Document:

<PAGE>   1
                                                                    EXHIBIT 10.6

                                 LEASE AGREEMENT
                                    (NNN R&D)
                             BASIC LEASE INFORMATION

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Lease Date:                              June 21, 1999

Landlord:                                Legacy-RECP Sorrento OPCO, LLC,
                                         a Delaware limited liability company

Landlord's Address:                      c/o Legacy Partners Commercial, Inc.
                                         6480 Weathers Place, Suite 245
                                         San Diego, CA 92121

Tenant:                                  NETPARTNERS INTERNET SOLUTIONS, Inc.,
                                         a Delaware corporation

Tenant's Address:                        10240 Sorrento Valley Road, Suite 200
                                         San Diego, CA 92121

Premises:                                Approximately 41,259 rentable square feet as shown on Exhibit A

Premises Address:                        10240 Sorrento Valley road, 1st (Storage Room), 2nd (All) and
                                         3rd (All) Floors,
                                         San Diego, CA 92121

                                         Building [10240]: Approximately 65,217 rentable square feet
                                         Lot (Building's tax parcel):  APN 343-130-17
                                         Park [Legacy Creekside]:  Approximately 122,172 rentable
                                         square feet

Term:                                    September 1, 1999 ("Commencement Date"), through
                                         August 31, 2002 ("Expiration Date")

Base Rent (P. 3):                        Fifty-four Thousand Four Hundred Sixty-two Dollars ($54,462.00)
                                         per month

Adjustments to Base Rent:                September 1, 2000 to August 31, 2001:  $56,640.00 per month
                                         September 1, 2001 to August 31 2002:  $58,906.00 per month

Security Deposit (P. 41):                Fifty-four thousand Four Hundred Sixty-two Dollars ($54,462.00)

Letter of Credit (P. 4):                 Two Hundred Seventy-one Thousand Four Hundred Sixty-five Dollars
                                         ($271,465.00) as further described in Section 4 of the Lease.

*Tenant's Share of Operating
Expenses (P. 6.1):                       63.3% of Building 10240 and 33.8% of the Park
*Tenant's Share of Tax
Expenses (P. 6.2):                       33.8% of the Park
*Tenant's Share of Common Area
Utility Costs (P. 7):                    33.8% of the Park
*Tenant's Share of Utility
Expenses (P. 7):                         63.3% of Building 10240 and 33.8% of the Park
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*The amount of Tenant's Share of the expenses as referenced above shall be
subject to modification as set forth in this Lease.

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Permitted Uses P. 9:                     General office, software development and customer support,
                                         but only to the extent permitted by the City of San Diego
                                         and all agencies and governmental authorities having
                                         jurisdiction thereof.

Unreserved                               One hundred sixty (160) spaces, consisting of one (1) reserved
Parking Spaces:                          space designated for Tenant's Employee of the Month, and one
                                         hundred fifty-nine (159) non-exclusive and non-designated
                                         spaces.
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Broker (P. 38):                          CB Richard Ellis for Tenant Colliers International for Landlord

Exhibits:                                Exhibit A -    Premises, Building, Lot and/or Park
                                         Exhibit B -    Tenant Improvements
                                         Exhibit C -    Rules and Regulations
                                         Exhibit D -    Intentionally Omitted
                                         Exhibit E -    Hazardous Materials Disclosure Certificate - Example
                                         Exhibit F -    Change of Commencement Date - Example
                                         Exhibit G -    Tenant's Initial Hazardous Materials Disclosure Certificate
                                         Exhibit H -    Sign Criteria

Addenda:                                 Addendum 1:  Option to Extend the Lease
                                         Addendum 2:  Right of First Refusal
</TABLE>

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<PAGE>   3

                                TABLE OF CONTENTS

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Section                                                                             Page
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1.      Premises......................................................................5
2.      Adjustment of Commencement Date; Condition of the Premises....................5
3.      Rent..........................................................................5
4.      Collateral for Performance of Lease Obligations...............................6
5.      Tenant Improvements...........................................................7
6.      Additional Rent...............................................................7
7.      Utilities....................................................................10
8.      Late Charges.................................................................11
9.      Use of Premises..............................................................12
10.     Alterations and Additions; and Surrender of Premises.........................12
11.     Repairs and Maintenance......................................................13
12.     Insurance....................................................................14
13.     Waiver of Subrogation........................................................15
14.     Limitation of Liability and Indemnity........................................15
15.     Assignment and Subleasing....................................................16
16.     Ad Valorem Taxes.............................................................17
17.     Subordination................................................................18
18.     Right of Entry...............................................................18
19.     Estoppel Certificate.........................................................18
20.     Tenant's Default.............................................................19
21.     Remedies for Tenant's Default................................................19
22.     Holding Over.................................................................21
23.     Landlord's Default...........................................................21
24.     Parking......................................................................21
25.     Sale of Premises.............................................................21
26.     Waiver.......................................................................21
27.     Casualty Damage..............................................................22
28.     Condemnation.................................................................22
29.     Environmental Matters/Hazardous Materials....................................22
30.     Financial Statements.........................................................25
31.     General Provisions...........................................................25
32.     Signs........................................................................26
33.     Mortgage Protection..........................................................27
34.     Quitclaim....................................................................27
35.     Modifications of Tenant......................................................27
36.     Warranties of Tenant.........................................................27
37.     Compliance with Americans with Disabilities Act..............................27
38.     Brokerage Commission.........................................................28
39.     Quiet Enjoyment..............................................................28
40.     Landlord's Ability to Perform Tenant's Unperformed Obligations...............28
41.     Security Deposit.............................................................28
42.     Satellite Dish...............................................................29
43.     Attendant on First Floor of Building.........................................30
</TABLE>

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<PAGE>   4

                                 LEASE AGREEMENT

Date:    This Lease is made and entered into as of the Lease Date set forth on
         Page 1. The Basic Lease Information set forth on Page 1 and this Lease
         are and shall be construed as a single instrument.

1.      PREMISES

        Landlord hereby leases the Premises to Tenant upon the terms and
conditions contained herein. Landlord hereby grants to Tenant a license for the
right to use, on a non-exclusive basis, parking areas and ancillary facilities
located within the Common Areas of the Park, subject to the terms of this Lease.
Landlord and Tenant hereby agree that for purposes of this Lease, as of the
Lease Date, the rentable square footage area of the Premises, the Building, the
Lot and the Park shall be deemed to be the number of rentable square feet as set
forth in the Basic Lease Information on Page 1. Tenant hereby acknowledges that
the rentable square footage of the Premises may include a proportionate share of
certain areas used in common by all occupants of the Building and/or the Park
(for example an electrical room or telephone room). Tenant further agrees that
the number of rentable square feet of the Building, the Lot and the Park may
subsequently change after the Lease Date commensurate with any physical
modifications to any of the foregoing by Landlord resulting from condemnation,
casualty, or rehabilitation of the Building, the Lot, or the Park, and Tenant's
Share shall accordingly change.

2.      ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES

        2.1 If Landlord cannot deliver possession of the Premises on the
Commencement Date, Landlord shall not be subject to any liability nor shall the
validity of the Lease be affected; provided, the Lease Term and the obligation
to pay Rent shall commence on the date possession is tendered and the Expiration
Date and the dates for the adjustments to Base Rent shall be extended
commensurately. In the event the commencement date and/or the expiration date of
this Lease is other than the Commencement Date and/or Expiration Date specified
in the Base Lease Information, as the case may be, Landlord and Tenant shall
execute a written amendment to this Lease, substantially in the form of Exhibit
F hereto, wherein the parties shall specify the actual commencement date,
expiration date, the date on which Tenant is to commence paying Rent, and the
dates for the adjustments to Base Rent. The work "Term" whenever used herein
refers to the initial term of this Lease and any extension thereof. By taking
possession of the Premises, Tenant shall be deemed to have accepted the Premises
in good condition and state of repair; however Landlord shall deliver the
Premises with the existing building operating systems including electrical,
mechanical and plumbing systems in good working condition as of the Commencement
Date of the Lease and Tenant shall have a review period of thirty (30) days to
confirm such condition. Tenant hereby acknowledges and agrees that neither
Landlord nor Landlord's agents or representatives has made any representations
or warranties as to the suitability, safety or fitness of the Premises for the
conduct of Tenant's business, Tenant's intended use of the Premises or for any
other purpose.

        2.2 Landlord shall permit Tenant to access the Premises for the sole
purposes of installing telephone and computer wiring and systems, and installing
cubicles on August 1, 1999 (prior to the Commencement Date) and such access
shall be at Tenant's sole risk and subject to all provisions of this Lease,
including, but not limited to, the requirement to pay the Security Deposit and
deliver to Landlord the Letter of Credit, and to obtain the insurance required
pursuant to this Lease and to delivery insurance certificates as required
herein. In addition to the foregoing, Landlord shall have the right to impose
such additional reasonable conditions on Tenant's early entry as Landlord shall
deem appropriate. Tenant shall not be reasonable for paying Base Rent or
Tenant's Share of Operating Expenses, Tax Expenses, Common Area Utility Costs,
or Utility Expenses during such early access period. However, if, at any time,
Tenant is in default of any term, condition or provision of this Lease, any such
waiver by Landlord of Tenant's requirement to pay rental payments shall be null
and void and Tenant shall immediately pay to Landlord all rental payments so
waived by Landlord.

3.      RENT

        On the date that Tenant executes this Lease, Tenant shall deliver to
Landlord the original executed Lease, the Base Rent (which shall be applied
against the Rent payable for the first month Tenant is required to pay Base

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<PAGE>   5

Rent), the Security Deposit, and all insurance certificates evidencing the
insurance required to be obtained by Tenant under Section 12 of this Lease.
Tenant agrees to pay Landlord, without prior notice or demand, or abatement,
offset, deduction or claim, the Base Rent specified in the Basic Lease
Information, payable in advance at Landlord's address specified in the Basic
Lease Information on the Commencement Date and thereafter on the first (1st) day
of each month throughout the balance of the Term of the Lease. In addition to
the Base Rent set forth in the Basic Lease Information, Tenant shall pay
Landlord in advance on the Commencement Date and thereafter on the first (1st)
day of each month throughout the balance of the Term of this Lease, as
Additional Rent, Tenant's Share of Operating Expenses, Tax Expenses, Common Area
Utility Costs, and Utility Expenses. Tenant shall also pay to Landlord as
Additional Rent hereunder, within ten (10) days after receipt of Landlord's
written demand therefor, any and all costs and expenses incurred by Landlord to
enforce the provisions of this Lease, including, but not limited to, costs
associated with the delivery of notices, delivery and recordation of notice(s)
of default, attorneys' fees, expert fees, court costs and filing fees
(collectively, the "Enforcement Expenses"). The term "Rent" whenever used herein
refers to the aggregate of all these amounts. If Landlord permits Tenant to
occupy the Premises without requiring Tenant to pay rental payments for a period
of time, the waiver of the requirement to pay rental payments shall only apply
to waiver of the Base Rent and Tenant shall otherwise perform all other
obligations of Tenant required hereunder, except Tenant shall not be responsible
for paying Tenant's Share of Operating Expenses, Tax Expenses, Common Area
Utility Costs, or Utility Expenses during the early access period described in
Section 2.2 above. The Rent for any fractional part of a calendar month at the
commencement or termination of the Lease term shall be a prorated amount of the
Rent for a full calendar month based upon a thirty (30) day month. The prorated
Rent shall be paid on the Commencement Date and the first day of the calendar
month in which the date of termination occurs, as the case may be.

4.      COLLATERAL FOR PERFORMANCE OF LEASE OBLIGATIONS

        Prior to Tenant's early access under Section 2.2, Tenant shall deliver
to Landlord, as collateral for the full and faithful performance by Tenant of
all of its obligations under this Lease and for all losses and damages Landlord
may suffer as a result of any default by Tenant under this Lease, an irrevocable
and unconditional negotiable letter of credit, in the form and containing the
terms required herein, payable in the City of San Diego, California running in
favor of Landlord issued by a solvent bank under the supervision of the
Superintendent of Banks of the State of California, or a National Banking
Association, in the original amount of Two Hundred Seventy-one Thousand Four
Hundred Sixty-five Dollars ($271,465,000) (the "Letter of Credit"). The Letter
of Credit shall be (a) at sight and irrevocable, (b) except as set forth in this
Section 4, maintained in effect, whether through replacement, renewal or
extension, for the entire Lease Term (the "Letter of Credit Expiration Date")
and Tenant shall delivery a new Letter of Credit or certificate of renewal or
extension to Landlord at least thirty (30) days prior to the expiration of the
Letter of Credit, without any action whatsoever on the part of Landlord, (c)
subject to the Uniform Customs and Practices for Documentary Credits (1993-Rev)
International Chamber of Commence Publication #500, (d) acceptable to Landlord
in its sole discretion, (e) fully assignable by Landlord by amendment thereto in
accordance with customary letter of credit practice, and (f) permit partial
draws. In addition to the foregoing, the form and terms of the Letter of Credit
(and the bank issuing the same) shall be acceptable to Landlord, in Landlord's
reasonable discretion, and shall provide, among other things, in effect that:
(1) Landlord, or its then managing agent, shall have the right to draw down an
amount up to the face amount of the Letter of Credit upon the presentation to
the issuing bank of Landlord's (or Landlord's then managing agent's) statement
that such (A) amount is due to Landlord under the terms and conditions of this
Lease, it being understood that if Landlord or its managing agent by a
corporation, partnership or other entity, then such statement shall be signed by
an officer (if a corporation), a general partner (if a partnership), or any
authorized party (if another entity), and (B) an event of default has occurred
under this Lease and all applicable notice and care periods have elapsed; (2)
the Letter of Credit will be honored by the issuing bank without inquiry as to
the accuracy thereof and regardless of whether the Tenant disputes the content
of such statement; and (3) in the event of a transfer of Landlord's interest in
the Building, Landlord shall transfer the Letter of Credit, in whole or in part
(or cause a substitute letter of credit to be delivered, as applicable), to the
transferee and thereupon the Landlord shall, without any further agreement
between the parties, be released by Tenant from all liability therefor, and it
is agreed that the provisions hereof shall apply to every transfer or assignment
of the whole or any portion of said Letter of Credit to a new Landlord. If, as a
result of any such application of all or any part of the Letter of Credit, the
amount of the Letter of Credit shall be less than Two Hundred Seventy-one
Thousand Four Hundred Sixty-five Dollars ($271,465.00), Tenant shall within five
(5) days thereafter provide Landlord with additional letter(s) of credit in an
amount equal to the deficiency (or a replacement letter of credit in the total
amount of Two Hundred Seventy-one Thousand Four Hundred Sixty-five Dollars

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<PAGE>   6

($271,465.00) and each such additional (or replacement) letter of credit shall
comply with all of the provisions of this Section 4, and if Tenant fails to do
so, the same shall constitute an incurable default by Tenant. Tenant further
covenants and warrants that it will neither assign nor encumber the Letter of
Credit or any part thereof and that neither Landlord nor its successors or
assigns will be bound by any such assignment, encumbrance, attempted assignment
or attempted encumbrance. Without limiting the generality of the foregoing, if
the Letter of Credit expires earlier than the Letter of Credit Expiration Date,
Landlord will accept a renewal thereof or substitute letter of credit (such
renewal or substitute letter of credit to be in effect not later than twenty
(20) days prior to the expiration thereof), which shall be irrevocable and
automatically renewable as above provided through the Letter of Credit
Expiration Date upon the same terms as the expiring letter of credit or such
other terms as may be acceptable to Landlord in its reasonable discretion.
However, if the Letter of Credit is not timely renewed or a substitute letter of
credit is not timely received, or if Tenant fails to maintain the Letter of
Credit in the amount and terms set forth in this Section 4, Landlord shall have
the right to present such Letter of Credit to the bank in accordance with terms
of this Section 4, and the entire sum evidenced thereby shall be paid to and
held by Landlord as collateral for performance of all Tenant's obligations under
this Lease and for all losses and damages Landlord may suffer as a result of any
default by Tenant under this Lease. If there shall occur a default under this
Lease as set forth in Section 20 of this Lease, Landlord may, but without
obligation to do so, draw upon the Letter of Credit, in part or in whole, to
cure any default of Tenant and/or to compensate Landlord for any all damages of
any kind or nature sustained or which may be sustained by Landlord resulting
from Tenant's default. Tenant agrees not to interfere in any way with payment to
Landlord of the proceeds of the Letter of Credit, either prior to or following a
"draw" by Landlord of any portion of the Letter of Credit, regardless of whether
any dispute exists between Tenant and Landlord as to Landlord's right to draw
from the Letter of Credit. No condition or term of this Lease shall be deemed to
render the Letter of Credit conditional to justify the issuer of the Letter of
Credit in failing to honor a drawing upon such Letter of Credit in a timely
manner. Landlord and Tenant acknowledge and agree that in no event or
circumstance shall the Letter of Credit or any renewal thereof or substitute
therefor be (i) deemed to be or treated as a "security deposit" within the
meaning of California Civil Code Section 1950.7, (ii) subject to the terms of
such Section 1950.7, or (iii) intended to serve as a "security deposit" within
the meaning of such Section 1950.7. The parties hereto (x) recite that the
Letter of Credit is not intended to serve as a security deposit and such Section
1950.7 and any and all other laws, rules and regulations applicable to security
deposits in the commercial context ("Security Deposit Laws") shall have no
applicability or relevancy to the Letter of Credit and (y) waive any and all
rights, duties and obligations either party may now or, in the future, will have
relating to or arising from the expiration of each six (6) month period
thereafter, provided Tenant is not then in default under this Lease, Tenant
shall have the right to reduce the amount of the Letter of Credit by an amount
equal to Fifty-Four Thousand Two Hundred Ninety-Three Dollars ($54,293.00), if
and when Tenant provides to Landlord financial statements in the form required
by Section 30 of this Lease which demonstrate, over the previous three (3)
calendar quarters, that the quotient of the following, on a percentage basis,
equals or exceeds eight percent (8%): Tenant's EBITDA (Earnings Before Interest,
Taxes and Depreciation), divided by Tenant's gross revenues.

