortages, failures,
variations, interruptions, disconnections, loss or damage caused by
installation, maintenance, replacement, use or removal of Lines by or for other
occupants of the Complex, by any failure of the environmental conditions or the
power supply for the Building to conform to any requirements for the Lines or
any associated equipment or any other problems associated with any Lines by any
other cause.

     Any such interruption or suspension of services shall not be deemed an
eviction or disturbance of Lessee's use and possession of the Leased Premises or
any part thereof, nor render Lessor liable to Lessee for damages by abatement of
Rent or otherwise, nor relieve Lessee of performance of Lessee's obligations
under this Lease.

     13.7 Building Upgrade Work. Lessor has advised Lessee that Lessor may make
certain upgrades and improvements to the Common Areas and central systems of the
Complex ("Building Upgrade Work"). Lessee acknowledges that the performance of
the Building Upgrade Work may result in noise, dust and other temporary
inconveniences or interruptions to the conduct of normal business activity in
the Building. Lessor will utilize reasonable measures to reduce noise levels
associated with the performance of the Building Upgrade Work; provided, however,
the Building Upgrade Work shall in no event constitute a constructive eviction
or serve as a basis for any abatement or reduction in rent.

                                   14. WASTE

     14.1 Waste or Nuisance. Lessee shall not commit, or suffer to be committed,
any waste upon the Leased Premises, or any nuisance, or other act or thing which
may disturb the quiet enjoyment of any other lessee or occupant of the Complex
in which the Leased Premises are located.

                               15.  ALTERATIONS

     15.1 Consent of Lessor; Ownership. Lessee shall not make, or suffer to be
made, any Alterations to the Leased Premises, the Building, or the Complex,
and/or Lines, systems and facilities therein, or any part thereof, without the
written consent of Lessor first had and obtained. Any additions to or
Alterations of the Leased Premises (except trade fixtures) shall, immediately
upon being made, constitute a part of the realty and Lessor's property, and
shall, at the expiration or earlier termination of this Lease, remain upon the
Leased Premises without compensation to Lessee. Except as otherwise provided in
this Lease, Lessee shall have the right to remove its trade fixtures placed upon
the Leased Premises provided that Lessee restores the Leased Premises as
indicated below. Any anal all costs incurred by Lessor, whether in complying
with laws, governmental requirements or otherwise, as a result of any
Alterations, or as a result of request by Lessee for increased Lines or other
utility capacity above that presently existing (or,

                                      24.
<PAGE>

in the event the Building is to be constructed or substantially altered by
Lessor prior to the Delivery Date, above that which is planned by Lessor for the
Building) shall be paid by Lessee within ten (10) days after demand therefor by
Lessor.

     15.2 Lessee Alterations. Any alterations, additions, improvements or
installations performed by Lessee (collectively "Alteration" or "Alterations")
shall be subject to strict conformity with the following requirements:

          (a)  All Alterations shall be at the sole cost and expense of Lessee;

          (b)  Prior to commencement of any work of Alteration, Lessee shall
submit detailed plans and specifications, including working drawings
(hereinafter referred to as "Plans"), of the proposed Alterations, which shall
be subject to the consent of Lessor in accordance with the terms of Section 15.1
above;

          (c)  Following approval of the Plans by Lessor, Lessee shall give
Lessor at least ten (10) days' prior written notice of commencement of work in
the Leased Premises so that Lessor may post notices of non-responsibility in or
upon the Leased Premises as provided by law;

          (d)  No Alterations shall be commenced without Lessee having
previously obtained all appropriate permits and approvals required by and of
governmental agencies;

          (e)  All Alterations shall be performed in a skillful and workmanlike
manner, consistent with the Building Standards set forth as Exhibit G, and
pursued with diligence in accordance with the Plans previously approved by
Lessor and in full accord with all applicable laws and ordinances. All material,
equipment, and articles incorporated in the Alterations are to be new and of
recent manufacture and of the most suitable grade for the purpose intended.
Lessee's contractor shall maintain all of the insurance reasonably required by
Lessor, including, without limitation, commercial general liability, workers'
compensation, builder's risk and course of construction insurance. The limits of
such insurance shall be the same as those specified in Article 18;

          (f)  Lessee must obtain the prior written approval from Lessor for
Lessee's contractor before the commencement of the work. Lessor may require that
Lessee use subcontractors designated by Lessor as to specified portions of the
work. Lessee's contractor shall maintain all insurance reasonably required by
Lessor;

          (g)  As a condition of approval of .the Alterations, Lessor may
require performance and labor and materialmen's payment bonds issued by a surety
approved by Lessor, in a sum equal to the cost of the Alterations guarantying
the completion of the Alterations free and clear of all liens and other charges
in accordance with the Plans. Such bonds shall name Lessor as beneficiary;

          (h)  The Alterations must be performed in -a manner such that they
will not interfere with the quiet enjoyment of the other lessees in the Complex;

                                      25.
<PAGE>

          (i)  Lessor shall have the right to condition any approval of the
Alterations upon (i) submission by Lessee of a Report with respect to Hazardous
Materials, and/or (ii) the performance by Lessee at Lessee's cost and expense of
such investigation, clean-up and remediation with respect to Hazardous Materials
as Lessor may request, in Lessor's sole and absolute discretion; provided,
however, that Lessor shall have the right, but not the obligation, to undertake
all or any portion of such investigation, clean-up or remediation at Lessee's
cost and expense in accordance with the provisions of Section 12.3(e) above.
Lessee acknowledges and agrees that Lessor shall have the right, in its sole and
absolute discretion, to disapprove the making of any such Alterations based upon
the results of any investigation with respect to Hazardous Materials.

     15.3 Liens. Lessee shall keep the Leased Premises and the Complex in which
the Leased Premises are situated free from any liens arising out of any work
performed, materials furnished or obligations incurred by Lessee. In the event a
mechanic's or other lien is filed against the Leased Premises or the Complex of
which the Leased Premises form a part as a result of a claim arising through
Lessee, Lessor may demand that Lessee furnish to Lessor a surety bond
satisfactory to Lessor in an amount equal to at least one hundred fifty percent
(150%) of the amount of the contested lien claim or demand, indemnifying Lessor
against liability for the same and holding the Leased Premises free from the
effect of such lien or claim. Such bond must be posted within ten (10) days
following notice from Lessor. In addition, Lessor may require Lessee to pay
Lessor's attorneys' fees and costs in participating in any action to foreclose
such lien if Lessor shall decide it is to its best interest to do so. Lessor may
pay the claim prior to the enforcement thereof, in which event Lessee shall
reimburse Lessor in full, including attorneys' fees, for any such expense, as
additional rent, with the next due rental.

     15.4 Restoration. Lessee shall, at Lessee's sole cost and expense, return
the Leased Premises to Lessor at the expiration or earlier termination of this
Lease in good and sanitary order, condition and repair, free of rubble and
debris, broom clean, reasonable wear and tear excepted. In addition, Lessee
shall ascertain from Lessor at the time of approval of any Alterations, whether
Lessor considers any such Alterations to be specialized and non-reusable areas,
such as classrooms, manufacturing areas and storage racks, and whether Lessor
desires such specialized and non-reusable areas of the Leased Premises restored
to its condition prior to the making of such permitted Alterations. In such
event, Lessor shall, at least three (3) months prior to Lease expiration,
provide Lessee with an estimate of the costs to so restore the Leased Premises
("Restoration Costs") and Lessee shall pay to Lessor, as additional Rent, the
entire amount of the Restoration Costs no later than ten (10) days prior to
Lease expiration. The foregoing restoration of the Leased Premises shall be
performed after the Lease expiration. All damage to the Leased Premises caused
by the removal of such trade fixtures and other personal property that Lessee is
permitted to remove under the terms of this Lease and/or such restoration shall
be repaired by Lessee at its sole cost and expense prior to , termination.
Lessee's obligations under this Section 15.4 shall apply to the parking garage,
roof and other areas of the Complex impacted by Lessee's use and/or occupancy of
the Complex or any part thereof.

                            16.  PROPERTY INSURANCE

     16.1 Lessor's Insurance. Lessor shall, to the extent available, procure and
maintain at all times during the Term an "All Risk" or "Special Form" policy or
policies of insurance

                                      26.
<PAGE>

covering loss or damage to the Building and the Complex in an amount sufficient
to exceed minimum coinsurance requirements of such policy (exclusive of Lessee's
trade fixtures, inventory, personal property, Tenant Improvements and
equipment), providing protection against all perils included within the
classification of fire and extended coverage, vandalism coverage and malicious
mischief, sprinkler leakage, water damage, and special extended coverage on
Building. Additionally, Lessor may (but shall not be required to) carry: (i)
bodily injury and property damage liability insurance and/or excess liability
coverage insurance; (ii) earthquake and/or flood damage insurance; or (iii)
rental income insurance at its election or if required by its lender from time
to time during the Term; or (iv) any other insurance as Lessor or its lender
reasonably deem appropriate, in such amounts and with such limits as Lessor or
its lender may deem appropriate. The costs of all such insurance shall be
included in Operating Costs.

     16.2 Use of Premises. No use shall be made or permitted to be made on the
Leased Premises, nor acts done, which will increase the existing rate of
insurance upon the Building in which the Leased Premises are located or upon any
other Building in the Complex or cause the cancellation of any insurance policy
covering the Building, or any part thereof, nor shall Lessee sell, or permit to
be kept, used or sold, in or about the Leased Premises, any article which may be
prohibited by the standard form of "All Risk" fire insurance policies. Lessee
shall, at its sole cost and expense, comply with any and all requirements
pertaining to the Leased Premises, of any insurance organization or company,
necessary for the maintenance of reasonable property damage and commercial
general liability insurance, covering the Leased Premises, the Building, or the
Complex.

     16.3 Increase in Premiums. Lessee agrees to pay to Lessor, as additional
Rent, any increase in premiums on policies which may be carried by Lessor on the
Leased Premises, the Building or the Complex, or any blanket policies which
include the Building or Complex, covering damage thereto and loss of Rent caused
by fire and other perils above the rates for the least hazardous type of
occupancy for office use. Lessee further agrees to pay Lessor, as additional
Rent, any increases in such premiums resulting from the nature of Lessee's
occupancy or any act or omission of Lessee. All payments of additional Rent by
Lessee to Lessor pursuant to this Section 16.3 shall be made within ten (10)
days after receipt by Lessee of Lessor's billing therefor.

     16.4 Personal Property Insurance. Lessee shall maintain in full force and
effect on all of its fixtures, furniture, equipment and other business personal
property in the Leased Premises a policy or policies providing protection
against any peril included within the classification "All Risk" to the extent of
at least ninety percent (90%) of their replacement cost, or that percentage of
the replacement cost required to negate the effect of a coinsurance provision,
whichever is greater. No such policy shall have a deductible in a greater amount
than One Thousand Dollars ($1,000). Lessee shall also insure in the same manner
the physical value of all its Tenant Improvements and Alterations in the Leased
Premises including the Lessee's Work. During the Term, the proceeds from any
such policy or policies of insurance shall be used for the repair or replacement
of the fixtures, equipment, and Tenant Improvements so insured. Lessor shall
have no interest in said insurance, and will sign all documents necessary or
proper in connection with the settlement of any claim or loss by Lessee. Lessee
shall also maintain insurance for all plate glass upon the Leased Premises. All
insurance specified in this Section 16.4 to be maintained by Lessee shall be
maintained by Lessee at its sole cost.

                                      27.
<PAGE>

            17.  INDEMNIFICATION, WAIVER OF CLAIMS AND SUBROGATION

     17.1 Waiver of Subrogation. Lessor and Lessee release each other, and their
respective authorized representatives, from any claims for damage to the Leased
Premises and the Building and other improvements in which the Leased Premises
are located, and to the furniture, fixtures, and other business personal
property, Lessee's improvements and Alterations of either Lessor or Lessee, in
or on the Leased Premises and the Building and other improvements in which the
Leased Premises are located, including loss of income, that are caused by or
result from risks insured or required under the terms of this Lease to be
insured against under any property insurance policies carried or to be carried
by either of the parties.

     17.2 Form of Policy. Each party shall cause each such insurance policy
obtained by it to provide that the insurance company waives all rights of
recovery by way of subrogation against either party in connection with any
damage covered by such policy. Neither party shall be liable to the other far
any damage caused by any peril included within the classification "All Risk"
which is insured against under any property insurance policy carried under the
terms of this Lease.

     17.3 Indemnity. Lessee, as a material part of the consideration to be
rendered to Lessor, shall indemnify, defend, protect and hold harmless Lessor
against all actions, claims, demands, damages, liabilities, losses, penalties,
or expenses of any kind which may be brought or imposed upon Lessor or-which
Lessor may pay or incur by reason of injury to person or property or business,
from whatever cause, all or in any way connected with the acts and omissions of
Lessee, and the condition or use of the Leased Premises, or the improvements or
personal property therein or thereon, including without limitation any liability
or injury to the person or property or business of Lessee, its agents, officers,
employees or invitees. Lessee agrees to indemnify, defend and protect Lessor and
hold it harmless from any and all liability, loss, cost or obligation on account
of, or arising out of, any such injury or loss however occurring, including
breach of the provisions of this Lease and the negligence of the parties hereto.
Nothing contained herein shall obligate Lessee to indemnify Lessor against its
own sole or gross negligence or willful acts, for which Lessor shall indemnify
Lessee.

     17.4 Defense of Claims. In the event any action, suit or proceeding is
brought against Lessor by reason of any such occurrence, Lessee, upon Lessor's
request, will at Lessee's expense resist and defend such action, suit or
proceeding, or cause the same to be resisted and defended by counsel designated
either by Lessee or by the insurer whose policy covers the occurrence and in
either case approved by Lessor. The obligations of Lessee under this Section
arising by reason of any occurrence taking place during the Term shall survive
any termination of this Lease.

     17.5 Waiver of Claims. Lessee, as a material part of the consideration to
be rendered to Lessor, hereby waives all claims against Lessor for damages or
injury, as described below, from any cause arising at any time, including breach
of the provisions of this Lease and the negligence of the parties hereto:

          (a)  damages to goods, wares, merchandise and loss of business in,
upon or about the Leased Premises; and

                                      28.
<PAGE>

          (b)  (notwithstanding anything to the contrary contained in this
Lease, including, without limitation, the definition of Operating Costs in
Section 2.1, which includes "policing") damages to goods, wares, merchandise and
loss of business, in, upon or about the Leased Premises or the Complex, and
injury to Lessee, its agents, employees, invitees or third persons in, upon or
about the Leased Premises or the Complex, where such damage or injury results
from Lessor's failure to police or provide security for the Complex or Lessor's
negligence in connection therewith.

     Lessee expressly acknowledges and agrees that the provisions of Section
12.5(6) above apply fully with respect to the matters waived pursuant to this
Section 17.5, and, for such purpose, the term Released Matters, as used in
Section 12.5(6), shall be deemed to include the matters waived pursuant to this
Section 17.5.

     17.6 References. Wherever in this Article the term Lessor or Lessee is used
and such party is to receive the benefit of a provision contained in this
Article, such term shall refer not only to that party but also to its officers,
directors, shareholders, employees, contractors, partners, agents and mortgagees
or other lien holders.

                           18.  LIABILITY INSURANCE

     18.1 Lessee's Insurance. Lessee shall, at Lessee's expense, obtain and keep
in force during the Term, a commercial general liability insurance policy
insuring Lessee against the risks of, bodily injury and property damage,
personal injury, contractual liability, completed operations, products
liability, host liquor liability, owned and non-owned automobile liability
arising out of the ownership, use, occupancy or maintenance of the Leased
Premises and all areas appurtenant thereto. Such insurance shall be a combined
single limit policy in an amount not less than One Million Dollars ($1,000,000)
per occurrence with a Two Million Dollar ($2,000,000) annual aggregate; and an
umbrella policy of Three Million Dollars ($3,000,000) for any one occurrence.
Lessor and any lender or other party in interest designated by Lessor shall be
named as additional insured(s). The policy shall contain cross liability
endorsements and shall insure performance by Lessee of the indemnity provisions
of this Lease; shall be primary, not contributing with, and not in excess of
coverage which Lessor may carry; shall state that Lessor is entitled to recovery
for the negligence of Lessee even though Lessor is named as an additional
insured; shall provide for severability of interest; shall provide that an act
or omission of one of the insured or additional insureds which would void or
otherwise reduce coverage shall not void or reduce coverages as to the other
insured or additional insured; and shall afford coverage after the Term (by
separate policy or extension if necessary) for all claims based on acts,
omissions, injury or damage which occurred or arose (or the onset of which
occurred or arose) in whole or in part during the Term. The limits of said
insurance shall not limit any liability of Lessee hereunder. Not more frequently
than every three (3) years, if, in the reasonable opinion of Lessor, the amount
of liability insurance required hereunder is not adequate, Lessee shall promptly
increase said insurance coverage as required by Lessor.

     18.2 Workers' Compensation Insurance. Lessee shall carry Workers'
Compensation insurance as required by law, including an employers' liability
endorsement.

                                      29.
<PAGE>

     18.3 Rent Loss/Business Interruption Insurance. Lessee shall carry Rental
Loss/Business Interruption insurance covering rental loss or business
interruptions resulting from those risks referred to in Section 18.1 in an
amount equal to all Rent payable under this Lease for a period of twelve (12)
months at the then current rate of charges.

                      19.  INSURANCE POLICY REQUIREMENTS

     19.1 General Requirements. All insurance policies required to be carried by
Lessee (except Lessee's business personal property insurance) hereunder shall
conform to the following requirements:

          (a)  The insurer in each case shall carry a designation in "Best's
Insurance Reports" as issued from time to time throughout the Term as follows:
policyholders' rating of A; financial rating of not less than VII;

          (b)  The insurer shall be qualified to do business in the state in
which the Leased Premises are located;

          (c)  The policy shall be in a form and include such endorsements as
are acceptable to Lessor;

          (d)  Certificates of insurance shall be delivered to Lessor at
commencement of the Term and certificates of renewal at least thirty (30) days
prior to the expiration of each policy;

          (e)  Each policy shall require that Lessor be notified in writing by
the insurer, at least thirty (30) days prior to any cancellation or expiration
of such policy, or any reduction in the amounts of insurance carried.

                         20.  LESSEE INSURANCE DEFAULT

     20.1 Rights of Lessor. In the event that Lessee fails to obtain any
insurance required of it under the terms of this Lease, Lessor may, at its
option, but is not obligated to, obtain such insurance on behalf of Lessee and
bill Lessee, as additional rent, for the cost thereof. Payment shall be due
within ten (10) days of receipt of the billing therefor by Lessee.

                 21.  FORFEITURE OF PROPERTY AND LESSOR'S LIEN

     21.1 Removal of Personal Property. Lessee agrees that as of the date of
termination of this Lease or repossession of the Leased Premises by Lessor, by
way of default or otherwise, it shall remove all personal property to which it
has the right to ownership pursuant to the terms of this Lease. Any and all such
property of Lessee not removed by such date shall, at the option of Lessor,
irrevocably become the sole property of Lessor. Lessee waives all rights to
notice and all common law and statutory claims and causes of action which it may
have against Lessor subsequent to such date as regards the storage, destruction,
damage, loss of use and ownership of the personal property affected by the terms
of this Article. Lessee acknowledges Lessor's need to relet the Leased Premises
upon termination of this Lease or repossession of the Leased Premises and
understands that the forfeitures and waivers provided herein are necessary to
aid

                                      30.
<PAGE>

said reletting, and to prevent Lessor incurring a loss for inability to deliver
the Leased Premises to a prospective lessee.

     21.2 Lessor's Lien. Lessee hereby grants to Lessor a lien upon and security
interest in all fixtures, chattels and personal property of every kind now or
hereafter to be placed or installed in or on the Leased Premises and agrees that
in the event of any default, as defined in Article 29 herein, on the part of
Lessee, Lessor shall have all the rights and remedies afforded the secured party
by the chapter on "Default" of Division 9 of the Uniform Commercial Code of the
state in which the Leased Premises are located and may, in connection therewith,
also (a) enter on the Leased Premises to assemble and take possession of the
collateral, (6) require Lessee to assemble the collateral and make its
possession available to Lessor at the Leased Premises, and (c) enter the Leased
Premises, render the collateral, if equipment, unusable and dispose of it in a
manner provided by the Uniform Commercial Code of the state in which the Leased
Premises are located. Lessee hereby designates Lessor as his attorney-in-fact
for purposes of executing such documents as may be necessary to perfect the lien
and security interest granted hereunder.

                         22.  MAINTENANCE AND REPAIRS

     22.1 Lessor's Obligations. Subject to the other provisions of this Lease
imposing obligations in this respect upon Lessee, Lessor shall repair, replace
and maintain the external and Structural parts of the Complex which do not
comprise a part of the Leased Premises and are not leased to others, janitor and
equipment closets and shafts within the Leased Premises designated by Lessor for
use by it in connection with the operation and maintenance of the Complex, and
all Common Areas. Lessor shall maintain and repair equipment, Lines, facilities
or systems of the Building or Complex which are outside of the Leased Premises
or which do not exclusively serve the Leased Premises. Lessor shall perform such
repairs, replacements and maintenance with reasonable dispatch, in a good and
workmanlike manner; but Lessor shall not be liable for any damages, direct,
indirect or consequential, or for damages for personal discomfort, illness or
inconvenience of Lessee by reason of failure of equipment, Lines, facilities or
systems or reasonable delays in the performance of such repairs, replacements
and maintenance, unless caused by the deliberate act or omission of Lessor, its
servants, agents, or employees. The cost for such repairs, maintenance and
replacement shall be included in Operating Costs in accordance with Section 2.1
hereof.

     22.2 Negligence of Lessee. If the Building, the elevators, escalators,
boilers, engines, pipes or apparatus used for the purpose of climate control of
the Building or operating the elevators, or escalators, or if the water pipes,
drainage pipes, electric lighting or other equipment, Lines, systems and/or
facilities of the Building or the Complex, or the roof or the outside walls of
the Building, fall into a state of disrepair or become damaged or destroyed
through the negligence, carelessness or misuse of Lessee, its agents, employees
or anyone permitted by it to be in the Complex, or through it in any way, the
cost of the necessary repairs, replacements or Alterations shall be borne by
Lessee who shall pay the same to Lessor as additional charges forthwith on
demand.

     22.3 Lessee's Obligations. Lessee shall repair the Leased Premises,
including without limiting the generality of the foregoing, all interior
partitions and walls, fixtures, Leasehold Improvements and Alterations in the
Leased Premises and all electrical and telephone outlets and

                                      31.
<PAGE>

conduits, fixtures and shelving, and special mechanical and electrical equipment
which equipment is not a normal part of the Leased Premises installed by or for
Lessee, reasonable wear and tear, damage with respect to which Lessor has an
obligation to repair as provided in Section 22.1 and Section 23.2 hereof only
excepted. Prior to commencement of any repairs, Lessee shall give Lessor at
least ten (10) days' prior written notice thereof so that Lessor may post
notices of non-responsibility in or upon the Leased Premises as provided by law.
Lessee must obtain the prior written approval from Lessor for Lessee's
contractor before the commencement of the repair. Lessor may require that Lessee
use a specific contractor for certain types of repairs. Lessor may enter and
view the state of repair and Lessee will repair in a good and workmanlike manner
according to notice in writing. Notwithstanding the foregoing, Lessee shall not
make any repairs to the equipment, Lines, facilities or systems of the Building
or Complex which are outside of the Leased Premises or which do not exclusively
serve the Leased Premises.

     22.4 Cleaning. Lessee agrees at the end of each business day to leave the
Leased Premises in a reasonably clean condition for the purpose of the
performance of Lessor's cleaning services referred to herein. Lessee shall
maintain the appearance of the Leased Premises in a manner consistent with the
character, use and appearance of the Complex.

     22.5 Waiver. Lessee waives all rights it may have under law to make repairs
at Lessor's expense.

     22.6 Acceptance. Except as to the construction obligations of Lessor for
the Lessor's Work, if any, stated in Exhibit D to this Lease, Lessee shall
accept the Leased Premises in "as is" condition as of the date of execution of
this Lease by Lessee, and Lessee acknowledges that the Leased Premises in such
condition are in good and sanitary order, condition and repair. Lessee
acknowledges that there shall be no floor/ceiling coring or penetrations due to
the post tension floor slab structural system of the Building.

