Document:

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                                                                   EXHIBIT 10.5

                              AMENDED AND RESTATED
                             DIGITAL ON-DEMAND, INC.
                        1998 GENERAL STOCK INCENTIVE PLAN

                   (AS ADOPTED AND EFFECTIVE OCTOBER 26, 1998,
              AND AS AMENDED AND RESTATED EFFECTIVE APRIL 29, 1999)

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                                TABLE OF CONTENTS

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SECTION 1.  PURPOSE.............................................................................      1

SECTION 2.  DEFINITIONS.........................................................................      1
      (a)   "Award".............................................................................      1
      (b)   "Board of Directors"................................................................      1
      (c)   "Change in Control".................................................................      1
      (d)   "Code"..............................................................................      1
      (e)   "Committee".........................................................................      1
      (f)   "Common-Law Employee"...............................................................      1
      (g)   "Company"...........................................................................      2
      (h)   "Employee"..........................................................................      2
      (i)   "Exchange Act"......................................................................      2
      (j)   "Exercise Price"....................................................................      2
      (k)   "Fair Market Value".................................................................      2
      (l)   "Incentive Stock Option" or "ISO"...................................................      3
      (m)   "Nonstatutory Option" or "NSO"......................................................      3
      (n)   "Offeree"...........................................................................      3
      (o)   "Option"............................................................................      3
      (p)   "Optionee"..........................................................................      3
      (q)   "Outside Director" .................................................................      3
      (r)   "Participant".......................................................................      3
      (s)   "Plan"..............................................................................      3
      (t)   "Purchase Price"....................................................................      3
      (u)   "Restricted Share"..................................................................      3
      (v)   "Service"...........................................................................      3
      (w)   "Share".............................................................................      3
      (x)   "Stock".............................................................................      3
      (y)   "Stock Award Agreement".............................................................      3
      (z)   "Stock Option Agreement"............................................................      3
      (aa)  "Stock Purchase Agreement"..........................................................      3
      (bb)  "Subsidiary"........................................................................      4
      (cc)  "Total and Permanent Disability"....................................................      4
      (dd)  "W-2 Payroll".......................................................................      4

SECTION 3.  ADMINISTRATION......................................................................      4
      (a)   Committee Membership................................................................      4
      (b)   Committee Procedures................................................................      4
      (c)   Committee Responsibilities..........................................................      4
      (d)   Committee Liability.................................................................      5
      (e)   Financial Reports...................................................................      5

SECTION 4.  ELIGIBILITY.........................................................................      5
      (a)   General Rule........................................................................      5
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      (b)   Ten-Percent Shareholders............................................................      5
      (c)   Attribution Rules...................................................................      5
      (d)   Outstanding Stock...................................................................      5

SECTION 5.  STOCK SUBJECT TO PLAN...............................................................      5
      (a)   Basic Limitation....................................................................      5
      (b)   Additional Shares...................................................................      6

SECTION 6.  TERMS AND CONDITIONS OF AWARDS OR SALES.............................................      6
      (a)   Stock Purchase Agreement............................................................      6
      (b)   Duration of Offers..................................................................      6
      (c)   Purchase Price......................................................................      6
      (d)   Payment for Shares..................................................................      6
            (i)   Surrender of Stock............................................................      6
            (ii)  Promissory Notes..............................................................      7
            (iii) Cashless Exercise.............................................................      7
            (iv)  Other Forms of Payment........................................................      7
      (e)   Exercise of Awards on Termination of Service........................................      7

SECTION 7.  ADDITIONAL TERMS AND CONDITIONS OF RESTRICTED SHARES................................      7
      (a)   Form and Amount of Award............................................................      7
      (b)   Exercisability......................................................................      7
      (c)   Effect of Change in Control.........................................................      8
      (d)   Voting Rights.......................................................................      8

SECTION 8.  TERMS AND CONDITIONS OF OPTIONS.....................................................      8
      (a)   Stock Option Agreement..............................................................      8
      (b)   Number of Shares....................................................................      8
      (c)   Exercise Price......................................................................      8
      (d)   Exercisability......................................................................      8
      (e)   Effect of Change in Control.........................................................      8
      (f)   Term................................................................................      8
      (g)   Exercise of Options on Termination of Service.......................................      9
      (h)   Payment of Option Shares............................................................      9
            (i)   Surrender of Stock............................................................      9
            (ii)  Promissory Notes..............................................................      9
            (iii) Cashless Exercise.............................................................      9
            (iv)  Other Forms of Payment........................................................      9
      (i)   No Rights as a Shareholder..........................................................     10
      (j)   Modification, Extension and Assumption of Options...................................     10

SECTION 9.  ADJUSTMENT OF SHARES................................................................     10
      (a)   General.............................................................................     10
      (b)   Reorganizations.....................................................................     10
      (c)   Reservation of Rights...............................................................     10
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SECTION 10. WITHHOLDING TAXES...................................................................     10
      (a)   General.............................................................................     10
      (b)   Share Withholding...................................................................     11
      (c)   Cashless Exercise/Pledge............................................................     11
      (d)   Other Forms of Payment..............................................................     11

SECTION 11. ASSIGNMENT OR TRANSFER OF AWARDS....................................................     11
      (a)   General.............................................................................     11
      (b)   Trusts..............................................................................     11

SECTION 12. LEGAL REQUIREMENTS..................................................................     11

SECTION 13. NO EMPLOYMENT RIGHTS................................................................     12

SECTION 14. DURATION AND AMENDMENTS.............................................................     12
      (a)   Term of the Plan....................................................................     12
      (b)   Right to Amend or Terminate the Plan................................................     12
      (c)   Effect of Amendment or Termination..................................................     12

SECTION 15. EXECUTION...........................................................................     13
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                              AMENDED AND RESTATED
                             DIGITAL ON-DEMAND, INC.
                        1998 GENERAL STOCK INCENTIVE PLAN

                   (AS ADOPTED AND EFFECTIVE OCTOBER 26, 1998,
              AND AS AMENDED AND RESTATED EFFECTIVE APRIL 29, 1999)

SECTION 1. PURPOSE.

      The purpose of the Plan is to offer selected employees, directors and
consultants an opportunity to acquire a proprietary interest in the success of
the Company, or to increase such interest, to encourage such selected persons to
remain in the employ of the Company and to attract new employees with
outstanding qualifications. The Plan seeks to achieve this purpose by providing
for Awards in the form of Restricted Shares and Options (which may constitute
Incentive Stock Options or Nonstatutory Stock Options) as well as the direct
award or sale of Shares of the Company's Common Stock. While this Plan is
intended to satisfy Section 25102(o) of the California Corporations Code, awards
may be granted under this Plan in reliance upon other state securities law
exemptions and to the extent another exemption is relied upon, the terms of this
Plan which are required only because of Section 25102(o), need not apply to the
extent provided by the Committee in the award agreement. This Plan amends and
restated in its entirety the Digital On-Demand, Inc. 1998 General Stock
Incentive Plan (as Adopted and Effective October 26, 1998).

SECTION 2. DEFINITIONS.

      (a) "Award" shall mean any award of an Option, Restricted Share or other
right under the Plan.

      (b) "Board of Directors" shall mean the Board of Directors of the Company,
as constituted from time to time.

      (c) "Change in Control" shall be defined by the Committee and provided for
in the Stock Purchase Agreements, Stock Option Agreements and Stock Award
Agreements. The term "Change in Control" shall not include a transaction the
sole purpose of which is to change the state of the Company's incorporation.

      (d) "Code" shall mean the Internal Revenue Code of 1986, as amended.

      (e) "Committee" shall mean a committee of the Board of Directors which is
authorized to administer the Plan under Section 3.

      (f) "Common-Law Employee" shall mean an individual paid from W-2 Payroll
of the Company or a Subsidiary. If, during any period, the Company (or
Subsidiary, as applicable) has not treated an individual as a Common-Law
Employee and, for that reason, has not paid such individual in a manner which
results in the issuance of a Form W-2 and withheld taxes with respect to him or
her, then such individual shall not be an eligible Employee for that period,
even

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if any person, court of law or government agency determines, retroactively, that
such individual is or was a Common-Law Employee during all or any portion of
that period.

      (g) "Company" shall mean Digital On-Demand, Inc., a California
corporation.

      (h) "Employee" shall mean (i) any individual who is a Common-Law Employee
of the Company or of a Subsidiary, (ii) a member of the Board of Directors,
including (without limitation) an Outside Director, or an affiliate of a member
of the Board of Directors, (iii) a member of the board of directors of a
Subsidiary or (iv) an independent contractor who performs services for the
Company or a Subsidiary. Service as a member of the Board of Directors, a member
of the board of directors of a Subsidiary or an independent contractor shall be
considered employment for all purposes of the Plan except the second sentence of
Section 4(a).

      (i) "Exchange Act" shall mean the Securities and Exchange Act of 1934, as
amended.

      (j) "Exercise Price" shall mean the amount for which one Share may be
purchased upon exercise of an Option, as specified by the Committee in the
applicable Stock Option Agreement.

      (k) "Fair Market Value" shall mean the market price of Shares, determined
by the Committee as follows:

            (i) If the Shares were traded over-the-counter on the date in
      question but were not traded on the Nasdaq Stock Market or the Nasdaq
      National Market System, then the Fair Market Value shall be equal to the
      mean between the last reported representative bid and asked prices quoted
      for such date by the principal automated inter-dealer quotation system on
      which the Shares are quoted or, if the Shares are not quoted on any such
      system, by the "Pink Sheets" published by the National Quotation Bureau,
      Inc.;

            (ii) If the Shares were traded over-the-counter on the date in
      question and were traded on the Nasdaq Stock Market or the Nasdaq National
      Market System, then the Fair Market Value shall be equal to the
      last-transaction price quoted for such date by the Nasdaq Stock Market or
      the Nasdaq National Market;

            (iii) If the Shares were traded on a stock exchange on the date in
      question, then the Fair Market Value shall be equal to the closing price
      reported by the applicable composite transactions report for such date;
      and

            (iv) If none of the foregoing provisions is applicable, then the
      Fair Market Value shall be determined by the Committee in good faith on
      such basis as it deems appropriate.

      In all cases, the determination of Fair Market Value by the Committee
shall be conclusive and binding on all persons.

      (l) "Incentive Stock Option" or "ISO" shall mean an employee incentive
stock option described in Code section 422(b).

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      (m) "Nonstatutory Option" or "NSO" shall mean an employee stock option
that is not an ISO.

      (n) "Offeree" shall mean an individual to whom the Committee has offered
the right to acquire Shares under the Plan (other than upon exercise of an
Option).

      (o) "Option" shall mean an Incentive Stock Option or Nonstatutory Option
granted under the Plan and entitling the holder to purchase Shares.

      (p) "Optionee" shall mean an individual or estate who holds an Option.

      (q) "Outside Director" shall mean a member of the Board who is "a
Non-Employee Director" as defined in Rule 16b-3 under the Exchange Act.

      (r) "Participant" shall mean an individual or estate who holds an Award.

      (s) "Plan" shall mean this Amended and Restated Digital On-Demand, Inc.
1998 General Stock Incentive Plan.

      (t) "Purchase Price" shall mean the consideration for which one Share may
be acquired under the Plan (other than upon exercise of an Option), as specified
by the Committee.

      (u) "Restricted Share" shall mean a Share sold or granted to an eligible
Employee which is nontransferable and subject to substantial risk of forfeiture
until restrictions lapse.

      (v) "Service" shall mean service as an Employee.

      (w) "Share" shall mean one share of Stock, as adjusted in accordance with
Section 9 (if applicable).

      (x) "Stock" shall mean the common stock of the Company.

      (y) "Stock Award Agreement" shall mean the agreement between the Company
and the recipient of a Restricted Share which contains the terms, conditions and
restrictions pertaining to such Restricted Share.

      (z) "Stock Option Agreement" shall mean the agreement between the Company
and an Optionee which contains the terms, conditions and restrictions pertaining
to his or her Option.

      (aa) "Stock Purchase Agreement" shall mean the agreement between the
Company and an Offeree who acquires Shares under the Plan which contains the
terms, conditions and restrictions pertaining to the acquisition of such Shares.

      (bb) "Subsidiary" shall mean any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A

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corporation that attains the status of a Subsidiary on a date after the adoption
of the Plan shall be considered a Subsidiary commencing as of such date.

      (cc) "Total and Permanent Disability" shall mean that the Optionee is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment.

      (dd) "W-2 Payroll" shall mean whatever mechanism or procedure that the
Company or a Subsidiary utilizes to pay any individual which results in the
issuance of Form W-2 to the individual. "W-2 Payroll" does not include any
mechanism or procedure which results in the issuance of any form other than a
Form W-2 to an individual, including, but not limited to, any Form 1099 which
may be issued to an independent contractor, an agency employee or a consultant.
Whether a mechanism or procedure qualifies as a "W-2 Payroll" shall be
determined in the absolute discretion of the Company (or Subsidiary, as
applicable), and the Company or Subsidiary determination shall be conclusive and
binding on all persons.

SECTION 3. ADMINISTRATION.

      (a) Committee Membership. The Plan shall be administered by the Committee
appointed by the Board of Directors. In the event the Company's Shares become
publicly traded, the Committee shall be comprised solely of two or more Outside
Directors (although Committee functions may be delegated to officers to the
extent the awards relate to persons who are not subject to the reporting
requirements of Section 16 of the Exchange Act). If no Committee has been
appointed, the entire Board shall constitute the Committee.

      (b) Committee Procedures. The Board of Directors shall designate one of
the members of the Committee as chairperson. The Committee may hold meetings at
such times and places as it shall determine. The acts of a majority of the
Committee members present at meetings at which a quorum exists, or acts reduced
to or approved in writing by all Committee members, shall be valid acts of the
Committee.

      (c) Committee Responsibilities. The Committee has and may exercise such
power and authority as may be necessary or appropriate for the Committee to
carry out its functions as described in the Plan. The Committee has authority in
its discretion to determine eligible Employees to whom, and the time or times at
which, Awards may be granted and the number of Shares subject to each Award.
Subject to the express provisions of the respective Award agreements (which need
not be identical), the Committee has authority to prescribe the terms and
conditions of each Award and to make all other determinations necessary or
advisable for Plan administration. The Committee has authority to prescribe,
amend and rescind rules and regulations relating to the Plan. All
interpretations, determinations, and actions by the Committee will be final,
conclusive and binding upon all persons.

      (d) Committee Liability. No member of the Board or the Committee will be
liable for any action or determination made in good faith by the Committee with
respect to the Plan or any Award made under the Plan.

      (e) Financial Reports. To the extent required by applicable law, and not
less often

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than annually, the Company shall furnish to Offerees, Optionees and shareholders
who have received Stock under the Plan its financial statements (including a
balance sheet regarding the Company's financial condition and a statement of its
results of operations), unless such Offerees, Optionees or shareholders have
duties with the Company that assure them access to equivalent information. Such
financial statements need not be audited.

SECTION 4. ELIGIBILITY.

      (a) General Rule. Only Employees shall be eligible for designation as
Participants by the Committee. In addition, only individuals who are employed as
Common-Law Employees by the Company or a Subsidiary shall be eligible for the
grant of ISOs.

      (b) Ten-Percent Shareholders. An Employee who owns more than ten percent
(10%) of the total combined voting power of all classes of outstanding stock of
the Company or any of its Subsidiaries shall not be eligible for designation as
an Offeree or Optionee unless (i) the Exercise Price for an ISO (and a NSO to
the extent required by applicable law) is at least one hundred ten percent
(110%) of the Fair Market Value of a Share on the date of grant, (ii) the
Purchase Price of Shares is at least one hundred percent (100%) of the Fair
Market Value of a Share on the date of grant and (iii) in the case of an ISO,
such ISO by its terms is not exercisable after the expiration of five years from
the date of grant.

      (c) Attribution Rules. For purposes of Subsection (b) above, in
determining stock ownership, an Employee shall be deemed to own the stock owned,
directly or indirectly, by or for his brothers, sisters, spouse, ancestors and
lineal descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be deemed to be owned
proportionately by or for its shareholders, partners or beneficiaries. Stock
with respect to which such Employee holds an Option shall not be counted.

      (d) Outstanding Stock. For purposes of Subsection (b) above, "outstanding
stock" shall include all stock actually issued and outstanding immediately after
the grant. "Outstanding Stock" shall not include shares authorized for issuance
under outstanding Options held by the Employee or by any other person.

SECTION 5. STOCK SUBJECT TO PLAN.

      (a) Basic Limitation. Shares offered under the Plan shall be authorized
but unissued Shares. Subject to Sections 5(b) and 9 of the Plan, the aggregate
number of Shares which may be issued or transferred pursuant to an Award under
the Plan shall not exceed 2,000,000 Shares.

      The number of shares that may be issued or transferred during any 12-month
period to any eligible Employee pursuant to an Award shall not exceed 250,000
Shares.

      In any event, (i) the number of Shares which are subject to Awards or
other rights outstanding at any time under the Plan shall not exceed the number
of Shares which then remain available for issuance under the Plan; and (ii) to
the extent an award is made in reliance upon the exemption available under
Section 25102(o) of the California Corporations Code, the number of Shares which
are subject to Awards or other rights outstanding at any time under the Plan or
otherwise shall not exceed the limitation imposed by Section 260.140.45 of the
Code of

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Regulations of the California Commissioner of Corporations. The Company, during
the term of the Plan, shall at all times reserve and keep available sufficient
Shares to satisfy the requirements of the Plan.

      (b) Additional Shares. In the event that any outstanding Option or other
right for any reason expires or is canceled or otherwise terminated, the Shares
allocable to the unexercised portion of such Option or other right shall again
be available for the purposes of the Plan. If a Restricted Share is forfeited
before any dividends have been paid with respect to such Restricted Share, then
such Restricted Share shall again become available for award under the Plan.

SECTION 6. TERMS AND CONDITIONS OF AWARDS OR SALES.

      (a) Stock Purchase Agreement. Each award or sale of Shares under the Plan
(other than upon exercise of an Option) shall be evidenced by a Stock Purchase
Agreement between the Offeree and the Company. Such award or sale shall be
subject to all applicable terms and conditions of the Plan and may be subject to
any other terms and conditions which are not inconsistent with the Plan and
which the Committee deems appropriate for inclusion in a Stock Purchase
Agreement. The provisions of the various Stock Purchase Agreements entered into
under the Plan need not be identical.

      (b) Duration of Offers. Any right to acquire Shares under the Plan (other
than an Option) shall automatically expire if not exercised by the Offeree
within 30 days after the grant of such right was communicated to the Offeree by
the Committee.

      (c) Purchase Price. The Purchase Price of Shares to be offered under the
Plan shall not be less than eighty-five percent (85%) of the Fair Market Value
of a Share on the date of grant, except as otherwise provided in Section 4(b)
(i.e., 100% for 10% shareholders). Subject to the preceding sentence, the
Purchase Price shall be determined by the Committee in its sole discretion. The
Purchase Price shall be payable in a form described in Subsection (d) below.

      (d) Payment for Shares. The entire Purchase Price of Shares issued under
the Plan shall be payable in lawful money of the United States of America at the
time when such Shares are purchased, except as provided below. Notwithstanding
any other provision of the Plan, Shares may, in the discretion of the Committee,
be awarded under the Plan in consideration of Service rendered to the Company or
a Subsidiary prior to the Award. Permissible forms of payment, in addition to
cash, are:

            (i) Surrender of Stock. To the extent that a Stock Purchase
      Agreement so provides, payment may be made all or in part with Shares
      which have already been owned by the Offeree or the Offeree's
      representative for any time period specified by the Committee and which
      are surrendered to the Company in good form for transfer. Such Shares
      shall be valued at their Fair Market Value on the date when the new Shares
      are purchased under the Plan.

            (ii) Promissory Notes. To the extent that a Stock Purchase Agreement
      so provides, payment may be made all or in part with a full recourse
      promissory note executed by the Offeree. The interest rate and other terms
      and conditions of such note

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      shall be determined by the Committee. The Committee may require that the
      Offeree pledge his or her Shares to the Company for the purpose of
      securing the payment of such note. In no event shall the stock
      certificate(s) representing such Shares be released to the Offeree until
      such note is paid in full.

            (iii) Cashless Exercise. To the extent that a Stock Purchase
      Agreement so provides and a public market for the Shares exists, payment
      may be made all or in part by delivery (on a form prescribed by the
      Committee) of an irrevocable direction to a securities broker to sell
      Shares and to deliver all or part of the sale proceeds to the Company in
      payment of the aggregate Exercise Price.

            (iv) Other Forms of Payment. To the extent provided in the Stock
      Purchase Agreement, payment may be made in any other form that is
      consistent with applicable laws, regulations and rules, including payment
      for past services.

      (e) Exercise of Awards on Termination of Service. Each Stock Award
Agreement shall set forth the extent to which the recipient shall have the right
to exercise the Award following termination of the recipient's Service with the
Company and its Subsidiaries. Such provisions shall be determined in the sole
discretion of the Committee, need not be uniform among all the Awards issued
pursuant to the Plan, and may reflect distinctions based on the reasons for
termination of employment.

SECTION 7. ADDITIONAL TERMS AND CONDITIONS OF RESTRICTED SHARES.