5.      TENANT IMPROVEMENTS

        Tenant hereby accepts the Premises as suitable for Tenant's intended use
and as being in good operating order, condition and repair, "AS IS", except as
specified in Exhibit B attached hereto. Landlord or Tenant, as the case may be,
shall install and construct the Tenant Improvements (as such term is defined in
Exhibit B hereto) in accordance with the terms, conditions, criteria and
provisions set forth in Exhibit B. Landlord and Tenant hereby agree to and shall
be bound by the terms, conditions and provisions of Exhibit B. Tenant
acknowledges and agrees that neither Landlord nor any of Landlord's agents,
representatives or employees has may any representations as to the suitability,
fitness or condition of the Premises for the conduct of Tenant's business or for
any other purpose, including without limitation, any storage incidental thereto.
Any exception to the foregoing provisions must be made by express written
agreement by both parties.

6.      ADDITIONAL RENT

        It is intended by Landlord and Tenant that this Lease be a "triple net
lease." The costs and expenses described in this Section 6 and all other sums,
charges, costs and expenses specified in this Lease other than Base Rent are to
be paid by Tenant to Landlord as additional rent (collectively, "Additional
Rent").

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<PAGE>   7

        6.1 OPERATING EXPENSES: In addition to the Base Rent set forth in
Section 3, Tenant shall pay Tenant's Share, which is specified in the Base Lease
Information, of all Operating Expenses as Additional Rent. The term "Operating
Expenses" as used herein shall mean the total amounts paid or payable by
Landlord in connection with the ownership, maintenance, repair and operation of
the Premises, the Building and the Lot, and where applicable, of the Park
referred to in the Basic Lease Information. The amount of Tenant's Share of
Operating Expenses shall be reviewed from time to time by Landlord and shall be
subject to modification by Landlord if there is a change in the rentable square
footage of the Premises, the Building and/or the Park. These Operating Expenses
may include, but are not limited to:

            6.1.1 Landlord's cost of repairs to, and maintenance of, the roof,
the roof membrane and the exterior walls of the Building;

            6.1.2 Landlord's cost of maintaining the outside paved area,
landscaping and other common areas for the Park. The term "Common Area" shall
mean all areas and facilities within the Park exclusive of the Promises and the
other portions of the Park leasable exclusively to other tenants. The Common
Areas include, but are not limited to, interior lobbies, mezzanines, parking
areas, access and perimeter roads, sidewalks, landscaped areas and similar areas
and facilities;

            6.1.3 Landlord's annual cost of insurance insuring against fire and
extended coverage (including, if Landlord elects, "all risk" or "special
purpose" coverage) and all other insurance, including, but not limited to,
earthquake, flood and/or surface water endorsements for the Building, the Lot
and the Park (including the Common Areas), rental value insurance against loss
of Rent in an amount equal to the amount of Rent for a period of at least six
(6) months commencing on the date of loss, and subject to the provisions of
Section 27 below, any deductible;

            6.1.4 Landlord's cost of: (i) modifications and/or new improvements
to the Building, the Common Areas and/or the Park occasioned by any rules, laws
or regulations effective subsequent to the date on which the Building was
originally constructed, but excluding Landlord's cost of modifications and/or
new improvements to the Building, the Common Areas and/or the Park required by
the Americans with Disabilities Act as in effect as of the date of the Lease;
(ii) reasonable necessary replacement improvements to the Building, the Common
Areas and the Park after the Commencement Date; and (iii) new improvements to
the Building, the Common Areas and/or the Park that reduce operating costs or
improve life/safety conditions, all as reasonably determined by Landlord, in its
sole discretion; provided, however, if any of the foregoing are in the nature of
capital improvements, then the cost of such capital improvements shall be
amortized on a straight-line basis over a reasonable period, which shall not be
less than the lesser of fifteen (15) years or the reasonable estimated useful
life of such modifications, new improvements or replacement improvements in
question (at an interest rate as reasonable determined by Landlord), and Tenant
shall pay Tenant's Share of the monthly amortized portion of such costs
(including interest charges) as part of the Operating Expenses herein;

            6.1.5 If Landlord reasonably elects to so procure, Landlord's cost
of preventative maintenance, and repair contracts including, but not limited to,
contracts for elevator systems and heating, ventilation and air conditioning
systems, lifts for disabled persons as required by law, and trash or refuse
collection;

            6.1.6 Landlord's cost of security and fire protection services for
the Building and/or the Park, as the case may be, if in Landlord's sole
discretion such services are provided;

            6.1.7 Intentionally Omitted;

            6.1.8 Intentionally Omitted;

            6.1.9 Landlord's cost of supplies, equipment, rental equipment and
other similar items used in the operation and/or maintenance of the Park;

            6.1.10 Landlord's cost for the repairs and maintenance items set
forth in Section 11.2 below;

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<PAGE>   8

            6.1.11 Landlord's cost for the management and administration of the
Premises, the Building and/or Park or any part thereof, including, without
limitation, a property management fee, accounting, auditing, billing, postage,
salaries and benefits for clerical and supervisory employees, whether located on
the Park or off-site, payroll taxes and legal and accounting costs and all fees,
licenses and permits related to the ownership, operation and management of the
Park. Landlord covenants that said costs shall be allocated uniformly throughout
the Park, and shall not be in excess of those costs charged by unaffiliated
third-party management companies in the San Diego area;

            6.1.12 In the event Landlord elects, at Landlord's sole discretion,
to employ (or contract with a vendor for) a concierge for the Building (which
concierge shall perform such services for the Building as Landlord shall
reasonably request of such concierge), Landlord's cost of providing such
concierge, including without limitation, vendor charges, salary costs,
employment taxes, health insurance costs and other costs typically incurred in
the employment of personnel; and

            6.1.13 Despite anything to the contrary in this Lease, the following
items shall be excluded from the calculation of Operating Expenses, and Tenant
shall not have a responsibility for any portion of the cost thereof:

               (a) Cost of repairs or other work occasioned by the exercise of
right of eminent domain;

               (b) Leasing considerations, attorneys' fees, costs and
disbursements and other expenses which are incurred in connection with
negotiations or disputes with tenants, other occupants or prospective tenants;

               (c) Cost of renovating or otherwise improving or decorating,
painting or redecorating leased space for tenants or other occupants or vacant
tenant space, other than ordinary maintenance provided to all tenants, except in
all Common Areas;

               (d) If applicable, Landlord's costs of electricity and other
services sold separately to tenants for which Landlord is entitled to be
reimbursed by such tenants as an additional charge over and above the Base Rent
and Operating Expenses or other rental adjustments payable under the Lease with
such tenant, and domestic water submetered and separately billed to tenants;

               (e) Depreciation;

               (f) Costs incurred due to violation by Landlord or any tenant of
the terms and conditions of any lease;

               (g) Overhead and profit paid to subsidiaries or affiliates of
Landlord for services on or to the Building and/or Premises, to the extent only
that the costs of such services exceed competitive costs for such services were
they not so rendered by a subsidiary or affiliate;

               (h) Ground rents, principal payments, or any interest expense on
any loans secured by mortgages placed upon the Building and Lot (or a leasehold
interest therein);

               (i) Any compensation paid to clerks, attendants or other persons
in commercial concessions operated by Landlord, except to the extent that such
compensation exceeds the revenue earned from such commercial concession. In such
event, the revenue earned from such commercial concession shall first be applied
to the cost of such compensation;

               (j) Any particular items and services for which Tenant otherwise
reimburses Landlord by direct payment over and above Base Rent and Operating
Expenses;

               (k) Advertising and promotional expenditures;

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               (l) Any fines or penalties incurred due to violations by Landlord
of any governmental law, ordinance, rule or authority;

               (m) Any expense for which Landlord is compensated through
proceeds of insurance; and

               (n) Expenses in connection with services or other benefits of a
type which Tenant is not entitled to receive under the Lease but which are
provided to another tenant or occupant.

        6.2 TAX EXPENSES: In addition to the Base rent set forth in Section 3,
Tenant shall pay its share, which is specified in the Basic Lease Information,
of all real property taxes applicable to the land and improvements included
within the Lot on which the Premises are situated and one hundred percent (100%)
of all personal property taxes now or hereafter assessed or levied against the
Premises or Tenant's personal property. The amount of Tenant's Share of Tax
Expenses shall be reviewed from time to time by Landlord and shall be subject to
modification by Landlord if there is a change in the rentable square footage of
the Premises, the Building and/or the Park. Tenant shall also pay one hundred
percent (100%) of any increase in real property taxes attributable, in
Landlord's reasonable discretion, to any and all alterations, Tenant
Improvements or other improvements of any kind, which are above standard
improvements customarily installed for similar buildings located within the
Building or the Park (as applicable), whatsoever placed in, on or about the
Premises for the benefit of, at the request of, or by assessment (general,
special, supplemental, ordinary or extraordinary), commercial rental tax,
payment under any improvement bond or bonds, license fees, license tax, business
license fee, rental tax, transaction tax, levy, or penalty imposed by authority
having the direct or indirect power of tax (including any city, county, state or
federal government, or any school, agricultural, lighting, drainage or other
improvement district thereof) as against any legal or equitable interest of
Landlord in the Premises, the Building, the Lot or the Park, as against
Landlord's right to rent, or as against Landlord's business of leasing the
Premises or the occupancy of Tenant or any other tax, fee, or excise, however
described, including, but not limited to, any value added tax, or any tax
imposed in substitution (partially or totally) of any tax previously included
within the definition of real property taxes, or any additional tax the nature
of which was previously included within the definition of real property taxes.
The term "Tax Expenses" shall not include any franchise, estate, inheritance,
net income, or excess profits tax imposed upon Landlord.

        6.3 PAYMENT OF EXPENSES: Landlord shall reasonably estimate Tenant's
Share of the Operating Expenses and Tax Expenses for the calendar year in which
the Lease commences. Commencing on the Commencement Date, one-twelfth (1/12th)
of this estimated amount shall be paid by Tenant to Landlord, as Additional
Rent, and thereafter on the first (1st) day of each month throughout the
remaining months of such calendar year. Thereafter, Landlord may estimate such
expenses as of the beginning of each calendar year during the Term of this Lease
and Tenant shall pay one-twelfth (1/12th) of such estimated amount as Additional
Rent hereunder on the first (1st) day of each month during such calendar year
and for each ensuing calendar year throughout the Term of this Lease. Tenant's
obligation to pay Tenant's Share of Operating Expenses and Tax Expenses shall
survive the expiration or earlier termination of this Lease.

        6.4 ANNUAL RECONCILIATION: By June 30th of each calendar year, or as
soon thereafter as reasonably possible, Landlord shall furnish Tenant with an
accounting of actual Operating Expenses and Tax Expenses. Within thirty (30)
days of Landlord's delivery of such accounting, Tenant shall pay to Landlord the
amount of any underpayment. Notwithstanding the foregoing, failure by Landlord
to give such accounting by such date shall not constitute a waiver by Landlord
of its right to collect any of Tenant's underpayment at any time. Landlord shall
credit the amount of any overpayment by Tenant toward the next estimated monthly
installment(s) falling due, or where the Term of the Lease has expired, refund
the amount of overpayment to Tenant together with such accounting. If the Term
of the Lease expires prior to the annual reconciliation of expenses Landlord
shall have the right to reasonably estimate Tenant's Share of such expenses, and
if Landlord determines that an underpayment is due, Tenant hereby agrees that
Landlord shall be entitled to deduct such underpayment from Tenant's Security
Deposit, provided Landlord delivers such accounting described herein. If
Landlord reasonably determines that an overpayment has been made by Tenant,
Landlord shall refund said overpayment to Tenant as soon a practicable
thereunder. Notwithstanding the foregoing, failure of Landlord to accurately
estimate Tenant's Share of such expenses or to otherwise perform such
reconciliation of expenses, including without limitation, Landlord's failure to
deduct any portion of any underpayment from Tenant's Security Deposit, shall not
constitute a waiver of Landlord's

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<PAGE>   10

right to collect any of Tenant's underpayment at any time during the Term of the
Lease or at any time after the expiration or earlier termination of this Lease.

        6.5 AUDIT: After delivery to Landlord of at least twenty (20) days prior
written notice Tenant, at its sole cost and expense through any accountant
designated by it, shall have the right to examine and/or audit the books and
records evidencing such costs and expenses for the previous one (1) calendar
year, during Landlord's reasonable business hours but not more frequently than
once during any calendar year. Any such accounting firm designated by Tenant may
not be compensated on a contingency fee basis. The results of any such audit
(and any negotiations between the parties related thereto) shall be maintained
strictly confidential by Tenant and its accounting firm and shall not be
disclosed, published or otherwise disseminated to any other party other than to
Landlord and its authorized agents. Landlord and Tenant shall use their best
efforts to cooperate in such negotiations and to promptly resolve any
discrepancies between Landlord and Tenant in the accounting of such costs and
expenses.

        6.6 AFTER-HOURS HVAC: Landlord shall install at its expense equipment to
enable Tenant to activate and control heating, air conditioning and/or
ventilation to the Premises during all hours which are non-building standard
hours for operation ("After-Hours HVAC"). Heating, air conditioning and/or
ventilation utilized at anytime outside of the hours of 7:00 a.m. to 6:00 p.m.
on Monday through Friday and 8:00 a.m. to 1:00 p.m. on Saturday (including legal
holidays) shall be considered After-Hours HVAC use. Tenant shall pay to Landlord
within ten (10) days of Landlord's written demand therefor, as additional rent
(i) Landlord's actual cost of supplying such After-Hours HVAC, plus (ii) an
amount reasonably determined by Landlord to be the depreciation and ordinary
wear-and-tear of the HVAC system attributable to Tenant's additional usage of
such system, plus an amount equal to fifteen percent (15%) of (i) and (ii) above
as Landlord's administrative fee. As of the date of this Lease, the cost for
After-Hours HVAC use is estimated to be $15.18 per hour, but is subject to
change as reasonably determined by Landlord.

7. UTILITIES

        Utility Expenses, Common Area Utility Costs and all other sums or
charges set forth in this Section 7 are considered part of Additional Rent. In
addition to the Base Rent set forth in Section 3 hereof, Tenant shall pay the
cost of all water, sewer use, sewer discharge fees and sewer connection fees,
gas, heat, electricity, refuse pickup, janitorial service, telephone and other
utilities billed or metered separately to the Premises and/or Tenant. Tenant
shall also pay Tenant's Share (as set forth in the Basic Lease Information) of
any assessments or charges for utility or similar purposes included within any
tax bill for the Lot on which the Premises are situated, including, without
limitation, entitlement fees, allocation unit fees, and/or similar fees or
charges, and any penalties related thereto. For any such utility fees or use
charges that are not billed or metered separately to Tenant, including without
limitation, electricity serving the Premises and water and refuse pick up
charges. Tenant shall pay to Landlord, as Additional Rent, without prior notice
or demand, on the Commencement Date and thereafter on the first (1st) day of
each month throughout the balance of the Term of this Lease the amount which is
attributable to Tenant's use of the utilities or similar services, as reasonably
estimated and determined by Landlord based upon factors such as size of the
Premises in relation to the size of the Building and/or Park and intensity of
use of such utilities by Tenant such that Tenant shall pay the portion of such
charges reasonably consistent with Tenant's use of such utilities and similar
services ("Utility Expenses"). If Tenant disputes any such estimate or
determination, then Tenant shall either pay the estimated amount or cause the
Premises to be separately metered at Tenant's sole expense. In addition, Tenant
shall pay to Landlord Tenant's Share of any Common Area utility costs, fees,
charges or expenses ("Common Area Utility Costs"). Tenant shall pay to Landlord
one-twelfth (1/12th) of the estimated amount of Tenant's Share of the Common
Area Utility Costs on the Commencement Date and thereafter on the first (1st)
day of each month throughout the balance of the Term of this Lease and any
reconciliation thereof shall be substantially in the same manner as specified
Section 6.4 above. The amount of Tenant's Share of Common Area Utility Costs
shall be reviewed from time to time by Landlord and shall be subject to
modification by Landlord if there is a change in the rentable square footage of
the Premises, the Building and/or the Park. Tenant acknowledges that the
Premises may become subject to the rationing of utility services or restrictions
on utility use as required by a public utility company, governmental agency or
other similar entity having jurisdiction thereof. Notwithstanding any such
rationing or restrictions on use of any such utility services, Tenant
acknowledges and agrees that its tenancy and occupancy hereunder shall be
subject to such rationing restrictions as may be imposed upon Landlord, Tenant,
the Premises, the Building or the Park, and Tenant shall in no event be excused
or relieved from any covenant or

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<PAGE>   11

obligation to be kept or performed by Tenant by reason of any such rationing or
restrictions. Tenant further agrees to timely and faithfully pay, prior to
delinquency, any amount, tax, charge, surcharge, assessment or imposition
levied, assessed or imposed upon the Premises, or Tenant's use and occupancy
thereof. Notwithstanding anything to the contrary contained herein, if permitted
by applicable Laws, Landlord shall have the right at any time and from time to
time during the Term of this Lease to either contract for service from a
different company or companies (each such company shall be referred to herein as
an "Alternate Service Provider") other than the company or companies presently
providing electricity service for the Building or the Park (the "Electric
Service Provider") or continue to contract for service from the Electric Service
Provider, at Landlord's sole discretion. Tenant hereby agrees to cooperate with
Landlord, the Electric Service Provider, and any Alternate Service Provider at
all times and, as reasonably necessary, shall allow Landlord, the Electric
Service Provider, and any Alternate Service Provider reasonable access to the
Building's electric lines, feeders, risers, wiring, and any other machinery
within the Premises. In the event any of the utility services essential to the
use and occupancy of the Premises shall be interrupted (such that any of such
services shall not be available for Tenant's use and occupancy of the Premises)
for a period in excess of thirty (30) days, such interruption shall not have
been caused in whole or in part by the acts or omissions of Tenant or Tenant's
Representatives, such interruption shall not have been the result of or arise
out of a Casualty or Condemnation contained within the terms of Sections 27 or
28, such interruption shall have had a material and adverse effect on Tenant's
use and occupancy of the Premises and the business interruption insurance
required to be carried by Tenant hereunder shall have been exhausted by such
interruption or such business interruption insurance shall not cover such
utility interruption, Tenant shall receive an abatement of one (1) day of Base
Rent for each day subsequent to the expiration of such thirty (30) day period
that such utility interruption continues and the Term of this Lease shall be
extended by one (1) day for each day of such abatement. Tenant shall not be
entitled to any abatement or to exercise any termination rights based on such
interruption in the event Tenant is in default of this Lease.