                               23.  DESTRUCTION

     23.1 Rights of Termination. In the event the Leased Premises suffers (a) an
Uninsured Property Loss (as hereinafter defined) or (b) a property loss which
cannot be repaired within one hundred twenty (120) days from the date of
destruction under the laws and regulations of state, federal, county or
municipal authorities, or other authorities with jurisdiction, Lessor may
terminate this Lease as at the date of the damage upon written notice to Lessee
following the property loss. For purposes of this Lease, the term "Uninsured
Property Loss" shall mean any loss arising from a peril not covered by the
standard form of an "All Risk" or "Special Form" property insurance policy.

     23.2 Repairs. In the event of a property loss which may be repaired within
one hundred twenty (120) days from the date of the damage, or, in the
alternative, in the event Lessor does not elect to terminate this Lease under
the terms of Section 23.1 above, then this Lease shall continue in full force
and effect and Lessor shall forthwith undertake to make such repairs to
reconstitute the Leased Premises to as near the condition as existed prior to
the property loss as practicable but not including any construction originally
performed by Lessee (including Lessee's Work) or subsequently undertaken by
Lessee, but shall include solely property

                                      32.
<PAGE>

constructed by Lessor (including Lessor's Work) prior to the commencement of the
Term. Such partial destruction shall in no way annul or void this Lease except
that Lessee shall be entitled to a proportionate reduction of Minimum Rent
following the property loss and until the time the Leased Premises are restored.
Such reduction shall be pro rata based upon the number of usable square feet of
the Leased Premises damaged and not occupied. Lessor's obligations to restore
shall in no way include any construction originally performed by Lessee or
subsequently undertaken by Lessee, but shall include solely that property
constructed by Lessor prior to commencement of the Term.

     23.3 Repair Costs. The cost of any repairs to be made by Lessor, pursuant
to Section 23.2 of this Lease, shall be paid by Lessor utilizing available
insurance proceeds. Lessee shall reimburse Lessor upon completion of the repairs
for any deductible for which no insurance proceeds will be obtained under
Lessor's insurance policy to the extent such deductible is not reimbursed as an
Operating Cost, or if other premises are also repaired, a pro rata share based
on total costs of repair equitably apportioned to the Leased Premises. Lessee
shall, however, not be responsible to pay any deductible or its share of any
deductible to the extent that Lessee's payment would be in excess of Ten
Thousand Dollars ($10,000) if Lessee's' consent has not been received by Lessor,
unless such denial of consent by Lessee is unreasonable in the reasonable
judgment of Lessor's insurance consultant.

     23.4 Waiver. Lessee hereby waives all statutory or common law rights of
termination in respect to any partial destruction or property loss which Lessor
is obligated to repair or may elect to repair under the terms of this Article.
Further, in event of a property loss occurring during the last two (2) years of
the original Term hereof or of any extension, Lessor need not undertake any
repairs and may cancel this Lease unless Lessee has the right under the terms of
this Lease to extend the Term for an additional period of at least five (5)
years and does so within thirty (30) days of the date of the property loss.

     23.5 Lessor's Election. In the event that the Complex or Building in which
the Leased Premises are situated be destroyed to the extent of not less than (i)
thirty-three and one-third percent (33-1/3%) of the replacement cost thereof in
the event of an insured property loss, or (ii) more than Five Hundred Thousand
Dollars ($500,000) in replacement construction costs in the case of an Uninsured
Property Loss, Lessor may elect to terminate this Lease, whether the Leased
Premises be injured or not, in the same manner as in Section 23.1 above. At all
events, a total destruction of the Complex of which the Leased Premises form a
part, or the Leased Premises itself, shall terminate this Lease.

                               24.  CONDEMNATION

     24.1 Definitions.

          (a)  "Condemnation" means (i) the exercise of any governmental power,
                ------------
whether by legal proceedings or otherwise, by a Condemnor (as defined below)
and/or (ii) a voluntary sale or transfer by Lessor to any Condemnor, either
under threat of condemnation or while legal proceedings for condemnation are
pending.

                                      33.
<PAGE>

          (b)  "Date of Taking" means the date the Condemnor has the right to
                --------------
possession of the property being condemned.

          (c)  "Award" means all compensation, sums or anything of value
                -----
awarded, paid or received on a total or partial Condemnation.

          (d)  "Condemnor" means any public or quasi-public authority, or
                ---------
private corporation or individual, having the power of Condemnation.

     24.2 Total Taking. If the Leased Premises are totally taken by
Condemnation, this Lease shall terminate on the Date of Taking.

     24.3 Partial Taking; Common Areas.

          (a)  If any portion of the Leased Premises is taken by Condemnation,
this Lease shall remain in effect, except that Lessee can elect to terminate
this Lease if thirty-three and one-third percent (33-1/3%) or more of the total
number of square feet in the Leased Premises is taken.

          (b)  If any part of the Common Areas of the Complex is taken by
Condemnation and as a consequence thereof, the Complex is not in compliance with
applicable governmental codes and requirements, then Lessor shall have the
election to terminate this Lease pursuant to this Section.

          (c)  If fifty percent (50%) or more of the Building in which the
Leased Premises are located is taken, Lessor shall have the election to
terminate this Lease in the manner prescribed herein.

     24.4 Termination or Abatement. If either party elects to terminate this
Lease under the provisions of Section 24.3 (such party is hereinafter referred
to as the "Terminating Party"), it must terminate by giving notice to the other
party (the "Nonterminating Party") within thirty (30) days after the nature and
extent of the taking have been finally determined (the "Decision Period"). The
Terminating Party shall notify the Nonterminating Party of the date of
termination, which date shall not be earlier than sixty (60) days after the
Terminating Party has notified the Nonterminating Party of its election to
terminate nor later than the Date of Taking. If Notice of Termination is not
given within the Decision Period, the Lease shall continue in full force and
effect except that Minimum Rent shall be reduced by subtracting therefrom an
amount calculated by multiplying the Minimum Rent in effect prior to the taking
by a fraction the numerator of which is the number of square feet taken from the
Leased Premises and the denominator of which is the number of square feet in the
Leased Premises prior to the taking.

     24.5 Restoration. If there is a partial taking of the Leased Premises and
this Lease remains in full force and effect pursuant to this Article, Lessor, at
its cost, shall accomplish all necessary restoration so that the Leased Premises
is returned as near as practical -to its condition immediately prior to the date
of the taking, but in no event shall Lessor be obligated to expend more for such
restoration than the extent of funds actually paid to Lessor by the Condemnor.

                                      34.
<PAGE>

     24.6 Award. Any award arising from the Condemnation or the settlement
thereof shall belong to and be paid to Lessor except that Lessee shall receive
from the award compensation for the following if specified in the award by the
Condemnor, so long as it does not reduce Lessor's award in respect of the real
property: Lessee's trade fixtures, tangible personal property, loss of business
and relocation expenses. At all events, Lessor shall be solely entitled to all
award in respect of the real property, including the bonus value of the
leasehold. Lessee shall not be entitled to any award until Lessor has received
the above sum in full.

                        25.  ASSIGNMENT AND SUBLETTING

     25.1 Lease is Personal. The purpose of this Lease is to transfer possession
of the Leased Premises to Lessee for Lessee's personal use in return for certain
benefits, including rent, to be transferred to the Lessor. Lessee's right to
assign or sublet as stated in this Article is subsidiary and incidental to the
underlying purpose of this Lease. Lessee acknowledges and agrees that it has
entered into this Lease in order to acquire the Leased Premises for its own
personal use and not for the purpose of obtaining the right to convey the
leasehold to others.

     25.2 "Transfer of the Leased Premises" Defined. The terms "Transfer of the
Leased Premises" or "Transfer" as used herein shall include any assignment of
all or any part of this Lease (including assignment by operation of law),
subletting of all or any part of the Leased Premises or transfer of possession,
or granting of the right of possession or contingent right of possession of all
or any portion of the Leased Premises including, without limitation, license,
concession, mortgage, devise, hypothecation, agency, franchise or management
agreement, or suffering any other person (the agents and servants of Lessee
excepted) to occupy or use the Leased Premises or any portion thereof; and the
party to whom the Transfer is to be effected is hereinafter referred to as the
"Transferee." If Lessee is a corporation which is not deemed a public
corporation, or is an unincorporated association or partnership, or Lessee
consists of more than one party, the transfer, assignment or hypothecation of
any stock or interest in such corporation, association, partnership or ownership
interest, in the aggregate in excess of twenty-five percent (25%), shall be
deemed a Transfer of the Leased Premises.

     25.3 No Transfer Without Consent. Lessee shall not suffer a Transfer of the
Leased Premises or any interest therein, or any part thereof, or any right or
privilege appurtenant thereto without the prior written consent of Lessor, and a
consent to one Transfer of the Leased Premises shall not be deemed to be a
consent to any subsequent Transfer of the Leased Premises. Any Transfer of the
Leased Premises without such consent shall (i) be voidable, and (ii) terminate
this Lease, in either case, at the option of Lessor.

     25.4 When Consent Granted.

          (a)  The consent .of Lessor to a Transfer may not be unreasonably
withheld, provided that it is agreed to be reasonable for Lessor to consider
any-of the following reasons, which list is not exclusive, in electing to
consent or to deny consent:

               (i)  Financial strength of the proposed Transferee is not at
least equal to that of Lessee at the time of execution of this Lease;

                                      35.
<PAGE>

               (ii)  A proposed Transferee whose occupation of the Leased
Premises would cause a diminution in the reputation of the Complex or the other
businesses located therein;

               (iii) A proposed Transferee whose impact on the common facilities
or the other occupants of the Complex would be disadvantageous to the operation
and management of the Complex including increasing the cost of operation and
management;

               (iv)  A proposed Transferee whose use presents a risk of
violation of Article 12;

               (v)   A proposed Transferee whose occupancy will require a
variation in the terms of this Lease (for example; a variation in the use
clause) or which otherwise adversely affects any interest of Lessor;

               (vi)  That there be no uncured notices of default under the terms
of this Lease; or

               (vii)  A proposed Transferee who is or is likely to be, or whose
business is or is likely to be, subject to compliance with additional laws or
other governmental requirements beyond those to which Lessee or Lessee's
business is subject.

          (b)  Notwithstanding the foregoing, Lessee shall have the right,
without the consent of Lessor, but upon prior written notice to Lessor, to
assign this Lease to a company incorporated or to be incorporated by Lessee,
provided that Lessee owns or beneficially controls all the issued and
outstanding shares of capital stock of the company; further provided, however,
that in the event that at any time following such assignment, Lessee wishes to
sell, mortgage, devise, hypothecate or in any other manner whatsoever transfer
any portion of the ownership or beneficial control of the issued and outstanding
shares in the capital stock of such company, such transaction shall be deemed to
constitute a Transfer and shall be subject to all of the provisions of this
Article 25 with respect to a Transfer of the Leased Premises including, by
specific reference, the provisions of Section 25.8.

     25.5 Procedure for Obtaining Consent.

          (a)  Lessor need not commence its review of any proposed Transfer, or
respond to any request by Lessee with respect to such, unless and until it has
received from Lessee adequate descriptive information concerning the Transferee,
the business to be conducted by the Transferee, the Transferee's financial
capacity, and such other information as may reasonably be required in order to
form a prudent judgment as to the acceptability of the proposed Transfer,
including, without limitation, the following:

               (i)  Reasonable financial information concerning the proposed
Transferee including the past two years' audited annual Balance Sheets and
Profit and Loss statements, certified correct by a Certified Public Accountant;

               (ii) Banking references of the proposed Transferee;

                                      36.
<PAGE>

               (iii) A resume of the business background and experience of the
proposed Transferee;

               (iv)  At least five (5) business references for the proposed
Transferee;

               (v)   An executed copy of the instrument by which Lessee proposes
to effectuate the Transfer;

               (vi)  A certified statement, including the calculation, of the
amount of unamortized cost of Lessee's Tenant Improvements to the Leased
Premises.

          (b)  Lessee shall reimburse Lessor as additional rent for Lessor's
reasonable costs and attorneys' fees incurred in conjunction with the processing
and documentation of any proposed Transfer of the Leased Premises, whether or
not consent is granted.

     25.6 Recapture.

          (a) By written notice to Lessee (the "Termination Notice") within
twenty (20) business days following submission to Lessor by Lessee of the
information specified in Section 25.5, Lessor: (i) may terminate this Lease in
the event of an assignment of this Lease or sublet of the entire Leased
Premises; or (ii) if such proposed subletting will result in more than fifty
percent (50%) of the entire Leased Premises being sublet (in the aggregate with
any previous subleases), terminate this Lease as to all or any portion of the
Leased Premises. Any termination pursuant to clause (ii) above shall be subject
to the rights of any sublessees under any existing subleases provided Lessor has
previously consented to the sublease in accordance with the terms of this Lease.
In the event Lessor elects to terminate this Lease as to that portion of the
Leased Premises to be sublet, an amendment to this Lease shall be executed
whereby the description of the Leased Premises is restated and Lessee's
obligations for rent and other charges are reduced in proportion to the
reduction in Rentable Area of the Leased Premises caused thereby.

          (b) In the event that Lessor terminates this Lease or terminates this
Lease as to a portion thereof, Lessor may, if it elects, enter into a new lease
covering the Leased Premises or a portion thereof with the intended Transferee
on such terms as Lessor and such Transferee may agree or enter into a new lease
covering the Leased Premises with any other party; in such event, Lessee shall
not be entitled to any portion of the profit if any which Lessor may realize on
account of such termination and reletting. From and after the date of such
termination of this Lease, the parties shall have no further obligations to each
other under this Lease except for matters occurring or obligations arising prior
to the date of such termination.

     25.7 Reasonable Restriction. The restrictions on Transfer described in this
Article 25 are acknowledged by Lessee to be reasonable for all purposes,
including, without limitation, the provisions of California Civil Code (the
"Code") Section 1951.4(6)(2). Lessee expressly waives any rights which it might
otherwise be deemed to possess pursuant to applicable law, including, without
limitation, Section 1997.040 of the Code, to limit any remedy of Lessor pursuant
to Section 1951.2 or 1951.4 of the Code by means of proof that enforcement of a
restriction on use of the Leased Premises would be unreasonable.

                                      37.
<PAGE>

     25.8 Effect of Transfer. If Lessor consents to a Transfer (or if a Transfer
occurs without Lessor's consent in accordance with Section 25.4(6)), the
following conditions shall apply:

          (a)  Each and every covenant, condition or obligation imposed upon
Lessee by this Lease and each and every right, remedy or benefit afforded Lessor
by this Lease shall not be impaired or diminished as a result of such Transfer.

          (b)  Lessee shall pay to Lessor, on a monthly basis, seventy percent
(70%) of the excess of any sums of money, or other economic consideration
received by Lessee from the Transferee in such month (whether or not for a
period longer than one month), including higher rent, bonuses, key money, or the
like over the aggregate, of: (i) the Amortized Portion, as defined below, of the
reasonable expenses actually paid by Lessee to unrelated third parties for
brokerage commissions, tenant improvements to the Leased Premises, or design
fees incurred as a direct consequence of the Transfer; and (ii) the total sums
which Lessee pays Lessor under this Lease in such month, or the prorated portion
thereof if the Leased Premises transferred is less than the entire Leased
Premises. The amount so derived shall be paid with Lessee's payment of Minimum
Rent. The term "Amortized Portion" is that portion of the applicable expenses
derived by dividing such expenses by the number of months in the original term
of the Transfer transaction.

          (c)  No Transfer, whether or not consent of Lessor is required
hereunder, shall relieve Lessee of its primary obligation to pay the rent and to
perform all other obligations to be performed by Lessee hereunder. The
acceptance of rent by Lessor from any proposed Transferee shall not be deemed to
be a waiver by Lessor of any provision of this Lease or to be a consent to any
Transfer of the Leased Premises.

          (d)  If Lessor consents to a sublease, such sublease shall not extend
beyond the expiration of the Term.

          (e)  No Transfer shall be valid and no Transferee shall take
possession of the Leased Premises or any part thereof unless, within ten (10)
days after the execution of the documentary evidence thereof, Lessee shall
deliver to Lessor a duly executed duplicate original of the Transfer instrument
in form satisfactory to Lessor which provides that: (i) the Transferee assumes
Lessee's obligations for the payment of rent and for the full and faithful
observance and performance of the covenants, terms and conditions contained
herein; (ii) such Transferee will, at Lessor's election, attorn directly to
Lessor in the event Lessee's Lease is terminated for any reason on the terms set
forth in the instrument of transfer; and (iii) such instrument of transfer
contains such other assurances as Lessor reasonably deems necessary.

                               26.  ABANDONMENT

     26.1 Lessee to Occupy. Lessee shall not abandon the Leased Premises at any
time during the Term, and if Lessee shall abandon, vacate or surrender the
Leased Premises, or be dispossessed by process of law, or otherwise, any
personal property belonging to Lessee and remaining on the Leased Premises
thereafter shall, at the option of Lessor, be deemed abandoned.

                                      38.
<PAGE>

                             27.  ENTRY BY LESSOR

     27.1 Rights of Lessor. Lessee shall permit Lessor and Lessor's agents to
enter the Leased Premises at all reasonable times for the purpose of inspecting
the same or for the purpose of maintaining the Building and the Lines, systems
and facilities therein, or for the purpose of making repairs, replacements,
alterations or additions to any portion of the Building and the Lines, systems
and facilities therein, including the erection and maintenance of such
scaffolding, canopies, fences and props as may be required, or for the purpose
of posting notices of non-responsibility for alterations, additions or repairs,
or for the purpose of placing upon the Building any usual or ordinary "for sale"
signs, without any rebate of Rent and without any liability to Lessee for any
loss of occupation or quiet enjoyment of the Leased Premises thereby occasioned,
and shall permit Lessor, at any time within ninety (90) days prior to the
expiration of this Lease, to place upon the Leased Premises any usual or
ordinary "to let" or "to lease" signs. This Section in no way affects the
maintenance obligations of the parties hereto.

                                  28.  SIGNS

     28.1 Lessee shall not place on the Leased Premises or on the Complex, any
exterior signs or advertisements nor any interior signs or advertisements that
are visible from the exterior of the Leased Premises including the Atrium,
without Lessor's prior written consent, which Lessor reserves the right to
withhold for any aesthetic reason in its sole judgment. Lessee's name shall be
included on the Building directory in the main lobby of the Building and in
applicable Common Areas, in accordance with Lessor's Sign Program. The cost of
installation and regular maintenance of any such signs approved by Lessor shall
be at the sole expense of Lessee. At the termination of this Lease, or any
extension thereof, Lessee shall remove all its signs, and all damage caused by
such removal shall be repaired at Lessee's expense.

                                 29.  DEFAULT

     29.1 Definition. The occurrence of any of the following shall constitute a
material default and breach of this Lease by Lessee:

          (a)  Any failure by Lessee to pay the rent or to make any other
payment required to be made by Lessee hereunder when due;

          (b)  The abandonment of the Leased Premises by Lessee in violation of
Section 26.1 hereof;

          (c)  Any failure by Lessee to provide executed documents as and when
required under the provisions of Section 36.2 and/or Article 37;

          (d)  A failure by Lessee to observe and perform any other provision of
this Lease to be observed or performed by Lessee, where such failure continues
for ten (10) days after written notice thereof by Lessor to Lessee; provided,
however, that if the nature of the default is such that the same cannot
reasonably be cured within the ten (10) day period allowed, Lessee shall not be
deemed to be in default if Lessee shall, within such ten (10) day period,
commence to cure and thereafter diligently prosecute the same to completion;

                                      39.
<PAGE>

          (e)  Either: (i) the appointment of a receiver (except a receiver
appointed at the instance or request of Lessor) to take possession of all or
substantially all of the assets of Lessee; (ii) a general assignment by Lessee
for the benefit of creditors; or (iii) any action taken or suffered by Lessee
under any insolvency or bankruptcy act shall constitute a breach of this Lease
by Lessee. In such event, Lessor may, at its option, declare this Lease
terminated and forfeited by Lessee, and Lessor shall be entitled to immediate
possession of the Leased Premises. Upon such notice of termination, this Lease
shall terminate immediately and automatically by its own limitation;

          (f)  Any two (2) failures by Lessee to observe and perform any
material provision of this Lease during any twelve (12) month period of the
Term, as such may be extended, shall constitute, at the option of Lessor, a
separate and noncurable default.

                          30.  REMEDIES UPON DEFAULT

     30.1 Termination and Damages. In the event of any default by Lessee, then
in addition to any other remedies available to Lessor herein or at law or in
equity, Lessor shall have the immediate option to terminate this Lease and all
rights of Lessee hereunder by giving written notice of such intention to
terminate. In the event that Lessor shall elect to so terminate this Lease, then
Lessor may recover from Lessee:

          (a)  The Worth at the Time of Award , as defined below, of any unpaid
rent which had been earned at the time of such termination; plus

          (b)  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 Lessee proves could have been reasonably
avoided; plus

          (c)  The Worth at the Time of Award of the amount by which the unpaid
rent for the balance of the Term after the time of award exceeds the amount of
such rental loss that Lessee proves could be reasonably avoided; plus

          (d)  Any other amount necessary to compensate Lessor for all the
detriment proximately caused by Lessee's failure to perform its obligations
under this Lease or which in the ordinary course of events would be likely to
result therefrom; and

          (e)  At Lessor's election, such other amounts in addition to or in
lieu of the foregoing as maybe permitted from time to time by the applicable law
in the state in which the Leased Premises are located.

     30.2 Definition. As used in subsections 30.1(a) and (b) above, the "Worth
at the Time of Award" is computed by allowing interest at the rate of ten
percent (10%) per annum. As used in subsection 30.1(c) above, the "Worth at the
Time of Award" is computed by discounting such amount at the discount rate of
the Federal Reserve Bank for the region in which the Complex is located at the
time of award plus one percent (1%).

                                      40.
<PAGE>

     30.3 Personal Property.

          (a)  In the event of any default by Lessee, Lessor shall also have the
right, with or without terminating this Lease, to reenter the Leased Premises
and remove all persons and property from the Leased Premises; such property may
be removed and stored in a public warehouse or elsewhere at the cost of and for
the account of Lessee.

          (b)  In the event of default, all of Lessee's fixtures, furniture,
equipment, improvements, additions, Alterations and other personal property
shall, at the option of Lessor, remain upon the Leased Premises and in that
event, and continuing during the length of such default, Lessor shall have the
sole right to take exclusive possession of such property and to use it, rent or
charge free, until all defaults are cured or, at Lessor's option, at any time
during the Term, to require Lessee to forthwith remove such property. The rights
stated herein are in addition to Lessor's rights described in Section 21.1.

     30.4 Recovery of Rent; Reletting.

          (a)  In the event of the vacation or abandonment of the Leased
Premises by Lessee or in the event that Lessor shall elect to reenter as
provided in Section 30.3 above, or shall take possession of the Leased Premises
pursuant to legal proceeding or pursuant to any notice provided by law, then if
Lessor does not elect to terminate this Lease as provided in Section 30.1 above,
this Lease shall continue in effect for so long as Lessor does not terminate
Lessee's right to possession, and Lessor may enforce all its rights and remedies
under this Lease, including, without limitation, Lessor's right from, time to
time, without terminating this Lease, to either recover all rental as it becomes
due or relet the Leased Premises or any part thereof for such term or terms and
at such rental or rentals and upon such other terms and conditions as Lessor, in
its sole discretion, may deem advisable, with the right to make Alterations and
repairs to the Leased Premises. Acts of maintenance or preservation or efforts
to relet the Leased Premises or the appointment of a receiver upon initiation of
Lessor or other legal proceeding granting Lessor or its agent possession to
protect Lessor's interest under this Lease shall not constitute a termination of
Lessee's right to possession.

          (b)  In the event that Lessor shall elect to so relet, then rentals
received by Lessor from such reletting shall be applied: first, to the payment
of any indebtedness other than rent due hereunder from Lessee to Lessor; second,
to the payment of any cost of such reletting; third,' to the payment of the cost
of any alterations and repairs to the Leased Premises; fourth, to the payment of
rent due and unpaid hereunder; and the residue, if any, shall be held by Lessor
and applied in payment of future rent as the same may become due and payable
hereunder. Should that portion of such rentals received from such reletting
during any month, which is applied by the payment of rent hereunder, be less
than the rent payable during that month by Lessee hereunder, then Lessee shall
pay such deficiency to Lessor immediately upon demand therefor by Lessor. Such
deficiency shall be calculated and paid monthly. Lessee shall also pay to
Lessor, as soon as ascertained, any costs and expenses incurred by Lessor in
such reletting or in making such alterations and repairs not covered by the
rentals received from such reletting.

