Document:

<PAGE>

                                                                    EXHIBIT 10.7

                               COMMERCIAL OFFICE

                                     LEASE

                                    BETWEEN

                          C & C INVESTMENTS, LANDLORD

                                      and

                            MZ GROUP, INC., TENANT

                           Premises: 221 Main Street

                            San Francisco, CA 94105
<PAGE>

                            COMMERCIAL OFFICE LEASE
                            -----------------------
                            BASIC LEASE INFORMATION
                            -----------------------

Lease Section
-------------

Introductory      Date:            October 29, 1992
Paragraph

                  Landlord:        C & C INVESTMENTS

                  Tenant:          MZ GROUP, INC.
                                   a California corporation

Section 1         Premises:        a portion of the 7th floor

                  Building:        221 Main Street
                                   San Francisco, CA 94105

Section 2         Term
                  Commencement:    October 1, 1992

Section 2         Term
                  Expiration:      September 30, 1997

Section 3         Base Rent:       10/1/92-  $15,710.39 per month
                                   12/31/92  (to be abated,
                                             subject to
                                             Section 41)

                  1/1/93           $15,710.39 per month
                  9/30/97

Section 3(b)      Base Year
                  (for Operating
                  Expenses
                  Increases):      Calendar year 1992

                                       i.
<PAGE>

Section 3(c)      Base Year
                  (for Property
                  Taxes
                  Increases):      Calendar year 1992

Section 3(b)      Tenant's
and 3(c)          Percentage
                  Share (of
                  increases in
                  Operating
                  Expenses and
                  Property
                  Taxes):          3.22%

Section 33        Tenant's
                  Address for
                  Notices:         Suite 700
                                   221 Main Street
                                   San Francisco, CA 94105

Section 33        Landlord's
                  Address for
                  Notices:         Suite 404
                                   101 Howard Street
                                   San Francisco, CA 94105

Section 38        Deposit:         $15,710.39

                                      ii.
<PAGE>

The provisions of the Lease identified above in the margin are those provisions
where references to particular Basic Lease Information appear. Each such
reference shall incorporate the applicable Basic Lease Information.

LANDLORD:                                    TENANT:

C & C INVESTMENTS                            MZ GROUP, INC.
a trust                                      a California corporation

By_________________________                  By______________________________
       Corwin Booth                                 Mansoor Zakaria
       Trustee                                      Chairman

                                      iii.
<PAGE>

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<CAPTION>
                                                                                           Page
                                                                                           ----
<S>                                                                                        <C>
1.   Premises                                                                                1
     --------
2.   Term; Improvements                                                                      1
     ------------------
3.   Rental                                                                                  2
     ------
4.   Use                                                                                     9
     ---
5.   Services                                                                               11
     --------
6.   Taxes Payable by Tenant                                                                14
     -----------------------
7.   Alterations, Additions or Improvements                                                 15
     --------------------------------------
8.   Liens                                                                                  16
     -----
9.   Repairs                                                                                17
     -------
10.  Destruction or Damage                                                                  17
     ---------------------
11.  Insurance; Waiver of Subrogation                                                       19
     --------------------------------
12.  Waiver; Indemnity                                                                      21
     -----------------
13.  Compliance with Legal Requirements                                                     23
     ----------------------------------
14.  Assignment and Subletting                                                              27
     -------------------------
15.  Rules                                                                                  34
     -----
16.  Entry by Landlord                                                                      34
     -----------------
17.  Events of Default                                                                      36
     -----------------
18.  Landlord's Right to Terminate                                                          38
     -----------------------------
19.  Continuation Notwithstanding Default                                                   40
     ------------------------------------
20.  Additional Remedies                                                                    40
     -------------------
21.  Landlord's Right to Cure Defaults                                                      40
     ---------------------------------
22.  Attorneys' Fees                                                                        41
     ---------------
23.  Eminent Domain                                                                         41
     --------------
24.  Subordination                                                                          43
     -------------
</TABLE>

                                      iv.
<PAGE>

<TABLE>
<S>                                                                                         <C>
25.   No Merger                                                                             44
      ---------
26.   Sale                                                                                  44
      ----
27.   Estoppel Certificate                                                                  45
      --------------------
28.   No Light, Air, or View Easement                                                       45
      -------------------------------
29.   Holding Over                                                                          45
      ------------
30.   Abandonment                                                                           46
      -----------
31.   Surrender                                                                             46
      ---------
32.   Waiver                                                                                47
      ------
33.   Notice                                                                                47
      ------
34.   Complete Agreement                                                                    48
      ------------------
35.   Corporate Authority                                                                   48
      -------------------
36.   Miscellaneous Provisions                                                              48
      ------------------------
37.   Exhibits                                                                              50
      --------
38.   Security Deposit                                                                      50
      ----------------
39.   Brokerage                                                                             51
      ---------
40.   Limitation of Liability                                                               52
      -----------------------
41.   Base Rent Abatement                                                                   52
      -------------------
42.   Parking Spaces                                                                        52
      --------------
</TABLE>

Exhibit A -- Floor Plan

Exhibit B -- Initial Improvements

Landlord's Rules

                                       v.
<PAGE>

                            COMMERCIAL OFFICE LEASE
                            -----------------------

     THIS LEASE, dated effective as of the date set forth in the Basic Lease
Information is made and entered into by and between each of the persons or
entities specified in the Basic Lease Information as Landlord ("Landlord") and
Tenant ("Tenant"), respectively.

     1.   Premises. Landlord hereby leases to Tenant, and Tenant hereby leases
          --------
from Landlord, the Premises, as specified in the Basic Lease Information and as
more particularly described in Exhibit A attached hereto, located within the
Building as specified in the Basic Lease Information for the term and subject to
the terms, covenants, agreements and conditions hereinafter set forth, to each
and all of which Landlord and Tenant hereby mutually agree.

     2.   Term; Improvements.
          ------------------

          (a)  Term. The term of this Lease shall commence and, unless sooner
               ----
terminated as hereinafter provided, shall end on the dates specified in the
Basic Lease Information. If Landlord, for any reason whatsoever, cannot deliver
possession of the Premises to Tenant at the commencement of the term, this Lease
shall not be void or voidable, the term of this Lease shall not be extended by
such delay, and the Landlord shall not be liable to Tenant for any loss or
damage resulting therefrom, but in that event, subject to any contrary
provisions in Exhibit B attached hereto, (i) commencement of the term shall be
deferred and the

                                       1.
<PAGE>

date on which rental commences shall be deferred for the period of such delay
and (ii) the term of the Lease shall be reduced by the number of days of such
delay.

          (b)  Improvements. The Premises are leased to Tenant in their present
               ------------
"as-is" condition, except that Landlord shall construct or install in the
Premises the improvements to be constructed or installed by Landlord pursuant to
the provisions of Exhibit B, and the costs for such improvements shall be borne
as provided in Exhibit B. Landlord's architect and Tenant shall conduct a joint
inspection of the Premises following substantial completion of such improvements
and shall prepare a joint punchlist of items to be completed. Landlord shall
complete such joint punchlist items within 30 days following preparation
thereof.

     3.   Rental. Tenant shall pay to Landlord throughout the term of this Lease
          ------
the following sums as rental for the Premises:

          (a)  Base Rent. The monthly Base Rent payable during the term of the
               ---------
Lease shall be the sum specified in the Basic Lease Information as the Base Rent
subject to the further provisions hereof.

          (b)  Additional Rent on Account of Increases in Operating Expenses. In
               -------------------------------------------------------------
addition to Base Rent, Tenant, subject to Section 3(d), shall pay to Landlord as
additional rent with respect to each calendar year of the term of this Lease or
portion thereof occurring subsequent to October 1, 1993 Tenant's percentage
share (as specified in the Basic Lease Information) of

                                       2.
<PAGE>

the total dollar increase, if any, in Operating Expenses paid or incurred by
Landlord in such subsequent calendar year or portion thereof over the Base Year
Operating Expenses. For purposes hereof, "Operating Expenses" shall mean (i) all
direct and indirect costs of management, operation and maintenance of the
Building (including rentable areas occupied by Landlord) and including, without
limiting the foregoing: wages, salaries, employee benefits, and payroll burden
of personnel engaged in management, operation and maintenance of the Building,
Building office rent or rental value, power, heat, light, steam, air
conditioning, gas, water, garbage, sewage and waste disposal and other
utilities, equipment, tools, materials and supplies, maintenance and repairs,
insurance, license, permit and inspection fees, janitorial services, maintenance
contracts and general services, and depreciation on personal property, costs of
compliance with environmental laws (including costs of monitoring and tests),
and (ii) the cost of any capital improvements made to the Building by Landlord
after the Base Year for Operating Expenses Increases that (A) reduce Operating
Expenses or that reduce or conserve the amount of utilities consumed (e.g.,
electricity, gas or other fuels) such cost of such capital improvements to be
included to the extent of the amount of the actual cost savings realized, or (B)
are required under any governmental law or regulation that was not applicable to
the Building at the time this Lease was entered into, such cost or allocable
portion thereof to be amortized over such reasonable

                                       3.
<PAGE>

period as Landlord shall determine together with interest on the unamortized
balance at the rate of 10 percent per year or such higher rate as may have been
paid by Landlord on funds borrowed for the purpose of constructing such capital
improvements; provided, however that Operating Expenses shall not include
              --------  -------
Property Taxes, depreciation on the Building other than depreciation on personal
property, costs of tenants' improvements, interest, capital items other than
those referred to in clause (ii) above, and payments on debt (principal or
interest). Actual Operating Expenses for both the Base Year and each subsequent
year of the term of this Lease shall be adjusted to equal Landlord's reasonable
estimate of Operating Expenses had the total rentable area of the Building been
occupied for both years. The determination of the costs of management,
operation, and maintenance of the Building and the costs of the capital
improvements referred to in clause (ii) above shall be in accordance with
generally accepted accounting principles consistently applied.

          (c)  Additional Rent on Account of Increases in Property Taxes. In
               ---------------------------------------------------------
addition to Base Rent, Tenant, subject to Section 3(d), shall pay to Landlord as
additional rent with respect to each calendar year of the term of this Lease or
portion thereof occurring subsequent to October 1, 1993 Tenant's percentage
share (as specified in the Basic Lease Information) of the total dollar
increase, if any, in Property Taxes paid or incurred by Landlord in such
subsequent calendar year or portion

                                       4.
<PAGE>

thereof over the Base Year Property Taxes. For purposes hereof, "Property Taxes"
shall mean all real property taxes, assessments (general or special), property
tax reassessments caused by a change in ownership of the Building or the
Premises and all other taxes (including any tax levied wholly or partly in lieu
thereof) levied against the Building (or this Lease, the occupancy of Tenant,
the sums payable by Tenant hereunder, or in any manner relative to the subject
matter hereof), excluding only taxes covered by Section 6 hereof and federal and
California income and death taxes imposed with respect to Landlord. For purposes
hereof, "taxes" is meant to be interpreted in its most comprehensive sense and
to include any impost, levy or the like levied by any governmental jurisdiction;
and without limiting the generality of the foregoing, "taxes" shall include any
tax, fee, excise, levy or other impost imposed by the United States, the State
of California or any political subdivision of the State (including any county,
city, city and county, public corporation, district or any other political
entity or public corporation thereof), however described (including any so-
called value-added tax) as a direct substitution in whole or in part for, or in
addition to, real property taxes and assessments.

          (d)  Procedure. The additional rent provided under Sections 3(b) and
               ---------
3(c) above shall be paid in accordance with the following procedures:

               (i)  As soon as is practicable following the first anniversary of
this Lease and the end of each calendar year

                                       5.
<PAGE>

thereafter occurring during the term of this Lease, Landlord shall give Tenant
written notice of its estimate of any increased amounts payable under Section
3(b) and/or 3(c). On or before the first day of the calendar month next
following such notice, Tenant shall pay to Landlord that portion of the
estimated amounts that already shall have accrued and thereafter on or before
the first day of each succeeding calendar month shall pay a ratable portion of
the balance remaining over the relevant period covered. If for any reason such
notice is not given as provided above, Tenant shall continue to pay on the basis
of the then applicable rental until the month after such notice is given. If at
any time or times Landlord determines that the increased amounts payable under
Sections 3(b) and/or 3(c) above will vary from its estimate by more than 10
percent, Landlord shall, by notice to Tenant, revise its estimate for such year,
and subsequent payments by Tenant for such year shall be based upon such revised
estimate.

               (ii) Within 90 days after the close of each respective calendar
year during the term of this Lease subsequent to the Base Year (or as soon after
such 90-day period as practicable), Landlord shall deliver to Tenant a statement
of the adjustments to be made pursuant to Sections 3(b) and/or 3(c) above for
such calendar year which statement shall be audited and shall be prepared in
accordance with generally accepted accounting principles, and such statement
shall be final and binding upon Landlord and Tenant. If on the basis of such

                                       6.
<PAGE>

statement Tenant owes an amount that is less than the estimated payments for
such year previously made by Tenant, Landlord shall refund such excess to Tenant
within 30 days of the delivery of such statement. If on the basis of the
statement Tenant owes an amount that is more than the estimated payments for
such year previously made by Tenant, Tenant shall pay the deficiency to Landlord
within 30 days after delivery of the statement.

               (iii) If the date of the first anniversary of this Lease is a day
other than the first day of a calendar year, the amount of adjustment to be made
pursuant to Sections 3(b) and/or 3(c) above that is applicable to the calendar
year in which such first anniversary occurs shall be prorated on the basis that
the number of days from the first anniversary date to and including the last day
of such calendar year bears to 365.

               (iv)  If this Lease shall terminate on a day other than the last
day of a calendar year, the amount of adjustment to be made pursuant to Sections
3(b) and/or 3(c) above that is applicable to the calendar year in which such
termination occurs shall be prorated on the basis that the number of days from
the commencement of such year to and including the termination date bears to
365. The termination of this Lease shall not affect the obligations of Landlord
and Tenant pursuant to subparagraph (ii) of this Section 3(d) to be performed
after such termination.

          (e)  Rental Commencement. Base Rent shall be paid to Landlord (i) upon
               -------------------
the execution of this Lease for the first full month of the term of this Lease
for which rent is payable as set

                                       7.
<PAGE>

forth in the Basic Lease Information (as the same may be deferred pursuant to
Section 2(a) hereof), and (ii) with respect to the second full month and each
successive calendar month thereafter for which rent is payable, on or before the
first day of each such month. If this Lease commences on other than the first
day of a calendar month or ends on other than the last day of a calendar month,
the second and last installments of rent shall be pro-rated for the partial
months involved.

          (f)  No Deduction or Offset; Interest. All rental and all other sums
               --------------------------------
due and payable by Tenant to Landlord under any of the provisions of this Lease
shall be paid to Landlord, without abatement, deduction, offset, prior notice or
demand, in lawful money of the United States at Landlord's address for notices
or to such other person or at such other place as Landlord, from time to time,
may designate in writing. Tenant acknowledges that late payment by Tenant to
Landlord of rental or such sums will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of such costs being extremely
difficult and impracticable to fix. Such costs include, without limitation,
processing and accounting charges, and late charges that may be imposed on
Landlord by the terms of any encumbrance and note secured by any encumbrance
covering the Building and/or the Premises. Therefore, if any installment of
rental or any other sum due and payable by Tenant to Landlord is not paid to and
received by Landlord within 10 days of the due date thereof (or, if Landlord has
notified Tenant in writing on two occasions

                                       8.
<PAGE>

during the 12 months preceding the due date that Tenant has failed to pay rent
or any other sum on the due date thereof, then if Tenant fails to pay rent or
other sum on the due date thereof):

               (i)  Tenant shall pay to Landlord an additional sum of five
percent (5%) of the overdue amount as a late charge. The parties agree that this
late charge represents a fair and reasonable estimate of the costs that Landlord
will incur by reason of late payment by Tenant; and

               (ii) the sums due and payable shall bear interest from date due
until paid at the highest rate legally permitted by applicable law.

     Acceptance of any late charge or interest shall not constitute a waiver of
Tenant's default on the overdue amount, or prevent Landlord from exercising any
of the other rights and remedies available to Landlord.

     4.   Use. The Premises shall be used for general office purposes and no
          ---
others. Tenant shall neither do nor permit to be done in or about the Premises,
nor bring or permit to be brought or kept therein, anything which is prohibited
by or will in any way conflict with any law, statute, ordinance or governmental
rule or regulation now in force or which may hereafter be enacted or
promulgated, or which now or hereafter is prohibited by any insurance policy
carried by Landlord, or will in any way increase the existing rate of or affect
any fire or any other insurance upon the Building or any of its contents, or
cause a cancellation

                                       9.
<PAGE>

of any insurance policy covering the Building or any part thereof or any of its
contents. Tenant, in its own respect and in respect of its agents, servants and
invitees, shall neither do nor permit anything to be done in or about the
Premises or the Building or any part thereof which will in any way obstruct or
interfere with the rights of other tenants of the Building (including any noise
audible or any odor or vibrations observable from outside the Premises), or
injure or annoy them, or use or allow the Premises or the Building or any part
thereof to be used for any improper, unlawful or objectionable purpose, nor
shall Tenant cause, maintain or permit any nuisance in, on or about the Premises
or the Building or any portion thereof, or commit or suffer to be committed any
waste or damage in or about the Premises or the Building or any portion thereof.
Tenant shall not permit any materials to be placed or stored in the common areas
of the Building and shall not permit debris to be placed therein, except in
appropriate receptacles provided therefor. Tenant, its agents, servants and
invitees shall have the right on a 24 hour per day - seven day per week basis
during the term hereof, subject to compliance with Landlord's security
procedures, to the (a) non-exclusive use of the entrance lobby of the Building,
its passenger and freight elevators, and the common area of the floor of the
Building in which the Premises are located, for purposes of ingress to and
egress from the Premises, and (b) the restrooms located on the floor of the
Building in which the Premises are located, and (c) the exclusive use of the

                                      10.
<PAGE>

Premises. The provisions of Sections 11 and 12 of this Lease shall apply to all
such areas. Tenant shall not use any portion of the Building (including, without
limitation, the Building roof or portions of the Building leased to other
tenants) other than the Premises, excepting only as set forth in the preceding
sentence and such other portions of the Building as are necessary for fire and
other emergency ingress and egress purposes in accordance with applicable law.
Tenant shall not place any equipment in or otherwise utilize the Premises in a
manner that would exceed the floor load limits specified by Landlord.

     5.   Services.
          ---------

          (a)  Reasonable Services. Landlord (subject to the further provisions
               -------------------
of this Section 5) shall furnish the Premises:

               (i)   during the period from 7 a.m. to 6 p.m., Monday through
Friday (except holidays), or such shorter period as may be prescribed by any
applicable policies or regulations adopted by any utility or governmental
agency, with heat and air conditioning in such amounts and at such temperatures
as Landlord reasonably determines are required for purposes of human comfort;

               (ii)  a reasonable amount of water;

               (iii) electricity for lighting and the operation of office
machines and any equipment installed pursuant to Exhibit B hereof, for which
purposes Landlord will provide Tenant with an electric allowance of 11,208
kilowatt-hours per month. Tenant shall pay to Landlord upon demand for all
electric power Landlord determines is consumed by Tenant in excess of such

                                      11.
<PAGE>

allowance. The determination of the amount of Tenant's electric power
consumption shall be made by Landlord in good faith and shall be final, binding
and conclusive, provided that, if Tenant so elects, Landlord shall install at
Tenant's expense a separate electric meter to measure the electrical power
actually consumed by Tenant;

               (iv)  non-attended, or attended, at Landlord's election, elevator
service, and

               (v)   daily (one shift) janitor service Monday through Friday
(except holidays) which shall be provided by Landlord in the manner that such
service is customarily furnished in comparable office buildings in the area.

     Tenant shall notify Landlord within five (5) days following request thereby
of the nature and quantity of all Tenant's equipment and other items using
electricity in the Premises.

     Landlord shall not be in default hereunder or be liable for any damage
directly or indirectly resulting from, nor shall the rental herein reserved be
abated by reason of, (i) failure to furnish or delay in furnishing any such
services when such failure or delay is caused by accident or any condition
beyond the control of Landlord or by the making of repairs or improvements to
the Premises or to the Building (including the Building systems), or (ii) the
limitation, curtailment, rationing or restrictions on use of or the failure of
the supply by the relevant utility to Tenant of, water, electricity, gas, or any
other form of utility services serving the Premises or the

                                      12.
<PAGE>

Building. Tenant expressly acknowledges that all utility services are provided
by the relevant utility involved, and Landlord is to have no responsibility for
the amount or quality of utility services provided, including without
limitation, the improper operation of Tenant's equipment utilizing the same.

