Document:

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                                                                    EXHIBIT 10.7

                                                                  Execution Copy

                     WARRANTS REGISTRATION RIGHTS AGREEMENT

               WARRANTS REGISTRATION RIGHTS AGREEMENT, dated as of March 10,
2000 (this "Agreement"), between COLO.COM, a California corporation (the
"Company"), and STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., as
warrant agent (the "Warrant Agent").

               Pursuant to the terms of a Purchase Agreement, dated the date
hereof (the "Purchase Agreement"), among the Company, Goldman Sachs & Co., Bear,
Stearns & Co., Chase Securities Inc., Deutsche Bank Securities Inc., Warburg
Dillon Read LLC and Jefferies and Company, Inc. (the "Purchasers"), the Company
has agreed to issue and sell to the Purchasers an aggregate of 300,000 Warrants
(each, a "Warrant"), each Warrant initially entitling the holder thereof to
purchase 19.9718 Common Shares (as defined below) of the Company at a per share
exercise price equal to $0.01, as part of the issuance of 300,000 Units (the
"Units"), each consisting of one 13 7/8% Senior Note due 2010 of the Company
with a principal amount of $1,000 (each, a "Note" and collectively, the "Notes")
to be issued pursuant to the provisions of a Indenture to be dated as of the
Closing Date (the "Indenture") between the Company, as issuer, and State Street
Bank and Trust Company of California, N.A., as trustee, and one Warrant. The
Note and the Warrant included in each Unit will become separately transferable
at the close of business upon the earliest to occur of (i) the date that is one
year after the Closing Date (as defined below), (ii) 180 days after the closing
date of the Company's initial public offering, (iii) the commencement of an
exchange offer with respect to the Notes undertaken pursuant to the Registration
Rights Agreement (as defined below), (iv) the effectiveness of a shelf
registration statement with respect to resales of the Notes, (v) the
commencement of an offer to purchase the Notes upon a change of control and (vi)
such date as determined by Goldman, Sachs & Co. in its sole discretion.

               In consideration of the foregoing and of the mutual agreements
contained herein and in the Purchase Agreement, the Company and the Warrant
Agents hereby agree as follows:

               1.     Definitions.

               As used in this Agreement, the following capitalized defined
terms shall have the following meanings:

               "Auditors" means, at any time, the independent auditors of the
Company at such time.

               "Board" means the board of directors of the Company from time to
time.

               "Closing Date" means the date of issuance of the Units.

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               "Comfort Letter" has the meaning specified in Section 3 hereof.

               "Commission" means the United States Securities and Exchange
Commission.

               "Common Shares" means the shares of common stock, $0.01 par value
per share, of the Company and any other capital stock of the Company into which
such Common Shares may be converted or reclassified or that may be issued in
respect of, in exchange for or in substitution of such Common Shares by reason
of any stock splits, stock dividends, distributions, mergers, consolidations or
other like events.

               "Company" has the meaning specified in the preamble to this
Agreement.

               "Company Shares" has the meaning specified in Section 2(b)
hereof.

               "Cutback Notice" has the meaning specified in Section 2(a)
hereof.

               "Effectiveness Period" has the meaning specified in Section 3
hereof.

               "Exchange Act" has the meaning specified in Section 4 hereof.

               "Existing Registration Rights Agreement" means any registration
rights or similar agreement described in the Final Offering Memorandum under the
caption "Description of Capital Stock--Registration Rights", as it may be
amended, waived, supplemented, modified, restated, renewed or extended from time
to time, including any amendment, waiver supplement, modification, restatement,
renewal or extension entered into after the date hereof to include any shares
issuable after the date hereof in such agreement.

               "Existing Registration Rights Agreement Shares" has the meaning
specified in Section 2(b) hereof.

               "Expiration Date" means the tenth anniversary of the Closing
Date.

               "Holders" means the record holders of the Warrants and the
holders of Common Shares (or other securities) received upon exercise thereof.

               "Includible Secondary Shares" has the meaning specified in
Section 2(c) hereof.

               "Includible Shares" has the meaning specified in Section 2(b)
hereof.

               "Indemnified Person" has the meaning specified in Section 7(a)
hereof.

               "Indenture" has the meaning specified in the recitals to this
Agreement.

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               "managing underwriter" has the meaning specified in Section 2
hereof.

               "Notes" has the meaning specified in the recitals to this
Agreement.

               "Opinion" has the meaning specified in Section 3 hereof.

               "Other Shares" has the meaning specified in Section 2(b) hereof.

               "Person" means an individual, general partnership, limited
partnership, corporation, trust, joint stock company, association, joint venture
or any other entity or organization, whether or not legal entities, including,
without limitation, a government or political subdivision or an agency or
instrumentality thereof.

               "Piggy-back Registration Rights" has the meaning specified in
Section 2(a) hereof.

               "Purchasers" has the meaning specified in the recitals to this
Agreement.

               "Purchase Agreement" has the meaning specified in the recitals to
this Agreement.

               "Registration Rights Agreement" means the Registration Statement
dated as of the Closing Date between the Company and Goldman, Sachs & Co. for
itself and on behalf of the purchasers set forth in Schedule I of the Purchase
Agreement.

               "Registration Statement" has the meaning specified in Section
2(a) hereof.

               "Resale Shelf" has the meaning specified in Section 3 hereof.

               "Securities Act" means the United States Securities Act of 1933,
as amended.

               "Units" has the meaning specified in the recitals to this
Agreement.

               "Warrant" has the meaning specified in the recitals to this
Agreement.

               "Warrant Agent" has the meaning specified in the preamble to this
Agreement.

               "Warrant Agreement" means the Warrant Agreement dated as of the
Closing Date between the Company and State Street Bank and Trust Company of
California, N.A., relating to the Warrants.

               "Warrant Shares" means the Common Shares (or other securities)
issued or purchasable upon exercise of the Warrants.

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               "Warrant Shelf Registration Statement" has the meaning specified
in Section 3 hereof.

               2.     Piggy-Back Registration Rights.

               (a) If, prior to the date that is ten days prior to the
expiration of the Warrants, the Company proposes to file a Registration
Statement with the Commission respecting an offering of any Common Shares (or
other securities) purchasable upon exercise of the Warrants (other than (x) an
offering that could be registered solely on Form S-4, S-8, or F-4 or any
successor form thereto, (y) securities offered or issued pursuant to any
employment or benefit plan or arrangement to any employee, director, partner,
trustee or consultant or advisor of or to the Company or any subsidiary of the
Company, and (z) the initial public offering of Common Shares (or other
securities) purchasable upon exercise of the Warrants if no shareholder of the
Company participates therein as a selling shareholder), the Company shall give
prompt written notice to all the Holders of Warrants or Warrant Shares at least
30 days prior to the initial filing of the registration statement relating to
such offering (the "Registration Statement"). Each such Holder shall have the
right, within 20 days after delivery of such notice, to request in writing that
the Company include all or a portion of such of the Warrant Shares in such
Registration Statement ("Piggy-back Registration Rights"). The Company shall
include in the public offering all of the Warrant Shares that a Holder has
requested be included, unless the underwriter for the public offering or the
underwriter managing the public offering (in either case, the "managing
underwriter") delivers a notice (a "Cutback Notice") pursuant to Section 2(b) or
2(c) hereof. The managing underwriter may deliver one or more Cutback Notices at
any time prior to the execution of the underwriting agreement for the public
offering.

               (b) If a proposed public offering includes both securities to be
offered for the account of the Company ("Company Shares") and shares to be sold
by shareholders, the provisions of this Section 2(b) shall be applicable if the
managing underwriter delivers a Cutback Notice stating that, in its opinion, the
number of Common Shares that selling shareholders propose to sell therein (other
than shareholders proposing to sell shares pursuant to the registration rights
granted under the Existing Registration Rights Agreement (the "Existing
Registration Rights Agreement Shares")), whether or not such selling
shareholders have the right to include shares therein (the "Other Shares"), plus
the number of Warrant Shares that the Holders have requested to be sold therein,
plus the number of Existing Registration Rights Agreement Shares that the
holders thereof have requested to be sold therein, plus the Company Shares,
exceeds the maximum number of shares specified by the managing underwriter in
such Cutback Notice that may be distributed without materially and adversely
affecting the price, timing or distribution of the Company Shares. Such maximum
number of shares that may be so sold, excluding the Company Shares, are referred
to as the "Includible Shares."

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               If the managing underwriter delivers such Cutback Notice, the
Company shall be entitled to include all of the Company Shares in the public
offering and each requesting party (or beneficiary) exercising its registration
rights (or privileges) under the Existing Registration Rights Agreement, shall
be entitled to include in the public offering up to its pro rata portion of the
Includible Shares and in priority to the inclusion of any Warrant Shares and any
Other Shares that are proposed to be sold in such public offering, and each
requesting Holder shall be entitled to include in the public offering up to its
pro rata portion of the Includible Shares and in priority to the inclusion of
any Other Shares that are proposed to be sold in such public offering. No
shareholder that proposes to sell Other Shares in the proposed initial public
offering, other than as specified above, may sell any such shares therein unless
all Warrant Shares requested by the Holders to be sold therein are so included.

               (c) If a proposed public offering is entirely a secondary
offering, the provisions of this Section 2(c) shall be applicable if the
managing underwriter delivers a Cutback Notice stating that, in its opinion, the
aggregate number of Warrant Shares and Other Shares proposed to be sold therein
exceeds the maximum number of shares (the "Includible Secondary Shares")
specified by the managing underwriter in such Cutback Notice that may be
distributed without materially and adversely affecting the price, timing or
distribution of the Common Shares being distributed.

               (i) If the managing underwriter delivers such Cutback Notice, in
        the case of a demand registration pursuant to the Existing Registration
        Rights Agreement, first each party entitled to be included in such
        demand registration pursuant to the Existing Registration Rights
        Agreement shall be entitled to include all of its Includible Secondary
        Shares, and second each requesting Holder shall be entitled to include
        up to its pro rata portion of the remaining Includible Secondary Shares
        and in priority to the inclusion of any Other Shares, other than as
        specified above, that are proposed to be sold in such public offering;
        and

               (ii) If the managing underwriter delivers such Cutback Notice in
        the case of any other demand registration, first each party exercising
        such demand registration rights shall be entitled to include all of its
        Includible Secondary Shares, then each party entitled to be included in
        such demand registration pursuant to the Existing Registration Rights
        Agreement, and then each requesting Holder, shall be entitled to include
        up to its pro rata portion of the remaining Includible Secondary Shares
        and in priority to the inclusion of any Other Shares, other than as
        specified above, that are proposed to be sold in such public offering.

No shareholder that proposes to sell Other Shares in the proposed public
offering, other than as specified above, may sell any such shares therein unless
all Warrant Shares requested by the Holders to be sold therein are so included.

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               (d) The underwriting agreement for such public offering shall
provide that each requesting Holder shall have the right to sell its Warrant
Shares to the underwriters and that the underwriters shall purchase the Warrant
Shares at the price paid by the underwriters for the Common Shares sold by the
Company and/or selling shareholders, as the case may be.

               3. Shelf Registration. (a) If only the Company sells Common
Shares in an initial public offering or all of the Warrant Shares (or other
securities) purchasable upon exercise of the Warrants have not been sold in one
or more public offerings, the Company shall use its best efforts to cause to be
filed pursuant to Rule 415 under the Securities Act a shelf registration
statement on the appropriate form (the "Warrant Shelf Registration Statement")
covering the resale of the Warrant Shares (or other securities) by the Holders
and shall use its best efforts to cause the Warrant Shelf Registration Statement
to become effective under the Securities Act upon the earliest to occur (i) 180
days after the closing date of the initial public offering of the Company and
(ii) one year after the Closing Date (subject to an extension (not to exceed 90
days) if the Company is subject to a "lockup" or "blackout" period imposed
pursuant to or in connection with any underwriting or purchase agreement
relating to an underwritten Rule 144A or registered public offering of Common
Shares or securities convertible into or exchangeable for Common Shares). The
Company shall use reasonable efforts to keep the Warrant Shelf Registration
Statement continuously effective, subject to Section 4 hereof, until the earlier
of such time as all of the Warrants Shares have been resold and two years after
the Closing Date (the "Effectiveness Period"). Prior to filing the Warrant Shelf
Registration Statement or any amendment thereto, the Company shall provide a
copy thereof to Goldman, Sachs & Co. and its counsel and afford them a
reasonable time to comment thereon.

               (b) If the Warrant Shelf Registration Statement shall register
the resale of the Warrant Shares (a "Resale Shelf") as provided in Section 3(a)
above, the Company agrees to:

               (i) make available for inspection by a representative of the
        Holders, the managing underwriter participating in any disposition
        pursuant to such Resale Shelf and one firm of attorneys designated by
        the Holders (upon execution of customary confidentiality agreements
        reasonably satisfactory to the Company and its counsel), at reasonable
        times and in a reasonable manner, financial and other records, documents
        and properties of the Company that are pertinent to the conduct of due
        diligence customary for an underwritten offering, and cause the
        officers, directors and employees of the Company to supply all
        information reasonably requested by any such representative, underwriter
        or attorney in connection with a Resale Shelf as shall be necessary to
        enable such persons to conduct a reasonable investigation within the
        meaning of Section 11 of the Securities Act of 1933, as amended from
        time to time;

               (ii) use its reasonable best efforts to cause all Warrant Shares
        sold under a Resale Shelf to be listed on any securities exchange or any
        automated quotation system

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        on which similar securities issued by the Company are then listed, to
        the extent such Warrant Shares satisfy applicable listing requirements;

               (iii) provide a reasonable number of copies of the prospectus
        included in such Resale Shelf to Holders that are selling Warrant Shares
        pursuant to such Resale Shelf;

               (iv) if any disposition pursuant to such Resale Shelf is an
        underwritten offering, use its reasonable best efforts to cause to be
        provided to the managing underwriter upon the effectiveness of such
        Resale Shelf, a customary "10b-5" opinion of independent counsel (an
        "Opinion") and a customary "cold comfort" letter of independent auditors
        (a "Comfort Letter");

               (v) if any disposition pursuant to such Resale Shelf is an
        underwritten offering, use its reasonable best efforts to cause to be
        provided to the managing underwriter an Opinion and Comfort Letter with
        respect to each document, including any amendments thereto, that is
        incorporated by reference in such Resale Shelf; and

               (vi) notify the Warrant Agent and any managing underwriter in
        writing, for distribution to the Holders, (A) when the Resale Shelf has
        become effective and when any post-effective amendment thereto has been
        filed and becomes effective, (B) of any request by the Commission or any
        state securities authority for amendments and supplements to the Resale
        Shelf or of any material request by the Commission or any state
        securities authority for additional information after the Resale Shelf
        has become effective, (C) of the issuance by the Commission or any state
        securities authority of any stop order suspending the effectiveness of
        the Resale Shelf or the initiation of any proceedings for that purpose,
        (D) if, between the effective date of the Resale Shelf and the closing
        of any sale of Warrant Shares covered thereby, the representations and
        warranties of the Company contained in any underwriting agreement,
        securities sales agreement or other similar agreement, including this
        Agreement, relating to disclosure cease to be true and correct in all
        material respects or if the Company receives any notification with
        respect to the suspension of the qualification of the Warrant Shares for
        sale in any jurisdiction or the initiation of any proceeding for such
        purpose, (E) of the happening of any event during the period the Resale
        Shelf is effective such that such Resale Shelf or the related prospectus
        contains an untrue statement of a material fact or omits to state a
        material fact required to be stated therein or necessary to make
        statements therein not misleading (in the case of a prospectus, in light
        of circumstances under which they were made) and (F) of any
        determination by the Company that a post-effective amendment to a
        Registration Statement would be appropriate. The Holders hereby agree to
        suspend, and to cause any managing underwriter to suspend, use of the
        prospectus contained in a Resale Shelf upon receipt of such notice under
        clause (C), (E) or (F) above until, in the case of clause (C), such stop
        order is removed or rescinded or, in the case of

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        clauses (E) and (F), the Company has amended or supplemented such
        prospectus to correct such misstatement or omission or otherwise.

               (c) Each beneficial owner of Warrant Shares sold pursuant to a
Resale Shelf, by accepting its beneficial ownership of a Warrant or the Warrant
Shares, hereby (i) agrees to provide the Company with information with respect
to it that the Company reasonably requests in connection with any Resale Shelf.

               4.     Suspension.

               Notwithstanding the foregoing, during any consecutive 365-day
period while the Warrants are exercisable, the Company shall have the ability to
suspend the filing, effectiveness or use of such Warrant Shelf Registration
Statement for up to two 30-consecutive-day periods (except during the 30 days
immediately prior to the expiration of the Warrants) if:

               (a) an event or circumstance occurs and is continuing as a result
        of which the registration statement, any related prospectus or any
        document incorporated therein by reference, as then amended or
        supplemented or proposed to be filed, would, in the good faith
        determination of the Board, contain an untrue statement of a material
        fact or omit to state a material fact necessary in order to make the
        statements therein, in light of the circumstances under which they were
        made, not misleading; and

               (b) (i) the Board determines in good faith that the disclosure of
        such an event at such time would have a material adverse effect on the
        business, operations or prospects of the Company or (ii) the disclosure
        otherwise relates to a material business transaction which has not yet
        been publicly disclosed;

provided that the Effectiveness Period shall be extended by the number of days
in any such suspension period. The Company shall provide notice of such
determination to the Holders at their addresses appearing in the register of
Warrants maintained by the Warrant Agent.

               5.     Blue Sky.

               The Company shall use its reasonable best efforts to register or
qualify the Warrant Shares proposed to be sold or issued pursuant to the
Registration Statement or the Warrant Shelf Registration Statement under all
applicable securities or "blue sky" laws of all jurisdictions in the United
States in which any Holder of Warrants may or may be deemed to purchase Warrant
Shares upon the exercise of Warrants or resale of the Warrant Shares, as the
case may be, and shall use its reasonable best efforts to maintain such
registration or qualification through the earlier of (A) the date upon all
Warrant Shares have been resold under the Warrant Shelf Registration Statement
and (B) the Expiration Date; provided, however, that the Company shall not be
required to (i) qualify as a foreign corporation or as a broker or a dealer in
securities

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        in any jurisdiction where it would not otherwise be required to qualify
        but for this Section 5, (ii) file any general consent to service of
        process or (iii) subject itself to taxation in any jurisdiction if it is
        not otherwise so subject.

               6.     Accuracy of Disclosure.

               The Company (and its successors) represents and warrants to each
Holder (and each beneficial owner of a Warrant or Warrant Share) and agrees for
the benefit of each Holder (and each beneficial owner of a Warrant or Warrant
Share) that, except during any period in which the availability of the Warrant
Shelf Registration Statement has been suspended, (i) the Warrant Shelf
Registration Statement and the documents incorporated by reference therein will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein not misleading; and (ii) the
prospectus delivered pursuant to which such Holder sells its Warrant Shares and
the documents incorporated by reference therein will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that representations, warranties and
agreements set forth in this Section 6 do not apply to statements or omissions
in the Warrant Shelf Registration Statement or any such prospectus based upon
information relating to any Holder furnished to the Company (or its successors)
in writing by such Holder expressly for use therein.

               7. Indemnity. (a) The Company hereby agrees to indemnify each
beneficial owner of a Warrant and each person, if any, who controls any
beneficial owner of a Warrant within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or is under common control with, or is controlled by, any
beneficial owner of a Warrant (whether or not it is, at the time the indemnity
provided for in this Section 7 is sought, such a beneficial owner), from and
against all losses, damages or liabilities which such beneficial owner or any
such controlling or affiliated person ("Indemnified Person") suffers as a result
of any breach, on the date of the resale of any Warrant Share by such
Indemnified Person pursuant to the Warrant Shelf Registration Statement, of the
representations, warranties or agreements contained in Section 6. In addition,
the foregoing indemnity with respect to any preliminary Prospectus shall not
inure to the benefit of any Indemnified Person to the extent that any such
losses, claims, damages or liabilities result from the fact that such
Indemnified Person sold securities to a person to whom there was not sent or
given by or on behalf of such Indemnified Person (if required by law so to have
been delivered) a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) at or prior
to the written confirmation of the sale of the Warrant Shares to such person,
and if the losses, claims, damages or liabilities result from an untrue
statement or alleged untrue statement or an omission or alleged omission
contained in such preliminary Prospectus that was corrected in the Prospectus
(as so amended or supplemented), unless such failure is the result of
noncompliance by the Company with its obligations to deliver copies of the
Prospectus to the Indemnified Person, nor shall this indemnity

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agreement inure to the benefit of any Indemnified Person from whom the person
asserting any such losses, claims, damages or liabilities purchased the Warrant
Shares concerned to the extent that at the time of such purchase such
Indemnified Person had received written notice from the Company that the use of
such Prospectus, amendment, supplement or preliminary Prospectus was suspended
as provided in Section 3(b)(vi) or Section 4. In addition, the Company shall not
be liable in any such case to the extent that any such loss, damage or liability
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in any preliminary Prospectus or Prospectus
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by any such Indemnified Person
expressly for use therein.

               (b) Promptly after receipt by an Indemnified Person under this
Section 7 of notice of the commencement of any action (including any
governmental action), such Indemnified Person will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 7,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an Indemnified Person shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the Indemnifying Person would be inappropriate due to actual
or potential conflict of interests between such Indemnified Person and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the Indemnified Person under this Section 7, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any Indemnified Person otherwise than under this Section 7.

               8.     Expenses.

               All expenses incident to the Company's performance of or
compliance with its obligations under this Agreement will be borne by the
Company, regardless of whether a Registration Statement or Warrant Shelf
Registration Statement becomes effective, including without limitation (i) all
Commission or National Association of Securities Dealers, Inc. registration and
filing fees, (ii) all reasonable fees and expenses incurred in connection with
compliance with state securities or "blue sky" laws, (iii) all reasonable
expenses of any persons incurred by or on behalf of the Company in preparing or
assisting in preparing, word processing, printing and distributing any
registration statement, any prospectus, any amendments or supplements thereto
and other documents relating to the performance of and compliance with this
Agreement, (iv) the reasonable fees (including legal fees and expenses) and
disbursements of the Warrant Agent, (v) the reasonable fees and disbursements of
counsel for the Company and

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               (vi) the fees and disbursements, if any, of the Auditors, but
excluding (x) the reasonable fees and disbursements of counsel retained by the
participating Holders and (y) the Holders' share of underwriting discounts and
commissions.

               9.     "Market Stand Off" Agreement.

               Each Holder hereby agrees that during the 180 day period
following the effective date of an initial public offering of Common Shares (or
other securities purchasable upon exercise of the Warrants), it shall not, to
the extent requested by the Company or the managing underwriter, sell or
otherwise transfer or dispose of (other than to donees who agree to be similarly
bound) any Common Shares of the Company held by it at any time during such
period except Common Shares included in such registration; provided, however,
that all directors of the Company party to or beneficiaries of, from time to
time, the Existing Registration Rights Agreement and, if required by the
managing underwriter, the Management Investors, Beneficial Investors and others
party thereto, or beneficiaries thereof, from time to time, enter into or are
bound by similar agreements.

               In order to enforce the foregoing covenant, the Company may
impose stop-transfer instructions with respect to the Warrant Shares until the
end of such period.

               10.    Miscellaneous.

               (a) No Inconsistent Agreements. The Company represents and the
Warrant Agent represents to the best of its knowledge to the other that it has
not entered into, and agrees that on or after the date of this Agreement it will
not enter into, any agreement which is inconsistent with the rights granted to
the Holders of Warrants or Warrant Shares in this Agreement or otherwise
conflicts with the provisions hereof. The Company represents that the rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities under any agreements (after giving effect to
any waiver, consent, amendment, resolution or other instrument in full force and
effect on the date hereof).