8.      LATE CHARGES

        Any and all sums or charges set forth in this Section 8 are considered
part of Additional Rent. Tenant acknowledges that late payment (the fifth day of
each month or any time thereafter) by Tenant to Landlord of Base Rent, Tenant's
Share of Operating Expenses, Tax Expenses, Common Area Utility Costs, and
Utility Expenses or other sums due hereunder, 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 note secured by any encumbrance against the
Premises, and late charges and penalties due to the late payment of real
property taxes on the Premises. Therefore, if any installment of Rent or any
other sum due from Tenant is not received by Landlord within five (5) days of
when due, Tenant shall promptly pay to Landlord all of the following, as
applicable: (a) an additional sum equal to five percent (5%) of such delinquent
amount plus interest on such delinquent amount at the rate equal to the prime
rate plus three percent (3%) for the time period such payments are delinquent as
a late charge for every month or portion thereof that such sums remain unpaid,
(b) the amount of seventy-five dollars ($75) for each three-day notice prepared
for, or served on, Tenant, (c) the amount of fifty dollars ($50) relating to
checks for which there are not sufficient funds. If Tenant delivers to Landlord
a check for which there are not sufficient funds, Landlord may, at its sole
option, require Tenant to replace such check with a cashier's check for the
amount of such check and all other charges payable hereunder. The parties agree
that this late charge and other charges referenced above represent a fair and
reasonable estimate of the costs that Landlord will incur by reason of late
payment by Tenant. Acceptance of any late charge or other charges shall not
constitute a waiver by Landlord of Tenant's default with respect to the
delinquent amount, nor prevent Landlord from exercising any of the other rights
and remedies available to Landlord for any other breach of Tenant under this
Lease. If a late charge or other charge becomes payable for any three (3)
installments of Rent within any twelve (12) month period, then Landlord, at
Landlord's sole option, can either require the Rent be paid quarterly in
advance, or be paid monthly in advance by cashier's check or by electronic funds
transfer.

9.      USE OF PREMISES

        9.1 COMPLIANCE WITH LAWS, RECORDED MATTERS, AND RULES AND REGULATIONS:
The Premises are to be used solely for the purposes and uses specified in the
Basic Lease Information and for no other uses or purposes without Landlord's
prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed so long as the proposed use (i) does not involve the use
of Hazardous Materials other than as expressly permitted

                                       11
<PAGE>   12

under the provisions of Section 29 below, (ii) does not require any additional
parking in excess of the parking spaces already licensed to Tenant pursuant to
the provisions of Section 24 of this Lease, and (iii) is compatible and
consistent with the other uses then being made in the Park and in other similar
types of buildings in the vicinity of the Park, as reasonably determined by
Landlord. The use of the Premises by Tenant and its employees, representatives,
agents, invitees, licensees, subtenants, customers or contractors (collectively,
"Tenant's Representatives") shall be subject to, and at all times in compliance
with, (a) any and all applicable laws, ordinances, statutes, orders and
regulations as same exist from time to time (collectively the "Laws"), (b) any
and all documents, matters or instruments, including without limitation, any
declarations of covenants, conditions and restrictions, and any supplements
thereto, each of which has been or hereafter is recorded in any official or
public records with respect to the Premises, the Building, the Lot and/or the
Park, or any portion thereof (collectively, the "Recorded Matters") and (c) any
and all rules and regulations set forth in Exhibit C, attached to and made a
part of this Lease, and any other reasonable rules and regulations promulgated
by Landlord now or hereafter enacted relating to parking and the operation of
the Premises, the Building and the Park (collectively, the "Rules and
Regulations"). Tenant agrees to, and does hereby, assume full and complete
responsibility to ensure that the Premises are adequate to fully meet the needs
and requirements of Tenant's intended operations of its business within the
Premises, and Tenant's use of the Premises and that same are in compliance with
all applicable Laws throughout the Term of this Lease. Additionally, Tenant
shall be solely responsible for the payment of all costs, fees and expenses
associated with any modifications, improvements or alterations to the Premises,
Building, the Common Areas and/or the Park occasioned by the enactment of, or
changes to, any Laws arising from Tenant's particular use of the Premises or
alterations, improvements or additions made to the Premises regardless of when
such Laws became effective.

        9.2 PROHIBITION ON USE: Tenant shall not use the Premises or permit
anything to be done in or about the Premises nor keep or bring anything therein
which will in any way conflict with any of the requirements of the Board of Fire
Underwriters or similar body now or hereafter constituted or in any way increase
the existing rate of or affect any policy of fire or other insurance upon the
Building or any of its contents, or cause a cancellation of any insurance
policy. No auctions may be held or otherwise conducted in, on or about the
Premises, the Building, the Lot or the Park without Landlord's written consent
thereto, which consent may be given or withheld in Landlord's sole discretion.
Tenant shall not do or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of Landlord, other tenants
or occupants of the Building, other buildings in the Park, or other persons or
businesses in the area or injure or annoy or use or allow the Premises to be
used for any unlawful or objectionable purpose, as determined by Landlord, in
its reasonable discretion, for the benefit, quiet enjoyment and use by Landlord
and all other tenants or occupants of the Building or other buildings in the
Park; nor shall Tenant cause, maintain or permit any private or public nuisance
in, on or about the Premises, Building, Park and/or the Common Area including
but not limited to, any offensive odors noises, fumes or vibrations. Tenant
shall not damage or deface or otherwise commit or suffer to be committed any
waste in, upon or about the Premises. Tenant shall not place or store, nor
permit any other person or entity to place or store, any property, equipment,
materials, supplies personal property or other items or goods outside of the
Premises for any period of time. Tenant shall not permit any non-service
animals, including, but not limited to, any household pets, to be brought or
kept in or about the Premises. Tenant shall place no loads upon the floors,
walls, or ceilings in excess of the maximum designed load permitted by the
applicable Uniform Building Code or which may damage the Building or outside
areas; nor place any harmful liquids in the drainage systems; nor dump or store
waste materials, refuse or other such materials, or allow such to remain outside
the Building area, expect for any non-refuse or other such materials, or allow
such to remain outside the Building area, except for any non-hazardous or
non-harmful materials which may be stored in refuse dumpsters or in any enclosed
trash areas provided. Tenant shall honor the terms of all Recorded Matters
relating to the Premises, the Building, the Lot and/or the Park Tenant shall
honor the Rules and Regulations. If Tenant fails to comply with such Laws,
Recorded Matters, Rules and Regulations or the provisions of this Lease,
Landlord shall have the right to collect from Tenant a reasonable sum as a
penalty, in addition to all rights and remedies of Landlord hereunder including,
but not limited to, the payment by Tenant to Landlord of all Enforcement
Expenses and Landlord's costs and expenses, if any, to cure any of such failures
of Tenant, if Landlord, at its sole option, to undertake such cure.

10. ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES

        10.1 ALTERATIONS AND ADDITIONS: Tenant shall not install any signs,
fixtures, improvements, nor make or permit any other alterations or additions to
the Premises without the prior written consent of Landlord, which

                                       12
<PAGE>   13

consent shall not be unreasonably withheld, conditioned, or delayed. If any such
alteration or addition is expressly permitted by Landlord, Tenant shall deliver
at least fifteen (15) days prior notice to Landlord, from the date Tenant
intends to commence construction, sufficient to enable Landlord to post a Notice
of Non-Responsibility. In all events, Tenant shall obtain all permits or other
governmental approvals prior to commencing any of such work and delivery a copy
of same to Landlord. All alterations and additions shall be installed by a
licensed contractor approved by Landlord, at Tenant's sole expense in compliance
with applicable Laws (including, but not limited to, the ADA as defined herein),
Recorded Matters, and Rules and Regulations. Tenant shall keep the Premises and
the property on which the Premises are situated free from any liens arising out
of any work performed, materials furnished or obligations incurred by or on
behalf of Tenant.

        10.2 SURRENDER OF PREMISES: Upon the termination of this Lease, whether
by forfeiture, lapse of time or otherwise, or upon the termination of Tenant's
right to possession of the Premises, Tenant will at once surrender and deliver
up the Premises, together with the fixtures (other than trade fixtures),
additions and improvements which Landlord has notified Tenant, in writing, that
Landlord will require Tenant not to remove, to Landlord in good condition and
repair (including, but not limited to, replacing all light bulbs and ballasts
not in good working condition) and in the condition in which the Premises
existed as of Commencement Date, except for casualty under Section 27 or
reasonable wear and tear. Reasonable wear and tear shall not include any damage
or deterioration to the floors of the Premises arising from the use of forklifts
in, on or about the Premises (including, without limitation, any marks or stains
of any portion of the floors), and any damage or deterioration that would have
been prevented by proper maintenance by Tenant or Tenant otherwise performing
all of its obligations under this Lease. Upon such termination of this Lease,
Tenant shall remove all tenant signage, trade fixtures, furniture, furnishings,
personal property, additions, and other improvements unless Landlord requests,
in writing, that Tenant not remove some or all of such fixtures (other than
trade fixtures), additions or improvements installed by, or on behalf of Tenant
or situated in or about the Premises. By the date which is twenty (20) days
prior to such termination of this Lease, Landlord shall notify Tenant in writing
of those fixtures (other than trade fixtures), alterations, additions and other
improvements which Landlord shall require Tenant not to remove from the
Premises. Tenant shall repair any damage caused by the installation or removal
of such signs, trade fixtures, furniture, furnishings, fixtures, additions and
improvements which are to be removed from the Premises by Tenant hereunder. If
Landlord fails to so notify Tenant at least twenty (20) days prior to such
termination of this Lease, then Tenant shall remove all tenant signage,
alterations, furniture, furnishings, trade fixtures, additions and other
improvements (other than the Tenant Improvements) installed in or about the
Premises by, or on behalf of Tenant. Tenant shall ensure that the removal of
such items and the repair of the Premises will be completed prior to such
termination of this Lease.

11.     REPAIRS AND MAINTENANCE

        11.1 TENANT'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for those
portions of the Building to be maintained by Landlord, as provided in Sections
11.2 and 11.3 below, Tenant shall, at Tenant's sole cost and expense, keep and
maintain the Premises in good, clean and safe condition and repair to the
reasonable satisfaction of Landlord including, but not limited to, repairing any
damage caused by Tenant or Tenant's Representatives and replacing any property
so damaged by Tenant or Tenant's Representatives. Without limiting the
generality of the foregoing, Tenant shall be solely responsible for maintaining,
repairing, and replacing (a) all plumbing, electrical wiring and equipment
exclusively serving the Premises, (b) all interior lighting (including, without
limitation, light bulbs and/or ballasts) serving the Premises, (c) all glass,
windows, window frames, window casements, skylights, interior and exterior
doors, door frames and door closers, (d) all tenant signage, (e) security
systems, (f) all partitions, fixtures, equipment, interior painting, and
interior walls contiguous to any portion of the Premises). Tenant shall be
responsible for providing janitorial service for the Premises at its sole cost.

        11.2 REIMBURSABLE REPAIRS AND MAINTENANCE OBLIGATIONS: Subject to the
provisions of Sections 6 and 9 of this Lease and except for (i) the obligations
of Tenant set forth in Section 11.1 above, (ii) the obligations of Landlord set
forth in Section 11.3 below, and (iii) the repairs rendered necessary by the
intentional or negligent acts or omissions of Tenant or any of Tenant's
Representatives, Landlord agrees, at Landlord's expense, subject to
reimbursement pursuant to Section 6 above, to keep in good repair all mechanical
systems, heating, ventilation and air conditioning systems exclusively serving
the Premises, sprinkler systems and fire protection systems, the plumbing and
mechanical systems exterior to the Premises, the roof, roof membranes, exterior
walls of the Building, signage (exclusive of tenant signage), and exterior
electrical wiring and equipment, exterior lighting, exterior glass, exterior
doors/entrances and door closers, exterior window casements, exterior painting
of the Building (exclusive of

                                       13
<PAGE>   14

the Premises), and underground utility and sewer pipes outside the exterior
walls of the Building. For purposes of this Section 11.2, the term "exterior"
shall mean outside of and not exclusively serving the Premises. Landlord shall
procure and maintain (a) the heating, ventilation and air conditioning systems
preventative maintenance and repair contract(s), and (b) the fire and sprinkler
protection services and preventative maintenance and repair contract(s)
(including, without limitation, monitoring services). Tenant will reimburse
Landlord for the cost thereof in accordance with the provisions of Section 6
above.

        11.3 LANDLORD'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for repairs
rendered necessary by the intentional or negligent acts or omissions of Tenant
or any of Tenant's Representatives, Landlord agrees, at Landlord's sole cost and
expense, to (a) keep in good repair the structural portions of the floors,
foundations and exterior perimeter walls of the Building (exclusive of glass and
exterior doors), and (b) replace the structural portions of the roof of the
Building (excluding the roof membrane) as, and when, Landlord determines such
replacement to be necessary in Landlord's reasonable discretion.

        11.4 TENANT'S FAILURE TO PERFORM REPAIRS AND MAINTENANCE OBLIGATIONS:
Except for normal maintenance and repair of the items described above and
subject to Section 42 below, Tenant shall have no right of access to or right to
install any device on the roof of the Building nor make any penetrations of the
roof of the Building without the express prior written consent of Landlord. If
Tenant refuses or neglects to repair and maintain the Premises and the adjacent
areas properly as required herein and to the reasonable satisfaction of
Landlord, Landlord may, but without obligation to do so, at any time after
providing ten (10) days prior written notice of its intent to do so (except in
the event of an emergency, in which case such notice is not required), make such
repairs and/or maintenance without Landlord having any liability to Tenant for
any loss or damage that may accrue to Tenant's merchandise, fixtures or other
property, or to Tenant's business by reason thereof, except to the extent any
damage is caused by the willful misconduct or gross negligence of Landlord or
its authorized agents and representatives. In the event Landlord makes such
repairs and/or maintenance, upon completion thereof Tenant shall pay to
Landlord, as additional rent, the Landlord's costs for making such repairs
and/or maintenance, plus twenty percent (20%) for overhead, upon presentation of
a bill therefor, plus any Enforcement Expenses. The obligations of Tenant
hereunder shall survive the expiration of the Term of this Lease or the earlier
termination thereof. Tenant hereby waives any right to repair at the expense of
Landlord under any applicable Laws now or hereafter in effect respecting the
Premises.

12.     INSURANCE

        12.1 TYPES OF INSURANCE: Tenant shall maintain in full force and effect
at all times during the Term of this Lease, at Tenant's sole cost and expense,
for the protection of Tenant and Landlord, as their interests may appear,
policies of insurance which afford the following coverages (i) worker's
compensation: statutory limits; (ii) employer's liability, as required by law,
with a minimum limit of $100,000 per employee and $500,000 per occurrence; (iii)
commercial general liability insurance (occurrence form) providing coverage
against any and all claims for bodily injury and property damage occurring in,
or about the Premises arising out of Tenant's and Tenant's Representatives' use
and/or occupancy of the Premises. Such insurance shall include coverage for
blanket contractual liability, fire damage, premises, personal injury, completed
operations, products liability, personal and advertising, and a plate-glass
rider to provide coverage for all glass in, on or about the Premises including,
without limitation, skylights. Such insurance shall have a combined single limit
of not less than One Million Dollars ($1,000,000) per occurrence with a Two
Million Dollar ($2,000,000) aggregate limit and excess/umbrella insurance in the
amount of Two Million Dollars ($2,000,000). If Tenant has other locations which
it owns or leases, the policy shall include an aggregate limit per location
endorsement. If necessary, as reasonably determined by Landlord, Tenant shall
provide for restoration of the aggregate limit; (iv) comprehensive automobile
liability insurance: a combined single limit of not less than $2,000,000 per
occurrence and insuring Tenant against liability for claims arising out of the
ownership, maintenance, or use of any owned, hired or non-owned automobiles; (v)
"all risk" or "special purpose" property insurance, including without
limitation, sprinkler leakage, boiler and machinery comprehensive form, if
applicable, covering damages to or loss of any personal property, trade
fixtures, inventory, fixtures and equipment located in, or about the Premises
and in addition, business interruption of Tenant. Such insurance shall be
written on a replacement cost basis (without deduction for depreciation) in an
amount equal to one hundred percent (100%) of the full replacement value of the
aggregate of the items referred to in this subparagraph (v); and (vi) such other
insurance as Landlord deems necessary and prudent or as may otherwise be
reasonably required by any of Landlord's lenders or joint venture partners.