          (b)  Excess Electricity. Tenant, without the prior written consent of
               ------------------
Landlord, shall not use any apparatus or device in the Premises which alone or
collectively uses electricity in excess of the capacity of the electrical
circuits to the Premises installed pursuant to Exhibit B hereof, nor connect
with electric current, except through existing electrical outlets in the
Premises, any apparatus or device, for the purposes of using electric current.
If Tenant shall require electric current in excess of the capacity of the
electrical circuits to the Premises installed pursuant to Exhibit B hereof,
Tenant shall first obtain Landlord's consent to the installation of such
increased electrical capacity in accordance with the provisions of Section 7
hereof. Tenant agrees to pay Landlord for such excess electric current consumed
in excess of the allowance provided in Section 5(a) above.

          (c)  Excess Water. Tenant shall not use water in excess of that
               ------------
furnished by Landlord for use of the Premises as general office space or connect
any apparatus or device for the purpose of using water. If Tenant shall require
water in excess of that usually furnished or supplied for use of the Premises as
general office space, Tenant shall first procure the written

                                      13.
<PAGE>

consent of Landlord to the use thereof. Landlord, as a condition of Landlord's
consent, may cause a water meter to be installed, so as to measure the amount of
excess water used. The cost of any such meter and of installation, maintenance
and repair thereof shall be paid by Tenant, and Tenant agrees to pay to Landlord
promptly upon demand thereof by Landlord for all such excess water so used.
Unless and until Landlord installs such separate meter, Tenant shall pay to
Landlord promptly upon demand Landlord's good faith estimate of the cost of the
excess of the amount of water used by Tenant over that usually furnished or
supplied by Landlord for use of the Premises as general office space, and
Landlord's estimate of such excess amounts, based upon the independent judgment
of Landlord's engineer, the manufacturer of the equipment involved, or the
utility providing the service, shall be final, binding, and conclusive upon
Tenant.

          (d)  Excess Air-Conditioning. Tenant (except as otherwise provided in
               -----------------------
Exhibit B) shall not use any apparatus or device in the Premises that will
increase the amount of air conditioning furnished by Landlord for general office
space.

     6.   Taxes Payable by Tenant. In addition to the monthly rental and other
          -----------------------
charges that are payable by Tenant hereunder, Tenant shall reimburse Landlord
upon demand for any and all taxes payable by Landlord whether or not now
customary or within the contemplation of the parties hereto which are upon,
measured by, or reasonably attributable to the cost or value of Tenant's
equipment, furniture, fixtures, and other personal property

                                      14.
<PAGE>

located in the Premises or by the cost or value of any leasehold improvements
made in or to the Premises by or for Tenant, other than tenant improvements made
and paid for by Landlord hereunder, regardless of whether title to such
improvements shall be in Tenant or Landlord.

     7.  Alterations, Additions or Improvements. Except for the initial
         --------------------------------------
improvement of the Premises pursuant to Exhibit B, which shall be governed by
the provisions of Exhibit B, Tenant shall not make or suffer to be made any
alterations, additions, or improvements to or of the Premises or any part
thereof, or attach any fixtures or equipment thereto, without Landlord's prior
written consent. All such alterations, additions or improvements shall become
Landlord's property immediately and, at the end of the term hereof, shall remain
on the Premises without compensation to Tenant unless Landlord elects by notice
to Tenant given at the time of Landlord's consent to have Tenant remove the
same, in which event Tenant shall promptly remove such alterations, additions or
improvements, repair any damage to the Premises, and restore the Premises to
their condition prior to the installation of such alterations, additions or
improvements.

     Tenant at its expense shall obtain any and all permits and consents of
applicable governmental authorities in respect of such alterations, additions,
and improvements and shall comply with the requirements of all governmental
authorities in connection therewith, including all building codes; and Tenant
shall be liable to Landlord and shall reimburse Landlord for the

                                      15.
<PAGE>

costs of any improvements to the Building (whether or not within the Premises)
which may be required by governmental authority as a consequence of Tenant's
alterations, additions and improvements.

     All alterations made by Tenant with the prior written consent of Landlord
shall be effected through the use of contractors approved by Landlord who shall
furnish to Landlord upon demand such completion bonds and labor and material
bonds as Landlord may require so as to assure completion of such alterations,
additions or improvements on a lien-free basis (and the furnishing of the same
shall not relieve Tenant of its obligation under Section 8 hereof).

     8.   Liens. Tenant shall keep the Premises and the Building free and clear
          -----
of and from any and all mechanics', materialmen's and other liens for work or
labor done, services performed and for materials used or furnished in or about
the Premises by or on behalf of Tenant. Tenant at all times shall pay and
discharge, promptly and fully, any and all claims upon which any such lien may
or could be based, provided that Tenant in good faith may contest any such lien
if Tenant obtains and records a statutory lien release bond the effect of which
is that the lien is expunged from Landlord's title as a matter of law. Tenant
shall save, defend, indemnify and hold Landlord, the Premises and the Building
free and harmless of and from any and all such liens or claims of liens or suits
or other proceedings pertaining thereto.

                                      16.
<PAGE>

     9.   Repairs. By entry hereunder, Tenant accepts the Premises as being in
          -------
the condition in which Landlord is obligated to deliver the Premises, subject
only to the work to be performed by Landlord pursuant to Section 2(b) and
Exhibit B. Tenant, at all times during the term hereof and at Tenant's sole cost
and expense, shall keep the Premises and every part thereof in good condition
and repair, excepting (a) ordinary wear and tear, and (b) damage due to casualty
with respect to which the provisions of Section 10 and 12 shall apply. Tenant
hereby waives all right to make repairs at the expense of Landlord or in lieu
thereof to vacate the Premises as provided by California Civil Code Section 1941
and 1942 or any other law, statute or ordinance now or hereafter in effect.
Landlord has no obligation and has made no promise to alter, remodel, improve,
repair, decorate, or paint the Premises or any part thereof except as
specifically herein set forth in Exhibit B. The maintenance of the Building
structure, Building systems, and common areas of the Building are the sole
responsibility of the Landlord. Except as specifically set forth herein,
Landlord has not made any representations respecting the condition of the
Premises to Tenant.

     10.  Destruction or Damage.
          ---------------------

          (a)  Damage. If the Premises and/or the portion of the Building
               ------
necessary for Tenant's occupancy are damaged by fire, earthquake, act of God,
the elements, or other casualty, Landlord shall forthwith repair the same,
subject to the provisions of this Section hereinafter set forth, if such
repairs, in

                                      17.
<PAGE>

Landlord's opinion, can be made within 90 days following the issuance of any
building permit required by relevant governmental authority (the "Rebuilding
Period"). This Lease shall remain in full force and effect except that, if such
damage is not the result of the negligence or willful misconduct of Tenant or
Tenant's employees or invitees, a proportional abatement of rental (based upon
square footage) shall be allowed Tenant for such part of the Premises as shall
be rendered unusable by Tenant in the conduct of its business during the time
such part is so unusable. Landlord's determination that such repair may be made
within the Rebuilding Period shall not obligate Landlord to complete the same
within such period. For purposes of this Section 10, "repairs" shall include all
repair and restorative work Landlord in Landlord's good faith but nevertheless
sole discretion deems advisable, including without limitation, all work and
improvements Landlord deems advisable to improve the condition and quality of
the Building, whether in the form of government mandated building code upgrades
or otherwise.

          (b)  Repair. If such repairs, in Landlord's opinion, cannot be made
               ------
within the Rebuilding Period, Landlord shall elect, by notice to Tenant within
30 days after the date of such fire or other casualty: (i) to repair or restore
such damage, in which event this Lease shall continue in full force and effect
(except that the rent shall be partially abated as hereinabove provided) and
Landlord shall repair and restore such damage with reasonable diligence, or (ii)
to terminate this Lease, in which

                                      18.
<PAGE>

event this Lease shall terminate as of the date of such fire or other casualty.

          (c)  Waiver. Tenant waives California Civil Code Sections 1932(2) and
               ------
1933(4) providing for termination of hiring upon destruction of the thing hired.

          (d)  Costs of Repair. If the Premises are to be repaired under this
               ---------------
Section, Landlord (subject to the provisions of Section 12(b) hereof) shall
repair at its cost any injury or damage to the Building itself and the tenant
improvements in the Premises paid for by Landlord hereunder. Tenant shall repair
and pay the cost of repairing Tenant's alterations, Tenant's improvements,
Tenant's trade fixtures, Tenant's personal property and any other tenant
improvements in the Premises and shall be responsible for carrying such casualty
insurance as it deems appropriate with respect to such other tenant
improvements.

          (e)  Tenant's Right to Terminate Lease. If the Premises are not
               ---------------------------------
restored within one hundred eighty (180) days after the date of damage or
destruction, Tenant shall have the right to terminate this Lease.

     11.  Insurance; Waiver of Subrogation.
          --------------------------------

          (a)  Insurance. Tenant, at Tenant's expense, shall maintain in full
               ---------
force during the term hereof a policy or policies of comprehensive broad form
general public liability insurance insuring against claims and liability for
personal injury, death and property damage arising in or about the Premises, the
Building and adjoining areas or ways, with a

                                      19.
<PAGE>

carrier or carriers acceptable to Landlord, and which carrier or carriers in any
event shall have a rating of not less than A Plus XIII by Best's Insurance
Guide. The liability under such insurance shall not be less than $1,000,000
combined single limit bodily injury and property damage. Such policy or policies
of insurance shall (a) name Landlord and Landlord's lender as additional
insureds, (b) be nonassessable, primary and noncontributory with any policies
carried by Landlord, and (c) provide that the same may not be cancelled or
materially amended except upon 30 days prior written notice to Landlord. Tenant
at all times shall maintain with Landlord a current certificate or certificates
of said policy or policies. The amount of insurance coverage provided for in
this Section shall be increased from time to time during the term hereof upon
demand of Landlord to the extent reasonably required by circumstances then
existing (including, but not limited to increases in the cost of living as
reflected in the Consumer Price Index published by the U.S. Department of Labor
and increases in personal injury and wrongful death judgments or awards in the
City and County of San Francisco).

          (b)  Subrogation. To the extent available without material incremental
               -----------
premium, each party shall obtain from its insurers under all policies of
property insurance maintained by such party at any time during the term hereof
insuring or covering the Premises, the Building or any portion thereof or
operations therein, a waiver of all rights of subrogation which

                                      20.
<PAGE>

the insurer might have against the other party, and each party shall indemnify
the other party against any loss or expense, including reasonable attorneys'
fees, resulting from the failure to obtain such waiver to the extent the same is
so available.

     12.  Waiver; Indemnity.
          -----------------

          (a)  Tenant covenants and agrees that Landlord shall not at any time
after the date hereof or to any extent whatsoever be liable, responsible or in
anywise accountable for, and Tenant waives and releases any claim (including any
claim for contractual or implied indemnity) against Landlord, for Losses
(hereinafter defined) which at any time after the date hereof may be suffered or
sustained by:

               (i)  Tenant; or

               (ii) Any person whosoever may at any time be using or occupying
          or visiting the Premises or be in, on or about the same, or in or
          about the common areas of the Building or the sidewalks adjacent
          thereto, and which Losses are caused in whole or in part by any act or
          omission (whether negligent, non-negligent or otherwise) of Tenant,
          its agents, servants and invitees;

and whether in case of either clause (i) and/or (ii) such Losses shall be caused
----------
in part by any act, omission or negligence of Landlord, its agents or servants,
except to the extent caused by the grossly negligent or willful act or omission
of Landlord, its agents or employees.

                                      21.
<PAGE>

          (b)  In addition to, and not in limitation of (a) above, Tenant shall
forever indemnify, defend, hold and save Landlord and Landlord's Lender free and
harmless of, from and against any and all Losses caused in whole or in part by
any act or omission (whether negligent, non-negligent, or otherwise) of Tenant,
its agents servants and invitees and suffered or sustained by:

               (i)  Landlord; and/or

               (ii) any third person who asserts a claim against Landlord on
          account thereof;

and whether in case of either clause (i) and/or (ii) such Losses shall be caused
-----------
in part by any act, omission or negligence of Landlord, its agents or servants,
except to the extent caused by the grossly negligent or willful act or omission
of Landlord, its agents or employees. The foregoing indemnity obligation of
Tenant shall include reasonable attorneys' fees, investigation costs, and all
other reasonable costs and expenses incurred by Landlord from the first notice
that any claim or demand is to be made or may be made.

          (c)  For purposes hereof "Losses" shall mean any and all losses,
damages, costs and expenses, direct and indirect, actual and consequential, on
account of injury to or death of persons, or loss of or damage to property, of
any kind or nature, including without limitation, loss, injury, death or damage
due to criminal act by third persons.

                                      22.
<PAGE>

          (d)  The provisions of this Section 12 shall survive the termination
of this Lease with respect to any Losses occurring prior to such termination.
The insurance policy or policies required pursuant to the provisions of Section
11(a) by their terms shall cover the indemnity obligations of Tenant under
Section 12(b), except to the extent that any such obligation arises from
allegations of the willful misconduct of Tenant, its servants or its agents.

     13.  Compliance with Legal Requirements.
          ----------------------------------

          (a)  During the term of this Lease, Tenant, with respect to the
Premises, at its sole cost and expense shall comply promptly with (i) all laws,
statutes, regulations, ordinances, governmental rules, or requirements now in
force or which may hereafter be in force, (ii) the requirements of any board of
fire underwriters or other similar body now or hereafter constituted, (iii) any
direction or occupancy certificate issued pursuant to any law by any public
officer or officers, and (iv) the provisions of all recorded documents affecting
the Building or the Premises insofar as any of clauses (i) through (iv) relate
to or affect the condition, use or occupancy of the Premises, excluding
structural changes not necessitated by improvements made by or for Tenant
pursuant to Section 7 or by acts or other omissions of Tenant. The judgment of
any court of competent jurisdiction or the admission by Tenant (excluding from
the term "admission" any settlement or consent decree which by its terms does
not admit Tenant's liability) in any action or

                                      23.
<PAGE>

proceeding against Tenant (whether Landlord be a party thereto or not) that
Tenant has violated any such law, statute or governmental rule, regulation, or
requirement, shall be conclusive of such violation as between Landlord and
Tenant.

          (b)  Environmental Matters.
               ---------------------

               (i)  As used herein, the following items shall have the following
meanings:

               "Environmental Activity" means any actual, proposed or threatened
                ----------------------
use, storage, treatment, existence, release, emission, discharge, generation,
manufacture, disposal or transportation of any Hazardous Materials from, into,
on, under or about the Premises, or any other activity or occurrence that causes
or would cause any such event to exist.

               "Environmental Requirements" means all present and future
                --------------------------
federal, state, regional or local laws relating to the use, storage, treatment,
existence, release, emission, discharge, generation, manufacture, disposal or
transportation of any Hazardous Materials.

               "Hazardous Material" means at any time any substances or
                ------------------
materials which at such time are classified or considered to be hazardous or
toxic under any Environmental Requirement.

               (ii) Tenant shall not engage in nor permit the occurrence of any
Environmental Activity except in the ordinary course of Tenant's business and
only in compliance with all Environmental Requirements and prudent industry
practices.

                                      24.
<PAGE>

Tenant shall, at its own expense, procure, maintain in effect and comply with
all conditions of any and all permits, licenses, and other governmental and
regulatory approvals required under any Environmental Requirements for any
Environmental Activity by Tenant, including, without limitation, the discharge
of (appropriately treated) materials or wastes into or through any sanitary
sewer serving the Premises, and upon termination of this Lease shall cause all
of its Hazardous Materials to be removed from the Premises in accordance with
and in compliance with all applicable Environmental Requirements.

               (iii) Upon having knowledge thereof, Tenant shall immediately
notify Landlord in writing of:

                    (A)  any regulatory action that has been instituted, or
threatened by any governmental agency or court with respect to Tenant that
relates to any Environmental Activity;

                    (B)  any claim relating to any Environmental Activity by
Tenant in, on or about the Premises, or that arises out of or in connection with
any Hazardous Materials in, on, under or about the Premises or removed from the
Premises; or

                    (C)  any actual or threatened material release on, under or
about the Premises or any adjacent property of any Hazardous Material, except
any Hazardous Material whose discharge or emission is expressly authorized by
and in compliance with a permit issued by a federal, state, regional or local
governmental agency pursuant to Environmental Requirements.

                                      25.
<PAGE>

               (iv) Tenant shall provide Landlord with copies of any
communications with federal, state, regional or local governments, agencies or
courts with respect to any Environmental Activity or Environmental Requirement
relating to the Premises and any communications with any third party relating to
any claim made or threatened with respect to any Environmental Activity by
Tenant in, on or about the Premises.

               (v)  Tenant shall indemnify, defend (by counsel reasonably
acceptable to Landlord), protect, and hold Landlord and each of Landlord's
partners, employees, agents, attorneys, successors and assigns, free and
harmless from and against any and all claims, liabilities, penalties,
forfeitures, losses or expenses (including attorneys' fees) arising from or
caused in whole or in part, directly or indirectly, by (i) an Environmental
Activity by Tenant; or (ii) Tenant's failure to comply with any Environmental
Requirement. Tenant's obligations under this Section 13(b) shall include,
without limitation, and whether foreseeable or unforeseeable, all costs of any
repair or cleanup, removal or remediation action, or detoxification or
decontamination of the Premises, or the preparation and implementation of any
closure, remedial action or other plans in connection therewith that are
required as a result of any Environmental Activity by Tenant, and shall survive
the expiration or earlier termination of the term of this Lease.

               (vi) The provisions of this Section 13(b) shall survive the
termination of this lease.

                                      26.
<PAGE>

     14.  Assignment and Subletting.
          -------------------------

          (a)  Assignment and Subletting. Except as expressly permitted pursuant
               -------------------------
to this Section, Tenant shall not, without the prior written consent of
Landlord, assign this Lease, or any interest herein, or sublet the Premises, or
any part thereof, or permit the use or occupancy of the Premises (or any right
or privilege appurtenant thereto) by any party other than Tenant. For purposes
hereof, "assignment" shall include any proposed disposition or transfer,
voluntary or involuntary, or hypothecation; and where Tenant is a (i)
partnership, "assignment" shall include a transfer of 25% or more of the equity
interest therein (other than to an existing equity holder) or (ii) a corporation
"assignment" shall include (except with respect to a corporation whose stock is
publicly traded) any (A) merger, consolidation or other reorganization
(involving the equity securities of Tenant) of Tenant, (B) liquidation,
dissolution or disposition of all or substantially all of the assets of Tenant
or (C) change in ownership of 40% or more of the equity interest therein (other
than a transfer to an existing equity holder). Any of the foregoing acts without
such consent of Landlord shall be void and shall, at the option of Landlord,
terminate this Lease. This Lease shall not, nor shall any interest herein, be
transferable or assignable as to the interest of Tenant by operation of law
without the written consent of Landlord.

     Landlord's consent to any assignment or subletting of all or any part of
the Premises shall not be unreasonably withheld or

                                      27.
<PAGE>

delayed. Without limiting the other instances in which it may be reasonable for
Landlord to withhold its consent to an assignment or subletting, Landlord and
Tenant acknowledge that it shall be reasonable for Landlord to withhold its
consent from a proposed assignment or subletting in the following instances:

               (i)   If Landlord determines in its good faith but nevertheless
sole discretion that the use of the Premises by the proposed assignee or
sublessee would be in violation of Section 4 of this Lease;

               (ii)  If Landlord determines in its good faith but nevertheless
sole discretion that the financial worth of the proposed assignee or sublessee
does not meet the credit standards applied by Landlord for other tenants under
leases with comparable terms;

               (iii) If Landlord determines in its good faith but nevertheless
sole discretion that the proposed assignee or sublessee does not have a
favorable reputation as a tenant of property;

               (iv)  If Landlord has received from any prior lessor to the
proposed assignee or subtenant a negative report concerning such prior lessor's
experience with the proposed assignee or subtenant;

               (v)   If Landlord has experienced previous defaults by or is in
litigation with the proposed assignee or subtenant;

               (vi)  If the use of the Premises by the proposed assignee or
subtenant will violate any applicable law, ordinance

                                      28.
<PAGE>

or regulation, or any use permit issued for the use and occupancy of the
Premises.