          (c)  No reentry or taking possession of the Leased Premises or any
other action under this Section shall be construed as an election to terminate
this Lease unless a written notice

                                      41.
<PAGE>

of such intention be given to Lessee or unless the termination thereof be
decreed by a court of competent jurisdiction. Notwithstanding any reletting
without termination by Lessor because of any default by Lessee, Lessor may at
any time after such reletting elect to terminate this Lease for any such
default.

          (d)  Lessor has 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 right to sublet or
assign, subject only to reasonable limitations).

     30.5 No Waiver. Efforts by Lessor to mitigate the damages caused by
Lessee's default in this Lease shall not constitute a waiver of Lessor's right
to recover damages hereunder, nor shall Lessor have any obligation to mitigate
damages hereunder.

     30.6 Curing Defaults. Should Lessee fail to repair, maintain, keep clean,
and/or service the Leased Premises, or any part or contents thereof at any time
or times, or perform any other obligations imposed by this Lease or otherwise,
then after having given Lessee reasonable notice of the failure or failures and
a reasonable opportunity which in no case shall exceed ten (10) days, to remedy
the failure, Lessor may enter upon the Leased Premises and perform or contract
for the performance of the repair, maintenance, or other Lessee obligation, and
Lessee shall pay Lessor for all direct and indirect costs incurred in connection
therewith within ten (10) days of receiving a bill therefor from Lessor.

     30.7 No Right to Cure. Notwithstanding anything to the contrary set forth
in Section 29.1 above, Lessee shall be deemed to have committed a material
default and breach of this Lease, without any right on Lessee's part to cure
such default and breach, upon the failure by Lessee to observe and perform the
provisions of any one or more of the following Sections (or indicated portions
thereof) of this Lease: 3.3, 12.1, 15.1 (first sentence), 25.3, 27.1, 36.2,
37.1, and 37.2.

     30.8 Cumulative Remedies. The various rights, options, election powers, and
remedies of Lessor contained in this Article and elsewhere in this Lease shall
be construed as cumulative and no one of them exclusive of any others or of any
legal or equitable remedy which Lessor might otherwise have in the: event of
breach or default, and the exercise of ore right or remedy by Lessor shall not
in any way impair its right to any other right or remedy.

                                31.  BANKRUPTCY

     31.1 Bankruptcy Events. If at any time during the Term there shall be filed
by or against Lessee in any court pursuant to any statute either of the United
States or of any state, commonwealth, district or territory thereof a petition
in bankruptcy or insolvency or for reorganization or for the appointment of a
receiver or trustee of all or a portion of Lessee's property or estate, or if a
receiver or trustee takes possession of any of the assets of Lessee, or if the
leasehold interest herein passes to a receiver, or if Lessee makes an assignment
for the benefit of creditors or petitions for or enters into an arrangement (any
of which are referred to herein as a "Bankruptcy Event"), then the following
provisions shall apply:

          (a)  Upon the occurrence of a Bankruptcy Event, or if Lessee takes
advantage of any insolvency laws of any state, district, commonwealth or
territory of the United States, then

                                      42.
<PAGE>

in any such event Lessor at its option and sole discretion may terminate this
Lease at any time by written notice to Lessee (subject, however, to applicable
provisions of the applicable bankruptcy federal or state statutes or any
insolvency laws during the pendency of any action thereunder involving Lessee as
the subject debtor). If this Lease is terminated under this Article: (i) Lessee
agrees to immediately surrender and vacate the Leased Premises, waives all
statutory or other notice to quit, and agrees that Lessor's obligations under
this Lease shall cease from such termination date; and (ii) Lessor may recover
possession by process of law or in any other lawful manner. Furthermore, if this
Lease terminates under this Section (a), Lessor shall, subject to the Bankruptcy
Code, have all rights and remedies against Lessee as provided in this Lease and
at law for a default of Lessee in the payment of Minimum Rent, Percentage Rent,
if any, and/or additional Rent. Lessee hereby acknowledges that it shall have
abandoned all of its personal property remaining in the Leased Premises after
Lessee surrenders possession of the Leased Premises, and Lessee hereby
authorizes Lessor to dispose of such personal property in any manner Lessor
deems appropriate without accounting to Lessee or its legal representative for
the proceeds thereof. Notwithstanding the foregoing, Lessor retains the right to
assert an administrative claim and a general unsecured claim that result from a
breach of this Lease including, without limitation, the cost to remove Lessee's
personal property from the Leased Premises and to restore the Leased Premises
after Lessee surrenders possession thereof.

          (b)  In all events any receiver or trustee in bankruptcy or Lessee as
debtor in possession shall, by written notice, either expressly assume or reject
this Lease within sixty (60) days following the entry of an "Order for Relief."
Failure of the trustee to give notice of such assumption hereof within said
period shall conclusively and irrevocably constitute a rejection of this Lease
and waiver of any rights to assume or assign this Lease.

          (c)  Lessee or the receiver or trustee shall not have the right to
assume this Lease unless: (1) Lessee or the receiver or trustee cures any
default. or provides adequate assurances that defaults will be promptly cured;
(2) Lessee or the receiver or trustee compensates Lessor and any other party
other then Lessor for all monetary damages and/or any actual pecuniary loss
incurred as a result of such default or provides adequate assurances that
compensation will be made for such monetary damages and/or actual pecuniary
loss; (3) the Bankruptcy Court (or other court of competent jurisdiction) enters
an order authorizing the assumption or assignment; (4) the assumption or
assignment is not prohibited under applicable law, including, but not limited
to, Section 365 of the Bankruptcy Code; and (5) Lessee or the receiver or
trustee provides to Lessor Adequate Assurance of Future Performance (as defined
herein below) of the Lease. For the purposes of this Section (c), "Adequate
Assurance of Future Performance" of all obligations under this Lease shall
include, but is not limited to:

               (i)   providing financial records which reveal that Lessee's
gross receipts in the ordinary course of its business during the thirty (30)
days immediately preceding the initiation of the case under the Bankruptcy Code
must be at least ten (10) times greater than the next installment of Minimum
Rent and other charges due under this Lease;

               (ii)  providing financial records which reveal that both the
average and median of Lessee's monthly gross receipts in the ordinary course of
business during the six (6) months immediately preceding initiation of the case
under the Bankruptcy Code must be at least

                                      43.
<PAGE>

five (5) times greater than the next installment of Minimum Rent and other
charges due under this Lease;

               (iii) covenanting in writing to Lessor (and obtaining approval
from the Bankruptcy Court therefor) that Lessee shall pay in advance to Lessor
all Minimum Rent and other sums payable by Lessee hereunder including, but not
limited to, its share (as estimated by Lessor) of the cost of all services
provided by Lessor (whether directly or through agents or contractors, and
whether or not the cost of such services is to be passed through to Lessee) in
advance of the performance or provision of such services;

               (iv)  covenanting in writing to Lessor (and obtaining approval
from the Bankruptcy Court therefor) that Lessee shall pay Minimum Rent and any
other consideration due under the Lease shall first be paid before any other of
Lessee's costs of operation of its business in the Leased Premises are paid;

               (v)   covenanting in writing to Lessor (and obtaining approval
from the Bankruptcy Court therefor) that Lessee's business shall be conducted in
a first class manner, and that no liquidating sales, auctions, or other non-
first class business operations shall be conducted on the Leased Premises, and
that the use of the Leased Premises as stated in this Lease will remain
unchanged, and that the assumption or assignment of this Lease will not violate
or adversely affect the rights of other lessees located in the Complex, and that
if any of these breaches occur, Lessee or the receiver or trustee will indemnify
Lessor against such loss (including costs of suit and attorneys' fees),
occasioned by such breach; and

               (vi)  in the event this Lease is for space within a shopping
center, Lessee reasonably satisfying any additional .requirements imposed under
Section 365(b)(3) of the Bankruptcy Code.

          (d)  Where a default exists under the Lease, the party assuming the
Lease may not require Lessor to provide services or supplies incidental to the
Lease before its assumption, unless Lessor is compensated under the terms of the
Lease for such services and supplies before the assumption of such Lease.

          (e)  In the event Lessee is unable to: (i) cure its defaults; (ii)
reimburse Lessor or any other party to this Lease for its monetary damages or
actual pecuniary loss to such party resulting from the defaults; (iii) pay the
rents due under this Lease or any other payments required of Lessee under this
Lease when due; or (iv) meet the criteria and obligations imposed by (i) through
(vi) in the previous Section (c), then Lessee hereby agrees in advance that it
has not met its burden to provide Adequate Assurance of Future Performance and
therefore cannot assume this Lease, and this Lease may be immediately terminated
by Lessor in accordance with Section (a) above.

          (f)  Lessee or the receiver or trustee may only assign this Lease in
accordance with the terms of Article 25 and if Adequate Assurance of Future
Performance by the assignee is provided, whether or not there has been a default
under the Lease. Any consideration paid by any assignee in excess of the rental
reserved in the Lease shall be the sole property of, and paid to, Lessor. Upon
assignment by Lessee or the receiver or trustee, the obligations of Lessee under

                                      44.
<PAGE>

this Lease shall be deemed to have been assumed by the assignee, and the
assignee shall execute an assumption agreement on request of Lessor.

          (g)  Subsequent to the commencement of a Bankruptcy Event, Lessor
shall be entitled to receive as rental for the Leased Premises and the services
provided by Lessor no less than the rental and charges reserved in the Lease.

          (h)  It is further stipulated and agreed that, notwithstanding any
provision herein to the contrary, in the event of the termination of this Lease
pursuant this Article, Lessor shall forthwith, upon such termination, to the
extent that Lessor is prevented by the Bankruptcy Code from pursuing remedies
under this Lease, and/or as provided by state law, become entitled to recover as
liquidated damages for the breach of the provisions of this Lease an amount
equal to the amount by which the then cash value of the Minimum Rent reserved
hereunder for the unexpired portion of the Lease Term exceeds the then cash
rental value of the Leased Premises for such unexpired portion of the Lease
Term, unless the statute which governs or shall govern the proceedings in which
such damages are to be proved limits or shall limit the amount of such claim
capable of so being proved, in which case Lessor shall be entitled to prove as
and for liquidated damages an amount equal to that allowed by or under any such
statute. When calculating damages hereunder, Lessor shall be entitled to recover
the amount of any "free rent" or other concessions extended by Lessor and
received by Lessee prior to the premature expiration of this Lease, it being
agreed by Lessee that such "free rent" and concessions were contingent upon
Lessee fulfilling its obligations for the entire term of this Lease. The
provisions of this paragraph shall be without prejudice to (i) Lessor's right to
prove in full damages for Minimum Rent, Percentage Rent, if any, and additional
Rent accrued prior to the termination of this Lease, but not paid, and (ii) any
rights given to Lessor by any pertinent statute to prove any amounts allowed
thereby. In making any such computation, the then cash rental value of the
Leased Premises shall be deemed prima facie to be the rental realized upon any
reletting, if such reletting can be accomplished by Lessor within a reasonable
time after such termination of this Lease, and the then present cash value of
the future rents hereunder reserved to Lessor for the unexpired portion of the
Lease Term hereby demised shall be deemed to be such sum, if invested at the
then current passbook account rate offered by Wells Fargo Bank, N.A. at its main
office in San Francisco, as will produce the future rent over the period of time
in question. Lessor and Lessee further agree that in making any computation of
damages for Lessee holding over after the termination of this Lease, Lessor may
claim damages based on the Minimum Rent, Percentage Rent; if any, and additional
Rent provided herein for the period of such hold over, it being agreed that the
Minimum Rent, Percentage Rent, if any, and additional Rent constitutes the fair
rental value of the Leased Premises during the hold over period.

               (i)  Notwithstanding subsection (h) of this Article 31, Lessor
specifically reserves any and all remedies available to Lessor in Article 30
hereof or at law or in equity in respect of a Bankruptcy Event to the extent
such remedies are permitted by law.

                            32.  SURRENDER OF LEASE

     32.1 No Merger. The voluntary or other surrender of this Lease by Lessee,
or a mutual cancellation thereof, shall not work as a merger, and shall, at the
option of Lessor,

                                      45.
<PAGE>

terminate all or any existing subleases or subtenancies, or may, at the option
of Lessor, operate as an assignment to it of any or all such subleases or
subtenancies.

                           33.  LESSOR'S EXCULPATION

     33.1 Limited Liability. In the event of default, breach, or violation by
Lessor (which term includes Lessor's partners, co-venturers, co-tenants,
officers, directors, trustees, employees, agents, representatives, successors or
assigns) of any of Lessor's obligations under this Lease, Lessor's liability to
Lessee shall be limited to its ownership interest in the Leased Premises (or its
interest in the Complex, if applicable) or the proceeds of a public sale of such
interest pursuant to foreclosure of a judgment against Lessor. Lessor may, at
its option, and among its other alternatives, relieve itself of all liability
under this Lease by conveying the Leased Premises to Lessee. Notwithstanding any
such conveyance, Lessee's leasehold and ownership interest shall not merge.

     33.2 No Recourse. Lessor .(as defined in Section 33.1) shall not be
personally liable for any deficiency beyond its interest in the Leased Premises.
All personal liability of all trustees, their employees, agents or
representatives; is expressly waived by Lessee.

                             34.  ATTORNEYS' FEES

     34.1 Actions, Proceedings, etc. Lessee hereby agrees to pay, as additional
rent, all attorneys' fees and disbursements, and all other court costs or
expenses of legal proceedings or other legal services which Lessor may incur or
pay out by reason of, or in connection with:

          (a)  Any appearance by Lessor (or any officer, partner, or employee of
Lessor) as a witness or otherwise in any action or proceeding whatsoever
involving or affecting Lessee or this Lease except as otherwise covered by
Section 34.3;

          (b)  Any assignment, sublease, or leasehold mortgage proposed or
granted by Lessee (whether or not permitted under this Lease), and all
negotiations with respect thereto; and

          (c)  Any Alteration of the Leased Premises by Lessee, and all
negotiations with respect thereto.

     34.2 Survival. Lessee's obligations under this Section shall survive the
expiration or any other termination of this Lease. This Section is intended to
supplement (and not to limit) other provisions of this Lease pertaining to
indemnities and/or attorneys' fees.

     34.3 Attorneys' Fees. If there is any legal action or proceeding (including
arbitration other than the Arbitration of Fair Market Rental described in
Section 4.3) between Lessor and Lessee arising out of any default by Lessee or
Lessor in the observance or performance of any obligation under this Lease or to
enforce this Lease or to protect or establish any right or remedy under this
Lease, the unsuccessful party to such action or proceeding shall pay to the
prevailing party all costs and expenses, including reasonable attorneys' fees
and disbursements, incurred by such prevailing party in such action or
proceeding and in any appeal in connection therewith. If such prevailing party
recovers a judgment in any such action or proceeding (including

                                      46.
<PAGE>

arbitration) or appeal thereon, such costs, expenses and attorneys' fees and
disbursements shall be included in and as a part of such judgment.

                                 35.  NOTICES

     35.1 Writing. All Notices (as defined below), demands and requests required
or permitted to be given or made under any provision of this Lease shall be in
writing and shall be given or made by (i) personal service, or (ii) by telephone
facsimile upon which date and time are imprinted in the course of transmission
to the number indicated in Section 1.2, or (iii) by mailing same by registered
or certified mail, return receipt requested, postage prepaid, or (iv) by
reputable courier which provides written evidence of delivery, addressed to the
respective party at the address set forth in Section 1.2 of this Lease or at
such other address as the party may from time to time designate, by a written
Notice, as defined below, sent to the other in the manner aforesaid.

     35.2 Effective Date. Any such Notice, demand or request ("Notice") shall be
deemed given or made on the third day after the date so mailed. Notwithstanding
the foregoing, Notice given by personal delivery to the party at its address as
aforesaid shall be deemed given on the day on which delivery is made. Notice
given by a reputable courier service which provides written evidence of delivery
shall be deemed given on the business day immediately following deposit with the
courier service.

     35.3 Authorization to Receive. Each person and/or entity whose signature is
affixed to this Lease as Lessee or as guarantor of Lessee's obligations
("Obligor") designates such other Obligor its agent for the purpose of receiving
any Notice pertaining to this Lease or service of process in the event of any
litigation or dispute arising from any obligation imposed by this Lease.

                              36.  SUBORDINATION

     36.1 Priority of Encumbrances. This Lease shall be subject and subordinate
at all times to any and all ground leases and the lien of any and all mortgages
and deeds of trust securing any amount or amounts whatsoever which may now exist
or hereafter be placed on or against or encumbering the Building or on or
against or encumbering Lessor's interest or estate therein ("Superior Leases and
Mortgages"), all without the necessity of having further instruments executed by
Tenant to effect such subordination; provided however; (i) with respect to that
certain deed of trust encumbering the Building of record as of the date of this
Lease in favor of Wells Fargo Bank (the "Bank"), Lessor covenants to use
commercially reasonable efforts (without any requirement to pay any fees to said
lender or to initiate litigation) to cause the Bank to execute and deliver on or
before the Delivery Date a non-disturbance agreement in the form attached hereto
as Exhibit I, attached hereto, in favor of Lessee; and (ii) with respect to any
Superior Leases and Mortgages encumbering the Building after the date of this
Lease, Lessee shall execute a subordination agreement in the form of Exhibit I,
provided that the subordination of this Lease shall be conditioned upon such
Lessor's mortgagee executing a non-disturbance agreement in favor of Lessee on
the current form used by such lender. In the event of a foreclosure of any such
mortgage or deed of trust or of any other action or proceeding for the
enforcement thereof, or of any sale thereunder or in the event of a termination
of any such

                                      47.
<PAGE>

ground lease, this Lease shall not be terminated or extinguished, nor shall the
rights and possession of Lessee hereunder be disturbed, if no default then
exists under this Lease, and Lessee shall attorn to the person who acquires
Lessor's interest hereunder through any such mortgage or deed of trust.

     36.2 Execution of Documents. Lessee agrees to execute any documents
required to effectuate such subordination or to make this Lease prior to the
lien of any mortgage, deed of trust or ground lease, as the case may be, and
failing to do so within ten (10) days after written demand, does hereby make,
constitute and irrevocably appoint Lessor as Lessee's attorney-in-fact and in
Lessee's name, place and stead, to do so. It is understood by all parties that
Lessee's failure to execute the subordination documents referred to above may
cause Lessor serious financial damage by causing the failure of a financing or
sale transaction.

     36.3 Attornment. Lessee shall attorn to any purchaser at any foreclosure
sale, or to any grantee or Transferee designated in any Deed given in lieu of
foreclosure.

                          37.  ESTOPPEL CERTIFICATES

     37.1 Execution by Lessee. Within ten (10) days of request therefor by
Lessor, Lessee shall execute a written statement acknowledging the commencement
and termination dates of this Lease, that it is in full force and effect, has
not been modified (or if it has, stating such modifications) and providing any
other pertinent information as Lessor or its agents might reasonably request.
Failure to comply with this Article shall be a material breach of this Lease by
Lessee giving Lessor all rights and remedies under Article 30 hereof, as well as
a right to damages caused by the loss of a loan or sale which may result from
such failure by Lessee.

     37.2 Financing, Sale or Transfer. If Lessor desires to finance, refinance,
sell, ground lease or otherwise transfer the Leased Premises, or any part
thereof, or the Building, Lessee hereby agrees, within ten (10) days of request
therefor by Lessor, to deliver to any lender or to any prospective buyer, ground
lessor or other Transferee designated by Lessor such financial statements of
Lessee, its Guarantor and its parent company, if any, as may be reasonably
required by such party. Such statements shall include the past three (3) years'
financial statements of Lessee. All such financial statements shall be received
by Lessor in confidence and shall be used only for the purposes herein set
forth.

                                  38.  WAIVER

     38.1 Effect of Waiver. The waiver by Lessor of any breach of any Lease
provision shall not be deemed to be a waiver of such Lease provision or any
subsequent breach of the same or any other term, covenant or condition therein
contained. The subsequent acceptance of rent hereunder by Lessor shall not be
deemed to be a waiver of any preceding breach by Lessee of any provision of this
Lease, other than the failure of Lessee to pay the particular rental so
accepted, regardless of Lessor's knowledge of such preceding breach at the time
of acceptance of such rent.

                                      48.
<PAGE>

                               39.  HOLDING OVER

     39.1 Month-to-Month Tenancy on Acceptance. If Lessee should remain in
possession of the Leased Premises after the expiration of the Term and without
executing a new Lease, then, upon acceptance of rent by Lessor, such holding
over shall be construed as a tenancy from month-to-month, subject to all the
conditions, provisions and obligations of this Lease as existed during the last
month of the Term hereof, so far as applicable to a month-to-month tenancy,
except that the Minimum Rent shall be equal to twice the Minimum Rent payable
immediately prior to the expiration or sooner termination of the Lease.

                          40.  SUCCESSORS AND ASSIGNS

     40.1 Binding Effect. The covenants and conditions herein contained shall,
subject to the provisions as to assignment, apply to and bind the heirs,
successors, executors, administrators and assigns of all of the parties hereto;
and all of the parties hereto shall be jointly and severally liable hereunder.

                                   41.  TIME

     41.1 Time of the Essence. Time is of the essence of this Lease with respect
to each and every article, section and subsection hereof.

                      42.  EFFECT OF LESSOR'S CONVEYANCE

     42.1 Release of Lessor. If, during the Term, Lessor shall sell its interest
in the Building or Complex of which the Leased Premises form a part, or the
Leased Premises, then from and after the effective date of the sale or
conveyance, Lessor shall be released and discharged from any and all obligations
and responsibilities under this Lease, except those already accrued.

                               43.  COMMON AREAS

     43.1 Lessor shall, in Lessor's sole discretion, maintain the Common Areas
(subject to reimbursement pursuant to Article 8 hereof), establish and enforce
reasonable rules and regulations concerning such areas, close any of the Common
Areas to whatever extent required in the opinion of Lessor's counsel to prevent
a dedication of any of the Common Areas or the accrual of any rights of any
person or of the public to the Common Areas, close temporarily any of the Common
Areas for maintenance purposes and make changes `to the Common Areas including,
without limitation, changes in the location of driveways, corridors, entrances,
exits, vehicular parking spaces, parking area, the designation of areas for the
exclusive use of others, the direction of the flow of traffic or construction of
additional buildings thereupon. Lessor may provide security for the Common Areas
but is not obligated to do so.

                           44.  TRANSFER OF SECURITY

     44.1 Transfer to Purchaser. If any security be given by Lessee to secure
the faithful performance of all or any of the covenants of this Lease on the
part of Lessee, Lessor may transfer and/or deliver the security, as such, to the
purchaser of the reversion, in the event that the

                                      49.
<PAGE>

reversion be sold, and thereupon Lessor shall be discharged from any further
liability in reference thereto.

                               45.  LATE CHARGES

     45.1 Late Payment by Lessee. Lessee acknowledges that late payment by
Lessee to Lessor of rent or any other payment due hereunder will cause Lessor to
incur costs not contemplated by this Lease, the exact amount of such costs being
extremely difficult and impractical to fix. Such costs include, without
limitation, processing and accounting charges, and late charges that may be
imposed on Lessor by the terms of any encumbrance and note secured by any
encumbrance covering the Leased Premises. Therefore, if any installment of rent,
or any other payment due hereunder from Lessee is not received by Lessor when
due, Lessee shall pay to Lessor an additional sum of ten percent (10%) of such
rent or other charge as a late charge. The parties agree that this late charge
represents a fair and reasonable estimate of the cost that Lessor will incur by
reason of late payment by Lessee. Acceptance of any late charge shall not
constitute a waiver of Lessee default with respect to the overdue amount, or
prevent Lessor from exercising any other rights or remedies available to Lessor.