                                       14
<PAGE>   15

        12.2 INSURANCE POLICIES: Insurance required to be maintained by Tenant
shall be written by companies (i) licensed to do business in the State o
California, (ii) domiciled in the United States of America, and (iii) having a
"General Policyholders Rating" of at least A:X (or such higher rating as may be
require by a lender having a lien on the Premises) as set forth in the most
current issues of A.M. Best's Rating Guides." Any deductible amounts under any
of the insurance policies required hereunder shall not exceed Five Thousand
Dollars ($5,000). Tenant shall deliver to Landlord certificates of insurance and
true and complete copies of any and all endorsements required herein for all
insurance required to be maintained by Tenant hereunder prior to Tenant's early
access in accordance with Section 2.2. Tenant shall, at least thirty (30) days
prior to expiration of each policy, furnish Landlord with certificates of
renewal or "binders" thereof. Each certificate shall expressly provide that such
policies shall not be cancelable or otherwise subject to modification except
after thirty (30) days prior written notice to the parties named as additional
insureds as required in this Lease (except for cancellation for nonpayment of
premium, in which event cancellation shall not take effect until at least ten
(10) days' notice has been given to Landlord). Tenant shall have the right to
provide insurance coverage which it is obligated to carry pursuant to the terms
of this Lease under a blanket insurance policy, provided such blanket policy
expressly affords coverage for the Premises and for Landlord as required by this
Lease.

        12.3 ADDITIONAL INSUREDS AND COVERAGE: Landlord, any property management
company and/or agent of Landlord for the Premises, the Building, the Lot or the
Park, and any lender(s) of Landlord having a lien against the Premises, the
Building, the Lot or the Park shall be named as additional insureds under all of
the policies required in Section 12.1 (iii) above, but only if Landlord provides
notice expressly requesting such entities to be named as additional insureds.
Additionally, such policies shall provide for severability of interest. All
insurance to be maintained by Tenant shall, except for workers' compensation and
employer's liability insurance, be primary, without right of contribution from
insurance maintained by Landlord. Any umbrella/excess liability policy (which
shall be in "following form") shall provide that if the underlying aggregate is
exhausted, the excess coverage will drop down as primary insurance. The limits
of insurance maintained by Tenant shall not limit Tenant's liability under this
Lease. It is the parties' intention that the insurance be procured and
maintained by Tenant as required herein shall provide coverage for any and all
damage or injury arising from or related to Tenant's operations of its business
and/or Tenant's or Tenant's Representatives' use of the Premises and/or any of
the areas within the Park, whether such events occur within the Premises (as
described in Exhibit A hereto) or in any other part of the Park. It is not
contemplated or anticipated by the parties that the aforementioned risks of loss
be borne by Landlord's insurance carriers, rather it is contemplated and
anticipated by Landlord and Tenant that such risks of loss be borne by Tenant's
insurance carriers pursuant to the insurance policies procured and maintained by
Tenant as required herein.

13.     WAIVER OF SUBROGATION

        Landlord and Tenant hereby mutually waive their respective rights of
recovery against each other for any loss of, or damage to, either parties'
property to the extent that such loss or damage is insured by an insurance
policy required to be in effect at the time of such loss or damage. Each party
shall obtain any special endorsements, if required by its insurer whereby the
insurer waives its rights of subrogation against the other party. This provision
is intended to waive fully, and for the benefit of the parties hereto, any
rights and/or claims which might give rise to a right of subrogation in favor of
any insurance carrier. The coverage obtained by Tenant pursuant to Section 12 of
this Lease shall include, without limitation, a waiver of subrogation
endorsement attached to the certificate of insurance. The provisions of this
Section 13 shall not apply in those instances in which such waiver of
subrogation would invalidate such insurance coverage or would cause either
party's insurance coverage to be voided or otherwise uncollectable.

14.     LIMITATION OF LIABILITY AND INDEMNITY

        Except to the extent of damage resulting from the gross negligence or
willful misconduct of Landlord or its authorized representatives, Tenant agrees
to protect, defend (with counsel acceptable to Landlord) and hold Landlord and
Landlord's lenders, partners, members, property management company (if other
than Landlord), agents, directors, officers, employees, representatives,
contractors, shareholders, successors and assigns, and each of their respective
partners, members, directors, employees, representatives, agents, contractors,
shareholders, successors and assigns (collectively, the "Indemnitees") harmless
and indemnify the Indemnitees from and against

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<PAGE>   16

all liabilities, damages, claims, losses, judgments, charges and expenses
(including reasonable attorneys' fees, costs of court and expenses necessary in
the prosecution or defense of any litigation including the enforcement of this
provision) arising from or in any way related to, directly or indirectly, (i)
Tenant's or Tenant's Representatives' use of the Premises, Building and/or Park,
(ii) the conduct of Tenant's business, (iii) from any activity, work or thing
done, permitted or suffered by Tenant in or about the Premises, (iv) in any way
connected with the Premises or with the improvements or personal property
therein, including, but not limited to, any liability for injury to person or
property of Tenant, Tenant's Representatives, or third party persons, and/or (v)
Tenant's failure to perform any covenant or obligation of Tenant under this
Lease. Tenant agrees that the obligations of Tenant herein shall survive the
expiration or earlier termination of this Lease.

        Except to the extent of damage resulting from the gross negligence or
willful misconduct of Landlord or its authorized representatives, to the fullest
extent permitted by law, Tenant agrees that neither Landlord nor any of
Landlord's lender(s), partners, members, employees, representatives, legal
representatives, successors or assigns shall at any time or to any extent
whatsoever be liable, responsible or in any way accountable for any loss,
liability, injury, death or damage to persons or property which at time may be
suffered or sustained by Tenant or by any person(s) whomsoever who may at any
time be using, occupying or visiting the Premises, the Building or the Park,
including, but not limited to, any acts, errors or omissions by or on behalf of
any other tenants or occupants of the Building and/or Park. Tenant shall not, in
any event or circumstance, be permitted to offset or otherwise credit against
any payments of Rent required herein for matters which Landlord may be liable
hereunder. Landlord and its authorized representatives shall not be liable for
any interference with light or air, or for any latent defect in the Premises or
the Building.

15.     ASSIGNMENT AND SUBLEASING

        15.1 PROHIBITION: Tenant shall not assign, mortgage, hypothecate,
encumber, grant any license or concession, pledge or otherwise transfer this
Lease (collectively, "assignment"), in whole or in part whether voluntarily or
involuntarily or by operation of law, nor sublet or permit occupancy by any
person other than Tenant of all or any portion of the Premises without first
obtaining the prior written consent of Landlord, which constant shall not
reasonably be withheld, conditioned or delayed. Tenant hereby agrees that
Landlord may withhold its consent to any proposed sublease or assignment if the
proposed sublessee or assignee or its business is subject to compliance with
additional requirements of the ADA (defined below) and/or Environmental Laws
(defined below) beyond those requirements which are applicable to Tenant, unless
the proposed sublessee or assignee shall (a) first delivery plans and
specifications for complying with such additional requirements and obtain
Landlord's written consent thereto, and (b) comply with all Landlord's
conditions for or contained in such consent, including without limitation,
requirements for security to assure the lien-free completion of such
improvements. If Tenant seeks to sublet or assign all or any portion of the
Premises, Tenant shall deliver to Landlord at least thirty (30) days prior to
the proposed commencement of the sublease or assignment (the "Proposed Effective
Date") the following (i) the name of the proposed assignee or sublessee; (ii)
such information as to such assignee's or sublessee's financial responsibility
and standing as Landlord may reasonably require; and (iii) the aforementioned
plans and specifications, if any. Within ten (10) days after Landlord's receipt
of a written request from Tenant that Tenant seeks to sublet or assign all or
any portion of the Premises, Landlord shall deliver to Tenant a copy of
Landlord's standard form of sublease or assignment agreement (as applicable),
which instrument shall be utilized for each proposed sublease or assignment (as
applicable), and such instrument shall include a provision whereby the assignee
or sublessee assumes all of Tenant's obligations hereunder and agrees to be
bound by the terms hereof. As Additional Rent hereunder, Tenant shall pay to
Landlord a fee in the amount of five hundred dollars ($500) plus Tenant shall
reimburse Landlord for actual reasonable legal and other expenses incurred by
Landlord in connection with any actual or proposed assignment or subletting. In
the event the sublease or assignment (1) by itself or taken together with prior
sublease(s) or partial assignment(s) covers or totals, as the case may be, more
than twenty-five percent (25%) of the rentable square feet of the Premises or
(2) is for a term which by itself or taken together with prior or other
subleases or partial assignments is greater than fifty percent (50%) of the
period remaining in the Term of this Lease as of the time of the Proposed
Effective Date, then Landlord shall have the right to be exercised by giving
written notice to Tenant within thirty (30) days following receipt of Tenant's
notice of proposed assignment or sublease, to recapture the space described in
the sublease or assignment. If such recapture notice is given, it shall serve to
terminate this Lease with respect to the proposed sublease so long as Tenant
delivers such recission notice to Landlord within ten (10) days of Tenant's
receipt of Landlord's recapture notice. However, no termination of this Lease
with respect to part or all of the Premises shall become effective without the
prior written consent, where

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<PAGE>   17

necessary, of the holder of each deed of trust encumbering the Premises or any
party thereof. If this Lease is terminated pursuant to the foregoing with
respect to less then the entire Premises, the Rent shall be adjusted on the
basis of proportion of square feet retained by Tenant to the square feet
originally demised and this Lease as so amended shall continue thereafter in
full force and effect Each permitted assignee or sublessee shall assume and be
deemed to assume this Lease and shall be and remain liable jointly and severally
with Tenant for payment of Rent and for the due performance of, and compliance
with all terms, covenants, conditions and agreements herein contained on
Tenant's part to be performed or complied with for the term of this Lease. No
assignment or subletting shall affect the continuing primary liability of Tenant
(which, following assignment, shall be joint and several with the assignee), and
Tenant shall not be released from performing any of the terms, covenants and
conditions of this Lease. Tenant hereby acknowledges and agrees that it
understands that Landlord's accounting department may process and accept Rent
payments without verifying that such payments are being made by Tenant, a
permitted sublessee or a permitted assignee in accordance with the provisions of
this Lease. Although such payments may be processed and accepted by such
accounting department personnel, any and all actions or omissions by the
personnel of Landlord's accounting department shall not be considered as
acceptance by Landlord of any proposed assignee or sublessee nor shall such
actions or omissions to be deemed to be a substitute for the requirement that
Tenant obtain Landlord's prior written consent to any such subletting or
assignment, and any such actions or omissions by the personnel of Landlord's
accounting department shall not be considered as a voluntary relinquishment by
Landlord of any its rights hereunder nor shall any voluntary relinquishment of
such rights be inferred therefrom. For purposes hereof, in the event Tenant is a
corporation, partnership, joint venture, trust or other entity other than a
natural person, any change in the direct or indirect ownership of Tenant
(whether pursuant to one or more transfers) which results in a change of more
than fifty percent (50%) in the direct or indirect ownership of Tenant shall be
deemed to be an assignment within the meaning of this Section 15 and shall be
subject to all the provisions hereof. Except with respect to any Related Entity
(as defined below), any and all opinions (except for the Option to Extend the
Lease described in Addendum One of this Lease), first rights of refusal, tenant
improvement allowances and other similar rights granted to Tenant in this Lease,
if any, shall not be assignable by Tenant unless expressly authorized in writing
by Landlord.

        15.2 EXCESS SUBLEASE RENTAL OR ASSIGNMENT CONSIDERATION: In the vent of
any sublease or assignment of all or any portion of the Premises where the rent
or other consideration provided for in the sublease or assignment either
initially or over the term of the sublease or assignment exceeds the Rent or pro
rata portion of the Rent, as the case may be, for such space reserved in the
Lease, Tenant shall pay the Landlord monthly, as Additional Rent, at the same
time as the monthly installments of Rent are payable hereunder, after deduction
for reasonable attorneys' fees (in an amount not to exceed $2,500) and brokerage
commissions (but without deduction for any Tenant Improvement Costs incurred by
Tenant) fifty percent (50%) of the excess of each such payment of rent or other
consideration in excess of the Rent called for hereunder.

        15.3 WAIVER: Notwithstanding any assignment or sublease, or any
indulgences, waivers or extensions of time granted by Landlord to any assignee
or sublessee, or failure by Landlord to take action against any assignee or
sublessee, Tenant waives notice of any default of any assignee or sublessee and
agrees that Landlord may, at its option, proceed against Tenant without having
taken action against or joined such assignee or sublessee, except that Tenant
shall have the benefit of any indulgences, waivers and extensions of time
granted to any such assignee or sublessee.

        15.4 RELATED ENTITIES: Notwithstanding anything to the contrary
contained in this Section 15, so long as Tenant delivers to Landlord (1) at
least fifteen (15) business days prior written notice of its intention to assign
or sublease the Premises to any Related Entity, which notice shall set forth the
name of the Related Entity, (2) a copy of the proposed agreement pursuant to
which such assignment or sublease shall be effectuated, and (3) such other
information concerning the Related Entity as Landlord may reasonably require,
including without limitation, information regarding any change in the proposed
use of any portion of the Premises and any financial information with respect to
such Related Entity, and so long as any change in the proposed use of the
subject portion of the Premises is in conformance with the uses permitted to be
made under this Lease and do not involve the use or storage of any Hazardous
Materials (other than nominal amounts of ordinary household cleaners, office
supplies and janitorial supplies which are not regulated by any Environmental
Laws), then Tenant may assign this Lease or sublease any portion of the Premises
to any Related Entity, or in connection with any merger, consolidation or sale
of substantially all of the assets of Tenant, without having to obtain the prior
written consent of Landlord thereto. For purposes of this Lease the term
"Related Entity" shall mean and refer to any corporation or entity which

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<PAGE>   18

controls, is controlled by or is under common control with Tenant, as all of
such terms are customarily used in the industry.

16.     AD VALOREM TAXES

        Prior to delinquency, Tenant shall pay all taxes and assessments levied
upon trade fixtures, alterations, additions, improvement, inventories and
personal property located and/or installed on or in the Premises by, or on
behalf of, Tenant; and if requested by Landlord, Tenant shall promptly deliver
to Landlord copies of receipts for payment of all such taxes and assessments. To
the extent any such taxes are not separately assessed or billed to Tenant,
Tenant shall pay the amount thereof as invoiced by Landlord.

17.     SUBORDINATION

        Without the necessity of any additional document being executed by
Tenant for the purpose of effecting a subordination, and at the election of
Landlord or any bona fide mortgagee or deed of trust beneficiary with a lien on
all or any portion of the Premises or any ground lessor with respect to the land
of which the Premises are a part, the rights of Tenant under this Lease and this
Lease shall be subject and subordinate at all times to (i) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Building or the land upon which the Building is situated or both, and (ii) the
lien of any mortgage or deed of trust which my now exist or hereafter be
executed in any amount of which the Building, the Lot, ground leases or
underlying leases, or Landlord's interest or estate in any of said items is
specified as security. Notwithstanding the foregoing, Landlord or any such
ground lessor, mortgagee, or any beneficiary shall have the right to subordinate
or cause to be subordinated any such ground leases or underlying leases or any
such liens to this Lease. If any ground lease or underlying lease terminates for
any reason or any mortgage or deed of trust is foreclosed or a conveyance in
lieu of foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination and upon the request of such successor to Landlord, attain to and
become the Tenant of the successor in interest to Landlord, provided such
successor in interest will not disturb Tenant's use, occupancy or quiet
enjoyment of the Premises so long as Tenant is not in default of the terms and
provisions of this Lease. The successor in interest to Landlord following
foreclosure, sale or deed in lieu thereof shall not be (a) liable for any act or
omission of any prior lessor or with respect to events occurring prior to
acquisition of ownership; (b) subject to any offsets or defenses which Tenant
might have against any prior lessor (c) bound by prepayment of more than one (1)
month's Rent, except in those instances when Tenant pays Rent quarterly in
advance pursuant to Section 8 hereof, then not more than three months' Rent; or
(d) liable to Tenant for any Security Deposit not actually received by such
successor in interest to the extent any portion of all of such Security Deposit
has not already been forfeited by, or refunded to, Tenant. Landlord shall be
liable to Tenant for all or any portion of the Security Deposit not forfeited
by, or refunded to Tenant, until and unless Landlord transfers such Security
Deposit to the successor in interest. Tenant covenants and agrees to execute
(and acknowledge if required by Landlord, any lender or ground lessor) and
deliver, within ten (10) days of a demand or request by Landlord and in the
commercially reasonable form requested by Landlord, ground lessor, mortgagee or
beneficiary, any additional documents evidencing the priority or subordination
of this Lease with respect to any such ground leases or underlying leases or the
lien of any such mortgage or deed of trust. Tenant's failure to timely execute
and deliver such additional documents shall, at Landlord's option, constitute a
material default hereunder. It is further agreed that Tenant shall be liable to
Landlord, and shall indemnify Landlord from and against any loss, cost, damage
or expense, incidental, consequential, or otherwise, arising or accruing
directly or indirectly, from any failure of Tenant to execute or deliver to
Landlord any such additional documents, together with any and all Enforcement
Expenses.