          (b)  Information; Landlord's Options. If at any time, or from time to
               -------------------------------
time, during the term of this Lease, Tenant desires to assign, sublet or permit
the occupancy or use by another of all or any part of the Premises, Tenant shall
give notice to Landlord setting forth the following: (i) the name, address, and
legal composition of the proposed sublessee, occupier or user; (ii) the nature
of the business proposed to be carried on in the Premises (including proposed
number of employees to be located in the Premises, the proposed equipment to be
used therein, proposed floor loads and proposed electrical loads); (iii) a copy
of the proposed assignment or sublease agreement; and (iv) any other
documentation or information reasonably requested by Landlord, including
financial information covering the proposed assignee, sublessee, occupier or
user with respect to such proposed subletting. All such information may be
considered by Landlord in making Landlord's permitted determinations hereunder,
including the granting or withholding of consent in respect of a proposed
assignment or subletting. Such notice, once so given, shall not be withdrawn or
rescinded by Tenant. Landlord shall have the options, exercisable by notice
given to Tenant within 10 days after Tenant's notice is given, to do the
following:

               (i)  In the case of a proposed subletting, Landlord may sublet
from Tenant such space at the rental and

                                      29.
<PAGE>

other terms set forth in this Lease, prorated where appropriate to reflect
obligations allocable to that portion of the Premises to be sublet, unless the
rental to be paid by the proposed sublessee is lower than the rental, as so
prorated, payable under the Lease, in which event such lower rental shall be
payable by Landlord to Tenant, or

               (ii) In the case of either a proposed assignment or subletting,
Landlord may terminate this Lease as to that part or all of the Premises
proposed to be assigned or sublet, and in the case of termination as to a
portion of the Premises, Tenant's obligations under the Lease as to the balance
of the Premises remaining shall be proportionately reduced.

     If Landlord sublets such space or terminates the Lease as to such space, in
each instance leaving a portion of the Premises occupied by Tenant, Tenant shall
provide Landlord without charge reasonable and appropriate access to such space
and reasonable use of any common areas and facilities appurtenant thereto. For
purposes hereof, "common area" shall mean the total area on a floor consisting
of rest rooms, janitor, telephone and electrical closets, mechanical areas, and
public corridors providing access to tenant space on such floor, but excluding
public stairs, elevator shafts and pipeshafts, together with the enclosing walls
thereof.

          (c)  Assignment or Subletting Conditions. Subject to (i) the other
               ------------------------ ----------
provisions of this Section 14 and (ii) Landlord's consent, which shall not be
unreasonably withheld or delayed,

                                      30.
<PAGE>

Tenant may assign or sublet such space to any third party on the following
conditions:

               (i)   In the case of a sublease, the same shall be subject and
subordinate to all of the provisions, terms and conditions of this Lease,

               (ii)  No assignment or sublease shall be valid and no assignee or
sublessee shall take possession of the Premises assigned or subleased until an
executed counterpart of such assignment or sublease, in form and substance
satisfactory to Landlord, shall have been delivered to Landlord, and Landlord
shall have expressly consented thereto in writing,

               (iii) No assignee or sublessee shall have a further right to
assign or sublet,

               (iv)  An amount equal to 50% of all sums or other economic
consideration received by Tenant as a result of such assignment or subletting,
however denominated (whether as consideration for the assignment, rentals under
a sublease, or otherwise), which exceed in aggregate the total sums which Tenant
(or Tenant's assignee in case of an assignment) is obligated to pay Landlord
under this Lease (after deducting (a) bona fide charges for services provided by
the Tenant to subtenants at rates that are comparable to and not in excess of
rates charged for similar services in the area, and (b) Tenant's actual out-of-
pocket costs of such assignment or subletting, not to exceed $15 per net
rentable square foot multiplied by the number of net rentable square feet
involved, which deduction shall be amortized

                                      31.
<PAGE>

in the case of a subletting in equal monthly installments over the term of the
sublease), prorated to reflect obligations allocable to that portion of the
Premises subject to such assignment or sublease, shall be payable to Landlord as
additional rental under this Lease without affecting or reducing any other
obligations of Tenant hereunder, provided that (A) in no event shall Tenant be
obligated to pay Landlord less than the rental specified in this Lease, and (B)
there are excluded from this clause (iv) any sublease or subleases totalling
less than 30% of the rentable area of the Premises, which exclusion is based on
the condition that at no time during the term of this lease shall there be any
assignment or subletting of 30% or more of the rentable area of the Premises,
(and in the event of the failure of such condition at any time this clause (iv)
shall apply to any consideration thereafter received on account of any
assignment or subletting, including the subletting of less than 30% of the
rentable area of the Premises to which the exclusion otherwise would apply). The
parties hereto acknowledge and agree that it is not their intention that
Tenant's leasehold interest in the Premises have any bonus value or marketable
value to Tenant even though the rentals provided for herein may from time to
time be less than the fair market rental value of the Premises.

               (v)  Tenant shall immediately and irrevocably assign to Landlord,
as security for Tenant's obligations under this Lease, all rental from any
subletting of all or a part of the Premises as permitted by this Lease, and
Landlord, as

                                      32.
<PAGE>

assignee and as attorney-in-fact for Tenant, or a receiver for Tenant appointed
on Landlord's application, may collect such rental and apply it towards Tenant's
obligations under this Lease; except that, until the occurrence of an Event of
Default by Tenant as defined in Section 17, Tenant shall have the right to
collect such rental.

          (d)  Primary Liability. Regardless of Landlord's consent, no
               -----------------
subletting or assignment shall release Tenant of Tenant's obligation or alter
the primary liability of Tenant to pay the rental and to perform all other
obligations to be performed by Tenant hereunder. The acceptance of rental by
Landlord from any other person shall not be deemed to be a waiver by Landlord of
any provision hereof. Consent to one assignment or subletting shall not be
deemed consent to any subsequent assignment or subletting. In the event of
default by any assignees of Tenant or any successor of Tenant in the performance
of any of the terms hereof, Landlord may proceed directly against Tenant without
the necessity of exhausting remedies against such assignee or successor.
Landlord may consent to subsequent assignments or subletting of this Lease or
amendments or modifications to this Lease with assignees of Tenant, without
notifying Tenant, or any successor of Tenant, and without obtaining its or their
consent thereto, and such action shall not relieve Tenant of liability under
this Lease, provided that any such amendments or modifications shall not
increase Tenant's liability hereunder.

                                      33.
<PAGE>

               (e)  Attorneys' Fees. If Tenant shall assign or sublet the
                    ---------------
Premises or request the consent of Landlord to any assignment or subletting, or
if Tenant shall request the consent of Landlord for any act that Tenant proposes
to do, then Tenant shall pay Landlord's reasonable attorneys' fees incurred in
connection therewith.

               (f)  Conflicting Provisions. The provisions of this Section shall
                    ----------------------
prevail and govern over any conflicting provision in any assignment or
subletting to which Landlord gives written consent. Any modification of the
terms of this Lease as between Tenant and Sublessee shall be void and will not
be binding on the Landlord.

               (g)  Brokerage. Tenant shall forever save, indemnify and hold
                    ---------
Landlord harmless from any and all claims for real estate brokerage of persons
claiming by or through Tenant arising from any assignment or subletting.

     15.  Rules. Tenant shall faithfully observe and comply with the rules and
          -----
regulations annexed to this Lease and, after notice thereof, all reasonable
modifications thereof and additions thereto from time to time promulgated in
writing by Landlord. Landlord shall not be responsible to Tenant for the
nonperformance by any other tenant or occupant of the Building of any of said
rules and regulations.

     16.  Entry by Landlord. Landlord may enter the Premises at reasonable hours
          -----------------
to (a) inspect the same, (b) exhibit the same to prospective purchasers,
lenders, or tenants, (c) determine

                                      34.
<PAGE>

whether Tenant is complying with all its obligations hereunder, (d) supply
janitor service and any other service to be provided by Landlord to Tenant
hereunder, (e) post notices of nonresponsibility and (f) make repairs in the
Premises or repairs to any adjoining space or utility services or make repairs,
alterations or improvements to any other portion of the Building (provided,
however, that all such work shall be done as promptly as reasonably possible and
so as to cause as little interference to Tenant as reasonably possible). Without
limiting the foregoing, Landlord may, at any time or from time to time during
the term of this Lease, perform substantial renovation work in and to the
Building or the systems serving the Building (which work may include, but need
not be limited to, the repair or replacement of the Building's exterior facade,
exterior window glass, elevators, electrical systems, air conditioning and
ventilating systems, plumbing system, common hallways, or lobby), any of which
work may require access to the same from within the Premises. Tenant agrees that
(a) Landlord shall have access to the Premises at all reasonable times, upon
reasonable notice, for the purpose of performing such work, and (b) Landlord
shall incur no liability to Tenant, nor shall Tenant be entitled to any
abatement of rent on account of any noise, vibration, or other disturbance to
Tenant's business at the Premises (provided that Tenant is not denied access to
said Premises and Tenant's ability to conduct its business on the Premises is
not substantially impaired thereby) which shall arise out of said access by
Landlord or by

                                      35.
<PAGE>

the performance by Landlord of the aforesaid renovations at the Building.
Landlord shall use reasonable efforts (which shall not include any obligation to
employ labor at overtime rates) to avoid disruption of Tenant's business during
any entry upon the Premises by Landlord permitted by this Section 16.

     Tenant hereby waives any claim for damages for any injury or inconvenience
to or interference with Tenant's business, any loss of occupancy or quiet
enjoyment of the Premises or any other loss occasioned by any such entry or
entries made by Landlord pursuant to any of the foregoing. Landlord shall at all
times have and retain keys with which to unlock all of the doors in, on or about
the Premises (excluding Tenant's vaults, safes and similar areas designated in
writing by Tenant and approved by Landlord in advance); and Landlord shall have
the right to use any and all means which Landlord may deem proper to open such
doors in an emergency in order to obtain entry to the Premises, and any entry to
the Premises 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.

     17.  Events of Default. The occurrence of any one or more of the following
          -----------------
events (an "Event of Default") shall constitute a breach of this Lease by
Tenant: (a) if Tenant shall fail to pay rent or any other sum when and as the
same becomes due and payable and such failure shall continue for more than 10
days

                                      36.
<PAGE>

(except that if Landlord has notified Tenant in writing on two occasions during
the 12 months preceding the due date that Tenant has failed to pay rent or any
other sum on the due date, then the failure to pay such rent or other sum on the
due date shall constitute an Event of Default); or (b) if Tenant shall default
in the performance or observance of any other term hereof or of the rules and
regulations described in Section 15 to be performed or observed by Tenant, and
within 30 days following written notice from Landlord to Tenant, Tenant shall
have failed to completely cure such default, or if the nature of such default is
such that it cannot reasonably be cured within such 30 day period, Tenant shall
not within such 30 day period have commenced with prompt diligence the curing of
such default, or, having so commenced, shall thereafter have failed to prosecute
with prompt diligence the complete curing of such default; or (c) if Tenant
shall make a general assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts as they become due, or shall file a
petition in bankruptcy, or shall be adjudicated a bankrupt or as insolvent, or
shall file a petition in any proceeding seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any
present or future statute, law, or regulation, or shall file an answer
admitting, or fail to protest timely the material allegations of a petition
filed against it in any such proceeding, or shall seek or consent to or
acquiesce in the appointment of any trustee, receiver, or liquidator of Tenant
or

                                      37.
<PAGE>

any material part of its properties; or (d) if within 45 days after the
commencement of any proceeding against Tenant seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any present or future statute, law, or regulation, such proceeding
shall not have been dismissed, or if, within 30 days after the appointment
without the consent or acquiescence of Tenant, of any trustee, receiver, or
liquidator of Tenant or of any material part of its properties, such appointment
shall not have been vacated; or (e) if this Lease or any estate of Tenant
hereunder shall be levied upon under any attachment or execution and such
attachment or execution is not vacated within 30 days; or (f) if Tenant shall
abandon or surrender the Premises, or be dispossessed by process of law or
otherwise, or shall vacate or fail to take possession of the Premises.

     18.  Landlord's Right to Terminate. If an Event of Default shall occur,
          -----------------------------
Landlord at any time thereafter may give a written termination notice to Tenant,
and on the date specified in such notice (which shall be not less than three
days after the giving of such notice) Tenant's right to possession shall
terminate, unless on or before such date all delinquent rent and all other sums
payable by Tenant under this Lease and all costs and expenses incurred by or on
behalf of Landlord hereunder shall have been paid by Tenant and all other
breaches of this Lease by Tenant at the time existing shall have been fully
remedied to the satisfaction of Landlord. Landlord may remove all persons and

                                      38.
<PAGE>

property located therein and hold, administer and dispose of any or all of such
properties in accordance with applicable California law, including California
Civil Code Section 1980 et seq. and California Code of Civil Procedure Section
                        -- ---
1174. Landlord may do all things Landlord deems necessary in order to relet the
Premises, including, without limitation any alterations, repair and/or
restoration of the Premises. Upon such termination, Landlord may recover from
Tenant: (a) the worth at the time of award of the unpaid rental which had been
earned at the time of termination; (b) the worth at the time of award of the
amount by which the unpaid rental which would have been earned after termination
until the time of award exceeds the amount of such rental loss that Tenant
proves could have been reasonably avoided; (c) the worth at the time of award of
the amount by which the unpaid rental for the balance of the term of this Lease
after the time of award exceeds the amount of such rental loss that Tenant
proves could be reasonably avoided; and (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. The "worth at the time of award" of
the amounts referred to in clauses (a) and (b) above is computed by allowing
interest at the highest rate legally permitted under applicable law. The "worth
at the time of award" of the amount referred to in clause (c) above is computed
by discounting such amount at the discount rate of the

                                      39.
<PAGE>

Federal Reserve Bank of San Francisco at the time of award plus 1% (one
percent). Notwithstanding any other provisions hereof, any efforts by Landlord
to mitigate damages caused by Tenant's breach of this Lease shall not constitute
a waiver of Landlord's right to recover damages hereunder and shall not affect
the right of Landlord to indemnification pursuant to the provisions of Section
12 hereof.

     19.  Continuation Notwithstanding Default. Even though Tenant has breached
          ------------------------------------
this Lease and abandoned the Premises, this Lease shall continue in effect for
so long as Landlord does not terminate Tenant's right to possession, and
Landlord may enforce all its rights and remedies under this Lease, including the
right to recover the rental as it becomes due under this Lease. Acts of
maintenance or preservation or efforts to relet the Premises or the appointment
of a receiver upon the initiative of Landlord to protect Landlord's interest
under this Lease shall not constitute a termination of Tenant's right to
possession.

     20.  Additional Remedies. The remedies provided for in this Lease are in
          -------------------
addition to any other remedies available to Landlord at law or in equity by
statute or otherwise.

     21.  Landlord's Right to Cure Defaults. All agreements and provisions to be
          ---------------------------------
performed by Tenant under any of the terms of this Lease shall be at its sole
cost and expense and without any abatement of rental. If Tenant shall fail to
pay any sum of money, other than rental, required to be paid by it hereunder, or
shall fail to perform any other act on its part to be performed

                                      40.
<PAGE>

hereunder and such failure shall continue for 10 days after notice thereof by
Landlord, Landlord may, but shall not be obligated to do so, and without waiving
or releasing Tenant from any obligations of Tenant, make any such payment or
perform any such other act on Tenant's part to be made or performed as in this
Lease provided. All sums so paid by Landlord and all necessary incidental costs
shall be deemed additional rent hereunder and shall be payable to Landlord on
demand, and Landlord shall have (in addition to any other right or remedy of
Landlord) the same rights and remedies in the event of the nonpayment thereof by
Tenant as in the case of default by Tenant in the payment of rental.

     22.  Attorneys' Fees. If as a result of any breach or default in the
          ---------------
performance of any of the provisions of this Lease, Landlord uses the services
of an attorney in order to secure compliance with such provisions or recover
damages therefor, or to terminate this Lease or evict Tenant, Tenant shall
reimburse Landlord upon demand for any and all attorneys' fees and expenses so
incurred by Landlord, provided that if Tenant shall be the prevailing party in
any legal action brought by Landlord against Tenant, Tenant shall be entitled to
recover for the fees of its attorneys in such amount as the court may adjudge
reasonable.

     23.  Eminent Domain. If any part of the Premises shall be taken as a result
          --------------
of the exercise of the power of eminent domain, this Lease shall terminate as to
the part of the Premises so

                                      41.
<PAGE>

taken as of the date of taking, and either Landlord or Tenant shall have the
right to terminate this Lease as to the balance of the Premises remaining after
a partial taking by written notice to the other within 30 days after such date,
provided, however, that a condition to the exercise by Tenant of such right to
terminate shall be that such partial taking shall be to such extent and nature
as to substantially and permanently handicap, impede, or impair the conduct of
Tenant's business therein. If all of the Premises are taken as a result of the
exercise of the power of eminent domain, this Lease shall terminate upon the
date of taking. If any part of the Building (other than the Premises) shall be
taken as a result of the exercise of the power of eminent domain, Landlord shall
have the right to terminate this Lease by written notice to Tenant within 30
days from the date of such taking; in the event that Landlord does not so elect,
this Lease shall continue in full force and effect, provided that Tenant is
afforded continuous access to the Premises.

     Landlord shall be entitled to any and all compensation, damages, income,
rent, awards, or any interest therein whatsoever which may be paid or made in
connection with any exercise of the power of eminent domain, and Tenant shall
have no claim against Landlord for the value of any unexpired term of this Lease
or otherwise, except that Tenant shall be entitled to any specific award made in
favor of Tenant covering Tenant's trade fixtures and relocation expenses. In the
event of a partial taking of the Premises which does not result in a termination
of this Lease,

                                      42.
<PAGE>

the monthly rental thereafter to be paid shall abate in proportion to that
portion of the Premises that is rendered unusable by Tenant in the conduct of
its business.

     It is understood and agreed that the foregoing provisions of this Section
are intended to and do fully define and set forth the respective rights and
obligations of the parties in the event of a taking of the Premises or a part
thereof, including without limitation the circumstances under which this Lease
shall or may be terminated, and the disposition of any proceeds of any insurance
or award, and Landlord and Tenant each expressly waives the benefit and effect
of any rights and/or obligations whether purporting to arise by law, by
governmental order, under any insurance contract, or otherwise (including the
provisions of the California Code of Civil Procedure section1265.130), which are
inconsistent with the rights and obligations set forth herein.

     For purposes hereof the "date of taking" shall be deemed to be the date
that physical possession of the property taken is delivered to the condemning
authority.

     24.  Subordination. This Lease shall be subject and subordinate at all
          -------------
times to (a) all ground or underlying leases which may hereafter be executed
affecting the Building and (b) the liens of all mortgages and deeds of trust now
or hereafter placed on or against the Building or on or against Landlord's
interest or estate therein or on or against all such ground or underlying
leases, all without the necessity of having further instruments executed on the
part of Tenant to effect such

                                      43.
<PAGE>

subordination; provided that if and for as long as Tenant is not in default in
the payment of rental or other sums or be otherwise in default under the terms
of this Lease, and Tenant attorns to the Landlord of any such ground or
underlying lease or to the purchaser upon foreclosure of the lien of any
mortgage or deed of trust, or, if requested, enters into a new lease for the
balance of the original or extended term hereof then remaining upon the same
terms and provisions as are in this Lease contained (which attornment or entry
into a new lease Tenant hereby agrees to do), the rights and possession of
Tenant under this Lease shall not be disturbed. Tenant agrees to execute and
deliver upon demand such further instruments evidencing such subordination of
this Lease to such ground or underlying leases, and to the liens of any such
mortgages or deeds of trust, as may be requested by Landlord and/or in such form
as is required by Landlord's lender (including provisions waiving as against
lender claims of, and giving to lender notice of and the right to cure, Landlord
defaults under the Lease).

     25.  No Merger. The voluntary or other surrender of this Lease by Tenant,
          ---------
or a mutual cancellation thereof, shall not work a merger, and, at the option of
Landlord, either shall operate (a) to terminate all or any existing subleases or
subtenancies under the Lease or (b) as an assignment to Landlord of any or all
such subleases and subtenancies.