      (a) Form and Amount of Award. Each Stock Award Agreement shall specify the
number of Shares that are subject to the Award. Restricted Shares may be awarded
in combination with NSOs and such an Award may provide that the Restricted
Shares will be forfeited in the event that the related NSOs are exercised.

      (b) Exercisability. Each Stock Award Agreement shall specify the
conditions upon which Restricted Shares shall become vested, in full or in
installments. To the extent required by applicable law, each Stock Award shall
become exercisable no less rapidly than the rate of 20% per year for each of the
first five years from the date of grant. Subject to the preceding sentence, the
exercisability of any Stock Award shall be determined by the committee in its
sole discretion.

      (c) Effect of Change in Control. The Committee may determine at the time
of making an Award or thereafter, that such Award shall become fully vested in
the event that a Change in Control occurs with respect to the Company.

      (d) Voting Rights. Holders of Restricted Shares awarded under the Plan
shall have the same voting, dividend and other rights as the Company's other
shareholders. A Stock Award Agreement, however, may require that the holders
invest any cash dividends received in additional Restricted Shares. Such
additional Restricted Shares shall be subject to the same conditions and
restrictions as the Award with respect to which the dividends were paid. Such
additional Restricted Shares shall not reduce the number of Shares available
under Section 5.

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SECTION 8. TERMS AND CONDITIONS OF OPTIONS.

      (a) Stock Option Agreement. Each grant of an Option under the Plan shall
be evidenced by a Stock Option Agreement between the Optionee and the Company.
Such Options shall be subject to all applicable terms and conditions of the Plan
and may be subject to any other terms and conditions which are not inconsistent
with the Plan and which the Committee deems appropriate for inclusion in a Stock
Option Agreement. The provisions of the various Stock Option Agreements entered
into under the Plan need not be identical.

      (b) Number of Shares. Each Stock Option Agreement shall specify the number
of Shares that are subject to the Option and shall provide for the adjustment of
such number in accordance with Section 9. The Stock Option Agreement shall also
specify whether the Option is an ISO or a Nonstatutory Option.

      (c) Exercise Price. Each Stock Option Agreement shall specify the Exercise
Price. The Exercise Price of an ISO shall not be less than one hundred percent
(100%) of the Fair Market Value of a Share on the date of grant, except as
otherwise provided in Section 4(b). To the extent required by applicable law and
except as otherwise provided in Section 4(b), the Exercise Price of a
Nonstatutory Option shall not be less than eighty-five percent (85%) of the Fair
Market Value of a Share on the date of grant. Subject to the preceding two
sentences, the Exercise Price under any Option shall be determined by the
Committee in its sole discretion. The Exercise Price shall be payable in a form
described in Subsection (h) below.

      (d) Exercisability. Each Stock Option Agreement shall specify the date
when all or any installment of the Option is to become exercisable. To the
extent required by applicable law, an Option shall become exercisable no less
rapidly than the rate of 20% per year for each of the first five years from the
date of grant. Subject to the preceding sentence, the exercisability of any
Option shall be determined by the Committee in its sole discretion.

      (e) Effect of Change in Control. The Committee may determine, at the time
of granting an Option or thereafter, that such Option shall become fully vested
in the event that a Change in Control occurs with respect to the Company.

      (f) Term. The Stock Option Agreement shall specify the term of the Option.
The term shall not exceed ten years from the date of grant (or five (5) years,
in the instance of an ISO for ten percent (10%) shareholders as provided in
Section 4(b)). Subject to the preceding sentence, the Committee at its sole
discretion shall determine when an Option is to expire.

      (g) Exercise of Options on Termination of Service. Each Option shall set
forth the extent to which the Optionee shall have the right to exercise the
Option following termination of the Optionee's Service with the Company and its
Subsidiaries. Such provisions shall be determined in the sole discretion of the
Committee, need not be uniform among all Options issued pursuant to the Plan,
and may reflect distinctions based on the reasons for termination of employment.
Notwithstanding the foregoing, to the extent required by applicable law each
Option shall provide that the Optionee shall have the right to exercise the
vested portion of any Option held at termination for at least thirty (30) days
following termination of Service with the Company for any reason, and that the
Optionee shall have the right to exercise the Option for at

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least six (6) months if the Optionee's Service terminates due to death or
Disability.

      (h) Payment of Option Shares. The entire Exercise Price of Shares issued
under the Plan shall be payable in lawful money of the United States of America
at the time when such Shares are purchased, except as provided below:

            (i) Surrender of Stock. To the extent that a Stock Option Agreement
      so provides, payment may be made all or in part with Shares which have
      already been owned by the Optionee or the Optionee's representative for
      any time period specified by the Committee and which are surrendered to
      the Company in good form for transfer. Such Shares shall be valued at
      their Fair Market Value on the date when the new Shares are purchased
      under the Plan.

            (ii) Promissory Notes. To the extent that a Stock Option Agreement
      so provides, payment may be made all or in part with a full recourse
      promissory note executed by the Optionee. The interest rate and other
      terms and conditions of such note shall be determined by the Committee.
      The Committee may require that the Optionee pledge his or her Shares to
      the Company for the purpose of securing the payment of such note. In no
      event shall the stock certificate(s) representing such Shares be released
      to the Optionee until such note is paid in full.

            (iii) Cashless Exercise. To the extent that a Stock Option Agreement
      so provides and a public market for the Shares exists, payment may be made
      all or in part by delivery (on a form prescribed by the Committee) of an
      irrevocable direction to a securities broker to sell Shares and to deliver
      all or part of the sale proceeds to the Company in payment of the
      aggregate Exercise Price.

            (iv) Other Forms of Payment. To the extent provided in the Stock
      Option Agreement, payment may be made in any other form that is consistent
      with applicable laws, regulations and rules.

      (i) No Rights as a Shareholder. An Optionee, or a transferee of an
Optionee, shall have no rights as a shareholder with respect to any Shares
covered by an Option until the date of the issuance of a stock certificate for
such Shares.

      (j) Modification, Extension and Assumption of Options. Within the
limitations of the Plan, the Committee may modify, extend or assume outstanding
Options or may accept the cancellation of outstanding Options (whether granted
by the Company or another issuer) in return for the grant of new Options for the
same or a different number of Shares and at the same or a different Exercise
Price or for other consideration.

                                      -9-
<PAGE>

SECTION 9. ADJUSTMENT OF SHARES.

      (a) General. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a combination or consolidation of
the outstanding Stock into a lesser number of Shares, a recapitalization, a
reclassification or a similar occurrence, the Committee shall make appropriate
adjustments in one or more of (i) the number of Shares available for future
Awards under and Section 5, (ii) the number of Shares covered by each
outstanding Option or Purchase Agreement or (iii) the Exercise Price or Purchase
Price under each outstanding Option or Stock Purchase Agreement.

      (b) Reorganizations. In the event that the Company is a party to a merger
or reorganization, outstanding Options shall be subject to the agreement of
merger or reorganization.

      (c) Reservation of Rights. Except as provided in this Section 9, an
Optionee or an Offeree shall have no rights by reason of (i) any subdivision or
consolidation of shares of stock of any class, (ii) the payment of any dividend
or (iii) any other increase or decrease in the number of shares of stock of any
class. Any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment, by reason thereof shall be made with respect to, the number,
Exercise Price or Purchase Agreement of Shares subject to an Option or Stock
Purchase Agreement. The grant of an Award pursuant to the Plan shall not affect
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure, to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.

SECTION 10. WITHHOLDING TAXES.

      (a) General. To the extent required by applicable federal, state, local or
foreign law, a Participant or his or her successor shall make arrangements
satisfactory to the Committee for the satisfaction of any withholding tax
obligations that arise in connection with the Plan. The Company shall not be
required to issue any Shares or make any cash payment under the Plan until such
obligations are satisfied.

      (b) Share Withholding. The Committee may permit a Participant to satisfy
all or part of his or her withholding or income tax obligations by having the
Company withhold all or a portion of any Shares that otherwise would be issued
to him or her or by surrendering all or a portion of any Shares that he or she
previously acquired. Such Shares shall be valued at their Fair Market Value on
the date when taxes otherwise would be withheld in cash. Any payment of taxes by
assigning Shares to the Company may be subject to restrictions, including any
restrictions required by rules of any federal or state regulatory body or other
authority.

      (c) Cashless Exercise/Pledge. The Committee may provide that if Company
Shares are publicly traded at the time of exercise, arrangements may be made to
meet the Optionee's

                                      -10-
<PAGE>

withholding obligation by cashless exercise or pledge.

      (d) Other Forms of Payment. The Committee may permit such other means of
tax withholding as it deems appropriate.

SECTION 11. ASSIGNMENT OR TRANSFER OF AWARDS.

      (a) General. An Award granted under the Plan shall not be anticipated,
assigned, attached, garnished, optioned, transferred or made subject to any
creditor's process, whether voluntarily, involuntarily or by operation of law,
except as approved by the Committee. Notwithstanding the foregoing, ISOs may not
be transferable. Also, notwithstanding the foregoing, while the Shares are
subject to California Corporations Code Section 25102(o), (i) Offerees and
Optionees may not transfer their rights hereunder except by will, beneficiary
designation or the laws of descent and distribution, and (ii) any rights of
repurchase in favor of the Company shall take into account the provisions of
Department of Corporations Regulation Section 260.140.41 or 260.140.42, as
applicable.

      (b) Trusts. Neither this Section 11 nor any other provision of the Plan
shall preclude a Participant from transferring or assigning Restricted Shares to
(i) the trustee of a trust that is revocable by such Participant alone, both at
the time of the transfer or assignment and at all times thereafter prior to such
Participant's death, or (ii) the trustee of any other trust to the extent
approved by the Committee in writing. A transfer or assignment of Restricted
Shares from such trustee to any other person than such Participant shall be
permitted only to the extent approved in advance by the Committee in writing,
and Restricted Shares held by such trustee shall be subject to all the
conditions and restrictions set forth in the Plan and in the applicable Stock
Award Agreement, as if such trustee were a party to such Agreement.

SECTION 12. LEGAL REQUIREMENTS.

      Shares shall not be issued under the Plan unless the issuance and delivery
of such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
regulations, and the regulations of any stock exchange on which the Company's
securities may then be listed.

SECTION 13. NO EMPLOYMENT RIGHTS.

      No provision of the Plan, nor any right or Option granted under the Plan,
shall be construed to give any person any right to become, to be treated as, or
to remain an Employee. The Company and its Subsidiaries reserve the right to
terminate any person's Service at any time and for any reason.

                                      -11-
<PAGE>

SECTION 14. DURATION AND AMENDMENTS.

      (a) Term of the Plan. The Plan, as set forth herein, shall become
effective on the date of its adoption by the Board of Directors, subject to the
approval of the Company's shareholders. In the event that the shareholders fail
to approve the Plan within twelve (12) months after its adoption by the Board of
Directors, any grants already made shall be null and void, and no additional
grants shall be made after such date. The Plan shall terminate automatically ten
(10) years after its adoption by the Board of Directors and may be terminated on
any earlier date pursuant to Subsection (b) below.

      (b) Right to Amend or Terminate the Plan. The Board of Directors may amend
the Plan at any time and from time to time. Rights and obligations under any
right or Option granted before amendment of the Plan shall not be materially
altered, or impaired adversely, by such amendment, except with consent of the
person to whom the right or Option was granted. An amendment of the Plan shall
be subject to the approval of the Company's shareholders only to the extent
required by applicable laws, regulations or rules including the rules of any
applicable exchange.

      (c) Effect of Amendment or Termination. No Shares shall be issued or sold
under the Plan after the termination thereof, except upon exercise of an Option
granted prior to such termination. The termination of the Plan, or any amendment
thereof, shall not affect any Shares previously issued or any Option previously
granted under the Plan.

                                      -12-
<PAGE>

SECTION 15. EXECUTION.

      To record the adoption of the Plan by the Company, the Board of Directors
has caused its authorized officer to execute the same, to be effective as of
April 29, 1999.

                                                 DIGITAL ON-DEMAND, INC.

                                                 By:
                                                 Name:
                                                 Its:

                                      -13-<PAGE>
                                                                   EXHIBIT 10.6

KY________                                                          CDC#________

                    MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE

                               Effective Date:  September 5, 2003

                               BASIC LEASE INFORMATION

Landlord:                      CATELLUS DEVELOPMENT CORPORATION a Delaware
                               corporation

Landlord's Address             Catellus Development Corporation
      For Notice:              165 South Union Boulevard, Suite 852
                               Lakewood, CO 80220
                               Attn: Asset Management
                               Telephone: (303) 980-3400
                               Fax: (303) 980-3493

With a copy to:                Catellus Development Corporation
                               201 Mission Street
                               San Francisco, CA 94105
                               Attn: General Counsel
                               Telephone: (415) 974-4500
                               Fax: (415) 974-4687

Landlord's Address             File #1918
      For Payment of Rent:     P.O. Box 61000
                               San Francisco, California 94161-1918

Tenant:                        AEC ONE STOP GROUP, INC., a Delaware corporation

Tenant's Address               AEC One Stop Group, Inc.
     For Notice:               4250 Coral Ridge Drive
                               Coral Springs, FL 33065
                               Attn: Peter Blei
                               Telephone: (954) 255-4405
                               Fax: (954) 255-4068

With a copy to:                AEC One Stop Group, Inc.
                               4250 Coral Ridge Drive
                               Coral Springs, FL 33065
                               Attn: Legal Department
                               Telephone: (954) 255-4074
                               Fax: (954) 255-4068

And a copy to:                 McBrayer, McGinnis, Leslie & Kirkland, PLLC
                               201 East Main Street, Suite 1000
                               Lexington, KY 40507
                               Attn: Stacy C. Kula, Esq.
                               Telephone: (859) 231-8780, ext. 196
                               Fax: (859) 255-9777

Project:                       Southgate Distribution Center I, Sheperdsville,
                               Kentucky

                                      (i)
<PAGE>

Building:                           270 Omega Parkway, Sheperdsville,
                                    Kentucky 40165

Premises:                           Approximately 168,000 rentable square feet
                                    as shown in Exhibit A.

Premises Address:
     Street:                        270 Omega Parkway
     City and State:                Sheperdsville, Kentucky 40165
Term:                               Sixty-six (66) months

Estimated Commencement Date:        November 1, 2003

Base Rent:                          Months      Monthly Base Rent
                                    ------      -----------------
                                    1-4

                                    $0.00 based on Base Rent abatement*

                                    5-16
                                    $1/12th of $2.965 per Premises rentable
                                    square foot

                                    17
                                    $0.00 based on Base Rent abatement*

                                    18-29
                                    1/12th of $2.965 per Premises rentable
                                    square foot

                                    30
                                    $0.00 based on Base Rent abatement*

                                    31-66
                                    1/12th of $2.965 per Premises rentable
                                    square foot

                                    *Subject to abatement of Base Rent during
                                    the Base Rent Abatement Period as provided
                                    in Addendum Section 20, and as may be
                                    otherwise expressly provided in this Lease.

Tenant's Share:                     43.89% (based on a fraction, expressed as a
                                    percentage, the numerator of which is the
                                    rentable area of the Premises and the
                                    denominator of which is the rentable area of
                                    the Building).

Security Deposit:                   $40,600.00.

Broker:                             Landlord's Broker: CB Richard Ellis/Nicklies
                                    Tenant's Broker: CB Richard Ellis/Nicklies

Lease Year:                         Shall refer to each twelve month period
                                    during the Term commencing on the
                                    Commencement Date.

Permitted Uses:                     Warehousing, assembly and distribution of
                                    cd's, tapes and other products (subject to
                                    the provisions of Exhibit E attached
                                    hereto), and related general office use, and
                                    no other uses shall be permitted without the
                                    prior written consent of Landlord, which
                                    consent shall not be unreasonably withheld,
                                    provided that the parties hereby agree that,
                                    by way of example only and without
                                    limitation, it shall be reasonable for
                                    Landlord to withhold such consent to a
                                    change in use which would result in a
                                    material increased risk of liability to
                                    Landlord from the operation of business from
                                    the Premises (including, without limitation,
                                    a material increased risk of liability
                                    relating to Hazardous Materials).

Options:                            Two (2) options to extend, each for an
                                    additional period of sixty (60) months, in
                                    accordance with Addendum Section 21. In
                                    addition, Tenant shall have the option to
                                    expand described in Addendum Section 22.

Guarantor(s):                       None.

                                      (ii)

<PAGE>

EXHIBITS

A   Premises
B   Work Letter
C   Commencement Date Memorandum
D   Insurance Certificate
E   Prohibited Uses
F   Rules and Regulations
G   Requirements for Improvements or Alterations by Tenant
H   Estoppel Certificate
I   Subordination, Nondisturbance and Attornment Agreement
J   Form of Services Agreement with the Kentucky Economic Development Finance
    Authority

         The Basic Lease Information set forth above and the Addendum and
Exhibits attached hereto are incorporated into and made a part of the following
Lease. Each reference in this Lease to any of the Basic Lease Information shall
mean the respective information above and shall be construed to incorporate all
of the terms provided under the particular Lease paragraph pertaining to such
information. In the event of any conflict between the Basic Lease Information
and the provisions of the Lease, the latter shall control. In the event of any
conflict between the Addendum and any other provisions of the Lease, the
Addendum shall control.

       LANDLORD      (_______) AND TENANT          (_______)AGREE.
                      Initial                       initial

                                     (iii)
<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>

                                                                          PAGE

<S>  <C>                                                                  <C>
1.   PREMISES...............................................................1
     1.1      Premises......................................................1
     1.2      Common Area...................................................1
     1.3      Reserved Rights...............................................1

2.   TERM...................................................................1
     2.1      Commencement Date.............................................1
     2.2      Possession....................................................2
     2.3      Early Entry...................................................2

3.   RENT...................................................................3
     3.1      Rent..........................................................3
     3.2      Late Charge and Interest......................................3
     3.3      Security Deposit..............................................3
     3.4      Abatement of Rent.............................................4

4.   UTILITIES..............................................................4

5.   TAXES..................................................................4
     5.1      Real Property Taxes...........................................4
     5.2      Definition of Real Property Taxes.............................4
     5.3      Personal Property Taxes.......................................5

6.   OPERATING EXPENSES.....................................................5
     6.1      Operating Expenses............................................5
     6.2      Definition of Operating Expenses..............................5

7.   ESTIMATED EXPENSES.....................................................6
     7.1      Payment.......................................................6
     7.2      Adjustment....................................................6

8.   INSURANCE..............................................................7
     8.1      Landlord......................................................7
     8.2      Tenant........................................................7
     8.3      General.......................................................8
     8.4      Indemnity.....................................................9
     8.5      Exemption of Landlord from Liability.........................10

9.   REPAIRS AND MAINTENANCE...............................................10
     9.1      Tenant.......................................................10
     9.2      Landlord.....................................................11

10.  ALTERATIONS...........................................................11
     10.1     Trade Fixtures; Alterations..................................11
     10.2     Damage; Removal..............................................12
     10.3     Liens........................................................12
     10.4     Standard of Work.............................................12

11.  USE...................................................................12

12.  ENVIRONMENTAL MATTERS.................................................13
     12.1     Hazardous Materials..........................................13
     12.2     Indemnification..............................................14
</Table>

                                      (iv)

<PAGE>

<Table>

<S>  <C>                                                                   <C>
13.  DAMAGE AND DESTRUCTION................................................14
     13.1     Casualty.....................................................14
     13.2     Tenant's Fault...............................................15
     13.3     Uninsured Casualty...........................................15
     13.4     Waiver.......................................................16

14.  EMINENT DOMAIN........................................................16
     14.1     Total Condemnation...........................................16
     14.2     Partial Condemnation.........................................16
     14.3     Award........................................................16
     14.4     Temporary Condemnation.......................................16

15.  DEFAULT...............................................................16
     15.1     Events of Defaults...........................................16
     15.2     Remedies.....................................................17
     15.3     Cumulative...................................................18

16.  ASSIGNMENT AND SUBLETTING.............................................18

17.  ESTOPPEL, ATTORNMENT AND SUBORDINATION................................19
     17.1     Estoppel.....................................................19
     17.2     Subordination................................................19
     17.3     Attornment...................................................20

18.  INTENTIONALLY OMITTED.................................................20

19.  MISCELLANEOUS.........................................................20
     19.1     General......................................................20
     19.2     Signs........................................................21
     19.3     Waiver.......................................................21
     19.4     Financial Statements.........................................21
     19.5     Limitation of Liability......................................22
     19.6     Notices......................................................22
     19.7     Brokerage Commission.........................................22
     19.8     Authorization................................................22
     19.9     Holding Over; Surrender......................................22
     19.10    Joint and Several............................................23
     19.11    Intentionally Omitted........................................23
     19.12    Auctions.....................................................23
     19.13    Consents.....................................................23
     19.14    Force Majeure................................................23
     19.15    Mortgagee Protection.........................................23
     19.16    Telecommunications Services..................................24
     19.17    Guarantors...................................................24
     19.18    Addenda......................................................24
</Table>

                                      -v-

<PAGE>

1.       PREMISES.

         1.1 Premises. Landlord hereby leases to Tenant the Premises as shown on
Exhibit A attached hereto, but excluding the Common Area (defined below) and any
other portion of the Project. Tenant has determined that, subject to the express
provisions of this Lease (including, without limitation, the Work Letter), the
Premises are acceptable for Tenant's use and Tenant acknowledges that, except as
expressly set forth in this Lease (including, without limitation, the Work
Letter), neither Landlord nor any broker or agent has made any representations
or warranties in connection with the physical condition of the Premises or their
fitness for Tenant's use upon which Tenant has relied directly or indirectly for
any purpose. By taking possession of the Premises, Tenant accepts the Premises
"AS-IS," with no representations, warranties or covenants, express or implied,
made by Landlord except as expressly provided in this Lease (including, without
limitation, in the Work Letter attached hereto) and waives all claims of defect
in the Premises, except as set forth in this Lease (including, without
limitation, the Work Letter). Prior to or promptly following the date the Tenant
Improvements are Substantially Complete, Landlord shall cause Landlord's
architect to measure and certify in writing to the parties the rentable square
footage of the Premises and Building (with the Premises measured from the
exterior drip line of the Building to the mid-point of interior demising walls),
and if such measurement differs from the rentable square footage of the Premises
and/or Building specified in the Basic Lease Information, then all amounts under
this Lease calculated on the basis of the rentable square footage of the
Premises and/or Building, as applicable (including in the case of adjustment of
Premises rentable square footage, without limitation, the Base Rent, Tenant's
Share and the Security Deposit) shall be adjusted accordingly within thirty (30)
days thereafter, retroactive to the date the Possession Date.