               (b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company and the Warrant Agent have obtained the
written consent of Holders of at least a majority of the outstanding Warrants
affected by such amendment, modification, supplement, waiver or consent;
provided that any amendment, modification or supplement to this Agreement which,
in the good faith opinion of the Board of Directors of the Company (and
evidenced by a resolution of such board), does not adversely affect any Holder,
shall not be subject to such requirement for written consent.

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               (c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 10(c); (ii) if to the Company, initially at the Company's address set
forth in the Indenture and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 10(c); and (iii) if to
the Warrant Agent, initially at the Warrant Agent's address set forth in the
Warrant Agreement and thereafter at such other address, notice of which is given
in accordance with the provisions of this Section 10(c).

               All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day if timely delivered to an air courier guaranteeing
overnight delivery.

               (d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation, subsequent Holders; provided that
nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Warrants in violation of the terms of the Purchase Agreement or
the Warrant Agreement. If any transferee of any Holder shall acquire Warrants,
in any manner, whether by operation of law or otherwise, such Warrants shall be
held subject to all of the terms of this Agreement and the Warrant Agreement,
and by taking and holding such Warrants such person shall be conclusively deemed
to have agreed to be bound by and to perform all of the terms and provisions of
this Agreement or the Warrant Agreement and such person shall be entitled to
receive the benefits hereof.

               (e) Purchases and Sales of Warrants. The Company shall not, and
shall use its best efforts to cause its affiliates (as defined in Rule 405 under
the Securities Act) not to, purchase and then resell or otherwise transfer
(other than to the Company or any subsidiary thereof) any Warrants other than
Warrants acquired and cancelled.

               (f) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Warrant Agents, and each Holder shall have the right to enforce such agreements
directly to the extent it deems such enforcement necessary or advisable to
protect its rights or the rights of Holders hereunder.

               (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

<PAGE>   13

                                       13

               (h) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.

               (i) Governing Law. This Agreement shall be governed by the laws
of the State of New York. The Warrant Agent, the Company and the Holders agree
to submit to the jurisdiction of the courts of the State of New York in any
action or proceeding arising out of or related to this Agreement or the
Warrants.
               (j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.

<PAGE>   14

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

                                            COLO.COM

                                            By /s/ CHARLES M. SKIBO
                                              ----------------------------------
                                            Name: Charles M. Skibo
                                               Title: President and Chief
                                                      Financial Officer

                                            STATE STREET BANK AND TRUST COMPANY
                                            OF CALIFORNIA, N.A.,
                                            as Warrant Agent

                                            By /s/ SCOTT C. EMMONS
                                              ----------------------------------
                                               Name: Scott C. Emmons
                                               Title: Vice President

<PAGE>   15

                                                                  Execution Copy

                     WARRANTS REGISTRATION RIGHTS AGREEMENT

                                     between

                                    COLO.COM

                                       and

            STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.,

                                as Warrant Agent

                           Dated as of March 10, 2000<PAGE>   1
                                                                   EXHIBIT 10.11

                                  OFFICE LEASE

                                 BY AND BETWEEN

                             HITACHI AMERICA, LTD.,

                                  AS LANDLORD,

                                      AND

                                COLOMOTION, INC.,

                                   AS TENANT

<PAGE>   2
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                          Page
                                                                          No.
                                                                          ----
<S>         <C>                                                           <C>
SECTION 1.  TERMS AND DEFINITIONS.........................................   1

SECTION 2.  PROPERTY LEASED...............................................   3
     A.     Premises......................................................   3
     B.     Common Areas..................................................   3
     C.     Minor Variations In Area......................................   3

SECTION 3.  COMMENCEMENT OF TERM AND POSSESSION OF PREMISES...............   3
     A.     Lease Commencement Date.......................................   3
     B.     Completion of Tenant Improvements and Possession of Premises..   4
     C.     Extension of Lease Commencement Date..........................   4
     D.     Acceptance and Suitability....................................   4
     E.     Tenant's Termination Right....................................   5

SECTION 4.  RENT..........................................................   5
     A.     Monthly Rental................................................   5
     B.     Rent and Additional Rent......................................   5

SECTION 5.  COMMON AREAS..................................................   5
     A.     Definitions...................................................   5
     B.     Control of Common Areas.......................................   5

SECTION 6.  SECURITY DEPOSIT..............................................   6

SECTION 7.  TENANT'S TAXES................................................   6

SECTION 8.  USE OF PREMISES...............................................   7
     A.     Permitted Uses................................................   7
     B.     Compliance with Laws..........................................   7
     C.     Hazardous Materials...........................................   8
     D.     Landlord's Rules and Regulations..............................  10
     E.     Traffic and Energy Management; Recycling......................  10

SECTION 9.  SERVICE AND UTILITIES.........................................  11
     A.     Standard Building Services....................................  11
     B.     After-Hours Charges...........................................  11
     C.     Limitation on Landlord's Obligations..........................  11
     D.     Excess Service................................................  11
     E.     Security Services.............................................  12

SECTION 10. MAINTENANCE AND REPAIRS.......................................  12
     A.     Landlord's Obligations........................................  12
     B.     Tenant's Obligations..........................................  12
</TABLE>

                                       i

<PAGE>   3
<TABLE>
<S>         <C>                                                            <C>
     C.     Landlord's Right to Make Repairs..............................  13
     D.     Condition of Premises Upon Surrender..........................  13

SECTION 11. ENTRY BY LANDLORD.............................................  13

SECTION 12. ALTERATIONS, ADDITIONS AND TRADE FIXTURES.....................  14

SECTION 13. MECHANIC'S LIENS..............................................  15

SECTION 14. INSURANCE.....................................................  15
     A.     Tenant........................................................  15
     B.     Landlord......................................................  16
     C.     Waiver of Subrogation.........................................  16

SECTION 15. INDEMNITY.....................................................  16
     A.     Indemnification by Tenant.....................................  16
     B.     Limitation on Landlord's Liability............................  17
     C.     No Landlord Liability for Force Majeure Events................  17
     D.     Indemnification by Landlord...................................  17

SECTION 16. ASSIGNMENT AND SUBLETTING BY TENANT...........................  18
     A.     Consent Required..............................................  18
     B.     Tenant's Request for Consent..................................  18
     C.     Landlord's Election...........................................  18
     D.     Landlord's Factors............................................  18
     E.     Granting of Consent...........................................  19
     F.     Assignment and Sublease Profit................................  19
     G.     Tenant Remains Liable.........................................  20
     H.     Assignee Becomes Liable.......................................  20
     I.     Bankruptcy....................................................  20
     J.     Landlord's Fees...............................................  20
     K.     Certain Rights Personal to Tenant.............................  20
     L.     Sublease Rents................................................  21

SECTION 17. TRANSFER OF LANDLORD'S INTEREST...............................  21

SECTION 18. DAMAGE AND DESTRUCTION........................................  21
     A.     Minor Insured Damage..........................................  21
     B.     Major or Uninsured Damage.....................................  21
     C.     Abatement of Rent.............................................  22
     D.     Waiver........................................................  22

SECTION 19. CONDEMNATION..................................................  22
     A.     Total or Partial Taking.......................................  22
     B.     Award.........................................................  22
     C.     Abatement in Rent.............................................  23
     D.     Temporary Taking..............................................  23
     E.     Transfer of Landlord's Interest to Condemnor..................  23
</TABLE>

                                       ii

<PAGE>   4
<TABLE>
<S>         <C>                                                            <C>
SECTION 20. DEFAULT.......................................................  23
     A.     Tenant's Default..............................................  23
     B.     Remedies......................................................  24
     C.     Relief From Forfeiture........................................  26

SECTION 21. LATE PAYMENTS/INTEREST AND LATE CHARGES.......................  26
     A.     [Intentionally Omitted].......................................  26
     B.     Interest......................................................  26
     C.     Late Charges..................................................  27
     D.     No Waiver.....................................................  27

SECTION 22. [INTENTIONALLY OMITTED].......................................  27

SECTION 23. HOLDING OVER..................................................  27

SECTION 24. ATTORNEYS' FEES...............................................  28

SECTION 25. MORTGAGE PROTECTION/SUBORDINATION.............................  28
     A.     Subordination.................................................  28
     B.     Attornment....................................................  28
     C.     Amendment.....................................................  29

SECTION 26. ESTOPPEL CERTIFICATION/FINANCIAL STATEMENTS...................  29
     A.     Estoppel Certificate..........................................  29
     B.     Furnishing of Financial Statements............................  29

SECTION 27. PARKING.......................................................  29
     A.     Landlord's Obligations........................................  29
     B.     Tenant's Rights and Obligations...............................  30
     C.     Control of Parking Area.......................................  30

SECTION 28. SIGNS; NAME OF BUILDING.......................................  31
     A.     Signs.........................................................  31
     B.     Building Identification.......................................  31

SECTION 29. QUIET ENJOYMENT...............................................  31

SECTION 30. ADDITIONAL FACILITIES AVAILABLE TO TENANT.....................  32
     A.     Conference Rooms..............................................  32
     B.     Fitness Center................................................  32
     C.     Fees..........................................................  33

SECTION 31. NOTICES.......................................................  33

SECTION 32. NOTICE AND CURE TO LANDLORD AND MORTGAGEE.....................  33

SECTION 33. GENERAL.......................................................  33
     A.     Paragraph Headings............................................  33
     B.     Incorporation of Prior Agreements; Amendments.................  33
</TABLE>

                                      iii

<PAGE>   5
<TABLE>
<S>         <C>                                                            <C>
     C.     Waiver........................................................  34
     D.     Short Form or Memorandum of Lease.............................  34
     E.     Time of Essence...............................................  34
     F.     Examination of Lease..........................................  34
     G.     Severability..................................................  34
     H.     Surrender of Lease Not Merger.................................  34
     I.     Authority.....................................................  34
     J.     Governing Law.................................................  35
     K.     Force Majeure.................................................  35
     L.     Use of Language...............................................  35
     M.     Successors....................................................  35
     N.     No Reduction of Rental........................................  35
     O.     No Partnership................................................  35
     P.     Exhibits......................................................  35
     Q.     Indemnities...................................................  35
     R.     Nondisclosure of Lease Terms..................................  36
     S.     No Light, Air or View Easement................................  36
     T.     Brokers.......................................................  36
     U.     Counterparts..................................................  36
</TABLE>

EXHIBIT A  FLOOR PLAN OF THE PREMISES
EXHIBIT B  CONSTRUCTION WORK LETTER
EXHIBIT C  RULES AND REGULATIONS
EXHIBIT D  AMENDMENT OF LEASE COMMENCEMENT DATE

<PAGE>   6
                                  OFFICE LEASE

THIS LEASE is entered into by and between Landlord and Tenant effective as of
this 18th day of May, 1999.

SECTION 1. TERMS AND DEFINITIONS

The following terms as used herein shall have the meanings as set forth below:

A.    "Landlord" means HITACHI AMERICA, LTD., a New York corporation, and its
      successors and assigns.

B.    "Tenant" means COLOMOTION, INC., a California corporation.

C.    "Building" means the building in which the Premises are located, which
      Building has approximately 266,606 square feet of Rentable Area and is
      located at 2000 Sierra Point Parkway, in the City of Brisbane, California.

D.    "Project" means the Building, the Premises, the Common Areas and the
      legal parcel on which the Building is located.

E.    "Premises" means the following: from the Lease Commencement Date until
      12/31/1999, the space labeled as "Phase 1" on Exhibit A, Page 2 of 2
      attached hereto and incorporated herein by this reference; from 01/01/2000
      until 06/30/2000, the spaces labeled as "Phase 1" and "Phase 2" thereon;
      and from and after 07/01/2000, the spaces labeled as "Phase 1," "Phase 2"
      and "Phase 3" thereon. The Premises from time to time covered by this
      Lease shall be referred to as Suite 601.

F.    "Term" means the approximately sixty (60) month period commencing on the
      Lease Commencement Date and expiring on the Expiration Date.

G.    "Lease Commencement Date" means the earlier to occur of (1) July 1, 1999
      and (2) the date Tenant commences operation of its business from the
      Premises; provided, however, that if the Lease Commencement Date stated
      in this subsection is amended pursuant to Section 3(C) below, Landlord
      and Tenant shall execute and attach hereto as a new Exhibit D an
      Amendment of Lease Commencement Date in the form of Exhibit D hereto,
      which shall specify such amended Lease Commencement Date and, if
      applicable, an amended Expiration Date.

H.    "Expiration Date" means June 30, 2004 unless amended as provided in an
      Amendment of Lease Commencement Date executed as provided above.

                                       1
<PAGE>   7
I.    "Monthly Rental" means the following:

<TABLE>
<CAPTION>
                        Period                              Monthly Rental
                        ------                              --------------
      <S>                                                   <C>
      Lease Commencement Date - 12/31/1999                  $18,720.00

      01/01/2000 - 06/30/2000                               $37,440.00

      07/01/2000 - 06/30/2001                               $59,019.84

      07/01/2001 - 06/30/2002                               $61,387.92

      07/01/2002 - 06/30/2003                               $63,938.16

      01/01/2003 - 06/30/2004                               $66,488.40
</TABLE>

J.    "Rentable Area" means:

      (1)   As to each floor of the Building on which the entire space rentable
            to tenants is or will be leased to one tenant (hereinafter referred
            to as a "Single Tenant Floor"), Rentable Area shall be the entire
            area bounded by the inside surface of the four exterior glass walls
            (or in the inside surface of the permanent exterior wall(s) where
            there is no glass) on such floor, including all areas used for
            elevator lobbies, corridors, special stairways, or elevators,
            restrooms, mechanical rooms, electrical rooms and telephone closets
            without deduction for columns and other structural portions of the
            Building or vertical penetrations that are included for the special
            use of the tenant of such floor together with a portion of the
            covered or enclosed common facilities which constitute a part of the
            Building and which are maintained by Landlord for the common
            benefit of all tenants of the Building which bears the same
            proportion to the total area of such common facilities as the
            Rentable Area of each Single Tenant Floor bears to the Rentable
            Area of the Building (excluding such common facilities), but
            excluding the area contained within the exterior walls of the
            Building stairs, fire towers, vertical ducts, elevator shafts,
            flues, vents, stacks and pipe shafts.

      (2)   As to each floor of the Building on which space is or will be
            leased to more than one tenant, Rentable Area attributable to each
            such lease shall be the total of (a) the entire area included
            within the premises covered by such lease, being the area bounded by
            the inside surface of any exterior glass walls (or the inside
            surface of the permanent exterior wall(s) where there is no glass)
            of the Building bounding such premises, the exterior of all walls
            separating such premises from any public corridors or other public
            areas on such floor, and the centerline of all walls separating
            such premises from other areas leased or to be leased to other
            tenants on such floor, (b) that portion outside the Premises but
            within space intended for use or occupancy as premises by another
            tenant utilized by Tenant for wiring, ducts, vents or other
            requirements of Tenant's operations in the Premises, (c) that
            portion of the covered or enclosed common facilities which
            constitute a part of the Building and which are maintained by
            Landlord for the common benefit of all tenants of the Building
            which bears the same proportion to the total area of such common
            facilities as the Rentable Area of such Premises bears to the
            Rentable Area of the Building (excluding such common facilities),
            and (d) a pro rata portion of any area of the Building devoted to
            common features such as elevator lobbies, corridors, restrooms,
            mechanical rooms, electrical rooms and telephone closets, but
            excluding any area contained within the exterior walls of the

                                       2

<PAGE>   8

          Building for stairs, fire towers, vertical ducts, elevator shafts,
          flues, vents, stacks and pipe shafts.

K.   "Security Deposit" means $132,976.80.

L.   "Permitted Use" means commercial office use.

M.   "Brokers" means Cornish & Carey Commercial and Cushman & Wakefield.

N.   "Landlord's Address for Notice" means 2000 Sierra Point Parkway, MS 550,
     Brisbane, California 94005, Attention: Facilities Manager.

O.   "Tenant's Address for Notice" means the address of the Premises.

P.   "Parking Spaces" means 3.3 unreserved parking spaces per 1000 square feet
     of Rentable Area in the Premises in the area of the Project designated by
     Landlord for vehicle parking.

Q.   "Fitness Center Memberships" means eighteen (18) memberships in the
     fitness center located on the first floor of the Building ("Fitness
     Center").

SECTION 2. PROPERTY LEASED

A.   Premises. Upon and subject to the terms, covenants and conditions
     hereinafter set forth, Landlord hereby leases to Tenant, and Tenant hereby
     leases from Landlord, the Premises; reserving to Landlord, however, (1)
     the use of the exterior walls, roof, return air plenum and the area under
     the Premises floor and (2) the rights to make structural (building)
     modifications and the right to install, maintain, use, repair and replace
     pipes, ducts, conduits, and wires to serve or serving other tenant
     premises in the Building through the Premises in locations which will not
     materially interfere with Tenant's use thereof. Tenant shall not enter
     upon or use in any manner or for any purpose any space on the sixth floor
     of the Building other than the area from time to time expressly included
     within the Premises in accordance with the provisions of Section 1(E),
     except with the prior written approval of Landlord, which Landlord may
     give or withhold in its sole and absolute discretion. For any calendar
     month during any portion of which Tenant may use or occupy any space not
     included within the Premises, Tenant shall pay to Landlord a rental equal
     to the area used or occupied by Tenant multiplied by the per square foot
     rental amount then in effect for the Premises, or such other amount as
     Landlord and Tenant may mutually agree in writing.

B.   Common Areas. Subject to the terms, covenants and conditions of this
     Lease, Tenant shall have the right, for the benefit of Tenant and its
     employees and invitees, to the non-exclusive use of all of the Common
     Areas as hereinafter defined.

C.   Minor Variations In Area. The Rentable Area of the Premises contained in
     Section 1(E) is agreed to be the Rentable Area of the Premises regardless
     of minor variations resulting from construction of the Building and/or
     tenant improvements.

SECTION 3. COMMENCEMENT OF TERM AND POSSESSION OF PREMISES

A.   Lease Commencement Date. The Term of the Lease shall commence on the Lease
     Commencement Date (as extended only pursuant to Section 3(C) below, if
     applicable), and shall continue, subject to earlier termination as
     provided herein, until the Expiration Date (as extended only pursuant to
     Section 3(C) below).

                                       3
<PAGE>   9
B.   Completion of Tenant Improvements and Possession of Premises. Upon
     execution of this Lease by the parties, Tenant shall have the right to
     enter the Premises solely for purposes of performing and completing all
     tenant improvements described as "Tenant's Work" in Exhibit B hereto, and
     Tenant shall open the Premises for business, on or before the Lease
     Commencement Date. Tenant's occupancy of the Premises prior to the Lease
     Commencement Date shall be subject to all of the terms and conditions of
     this Lease; provided, however, Tenant's obligation to pay Monthly Rental
     shall not commence until the Lease Commencement Date. All tenant
     improvements constructed in the Premises, whether by Landlord or by (or on
     behalf of) Tenant and whether at Landlord's or Tenant's expense, shall
     become part of the Premises and shall be and remain the property of
     Landlord unless Landlord specifically agrees otherwise in writing.

C.   Extension of Lease Commencement Date. If the Premises are not ready for
     occupancy by Tenant on the original Lease Commencement Date specified in
     Section 1(G) due to one or more delays caused by Landlord or caused by
     matters beyond the control of Landlord, this Lease and the obligations of
     Landlord and Tenant hereunder shall nevertheless continue in full force
     and effect. However, in such event Landlord and Tenant shall agree on an
     amendment of the original Lease Commencement Date to reflect such delay or
     delays and shall, in each instance, within thirty (30) days after the
     amended Lease Commencement Date, execute and attach hereto an amendment in
     the form of that attached as Exhibit D hereto stating such amended Lease
     Commencement Date and, if applicable, an amended Expiration Date and no
     rental shall be payable by Tenant hereunder until the amended Lease
     Commencement Date. The delay in commencement of the Term and in the
     accrual of rent described in the foregoing sentence shall constitute full
     settlement of all claims that Tenant might otherwise have by reason of the
     Premises not being ready for occupancy on the original Lease Commencement
     Date specified in Section 1(G) above.

     If the Premises are not ready for occupancy by Tenant on the Lease
     Commencement Date due to one or more delays caused by Tenant, or anyone
     acting under or for Tenant, Landlord shall have no liability for such
     delay and the Lease Commencement Date shall nevertheless begin as of the
     Lease Commencement Date stated in Section 1(G) (as extended only because
     of Landlord's delay pursuant to this Section 3(C), if applicable).

D.   Acceptance and Suitability. Tenant hereby agrees to accept the Premises in
     its "AS IS" condition. Tenant agrees that by taking possession of the
     Premises it will conclusively be deemed to have inspected the Premises and
     found the Premises in satisfactory condition. Tenant acknowledges that
     neither Landlord, nor any agent, employee or servant of Landlord, has made
     any representation with respect to the Premises, the Building, or the
     Project or with respect to the suitability of them for the conduct of
     Tenant's business, nor has Landlord agreed to undertake any modifications,
     alterations, or improvements of the Premises or Building, except as
     specifically provided in this Lease.

     TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, LANDLORD HEREBY
     DISCLAIMS, AND TENANT WAIVES THE BENEFIT OF, ANY AND ALL IMPLIED
     WARRANTIES, INCLUDING IMPLIED WARRANTIES OF HABITABILITY, FITNESS OR
     SUITABILITY FOR PURPOSE, OR THAT THE BUILDING OR THE IMPROVEMENTS IN THE
     PREMISES HAVE BEEN CONSTRUCTED IN A GOOD AND WORKMANLIKE MANNER.

                                       4

<PAGE>   10
E.   Tenant's Termination Right.   Tenant shall have a right to terminate this
     Lease effective as of June 30, 2002, upon notice given and payment made as
     specified below; provided, however, that the termination of this Lease
     pursuant to any such notice and payment shall not be effective if Tenant is
     in default under this Lease at the time of giving notice of termination or,
     at Landlord's option, upon the effective date of termination. Tenant shall
     exercise such option by giving written notice to Landlord not later than
     September 30, 2001, time being of the essence with regard to the giving of
     such notice, and by paying to Landlord, at the time such notice is given, a
     termination payment of $245,551.68. Tenant's notice shall be effective to
     terminate this Lease only provided and on condition that it is accompanied
     by payment to Landlord of such termination payment. If Tenant effectively
     exercises its right to terminate this Lease herein provided, Tenant shall
     continue to pay all of the rents herein and perform all of its obligations
     hereunder through June 30, 2002, upon which date the Term of this Lease
     shall end in the same manner as if the same were the Expiration Date
     originally specified on this Lease.

SECTION 4. RENT

A.   Monthly Rental. Commencing on the Lease Commencement Date, Tenant shall pay
     to Landlord during the Term the amount set forth in Section 1(I) in monthly
     installments (the "Monthly Rental"), which sum shall be payable by Tenant
     on or before the first day of each month, in advance, without further
     notice, at the address specified for Landlord in Section 1(N), or such
     other place as Landlord shall designate, without any prior demand therefor
     and without any abatement, demand, counterclaim, deduction or setoff
     whatsoever. If the Lease Commencement Date should occur on a day other than
     the first day of a calendar month, or the Expiration Date should occur on a
     day other than the last day of a calendar month, then the rental for such
     fractional month shall be prorated on a daily basis upon a thirty (30) day
     calendar month.