     26.  Sale. If the original Landlord hereunder, or any successor owner of
          ----
the Building, shall sell or convey the

                                      44.
<PAGE>

Building, all liabilities and obligations on the part of the original Landlord,
or such successor owner, under this Lease accruing thereafter shall terminate,
and thereupon all such liabilities and obligations shall be binding upon the new
owner. Tenant agrees to attorn to such new owner.

     27.  Estoppel Certificate. Tenant shall execute, acknowledge and deliver to
          --------------------
Landlord, within ten (10) days following request by Landlord a certificate
certifying (a) that this Lease is unmodified and in full force and effect (or if
there have been modifications, that this Lease is in full force and effect as
modified and stating the date and nature of each modification), (b) the date, if
any, to which rental and other sums payable hereunder have been paid, (c) that
no notice has been received by Tenant of any default which has not been cured,
except as to defaults specified in said certificate and (d) such other matters
as may be requested by Landlord or Landlord's lender. Any such certificate may
be relied upon by any prospective purchaser, mortgagee, or beneficiary under any
deed of trust on the Building or any part thereof.

     28.  No Light, Air, or View Easement. Any diminution or shutting off 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.

     29.  Holding Over. If, without objection by Landlord, Tenant holds
          -----------
possession of the Premises after expiration of the term of this Lease, Tenant
shall become a tenant from month to

                                      45.
<PAGE>

month upon the terms, conditions and provisions herein specified but at a
monthly rental equivalent to 150 percent of the then prevailing fair market
rental as determined in good faith by the Landlord but in no event less than the
rental being paid by Tenant in the last month of the term of this Lease, payable
in advance on or before the first day of each month. Each party shall give the
other notice at least one month prior to the date of termination of such monthly
tenancy of its intention to terminate such tenancy.

     30.  Abandonment. Tenant shall not vacate or abandon any part or all of the
          -----------
Premises. If Tenant shall vacate, abandon, or surrender the Premises, or be
dispossessed by process of law or otherwise, any personal property belonging to
Tenant and left on the Premises shall be deemed to be abandoned, at the option
of the Landlord, except such property as may be mortgaged to Landlord.

     31.  Surrender. Tenant shall at the end of the term hereof surrender to
          ---------
Landlord the Premises and all alterations, additions and improvements thereto in
the same condition as when received, ordinary wear and tear and damage by fire,
earthquake, act of God, or the elements excepted. Subject to Landlord's right to
require removal pursuant to Section 7 hereto, all improvements installed in the
Premises by Tenant, shall, without compensation to Tenant, then become
Landlord's property free and clear of all claims to or against them by Tenant or
any third person, and Tenant shall defend and indemnify Landlord against all
liability

                                      46.
<PAGE>

and loss arising from such claims or from Landlord's exercise of the rights
conferred by this Section.

     32.  Waiver. The waiver by either party of any term, agreement, condition,
          ------
or provision herein contained shall not be deemed to be a waiver of any
subsequent breach of the same or any other term, agreement, condition, or
provision herein contained, nor shall any custom or practice which may grow
between the parties in the administration of the terms hereof be construed to
waive or to lessen the right of such party to insist upon the performance by the
other party in strict accordance with said terms. The subsequent acceptance of
rental hereunder by Landlord shall not be deemed to be a waiver of any preceding
breach by Tenant of any term, agreement, condition, or provision of this Lease,
other than the failure of Tenant to pay particular rental so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such rental.

     33.  Notice. All notices, demands or other writings provided in this Lease
          ------
to be given or made or sent, or which may be given or made or sent by one party
to another party, shall be deemed to have been fully given or made or sent when
made in writing and upon personal delivery (whether by such party or its agent,
or by courier, or by electronic transmissions such as FAX or telex) or after 72
hours following deposit in the United States mail, registered or certified,
postage prepaid, and addressed to such party at the address specified in the
Basic Lease Information, or to such other place as such party may from

                                      47.
<PAGE>

time to time designate in a notice to the other party or parties. Tenant hereby
appoints as its agent to receive the service of all dispossessory or distraint
proceedings and notices thereunder the person in charge of or occupying the
Premises at the time, and, if no person shall be in charge of or occupying the
same, then such service may be made by attaching the same on the main entrance
of the Premises.

     34.  Complete Agreement. There are no oral agreements between Landlord and
          ------------------
Tenant affecting this Lease, and this Lease supersedes and cancels any and all
previous negotiations, arrangements, brochures, agreements, and understandings,
if any, between Landlord and Tenant or displayed by Landlord to Tenant with
respect to the subject matter of this Lease. There are no representations
between Landlord and Tenant other than those contained in this Lease, and all
reliance with respect to any representations is solely upon such
representations.

     35.  Corporate Authority. If Tenant signs as a corporation, each of the
          -------------------
persons executing this Lease on behalf of Tenant does hereby covenant and
warrant that Tenant is a duly authorized and existing corporation, that Tenant
has and is qualified to do business in California, that the corporation has full
right and authority to enter into this Lease, and that the person(s) signing on
behalf of the corporation were authorized to do so.

     36.  Miscellaneous Provisions.
          ------------------------

          (a)  The words "Landlord" and "Tenant" as used herein shall include
the plural as well as the singular.

                                      48.
<PAGE>

          (b)  If there be more than one Tenant, the obligations hereunder
imposed upon Tenant shall be joint and several.

          (c)  Time is of the essence of this Lease and each and all of its
provisions.

          (d)  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 and delivery by both Landlord
and Tenant.

          (e)  The agreements, conditions and provisions herein contained shall,
subject to the provisions as to assignment, apply to and bind the heirs,
executors, administrators, successors and assigns of the parties hereto.

          (f)  If any provision of this Lease shall be determined to be illegal
or unenforceable, such determination shall not affect any other provision of
this Lease and all such other provisions shall remain in full force and effect.

          (g)  This Lease shall be governed by and construed pursuant to the
laws of the State of California.

          (h)  All remedies hereinbefore and hereafter conferred upon Landlord
shall be deemed cumulative and no one shall be exclusive of the other, or shall
in any way limit the availability to Landlord of any other remedy conferred by
law, whether or not specifically conferred by the provisions of this Lease.

          (i)  All indemnities of Tenant contained in this Lease shall survive
the expiration or other termination hereof with respect to any act, condition or
event which is the subject

                                      49.
<PAGE>

matter of such indemnity and which occurs prior to such expiration or other
termination.

          (j)  The parties acknowledge and agree that each party has reviewed
and revised, and has been provided the opportunity of its respective counsel to
review and revise, this Lease, and no rule of construction to the effect that
any ambiguities are to be resolved against the drafting party shall be employed
in the interpretation or construction of this Lease, or any amendments or
exhibits thereto, or any other document executed and delivered by either party
in connection therewith.

     37.  Exhibits. The exhibit(s) and addendum, if any, specified in any of the
          --------
Sections of this Lease are attached to this Lease and by this reference made a
part hereof.

     38.  Security Deposit. Tenant shall deposit with Landlord the sum specified
          ----------------
in the Basic Lease Information ("Deposit") prior to January 15, 1993.
Notwithstanding anything in this Lease to the contrary, receipt of the Deposit
shall be a condition precedent to Landlord's obligation to install improvements
to the Premises as provided in Section 2(b) and Exhibit B. The Deposit shall be
held by Landlord as security for the faithful performance by Tenant of all of
the provisions of this Lease to be performed or observed by Tenant. If Tenant
fails to pay rent or other charges due hereunder, or otherwise defaults with
respect to any provision of this Lease, Landlord may use, apply or retain all or
any portion of the Deposit for the payment of any rent or other charge in
default or for the

                                      50.
<PAGE>

payment of any other sum to which Landlord may become obligated by reason of
Tenant's default or to compensate Landlord for any loss or damage which Landlord
may suffer thereby. If Landlord so uses or applies all or any portion of the
Deposit, Tenant, within 10 days after demand therefor, shall deposit cash with
Landlord in an amount sufficient to restore the Deposit to the full amount
thereof, and Tenant's failure to do so shall be a material breach of this Lease.
Landlord shall not be required to keep the Deposit separate from its general
accounts. If Tenant performs all of Tenant's obligations hereunder, the Deposit,
or so much thereof as has not theretofore been applied by Landlord, shall be
returned, without payment of interest or other increment for its use, to Tenant
(or, at Landlord's option, to the last assignee, if any, of Tenant's interest
hereunder) at the expiration of the term hereof, and after Tenant has vacated
the Premises. No trust relationship is created herein between Landlord and
Tenant with respect to the Deposit.

     39.  Brokerage. Each party warrants and represents to the other that such
          ---------
party has not retained the services of any real estate broker, finder or any
other person whose services would form the basis for any claim for any
commission or fee in connection with this Lease or the transactions contemplated
hereby except for (a) real estate brokerage services rendered to Landlord by
Stubbs, Collenette and Associates, the commissions earned with respect to which
Landlord shall pay to such broker pursuant to separate agreement between
Landlord and such broker, and

                                      51.
<PAGE>

(b) such real estate brokerage services as may have been rendered to Tenant for
which Landlord is to have no liability. Each party agrees to save, defend,
indemnify and hold the other party free and harmless from any breach of its
warranty and representation as set forth in the preceding sentence, including
the other party's attorneys fees.

     40.  Limitation of Liability. With the exception of actions arising from
          -----------------------
Landlord's fraud, bad faith or willful misconduct, any liability of Landlord
under this Lease shall be limited to Landlord's interest in the Building and the
parcel of real property on which the Building is located, and any appurtenant
rights thereto.

     41.  Base Rent Abatement. Base Rent shall be abated as provided in the
          -------------------
Basic Lease Information, and such abatement is provisional and conditioned upon
the full and faithful performance by Tenant of each and all of its obligations
under this Lease. Upon the occurrence of an Event of Default pursuant to Section
17, such condition shall have failed and, unless subsequently and expressly
waived in writing by Landlord, such abatement shall be cancelled and of no
further force or effect; and such Base Rent covered thereby shall be immediately
due and payable in full without demand or notice from Landlord.

     42.  Parking Spaces. Landlord shall provide to Tenant three parking spaces
          --------------
in the garage of the Building for the term of the Lease. Tenant shall use such
parking spaces at its sole risk and liability, and no bailment shall be created.

                                      52.
<PAGE>

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

LANDLORD:                                    TENANT:

C & C INVESTMENTS                            MZ GROUP, INC.
a trust                                      a California corporation

By ___________________________               By ________________________________
       Corwin Booth                                    Mansoor Zakaria
       Trustee                                         Chairman

                                      53.
<PAGE>

                                   EXHIBIT B
                                   ---------

                                  WORK LETTER
                                  -----------

     The purpose of this Work Letter is to delineate the responsibilities of
Landlord and Tenant with respect to the costs and construction of the shell work
and interior improvements to the Premises. Except as otherwise defined herein,
capitalized terms shall have the meanings set forth in the Lease.

     1.   Landlord's Work. Landlord shall, at its direct cost, without any
          ---------------
application of funds from the Tenant Improvement Allowance (as hereinafter
defined), bring the restrooms on the 8th floor of the Building into compliance
with the requirements of the San Francisco Building Department for handicapped
accessibility.

     2.   Tenant's Work. After the commencement of the term of this Lease,
          -------------
Tenant shall construct furnish or install within the Premises, at its sole cost
and expense, in compliance with its obligations under the Lease, all
improvements, equipment or fixtures that are necessary for Tenant's use and
occupancy of the Premises (the "Tenant's Work"). The construction, furnishing
and installation of Tenant's Work, is referred to herein as the "Improvement
Work". The Improvement Work shall be performed in accordance with the following
provisions:

     (a)  Tenant will be responsible for delivery of final working drawings and
specifications for the Premises to Landlord prior to beginning work. The final
working drawings and specifications shall include mechanical and electrical
drawings and decorating plans showing the location of partitions, reflected
ceiling plans including light fixtures, electrical outlets, telephone outlets,
sprinklers, doors, wall finishes, floor coverings and any other work required by
Tenant. The final working drawings and specifications are referred to herein as
"Tenant's Final Plans." Tenant shall cause all Tenant's Final Plans to be
prepared by licensed architects, and where appropriate, licensed mechanical,
electrical and structural engineers.

     (b)  Tenant's Final Plans shall be subject to Landlord's approval, which
approval shall not be unreasonably withheld. If Landlord disapproves Tenant's
Final Plans, or any portion

                                      1.
<PAGE>

thereof, Landlord shall promptly notify Tenant thereof and of the revisions that
Landlord reasonably requires in order to obtain Landlord's approval. As promptly
as reasonably possible thereafter, Tenant shall submit to Landlord plans and
specifications incorporating the revisions required by Landlord. Said revisions
shall be subject to Landlord's approval, which shall not be unreasonably
withheld. This procedure shall be repeated until Tenant's Final Plans are
finally approved by Landlord and written approval has been received by Tenant.
Tenant shall pay Landlord for the review of plans and specifications at the
hourly rate of Landlord's architect, not to exceed a total of $1,500. The final
plans and specifications approved by Landlord, including any changes, additions
or alterations thereto approved by Landlord as provided in Paragraph 2(i) below,
shall be referred to as the "Approved Plans."

     (c)  Tenant shall obtain all building and other permits, licenses and other
approvals necessary to construct the Improvement Work in compliance with all
applicable laws (collectively, "Permits") prior to the commencement of such
work. Tenant's Work shall (i) be constructed in compliance with the Approved
Plans, with all of the terms and conditions of the Lease and with all applicable
laws, (ii) not involve changes to structural components of the Building nor
involve any floor penetrations unless approved by Landlord, in its sole and
absolute discretion, (iii) not require any material modifications of the
Building's mechanical or electrical systems unless approved by Landlord, in its
sole and absolute discretion, and (iv) not cause pipes or conduits to run over
or through any other tenant's space except as directed by Landlord.

     (d)  Prior to commencing construction, Tenant shall deliver to Landlord the
following:

          (i)   The address of Contractor (as hereinafter defined), and the
names of the primary subcontractors Contractor intends to engage for the
construction of the Premises.

          (ii)  The actual commencement date of construction and the estimated
date of completion of the work, including fixturization.

          (iii) Executed copies of the applicable Permits for such work.

     (e)  After final approval of the Approved Plans by Landlord, Tenant shall
proceed promptly to commence performance of the Improvement Work. Tenant's
contractors and subcontractors shall be acceptable to and approved in writing by
Landlord, which approval shall not be unreasonably withheld, and shall be
subject to administrative supervision by Landlord in

                                      2.
<PAGE>

their use of the Building, provided, however, that any such administrative
supervision shall not impose any liability or obligation whatsoever on Landlord.
Tenant shall furnish to Landlord a copy of the executed contract between Tenant
and Contractor covering all of Tenant's obligations under this Exhibit B.
Tenant's contractors shall conduct their work and employ labor in such manner as
to maintain harmonious labor relations and as not to interfere with any of
Landlord's other tenants in the Building. All Improvement Work shall be done
with union labor in accordance with the Northern California Master Labor
Agreement and shall comply with all laws, codes and ordinances of the City of
San Francisco, the State Fire Marshall's Office and any authority having
jurisdiction over the project.

     (f)  Tenant shall hire its own general contractor ("Contractor") to
complete Tenant's Work, which Contractor shall be subject to Landlord's prior
written approval, which approval shall not be unreasonably withheld.

     (g)  Contractor shall obtain a "course of construction" policy of insurance
in an amount and form and issued by a carrier reasonably satisfactory to
Landlord, endorsed to show Landlord as an additional insured, and Contractor and
subcontractors shall carry worker's compensation insurance for their employees
as required by law. The builder's risk policy of insurance shall name Landlord
as an additional insured and shall not be cancelable without at least 30 days'
prior written notice to Landlord.

     (h)  Tenant shall cause Contractor to use ACCO and CBF, Inc., for its HVAC
and electrical work, respectively.

     (i)  If Tenant shall request any change, addition or alteration in Tenant's
Work from the Approved Plans approved by Landlord, Tenant's Architect (as
hereinafter defined) shall prepare plans and specifications with respect to such
change, addition or alteration, which plans and specifications shall be
submitted to Landlord and shall be subject to Landlord's prior written approval,
which approval may be withheld in Landlord's sole discretion. Only new and
first-class materials shall be used in the construction of the Improvement Work,
except with the written consent of Landlord.

     (j)  Trash removal will be done continually at Tenant's cost and expense.
No trash, or other debris, or other waste may be deposited at any time outside
the Premises. If so, Landlord

                                      3.
<PAGE>

may remove it at Tenant's expense, which expense shall equal the cost of removal
plus twenty-five percent (25%) of such costs as a management fee.

     (k)  Storage of Tenant's contractors' construction materials, tools and
equipment shall be confined within the Premises.

     (l)  Landlord shall have the right to post in a conspicuous location on
Tenant's Premises, as well as record with the City and County of San Francisco,
a Notice of Nonresponsibility.

     (m)  Tenant shall, upon completion of its work, submit to Landlord two (2)
complete sets of plans (one in electronic format compatible with AutoCAD Release
14 or earlier) and specifications covering all of the Improvement Work,
including architectural, electrical, and plumbing, as built.

     3.   Tenant Improvement Allowance.
          ----------------------------

     (a)  Landlord shall provide Tenant with a cash tenant improvement allowance
(the "Tenant Improvement Allowance") of up to $431,860. The Tenant Improvement
Allowance shall be applied to hard costs of construction and for Tenant's
architectural and engineering expenses in connection with the Improvement Work.
Tenant shall bear and pay the cost of the Improvement Work in excess of the
Tenant Improvement Allowance payable to Tenant. Based upon applications for
payment prepared, certified and submitted by Tenant, Landlord shall make a
progress payments from the Tenant Improvement Allowance in accordance with the
provisions of this Paragraph 3.

     (b)  As a condition to the first disbursement of the Tenant Improvement
Allowance, all of the following conditions must be satisfied:

          (i)  Tenant shall have delivered to Landlord duly executed originals
of each of (A) the agreement between Tenant and the licensed architect
("Tenant's Architect") engaged by Tenant and approved by Landlord, in its
reasonable discretion, for the design and oversight of the Improvement Work (the
"Architect Agreement") and (B) the guaranteed maximum cost contract with
Contractor for the construction of the Improvement Work (the "Tenant Improvement
Contract").

          (ii) Landlord shall have approved the budget for the Improvement Work.

                                      4.
<PAGE>

The Approved Plans shall have been completed and approved.

          (iii) Tenant shall have obtained and be in compliance with all
Permits.

     (c)  Not later than the 25th day of each month Tenant shall submit
applications for payment to Landlord in a form satisfactory to Landlord,
certified as correct by an officer of Tenant and by Tenant's Architect, for
payment of that portion of the cost of the Improvement Work allocable to
expenses reimburseable from the Tenant Improvement Allowance incurred during the
period from the first day of the same month projected through the last day of
the month. Each application for payment shall set forth such information and
shall be accompanied by such supporting documentation as shall be requested by
Landlord, including the following:

          (i)   Fully executed conditional lien releases in the form prescribed
by law from the Contractor and all subcontractors and suppliers furnishing labor
or materials during such period and fully executed unconditional lien releases
from all such entities covering the prior payment period.

          (ii)  Contractor's worksheets showing percentages of completion,
detailing the portion of the work completed and the portion not completed, and
the ten percent (10%) retainage to be held by Tenant pursuant to the Tenant
Improvement Contract until substantial completion of the Improvement Work.

          (iii) Contractor's certification as follows:

                "There are no known mechanics' or materialmen's liens
outstanding at the date of this application for payment, all due and payable
bills with respect to the Building have been paid to date or shall be paid from
the proceeds of this application for payment, and there is no known basis for
the filing of any mechanics' or materialmen's liens against the Building, and,
to the best of our knowledge, waivers from all subcontractors are valid and
constitute an effective waiver of lien under applicable law to the extent of
payments that have been made or shall be made concurrently herewith."

          (iv)  All documents necessary to effect and perfect the transfer of
title to the materials or equipment for which application for payment is made.

          (v)   Invoices for labor rendered and materials delivered to the
Premises.