                           46.  CORPORATE AUTHORITY

     46.1 Authorization to Execute. If Lessee is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation in accordance with a duly adopted resolution of the Board of
Directors of said corporation or in accordance with the Bylaws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms. Further, Lessee shall, within thirty (30) days after execution
of this Lease, deliver to Lessor a certified copy of a resolution of the Board
of Directors of said corporation authorizing or ratifying the execution of this
Lease.

                           47.  MORTGAGEE PROTECTION

     47.1 Notice and Right to Cure Default. Lessee agrees to give any
mortgagees) and/or trust deed holders, by registered mail, a copy of any notice
of default served upon Lessor, provided that prior to such notice Lessee has
been notified, in writing (by way of Notice of Assignment of Rents and Leases,
or otherwise), of the address of such mortgagees and/or trust deed holders.
Lessee further agrees that if Lessor shall have failed to cure such default
within the time provided for in this Lease, then the mortgagees and/or trust
deed holders shall have an additional thirty (30) days within which to cure such
default or, if such default cannot be cured within that time, then such
additional time as may be necessary if, within such thirty (30) days, any
mortgagee and/or trust deed holder has commenced and is diligently pursuing the
remedies necessary to cure such default (including, but not limited to,
commencement of foreclosure proceedings, if necessary to effect such cure), in
which event this Lease shall not be terminated while such remedies are being so
diligently pursued.

                         48.  MISCELLANEOUS PROVISIONS

     48.1 Captions. The captions of this Lease are for convenience only and are
not a part of this Lease and do not in any way limit or amplify the terms and
provisions of this Lease.

                                      50.
<PAGE>

     48.2 Number and Gender. Whenever the singular number is used in this Lease
and when required by the context, the same shall include the plural, the plural
shall include the singular, and the masculine gender shall include the feminine
and neuter genders, and the word "person" shall include corporation, firm or
association. If there be more than one Lessee, the obligations imposed under
this Lease upon Lessee shall be joint and several.

     48.3 Modifications. This instrument contains all of the agreements,
conditions and representations made between the parties to this Lease and may
not be modified orally or in any other manner than by an agreement in, writing
signed by all of the parties to this Lease.

     48.4 Payments. Except as otherwise expressly stated, each payment required
to be made by Lessee shall be in addition to and not in substitution for other
payments to be made by Lessee.

     48.5 Severability. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.

     48.6 No Offer. The preparation and submission of a draft of this Lease by
either party to the other shall not constitute an offer, nor shall either party
be bound to any terms of this Lease or the entirety of the Lease itself until
both parties have fully executed a final document and an original signature
document has been received by both parties. Until such time as described in the
previous sentence, either party is free to terminate negotiations with no
obligation to the other.

     48.7 Disputed Sums. Under the terms of this Lease numerous charges are and
may be due from Lessee to Lessor including, without limitation, Operating Costs,
Real Estate Taxes and other items of a similar nature including advances made by
Lessor in respect of Lessee's default at Lessor's option. In the event that at
any time during the Term there is a bona fide dispute between the parties as to
the amount due for any of such charges claimed by Lessor to be due, the amount
demanded by Lessor shall be paid by Lessee until the resolution of the dispute
between the parties or by litigation. Failure by Lessee to pay the disputed sums
until resolution shall constitute a default under the terms of the Lease.

     48.8 Lessee's Remedies. Notwithstanding anything to the contrary contained
in this Lease, if any provision of this Lease expressly or impliedly obligates
Lessor not to unreasonably withhold its consent or approval, an action for
declaratory judgment or specific performance will be Lessee's sole right and
remedy in any dispute as to whether Lessor has breached such obligation.

     48.9 Light, Air and View. No diminution of light, air, or view by any
structure which may hereafter be erected (whether or not by Lessor) shall
entitle Lessee to any reduction of Rent, result in any liability of Lessor to
Lessee, or in any other way affect this Lease or Lessee's obligations hereunder.

     48.10 Public Transportation Information. Lessee shall establish and
maintain during the Term hereof a program to encourage maximum use of public
transportation by personnel of Lessee employed on the Leased Premises,
including, without limitation, the distribution to such employees of written
materials explaining the convenience and availability of public

                                      51.
<PAGE>

transportation facilities adjacent or proximate to the Complex, staggering
working hours of employees, and encouraging use of such facilities, all at
Lessee's sole reasonable cost and expense. Lessee shall comply with all
requirements of any local transportation management ordinance.

     48.11 Rules and Regulations. Lessee agrees to comply with all reasonable
rules and regulations adopted and promulgated by Lessor and applicable to all
tenants in the Complex for the lawful, orderly, clean, safe, aesthetic, quiet,
and beneficial use, operation, maintenance, management, and enjoyment of the
Complex. Lessor shall have no liability for violation by any other lessee in the
Complex of any rules or regulations, nor shall such violation or waiver thereof
excuse Lessee from compliance. The initial rules and regulations concerning the
Complex are attached hereto as Exhibit F. Lessor reserves the right to make
additional rules affecting the Complex throughout the Term hereof. All delivery
and dispatch of supplies, fixtures, equipment and furniture shall be by means
and during hours established by Lessor. Lessee shall not at any time park its
trucks or other delivery vehicles in the Common Areas, except in such parts
thereof as from time to time designated by Lessor.

     48.12 Joint and Several Liability. Should Lessee consist of more than one
person or entity, they shall be jointly and severally liable on this Lease.

     48.13 Survival of Obligations. All obligations of Lessee which may accrue
or arise during the Term or as a result of any act or omission of Lessee during
said Term shall, to the extent they have not been fully performed, satisfied or
discharged, survive the expiration or termination of this Lease.

     48.14 Real Estate Brokers. Lessor and Lessee each represents and warrants
to the other party that it has not authorized or employed, or acted by
implication to authorize or employ, any real estate broker or salesman to act
for it in connection with this Lease other than the real estate brokers
specified in Section 1.10. Lessor shall pay the commission due Lessor's broker
and Lessee's broker pursuant to a separate agreement between Lessor and Lessor's
broker. Lessor and Lessee shall each indemnify, defend and hold the other party
harmless from and against any and all claims by any real estate broker or
salesman whom the indemnifying party authorized or employed, or acted by
implication to authorize or employ, to act for the indemnifying party in
connection with this Lease.

     48.15 Nonliability of Lessor for Approvals. Except as may otherwise be
expressly stated by a provision of this Lease, and only to the extent so stated,
the consent or approval, whether express or implied, or the act, failure to act
or failure to object, by Lessor in connection with any plan, specification,
drawing, proposal, request, act, omission, notice or communication (collectively
"Act") by or for, or prepared by or for, Lessee, shall not create any
responsibility or liability on the part of Lessor, and shall not constitute a
representation by Lessor, with respect to the completeness, sufficiency,
efficacy, propriety, quality or legality of such Act.

     48.16 Interest On Past Due Amounts. If any sum due Lessor from Lessee is
not received by Lessor within five (5) calendar days after the date such sum is
due and payable, such sum shall bear interest from the due date until paid by
Lessee at the rate of two percent (2%) above the Prime Rate (as herein defined),
not to exceed the maximum rate of interest allowed by

                                      52.
<PAGE>

law in the state where the Leased Premises are located, and such interest shall
be, deemed to be additional rent. "Prime Rate" means the Prime Rate of interest
as quoted in the Wall Street Journal on the date such sum was due and payable.

     48.17 Counterparts. This Lease may be executed in one or more counterparts,
each of which shall be deemed an original, and all taken together shall
constitute one and the same instrument.

                    49.  WAIVER OF CALIFORNIA CODE SECTIONS

     49.1  Waiver by Lessee. In this Lease, numerous provisions have been
negotiated by the parties, some of which provisions are covered by statute.
Whenever a provision of this Lease and a provision of any statute or other law
cover the same matter, the provisions of this Lease shall control. Therefore,
Lessee waives (for itself and all persons claiming under Lessee) the provisions
of Civil Code Sections 1932(2) and 1933(4) with respect to the destruction of
the Leased Premises; Civil Code Sections 1941 and 1942 with respect to Lessor's
repair duties and Lessee's right to repair; Civil Code Section 1950.7, limiting
a lessor's right to claim sums from a security deposit only as necessary to
remedy defaults; Civil Code Section 1995.310, granting to a tenant all remedies
provided by law for breach of contract (including, without limitation, the right
to contract damages and the right to terminate the lease) in the event that the
landlord unreasonably withholds consent to a transfer in violation of the
tenant's rights under the lease; Code of Civil Procedure Section 1265.130,
allowing either party to petition the Superior Court to terminate this Lease in
the event of a partial taking of the Leased Premises by Condemnation as herein
defined; and any right of redemption or reinstatement of Lessee under any
present or future case law or statutory provision (including Code of Civil
Procedure Sections 473 and 1179 and Civil Code Section 3275) in the event Lessee
is dispossessed from the Leased Premises for any reason. This waiver applies to
future statutes enacted in addition to or in substitution for the statutes
specified herein.

                             50.  SHUTTLE SERVICE

     50.1  Lessor presently maintains for the benefit of Lessee's employees at
the Leased Premises, a van shuttle service which shall operate Monday through
Friday from 7:00 a.m. to 7:00 p.m. with not less than one van vehicle operating
throughout the day and two vehicles operating during peak commute hours of 7:00
a.m. to 9:00 a.m. Monday through Friday and 5:00 p.m. to 7:00 p.m. Monday
through Friday. The shuttle will serve the major transportation centers of San
Francisco, i.e., the Transbay Terminal, BART, the nearest Municipal Railway
stop, the Ferry Building and CalTrain Terminal. The cost of the shuttle service
shall be included in Operating Costs. Lessor may terminate the shuttle service
if the City of San Francisco is, in Lessor's reasonable judgment, then providing
adequate public transportation to the area of the Building and no longer
requires that Lessor provide such shuttle service.

     50.2  Parking. Lessee may lease on a monthly basis up to the number of
parking spaces described in Section 1.12 in the parking facility of the Complex.
Said parking spaces shall be on a non-exclusive, non-reserved basis. Lessee
shall pay a parking fee for each parking space which Lessee leases at the same
monthly rates as are established from time to time by Lessor or the owner or
operator of the parking facility. The use by Lessee, its employees or

                                      53.
<PAGE>

other users of such parking space shall be subject to the rules and regulations
established from time to time by Lessor, or the owner or operator of the parking
facility. If Lessee has not leased the number of parking spaces to which it is
entitled within three (3) months after the Commencement Date, or if at any time
thereafter, Lessee releases any parking spaces or if parking spaces to which
Lessee is entitled under this Section 50.2 exceeds the parking spaces actually
leased by Lessee, Lessee shall have no further right or entitlement to such
parking spaces and Lessor may permit others to use or lease such parking spaces
on a long or short term basis. If Lessor or the owner or operator of the parking
facility changes the parking arrangements in the parking facility, then Lessee's
rights under this Section 50.2 shall be subject to modification to reflect such
change, so long as Lessee is not disproportionately prejudiced by such changes
as compared to other lessees of the Building.

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

LESSOR:                                    LESSEE:
ZORO, LLC,                                 NAVIANT TECHNOLOGY
a California limited liability company     SOLUTIONS, INC., a Delaware
                                           corporation

By:                                        By:
    ___________________________________        _________________________________
    Its    Managing Member                     Its  Vice President, Strategic
                                                    Accounts
                                           By:
                                               _________________________________
                                               Its:
                                                    ____________________________

                                      54.
<PAGE>

                                   EXHIBIT A

                               LEGAL DESCRIPTION

The land referred to herein is situated in the State of California, County of
San Francisco, City of San Francisco, and is described as follows:

PARCEL ONE:

ALL OF LOT 9, Assessor's Block 3783, as shown on that certain Map entitled,
"Parcel Map of a portion of 100 Vara Block No. 412, also being a portion of
Assessor's Block No. 3783 which Map was filed for record in the Office of the
Recorder of the City and County of San Francisco, State of California, on
November 29, 1988 in Book 38 of Parcel Maps, at Page 36.

PARCEL TWO:

Non-exclusive easements as set forth in that certain Grant of Easement with
Covenants and Restrictions affecting land dated as of December 29, 1988 by and
between Bay West Showplace Investors, a California Limited Partnership, and
Portman/Bay West Apparel Partners, a California Partnership, recorded on
December 30, 1988 in Book E775 at Page 1598, Series No. E296406 in the Official
Records.

APN:  Lot 009, Block 3783

COMMON KNOWN AS:
                                                     650 Townsend Street
                                                     SAN FRANCISCO, CA
<PAGE>

                                   EXHIBIT B

         [Insert graphic for Exhibit B here]
<PAGE>

                                   EXHIBIT C

         [Insert graphic for Exhibit C here]
<PAGE>

                                   EXHIBIT D

                             Work Letter Agreement
                             ---------------------
                         (Lessor's and Lessee's Work)

A.   LESSOR'S WORK

     The Leased Premises shall be delivered to Lessee in "AS-IS" condition, and
without any obligation on the part of Lessor to perform improvements to the
Leased Premises, except for the work expressly set forth in Schedule 1 (the
"Lessor's Work").

B.   LESSEE'S WORK

1.   Plans/Specifications

     1.1  Plan Design

     Prior to commencing work on the leasehold improvements to the Leased
Premises as hereinafter provided ("Tenant Improvements"), Lessee shall submit to
Lessor complete and detailed plans and specifications for the Tenant
Improvements ("Plans"). The Plans shall be prepared by Lessee's architect, who
shall be approved in writing by Lessor, which approval Lessor shall not
unreasonably withhold ("Architect") and by Mazzetti & Associates for mechanical
engineering and Camissa and Wipf as electrical engineers ("Engineers"), both
licensed to practice in the State of California.

     1.2  (a)  Coordination. The Architect shall coordinate with Lessor's
               ------------
Project Manager Joseph Mock to assure that the Plans are consistent with the
existing design and construction of the Leased Premises. Lessee acknowledges
that Lessor has provided Lessee with a set of base building drawings for the
Leased Premises ("Building Drawings"). However, Lessor does not warrant, and
Lessee should not rely upon, the accuracy of the Building Drawings. Lessee,
therefore, should undertake its own investigation of the Leased Premises to
confirm existing conditions, rather than relying on the Building Drawings.

          (b)   Governmental. Lessee acknowledges that Lessor has established
                ------------
procedures for relations with the Building and Planning Departments of the City
and County of San Francisco and that Lessee, Lessee's representatives,
architects, or agents shall not contact any representatives of the City and
County of San Francisco without the presence of Lessor's representative to
assure consistency of treatment of the Building and its lessees by such
governmental agencies. Any such contact by Lessee's representatives in
contravention of this provision which causes an alteration in governmental
treatment of the Building which results in additional costs to the Building or
any lessee therein, shall be borne by the Lessee.

     1.3  Schematics

     Lessee shall deliver to Lessor the schematic drawings ("Schematic
Drawings") upon which the Plans shall be based not later than ten (10) days
following the date the current tenant releases the Leases Premises (the "Release
Date"). The Schematic Drawings and the Plans shall conform with standards set
forth by Lessor for material specifications and construction

                                      1.
<PAGE>

specifications which are applicable for the Building in general. Lessor shall
have ten (10) working days after receipt thereof to review and
approve/disapprove the Schematic Drawings. Once Lessor has approved the
Schematic Drawings, Lessee shall cause the Architect to prepare the Plans which
must be consistent with the approved Schematic Drawings. Provided Lessor has
approved the Schematic Drawings, Lessee shall deliver the Plans to Lessor for
its approval, in one or more stages, during the period between the Release Date
fifteen (15) days following the Release Date. Lessor shall not unreasonably
withhold its approval of the Plans so long as the Plans are consistent with the
Schematic Drawings. In scheduling the preparation of the Schematic Drawings and
the Plans, Lessee shall allow sufficient time for review and approval by Lessor
and by the appropriate government agencies: Lessee shall pay for the cost of
Lessor's architect and engineer to review Lessee's Schematic Drawings and Plans.

     1.4  Schematics Approval

     If Lessor disapproves of the Schematic Drawings or the Plans or any portion
of either, Lessor shall promptly notify Lessee thereof in writing and of the
revisions which Lessor requires in order for Lessee to obtain Lessor's approval.
As promptly as reasonably possible, but in no event later than fifteen (15) days
thereafter, Lessee shall submit to Lessor a revised set of Schematic Drawings or
Plans incorporating the changes required by Lessor. Said revisions shall also be
subject to Lessor's approval. Lessor shall have ten (10) working days after
receipt of the revised Schematic Drawings or Plans to notify Lessee in writing
of Lessor's approval or disapproval of same. If Lessor again disapproves of or
requests revisions to the Schematic Drawings or the Plans, Lessee shall submit
to Lessor, within ten (10) business days after receiving Lessor's written
disapproval or request for revisions, a further revised set of Schematic
Drawings or Plans incorporating the changes required by Lessor. This process
shall continue until Lessor has approved the Schematic Drawings and the Plans.

     1.5  Final Plans

     The Plans, approved by Lessor, shall be referred to as the "Final Plans."
The Final Plans shall be signed by Lessor and Lessee. After approval of the
Final Plans, Lessee shall not make any changes thereto without Lessor's prior
written approval in accordance with the provisions of this Exhibit D.

     1.6  Permits

     Subject to the provisions of paragraph 1.2(b), Lessee shall be solely
responsible for. obtaining all necessary governmental approvals and permits
(including but not limited to the approval of the San Francisco City Planning
Department) required to commence and complete the Tenant Improvements after
obtaining the prior approval of Lessor before making any submittal to any
governmental agency for permit, which approval of Lessor shall not be
unreasonably withheld; and immediately upon receipt thereof, Lessee shall
deliver copies of all such approvals and permits to Lessor.

     1.7  Code Compliance

     Except as expressly set forth to the contrary in the Lease with respect to
Code Compliance, it shall be Lessee's sole responsibility to satisfy all
applicable building code

                                      2.
<PAGE>

requirements and governmental rules and regulations concerning the design and
construction of the Tenant Improvements. Lessor's approval of the Final Plans is
not intended, and should not be understood by Lessee, as an affirmation that the
Final Plans comply with applicable building codes or other governmental rules
and regulations or that the Final Plans are in conformance with standards of
good workmanship as practiced by architects/engineers in the San Francisco Bay
Area. Lessor's review of the Final Plans is solely for Lessor's benefit, and
Lessee shall not rely upon that review for any purpose whatsoever in connection
with the work on or the design of the Tenant Improvements.

     1.8  Contractor

     Lessor hereby approves Rudolph Commercial Interiors as general contractor
to perform the Tenant Improvements ("Contractor"), duly licensed in the State of
California and familiar with all applicable building code requirements.

2.    Scheduling and Lessee's Prior Access to the Premises

     2.1  Schedule

     At least five (5) days prior to the start of construction of the Tenant
Improvements, Lessee shall deliver to Lessor the proposed schedule of the
Lessee's Work to be performed ("TI Schedule"). The TI Schedule shall be prepared
by the Contractor, and it shall show the schedule for the submission of all shop
drawings/submittals and for the performance of each portion of the Tenant
Improvements. Lessee and the Architect shall either consult with the Contractor
or the Architect shall perform the necessary investigation to determine the
availability of the equipment and materials to be incorporated into the Tenant
Improvements and which portions of the Tenant Improvements will require long
lead time for ordering and/or manufacturing. The TI Schedule shall be in the
form of a Critical Path Method schedule.

     2.2  Commencement of Construction

     Upon delivery of the Leased Premises to Lessee and Lessee's receipt of all
approvals of the Final Plans and the acquisition by Lessee of all necessary
permits, Lessee shall commence the construction of the Tenant Improvements.
Lessor and Lessee agree that Lessor must perform certain Lessor's Work, and that
both parties will use all commercially reasonable efforts, to coordinate their
respective work inside the space; however, in event of any conflict between
Lessor's Work and Lessee's Work, on one day's prior written notice Lessee shall
either accommodate Lessor's requirements or vacate the Leased Premises until
completion of Lessor's Work. In addition to the foregoing, Lessor shall permit
Lessee access to the Leased Premises, prior to approval of Final Plans and the
acquisition of permits, for the purposes of obtaining measurements of the Leased
Premises, confirming existing conditions and for space planning preparation
purposes. Lessee's entry to the Leased Premises prior to the Delivery Date for
such purposes shall be upon all of the terms and conditions of the Lease,
including, without limitation the provisions regarding insurance and
indemnification, but excepting the payment of Minimum Rent and additional Rent.
Lessee shall be solely responsible for all costs and expenses incurred in
connection with the Tenant Improvements and any pre-Delivery Date activities,
and Lessee

                                      3.
<PAGE>

hereby agrees to indemnify, defend, and hold harmless Lessor from and against
any loss, cost, expense, liability, damage, or injury in connection therewith.

3.   Payment for Tenant Improvements and the Construction Contract

     3.1  Construction Costs

     As an inducement to Lessee to enter into the Lease, but subject to
paragraph 3.2 below and as otherwise provided in the Lease and this Exhibit D,
Lessor agrees to reimburse Lessee for: (1) the cost of construction of the
Tenant Improvements identified on the approved Final Plans; (2) costs of any
permits or licensing fees; (3) payment of the fees of the Architect and Engineer
for the Tenant Improvements; and (4) any other costs approved by Lessor
including planning and design costs ("Tenant Improvement Costs") up to a cost
not to exceed fifteen dollars ($15) for each Adjusted Rentable Square Foot in
the Leased Premises (the "Allowance"). If the Allowance is not used for Tenant
Improvement Costs, the unused portion shall revert to Lessor and shall not be
available for any other purpose by Lessee.

     3.2  Payment of Allowance

          (a)  Payment Procedure. Lessor shall reimburse Lessee for the Tenant
               -----------------
Improvement Costs up to the Allowance upon the last to occur of: (i) substantial
completion of the Tenant Improvements; (ii) receipt by Lessor of invoices for
all portions of the Tenant Improvements from the persons) performing the work or
rendering the services, together with such supporting documentation as Lessor
may reasonably request in connection therewith, and (iii) receipt by Lessor of
unconditional lien releases with respect to the entirety of the Tenant
Improvements from all contractors, subcontractors and materialmen who performed
the work or rendered services or materials. Lessor shall have no obligation to
pay all or any portion of the Allowance at any time following the occurrence,
and during the continuance, of any event of default by Lessee under the Lease.

          (b)  Primary Obligation. Lessee shall pay all costs incurred in
               -------------------
connection with the construction of the Tenant Improvements.

          (c)  Project Management Services. In consideration of the supervisory,
               ---------------------------
logistical and oversight and review work to be performed by Lessor in connection
with the Tenant Improvements, Lessee agrees that Lessor shall be entitled to
charge against the Allowance a construction management fee (the "Coordination
Fee") in the amount of three percent (3%) of the total cost of the Tenant
Improvements. Lessor shall deduct the Coordination Fee from the Allowance.

     3.3  Contract Terms

     The construction contract for the Tenant Improvements shall include all
of the provisions which are included herein and identified as "Construction
Contract Terms;" provided, however, that the Construction Contract Terms may be
revised with Lessor's approval, which approval shall not be unreasonably
withheld, in a manner which does not expose Lessor to additional liability.

                                      4.
<PAGE>

4.   Changes, Additions, and Alterations

     4.1  Materiality

     From time to time Lessee may make nonmaterial changes in the Final Plans
prior to final completion with Lessor's prior approval, which approval shall not
be unreasonably withheld. Lessee shall not make any material changes to the
Final Plans (which shall mean a change the cost of which will be in excess of
$5,000.00, or is visible from the exterior of the Leased Premises, or affects
the structure, roof, central building systems or exterior walls of the Leased
Premises) without securing the prior written approval of Lessor, which approval
may be withheld by Lessor in its sole discretion. In seeking Lessor's approval
for changes to the Final Plans, Lessee shall deliver to Lessor such
documentation as the Construction Contract shall require for changes in the
Contract Price or an extension of the Completion Date.

     4.2  Rent Commencement

     No such changes in the Final Plans shall delay the Rent Commencement Dates
set forth in the Lease. Lessor shall approve or disapprove any such changes
within ten (10) working days after the receipt of a request from Lessee. Upon
approval by Lessor, such change shall be included within the phrase "Final
Plans."