         1.2 Common Area. Tenant may, subject to reasonable rules made by
Landlord, use the following areas ("Common Area") in common with Landlord and
other tenants of the Project: refuse facilities, landscaped areas, driveways
necessary for access to the Premises, parking spaces and other common facilities
designated by Landlord from time to time for the common use of all tenants of
the Project.

         1.3 Reserved Rights. Landlord reserves the right to enter the Premises
for any reason upon reasonable notice to Tenant (or without notice in case of an
emergency) and/or to undertake the following all without abatement of rent or
liability to Tenant (subject to the provisions of Section 3.4 below): inspect
the Premises and/or the performance by Tenant of the terms and conditions
hereof; make such alterations, repairs, improvements or additions to the
Premises as required or permitted hereunder; change boundary lines of the Common
Areas; install, use, maintain, repair, alter, relocate or replace any pipes,
ducts, conduits, wires, equipment and other facilities in the Common Area or the
Building; grant easements on the Project, dedicate for public use portions
thereof and record covenants, conditions and restrictions ("CC&Rs") affecting
the Project and/or amendments to existing CC&Rs which do not unreasonably or
materially interfere with Tenant's use of the Premises or impose additional
material monetary obligations on Tenant; change the name of the Project; affix
reasonable signs and displays; and, during the last nine (9) months of the Term,
place signs for the rental of, and show the Premises to prospective tenants;
provided, however, that except in the event of an emergency or in the case of a
Tenant default, Landlord shall use its commercially reasonable efforts to enter
the Premises at such times and in such manner so as to minimize the extent of
any interruption of or adverse effect upon Tenant's business activities.

2.       TERM.

         2.1 Commencement Date. The Term of the Lease shall commence on the date
(the "Commencement Date") which is the first day of the first full month
following the date on which Landlord delivers to Tenant with the Tenant
Improvements Substantially Complete (as hereinafter defined) except that if
Landlord delivers the Premises to Tenant on the first day of a month, that date
shall be the Commencement Date, and the Lease shall continue in full force and
effect for the period of time specified as the Term or until this Lease is
terminated as otherwise provided herein. The Tenant Improvements shall be deemed
to be "Substantially Complete" on the date on which Landlord delivers to Tenant
the certification of the "Architect" (as defined in the Work Letter) that the
Tenant Improvements are substantially complete and obtains all necessary
governmental approvals or sign-offs with respect to the Tenant Improvements
required to allow full use and occupancy of the Premises (but for any such
approval or sign-off which is not obtainable until Tenant's completion of
fixturization work to be performed by Tenant), or such earlier date on which
such substantial completion would have occurred but for delays caused by Tenant
or any of Tenant's employees, agents or contractors (including, without
limitation, delays resulting from Tenant's failure to perform within the time
frames for performance specified in the Work Letter). Landlord shall arrange for
the construction of

<PAGE>

certain Tenant Improvements (as defined in the Work Letter), if any, in
accordance with and subject to the terms of the Work Letter attached hereto as
Exhibit B. Tenant shall, upon demand after delivery of the Premises to Tenant,
execute and deliver to Landlord a Commencement Date Memorandum in the form
attached hereto as Exhibit C acknowledging (i) the Commencement Date, (ii) the
final square footage of the Premises and (iii) Tenant's acceptance of the
Premises. If the Tenant Improvements are not Substantially Complete on the
Estimated Commencement Date (as such estimated date may be extended by one or
more Tenant Delays and/or Force Majeure Delays, as such terms are defined in
Exhibit B), this Lease shall remain in effect, Landlord shall not be subject to
any liability, and the Commencement Date shall be delayed until the date the
Tenant Improvements are Substantially Complete; provided, however, that if the
Tenant Improvements are not Substantially Complete by the "Outside Date" (as
hereinafter defined), then Tenant shall be entitled to one (1) day of abatement
of Base Rent first otherwise coming due under this Lease (after the expiration
of the Base Rent Abatement Period, as set forth in Addendum Section 20) for each
day following the Outside Date until the date the Tenant Improvements are
Substantially Complete. As used herein, the "Outside Date" shall mean November
6, 2003, provided that such Outside Date shall be subject to extension on a day
for day basis to the extent that the date the Tenant Improvements are
Substantially Complete is delayed by the occurrence of one or more Force Majeure
events and/or Tenant Delays.

         2.2 Possession. Tenant's possession of the Premises during the period
of time, if any, from the date on which Landlord delivers possession of the
Premises to Tenant with the Tenant Improvements Substantially Complete (the
"Possession Date") to the Commencement Date, shall be subject to all the
provisions of this Lease and shall not advance the expiration date. Rent shall
be paid for the period from the Possession Date through and including the date
immediately preceding the Commencement Date at the rate stated in the Basic
Lease Information, prorated on the basis of a thirty (30) day month, and shall
be due and payable to Landlord on or before the Commencement Date. Tenant shall
upon demand acknowledge in writing the Possession Date in the form attached
hereto as Exhibit C.

         2.3 Early Entry. Subject to compliance with the requirements of all
applicable governmental authorities (including, without limitation, obtaining
any required permit or approval in connection therewith), Tenant may, at
Tenant's sole risk, enter the Premises commencing on the date (the "Early Entry
Start Date") which is thirty (30) days following the date hereof for purposes of
installation of Tenant's equipment, trade fixtures and other personal property
therein; provided, however, that (a) Tenant's occupancy prior to the Substantial
Completion of the Tenant Improvements shall not interfere with, delay or
increase the cost of performance of the work of the Tenant Improvements or cause
work disruptions; and (b) Tenant shall comply with all provisions of this Lease
during such early entry (including, without limitation, Tenant's obligations
under this Lease relating to maintenance of insurance and indemnification of
Landlord); provided, however, that Tenant shall not be obligated for payment of
Base Rent or payment of Tenant's Share of Real Property Taxes and Operating
Expenses prior to the Substantial Completion of the Tenant Improvements. Tenant
acknowledges that construction activities will be taking place in or near to the
Premises during such early entry period, and Landlord shall not be liable to
Tenant or any Tenant Parties for any noise, dust, vibration or interference with
access to the Premises or disruption in Tenant's business therein caused
thereby, and, during such early entry period, Landlord shall not be responsible
for any loss, including theft, damage or destruction to any work or material
installed or stored by Tenant or any Tenant Parties in the Premises or for any
injury to Tenant or any Tenant Parties. As of the Early Entry Start Date
(subject to extension on a day for day basis to the extent that the date the
substantial completion of the Warehouse Lighting and Floor Sealing Work, as
hereinafter described, is delayed by the occurrence of one or more Force Majeure
events and/or Tenant Delays), Landlord shall have substantially completed the
elements of the Tenant Improvements comprising installation of lighting and
floor sealing in the warehouse portions of the Premises (collectively, the
"Warehouse Lighting and Floor Sealing Work"), such that the early entry
contemplated by this Section 2.3 shall not be materially interfered with by
reason of any remaining Warehouse Lighting and Floor Sealing Work remaining to
be performed. To the extent that Landlord has not so substantially completed the
Warehouse Lighting and Floor Sealing Work by the Early Entry Start Date (subject
to extension on a day for day basis to the extent that the date such substantial
completion of the Warehouse Lighting and Floor Sealing Work is delayed by the
occurrence of one or more Force Majeure events and/or Tenant Delays), then
Tenant shall be entitled to one (1) day of abatement of Base Rent first
otherwise coming due under this Lease (after the expiration of the Base Rent
Abatement Period, as set forth in Addendum Section 20 and the expiration of any
abatement of Base Rent pursuant to Section 2.1 above) for each day following
such Early Entry Start Date (as such date may be so extended on a day for day
basis as provided above) until the date the Warehouse Lighting and Floor Sealing
Work is so substantially completed.

                                       2
<PAGE>

3.       RENT.

         3.1 Rent. Tenant shall pay to Landlord, at Landlord's Address for
Payment of Rent designated in the Basic Lease Information, or at such other
address as Landlord may from time to time designate in writing to Tenant for the
payment of Rent, the Base Rent, without notice, demand, offset or deduction
(except as expressly otherwise provided in this Lease), in advance, on the first
day of each calendar month. Landlord shall have no obligation to notify Tenant
of any increase in Base Rent and Tenant's obligation to pay Base Rent
(including, without limitation, any increases therein) when due shall not be
modified or altered by such lack of notice from Landlord. It is intended that
this Lease be a "triple net lease," and that the Rent to be paid hereunder by
Tenant will be received by Landlord without any deduction or offset whatsoever
by Tenant, foreseeable or unforeseeable (except as expressly otherwise provided
in this Lease). Except as expressly provided to the contrary in this Lease,
Landlord shall not be required to make any expenditure, incur any obligation, or
incur any liability of any kind whatsoever in connection with this Lease or the
ownership, construction, maintenance, operation or repair of the Premises or the
Project. If the Term commences (or ends) on a date other than the first (or
last) day of a month, Base Rent shall be prorated on the basis of a thirty (30)
day month. All sums other than Base Rent which Tenant is obligated to pay under
this Lease shall be deemed to be additional rent due hereunder ("Additional
Rent"), whether or not such sums are designated Additional Rent and, together
with the Base Rent, shall be due and payable to Landlord commencing on the
Possession Date. The term "Rent" means the Base Rent and all Additional Rent
payable hereunder.

         3.2 Late Charge and Interest. The late payment of any Rent will cause
Landlord to incur additional costs, including administration and collection
costs and processing and accounting expenses and increased debt service
("Delinquency Costs"). If Landlord has not received any installment of Rent
within five (5) business days after such amount is due, Tenant shall pay a late
charge of five percent (5%) of the delinquent amount, which is agreed to
represent a reasonable estimate of the Delinquency Costs incurred by Landlord.
In addition, all amounts payable by Tenant to Landlord under this Lease which
are not paid within five (5) business days of when due shall bear interest from
the date such amount was due until paid in full at a rate per annum ("Applicable
Interest Rate") equal to the lesser of (a) the maximum interest rate permitted
by law or (b) two percent (2%) above the rate publicly announced by Bank of
America, N.A. (or if Bank of America, N.A. ceases to exist, the largest bank,
then headquartered in the State of California) ("Bank") as its "Reference Rate."
If the use of the announced Reference Rate is discontinued by the Bank, then the
term Reference Rate shall mean the announced rate charged by the Bank which is,
from time to time, substituted for the Reference Rate. Landlord and Tenant
recognize that the damage which Landlord shall suffer as a result of Tenant's
failure to pay such amounts is difficult to ascertain and said late charge and
interest are the best estimate of the damage which Landlord shall suffer in the
event of late payment. As used in this Lease, a "business day" shall mean any
day other than a Saturday, Sunday or other day on which banks are authorized or
required by Applicable Laws to be closed in Lexington, Kentucky.

         3.3 Security Deposit. Upon the execution of this Lease, Tenant shall
pay to Landlord the Security Deposit. The Security Deposit shall secure the full
and faithful performance of each provision of this Lease to be performed by
Tenant. Landlord shall not be required to pay interest on the Security Deposit
or to keep the Security Deposit separate from Landlord's own funds. If Tenant
fails to perform fully and timely all or any of Tenant's covenants and
obligations hereunder, Landlord may, but without obligation, apply all or any
portion of the Security Deposit toward fulfillment of Tenant's unperformed
covenants and/or obligations under this Lease and/or to compensate Landlord for
any and all losses and/or damages of any kind or nature sustained or which
Landlord reasonably estimates that it will sustain resulting from Tenant's
default. Tenant hereby waives the provisions of law, now or hereafter in effect,
which (i) establish the time frame by which Landlord must refund collateral or
security for performance of a tenant's obligations under a lease, and/or (ii)
provide that Landlord may claim from collateral or security for performance of a
tenant's obligations under a lease only those sums reasonably necessary to
remedy defaults in the payment of rent, to repair damage caused by Tenant or to
clean the Premises, it being agreed that Landlord may, in addition, claim those
sums specified elsewhere in this Lease and/or those sums reasonably necessary to
compensate Landlord for any loss or damage caused by Tenant's breach of this
Lease or the acts or omission of Tenant or any employee, agent, contractor or
invitee of Tenant. If Landlord does so apply any portion of the Security
Deposit, Tenant shall immediately pay Landlord sufficient cash to restore the
Security Deposit to the amount of the then current Base Rent per month. Upon any
increase in Base Rent, Landlord may require the Security Deposit to be increased
by the amount of the increase in Base Rent per month. After Tenant vacates the
Premises, upon the expiration or sooner termination of this Lease, if Tenant is
not then in default, Landlord shall return to Tenant any unapplied balance of
the Security Deposit. Should the Permitted Use be amended (in Landlord's sole
and absolute discretion) to accommodate a change in the business of Tenant or to
accommodate a

                                       3
<PAGE>

subtenant or assignee approved by Landlord, Landlord shall have the right to
increase the Security Deposit to the extent necessary, in Landlord's reasonable
judgment, to account for any increased risk to the Premises or increased wear
and tear that the Premises may suffer as a result thereof. If a change in
control of Tenant occurs during this Lease and following such change the
financial condition of Tenant is, in Landlord's reasonable judgment, reduced,
Tenant shall deposit such additional monies with Landlord as shall be sufficient
to cause the Security Deposit to be at a commercially reasonable level based on
said change in financial condition.

         3.4 Abatement of Rent. Notwithstanding anything to the contrary
contained in this Lease, during the period from the Possession Date through to
the expiration of the Term of the Lease, if Tenant is actually prevented from
using all or a material portion of the Premises as a result of (i) an
interruption in essential utility services to the Premises which is the fault of
Landlord or Landlord's employees, agents or contractors, (ii) Landlord's actions
in entering upon the Premises (other than in exercising any remedy or curing any
Tenant failure to perform in accordance with this Lease), or (iii) Landlord's
failure to perform its maintenance and repair obligations under this Lease as
and when due hereunder, and which prevention from use is not cured by Landlord
within five (5) consecutive business days following Landlord's receipt of
written notice thereof from Tenant stating Tenant's intent to receive an
abatement, then Base Rent and Tenant's obligation for payment of Tenant's Share
of Operating Expenses and Real Property Taxes shall thereafter be equitably
abated based upon the portion of the Premises which Tenant is so prevented from
using, until and to the extent that Tenant is no longer so prevented from using
such portion of the Premises as a result of the applicable item described in
clause (i), (ii) or (iii) above. Notwithstanding the foregoing, the provisions
of Section 13 below and not the provisions of this Section 3.4 shall govern in
the event of casualty damage to the Premises or Project and the provisions of
Section 14 below and not the provisions of this Section 3.4 shall govern in the
event of condemnation of all or a part of the Premises or Project.

         4. UTILITIES. Tenant shall pay all charges for heat, water, gas,
electricity, telephone and any other utilities used on or provided to the
Premises. Landlord shall not be liable to Tenant for interruption in or
curtailment of any utility service, nor shall any such interruption or
curtailment constitute constructive eviction or grounds for rental abatement.
Landlord shall cause the Premises to be separately metered for electricity and
gas. In the event the Premises is not separately metered for other utility
services, Tenant shall have the option, subject to Landlord's prior written
consent and the terms of this Lease, to cause the Premises to be separately
metered for such services at Tenant's cost and expense. To the extent the
Premises are not separately metered for any such services, Tenant shall pay a
reasonable proration of utilities, as reasonably determined by Landlord based on
estimated usage.

5.       TAXES.

         5.1 Real Property Taxes. Tenant shall pay to Landlord Tenant's Share of
the Real Property Taxes for each full or partial calendar year during the Lease
Term.

         5.2 Definition of Real Property Taxes. "Real Property Taxes" shall be
the sum of the following: all real property taxes, assessments, supplementary
taxes, escape taxes, possessory-interest taxes, business or license taxes or
fees, service payments in lieu of such taxes or fees, special taxes, fees and/or
charges assessed or otherwise payable under any community facilities district,
special service district or any other special taxing district or authority,
annual or periodic license or use fees, excises, transit and traffic charges,
housing fund assessments, open space charges, childcare fees, school, sewer and
parking fees or any other assessments, levies, fees, exactions or charges,
general and special, ordinary and extraordinary, unforeseen as well as foreseen
(including fees "in-lieu" of any such tax or assessment) which are assessed,
levied, charged, conferred or imposed by any public authority upon the Project
(or any real property comprising any portion thereof) or its operations,
together with all taxes, assessments or other fees imposed by any public
authority or quasi-public authority upon or measured by any Rent or other
charges payable hereunder, including any gross receipts tax or excise tax levied
by any governmental authority with respect to receipt of rental income, or upon,
with respect to or by reason of the development, possession, leasing, operation,
management, maintenance, alteration, repair, use or occupancy by Tenant of the
Premises or any portion thereof, or documentary transfer taxes upon this
transaction or any document to which Tenant is a party creating or transferring
an interest in the Premises, together with any tax imposed in substitution,
partially or totally, of any tax previously included within the aforesaid
definition or any additional tax the nature of which was previously included
within the aforesaid definition, together with any and all costs and expenses
(including, without limitation, attorneys, administrative and expert witness
fees and costs) of challenging any of the foregoing or seeking the reduction in
or abatement, redemption or return of any of the foregoing, but only to the
extent of any such

                                       4
<PAGE>

reduction, abatement, redemption or return. All references to Real Property
Taxes during a particular year shall be deemed to refer to taxes accrued during
such year, including supplemental tax bills regardless of when they are actually
assessed and without regard to when such taxes are payable. The obligation of
Tenant to pay for Real Property Taxes (including, without limitation, any
supplemental taxes) relating in whole or in part to a part of the Term of this
Lease shall survive the expiration or early termination of this Lease; provided,
however, that if Landlord terminates this Lease early in violation of the terms
of this Lease (and not as a result of Tenant's default hereunder), or if Tenant
terminates this Lease early in accordance with the terms of this Lease, then
Tenant shall not be liable for Real Property Taxes allocable to the period of
time following the termination of this Lease. Nothing contained in this Lease
shall require Tenant to pay any franchise, corporate, estate or inheritance tax
of Landlord, or any income, profits or revenue tax or charge upon the net income
of Landlord. Real Property Taxes for partial years, if any, falling within the
Term shall be prorated (so that Tenant is not liable for Real Property Taxes
relating to the period prior to the Possession Date or relating to the period
following the expiration of the Term). Tenant's obligations for Real Property
Taxes for the last full and/or partial year(s) of the Term shall survive the
expiration or early termination of the Lease.

         If in Landlord's reasonable judgment the assessed value of the Building
or the land for Real Property Tax purposes is higher than the actual fair market
value, Landlord shall have the right to appeal or institute such other
proceedings as it may consider appropriate to effect a reduction or abatement in
any Real Property Tax levied upon the Building and/or the land. If Landlord does
not so elect to undertake such an appeal or institute such other proceedings, at
Tenant's option, Tenant may, at Tenant's cost and expense, appeal or institute
such other proceedings as it may consider appropriate to effect a reduction or
abatement in any Real Property Tax levied upon the Building and/or the land upon
which the Building is located. If Tenant undertakes such an appeal, Landlord
shall reasonably cooperate with Tenant in making such appeal, provided that
Landlord shall be under no obligation to incur any expenses or other liabilities
in doing so and Tenant shall reimburse Landlord upon demand for all reasonable,
out-of-pocket expenses incurred by Landlord in connection therewith. In the
event that a "Net Refund" (as hereinafter defined) is obtained for any Real
Property Tax for which Tenant previously reimbursed Landlord, Landlord shall
promptly pay Tenant its pro rata share of such Net Refund. As used herein, the
term "Net Refund" shall mean the amount of any refund of Real Property Taxes
less amounts incurred by Landlord, but not yet paid for by Tenant, in obtaining
such Net Refund.