     (d)  On or before the 25th day of the month following submission of the
application for payment, Landlord shall make payment to Tenant of an amount
equal to the Tenant Improvement

                                      5.
<PAGE>

Portion (as hereinafter defined) less the Retained Amount (as hereinafter
defined), provided that, (A) no default exists under the Lease, (B) no default
exists under either of the Tenant Improvement Contract or the Architect
Agreement, (C) no lien has been filed with respect to the Improvement Work that
has not been released, (D) Tenant is in compliance with all Permits, (E) all
insurance required hereunder and under the Lease is in full force and effect and
(F) Landlord does not dispute any request for payment based on non-compliance of
any work with the Approved Plans or due to any substandard work, or for any
other reason. Landlord has no obligation to make any payments to Contractor's
material suppliers or subcontractors or to determine whether amounts due them
from Contractor in connection with the Improvement Work have, in fact, been
paid. As used herein, the "Tenant Improvement Portion" shall be equal to the
amount requested by Tenant in the application for payment multiplied by a
fraction, the numerator of which is the amount of the Tenant Improvement
Allowance and the denominator of which is the total cost of the Improvement Work
as set forth in the Tenant Improvement Contract. Tenant agrees that Landlord
shall have the right, at all times prior to Tenant's satisfaction of all
conditions precedent to Landlord's final disbursement of the Tenant Improvement
Allowance, to withhold from each payment to Tenant of the Tenant Improvement
Portion an amount equal to ten percent (10%) of each such Tenant Improvement
Portion (the "Retained Amount"), which Retained Amount shall not be paid to
Tenant until all of the conditions set forth in Paragraph 3(e) below are
completed to Landlord's satisfaction.

     (e)  In addition to the requirements set forth above, as a condition to the
final disbursement of the Tenant Improvement Allowance, all of the following
conditions must be satisfied:

          (i)   The Improvement Work shall have been completed to the reasonable
satisfaction of Landlord.

          (ii)  Tenant shall have obtained and be in compliance with all
Permits, and have provided Landlord with a copy of each Permit fully and finally
approved by the appropriate authority.

          (iii) Tenant shall submit an application for payment to Landlord,
certified as correct by Tenant, setting forth such information and accompanied
by such supporting documentation as shall be reasonably requested by Landlord.

                                      6.
<PAGE>

          (iv)  Tenant shall have provided, to Landlord's satisfaction, all
items required in Paragraph 4 below.

     (f)  On or before the 30th day following submission of the application for
payment in full satisfaction of all conditions set forth in clause (e)
immediately above, Landlord shall make payment to Tenant of the final amount due
Tenant, including the Retained Amount.

     (g)  Notwithstanding anything contained herein, in no event shall Landlord
be obligated to make payments in excess of the Tenant Improvement Allowance.

     (h)  Landlord's payment of any amounts of the Tenant Improvement Allowance
shall in no event be deemed to be Landlord's approval or acceptance of the work
furnished or materials supplied as set forth in Tenant's payment request.

     4.   Evidence of Completion of Improvement Work. Upon the completion of the
          ------------------------------------------
Improvement Work, Tenant shall:

     (a)  Submit to Landlord a detailed breakdown of Tenant's final and total
construction costs, together with receipted evidence showing payment thereof,
satisfactory to Landlord.

     (b)  Submit to Landlord certifications from Contractor and Tenant's
architect that the Improvement Work has been substantially completed in
accordance with the Approved Plans.

     (c)  Submit to Landlord copies of final and unconditional lien releases
from all contractors and subcontractors.

     (d)  Submit to Landlord all evidence from governmental authorities showing
compliance with any and all other laws, orders and regulations of any and all
governmental authorities having jurisdiction over the Premises, including,
without limitation, authorization for physical occupancy of the Premises.

     (e)  Submit to Landlord the as-built plans and specifications referred to
above.

                                      7.
<PAGE>

                               LANDLORD'S RULES
                               ----------------

     1.   Signs. No sign, placard, picture, advertisement, name or notice shall
          -----
be inscribed, displayed, printed or affixed on or to any part of the outside or
inside of the Building without the written consent of Landlord first had and
obtained, and Landlord shall have the right to remove any such sign, placard,
picture, advertisement, name or notice, without notice to and at the expense of
Tenant.

     2.   Building Directory. The directory of the Building will be provided
          ------------------
exclusively for the display of the name and location of Tenant and other tenants
in the building and Landlord reserves the right to exclude any other names
therefrom. Any changes by Landlord made to such a directory at the request of
Tenant shall be at Tenant's expense. Tenant shall have the right to use up to 21
strips in such directory.

     3.   Locks. No additional locks shall be placed upon any doors of the
          -----
Premises, and Tenant agrees not to have any duplicate keys made without the
consent of Landlord. An initial quantity of keys shall be provided to Tenant as
provided in Exhibit B of the Lease; additional keys shall be paid for by Tenant.
Upon termination of the Lease, Tenant shall surrender all keys.

     4.   Wiring. When wiring of any kind is introduced, it must be connected as
          ------
directed by Landlord, and no boring or cutting for wires will be allowed except
with the consent of Landlord. The location of telephones, electrical outlets,
and other office equipment affixed to the Premises shall be prescribed by
Landlord.

     5.   Landlord's Non-Responsibility. Landlord is not responsible to any
          -----------------------------
tenant for the non-observance or violation of the rules and regulations by any
other tenant.

     6.   Obstructing Light. Tenant shall not allow anything to be placed
          -----------------
against or near the glass in the partitions or in the doors between the Premises
leased and in the halls or corridors. The doors between the Premises and the
corridors of the Building shall at all times, except when in actual use for
ingress and egress, be kept closed.

     7.   Halls and Stairways. The entries, passages, stairways, and elevators
          -------------------
shall not be obstructed by Tenant or used for any purpose other than ingress and
egress of persons to and from the respective offices. Tenant shall not bring
into or keep within the Premises any animal or vehicle.

     8.   Plumbing. The wash-bowls, water closets, and urinals shall not be used
          --------
for any purpose other than those for which they were constructed.

                                      1.
<PAGE>

     9.   Closing Precautions. Before leaving the Building, Tenant shall cause
          -------------------
(a) all doors of the Premises to be closed and securely locked, (b) all water
faucets or water apparatus to be shut off, and (c) all unused electrical or gas
appliances to be shut off, all so as to prevent waste or damage.

     10.  Moving Equipment Safes, etc. No freight, furniture, supplies, books or
          ---------------------------
equipment of any kind shall be brought into or removed from the Building without
the consent of Landlord or Landlord's agent and all moving of same into or out
of the Building by Tenant shall be done at such times and in such manner as
Landlord shall designate (and unless otherwise expressly designated by Landlord,
the freight elevator not any passenger elevator shall be used for any and all
moving of the same). Landlord shall have the right to prescribe the weight,
size, and position of all safes and other heavy property brought into the
Building, and also the times and manner of moving the same in and out of the
Building. Landlord will not be responsible for loss of or damages to any such
safe or property from any cause and all damage done to the Building by moving or
maintaining any such safe or property shall be repaired at the expense of
Tenant.

     11.  Janitor Service. No Tenant shall employ any person or persons other
          ---------------
than the janitor of Landlord for the purpose of cleaning the Premises unless
otherwise agreed to by Landlord in writing. Except with the written consent of
Landlord, no person or persons other than those approved by Landlord shall be
permitted to enter the Building for the purpose of cleaning the same. No Tenant
shall cause any unnecessary labor by reason of such Tenant's carelessness or
indifference in the preservation of good order and cleanliness. Janitor service
shall include ordinary dusting, cleaning, and vacuuming by the janitor assigned
to such work and shall not include beating of carpets or rugs or moving of
furniture or other special services. Window cleaning shall be done only by
Landlord, and at such intervals and such hours as Landlord shall deem
appropriate.

     12.  Violation of Rules. Landlord reserves the right to exclude or expel
          ------------------
from the Building any person who, in the judgment of Landlord, is intoxicated or
under the influence of liquor or drugs, or who shall in any manner do any act in
violation of any of the rules and regulations of the Building.

     13.  Requirements. The requirements of Tenant will be attended to only upon
          ------------
application at the office of the Building. Employees of Landlord shall not
perform any work or do anything outside of their regular duties unless under
special instructions from the office, and no

                                      2.
<PAGE>

employee will admit any person (tenant or otherwise) to any office without
specific instructions from the office of the Building.

     14.  Rooms Used in Common. Rooms used in common by tenants shall be subject
          --------------------
to such regulations as are posted therein.

     15.  Entrance Doors. Landlord reserves the right to close and keep locked
          --------------
all entrance and exit doors of the Building during such hours as Landlord may
deem to be advisable for the adequate protection of the Building, provided,
however, that retail tenants shall have access and be responsible for entrance
and exit doors to their own Premises. Tenants who require access to the Building
during hours outside of the normal hours of operation as stated in Rule 16 shall
make arrangements with the Building manager.

     16.  Hours of Operation. The normal hours of operation for the Building
          ------------------
will be Monday through Friday (excluding holidays) from 7:00 a.m. to 6:00 p.m.

     17.  Food. Tenant shall not prepare or sell, or permit to be prepared or
          ----
sold, any food in the Premises, except that Tenant may (a) prepare coffee, teas
and like beverages for consumption by Tenant's employees on the Premises and (b)
prepare food in a microwave oven, provided that Tenant in so doing nevertheless
shall comply at all times with the provisions of Section 4 of the Lease.

                                      3.<PAGE>

                                                                    EXHIBIT 10.8

                                LEASE AGREEMENT
                                ----- ---------

BY AND BETWEEN:

FIRST INDUSTRIAL, L.P.,
a Delaware limited partnership,

                                  "Landlord"

                                    - and -

2BRIDGE SOFTWARE, INC.
a California corporation,

                                   "Tenant"

Premises: 11C PRINCESS ROAD
          LAWRENCEVILLE, NEW JERSEY

DATED: Dec. 7th, 1999

PREPARED BY: ROBERT K. BROWN, ESQ.

November 23, 1999 (mf)
<PAGE>

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<S>                                                         <C>
1.    LEASED PREMISES                                        1

2.    TERM OF LEASE                                          2

3.    RENT                                                   4

4.    PARKING AND USE OF EXTERIOR AREA                       5

5.    USE                                                    5

6.    CONDITION OF LEASED PREMISES                           5

7.    REPAIRS AND MAINTENANCE                                6

8.    UTILITIES                                              9

9.    TAXES                                                  9

10.   INSURANCE                                             11

11.   SIGNS                                                 14

12.   FIXTURES                                              14

13.   BROKERAGE                                             15

14.   FIRE AND CASUALTY                                     15

15.   COMPLIANCE WITH LAWS, RULES AND REGULATIONS           16

16.   INSPECTION BY LANDLORD                                20

17.   DEFAULT BY TENANT                                     20

18.   LIABILITY OF TENANT FOR DEFICIENCY                    23

19.   NOTICES                                               23

20.   NON-WAIVER                                            24

21.   RIGHT OF TENANT TO MAKE ALTERATIONS AND IMPROVEMENTS  24

22.   NON-LIABILITY OF LANDLORD                             25

23.   RESERVATION OF EASEMENT                               25
</TABLE>
<PAGE>

<TABLE>
<S>                                                                   <C>
24.   POLLUTION                                                       26

25.   STATEMENT OF ACCEPTANCE                                         26

26.   FORCE MAJEURE                                                   27

27.   STATEMENTS BY LANDLORD AND TENANT                               27

28.   CONDEMNATION                                                    27

29.   LANDLORD'S REMEDIES                                             29

30.   QUIET ENJOYMENT                                                 30

31.   SURRENDER OF PREMISES                                           30

32.   INDEMNITY                                                       30

33.   LEASE CONSTRUCTION                                              31
</TABLE>
<PAGE>

<TABLE>
<S>                                                              <C>
34.    BIND AND INURE CLAUSE                                     31

35.    DEFINITIONS                                               31

36.    DEFINITION OF TERM OF "LANDLORD"                          32

37.    COVENANTS OF FURTHER ASSURANCES                           32

38.    COVENANT AGAINST LIENS                                    32

39.    SUBORDINATION                                             33

40.    EXCULPATION OF LANDLORD                                   33

41.    NET RENT                                                  33

42.    SECURITY                                                  34

43.    ASSIGNMENT AND SUBLETTING                                 34

44.    OPTION TO RENEW                                           37

45.    SECURITY MEASURES                                         38

46.    FINANCIAL STATEMENTS                                      38

47.    TENANCY REVIEW                                            38

48.    EXECUTION AND DELIVERY                                    39
</TABLE>

Schedule "A" - Site Plan
<PAGE>

     THIS AGREEMENT, made the day of 199 , by and between FIRST INDUSTRIAL,
L.P., a Delaware limited partnership, having an office at 354 Eisenhower
Parkway, Livingston, New Jersey 07039 (having a mailing address at P.O. Box
1639, Livingston, New Jersey 07039), hereinafter called the "Landlord"; and
2BRIDGE SOFTWARE, INC., a California corporation, about to have an office at 11
Princess Road, Lawrenceville, New Jersey 08532, hereinafter called the "Tenant".

                                  WITNESSETH:
                                  -----------

     WHEREAS, the Landlord intends to lease to the Tenant Suite C, in the
building commonly known as 11 Princess Road, Lawrenceville, New Jersey,
hereinafter referred to as the "Building", which Suite contains approximately
5,000 square feet, outside outside dimensions to center line of common wall,
identified on the plot plan attached hereto and made a part hereof as Schedule
"A", hereinafter referred to as the "Leased Premises"; and

     WHEREAS, the parties hereto wish to mutually define their rights, duties
and obligations in connection with the said lease,

     NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that for the rents
reserved, the mutual considerations herein and the parties mutually intending to
be legally bound hereby, the Landlord does demise, lease and let unto the Tenant
and the Tenant does rent and take from the Landlord the Leased Premises as
described in Article 1, and the Landlord and Tenant do hereby mutually covenant
and agree as follows:

     1.   LEASED PREMISES
          ---------------

          1.1  The Leased Premises shall consist of Suite C located in the
Building, which Suite contains approximately 5,000 square feet outside
dimensions to center line of common wall, identified on the plot plan attached
hereto and made a part hereof as Schedule "A", together with all easements,
improvements, tenements, appurtenances, hereditament, fixtures and rights and
privileges appurtenant thereto, and any and all fixtures and equipment which
have been installed in said Building by the
<PAGE>

Landlord for the use of the Tenant in its occupancy of the Leased Premises.

          1.2  The Building is a part of the complex (the "Complex") upon which
Landlord has constructed three (3) additional buildings in addition to the
Building. The Complex comprises one designated lot and block (hereinafter
referred to as the "Property") as reflected on the Official Tax Map of the
Township of Lawrenceville. To the extent that Tenant shall be responsible under
this lease for Tenant's percentage of costs attributable to the Building only,
the same shall hereinafter be referred to as the "Building Percentage". To the
extent that Tenant's percentage of costs shall be applicable to the Property
(including the common areas thereof), exclusive of the Building and the other
buildings which have been constructed by Landlord, such Tenant's percentage
shall hereinafter be referred to as the "Common Area Percentage". For the
purposes of this lease the total gross rentable area of the Building is 55,000
square feet, and the total gross rentable area of all of the buildings on the
Complex is 118,750 square feet. The Building Percentage has been established at
9.1% and the current Common Area Percentage has been established at 4.2%. In the
event of any change in the size of the Leased Premises, Building or the Complex,
the Landlord shall certify to Tenant the resulting gross rentable area of the
Building, the Leased Premises and the Complex. If the certification indicates
applicable gross rentable area of the Leased Premises, Building and/or Complex
at variance with the square footage used to initially establish the Common Area
Percentage and the Building Percentage, Landlord and Tenant shall enter into a
lease amendment to reflect any required revisions and adjustment of such
applicable percentages, or any other applicable lease terms.

     2.   TERM OF LEASE
          -------------

          The Landlord leases unto the Tenant and the Tenant hires the Leased
Premises for the term of three (3) years, to commence on or about December 1,
1999, and to end on November 30, 2002, the

                                       2
<PAGE>

obligation of the Tenant hereunder being subject to the following proviso:

          2.1  That on or about December 1, 1999, the Landlord shall have
delivered to the Tenant a Certificate of Occupancy issued by the authorized
issuing officer of the governmental instrumentality having jurisdiction thereof.
Upon the delivery by the Landlord to the Tenant of the Leased Premises, and the
Certificate of Occupancy hereinabove mentioned, the lease term shall commence
and the Tenant's obligation to pay rent shall begin (subject to the provisions
of Article 2.2 hereof).

          2.2  Subject to the terms and conditions of this lease, in the event
the Leased Premises are delivered to the Tenant in the manner provided in
Article 2.1 above, prior to or after December 1, 1999, the lease term of three
(3) years shall commence on the first day of the next succeeding month following
delivery of possession to the Tenant (hereinafter called the "Commencement
Date") and shall continue for a term of three (3) years thereafter. The Tenant
shall, however, pay to the Landlord a sum equal to the pro rata share of one (1)
month's rent for that portion of the month prior to the Commencement Date.
During said period of partial monthly occupancy, if any, all other terms and
conditions of this lease shall be applicable to the occupancy of the Leased
Premises by the Tenant.

          2.3  In the event the Landlord has not delivered the Leased Premises
to Tenant within sixty (60) days of the later of (a) full execution of this
lease and (b) delivery by Tenant to Landlord of any executed application and/or
any other documentation required in order to obtain a certificate of occupancy.
Tenant acknowledges that the ability of the Landlord to deliver the Leased
Premises to the Tenant shall not be delayed due to the unavailability of the
carpet or paint selected by the Tenant. In such event, Tenant shall timely make
alternate choices of building standard carpet and paint in lieu of the
selections originally made.

                                       3
<PAGE>

     3.   RENT
          ----

          3.1  The Tenant covenants and agrees to pay, in good and useable
funds, the annual rent ("Base Rent") as follows:

          (a)  During the first (1st) and second (2nd) years of the lease term,
Tenant shall pay Base Rent in the amount of SIXTY THOUSAND AND 00/100
($60,000.00) DOLLARS per annum, in equal installments in the sum of FIVE
THOUSAND AND 00/100 ($5,000.00) DOLLARS per month.

          (b)  During the third (3rd) year of the lease term, Tenant shall pay
Base Rent in the amount of SIXTY ONE THOUSAND TWO HUNDRED FIFTY AND 00/100
($61,250.00) DOLLARS per annum, in equal monthly installments in the sum of FIVE
THOUSAND ONE HUNDRED FOUR AND 17/100 ($5,104.17) DOLLARS.

          All of the foregoing monthly payments shall be made promptly in
advance on the first day of each and every month during the term of the lease
without demand and without off-set or deduction, together with such additional
rent and other charges ("Additional Rent") required to be paid by Tenant as are
herein-after set forth.

          3.2  Simultaneously with the execution hereof, the Tenant has
delivered to the Landlord the first monthly installment of Base Rent payable
hereunder, together with the security deposit referred to herein.

          3.3  Any installment of Base Rent or Additional Rent accruing
hereunder (collectively "rent"), and any other sum payable hereunder by Tenant
to Landlord which is not paid prior to the fifth (5th) day of any lease month,
shall bear a late charge of eight (8%) per cent of such Base Rent or Additional
Rent, to be paid therewith, and the failure to pay such charge shall be a
default. Such late charge shall be deemed to be Additional Rent hereunder. It is
expressly understood and agreed that the foregoing late charge is not a penalty,
but agreed upon compensation to the Landlord for administrative costs incurred
by Landlord in connection with any such late payment. In addition,

                                       4
<PAGE>

any payment of Base Rent or Additional Rent, which is not paid within thirty
(30) days of the date upon which it is due shall require the payment of interest
at the rate of fifteen (15%) percent per annum, calculated from the date that
such payment was due through the date that any such payment is actually made.

     4.   PARKING AND USE OF EXTERIOR AREA
          --------------------------------

          4.1  The Tenant shall have the right, at no additional cost, to use
the parking spaces on a non-exclusive basis in common with other tenants of the
Complex and to use the access driveways and allocated parking spaces for its
business purposes and for those of its agents, servants, employees or invitees.
The Landlord reserves the right to allocate designated parking spaces if
Landlord chooses. The Landlord and Tenant mutually agree that they will not
block, hinder or otherwise obstruct the access driveways and parking areas so as
to impede the free flow of vehicular traffic in and out of the Complex. In
connection with the use of the loading platforms, if any, both Landlord and
Tenant agree that they will not use the same in connection with the conduct of
their business so as to unreasonably interfere with the use of the access
driveways and parking areas.

          4.2  The Tenant may not utilize any portion of the land outside of the
Leased Premises for outside storage of raw materials or finished products.