        Tenant's agreement to subordinate this Lease to any future ground or
underlying lease or any future deed of trust or mortgage pursuant to the
foregoing provisions of this Section 17 is conditioned upon Landlord delivering
to Tenant from the Lessor under such future ground or underlying lease or the
holder of any such deed of trust, a non-disturbance agreement in a commercially
reasonable form agreeing, among other things, that Tenant's right to possession
of the Premises pursuant to the terms and conditions of this Lease shall not be
disturbed provided Tenant is not in default under this Lease beyond the
applicable notice and cure periods hereunder.

18.     RIGHT OF ENTRY

        Tenant grants Landlord or its agents the right to enter the Premises at
all reasonable times upon one (1) business day notice (except in the event of an
emergency, in which case such notice is not required) for purposes of

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<PAGE>   19

inspection, exhibition, posting or notices, repair or alteration. At Landlord's
option, Landlord shall at all times have and retain a key with which to unlock
all the doors in, upon and about the Premises, excluding Tenant's vaults and
safes. It is further agreed that Landlord shall have the right to use any and
all means Landlord deems necessary to enter the Premises in an emergency.
Landlord shall have the right to place "for rent" or "for lease" signs on the
outside of the Premises, the Building and in the Common Areas. Landlord shall
also have the right to place " for sale" signs on the outside of the Building
and in the Common Areas. Tenant hereby waives any claim from, damages or for any
injury or inconvenience to or interference with Tenant's business, or any other
loss occasioned thereby except for any claim for any of the foregoing arising
out of the sole active gross negligence or willful misconduct of Landlord or its
authorized representatives.

19.     ESTOPPEL CERTIFICATE

        Tenant shall execute (and acknowledge if required by any lender or
ground lessor) and deliver to Landlord, within ten (10) days after Landlord
provides such to Tenant, a statement in writing certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modification), the date to which the Rent and other charges are paid in
advance, if any, acknowledging that there are not, to Tenant's knowledge, any
uncured defaults on the part of Landlord hereunder or specifying such defaults
as are claimed, and such other matters as Landlord may reasonably require. Any
such statement may be conclusively relied upon by Landlord and any prospective
purchaser or encumbrance of the Premises. Tenant's failure to deliver such
statement within such time shall be conclusive upon the Tenant that (a) this
Lease is in full force and effect, without modification except as may be
represented by Landlord; (b) there are no uncured defaults in Landlord's
performance; and (c) not more than one month's Rent has been paid in advance,
except in those instances when Tenant pays Rent quarterly in advance pursuant to
Section 8 hereof, then not more than three month's Rent has been paid in
advance. Failure by Tenant to so deliver such certified estoppel certificate
shall be a material default of the provisions of this Lease. Tenant shall be
liable to Landlord, and shall indemnify Landlord from and against any loss,
cost, damage or expense, incidental, consequential, or otherwise, arising or
accruing directly or indirectly, from any failure of Tenant to execute or
deliver to Landlord any such certified estoppel certificate, together with any
and all Enforcement Expenses.

20.     TENANT'S DEFAULT

        The occurrence of any one or more of the following events shall, at
Landlord's option, constitute a material default by Tenant of the provisions of
this Lease:

        20.1 The abandonment of the Premises by Tenant or, after five (5)
business days written notice to Tenant, the vacation of the Premises by Tenant
which would cause any insurance policy to be invalidated or otherwise lapse.
Tenant agrees to notice and service of notice as provided for in this Lease and
waives any right to any other or further notice or service of notice which
Tenant may have under any statute of law now or hereafter in effect;

        20.2 The failure by Tenant to make any payment of Rent, Additional Rent
or any other payment required hereunder with three (3) business days after
Landlord's delivery of written notice to Tenant that said payment is past due.
Tenant agrees that any such written notice delivered by Landlord shall, to the
fullest extent permitted by law, serve as the statutorily required notice under
applicable law. In addition to the foregoing, Tenant agrees to notice and
service of notice as provided for in this Lease;

        20.3 The failure by Tenant to observe, perform or comply with any of the
conditions, covenants or provisions of this Lease (except failure to make any
payment of Rent and/or Additional Rent) and such failure is not cured within
fifteen (15) days after notice from Landlord. If such failure is susceptible of
cure but cannot reasonably be cured within the aforementioned time period (if
any), as reasonably determined by Landlord, Tenant shall promptly commence the
cure of such failure and thereafter diligently prosecute such cure to completion
within the time period specified by Landlord in any written notice regarding
such failure as may be delivered to Tenant by Landlord. In no event or
circumstance shall Tenant have more than thirty (30) days to complete any such
cure, unless otherwise expressly agreed to in writing by Landlord (in Landlord's
sole discretion); notwithstanding the foregoing, the failure of Tenant to
deliver the Letter of Credit to Landlord as and when set forth in Section 4 of
this Lease shall constitute a material default hereunder;

                                       19
<PAGE>   20

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

        20.5 Tenant's use or storage of Hazardous Materials in, on or about the
Premises, the Building, the Lot and/or the Park other than as expressly
permitted by the provisions of Section 29 below which is not cured with five (5)
business days' notice from Landlord; or

        20.6 The making of any material misrepresentation or omission by Tenant
in any materials delivered by or on behalf of Tenant to Landlord pursuant to
this Lease.

21.     REMEDIES FOR TENANT'S DEFAULT

        21.1 LANDLORD'S RIGHTS: In the event of Tenant's material default under
this Lease, Landlord may terminate Tenant's right to possession of the Premises
by any lawful means in which case upon delivery of written notice by Landlord
this Lease shall terminate on the date specified by Landlord in such notice and
Tenant shall immediately surrender possession of the Premises to Landlord. In
addition, the Landlord shall have the immediate right of re-entry whether or not
this Lease is terminated, and if this right of re-entry is exercised following
abandonment of the Premises by Tenant, Landlord may consider any personal
property belonging to Tenant and left on the Premises to also have been
abandoned. No re-entry or taking possession of the Premises by Landlord pursuant
to this Section 21 shall be construed as an election to terminate this Lease
unless a written notice of such intention is given to Tenant. If Landlord relets
the Premises or any portion thereof, (i) Tenant shall be liable immediately to
Landlord for all reasonable costs Landlord incurs in reletting the Premises or
any part thereof, including, without limitation, broker's commissions, expenses
of cleaning, redecorating, and further improving the Premises and other similar
costs (collectively, the "Reletting Costs"), and (ii) the rent received by
Landlord from such reletting shall be applied to the payment of, first, any
indebtedness from Tenant to Landlord other than Base Rent, Operating Expenses,
Tax Expenses, Common Area Utility Costs and Utility Expenses; second, all costs
including maintenance, incurred by Landlord in reletting; and, third, Base Rent,
Operating Expenses, Tax Expenses, Common Area Utility Costs, Utility Expenses,
and all other sums due under this Lease. Any and all of the Reletting Costs
shall be fully chargeable to Tenant and shall not be prorated or otherwise
amortized in relation to any new lease for the Premises or any portion thereof.
After deducting the payments referred to above, any sum remaining from the
rental Landlord received from reletting shall be held by Landlord and applied in
payment of future Rent as Rent becomes due under this Lease. In no event shall
Tenant be entitled to any excess rent received by Landlord. Reletting may be for
a period shorter or longer than the remaining term of this Lease. No act by
Landlord other than giving written notice to Tenant shall terminate this Lease.
Act of maintenance, efforts to relet the Premises or the appointment of a
receiver on Landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to possession. So
long as this Lease is not terminated, Landlord shall have the right to remedy
any default of Tenant, to maintain or improve the Premises, to cause a receiver
to be appointed to administer the Premises and new or existing subleases and to
add to the Rent payable hereunder all of Landlord's reasonable costs in so
doing, with interest at the maximum rate permitted by law from the date of such
expenditure.

        21.2 DAMAGES RECOVERABLE: If Tenant breaches this Lease and abandons the
Premises before the end of the Term, or if Tenant's right to possession is
terminated by Landlord because of a breach or default under this Lease, then in
either such case, Landlord may recover from Tenant all damages suffered by
Landlord as a result of Tenant's failure to perform its obligations hereunder,
including, but not limited to, the cost of any Tenant Improvements constructed
by or on behalf of Tenant pursuant to Exhibit B hereto, the portion of any
broker's or leasing agent's commission incurred with respect to the leasing of
the Premises to Tenant for the balance of the Term of the Lease remaining after
the date on which Tenant is in default of its obligations hereunder, and all
Reletting Costs, and the worth at the time of the award (computed in accordance
with paragraph (3) of Subdivision

                                       20
<PAGE>   21

(a) of Section 1951.2 of the California Civil Code) of the amount by which the
Rent then unpaid hereunder for the balance of the Lease Term exceeds the amount
of such loss of Rent for the same period which Tenant proves could be reasonably
avoided by Landlord and in such case, Landlord prior to the award, may relet the
Premises for the purpose of mitigating damages suffered by Landlord because of
Tenant's failure to perform its obligations hereunder; provided, however, that
even though Tenant has abandoned the Premises following such breach, this Lease
shall nevertheless continue in full force and effect for as long as Landlord
does not terminate Tenant's right of possession, and until such termination,
Landlord shall have the remedy described in Section 1951.4 of the California
Civil Code (Landlord may continue this Lease in effect after Tenant's breach and
abandonment and recover Rent as it becomes due, if Tenant has the right to
sublet or assign, subject only to reasonable limitations) and may enforce all
its rights and remedies under this Lease, including the right to recover the
Rent from Tenant as it becomes due hereunder. The "worth at the time of the
award" within the meaning of Subparagraphs (a)(1) and (a)(2) of Section 1951.2
of the California Civil Code shall be computed by allowing interest at the rate
of ten percent (10%) per annum. Tenant waives redemption or relief from
forfeiture under California Code of Civil Procedure Sections 1174 and 1179, or
under any other present or future law, in the event Tenant is evicted or
Landlord takes possession of the Premises by reason of any default of Tenant
hereunder.

        21.3 RIGHTS AND REMEDIES CUMULATIVE: The foregoing rights and remedies
of Landlord are not exclusive; they are cumulative in addition to any rights and
remedies now or hereafter existing at law, in equity by statute or otherwise, or
to any equitable remedies Landlord may have, and to any remedies Landlord may
have under bankruptcy laws or laws affecting creditor's rights generally. In
addition to all remedies set forth above, if Tenant materially defaults under
this Lease, any and all Base Rent waived by Landlord under Section 3 above shall
be immediately due and payable to Landlord and all options granted to Tenant
hereunder shall automatically terminate, unless otherwise expressly agreed to in
writing by Landlord.

        21.4 WAIVER OF A DEFAULT: The waiver by Landlord of any default of any
provision of this Lease shall not be deemed or construed a waiver of any other
default by Tenant hereunder or of any subsequent default of this Lease, except
for the default specified in the waiver.

22.     HOLDING OVER

        If Tenant holds possession of the Premises after the expiration of the
Term of this Lease with Landlord's consent, Tenant shall become a tenant from
month-to-month upon the terms and provision of this Lease, provided the monthly
Base Rent during such hold over period shall be 125% of the Base Rent due on the
last month of the Lease Term, payable in advance on or before the first day of
each month. Acceptance by Landlord of the monthly Base Rent without the
additional twenty-five percent (25%) increase of Base Rent shall not be deemed
or construed as a waiver by Landlord of any of its rights to collect the
increased amount of the Base Rent as provided herein at any time. Such
month-to-month tenancy shall not constitute a renewal or extension for any
further term. All options, if any, granted under the terms of this Lease shall
be deemed automatically terminated and be of no force or effect during said
month-to-month tenancy. Tenant shall continue in possession until such tenancy
shall be terminated by either Landlord or Tenant giving written notice of
termination to the other party at least thirty (30) days prior to the effective
date of termination. This paragraph shall not be construed as Landlord's
permission for Tenant to hold over. Acceptance of Base Rent by Landlord
following expiration or termination of this Lease shall not constitute a renewal
of this Lease.

23.     LANDLORD'S DEFAULT

        Landlord shall not be deemed in breach or default of this Lease unless
Landlord fails within a reasonable time to perform an obligation required to be
performed by Landlord hereunder. For purposes of this provision, a reasonable
time shall not be less than thirty (30) days after receipt by Landlord of
written notice specifying the nature of this obligation Landlord has not
performed; provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days, after receipt of written notice, is
reasonably necessary for its performance, then Landlord shall not be in breach
or default of this Lease if performance of such obligation is commenced within
such thirty (30) day period and thereafter diligently pursued to completion. In
providing notice to Landlord hereunder, Tenant shall also comply with any notice
requirements under Section 33 below.

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<PAGE>   22

24.     PARKING

        Tenant shall have a license to use the number of parking spaces
specified in the Basic Lease Information. Landlord shall exercise reasonable
efforts to insure that such spaces are available to Tenant for its use, but
Landlord shall not be required to enforce Tenant's right to use the same.

25.     SALE OF PREMISES

        In the event of any sale of Premises by Landlord or the cessation
otherwise of Landlord's interest therein, Landlord shall be and is hereby
released from any and all of its obligations to perform or further perform under
this Lease and from all liability hereunder accruing from or after the date of
such sale; and the purchaser, at such sale or any subsequent sale of the
Premises shall be deemed, without any further agreement between the parties or
their successors in interest or between the parties and any such purchaser, to
have assumed and agreed to carry out any and all of the covenants and
obligations of the Landlord under this Lease. For purposes of this Section 25,
the term "Landlord" means only the owner and/or agent of the owner as such
parties exist as of the date on which Tenant executes this Lease. A ground lease
or similar long term lease by Landlord of the entire Building, of which Premises
are a part, shall be deemed a sale within the meaning of this Section 25. Tenant
agrees to attorn to such new owner provided such new order does not disturb
Tenant's use, occupancy or quiet enjoyment of the Premises so long as Tenant is
not in default of any of the provisions of this Lease.

26.     WAIVER

        No delay or omission in the exercise of any right or remedy of Landlord
on any default by Tenant shall impair such a right or remedy or be construed as
a waiver. No delay or omission in the exercise of any right or remedy of Tenant
on any default by Landlord shall impair such a right or remedy or be construed
as a waiver. The subsequent acceptance of Rent by Landlord after default by
Tenant of any covenant or term of this Lease shall not be deemed a waiver of
such default, other than a waiver of timely payment for the particular Rent
payment involved, and shall not prevent Landlord from maintaining an unlawful
detainer or other action based on such breach. No payment by Tenant or receipt
by Landlord of a lesser amount than the monthly Rent and other sums due
hereunder shall be deemed to be other than on account of the earliest Rent or
other sums due, nor shall any endorsement or statement on any check or
accompanying any check or payment be deemed an accord and satisfaction; and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance of such Rent or other sum or pursue any other remedy
provided in this Lease. No failure, partial exercise or delay on the part of the
Landlord in exercising any right, power or privilege hereunder shall operate as
a waiver thereof.

27.     CASUALTY DAMAGE

        If the Premises or any part thereof shall be damaged by fire or other
casualty, Tenant shall give prompt written notice thereof to Landlord. In case
the Building shall be so damaged by fire or other casualty that substantial
alteration or reconstruction of the Building shall, in Landlord's reasonable
opinion, be required (whether or not the Premises shall have been damaged by
such fire or other casualty), Landlord may, at its option, terminate this Lease
by notifying Tenant in writing of such termination within ninety (90) days after
the date of such damage, in which event the Rent shall be abated as of the date
of such damage. If Landlord does not elect to terminate this Lease, and provided
insurance proceeds and any contributions from Tenant, if necessary, are
available to fully repair the damage, Landlord shall within one hundred twenty
(120) days after the date of such damage commence to repair and restore the
Building and shall proceed with reasonable diligence to restore the Building
(except that Landlord shall not be responsible for delays outside its control)
to substantially the same condition in which it was immediately prior to the
happening of the casualty; provided, Landlord shall not be required to rebuild,
repair, or replace any part of Tenant's furniture, furnishings, fixtures and/or
equipment removable by Tenant or any improvements, alterations or additions
installed by or for the benefit of Tenant under the provisions of this Lease.
Landlord shall not in any event be required to spend for such work an amount in
excess of the insurance proceeds (excluding any deductible) and any
contributions from Tenant, if necessary, actually received by Landlord as a
result of the fire or other casualty. Landlord shall not be liable for any
inconvenience or annoyance to Tenant, injury to the business of Tenant, loss of
use of any part of the Premises by the Tenant or loss of Tenant's personal
property resulting in any way from such damage or the repair thereof, except to
the extent caused by Landlord's gross negligence or willful misconduct, and
except that, subject to the provision of the next sentence, Landlord shall allow
Tenant a fair diminution of Rent during the time and to the extent the Premises
are unfit for occupancy. Notwithstanding

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<PAGE>   23

anything to the contrary contained herein, if the Premises or any other portion
of the Building be damaged by fire or other casualty resulting from the
intentional or negligent acts or omissions of Tenant or any of Tenant's
Representatives; (i) the Rent shall not be diminished during the repair of such
damage, (ii) Tenant shall not have any right to terminate this Lease due to the
occurrence of such casualty or damage, and (iii) Tenant shall be liable to
Landlord for the cost and expense of the repair and restoration of all or any
portion of the Building caused thereby (including, without limitation, any
deductible) to the extent such cost and expenses is not covered by insurance
proceeds. In the event the holder of any indebtedness secured by the Premises
requires that the insurance proceeds he applied to such indebtedness, then
Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within thirty (30) days after the date of notice
to Tenant of any such event, whereupon all rights and obligations shall cease
and terminate hereunder except for those obligations expressly intended to
survive any such termination of this Lease. Except as otherwise provided in this
Section 27, Tenant hereby waives the provisions of Sections 1932(2), 1933(4),
1941 and 1942 of the California Civil Code.