B.   Rent and Additional Rent. As used in this Lease, the term "rent" shall mean
     Monthly Rental and additional rent, and the term "additional rent" shall
     mean all other amounts payable by Tenant to Landlord pursuant to this Lease
     other than Monthly Rental. All Monthly Rental and additional rent shall be
     paid without any abatement, demand, deduction, setoff or counterclaim
     whatsoever in lawful money of the United States which shall be legal tender
     at the time of payment. Where no other time is stated herein for payment,
     payment of any amount payable from Tenant to Landlord hereunder shall be
     due and made, within ten (10) days after Tenant's receipt of Landlord's
     invoice or statement therefor. Tenant expressly acknowledges that Tenant's
     covenant to pay rent under this Lease is separate and independent from
     Landlord's covenant to provide services and other amenities hereunder.

SECTION 5. COMMON AREAS

A.   Definitions. "Common Areas" means all areas, space, equipment and special
     services provided by Landlord for the common or joint use and benefit of
     Landlord, the tenants and other occupants of the Building, and their
     respective employees, agents, servants, suppliers, customers and other
     invitees, including, by way of illustration, but not limitation, retaining
     walls, fences, landscaped areas, parks, curbs, sidewalks, private roads,
     the cafeteria on the first floor of the Building, common restrooms,
     stairways, elevators, lobbies, common hallways, patios, service quarters,
     parking areas and all common areas and other areas within the exterior of
     the Building and in the Project.

B.   Control of Common Areas. Landlord shall maintain the Common Areas,
     including lobbies, stairs, elevators, corridors, restrooms, windows,
     mechanical, plumbing and electrical equipment, and the structure itself in
     reasonably good order and condition except for damage occasioned by the act

                                       5
<PAGE>   11
     of Tenant, its employees, agents, contractors or invitees, which damage
     shall be repaired by Landlord at Tenant's expense. Landlord shall have the
     sole and exclusive control of the Common Areas, as well as the right to
     make changes to the Common Areas. Notwithstanding the preceding sentence,
     Landlord is not responsible for any harm or damage to any of Tenant's
     officers, agents, employees, servants, suppliers, customers or other
     invitees as a result of their use of the Common Areas. Landlord's rights to
     make changes shall include, but not be limited to, the right to (a)
     restrain the use of the Common Areas by unauthorized persons, (b) utilize
     from time to time any portion of the Common Areas for promotional and
     related matters, (c) temporarily close any portion of the Common Areas for
     repairs, improvements or alterations, (d) change the shape and size of the
     Common Areas or change the location of improvements within the Common
     Areas, including, without limitation, parking areas, roadways and curb
     cuts, and (e) prohibit access to or use of Common Areas that are designated
     for the storage of supplies or operation of equipment necessary to operate
     the Project or Building. Landlord may determine the nature, size and extent
     of the Common Areas as well as make changes to the Common Areas from time
     to time which, in its opinion, are deemed desirable. Noise, dust, dirt or
     vibration or other incidents to new construction of improvements on lands
     adjacent or proximate to the Building, whether or not owned by Landlord,
     shall in no way affect this Lease or impose any liability on Landlord.

SECTION 6.  SECURITY DEPOSIT

Upon execution of this Lease, Tenant shall deposit with Landlord the Security
Deposit defined in Section 1(K) above, which shall be held by Landlord as
security for the performance by Tenant of all terms, covenants and conditions
of this Lease. It is expressly understood and agreed that such Security Deposit
is not an advance rental deposit or a measure of Landlord's damages in case of
Tenant's default. If Tenant defaults with respect to any provision of this
Lease, including, but not limited to, the provisions relating to the payment of
rent or the obligation to repair and maintain the Premises or to perform any
other term, covenant or condition contained herein, Landlord may (but shall not
be required to), without prejudice to any other remedy provided herein or
provided by law and without notice to Tenant, use the Security Deposit, or any
portion of it, to cure the default or to compensate Landlord for all damages
sustained by Landlord resulting from Tenant's default. Tenant shall immediately
on demand pay to Landlord a sum equivalent to the portion of the Security
Deposit so expended or applied by Landlord as provided in this Section so as to
maintain the Security Deposit in the sum initially deposited with Landlord.
Although the Security Deposit shall be deemed the property of Landlord, if
Tenant is not in default at the expiration or termination of this Lease,
Landlord shall return the Security Deposit (or applicable portion thereof) to
Tenant. Landlord shall not be required to keep the Security Deposit separate
from its general funds and Landlord, not Tenant, shall be entitled to all
interest, if any, accruing on any such Security Deposit. Upon any sale or
transfer of its interest in the Building, Landlord shall transfer the Security
Deposit to its successor in interest and thereupon, Landlord shall be released
from any liability or obligation with respect thereto.

SECTION 7.  TENANT'S TAXES

Tenant shall be liable for any tax (now or hereafter imposed by any
governmental entity) applicable to or measured by or on the rents or any other
charges payable by Tenant under this Lease, including (but not limited to) any
gross income tax, gross receipts tax or excise tax with respect to the receipt
of such rent or other charges or the possession, leasing or operating, use or
occupancy of the Premises, but not including any net income, franchise, capital
stock, estate or inheritance taxes. If any such tax is required to be paid to
the governmental taxing entity directly by Landlord, then Landlord shall pay the
amount due and, upon demand, shall be fully reimbursed by Tenant for such
payment.

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<PAGE>   12
Tenant shall also be liable for all taxes levied against the leasehold held by
Tenant or against any personal property, leasehold improvements, additions,
alterations and fixtures placed by or for Tenant in, on or about the Premises,
Building and Project or constructed by Landlord for Tenant in the Premises; and
if any such taxes are levied against Landlord or Landlord's property, or if the
assessed value of such property is increased (whether by special assessment or
otherwise) by the inclusion therein of value placed on such leasehold, personal
property, leasehold improvements, additions, alterations and fixtures, and
Landlord pays any such taxes (which Landlord shall have the right to do
regardless of the validity thereof), Tenant, upon demand, shall fully reimburse
Landlord for the taxes so paid by Landlord or for the proportion of such taxes
resulting from such increase in any assessment.

SECTION 8.  USE OF PREMISES

A.   Permitted Uses.  Tenant shall use the Premises solely for the Permitted Use
     specified in Section 1(L) above, and for no other use, and under the name
     specified in Section 1(B) above. Tenant shall, at its own cost and expense,
     obtain any and all licenses and permits necessary for any such use. Tenant
     shall not do or permit anything to be done in or about the Premises, Common
     Areas, Building or Project which will in any way obstruct or interfere with
     the rights of Landlord or other tenants or occupants of the Building or
     injure or annoy them or use or allow the Premises to be used for any
     unlawful purpose, nor shall Tenant cause, maintain or permit any nuisance
     in, on or about the Premises and Common Areas or permit any odors to
     emanate from the Premises and intrude upon the Common Areas or the premises
     of Landlord or other tenants. Tenant shall not commit or suffer to be
     committed any waste in or upon the Premises, Common Areas, Building or
     Project. Tenant shall not do or permit anything to be done in or about the
     Premises, Common Areas, Building or Project which may render the insurance
     thereon void or increase the insurance risk thereon. If an increase in any
     fire and extended coverage insurance premiums paid by Landlord for the
     Building and Project is caused by Tenant's use and occupancy of the
     Premises, then Tenant shall pay as additional rental the amount of such
     increase to Landlord.

B.   Compliance with Laws.  Tenant shall not use the Premises, Building,
     Project or Common Areas in any way (or permit or suffer anything to be
     done in or about the same) which will conflict with any law, statute,
     ordinance or governmental rule or regulation or any covenant, condition or
     restriction (whether or not of public record) affecting the Premises,
     Project or Building, now in force or which may hereafter be enacted or
     promulgated including, but not limited to, the provisions of any city or
     county zoning codes regulating the use thereof. Tenant shall, at its sole
     cost and expense, promptly comply with (i) all laws, statutes, ordinances
     and governmental rules and regulations, now in force or which may
     hereafter be in force, applicable to Tenant or its use of or business
     operations in the Premises including structural, utility system and life
     safety system changes necessitated by Tenant's acts, use of the Premises or
     by improvements made by or for Tenant, (ii) all requirements, and other
     covenants, conditions and restrictions, now in force or which may
     hereafter be in force, which affect the Premises, and (iii) all
     requirements, now in force or which may hereafter be in force, of any
     board of fire underwriters or other similar body now or hereafter
     constituted relating to or affecting the condition, use or occupancy of
     the Premises, Building or Project. The judgment of any court of competent
     jurisdiction or the admission by Tenant in any action against Tenant,
     whether Landlord be a party thereto or not, that Tenant has violated any
     law, statute, ordinance, governmental rule or regulation or any
     requirement, covenant, condition or restriction shall be conclusive of the
     fact as between Landlord and Tenant. Tenant agrees to fully indemnify
     Landlord against any liability, claims or damages arising as a result of a
     breach of the provisions of this Section 8(B) by Tenant, and against all
     costs, expenses, fines or other charges arising therefrom, including,
     without limitation, reasonable attorneys' fees and related costs incurred
     by Landlord in connection therewith, which indemnity shall survive the
     expiration or earlier termination of this Lease. Without limiting the
     generality

                                       7
<PAGE>   13
      of the foregoing, it is expressly understood and agreed that Tenant is
      accepting the Premises "AS IS," in its present state and condition,
      without any representations or warranties from Landlord of any kind
      whatsoever, either express or implied, with respect to the Premises or
      the Building, including without limitation the compliance of the Premises
      or the Building with The Americans With Disabilities Act and the rules
      and regulations promulgated thereunder, as amended from time to time (the
      "ADA"). Tenant shall be responsible for insuring that the Premises and
      Tenant's use thereof and operations therein fully and completely comply
      with the ADA. If Tenant's use of the Premises or operations therein cause
      Landlord to incur any obligation under the ADA, as reasonably determined
      by Landlord, then Tenant shall reimburse Landlord for Landlord's costs
      and expenses in connection therewith. If Tenant's initial use of the
      Premises is not a "place of public accommodation" within the meaning of
      the ADA, then Tenant may not thereafter change the use of the Premises to
      cause the Premises to become a "place of public accommodation." In the
      event that Tenant desires or is required hereby to make Alterations (as
      defined below) to the Premises in order to satisfy its obligations under
      the ADA, then all such Alterations shall be subject to any requirements
      in this Lease with respect to Alterations of the Premises, and shall be
      performed at Tenant's sole cost and expense.

C.    Hazardous Materials.

      (1)   Tenant covenants and agrees that it shall not cause or permit any
            Hazardous Materials (as defined below) to be brought upon, kept, or
            used in or about the Premises, Building or Project by Tenant, its
            agents, employees, contractors or invitees. The foregoing covenant
            shall not extend to substances typically found or used in general
            office applications so long as (a) such substances and any
            equipment which generates such substances are maintained only in
            such quantities as are reasonably necessary for Tenant's operations
            in the Premises, (b) such substances are used strictly in
            accordance with the manufacturers' instructions therefor, (c) such
            substances are not disposed of in or about the Project in a manner
            which would constitute a release or discharge thereof, and (d) all
            such substances and any equipment which generates such substances
            are removed from the Project by Tenant upon the expiration or
            earlier termination of this Lease. Any use, storage, generation,
            disposal, release or discharge by Tenant of Hazardous Materials in
            or about the Project as is permitted pursuant to this Section shall
            be carried out in compliance with all applicable federal, state and
            local laws, ordinances, rules and regulations, including without
            limitation any labeling standards established by state regulations.
            Moreover, no hazardous waste resulting from any operations by
            Tenant shall be stored or maintained by Tenant in or about the
            Project for more than ninety (90) days prior to removal by Tenant.
            Tenant shall, annually within thirty (30) days after Tenant's
            receipt of Landlord's written request therefor, provide to Landlord
            a written list identifying any Hazardous Materials then maintained
            by Tenant in the Project, the use of each such Hazardous Material
            and the approximate quantity of each such Hazardous Material so
            maintained by Tenant, together with written certification by Tenant
            stating, in substance, that neither Tenant nor any person for whom
            Tenant is responsible has released or discharged any Hazardous
            Materials in or about the Project.

      (2)   In the event that Tenant proposes to conduct any use or to operate
            any equipment which will or may utilize or generate a Hazardous
            Material other than as specified in Section 8(C)(1) above, Tenant
            shall first in writing submit such use or equipment to Landlord for
            approval. No approval by Landlord shall relieve Tenant of any
            obligation of Tenant pursuant to this Section 8(C), including the
            removal, clean-up and indemnification obligations imposed upon
            Tenant by this Section 8(C). Tenant shall, within five (5) days
            after receipt thereof, furnish to Landlord copies of all notices or
            other communications

                                       8
<PAGE>   14
     received by Tenant with respect to any actual or alleged release or
     discharge of any Hazardous Material in or about the Premises or the
     Project and shall, whether or not Tenant receives any such notice or
     communication, notify Landlord in writing of any discharge or release of
     Hazardous Material by Tenant or anyone for whom Tenant is responsible in or
     about the Premises or the Project. In the event that Tenant is required to
     maintain any Hazardous Materials license or permit in connection with any
     use conducted by Tenant or any equipment operated by Tenant in the
     Premises, copies of each such license or permit, each renewal or revocation
     thereof and any communication relating to suspension, renewal or revocation
     thereof shall be furnished to Landlord within five (5) days after receipt
     thereof by Tenant. Compliance by Tenant with the two immediately preceding
     sentences shall not relieve Tenant of any other obligation of Tenant
     pursuant to this Section 8(C).

(3)  Upon any violation of the foregoing covenants, Tenant shall be obligated,
     at Tenant's sole cost, to clean-up and remove from the Project all
     Hazardous Materials introduced into the Project by Tenant or any person or
     entity for whom Tenant is responsible. Such clean-up and removal shall
     include all testing and investigation required by any governmental
     authorities having jurisdiction and preparation and implementation of any
     remedial action plan required by any governmental authorities having
     jurisdiction. All such clean-up and removal activities of Tenant shall, in
     each instance, be conducted to the satisfaction of Landlord and all
     governmental authorities having jurisdiction. Landlord's right of entry
     pursuant to Section 11 below shall include the right to enter and inspect
     the Premises for violations of Tenant's covenants in this Section 8(C).

(4)  Tenant shall indemnify, defend and hold harmless Landlord, and its
     successors, assigns, partners, officers, employees, agents, lenders and
     attorneys from and against any and all claims, liabilities, losses,
     actions, costs and expenses (including attorneys' fees and costs of
     defense) incurred by such indemnified persons, or any of them, as the
     result of (a) the introduction into or about the Project by Tenant or
     anyone for whom Tenant is responsible of any Hazardous Materials, (b) the
     usage, storage, maintenance, generation, disposition or disposal by Tenant
     or anyone for whom Tenant is responsible of Hazardous Materials in or about
     the Project, (c) the discharge or release in or about the Project by Tenant
     or anyone for whom Tenant is responsible of any Hazardous Materials, (d)
     any injury to or death of persons or damage to or destruction of property
     resulting from the use, introduction, maintenance, storage, generation,
     disposal, disposition, release or discharge by Tenant or anyone for whom
     Tenant is responsible of Hazardous Materials in or about the Project, and
     (e) any failure of Tenant or anyone for whom Tenant is responsible to
     observe the foregoing covenants of this Section 8(C).

(5)  Upon any violation of the foregoing covenants, Landlord shall be entitled
     to exercise all remedies available to a landlord against a defaulting
     tenant, including but not limited to those set forth in Section 20. Without
     limiting the generality of the foregoing, Tenant expressly agrees that upon
     any such violation Landlord may, at its option, (a) immediately terminate
     this Lease or (b) continue this Lease in effect until compliance by Tenant
     with its clean-up and removal covenant notwithstanding any earlier
     expiration date of the term of this Lease. No action by Landlord hereunder
     shall impair the obligations of Tenant pursuant to this Section 8(C).

(6)  As used in this Section 8(C), "Hazardous Materials" is used in its broadest
     sense and shall include any petroleum based products, pesticides, paints
     and solvents, polychlorinated biphenyl, lead, cyanide, DDT, acids, ammonium
     compounds and other chemical products

                                       9
<PAGE>   15

          and any substance on material defined or designated as hazardous or
          toxic, or other similar term, by any federal, state or local
          environmental statute, regulation, or ordinance affecting the
          Premises, Building or Project presently in effect or that may be
          promulgated in the future, as such statutes, regulations and
          ordinances may be amended from time to time, including but not
          limited to the statutes listed below:

          Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section
            6901 et seq.
          Comprehensive Environmental Response, Compensation, and Liability Act
            of 1980, 42 U.S.C. Section 9601 et seq.
          Clean Air Act, 42 U.S.C. Sections 7401-7626.
          Water Pollution Control Act (Clean Water Act of 1977), 33 U.S.C.
            Section 1251 et seq.
          Insecticide, Fungicide, and Rodenticide Act (Pesticide Act of 1987),
            7 U.S.C. Section 135 et seq.
          Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.
          Safe Drinking Water Act, 42 U.S.C. Section 300(f) et seq.
          National Environmental Policy Act (NEPA) 42 U.S.C. Section 4321 et
            seq.
          Refuse Act of 1899, 33 U.S.C. Section 407 et seq.
          California Health and Safety Code Section 25316 et seq.
          California Code of Federal Regulations, Title 8 Section 5194
          California Code of Federal Regulations, Title 22 Section 12601

     (7)  By its signature to this Lease, Tenant confirms that it has conducted
          its own examination of the Premises and the Project with respect to
          Hazardous Materials and accepts the same "AS IS" and with no
          Hazardous Materials present thereon.

     (8)  Tenant acknowledges that incorporation of any material containing
          asbestos into the Premises is absolutely prohibited. Tenant agrees,
          represents and warrants that it shall not incorporate or permit or
          suffer to be incorporated, knowingly or unknowingly, any material
          containing asbestos into the Premises.

D.   Landlord's Rules and Regulations. Tenant shall, and Tenant agrees to cause
     its agents, servants, employees, invitees and licensees to, observe and
     comply fully and faithfully with the rules and regulations attached hereto
     as Exhibit C or such rules and regulations which may hereafter be adopted
     by Landlord (the "Rules") for the care, protection, cleanliness, and
     operation of the Premises, Building and Project, and any modifications or
     additions to the Rules adopted by Landlord, provided that, Landlord shall
     give written notice thereof to Tenant. Landlord shall not be responsible
     to Tenant for the failure of any other party to observe or comply with any
     of the Rules.

E.   Traffic and Energy Management; Recycling. Tenant agrees to cooperate and
     use its best efforts to participate in governmentally mandated or
     voluntary traffic management and recycling programs generally applicable
     to businesses located in the area in which the Project is situated or to
     the Project and, initially, shall encourage and support van and car
     pooling by employees and shall encourage and support staggered and
     flexible working hours for employees to the fullest extent permitted by
     the requirements of Tenant's business. Landlord shall offer, for the
     benefit of Tenant and other occupants of the Building and their respective
     employees only, the non-exclusive use of a shuttle service from the
     Project to a Caltrain station and a BART station at times designated by
     Landlord. Landlord shall have the option to discontinue such shuttle
     service at any time. Neither this Section 8(E) nor any other provision in
     this Lease, however, is intended to or shall create any rights or benefits
     in any other person, firm, company, governmental entity or the public.
     Landlord and Tenant agree to cooperate and use their best efforts to
     comply with any and all guidelines or

                                       10

<PAGE>   16
     controls imposed upon either Landlord or Tenant by federal or state
     governmental organizations or by any energy conservation association to
     which Landlord is a party concerning energy management. Landlord will
     provide recycling containers for Tenant's use at the Premises. Tenant
     agrees to use its best efforts to encourage its employees to recycle all
     recyclable material. Any costs, fees, fines or other levies assessed
     against Landlord as the result of failure of Tenant to comply with this
     Section 8(E) shall be reimbursed by Tenant to Landlord as additional rent.

SECTION 9. SERVICE AND UTILITIES

A.   Standard Building Services. So long as Tenant is not in default hereunder
     (including any default of a type described in clauses (4) - (6) of Section
     20(A) below), Landlord agrees to make available to the Premises, during
     the Building's normal business hours of 8:00 a.m. to 6:00 p.m. Monday
     through Friday (holidays excepted), which hours are subject to change from
     time to time as reasonably determined by Landlord, such heat and air
     conditioning (hereafter "HVAC"), water and electricity, as may be required
     in Landlord's judgment for the comfortable use and occupation of the
     Premises for general office purposes and at a level which is usual and
     customary in similar office buildings in the area where the Building is
     located, all of which shall be subject to the Rules of the Building as
     well as any governmental requirements or standards relating to, among
     other things, energy conservation.

B.   After-Hours Charges. During non-business hours Landlord shall keep the
     public areas of the Building and Project lighted and shall provide
     elevator service with at least (1) elevator, but shall not be obligated to
     furnish HVAC to the Premises. If Tenant requires HVAC during non-business
     hours, Tenant shall give Landlord at least twenty-four (24) hours prior
     notice of such requirement or shall follow such other procedure for
     activating the building energy management system as Landlord may advise
     Tenant, and Tenant shall pay Landlord for such extra service at Landlord's
     standard rates. Such rates are subject to increase from time to time based
     on increase in Landlord's costs associated with providing such extra
     services. All payments required for such charges shall be deemed to be
     additional rent and Landlord shall have the same remedies for a default in
     payment thereof as for a default in payment of rent. If the Building is
     designed for individual tenant operation of the HVAC, Tenant agrees to pay
     the cost of operating the HVAC at any time other than the schedule of
     hours for providing the same set forth above, which cost may include the
     operation of the HVAC for space located outside the Premises when such
     space is serviced concurrently with the operation of the HVAC for the
     benefit of the Premises.

C.   Limitation on Landlord's Obligations. Landlord shall not be in breach of
     its obligations under this Section 9 unless Landlord fails to make any
     repairs or perform maintenance which it is obligated to perform hereunder
     and such failure persists for an unreasonable time after written notice of
     a need for such repairs or maintenance is given to Landlord by Tenant.
     Landlord shall not be liable for and Tenant shall not be entitled to any
     abatement or reduction of rent by reason of Landlord's failure to furnish
     or the interruption or termination of any of the foregoing when such
     failure, interruption or termination is caused by accidents, breakage,
     repairs, strikes, brownouts, blackouts, lockouts or other labor
     disturbances or labor disputes of any character, or by any other cause,
     similar or dissimilar, beyond the actual or reasonable control of
     Landlord, nor shall such failure, interruption or termination under such
     circumstances be construed as a constructive or actual eviction of Tenant.
     Landlord shall not be liable under any circumstances for loss or injury to
     property or business, however occurring, through or in connection with or
     incidental to Landlord's failure to furnish or the interruption or
     termination of any of said service or utilities.

D.   Excess Service. Tenant shall not, without the written consent of Landlord,
     use any apparatus or device in the Premises, including, without
     limitation, electronic data processing machines, punch card machines or
     machines using in excess of one hundred twenty (120) volts or which
     consumes

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<PAGE>   17
     more electricity than is usually furnished for the Permitted Use of the
     Premises, as determined by Landlord. Tenant shall not consume water or
     electric current in excess of that usually furnished or supplied for the
     use of the Premises (as determined by Landlord), without first procuring
     the written consent of Landlord, which Landlord may refuse. The excess cost
     (including any penalties for excess usage) for such water and electric
     current shall be established by an estimate made by a utility company or
     independent engineer hired by Landlord at Tenant's expense and Tenant shall
     pay such excess costs each month with Monthly Rental. All costs and
     expenses of modifying existing equipment, cables, lines, etc. or installing
     additional equipment, cables, lines, etc. to accommodate such excess usage
     or use by Tenant of such apparatus or device shall be borne by Tenant.