     5.   USE
          ---

          The Tenant covenants and agrees to use and occupy the Leased Premises
for office and warehouse purposes only, which use by Tenant, however, is and
shall be expressly subject to all applicable zoning ordinances, rules and
regulations of any governmental instrumentalities, boards or bureaus having
jurisdiction thereof.

     6.   CONDITION OF LEASED PREMISES
          ----------------------------

          6.1  Anything herein contained to the contrary notwithstanding, it is
expressly understood and agreed that the Tenant shall take the Leased Premises
and improvements as of the

                                       5
<PAGE>

Commencement Date of the within lease in an "as is" condition, except that
Landlord shall, prior to the delivery of the Leased Premises, recarpet the
existing office area, and also repaint the same, using building standard
materials

          6.2  In the event that any changes or additions are required to the
Leased Premises by any governmental or quasi governmental entity having
jurisdiction over the Tenant, or its use and occupancy of the Leased Premises,
including any required modification to the fire suppression system serving the
same, any such changes or additions shall be performed by the Landlord at the
Landlord's sole cost and expense unless the same is required due to Tenant's
particular use of the Leased Premises. In addition, in the event that the
performance of any such changes or additions required due to Tenant's particular
use of the Leased Premises shall delay the Commencement Date hereunder, the
Commencement Date shall be established as of the date that the Leased Premises
would otherwise have been delivered by the Landlord to Tenant, but for such
additional requirements which are applicable to the Tenant.

     7.   REPAIRS AND MAINTENANCE
          -----------------------

          7.1  The Tenant shall take good care of the Leased Premises and, at
its cost and expense, keep and maintain in good repair the interior of the
Leased Premises, including all repairs to the floor, the air-conditioning and
heating plant, the plumbing, pipes, sewer lines and conduits, and fixtures
belonging thereto; and shall replace all air-conditioning, electrical, heating
and plumbing plants, fixtures and systems, including mechanical and working
parts as may be required; and shall replace all ballasts and fluorescent
fixtures; and shall maintain interior water and sewer pipes and connections, and
shall generally maintain and repair the interior of the Leased Premises, and
shall, at the end or the expiration of the term, deliver up the Leased Premises
in good order and condition, damages by fire or casualty, the elements and
ordinary wear and tear excepted. The Tenant expressly agrees that it shall enter
into a periodic maintenance agreement with a

                                       6
<PAGE>

reputable heating, ventilating and air-conditioning contractor, which contract
shall provide for a minimum of two (2) inspections per year. A copy of said
contract shall be forwarded to the Landlord prior to the Commencement Date and
thereafter on an annual basis, and copies of inspection reports shall be
delivered to the Landlord within ten (10) days of receipt thereof by Tenant. The
Tenant covenants and agrees that it shall not cause or permit any waste (other
than reasonable wear and tear), damage or disfigurement to the Leased Premises,
or any overloading of the floors of the Building, constituting part of the
Leased Premises. Tenant shall reimburse Landlord in connection with exterior
maintenance and repairs as hereinafter provided in Article 7.2.

          7.2  The Tenant shall pay to the Landlord monthly, as Additional Rent,
a sum equal to Tenant's Common Area Percentage of costs incurred by the Landlord
for the management, maintenance, repair and replacement of the following: (i)
parking lot and roadways, driveways, sidewalks, walkways, exterior lighting;
(ii) exterior sewer and utility lines; (iii) lawns and shrubbery; (iv) snow
removal; (v) signs serving the Complex; and (vi) detention ponds. In addition
the Tenant shall pay the Landlord monthly, as Additional Rent, Tenant's Building
Percentage of costs incurred by the Landlord for the maintenance, repair and
replacement of the following: roof, gutters, leaders, flashings, metal gravel
stops and roof drains. Landlord shall be responsible at its sole cost for the
maintenance, repair and replacement of the exterior walls, load bearing interior
walls and the foundation of the Leased Premises unless arising from the
negligence or willful misconduct of Tenant, its agents, employees or
contractors. Landlord shall be solely responsible for the cost of repairing
original construction defects and the costs of repairs and replacements incurred
by reason of fire or other casualty. Notwithstanding the above, the cost of any
replacement of the roof of the Building, exterior sewer and utility lines,
repaving of the parking lot or replacement of the heating, ventilating and air
conditioning system shall be each

                                       7
<PAGE>

amortized on a straight line basis over its useful life which is deemed to be
ten (10) years in each instance and Tenant shall be responsible to reimburse the
Landlord for that portion of such amortized costs as is applicable to the then
remaining term of this lease based on Tenant's Common Area Percentage. In the
event of any subsequent renewal or extension of this lease, Tenant shall be
responsible to reimburse the Landlord for that portion of such amortized costs
which is applicable to the renewal or extension term based on Tenant's Common
Area Percentage.

          7.3  During the first year of the lease term, the Landlord shall
estimate the cost of all of the management, maintenance, repair and replacement
services required pursuant to Article 7.2 above, inclusive of management fees.
Landlord shall furnish such estimate to the Tenant, and Tenant shall pay to
Landlord one-twelfth (1/12th) of its Common Area Percentage or Building
Percentage thereof, as applicable, during each month of the lease year as
Additional Rent. At the expiration of the first twelve (12) months of the lease
term, the Landlord shall furnish to Tenant a breakdown, certified by the
Landlord, as to the total cost of management, maintenance, repair and
replacement for the prior twelve (12) months. Upon Landlord's receipt of a
written request from Tenant within sixty (60) days after Tenant's receipt of the
annual certified statement, the Landlord shall forward copies of all relevant
invoices, contracts and other documentation in support of the Landlord's
certified statement for Tenant's review. In the event Tenant's pro rata share
shall be more than the aggregate paid by the Tenant during the preceding twelve
(12) month period, Tenant shall pay to the Landlord, in one lump sum, any
difference in such obligation, said sum to be paid within fifteen (15) days
after demand. In the event Tenant shall have overpaid its pro rata share, any
such overage shall be applied to the monthly management, maintenance, repair and
replacement charges prospectively due under the lease. This procedure shall be
followed during each year of the lease term, and at the expiration of the lease,
any overage or

                                       8
<PAGE>

underage shall be credited or paid after computation by the Landlord, which
obligation of Landlord and Tenant shall survive the expiration of the lease
term.

          7.4  The Tenant expressly covenants and agrees to replace any broken
glass in the windows or other apertures of the Leased Premises which become
damaged or destroyed, at Tenant's sole cost and expense.

     8.   UTILITIES
          ---------

          8.1  The Tenant shall, at its own cost and expense, pay all utility
meter and service charges applicable to the Leased Premises, including gas,
sewer, electric, water, janitorial and garbage disposal services and Tenant's
Building Percentage of standby sprinkler charges, if any. It is understood and
agreed that if the Leased Premises are not separately metered for any utility
service, the Tenant shall pay its pro rata share of the charges indicated by the
applicable utility meter serving the Leased Premises, based upon the
relationship between the gross rentable area of the Leased Premises and the
gross rentable area of all of the premises served by said utility meter.

          8.2  The Landlord is hereby granted the privilege of entering the
Leased Premises for the purpose of repairing any utility lines which serve the
Leased Premises. Any entry shall be upon reasonable prior oral notice except in
the event of emergency.

     9.   TAXES
          -----

          9.1  The Tenant, in addition to the rent reserved, shall, during the
term of the lease, promptly pay to the Landlord, monthly, in advance, its
proportionate part of all real estate and personal property taxes assessed
against the Complex for land, buildings and improvements. Said obligation shall
be prorated as of the commencement and expiration of the lease term. In addition
to the obligation to pay real estate taxes as hereinabove set forth, the Tenant
shall, during the term of this lease, pay to the Landlord monthly, in advance,
its proportionate part of any levy for the installation of local improvements
affecting the Complex as

                                       9
<PAGE>

may be assessed by any governmental body having jurisdiction thereof. The real
estate tax obligation of the Tenant shall include any tax or imposition for
parking lot usage which may be levied by any governmental body having
jurisdiction thereof. For the purpose of this Lease Tenant's obligation to pay
taxes assessed against the land shall be based on the Common Area Percentage
applied to the assessed valuation of the land, and resultant taxes produced, and
if the Building is assessed separately Tenant's obligation for such portion of
the real estate taxes shall be based on the Building Percentage of such tax. If
however, all of the buildings in the Complex are not separately assessed the
Tenant's obligations shall be equal to the Common Area Percentage of the real
estate tax attributable thereto.

          9.2  The Landlord may contest any assessment or levy of taxes on the
Complex. A contest conducted by the Landlord may include the Complex and other
land and buildings owned by the Landlord. The Tenant shall have no right to
prosecute a tax appeal affecting the Complex.

          9.3  If at any time during the term of this lease the method or scope
of taxation prevailing at the commencement of the lease term shall be altered,
modified or enlarged so as to cause the method of taxation to be changed, in
whole or in part, so that in substitution for the real estate taxes now assessed
there may be, in whole or in part, a capital levy or other imposition based on
the value of the Complex, or the rents received therefrom, or some other form of
assessment based in whole or in part on some other valuation of the Complex,
then and in such event, such substituted tax or imposition shall be payable and
discharged by the Tenant in the manner required pursuant to such law promulgated
which shall authorize such change in the scope of taxation, and as required by
the terms and conditions of the within lease.

          9.4  Nothing in this lease contained shall require the Tenant to pay
any franchise, estate, inheritance, succession, capital levy or transfer tax of
the Landlord, or Federal Income

                                       10
<PAGE>

Tax, State Income Tax, or excess profits or revenue tax, unless such taxes are
in substitution for real property taxes.

          9.5  The Tenant shall pay to Landlord monthly, as Additional Rent,
one-twelfth (1/12th) of Tenant's proportionate share of annual real estate taxes
and assessments to be paid by Tenant, as provided in Article 9.1 above. Landlord
shall adjust Tenant's rent payment from time to time based on annual tax
requirements, and Landlord shall furnish to Tenant, if requested, a computation
and breakdown of Tenant's tax obligation.

     10.  INSURANCE
          ---------

          10.1 The Tenant agrees to pay monthly, in advance, as Additional Rent,
Tenant's Building Percentage of the annual insurance premium or premiums charged
to the Landlord for insurance coverage which insures the Building. The insurance
shall be for the full replacement value of all insurable improvements with any
customary extensions of coverage including, but not limited to, vandalism,
malicious mischief, sprinkler damage, flood insurance and comprehensive
liability for the whole of the land, Building and improvements of which the
Leased Premises are a part, including Landlord's cost for umbrella insurance
(excess coverage) in an amount not to exceed FIFTEEN MILLION ($15,000,000.00)
DOLLARS. Tenant shall pay the full premium attributable to casualty rent
insurance, insuring the value of one (1) year's gross rental obligation of
Tenant hereunder, including taxes and insurance premiums. Any increase in the
premiums hereinabove referred to due to change in rating of the Building,
attributable to the use of the Leased Premises by the Tenant shall be paid
entirely by the Tenant. Landlord shall certify annually, the annual cost of such
insurance premiums, and shall furnish to Tenant, if requested, a copy of all
insurance premium bills for which Tenant has been charged its pro rata share
thereof.

          10.2 Tenant shall provide the following insurance coverage:

                                       11
<PAGE>

               (a)  "All Risk" property insurance on a replacement cost basis,
covering all of Tenant's personal property, trade fixtures, furnishings and
equipment and all leasehold improvements installed in the Leased Premises by, or
on behalf of, Tenant, all in an amount not less than the full replacement cost
of all such property. Landlord and any other parties designated by Landlord
(including, but not limited to, its beneficiary, its general and limited
partners, and Landlord's mortgagees) shall be included as loss payee(s).

               (b)  Commercial general public liability and comprehensive
automobile liability (and, if necessary to comply with any conditions of this
Lease, umbrella liability insurance) covering Tenant against any claims arising
out of liability for bodily injury and death and personal injury and advertising
injury and property damage occurring in and about the Leased Premises, and/or
the Property and otherwise resulting from any acts and operations of Tenant, its
agents and employees, with limits of not less than total limits of $2,000,000.00
per occurrence and $5,000,000.00 annual general aggregate, per location. The
total amount of a deductible or otherwise self-insured retention with respect to
such coverage shall be not more than $10,000.00 per occurrence. Such insurance
shall include, inter alia: (i) "occurrence" rather than "claims made" policy
forms unless such "occurrence" policy forms are not available; (ii) any and all
liability assumed by Tenant under the terms of this Lease, to the extent such
insurance is available; (iii) premises medical-operations expenses in an amount
not less than $5,000.00 per person, per accident; (iv) a hostile fire
endorsement; (v) Landlord and any other parties designated by Landlord or Agent
(including, but not limited to, its beneficiary, its general and limited
partners, and Landlord's mortgagees) shall be designated as Additional
Insured(s) with respect to (x) the Leased Premises, and (y) all operations of
Tenant, and (z) and Property and areas and facilities of Landlord used by
Tenant, its employees, invitees,

                                       12
<PAGE>

customers or guests; and (vi) severability of insured parties and any cross-
liability exclusion deleted so that the protection of such insurance shall be
afforded to Landlord in the same manner as if separate policies had been issued
to each of the insured parties.

               (c)  Workers' compensation and employer's liability insurance in
the state in which the Leased Premises and any other operations of Tenant are
located and any other state in which Tenant or its contractors or subcontractors
may be subject to any statutory or other liability arising in any manner
whatsoever out of the actual or alleged employment of others. The total limits
of the employer's liability coverage (including umbrella liability insurance)
shall not be less than the amounts specified in Subsection (b) above.

          All insurance policies required to be obtained by Tenant under this
lease shall: (i) be issued by companies licensed to do business in the State in
which the Property is located and acceptable to Landlord and any Landlord's
mortgagees and any other party having any interest in the Property; (ii) not be
subject to cancellation or material change or non-renewal without at least
thirty (30) days' prior written notice to Landlord and any other parties
designated by Landlord (A) to be loss payee(s) or additional insured(s) under
the insurance policies required from Tenant, or (B) to receive such notices; and
(iii) be deemed to be primary insurance in relation to any other insurance
maintained by Landlord.

          10.3 Notwithstanding anything to the contrary in this lease, the
parties hereto mutually covenant and agree that each party, in connection with
insurance policies required to be furnished in accordance with the terms and
conditions of this lease, or in connection with insurance policies which they
obtain insuring such insurable interest as Landlord or Tenant may have in its
own properties, whether personal or real, shall expressly waive any right of
subrogation on the part of the insurer against the

                                       13
<PAGE>

Landlord or Tenant as the same may be applicable, which right to the extent not
prohibited or violative of any such policy is hereby expressly waived, and
Landlord and Tenant each mutually waive all right of recovery against each
other, their agents, or employees for any loss, damage or injury of any nature
whatsoever to property or person for which either party is required by this
lease to carry insurance.

     11.  SIGNS
          -----

          The Tenant shall have the right to install a sign on the entrance door
to the Leased Premises, subject to the prior written approval of the Landlord,
which approval shall not be unreasonably withheld. Said sign shall comply with
the applicable rules and regulations of all governmental boards and bureaus
having jurisdiction thereof. No other exterior signage of Tenant shall be
permitted.

     12.  FIXTURES
          --------

          The Tenant is given the right and privilege of installing and removing
property, machinery, equipment and fixtures in the Leased Premises during the
term of the lease subject to compliance with applicable rules and regulations of
governmental boards and bureaus having jurisdiction thereof, at the cost and
expense of Tenant. However, if the Tenant is in default and moves out, or is
dispossessed, and fails to remove any property, machinery, equipment and
fixtures or other property prior to such default, dispossess or removal, then
and in that event, the said property, machinery, equipment and fixtures or other
property shall be deemed, at the option of the Landlord, to be abandoned; or in
lieu thereof, at the Landlord's option, the Landlord may remove such property
and charge the reasonable cost and expense of removal, storage and disposal to
the Tenant, together with an additional twenty one (21%) per cent of such costs
for Landlord's overhead and profit, which total costs shall be deemed to be
additional rent hereunder. The Tenant shall be liable for any damage which it
causes in the removal of said property from the Leased Premises.

                                       14
<PAGE>

     13.  BROKERAGE
          ---------

          The parties mutually represent to each other that WEICHERT COMMERCIAL
REALTORS is the sole broker who negotiated and consummated the within
transaction, and that neither party dealt with any other broker in connection
with the within lease, it being understood and agreed that the Landlord shall be
responsible, at its sole cost and expense, to pay the real estate brokerage in
connection with this lease transaction. Landlord agrees to indemnify, defend and
save harmless Tenant in connection with the claims of any other real estate
brokers claiming commissions in connection with the within transaction and
claiming authority from Landlord. Tenant agrees to indemnify, defend and save
harmless Landlord in connection with the claims of any other real estate brokers
claiming commissions in connection with the within transaction and claiming
authority from Tenant.

     14.  FIRE AND CASUALTY
          -----------------

          14.1 In case of any damage to the Building by fire or other casualty
occurring during the term or previous thereto, which renders the Leased Premises
wholly untenantable so that the same cannot be repaired within one hundred
eighty (180) days from the happening of such damage, then the term hereby
created shall, at the option of the Landlord or Tenant, terminate from the date
of such damage. If the Landlord or Tenant elects to terminate the lease, the
terminating party shall notify the other party of such election within thirty
(30) days of the happening of the fire or casualty, and in such event the Tenant
shall immediately surrender the Leased Premises and shall pay Base Rent and
Additional Rent only to the time of such damage and the Landlord may re-enter
and re-possess the Leased Premises, discharged from this lease. In the event the
Landlord can restore the Leased Premises within one hundred eighty (180) days,
it shall advise the Tenant of such fact, and the lease shall remain in full
force and effect during the period of Landlord's restoration, except that Base
Rent and Additional Rent shall abate, upon the happening of fire or

                                       15
<PAGE>

casualty, and while the repairs and restorations are being made, but the rent
shall recommence upon restoration of the Leased Premises and delivery of the
same by the Landlord to the Tenant. Landlord agrees that it will undertake
reconstruction and restoration of the Leased Premises with due diligence and
reasonable speed and dispatch, subject to the terms and conditions of Article 26
(Force Majeure).

          14.2 If the Building shall be damaged, but the damage is repairable
within one hundred eighty (180) days the Landlord agrees to repair the same with
due diligence and reasonable speed and dispatch subject to the terms and
conditions of Article 26 (Force Majeure). In such event, the rent accrued and
accruing shall not abate, except for that portion of the Leased Premises that
has been rendered untenantable and as to that portion the rent shall abate,
based on equitable adjustments.

          14.3 The Tenant shall immediately notify the Landlord in case of fire
or other damage to the Leased Premises.

          14.4 Notwithstanding anything contained in Article 14.1 or 14.2 above,
if such repairs are for any reason not completed within two hundred ten (210)
days, then the Tenant shall have the right to terminate this lease upon written
notice to the Landlord of such election, and in such event of termination
Landlord and Tenant shall thereupon be released of liability one to the other,
and the within lease shall be deemed null and void.

          14.5 Rent, as referred to in this Article 14, is intended to include
Base Rent, Additional Rent and all other lease charges required to be paid by
Tenant pursuant to this lease.

     15.  COMPLIANCE WITH LAWS, RULES AND REGULATIONS
          -------------------------------------------

          15.1 (i)   The Tenant covenants and agrees that upon acceptance and
occupancy of the Leased Premises, it will, during the lease term, promptly, at
Tenant's cost and expense, execute and comply with all statutes, ordinances,
rules, orders, regulations and requirements of the Federal, State and Municipal
governments and of any and all their instrumentalities, departments and

                                       16
<PAGE>

bureaus, applicable to the Leased Premises, as the same may require correction,
prevention and abatement of nuisances, violations or other grievances, in, upon
or connected with the Leased Premises, and/or arising from the operations of the
Tenant therein.

               (ii)  The Tenant covenants and agrees, at its own cost and
expense, to comply with such regulations or requests as may be required by the
fire or liability insurance carriers providing insurance for the Leased
Premises, and will further comply with such other requirements that may be
promulgated by the Board of Fire Underwriters, in connection with the use and
occupancy by the Tenant of the Leased Premises in the conduct of its business.

               (iii) The Tenant covenants and agrees that it will not commit any
nuisance, nor permit the emission of any objectionable sound, noise or odors
which would be violative of any applicable governmental rule or regulation or
would per se create a nuisance. The Tenant further covenants and agrees that it
will handle and dispose of all rubbish, garbage and waste in connection with the
Tenant's operations in the Leased Premises in accordance with reasonable
regulations established by the Landlord from time to time in order to keep the
premises in an orderly condition and in order to avoid unreasonable emission of
dirt, fumes, odors or debris which may constitute a nuisance or induce pests or
vermin.