28.     CONDEMNATION

        If twenty-five percent (25%) or more of the Premises is condemned by
eminent domain, inversely condemned or sold in lieu of condemnation for any
public or quasi-public use or purpose ("Condemned"), then Tenant or Landlord may
terminate this Lease as of the date when physical possession of the Premises is
taken and title vests in such condemning authority, and Rent shall be adjusted
to the date of termination. Tenant shall not because of such condemnation assert
any claim against Landlord or the condemning authority for any compensation
because of such condemnation, and Landlord shall be entitled to receive the
entire amount of any award without deduction for any estate of interest or other
interest of Tenant; provided, however, the foregoing provisions shall not
preclude Tenant, at Tenant's sole cost and expense, from obtaining any separate
award to Tenant for loss of or damage to Tenant's trade fixtures and removable
personal property or for damages for cessation of interruption of Tenant's
business provided such award is separate from Landlord's award and provided
further such separate award neither diminishes nor impairs the award otherwise
payable to Landlord. In addition to the foregoing, Tenant shall be entitled to
seek compensation for the relocation costs recoverable by Tenant pursuant to the
provisions of California Government Code Section 7262. If neither party elects
to terminate this Lease, Landlord shall, if necessary, promptly proceed to
restore the Premises or the Building to substantially its same condition prior
to such partial condemnation, allowing for the reasonable effects of such
partial condemnation, and a proportionate allowance shall be made to Tenant, as
reasonably determined by Landlord, for the Rent corresponding to the time during
which, and to the part of the Premises of which, Tenant is deprived on account
of such partial condemnation and restoration. Landlord shall not be required to
spend funds for restoration in excess of the amount received by Landlord as
compensation awarded.

29.     ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS

        29.1 HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE: Prior to executing this
Lease, Tenant has completed, executed and delivered to Landlord Tenant's Initial
Hazardous Materials Disclosure Certificate (the "Initial HazMat Certificate"), a
copy of which is attached hereto as Exhibit G and incorporated herein by this
reference. Tenant covenants, represents and warrants to Landlord that the
information on the Initial HazMat Certificate is true and correct and accurately
describes the use(s) of Hazardous Materials which will be made and/or used on
the Premises by Tenant. Tenant shall commencing with the date which is one year
from the Commencement Date and continuing every year thereafter, complete,
execute, and deliver to Landlord, a Hazardous Materials Disclosure Certificate
("the HazMat Certificate") describing Tenant's present use of Hazardous
Materials on the Premises, and any other reasonably necessary documents as
requested by Landlord. The HazMat Certificate required hereunder shall be in
substantially the form as that which is attached hereto as Exhibit E.

        29.2 DEFINITION OF HAZARDOUS MATERIALS: As used in this Lease, the term
Hazardous Materials shall mean and include (a) any hazardous or toxic wastes,
materials or substances, and other pollutants or contaminants, which are or
become regulated by any Environmental Laws; (b) petroleum, petroleum by
products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos
and asbestos containing material, in any form, whether friable or non-friable;
(d) polychlorinated biphenyls; (e) radioactive materials; (f) lead and
lead-containing materials; (g) any other material, waste or substance displaying
toxic, reactive, ignitable or corrosive characteristics, as all such terms are
used in their broadest sense, and are defined or become defined by any
Environmental Law (defined below); or (h) any materials which cause or threatens
to cause a nuisance upon or waste to any portion of the Premises, the

                                       23
<PAGE>   24

Building, the Lot, the Park or any surrounding property; or poses or threatens
to pose a hazard to the health and safety of persons on the Premises or any
surrounding property.

        29.3 PROHIBITION; ENVIRONMENTAL LAWS: Tenant shall not be entitled to
use nor store any Hazardous Materials on, in, or about the Premises, the
Building, the Lot and the Park, or any portion of the foregoing, without, in
each instance, obtaining Landlord's prior written consent thereto. If Landlord
consents to any such usage or storage, then Tenant shall be permitted to use
and/or store only those Hazardous Materials that are necessary for Tenant's
business and to the extent disclosed in the HazMat Certificate (and any updates
thereof) and as expressly approved by Landlord in writing, provided that such
usage and storage is only to the extent of the quantities of Hazardous Materials
as specified in the then applicable HazMat Certificate as expressly approved by
Landlord and provided further that such usage and storage is in full compliance
with any and all local, state and federal environmental, health and/or
safety-related laws, statutes, orders, standards, courts' decisions, ordinances,
rules and regulations (as interpreted by judicial and administrative decisions),
decrees, directives, guidelines, permits or permit conditions, currently
existing and as amended, enacted, issued or adopted in the future which are or
become applicable to Tenant or all or any portion of the Premises (collectively,
the "Environmental Laws"). Tenant agrees that any changes to the type and/or
quantities of Hazardous Materials specified in the most recent HazMat
Certificate may be implemented only with the prior written consent of Landlord,
which consent may be given or withheld in Landlord's sole discretion. Tenant
shall not be entitled nor permitted to install any tanks under, on or about the
Premises for the storage of Hazardous Materials without the express written
consent of Landlord, which may be given or withheld in Landlord's sole
discretion. Landlord shall have the right during ordinary business hours during
the Term of this Lease, upon one business day's advance written notice to (I)
inspect the Premises, (ii) conduct tests and investigations to determine whether
Tenant is in compliance with the provisions of this Section 29, and (iii)
request lists of all Hazardous Materials used, stored or otherwise located on,
under or about any portion of the Premises and/or the Common Areas. The cost of
all such inspections, tests and investigations shall be borne solely by Tenant,
if Landlord reasonably determines that Tenant or any Tenant's Representatives
are directly or indirectly responsible in any manner for any contamination
revealed by such inspections, costs and investigations. The aforementioned
rights granted herein to Landlord and its representatives shall not create (a) a
duty on Landlord's part to inspect, test, investigate, monitor or otherwise
observe the Premises or the activities of Tenant and Tenant's Representatives
with respect to Hazardous Materials, including without limitation, Tenant's
operation, use and any remediation related thereto, or (b) liability on the part
of Landlord and its representatives for Tenant's use, storage, disposal or
remediation of Hazardous Materials, it being understood that Tenant shall be
solely responsible for all liability in connection therewith.

        29.4 TENANT'S ENVIRONMENTAL OBLIGATIONS: Tenant shall give to Landlord
immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about any portion of the Premises or in any
Common Areas. Tenant, at its sole cost and expense, covenants and warrants to
promptly investigate, clean up, remove, restore and otherwise remediate
(including, without limitation, preparation of any feasibility studies or
reports and the performance of any and all closures) any spill, release,
discharge, disposal, emission, migration or transportation of Hazardous
Materials arising from or related to the intentional or negligent acts or
omissions of Tenant or Tenant's Representatives such that the affected portions
of the Park and any adjacent property are returned to the condition existing
prior to the appearance of such Hazardous Materials. Any such investigation,
clean up, removal, restoration and other remediation shall only be performed
after Tenant has obtained Landlord's prior written consent, which consent shall
not be unreasonably withheld, conditioned or delayed so long as such actions
would not potentially have a material advance long-term or short-term effect on
any portion of the Premises, the Building, the Lot or the Park. Notwithstanding
the foregoing, Tenant shall be entitled to respond immediately to an emergency
without first obtaining Landlord's prior written consent. Tenant, at its sole
cost and expense, shall conduct and perform, or cause to be conducted and
performed, all closures as required by any Environmental Laws or any agencies or
other governmental authorities having jurisdiction thereof. If Tenant fails to
so promptly investigate, clean up, remove, restore, provide closure or otherwise
so remediate, Landlord may, but without obligation to do so, take any and all
steps necessary to rectify the same and Tenant shall promptly reimburse Landlord
upon demand, for all costs and expenses to Landlord of performing investigation,
clean up, removal, restoration, closure and remediation work. All such work
undertaken by Tenant, as required herein, shall be performed in such a manner as
to enable Landlord to make full economic use of the Premises, the Building, the
Lot and the Park after the satisfactory completion of such work.

                                       24
<PAGE>   25

        29.5 ENVIRONMENTAL INDEMNITY: In addition to Tenant's obligations as set
forth hereinabove, Tenant and Tenant's officers and directors agree to, and
shall, protect, indemnify, defend (with counsel acceptable to Landlord) and hold
Landlord and the other Indemnitees harmless from and against any and all claims,
judgments, damages, penalties, fines, liabilities, losses (including, without
limitation, diminution in value of any portion of the Premises, the Building,
the Lot or the Park, damages for the loss of or restriction on the use of
rentable or usable space, and from any adverse impact of Landlord's marketing of
any space within the Building and/or Park), suits, administrative proceedings
and costs (including, but not limited to, attorneys' and consultant fees and
court costs) arising at any time during or after the Term of this Lease in
connection with or related to, directly or indirectly, the use, presence,
transportation, storage, disposal, migration, removal, spill, release or
discharge of Hazardous Materials on, in or about any portion of the Premises,
the Common Areas, the Building, the Lot or the Park as a result (directly or
indirectly) of the intentional or negligent acts or omissions of Tenant or any
Tenant's Representatives. Neither the written consent of Landlord to the
presence, use or storage of Hazardous Materials in, on, under or about any
portion of the Premises, the Building, the Lot and/or the Park, nor the strict
compliance by Tenant with all Environmental Laws shall excuse Tenant and
Tenant's officers and directors from its obligations of indemnification pursuant
hereto. Tenant shall not be relieved of its indemnification obligations under
the provisions of this Section 29.5 due to Landlord's status as either an
"owner" or "operator" under any Environmental Laws.

        29.6 SURVIVAL: Tenant's obligations and liabilities pursuant to the
provisions of this Section 29 shall survive the expiration or earlier
termination of this Lease. If it is determined by Landlord that the condition of
all or any portion of the Premises, the Building, the Lot and/or the Park is not
in compliance with the provision of this Lease with respect to Hazardous
Materials, including without limitation all Environmental Laws at the expiration
or earlier termination of this Lease, then in Landlord's reasonable discretion,
Landlord may require Tenant to hold over possession of the Premises until Tenant
can surrender the Premises to Landlord in the condition in which the Premises
existed as of the Commencement Date and prior to the appearance of such
Hazardous Materials except for reasonable wear and tear, including without
limitation, the conduct or performance of any closures as required by any
Environmental Laws. The burden of proof hereunder shall be upon Tenant. For
purposes hereof, the term "reasonable wear and tear" shall not include any
deterioration in the condition or diminution of the value of any portion of the
Premises, the Building, the Lot and/or the Park in any manner whatsoever related
to directly, or indirectly, Hazardous Materials. Any such holdover by Tenant
will be with Landlord's consent, will not be terminable by Tenant in any event
or circumstances and will otherwise be subject to the provisions of Section 22
of this Lease.

        29.7 EXCULPATION OF TENANT: Tenant shall not be liable to Landlord
(either directly or as an Operating Expense) for nor otherwise obligated to
Landlord under any provision of the Lease with respect to the following: (i) any
claim, remediation, obligation, investigation, obligation, liability, cause of
action, attorney's fees, consultants' costs, expense or damage resulting from
any Hazardous Materials present in, on or about the Premises or the Buildings to
the extent not caused or otherwise permitted, directly or indirectly, by Tenant
or Tenant's Representatives; or (ii) the removal, investigations, monitoring or
remediation of any Hazardous Materials present in, or about the Premises or the
Building caused by any source, including third parties, other than Tenant or
Tenant's Representatives; provided, however, Tenant shall be fully liable for
and otherwise obligated to Landlord under the provisions of this Lease for all
liabilities, costs, damages, penalties, claims, judgments, expenses (including
without limitation, attorneys' and experts' fees and costs) and losses to the
extent (a) Tenant or any of Tenant's Representatives contributes to the presence
of such Hazardous Materials, or Tenant and/or any of Tenant's Representatives
exacerbates the conditions caused by such Hazardous Materials, or (b) Tenant
and/or Tenant's Representatives allows or permits persons over which Tenant or
any of Tenant's Representatives had control, and/or for which Tenant or any of
Tenant's Representatives are legally responsible for, to cause such Hazardous
Materials to be present in, on, under, through or about any portion of the
Premises, the Common Areas, the Building or the Park, or (c) Tenant and/or any
of Tenant's Representatives does not take all reasonably appropriate actions to
prevent such persons over which Tenant of any of Tenant's Representatives has
control and/or for which Tenant or any of Tenant's Representatives are legally
responsible from causing the presence of Hazardous Materials in, on, under,
through or about any portion of the Premises, the Common Areas, the Building or
the Park.

30.     FINANCIAL STATEMENTS

        Tenant, for the reliance of Landlord, any lender holding or anticipated
to acquire a lien upon the Premises, the Building or the Park or any

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<PAGE>   26

portion thereof, or any prospective purchaser of the Building or the Park or any
portion thereof, within ten (10) days after Landlord's request therefor, but not
more often than once annually so long as Tenant is not in default of this Lease,
shall deliver to Landlord the then current audited financial statements of
Tenant (including interim periods following the end of the last fiscal year for
which annual statements are available) which statements shall be prepared or
compiled by a certified public accountant and shall present fairly the financial
condition of Tenant at such dates and thus result of its operations and changes
in its financial positions for the periods ended on such dates. If an audited
financial statement has not been prepared, Tenant shall provide Landlord with an
unaudited financial statement and/or such other information, the type and form
of which are acceptable to Landlord in Landlord's reasonable discretion, which
reflects the financial condition of Tenant. If Landlord so requests, Tenant
shall deliver to Landlord an opinion of a certified public accountant, including
a balance sheet and profit and loss statement for the most recent prior year,
all prepared in accordance with generally accepted accounting principles
consistently applied. Any and all options granted to Tenant hereunder shall be
subject to and conditioned upon Landlord's reasonable approval of Tenant's
financial condition at the time of Tenant's exercise of any such option. In the
event Tenant shall remain a privately held company, Landlord shall not disclose
any of Tenant's financial statements without Tenant's consent, which consent
shall not be unreasonably withheld, conditioned or delayed, except Landlord may
disclose such financial statements to its joint venture partners, lenders,
attorneys, accountants, prospective buyers and lenders, agents, employees, and
property manager without Tenant's consent.

31.     GENERAL PROVISIONS

        31.1 TIME. Time is of the essence in this Lease and with respect to each
and all of its provisions in which performance is a factor.

        31.2 SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.

        31.3 RECORDATION. Tenant shall not record this Lease or a short form
memorandum hereof with the prior written consent of the Landlord.

        31.4 LANDLORD'S PERSONAL LIABILITY. The liability of Landlord (which,
for purposes of this Lease, shall include Landlord and the owner of the Building
if other than Landlord) to Tenant for any default by Landlord under the terms of
this Lease shall be limited to the actual interest of Landlord and its present
or future partners or members in the Premises or the Building and the proceeds
therefrom, and Tenant agrees to look solely to the Premises for satisfaction of
any liability and shall not look to other assets of Landlord nor seek any
recourse against the assets of the individual partners, members, directors,
officers, shareholders, agents or employees of Landlord (including without
limitation, any property management company of Landlord); it being intended that
Landlord and the individual partners, members, directors, officers,
shareholders, agents and employees of Landlord (including without limitation,
any property management company of Landlord) shall not be personally liable in
any manner whatsoever for any judgment or deficiency. The liability of Landlord
under this Lease is limited to its actual period of ownership of title to the
Building, and Landlord shall be automatically released from further performance
under this Lease upon transfer of Landlord's interest in the Premises or the
Building.

        31.5 SEPARABILITY. Any provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provisions hereof and such other provision shall remain in full force and
effect.

        31.6 CHOICE OF LAW. This Lease shall be governed by, and construed in
accordance with, the laws of the State of California.

        31.7 ATTORNEYS' FEES. In the event any dispute between the parties
results in litigation or other proceeding, the prevailing party shall be
reimbursed by the party not prevailing for all reasonable costs and expenses,
including, without limitation, reasonable attorneys' and experts' fees and costs
incurred by the prevailing party in connection with such litigation or other
proceeding, and any appeal thereof. Such costs, expenses and fees shall be
included in and made a part of the judgment recovered by the prevailing party,
if any.

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<PAGE>   27

        31.8 ENTIRE AGREEMENT. This Lease supercedes any prior agreements,
representations, negotiations or correspondence between the parties, and
contains the entire agreement of the parties on matters covered. No other
agreement, statement or promise made by any party, that is not in writing and
signed by all parties to this Lease, shall be binding.

        31.9 WARRANTY OF AUTHORITY. On the date that each party executes this
Lease, each party shall deliver to the other an original certificate of status
for itself issued by the California Secretary of State or statement of
partnership for itself recorded in the county in which the Premises are located,
as applicable. Each person executing this Lease on behalf of the party
represents and warrants that (1) such person is duly and validly authorized to
do so on behalf of the entity it purports to so bind, and (2) if such party is a
partnership, corporation or trustee, that such partnership, corporation or
trustee has full right and authority to enter into this Lease and perform all of
its obligations hereunder. Tenant hereby warrants that this Lease is valid and
binding upon Tenant and enforceable against Tenant in accordance with its terms.