5.   Construction and Delays

     5.1  The performance of the Tenant Improvements shall be subject to the
following terms and conditions:

          (a)  Compliance by Lessee and the Contractor and its subcontractors,
material suppliers, and equipment renters of whatever tier ("Lessee's
Contractors") with the applicable provisions of the Lease; (b) All of the Tenant
Improvements, which are performed by Lessee's Contractors, shall be scheduled
through Lessee;

          (c)  All of -the Tenant Improvements shall be performed in accordance
with the reasonable rules and regulations which Lessor may issue from time to
time;

          (d)  Lessor shall have no responsibility whatsoever for the
supervision or coordination of Lessee's Contractors, the Architect, or the
Engineer, the quality of their work or any other matter with respect to Lessee's
Contractors, the Architect, or the Engineer; however, Lessee shall coordinate
all Tenant Improvements with Lessor's Project Manager as described herein and as
set forth in the TI Schedule.

          (e)  Although Lessor shall have no responsibility as set forth in
subparagraph (d) above, Lessor's Project Manager may, at his option, demand a
stop in Lessee's Work if any terms of this Exhibit D are violated or threatened
to be violated by Lessee or Lessee's contractor or if the Tenant Improvement
Work is not being performed in accordance with the approved Final Plans.

                                      5.
<PAGE>

          (f)  In connection with the construction of the Tenant Improvements,
Lessee's Contractor and subcontractors shall not be charged for the use of
utilities, loading dock and freight elevators during normal business hours.

6.   Substantial Completion

     6.1  Definition

     For purposes of this Exhibit D and the Lease, "Substantial Completion" of
the Tenant Improvements shall mean the date that (i) the Architect certifies to
Lessor that the Tenant Improvements have been completed in accordance with the
Final Plans; and (ii) the Rent Commencement Date under the Lease has occurred,
and (iii) Lessor has received unconditional lien releases with respect to the
Tenant Improvement work performed.

7.   Default

     7.1  Any default by Lessee under this Exhibit D shall be deemed an
immediate event of default under the Lease, entitling Lessor to exercise any and
all of its rights and remedies available to Lessor under the Lease, at law or in
equity for nonpayment of Rent. In addition to all other amounts payable by
Lessee hereunder, upon the default by Lessee under this Exhibit D, and
notwithstanding anything to the contrary contained herein, Lessee shall pay
Lessor upon demand all costs and expenses incurred by Lessor in connection with
its review of the Plans, the Final Plans, the TI Schedule and any construction
documents, and in connection with the construction of the Tenant Improvements.

8.   Construction Contract Terms

     8.1  Indemnification by Contractor

     Contractor shall defend, protect, indemnify, and hold harmless Lessee and
Lessor and their respective, directors, officers, shareholders, members,
managers, agents and employees (collectively referred to as "Indemnitees") from
and against all liability, liens, injuries, claims, damages, fines, penalties,
costs, and expenses, including attorneys' fees and litigation or arbitration
costs, arising out of or resulting from the performance of the Work and/or
breach of the Contract Documents, provided that any such liability, lien,
injury, claim, damage, cost; or expense is caused, in whole or in part, by any
act of omission of Contractor, its subcontractors of any lower tier, anyone
directly or indirectly employed by any of them, or anyone for whose acts any of
them may be liable. Contractor's indemnity obligation shall be binding upon
Contractor regardless of whether any of the Indemnitees is negligent, actively,
passively, or not at all. However, Contractor shall not be required to indemnify
any Indemnitee whose sole negligence or willful misconduct is responsible for
the liability, lien, injury, claim, damage, cost, or expense. Contractor shall,
upon demand by any of its Indemnitees, defend any action of proceeding brought
against any of its Indemnitees with respect to the matters set forth in this
Construction Contract; but any of the Indemnitees shall have the right to
conduct its own defense if it chooses to do so.

                                      6.
<PAGE>

     8.2  Insurance Required to be Carried by Contractor

     Contractor shall at all times carry with companies acceptable to Lessee all
necessary Worker's Compensation and other insurance required by law and a
Commercial General Liability Insurance policy in amounts not less than
$5,000,000.00 per occurrence for bodily injury and property damage. Such policy
or policies shall include coverage for premises and operations liability,
contractual liability (including, but not limited to, Contractor's indemnity
obligation to the Indemnitees), completed operations coverage, products
liability, broad form property damage liability, liability which Contractor may
incur as a result of the operations, acts, or omissions of its subcontractors,
suppliers, or materialmen, and their agents or employees, automobile liability,
including owned, non-owned, and hired vehicles. Such policy or policies shall be
endorsed to include all Indemnitees as additional insureds and to stipulate that
such insurance shall be primary insurance and that any insurance carried by any
Indemnitees shall be excess and not contributory insurance.

     8.3  Insurance Requirements

     All insurance coverage procured by the Contractor shall (i) list all of the
named insureds under the policy, (ii) be issued by an insurer admitted to
transact insurance in the State of California with a financial rating of at
least an A:VII as rated in the most recent edition of Best's Insurance Reports,
(iii) contain an endorsement requiring at least thirty (30) days written notice
form the insurance company to all of the named additional insureds before any
cancellation or material change in coverage, scope, or amount of the insurance
policy, and (iv) contain an endorsement stating that no additional insured will
be excluded from coverage in the event that the additional insured is alleged or
found to be negligent in connection with any claim made under the policy or
otherwise.

     8.4  Delivery of Certificates of Insurance and Policy Endorsements to
          Lessor, and Lessee

     If Contractor fails to deliver to Lessor and Lessee insurance certificates
and' policy endorsements which reflect the requirements specified in this
Construction Contract within forty-eight (48) hours after demand, and in any
event prior to commencement of Contractor's Work on the Project, Lessor may, but
shall not be obligated to, obtain such insurance for Contractor and pay the
premiums thereon, and Contractor shall repay Lessor, on demand, any sum or sums
paid therefor, or Lessor may deduct such premiums from any money due or to
become due to Contractor under this Agreement. In the alternative, Lessor may
declare Contractor in default under this Construction Contract.

                                      7.
<PAGE>

                                 Schedule 1 to
                                   Exhibit D

     Lessor agrees to perform the following in or for the Leased Premises at
its sole cost and expense:

     1.   Building Standard window film on all demising windows of the Leased
Premises.

     2.   Lessor shall not install but shall give Lessee a credit against Rent
next coming due for the purchase and installation of one (1) strobe light and
one (1) horn for life safety. All other life safety requirements shall be at
Lessee's sole cost and expense.

     As used herein, the term "Building Standard" refers to the materials
maintained in stock by Lessor for use in the improvements of Lessee's space in
the Building.

                                      1.
<PAGE>

                                   Exhibit E

                        ACKNOWLEDGMENT OF COMMENCEMENT

                         Location: 650 Townsend Street
                               San Francisco, CA

     This Acknowledgment is made as of _________________, with reference to that
certain Lease (hereinafter referred to as the "Lease") dated _______________, by
and between Zoro, LLC as "Lessor" therein, and __________________ as "Lessee."

     The undersigned hereby confirms the following:

     1.   That Lessee accepted possession of the Leased Premises (as described
in the Lease) on the following date; that the Leased Premises are as
represented by Lessor and in good order, condition and repair; and that the
improvements, if any, required by the Lease to be constructed for Lessee by
Lessor have been so constructed and are satisfactorily completed in all
respects.

     2.   That all conditions of the Lease to be performed by Lessor
prerequisite to the full effectiveness of the Lease have been satisfied and
Lessor has fulfilled all of its duties of an inducement nature, except

     3.   That in accordance with the provisions of Article 4 of the Lease the
Commencement Date for the Leased Premises is and that unless sooner terminated,
the Expiration Date of the original term of the Lease is

     4.   That the Lease is in full force and effect and that the same
represents the entire agreement between Lessor and Lessee concerning the subject
matter of the Lease.

     5.   That there are no existing defenses or offsets which Lessee has
against the enforcement of the Lease by Lessor, arid no presently exercisable
offsets or credits against rentals, except

     6.   That Lessee's obligation for payment of Minimum Rent under the
Lease is presently in effect and that all rentals, charges and other obligations
on the part of Lessee under the Lease commenced to accrue on the date set forth
in Section 3 of this Acknowledgment

                                      1.
<PAGE>

     7.    That the undersigned Lessee has not made any prior assignment,
hypothecation or pledge of the Lease or of the rents thereunder.

LESSOR                                       LESSEE

Zoro, LLC,
a California Limited Liability Company       ___________________________________

By:____________________________________      By: _______________________________
          Its Managing Member

Dated: _____________, 19__                   Dated:  ______________, 19__

                                      2.
<PAGE>

                                   EXHIBIT F

                             Rules and Regulations
                             ---------------------

In the event the Lease expressly permits Lessee to perform any act that is
prohibited by these Rules and Regulations, the specific provisions) of the Lease
shall control.

     1.   Common Areas. The sidewalks, halls, passages, exits, entrances,
          ------------
elevators and stairways of the Complex shall not be obstructed by Lessee or used
for any purpose other than for ingress to and egress from the Leased Premises.
The halls, passages, exits, entrances, elevators and stairways are not for the
general public and Lessor shall in all cases have the right to control and
prevent access thereto of all persons (including, without limitation, messengers
or delivery personnel not having proper identification) whose presence in the
judgment of Lessor would be prejudicial to the safety, character, reputation or
interests of the Complex and its Lessees. Neither Lessee nor any agent,
employee, contractor, invitee or licensee of Lessee shall go upon the roof of
the Complex other than for parking purposes or as expressly set forth to the
contrary in the Lease. Subject to the limitations set forth in Section 3.2 of
the Lease, Lessor shall have the right at any time, without the same
constituting an actual or constructive eviction and without incurring any
liability to Lessee therefor, to change the arrangement or location of entrances
or passageways, doors or doorways, corridors, elevators, stairs, toilets and
common areas of the Complex, but Lessor shall at all times provide reasonable
access to the sixth floor of the Building from the parking facility of the
Complex.

     2.   Prohibited Uses. The Leased Premises shall not be used for lodging. No
          ---------------
cooking shall be done or permitted on the Leased Premises except that private
use by Lessee of microwave ovens and/or Underwriters' Laboratory-approved
equipment for brewing coffee, tea, hot chocolate and similar beverages will be
permitted, provided that such use is in accordance with all applicable federal,
state and municipal laws, codes, ordinances, rules and regulations.

     3.   Janitorial Service. Lessee shall not employ any person other than the
          ------------------
janitor of Lessor for the purpose of cleaning the Leased Premises unless
otherwise agreed to by Lessor in writing. Except with the written consent of
Lessor, no persons other than those approved by Lessor shall be permitted to
enter the Complex for the purpose of cleaning the Leased Premises. Lessee shall
not cause any unnecessary labor by reason of Lessee's carelessness or
indifference in the preservation of good order and cleanliness. Except as
otherwise expressly set forth in the Lease, Lessor shall not be responsible to
Lessee for any loss of property in the Leased Premises, however occurring, or
for any damage done to the effects of Lessee by the janitor or any other
employee or any other person.

     4.   Keys. Lessor will furnish Lessee without charge with five (5) keys to
          ----
each exterior door to the Leased Premises. Lessor may make a reasonable charge
for any additional keys. Lessee shall not have any such keys copied or any keys
made. Lessee shall not alter any lock or install a new or additional lock or any
bolt on any door of the Leased Premises. Lessee, upon the termination of this
Lease, shall deliver to Lessor all keys to doors in the Complex.

     5.   Moving Procedures. Lessor shall designate appropriate entrances for
          -----------------
deliveries or other movement to or from the Leased Premises of equipment,
materials, supplies, furniture or

                                      F-1
<PAGE>

other property, and Lessee shall not use any other entrances for such purposes.
All moves shall be scheduled and carried out during nonbusiness hours of the
Complex. All persons employed and means or methods used to move equipment,
materials, supplies, furniture or other property in or out of the Complex must
be approved by Lessor prior to any such movement. Lessor shall have the right to
prescribe the maximum weight, size and position of all equipment, materials,
furniture or other property brought into the Complex. Heavy objects shall, if
considered necessary by Lessor, stand on a platform of such thickness as is
necessary properly to distribute the weight. All damage done to the Complex by
moving or maintaining such property shall be repaired at the expense of Lessee.

     6.   No Nuisances. Lessee shall not use or keep in the Leased Premises or
          ------------
the Complex any kerosene, gasoline or inflammable or combustible fluid or
material other than limited quantities thereof reasonably necessary for the
operation or maintenance of office and multimedia equipment. Lessee shall not
use any method of heating or air conditioning other than that supplied by
Lessor. Lessee shall not use or keep or permit to be used or kept any foul or
noxious gas or substance in the Leased Premises, or permit or suffer the Leased
Premises to be occupied or used in a manner offensive or objectionable to Lessor
or other occupants of the Complex by reason of noise, odors or vibrations, or
interfere in any way with other Lessees or those having business in the Complex,
nor shall any animals be brought or kept in the Leased Premises or the Complex.

     7.   Change of Address. Lessor shall have the right, upon adequate written
          -----------------
notice to Lessee, to change the name or street address of the Complex or the
room or suite number of the Leased Premises.

     8.   Access to Complex. Lessor reserves the right to exclude from the
          -----------------
Complex during the evening, night and early morning hours beginning at 6 P.M.
and ending at 8 A.M. Monday through Friday, beginning at 1 P.M. and ending at 8
A.M. on Saturdays, and at all hours on Sundays, union holidays and legal
holidays, all persons who do not present identification acceptable to Lessor.
Lessee shall provide Lessor with a list of all persons authorized by Lessee to
enter the Leased Premises and shall be liable to Lessor for all acts of such
persons. Lessor .shall in no case be liable for damages for any error with
regard to the admission to or exclusion from the Complex of any person. In the
case of invasion, mob, riot, public excitement or other circumstances rendering
such action advisable in Lessor's opinion, Lessor reserves the right to prevent
access to the Complex during the continuance of the same by such action as
Lessor may deem appropriate, including closing doors.

     9.   Complex Directory. The directory of the Complex will be provided for
          -----------------
the display of the name and location of Lessee and a reasonable number of the
principal officers and employees of Lessee at the expense of Lessee. Lessor
reserves the right to restrict the amount of directory space utilized by Lessee.

     10.  Window Coverings. No curtains, draperies, blinds, shutters, shades,
          ----------------
screens or other coverings, hangings or decorations shall be attached to, hung
or placed in, or used in connection with any window of the Complex without the
prior written consent of Lessor. In any event, with the prior written consent of
Lessor, such items shall be installed on the interior side of Lessor's standard
window covering and shall in no way be visible from the exterior of the

                                      F-2
<PAGE>

Complex. Lessee shall keep window coverings closed when the effect of sunlight
(or the lack thereof) would impose unnecessary loads on the Complex's air
conditioning systems.

     11.  Food and Beverages. Lessee shall not obtain for use in the Leased
          ------------------
Premises ice, drinking water, food, beverage, towel or other similar services,
except at such reasonable hours and under such reasonable regulations as may be
established by Lessor.

     12.  Procedures When Leaving. Lessee shall ensure that the doors of the
          -----------------------
Leased Premises are closed and locked and that all water faucets, water
apparatus and utilities are shut off before Lessee and its employees leave the
Leased Premises so as to prevent waste or damage. For any default or
carelessness in this regard, Lessee shall be liable and pay for all damage and
injuries sustained by Lessor or other Lessees or occupants of the Complex. On
multiple-tenancy floors, Lessee shall keep the doors to the Complex corridors
closed at all times except for ingress and egress.

     13.  Bathrooms. The toilet rooms, toilets, urinals, wash bowls and other
          ---------
apparatus shall not be used for any purpose other than that for which they were
constructed, no foreign substance of any kind whatsoever shall be thrown
therein, and the expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be paid by Lessee if caused by Lessee or its
agents, employees, contractors, invitees or licensees.

     14.  Prohibited Activities. Except with the prior written consent of Lessor
          ---------------------
or as otherwise expressly set forth in the Lease, Lessee shall (a) not sell
newspapers, magazines, periodicals, theater or travel tickets or any other goods
or merchandise to the general public in or on the Leased Premises, (b) not carry
on or permit or allow any employee or other person to carry on the business of
stenography, typewriting, printing or photocopying or any similar business in or
from the Leased Premises for the service or accommodation of occupants of any
other portion of the Complex, and (c) not allow the Leased Premises to be used
for manufacturing of any kind, or any business or activity other than that
specifically provided for in this Lease.

     15.  Vehicles. There shall not be used in any space or in the public halls
          --------
of the Complex, either by Lessee or others, any hand trucks except those
equipped with rubber tires and side guards and such other material handling
equipment as Lessor approves. No vehicles of any kind shall be brought by Lessee
into the Complex (except as set forth in Section 49.1 of the Lease) or kept in
or about the Leased Premises.

     16.  Trash Removal. Lessee shall store all its trash and garbage within the
          -------------
Leased Premises. No material shall be placed in the trash boxes or receptacles
if such material is of such nature that it may not be disposed of in the
ordinary and customary manner of removing and disposing of Complex trash and
garbage in the city or county in which the Complex is located without being in
violation of any law or ordinance governing such disposal. All garbage and
refuse disposal shall be made only through entryways and elevators provided for
such purposes and at such times as Lessor shall designate. Lessee shall crush
and flatten all boxes, cartons and containers. Lessee shall pay extra charges
for any unusual trash disposal.

                                      F-3
<PAGE>

     17.  No Soliciting. Canvassing, soliciting, distribution of handbills or
          --------------
any other written material and peddling in the Complex are prohibited, and
Lessee shall cooperate to prevent the same.

     18.  Services. The requirements of Lessee will be attended to only upon
          --------
application in writing at the office of the Complex. Personnel of Lessor shall
not perform any work or do anything outside of their regular duties unless under
special instructions from Lessor.

     19.  Waiver. Lessor may waive any one or more of these Rules and
          ------
Regulations for the benefit of any particular Lessee or Lessees, but no such
waiver by Lessor shall be construed as a waiver of such Rules arid Regulations
in favor of any other Lessee or Lessees, nor prevent Lessor from thereafter
enforcing any such Rules and Regulations against any or all of the Lessees of
the Complex.

     20.  Supplemental to Lease. These Rules and Regulations are in addition to,
          --------------------
and shall not be construed to in any way modify or amend, in whole or in part,
the covenants of this Lease.

     21.  Amendments and Additions. Lessor reserves the right to make such other
          ------------------------
rules and regulations, and to amend or repeal these Rules and Regulations, as in
Lessor's judgment may from time to time be desirable for the safety, care and
cleanliness of the Complex and for the preservation of good order therein.

                                      F-4
<PAGE>

                                   EXHIBIT G

                              BUILDING STANDARDS

         That certain Redevelopment Masterplan for the Townsend Center dated
January 20, 1998 and revised on February 5, 1998.
<PAGE>

                                   Exhibit H

                           JANITORIAL SPECIFICATIONS

A.   Janitorial Service Specifications for Day Porter
     ------------------------------------------------

     Day Porter shall be on duty from 8:30 a.m. to 5:00 p.m., Monday through
     Friday; Saturdays, Sundays and holidays excepted. The duties of the Day
     Porter, who is under the exclusive direction of the Chief
     Engineer/Operations Manager and Property Manager, shall be, but is not
     limited to, the following:

     1.   Entrance Lobby

     The entrance lobby is to be kept neat and clean at all times and the
     following minimum cleaning operations shall be maintained to attain this
     effect:

          a.   Wipe down metal surfaces daily.
          b.   Clean cigarette urns as necessary.
          c.   Wash glass doors and mirrored surfaces daily and as needed.
          d.   Empty garbage receptacles as necessary.

     2.   Elevators/Escalators

          a.   Vacuum carpets daily and as needed. Include spot cleaning as
               required in base contract.
          b.   Spot clean lobby elevator saddles, doors and frames daily.
          c.   Spot clean sides of elevator cars daily.
          d.   Spot clean sides of escalators daily.

     3.   Toilets - Daily

          a.   Fill soap dispensers and paper towel dispensers (towels and soap
               to be furnished by Lessor).
          b.   Report all mechanical deficiencies (i.e., dripping faucets, etc.)
               to the Property Manager.
          c.   Wash all mirrors, powder shelves and lavatory tops.
          d.   Empty paper towel receptacles and debris as needed but not less
               than once daily.
          e.   Stock and maintain all sanitary product machines.

     4.   Public Areas

          a.   Remove all foreign matter and debris from all public corridors as
               necessary.
          b.   Handles special requests as directed by Manager (i.e., unplug
               toilets, remove trash, etc.)

                                      1.
<PAGE>

     5.   Building Service Areas

          a.   Remove foreign matter and debris from planters and sidewalks
               along 8th and Townsend Streets daily.
          b.   Lay down and remove lobby runners, as necessary.
          c.   Ensure that the loading dock area, including the Mail Room, is
               free of debris.

B.   Janitorial Service Specifications for Common Areas and Tenant Suites
     --------------------------------------------------------------------

     1.   Nightly Services Sunday through Thursday.

          a.   Secure all lights as soon as possible each night.
          b.   Vacuum all Common Area carpets and tenanted areas.
          c.   Dust mop all resilient and composition floors with treated dust
               mops. Damp mop to remove spills and water stains as required.
          d.   Feather dust all desks and office furniture, excluding chairs.
          e.   Papers and folders on desks are not to be moved.
          f.   Empty all ash trays and ash urns. Clean and sanitize as required.
          g.   Empty all waste paper baskets and other trash containers.
          h.   Remove all trash from floors to designated trash areas.
          i.   Remove fingerprints, dirt smudges, graffiti, etc., from all
               doors, frames, glass partitions, windows, light switches, walls,
               elevator do or jambs and elevator interiors.
          j.   Return chairs and waste baskets to proper positions.
          k.   Clean sanitize and polish drinking fountains.

     2.   Weekly Services

          a.   Dust all low reach and high reach areas, including but not
               limited to, structural ledges, mirror tops, partition tops and
               edges, air conditioning diffusers and return air grilles.

     3.   Monthly Services

          a.   Wipe down all walls and metal partitions. Partitions shall be
               left clean and not streaked after this work.
          b.   Clean all ventilation grilles.
          c.   Dust all doors and door jambs.

     4.   Quarterly Services

          a.   Thoroughly clean and reseal all ceramic tile floors, using
               approved sealers.

                                      2.
<PAGE>

C.   Main Floor Elevator/Escalator Lobbies and Public Corridors Specifications
     -------------------------------------------------------------------------

     1.   Nightly Services

          a.   Thoroughly wash all swinging glass doors exclusive of tenant
               door.
          b.   Spot clean all glass including low partitions and the corridor
               side of all windows and glass doors to tenant premises.
          c.   Spot clean all chrome brightwork including swinging door
               hardware, kick plates, base, partition tops, handrails, waste
               paper receptacles, planters, elevator call button plates, hose
               cabinets and visible hardware on the corridor side of tenant
               entry doors.
          d.   Spot clean all interior architectural finishes including the
               corridor side of all tenant area window and door frames and
               bases.
          e.   Thoroughly clean all door saddles of dirt and debris.
          f.   Spot clean and dust directory boards and ledges.
          g.   Empty, clean and sanitize as required all waste paperbaskets and
               refuse receptacles.
          h.   Vacuum all carpets and minor spot clean, as necessary.
          i.   Spot clean all elevator doors and frames.
          j.   Police all areas for debris at least once during day time
               operating hours.

     2.   Monthly Services

          a.   Thoroughly clean all chrome and architectural interior finishes.

D.   Basement Corridors. Service Office (Engineering. Security. Cleaning) Store
     --------------------------------------------------------------------------
     Rooms, Service Corridors, Roof and Service Sink Closets:
     -------------------------------------------------------

     Note: Nightly and periodic services for offices, corridors, locker rooms
     ----
and restrooms included in the above areas shall be per specifications previously
outlined for tenant areas and common areas on tenant floors. Additional work not
previously specified shall be as follows:

     1.   Nightly Services

          a.   Remove trash from all the above areas.
          b.   Maintain an orderly arrangement of all janitorial supplies and
               paper products in the storage rooms and service sink closets.
          c.   Maintain an orderly arrangement of all equipment stored in these
               areas such as mops, buckets, brooms, vacuum cleaners, scrubbers,
               etc.
          d.   Clean and disinfect service sinks:
          e.   Sweep and damp mop service sink closet floors; deodorize and
               disinfect as required.
          f.   Sweep store room floors.
          g.   Receive and store all janitorial supplies in an orderly manner.