         5.3 Personal Property Taxes. Prior to delinquency, Tenant shall pay all
taxes and assessments levied upon trade fixtures, alterations, additions,
improvements, inventories and other personal property located and/or installed
on the Premises by Tenant; and Tenant shall provide Landlord copies of receipts
for payment of all such taxes and assessments. To the extent any such taxes are
not separately assessed or billed to Tenant, Tenant shall pay the actual amount
thereof as invoiced by Landlord (without any administrative fee to Landlord).

6.       OPERATING EXPENSES.

         6.1 Operating Expenses. Tenant shall pay to Landlord Tenant's Share of
the Operating Expenses for each full or partial calendar year during the Lease
Term.

         6.2 Definition of Operating Expenses. "Operating Expenses" means the
total reasonable costs and expenses incurred by Landlord in the ownership,
operation, maintenance, repair and management of the Project, the Common Area
and the Building, including, but not limited to, (a) repair, maintenance,
utility costs and landscaping of the Common Area, including, but not limited to,
any and all costs of maintenance, repair and replacement of all parking areas
(including bumpers, sweeping, striping and slurry coating), common driveways,
loading and unloading areas, trash areas, outdoor lighting, sidewalks, walkways,
landscaping (including, without limitation, tree trimming), irrigation systems,
monument signs, fences and gates, and other costs which are allocable to the
Project or the real property of which the Premises are a part including any
costs under the terms of any CC&Rs affecting the real property, (b) repairs to
and maintenance of the roof (and roof membrane, including, without limitation,
repair of leaks), and exterior walls of the Premises (including painting); (c)
insurance deductibles and the costs relating to the insurance maintained by
Landlord with respect to the Project, including, without limitation, Landlord's
cost of any self insurance deductible or retention; (d) maintenance contracts
for, and the repair and replacement of, the heating, ventilation and
air-conditioning (HVAC) systems and elevators, if any, and maintenance, repair,
replacement, monitoring and operation of the fire/life safety system; (e) trash
collection; (f) capital improvements made to, replacements of or capital assets
acquired for the Project after the Commencement Date that are intended to reduce

                                       5
<PAGE>

Operating Expenses or are reasonably necessary for the health and safety of the
occupants of the Project or are required under any governmental law or
regulation, provided that such capital costs shall not be wholly included in
Operating Expenses in the year incurred and instead shall be amortized over the
reasonably anticipated useful life, as reasonably determined by Landlord, of the
applicable item with interest at the Applicable Interest Rate, and annual
amortization of such amount shall be included in Operating Expenses in each year
of such useful life; and (g) any other reasonable costs incurred by Landlord
related to the Project (including, without limitation, if there is ever more
than one building within the Project, a reasonable share of shared Project
expenses allocated to the Building and/or the Common Areas serving the Building,
as allocated by Landlord in good faith). Landlord shall have the right, from
time to time, to allocate some or all of the Operating Expenses equitably among
different tenants of the Building or Project ("Cost Pools"). Such Cost Pools may
include, but shall not be limited to, Project-wide Operating Expenses (whether
assessed or charged under the CC&Rs, or any reciprocal easement agreement,
common area agreement or otherwise) and Building specific expenses. Operating
Expenses shall not include (i) replacement of or structural repairs to the roof
or the exterior walls; (ii) repairs to the extent covered by insurance proceeds,
warranties, or paid by Tenant or other third parties; (iii) alterations solely
attributable to tenants of the Project other than Tenant; (iv) marketing
expenses; (v) costs of repair of skylights; (vi) costs of repair or replacement
of the Building foundation or structural elements of the Building floor or
sub-floor; or (vii) costs or expenses relating to the management or
administration of the Project (provided that nothing contained herein shall
limit Tenant's obligation for payment of the Management Fee, as hereinafter
provided). In addition to Operating Expenses, in consideration of certain costs
and fees incurred by Landlord in connection with the management of this Lease
and the Premises including the cost of those services which are customarily
performed by a property management services company, whether performed
internally or through an outside management company, Tenant shall also pay to
Landlord, as additional rent in addition to Base Rent, monthly in advance, an
amount equal to one half of One Cent ($0.005) per rentable square foot in the
Premises per month (the "Management Fee").

7.       ESTIMATED EXPENSES.

         7.1 Payment. "Estimated Expenses" for any particular year shall mean
Landlord's estimate of Operating Expenses and Real Property Taxes for a calendar
year. Tenant shall pay Tenant's Share of the Estimated Expenses with
installments of Base Rent in monthly installments of one-twelfth (1/12th)
thereof on the first day of each calendar month during such year. If at any time
Landlord determines that Operating Expenses and Real Property Taxes are
projected to vary from the then Estimated Expenses, Landlord may, by notice to
Tenant, revise such Estimated Expenses, and Tenant's monthly installments for
the remainder of such year shall be adjusted so that by the end of such calendar
year Tenant has paid to Landlord Tenant's Share of the revised Estimated
Expenses for such year.

         7.2 Adjustment. "Operating Expenses and Real Property Taxes Adjustment"
(or "Adjustment") shall mean the difference between Tenant's Share of Estimated
Expenses and Tenant's Share of Operating Expenses and Real Property Taxes for
any calendar year. As soon as reasonably practicable after the end of each
calendar year and the determination of actual Operating Expenses and Real
Property Taxes for such year, Landlord shall deliver to Tenant a statement of
Tenant's Share of Operating Expenses and Real Property Taxes for such calendar
year, accompanied by a computation of the Adjustment. If Tenant's payments are
less than Tenant's Share, then Tenant shall pay the difference within twenty
(20) days after receipt of such statement. Tenant's obligation to pay such
amount shall survive the expiration or termination of this Lease. If Tenant's
payments exceed Tenant's Share, then (provided that Tenant is not in default),
Landlord shall credit such excess amount to future installments of Tenant's
Share for the next calendar year; provided, however, that if no additional Rent
shall be due under this Lease because of its expiration or termination, then
Landlord shall refund any such excess to Tenant together with delivery of the
applicable Adjustment statement. If Tenant is in default, Landlord may, but
shall not be required to, credit such amount to Rent arrearages. Within 30 days
after Tenant's receipt of Landlord's statement, Tenant, at Tenant's expense, may
audit the tax and expense records for the Project, the Common Area and the
Building pursuant to Section 7.3 below. If during any calendar year the Building
is not at least 95% occupied, Operating Expenses for such year shall be
calculated based on a 95% occupancy rate for the Building.

         7.3 Audit Rights. In the event of any dispute as to the amount of
Tenant's Share of Operating Expenses, Tenant will have the right, by prior
written notice ("Audit Notice") given to Landlord within thirty (30) days
("Audit Period") following receipt of an actual statement of Operating Expenses
("Actual Statement"), to audit Landlord's accounting records with respect to
Operating Expenses relative to the year to which such Actual

                                       6
<PAGE>

Statement relates. The audit shall be conducted by an accounting firm engaged by
Tenant and reasonably satisfactory to Landlord (billing hourly and not on a
contingency fee basis) and shall be conducted at the office of Landlord at which
records are kept or, at Landlord's election, the office of Landlord's property
manager (if any). The audit shall be conducted at reasonable times during normal
business hours. In no event shall Landlord or its property manager be required
to (i) photocopy any accounting records or other items or contracts, (ii) create
any ledgers or schedules not already in existence, (iii) incur any costs or
expenses relative to such inspection, or (iv) perform any other tasks other than
making available such accounting records as aforesaid. Neither Tenant nor its
auditor may leave the office of Landlord with originals of any materials
supplied by Landlord. Tenant must pay Tenant's Share of Operating Expenses when
due pursuant to the terms of this Lease and may not withhold payment of
Operating Expenses or any other Rent pending results of the audit or during a
dispute regarding Operating Expenses (but nothing contained in this sentence
shall be deemed to limit Tenant's right to withhold payment of amounts payable
under this Lease if such withholding is permitted pursuant to the other express
provisions of this Lease unrelated to such audit or dispute). The audit must be
completed within thirty (30) days of the date Landlord makes such accounting
records available to Tenant and the results of such audit shall be delivered to
Landlord within fifteen (15) days after such audit completion. If Tenant does
not comply with any of the aforementioned time frames, then such Actual
Statement shall be conclusively binding on Tenant. If such audit or review
correctly reveals that Landlord has overcharged Tenant, then within thirty (30)
days after the results of such audit are made available to Landlord, Landlord
shall refund to Tenant the amount of such overcharge. If the audit reveals that
Tenant was undercharged, then within thirty (30) days after the results of the
audit are made available to Tenant, Tenant agrees to reimburse Landlord the
amount of such undercharge. Tenant agrees to pay the cost of such audit,
provided that if the audit reveals that Landlord's determination of Tenant's
Share of Operating Expenses as set forth in the relevant Actual Statement was in
error in Landlord's favor by more than three percent (3%) of the amount charged
by Landlord to Tenant pursuant to such Actual Statement, then Landlord agrees to
pay the reasonable, third-party cost of such audit incurred by Tenant. To the
extent Landlord must pay the cost of such audit, such cost shall not exceed a
reasonable hourly charge for a reasonable amount of hours spent by such
third-party in connection with the audit, and in no event will the costs which
Landlord is so obligated to pay for the audit exceed the amount of the error.
Tenant agrees to keep the results of the audit confidential and shall cause its
agents, employees and contractors to keep such results confidential. To that
end, Landlord may require Tenant and its auditor to execute a commercially
reasonable form of confidentiality agreement provided by Landlord.

8.       INSURANCE.

         8.1 Landlord. Landlord shall maintain insurance through individual or
blanket policies insuring the Building against fire and extended coverage
(including, if Landlord elects, "all risk" coverage, earthquake/volcanic action,
flood and/or surface water insurance) for the full replacement cost of the
Building, with deductibles and the form and endorsements of such coverage as
selected by Landlord, together with rental abatement insurance against loss of
Rent in an amount equal to the amount of Rent for a period of at least twelve
(12) months commencing on the date of loss. Landlord may also carry such other
insurance as Landlord may deem prudent or advisable, including, without
limitation, liability insurance in such amounts and on such terms as Landlord
shall determine. The amounts and types of coverages, and the amount of any
deductibles under such policies, shall be commercially reasonable.

         8.2 Tenant. Tenant shall, at Tenant's expense, obtain and keep in force
at all times the following insurance:

             8.2.1 Commercial General Liability Insurance (Occurrence Form). A
policy of commercial general liability insurance (occurrence form), having a
combined single limit of not less than One Million Dollars ($1,000,000) per
occurrence and Two Million Dollars ($2,000,000) aggregate per location if Tenant
has multiple locations, providing coverage for, among other things, blanket
contractual liability for both oral and written contracts, owners and
contractors protective, premises and operations, personal and advertising
injury, and products/completed operations with an "Additional Insured-Managers
or Lessors of Premises Endorsement" and containing the "Amendment of the
Pollution Exclusion Endorsement" for damage caused by heat, smoke or fumes from
a hostile fire, and personal and advertising injury coverage, and the policy
shall not contain any intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this Lease
as an "insured contract" for the performance of Tenant's indemnity obligations
under this Lease.

                                       7
<PAGE>

             8.2.2 Automobile Liability Insurance. Comprehensive automobile
liability insurance having a combined single limit of not less than One Million
Dollars ($1,000,000) per occurrence and insuring Tenant against liability for
claims arising out of ownership, maintenance, or use of any owned, hired,
borrowed or non-owned automobiles.

             8.2.3 Workers' Compensation and Employer's Liability Insurance.
Workers' compensation insurance having limits not less than those required by
applicable state statute and federal statute and covering all persons employed
by Tenant in the conduct of its operations on the Premises (including the all
states endorsement and, if applicable, the volunteers endorsement), together
with employer's liability insurance coverage in the amount of at least One
Million Dollars ($1,000,000) each accident for bodily injury by accident and One
Million Dollars ($1,000,000) each employee for bodily injury by disease.

             8.2.4 Umbrella Liability Insurance. Umbrella liability insurance on
an occurrence basis, with minimum limits of not less than Five Million Dollars
($5,000,000) combined single limit and aggregate limit, in excess of and
following the form of the underlying insurance described in Sections 8.2.1,
8.2.2 and 8.2.3 which is at least as broad as each and every area of the
underlying policies. Such umbrella liability insurance shall include pay on
behalf of wording, concurrency of effective dates with primary policies, blanket
contractual liability, application of primary policy aggregates, and shall
provide that if the underlying aggregate is exhausted, the excess coverage will
drop down as primary insurance. The amounts of insurance required in Sections
8.2.1, 8.2.2, 8.2.3 and 8.2.4 may be satisfied by purchasing coverage for the
limits specified or by any combination of underlying and umbrella limits, so
long as the total amount of insurance is not less than the limits specified in
each of Sections 8.2.1, 8.2.2 and 8.2.3 when added to the limit specified in
this Section 8.2.4.

             8.2.5 Property Insurance. "All risk" property insurance including
boiler and machinery comprehensive form, if applicable, including coverage for
vandalism, malicious mischief and sprinkler leakage, covering damage to or loss
of any of Tenant's personal property, fixtures, equipment, merchandise,
inventory and alterations, including electronic data processing equipment
(collectively "Tenant's Property") in an amount equal to the full replacement
cost thereof (Tenant shall redetermine the same as frequently as necessary to
comply herewith), and including, if applicable (meaning if the property of
Tenant's invitee is to be kept in the Premises), warehouser's legal liability or
bailee customers insurance for the full replacement cost of the property
belonging to invitee and located in the Premises unless otherwise covered by
insurance maintained by the consignor or owner or unless self-insured by Tenant
(provided that such self-insurance shall in all respects, including, without
limitation, for purposes of the waiver of subrogation provided under Section
8.3.5 below, be treated in the same manner as if Tenant had obtained such
insurance coverage from a third party).

             8.2.6 Intentionally Omitted.

             8.2.7 Other Insurance. Any other forms of insurance Landlord may
require from time to time, in form and amounts and for insurance risks against
which a prudent tenant of comparable size and in a comparable business would
protect itself consistent with then customary practices for tenants of
comparable buildings in the vicinity of the Building, as reasonably approved by
Tenant.

         8.3 General.

             8.3.1 Insurance Companies. Insurance required to be maintained by
Tenant shall be written by companies licensed to do business in the state in
which the Premises are located and having a "General Policyholders Rating" of at
least A-:VIII as issued by A.M. Best.

             8.3.2 Certificates of Insurance. Tenant shall deliver to Landlord
certificates of insurance for all insurance required to be maintained by Tenant
in the form of Exhibit D attached hereto (or in such other form as may be
acceptable to Landlord in its sole discretion) and additional insured
endorsements on ISO Form CG 20 11 01 96 ("Additional Insured--Managers or
Lessors of Premises") or equivalent, no later than seven (7) days prior to the
date of possession of the Premises. Tenant shall, at least ten (10) days prior
to expiration of the policy, furnish Landlord with certificates of renewal or
"binders" thereof and additional insured endorsements. Each certificate shall
expressly provide that such policies shall not be cancelable or otherwise
subject to modification except after thirty (30) days prior written notice to
the parties named as additional insureds in this Lease (except in the case of

                                       8
<PAGE>

cancellation for nonpayment of premium in which case cancellation shall not take
effect until at least ten (10) days' notice has been given to Landlord). Failure
of Landlord to demand such certificates, endorsements or other evidence of full
compliance with the insurance requirements of this Section 8, or failure of
Landlord to identify a deficiency from evidence provided will not be construed
as a waiver of the Tenant's obligation to maintain such insurance. The
acceptance of delivery by Tenant of any certificates, endorsements or other
evidence of insurance does not constitute approval or agreement by Landlord that
the insurance requirements have been met, that the insurance policies evidenced
are in compliance with these requirements, or that the insurance requirements
are sufficient to fully protect Tenant from liability.

             8.3.3 Additional Insureds. Landlord, and, if requested by Landlord,
any Landlord's lender and/or property management company of Landlord for the
Premises shall each be named as additional insureds on a form approved by
Landlord under all of the policies required by Sections 8.2.1, 8.2.2 and 8.2.4,
and said policies shall provide for severability of interest.

             8.3.4 Primary Coverage. All insurance to be maintained by Tenant
shall, except for workers' compensation and employer's liability insurance, be
primary, without right of contribution from insurance of any additional insured.

             8.3.5 Waiver of Subrogation. Landlord and Tenant, on behalf of
themselves, their property insurers, and anyone claiming by, through or under
them, each hereby waives any claims against and releases the other from any
liability for any loss, cost, damage or expense resulting from any fire,
explosion or other casualty that is covered in whole or in part by the property
insurance that is required to be maintained by such waiving party under this
Lease (or would have been covered but for such party's failure to maintain the
insurance that is required of such party under this Lease). All insurance that
is carried by either party under this Lease to insure against damage or loss to
such party's property shall include provisions denying to each respective
insurer rights of subrogation and recovery against the other party.

             8.3.6 Notification of Incidents. Tenant shall notify Landlord
within twenty-four (24) hours after Tenant's first learning of the occurrence of
any accidents or incidents in the Premises, the Building, Common Areas or the
Project which could give rise to a claim against Landlord under this Section 8.

         8.4 Indemnity.

             8.4.1 Tenant's Indemnity. Tenant shall indemnify, protect, defend
and hold harmless Landlord and Landlord's affiliated entities, and each of their
respective members, managers, partners, directors, officers, employees,
shareholders, lenders, agents, contractors, successors and assigns from and
against any and all claims, judgments, causes of action, damages, penalties,
costs, liabilities, and expenses, including all costs, attorneys' fees, expenses
and liabilities incurred in the defense of any such claim or any action or
proceeding brought thereon (collectively, "Claims or Liabilities"), arising at
any time during or after the Term as a result (directly or indirectly) of or in
connection with (a) any default in the performance of any obligation on Tenant's
part to be performed under the terms of this Lease, or (b) Tenant's use of the
Premises, the conduct of Tenant's business or any activity, work or things done,
permitted or suffered by Tenant or any Tenant Party in or about the Premises,
the Building, the Common Area or other portions of the Project, provided,
however (and though Tenant shall in all cases accept any tender of defense of
any action, claim or proceeding in which Landlord is named or made a party and
shall, notwithstanding any allegations of negligence or misconduct on the part
of Landlord or its employees, agents or contractors, defend Landlord as provided
herein), Tenant shall not be liable and Landlord shall reimburse Tenant for such
damage or injury to the extent and in proportion that the same is ultimately
determined to be attributable to the negligence or willful misconduct of
Landlord. The foregoing indemnity obligation shall include, without limitation,
any claim by any Tenant Party for any injury or illness caused or alleged to be
caused in whole or in part by any furniture, carpeting, draperies, stoves or any
other materials on the Premises.

             8.4.2 Landlord's Reimbursement Obligation. Though Tenant shall in
all cases accept any tender of defense of any Claims or Liabilities (as defined
in Section 8.4.1 above) in which Landlord is named or made a party in accordance
with Section 8.4.1 above and shall, notwithstanding any allegations of
negligence or misconduct on the part of Landlord or its employees, agents or
contractors (collectively, the "Landlord Parties"), defend Landlord and Landlord
Parties as provided herein, Tenant shall not be liable and Landlord shall
reimburse

                                       9
<PAGE>

Tenant for such damage or injury to the extent and in proportion that the same
is ultimately determined to be attributable to the negligence or willful
misconduct of Landlord in connection with such Claims or Liabilities; provided,
however, the foregoing reimbursement obligation of Landlord shall (i) in no way
limit the provisions for the exemption of Landlord from liability under this
Lease pursuant to Paragraph 8.5 hereof, to the extent permitted by law, or (ii)
limit or otherwise affect the limitation on Landlord's liability under this
Lease pursuant to Paragraph 19.5 hereof.

             8.4.3 Survival. The obligations of Landlord and Tenant under this
Section 8.4 shall survive the termination of this Lease with respect to any
claims or liability arising with respect to the period prior to such
termination.

         8.5 Exemption of Landlord from Liability. Tenant, as a material part of
the consideration to Landlord, hereby assumes all risk of damage to property
including, but not limited to, Tenant's fixtures, equipment, furniture and
alterations or illness or injury to persons in, upon or about the Premises, the
Building, the Common Area or other portions of the Project arising from any
cause, and Tenant hereby expressly releases Landlord and waives all claims in
respect thereof against Landlord; provided, however, (and though Tenant shall in
all cases accept any tender of defense of any action, claim or proceeding in
which Landlord is named or made a party and shall, notwithstanding any
allegations of negligence or misconduct on the part of Landlord or its
employees, agents or contractors, defend Landlord as provided herein), Tenant
shall not be liable and Landlord shall reimburse Tenant for such damage or
injury to the extent and in proportion that the same is ultimately determined to
be attributable to the negligence or willful misconduct of Landlord.
Notwithstanding anything to the contrary contained herein, Tenant hereby agrees
that Landlord shall not be liable for injury to Tenant's business or any loss of
income therefrom or for damage to the property of Tenant, or injury to or
illness or death of Tenant or any Tenant Party, or any other person in or about
the Premises, the Building, the Common Area or the Project, whether such damage,
illness or injury is caused by fire, steam, electricity, gas, water or rain, or
from the breakage, leakage or other defects of sprinklers, wires, appliances,
plumbing, ventilation, air conditioning or lighting fixtures, or from any other
cause, and whether said damage or injury results from conditions arising upon
the Premises, upon other portions of the Building or from other sources or
places, and regardless of whether the cause of such damage, illness or injury or
the means of repairing the same is inaccessible to Tenant; provided, however,
(and though Tenant shall in all cases accept any tender of defense of any
action, claim or proceeding in which Landlord is named or made a party and
shall, notwithstanding any allegations of negligence or misconduct on the part
of Landlord or its employees, agents or contractors, defend Landlord as provided
herein), Tenant shall not be liable and Landlord shall reimburse Tenant for such
damage or injury' to the extent and in proportion that the same is ultimately
determined to be attributable to the negligence or willful misconduct of
Landlord. Landlord shall not be liable for any damages arising from any act or
neglect of any contractor or other tenant, if any, of the Building or the
Project or Landlord's failure to enforce the terms of any agreements with
parties other than Tenant.