E.   Security Services. Certain security measures (both by electronic equipment
     and personnel) may be provided by Landlord in connection with the Building
     and Common Areas. However, Tenant hereby acknowledges that such security is
     intended to be only for the benefit of the Landlord in protecting its
     property from fire, theft, vandalism and similar perils and while certain
     incidental benefits may accrue to Tenant therefrom, such security is not
     for the purpose of protecting either the property of Tenant or the safety
     of its officers, employees, servants or invitees. By providing such
     security, Landlord assumes no obligation to Tenant and shall have no
     liability arising therefrom and Tenant hereby releases Landlord from all
     liability relating thereto. If, as a result of Tenant's occupancy of the
     Premises, Landlord in its sole discretion determines that it is necessary
     to provide security or implement additional security measures or devices in
     or about the Building or the Common Areas, Tenant shall be required to pay,
     as additional rent, the cost or increased cost, as the case may be, of such
     security.

SECTION 10. MAINTENANCE AND REPAIRS

A.   Landlord's Obligations. Except for special or non-standard systems and
     equipment installed for Tenant's exclusive use, Landlord shall keep in good
     condition and repair, at Landlord's initial cost and expense, HVAC systems
     which service the Premises as well as other premises within the Building,
     the foundations, exterior walls, structural condition of interior bearing
     walls and roof of the Premises, interior walls, interior surfaces of
     exterior walls, ceilings, windows, doors, cabinets, draperies, electrical
     and lighting facilities within the Premises, window coverings, carpeting
     and other floor coverings, plate glass and skylights located within the
     Premises and the Building, as well as the parking lots, walkways,
     driveways, landscaping, fences, signs, and utility installations of the
     Project. Janitorial services to the Premises shall be provided in
     accordance with specifications established by Landlord, which
     specifications are subject to change from time to time in the reasonable
     discretion of Landlord. Landlord shall also provide elevator service,
     restroom supplies and window washing with reasonable frequency. Landlord
     shall not be required to make any repairs that are the obligation of any
     other tenant or occupant within the Building or Project or repairs for
     damage caused by any negligent or intentional act or omission of Tenant or
     any person claiming through or under Tenant or any of Tenant's employees,
     suppliers, shippers, customers or invitees, in which event Tenant shall
     repair such damage at its sole cost and expense. Tenant hereby waives and
     releases its right to make repairs at Landlord's expense under any law,
     statute, ordinance, rule or regulation now or hereafter in effect in any
     jurisdiction in which the Project is located.

B.   Tenant's Obligations. Tenant shall, at its sole cost and expense, make all
     repairs and replacements as and when Landlord deems reasonably necessary to
     preserve in good working order and condition any special or supplementary
     HVAC systems located within the Premises and installed for the exclusive
     use of the Premises, Tenant's cabling and telephone lines and all other
     non-standard utility facilities and systems exclusively serving the
     Premises, and all of Tenant's

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<PAGE>   18
     trade fixtures located within the Premises; provided, however, at Tenant's
     written request, Landlord will maintain such non-standard improvements at
     Tenant's expense, at a cost or charge equal to the costs incurred in such
     maintenance plus an additional overhead charge of fifteen percent (15%).
     Tenant shall not commit or permit any waste in or about the Premises, the
     Building or the Project. Tenant shall reimburse Landlord on demand for all
     repairs to the Premises, Building and Project which are required, in the
     reasonable opinion of Landlord, as a result of any misuse, neglect,
     negligent or intentional act or omission committed or permitted by Tenant
     or by any subtenant, agent, employee, supplier, shipper, customer, invitee
     or servant of Tenant.

C.   Landlord's Right to Make Repairs. In the event that Tenant fails to
     maintain the Premises in good and sanitary order, condition and repair as
     required by this Lease, then, following written notification to Tenant
     (except in the case of an emergency, in which case no prior notification
     shall be required), Landlord shall have the right, but not the obligation,
     to enter the Premises and to do such acts and expend such funds at the
     expense of Tenant as are required to place the Premises in good, safe and
     sanitary order, condition and repair. Any amount so expended by Landlord
     plus an overhead charge of fifteen percent (15%) of the expended amount
     shall be paid by Tenant promptly upon demand as additional rent.

D.   Condition of Premises Upon Surrender. Except as otherwise provided in this
     Lease, Tenant shall, upon the expiration or earlier termination of the
     Term, surrender the Premises to Landlord in the same condition as on the
     date Tenant took possession, reasonable wear and tear excepted. All
     appurtenances, fixtures, improvements, additions and other property
     attached to or installed in the Premises whether by Landlord or by or on
     behalf of Tenant, and whether at Landlord's expense or Tenant's expense,
     shall be and remain the property of Landlord unless Landlord specifically
     agrees otherwise in writing. Any furnishings and personal property of
     Tenant located in the Premises, whether the property of Tenant or leased by
     Tenant (including the fixtures, improvements and other items agreed, in
     writing, by Landlord to belong to the Tenant as provided in the preceding
     sentence and, unless Landlord elects to require Tenant to leave the same in
     the Premises, which Landlord shall have the right to do, all data,
     telephone or other cabling or wiring installed by or on behalf of Tenant in
     the Premises, including the plenum area above the ceiling of the Premises),
     shall be and remain the property of Tenant and shall be removed by Tenant
     at Tenant's sole cost and expense at the expiration of the Term. Tenant
     shall promptly repair any damage to the Premises or the Building resulting
     from such removal. Any of Tenant's property not removed from the Premises
     upon the expiration of the Term shall, at Landlord's option, either become
     the property of Landlord or may be removed by Landlord and Tenant shall pay
     to Landlord the cost of such removal within ten (10) days after delivery of
     a bill therefor or Landlord, at its option, may deduct such amount from the
     Security Deposit. Any damage to the Premises, including any structural
     damage, resulting from Tenant's use or from the removal of Tenant's
     fixtures, furnishings and equipment, shall be repaired by Tenant at
     Tenant's expense.

SECTION 11. ENTRY BY LANDLORD.

Landlord reserves and shall at any and all times have the right to enter the
Premises at reasonable times during normal business hours and at any time in
case of an emergency to inspect the same to determine whether Tenant is
complying with its obligations hereunder; to supply janitorial service and any
other service to be provided by Landlord hereunder; and, upon reasonable notice
to Tenant, may exhibit the Premises to prospective purchasers, mortgagees or
prospective tenants; to post notices of nonresponsibility; and to alter, improve
or repair the Premises and any portion of the Building and Project, without
abatement of rent, and may for that purpose erect scaffolding and other
necessary structures that are reasonably required by the character of the work
to be performed by Landlord, provided that the business of Tenant

                                       13
<PAGE>   19
shall not be interfered with unreasonably. For each of the aforesaid purposes,
Landlord shall at all times have and retain a key with which to unlock all of
the doors in, upon and about the Premises, excluding Tenant's vaults and safes,
and Landlord shall have the right to use any and all means which Landlord may
deem proper to open such doors in the event of an emergency. Any entry to the
Premises or portions thereof obtained by Landlord by any of said means, or
otherwise, shall not under any circumstances be construed or deemed to be a
forcible or unlawful entry into, or a detainer of, the Premises, or an
eviction, actual or constructive, of Tenant from the Premises, or any portion
thereof. Tenant hereby waives any claim for damages for any injury or
inconvenience to or interference with Tenant's business and any loss of
occupancy or quiet enjoyment of the Premises by reason of Landlord's exercise
of its right of entry in accordance with this Section 11, and Tenant shall not
be entitled to an abatement or reduction of rent in connection therewith.

SECTION 12. ALTERATIONS, ADDITIONS AND TRADE FIXTURES

Except to the extent provided for in Exhibit B hereto, Tenant shall not make any
alterations, additions or improvements to the Premises, or any part thereof,
whether structural or nonstructural (hereafter "Alterations"), without
Landlord's prior written consent. If Tenant does not use Landlord's architect or
contractor to design or perform Alterations, Tenant shall pay to Landlord, as
additional rent, a management fee equal to ten percent (10%) of the cost of the
Alterations plus any professional fees or other costs and expenses incurred by
Landlord in reviewing such plans and specifications or inspecting progress of
any such work. In order to obtain Landlord's preliminary consent, which
preliminary consent may be given or denied in Landlord's sole discretion, Tenant
shall submit such information as Landlord may require, including without
limitation plans and specifications for the Alterations. After Landlord gives
preliminary consent, in order to obtain Landlord's final consent, which consent
may not be unreasonably withheld, Tenant shall then submit (a) permits,
licenses, bonds, and the construction contract, all in conformance with the
plans and specifications preliminarily approved by Landlord; (b) evidence of
insurance coverage in such types and amounts and from such insurers as Landlord
deems satisfactory; and (c) such other information as Landlord deems reasonably
necessary. The construction contract shall, at a minimum, require the general
contractor and all subcontractors to obey the rules and regulations of the
Building and Project. All Alterations shall be done in good workmanlike manner
by qualified and licensed contractors or mechanics, as approved by Landlord.
Except for Alterations to the Premises, Tenant shall have no right whatsoever to
make any alterations or modifications to any portion of the Building or its
appurtenant facilities nor shall any Alterations affect the structure of the
Building or its exterior appearance. All Alterations made by or for Tenant
(other than Tenant's moveable trade fixtures), shall, unless Landlord expressly
requires or agrees otherwise in writing, immediately become the property of
Landlord, without compensation to Tenant, but Landlord has no obligation to
repair, maintain or insure those Alterations. Carpeting, shelving and cabinetry
are considered improvements of the Premises and not movable trade fixtures,
regardless of how or where affixed. No Alterations will be removed by Tenant
from the Premises either during or at the expiration or earlier termination of
the Term, and they shall be surrendered as a part of the Premises unless
Landlord has required that Tenant remove them. At Landlord's discretion,
Alterations are subject to removal by Tenant and at Tenant's sole cost and
expense. Upon any such removal, Tenant shall repair any damage caused to the
Premises thereby, and shall return the Premises to the condition they were in
prior to installation of such Alterations so removed. Tenant shall indemnify,
defend and keep Landlord free and harmless from and against all liability, loss,
damage, cost, attorneys' fees and any other expense incurred on account of
claims by any person performing work or furnishing materials or supplies for
Tenant or any person claiming under Tenant. Landlord may require Tenant to
provide Landlord, at Tenant's sole cost and expense, a lien and completion bond
in an amount equal to one and one-half times the estimated cost of such
improvements, to insure Landlord against any liability for mechanic's liens and
to insure completion of the work. Landlord shall have the right at all times to
post on the Premises any notices permitted or required by law, or that Landlord
shall deem proper, for the protection of Landlord, the Premises, the Building
and the Project, and any other party having an interest

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<PAGE>   20
therein, from mechanics' and materialmen's liens, and Tenant shall give to
Landlord written notice of the commencement of any construction in or on the
Premises at least thirty (30) days prior thereto. Prior to the commencement of
any such construction, Landlord shall be furnished certificates of insurance,
naming Landlord as an additional insured, evidencing that each contractor
performing work has insurance acceptable to Landlord, including but not limited
to general liability insurance of not less that Two Million Dollars
($2,000,000.00) and worker's compensation insurance in the statutorily required
amount.

SECTION 13. MECHANIC'S LIENS

Tenant shall keep the Premises, the Building and the Project free from any
liens arising out of any work performed, material furnished or obligation
incurred by or for Tenant or any person or entity claiming through or under
Tenant. In the event that Tenant shall not, within ten (10) days following the
imposition of any such lien, cause the same to be released of record by payment
or posting of a proper bond, Landlord shall have, in addition to all other
remedies provided herein and by law, the right, but not the obligation, to
cause such lien to be released by such means as Landlord deemed proper,
including payment of the claim giving rise to such lien. All such sums paid and
all expenses incurred by Landlord in connection therewith shall be due and
payable to Landlord by Tenant on demand.

SECTION 14. INSURANCE

A.   Tenant. During the Term hereof, Tenant shall keep in full force and effect
     the following insurance and shall provide appropriate insurance
     certificates to Landlord prior to the Lease Commencement Date and annually
     thereafter before the expiration of each policy:

     (1)  Commercial general liability insurance for the benefit of Tenant and
          Landlord as an additional insured, with a limit of not less than Two
          Million Dollars ($2,000,000.00) combined single limit per occurrence,
          against claims for personal injury liability including, without
          limitation, bodily injury, death or property damage liability and
          covering (a) the business(es) operated by Tenant and by any subtenant
          of Tenant on the Premises, (b) operations of independent contractors
          engaged by Tenant for services or construction on or about the
          Premises, and (c) contractual liability;

     (2)  All risk property insurance, insuring the personal property,
          furniture, furnishings and fixtures belonging to Tenant located on the
          Premises for not less than one hundred percent (100%) of the actual
          replacement value thereof;

     (3)  Workers' compensation in the amount required by law; and

     (4)  Business interruption or loss of income insurance in amounts
          satisfactory to Landlord, with a rental interruption rider assuring
          Landlord that the rent due hereunder will be paid for a period of not
          less than twelve (12) months or the remaining term of this Lease,
          whichever is shorter, if the Premises are destroyed or rendered
          inaccessible by a risk insured against by a policy of all risk
          insurance.

     Each insurance policy obtained by Tenant pursuant to this Lease shall
     contain a clause that the insurer will provide Landlord with at least
     thirty (30) days' prior written notice of any material change, non-renewal
     or cancellation of the policy, shall be in a form satisfactory to Landlord
     and shall be taken out with an insurance company authorized to do business
     in the State in which the Project is located and rated not less than Best's
     Financial Class X and Best's Policy Holder Rating Project is located and
     rated not less than Best's Financial Class X and Best's Policy Holder
     Rating "A". In addition, any insurance policy obtained by Tenant shall be
     written as a primary policy, and shall not be contributing with or in
     excess of any coverage which Landlord may carry. The

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<PAGE>   21
     liability limits of the above described insurance policies shall in no
     manner limit the liability of Tenant under the terms of Section 15 below.

     Not more frequently than every two (2) years, if, in the reasonable
     opinion of Landlord, the amount of liability insurance specified in this
     Section 14 is not adequate, the above-described limits of coverage shall
     be adjusted by Landlord, by written notification to Tenant, in order to
     maintain the level of insurance protection at least equal to the
     protection afforded on the date the Term commences. If Tenant fails to
     maintain and secure the insurance coverage required under this Section 14,
     then Landlord shall have, in addition to all other remedies provided
     herein and by law, the right, but not the obligation, to procure and
     maintain such insurance, the cost of which shall be due and payable to
     Landlord by Tenant on demand.

     If, on account of the failure of Tenant to comply with the provisions of
     this Section, Landlord is deemed a co-insurer by its insurance carrier,
     then any loss or damage which Landlord shall sustain by reason thereof
     shall be borne by Tenant and shall be immediately paid by Tenant as
     additional rent upon receipt of a bill therefor and evidence of such loss.

B.   Landlord. During the Term hereof, Landlord shall keep in full force and
     effect the following insurance:

     (1)  All risk property insurance (including flood and earthquake) insuring
          the Building and Landlord's improvements in an amount not less than
          the full replacement cost thereof; and

     (2)  Such other insurance as Landlord deems necessary in its sole and
          absolute discretion.

     All insurance policies shall be issued in the names of Landlord and
     Landlord's lender, if any, and any other party reasonably designated by
     Landlord as an additional insured, as their interests appear. The
     insurance policies shall provide that any proceeds shall be made payable
     to Landlord, or to the holders of mortgages or deeds of trust encumbering
     Landlord's interest in the Premises, Building, and Project, or to any
     other party reasonably designated by Landlord as an additional insured, as
     their interests shall appear.

C.   Waiver of Subrogation. Landlord and Tenant each hereby waives any and all
     rights of recovery against the other, and against any other tenant or
     occupant of the Building and against the officers, employees, agents,
     representatives, customers and business visitors of such other party and of
     each such other tenant or occupant of the Building, for loss of or damage
     to such waiving party or its property or the property of others under its
     control, arising from any cause insured against under any policy of
     property insurance required to be carried by such waiving party pursuant to
     the provisions of this Lease (or any other policy of property insurance
     carried by such waiving party in lieu thereof) at the time of such loss or
     damage. The foregoing waiver shall be effective whether or not a waiving
     party actually obtains and maintains such insurance which such waiving
     party is required to obtain and maintain pursuant to this Lease (or any
     substitute therefor). Landlord and Tenant shall, upon obtaining the
     policies of insurance which they are required to maintain hereunder, give
     notice (if required) to their respective insurance carrier or carriers that
     the foregoing mutual waiver of subrogation is contained in this Lease.

SECTION 15. INDEMNITY

A.   Indemnification by Tenant. Tenant agrees to indemnify, defend and hold
     Landlord and its officers, directors, partners, agents and employees
     (collectively, "Indemnitees") entirely harmless from and against all
     liabilities, loss, demands, actions, expenses or claims, including
     reasonable attorneys'

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<PAGE>   22
     fees and court costs, for injury to or death of any person or for damages
     to any property or for violation of law arising out of or in any manner
     connected with (i) the use, occupancy or enjoyment of the Premises,
     Building or Project by Tenant or Tenant's agents, employees, invitees or
     contractors (the "Tenant's Agents") or any work, activity or other things
     allowed or suffered by Tenant or Tenant's Agents to be done in or about
     the Premises, Building or Project, (ii) any breach or default in the
     performance of any obligation of Tenant under this Lease, and (iii) any act
     or failure to act, whether negligent or otherwise tortious, by Tenant or
     Tenant's Agents in or about the Premises, Building or Project; provided,
     however, that Tenant shall not be required to indemnify Landlord in
     respect of any loss or damage arising by reason of the gross negligence or
     willful misconduct of Landlord.

B.   Limitation on Landlord's Liability; Release of Directors, Officers and
     Partners of Landlord. Tenant agrees that, in the event Tenant shall have
     any claim against Landlord under this Lease arising out of the subject
     matter of this Lease, Tenant's sole recourse shall be against the
     Landlord's interest in the Building, for the satisfaction of any claim,
     judgment or decree requiring the payment of money by Landlord as a result
     of a breach hereof or otherwise in connection with this Lease, and no
     other property or assets of Landlord, its officers, directors, employees,
     successors or assigns, shall be subject to the levy, execution or other
     enforcement procedure for the satisfaction of any such claim, judgment,
     injunction or decree. MOREOVER, TENANT AGREES THAT LANDLORD SHALL IN NO
     EVENT AND UNDER NO CIRCUMSTANCES BE RESPONSIBLE FOR ANY CONSEQUENTIAL,
     SPECIAL, INCIDENTAL OR PUNITIVE DAMAGES INCURRED OR SUSTAINED BY TENANT,
     OR ITS EMPLOYEES, AGENTS, CONTRACTORS OR INVITEES AS A RESULT OF OR IN ANY
     WAY CONNECTED TO TENANT'S OCCUPANCY OF THE PREMISES. None of the
     Indemnitees shall be liable to Tenant for, and, as such assumption and
     waiver do not violate public policy, Tenant assumes shall risk of, and
     waives any and all right to assert claims against, or obtain any damages
     from, the Indemnitees with respect to, loss, injury, or damages which may
     be sustained by the person, goods, wares, merchandise or property of
     Tenant, Tenant's Agents, or any other person in or about the Premises from
     any cause whatsoever, whether such damage or injury results from
     conditions arising within the Premises or from other sources and whether
     known, unknown, foreseen, unforeseen, patent or latent. Tenant understands
     and acknowledges the significance and consequence of such specific
     assumption of risk and waiver.

C.   No Landlord Liability for Force Majeure Events. Landlord shall not be
     liable or responsible to Tenant for any loss or damage to any property or
     person occasioned by theft, fire, act of God, public enemy, injunction,
     riot, strike, insurrection, war, court order, requisition, or order of
     governmental body or authority, or for any damage or inconvenience that
     may arise through repair or alteration of any part of the Project, the
     Building or the Premises, or a failure to make any such repairs, except as
     expressly provided in this Lease.

D.   Indemnification by Landlord. Landlord shall indemnify, defend, protect and
     save Tenant harmless from all losses, costs, damages, claims and liability
     whatsoever on account of any damage or liability of any kind or for any
     injury to or death of persons arising in the Common Areas if caused by or
     resulting from any negligent or willful act or omission of Landlord or its
     employees or agents; provided, however, that Landlord's obligation to
     indemnify and hold harmless Tenant pursuant to the foregoing provisions is
     made for the purpose of providing any benefit from time to time available
     to Tenant under policies of insurance carried by Landlord, and further
     provided that the foregoing provisions shall in no event require Landlord
     to provide any defense to Tenant or pay any sum to or on behalf of Tenant
     in addition to that which may be provided and paid pursuant to such
     policies of insurance as may be carried by Landlord from time to time.

                                       17

<PAGE>   23
SECTION 16. ASSIGNMENT AND SUBLETTING BY TENANT

A.   Consent Required. Tenant shall not, directly or indirectly, voluntarily or
     by operation of law, sell, assign, encumber, pledge or otherwise transfer
     or hypothecate all or any part of the Premises or Tenant's leasehold
     estate hereunder (collectively, "Assignment"), or permit the Premises to
     be occupied by anyone other than Tenant or sublet the Premises
     ("Sublease") or any portion thereof without Landlord's prior written
     consent being had and obtained in each instance, subject to the terms and
     conditions contained in this Section. In no event will Landlord's consent
     be unreasonably withheld. Any sale or other transfer, including transfer
     by consolidation, merger or reorganization, of twenty-five percent (25%)
     or more of the voting stock of Tenant, if Tenant is a corporation, or any
     sale or other transfer of twenty-five percent (25%) or more of the
     partnership interest in Tenant, if Tenant is a partnership, shall be an
     Assignment for purposes of this Section. As used in this subsection, the
     term "Tenant" shall also mean any entity that has guaranteed Tenant's
     obligation under this Lease, and the prohibition hereof shall be
     applicable to any sales or transfers of stock or partnership interest of
     said guarantor.

B.   Tenant's Request for Consent. If Tenant desires at any time to enter into
     an Assignment of this Lease or a Sublease of the Premises or any portion
     thereof, Tenant shall request, in writing, at least sixty (60) days prior
     to the effective date of the Assignment or Sublease, Landlord's consent to
     the Assignment or Sublease, and shall provide Landlord with the following
     information:

     (1)  The name of the proposed assignee, subtenant or occupant;

     (2)  The nature of the proposed assignee's, subtenant's or occupant's
          business to be carried on in the Premises;

     (3)  The terms and provisions of the proposed Assignment or Sublease and a
          copy of such documents; and

     (4)  Such financial information concerning the proposed assignee,
          subtenant or occupant which Landlord shall have requested following
          its receipt of Tenant's request for consent.

C.   Landlord's Election. At any time within fifteen (15) business days after
     Landlord's receipt of the notice specified above, Landlord may by written
     notice to Tenant elect to (1) consent to the proposed Assignment or
     Sublease, (2) refuse to consent to the proposed Assignment or Sublease, or
     (3) terminate this Lease in full with respect to an Assignment or
     terminate in part with respect to a Sublease. Any such termination of
     this Lease shall be conditioned on Landlord successfully entering into a
     new lease covering the Premises or a portion thereof with the intended
     assignee or subtenant on such terms as Landlord and such person may agree,
     or entering into a new lease covering the Premises or a portion thereof
     with any other person. In such event, Tenant shall not be entitled to any
     portion of the profit, if any, which Landlord may realize on account of
     such termination and reletting. Landlord's exercise of its aforesaid option
     shall not be construed to impose any liability upon Landlord with respect
     to any real estate brokerage commission(s) or any other proposed
     subletting or assignment.

D.   Landlord's Factors. Landlord and Tenant agree (by way of example and
     without limitation) that Landlord shall be entitled to take into account
     any fact or factor which Landlord reasonably deems relevant to its
     decision to consent or not consent to an  Assignment or Sublease,
     including but not necessarily limited to the following, all of which Tenant
     hereby agrees are reasonable factors for Landlord's consideration:

                                       18

<PAGE>   24
     (1)  The financial strength of the proposed assignee or subtenant (which
          shall be at least equal to that of Tenant as of the date of execution
          of this Lease), including the adequacy of its working capital to pay
          all expenses anticipated in connection with any remodeling of the
          Premises.