               (iv)  Notwithstanding anything to the contrary contained in this
Article 15.1, Tenant shall have no obligation to alter or improve the Leased
Premises or any portion thereof to comply with any legal or insurance
requirement unless such requirement is triggered by the particular specific
manner in which Tenant uses the Leased Premises.

          15.2 In case the Tenant shall fail or neglect to comply with the
aforesaid statutes, ordinances, rules, orders, regulations and requirements or
any of them, or in case the Tenant shall neglect or fail to make any necessary
repairs, then the Landlord or the Landlord's agents may after ten (10) days'
notice (except for

                                       17
<PAGE>

emergency repairs, which may be made immediately) enter the Leased Premises and
make said repairs and comply with any and all of the said statutes, ordinances,
rules, orders, regulations or requirements, at the cost and expense of the
Tenant and in case of the Tenant's failure to pay therefor, the said cost and
expense shall be added to the next month's rent and be due and payable as such,
or the Landlord may deduct the same from the balance of any sum remaining in the
Landlord's hands. This provision is in addition to the right of the Landlord to
terminate this lease by reason of any default (beyond any applicable notice and
cure periods) on the part of the Tenant, subject to the rights of the Tenant as
herein-above mentioned in the manner as in this lease otherwise provided.

          15.3 Without limiting anything hereinabove contained in this Article
15, Tenant expressly covenants and agrees to fully comply with the provisions of
the New Jersey Industrial Site Recovery Act (N.J.S.A. 13:1K-6, et seq.)
hereinafter referred to as "ISRA", and all regulations promulgated thereto (or
under its predecessor statute, the New Jersey Environmental Cleanup
Responsibility Act) prior to the expiration or earlier termination of the within
lease or at any time that any action of the Tenant triggers the applicability of
ISRA. In particular, the Tenant agrees that it shall comply with the provisions
of ISRA in the event of any "closing, terminating or transferring" of Tenant's
operations, as defined by and in accordance with the regulations which have been
promulgated pursuant to ISRA. In the event evidence of such compliance is not
delivered to the Landlord prior to surrender of the Leased Premises by the
Tenant to the Landlord, it is understood and agreed that the Tenant shall be
liable to pay to the Landlord an amount equal to two times the annual Base Rent
then in effect, prorated on a monthly basis, together with all applicable
additional rent from the date of such surrender until such time as evidence of
compliance with ISRA has been delivered to the Landlord, and together with any
costs and expenses incurred by Landlord in enforcing Tenant's obligations under
this Article 15.3.

                                       18
<PAGE>

Evidence of compliance, as used herein, shall mean a "letter of non-
applicability" issued by the New Jersey Department of Environmental Protection,
hereinafter referred to as "NJDEP", or an approved "no further action letter" or
a "remediation action workplan" which has been fully implemented and approved by
NJDEP. Evidence of compliance shall be delivered to the Landlord, together with
copies of all submissions made to, and received from, the NJDEP, including all
environmental reports, test results and other supporting documentation. In
addition to the above, Tenant hereby agrees that it shall cooperate with
Landlord in the event of the termination or expiration of any other lease
affecting the Property, or a transfer of any portion of the property indicated
on Schedule "A", or any interest therein, which triggers the provisions of ISRA.
In such case, Tenant agrees that it shall fully cooperate with Landlord in
connection with any information or documentation which may be requested by the
NJDEP. In the event that any remediation of the Property is required in
connection with the conduct by Tenant of its business in the Leased Premises,
Tenant expressly covenants and agrees that it shall be responsible for that
portion of said remediation which is attributable to the Tenant's use and
occupancy thereof. Tenant hereby represents and warrants that its Standard
Industrial Classification No. is          , and that Tenant shall not generate,
manufacture, refine, transport, treat, store, handle or dispose of "hazardous
substances" as the same are defined under ISRA and the regulations promulgated
pursuant thereto. Tenant hereby agrees that it shall promptly inform Landlord of
any change in its SIC number or the nature of the business to be conducted in
the Leased Premises. Landlord hereby represents to the best of its knowledge
without making any independent inquiry that Landlord is not aware of any
environmental condition affecting the Property including the Leased Premises.
The Landlord hereby agrees that it shall indemnify, defend and save harmless the
Tenant from and against all claims or liabilities incurred in connection with
the environmental condition

                                       19
<PAGE>

of the Leased Premises existing prior to the Commencement Date hereunder. In no
event shall Tenant be liable for hazardous substances migrating onto or under
the Leased Premises except if such migration is caused by Tenant, its agents,
employees or contractors. The within covenants shall survive the expiration or
earlier termination of the lease term.

     16.  INSPECTION BY LANDLORD
          ----------------------

          The Tenant agrees that the Landlord's agents, and other
representatives, shall have the right, during normal business hours, to enter
into and upon the Leased Premises, or any part thereof, with reasonable prior
oral notice at all reasonable hours for the purpose of examining the same, or
for exhibiting the same to prospective tenants [within the last eight (8) months
of the term of this lease or at any time during which the Tenant is in default
under the terms and conditions of this lease] and purchasers (at all times) in
the presence of a representative of Tenant (except in the event of emergency) or
making such repairs or alterations therein as may be necessary for the safety
and preservation thereof, without unduly or unreasonably disturbing the
operations of the Tenant (except in the event of emergency).

     17.  DEFAULT BY TENANT
          -----------------

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

               (1)  (i)   filing of a petition by the Tenant for adjudication as
     a bankrupt, or for reorganization, or for an arrangement under any federal
     or state statute, except in a Chapter 11 Bankruptcy where the Base Rent and
     Additional Rent stipulated herein is being paid and the terms of the lease
     are being complied with;

                    (ii)  dissolution or liquidation of the Tenant;

                    (iii) appointment of a permanent receiver or a permanent
     trustee of all or substantially all of the property of the Tenant, if such
     appointment shall not be vacated within sixty (60) days, provided the Base
     Rent and Additional Rent stipulated herein is being paid and the terms of
     the lease are being complied with, during said one hundred twenty (120) day
     period;

                    (iv)  taking possession of the property of the Tenant by a
     governmental officer or agency pursuant to statutory authority for
     dissolution, rehabilitation, reorganization or liquidation of the Tenant if
     such taking of possession shall not be vacated within sixty (60) days,
     provided the Base Rent and Additional Rent stipulated herein is being paid
     and the terms of the lease are being complied with, during said one hundred
     twenty (120) day period;

                                       20
<PAGE>

                    (v) making by the Tenant of an assignment for the benefit of
creditors;

                    (vi) abandonment of the Leased Premises by the Tenant.

          If any event mentioned in this subdivision (1) shall occur, Landlord
may thereupon or at any time thereafter elect to cancel this lease by ten (10)
days' notice to the Tenant and this lease shall terminate on the day in such
notice specified with the same force and effect as if that date were the date
herein fixed for the expiration of the term of the lease.

               (2)  (i)  Default in the payment of the Base Rent or Additional
     Rent herein reserved or any part thereof for a period of seven (7) days
     after the same is due and payable as in this lease required.

                    (ii) A default in the performance of any other covenant or
     condition of this lease on the part of the Tenant to be performed for a
     period of thirty (30) days after notice. For purposes of this subdivision
     (2) (ii) hereof, no default on the part of Tenant in performance of work
     required to be performed or acts to be done or conditions to be modified
     shall be deemed to exist if steps shall have been commenced by Tenant
     diligently after notice to rectify the same and shall be prosecuted to
     completion with reasonable diligence, and if the Landlord is indemnified
     against loss or liability arising from the default.

          17.2  In case of any such default under Article 17.1 (2), at any time
following the expiration of the respective grace periods above mentioned,
Landlord may serve a notice upon the Tenant electing to terminate this lease
upon a specified date not less than seven (7) days after the date of serving
such notice and this Lease shall then expire on the date so specified as if that
date had been originally fixed as the expiration date of the term herein
granted; however, a default under Article 17.1 (2) hereof shall be deemed waived
if such default is made good before the date specified for termination in the
notice of termination served on the Tenant.
          17.3  In case this Lease shall be terminated as hereinbefore provided,
or by summary proceedings or otherwise, Landlord or its agents may, immediately
or any time thereafter, re-enter and resume possession of the Leased Premises or
such part thereof, and remove all persons and property therefrom, either by

                                       21
<PAGE>

summary proceedings or by a suitable action or proceeding at law, without being
liable for any damages therefor. No re-entry by landlord shall be deemed an
acceptance of a surrender of this lease.
          17.4  In case this lease shall be terminated as hereinafter provided,
or by summary proceedings or otherwise, Landlord may, in its own name and in its
own behalf, relet the whole or any portion of the Leased Premises, for any
period equal to or greater or less than the remainder of the then current term,
for any sum which it may deem reasonable, to any tenant which it may deem
suitable and satisfactory, and for any use and purpose which it may deem
appropriate, and in connection with any such lease Landlord may make such
changes in the character of the improvements on the Leased Premises as Landlord
may determine to be appropriate or helpful in effecting such lease, and Landlord
may grant concessions or free rent. Landlord agrees that it will take reasonable
steps to mitigate Tenant's damages. It is specifically understood and agreed
that Landlord, by listing the Leased Premises for lease with a recognized real
estate broker doing business in the Lawrenceville, New Jersey area, shall be
conclusively deemed to have utilized reasonable efforts to mitigate Tenant's
damages. Landlord shall not in any event be required to pay Tenant any surplus
of any sums received by Landlord on a reletting of the Leased Premises in excess
of the rent reserved in this Lease.
          17.5  (1) In case this lease be terminated by summary proceedings or
otherwise, as provided in this Article 17, and whether or not the Leased
Premises be relet, Landlord shall be entitled to recover from the Tenant, the
following:

                    (i)  a sum equal to all expenses, if any, including
     reasonable counsel fees, incurred by Landlord in recovering possession of
     the Leased Premises, and all reasonable costs and charges for the care of
     the Leased Premises while vacant, which damages shall be due and payable by
     Tenant to Landlord at such time or times as such expenses shall have been
     incurred by Landlord; and

                    (ii) a sum equal to all damages set forth in this Article 17
     and in Article 18.

                                       22
<PAGE>

          (2) Without any previous notice or demand, separate actions may be
maintained by Landlord against Tenant from time to time to recover any damages
which, at the commencement of any such action, have then or theretofore become
due and payable to the Landlord under this Article 17 and subsections hereof
without waiting until the end of the then current term.

          (3) All sums which Tenant has agreed to pay by way of adjustments to
rent or equitable adjustments in utility charges shall be deemed rent reserved
in this lease within the meaning of this Article 17 and subsections hereof.

          (4) Notwithstanding anything in this lease to the contrary, all
amounts payable by Tenant to or on behalf of Landlord under this lease, whether
or not expressly denominated as rent, shall constitute rent for the purposes of
section 502(b)(6) of the Bankruptcy Code, 11 U.S.C. Section 502(b)(6), or any
successor statute.

     18.  LIABILITY OF TENANT FOR DEFICIENCY
          ----------------------------------
          In the event that the relation of the Landlord and Tenant may cease or
terminate by reason of the default (beyond any applicable notice and cure
periods) by the Tenant and the re-entry of the Landlord as permitted by the
terms and conditions contained in this lease or by the ejectment of the Tenant
by summary proceedings or other judicial proceedings, or after the abandonment
of the Leased Premises by the Tenant, it is hereby agreed that the Tenant shall
remain liable to pay in monthly payments the rent which shall accrue subsequent
to the re-entry by the Landlord, and the Tenant expressly agrees to pay as
damages for the breach of the covenants herein contained the difference between
the rent reserved and the rent collected and received, if any, by the Landlord,
during the remainder of the unexpired term, as the amount of such difference or
deficiency shall from time to time be ascertained.

     19.  NOTICES
          -------
          All notices required or permitted to be given to the Landlord shall be
given by certified mail, return receipt

                                       23
<PAGE>

requested, at the address hereinbefore set forth on the first page of this
lease, and/or such other place as the Landlord may designate in writing.
          All notices required or permitted to be given to the Tenant shall be
given by certified mail, return receipt requested, at the Leased Premises,
and/or such other place as the Tenant may designate in writing.

     20.  NON-WAIVER
          ----------
          The failure of either party to insist upon strict performance of any
of the covenants or conditions of this lease, or to exercise any option of the
Landlord or Tenant, as the case may be herein conferred in any one or more
instances, shall not be construed as a waiver by either party of any of their
respective rights or remedies in this Lease, and shall not be construed as a
waiver, relinquishment or failure of any such covenants, conditions, or options,
but the same shall be and remain in full force and effect.

     21.  RIGHT TO TENANT TO MAKE ALTERATIONS AND IMPROVEMENTS
          ----------------------------------------------------
          21.1  The Tenant may make alterations, additions or improvements to
the Leased Premises only with the prior written consent of the Landlord, which
consent shall not be unreasonably withheld, provided such alterations,
additions or improvements do not require structural changes in the Leased
Premises, or do not lessen the value of the Leased Premises. Any consent which
Landlord may give shall be conditioned upon Tenant furnishing to Landlord,
detailed plans and specifications with respect to any such changes, to be
approved by Landlord in writing. At the time of such consent, Landlord shall
notify Tenant if Tenant shall be required to remove, at Tenant's sole cost and
expense, any such alterations or additions by no later than the expiration of
the lease term. If Landlord does not require such removal, any such alterations
or additions shall be deemed to be part of the realty upon installation and
Tenant shall not be required to remove same. Landlord and Tenant hereby agree
that they shall conduct a walk

                                       24
<PAGE>

through inspection of the Leased Premises at least ninety (90) days prior to the
Expiration Date of this lease, at which time Landlord shall confirm which
alterations and improvements, as aforesaid, will need to be removed by the
Tenant at Tenant's sole cost and expense, and which shall remain. All such
alterations, additions or improvements shall be only in conformity with
applicable governmental and insurance company requirements and regulations
applicable to the Leased Premises. Tenant shall hold and save Landlord harmless
and indemnify Landlord against any claim for damage or injury in connection with
any of the foregoing work which Tenant may make as hereinabove provided.
          21.2  Nothing herein contained shall be construed as a consent on the
part of the Landlord to subject the estate of the Landlord to liability under
the Construction Lien Law of the State of New Jersey, it being expressly
understood that the Landlord's estate shall not be subject to such liability.

     22.  NON-LIABILITY OF LANDLORD
          -------------------------
          22.1  It is expressly understood and agreed by and between the parties
to this agreement that the Tenant shall assume all risk of damage to its
property, equipment and fixtures occurring in or about the Leased Premises,
whatever the cause of such damage or casualty.
          22.2  It is expressly understood and agreed that in any event, the
Landlord shall not be liable for any damage or injury to property or person
caused by or resulting from steam, electricity, gas, water, rain, ice or snow,
or any leak or flow from or into any part of said Building, or from any damage
or injury resulting or arising from any other cause or happening whatsoever
unless due to the negligence or willful misconduct of Landlord, its agents,
employees or contractors.

     23.  RESERVATION OF EASEMENT
          -----------------------
          The Landlord reserves the right, easement and privilege to enter on
the Complex and Leased Premises in order to install, at its own cost and
expense, any storm drains and sewers and/or

                                       25
<PAGE>

utility lines in connection therewith as may be required by the Landlord. It is
understood and agreed that if such work as may be required by Landlord requires
an installation which may displace any paving, lawn, seeded area or shrubs the
Landlord, shall, at its own cost and expense, restore said paving, lawn, seeded
area or shrubs. The Landlord covenants that the foregoing work shall not
unreasonably interfere with the normal operation of Tenant's business, and the
Landlord shall indemnify and save the Tenant harmless in connection with such
installations.

     24.  POLLUTION
          ---------
          The Tenant expressly covenants and agrees to indemnify, defend, and
save the Landlord harmless against any claim, damage, liability, costs,
penalties, or fines which the Landlord may suffer as a result of air, water or
ground, toxic or hazardous waste pollution caused by the Tenant in its use of
the Leased Premises. The Tenant covenants and agrees to notify the Landlord
immediately of any claim or notice served upon it with respect to any such claim
the Tenant is causing water, air or ground pollution; and the Tenant, in any
event, will take immediate steps to halt, remedy or cure any pollution of air,
water or ground, toxic or hazardous waste caused by the Tenant by its use of the
Leased Premises. The within covenant on the part of the Tenant shall survive the
expiration or earlier termination of this lease.

     25.  STATEMENT OF ACCEPTANCE
          -----------------------
          Upon the delivery of the Leased Premises to the Tenant, pursuant to
the terms and conditions of this lease, the Tenant covenants and agrees that it
will furnish to the Landlord a statement that it accepts the Leased Premises and
agrees to pay rent from the date of acceptance, subject to the terms and
conditions of the lease as herein contained, which statement may be in
recordable form if required by the Landlord, and which statement shall set forth
the Commencement Date and the date of expiration of the lease term.

                                       26
<PAGE>

     26.  FORCE MAJEURE
          -------------
          Except for the obligation of the Tenant to pay rent and other charges
as in this lease provided, the period of time during which the Landlord or
Tenant is prevented from performing any act required to be performed under this
lease by reason of fire, catastrophe, strikes, lockouts, civil commotion, acts
of God or the public enemy, government prohibitions or preemptions, embargoes,
inability to obtain material or labor by reason of governmental regulations or
prohibitions, the act or default of the other party, or other events beyond the
reasonable control of Landlord or Tenant, as the case may be, shall be added to
the time for performance of such act.

     27.  STATEMENTS BY LANDLORD AND TENANT
          ---------------------------------
          Landlord and Tenant agree at any time and from time to time upon not
less than ten (10) days' prior notice from the other to execute, acknowledge and
deliver to the party requesting same, a statement in writing, certifying that
this lease is unmodified and in full force and effect (or if there have been
modifications, that the same is in full force and effect as modified and stating
the modifications) that it is not in default (or if claimed to be in default,
stating the amount and nature of the default) and specifying the dates to which
the basic rent and other charges have been paid in advance, if any; it being
intended that any such statement delivered pursuant to this Article may be
relied upon as to the facts contained therein.

     28.  CONDEMNATION
          ------------
          28.1  If due to the condemnation or taking or seizure by any authority
having the right of eminent domain, (i) more than fifteen (15%) percent of the
Leased Premises is taken or rendered untenantable, or (ii) in the event that
more than twenty-five (25%) percent of the ground allocated to the Building is
taken (including the parking areas, but exclusive of front, side and rear set
back areas), or (iii) if access to the Leased Premises be denied, which taking
in the manner hereinabove referred to and in excess of the

                                       27
<PAGE>

foregoing percentage amounts shall unreasonably or unduly interfere with the use
of the Building, ground area, parking area, or deny access to the Leased
Premises, then and in either of such events as hereinabove provided, the lease
term created shall, at the option of the Tenant, terminate, cease and become
null and void from the date when the authority exercising the power of eminent
domain takes or interferes with the use of the Building or the Leased Premises,
its use of the ground area, parking area, or area of access to the Leased
Premises. The Tenant shall only be responsible for the payment of rent until the
time of surrender. In any event, no part of the Landlord's condemnation award
shall belong to or be claimed by the Tenant. Without diminishing Landlord's
award, the Tenant shall have the right to make a claim against the condemning
authority for such independent claim which it may have and as may be allowed by
law, for costs and damages due to relocating, moving and other similar costs and
charges directly incurred by the Tenant and resulting from such condemnation.
          28.2  In the event of any partial taking which would not be cause for
termination of the within lease or in the event of any partial taking in excess
of the percentages provided in Article 28.1, and in which event the Tenant shall
elect to retain the balance of the Leased Premises remaining after such taking,
then and in either event, the rent shall abate in an amount mutually to be
agreed upon between the Landlord and Tenant based on the relationship that the
character of the property prior to the taking bears to the property which shall
remain after such condemnation. In any event, no part of the Landlord's
condemnation award shall belong to or be claimed by the Tenant. However, the
Landlord shall, to the extent permitted by applicable law and as the same may be
practicable on the site of the Leased Premises, at the Landlord's sole cost and
expense, promptly make such repairs and alterations in order to restore the
Building and/or improvements to usable condition to the extent of the
condemnation award.