9.       REPAIRS AND MAINTENANCE.

         9.1 Tenant. Tenant, at Tenant's sole cost and expense, shall keep and
maintain the Premises (interior and exterior, excluding roofing and painting),
including, without limitation, loading docks, roll up doors and ramps, floors
and subfloors (other than the structural elements of the floor and subfloors),
floor coverings, walls, drywall and wall coverings, doors, windows, glass, plate
glass, locks, ceilings, lighting systems, interior plumbing, electrical and
mechanical systems and wiring, appliances and devices using or containing
refrigerants, fixtures and equipment in good repair and in a clean and safe
condition, and repair and/or replace any and all of the foregoing in a clean and
safe condition, in good order, condition and repair, reasonable wear and tear
excepted. Without limiting the foregoing, Tenant shall, at Tenant's sole
expense, immediately replace all broken glass in the Premises with glass equal
to or in excess of the specification and quality of the original glass; and
repair any area damaged by Tenant, Tenant's agents, employees, invitees and
visitors, including any damage caused by any roof penetration, whether or not
such roof penetration was approved by Landlord. All repairs and replacements by
Tenant shall be made and performed: (a) at Tenant's cost and expense and at such
time and in such manner as Landlord may designate, (b) by contractors or
mechanics reasonably approved by Landlord, (c) so that same shall be at least
equal in quality, value and utility to the original work or installation, (d) in
a manner and using equipment and materials that will not interfere with or
impair the operations, use or occupation of the Building or any of the
mechanical, electrical, plumbing or other systems in the Building or the
Project, and (e) in accordance with the Rules and Regulations and all Applicable
Laws (as defined in Section 11). In the event Tenant fails, in the reasonable
judgment of Landlord, to

                                       10
<PAGE>

maintain the Premises in accordance with the obligations under the Lease, which
failure continues at the end of ten (10) days following Tenant's receipt of
written notice from Landlord stating the nature of the failure, Landlord shall
have the right to enter the Premises and perform such maintenance, repairs or
refurbishing at Tenant's sole cost and expense (including a sum for overhead to
Landlord equal to ten percent (10%) of the costs of maintenance, repairs or
refurbishing). Tenant shall maintain written records of maintenance and repairs,
as required by any Applicable Law, and shall use certified technicians to
perform such maintenance and repairs, as so required. Tenant shall deliver full
and complete copies of all service or maintenance contracts entered into by
Tenant for the Premises to Landlord within one hundred twenty (120) days after
the Commencement Date.

         9.2 Landlord. Landlord shall, at Landlord's sole cost except to the
extent such cost is permitted to be included in Operating Expenses pursuant to
the provisions of Section 6 above, subject to the following limitations, repair
damage to the roof (including roof structure, integrity and impermeability),
skylights, foundation, structural elements of the floor and sub-floor, and
structural portions of the Building, including load-bearing portions of walls
(excluding drywall, wall coverings, painting, glass and doors) of the Building
and maintain the Common Areas in good condition and state of repair; provided,
if such damage is caused by an act or omission of Tenant, or any Tenant Party,
then such repairs shall be at Tenant's sole expense. Landlord shall not be
required to make any repair resulting from (i) other than the initial Tenant
Improvements made pursuant to the Work Letter, any alteration or modification to
the Building or to mechanical equipment within the Building performed by, for or
because of Tenant or to special equipment or systems installed by, for or
because of Tenant, (ii) the installation, use or operation of Tenant's property,
fixtures and equipment, (iii) the moving of Tenant's property in or out of the
Building or in and about the Premises, (iv) Tenant's use or occupancy of the
Premises in violation of Section 11 of this Lease or in the manner not
contemplated by the parties at the time of the execution of this Lease, (v) the
acts or omissions of Tenant or any Tenant Party, (vi) fire and other casualty,
except as provided by Section 13 of this Lease or (vii) condemnation, except as
provided in Section 14 of this Lease. Landlord shall have no obligation to make
repairs under this Section 9.2 until a reasonable time after receipt of written
notice from Tenant of the need for such repairs, but Landlord shall promptly
make such repairs as are the responsibility of Landlord under this Lease after
Landlord's learning of the need for such repairs. There shall be no abatement of
Rent during the performance of such work, subject to the provisions of Section
3.4 above. Landlord shall not be liable to Tenant for injury or damage that may
result from any defect in the construction or condition of the Premises, nor for
any damage that may result from interruption of Tenant's use of the Premises
during any repairs by Landlord. Tenant waives any right to repair the Premises,
the Building and/or the Common Area at the expense of Landlord under any
Applicable Laws, but Tenant shall have the rights provided under Addendum
Section 23.

10.      ALTERATIONS.

         10.1 Trade Fixtures; Alterations. Tenant may install necessary trade
fixtures, equipment and furniture in the Premises, provided that such items are
installed and are removable without structural or material damage to the
Premises, the Building, the Common Area or the Project. Tenant shall not
construct, nor allow to be constructed, any alterations or physical additions
in, about or to the Premises without obtaining the prior written consent of
Landlord, which consent shall be conditioned upon Tenant's compliance with the
provisions of Exhibit G and any other applicable requirements of Landlord
regarding construction of improvements and alterations. Notwithstanding the
foregoing provisions of this Section 10.1, Tenant may perform certain interior
decorating or other non-structural alterations to the Premises such as
carpeting, painting (so long as the odors from the same do not materially or
unreasonably interfere with any other tenants operations), hanging artwork or
wall coverings, installing non-affixed furniture systems, installing non-load
bearing partitions, or other similar interior decorating improvements or
non-structural alterations, without obtaining Landlord's consent therefor (but
subject to the remaining requirements of this Section 10.1), but only if: (i)
such items do not adversely affect the Building structure or systems, the Common
Area of the Building or any other tenant space; (ii) such items are not visible
from outside of the Premises; (iii) the cost of such items does not exceed the
sum of $35,000 per work of alterations, improvements and/or additions; and (iv)
Tenant gives at least ten (10) days prior written notice to Landlord of such
items, including a description of the contemplated work and the types of
materials to be used. Tenant shall submit plans and specifications to Landlord
with Tenant's request for approval and shall reimburse Landlord for all
reasonable costs which Landlord may incur in connection with the granting of
approval to Tenant for any such alterations and additions, including any
reasonable costs or expenses which Landlord may incur in electing to have
outside architects and engineers review said matters. Landlord shall respond to
each written request to Landlord from Tenant for approval under this Section
10.1 within ten (10) business days. In the event Tenant makes any alterations

                                       11
<PAGE>

to the Premises that trigger or give rise to a requirement that the Building or
the Premises come into compliance with any governmental laws, ordinances,
statutes, orders and/or regulations (such as ADA requirements), Tenant shall be
fully responsible for complying, at its sole cost and expense, with same. Tenant
shall file a notice of completion after completion of such work and provide
Landlord with a copy thereof. Tenant shall provide Landlord with a set of
"as-built" drawings for any such work.

         10.2 Damage; Removal. Tenant shall repair all damage to the Premises,
the Building, the Common Area or the Project caused by the installation or
removal of Tenant's fixtures, equipment, furniture or alterations. Upon the
termination of this Lease, Tenant shall remove any or all trade fixtures,
alterations, additions, improvements and partitions made or installed by Tenant
and restore the Premises to its condition existing prior to the construction of
any such items (except that Tenant shall not be required to remove such items
installed by Tenant as to which Landlord agreed by written notice to Tenant at
the time of Tenant's installation of the applicable item that such removal would
not be so required, and Landlord hereby agrees to notify Tenant within ten (10)
days following receipt of request therefor whether such removal shall be
required as to a particular proposed item). All such removals and restoration
shall be accomplished in a good and workmanlike manner and so as not to cause
any damage to the Premises, the Building, the Common Area or the Project
whatsoever.

         10.3 Liens. Tenant shall promptly pay and discharge all claims for
labor performed, supplies furnished and services rendered at the request of
Tenant and shall keep the Premises free of all mechanics' and materialmen's
liens in connection therewith. Tenant shall provide at least ten (10) days prior
written notice to Landlord before any labor is performed, supplies furnished or
services rendered on or at the Premises (or such lesser notice as may be
reasonably practicable in the event of performance of work to cure an emergency
situation) and Landlord shall have the right to post on the Premises notices of
non-responsibility. If any lien is filed, Tenant shall cause such lien to be
released and removed within ten (10) days after the date of filing, and if
Tenant fails to do so, Landlord may take such action as may be necessary to
remove such lien and Tenant shall pay Landlord such reasonable amounts expended
by Landlord together with interest thereon at the Applicable Interest Rate from
the date of expenditure.

         10.4 Standard of Work. All work to be performed by or for Tenant
pursuant hereto shall be performed diligently and in a first class, workmanlike
manner, and in compliance with all Applicable Laws, and/or Tenant and Landlord's
insurance carriers' requirements. Landlord shall have the right, but not the
obligation, to inspect periodically the work on the Premises and Landlord may
require commercially reasonable changes in the method or quality of the work.

11. USE. The Premises shall be used only for the Permitted Uses set forth in the
Basic Lease Information and for no other uses (subject to Tenant's right to
change the use with Landlord's prior approval as provided in the Basic Lease
Information). Tenant's use of the Premises shall be in compliance with and
subject to all applicable laws, statutes, codes, ordinances, orders, rules,
regulations, conditions of approval and requirements of all federal, state,
county, municipal and governmental authorities and all administrative or
judicial orders or decrees and all permits, licenses, approvals and other
entitlements issued by governmental entities, and rules of common law, relating
to or affecting the Project, the Premises or the Building or the use or
operation thereof, whether now existing or hereafter enacted, including, without
limitation, the Americans with Disabilities Act of 1990, 42 USC 12111 et seq.
(the "ADA") as the same may be amended from time to time, all Environmental Laws
(as defined in Section 12.1), and any CC&Rs or any supplement thereto recorded
in any official or public records with respect to the Project or any portion
thereof ("Applicable Laws"). Tenant, at Tenant's sole cost and expense, shall
comply with all Applicable Laws, which compliance obligation shall include the
alteration of the Premises and/or any interior improvements or fixtures in order
to comply with such Applicable Laws. Tenant shall be responsible for obtaining
any permit, business license, certificate of occupancy, or other permits or
licenses required by any governmental agency permitting Tenant's use or
occupancy of the Premises, except that Landlord shall be responsible for
obtaining any certificate of occupancy or comparable governmental sign-off
sufficient to permit occupancy of the Premises based upon Substantial Completion
of the Tenant Improvements. Landlord shall reasonably cooperate with Tenant in
Tenant's efforts to obtain any governmental permit, license or approval which is
the responsibility of Tenant hereunder, at no cost, expense or liability to
Landlord. If any Applicable Laws are hereafter changed so as to require during
the term of the Lease, any alteration of the Premises, or the reinforcement of
any other physical modification of the Premises, Tenant shall be solely
responsible for such cost and expense; provided, however, that notwithstanding
anything to the contrary contained in this Lease, Landlord (and not Tenant)
shall be required to make, at Landlord's cost but subject to inclusion of such
costs in Operating Expenses to the extent permitted under

                                       12
<PAGE>

the definition of Operating Expenses in Section 6 above (including, without
limitation, the requirement for amortization of capital expenditures in
Operating Expenses as provided in Section 6 above), any capital improvements to
the Premises required in order to cause the Premises to comply with Applicable
Laws except that if such compliance work is necessitated by the particular use
of, or alterations or improvements to, the Premises by Tenant or any Tenant
Parties, then Tenant shall perform such compliance work at Tenant's sole cost.
In no event shall the Premises be used for any of the Prohibited Uses set forth
on Exhibit E attached hereto. Tenant shall comply with the rules and regulations
attached hereto as Exhibit F, together with such additional rules and
regulations as Landlord may from time to time prescribe. Tenant shall not commit
waste, overload the floors or structure of the Building, subject the Premises,
the Building, the Common Area or the Project to any use which would damage the
same or increase the risk of loss or violate any insurance coverage, permit any
unreasonable odors, smoke, dust, gas, substances, noise or vibrations to emanate
from the Premises, take any action which would constitute a nuisance or would
disturb, obstruct or endanger any other tenants, take any action which would
abrogate any warranties, or use or allow the Premises to be used for any
unlawful purpose. Tenant shall have the right in common with other tenants of
Landlord to use the parking facilities of the Project. Tenant agrees not to
overburden the parking facilities and agrees to cooperate with Landlord and
other tenants in the use of parking facilities. Landlord shall not be
responsible for non-compliance by any other tenant or occupant of the Project
with, or Landlord's failure to enforce, any of the rules or regulations or CC&Rs
or any other terms or provisions of such tenant's or occupant's lease, but
Landlord shall use commercially reasonable efforts to enforce the rules,
regulations and CC&Rs with respect to all Project tenants in a
non-discriminatory manner (provided that nothing contained herein shall obligate
Landlord to commence any litigation or other proceeding in pursuing such
enforcement). Tenant shall promptly comply with the reasonable requirements of
any board of fire insurance underwriters or other similar body now or hereafter
constituted. Tenant shall not do any act which shall in any way encumber the
title of Landlord in and to the Premises, the Building or the Project.

12.      ENVIRONMENTAL MATTERS.

         12.1 Hazardous Materials. Tenant shall not cause nor permit, nor allow
any of Tenant's employees, agents, customers, visitors, invitees, licensees,
contractors, assignees or subtenants (individually, a "Tenant Party" and
collectively, "Tenant Parties") to cause or permit, any Hazardous Materials to
be brought upon, stored, manufactured, generated, blended, handled, recycled,
treated, disposed or used on, under or about the Premises, the Building, the
Common Area or the Project, except for routine office and janitorial supplies in
usual and customary quantities stored, used and disposed of in accordance with
all applicable Environmental Laws. As used herein, "Hazardous Materials" means
any chemical, substance, material, controlled substance, object, condition,
waste, living organism or combination thereof, whether solid, semi-solid, liquid
or gaseous, which is or may be hazardous to human health or safety or to the
environment due to its radioactivity, ignitability, corrosivity, reactivity,
explosivity, toxicity, carcinogenicity, mutagenicity, phytotoxicity,
infectiousness or other harmful or potentially harmful properties or effects,
including, without limitation, tobacco smoke, petroleum and petroleum products,
asbestos, radon, polychlorinated biphenyls (PCBs), refrigerants (including those
substances defined in the Environmental Protection Agency's "Refrigerant
Recycling Rule," as amended from time to time) and all of those chemicals,
substances, materials, controlled substances, objects, conditions, wastes,
living organisms or combinations thereof which are now or become in the future
listed, defined or regulated in any manner by any Environmental Law based upon,
directly or indirectly, such properties or effects. As used herein,
"Environmental Laws" means any and all federal, state or local environmental,
health and/or safety-related laws, regulations, standards, decisions of courts,
ordinances, rules, codes, orders, decrees, directives, guidelines, permits or
permit conditions, currently existing and as amended, enacted, issued or adopted
in the future which are or become applicable to Tenant, the Premises, the
Building, the Common Area or the Project. Tenant and Tenant Parties shall comply
with all Environmental Laws and promptly notify Landlord in writing of the
violation of any Environmental Law or presence of any Hazardous Materials, other
than office and janitorial supplies as permitted above, in, on, under or about
the Premises or the improvements or the soil or groundwater thereunder. Landlord
shall have the right to enter upon and inspect the Premises and to conduct
tests, monitoring and investigations. If such tests indicate the presence of any
environmental condition caused or exacerbated by Tenant or any Tenant Party or
arising during Tenant's or any Tenant Party's occupancy, Tenant shall reimburse
Landlord for the cost of conducting such tests. The phrase "environmental
condition" shall mean any adverse condition relating to any Hazardous Materials
or the environment, including surface water, groundwater, drinking water supply,
land, surface or subsurface strata or the ambient air and includes air, land and
water pollutants, noise, vibration, light and odors. In the event of any such
environmental condition, Tenant shall promptly take any and all steps necessary
to rectify the same to the satisfaction

                                       13
<PAGE>

of the applicable agencies and Landlord, or shall, at Landlord's election,
reimburse Landlord, upon demand, for the cost to Landlord of performing
rectifying work. The reimbursement shall be paid to Landlord in advance of
Landlord's performing such work, based upon Landlord's reasonable estimate of
the cost thereof; and upon completion of such work by Landlord, Tenant shall pay
to Landlord any shortfall promptly after receipt of Landlord's bills therefor or
Landlord shall promptly refund to Tenant any excess deposit, as the case may be.

         12.2 Indemnification. Tenant shall indemnify, protect, defend (by
counsel reasonably acceptable to Landlord) and hold harmless Landlord and
Landlord's affiliated entities, and each of their respective members, managers,
partners, directors, officers, employees, shareholders, lenders, agents,
contractors, successors and assigns (individually and collectively,
"Indemnitees") from and against any and all claims, judgments, causes of action,
damages, penalties, fines, taxes, costs, liabilities, losses and expenses
(including, without limitation, attorneys' fees, expenses and court costs)
arising at any time during or after the Term as a result (directly or
indirectly) of or in connection with (a) Tenant and/or any Tenant Party's breach
of this Section 12, or (b) the presence of Hazardous Materials on, under or
about the Premises or other property as a result (directly or indirectly) of
Tenant's and/or any Tenant Party's activities, or failure to act, in connection
with the Premises. This indemnity shall include, without limitation, attorneys'
and experts' fees and costs, costs of litigation and governmental oversight
costs, the cost of any required or necessary repair, cleanup or detoxification,
and the preparation and implementation of any closure, monitoring or other
required plans, whether such action is required or necessary prior to or
following the termination of this Lease. Neither the written consent by Landlord
to the presence of Hazardous Materials on, under or about the Premises, nor the
strict compliance by Tenant with all Environmental Laws, shall excuse Tenant
from Tenant's obligation of indemnification pursuant hereto. Tenant's
obligations pursuant to the foregoing indemnity shall survive the expiration or
termination of this Lease.

13.      DAMAGE AND DESTRUCTION.

         13.1 Casualty. If the Premises or Building should be damaged or
destroyed by fire or other casualty, Tenant shall give immediate written notice
to Landlord. Within thirty (30) days after receipt from Tenant of such written
notice, Landlord shall notify Tenant whether the necessary repairs can
reasonably be made: (a) within ninety (90) days; (b) in more than ninety (90)
days but in less than one hundred eighty (180) days; or (c) in more than one
hundred eighty' (180) days, in each case after the date of the issuance of
permits for the necessary repair or reconstruction of the portion of the
Building or Premises which was damaged or destroyed.

             13.1.1 Less Than 90 Days. If the Premises or Building should be
damaged only to such extent that rebuilding or repairs can reasonably be
completed within ninety (90) days after the issuance of permits for the
necessary repair or reconstruction of the portion of the Building or Premises
which was damaged or destroyed, this Lease shall not terminate and, provided
that insurance proceeds are available to fully repair the damage, Landlord shall
repair the Premises, except that Landlord shall not be required to rebuild,
repair or replace Tenant's Property which may have been placed in, on or about
the Premises by or for the benefit of Tenant. If Tenant is required to vacate
all or a portion of the Premises during Landlord's repair thereof, the Base Rent
payable hereunder shall be abated proportionately on the basis of the size of
the area of the Premises that is damaged (i.e, the number of square feet of
floor area of the Premises that is damaged compared to the total square footage
of the floor area of the Premises) from the date Tenant vacates all or a portion
of the Premises that was damaged only to the extent rental abatement insurance
proceeds are received by Landlord and only during the period the Premises are
unfit for occupancy as reasonably determined by the parties.