     (2)  The quality and nature of the business and/or services to be conducted
          in or from the Premises by the proposed assignee or subtenant and in
          any other locations which it has.

     (3)  Violation of exclusive use rights previously granted by Landlord to
          other tenants of the Building.

     (4)  The quality of the appearance of the Premises resulting from any
          remodeling or renovation to be conducted by the proposed assignee or
          subtenant, and the compatibility of such quality with that of other
          premises in the Building.

     (5)  Whether the business in the Premises is, and whether the business to
          be operated by the proposed assignee or subtenant will be, a
          "destination business" (i.e., a business which draws patrons to the
          Building specifically to obtain services from such business).

     (6)  Whether the proposed tenant is a direct competitor of Landlord.

     (7)  Whether there then exists any default by Tenant pursuant to this Lease
          or any non-payment or non-performance by Tenant under this Lease
          which, with the passage of time and/or the giving of notice, would
          constitute a default under this Lease.

     Moreover, Landlord shall be entitled to be reasonably satisfied that each
     and every covenant, condition or obligation imposed upon Tenant by this
     Lease and each and every right, remedy or benefit afforded Landlord by this
     Lease is not impaired or diminished by such Assignment or Sublease. In no
     event shall there be any substantial change in the use of the Premises in
     connection with any Assignment or Sublease except as expressly approved in
     writing by Landlord in advance. Landlord and Tenant acknowledge that the
     express standards and provisions set forth in this Lease dealing with
     Assignment and Sublease, including those set forth in Section 16(E) through
     16(H) have been freely negotiated and are reasonable at the date hereof
     taking into account Tenant's proposed use of the Premises and the nature
     and quality of the Building and Project. No withholding of consent by
     Landlord for any reason deemed sufficient by Landlord shall give rise to
     any claim by Tenant or any proposed assignee or subtenant or entitle Tenant
     to terminate this Lease or to any abatement of rent. Approval of any
     Assignment of Tenant's interest shall, whether or not expressly so stated,
     be conditioned upon such assignee assuming in writing all obligations of
     Tenant hereunder by a written instrument satisfactory to Landlord.

E.   Granting of Consent. If Landlord consents to the Sublease or Assignment
     within said thirty (30) day period, Tenant may enter into such Assignment
     or Sublease of the Premises or portion thereof, but only upon the terms and
     conditions set forth in the notice furnished by Tenant to Landlord pursuant
     to Section 16(B) above.

F.   Assignment and Sublease Profit. In connection with any Assignment or
     Sublease, as a condition to Landlord's consent, seventy-five percent (75%)
     of any sums or other economic consideration received by Tenant directly or
     indirectly in connection with any assignment or sublease hereunder (except
     to the extent of assignment or sublease commissions paid by Tenant to a
     licensed broker at prevailing rates for comparable space) from assignee or
     sublessee and leasehold improvement costs whether described as rental or
     otherwise which exceed, in the aggregate, the total sums which

                                       19
<PAGE>   25
      Tenant is obligated to pay Landlord hereunder (prorated to reflect
      obligations allocable to that portion of the Premises assigned or sublet)
      shall be payable to Landlord as additional rent under this Lease. Within
      fifteen (15) days after written request therefor by Landlord, Tenant
      shall at any time and from time to time at Landlord's request certify to
      Landlord the amount of all such sums or other economic consideration
      received and all such commissions and improvement costs incurred, or
      expected to be received or incurred.

G.    Tenant Remains Liable. No consent by Landlord to any Assignment or
      Sublease by Tenant shall relieve Tenant of any obligation to be performed
      by Tenant under this Lease, whether arising before or after the
      Assignment or Sublease. The consent by Landlord to any Assignment or
      Sublease shall not relieve Tenant of the obligation to obtain Landlord's
      express written consent to any other Assignment or Sublease. Any
      Assignment or Sublease that is not in compliance with this Section 16
      shall be void and, at the option of Landlord, shall constitute a material
      default by Tenant under this Lease. The acceptance of rent by Landlord or
      payment to Landlord of any other monetary obligation by a proposed
      assignee or sublessee shall not constitute the consent by Landlord to
      such Assignment or Sublease. Tenant shall promptly provide to Landlord a
      copy of the fully executed Sublease or Assignment.

H.    Assignee Becomes Liable. Each assignee, sublessee or other transferee,
      other than Landlord, shall assume, as provided in this Section 16(H), all
      obligations of Tenant under this Lease and shall be and remain liable
      jointly and severally with Tenant for the payment of Monthly Rental and
      all other monetary obligations hereunder, and for the performance of all
      the terms, covenants, conditions and agreements herein contained on
      Tenant's part to be performed for the Term; provided, however, that the
      assignee, sublessee, or other transferee shall be liable to Landlord for
      rent only in the amount set forth in the Assignment or Sublease. No
      Assignment shall be binding on Landlord unless the assignee or Tenant
      shall deliver to Landlord a counterpart of the Assignment and an
      instrument in recordable form that contains a covenant of assumption by
      the assignee satisfactory in substance and form to Landlord, consistent
      with the requirements of this Section 16(H) but the failure or refusal of
      the assignee to execute such instrument of assumption shall not release
      or discharge the assignee from its liability as set forth above.

I.    Bankruptcy. If this Lease is assigned to any person or entity pursuant to
      the provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et seq.,
      (the "Bankruptcy Code"), any and all monies or other consideration
      payable or otherwise to be delivered in connection with such assignment
      shall be paid or delivered to Landlord, shall be and remain the exclusive
      property of Landlord and shall not constitute property of Tenant or of
      the estate of Tenant within the meaning of the Bankruptcy Code. Any and
      all monies or other considerations constituting Landlord's property under
      the preceding sentence not paid or delivered to Landlord shall be held in
      trust for the benefit of Landlord and be promptly paid or delivered to
      Landlord. Any person or entity to which this Lease is assigned pursuant
      to the provisions of the Bankruptcy Code, shall be deemed, without
      further act or deed, to have assumed all of the obligations arising under
      this Lease on and after the date of such Assignment. Any such assignee
      shall upon demand execute and deliver to Landlord an instrument
      confirming such assumption.

J.    Landlord's Fees. Tenant shall pay Landlord's expenses and attorneys' fees
      incurred in processing an Assignment or Sublease, but in no event less
      than Five Hundred Dollars ($500.00) for each such proposed transfer to
      cover the legal review and processing expenses of Landlord, whether or
      not Landlord shall grant its consent to such proposed transfers.

K.    Certain Rights Personal to Tenant. All options to extend, renew or
      expand, if any, contained in this Lease are personal to Tenant. Consent
      by Landlord to any Assignment or Sublease shall not

                                       20
<PAGE>   26
     include consent to the assignment or transfer of any such rights with
     respect to the Premises or any special privileges or extra services
     granted to Tenant by this Lease, or any addendum or amendment hereto or
     letter of agreement. All such options, rights, privileges and extra
     services shall terminate upon the effective date of such Assignment or
     Sublease unless Landlord specifically grants in writing such options,
     rights, privileges and extra services to such assignee or subtenant.
     Similarly, any allowance, abatement or monetary concession provided to
     Tenant as an inducement to execute this Lease is personal to Tenant and
     shall be amortized (on a straight line basis) over the term of this Lease.
     Upon the effective date of any Assignment or Sublease, the then
     unamortized portion thereof shall be paid by Tenant to Landlord in cash on
     or before the effective date of such Assignment or Sublease.

L.   Sublease Rents.  Tenant immediately and irrevocably assigns to Landlord,
     as security for Tenant's obligations under this Lease, all rent from any
     subletting of all or part of the Premises, and appoints Landlord, as
     assignee and as attorney-in-fact for Tenant for purposes hereof. Landlord,
     or a receiver for Tenant appointed on Landlord's application, may collect
     such rents and apply same toward Tenant's obligations under this Lease;
     except that, until the occurrence of an act of default by Tenant, Tenant
     shall have the right and license to collect such rents.

SECTION 17.  TRANSFER OF LANDLORD'S INTEREST

In the event Landlord shall sell or otherwise convey its title to the Building,
then, after the effective date of such sale or conveyance, Landlord shall have
no further liability under this Lease to Tenant except as to matters of
liability which have accrued and are unsatisfied as of the date of sale or
conveyance, and Tenant shall seek performance solely from Landlord's purchaser
or successor in title. In connection with such sale or transfer, Landlord may
assign its interest under this Lease without further notice to or consent by
Tenant. In such event, Tenant agrees to be bound to any successor Landlord.

SECTION 18.  DAMAGE AND DESTRUCTION

A.   Minor Insured Damage.  In the event the Premises or the Building, or any
     portion thereof, is damaged or destroyed by any casualty that is covered
     by the insurance maintained by Landlord pursuant to Section 14 above, then
     Landlord shall rebuild, repair and restore the damaged portion thereof,
     provided that (1) the amount of insurance proceeds available to Landlord
     equals or exceeds the cost of such rebuilding, restoration and repair, (2)
     such rebuilding, restoration and repair can be completed within one
     hundred eighty (180) days after the work commences in the opinion of a
     registered architect or engineer appointed by Landlord, (3) the damage or
     destruction has occurred more than twelve (12) months before the
     expiration of the Term, and (4) such rebuilding, restoration or repair is
     then permitted, under applicable governmental laws, rules and regulations,
     to be done in such a manner as to return the damaged portion thereof to
     substantially its condition immediately prior to the damage or
     destruction, including, without limitation, substantially the same
     Rentable Area on each of the damaged floors. To the extent that insurance
     proceeds must be paid to a mortgagee or beneficiary under, or must be
     applied to reduce any indebtedness secured by, a mortgage or deed of trust
     encumbering the Premises, Building or Project, such proceeds, for the
     purposes of this Section 18(A), shall be deemed not available to Landlord
     unless such mortgagee or beneficiary permits Landlord to use such proceeds
     for the rebuilding, restoration and repair of the damaged portion thereof.
     Notwithstanding the foregoing, Landlord shall have no obligation to repair
     any damage to, or to replace any of, Tenant's personal property,
     furnishings, trade fixtures, equipment or other such property or effects
     of Tenant.

B.   Major or Uninsured Damages.  In the event the Premises or the Building, or
     any portion thereof, is damaged or destroyed by any casualty to the extent
     that Landlord is not obligated, under Section 18(a) above, to rebuild,
     repair or restore the damaged portion thereof, then Landlord shall, within

                                       26
<PAGE>   27
     sixty (60) days after such damage or destruction, notify Tenant of its
     election, at its option, to either (1) rebuild, restore and repair the
     damaged portions thereof, in which case Landlord's notice shall specify the
     time period within which Landlord estimates such repairs or restoration can
     be completed; or (2) terminate this Lease effective as of the date the
     damage or destruction occurred. If Landlord does not give Tenant written
     notice within sixty (60) days after the damage or destruction occurs of its
     election to rebuild or restore and repair the damaged portions thereof,
     Landlord shall be deemed to have elected to terminate this Lease.

C.   Abatement of Rent. There shall be an abatement of rent by reason of damage
     to or destruction of the Premises or the Building, or any portion thereof,
     to the extent that Landlord receives insurance proceeds for loss of rental
     income attributable to the Premises, commencing on the date that the damage
     to or destruction of the Premises or Building has occurred. Such abatement
     shall be determined by reference to the area of the Premises rendered
     untenantable, except that if so much of the Premises shall be untenantable
     that it is not commercially practicable for Tenant to use any portion
     thereof, rent shall entirely abate during restoration of the casualty.

D.   Waiver. Tenant shall have no claim against Landlord for any damage suffered
     by Tenant by reason of any such damage, destruction, repair or restoration.
     Tenant waives the provisions of California Civil Code Sections 1932(2) and
     1933(4) and any present or future laws or case decisions to the same
     effect. Upon completion of such repair or restoration, Tenant shall
     promptly refixture the Premises substantially to the condition they were in
     prior to the casualty and shall reopen for business if closed by the
     casualty.

SECTION 19. CONDEMNATION

A.   Total or Partial Taking. If all or substantially all of the Premises is
     condemned or taken in any manner for public or quasi-public use, including
     but not limited to, a conveyance or assignment in lieu of the condemnation
     or taking, this Lease shall automatically terminate as of the earlier of
     the date on which actual physical possession is taken by the condemnor or
     the date of dispossession of Tenant as a result of such condemnation or
     other taking. If less than all or substantially all of the Premises is so
     condemned or taken, this Lease shall automatically terminate only as to the
     portion of the Premises so taken as of the earlier of the date on which
     actual physical possession is taken by the condemnor or the date of
     dispossession of Tenant as a result of such condemnation or taking. If a
     portion of the Building not including the Premises is condemned or
     otherwise taken so as to require, in the opinion of Landlord, a substantial
     alteration or reconstruction of the remaining portions thereof, this Lease
     may be terminated by Landlord, as of the date on which actual physical
     possession is taken by the condemnor or dispossession of Tenant as a result
     of such condemnation or taking, by written notice to Tenant delivered
     within sixty (60) days following notice to Landlord of the date on which
     such physical possession is taken or dispossession will occur.

B.   Award. Landlord shall be entitled to the entire award in any condemnation
proceeding or other proceeding for taking for public or quasi-public use,
including, without limitation, any award made for the value of the leasehold
estate created by this Lease. No award for any partial or total taking shall be
apportioned, and Tenant hereby assigns to Landlord any award that may be made
in such condemnation or other taking, together with any and all rights of
Tenant now or hereafter arising in or to the same or any part thereof. Although
all damages in the event of any condemnation are to belong to Landlord whether
such damages are awarded as compensation for diminution in value of the
leasehold or to the fee of the Premises, Tenant shall have the right to claim
and recover from the condemnor, but not from Landlord, such compensation as may
be separately awarded or recoverable by Tenant in Tenant's own right on account
of damages to Tenant's business by reason of the condemnation and for or on
account of any cost or loss to which Tenant might be put in

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<PAGE>   28
     removing Tenant's merchandise, furniture and other personal property,
     fixtures, and equipment, for the interruption of or damage of Tenant's
     business or for Tenant's relocation expenses.

C.   Abatement in Rent. In the event of a partial condemnation or other taking
     that does not result in a termination of this Lease as to the entire
     Premises pursuant to this Section 19, the rent and all other charges shall
     abate in proportion to the portion of the Premises taken by such
     condemnation or other taking. If this Lease is terminated, in whole or in
     part, pursuant to any of the provisions of this Section 19, all rentals and
     other charges payable by Tenant to Landlord hereunder and attributable to
     the Premises taken shall be paid up to the date upon which actual physical
     possession shall be taken by the condemnor. Landlord shall be entitled to
     retain all of the Security Deposit until such time as this Lease is
     terminated as to all of the Premises.

D.   Temporary Taking. If all or any portion of the Premises is condemned or
     otherwise taken for public or quasi-public use for a limited period of
     time, this Lease shall remain in full force and effect and Tenant shall
     continue to perform all terms, conditions and covenants of this Lease;
     provided, however, the rent and all other charges payable by Tenant to
     Landlord hereunder shall abate during such limited period in proportion to
     the portion of the Premises that is rendered untenantable and unusable as a
     result of such condemnation or other taking. Landlord shall be entitled to
     receive the entire award made in connection with any such temporary
     condemnation or other taking. Tenant shall have the right to claim and
     recover form the condemnor, but not from Landlord, such compensation as may
     be separately awarded or recoverable by Tenant in Tenant's own right on
     account of damages to Tenant's business by reason of the condemnation and
     for or on account of any cost or loss to which Tenant might be put in
     removing Tenant's merchandise, furniture and other personal property,
     fixtures and equipment or for the interruption of or damage to Tenant's
     business.

E.   Transfer of Landlord's Interest to Condemnor. Landlord may, without any
     obligation to Tenant, agree to sell and/or convey to the condemnor the
     Premises, the Building, the Project or any portion thereof, sought by the
     condemnor, free from this Lease and the rights to Tenant hereunder, without
     first requiring that any action or proceeding be instituted or, if
     instituted, pursued to a judgment.

SECTION 20. DEFAULT

A.   Tenant's Default. The failure by Tenant to perform any one or more of the
     following obligations shall constitute a default hereunder by Tenant:

     (1)  If Tenant abandons all or a substantial portion of the Premises;

     (2)  If Tenant fails to pay any rent or other charges required to be paid
          by Tenant under this Lease and such failure continues for five (5)
          days after such payment is due and payable; provided, however, that
          the obligation of Tenant to pay a late charge or interest pursuant to
          this Lease below shall commence as of the due date of the rent or such
          other monetary obligation and not on the expiration of such five (5)
          day grace period;

     (3)  If Tenant involuntarily transfers Tenant's interest in this Lease or
          voluntarily transfers (attempted or actual) its interest in this
          Lease, without Landlord's prior written consent;

     (4)  If Tenant files a voluntary petition for relief or if a petition
          against Tenant in a proceeding under the Federal Bankruptcy Laws or
          other insolvency laws is filed and not withdrawn or dismissed within
          forty-five (45) days thereafter, or if under the provisions of any law
          providing for reorganization or winding up of corporations, any court
          of competent

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<PAGE>   29
          jurisdiction assumes jurisdiction, custody or control of Tenant or any
          substantial part of the Premises or any of Tenant's personal property
          located at the Premises and such jurisdiction, custody or control
          remains in force unrelinquished, unstayed or unterminated for a period
          of forty-five (45) days;

     (5)  If in any proceeding or action in which Tenant is a party, a trustee,
          receiver, agent or custodian is appointed to take charge of the
          Premises or any of Tenant's personal property located at the Premises
          (or has the authority to do so) for the purpose of enforcing a lien
          against the Premises or Tenant's personal property;

     (6)  If Tenant shall make any general assignment for the benefit of
          creditors or convene a meeting of its creditors or any class thereof
          for the purpose of effecting a moratorium upon or composition of its
          debts, or any class thereof;

     (7)  If Tenant fails to discharge any lien placed upon the Premises, the
          Building or the Project by Tenant or any person claiming under, by or
          through Tenant within ten (10) days of the imposition of such lien;

     (8)  If Tenant fails to promptly and fully perform any other covenant,
          condition or agreement contained in this Lease (other than
          subparagraphs (1) through (7) above) and such failure continues for
          ten (10) days after written notice thereof from Landlord to Tenant, or
          if such failure cannot be completely cured within such ten (10) day
          period, then if Tenant fails to commence such cure within such ten
          (10) day period and thereafter proceed to completely cure such failure
          within thirty (30) days after such written notice; or

     (9)  If Tenant is a partnership or consists of more than one (1) person or
          entity, if any partner of the partnership or other person or entity is
          involved in any of the acts or events described in subparagraphs (1)
          through (8) above.

B.   Remedies. Any notice given by Landlord pursuant to Section 20(A) above may
     be the notice required or permitted pursuant to Section 1161 et seq. of the
     California Code of Civil Procedure or successor statutes, and the
     provisions of this Lease shall not require the giving of a notice in
     addition to such statutory notice to terminate this Lease and Tenant's
     right to possession of the Premises. The periods specified in Section 20(A)
     within which Tenant is permitted to cure any default following notice from
     Landlord shall run concurrently with any cure period provided by applicable
     laws. Upon the occurrence of a default by Tenant that is not cured by
     Tenant within any applicable grace period specified above, Landlord shall
     have the following rights and remedies in addition to all other rights and
     remedies available to Landlord at law or in equity, which shall be
     cumulative and non-exclusive:

     (1)  Without further notice or demand of any kind to Tenant or any other
          person, the right to declare this Lease and the term of this Lease
          terminated; re-enter the Premises and the improvements located
          thereon, with or without process of law; to eject all parties in
          possession thereof therefrom; repossess and enjoy the Premises
          together with all said improvements; and to recover from Tenant all of
          the following:

          (a)  The worth at the time of award of the unpaid rent which had been
               earned at the time of termination; plus

          (b)  The worth at the time of award of the amount by which the unpaid
               rent which would have been earned after termination until the
               time of award exceeds the

                                       24
<PAGE>   30
          amount of such rental loss that Tenant proves could have been
          reasonably avoided; plus

     (c)  The worth at the time of award of the amount by which the unpaid rent
          for the balance of the Term after the time of award exceeds the amount
          of rental loss that Tenant proves could be reasonably avoided; plus.

     (d)  Any other amount necessary to compensate Landlord for all the
          detriment proximately caused by Tenant's failure to perform its
          obligations under this Lease or which in the ordinary course of things
          would be likely to result therefrom, including, but not limited to,
          any attorneys' fees, broker's commissions or finder's fees (not only
          in connection with the reletting of the Premises, but also that
          portion of any leasing commission paid by Landlord in connection with
          this Lease which is applicable to that portion of the Term which is
          unexpired as of the date on which this Lease is terminated); the then
          unamortized cost of any tenant improvements constructed for or on
          behalf of Tenant by or at the expense of Landlord or of any moving
          allowance or other concession made available to Tenant and/or paid by
          Landlord pursuant to this Lease; any costs for repairs, clean-up,
          refurbishing, removal (including the repair of any damage caused by
          such removal) and storage (or disposal) of Tenant's personal property,
          equipment, fixtures, and anything else that Tenant is required (under
          this Lease) to remove but does not remove; any costs for alterations,
          additions and renovations; and any other costs and expenses, including
          reasonable attorneys' fees and costs, incurred by Landlord in
          regaining possession of and reletting (or attempting to relet) the
          Premises.

(2)  The right to continue this Lease in effect and to enforce all of Landlord's
     rights and remedies under this Lease, including the right to recover rent
     and any other additional monetary charges as they become due, for as long
     as Landlord does not terminate Tenant's right to possession. Acts of
     maintenance or preservation, efforts to relet the Premises, the appointment
     of a receiver upon Landlord's initiative to protect its interest under this
     Lease or Landlord's withholding of consent to an Assignment or Subletting
     pursuant to the terms and conditions of Section 16 above shall not
     constitute a termination of Tenant's right to possession.