                                      3.
<PAGE>

     2.   Weekly Services

          a.   Damp mop all composition floors in store rooms; deodorize and
               disinfect as required.
          b.   High dusting of these areas, including all pipes, ducts,
               conduits, ventilating diffusers and grills, mechanical,
               electrical equipment exposed beneath the hung ceilings outside of
               the mechanical equipment rooms.

E.   Passenger Elevator/Escalator Cleaning Specifications.
     ----------------------------------------------------

     1.   Nightly Services

          a.   Spot clean walls and interior door.
          b.   Spot clean outside surfaces of all doors and frames.
          c.   Clean all floors thoroughly.  Edge thoroughly.
          d.   Vacuum all thresholds.
          e.   Spot clean elevator carpets

     2.   Weekly Services

          a.   Thoroughly clean entire interior surfaces and finish of all doors
               and frames and outside surfaces of all doors and frames.
          b.   Steel wool clean all thresholds.
          c.   Wipe thoroughly all handrails.

     3.   Monthly Services

          a.   Shampoo all elevator cab floor carpets.
          b.   Wipe clean elevator cab lamps.
          c.   Wipe clean entire cab ceiling

F.   Trash Area and Service Entrance Specifications
     ----------------------------------------------

     1.   Nightly Services

          a.   Place all miscellaneous trash and debris except construction
               material, in the Property's trash receptacles or compactor.
          b.   Neatly stack all trash in the designated area.
          c.   Sweep entire area.

G.   Exterior Structure and Grounds Services Specifications.
     ------------------------------------------------------

     1.   Nightly Services

                                      4.
<PAGE>

                                   EXHIBIT I

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

WELLS FARGO BANK, NATIONAL ASSOCIATION
Real Estate Group, AU #AU NO.
400 Capitol Mall, Suite 700
Sacramento, CA 95814

Attn:  LOAN ADMINISTRATOR'S NAME HERE
Loan No.  LOAN NO.

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

    SUBORDINATION AGREEMENT; ACKNOWLEDGMENT OF LEASE ASSIGNMENT, ESTOPPEL,
                   ATTORNMENT AND NON-DISTURBANCE AGREEMENT
                           (Lease To Deed of Trust)

NOTICE:   THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE
          PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF
          SOME OTHER OR LATER SECURITY INSTRUMENT.

THIS SUBORDINATION AGREEMENT; ACKNOWLEDGMENT OF LEASE ASSIGNMENT, ESTOPPEL,
ATTORNMENT AND NON-DISTURBANCE AGREEMENT ("Agreement") is made DATE OF DOCUMENTS
by and between BORROWER NAME, a general partnership ("Owner"), NAME OF LESSEE
HERE ("Lessee") and WELLS FARGO BANK,. NATIONAL ASSOCIATION ("Lender").

                                R E C I T A L S
                                ---------------

A.   Pursuant to the terms and provisions of a lease dated DATE OF LEASE HERE
     ("Lease"), Owner, as "Lessor", granted to Lessee a leasehold estate in and
     to a portion of the property described on Exhibit A attached hereto and
     incorporated herein by this reference (which property, together with all
     improvements now or hereafter located on the property. is defined as the
     "Property").

B.   Said Lease contains provisions and terms granting Lessee an option to
     purchase the Property (the "Option To Purchase").

C.   Owner has executed, or proposes to execute, a deed of trust with absolute
     assignment of leases and rents, security agreement and fixture filing
     ("Deed of Trust") securing, among other things, a promissory note ("Note")
     in the principal sum of LOAN AMOUNT AND N0/100THS DOLLARS ($LOAN AMOUNT
     NOS.), dated DATE OF DOCUMENTS, in favor of Lender, which Note is payable
     with interest and upon the terms and conditions described therein ("Loan").
     The Deed of Trust is to be recorded concurrently herewith.

                                  Page 1 of 9
<PAGE>

D.   As a condition to making the Loan secured by the Deed of Trust, Lender
     requires that the Deed of Trust be unconditionally and at all times remain
     a lien on the Property, prior and superior to all the rights of Lessee
     under the Lease and the Option To Purchase and that the Lessee specifically
     and unconditionally subordinate the Lease and the Option To Purchase to the
     lien of the Deed of Trust.

E.   Owner and Lessee have agreed to the subordination, attornment and other
     agreements herein in favor of Lender.

NOW THEREFORE, for valuable consideration and to induce Lender to make the Loan,
Owner and Lessee hereby agree for the benefit of Lender as follows:

1.   SUBORDINATION.  Owner and Lessee hereby agree that:
     -------------

     1.1  Prior Lien. The Deed of Trust securing the Note in favor of Lender,
          ----------
          and any modifications, renewals or extensions thereof, shall
          unconditionally be and at all times remain a lien on the Property
          prior. and superior to the Lease and the Option To Purchase;

     1.2  Subordination. Lender would not make the Loan without this agreement
          -------------
          to subordinate; and

     1.3  Whole Agreement. This Agreement shall be the whole agreement and only
          ----------------
          agreement with regard to the subordination of the Lease and the Option
          To Purchase to the lien of the Deed of Trust and shall supersede and
          cancel, but only insofar as would affect the priority between the Deed
          of Trust and the Lease and the Option To Purchase, any prior
          agreements as to such subordination, including, without limitation.
          those provisions, if any, contained in the Lease which provide for the
          subordination of the Lease and the Option To Purchase to a deed or
          deeds of trust or to a mortgage or mortgages.

     AND FURTHER, Lessee individually declares, agrees and acknowledges for the
benefit of Lender, that:

     1.4  Use of Proceeds. Lender, in making disbursements pursuant to the Note,
          ---------------
          the Deed of Trust or any loan agreements with respect to the Property,
          is under no obligation or duty to, nor has Lender represented that it
          will, see to the application of such proceeds by the person or persons
          to whom Lender disburses such proceeds, and any application or use of
          such proceeds for purposes other than those provided for in such
          agreement or agreements shall not defeat this agreement to subordinate
          in whole or in part;

     1.5  Waiver, Relinquishment and Subordination. Lessee intentionally and
          ----------------------------------------
          unconditionally waives, relinquishes and subordinates all of Lessee's
          right, title and interest in and to the Property to the lien of the
          Deed .of Trust and understands that in reliance upon, and in
          consideration of, this waiver, relinquishment and subordination,
          specific loans and advances are being and will be made by Lender and,
          as part and parcel thereof, specific monetary and other obligations
          are being and will be entered into which would not be made or entered
          into but for said reliance upon this waiver, relinquishment and
          subordination.

2.   ASSIGNMENT. Lessee acknowledges and consents to the assignment of the Lease
     ----------
     by Lessor in favor of Lender.

3.   ESTOPPEL.  Lessee acknowledges and represents that:
     --------

                                 Page 2 of 9
<PAGE>

     3.1  Lease Effective. The Lease has been duly executed and delivered by
          ---------------
          Lessee and, subject to the terms and conditions thereof, the Lease is
          in full force and effect, the obligations of Lessee thereunder are
          valid and binding and there have been no modifications or additions to
          the Lease, written or oral;

     3.2  No Default. To the best of Lessee's knowledge, as of the date hereof:
          ----------
          (i) there exists no breach, default, or event or condition which, with
          the giving of notice or the passage of time or both, would constitute
          a breach or default under the Lease: and (ii) there are no existing
          claims, defenses or offsets against rental due or to become due under
          the Lease;

     3.3  Entire Agreement. The Lease constitutes the entire agreement between
          ----------------
          Lessor and Lessee with respect to the Property and Lessee claims no
          rights with respect to the Property other than as set forth in the
          Lease; and

     3.4  No Prepaid Rent. No deposits or prepayments of rent have been made in
          ---------------
          connection with the Lease, except as follows: (if none, state "None")

4.   ADDITIONAL AGREEMENTS. Lessee covenants and agrees that, during all such
     ---------------------
     times as Lender is the Beneficiary under the Deed of Trust:

     4.1  Modification, Termination and Cancellation. Lessee will not consent to
          ------------------------------------------
          any modification, amendment, termination or cancellation of the Lease
          (in whole or in part) without Lender's prior written consent and will
          not make any payment to Lessor in consideration of any modification,
          termination or cancellation of the Lease (in whole or in part) without
          Lender's prior written consent;

     4.2  Notice of Default. Lessee will notify Lender in writing concurrently
          -----------------
          with any notice given to Lessor of any default by Lessor under the
          Lease, and Lessee agrees that Lender has the right (but not the
          obligation) to cure any breach or default specified in such notice
          within the time periods set forth below and Lessee will not declare a
          default of the Lease, as to Lender, if Lender cures such default
          within fifteen (15) days from and after the expiration of the time
          period provided in the Lease for the cure thereof by Lessor; provided,
          however, that if such default cannot with diligence be cured by Lender
          within such fifteen (15) day period, the commencement of action by
          Lender within such fifteen (15) day period to remedy the same shall be
          deemed sufficient so long as Lender pursues such cure with diligence;

     4.3  No Advance Rents. Lessee will make no payments or prepayments of rent
          ----------------
          more than one (1) month in advance of the time when the same become
          due under the Lease; and

     4.4  Assignment of Rents. Upon receipt by Lessee of written notice from
          -------------------
          Lender that. Lender has elected to terminate the license granted to
          Lessor to collect rents, as provided in the Deed of Trust, and
          directing the payment of rents by Lessee to Lender, Lessee shall
          comply with such direction to pay and shall not be required to
          determine whether Lessor is in default under the Loan and/or the Deed
          of Trust.

5.   ATTORNMENT. Lessee agrees for the benefit of Lender (including for this
     ----------
     purpose any transferee of Lender or any transferee of Lessor's title in and
     to the Property by Lender's exercise of the remedy of sale by foreclosure
     under the Deed of Trust) as follows:

                                  Page 3 of 9
<PAGE>

     5.1  Payment of Rent. Lessee shall pay to Lender all rental payments
          ---------------
          required to be made by Lessee pursuant to the terms of the Lease for
          the duration of the term of the Lease:

     5.2  Continuation of Performance. Lessee shall be bound to Lender in
          ---------------------------
          accordance with all of the provisions of the Lease for the balance of
          the term thereof, and Lessee hereby attorns to Lender as its landlord,
          such attornment to be effective and self-operative without the
          execution of any further instrument immediately upon Lender succeeding
          to Lessor's interest in the Lease and giving written notice thereof to
          Lessee;

     5.3  No Offset. Lender shall not be liable for, nor subject to, any offsets
          ---------
          or defenses which Lessee may have by reason of any act or omission of
          Lessor under the Lease, nor for the return of any sums which Lessee
          may have paid to Lessor under the Lease as and for security deposits,
          advance rentals or otherwise, except to the extent that such sums are
          actually delivered by Lessor to Lender; and

     5.4  Subsequent Transfer. If Lender, by succeeding to the interest of
          -------------------
          Lessor under the Lease, should become obligated to perform the
          covenants of Lessor thereunder, then, upon, any further transfer of
          Lessor's interest by Lender, all of such obligations shall terminate
          as to Lender.

6.   NON-DISTURBANCE. In the event of a foreclosure under the Deed of Trust, so
     ---------------
     long as there shall then exist no breach, default, or event of default on
     the part of Lessee under the Lease, Lender agrees for itself and its
     successors and assigns that the leasehold interest of Lessee under the
     Lease shall not be extinguished or terminated by reason of such
     foreclosure, but rather the Lease shall continue in full force and effect
     and Lender shall recognize and accept Lessee as tenant under the Lease
     subject to the terms and provisions of the Lease except as modified by this
     Agreement; provided, however, that Lessee and Lender agree that the
                --------  -------
     following provisions of the Lease (if any) shall not be binding on Lender:
     any option to purchase with respect to the Property; any right of first
     refusal with respect to the Property; any provision regarding the use of
     insurance proceeds or condemnation proceeds with respect to the Property
     which is inconsistent with the terms of the Deed of Trust.

7.   MISCELLANEOUS.
     -------------

     7.1  Heirs, Successors, Assigns and Transferees. The covenants herein shall
          ------------------------------------------
          be binding upon, and inure to the benefit of, the heirs, successors
          and assigns of the. parties hereto; and

                                  Page 4 of 9
<PAGE>

     7.2  Notices. All notices or other communications required or permitted to
          -------
          be given pursuant to the provisions hereof shall be deemed served upon
          delivery or, if mailed, upon the first to occur of receipt or the
          expiration of three (3) days after deposit in United States Postal
          Service, certified mail, postage prepaid and addressed to the address
          of Lessee or Lender appearing below:

               "OWNER"                                 "LENDER"

BORROWER NAME, a general partnership     WELLS FARGO BANK, NATIONAL
STREET ADDRESS                           ASSOCIATION
CITY, STATE ZIP                          Real Estate Group (AU #AU N0.)
                                         400 Capitol Mall, Suite 700
                                         Sacramento, CA 95814

                                         Attn:  LOAN ADMINISTRATOR'S NAME HERE
                                         Loan No.  LOAN NO.

"LESSEE"

NAME OF LESSEE HERE
LESSEE'S ADDRESS (STACKED) HERE

     provided, however, any party shall have the right to change its address for
     --------  -------
     notice hereunder by the giving of written notice thereof to the other party
     in the manner set forth in this Agreement; and

     7.3  Counterparts. This Agreement may be executed in two or more
          ------------
          counterparts, each of which shall be deemed an original and all of
          which together shall constitute and be construed as one and the same
          instrument; and

     7.4  Remedies Cumulative. All rights of Lender herein to collect rents on
          --------------------
          behalf of Lessor under the Lease are cumulative and shall be in
          addition to any and all other rights and remedies provided by law and
          by other agreements between Lender and Lessor or others; and

     7.5  Paragraph Headings. Paragraph headings in this Agreement are for
          -------------------
          convenience only and are not to be construed as part of this Agreement
          or in any way limiting or applying the provisions hereof.

INCORPORATION. Exhibit A and Lease Guarantor's Consent are attached hereto and
-------------  ---------
incorporated herein by this reference.

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

NOTICE:   THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE.
          PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN A
          PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT
          OF THE LAND.

                                  Page 5 of 9
<PAGE>

IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS AGREEMENT, THE PARTIES
CONSULT WITH THEIR ATTORNEYS WITH RESPECT HERETO.

                                                       "OWNER"

                                   BORROWER NAME,
                                   a general partnership

                                   By:________________________________________

                                   Its:_______________________________________

                                                         "LENDER"

                                   WELLS FARGO BANK,
                                   NATIONAL ASSOCIATION

                                   By:________________________________________
                                                  Signee's Name

                                   Its:_______________________________________
                                                  Signee's Title

                                                  "LESSEE"

                                   NAME OF LESSEE HERE

                                   LESSEE SIGNATURE BLOCK HERE

                     (ALL SIGNATURES MUST BE ACKNOWLEDGED)

                                 Page 6 of 9
<PAGE>

                           LEASE GUARANTOR'S CONSENT

The undersigned ("Lease Guarantor") consents to the foregoing Subordination
Agreement; Acknowledgment of Lease Assignment, Estoppel, Attornment and
Non-Disturbance Agreement and the transactions contemplated thereby and
reaffirms its obligations under the lease guaranty ("Lease Guaranty") dated DATE
OF LEASE GUARANTY HERE. Lease Guarantor further reaffirms that its obligations
under the Lease Guaranty are separate and distinct from Lessee's obligations.

AGREED:
------

Dated as of:  DATE OF DOCUMENTS                            "LEASE GUARANTOR"

                                                  LEASE GUARANTOR BLOCK HERE

                                  Page 7 of 9
<PAGE>

                                                                       EXHIBIT A
                                                              Loan No.  LOAN NO.

                            DESCRIPTION OF PROPERTY

EXHIBIT A to Subordination Agreement; Acknowledgment of Lease Assignment,
---------
Estoppel, Attornment and Non-Disturbance Agreement dated as of DATE OF
DOCUMENTS, executed by BORROWER NAME, a general partnership as "Owner", NAME OF
LESSEE HERE, as "Lessee", and WELLS FARGO BANK, NATIONAL ASSOCIATION, as
"Lender".

All that certain real property located in the County of PROPERTY COUNTY, State
of California. described as follows:

APN

                                  Page 8 of 9
<PAGE>

STATE OF CALIFORNIA            )
                                 ss.
COUNTY OF ___________________  )

On this ______________ day of ________________, 19__, before me,
____________________________, a Notary Public in and for the State of
California, personally appeared personally known to me (or proved on the basis
of satisfactory evidence) to be the person(s) whose names) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the persons) acted, executed the instrument.

WITNESS my hand and official seal

Signature _________________________________

My commission expires ____________________.

                                  Page 9 of 9<PAGE>

                                     IMPCO

                             100 Town Center Drive
                              Rochester, NY 14623
<PAGE>

October 15, 1998

Mr. John W. Dobbertin
IMPCO Enterprises Inc.
100 Town Centre Drive
Rochester, NY 14623

RE:  Lease Dated July 1, 1998
     18,000 Square Feet
     100 Town Center Drive, Rochester, NY

Dear John:

This letter will serve to make the following change to the above referenced
lease.

     RENT

     The Landlord has agreed to amortize $8,012.00 of improvements into the
     lease term. With these amortized costs the revised rent shall now be
     $182,138.00 annually, to be paid in equal consecutive monthly installments
     of $15,178.16.

All other terms and conditions of the lease shall remain the same.

We look forward to a long relationship with your company.  Should you have any
questions please feel free to call.

/s/ John W. Dobbertin                   10/16/98
--------------------------------------------------
John W. Dobbertin, V.P. of Finance      Date

/s/ Richard R. LeFrois                  10/15/98
--------------------------------------------------
Richard R. LeFrois                      Date
<PAGE>

THIS AGREEMENT OF LEASES, dated as of the 1st day of July 1998, between RICHARD
R. LEFROIS, having an office and place of business located at 1020 Lehigh
Station Road, Henrietta, New York, hereinafter described as "Landlord" and IMPCO
Enterprises, Inc., a Subsidiary of Webcraft, Inc. a Corporation organized under
the laws of the State of Delaware, with an address of 1200 University Avenue,
Rochester, New York, hereinafter described as "Tenant".

                                   WITNESSETH:

1.   DESCRIPTION
     -----------

Landlord hereby leases to Tenant and Tenant hereby rents from Landlord the
premises described on "Exhibit A" attached hereto, consisting of approximately
18,000 square feet of floor area in the building ("Building") known as and
located at 100 Town Centre Drive, Rochester, New York 14623, (the "Premises").

2.   TERM
     ----

     (A). The term of this Lease (The "Lease Term") shall be five (5) years, to
commence on September 1, 1998, (the "Commencement Date") and to end at midnight,
August 31, 2003, (the "Expiration Date"), subject to the further provisions of
subparagraphs (C) and (D) hereof.

     (B). The term "Lease Year" as used herein is defined to be a period of
twelve consecutive calendar months beginning September 1st of each year of the
Lease Term.

     (C). Notwithstanding the foregoing, in the event that the Building is not
substantially completed by August 15, 1998 (the "Tenant Installation
Commencement Date"), in order to permit Tenant to begin making its own tenant
improvement installations in accordance with the provisions of Article 5 hereof,
then the Commencement Date (on which the payment of rent under Article 3 hereof
is to commence), shall be delayed one day for each day beyond the date of August
15, 1998, until the Building shall be so substantially completed, with the
intention that Tenant shall have fifteen (15) days prior to rent commencement
during which it may perform its Tenant installation work. In no event shall the
Expiration Date be adjusted by reason of any such delay. In the event that the
Tenant Installation Commencement date has not occurred on or before September
30, 1998, then Tenant by notice to Landlord delivered at any time from and

                                       1
<PAGE>

after that date, and prior to the actual Tenant Installation Commencement Date
(as measured by Landlord's substantial completion of the Premises), may cancel
this Lease, effective as of the date of such notice, and this Lease upon the
delivery thereof shall be and be deemed to be null and void and of no further
force and effect, and Landlord shall promptly return the security deposit made
in accordance with Article 37 hereof.

     (D). Tenant shall have the option to extend the Lease Term by an additional
period of five (5) years, from September 1, 2003, through August 31, 2008, on
the same terms and conditions (except that there shall be no further right to an
extension of the term hereof), provided that Tenant shall give Landlord notice
of its intent to renew not less that nine (9) months prior to the original Lease
Term Expiration Date (i.e., by notice given on or before November 30, 2002), at
a Lease Rate to be negotiated not to exceed a 10% increase.

     (E). Tenant shall be permitted to enter the Premises after the Tenant
Installation Commencement Date and prior to the Commencement Date, not for the
purpose of conducting business therein, but solely for the purpose of effecting
the Tenant installation work, without liability for the payment of fixed rent
hereunder; notwithstanding the foregoing, Tenant shall be liable for the payment
of any utilities consumed in the course of its installation work.

3.   RENT
     ----

The rent during the term of this Lease shall be $180,000.00 annually, to be paid
in equal consecutive monthly installments of $15,000.00 in advance on the first
(1st) day of each month during the term hereof, without deduction, setoff or
prior demand which rent Tenant agrees to pay in lawful money of the United
States, which shall be legal tender in payment of all debts and dues, public and
private, by check subject to collection drawn to the order of the Landlord, Mr.
Richard R. LeFrois, P. O. Box 92878, Department No. 102, Rochester, New York
14692, or such other place as the Landlord may designate by notice to Tenant.
This Lease is granted and accepted upon the foregoing and upon the following
covenants and conditions and subject to the following restrictions, to all and
every one of which the parties consent; and each of the parties hereby expressly
covenants and agrees to keep, perform and observe all the terms, covenants and
conditions herein contained on its part to be kept, performed and observed.

                                       2
<PAGE>

4.   USE
     ---

The Premises may be used and occupied exclusively by Tenant as an office and
warehouse (collectively, the "approved use"). Tenant will not at anytime use or
occupy the Premises in violation of its approved use. No part of the Premises
shall be occupied or used by any persons for any purpose or, in any manner so as
to increase the insurance risk or rates or prevent the obtaining of insurance
for the approved use; nor so that, in accordance with any requirement or law or
any public authority, the Landlord shall be obligated, on account of the purpose
or manner of said approved use or occupation, to make any addition or alteration
to or in the building. If, by reason of Tenant's failure to comply with this
provision, the fire insurance rate at any time shall be higher than it otherwise
would have been then Tenant shall reimburse Landlord, as additional rent, for
that part of all fire insurance premiums thereafter paid by Landlord by reason
or such violation by Tenant.

5.   LANDLORD'S REPAIRS
     ------------------

     Landlord Shall Maintain and Repair:

          1.   All Structural Elements of the Premises.

          2.   Exterior walls.

          3.   Roofs.

          4.   Major Repairs to the Pipes, Fixtures.

     Tenant is responsible for the maintenance of the Landlord-installed on-site
     Building system appliances and equipment (which includes the HVAC units),
     and for which all operations and maintenance manuals (or true and complete
     copies thereof) have been delivered to Tenant. As long as damages have not
     been caused by tenant's failure to maintain appliances and equipment
     properly, Landlord shall be responsible for major repairs or replacement to
     the appliances and equipment, and shall promptly commence and complete same
     or to Landlord following receipt of the bill therefor.

     As used herein, the term "major repairs" shall mean repairs costing more
     than Five Hundred Dollars, ($500.00) individually or aggregating more than
     One Thousand Dollars, ($1,000.00) in any lease year in respect of any one
     such Building system.

                                       3
<PAGE>

6.   UTILITIES
     ---------

     (A). Tenant shall pay, as additional rent, either to the utility providing
same or to Landlord following receipt of the bill therefor, all charges for
light, heat, power, electric, gas, water, sewerage charges, pollution charges,
Pure Water charges, fuel charges and such other similar services furnished or
used in connection with the Premises during the Lease Term.

     (B). Landlord agrees to install separate utility meters for the Premises at
Landlord's sole cost prior to the Tenant Installation Commencement Date (and the
installation thereof shall be required for determination of substantial
completion.)