        31.10 NOTICES. Any and all notices and demands required or permitted to
be given hereunder to Landlord shall be in writing and shall be sent: (a) by
United States mail, certified and postage prepaid; or (b) by personal delivery;
or (c) by overnight courier, addressed to Landlord at 101 Lincoln Centre Drive,
Fourth Floor, Foster City, California 94404-1167. Any and all notices and
demands required or permitted to be given hereunder to Tenant shall be in
writing and shall be sent: (i) by United Stated mail, certified and postage
prepaid; or (ii) by personal delivery to any employee or agent of Tenant over
the age of eighteen (18) years; or (ii) by overnight courier, all of which shall
be addressed to Tenant at the Premises. Notice and/or demand shall be deemed
given upon the earlier of actual receipt or the third day following deposit in
the United States mail. Any notice or requirement of service required by any
statute or law now or hereafter in effect, including, but not limited to,
California Code of Civil Procedure Sections 1161, 1161.1, and 1162 (including
any amendments, supplements or substitutions thereof), is hereby waived by
Tenant.

        31.11 JOINT AND SEVERAL. If Tenant consists of more than one person or
entity, the obligations of all such persons or entities shall be joint and
several.

        31.12 COVENANTS AND CONDITIONS. Each provisions to be performed by
Tenant hereunder shall be deemed to be both a covenant and a condition.

        31.13 WAIVER OF JURY TRIAL. The parties hereto shall and they hereby do
waive trial by jury in any action, proceeding or counterclaim brought by either
of the parties hereto against the other on any matters whatsoever arising out of
or in any way related to this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises, the Building or the Part, and/or any
claim of injury, loss or damage.

        31.14 INTENTIONALLY OMITTED.

        31.15 UNDERLINING. The use of underlining within the Lease is for
Landlord's reference purposes only and no other meaning or emphasis is intended
by this use, nor should any be inferred.

        31.16 MERGER. The voluntary or other surrender of this Lease by Tenant,
the mutual termination or cancellation hereof by Landlord and Tenant, or a
termination of this Lease by Landlord for a material default by Tenant
hereunder, shall not work a merger, and, at the sole option of Landlord, (i)
shall terminate all or any existing subleases or subtenancies, or (ii) may
operate as an assignment to Landlord of any or all of such subleases or
subtenancies. Landlord's election of either or both of the foregoing options
shall be exercised by delivery by Landlord of written notice thereof to Tenant
and all known subtenants under any sublease.

32.     SIGNS

        All signs and graphics of every kind visible in or from public view of
corridors or the exterior of the Premises shall be subject to Landlord's prior
written approval and shall be subject to any applicable governmental laws,
ordinances, and regulations and in compliance with Landlord's sign criteria as
same may exist from time to time or as set forth in Exhibit H hereto and made a
part hereof. Tenant shall remove all such signs and graphics prior to the
termination of this Lease. Such installations and removals shall be made in a
manner as to avoid damage

                                       27
<PAGE>   28

or defacement of the Premises; and Tenant shall repair any damage or defacement,
including without limitation, discoloration caused by such installation or
removal. Landlord shall have the right, at its option, to deduct from the
Security Deposit such sums as are reasonably necessary to remove such signs,
including, but not limited to, the costs and expenses associated with any
repairs necessitated by such removal. Notwithstanding the foregoing, in no event
shall any: (a) neon, flashing or moving sign(s) or (b) signs which shall
interfere with the visibility of any sign, awning, canopy, advertising matter,
or decoration of any kind of any other business or occupant of the Building or
the Park be permitted hereunder. Tenant further agrees to maintain any such
sign, awning, canopy, advertising matter, lettering, decoration or other thing
as may be approved in good condition and repair at all times.

33.     MORTGAGEE PROTECTION

        Upon any default on the part of Landlord, Tenant will give written
notice by registered or certified mail to any beneficiary of a deed of trust or
mortgagee of a mortgage covering the Premises who has requested such notice and
provided Tenant with notice of their interest together with an address for
receiving notice, and shall offer such beneficiary or mortgagee a reasonable
opportunity to cure the default (which, in no event shall be less than ninety
(90) days nor more than one hundred twenty (120) days), including time to obtain
possession of the Premises by power of sale or a judicial foreclosure, if such
should prove necessary to effect a cure. If such default cannot be cured within
such time period, then such additional time as may be necessary will be given to
such beneficiary or mortgagee to effect such cure so long as such beneficiary or
mortgagee has commenced the cure within the original time period and thereafter
diligently pursues such cure to completion, in which event this Lease shall not
be terminated while such cure is being diligently pursued. Tenant agrees that
each lender to whom this Lease has been assigned by Landlord is an express third
party beneficiary hereof. Tenant shall not make any prepayment of Rent more than
one (1) month in advance without the prior written consent of each such lender,
except if Tenant is required to make quarterly payments of Rent in advance
pursuant to the provisions of Section 8 above. Tenant waives the collection of
any deposit from such lender(s) or any purchaser at a foreclosure sale of such
lender(s)' deed of trust unless the lender(s) or such purchaser shall not
actually received and not refunded the deposit. Tenant agrees to make all
payments under this Lease to the lender with the most senior encumbrance upon
receiving a direction, in writing, to pay said amounts to such lender. Tenant
shall comply with such written direction to pay without determining whether an
event of default exists under such lender's loan to Landlord.

34.     QUITCLAIM

        Upon any termination of this Lease, Tenant shall, at Landlord's request,
execute, have acknowledged and deliver to Landlord a quitclaim deed of Tenant's
interest in and to the Premises. If Tenant fails to so deliver to Landlord such
a quitclaim deed, Tenant hereby agrees that Landlord shall have the full
authority and right to record such a quitclaim deed signed only by Landlord and
such quitclaim deed shall be deemed conclusive and binding upon Tenant.

35.     MODIFICATIONS FOR LENDER

        If, in connection with obtaining financing for the Premises or any
portion thereof, Landlord's lender shall request reasonable modification(s) to
this Lease as a condition to such financing, Tenant shall not unreasonably
withhold, delay or defer to consent thereto, provided such modifications do not
materially adversely affect Tenant's rights hereunder or the use, occupancy or
quiet enjoyment of Tenant hereunder.

36.     WARRANTIES OF TENANT

        Tenant hereby warrants and represents to Landlord, for the express
benefit of Landlord, that Tenant has undertaken a complete and independent
evaluation of the risks inherent in the execution of this Lease and the
operation of the Premises for the use permitted hereby, and that, based upon
said independent evaluation, Tenant has elected to enter into this Lease and
hereby assumes all risks with respect thereto. Tenant hereby further warrants
and represents to Landlord, for the express benefit of Landlord, that in
entering into this Lease, Tenant has not relied upon any statement, fact,
promise or representation (whether express or implied, written or oral) not
specifically set forth herein in writing and that any statement, fact, promise
or representation (whether express or implied, written or oral) made at any time
to Tenant, which is not expressly incorporated herein in writing, is hereby
waived by Tenant.

                                       28
<PAGE>   29

37.     COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT

        Landlord and Tenant hereby agree and acknowledge that the Premises, the
Building and/or the Park may be subject to the requirements of the Americans
with Disabilities Act, a federal law codified at 42 U.S.C. 12101 et seq,
including, but not limited to Title III thereof, all regulations and guidelines
related thereto, together with any and all laws, rules, regulations, ordinances,
codes and statutes now or hereafter enacted by local or state agencies having
jurisdiction thereof, including all requirements of Title 24 of the State of
California, as the same may be in effect on the date of this Lease and may be
hereafter modified, amended or supplemented (collectively, the "ADA"). Any
Tenant Improvements to be constructed hereunder shall be in compliance with the
requirements of the ADA, and all costs incurred for purposes of compliance
therewith shall be a part of and included in the costs of the Tenant
Improvements. Tenant shall be solely responsible for conducting its own
independent investigation of this matter and for ensuring that the design of all
Tenant Improvements strictly comply with all requirement of the ADA. Subject to
reimbursement pursuant to Section 6 of the Lease, if any barrier removal work or
other work is required to the Building, the Common Areas or the Park under the
ADA, then such work shall be the responsibility of Landlord; provided, if such
work is required under the ADA as a result of Tenant's use of the Premises or
any work or alteration made to the Premises by or on behalf Tenant, then such
work shall be performed by Landlord at the sole cost and expense of Tenant.
Except as otherwise expressly provided in this provision, Tenant shall be
responsible at its sole cost and expense for fully and faithfully complying with
all applicable requirements of the ADA, including without limitation, not
discriminating against any disabled persons in the operation of Tenant's
business in or about the Premises, and offering or otherwise providing auxiliary
aids and services as, and when, required by the ADA. Within ten (10) days after
receipt, Landlord and Tenant shall advise the other party in writing, and
provide the other copies of (as applicable), any notices alleging violation of
the ADA relating to any portion of the Premises or the Building; any claims made
or threatened in writing regarding noncompliance with the ADA and relating to
any portion of the Premises or the Building; or any governmental or regulatory
actions or investigations instituted or threatened regarding noncompliance with
the ADA and relating to any portion of the Premises or the Building. Tenant
shall and hereby agrees to protect, defend (with counsel acceptable to Landlord)
and hold Landlord and the other Indemnitees harmless and indemnify the
Indemnitees from and against all liabilities, damages, claims, loses, penalties,
judgments, charges and expenses (including reasonable attorneys' fees, costs of
court and expenses necessary in the prosecution or defense of any litigation
including the enforcement of this provision) arising from or in any way related
to, directly or indirectly, Tenant's or Tenant's Representatives' violation or
alleged violation of the ADA. Tenant agrees that the obligations of Tenant
herein shall survive the expiration or earlier termination of this Lease.

38.     BROKERAGE COMMISSION

        Landlord and Tenant each represents and warrants for the benefit of the
other that it has had no dealings with any real estate broker, agent or finder
in connection with the Premises and/or the negotiation of this Lease, except for
the Broker(s) (as set forth on Page 1), and that it knows of no other real
estate broker, agent or finder who is or might be entitled to a real estate
broker, agent or finder who is or might be entitled to a real estate brokerage
commission or finder's fee in connection with this Lease or otherwise based upon
contacts between the claimant and Tenant. Each party shall indemnify and hold
harmless the other from and against any and all liabilities or expenses arising
out of claims made for a fee or commission by any real estate broker, agent or
finder in connection with the Premises and this Lease other than Broker(s), if
any, resulting from the actions of the indemnifying party. Any real estate
brokerage commission or finder's fee payable to the Broker(s) in connection with
this Lease shall be paid by Landlord and only be payable and applicable to the
extent of the initial Term of the Lease and to the extent of the Premises as
same exist as of the date on which Tenant executes this Lease. Unless expressly
agreed to in writing by Landlord and Broker(s) no real estate brokerage
commission or finder's fee shall be owed to, or otherwise payable to, the
Broker(s) for any renewals or other extensions of the initial Term of this Lease
or for any additional space leased by Tenant other than the Premises as same
exists as of the date on which Tenant executes this Lease. Tenant further
represents and warrants to Landlord that Tenant will not receive (i) any portion
of any brokerage commission or finder's fee payable to the Broker(s) in
connection with this Lease or (ii) any other form of compensation or incentive
from the Broker(s) with respect to this Lease.

                                       29
<PAGE>   30

39.     QUIET ENJOYMENT

        Landlord covenants with Tenant, upon the paying of Rent and observing
and keeping the covenants, agreements and conditions of this Lease on its part
to be kept, and during the period that Tenant is not otherwise in default of any
of the terms or provisions of this Lease, and subject to the rights of any of
Landlord's lenders, (i) that Tenant shall and may peaceably and quietly hold,
occupy and enjoy the Premises and the Common Areas during the Term of this
Lease; and (ii) neither Landlord, nor any successor or assign of Landlord, shall
disturb Tenant's occupancy or enjoyment of the Premises and the Common Areas.

40.     LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS

        Notwithstanding anything to the contrary contained in this Lease, if
Tenant shall fail to perform any of the terms, provision, covenants or
conditions to be performed or complied with by Tenant pursuant to this Lease,
and/or if the failure of Tenant relates to a matter which in Landlord's judgment
reasonably exercised is of an emergency nature and such failure shall remain
uncured for a period of time commensurate with such emergency, then Landlord
may, at Landlord's option without any obligation to do so, and in its sole
discretion as to the necessity therefor, perform any such term, provision,
covenant, or condition, or make any such payment and Landlord by reason of so
doing shall not be liable or responsible for any loss or damage thereby
sustained by Tenant or anyone holding under or through Tenant. If Landlord so
performs any of Tenant's obligations hereunder, the full amount of the cost and
expense entailed or the payment so made or the amount of the loss so sustained
shall immediately be owing by Tenant to Landlord, and Tenant shall promptly pay
to Landlord upon demand, as Additional Rent, the full amount thereof with
interest thereon from the date of payment at the greater of (i) ten percent
(10%) per annum, or (ii) the highest rate permitted by applicable law and
Enforcement Expenses.

41.     SECURITY DEPOSIT

        Upon Tenant's execution of this Lease, Tenant shall deliver to Landlord,
as a Security Deposit for the performance by Tenant of its obligations under
this Lease, the amount specified in the Basic Lease Information. If Tenant is in
default, Landlord may, but without obligation to do so, use the Security
Deposit, or any portion thereof, to cure the default or to compensate Landlord
for all damages sustained by Landlord resulting from Tenant's default,
including, but not limited to the Enforcement Expenses. Tenant shall,
immediately on demand, pay to Landlord a sum equal to the portion of the
Security Deposit so applied or used so as to replenish the amount of the
Security Deposit held to increase such deposit to the amount initially deposited
with Landlord. As soon as practicable but no later than (30) days after the
termination of this Lease, Landlord shall return the Security Deposit to Tenant,
less such amounts as are reasonably necessary, as determined solely by Landlord,
to remedy Tenant's default(s) hereunder or to otherwise restore the Premises to
a clean and safe condition, reasonable wear and tear excepted. If the cost to
restore the Premises exceeds the amount of the Security Deposit, Tenant shall
promptly deliver to Landlord any and all of such excess sums as reasonably
determined by Landlord. Landlord shall not be required to keep the Security
Deposit separate from other funds, and, unless otherwise required by law, Tenant
shall not be entitled to interest on the Security Deposit. In no event or
circumstance shall Tenant have the right to any use of the Security Deposit and,
specifically, Tenant may not use the Security Deposit as a credit or to
otherwise offset any payments required hereunder, including, but not limited to,
Rent or any portion thereof.

42.     SATELLITE DISH

        Tenant shall have the right (but only to the extent permitted by the
City of San Diego and all agencies and governmental authorities having
jurisdiction thereof), at Tenant's sole cost and expense, to install and operate
a satellite or microwave dish or dishes and related equipment ("Satellite
Dishes") along with any necessary cables ("Cables") on a portion of the roof of
the Building to be designated by Landlord ("Roof Space") for the Term of the
Lease (the Satellite Dishes and Cables are hereinafter collectively referred to
as the "Equipment"). The location and size of the Equipment shall be subject to
Landlord's approval, not to be unreasonably withheld and which best promotes the
safety, aesthetics and efficiency of the Equipment; provided, all of the
Equipment and any modifications thereto or placement thereof shall (i) be at
Tenant's sole cost and expense, (ii) be contained visually within a roof screen
to be at Tenant's sole cost and expense, (iii) be installed and operated to
Landlord's reasonable specifications, (iv) installed, maintained, operated and
removed in accordance with all Recorded Matters, applicable Laws, and the
provisions of Section 10 of this Lease, and (v) not affect any of the structural
components or any of the systems of the Building. For purposes hereof, the
Equipment shall be construed as part of the Tenant's Property and shall be
removed by the Tenant at the expiration or earlier termination of this Lease.
Landlord shall cooperate

                                       30
<PAGE>   31

reasonably with Tenant to modify the roof screen placement (subject to all
applicable Laws and Recorded Matters) if required for signal quality,
reconfiguration due to the installation of any HVAC systems and other reasonable
considerations; provided, the cost of all such modifications shall be solely the
responsibility of the Tenant. All modifications to the Building, including the
Roof Space, if any, shall be approved by the Landlord prior to commencement of
any work with respect to the Equipment. No additional rent shall be paid by
Tenant for use of the Roof Space and operation of the Equipment. The Equipment
shall remain the property of the Tenant and Tenant shall remove the Equipment
upon the expiration or earlier termination of the Lease in accordance with the
provisions of Section 10 of this Lease. Tenant shall restore the Roof Space and
any other portion of the Building affected by the Equipment to its original
condition, excepting ordinary wear and tear and/or damage or destruction due to
fire or other casualty not caused directly or indirectly by Tenant, its agents,
employees, contractors or the Equipment or any part thereof. Notwithstanding
anything to the contrary contained herein, Tenant may not assign, lease, rent,
sublet or otherwise transfer any of its interest in the Roof Space or the
Equipment. Each of the other provisions of this Lease shall be applicable to the
Equipment and the use of the Roof Space by Tenant, including without limitation,
Sections 12 and 14 of this Lease. The Equipment shall comply with all rules and
regulations of the Federal Communications Commission and all other agencies
having jurisdiction thereof. If applicable, Tenant shall provide to the Landlord
a copy of (i) the Federal Communications Commission (or other agency) grant
which has awarded frequencies to Tenant and (ii) a list of Tenant's frequencies.
Anything to the contrary contained herein notwithstanding, if, during the Lease
Term, as such Term may be extended, Landlord, in its reasonable judgment,
believes that the Equipment poses a threat to human health or otherwise may be
an environmental hazard that cannot be remediated or has not been remediated
within ten (10) days after Tenant has been notified thereof, the Tenant shall
immediately cease all operations of the Equipment and Tenant shall remove all of
the Equipment within thirty (30) days thereafter. To the best of Tenant's
knowledge, Tenant represents to Landlord that the Equipment shall not emit or
project any electromagnetic fields which pose a threat to human health or
otherwise may be an environmental hazard. In addition, Tenant shall be solely
responsible for insuring the Equipment and Landlord shall have not
responsibility therefor. Tenant shall indemnify, defend (by counsel reasonably
acceptable to Landlord) and hold harmless Landlord and the other Indemnitees
from and against any and all claims, demands, liabilities, damages, judgments,
losses, penalties, costs and expenses (including reasonable attorneys' fees)
Landlord may suffer or incur arising out of or related to the installation, use,
operation, maintenance, replacement and/or removal of the Equipment or any
portion thereof, including without limitation the cost of repairs and
replacements to the roof of the Building occasioned by the installation,
maintenance, repairs and removal of the Equipment.