(3)  The foregoing provisions of clause (2) shall apply even though Tenant has
     breached the Lease and abandoned the Premises, in which case Landlord shall
     have the right to re-enter the Premises with or without process of law to
     eject therefrom all parties in possession thereof, and, without terminating
     this Lease, at any time and from time to time, but without obligation to do
     so, to relet the Premises and the improvements located therein or any part
     or parts of any thereof for the account of Tenant, or otherwise, on such
     conditions as Landlord in its discretion may deem proper, with the right to
     make alterations and repairs to the Premises in connection therewith, and
     to receive and collect the rents therefor, and apply the same (a) first to
     the payment of such costs and expenses as Landlord may have paid, assumed
     or incurred: (I) in recovering possession of the Premises and said
     improvements, including attorney's fees, and costs; (II) on expenses for
     placing the Premises and said improvements in good order and condition, for
     decorating and preparing the Premises for reletting; (III) for making any
     alterations, repairs, changes or additions to the Premises that may be
     necessary or convenient; and (IV) for all other costs and expenses,
     including leasing and subleasing commissions, and charges paid, assumed or
     incurred by Landlord in or upon reletting the Premises and said
     improvements, or in fulfillment of the covenants of Tenant under this
     Lease; (b) then to the payment of

                                       25
<PAGE>   31
          Monthly Rental and other monetary obligations due and unpaid
          hereunder; and (c) any balance shall be held by Landlord and applied
          in payment of future amounts as the same may become due and payable
          hereunder. Any such reletting may be for the remainder of the term of
          this Lease or for a longer or shorter period. Landlord may execute any
          lease or sublease made pursuant to the terms of this clause (3) either
          in its own name or in the name of Tenant as its agent, as Landlord may
          see fit. The tenant(s) or subtenant(s) thereunder shall be under no
          obligation whatsoever with regard to the application by Landlord of
          any rent collected by Landlord from such tenant or subtenant to any
          and all sums due and owing or which may become due and owing under the
          provisions of this Lease, nor shall Tenant have any right or authority
          whatever to collect any rent whatever from such tenant(s) or
          subtenant(s). If Tenant has been credited with any rent received by
          such reletting and such rent shall not be promptly paid to Landlord by
          the tenant(s) or subtenant(s), or if such rentals received from
          reletting during any month are less than those to be paid during that
          month by Tenant hereunder, Tenant shall pay any such deficiency to
          Landlord. Such deficiency shall be calculated and paid monthly. Tenant
          shall also pay to Landlord as soon as ascertained, any costs and
          expenses incurred by Landlord in such reletting or in making such
          alterations and repairs not covered by the rentals received from such
          reletting. For all purposes set forth in this clause (3), Landlord is
          hereby irrevocably appointed as agent for Tenant. No taking of
          possession of the Premises by Landlord shall be construed as
          Landlord's acceptance of a surrender of the Premises by Tenant or an
          election on Landlord's part to terminate this Lease unless written
          notice of such intention is given to Tenant. Notwithstanding any such
          subletting without termination, Landlord may at any time thereafter
          elect to terminate this Lease for such previous breach. Election by
          Landlord to proceed pursuant to this clause (3) shall be made upon
          written notice to Tenant and shall be deemed an election of the remedy
          described in California Civil Code Section 1951.4 (providing that a
          lessor of real property may continue a lease in effect after a
          lessee's breach or abandonment and recover rent as it becomes due, if
          the lessee has the right to sublet or assign, subject only to
          reasonable limitations). If Landlord elects to pursue such remedy,
          unless Landlord relets the Premises, Tenant shall have the right to
          sublet the Premises and to assign its interest in this Lease, subject
          to all of the standards and conditions set forth in Section 16.
          Landlord may elect to terminate the prosecution of such remedy at any
          time by written notice to Tenant, and the right of Tenant to sublet or
          assign shall terminate upon receipt by Tenant of such notice.

     (4)  The right to have a receiver appointed for Tenant, upon application by
          Landlord, to take possession of the Premises and to apply any rental
          collected from the Premises and to exercise all other rights and
          remedies granted to Landlord pursuant to this subsection.

C.   Relief From Forfeiture. Tenant hereby waives all rights under California
     Code of Civil Procedure Section 1179 and California Civil Code Section 3275
     providing for relief from forfeiture, and any other right now or hereafter
     existing to redeem the Premises or reinstate this Lease after termination
     pursuant to this Section 20 or by order or judgment of any court or by any
     legal process.

SECTION 21. LATE PAYMENTS/INTEREST AND LATE CHARGES

A.   [Intentionally Omitted].

B.   Interest. Any amount due from Tenant to Landlord which is not paid when due
     shall bear interest at the rate of one percent (1%) per month or, if less,
     the maximum rate permitted by law from the date such payment is due until
     paid, except that amounts spent by Landlord on behalf of Tenant shall bear
     interest at such rate from the date of disbursement by Landlord which
     Tenant agrees is

                                       26
<PAGE>   32
          to compensate Landlord for Tenant's use of Landlord's money after it
          is due. Payment of such interest shall not excuse or cure any default
          by Tenant pursuant to this Lease. Such rate shall remain in effect
          after the occurrence of any breach or default hereunder by Tenant to
          and until payment of the entire amount due.

     C.   Late Charges. TENANT HEREBY ACKNOWLEDGES THAT IN ADDITION TO LOST
          INTEREST, THE LATE PAYMENT BY TENANT TO LANDLORD OR RENT OR ANY OTHER
          SUMS DUE HEREUNDER WILL CAUSE LANDLORD TO INCUR OTHER COSTS NOT
          CONTEMPLATED IN THIS LEASE, THE EXACT AMOUNT OF WHICH WILL BE
          EXTREMELY DIFFICULT AND IMPRACTICABLE TO ASCERTAIN. SUCH OTHER COSTS
          INCLUDE, BUT ARE NOT LIMITED TO, PROCESSING, ADMINISTRATIVE AND
          ACCOUNTING COSTS, AND LATE CHARGES WHICH MAY BE IMPOSED UPON LANDLORD
          BY THE TERMS OF ANY ENCUMBRANCE COVERING THE PREMISES.  ACCORDINGLY,
          IF ANY INSTALLMENT OF RENT OR ANY ADDITIONAL RENT OR OTHER SUM DUE
          FROM TENANT SHALL NOT BE RECEIVED BY LANDLORD WHEN SUCH AMOUNT SHALL
          BE DUE (WITHOUT REGARD TO ANY GRACE PERIOD GRANTED IN THIS LEASE),
          TENANT SHALL PAY TO LANDLORD AS ADDITIONAL RENT HEREUNDER A LATE
          CHARGE EQUAL TO THE LESSER OF FIVE PERCENT (5%) OF SUCH OVERDUE AMOUNT
          OR $1,500.00. THE PARTIES HEREBY AGREE THAT (i) SUCH LATE CHARGE
          REPRESENTS A FAIR AND REASONABLE ESTIMATE OF THE COSTS LANDLORD WILL
          INCUR IN PROCESSING SUCH DELINQUENT PAYMENT BY TENANT, (ii) SUCH LATE
          CHARGE SHALL BE PAID TO LANDLORD AS LIQUIDATED DAMAGES FOR EACH
          DELINQUENT PAYMENT, AND (iii) THE PAYMENT OF THE LATE CHARGE IS TO
          COMPENSATE LANDLORD FOR THE ADDITIONAL ADMINISTRATIVE EXPENSE INCURRED
          BY LANDLORD IN HANDLING AND PROCESSING DELINQUENT PAYMENTS.

          [SIGNATURE ILLEGIBLE]              [ILLEGIBLE]
          -------------------------          -----------------
          Landlord's Initials                Tenant's Initials

     D.   No Waiver. Neither assessment nor acceptance of partial payments,
          interest or late charges by Landlord shall constitute a waiver of
          Tenant's default with respect to such overdue amount, nor prevent
          Landlord from exercising any of its other rights and remedies under
          this Lease. Nothing contained in this Section shall be deemed to
          condone, authorize, sanction or grant to Tenant an option for the late
          payment of rent, additional rent or other sums due hereunder, and
          Tenant shall be deemed in default with regard to any such payments
          should the same not be made by the date on which they are due.

SECTION 22. [INTENTIONALLY OMITTED].

SECTION 23. HOLDING OVER

Any holding over by Tenant in the possession of the Premises, or any portion
thereof, after the expiration or earlier termination of the Term, with the
prior written consent of Landlord, shall be construed to be a tenancy from
month to month at one hundred fifty percent (150%) of the Monthly Rental herein
specified for the last month in the Term (prorated on a monthly basis) unless
Landlord shall specify a lesser amount for rent in its sole discretion, and
shall otherwise be on the terms and conditions herein specified as far as
applicable. Any holding over without Landlord's consent shall constitute a
default by Tenant and shall entitle Landlord to pursue all remedies provided in
this Lease and Tenant shall be liable for any and all direct or consequential
damages or losses of Landlord resulting from Tenant's holding over without
Landlord's consent.

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<PAGE>   33
SECTION 24.  ATTORNEYS' FEES

Tenant shall pay to Landlord all amounts for costs and expenses, including, but
not limited to, reasonable attorneys' fees and amounts paid to any collection
agency, incurred by Landlord in connection with any breach or default by Tenant
under this Lease or incurred in order to enforce or interpret the terms or
provisions of this Lease. Tenant shall also pay to Landlord all such amounts,
including attorneys' fees, incurred by Landlord in responding to any request by
Tenant (a) to amend or modify this Lease or (b) to prepare any statement or
document in connection with this Lease, including without limitation estoppel
certificates or subordination agreements or the like. Such amounts shall be
payable upon demand. In addition, if any action shall be instituted by either
Landlord or Tenant for the enforcement or interpretation of any of its rights
or remedies in or under this Lease, the prevailing party shall be entitled to
recover from the losing party all costs incurred by the prevailing party in
said action and any appeal therefrom, including reasonable attorneys' fees and
court costs to be fixed by the court therein. In the event Landlord is made a
party to any litigation between Tenant and any third party, then Tenant shall
pay all costs and attorneys' fees incurred by or imposed upon Landlord in
connection with such litigation; provided, however, if Landlord is ultimately
held to be liable, then Landlord shall reimburse Tenant for the cost of any
attorneys' fees paid by Tenant on behalf of Landlord.

SECTION 25.  MORTGAGE PROTECTION/SUBORDINATION

A.   Subordination.  The rights of Tenant under this Lease are and shall be, at
     the option of Landlord, either subordinate or superior to any mortgage or
     deed of trust (including a consolidated mortgage or deed of trust)
     constituting a lien on the Premises, Building or Project, or Landlord's
     interest therein or any part thereof, whether such mortgage or deed of
     trust has heretofore been, or may hereafter be, placed upon the Premises
     by Landlord, and to any ground or master lease if Landlord's title to the
     Premises or any part thereof is or shall become a leasehold interest. To
     further assure the foregoing subordination or superiority, Tenant shall,
     upon Landlord's request, together with the request of any mortgagee under
     a mortgage or beneficiary under a deed of trust or ground or master
     lessor, execute any instrument (including without limitation an amendment
     to this Lease that does not materially and adversely affect Tenant's
     rights or materially increase Tenant's obligations under this Lease) or
     instruments intended to subordinate this Lease, or at the option of
     Landlord, to make it superior to any mortgage, deed of trust, or ground or
     master lease. Notwithstanding any such subordination, Tenant's right to
     occupy the Premises pursuant to this Lease shall remain in effect for the
     full Term as long as Tenant is not in default hereunder.

B.   Attornment.  Notwithstanding Section 25(A) above, Tenant agrees (1) to
     attorn to any mortgagee of a mortgage or beneficiary of a deed of trust
     encumbering the Premises and to any party acquiring title to the Premises
     by judicial foreclosure, trustee's sale, or deed in lieu of foreclosure,
     and to any ground or master lessor, as the successor to Landlord
     hereunder, (2) to execute any attornment agreement reasonably requested by
     a mortgagee, beneficiary, ground or master lessor, or party so acquiring
     title to the Premises, and (3) that this Lease, subject to the rights
     under any outstanding non-disturbance agreement, at the option of such
     mortgagee, beneficiary, or ground or master lessor, or other party, shall
     remain in force notwithstanding any such judicial foreclosure, trustee's
     sale, deed in lieu of foreclosure, or merger of titles. Notwithstanding
     the foregoing, neither a mortgagee of a mortgage or beneficiary of a deed
     of trust encumbering the Premises, any party acquiring title to the
     Premises by judicial foreclosure, trustee sale, or deed in lieu of
     foreclosure, or any ground lessor or master lessor, as the successor to
     Landlord hereunder, shall be liable or responsible for any breach of a
     covenant contained in this Lease that occurred before such party acquired
     its interest in the Premises or for any continuing breach thereof until
     after the successor Landlord has received the notice and right to cure as
     provided herein, and no such party shall be liable or responsible for any
     security deposits held by Landlord hereunder

                                       28

<PAGE>   34
     which have not been transferred or actually received by such party, and
     such party shall not be bound by any payment of rent or additional rent for
     more than two (2) months in advance.

C.   Amendment. If any lending institution with which Landlord has negotiated or
     may negotiate for financing for the Building or Project requires any
     changes to this Lease, Tenant shall promptly execute and deliver an
     amendment to this Lease prepared by Landlord and embodying such changes, so
     long as such changes do not materially and adversely affect Tenant's rights
     or materially increase Tenant's obligations hereunder. In the event that
     Tenant shall fail to execute and deliver such amendment within twenty (20)
     days after receipt thereof by Tenant, such failure shall constitute a
     default hereunder by Tenant and shall entitle Landlord to all remedies
     available to a landlord against a defaulting tenant pursuant to a written
     lease, including but not limited to those remedies set forth in Section 20.

SECTION 26. ESTOPPEL CERTIFICATE/FINANCIAL STATEMENTS

A.   Estoppel Certificate. Tenant, at any time and from time to time upon not
     less than ten (10) days' prior written notice from Landlord, agrees to
     execute and deliver to Landlord a statement in the form provided by
     Landlord (1) certifying that this Lease is unmodified and in full force and
     effect, or, if modified, stating the nature of such modification and
     certifying that this Lease, as so modified, is in full force and effect and
     the date to which the rent and other charges are paid in advance, if any;
     (2) acknowledging that there are not, to Tenant's knowledge, any uncured
     defaults on the part of Landlord hereunder, or specifying such defaults if
     they are claimed evidencing the status of this Lease; (3) acknowledging the
     amount of the Security Deposit held by Landlord; and (4) containing such
     other information regarding this Lease or Tenant as Landlord reasonably
     requests. Tenant's failure to deliver an estoppel certificate within such
     time shall be conclusive upon Tenant that (i) this Lease is in full force
     and effect without modification except as may be represented by Landlord,
     (ii) to Tenant's knowledge there are no uncured defaults in Landlord's
     performance, (iii) no rent has been paid in advance except as set forth in
     this Lease, and (iv) such other information regarding this Lease and Tenant
     set forth therein by Landlord is true and complete.

B.   Furnishing of Financial Statements. Landlord has reviewed the financial
     statements, if any, requested of Tenant and has relied upon the truth and
     accuracy thereof with Tenant's knowledge and representations of the truth
     and accuracy of such statements and that said statements accurately and
     fairly depict the financial condition of Tenant. Said financial statements
     are an inducing factor and consideration for the entering into of this
     Lease by Landlord with this particular Tenant. At each of the times
     provided below, Tenant shall furnish Landlord with Tenant's most recent
     audited financial statements, including a balance sheet and income
     statement, or a document in which Tenant states that its books are not
     independently audited accompanied by Tenant's most recent unaudited
     financial statements, including a balance sheet and income statement,
     signed by Tenant's chief financial officer. Such information shall be
     provided at Landlord's request by Tenant on each and all of the following
     dates (or if Landlord's request is not made at least ten (10) days before
     such date, within ten (10) days of Landlord's request): July 1, 2000;
     January 1, 2001; July 1, 2001; July 1, 2002; and July 1, 2003.

SECTION 27. PARKING

A.   Landlord's Obligations. Landlord agrees to maintain or cause to be
     maintained an automobile parking area and to maintain and operate, or cause
     to be maintained and operated, said automobile parking area during the Term
     of this Lease for the benefit and non-exclusive use by Tenant and the
     customers, service suppliers, other invitees and employees of Tenant.
     Whenever the words "automobile parking area" or "parking area" are used in
     this Lease, it is intended that the same

                                       29

<PAGE>   35
     shall include, whether in a surface parking area or a parking structure,
     the automobile parking stalls, driveways, loading docks, truck areas,
     service drives, entrances and exits and sidewalks, landscaped areas,
     pedestrian passageways in conjunction therewith and other areas designated
     for parking. Landlord shall keep said automobile parking are in a neat,
     clean and orderly condition, lighted and landscaped, and shall repair any
     damage to the facilities thereof. Nothing contained herein shall be deemed
     to impose liability upon Landlord for personal injury or theft, for damage
     to any motor vehicle, or for loss of property from within any motor
     vehicle, which is suffered by Tenant or any of its employees, customers,
     service suppliers or other invitees in connection with their use of said
     automobile parking area. Landlord shall also have the right to establish
     such reasonable rules and regulations as may be deemed desirable, at
     Landlord's sole discretion, for the proper and efficient operation and
     maintenance of said automobile parking area. Such rules and regulations may
     include, without limitation, (i) restrictions on the hours during which the
     automobile parking area shall be open for use and (ii) the establishment on
     a non-discriminatory basis of charges for parking therein (on either a
     reserved or unreserved basis, at Landlord's sole discretion) by tenants of
     the Building as well as by their employees, customers and service
     suppliers.

B.   Tenant's Rights and Obligations. Tenant shall be entitled to use the
     number of vehicle parking spaces allocated to Tenant in Section 1(P)
     without paying any additional rent therefor. Tenant and its employees shall
     park their vehicles only in those portions of the Common Areas or other
     locations designated and provided for that purpose by Landlord. Tenant's
     parking shall not be reserved and shall be limited to vehicles no longer
     than standard size automobiles or pickup or sport utility vehicles. Tenant
     shall not cause large trucks or other large vehicles to be parked within
     the Project or on the adjacent public streets except in accordance with the
     Rules. Vehicles shall be parked only in striped parking spaces and not in
     driveways or other locations not specifically designated for parking.
     Handicapped spaces shall only be used by those legally permitted to use
     them. Tenant shall not use or permit the use of loading areas, any spaces
     which have been specifically assigned by Landlord to employees of Landlord
     or other tenants or for such other uses as visitor parking or which have
     been designated by governmental entities as being restricted to certain
     uses. Tenant shall not permit or allow any vehicles that belong to or are
     controlled by Tenant or Tenant's employees, suppliers, shippers, customers,
     or invitees to be loaded, unloaded, or parked in areas other than those
     designated by Landlord for such activities. The parking area shall not be
     used to provide car wash, oil changes, detailing, automotive repair or
     other services unless otherwise approved or furnished by Landlord. Tenant
     shall furnish Landlord with its and its employees' license plate numbers
     within fifteen (15) days after taking possession of the Premises, and
     Tenant shall thereafter notify Landlord of any changes within five (5) days
     after such change occurs. If Tenant or its employees fail to park their
     cars in designated parking areas, then Landlord may charge Tenant Fifteen
     Dollars ($15.00) per day for each day or partial day that any such car is
     parked in any area other than those designated. Overnight and weekend
     parking shall not be permitted unless Tenant has provided Landlord with
     advance written notice thereof. If Tenant permits or allows any of the
     prohibited activities described herein, Landlord shall have the right,
     without notice, in addition to any other rights it may have, to remove or
     tow away the vehicle. If Landlord shall tow any vehicles of Tenant or its
     employees, suppliers, shippers, customers, or invitees, Tenant shall pay to
     Landlord the costs and expenses incurred by Landlord in connection
     therewith, within ten (10) days after Landlord sends Tenant an invoice
     therefor.

C.   Control of Parking Area. Landlord shall at all times during the Term
     hereof have the sole and exclusive control of the automobile parking area,
     and may at any time during the Term hereof exclude and restrain any person
     from use or occupancy thereof; excepting, however, Tenant and employees,
     customers, service suppliers and other invitees of Tenant and of other
     tenants in the Building who make use of said area in accordance with any
     rules and regulations established by

                                       30
<PAGE>   36
     Landlord from time to time with respect thereto. The rights of Tenant and
     its employees, customers, service suppliers and invitees referred to in
     this Section 27 shall at all times be subject to (i) the rights of Landlord
     and other tenants in the Building and their customers, employees,
     licensees, invitees, successors and assigns to use the same in common with
     Tenant and its employees, customers, service suppliers and invitees, (ii)
     the availability of parking spaces in said automobile parking area, and
     (iii) Landlord's right to assign reserved parking spaces and to change the
     location of any assigned reserved parking spaces in such instances as shall
     be determined at Landlord's sole discretion. Notwithstanding Landlord's
     exclusive control and obligations to provide a parking area, Landlord is
     not responsible or liable for any damage to any automobiles or persons in
     the parking area.

SECTION 28. SIGNS; NAME OF BUILDING

A.   Signs. Landlord shall enter Tenant's name in the Building directory located
     in the main lobby of the Building and in the elevator lobby of the floor on
     which the Premises is located. Tenant shall not have the right to place,
     construct, or maintain on or about the Premises, Building or Project, or in
     any interior portions of the Premises that may be visible from the exterior
     of the Building or Common Areas, any signs, names, insignia, trademark,
     advertising placard, descriptive material or any other similar item
     ("Sign") without Landlord's prior written consent, which consent may be
     withheld in Landlord's sole discretion; provided, however, any Signs are
     further subject to approval of any applicable governmental authority and/or
     compliance with applicable governmental requirements and covenants,
     conditions and restrictions applicable to the Building or the Project. In
     the event Landlord consents to Tenant placing a Sign on or about the
     Premises, Building or Project, any such Sign shall be subject to Landlord's
     approval of the color, size, style and location of such Sign, and shall
     conform to any current or future Sign criteria established by Landlord for
     the Building or Project. If Landlord enacts a Sign criteria or revises an
     existing Sign criteria, after Tenant has erected a Sign to which Landlord
     has granted its consent, if Landlord so elects, Tenant agrees, at
     Landlord's expense, subject to Landlord's prior approval of the cost
     thereof, to make the necessary changes to its Sign in order to conform the
     Sign to Landlord's Sign criteria, as enacted or revised, provided that such
     changes shall be limited to the color, size, style and location of Tenant's
     Sign and that Tenant shall not be required to change the content of its
     Sign. In the event Landlord consents to Tenant's placement of a Sign on the
     Building, Tenant shall, at its sole cost, remove such Sign from the
     Building at the end of the Term, restore the Building to the same condition
     as before the installation of the Sign, ordinary wear and tear excepted and
     remove any discoloration of the Building caused by the presence of such
     sign.

B.   Building Identification. Landlord reserves the right at any time it deems
     necessary or appropriate to (1) place Signs at any location on the Building
     and Project as it deems necessary and (2) change the name, address or
     designation of the Building and Project.

SECTION 29. QUIET ENJOYMENT

Upon payment by Tenant of the rents herein provided, and upon the observance
and performance of all the covenants, terms and conditions on Tenant's part to
be observed and performed, Tenant shall peaceably and quietly hold and enjoy
the Premises for the Term without hindrance or interruption by Landlord or any
other person or persons lawfully or equitably claiming by, through or under
Landlord, subject, nevertheless, to the terms and conditions of this Lease, and
any mortgage and/or deed of trust to which this Lease is subordinate.

                                       31
<PAGE>   37
SECTION 30. ADDITIONAL FACILITIES AVAILABLE TO TENANT

A.    Conference Rooms. Tenant shall have the right to reserve the use of (1)
      the Bay Conference Room located on the second floor of the Building
      without paying any additional rent therefor, (2) the Pacific Conference
      Room located on the second floor of the Building free of charge once each
      calendar quarter and at other times at a fee of $100.00 per day or
      partial day (plus a set-up fee based on Landlord's standard hourly rates
      to be determined from time to time) and (3) any other conference room
      located on the second floor of the Building at Landlord's standard hourly
      rates to be determined from time to time. Tenant shall pay Landlord for
      any audio/visual, video conferencing or other equipment available in any
      such conference room a fee to be determined by Landlord from time to
      time; provided however, Tenant acknowledges that Landlord does not
      guarantee that any such equipment will be available or in working order
      at any time. Landlord shall notify Tenant of any discretionary fees
      described above at such time as Tenant requests use of any such
      conference room or equipment. Such use of the conference rooms on the
      second floor of the Building shall be on a non-exclusive basis during
      normal business hours (as designated by Landlord from time to time) and
      shall in all other respects be subject to the same obligations set forth
      in this Lease regarding Tenant's use of the Common Areas. If Tenant
      desires to reserve a conference room, Tenant shall notify Landlord on
      Landlord's standard reservation form or in another manner acceptable to
      Landlord at least ten (10) business days before the desired date of use.
      Landlord shall notify Tenant within five (5) business days after receipt
      of Tenant's request whether the requested conference room is available
      for Tenant's use in accordance with the rules of Landlord from time to
      time in effect, which may include rules to ensure that Tenant's use of
      conference facilities is not disproportionate to the Rental Area of the
      Premises. If not, Tenant may request the use of another conference room,
      however, Tenant agrees that Landlord shall have no obligation to respond
      to such request within less than five (5) business days after receipt of
      Tenant's request. Tenant hereby waives any claims it may have against
      Landlord due to the unavailability of a conference room at any time,
      regardless whether Landlord has notified Tenant that a particular
      conference room is available for Tenant's use, except for claims due to
      Landlord's willful misconduct. Landlord shall not be required to make
      conference facilities available to Tenant if Landlord elects, in its
      discretion, to cease to maintain and operate shared conference facilities
      in the Building.