7.   REMEDIES OF TENANT REGARDING
     ----------------------------
     PROVISION OF SERVICES AND UTILITIES
     -----------------------------------

No diminution or abatement of rent or other compensation shall be claimed or
allowed for inconvenience or discomfort arising from the making of repairs or
improvements to the Building or to its appliances required by law or the
provisions of this Lease; provided, however, that Landlord agrees to perform
such work only during regular business hours, and with due care for the
minimization of interference with Tenant's conduct of business, and to give
Tenant reasonable advance notice (except in the case of emergency threatening
damage to persons or property) of any intended Landlord entry for the purposes
of Lease-mandated repairs or maintenance or legally-required improvements.
However, for any space taken to comply with any law, ordinance or order of a
governmental authority, the rent shall be apportioned ratably. In respect to the
various "services", if any, herein expressly or impliedly agreed to, be
furnished by the Landlord to the Tenant, it is agreed that there shall be no
diminution or abatement of the rent, or any other compensation, for interruption
or curtailment of such "services" when such interruption or curtailment shall be
due to accident, alterations or repairs desirable or necessary to be made or to
some other cause, not gross negligence or willful misconduct on the part of the
Landlord. No such interruption or curtailment of any such "services" shall be
deemed a constructive eviction. The Landlord shall not be required to furnish,
and the Tenant shall not be entitled to receive, any of such "services" during
any period wherein the Tenant shall be in default in respect to the payment of
rent following notice and opportunity to cure as required hereunder. Such
repairs, alterations, etc., shall be done with reasonable dispatch.

                                       4
<PAGE>

8.   PREPARATION OF PREMISES AND TENANT ALTERATIONS

     Landlord's Improvements:

     (A). Space to be divided into:

     Approximately 15,000 square feet of finished office space. Approximately
     3,000 square feet of unfinished warehouse space, located within the
     Premises as agreed with Tenant.

     (B). The finished office space to incorporate:

          1.   Office space to be open "bull pen".

          2.   The office area will have dropped ceilings with 2' x 4' lay-ins
               and recessed lighting fixtures of sufficient candle power to
               eliminate need of desk lighting.

          3.   The office area will have nine (9) feet of drywall painted.

          4.   Each office door will be equipped with different only individual
               locks and keys, but all locks "master Keyed" for the Branch
               Manager (including the door opening into the warehouse area).

          5.   If Tenant desires window treatments, Tenant shall provide any and
               all window treatments. Any interior window treatment shall be per
               Tenants design, any exterior window treatment shall be verticals
               to maintain a similar exterior appearance.

     (C). Tenant may make leasehold improvements as reasonably required for the
          conduct of Tenant's business, including additional partitions, wall,
          floor and ceiling coverings, window blinds and shades and draperies or
          other window hangings (subject to item 5 above), and other fixtures
          and equipment necessary to the conduct of the Tenant's business, upon
          compliance with the terms of this Article 8.

                                       5
<PAGE>

          1.   Not less than twenty (20 days prior to undertaking any
               alteration, addition or improvement, Tenant shall notify
               Landlord, specifying in detail the alterations or additions
               contemplated. Such notice shall be accompanied by a plan,
               blueprint, or diagram showing such proposed alterations or
               additions, and a bid or contract signed by a reputable builder or
               contractor, undertaking to perform said work as show in said
               plan, blueprint or diagram for a specified cost stated therein.

          2.   Tenant agrees it will not proceed with any alteration, addition
               or improvement without first obtaining .the Landlord's written
               consent to such alterations, addition or improvement (but such
               approval shall not be unreasonably withheld or delayed if the
               installations are customary or appropriate for Tenant's allowed
               use and the design, construction standards, quality standards and
               finish are all equivalent to or better than what is present in
               the Premises at the Commencement Date, and if not disapproved by
               notice given by Landlord within then (10) business days of
               Tenant's submission, shall be deemed approved). It is understood
               and agreed that Landlord shall have approval rights concerning
               compatibility with the facilities within the Building and to
               assure that such changes are compatible with and do not exceed
               the rated operating capacity of the Building systems, including
               electrical and HVAC, which approval shall not be unreasonably
               withheld or delayed if same do not adversely impact the Building
               systems.

          3.   If Landlord approves thereof and the specified cost as above
               stated is less than $3,000, such approval shall constitute the
               necessary consent to such alterations or additions. If, however,
               the aforesaid specified cost is in excess of $3,000, then no
               consent of the Landlord shall be valid or binding upon it unless
               and until Tenant furnishes Landlord with a certificate evidencing
               liability insurance with limits of $1,000,000/$100,000/ $250,000
               protecting Landlord from any liability for injury to persons or
               property arising, directly or indirectly, from the making of such
               alterations

                                       6
<PAGE>

               or additions by Tenant, its agents, servants, employees, and/or
               independent contractors.

          4.   In making alterations, Tenant shall conform to all applicable
               laws and ordinances of the appropriate governmental and quasi-
               governmental authorities having jurisdiction over the Premises.
               Any alterations, additions or improvements to the Premises,
               including, without limitation, additions of the Tenant fixtures
               and equipment, shall be done in a manner which minimizes damage
               or potential damage to the Premises.

9.   MAINTENANCE AND REPAIRS
     -----------------------

Tenant (a) except as specifically set forth in section 5, shall, at the Tenant's
own expense, take good care of the Premises, and the pipes, fixtures,
appliances, equipment and appurtenances belonging thereto, and keep the same in
good order and repairs (if any) shall be in quality and class at least equal to
the original work; on default of Tenant to do such work, the Landlord (following
required notice to Tenant and opportunity to cure) may do it for Tenant's
account, and Tenant shall have no claim for inconvenience on account thereof;
(b) shall not cut or drill or otherwise deface or injure the building, except as
permitted in connection with alterations and additions under Article 8 hereof;
(c) shall not use or permit the use of the roof except as shall be expressly
permitted in writing by Landlord, including, without limitation, for the
installation thereon of any antenna, airlines, masts, or other radio or
television equipment; (d) shall not, without the Landlord's prior written
consent first obtained in each instance, permit any matter or thing to be
extended or projected from the window sash, window sill, cornice or fire escape
of the Premises; (e) shall, within ten (10) days after the Landlord's demand
thereof, pay to Landlord as additional rent hereunder, an amount equal to the
increase, if any, in the amount of the fire insurance premium applicable to the
building for and during the demised term resulting from the Tenant's use and
occupancy of the Premises in violation of the use permitted in this Lease, or
from the Tenant's failure to comply with any requirements of law or the
recommendation of any insurance carrier; (f) shall not, without the Landlord's
prior written consent first obtained in each instance, make alteration or
addition to the electric wiring, equipment, or appliances, including, without
limitation, any heating, air conditioning system, water systems, or gas pipe
systems, or tap any mains or pipes to supply water for refrigeration or air
conditioning apparatus, except as

                                       7
<PAGE>

permitted in connection with alterations and additions under Article 8 hereof;
(g) shall not, without Landlord's prior written consent first obtained in each
instance, make any alterations, decorations or improvements in or to the
Premises, except as permitted in connection with alterations and additions under
Article 8 hereof provided however, Landlord's consent to non-structural interior
alterations or decorations shall not be unreasonably withheld; (h) shall comply
with all reasonable and uniform written regulations and orders of Landlord
designated to promote the safety or good order of the building; and (i) shall
promptly discharge by filing the necessary bond, or otherwise, any mechanic's
lien or other lien filed against the Premises because of any work or material
done or famished to the Tenant. All alterations, additions or improvements made
to the Premises by either party, including railings, galleries, decorations,
paneling and similar items, unless Landlord shall otherwise elect in writing,
shall become the property of Landlord and be surrendered as part of the Premises
at the expiration or earlier termination of this Lease.

10.  COVENANT AGAINST ASSIGNMENT AND SUBLETTING
     ------------------------------------------

     (A). Without the previous written consent of the Landlord, neither the
Tenant, nor the Tenant's legal representatives or successors in interest by
operation of law or otherwise, shall assign or mortgage this Lease, or sublet
the whole or any part of the Premises or any part thereof to be used by others:
Any consent by Landlord to any act of assignment or subletting shall be held to
apply only to the specific transaction thereby authorized. Such consent shall
not be construed as a waiver of the- duty of Tenant, or the legal
representatives or assigns of tenant, to obtain from the legal representatives
or assigns of Tenant, to obtain from Landlord consent to any other or subsequent
assignment or subletting, or as modifying or limiting the rights of Landlord
under the foregoing covenant by Tenant not to assign or sublet without such
consent. Any violation of any provision of this Lease, whether by act or
omission, by any assignee, subtenant, or undertenant, or occupant shall be
deemed a violation of such provision by Tenant, it being the intention and
meaning of the parties hereto that Tenant shall assume and be liable to Landlord
for any and all acts and omissions of any and all assignees, sub-tenants and
undertenants and occupants. If this Lease be assigned, the Landlord may, and is
hereby empowered to collect rent from the assignee if the Premises or any part
thereof be underlet or occupied by any person or Corporation other than Tenant.
Landlord, in the event of Tenant's

                                       8
<PAGE>

default may, and is hereby empowered to, collect rent from the undertenant or
occupant; in either of such events, Landlord may apply the net amount received
by it to the rent herein reserved, and no such collection shall be deemed a
waiver of the covenant herein against assignment and underletting, or the
acceptance of the assignee, undertenant, or a release of the Tenant from the
further performance of the covenants herein contained on the part of the Tenant.

     (B). Notwithstanding the provision of paragraph 10 (A) hereof, the Tenant
may, without the Landlord's consent, assign this Lease to any parent, affiliated
or subsidiary corporation, provided such assignment does not relieve the
original Tenant of any liability hereunder and may also assign this lease
without Landlord's consent in connection with the merger or consolidation of
Tenant with or into any other corporation or entity, or in connection with the
sale or transfer of a majority of the assets and liabilities of Tenant, so long
as, with respect to either of the foregoing, (i) the shareholder's equity
(determined in accordance with generally accepted accounting principles) of any
assignee is equal to or greater than the shareholders' equity equivalently
determined in Tenant as of the effective date of said assignment, (ii) the
assignee is engaged in a business customarily acceptable for a tenant in a
building such as the Building in metropolitan Rochester, New York, (iii) any
assignee shall assume all of the obligations of Tenant under this Lease, (iv) at
the time of such assignment, this lease is in full force and effect and there is
no event of default under this Lease on the part of Tenant, (v) assignee's
proposed use provision of this Lease, and (vi) such transaction was not entered
into as a subterfuge to avoid obligations and restrictions under this Lease
(such assignee complying with clauses (i) through (vi) hereinafter a "Permitted
Assignee"). At least ten days prior to the effective date of any such assignment
to a Permitted Assignee, Tenant agrees to furnish Landlord with notice of such
assignment and copies of the instruments intended to effect such assignment, and
with thirty days after the effective date of any such assignment to a Permitted
Assignee, to furnish Landlord with copies of the fully executed instruments
effecting any such assignment and documentation establishing Tenant's
satisfaction of the requirements set forth above applicable to any such
assignment. Any such permitted Assignee of Tenant must assume and agree in
writing to fully perform and observe all of the obligations and agreements of
Tenant under this Lease. No such assignment shall relieve any Tenant of this
Lease of any covenants or obligations under this Lease and any Tenant shall
remain fully liable hereunder.

                                       9
<PAGE>

11.  RIGHT OF ENTRY
     --------------

Tenant, during the term hereof, shall permit inspection of the demised Premises
during reasonable business hours by Landlord's agents or representatives, and by
or on behalf of prospective purchasers on reasonable advance notice; and shall
permit access by the Landlord, or Landlord's agents or representatives during
reasonable hours for the purpose of making repairs, renovations or decorations
on reasonable advance notice.

12.  COVENANT TO SURRENDERS REMOVAL OF PERSONAL PROPERTY
     ---------------------------------------------------

On the last day of the Lease Term or on the sooner termination thereof, Tenant
shall peaceably and quietly leave, surrender and yield up unto the Landlord all
and singular the Premises broom-clean arid in good order and repair, ordinary
wear and tear and damage by fire, condemnation or other casualty as is insurable
under present or future standard forms of fire and extended coverage insurance
policies, excepted, together with all alterations, additions and improvements
which may have been made upon the Premises with Landlord's permission except
movable furniture or movable trade fixtures put in at the expenses of Tenant. If
the last day of the Lease Term falls on Sunday, this Lease shall expire on the
business day immediately preceding it. Tenant, on or before said date, shall
remove all its property from the Premises, and all property not so removed shall
be deemed abandoned by Tenant. If said Premises be not surrendered at the end of
the term, Tenant shall make good to Landlord all damage which Landlord shall
suffer by reason thereof, and shall indemnify Landlord against all claims made
by any succeeding tenant against Landlord in delivering possession of the
Premises to such succeeding tenant, so far as such delay is occasioned by
failure of Tenant to surrender the Premises.

13.  FIRE OR CASUALTY DAMAGE
     -----------------------

In case of damage to the Premises or the building of which the Premises are a
part by fire, or other casualty as is insurable under present or future standard
forms of fire and extended coverage insurance policies, Landlord, unless it
shall otherwise elect as hereinafter provided, shall repair the same with
reasonable dispatch after written notice of damage. If the Premises, or any part
thereof, are damaged by fire, enemy action, or other casualty to such an extent
as to be rendered untenantable, but are, nevertheless, repaired by Landlord,
then the rent shall be abated to an extent corresponding with the time during
which and the extent to which said Premises may

                                       10
<PAGE>

have been untenantable. If such repairs,, however, are delayed because of
Tenant's failure to adjust Tenant's own insurance claim, no reduction shall be
made beyond a reasonable time allowed for such adjustment. If such repairs shall
be reasonably estimated to take more than ninety (90) days to accomplish, and
Landlord has determined not to terminate this lease as hereinafter set forth,
then Landlord shall promptly notify Tenant of the actual estimated time of
repair and Tenant shall have the option, exercisable within ten (10) days of
receipt of Landlord's repair time estimate to terminate this Lease by notice to
Landlord, and the rent shall be adjusted as of the time of the occurrence of any
such fire, enemy actions, or other casualty. If the Landlord in its exclusive
discretion, shall decide, within a reasonable time after the occurrence of any
such fire, enemy action, or other casualty, to demolish, rebuild or reconstruct
the building, then, upon at least thirty (30) days written notice given by
Landlord to Tenant, this lease shall terminate on a .date to be specified in
such notice as if that date had been originally fixed as the expiration date of
the Lease Term, and the rent shall be adjusted as of the time of the occurrence
of any such fire, enemy action, or other casualty. Tenant shall give immediate
notice to Landlord in case of fire or other casualty or in the event of
accidents to or defect in any fixtures or equipment of the building. Landlord,
for itself and its insurers, hereby releases Tenant with respect to any
liability (including that deriving from the fault or neglect of Tenant,
assignees, sub-tenants, its agents, employees or other persons under its or
their direction or control) which Tenant might otherwise have for any damage to
the building or the Premises by fire, explosion, or any other perils covered by
Landlord's insurance, occurring during the Lease Term. Whenever Landlord elects
to insure the Premises or the building against fire or other casualty with an
insurance company selected by Landlord, Landlord shall cause all policies
evidencing such insurance to include a provision permitting such release of
liability if such a provision is obtainable from such insurer at no additional
expense to Landlord. If such insurer will not include such a provision in said
policy, or if the inclusion of such provision in such policy would ,involve an
additional expense for Landlord, Landlord shall so advise Tenant within a
reasonable time. Where such a provision is obtainable from such insurer and
Tenant notifies Landlord in writing within a reasonable time thereafter the
Tenant desires Landlord to cause such a provision to be included in such policy
at the expense of Tenant, Landlord shall cause such a provision to be included,
and Tenant agrees to pay promptly all expenses incurred by Landlord as a result
of such inclusion.

                                       11
<PAGE>

In case Landlord shall fail to complete such repairs within ninety (90) days
from the date of such damage, the Tenant may at any time after such ninety (90)
day period give Landlord thirty (30) days notice in writing of termination of
this lease, then at the expiration of such thirty day period, this lease shall
terminate as completely as if that were the date fixed for expiration of the
term of this lease unless, Landlord shall have substantially completed repairs
prior to the expiration of such thirty day period.

14.  CONDEMNATION
     ------------

If the whole or a substantial part of the Premises shall be taken for any public
or quasi-public use, under any statute or by right of eminent domain or private
purchase in lieu thereof by a public body vested with the power of eminent
domain, then, when possession shall be taken thereunder of the Premises, or any
part thereof, the term herein demised and all rights of Tenant hereunder shall
immediately cease and terminate, and the rent shall be adjusted as of the time
of such termination. The termination shall be without prejudice to the rights of
either Landlord or Tenant to recover compensation from the condemning authority
for any loss or damage caused by the condemnation. Neither Landlord nor Tenant
shall have any rights in or to any award made to the other by the condemning
authority. If, after any condemnation and taking of a part of the Premises, the
remainder of the Premises is suitable, in the reasonable opinion of Tenant, for
continuation of the business of Tenant, this Lease shall not terminate but the
rent and additional rent payable shall abate to the extent to which the Premises
have been reduced by the taking. If the remainder is not so suitable, then
Tenant may terminate this Lease by notice effective as of the date of the
taking. In the event that any repair or rebuilding is necessary to restore the
Premises to a proper condition for the Tenant's use, the costs of such repair or
rebuilding shall be paid by the Landlord, except for costs of replacing trade
fixtures, equipment, furnishings and other elements of the Premises not
originally famished the Tenant by Landlord, which costs shall be paid by Tenant.

15.  RELEASE FROM LIABILITY IF UNABLE TO PERFORM
     -------------------------------------------

In case Landlord is prevented from making any repairs, decorations or installing
any fixtures or articles of equipment, or performing any other covenant or duty,
whether expressed herein or implied, to be performed on Landlord's part, due to
the Landlord's inability to obtain, or

                                       12
<PAGE>

difficulty in obtaining, labor or materials necessary thereof, or due to any
governmental rules or regulations relating to the priority of national defense
requirements or due to any other cause beyond Landlord's control, Landlord shall
not be liable to Tenant for damages resulting therefrom; 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; provided, however,
that Landlord's time to perform shall only be delayed for the period of force
majeure, and Landlord shall give Tenant prompt notice of any occasion of force
majeure which is expected to affect Landlord's fulfillment of any period of
performance hereunder.

16.  INSURANCE
     ---------

     (A). Tenant covenants and agrees, at its sole cost and expense, throughout
the duration of this Lease, to obtain, keep and maintain in full force and
effect for the mutual benefit of Landlord and Tenant, comprehensive liability
insurance claims for damage to persons or property arising out of the use and
occupancy of the Premises or any part or parts in limits not less than One
Million Dollars, ($1,000,000.00) for a combined single limit bodily injury,
property damage policy. Such public liability policy or policies shall name
Landlord as an additional insured. Tenant will supply Landlord with certificates
of insurance evidencing the term of this Lease prior to taking occupancy.

     (B). All insurance provided for in this paragraph 16 may be in the form of
a general coverage, floater policy or so called blanket policies which may be
furnished by Tenant, or the parent corporation of Tenant or any related entity.

     (C). Landlord shall keep the building containing the Premises insured
against loss or damage by fire with extended coverage endorsement in an amount
not less than 80% of the full insurable value thereof. Tenant agrees to pay its
proportionate share of the cost of said insurance during the term hereof. Said
proportionate share shall be determined by multiplying the cost of said
insurance by a fraction, the numerator of which shall be the square foot area of
the Premises and the denominator the total rentable square foot area of the
building of which the Premises are a part. A statement of the cost of said
insurance shall be rendered to Tenant and shall be payable on or before the end
of the month in which said statement is rendered.

                                       13
<PAGE>

17.  INDEMNITY
     ---------

Except as otherwise provided in Article 13 hereof, Tenant shall indemnify
Landlord against any expense, loss or liability paid, suffered or incurred as
the result of any breach by Tenant, Tenant's agents, servants, employees,
contractors, invitees or licensees, of any covenant or condition of this Lease,
or the carelessness, negligence or improper conduct of Tenant, Tenant's agents,
servants, employees, contractors or invitees. Tenant's liability under this
Lease extends to the acts and omissions of any sub-tenant, and any agent,
servant, employee, invitee or licensee of any such sub-tenant. Except as
otherwise provided in Articles 13 and 18 hereof, Landlord shall indemnify Tenant
against any expense, loss or liability paid, suffered or incurred as a result of
any breach by Landlord, Landlord's agents, servants, employees, contractors,
invitees or licensees, of any covenant or condition of this Lease, or the
carelessness, negligence or improper conduct of Landlord, Landlord's agents,
servants, employees, contractors or invitees.

18.  WAIVER OF SUBROGATION
     ---------------------

Tenant hereby releases Landlord from any and all liability for any loss or
damage caused by fire, or other casualty to the property of Tenant on the
Premises or the contents of the Premises even if such fire or other causality
shall be brought about by the fault or negligence of Landlord or its agents.

19.  MECHANIC'S LIEN
     ---------------

Tenant shall not do or suffer anything to be done whereby the Premises may be
encumbered by any mechanic's lien and shall, whenever and as often as any
mechanic's lien is filed against the Premises for labor or material furnished or
to be furnished to Tenant, discharge the same of record within thirty (30) days
after the date of filing. Notice is hereby given that Landlord shall not be
liable for any labor or materials furnished or to be furnished to Tenant upon
credit; and that no mechanic's or other lien for any such labor or materials
shall attach to or affect the reversionary or other estate or interest of
Landlord in and to the Premises herein demised.

20.  DEFAULT CLAUSE
     --------------

Each of the following shall be deemed a default by Tenant and a breach of this
Lease:

                                       14
<PAGE>

     (A). A default in the payment of the rent herein reserved, or any part
thereof, for a period of ten (10) days after written notice delivered to the
Tenant.

     (B). Default in the performance of any other covenant or condition of this
Lease on the part of Tenant to be performed for a period of thirty (30) days
after service of notice thereof by Landlord on Tenant, provided however, that if
the nature of Tenant's default is such that it cannot be cured solely by payment
of money and that more than thirty (30) days may be reasonably required for such
cure, then Tenant shall not be deemed to be in default if Tenant shall

[PAGE 14 OF ORIGINAL MISSING]

21.

22.

23.

24.

     (A). An amount equal to all expenses, if any, including reasonable counsel
fees incurred by the Landlord in recovering possession of the Premises, and all
reasonable costs and charges for the care of said Premises while vacant, not
otherwise the obligation of Landlord. which damages shall be due and payable by
Tenant to Landlord at such time or times as such expenses are incurred by
Landlord; and

     (B). An amount equal to the amount of all rent and additional rent reserved
under this Lease, less the net rent, if any, collected by Landlord on reletting
the Premises, which shall be immediately due and payable by Tenant to Landlord
and Landlord shall be entitled thereupon to recover same from Tenant on the
several days on which the rent and additional rent reserved in this Lease would
have become due and payable; that is to say, upon each of such days Tenant shall
pay to Landlord the amount of deficiency then existing. Such net rent collected
on reletting by Landlord shall be computed by deducting from the gross rents
collected all reasonable expenses incurred by the Landlord in connection with
the reletting, but shall not include the cost of performing any covenant
contained in Article 24.

                                       15
<PAGE>

Without any previous notice or demand, separate actions may be maintained by
Landlord against Tenant from time to time to recover any damages, which, at the
commencement of any such action, have then or theretofore become due and payable
to Landlord under Article 24, without waiting until the end of the original
Lease Term.

25.  COVENANTS INDEPENDENT
     ---------------------

Each and every covenant contained in this Lease shall be deemed separate and
independent, and not dependent on other provisions of this Lease or the use and
occupation of the Premises b3 Tenant, and the performance of any such covenant
shall not be considered to be rent or other payment for the use of said
Premises.

26.  LANDLORD MAY CURE DEFAULTS
     --------------------------

In the event of any breach hereunder by Tenant, Landlord shall have the right to
cure such breach for the account and at the expense of Tenant. However, Landlord
shall give Tenant prior written notice of its intention to exercise its said
right hereunder and a reasonable opportunity to cure and such breach. If
Landlord at any time, by reason of such breach, is compelled to pay, or elects
to pay, any sum of money or do any act which will require the payment of any sum
of money, or is compelled to incur any expense, including reasonable attorney's
fees, in instituting, prosecuting and/or defending any action or proceeding to
enforce Landlord's rights hereunder, the sum o: sums so paid by Landlord, with
all interest, and costs, shall be deemed to be additional rent hereunder and
shall be due from Tenant to Landlord on the first day of the month following the
incurring of such respective expenses.