                                       28
<PAGE>

     29.  LANDLORD'S REMEDIES
          -------------------
          29.1  The rights and remedies given to the Landlord in this lease are
distinct, separate and cumulative remedies, and no one of them, whether or not
exercised by the Landlord, shall be deemed to be in exclusion of any of the
others.
          29.2  In addition to any other legal remedies for violation or breach
by or on the part of the Tenant or by any undertenant or by anyone holding or
claiming under the Tenant or any one of them, of the restrictions, agreements or
covenants of this lease on the part of the Tenant to be performed or fulfilled,
such violation or breach shall be restrainable by injunction at the suit of the
Landlord.
          29.3  No receipt of money by the Landlord from any receiver, trustee
or custodian or debtors in possession shall reinstate, continue or extend the
term of this lease or affect any notice theretofore given to the Tenant, or to
any such receiver, trustee, custodian or debtor in possession, or operate as a
waiver or estoppel of the right of the Landlord to recover possession of the
Leased Premises for any of the causes therein enumerated by any lawful remedy;
and the failure of the Landlord to enforce any covenant or condition by reason
of its breach by the Tenant shall not be deemed to void or affect the right of
the Landlord to enforce the same covenant or condition on the occasion of any
subsequent default or breach.
          29.4  Tenant agrees that it shall reimburse Landlord for Landlord's
reasonable attorney's fees incurred in enforcing the terms and conditions of
this lease on the part of the Tenant to be performed. Tenant further agrees to
reimburse Landlord for Landlord's attorney's fees incurred in connection with
the review ??y Landlord of any Landlord's waiver, assignment or sublet agreement
or any other documentation reviewed by Landlord at tenant's request (which in
the aggregate shall not exceed $2,500.00).

                                       29
<PAGE>

     30.  QUIET ENJOYMENT
          ---------------
          The Landlord further covenants that the Tenant, on paying the rental
and performing the covenants and conditions contained in this Lease, shall and
may peaceably and quietly have, hold and enjoy the Leased Premises for the term
aforesaid.

     31.  SURRENDER OF PREMISES
          ---------------------
          On the last day, or earlier permitted termination of the lease term,
Tenant shall quit and surrender the Leased Premises in good and orderly
condition and repair as of the Commencement Date (reasonable wear and tear, and
damage by fire or other casualty excepted) and shall deliver and surrender the
Leased Premises to the Landlord peaceably, together with all alterations,
additions and improvements in, to or on the Leased Premises made by Tenant as
permitted under the lease. The Landlord reserves the right, however, to require
the Tenant at its cost and expense to remove any alterations or improvements
installed by the Tenant, which covenant shall survive the surrender and the
delivery of the Leased Premises as provided hereunder. Prior to the expiration
of the lease term the Tenant shall remove all of its property, fixtures,
equipment and trade fixtures from the Leased Premises. All property not removed
by Tenant shall be deemed abandoned by Tenant, and Landlord reserves the right
to charge the reasonable cost of such removal to the Tenant, which obligation
shall survive the lease termination and surrender hereinabove provided. If the
Leased Premises be not surrendered at the end of the lease term, Tenant shall
indemnify Landlord against loss or liability resulting from delay by Tenant in
surrendering the Leased Premises, including, without limitation any claims made
by any succeeding tenant founded on the delay.

     32.  INDEMNITY
          ---------
          Anything in this Lease to the contrary notwithstanding, and without
limiting the Tenant's obligation to provide insurance pursuant to Article 10
hereunder but subject to the provisions of Article 10.3, the Tenant covenants
and agrees that it will

                                       30
<PAGE>

indemnify, defend and save harmless the Landlord against and from all
liabilities, obligations, damages, penalties, claims, costs, charges and
expenses, including without limitation reasonable attorneys' fees, which may be
imposed upon or incurred by Landlord by reason of any of the following occurring
during the term of this lease:

          (i)   Any matter, cause or thing arising out of Tenant's use,
     occupancy, control or management of the Leased Premises and any part
     thereof;

          (ii)  Any negligence on the part of the Tenant or any of its agents,
     contractors, servants, employees, licensees or invitees;

          (iii) Any accident, injury, damage to any person or property occurring
     in, or about the Leased Premises;

          (iv)  Any failure on the part of Tenant to perform or comply with any
     of the covenants, agreements, terms or conditions contained in this lease
     on its part to be performed or complied with;

          (v)   Subject to the exceptions set forth in Article 22.1 hereof, the
foregoing shall not require indemnity by Tenant in the event of damage or injury
occasioned by the negligence or acts or omissions of the Landlord, its agents,
servants or employees.

Landlord shall promptly notify Tenant of any such claim asserted against it and
shall promptly send to Tenant copies of all papers or legal process served upon
it in connection with any action or proceeding brought against Landlord by
reason of any such claim.

     33.  LEASE CONSTRUCTION
          ------------------

          This Lease shall be construed pursuant to the laws of the State of New
Jersey.

     34.  BIND AND INURE CLAUSE
          ---------------------

          The terms, covenants and conditions of the within lease shall be
binding upon and inure to the benefit of each of the parties hereto and their
respective successors and assigns.

     35.  DEFINITIONS
          -----------

          The neuter gender, when used herein and in the acknowledgment
hereafter set forth, shall include all persons and corporations, and words used
in the singular shall include words in the plural where the text of the
instrument so requires.

                                       31
<PAGE>

     36.  DEFINITION OF TERM OF "LANDLORD"
          --------------------------------

          When the term "Landlord" is used in this lease it shall be construed
to mean and include only the owner of the title to the Building containing the
Leased Premises. Upon the transfer by the Landlord of the title, the Landlord
shall advise the Tenant in writing by certified mail, return receipt requested,
of the name of the Landlord's transferee. In such event, the Landlord shall be
automatically freed and relieved from and after the date of such transfer of
title of all personal liability with respect to the performance of any of the
covenants and obligations on the part of the Landlord herein contained to be
performed, provided any such transfer and conveyance by the Landlord is
expressly subject to the assumption by the grantee or transferee of the
obligations of the Landlord to be performed pursuant to the terms and conditions
of the within lease.

     37.  COVENANTS OF FURTHER ASSURANCES
          -------------------------------

          If, in connection with obtaining financing for the improvements on the
Complex, the Mortgage Lender shall request reasonable modifications in this
lease as a condition to such financing, Tenant will not unreasonably withhold,
delay or refuse its consent thereto, provided that such modifications do not in
Tenant's reasonable judgment increase the obligations of Tenant hereunder,
decrease Tenant's rights hereunder or adversely affect the leasehold interest
hereby created or Tenant's use and enjoyment of the Leased Premises.

     38.  COVENANT AGAINST LIENS
          ----------------------

          Tenant agrees that it shall not encumber, or suffer or permit to be
encumbered, the Leased Premises or the fee thereof by any lien, charge or
encumbrance, and Tenant shall have no authority to mortgage or hypothecate this
lease in any way whatsoever. Any violation of this Article shall be considered a
breach of this lease.

                                       32
<PAGE>

     39.  SUBORDINATION
          -------------

          This lease shall be subject and subordinate at all times to the lien
of any mortgages or ground leases or other encumbrances now or hereafter placed
on the land Complex without the necessity of any further instrument or act on
the part of Tenant to effectuate such subordination, but Tenant covenants and
agrees to execute and deliver upon demand such further instrument or instruments
evidencing such subordination of the lease to the lien of any such mortgage or
ground lease or other encumbrances as shall be desired by a mortgagee or
proposed mortgagee or by any person. Tenant appoints Landlord the attorney-in-
fact of the Tenant irrevocably, to execute and deliver any such instrument or
instruments for and in the name of Tenant. Notwithstanding the foregoing,
Landlord hereby agrees to obtain a Non-Disturbance and Attornment Agreement for
the benefit of the Tenant from any future mortgagee, if any, of Landlord to be
written upon such mortgagee's customary form.

     40.  EXCULPATION OF LANDLORD
          -----------------------

          Neither Landlord nor its principals shall have any personal obligation
for payment of any indebtedness or for the performance of any obligation under
this lease but the payment of the indebtedness and the performance of
obligations expressed herein may be enforced only against Landlord's interest in
the Complex, and the rents, issues and profits thereof, and the Tenant agrees
that no deficiency judgment or other judgment for money damages shall in any
event be entered by it against the Landlord or its principals personally in any
action; provided, however, that the provisions of this paragraph shall in no way
affect Tenant's other remedies for the payment of any indebtedness or for the
enforcement of Landlord's covenants under this lease.

     41.  NET RENT
          --------

          Intentionally Omitted.

                                       33
<PAGE>

     42.  SECURITY
          --------

          Upon execution of this lease, the Tenant shall deposit with the
Landlord the sum of TEN THOUSAND TWO HUNDRED EIGHT AND 34/100 ($10,208.34)
DOLLARS as security for the full and faithful performance of this lease upon the
part of the Tenant to be performed. Upon termination of this lease, and
providing the Tenant is not in default hereunder and has performed all of the
conditions of this lease, the Landlord shall return the said sum of TEN THOUSAND
TWO HUNDRED EIGHT AND 34/100 ($10,208.34) DOLLARS to the Tenant. Anything herein
contained to the contrary notwithstanding, it is expressly understood and agreed
that the said security deposit shall not bear interest. Tenant covenants and
agrees that it will not assign, pledge, hypothecate, mortgage or otherwise
encumber the aforementioned security during the term of this lease. It is
expressly understood and agreed that the Landlord shall have the right to co-
mingle the security funds with its general funds and said security shall not be
required to be segregated.

     43.  ASSIGNMENT AND SUBLETTING
          -------------------------

          43.1  Tenant shall neither assign this lease nor sublet all or any
portion of the Leased Premises without Landlord's prior consent, which consent
shall not be unreasonably withheld, subject to Landlord's rights hereinafter
provided in Article 43.4. Landlord may withhold such consent if, in the
reasonable exercise of its judgment, it determines that any of the following
enumerated conditions are applicable:

                (a) the proposed assignee's or subtenant's financial condition
is not sufficient to meet its obligations undertaken in such assignment or
sublease;

                (b) the proposed use of the Leased Premises is not appropriate
for the Complex and in keeping with the character of its existing tenancies;

                                       34
<PAGE>

          (c)  such assignee's or subtenant's occupancy will cause an excessive
density of traffic or make excessive demands on the Building's services,
maintenance or facilities;

          (d)  such assignee or subtenant is a tenant of and is vacating
premises in the Building, the Complex or any other building owned by or through
the persons constituting Landlord hereunder, including any corporation in which
Landlord's principals are majority stockholders, and any affiliates,
subsidiaries or parent of such corporation;

          (e)  the rental obligation of such assignee or subtenant would be less
than Tenant's rental obligations hereunder; or

          (g)  Landlord wishes to accept the offer as provided in Article 43.4.

          43.2 Any request by Tenant for Landlord's consent to an assignment of
the lease shall state the proposed assignee's address and be accompanied by a
profit and loss and balance statements of the proposed assignee for the prior
three (3) years, as well as duplicate original of the instrument of assignment
(wherein the assignee assumes, jointly and severally with Tenant, the
performance of Tenant's obligations hereunder).

          43.3 Any request by Tenant for Landlord's consent to a sublease shall
state the proposed subtenant's address and be accompanied by profit and loss and
balance statements of the proposed subtenant for the prior three (3) years, as
well as a duplicate original of the instrument of sublease (wherein Tenant and
the proposed subtenant agree that such sublease is subject to the lease and such
subtenant agrees that, if the lease is terminated because of Tenant's default,
such subtenant shall, at Landlord's option, attorn to Landlord).

          43.4 Any request by Tenant for Landlord's consent to an assignment of
the lease or a sublease of all or substantially all of the Leased Premises shall
clearly set forth the proposed terms of such proposed assignment or sublease and
shall constitute

                                       35
<PAGE>

Tenant's offer to cancel the lease. Landlord may accept such offer by notice to
Tenant within ninety (90) days after Landlord's receipt thereof, in which event,
the lease shall terminate as of the end of the month following the month in
which such notice is sent (with the same effect as if such date were the date
fixed herein for the natural expiration of the term), Base Rent and Additional
Rent shall be apportioned to such date, Tenant shall surrender the Leased
Premises on such date as herein provided, and subject to payment of required
lease adjustments, the parties shall thereafter have no further liability one to
the other. If Landlord fails to send such notice, Tenant, within twenty (20)
days after the expiration of such ninety (90) day period, may assign the lease
or sublet all or substantially all of the Leased Premises to the proposed
assignee or subtenant and upon the terms specified in such request, subject,
however, to Landlord's rights under Article 43.1(a) through (f).

          43.5  In the event of a permitted assignment, Landlord may collect
Base Rent and Additional Rent directly from the assignee. In the event of a
permitted sublease, Landlord may, if Tenant defaults hereunder, collect Base
Rent and Additional Rent directly from the subtenant. In either such event,
Landlord may apply any amounts so collected to the Base Rent and Additional Rent
hereunder without thereby waiving any provisions hereof or releasing Tenant from
liability for the performance of its obligations hereunder. In any event, Tenant
shall pay to Landlord, as Additional Rent, amounts received by Tenant from any
assignee or subtenant, in excess of the pro rata (per square foot) Base Rent and
Additional Rent payable by Tenant hereunder. All reasonable expenses incurred by
Tenant in connection with the sublease or assignment (including, without
limitation, reasonable attorney's fees and brokerage commissions) shall be
deducted from the amounts received by Tenant from the assignee or subtenant in
determining the extent by which such amounts exceed the Base Rent.

                                       36
<PAGE>

               43.6  Landlord's consent to any assignment or sublease hereunder
shall not be deemed a consent to any further proposed assignment or sublease by
Tenant or any one claiming under or through the Tenant, except in accordance
with this Article 43.

               43.7  It is expressly understood and agreed that Tenant's Option
to Renew, as hereinafter set forth in Article 44, shall be personal to Tenant
only, and may not be exercised by any permitted assignee or subtenant hereunder
except in the event of an assignment or sublet permitted pursuant to Article
44.8 hereof.. It is understood and agreed that Tenant's Option to Renew shall be
null and void in the event that fifty (50%) percent or more of the Leased
Premises have been sublet by the Tenant prior to the date set for the exercise
by Tenant of the Option to Renew hereinafter set forth.

               43.8  Landlord's consent shall not be required and the terms and
conditions of Article 43.1 shall not apply as to Landlord's right of first
refusal to recapture if the Tenant assigns this lease or subleases the Leased
Premises to a parent, subsidiary, affiliate or company into which Tenant is
merged, upon which Tenant is consolidated or to the purchaser of all or
substantially all of the assets of Tenant.

     44.  OPTION TO RENEW
          ---------------

          Provided the Tenant is not in default pursuant to the terms and
conditions of this lease, the Tenant is hereby given the right and privilege to
renew the within lease, for one (1) three (3) year renewal period, to commence
at the end of the initial term of this lease, which renewal shall be upon the
same terms and conditions as in this lease contained, except as follows:

               (1)  During the three (3) year renewal period, Tenant shall pay
Base Rent in the amount of SEVENTY THREE THOUSAND FIVE HUNDRED AND 00/100
($73,500.00) DOLLARS per annum, in equal installments in the sum of SIX THOUSAND
ONE HUNDRED TWENTY FIVE AND 00/100 ($6,125.00) DOLLARS per month, in the same
manner as required by Article 3 hereof.

                                       37
<PAGE>

               (2)  The right, option, and privilege of the Tenant to renew this
lease as hereinabove set forth is expressly conditioned upon the Tenant
delivering to the Landlord, in writing, by certified mail, return receipt
requested, eight (8) months' prior notice of its intention to renew, which
notice shall be given to the Landlord by the Tenant no later than eight (8)
months prior to the date fixed for termination of the original term of this
lease.

               (3)  The obligation to pay the Fixed Rent as hereinabove provided
shall be in addition to the obligation to pay all Additional Rent and other
charges required by the terms and conditions of this lease.

     45.  SECURITY MEASURES
          -----------------

          Tenant acknowledges that the rent payable to Landlord does not include
the cost of guard services or other security measures and Landlord has no
obligation to provide such services or measures. Tenant assumes all
responsibility for security of Tenant, its employees, agents, contractors,
subcontractors, licenses, concessionaires and invitees, and the property owned
by all of such parties.

     46.  FINANCIAL STATEMENTS
          --------------------

          The Tenant agrees, at the request of the Landlord, to be made not more
than once during any lease year, to furnish its latest current income and
balance statements, certified to by an officer of the corporation. The Landlord
shall keep all such statements strictly confidential except that Landlord shall
be permitted to disclose such statements to its lenders, prospective purchasers
and its professional advisors including but not limited to the Landlord's
accountants and attorneys.

     47.  TENANCY REVIEW
          --------------

          The within lease is conditioned upon and subject to the approval of
the Tenant's use and occupancy of the Leased Premises by the Township of
Lawrenceville. In the event said approval is not obtained, the within lease
shall be deemed to be null and void.

                                       38
<PAGE>

     48.  EXECUTION AND DELIVERY
          ----------------------

          The submission of the within lease by Landlord to Tenant for review
and approval shall not be deemed an option to lease, an offer to lease, or a
reservation of the Leased Premises in favor of Tenant, it being intended that no
rights or obligations shall be created by Landlord or Tenant until the execution
and delivery of the within lease by Landlord and Tenant, one to the other.

     IN WITNESS WHEREOF, the parties have hereunto set their hands and seals or
caused these presents to be signed by its proper corporate officers and caused
its proper corporate seal to be hereunto affixed, the day and year first above
written.

WITNESS:                                FIRST INDUSTRIAL, L.P.
                                        By: FIRST INDUSTRIAL REALTY TRUST, INC.

_______________________                 By: _____________________________
                                           Hayden Tiger,
                                           Regional Director

ATTEST:                                 2BRIDGE SOFTWARE, INC.

_______________________                 BY: _____________________________
(Affix Corporate Seal here)

                                       39
<PAGE>

                                  SCHEDULE A

                                [CHART OMITTED]
<PAGE>

STATE OF NEW JERSEY     )
                        )SS.:
COUNTY OF CSSE4         )

     BE IT REMEMBERED, that on this 7th day of December, 1999, before me, the
subscriber, MARY ANN E. RUSSELL personally appeared HAYDEN TIGER, who, I am
satisfied, is the person who signed the within Instrument as Regional Director,
of FIRST INDUSTRIAL REALTY TRUST, INC., a Delaware corporation, a General
Partner of FIRST INDUSTRIAL, L.P., the Landlord named therein, and he thereupon
acknowledged that the said instrument made by the corporation and sealed with
its corporate seal, was signed and sealed with the corporate seal and delivered
by him as such officer, and is the voluntary act and deed of the corporation,
made by virtue of authority from its Board of Directors.

                                            __________________________________

                                                  MARY ANN E. RUSSELL
                                            Notary Public State of New Jersey
                                           My Commission Expires July 20, 2003

STATE OF California     )
                        )SS.
COUNTY OF San Francisco )

          BE IT REMEMBERED, that on this 2 day of December, 1999, before me, the
subscriber, Geraldine L. Farrell, Notary Public personally appeared Ronald Parks
who, I am satisfied, is the person who signed the within Instrument as SVP,
Chief Fin Off of 2BRIDGE SOFTWARE, INC., a California corporation, the Tenant
named therein, and he thereupon acknowledged that the said instrument made by
the corporation and sealed with its corporate seal, was signed, sealed with the
corporate seal and delivered by him as such officer and is the voluntary act and
deed of the corporation, made by virtue of authority from its Board of
Directors.

                                            __________________________________

                                                   GERALDINE L. FARRELL
                                                   Commission # 1206239
                                                   Notary Public - California
                                                   San Francisco County
                                                   My Comm. Expires Jan 24, 2003
<PAGE>

                                LEASE AGREEMENT
                                ---------------

                    BY AND BETWEEN

                    FIRST INDUSTRIAL, L.P.,
                    a Delaware limited partnership,

                                  "Landlord"

                    -and-

                    2BRIDGE SOFTWARE, INC.
                    a California corporation,

                                   "Tenant"

                    -----------------------------------

                    DATED: Dec. 7, 1999
                    -----------------------------------

                                  LAW OFFICES

                       EPSTEIN, BROWN, MARKOWITZ & GIOIA
                          A Professional Corporation
                            245 Green Village Road
                                 P.O. Box 901
                        Chatham Township, NJ 07928-0901
                                (973) 593-4900
                              Fax (973) 593-4966

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