B.    Fitness Center. Tenant shall be entitled to use the number of Fitness
      Center Memberships allocated to Tenant in Section 1(Q) without paying any
      additional rent therefor. Such use of the Fitness Center at the Building
      shall be on a non-exclusive basis during the standard hours of operation
      of the Fitness Center (as designated by Landlord from time to time) and
      shall in all other respects be subject to the same obligations set forth
      in this Lease regarding Tenant's use of the Common Areas. Tenant shall
      have the right to purchase additional Fitness Center Memberships at $50
      per Membership per month. Such amounts shall be payable to Landlord as
      additional rent and shall be subject to increase on written notice from
      Landlord. Memberships may only be used by employees of Tenant and not
      spouses or friends of Tenant's employees or customers, consultants,
      vendors or agents of Tenant. Tenant shall assign Memberships to specific
      employees and shall arrange for the security badges of such employees to
      allow them access to the Fitness Center. Tenant shall notify Landlord of
      the names of such employees at such time or times as Tenant allocates
      Memberships to its employees. Tenant shall ensure that the assigned
      employees do not allow other individuals to use the assigned Memberships.
      Memberships shall be granted by Landlord only to Tenant; Landlord shall
      not have any obligation to grant Memberships directly to employees of
      Tenant. Prior to using the Fitness Center for the first time, each
      employee of Tenant shall sign a written waiver on Landlord's standard
      form releasing Landlord from all liability for personal injury or theft
      or for loss of property from within the Fitness Center. Nothing contained
      herein shall be deemed to impose, and Tenant hereby waives on behalf of
      itself and all users of the Fitness Center Memberships (authorized or
      unauthorized, paid or unpaid), liability against

                                       32
<PAGE>   38
     Landlord for personal injury or theft or for loss of property from within
     the Fitness Center, which is suffered by Tenant or any of its employees or
     other parties. Tenant further agrees to indemnify, defend and hold Landlord
     and its officers, directors, partners, agents and employees (collectively,
     "Indemnitees") entirely harmless from and against all liabilities, losses,
     demands, actions, expenses or claims, including reasonable attorneys' fees
     and court costs, for injury to or death of any person or for damages to any
     property or for violation of law arising out of or in any manner connected
     with the use, occupancy or enjoyment of the Fitness Center by Tenant or and
     users of the Fitness Center Memberships (authorized or unauthorized, paid
     or unpaid). Landlord shall not be required to make the Fitness Center
     available as provided above if Landlord elects, in its discretion, to
     discontinue operation of the Fitness Center.

C.   Fees. All amounts payable to Landlord pursuant to this Section 30 shall be
     deemed additional rent. All fees described herein shall be payable by
     Tenant regardless whether Tenant or its employees use the conference
     room(s) that have been reserved or the paid Fitness Center Memberships, as
     applicable.

SECTION 31. NOTICES

Any notice, demand, approval, consent, bill, statement or other communication
("Notice") required or desired to be given under this Lease shall be in
writing, shall be directed to Tenant at Tenant's Address for Notice or to
Landlord at Landlord's Address for Notice and shall be personally served or
given by pre-paid certified U.S. Mail or "overnight" delivery service. In the
case of personal delivery, any Notice shall be deemed to have been given when
delivered; in the case of service by certified mail, any Notice shall be deemed
delivered of the date of receipt, refusal or non-delivery indicated on the
return receipt; and in the case of overnight delivery service, any Notice shall
be deemed given when delivered as evidenced by a receipt. If more than one
Tenant is named under this Lease, service of any Notice upon any one of said
Tenants shall be deemed as service upon all of such Tenants. The parties hereto
and their respective heirs, successors, legal representatives, and assigns may
from time to time change their respective addresses for Notice by giving at
least fifteen (15) days' written notice to the other party, delivered in
compliance with this Section.

SECTION 32. NOTICE AND CURE TO LANDLORD AND MORTGAGEE

On any act or omission by Landlord which might give, or which Tenant claims or
intends to claim gives, Tenant the right to damages from Landlord or the right
to terminate this Lease by reason of a constructive or actual eviction from all
or part of the Premises, or otherwise, Tenant shall not sue for damages or
attempt to terminate this Lease until it has given written notice of the act or
omission to Landlord and to the holder(s) of the indebtedness or other
obligations secured by any mortgage or deed of trust affecting the Premises as
identified by Landlord, and a reasonable period of time for remedying the act
or omission has elapsed following the giving of the notice, during which time
Landlord and the lienholder(s), or either of them, their agents or employees,
may enter upon the Premises and do therein whatever is necessary to remedy the
act or omission. During the period after the giving of notice and during the
remedying of the act or omission, the Monthly Rental payable by Tenant shall
not be abated and apportioned except to the extent that the Premises are
untenantable.

SECTION 33. GENERAL

A.   Paragraph Headings. The paragraph headings used in this Lease are for the
     purposes of convenience only. They shall not be construed to limit or to
     extend the meaning of any part of this Lease.

B.   Incorporation of Prior Agreements; Amendments. This Lease contains all
     agreements of Landlord

                                       33
<PAGE>   39
     and Tenant with respect to any matter mentioned, or dealt with, herein. No
     prior agreement or understanding pertaining to any such matters shall be
     binding upon Landlord. Any amendments to or modifications of this Lease
     shall be in writing, signed by the parties hereto, and neither Landlord
     nor Tenant shall be liable for any oral or implied agreements. LANDLORD
     HAS NOT MADE, AND TENANT MAY NOT RELY ON, ANY REPRESENTATIONS OR
     WARRANTIES, EXPRESSED OR IMPLIED, WITH REGARD TO THE PROJECT, THE
     BUILDING, THE PREMISES OR OTHERWISE OR THE SUITABILITY THEREOF FOR
     TENANT'S BUSINESS, EXCEPT AS EXPRESSLY STATED IN THIS LEASE. IN
     PARTICULAR, LANDLORD HAS NOT AUTHORIZED ANY AGENT OR BROKER TO MAKE A
     REPRESENTATION OR WARRANTY INCONSISTENT WITH THE TERMS OF THIS LEASE AND
     TENANT MAY NOT RELY ON ANY SUCH INCONSISTENT REPRESENTATION OR WARRANTY.

C.   Waiver. Any waiver by Landlord of any breach of any term, covenant, or
     condition contained in this Lease shall not be deemed to be a waiver of
     such term, covenant, or condition or of any subsequent breach of the same
     or of any other term, covenant, or condition contained in this Lease.
     Landlord's consent to, or approval of any act shall not be deemed to
     render unnecessary the obtaining of Landlord's consent to, or approval of,
     any subsequent act by Tenant. The acceptance of rent or other sums payable
     hereunder by Landlord shall not be a waiver of any preceding breach by
     Tenant of any provision hereof, other than failure of Tenant to pay the
     particular rent or other sum so accepted, regardless of Landlord's
     knowledge of such preceding breach at the time of acceptance of such rent,
     or sum equivalent to rent.

D.   Short Form or Memorandum of Lease. Tenant agrees, at the request of
     Landlord, to execute, deliver, and acknowledge a short form or memorandum
     of this Lease satisfactory to counsel for Landlord, and Landlord may, in
     its sole discretion, record such short form or memorandum in the county
     where the Premises are located. Tenant shall not record this Lease, or a
     short form or memorandum of this Lease, without Landlord's prior written
     consent.

E.   Time of Essence. Time is of the essence in the performance of each
     provision of this Lease.

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

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

H.   Surrender of Lease Not Merger. Neither the voluntary or other surrender of
     this Lease by Tenant nor the mutual cancellation thereof shall cause a
     merger of the titles of Landlord and Tenant, but such surrender or
     cancellation shall, at the option of Landlord, either terminate all or any
     existing subleases or operate as an assignment to Landlord of any such
     subleases. The delivery of keys to the Premises to Landlord or its agent
     shall not, of itself, constitute a surrender and termination of this Lease.

I.   Authority. If Tenant is a corporation, each individual executing this
     Lease on behalf of Tenant represents and warrants (1) the he or she is
     duly authorized to execute and deliver this Lease on behalf of Tenant in
     accordance with a duly adopted resolution of the Board of Directors of
     Tenant in accordance with the By-laws of Tenant and (2) that this Lease is
     binding upon and enforceable

                                       34

<PAGE>   40
     by Landlord against Tenant in accordance with its terms. If Tenant is a
     corporation, Tenant shall, concurrently with delivery of an executed Lease
     to Landlord, deliver to Landlord a certified copy of a resolution of its
     Board of Directors authorizing or ratifying the execution of this Lease. If
     Tenant is a partnership, joint venture, or other unincorporated
     association, each individual executing this Lease on behalf of Tenant
     warrants that this Lease is binding on Tenant and that each and both of the
     persons signing on behalf of Tenant were authorized to do so.

J.   Governing Law. This Lease and the rights and obligations of the parties
     hereto shall be interpreted, construed and enforced in accordance with the
     local laws of the State in which the Building is located.

K.   Force Majeure. If the performance by Landlord of any provision of this
     Lease is delayed or prevented by any act of God, strike, lockout, shortage
     of material or labor, restriction by any governmental authority, civil
     riot, flood, and any other cause not within the control of Landlord, then
     the period for Landlord's performance of the provision shall be
     automatically extended for the same time Landlord is so delayed or
     hindered.

L.   Use of Language. Words of gender used in this Lease include any other
     gender, and words in the singular include the plural, unless the context
     otherwise requires.

M.   Successors. The terms, conditions and covenants contained in the Lease
     inure to the benefit of and are binding on, the parties hereto and their
     respective successors in interest, assigns and legal representatives,
     except as otherwise herein expressly provided. All rights, privileges,
     immunities and duties of Landlord under this Lease, including without
     limitation, notices required or permitted to be delivered by Landlord to
     Tenant hereunder, may, at Landlord's option, be exercised or performed by
     Landlord's agent or attorney.

N.   No Reduction of Rental. Except as otherwise expressly and unequivocally
     provided in this Lease, Tenant shall not for any reason withhold or reduce
     the amounts payable by Tenant under this Lease, it being understood that
     the obligations of Landlord hereunder are independent of Tenant's
     obligations. If Landlord is required by governmental authority to reduce
     energy consumption or impose a parking or similar charge with respect to
     the Premises, Building or Project, to restrict the hours of operation of,
     limit access to, or reduce parking spaces available at the Building, or
     take other limiting actions, then Tenant is not entitled to abatement or
     reduction of rent or to terminate this Lease.

O.   No Partnership. Notwithstanding anything else to the contrary, Landlord is
     not, and under no circumstances shall be considered to be, a partner of
     Tenant, or engaged in a joint venture with Tenant.

P.   Exhibits. All exhibits attached hereto are made a part hereof and are
     incorporated herein by this reference. A complete list of said exhibits is
     set forth in the Table of Contents.

Q.   Indemnities. The obligations of the indemnifying party under each and every
     indemnification and hold harmless provision contained in this Lease shall
     survive the expiration or earlier termination of this Lease to and until
     the last to occur of (1) the last date permitted by law for the bringing of
     any claim or action with respect to which indemnification may be claimed by
     the indemnified party against the indemnifying party under such provision
     or (2) the date on which any claim or action for which indemnification may
     be claimed under such provision is fully and finally resolved and, if
     applicable, any compromise thereof or judgment or award thereon is paid in
     full by the indemnifying party and the indemnified party is reimbursed by
     the indemnifying party for any amounts paid by the indemnified party in
     compromise thereof or upon a judgment or award thereon.

                                       35
<PAGE>   41
     and in defense of such action or claim, including reasonable attorneys'
     fees incurred. Payment shall not be a condition precedent to recovery upon
     any indemnification provision contained herein.

R.   Nondisclosure of Lease Terms.  Landlord and Tenant agree that the terms of
     this Lease are confidential and constitute proprietary information of the
     parties hereto. Disclosure of the terms hereof could adversely affect the
     ability of Landlord to negotiate with other tenants of the Building. Each
     of the parties hereto agrees that such party, and its respective partners,
     officers, directors, employees, agents, brokers and attorneys, shall not
     disclose the terms and conditions of this Lease to any other person
     without the prior written consent of the other party hereto except
     pursuant to an order of a court of competent jurisdiction. Provided,
     however, that Landlord may disclose the terms hereof to any prospective
     purchaser of the Building or any lender now or hereafter having a lien on
     Landlord's interest in the Building or the Project, or any portion
     thereof, and either party may disclose the terms thereof to its respective
     independent accountants who review its respective financial statements or
     prepare its respective tax returns, to any prospective transferee of all
     or any portions of their respective interests hereunder (including a
     prospective sublessee or assignee of Tenant), to its respective real estate
     brokers, to any lender or prospective lender to such party, to any
     governmental entity, agency or person to whom disclosure is required by
     applicable law, regulation or duty of diligent inquiry and in connection
     with any action brought to enforce the terms of this Lease, on account of
     the breach hereof or to seek a judicial determination of the rights and
     obligations of the parties hereunder.

S.   No Light, Air or View Easement.  Any diminution or shutting of light, air
     or view by any structure which may be erected on lands adjacent to the
     Building shall in no way affect this Lease or impose any liability on
     Landlord.

T.   Brokers.  Tenant warrants and represents that it has not dealt with any
     real estate broker or agent in connection with this Lease or its
     negotiation except the Brokers identified in Section 1(M). Tenant shall
     indemnify and hold Landlord harmless from any cost, expense or liability
     (including costs of suit and reasonable attorneys' fees) for any
     compensation, commission or fees claimed by any other real estate broker
     or agent in connection with this Lease or its negotiation by reason of any
     act of Tenant.

U.   Counterparts.  This Lease may be executed in several duplicate
     counterparts, each of which shall be deemed an original of this Lease for
     all purposes.

                                       36
<PAGE>   42
IN WITNESS WHEREOF, the parties have executed this Lease, consisting of the
foregoing provisions, any typed addenda appended hereto and all Exhibits
appended hereto, on the dates indicated below, the later of which shall be
deemed the date of execution of this Lease.

"TENANT"                                "LANDLORD"

COLOMOTION, INC.,                       HITACHI AMERICA, LTD.,
a California corporation                a New York corporation

By:                                     By: /s/ TOMOHARU SHIMAYAMA
   ---------------------------             ---------------------------
Name:                                   Name: TOMOHARU SHIMAYAMA
     -------------------------               -------------------------
Title:                                  Title: President
      ------------------------                ------------------------
                                        Dated: May 18, 1999
                                              -------
By: /s/ RICHARD J. PALOMBA
   ---------------------------
Name: RICHARD J. PALOMBA
     -------------------------
Title: VP Real Estate
      ------------------------
Dated: May 17, 1999
      -------
<PAGE>   43
                                  [FLOOR PLAN]
<PAGE>   44
                                  [FLOOR PLAN]

                                   Exhibit A
<PAGE>   45
                                   EXHIBIT B

                          CONSTRUCTION OF THE PREMISES

ARTICLE 1
PLANS AND SPECIFICATIONS

SECTION 1.1 TENANT'S WORK. Any and all work required for Tenant's occupancy of
the Premises ("Tenant's Work"), including but not limited to construction and
restoration of private offices, the procurement and installation of furniture,
fixtures, equipment, artwork and interior signage shall be performed by Tenant
or its subcontractors strictly in accordance with the Approved Design Drawings
(defined above). Tenant's Work shall be at Tenant's sole cost and expense and
shall comply in all respects with all applicable laws, statutes, ordinances,
building codes and regulations.

SECTION 1.2 TENANT'S PLANS. Tenant shall prepare and submit to Landlord plans
and specifications prepared at Tenant's expense and stamped as required by an
architect, registered licensed professional and/or engineer licensed in
California. Such plans and specifications shall be submitted in two (2) phases
as provided below. The Premises shall be delivered to Tenant subject to all
existing field conditions, and Tenant shall, in connection with the preparation
of such plans and specifications, cause its architect to inspect the Premises
to determine its existing conditions. If Tenant elects to use an architect
other than the architect recommended by Landlord, then Tenant shall pay to
Landlord, as additional rent, an architectural services fee equal to ten
percent (10%) of the fees paid by Tenant to its architect in connection with
Tenant's Work. For purposes hereof, Landlord recommends that Tenant engage RMW
Architects for any architectural services performed on behalf of Tenant in
connection with Tenant's Work.

SECTION 1.3 PRELIMINARY DESIGN DRAWINGS. Upon execution of the Lease, Tenant
shall submit to Landlord one (1) reproducible and three (3) prints of
preliminary drawings showing the intended design character and finishing of the
Premises (the "Preliminary Design Drawings").

SECTION 1.4 CONSTRUCTION DRAWINGS AND SPECIFICATIONS. Within ten (10) days
after receipt of accepted Preliminary Design Drawings, Tenant shall submit to
Landlord for review and acceptance one (1) reproducible and four (4) prints of
the construction drawings and specifications for Tenant's Work (the
"Construction Drawings and Specifications"). On or before this day, Tenant
shall submit to appropriate governmental agencies applications for all permits
and approvals required in connection with Tenant's Work.

SECTION 1.5 PLAN ACCEPTANCE AND PROCEDURES.

a.    The Preliminary Design Drawings and Construction Drawings and
      Specifications shall be subject to Landlord's review and written
      acceptance, which Landlord may give or withhold in its sole discretion.
      Landlord shall review any such drawings and shall, by giving notice to
      Tenant, either accept or reject the same within fifteen (15) days of
      receipt from Tenant, specifying the reasons for any rejection. Within ten
      (10) days after rejection by Landlord of any Preliminary Design Drawings
      or Construction Drawings and Specifications, Tenant shall revise the same
      in accordance with Landlord's objections thereto and resubmit the same to
      Landlord for review and written acceptance, as provided above. The
      Preliminary Design Drawings and the Construction Drawings and
      Specifications as accepted by Landlord are referred to herein as the
      "Approved Design Drawings."

b.    In the event Tenant shall submit to Landlord for review and acceptance
      any subsequent changes, modifications or alterations to the Approved
      Design Drawings accepted a herein provided, Landlord shall have the right
      to be reimbursed by Tenant for any additional charges, expenses or

                                       1
<PAGE>   46
     costs related to such changes, modifications or alterations. No such
     changes, modifications or alterations to the Approved Design Drawings shall
     be made without the written acceptance of Landlord, which Landlord may give
     or withhold in its sole discretion.

c.   Tenant hereby releases Landlord from any and all claims whatsoever for
     damages for any scheduling disruption or for any other event which causes a
     delay in the date on which the Premises are available for the commencement
     of Tenant's Work therein or the date upon which such work is completed.

d.   Tenant shall perform or cause Tenant's contractor to perform all Tenant's
     Work in a manner so as to avoid any labor dispute which causes or is likely
     to cause stoppage or impairment of work or delivery service or any other
     services in the Building. In the event there shall be any such stoppage or
     impairment as the result of any such labor dispute or potential labor
     dispute, Tenant shall immediately undertake such actions as may be
     necessary to eliminate such dispute or potential dispute, including, but
     not limited to, (i) removing all disputants from the job site until such
     time as the labor dispute no longer exists, (ii) seeking an injunction in
     the event of a breach of contract between Tenant and Tenant's contractor,
     and (iii) filing appropriate unfair labor practice charges in the event of
     a union jurisdictional dispute.

ARTICLE 2
PROCEDURES FOR CONSTRUCTION

SECTION 2.1 COMMENCEMENT OF CONSTRUCTION. Tenant shall commence and diligently
prosecute construction of Tenant's Work in the Premises in sufficient time to
complete its work by the Lease Commencement Date. The failure of Tenant to
comply with the procedures and schedules set forth in this Exhibit B, to
prepare Approved Design Drawings, to commence or complete Tenant's Work prior to
the Lease Commencement Date, or to fulfill or cause to be fulfilled all of the
conditions to opening specified in Section 2.5 of this Exhibit B shall not delay
or postpone the Lease Commencement Date, which shall be as provided for in the
Lease.

SECTION 2.2 GENERAL REQUIREMENTS.

a.   Tenant shall submit to Landlord, at least five (5) days prior to the
     commencement of any of Tenant's Work, the following information:

     1.   The name and address of the general contractor Tenant intends to
          engage in the construction of the Premises.

     2.   The date on which Tenant's Work will commence, together with the
          estimated date of completion of Tenant's Work and fixturizing work.

     3.   Evidence of Tenant's compliance with the insurance requirements set
          forth in Section 2.7 of this Exhibit B.

     4.   Itemized statement of estimated construction costs, including
          architectural, engineering and contractor's fees.

     5.   Tenant's contractors' performance and/or labor and material bonds, if
          so required by Landlord, and/or any other bond to be furnished by
          Tenant as may be required by Landlord to insure the faithful
          performance of Tenant's Work in accordance with the Approved Design
          Drawings.

                                       2
<PAGE>   47
b.   All contractors engaged by Tenant shall be bondable, licensed contractors,
     possessing good labor relations, capable of performing quality workmanship
     approved in advance by Landlord. If Tenant elects to use a contractor
     other than the contractor recommended by Landlord, then Tenant shall pay
     to Landlord, as additional rent, a construction services fee equal to ten
     percent (10%) of the hard costs of Tenant's Work. For purposes hereof,
     Landlord recommends that Tenant engage Webcor Builders as its general
     contractor for construction of Tenant's Work.

c.   Construction shall comply in all respects with applicable laws, statutes,
     ordinances, building codes and regulations. All required building and
     other permits in connection with the construction and completion of the
     Premises shall be obtained and paid for by Tenant.

d.   Tenant shall cause its contractor to provide warranties of not less than
     one (1) year against defects in workmanship, materials and equipment.

e.   Tenant's Work shall be subject to the inspection and approval of Landlord
     and its supervisory personnel.

f.   Tenant's contractor shall present to Landlord and maintain at the job site
     at all times one (1) full set of Construction Drawings and Specifications
     which have been accepted by Landlord endorsed with the approval stamp and
     permit number of the Building Department, local Fire Marshall and all
     other governmental agencies having jurisdiction over the construction and
     occupancy of the Premises. Landlord and its authorized representatives
     shall have the right to inspect such Construction Drawings and
     Specifications at any time.

g.   Tenant or its contractors shall arrange for necessary utility, hoisting
     and elevator service with Landlord and shall reimburse Landlord for any
     special costs incurred by Landlord as a result of Tenant's or Tenant's
     contractor's utility usage, hoisting arrangements or elevator usage.
     Tenant and its contractors shall be permitted to use the Building freight
     elevator (and are expressly prohibited from using the Building's passenger
     elevators) in performing Tenant's Work provided that such usage does not
     unreasonably burden Landlord or other tenants of the Building.

h.   Tenant shall be responsible for and shall obtain and record a Notice of
     Completion promptly following completion of Tenant's Work, and shall
     promptly forward a copy of same to Landlord.

i.   At Landlord's request, all work done by Tenant or its contractors shall be
     done with union labor recognized by the local building trades council in
     accordance with applicable union labor agreements.

SECTION 2.3. LANDLORD'S RIGHT TO PERFORM WORK. Landlord shall have the right to
perform, on behalf of and for the account of Tenant, subject to reimbursement
of the cost thereof by Tenant, all or such portion of Tenant's Work, which
Landlord determines in its sole discretion should be performed immediately and
on an emergency basis for the best interest of the Building, including without
limitation, work which pertains to structural components, mechanical, sprinkler
and general utility systems, roofing and removal of unduly accumulated
construction material and debris.