27.  REAL ESTATE TAXES AND ASSESSMENTS
     ---------------------------------

     (A). Tenant shall in all instances, pay as additional rent a portion of all
real estate taxes including extraordinary and/or special assessments (and all
costs and fees incurred by Landlord in contesting the fees) which may be levied
or assessed by apparent lawful taxing authority .against the land, building and
all other improvements of which the Premises are a part. Such portion shall be
determined as follows: the Tenant shall pay that portion of such taxes as shall
be equal to the product obtained by multiplying said taxes by a fraction, the
numerator of which shall be the square foot area of the Premises and the
denominator the total rentable square feet of the building of which the Premises
are a part. Statement of such additional rent, including all

                                       16
<PAGE>

taxes levied or assessed in each calendar year, shall be rendered to Tenant and
shall be paid on or before the end of the month in which the statement is
rendered. A tax bill submitted to Tenant shall be conclusive evidence of the
amount of taxes assessed or levied. Such additional rent attributable to the
year in which the term of this lease terminates shall be apportioned from the
date of the commencement of the term of this lease to the end of the calendar
year in which the lease commences or from the beginning of the calendar year in
which this lease terminates to the date of the termination of the term of this
Lease as the case may be and shall be paid within five (5) days after demand
therefore. Each tax or assessment levied during the calendar years in which this
lease commences and terminates shall be included in the computation of Tenant's
portion regardless of the date of the commencement or termination of the term of
this lease.

     (B). Tenant shall pay before delinquency any and all taxes, assessments,
license fees and public charges levied, assessed or imposed and which become
payable during the lease term upon leasehold improvements, fixtures, furniture,
appliances and personal property installed or located in or on the Premises. If
any such taxes, assessments, license fees, or public charges are not levied,
assessed or imposed separately upon such property, a fair and equitable
allocation of such taxes, assessments, license fees or public charges shall be
made between such property included in the same tax assessment or other bill.

28.  LATE CHARGES
     ------------

A charge equivalent to five percent (5%) of the payment amount will be due for
any rent received after the 7th day of the month. Notwithstanding the above
charges, this Lease shall be considered in default if payment is not received
when due following notice to Tenant as provided hereunder.

29.  COMMON AREAS
     ------------

     (A). Common areas and facilities furnished by Landlord shall include
parking area, access driveways, and such other areas, facilities, and exterior
utilities as may be furnished by Landlord and designated for the benefit of the
Tenants, all of which areas and facilities shall be subject to exclusive control
and management by Landlord. Landlord shall have the right from time to time to
establish, modify and enforce all reasonable rules and regulations in respect to
such areas, facilities and exterior utilities and use thereof.

                                       17
<PAGE>

     (B). Tenant shall pay to Landlord as additional rent a portion (as
determined pursuant to Paragraph (C) hereof) of each year's cost of the snow
plowing for the parking areas and sidewalks, landscaping, lawn maintenance,
driveway maintenance and exterior utilities.

     (C). At the termination of each maintenance year for snow plowing,
landscaping, lawn maintenance, driveway maintenance and exterior utilities, the
Landlord shall submit to Tenant a statement of the operating cost for such
services. Tenant shall pay as Tenant's portion of annual operation cost of the
common area an amount equal to the product obtained by multiplying the estimate
by a fraction, the numerator of which is the square foot area of the Premises
demised by this Lease and the denominator of which is the square foot area of
the total leasable area of the building of which the Premises are a part.

30.  HOLDING OVER
     ------------

Any holding over after the expiration of the term hereof, with the consent of
the Landlord, shall be construed to be a tenancy from month to month at the
rents herein specified (pro-rated on a monthly basis) and shall otherwise be on
the terms and conditions herein specified so far as applicable.

31.  BANKRUPTCY
     ----------

In order to more effectively secure to the Landlord the rent and other terms
herein provided, it is agreed as. a further condition of this Lease that the
filing of any petition in bankruptcy, or assignment for the benefit of creditors
by or against the Tenant or any guarantor of Tenant's obligations hereunder
shall be deemed to constitute a breach of this Lease, and thereupon ipso facto
and without entry or any other action by the Landlord this Lease shall become
and be terminated and notwithstanding any other provision of this Lease the
damages for such breach in an amount equal to the amount of the rent reserved in
this Lease for the residue to the term hereof, less the fair rental value of the
Premises for the residue of said term plus all costs of resenting.

32.  SIGNS
     -----

Tenant shall not place, erect or install any signs on the outside or the inside
or upon the roof of the building or allow printed displays or show window
lettering in such manner as to be seen

                                       18
<PAGE>

from the exterior of building without prior written approval by Landlord.
Landlord grants approval for signage displayed on the inside windows of the
demised premises. Any such sign permitted shall comply with sign regulations
which shall be established by Landlord. All such signs shall be maintained in
good and safe condition and appearance by the Tenant at its own expense. Tenant
shall repair damage to the Premises, either inside or outside, resulting from
the erection, maintenance or removal of said signs.

33.  VENDING MACHINES
     ----------------

Tenant may, if Tenant so elects, install on the Premises and operate vending
machines to dispense hot and cold beverages, ice cream, candy and cigarettes.
Such machines shall be maintained in a neat and sanitary condition and shall
comply with all applicable laws and ordinances. Any contract entered into by
Tenant with third parties or the installation and/or maintenance of such vending
machines shall provide that Landlord shall have no liability in connection
therewith.

34.  RULES
     -----

In the event that Landlord receives written notification that the Premises do
not conform to applicable requirements of law, requirements of duly constituted
authority, or any Board of Underwriters, Landlord shall cause the Premises to be
brought into compliance with said laws or regulations. In the event that Tenant
receives written notice that it is not in full compliance with all applicable
statutes, ordinances, rules and regulations pertaining to Tenant's use of the
Premises, or to any Tenant's alterations or additions to the Premises, then
Tenant shall fully comply with all such applicable statutes or rules. In each
instance, the noticed party shall perform the required work at its own cost and
expense.

35.  REMEDIES CUMULATIVE
     -------------------

The rights given to Landlord herein are in addition to any rights that may be
given to Landlord by any statute or otherwise.

36.  WAIVER OF RIGHT OF REDEMPTION
     -----------------------------

Tenant, for itself and for all persons claiming through or under it, hereby
expressly waives any and all rights which are or may be conferred upon Tenant by
a present or future law to redeem

                                       19
<PAGE>

said Premises, or to any new trial in any action of ejectment under any
provision of law, after re-entry thereupon by Landlord. If Landlord shall
acquire possession of said Premises by summary proceedings, or in any other
lawful manner without judicial proceedings, it shall be deemed a re-entry within
the meaning of that word as used in this Lease.

37.  SECURITY DEPOSIT
     ----------------

Tenant has deposited with Landlord the sum of $15,000.00 as security for the
faithful performance and observance by Tenant of the teens, provisions and
conditions of this Lease; it is agreed that in the event Tenant defaults in
respect of any of the terms, provisions and conditions of this Lease, including,
but not limited to, the payment of rent and additional rent, Landlord may at its
option use, apply or retain the whole or any part of the security so deposited
to the extent required for the payment of any rent and additional rent or any
sum as to which Tenant is in default or for any sum which Landlord may expend or
may be required to expend by reason of Tenant's default in respect of any of the
terms, covenants and conditions of this Lease, including but not limited to, any
damages or deficiency in the relating of the Premises whether such damages or
deficiency accrued before or after summary proceedings or other re-entry by
Landlord. Landlord shall deposit the security into an interest bearing account
in a bank to be selected, from time to time, by Landlord in its sole discretion
(with interest at the rate payable generally by commercial banks in Rochester,
New York, from time to time on lease security commercial accounts), which
account shall be separate from Landlord's funds and shall be designated as
Tenant's security deposit account. Landlord agrees to hold the said security in
such an account for the entire Lease Term, subject, however, to the terms of
this Article with respect to the application of such security in the event of
Tenant's default hereunder. To the extent permitted by law, Tenant agrees that
Landlord shall be entitled to receive and retain, as an administrative fee, a
sum equal to one (1%) percent per annum upon the security, and Landlord shall
have the right to withdraw such sum from time to time as Landlord shall
determine, in its sole discretion. The balance of the interest earned on such
security shall be paid to Tenant at least once during each year of the Lease
Term hereof, upon the request of Tenant. In the event that Tenant shall fully
and faithfully comply with all of the terms, provisions, covenants and
conditions of this Lease, the security shall be returned, without interest, to
Tenant after the date fixed as the end of the Lease and within a reasonable time
after delivery of entire possession of

                                       20
<PAGE>

the demised Premises to Landlord. In the event of a sale of the land and
building or leasing of the buildings, of which the demised Premises form a part,
Landlord shall have the right to transfer the security to the vendee or lessee,
and Landlord shall thereupon be released by Tenant from all liability for the
return of such security; and Tenant agrees to look to the new Landlord solely
for the return of said security; and it is agreed that the provisions hereof
shall apply to every transfer or assignment made of the security to a new
Landlord. Tenant further covenants that it will not assign or encumber or
attempt to assign or encumber the movies deposited herein as security and that
neither Landlord nor its successors or assigns shall be bound by any such
assignment, encumbrance, attempted assignment or attempted encumbrance.

38.  SUBORDINATION TO MORTGAGES
     --------------------------

This lease is and shall be subject and subordinate to any mortgage or mortgages
and to any extensions or modifications thereof now in force or which shall at
any time be placed upon the Premises or any part thereof or the building of
which the Premises is a part of. The Tenant agrees that it will, upon demand,
execute and deliver such instruments as necessary to effect more fully such
subordination of this lease to the lien of any such mortgage or mortgages as
shall be desired by any mortgagee or proposed mortgagee and in the event of the
failure of the lessee to execute such instrument, the Lessee hereby nominates
and appoints the Lessor attorney-in-fact for the purpose of executing any such
instrument of subordination.

39.  COVENANT OF QUIET ENJOYMENT
     ---------------------------

If and so long as Tenant pays the rent and additional rent reserved by this
Lease, and performs and observes all the covenants and provisions hereof, Tenant
shall quietly enjoy the Premises, subject, however, to the terms of this Lease.
This covenant shall be construed as a covenant running with the land and shall
not be construed as a personal covenant of Landlord, but is subject to the
provisions of Article 41 of this Lease respecting transfer of Landlord's
interest.

40.  ENTIRE AGREEMENT
     ----------------

This instrument contains all the agreements and conditions made between the
parties hereto and supersedes all prior or other leases, agreements and
representations in connection with the Premises and may not be modified orally
or in any other manner than by an agreement in writing, signed by all the
parties hereto or their respective successors in interest. The receipt of

                                       21
<PAGE>

rent by Landlord, with knowledge of any breach of this Lease by Tenant or of any
default on the part of Tenant in this observance or performance of any of the
conditions or covenants of this Lease shall not be deemed to be a waiver of any
provision of this Lease. If the Tenant makes any payment of any amount less than
that due hereunder, Landlord, without notice, may accept the same as a payment
on account; Landlord shall not be bound by any notation on any check involving
such payment or any statement in any accompanying letter. No failure on the part
of Landlord to enforce any covenant herein contained nor any waiver of any right
thereunder by Landlord, unless in writing, shall discharge or invalidate such
covenant or provision or affect that right of Landlord to enforce the same in
the event of any subsequent breach or default. The receipt by Landlord of rent
or any other sum of money or any other consideration hereunder paid by Tenant
after the termination, in any matter of the term herein demised shall not
reinstate, continue extend the term demised or destroy 1 in manner impair the
efficiency of any such notice of termination as may have been give hereunder by
Landlord or Tenant prior to the receipt of any such sum of money or other
consideration, unless so agreed to in writing and signed by Landlord. Neither
acceptance of the keys nor any other act or thing done by Landlord or any agent
or employee during the term herein demised shall be deemed to be an acceptance
of a surrender of said Premises, excepting only an agreement in writing signed
by Landlord accepting or agreeing to accept such a surrender.

41.  EFFECT OF CONVEYANCE
     --------------------

The term "Landlord" as used in this Lease, means only the owner for the time
being of the Premises so that, in the event of any sale of the Premises or in
the event of a lease by Landlord of the Premises subject to this Lease or
assignment by Landlord of this Lease, and the security deposited hereunder
Landlord shall be and hereby is entirely freed and relieved of all covenants and
obligations of the Landlord hereunder arising subsequent to any such transfer
and provided any such transferee assumes in writing the obligations of Landlord
hereunder and a copy of such assumption is delivered to Tenant, and it shall be
deemed and construed without further agreement between the parties or between
the parties and the purchaser at any such sale or the new lessee of the Premises
or assignee of this Lease that such purchaser or said new lessee, or said
assignee has assumed and agreed to carry out any and all covenants and
obligations of Landlord hereunder. If any landlord named herein be acting in a
fiduciary or representative

                                       22
<PAGE>

capacity, the termination, in whole or in part, of such capacity shall be deemed
a transfer within the meaning of this paragraph.

42.  TOWN REGULATIONS AND OBLIGATIONS
     --------------------------------

Tenant shall have full responsibility of complying with all Town regulations
including but not limited to, use as described by zoning ordinances etc;
provided, however, that Landlord warrants (i) that the Building Premises as
delivered to Tenant in accordance with Article 8 hereof are in conformity with
all said building and zoning ordinances and all applicable Federal Ordinances
such as the Americans With Disabilities Act, and any violation thereof noted
after the Commencement Date (and not caused by any alteration of Tenant) shall
be cured at Landlord's sole cost and expense, and (ii) that the approved use of
the Premises is permitted by said zoning ordinances and the certificate of
occupancy for the building containing the Premises so provides.

43.  CONSTRUCTION OF LEASE
     ---------------------

Words of any gender used in the Lease shall be held to include any other gender,
and words in the singular number shall be held to include the plural, when the
sense requires. Consents required of Landlord hereunder shall not be
unreasonably withheld or delayed.

44.  MARGINAL NOTES
     --------------

The marginal notes as to contents of particular paragraphs herein are inserted
only for convenience and are in no way to be constructed as a part of this Lease
or as a limitation on the scope of the particular paragraphs to which they
refer.

45.  RIGHTS OF SUCCESSORS AND ASSIGNS
     --------------------------------

The covenants and agreements contained in the within Lease shall apply to, enure
to the benefit of, and be binding upon the parties hereto and upon their
respective successors in interest and legal representatives, except as expressly
otherwise hereinabove provided.

46.  ENVIRONMENTAL LAWS
     ------------------

     (A).   Tenant covenants and agrees as follows:

                                       23
<PAGE>

            (1).  Tenant shall keep the Premises free of all Hazardous
Substances and shall not cause or permit the Premises or any part thereof to be
used for the treatment, generation, transportation, processing, production,
disposal, storage or handling of any hazardous substances, and shall promptly
remove from the Premises and shall dispose of all Hazardous Substances by-
products, arising from Tenant's use of the Premises, in compliance with all
applicable Environmental Laws.

            (2).  Tenant shall comply with all applicable Environmental Laws and
shall obtain and comply with all Environmental Permits relating to Tenant's use
of the demised premises.

            (3).  Tenant shall not cause or permit any change to be made in the
present or intended use of the demised premises which would (1) involve the
storage, treatment, generation, transportation, processing, handling, production
or disposal of any Hazardous Substance or the use of the demised premises as a
landfill or other waste disposal site or for military, manufacturing or
industrial purposes or for the storage of petroleum or petroleum based products,
(2) violate any applicable Environmental Law, (3) constitute non-compliance with
any Environmental Permit or (4) increase the risk of a release of any Hazardous
Substance.

            (4).  Tenant shall promptly provide Landlord with a copy of all
notifications which it gives or receives with respect to any past or present
release or the threat of a release of any Hazardous Substance on, at or from the
demised premises given by or on behalf of Tenant to any federal, state or local
governmental agencies or authorities or received by or on behalf of Tenant from
any source whatsoever.

            (5).  Tenant shall undertake and complete all investigations,
studies, sampling and testing and all removal and other remedial actions
necessary to contain, remove and clean up all Hazardous Substances that are
determined to be present at the demised premises, arising from Tenant's use of
the demised premises, in accordance with all applicable Environmental Laws and
all Environmental Permits.

            (6).  Tenant shall at all times allow Landlord and its officers,
employees, agents, representatives, contractors and subcontractors reasonable
access to the demised premises for the purpose of ascertaining site conditions,
including, but not limited to, subsurface conditions.

                                       24
<PAGE>

            (7).  If at any time Tenant obtains any evidence or information
which suggests that potential environmental problems may exist at the demised
premises arising from Tenant's use of the demised premises, Landlord may require
that a full or supplemental environmental inspection and audit report with
respect to the demised premises of a scope and level of detail satisfactory to
Landlord be prepared by an environmental engineer or other qualified person
acceptable to Landlord, at Tenant's sole cost and expense. If said audit report
indicates the presence of any Hazardous Substance or a release or the threat of
a release on, at or from the demised premises arising from Tenant's use of the
demised premises, Tenant shall promptly undertake and diligently pursue to
completion all necessary, appropriate and legally authorized investigative,
containment, removal, clean up and other remedial action, using methods
recommended by the environmental engineer or other person who prepared said
audit report and acceptable to the appropriate federal, state and local
regulatory authorities.

     (B).   Tenant covenants and agrees, at its sole cost and expense, to
indemnify, protect, defend and save harmless Landlord from and against any and
all damages, losses, liabilities, obligations, penalties, claims, litigation,
demands, defenses, judgments, suits, actions, proceedings, costs, disbursements
and/or expenses (including, without limitation, attorneys' and experts' fees,
expenses and disbursements) of any kind or nature whatsoever which may at any
time be imposed upon, incurred by or asserted or awarded against Landlord and
Tenant relating to, resulting from or arising out of (i) Tenant's use of the
demised premises for the storage, treatment, generation, transportation,
processing, handling, production or disposal of any Hazardous Substance or as a
landfill or other waste disposal site or for military, manufacturing or
industrial purposes or for the storage of petroleum or petroleum based products,
(ii) the presence of any Hazardous Substance or a Release or the threat of a
release on, at or from the demised premises arising from Tenant's use of the
demised premises, (iii) the failure to promptly undertake and diligently pursue
to completion all necessary, appropriate and legally authorized investigative,
containment, removal, clean up and other remedial actions with respect to a
Release or the threat of a Release on, at or from the demised premises arising
from Tenant's use of the demised premises, (iv) human exposure to any Hazardous
Substance, noises, vibrations or nuisances of whatever kind to the extent the
same arise from the use and operation of the demised premises, (v) a violation
by Tenant of any applicable Environmental Law, (vi) non-compliance by Tenant
with any Environmental Permit or (vii) a material misrepresentation or

                                       25
<PAGE>

inaccuracy in any representation or warranty or a material breach of or failure
to perform any covenant made by Tenant in this Paragraph 46.

     (C).   All capitalized terms used in this Section and not heretofore
defined shall have the meanings set forth below.

     "Environmental Laws" means all federal, state and local environmental, land
      ------------------
use, zoning, health, chemical use, safety and sanitation laws, statutes,
ordinances and codes relating to the protection of the Environment and/or
governing the use, storage, treatment, generation, transportation, processing,
handling, production or disposal of hazardous substances and the rules,
regulations, policies, guidelines, interpretations, decisions, orders and
directives of federal, state and local governmental agencies and authorities
with respect thereto.

     "Environmental Permits" means all permit, licenses, approvals,
      ---------------------
authorizations, consents or registrations required by any applicable
Environmental Law in connection with the ownership, use and/or operation of the
demised premises for the storage, treatment, generation, transportation,
processing, handling, production or disposal of hazardous substances or the
sale, transfer or conveyance of the demised premises.

     "Hazardous Substance" means, without limitation, any flammable explosive,
      -------------------
radon, radioactive materials, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyl's, petroleum and petroleum products, methane, hazardous
materials, hazardous wastes, hazardous or toxic substances or related materials,
as defined in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), the
                                                           ------
Hazardous Materials Transportation Act, as amended (49 U.S.C. Section 1801, et
                                                                            --
seq.),the Resource Conservation and Recovery Act, as amended (42 U.S.C. Section
---
6901, et seq.), the Toxic Substances Control Act, as amended (15 U.S.C. Section
      ------
2601, et seq.), Articles 15 and 27 of the New York State Environmental
      ------
Conservation Law or any other applicable Environmental Law and the regulations
promulgated thereunder.

     "Release" has the same meaning as given to that term in the Comprehensive
      -------
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Section 9601, et seq.), and the regulations promulgated thereunder.
                     ------

     (D).   Landlord makes no warranties or representations with respect to the
condition of the demised premises, except that Landlord warrants and represents
that it has no knowledge of

                                       26
<PAGE>

any violation of any Environmental Laws or Environmental Permits affecting the
demised premises. In the event of any violation of Environmental Laws or
Environmental Permits for one or more conditions existing at the Building Prior
to the Commencements Date but noted or issued thereafter, Landlord agrees that
Landlord shall be responsible for the cure and/or redemption thereof at
Landlord's sole cost and expense.

47.  NOTICES
     -------

All notices given under this Lease by either party must be in writing and
delivered to an officer, principal, employee or agent of the party being given
notice to or at the address of that party as stated below, or any address
subsequently provided -by such party to the other in writing as the address for
notices, in any one of the following ways: (1) personal service, (2) by any
nationally recognized courier service which provides written evidence of
delivery, or (3) shall be sent by registered mail, return receipt requested, to
the following addresses:

                                   LANDLORD
                                   --------

                            Mr. Richard R. LeFrois
                           1020 Lehigh Station Road
                                 P.O. Box 230
                           Henrietta, New York 14467

                                    TENANT
                                    ------

                     Mr. John W. Dobbertin, VP. of Finance
                            IMPCO Enterprises, Inc.
                            1200 University Avenue
                           Rochester, New York 14607

Any notice shall be considered to have been given, in the case of letter, at
5:00 p.m. local time on the date set forth on the post mark appearing on the
envelope. Such notice shall be deemed to be effective upon receipt, regardless
of the method of delivery, as evidence by affidavit of service (if served
personally) or the return receipt provided by the U.S. Postal Service or
nationally recognized courier.

48.  PAYMENTS
     --------

All payments shall be sent by to the following address:

                                       27
<PAGE>

                                   PAYMENTS
                                   --------

                            Mr. Richard R. LeFrois
                                P.O. Box 92878
                              Department No. 102
                           Rochester, New York 14692

49.  CONSTRUCTION AND VENUE
     ----------------------

This Lease shall be construed and enforced in accordance with the internal laws
of the State of New York without reference to the principles of conflicts of
laws. Any suite which may be brought to interpret or enforce any of the terms or
obligations of a party hereunder shall be brought in State Supreme Court, Monroe
County, New York.

50.  BROKER
     ------

Landlord and Tenant each represent to the other that each has not had any
dealing with any broker, agent or finder in connection with this Lease, other
than Landlord's engagement of Pyramid Brokerage Company of Rochester, and
Landlord and Tenant each agree to hold the other harmless from and indemnify the
other against any cost, expense or liability for any compensations, commission,
fee charge or damages, including reasonable attorneys' fees an expenses, as a
result of any claim of any other broker, agent or finder claiming under or
through the indemnifying party with respect to this Lease or the negotiation of
this Lease; provided that the Landlord shall pay all fees to Pyramid Brokerage
Company of Rochester pursuant to the terms, covenants and conditions of a
separate agreement.

                                       28
<PAGE>

IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease as of the
day and year first above written.

                               Richard R. LeFrois

LANDLORD                       By: /s/ Richard R. LeFrois
                                   --------------------------------------------
                                   Mr. Richard R. LeFrois, Landlord

                                   7-1-98
                                   --------------------------------------------
                                   Date

WITNESS                            /s/ Wendy W
                                   --------------------------------------------

                                   7-1-98
                                   --------------------------------------------
                                   Date

                            IMPCO ENTERPRISES, INC.
                        A Subsidiary of Webcraft, Inc.

LANDLORD                       By: /s/ John W. Dobbertin
                                   --------------------------------------------
                                   John W. Dobbertin, V.P. of Finance

                                   7-1-98
                                   --------------------------------------------
                                   Date

WITNESS                            /s/ Wendy W.
                                   --------------------------------------------

                                   7-1-98
                                   --------------------------------------------
                                   Date

                                       29

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