             13.1.2 Greater Than 90 Days. If the Premises or Building should be
damaged only to such extent that rebuilding or repairs can reasonably be
completed in more than ninety (90) days but in less than one hundred eighty
(180) days after the issuance of permits for the necessary repair or
reconstruction of the portion of the Building or Premises which was damaged or
destroyed, then Landlord shall have the option of: (a) terminating the Lease
effective upon the occurrence of such damage, in which event the Base Rent shall
be abated from the date Tenant vacates the Premises; or (b) electing to repair
the Premises, provided insurance proceeds are available to fully repair the
damage (except that Landlord shall not be required to rebuild, repair or replace
Tenant's Property which may have been placed in, on or about the Premises by or
for the benefit of Tenant). If Tenant is required to vacate all or a portion of
the Premises during Landlord's repair thereof, the Base Rent payable hereunder
shall be abated proportionately on the basis of the size of the area of the
Premises that is damaged (i.e., the number of square feet of floor area of the
Premises that is damaged compared to the total square footage of the floor area
of the Premises)

                                       14
<PAGE>

from the date Tenant vacates all or a portion of the Premises that was damaged
only to the extent rental abatement insurance proceeds are received by Landlord
and only during the period the Premises are unfit for occupancy as reasonably
determined by the parties. In the event that Landlord should fail to
substantially complete such repairs within one hundred eighty (180) days after
the issuance of permits for the necessary repair or reconstruction of the
portion of the Building or Premises which was damaged or destroyed, (such period
to be extended for delays caused by Tenant or because of any items of Force
Majeure, as hereinafter defined) and Tenant has not re-occupied the Premises.
Tenant shall have the right, as Tenant's exclusive remedy, within ten (10) days
after the expiration of such one hundred eighty (180) day period, and provided
that such repairs have not been substantially completed within such ten (10) day
period, to terminate this Lease by delivering written notice to Landlord as
Tenant's exclusive remedy, whereupon all rights hereunder shall cease and
terminate thirty (30) days after Landlord's receipt of such notice.

             13.1.3 Greater Than 180 Days. If the Premises or Building should be
so damaged that rebuilding or repairs cannot be completed within one hundred
eighty (180) days after the issuance of permits for the necessary repair or
reconstruction of the portion of the Building or Premises which was damaged or
destroyed, either Landlord or Tenant may terminate this Lease by giving written
notice within ten (10) days after notice from Landlord specifying such time
period of repair; and this Lease shall terminate and the Rent shall be abated
from the date Tenant vacates the Premises. In the event that neither party
elects to terminate this Lease, Landlord shall promptly commence and diligently
prosecute to completion the repairs to the Building or Premises, provided
insurance proceeds are available to repair the damage (except that Landlord
shall not be required to rebuild, repair or replace Tenant's Property which may
have been placed in, on or about the Premises by or for the benefit of Tenant).
If Tenant is required to vacate all or a portion of the Premises during
Landlord's repair thereof, the Base Rent payable hereunder shall be abated
proportionately on the basis of the size of the area of the Premises that is
damaged (i.e., the number of square feet of floor area of the Premises that is
damaged compared to the total square footage of the floor area of the Premises),
from the date Tenant vacates all or a portion of the Premises that was damaged
only to the extent rental abatement insurance proceeds are received by Landlord
and only during the period that the Premises are unfit for occupancy as
reasonably determined by the parties.

             13.1.4 Casualty During the Last Year of the Lease Term.
Notwithstanding any other provisions hereof, if the Premises or the Building
shall be damaged within the last year of the Lease Term, and if the cost to
repair or reconstruct the portion of the Building or the Premises which was
damaged or destroyed shall exceed $10,000, then, irrespective of the time
necessary to complete such repair or reconstruction, Landlord shall have the
right, in its sole discretion, to terminate the Lease effective upon the
occurrence of such damage, in which event the Rent shall be abated from the date
Tenant vacates the Premises. The foregoing right shall be in addition to any
other right and option of Landlord under this Section 13.

         13.2 Tenant's Fault. If the Premises or any portion of the Building is
damaged resulting from the negligence or breach of this Lease by Tenant or any
of Tenant Parties, Rent shall not be reduced during the repair of such damage
and Tenant shall be liable to Landlord for the cost of the repair caused thereby
to the extent such cost is not covered by insurance proceeds received by
Landlord.

         13.3 Uninsured Casualty. Tenant shall be responsible for and shall pay
to Landlord Tenant's Share of any deductible or retention amount payable under
the property insurance for the Building. In the event that the Premises or any
portion of the Building is damaged to the extent Tenant is unable to use the
Premises and such damage is not covered by insurance proceeds received by
Landlord or in the event that the holder of any indebtedness secured by the
Premises requires that the insurance proceeds be applied to such indebtedness,
then Landlord shall have the right at Landlord's option either (i) to repair
such damage as soon as reasonably possible at Landlord's expense, or (ii) to
give written notice to Tenant within thirty (30) days after the date of the
occurrence of such damage of Landlord's intention to terminate this Lease as of
the date of the occurrence of such damage. In the event Landlord elects to
terminate this Lease, Tenant shall have the right within ten (10) days after
receipt of such notice to give written notice to Landlord of Tenant's commitment
to pay the cost of repair of such damage, in which event this Lease shall
continue in full force and effect, and Landlord shall make such repairs as soon
as reasonably possible subject to the following conditions: Tenant shall deposit
with Landlord Landlord's estimated cost of such repairs not later than ten (10)
days prior to Landlord's commencement of the repair work. If the cost of such
repairs exceeds the amount deposited, Tenant shall reimburse Landlord for such
excess cost within fifteen (15) days after receipt of an invoice from Landlord.
Any amount deposited by Tenant in excess of the cost of such repairs shall be

                                       15
<PAGE>

refunded within thirty (30) days of Landlord's final payment to Landlord's
contractor. If Tenant does not give such notice within the ten (10) day period,
or fails to make such deposit as required, this Lease shall terminate
automatically as of the date of the occurrence of the damage.

         13.4 Waiver. With respect to any damage or destruction which Landlord
is obligated to repair or may elect to repair, Tenant waives all rights to
terminate this Lease pursuant to rights otherwise presently or hereafter
accorded by Applicable Laws, but nothing contained herein shall be deemed to
waive the rights expressly granted to Tenant under this Lease.

14.      EMINENT DOMAIN

         14.1 Total Condemnation. If all of the Premises is condemned by eminent
domain, inversely condemned or sold under threat of condemnation for any public
or quasi-public use or purpose ("Condemned"), this Lease shall terminate as of
the earlier of the date the condemning authority takes title to or possession of
the Premises, and Rent shall be adjusted to the date of termination.

         14.2 Partial Condemnation. If any portion of the Premises or the
Building is Condemned and such partial condemnation materially impairs Tenant's
ability to use the Premises for Tenant's business as reasonably determined by
the parties, Landlord shall have the option of either (i) relocating Tenant to
comparable space within the Project or (ii) terminating this Lease as of the
earlier of the date title vests in the condemning authority or as of the date an
order of immediate possession is issued and Rent shall be adjusted to the date
of termination. If such partial condemnation does not materially impair Tenant's
ability to use the Premises for the business of Tenant, Landlord shall promptly
restore the Premises to the extent of any condemnation proceeds recovered by
Landlord, excluding the portion thereof lost in such condemnation, and this
Lease shall continue in full force and effect except that after the date of such
title vesting or order of immediate possession Rent shall be adjusted as
reasonably determined by Landlord.

         14.3 Award. If the Premises are wholly or partially Condemned, Landlord
shall be entitled to the entire award paid for such condemnation, and Tenant
waives any claim to any part of the award from Landlord or the condemning
authority; provided, however, Tenant shall have the right to recover from the
condemning authority such compensation as may be separately awarded to Tenant in
connection with costs in removing Tenant's merchandise, furniture, fixtures,
leasehold improvements and equipment to a new location. No condemnation of any
kind shall be construed to constitute an actual or constructive eviction of
Tenant or a breach of any express or implied covenant of quiet enjoyment.
Landlord and Tenant hereby waive the provisions of any statutes or court
decisions which provide a party to a lease with a right to abatement of rent or
termination of the lease or establish the manner of allocation of the
condemnation award when leased property is condemned or taken and agree that
such event shall be exclusively governed by the terms of this Lease.

         14.4 Temporary Condemnation. In the event of a temporary condemnation
not extending beyond the Term, this Lease shall remain in effect, Tenant shall
continue to pay Rent and Tenant shall receive any award made for such
condemnation except damages to any of Landlord's property. If a temporary
condemnation is for a period which extends beyond the Term, this Lease shall
terminate as of the date of initial occupancy by the condemning authority and
any such award shall be distributed in accordance with the preceding section. If
a temporary condemnation remains in effect at the expiration or earlier
termination of this Lease, Tenant shall pay Landlord the reasonable cost of
performing any obligations required of Tenant with respect to the surrender of
the Premises.

15.      DEFAULT.

         15.1 Events of Defaults. The occurrence of any of the following events
shall, at Landlord's option, constitute an "Event of Default":

              15.1.1 Abandonment of the Premises for a period of thirty (30)
consecutive days and failure to pay Rent for such period of time;

              15.1.2 Failure to pay Rent on the date when due and the failure
continuing for a period of five (5) days after such payment is due;

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<PAGE>

             15.1.3 Failure to perform Tenant's covenants and obligations
hereunder (except default in the payment of Rent) where such failure continues
for a period of thirty (30) days after written notice from Landlord; provided,
however, if the nature of the default is such that more than thirty (30) days
are reasonably required for its cure, Tenant shall not be deemed to be in
default if Tenant commences the cure within ten (10) days after written notice
from Landlord and diligently and continuously prosecutes such cure to
completion;

             15.1.4 The making of a general assignment by Tenant for the benefit
of creditors; the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation or reorganization of Tenant under any law relating to bankruptcy,
insolvency or other relief of debtors and, in the case of an involuntary action,
the failure to remove or discharge the same within sixty (60) days of such
filing; the appointment of a receiver or other custodian to take possession of
substantially all of Tenant's assets or this leasehold; Tenant's insolvency or
inability to pay Tenant's debts or failure generally to pay Tenant's debts when
due; any court entering a decree or order directing the winding up or
liquidation of Tenant or of substantially all of Tenant's assets; Tenant taking
any action toward the dissolution or winding up of Tenant's affairs; the
cessation or suspension of Tenant's use of the Premises; or the attachment,
execution or other judicial seizure of substantially all of Tenant's assets or
this leasehold;

             15.1.5 The making of any material misrepresentation or omission by
Tenant or any successor in interest of Tenant in any materials delivered by or
on behalf of Tenant to Landlord or Landlord's lender pursuant to this Lease; or

             15.1.6 The occurrence of an Event of Default set forth in Section
15.1.4 or 15.1.5 with respect to any guarantor of this Lease, if applicable.

        15.2 Remedies.

             15.2.1 Termination. In the event of the occurrence of any Event of
Default, Landlord shall have the right to give a written termination notice to
Tenant (which notice may be the notice given under Section 15.1 above, if such
notice specifies that it also constitutes such a notice of termination
hereunder, and which notice shall be in lieu of, and not in addition to, any
notice required by Applicable Laws) and, on the date specified in such notice,
this Lease shall terminate unless on or before such date all arrears of Rent and
all other sums payable by Tenant under this Lease and all costs and expenses
incurred by or on behalf of Landlord hereunder shall have been paid by Tenant
and all other Events of Default at the time existing shall have been fully
remedied to the satisfaction of Landlord.

                    15.2.1.1 Repossession. Following termination, without
prejudice to other remedies Landlord may have, Landlord may (i) peaceably
re-enter the Premises upon voluntary surrender by Tenant or remove Tenant
therefrom and any other persons occupying the Premises, using such legal
proceedings as may be available; (ii) repossess the Premises or relet the
Premises or any part thereof for such term (which may be for a term extending
beyond the Term), at such rental and upon such other terms and conditions as
Landlord in Landlord's sole discretion shall determine, with the right to make
reasonable alterations and repairs to the Premises; and (iii) remove all
personal property therefrom.

                    15.2.1.2 Unpaid Rent. Landlord shall have all the rights and
remedies of a landlord provided by Applicable Law, including the right to
recover from Tenant: (a) the worth, at the time of award, of the unpaid Rent
that had been earned at the time of termination, (b) the worth, at the time of
award, of the amount by which the unpaid Rent that would have been earned after
the date of termination until the time of award exceeds the amount of loss of
rent that Tenant proves could have been reasonably avoided, (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 the loss of rent that Tenant
proves could have been reasonably avoided, and (d) any other amount, and court
costs, necessary to compensate Landlord for all detriment proximately caused by
Tenant's default. The phrase "worth, at the time of award," as used in (a) and
(b) above, shall be computed at the Applicable Interest Rate, and as used in (c)
above, shall be computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).

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<PAGE>

             15.2.2 Continuation. Even though an Event of Default may have
occurred, this Lease shall continue in effect for so long as Landlord does not
terminate Tenant's right to possession; and Landlord may enforce all of
Landlord's rights and remedies under this Lease, including, without limitation,
the right to recover Rent as it becomes due. Landlord, without terminating this
Lease, may, during the period Tenant is in default and has abandoned the
Premises, enter the Premises and relet the same, or any portion thereof, to
third parties for Tenant's account and Tenant shall be liable to Landlord for
all costs Landlord incurs in reletting the Premises, including, without
limitation, brokers' commissions, expenses of remodeling the Premises and like
costs. Reletting may be for a period shorter or longer than the remaining Term.
Tenant shall continue to pay the Rent on the date the same is due. No act by
Landlord hereunder, including acts of maintenance, preservation or efforts to
lease the Premises or the appointment of a receiver upon application of Landlord
to protect Landlord's interest under this Lease, shall terminate this Lease
unless Landlord notifies Tenant that Landlord elects to terminate this Lease. In
the event that Landlord elects to relet the Premises, the rent that Landlord
receives from reletting shall be applied to the payment of, first, any
indebtedness from Tenant to Landlord other than Base Rent and Tenant's Share of
Operating Expenses and Real Property Taxes; second, all costs, including
maintenance, incurred by Landlord in reletting; and, third, Base Rent and
Tenant's Share of Operating Expenses and Real Property Taxes under this Lease.
After deducting the payments referred to above, any sum remaining from the
rental Landlord receives from reletting shall be held by Landlord and applied in
payment of future Rent as Rent becomes due under this Lease. In no event, and
notwithstanding anything in Section 16 to the contrary, shall Tenant be entitled
to any excess rent received by Landlord. If, on the date Rent is due under this
Lease, the rent received from the reletting is less than the Rent due on that
date, Tenant shall pay to Landlord, in addition to the remaining Rent due, all
costs, including maintenance, which Landlord incurred in reletting the Premises
that remain after applying the rent received from reletting as provided
hereinabove. So long as this Lease is not terminated, Landlord shall have the
right to remedy any default of Tenant, to maintain or improve the Premises, to
cause a receiver to be appointed to administer the Premises and new or existing
subleases and to add to the Rent payable hereunder all of Landlord's reasonable
costs in so doing, with interest at the Applicable Interest Rate from the date
of such expenditure. Landlord shall have no duty to relet the Premises so long
as it has other unleased space available in the Project.

        15.3 Cumulative. Each right and remedy of Landlord provided for herein
or now or hereafter existing at law, in equity, by statute or otherwise shall be
cumulative and shall not preclude Landlord from exercising any other rights or
remedies provided for in this Lease or now or hereafter existing at law or in
equity, by statute or otherwise. No payment by Tenant of a lesser amount than
the Rent nor any endorsement on any check or letter accompanying any check or
payment as Rent shall be deemed an accord and satisfaction of full payment of
Rent (except as may be expressly otherwise permitted pursuant to the specific
provisions of this Lease); and Landlord may accept such payment without
prejudice to Landlord's right to recover the balance of such Rent or to pursue
other remedies.

16. ASSIGNMENT AND SUBLETTING. Tenant shall not assign, sublet or otherwise
transfer, whether voluntarily or involuntarily or by operation of law, the
Premises or any part thereof without Landlord's prior written approval, which
shall not be unreasonably withheld; provided, however, Tenant agrees it shall be
reasonable for Landlord to disapprove of a requested sublease or assignment, if
the proposed subtenant or assignee does not have a tangible net worth (as
determined in accordance with generally accepted accounting principles
consistently applied) which is reasonably sufficient given the obligations to be
performed by the subtenant or assignee under the applicable sublease or
assignment, as shown in the financial information provided to Landlord, or if
the proposed use of the Premises or portion thereof by the proposed subtenant or
assignee does not conform to the uses permitted under this Lease (as such
permitted uses may be modified with Landlord's prior approval, as provided in
the Basic Lease Information) and under all applicable zoning requirements, or if
the proposed subtenant or assignee is currently a tenant in any other space
leased by Landlord or if such proposed subtenant or assignee is in the process
of negotiation with Landlord to lease other space owned or managed by Landlord.
The merger of Tenant with any other entity or the transfer of any controlling or
managing ownership or beneficial interest in Tenant, or the assignment of a
substantial portion of the assets of Tenant, whether or not located at the
Premises, shall constitute an assignment hereunder. If Tenant desires to assign
this Lease or sublet any or all of the Premises, Tenant shall give Landlord
written notice thereof with copies of all related documents and agreements
associated with the assignment or sublease, including without limitation, the
financial statements of any proposed assignee or subtenant, at least thirty (30)
days prior to the anticipated effective date of the assignment or sublease.
Tenant shall pay Landlord's reasonable attorneys' fees incurred in the review of
such documentation plus an administrative fee of Five Hundred Dollars ($500.00)
for each proposed transfer. Landlord shall, within thirty (30) days following
receipt of such notice

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<PAGE>

and all related documents and agreements to notify Tenant in writing of
Landlord's approval or disapproval of the proposed assignment or sublease,
provided that Landlord shall use commercially reasonable efforts to notify
Tenant of Landlord's approval or disapproval within ten (10) days following
receipt of such notice and all related documents and agreements if reasonably
practicable under the circumstances. Landlord shall not be deemed to have
approved of an assignment or subletting unless and until Landlord provides
written notice to Tenant of such approval. This Lease may not be assigned by
operation of law. If the proposed assignment or sublease is for substantially
the remainder of the Term, Landlord may terminate the Lease (or in the case of a
partial sublease, terminate the Lease with respect to the portion of the
Premises proposed to be subject to the sublease) by giving written notice to
Tenant within such thirty (30) day period. Any purported assignment or
subletting contrary to the provisions hereof shall be void and shall constitute
an Event of Default hereunder. If Tenant receives rent or other consideration
for any such transfer in excess of the Rent, or in case of the sublease of a
portion of the Premises, in excess of such Rent that is fairly allocable to such
portion, after appropriate adjustments to assure that all other payments
required hereunder are appropriately taken into account and after Tenant's
recovery of its reasonable costs in connection with such transfer for brokerage
commissions, attorneys' fees (including, without limitation, payment of
Landlord's attorneys' fees), the administrative fee paid to Landlord pursuant
hereto in the amount of Five Hundred Dollars ($500.00), costs of improvements
made for the benefit of the transferee or allowances provided to the transferee,
Tenant shall pay Landlord fifty percent (50%) of the difference between each
such payment of rent or other consideration and the Rent required hereunder .
Landlord may, without waiving any rights or remedies, collect rent from the
assignee, subtenant or occupant and apply the net amount collected to the Rent
herein reserved and apportion any excess rent so collected in accordance with
the terms of the preceding sentence. Such acceptance of Rent shall in no event
be deemed to imply that Landlord is approving a subtenant or assignee which
Landlord has not approved in writing pursuant to the requirements of this
Section 16. Tenant shall continue to be liable as a principal and not as a
guarantor or surety to the same extent as though no assignment or subletting had
been made. Landlord may consent to subsequent assignments or subletting of this
Lease or amendments or modifications to the Lease by assignees of Tenant without
notifying Tenant or any successor of Tenant and without obtaining their consent.
No permitted transfer shall be effective until there has been delivered to
Landlord a counterpart of the transfer instrument in which the transferee agrees
to be and remain jointly and severally liable with Tenant for the payment of
Rent pertaining to the Premises and for the performance of all the terms and
provisions of this Lease relating thereto arising on or after the date of the
transfer.

17.      ESTOPPEL, ATTORNMENT AND SUBORDINATION

         17.1 Estoppel. Within ten (10) days after written request by Landlord,
Tenant shall deliver an estoppel certificate duly executed (and acknowledged if
required by any lender), in the form attached hereto as Exhibit H, or in such
other form as may be acceptable to the lender, which form may include some or
all of the provisions contained in Exhibit H, to any proposed mortgagee,
purchaser or Landlord. Tenant's failure to deliver said statement in such time
period shall be an Event of Default hereunder and shall be conclusive upon
Tenant that (a) this Lease is in full force and effect, without modification
except as may be represented by Landlord; (b) there are no uncured defaults in
Landlord's performance and Tenant has no right of offset, counterclaim or
deduction against Rent hereunder; and (c) no more than one month's Base Rent has
been paid in advance. If any financier should require that this Lease be amended
(other than in the description of the Premises, the Term, the Permitted Use, the
Rent or as will affect the rights of Tenant in a non-de minimis manner),
Landlord shall give written notice thereof to Tenant, which notice shall be
accompanied by a Lease supplement embodying such amendments. Tenant shall,
within ten (10) days after the receipt of Landlord's notice, execute and deliver
to Landlord the tendered Lease supplement. If Tenant fails to deliver to
Landlord the tendered Lease supplement within ten (10) days after receipt of
Landlord's notice, Tenant shall be deemed to have given Landlord a power of
attorney to execute such supplement on behalf of Tenant.