SECTION 2.4. TEMPORARY FACILITIES DURING CONSTRUCTION. Tenant shall provide and
pay for the removal of debris, as necessary and required in connection with the
construction of the Premises. Storage of Tenant's contractors' construction
materials, tools, equipment and debris shall be confined to the Premises and any
other areas which may be designated for such purposes by Landlord. Landlord
shall not be responsible for any loss or damage to Tenant's and/or Tenant's
contractors' equipment.

                                       3

<PAGE>   48
SECTION 2.5 CONDITION OF PREMISES.

a.   Tenant shall not open for business within the Premises until all of the
     following have been completed:

     i.   The satisfactory completion by Tenant of all of Tenant's Work to be
          performed by Tenant pursuant to this Exhibit B, in accordance with the
          Approved Design Drawings.

     ii.  The issuance of a Certificate of Occupancy by the Building Department
          of the City where the Building is located.

     iii. The request by Tenant's contractor, when the Premises are
          substantially complete, of a punch list prepared by Landlord
          enumerating deficiencies in Tenant's Work.

b.   Tenant shall cause the following to be performed or completed promptly
     after opening for business within the Premises, but in no event later than
     the deadlines set forth below:

     i.   Submission to Landlord of Unconditional Waivers and Releases of Lien
          Upon Final Payment, within thirty (30) days of completion of
          construction of the Premises. Such waivers and releases shall be
          submitted from all persons performing labor and/or supplying materials
          in connection with Tenant's Work showing that all of said persons have
          been compensated in full.

     ii.  Submission by Tenant to Landlord of a detailed breakdown of Tenant's
          final and total construction hard and soft costs within ten (10) days
          of completion of construction of the Premises.

     iii. Full payment by Tenant within ten (10) days of billing of all sums due
          Landlord pursuant to this Exhibit B.

     iv.  Correction of any deficiencies set forth in Landlord's punch list
          within ten (10) days of completion of construction of the Premises.

SECTION 2.6 PAYMENTS BY TENANT. Tenant shall pay Landlord all sums due Landlord
for items of work performed or expenses incurred by Landlord on behalf of
Tenant within ten (10) days after Landlord sends Tenant a statement therefor,
including without limitation any extra expense incurred by Landlord by reason
of faulty work done by Tenant or its contractors, by reason of damage to
existing work caused by Tenant or its contractors, or by reason of inadequate
cleanup by Tenant or its contractors.

SECTION 2.7 INSURANCE.

a.   Tenant shall, at its sole cost and expense, secure and maintain, or cause
     its contractors to secure and maintain during the period of construction
     and fixturizing work within the Premises, in addition to the insurance
     required pursuant to Section 14 of this Lease, all of the insurance
     policies required and in the amounts of coverage set forth below. Tenant
     shall not permit its contractors to commence any work until all required
     insurance has been obtained and certificates of such insurance have been
     delivered to Landlord.

b.   Tenant's General Contractor's and SubContractors' Required Minimum Coverage
     and Limits of Liability.

                                       4
<PAGE>   49
     1.   Worker's Compensation, as required by State Law, and including
          Employer's Liability Insurance with a limit of not less than
          $500,000.00, and any insurance required by the Employee Benefit Acts
          or other statutes applicable in the jurisdiction where the work is to
          be performed as will protect the contractor and sub-contractors from
          any and all liability under the aforementioned acts.

     2.   Comprehensive General Liability or Commercial General Liability
          Insurance (including Contractor's Protective Liability) in an amount
          not less than $2,000,000.00 for any one occurrence whether involving
          bodily injury liability (or death resulting therefrom) or property
          damage liability or a combination thereof with an aggregate limit of
          $2,000,000.00. Such insurance shall provide for explosion, collapse
          and underground coverage. Such insurance shall insure Landlord,
          Tenant and Tenant's general contractor against any and all claims for
          bodily injury, including death resulting therefrom and damage to or
          destruction of property of any kind whatsoever and to whomsoever
          belonging and arising from operations under the contract or contracts
          for Tenant's Work, whether such operations are performed by Tenant's
          general contractor, subcontractors, or any of their subcontractors,
          or by anyone directly or indirectly employed by any of them.

     3.   Comprehensive Automobile Liability Insurance, including the
          ownership, maintenance, and operation of any automotive equipment,
          owned, hired and non-owned, in an amount not less than $2,000,000.00
          for any one occurrence whether involving bodily injury liability (or
          death resulting therefrom) or property damage liability or a
          combination thereof. Such insurance shall insure Landlord, Tenant and
          Tenant's General Contractor and/or Subcontractors against any and all
          claims for bodily injury, including death resulting therefrom and
          damage to the property of others caused by accident and arising from
          operations under the contract or contracts for Tenant's Work, whether
          such operations are performed by the General Contractor,
          Subcontractors, or by anyone directly or indirectly employed by any
          of them.

c.   Tenant's Protective Liability Insurance:

     Tenant shall provide Owner's Protective Liability Insurance to insure
     Landlord and Tenant against any and all liability to third parties for
     damage because of bodily injury (or death resulting therefrom) and
     property damage of others or a combination thereof which may arise from
     work in connection with the Premises, and any other liability for damages
     which Tenant's general contractor and/or subcontractors are required to
     insure against under any provisions herein. Said insurance shall be
     provided in an amount not less than $2,000,000.00 for any one occurrence
     whether involving bodily injury liability (or death resulting therefrom)
     or property damage liability or a combination thereof.

d.   Tenant's Builder's Risk Insurance - Completed Value Builder's Risk Material
     Damage Insurance Coverage:

     Tenant shall provide an "All Physical Loss" Builder's Risk insurance
     policy on the work to be performed for Tenant in the Premises as it
     relates to the building within which the Premises are located. The policy
     shall include as insureds Tenant, its contractor and sub-contractors, and
     Landlord, as their interests may appear. The amount of the insurance to be
     provided shall be one hundred percent (100%) of the replacement cost.

e.   All insurance policies required under this Exhibit B other than Worker's
     Compensation Insurance shall include Landlord as an additional insured.
     The Worker's Compensation Insurance required under this Exhibit B shall
     contain an endorsement waiving all rights of subrogation against such

                                       5
<PAGE>   50
     persons and entities. Tenant shall deliver to Landlord policies of
     insurance or certificates thereof, and the policies of insurance required
     pursuant to this Exhibit B shall in all other respects be kept and
     maintained, in accordance with the provisions of Section 14 of this Lease
     relating to insurance maintained by Tenant thereunder. Tenant and Landlord
     shall each have, in respect of the insurance carried pursuant to this
     Exhibit B, the rights, remedies and obligations set forth in Section 14 of
     this Lease.

SECTION 2.8 SUBMISSIONS FOLLOWING COMPLETION. Tenant shall submit the following
to Landlord within thirty (30) days following the completion of Tenant's Work:

a.   A complete set of record drawing sepia prints initialed as such by
     Tenant's architect and/or general contractor of the accepted Construction
     Drawings and Specifications, together with drawings showing any changes
     made during the course of construction, which drawings and specifications
     may be relied on by Landlord as delineating Tenant's Work as actually
     constructed.

b.   Completed operating, maintenance, and spare parts manuals for all
     mechanical, electrical and similar equipment installed as part of Tenant's
     Work.

SECTION 2.9 REMOVAL OF TENANT'S WORK. All Tenant's Work shall immediately become
the property of Landlord and at the end of the term of the Lease, shall remain
on the Premises without compensation to Tenant unless Landlord elects by notice
to Tenant to have Tenant remove any Tenant's Work, in which event Tenant shall
be responsible for the cost of restoring the Premises to their condition prior
to the installment of such Alterations.

ARTICLE 3
LANDLORD'S WORK

SECTION 3.1 ENTRANCE DOORS. At Landlord's sole cost and expense, Landlord will
construct double entry glass doors connecting the Premises with the elevator
lobby. Until such work is completed by Landlord, the Premises shall be secured
by the existing smoke doors at the entrance to the Premises.

SECTION 3.2 OTHER WORK. Landlord will also, at Landlord's sole cost and expense,
do the following work: professionally clean the carpets; patch and paint walls;
install new building standard carpet in the area labeled as the "VCT" on Exhibit
A; and remove one wall adjacent to such area as shown on Exhibit A.

                                       6

<PAGE>   51
                                   EXHIBIT C

                             RULES AND REGULATIONS

                    ATTACHED TO AND MADE A PART OF THE LEASE

The following Rules and Regulations (the "Rules") shall be in effect at the
Building. Landlord reserves the right to adopt reasonable modifications and
additions hereto. In the case of any conflict between these Rules and the Lease,
the Lease shall be controlling. Landlord shall have the right to waive one or
more Rules for the benefit of a particular tenant in Landlord's reasonable
discretion.

1.   Except with the prior written consent of Landlord, no tenant shall conduct
     any retail sales in or from the Premises, or any business other than that
     specifically provided for in the Lease. There shall be no solicitation by
     Tenant of other tenants or occupants of the Building.

2.   Landlord reserves the right to prohibit personal goods and services
     vendors from access to the Building except upon such reasonable terms and
     conditions, including but not limited to a provision for insurance
     coverage, as are related to the safety, care and cleanliness of the
     Building, the preservation of good order thereon, and the relief of any
     financial or other burden on Landlord occasioned by the presence of such
     vendors or the sale by them of personal goods or services to a tenant or
     its employees. If reasonably necessary for the accomplishment of these
     purposes, Landlord may exclude a particular vendor entirely or limit the
     number of vendors who may be present at any one time in the Building. The
     term "personal goods or services vendors" means persons who periodically
     enter the Building of which the Premises are a part for the purpose of
     selling goods or services to a tenant, other than goods or services which
     are used by a tenant only for the purpose of conducting its business on
     the Premises. "Personal goods or services" include, but are not limited
     to, drinking water and other beverages, food, barbering services, and
     shoeshinning services.

3.   The sidewalks, halls, passages, elevators and stairways shall not be
     obstructed by any tenant or used by it for any purpose other than for
     ingress to and egress from their respective Premises. The halls, passages,
     entrances, elevators, stairways, balconies, janitorial closets, and roof
     are not for the use of the general public, and Landlord shall in all cases
     retain the right to control and prevent access thereto of all persons whose
     presence in the judgment of Landlord shall be prejudicial to the safety,
     character, reputation and interests of the Building and its tenants,
     provided that nothing herein contained shall be construed to prevent such
     access to persons with whom Tenant normally deals only for the purpose of
     conducting its business on the Premises (such as clients, customers, office
     suppliers and equipment vendors, and the like) unless such persons are
     engaged in illegal activities. No tenant or agent or employee of any tenant
     shall go upon the roof of the Building without the written consent of
     Landlord.

4.   The sashes, sash doors, windows, glass lights, and any lights or skylights
     that reflect or admit light into the halls or other places of the Building
     shall not be covered or obstructed. The toilet rooms, water and water and
     wash closets and other water apparatus shall not be used for any purpose
     other than that for which they were constructed, and no foreign substance
     of any kind whatsoever shall be known therein, and the expense of any
     breakage, stoppage or damage, resulting from the violation of this rule
     shall be borne by the tenant who, or whose clerks, agents, employees, or
     visitors, shall have caused it.

                                       1

<PAGE>   52
5.   No sign, advertisement or notice visible from the exterior of the Premises
     or Building shall be inscribed, painted or affixed by Tenant on any part
     of the Building or the Premises without the prior written consent of
     Landlord. If Landlord shall have given such consent at any time, whether
     before or after the execution of this Lease, such consent shall in no way
     operate as a waiver or release of any of the provisions hereof or of this
     Lease, and shall be deemed to relate only to the particular sign,
     advertisement or notice so consented to by Landlord and shall not be
     construed as dispensing with the necessity of obtaining the specific
     written consent of Landlord with respect to each and every such sign,
     advertisement or notice other than the particular sign, advertisement or
     notice, as the case may be, so construed to by Landlord.

6.   In order to maintain the outward professional appearance of the Building,
     all window coverings to be installed at the Premises shall be subject to
     Landlord's prior reasonable approval. If Landlord, by a notice in writing
     to Tenant, shall object to any curtain, blind, shade or screen attached
     to, or hung in, or used in connection with, any window or door of the
     Premises, such use of such curtain, blind, shade or screen shall be
     forthwith discontinued by Tenant. No awnings shall be permitted on any
     part of the Premises.

7.   Tenant shall not do or permit anything to be done in the Premises, or
     bring or keep anything therein, which shall in any way increase the rate
     of fire insurance on the Building, or on the property kept therein, or
     obstruct or interfere with the rights of other tenants, or in any way
     injure or annoy them; or conflict with the regulations of the Fire
     Department or the fire laws, or with any insurance policy upon the
     Building, or any part thereof, or with any rules and ordinances
     established by the Board of Health or other governmental authority. Tenant
     shall not bring into, or permit or suffer in, the Building or the Project,
     any weapons or firearms of any kind.

8.   No safes or other objects larger or heavier than the freight elevators of
     the Building are limited to carry shall be brought into or installed in
     the Premises. Landlord shall have the power to prescribe the weight,
     method of installation and position of such safes or other objects. The
     moving of safes shall occur only between such hours as may be designated
     by, and only upon previous notice to, the manager of the Building, and the
     persons employed to move safes in or out of the Building must be
     acceptable to Landlord. No freight, furniture or bulky matter of any
     description shall be received into the Building or carried into the
     elevators except during hours and in a manner approved by Landlord.

9.   Landlord shall clean the Premises as provided in the Lease, and except
     with the written consent of Landlord, no person or persons other than
     those approved by Landlord will be permitted to enter the Building for
     such purpose, but Tenant shall not cause unnecessary labor by reason of
     Tenant's carelessness and indifference in the preservation of good order
     and cleanliness.

10.  No tenant shall sweep or throw or permit to be swept or thrown from the
     Premises any dirt or other substance into any of the corridors or halls or
     elevators, or out of the doors or windows or stairways of the Building,
     and Tenant shall not use, keep or permit to be used or kept any foul or
     noxious gas or substance in the Premises, or permit or suffer the Premises
     to be occupied or used in an manner offensive or objectionable to Landlord
     or other occupants of the Building by reason of noise, odors and/or
     vibrations, or interfere in any way with other tenants or those having
     business therein, nor shall any animals, firearms or birds be kept in or
     about the Building. The Building is a non-smoking building. Smoking or
     carrying lighted cigars or cigarettes in the Building and the elevators of
     the Building is prohibited. Smoking is permitted within the Project only
     in areas designated by Landlord.

11.  Except for the use of microwave ovens and coffee makers for Tenant's
     personal use, no cooking shall be done or permitted by Tenant on the
     Premises, nor shall the Building be used for lodging.

                                       2
<PAGE>   53
12.  Tenant shall not use or keep in the Building any kerosene, gasoline, or
     inflammable fluid or any other illuminating material, or use any method of
     heating other than that supplied by Landlord.

13.  If Tenant desires telephone or telegraph connections, Landlord will direct
     electricians as to where and how the wires are to be introduced. No boring
     or cutting for wires or other otherwise shall be made without directions
     from Landlord.

14.  Each tenant, upon the termination of its tenancy, shall deliver to Landlord
     all the keys of offices, rooms and toilet rooms, and security access
     card/keys which shall have been furnished such tenant or which such tenant
     shall have had made, and in the event of loss of any keys so furnished,
     shall pay Landlord therefor.

15.  No Tenant shall lay linoleum or other similar floor covering so that the
     same shall be affixed to the floor of the Premises in any manner except by
     a paste, or other material which may easily be removed with water, the use
     of cement or other similar adhesive materials being expressly prohibited.
     The method of affixing any such linoleum or other similar floor covering to
     the floor, as well as the method of affixing carpets or rugs to the
     Premises shall be subject to reasonable approval by Landlord. The expense
     of repairing any damage resulting from a violation of this rule shall be
     borne by Tenant.

16.  No furniture, packages or merchandise will be received in the Building or
     carried up or down in the elevators, except between such Building hours and
     in such elevators as shall be designated by Landlord.

17.  On Saturdays, Sundays and legal holidays, and on other days between the
     hours of 6:00 p.m. and 8:00 a.m. access to the Building or to the halls,
     corridors, elevators or stairways in the Building, or to the Premises, may
     be refused unless the person seeking access is known to the building
     watchman, if any, in charge and has a pass or is properly identified.
     Landlord shall in no case be liable for damages for the admission to or
     exclusion from the Building of any person whom Landlord has the right to
     exclude under Rule 3 above. In case of invasion, mob, riot, public
     excitement, or other commotion, Landlord reserves the right but shall not
     be obligated to prevent access to the Building during the continuance of
     the same by closing the doors or otherwise, for the safety of Landlord and
     the tenants and protection of property in the Building.

18.  Tenant shall see that the windows and doors of the Premises are closed and
     securely locked before leaving the Building and Tenant shall exercise
     extraordinary care and caution that all water faucets or water apparatus
     are entirely shut off before Tenant or Tenant's employees leave the
     Building, and that all electricity, gas or air shall likewise be carefully
     shut off, so as to prevent waste or damage, and for any default or
     carelessness Tenant shall make good all injuries sustained by other tenants
     or occupants of the Building or Landlord.

19.  Tenant shall not alter any lock or install a new or additional lock or any
     bolt on any door of the Premises without prior written consent of Landlord.
     If Landlord shall give its consent, Tenant shall in each case furnish
     Landlord with a key for any such lock. Landlord shall have the right to
     impose a charge for each key issued and for rekeying any lock or bolt on
     any door of the Premises.

20.  Tenant shall not install equipment, such as but not limited to electronic
     tabulating or computer equipment, requiring electrical or air conditioning
     service in excess of those to be provided by Landlord under the Lease.

                                       3
<PAGE>   54
21.  No bicycle, or shopping cart, or other vehicle or any animal (other than
     dogs assisting visually-impaired individuals) shall be brought into the
     Premises or the halls, corridors, elevators or any part of the Building by
     Tenant.

22.  Landlord shall have the right to prohibit the use of the name of the
     Building or Project or any other publicity by Tenant which in Landlord's
     opinion tends to impair the reputation of the Building or Project or their
     desirability for other tenants, and upon written notice from Landlord,
     Tenant will refrain from or discontinue such publicity.

23.  Tenant shall not install any radio or television antenna, satellite dish,
     loud speaker or any other device on the exterior walls or the roof of the
     Building, without the prior written consent of Landlord. Tenant shall not
     interfere with radio or television broadcasting or reception from or in the
     Building, the Project or elsewhere.

24.  Alcohol may not be consumed in the Premises, the Building or the Project at
     any time.

25.  Tenant shall comply with all safety, fire protection and evacuation
     procedures and regulations established by Landlord or any governmental
     agency.

                                       4
<PAGE>   55
                                   EXHIBIT D

                      AMENDMENT OF LEASE COMMENCEMENT DATE

In connection with that certain Office Lease dated _________ between HITACHI
AMERICA, LTD., as Landlord, and ________________, as Tenant concerning the
Premises located at ___________________, Landlord and Tenant hereby agree as
follows:

1.   The Lease Commencement Date stated in Section 1(G) of the Office Lease is
     amended to be ________________, 1999, and the Expiration Date stated in
     Section 1(H) is amended to be ___________, 200_.

2.   Landlord has satisfactorily complied with all requirements and conditions
     precedent to the commencement of the Term as specified in the Office Lease.

3.   The Premises covered by the Office Lease and the tenant improvements
     therein have been fully completed as required, are in good condition, are
     ready for occupancy and have been accepted by Tenant.

4.   Tenant has or shall commence paying Monthly Rental pursuant to the Office
     Lease on _____________, 1999.

Dated effective this __day of __________, 1999.

"TENANT"                                "LANDLORD"

                                        HITACHI AMERICA, LTD.,
-------------------------,              a New York corporation
a
 -------------------------

By:                                     By:
   -----------------------                 -------------------------
Name:                                   Name:
     ---------------------                   -----------------------
Title:                                  Title:
      --------------------                    ----------------------
Dated:                                  Dated:
      --------------------                    ----------------------

By:
   -----------------------
Name:
     ---------------------
Title:
      --------------------
Dated:
      --------------------
<PAGE>   56
                        FIRST AMENDMENT TO OFFICE LEASE

THE FIRST AMENDMENT TO OFFICE LEASE (this "Amendment"), made as of the 31st day
of August, 1999, by and between HITACHI AMERICA, LTD., a New York corporation
("Landlord") and COLO.COM, INC., a California corporation formerly known as
Colomotion, Inc. ("Tenant").

WHEREAS, Landlord and Tenant entered into that certain Office Lease (the
"Lease") captioned "OFFICE LEASE," dated as of May 18, 1999, providing for,
among other matters, the lease of certain space by Landlord to Tenant known as
Suite 601 in that certain building located at 2000 Sierra Point Parkway,
Brisbane, CA (the "Premises"); and

WHEREAS, Landlord and Tenant desire to expand the size of the Premises sooner
than contemplated by the existing Lease.

NOW, THEREFORE, in consideration of the Premises and the respective
undertakings of the parties hereinafter set forth, it is hereby agreed that the
Lease shall be amended as follows:

1.   Defined Terms. Capitalized terms used herein and not defined herein shall
     have the meaning for the same set forth in the Lease.

2.   Expansion of Premises. Effective as of September 1, 1999, the Premises
     shall be expanded to include the entire sixth (6th) floor of the Building.
     All references in the Lease to "Premises" shall be deemed to be references
     to the entire sixth (6th) floor. Landlord and Tenant hereby agree that, as
     of September 1, 1999, the balance of the sixth (6th) floor not included in
     the original premises shall be deemed a part of the Premises for all
     purposes under the Lease, including without limitation Tenant's acceptance
     of such additional space in its "AS IS" condition as of September 1, 1999.
     To accomplish this agreement, effective as of September 1, 1999. To
     accomplish this agreement, effective as of September 1, 1999, Sections 1(E)
     and 1(I) of the Lease shall be deemed deleted in their entirety and
     replaced by the following:

     E.   "Premises" means suite(s) 601 covering the entire sixth (6th) floor of
          the Building and consisting of approximately eighteen thousand two
          hundred sixteen (18,216) square feet of Rentable Area, as more
          particularly shown on page 2 of Exhibit A attached hereto and
          incorporated herein by this reference.

     I.   "Monthly Rental" means the following:

<TABLE>

<CAPTION>

                      Period                      Monthly Rental
                      ------                      --------------

<S>                                              <C>
       Lease Commencement Date - 08/31/99        $18,720.00
      09/01/1999 - 06/30/2000                    $27,577,96
      07/01/2000 - 06/30/2001                    $59,019.84
      07/01/2001 - 06/30/2002                    $61,387.92
      07/01/2002 - 06/30/2003                    $63,938.16
      07/01/2003 - 06/30/2004                    $66,488.40
</TABLE>
<PAGE>   57
3.    New Space Plan for Premises. Page 2 of Exhibit A attached to the Lease is
      hereby deleted in its entirety and replaced by Schedule 1 attached to
      this Amendment.

4.    Lease in Effect. This Amendment (including the expansion of the Premises)
      shall be effective on September 1, 1999. Except as amended by this
      Amendment, the Agreement shall remain in full force and effect.

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

HITACHI AMERICA, LTD.                     COLO.COM, INC.

By:  /s/ TOMOHARU SHIMAYAMA               By:  /s/ RICHARD J. PALOMBA

Name:    TOMOHARU SHIMAYAMA               Name:    RICHARD J. PALOMBA

Its:     President                        Its:     VP Real Estate

                                       2
<PAGE>   58
                                   SCHEDULE 1

                                  [FLOOR PLAN]

                                   EXHIBIT A

                                  Page 2 of 2

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