         17.2 Subordination. This Lease shall be subject and subordinate to all
ground leases and master leases and the lien of all mortgages and deeds of trust
which now or hereafter affect the Premises or the Project or Landlord's interest
therein, and all amendments thereto, all without the necessity of Tenant's
executing further instruments to effect such subordination. If requested, Tenant
shall execute and deliver to Landlord within ten (10) days after Landlord's
request whatever documentation that may reasonably be required to further effect
the provisions of this paragraph including a Subordination, Nondisturbance and
Attornment Agreement in the form attached hereto as Exhibit I, or in such other
form as may be required by the lender, which form may include some or all of the
provisions contained in Exhibit I. Tenant's failure to deliver said
documentation in such time period shall be an Event of Default hereunder.
Notwithstanding anything to the contrary contained in the foregoing, Tenant's

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<PAGE>

obligation to hereafter subordinate this Lease to any ground lease or master
lease hereafter encumbering the Project or the Building or the lien of any
future mortgagee or trust deed beneficiary under a mortgage or deed of trust
hereafter encumbering the Project or Building or to hereafter attorn to such
ground lessor, master lessor, mortgagee or beneficiary shall be conditioned upon
the willingness of such ground lessor, master lessor, mortgagee or beneficiary
to enter into a Subordination, Nondisturbance and Attornment Agreement with
Tenant in the form of Exhibit I or in such other form as may be reasonably
required by the mortgagee or beneficiary. In addition, Landlord agrees to use
commercially reasonable efforts to provide Tenant, prior to the Commencement
Date, a Subordination, Nondisturbance and Attornment Agreement fully executed by
any existing mortgagees, trust deed beneficiaries, ground lessors or master
lessors with respect to the Building.

         17.3 Attornment. Tenant hereby agrees that Tenant will recognize as its
landlord under this Lease and shall attorn to any person succeeding to the
interest of Landlord in respect of the land and the buildings governed by this
Lease upon any foreclosure of any mortgage upon such land or buildings or upon
the execution of any deed in lieu of foreclosure in respect to such deed of
trust. If requested, Tenant shall execute and deliver an instrument or
instruments confirming its attornment as provided for herein; provided, however,
that no such beneficiary or successor- in-interest shall be bound by any payment
of Base Rent for more than one (1) month in advance, or any amendment or
modification of this Lease made without the express written consent of such
beneficiary where such consent is required under applicable loan documents.

18.      INTENTIONALLY OMITTED.

19.      MISCELLANEOUS.

         19.1 General.

              19.1.1 Entire Agreement. This Lease sets forth all the agreements
between Landlord and Tenant concerning the Premises; and there are no agreements
either oral or written other than as set forth herein.

              19.1.2 Time of Essence. Time is of the essence of this Lease.

              19.1.3 Attorneys' Fees; Jury Trial Waiver. In any action or
proceeding which either party brings against the other to enforce its rights
hereunder or arises through joinder of or third party action against the other
party, the non-prevailing party shall pay all costs incurred by the prevailing
party, including reasonable attorneys' fees and costs. Any judgment or order
entered in any final judgment shall contain a specific provision providing for
the recovery of all costs and expenses of suit, including reasonable attorneys'
fees (collectively "Costs") incurred in enforcing, perfecting and executing such
judgment. For the purposes of this paragraph, Costs shall include, without
limitation, attorneys' fees, costs and expenses incurred in (i) post-judgment
motions, (ii) contempt proceeding, (iii) garnishment, levy, and debtor and third
party examination, (iv) discovery, and (v) bankruptcy litigation. LANDLORD AND
TENANT ALSO HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO A
TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS LEASE.

              19.1.4 Severability. If any provision of this Lease or the
application of any such provision shall be held by a court of competent
jurisdiction to be invalid, void or unenforceable to any extent, the remaining
provisions of this Lease and the application thereof shall remain in full force
and effect and shall not be affected, impaired or invalidated.

              19.1.5 Law. This Lease shall be construed and enforced in
accordance with the laws of the state in which the Premises are located.

              19.1.6 No Option. Submission of this Lease to Tenant for
examination or negotiation does not constitute an option to lease, offer to
lease or a reservation of, or option for, the Premises; and this document shall
become effective and binding only upon the execution and delivery hereof by
Landlord and Tenant.

              19.1.7 Successors and Assigns. This Lease shall be binding upon
and inure to the benefit of the successors and assigns of Landlord and, subject
to compliance with the terms of Section 16, Tenant.

                                       20
<PAGE>

              19.1.8 Third Party Beneficiaries. Nothing herein is intended to
create any third party benefit.

              19.1.9 Memorandum of Lease. Tenant shall not record this Lease. In
addition, Tenant shall not record a short form memorandum of this Lease without
Landlord's prior written consent which shall not be unreasonably withheld.
However, if a memorandum of this Lease is entered into by the parties and
recorded, (a) the provisions of this Lease shall control in regard to any
omissions from the memorandum of this Lease, or in respect to any provisions of
this Lease which may be in conflict with the memorandum of this Lease, and (b)
upon the expiration of the Term of this Lease or earlier termination of this
Lease, Tenant shall execute and cause to be recorded in the County Recorder's
Office for the County where the Premises is located, at the cost of the party
who originally recorded the memorandum of this Lease, a quitclaim deed or other
evidence of termination of this Lease in such form as is reasonably requested by
Landlord. Tenant's obligation pursuant to the immediately preceding sentence
shall survive the expiration of the Term or earlier termination of this Lease.

              19.1.10 Agency, Partnership or Joint Venture. Nothing contained
herein nor any acts of the parties hereto shall be deemed or construed by the
parties hereto, nor by any third party, as creating the relationship of
principal and agent or of partnership or of joint venture by the parties hereto
or any relationship other than the relationship of landlord and tenant.

              19.1.11 Merger. The voluntary or other surrender of this Lease by
Tenant or a mutual cancellation thereof or a termination by Landlord permitted
under this Lease shall not work a merger and shall, at the option of Landlord,
terminate all or any existing subtenancies or may, at the option of Landlord,
operate as an assignment to Landlord of any or all of such subtenancies.

              19.1.12 Headings. Section headings have been inserted solely as a
matter of convenience and are not intended to define or limit the scope of any
of the provisions contained therein.

              19.1.13 Security Measures. Tenant hereby acknowledges that
Landlord shall have no obligation to provide a guard service or other security
measures whatsoever. From and after commencement of actual occupancy of the
Premises by Tenant (including, without limitation, early entry pursuant to
Section 2.3 above), Tenant assumes all responsibility for the protection of the
Premises, Tenant, its agents and invitees and their property from the acts of
third parties. However, nothing contained herein shall be deemed to make Tenant
liable for securing the Premises during period prior to commencement of actual
occupancy of the Premises by Tenant (including, without limitation, early entry
pursuant to Section 2.3 above).

         19.2 Signs. All signs and graphics of every kind visible in or from
public view or corridors, the Common Areas or the exterior of the Premises
(whether located inside or outside of the Premises) shall be subject to
Landlord's prior written approval and shall be subject to any applicable
governmental laws, ordinances, and regulations and in compliance with Landlord's
signage program. Tenant shall remove all such signs and graphics prior to the
termination of this Lease. Such installations and removals shall be made in such
manner as to avoid injury or defacement of the Premises; and Tenant shall repair
any injury or defacement, including without limitation, discoloration caused by
such installation or removal.

         19.3 Waiver. No waiver of any default or breach hereunder shall be
implied from any omission to take action on account thereof, notwithstanding any
custom and practice or course of dealing. No waiver by either party of any
provision under this Lease shall be effective unless in writing and signed by
such party. No waiver shall affect any default other than the default specified
in the waiver and then such waiver shall be operative only for the time and to
the extent therein stated. Waivers of any covenant shall not be construed as a
waiver of any subsequent breach of the same.

         19.4 Financial Statements. Tenant shall provide, and cause each
Guarantor (if applicable) to provide, to any lender, purchaser or Landlord,
within ten (10) days after request, a current, accurate, audited financial
statement for Tenant and Tenant's business and financial statements for Tenant
and Tenant's business for each of the three (3) years prior to the current
financial statement year prepared by an independent certified public account
under generally accepted accounting principles consistently applied, provided
that if such audited financial statements are not available, then Tenant may
provide unaudited financial statements certified as true and correct in all
material

                                       21
<PAGE>

respects by the Chief Financial Officer of Tenant. Tenant shall also provide
within said ten (10) day period such other financial information or tax returns
as may be reasonably required by Landlord, purchaser or any lender of either.
Tenant shall not be required to provide such financial statements or other
financial information more than once per year, except that Tenant shall be
required to provide such financial statements or other financial information two
times per year if required in connection with a prospective sale or financing by
Landlord.

         19.5 Limitation of Liability. The obligations of Landlord under this
Lease are not personal obligations of the individual partners, members,
managers, directors, officers, shareholders, agents or employees of Landlord;
and Tenant shall look solely to the Building for satisfaction of any liability
of Landlord and shall not look to other assets of Landlord nor seek recourse
against the assets of the individual partners, directors, officers,
shareholders, agents or employees of Landlord. Whenever Landlord transfers its
interest, Landlord shall be automatically released from further performance
under this Lease and from all further liabilities and expenses hereunder and the
transferee of Landlord's interest shall assume all liabilities and obligations
of Landlord hereunder from the date of such transfer.

         19.6 Notices. All notices to be given hereunder shall be in writing and
mailed postage prepaid by certified or registered mail, return receipt
requested, or delivered by personal or courier delivery, or sent by facsimile,
electronically confirmed, (immediately followed by one of the preceding
methods), to Landlord's Address and Tenant's Address, or to such other place as
Landlord or Tenant may designate in a written notice given to the other party.
Notices shall be deemed served upon the first attempted delivery by the U.S.
Postal Service, the courier or a recognized overnight delivery service, or upon
receipt of the facsimile prior to 5 p.m. on any business day, or, if after 5
p.m., on the next business day.

         19.7 Brokerage Commission. Landlord shall pay a brokerage commission to
Landlord's Broker and to Tenant's Broker specified in the Basic Lease
Information in accordance with separate agreements between Landlord and
Landlord's Broker and Tenant's Broker. Landlord shall have no further or
separate obligation for payment of any commissions or fees to any other broker
or finder. Tenant warrants to Landlord that Tenant's sole contact with Landlord
or with the Premises in connection with this transaction has been directly with
Landlord, Landlord's Broker and Tenant's Broker specified in the Basic Lease
Information, and that no other broker or finder can properly claim a right to a
commission or a finder's fee based upon contacts between the claimant and
Tenant. Subject to the foregoing, Tenant agrees to indemnify and hold Landlord
harmless from any claims or liability, including reasonable attorneys' fees, in
connection with a claim by any person for a real estate broker's commission,
finder's fee or other compensation based upon any statement, representation or
agreement of Tenant, and Landlord agrees to indemnify and hold Tenant harmless
from any such claims or liability, including reasonable attorneys' fees, based
upon any statement, representation or agreement of Landlord.

         19.8 Authorization. Each individual executing this Lease on behalf of
Tenant or Landlord represents and warrants that he or she is duly authorized to
execute and deliver this Lease on behalf of such party and that such execution
is binding upon such party.

         19.9 Holding Over; Surrender

              19.9.1 Holding Over. If Tenant holds over the Premises or any part
thereof after expiration of the Term, such holding over shall, at Landlord's
option, constitute a month-to-month tenancy, at a rent equal to (a) during the
initial thirty (30) days of such holding over, one hundred twenty-five percent
(125%) of the Base Rent in effect immediately prior to such holding over, (b)
during the thirty-first (31st) through and including the sixtieth (60th) days of
such holding over, one hundred thirty-seven percent (137%) of the Base Rent in
effect immediately prior to such holding over, and (c) from and after the
sixty-first (61st) day of such holding over, one hundred fifty percent (150%) of
the Base Rent in effect immediately prior to such holding over, and such holding
over shall at all times otherwise be on all the other terms and conditions of
this Lease. This paragraph shall not be construed as Landlord's permission for
Tenant to hold over. Acceptance of Rent by Landlord following expiration or
termination shall not constitute a renewal of this Lease or extension of the
Term except as specifically set forth above. If Tenant fails to surrender the
Premises upon expiration or earlier termination of this Lease, Tenant shall
indemnify and hold Landlord harmless from and against all loss or liability
resulting from or arising out of Tenant's failure to surrender the Premises,
including, but not limited to, any amounts required to be paid to any tenant or
prospective tenant who was to have occupied the Premises after the expiration or
earlier termination of this Lease and any related attorneys' fees and brokerage
commissions.

                                       22
<PAGE>

               19.9.2 Surrender. Upon the termination of this Lease or Tenant's
right to possession of the Premises, Tenant will surrender the Premises broom
clean, together with all keys, in good condition and repair, reasonable wear and
tear excepted. Tenant shall patch and fill all holes within the Premises and all
penetrations of the roof (caused by Tenant or any of the Tenant Parties) shall
be resealed to a watertight condition. In no event may Tenant remove from the
Premises any mechanical or electrical systems or any wiring or any other aspect
of any systems within the Premises. Conditions existing because of Tenant's
failure to perform maintenance, repairs or replacements shall not be deemed
"reasonable wear and tear."

         19.10 Joint and Several. If Tenant consists of more than one person,
the obligation of all such persons shall be joint and several.

         19.11 Intentionally Omitted

         19.12 Auctions. Tenant shall not conduct, nor permit to be conducted,
any auction upon the Premises without Landlord's prior written consent. Landlord
shall not be obligated to exercise any standard of reasonableness in determining
whether to permit an auction.

         19.13 Consents. Except as otherwise provided elsewhere in this Lease,
Landlord's actual reasonable costs and expenses (including, but not limited to,
architects', attorneys', engineers' and other consultants' fees) incurred in the
consideration of, or response to, a request by Tenant for any Landlord consent,
including but not limited to, consents to an assignment, a subletting or the
presence or use of a Hazardous Material, shall be paid by Tenant upon receipt of
an invoice and supporting documentation therefor. Landlord's consent to any act,
assignment or subletting shall not constitute an acknowledgment that no Event of
Default or breach by Tenant of this Lease exists, nor shall such consent be
deemed a waiver of any then existing Event of Default or breach, except as may
be otherwise specifically stated in writing by Landlord at the time of such
consent. Except as otherwise set forth herein, the failure to specify herein any
particular condition to Landlord's consent shall not preclude the imposition by
Landlord at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being
given.

         19.14 Force Majeure. "Force Majeure" as used herein means delays
resulting from causes beyond the reasonable control of the other party,
including, without limitation, any delay caused by any action, inaction, order,
ruling, moratorium, regulation, statute, condition or other decision of any
private party or governmental agency having jurisdiction over any portion of the
Project, over the construction anticipated to occur thereon or over any uses
thereof, or by delays in inspections or in issuing approvals by private parties
or permits by governmental agencies, or by fire, flood, inclement weather,
strikes, lockouts or other labor or industrial disturbance (whether or not on
the part of agents or employees of either party hereto engaged in the
construction of the Premises), civil disturbance, order of any government, court
or regulatory body claiming jurisdiction or otherwise, act of public enemy, war,
riot, sabotage, blockage, embargo, failure or inability to secure materials,
supplies or labor through ordinary sources by reason of shortages or priority,
discovery of hazardous or toxic materials, earthquake, or other natural
disaster, delays caused by any dispute resolution process, or any cause
whatsoever beyond the reasonable control (excluding financial inability) of the
party whose performance is required, or any of its contractors or other
representatives, whether or not similar to any of the causes hereinabove stated.

         19.15 Mortgagee Protection. Tenant agrees to give any holder of any
mortgage or deed of trust secured by the Real Property, by registered or
certified mail or nationally recognized overnight delivery service, a copy of
any notice of default served upon the Landlord by Tenant, provided that, prior
to such notice, Tenant has been notified in writing (by way of service on Tenant
of a copy of assignment of rents and leases or otherwise) of the address of such
holder of a mortgage or deed of trust. Tenant further agrees that if Landlord
shall have failed to cure such default within thirty (30) days after such notice
to Landlord (or if such default cannot be cured or corrected within that time,
then such additional time as may be necessary if Landlord has commenced within
such thirty (30) day period and is diligently pursuing the remedies or steps
necessary to cure or correct such default), then the holder of any mortgage or
deed of trust shall have an additional thirty (30) days within which to cure or
correct such default (or if such default cannot be cured or corrected within
that time, then such additional time as may be necessary if such holder of any
mortgage or deed of trust has commenced within such thirty (30) day period and
is diligently

                                       23
<PAGE>

pursuing the remedies or steps necessary to cure or correct such default).
Notwithstanding the foregoing, in no event shall any holder of any mortgage or
deed of trust have any obligation to cure any default of the Landlord.

         19.16 Telecommunications Services. If Tenant wishes to contract with or
obtain service from any network cabling, data or other telecommunication
provider which does not currently serve the Building or wishes to obtain from an
existing provider services which will require the installation of additional
equipment located outside of the Premises, such provider must, prior to
providing service, enter into a written agreement with Landlord setting forth
the terms and conditions of the access to be granted to such provider. In
considering the installation of any new or additional telecommunications cabling
or equipment at the Building, Landlord will consider all relevant factors in a
reasonable and non-discriminatory manner, including, without limitation, the
existing availability of services at the Building, the impact of the proposed
installations upon the Building and its operations and the available space and
capacity for the proposed installations. Landlord may also consider whether the
proposed service may result in interference with or interruption of other
services at the Building or other portions of the Project or the business
operations of other tenants or occupants of the Building and Project. In no
event shall Landlord be obligated to incur any costs or liabilities in
connection with the installation or delivery of telecommunication services or
facilities at the Building. All installations and alterations shall be subject
to Landlord's prior written approval, which approval shall not be unreasonably
withheld or delayed, and shall be performed in accordance with the terms of
Section 10 (Alterations). If Landlord approves the proposed installations in
accordance with the foregoing, Landlord will deliver its standard form agreement
upon request and will use commercially reasonable efforts to promptly enter into
an agreement on reasonable and non-discriminatory terms with a qualified,
licensed and reputable carrier confirming the terms of installation and
operation of telecommunications equipment consistent with the foregoing.

         19.17 Guarantors. The Guarantors, if any, shall each execute a guaranty
in a form provided by Landlord. It shall constitute an Event of Default of the
Tenant if any Guarantor fails or refuses, upon request to provide: (a) evidence
of the execution and continued enforceability of the guaranty, including the
authority of the party signing on Guarantor's behalf to obligate Guarantor, and
in the case of a corporate Guarantor, a certified copy of a resolution of its
board of directors authorizing the making of such guaranty, (b) current
financial statements, (c) an estoppel certificate, or (d) written confirmation
that the guaranty is still in effect as a valid binding obligation.

         19.18 Addenda. The Addenda attached hereto, if any, and identified with
this Lease are incorporated herein by this reference as if fully set forth
herein.

         IN WITNESS WHEREOF, the parties have executed this Lease as of the date
set forth above.

"Landlord"                                     "Tenant"

CATELLUS DEVELOPMENT CORPORATION,              AEC ONE STOP GROUP, INC.,
                                               a Delaware corporation
a Delaware corporation

                                               By:
                                                  -----------------------------
                                                  Name:
                                                       ------------------------
By:      CATELLUS COMMERCIAL                      Its:
                                                      -------------------------

                                               By:
                                                  -----------------------------
                                                  Name:
                                                       ------------------------
         By:                                      Its:
             ---------------------------              -------------------------
             Name: Stephen Bryan
                   ---------------------
             Its:  Senior Vice President       Date:
                   ---------------------            ---------------------------

         Date:    9/8/03
              --------------------------

                                       24
<PAGE>

<PAGE>

                                ADDENDUM TO LEASE

         THIS ADDENDUM TO LEASE ("Addendum") is attached to and constitutes an
integral part of the Lease between CATELLUS DEVELOPMENT CORPORATION, as
Landlord, and AEC ONE STOP GROUP, INC., a Delaware corporation, as Tenant. The
terms of this Addendum shall be incorporated in the Lease for all purposes. All
words and phrases not specifically defined in this Addendum are as defined in
the Lease. In the event of a conflict between the provisions of the Lease and
the provisions of this Addendum, this Addendum shall control.

         THE FOLLOWING NEW SECTIONS ARE HEREBY ADDED TO THE LEASE WHICH STATE IN
THEIR ENTIRETY AS FOLLOWS:

20.      New Section 20 - Base Rent Abatement Period. A new Section 20 is hereby
added to the Lease which states in its entirety as follows:

         20. Base Rent Abatement Period. Tenant's obligation to pay Base Rent in
the amount of one-twelfth (1/12th) of $2.965 per month per rentable square foot
in the Premises shall be conditionally abated during the first (1st), second
(2nd), third (3rd), fourth (4th), seventeenth (17th) and thirtieth (30th) months
of the Term (the "Base Rent Abatement Period"). Other than during the Base Rent
Abatement Period and as may be expressly otherwise provided in the Lease, Tenant
shall pay Base Rent as and when due under this Lease. Such abatement during the
Base Rent Abatement Period shall apply to Base Rent only and shall not apply to
any sums other than Base Rent payable under this Lease at any time during the
Term. The abatement of Base Rent described above is expressly conditioned on
this Lease not terminating as a result of Tenant's default in the performance of
Tenant's obligations under this Lease. If Tenant defaults under this Lease and
such default results in a termination of this Lease prior to the expiration of
the Term, then Tenant shall pay to Landlord on the date of such termination, in
addition to all other amounts and damages to which Landlord is entitled, the
amount of Base Rent which would otherwise have been due and payable during the
Base Rent Abatement Period but for the abatement provided for herein.

21.      New Section 21 - Options to Extend. A new Section 21 is hereby added to
the Lease which states in its entirety as follows:

         21.      Options to Extend.

                  21.1 Terms of Options. Provided (i)Tenant is not then in
default under the terms of this Lease at the time each extension option is
exercised, (ii) Tenant is occupying at least ninety percent (90%) of the
Premises, including any expansion space, and (iii) Landlord has not given more
than two (2) notices of default in any twelve (12) month period for nonpayment
of monetary obligations, Tenant shall have two (2), separate, consecutive
options to extend the Term of this Lease, each for an additional period of sixty
(60) months (each, an "Extension Term", and collectively, the "Extension
Terms"). The Extension Terms shall be on all the terms and conditions of this
Lease, except that Landlord shall have no additional obligation for free rent,
leasehold improvements or for any other tenant inducements for the Extension
Terms. As of the commencement of each Extension Term, Base Rent shall be
increased (but not decreased) to the fair market rental rate ("Market Rent") as
set forth below and the Security Deposit will be increased to reflect any
increase in Base Rent payable under the Lease, provided that as to the initial
such Extension Term (but not the second Extension Term), in no event shall Base
Rent be increased to an amount in excess of a two and one-half percent (2.5%)
per annum, cumulative and compounding increase in the Base Rent payable from and
after the Commencement Date through to the commencement of such initial
Extension Term. There shall be no additional extension terms beyond the second
Extension Term set forth herein. Tenant must exercise each option to extend the
Term of this Lease granted pursuant hereto by giving Landlord written notice of
its election to do so no later than three hundred sixty-five (365) days prior to
the end of the initial Term, or the first Extension Term, as applicable,
provided, however, that Tenant shall have the right to revoke its prior exercise
of such an option to extend the Term by an Extension Term by delivery of written
notice to Landlord not later than two hundred forty (240) days prior to the
commencement of the applicable Extension Term. Any notice not given in a timely
manner shall be void, and Tenant shall be deemed to have waived its extension
rights or its right to revoke a previously exercised option to extend, as
applicable. In no event shall Landlord be responsible for payment of any
brokerage fees or commissions to any broker or finder retained by Tenant or
representing Tenant in connection with Tenant's extension of the Term by either
Extension Term. The extension options set forth herein are personal to Tenant
and shall not be included in any assignment of this Lease.

                                       25
<PAGE>

         21.2     Determination of Base Rent During Extension Terms.

                  21.2.1 Agreement on Base Rent. Landlord and Tenant shall have
thirty (30) days after Landlord receives the exercise notice in which to agree
on the Base Rent during the applicable Extension Term. Notwithstanding anything
in this Section 21 to the contrary, in no event shall the Base Rent for any
Extension Term be less than the Base Rent in effect immediately prior to the
Extension Term in question.

                  21.2.2 Appraisal. If Landlord and Tenant are unable to agree
upon the Base Rent for the applicable Extension Term within such thirty (30) day
period, then within fifteen (15) days after the expiration of the thirty (30)
day period, each party, by giving notice to the other party, shall appoint a
real estate appraiser who is a current member of the American Institute of Real
Estate Appraisers, with at least five (5) years of experience appraising
building space comparable to the Premises in the city and county where the
Premises are located to determine the Market Rent. The term "Market Rent" shall
mean the monthly amount per rentable square foot in the Premises that a willing,
non-equity new tenant would pay and a willing landlord would accept at arm's
length for space in a comparable building or buildings, with comparable tenant
improvements, in a comparable location, giving appropriate consideration to
monthly rental rates per rentable square foot, the presence or absence of rent
escalation clauses such as operating expense and tax pass-throughs, length of
lease term, size and location of premises being leased and other generally
applicable terms and conditions of tenancy for a similar building or buildings.
If the two (2) appraisers are unable to agree on the Market Rent for the
applicable Extension Term within twenty (20) days, they shall select a third
appraiser meeting the qualifications stated in this Section within five (5) days
after the last day the two (2) appraisers are given to set the Market Rent for
the applicable Extension Term. The third appraiser, however selected, shall be a
person who has not previously acted in any capacity for either party. Within
twenty (20) days after the selection of the third appraiser, a majority of the
appraisers shall set the Market Rent for the applicable Extension Term. If a
majority of the appraisers is unable to set the Market Rent within the twenty
(20) day period, the two (2) closest appraisals shall be added together and
their total divided by two (2). The resulting quotient shall be the Market Rent
for the applicable Extension Term. Each party shall be responsible for the
costs, charges and fees of the appraiser appointed by that party plus one-half
of the cost of the third appraiser; except, however, that in the event of
Tenant's revocation of its exercise of an option to extend by an Extension Term
pursuant to Section 21.1 above, then Tenant shall reimburse Landlord for the
reasonable costs, charges and fees of the appraiser appointed by Landlord and
for one-half of the reasonable costs, charges and fees of the third appraiser
paid by Landlord, within thirty (30) days following Tenant's receipt of a
request for reimbursement accompanied by reasonable evidence of such costs,
charges and fees.

                  21.2.3 Amendment of Lease. Immediately after the Base Rent for
the Extension Term is determined pursuant to this Section 21, Landlord and
Tenant shall execute an amendment to this Lease stating the Base Rent in effect
during the Extension Term.

22.      New Section 22 - Option to Expand. A new Section 22 hereby is added to
the Lease which states in its entirety as follows:

         22.      Option to Expand.

                  22.1 Terms of Option. Provided (i) Tenant is not in default
under the terms of this Lease at the time the option is exercised, (ii) Tenant
is occupying at least ninety percent (90%) of the Premises, and (iii) Landlord
has not given more than two (2) notices of default in any twelve (12) month
period for nonpayment of monetary obligations, Tenant shall have the option at
any time during the first twelve (12) months of the Term to expand the area of
the Premises (the "Expansion Option") by 150,000 rentable square feet, not less
and not more (the "Expansion Area"). The Expansion Area shall be located in a
separate building (the "New Building") to be constructed on the approximately 9
acres of land owned by Landlord and located adjacent to the land underlying the
Project (the "Adjacent Land"). In addition to the portion of any New Building to
be leased to Tenant pursuant hereto, Landlord shall have the right to construct
additional square footage within the New Building, up to the maximum lawful
permitted building area. If the New Building will contain rentable area in
excess of the Expansion Area, Landlord shall reasonably designate the portion of
the New Building that will constitute the Expansion Area so that the balance of
the rentable space in the New Building will permit access and be in a
configuration so as to be reasonably marketable to third party tenants. In no
event shall Landlord be responsible for payment of any brokerage fees or
commissions to any broker or finder retained by Tenant or representing Tenant in
connection with Tenant's expansion of the Premises by the Expansion Area, except
that if Tenant continues to be represented by

                                       26
<PAGE>

Tenant's Broker as of the time of Tenant's expansion of the Premises leased,
then Landlord shall pay a commission to Tenant's Broker in connection with such
expansion pursuant to separate agreement. The expansion option set forth herein
is personal to Tenant and shall not be included in any assignment of this Lease.

         22.2 Exercise of Option and Delivery of Expansion Area. Subject to the
provisions of Section 22.1 above, Tenant may exercise the Expansion Option by
delivering written notice to Landlord at any time during the first twelve (12)
months of the Term. Promptly following Tenant's exercise of the Expansion Option
pursuant hereto, the parties shall meet and work in good faith to reach
agreement within thirty (30) days thereafter upon construction plans and
specifications for the Expansion Area (the "Expansion Area Plans") sufficient to
allow Landlord to construct the Expansion Area. The final Expansion Area Plans
shall be subject to mutual approval by Landlord and Tenant, which approval by
each party shall not be unreasonably withheld or delayed.

         22.3 Lease Terms. The Expansion Area shall be leased upon the same
terms and conditions applicable to the original Premises, except that:

              22.3.1 Tenant shall lease the Expansion Area for a term of not
less than five (5) years. If Tenant leases the Expansion Area, the Term of the
Lease applicable to the original Premises shall be extended so as to be
co-terminous with the term applicable to the Expansion Area, with Base Rent
allocable to the original Premises increased as of the commencement of such
extension period to an amount reflecting a one time increase of 3% per annum,
calculated on a cumulative and compounding basis from the Commencement Date.

              22.3.2 The annual Base Rent payable for the Expansion Area shall
commence on the date of substantial completion of Landlord's work described on
the Expansion Area Plans, or such earlier date upon which Tenant occupies the
Expansion Area for normal business operations (the "Expansion Area Commencement
Date"). The annual Base Rent payable for the Expansion Area shall be the product
obtained by multiplying (1) the Applicable Yield (as hereinafter defined) by (2)
the sum of (i) the Improvement Costs (as hereinafter defined) related to the
Expansion Area, plus (ii) a Development Fee payable to Landlord equal to five
percent (5%) of Improvement Costs, plus (iii) the Land Value (as hereinafter
defined).

              22.3.3 "Applicable Yield" shall mean a fixed rate of interest
equal to the higher of (A) ten and one-quarter percent (10.25%) or (B) the yield
on 10 year U.S. Treasury Notes, as published by the Wall Street Journal (or any
successor publications) as of the date Landlord commences construction of the
Building Addition, plus six hundred (600) basis points.

              22.3.4 "Improvement Costs" shall be the sum of all commercially
reasonable and customary hard and soft costs and expenses incurred by Landlord
with respect to design, permitting, construction and development of the
Expansion Area, which shall include, without limitation, any and all
construction fees and costs, all fees and costs relative to obtaining any and
all permits, other entitlements or third party consents necessary or required in
connection with the design, construction and development of the Expansion Area
(including, without limitation, permits for grading, building and occupancy
permits), costs for building shell, landscaping, architectural, contractor,
attorney and engineering fees, construction period taxes, brokerage fees (the
parties hereby agreeing that Landlord shall pay a commission to Tenant's Broker
in the event of the lease of the Expansion Area pursuant hereto pursuant to
separate agreement), insurance during construction, related legal expenses,
actual construction financing fees and costs and interest expense on the hard
and soft construction and development costs (or an imputed interest expense on
the same, at the Applicable Yield, plus an amount equal to then-customary
construction financing fees and costs, if Landlord does not obtain third-party
financing) until the Expansion Area Commencement Date, an imputed amount for a
return on Landlord's equity investment at a rate equal to Landlord's
then-applicable blended cost of funds, and any and all other out-of-pocket fees,
costs or expenses actually incurred by Landlord in connection with the
construction of the Expansion Area but not including any internal accounting,
management, administrative or other overhead expenses of Landlord except as
otherwise provided above.

              22.3.5 "Land Value" shall be $65,000.00 per acre.

                                       27
<PAGE>

         22.4 Operating Expenses and Real Property Taxes. In addition to the
Base Rent for the Expansion Area. Tenant shall be responsible for its prorata
share of all Operating Expenses and Real Property Taxes allocable to the
Expansion Area from and after the Expansion Area Commencement Date.

         22.5 Not Binding on Successor Landlords. Notwithstanding anything to
the contrary contained in this Section 22, the parties hereby agree and
acknowledge that a successor in interest to Landlord (including, without
limitation, a successor in interest to Landlord by way of foreclosure or deed in
lieu of foreclosure) may not own the Adjacent Land and, accordingly, the parties
hereby agree that the provisions of this Section 22 shall not be binding upon
any successor in interest to Landlord who does not own the Adjacent Land.

         23. New Section 23 - Tenant Cure Rights. A new Section 23 hereby is
added to the Lease which states in its entirety as follows:

         23. Tenant Cure Rights. In the event Landlord fails to perform any of
its repair and maintenance obligations under this Lease ("Landlord Repair
Obligations"), Tenant shall give Landlord and (provided that, prior to such
notice, Tenant has been notified in writing, by way of service on Tenant of a
copy of assignment of rents and leases or otherwise, of the address of such
"Landlord's Mortgagee", as hereinafter defined) any holder of any mortgage or
deed of trust secured by real property including the Premises ("Landlord's
Mortgagee"), written notice specifying such default, this Lease and Tenant's
rights under this Section and containing the following phrase at the top of page
1 of the notice in all capital letters and boldface type (or it shall not be
deemed validly given notice hereunder), "YOUR FAILURE TO COMMENCE THE CURE OF
LANDLORD'S REPAIR OBLIGATIONS SET FORTH IN THIS NOTICE WITHIN THIRTY (30) DAYS
SHALL ENTITLE THE UNDERSIGNED TO CURE SUCH DEFAULT AT LANDLORD'S EXPENSE WITHOUT
FURTHER NOTICE". Landlord shall thereupon have thirty (30) days in which to cure
Landlord's Repair Obligations; provided, however, if Landlord's Repair
Obligations are not reasonably capable of being cured in thirty (30) days,
Landlord shall be deemed to be in compliance with this Lease if Landlord, with
reasonable diligence, commences to cure Landlord's Repair Obligations (which
cure shall in any event be commenced within such thirty (30) day period) and
diligently and continuously prosecutes such cure to completion. In addition,
Landlord's Mortgagee shall have the right (but not the obligation) to cure or
remedy Landlord's Repair Obligations during the period that is permitted to
Landlord hereunder, plus an additional period of ten (10) days, and Tenant will
accept such curative or remedial action taken by Landlord's Mortgagee with the
same effect as if such action had been taken by Landlord, provided however, if
Landlord's Repair Obligation is of a nature which, if not cured immediately,
poses an imminent risk of harm to persons or property and/or will have an
immediate, material, adverse effect on the conduct of Tenant's business
operations at the Premises, Tenant shall have the right to cure Landlord's
Repair Obligation immediately, with only such prior notice (if any) to Landlord
and Landlord's Mortgagee as is reasonable under the circumstances. Upon the
failure of Landlord or Landlord's Mortgagee to cure Landlord's Repair
Obligations in accordance with the provisions of this Section 23, Tenant shall
be authorized and empowered to cure Landlord's Repair Obligations for and on
behalf of Landlord (including the cost of curing Landlord's Repair Obligations
in an emergency situation, where no written notice may have been provided to
Landlord in accordance with the provisions of this Section 23, provided in such
emergency situation Tenant shall use reasonable efforts to provide prior written
notice or oral notice to Landlord), and the reasonable cost of any item paid by
Tenant in curing Landlord's Repair Obligations for and on behalf of Landlord,
together with interest thereon from the date such costs are paid by Tenant until
reimbursed or otherwise recovered by Tenant, at the rate of ten percent (10%)
per annum, shall be payable on demand by Landlord to Tenant. If Landlord fails
to pay to Tenant the cost of such cure within thirty (30) days following
Landlord's (and Landlord's Mortgagee) receipt of Tenant's demand therefor, then
Tenant may provide to Landlord and Landlord's Mortgagee a second written demand
therefor ("Second Demand"), specifying this Lease and Tenant's rights under this
Section and which contains the following phrase at the top of page 1 of the
notice in all capital letters and boldface type (or it shall not be deemed
validly given notice hereunder) "YOUR FAILURE TO REIMBURSE TENANT AS REQUIRED
HEREIN WITHIN FIVE (5) DAYS SHALL ENTITLE THE UNDERSIGNED TO EXERCISE CERTAIN
OFFSET RIGHTS AS SET FORTH IN THE LEASE WITHOUT FURTHER NOTICE." If Landlord
fails to pay to Tenant the amount due to Tenant within five (5) days following
Landlord's receipt of the Second Demand, then Tenant may offset from the next
installments of Rent and other charges coming due under this Lease the full
amount owed by Landlord to Tenant (together with all accrued interest),
provided, however, that (i) the amount of offset during any single month shall
not exceed the greater of (A) twenty percent (20%) of the total Base Rent
payable by Tenant to Landlord for such month or (B) such percentage of total
Base Rent as is necessary to fully recover Tenant's cost of cure from the date
of completion of such cure to the expiration date of the Lease Term

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<PAGE>

(without regard to any unexercised renewal options), in equal monthly offset
amounts; and (ii) Landlord is not then contesting by court action or by
mediation or arbitration proceeding mutually approved by Landlord and Tenant the
amounts Tenant is intending to offset (or having contested same, a judgment,
decision or ruling in such action, mediation or arbitration has been rendered in
favor of Landlord).

24.      New Section 24 - Mechanical System Replacements. A new Section 24
hereby is added to the Lease which states in its entirety as follows:

         24. Mechanical System Replacements. Notwithstanding anything to the
contrary contained in this Lease, if during the Term (as the Term may be
extended pursuant to Section 21 above), Tenant is required by the provisions of
Section 9.1 of this Lease to make any replacements to the HVAC or other
mechanical systems serving the Premises which replacements are estimated to have
a useful life reasonably anticipated to include a period beyond the Term of this
Lease, then, provided that Tenant obtains Landlord's prior written approval as
to the applicable replacement item and the need therefor and the cost thereof
(which approval shall not be unreasonably withheld, conditioned or delayed),
then Landlord (and not Tenant), shall be responsible for the performance of the
work of the replacement of the applicable item, and Tenant shall pay to Landlord
a fraction of the cost of such work, the numerator of which is the number of
months remaining in the Term and the denominator of which is the total number of
months in the estimated useful life of the applicable replacement item, which
payment shall be made by Tenant to Landlord within thirty (30) days after
receipt of request for payment from Landlord accompanied by reasonable evidence
of costs. In addition, if Tenant thereafter desires to extend the Term of this
Lease by an Extension Term, it shall be a condition to the effectiveness of
Tenant's exercise of the option to so extend the Term by the Extension Term that
Tenant pay to Landlord a fraction of the cost of any replacements theretofore
made by Landlord pursuant to this Section 24 allocable to the applicable
Extension Term (meaning a fraction of the cost of any such replacement item, the
numerator of which is the number of months during the estimated useful life of
the applicable replacement item occurring during the applicable Extension Term
and the denominator of which is the number of months within the estimated useful
life of the applicable replacement item).

25.      New Section 25 - Hazardous Materials. A new Section 25 hereby is added
to the Lease which states in its entirety as follows:

         25. Hazardous Materials.

             25.1 Landlord Representation. Landlord hereby represents to Tenant
that, to its current, actual knowledge as of the Effective Date of this Lease,
there are no Hazardous Materials located on or under the Premises at levels
which would materially adversely affect the use or occupancy of the Premises by
Tenant. For purposes of this Lease, current, actual knowledge of Landlord shall
mean the actual, present knowledge of Steve Bryan (the Senior Vice President,
Development, of Landlord with responsibility for the Project) and Sandy Stevens
(the Associate Vice President, Environmental, of Landlord with responsibility
for the Project) as of the Effective Date of this Lease, without investigation
or inquiry of any kind.

             25.2 Landlord Hold Harmless. Landlord shall hold harmless Tenant
from and against any and all orders, penalties, fines, administrative actions,
or other proceedings (collectively, a "Compliance Obligation") commenced by any
governmental agency including, without limitation, the United States
Environmental Protection Agency, arising at any time to the extent that such
Compliance Obligation results from any environmental condition (as defined in
Section 12.1) (a) that exists as of the date of delivery of possession of the
Premises to Tenant (a "Preexisting Condition"), (b) that is the result of a
Pre-existing Condition that worsens following the delivery of possession, or (c)
that is the result of a sub-surface migration of Hazardous Materials (any such
Environmental Condition referenced in the foregoing clause (a), (b) or (c) is
referred to herein as a "Landlord Environmental Condition"), except to the
extent that such Landlord Environmental Condition is caused or aggravated by the
act or omission of Tenant and/or its employees or agents. Landlord's obligations
pursuant to the foregoing hold harmless obligation shall survive the termination
of this Lease.

26.      New Section 26 - Agreement with the Authority. A new Section 26 hereby
is added to the Lease which states in its entirety as follows:

         26. Agreement with the Authority. Landlord shall enter into and become
a party to that certain Service and Technology Agreement to be entered into
between Tenant and the Kentucky Economic Development Finance Authority
("Authority"), in the form attached hereto as Exhibit J (the "Services
Agreement"), for purposes of

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<PAGE>

Sections 7.2, 8.1, 8.2, 11.6 and 11.11 thereof Landlord agrees and covenants to
perform all duties listed therein, including, but not limited to providing to
the Authority, no later than forty-five (45) days after the end of each fiscal
year during the term of the Services Agreement, written evidence, including a
certificate of Landlord, substantially in the form required under the Services
Agreement, of all Rent payments made to Landlord during Tenant's prior fiscal
year. Such written evidence shall include, but not be limited to, a schedule
detailing each date upon which Tenant paid Rent and the amount of such Rent
payment on each and every such date. Landlord shall also provide to the
Authority written notice of any and all defaults under the Lease, specifying the
nature of such default(s), within ten (10) days of the declaration of such
default(s), and notice of the expiration of the term or early termination of the
Lease without extension or renewal within ten (10) days of such expiration or
termination.

Each of the parties acknowledges the incorporation of this Addendum to the
Lease.

------------------------------------         ----------------------------------
   Tenant                                      Landlord

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