43.     ATTENDANT ON FIRST FLOOR OF BUILDING

        Tenant shall have a non-exclusive license, which license shall be
revocable by Landlord in the event Tenant, or Tenant's Representatives, or the
attendant described below, shall not comply with any of the Provisions set forth
below within ten (10) days after written notice to Tenant, to employ, at
Tenant's sole cost and expense, an attendance for Tenant's operations to be
located on the first (1st) floor of the Building in area designated by Landlord;
provided, (i) any furniture (other than the existing reception desk, which will
be provided and owned by Landlord but maintained by Tenant), fixtures and/or
equipment for such attendant shall be at Tenant's sole cost and expense and
shall not be permanently attached to the Building or floor, (ii) upon revocation
o this license, Tenant shall have the obligation to restore the first (1st)
floor of the Building to its original condition, (iii) such attendant shall not
interfere with Landlord's operation, management, maintenance, marketing and
repair of any portion of the Building and shall work in harmony with any and all
representatives, contractors, subcontractors, employees and agents of Landlord,
(iv) all of the provisions of this Lease shall be applicable to such attendant,
including without limitation, Sections 12 and 14 of this Lease, (v) such
attendant shall (a) not interfere with other tenants' use and occupancy of their
respective premises and (b) use their commercially reasonable efforts to
minimize any disruption and inconvenience to such other tenants occupying the
first floor of the Building, and (vi) Tenant shall be fully and wholly
responsible and liable for any action, omission and/or failure to act of such
attendant and any and all damage, liability, claim, judgment, cost and expense
(collectively, "Claims") incurred as a result of or arising out of the presence,
action, omission and/or failure to act of such attendant and Tenant shall
indemnify, defend and hold Indemnitees harmless from and against all of such
Claims. Landlord and Landlord's agents, representatives, employees, and
contractors shall use their commercially reasonable efforts to work in harmony
with the attendant.

        IN WITNESS WHEREOF, this Lease is executed by the parties as of the
Lease Date referenced on Page 1 of this Lease.

                                       31
<PAGE>   32

TENANT:

NETPARTNERS INTERNET SOLUTIONS, INC.
A DELAWARE CORPORATION

By:   /s/  illegible
     --------------------------------
Its:  Chairman & CEO
     --------------------------------
Date: June 23, 1999
     --------------------------------

By:   /s/  illegible
     --------------------------------
Its:  VP Finance
     --------------------------------
Date: June 23, 1999
     --------------------------------

LANDLORD:

LEGACY-RECP SORRENTO OPCO, LLC
A DELAWARE LIMITED LIABILITY COMPANY

By:       Legacy Partners Commercial, Inc.
          as Manager and Agent of Landlord

By:       /s/ illegible
     --------------------------------
Date:
     --------------------------------

<PAGE>   33

                              EXHIBIT A - PREMISES

This exhibit, entitled "Premises", is and shall constitute EXHIBIT A to that
certain Lease Agreement dated June 21, 1999 (the "Lease"), by and between
Legacy-RECP Sorrento OPCO, LLC, a Delaware limited liability company
("Landlord") and NETPARTNERS INTERNET SOLUTIONS, Inc. a Delaware corporation
("Tenant") for the leasing of certain premises at 10240 Sorrento Valley Road,
1st (Storage Room), 2nd (All) and 3rd (All) Floors, San Diego, California (the
"Premises").

The Premises consist of the rentable square footage of space specified in the
Base Lease Information and has the address specified in the Base Lease
Information. The Premises are a part of and are contained in the Building
specified in the Base Lease Information. The cross-hatched area depicts the
Premises within the Building.

                                    [PICTURE]

                                    [PICTURE]

<PAGE>   34

                            EXHIBIT A TO ADDENDUM TWO

                                    [PICTURE]

<PAGE>   35

                                    EXHIBIT A
                                   (CONTINUED)

                                    [PICTURE]

                                    [PICTURE]

<PAGE>   36
                          EXHIBIT B TO LEASE AGREEMENT
                               TENANT IMPROVEMENTS

This exhibit, entitled "Tenant Improvements", is and shall constitute EXHIBIT B
to that certain Lease Agreement dated June 21, 1999 (the "Lease"), by and
between Legacy-RECP Sorrento OPCO, LLC, a Delaware limited liability company
("Landlord") and NETPARTNERS INTERNET SOLUTIONS, Inc., a Delaware corporation
("Tenant") for the leasing of certain premises located at 10240 Sorrento Valley
Road, 1st (Storage Room), 2nd (All) and 3rd (All) Floors, San Diego, California
(the "Premises"). The terms, conditions and provisions of this EXHIBIT B are
hereby incorporated into and are made a part of the Lease. Any capitalized terms
used herein and not otherwise defined herein shall have the meaning ascribed to
such terms as set forth in the Lease.

1. Tenant Improvements. Subject to the conditions set forth below, Landlord
agrees to construct and install certain improvements ("Tenant Improvements") in
the Building of which the Premises are a part in accordance with the Final
Drawings (defined below) and pursuant to the terms of this EXHIBIT B, in a good
and workman-like manner, using good quality materials.

2. Definition. "Tenant Improvements" as used in this Lease shall include only
those interior portions of the Building which are described below. "Tenant
Improvements" shall specifically not include any alterations, additions or
improvements installed or constructed by Tenant, and any of Tenant's trade
fixtures, equipment, furniture, furnishings, telephone equipment or other
personal property (collectively, "Personal Property"). The Tenant Improvements
shall include any and all interior improvements to be made to the Premises as
specified in the Final Drawings (defined below), as specified and agreed to by
Tenant and Landlord. Tenant identification signage (in accordance with Exhibit
H) shall be considered part of the Tenant Improvements.

3. Tenant's Initial Plans; the Work. Tenant desires Landlord to perform certain
Tenant Improvements in the Premises in substantial accordance with the plan(s)
or scope of work (collectively, the "Initial Plans") prepared by Legacy Partners
C.D.S., Inc., last revised June 23, 1999, a copy of which is attached hereto as
Schedule 1, and made a part hereof. Such work, as shown in the Initial Plans and
as more fully detailed in the Final Drawings (as defined and described in
Section 4 below), shall be hereinafter referred to as the "Work". Not later than
two (2) business days following Landlord's request specifying the needed
information, Tenant and/or Tenant's Representatives shall furnish to Landlord
such additional plans, drawings, specifications and finish details as Landlord
may reasonably request to enable Landlord's architects and engineers, as
applicable, to prepare mechanical, electrical and plumbing plans and to prepare
the Final Drawings, including but not limited to, a final telephone layout and
special electrical connections, if any. All plans, drawings, specifications and
other details describing the Work which have been, or are hereafter, furnished
by or on behalf of Tenant shall be subject to Landlord's approval, which
approval shall not be unreasonably withheld. Landlord shall not be deemed to
have acted unreasonably if it withholds its approval of any plans,
specifications, drawings or other details or of any Change Request (hereafter
defined in Section 11 below) because, in Landlord's reasonable opinion, the work
as described in any such item, or any Change Request, as the case may be: (a) is
likely to adversely affect Building systems, the structure of the Building or
the safety of the Building and/or its occupants; (b) might impair Landlord's
ability to furnish services to Tenant or other tenants in the Building; (c)
would increase the cost of operating the Building or the Park; (d) would violate
any applicable governmental, administrative body's or agencies' laws, rules,
regulations, ordinances, codes or similar requirements (or interpretations
thereof); (e) contains or uses Hazardous Materials; (f) would adversely affect
the appearance of the Building or the Park; (g) might adversely affect another
tenant's premises or such other tenant's use and enjoyment of such premises; (h)
is prohibited by any ground lease affecting the Building, the Lot and/or the
Park, any Recorded Matters or any mortgage, trust deed or other instrument
encumbering the building, the Lot and/or the Park; (i) is likely to be
substantially delayed because of unavailability or shortage of labor or
materials necessary to perform such work or the difficulties or unusual nature
of such work; (j) is not, at a minimum, in accordance with Landlord's Building
Standards (defined below), or (k) would increase the Tenant Improvement Costs
(defined in Section 9 below) by more than ten percent (10%) from the cost
originally estimated and anticipated by the parties. The foregoing reasons,
however, shall not be the only reasons for which Landlord may withhold its
approval, whether or not such other reasons are similar or dissimilar to the
foregoing. Neither the approval by Landlord of the Work or the Initial Plans or
any other plans, specifications, drawings or other items associated with the
Work nor Landlord's performance, supervision or monitoring of the Work shall
constitute any warranty or covenant by Landlord to Tenant of the adequacy of the
design for Tenant's intended use of the Premises. Tenant agrees to, and

                                       1
<PAGE>   37

does hereby, assume full and complete responsibility to ensure that the Work and
the Final Drawings are adequate to fully meet the needs and requirements of
Tenant's intended operations of its business within the Premises and Tenant's
use of the Premises.

4. Final Drawings. If necessary for the performance of the Work and to the
extent not already included as part of the Initial Plans attached hereto,
Landlord shall promptly prepare or cause to be prepared final working drawings
and specifications for the Work (the "Final Drawings") based on and consistent
with the Initial Plans and the other plans, specifications, drawings, finish
details or other information furnished by Tenant or Tenant's Representatives to
Landlord and approved by Landlord pursuant to Section 3 above. Tenant shall
cooperate diligently with Landlord and Landlord's architect, engineer and other
representatives and Tenant shall furnish within two (2) days after any request
therefor, all information required by Landlord or Landlord's architect, engineer
or other representatives for completion of the Final Drawings. So long as the
Final Drawings are substantially consistent with the Initial Plans, Tenant shall
approve the Final Drawings within two (2) business days after receipt of same
from Landlord. Landlord and Tenant shall indicate their approval of the Final
Drawings by initialing each sheet of the Final Drawings and delivering to one
another a true and complete copy of such initialed Final Drawings. A true and
complete copy of the approved and initialed Final Drawings shall be attached to
the Lease as EXHIBIT B-1 and shall be made a part thereof. Tenant's failure to
approve or disapprove such Final Drawings within the foregoing three (3)
business day time period, shall be conclusively deemed to be approval of same by
Tenant. If Tenant reasonably disapproves of any matters included in the Final
Drawings because such items are not substantially consistent with the Initial
Plans, Tenant shall, within the aforementioned two (2) business day period,
deliver to Landlord written notice of its disapproval and Tenants shall specify
in such written notice, in sufficient details as Landlord may reasonably
require, the matters disapproved, the reasons for such disapproval, and the
specific changes or revisions necessary to be made to the Final Drawings to
cause such drawings to substantially conform to the Initial Plans. Any
additional costs associated with such requested changes or revisions shall be
paid for solely by Tenant, as the Excess Tenant Improvement Costs (defined in
Section 10 below), in cash upon written demand therefor by Landlord. Any changes
or revisions requested by Tenant must first be approved by Landlord, which
approval shall not be unreasonably withheld, subject to the provisions of
Section 3 above. If Landlord approves such requested changes or revisions,
Landlord shall cause the Final Drawings to be revised accordingly and Landlord
and Tenant shall initial each sheet of the Final Drawings as revised and attach
a true and complete copy thereof to the Lease as EXHIBIT B-1. Landlord and
Tenant hereby covenant to each other to cooperate with each other and to act
reasonably in the preparation and approval of the Final Drawings.

5. Performance of Work. As soon as practicable after Tenant and Landlord initial
and attach to the Lease as EXHIBIT B-1 a true and complete copy of the Final
Drawings, Landlord shall submit the Final Drawings to the governmental
authorities having rights of approval over the Work and shall apply for the
necessary approvals and building permits. Subject to the satisfaction of all
conditions precedent and subsequent to its obligations under this EXHIBIT B, and
further subject to the provisions of Section 10 hereof, as soon as practicable
after Landlord or its representatives have received all necessary approvals and
building permits, Bearing Construction (or other general contractor selected by
Landlord), ("Bearing") will put the Final Drawings out for bid to its licensed,
bonded and insured sub-contractors. If the Tenant Improvement Costs (which
include the bid to be received from Bearing) exceed the Tenant Improvement
Allowance, then, within three (3) business days of Landlord informing Tenant in
writing that the Tenants Improvement Costs exceed the Tenant Improvement
Allowance, Tenant, at its sole option, which must be exercised within such three
(3) business day period, shall have the right to instruct Landlord in writing to
put the Final Drawings out for bid to at least two (2) other licensed, bonded
and insured general contractors chosen by Landlord. The Tenants Improvements
shall be constructed by Bearing or such other general contractor selected by
Landlord (the general contractor which shall construct the Tenant Improvements,
whether Bearing or such other general contractor is hereinafter referred to as
the "General Contractor"), provided, however, Landlord and Tenant acknowledge
and agree that, in the event Landlord bids the Final Drawings to a General
Contractor other than Bearing, it is each party's intention that the lowest
bidder be given substantial (although not determinative) consideration in the
selection of the General Contractor. Landlord shall commence construction, or
cause the commencement of construction by the General Contractor, of the Tenant
Improvements, as soon as practicable after selection of the General Contractor.
Except as hereinafter expressly provided to the contrary, Landlord shall cause
the performance of the Work using (except as may be stated or otherwise shown in
the Final Drawings) building standard materials, quantities and procedures then
in use by Landlord ("Building Standards"). Landlord shall use commercially
reasonable efforts not to unreasonably interfere with Tenant's business
operations at the Premises during any construction undertaken by Landlord on the
first floor of the Building.

                                       2
<PAGE>   38

6. Substantial Completion. Landlord and Tenant shall cause the General
Contractor to Substantially Complete (defined below) the Tenant Improvements in
accordance with the Final Drawings by the Commencement Date of the Lease as set
forth in Section 2 of the Lease (the "Completion Date"), subject to delays due
to (a) acts or events beyond its control including, but not limited to, acts of
God, earthquakes, strikes, lockouts, boycotts, casualties, discontinuance of any
utility or other service required for performance of the Work, moratoriums,
governmental agencies and weather, (b) the lack of availability or shortage of
specialized materials used in the construction of the Tenant Improvements, (c)
any matters beyond the control of Landlord, the General Contractor or any
subcontractors, (d) any changes required by the fire department, building and/or
planning department, building inspectors or any other agency having jurisdiction
over the Building, the Work and/or the Tenant Improvements (except to the extent
such changes are directly attributable to Tenant's use or Tenant's specialized
tenant improvements, in which event such delays are considered Tenant Delays)
(the events and matters set forth in Subsections (a), (b), (c) and (d) are
collectively referred to as "Force Majeure Delays"), or (c) any Tenant Delays
(defined in Section 7 below). The Tenant Improvements shall be deemed
substantially complete on the date that the building officials of the applicable
governmental agency(s) issues its temporary or final approval of the
construction of the Tenant Improvements whether in the form of the issuance of a
temporary or final permit, temporary or final certificate of occupancy or the
written approval evidencing its temporary or final inspection on the building
permit(s), or the date on which Tenant first takes occupancy of the Premises,
whichever first occurs ("Substantial Completion", or "Substantially Completed,
or "Substantially Complete"). Both Landlord and Tenant agree that any delay in
the installation of any folding door within the Premises or the door proposed to
be installed at the First Floor lobby stairway shall not be a condition of the
occurrence of Substantial Completion. If the Work is not deemed to be
Substantially Completed on or before the scheduled Completion Date, (i) Landlord
agrees to use reasonable efforts to Substantially Complete the Work as soon as
practicable thereafter, (ii) the Lease shall remain in full force and effect,
(iii) Landlord shall not be deemed to be in breach or default of the Lease or
this EXHIBIT B as a result thereof and Landlord shall have no liability to
Tenant as a result of any delay in occupancy (whether for damages, abatement of
all or any portion of the Rent, or otherwise), and (iv) except in the event of
any Tenant Delays, which will not affect the Commencement Date but will extend
the Completion Date without any penalty or liability to Landlord, and
notwithstanding anything to the contrary contained in the Lease, the
Commencement Date and the Expiration Date of the term of the Lease (as defined
in Section 2 of the Lease) shall be extended commensurately by the amount of
time attributable to such Force Majeure Delays, and Landlord and Tenant shall
execute a written amendment to the Lease evidencing such extensions of time,
substantially in the form of Exhibit F to the Lease. Subject to the provisions
of Section 10.2 of the Lease, the Tenant Improvements shall belong to Landlord
and shall be deemed to be incorporated into the Premises for all purposes of the
Lease, unless Landlord, in writing, indicates otherwise to Tenant.

         In the event Landlord is unable to deliver the Premises to Tenant on or
before September 1, 1999 due solely to a Landlord Delay (defined below), then
Tenant shall be entitled to one (1) day's free Base rent for each day after
September 1, 1999 until the Premises are delivered to Tenant; provided, however,
in no event shall Tenant be entitled to receive in excess of forty-five (45)
days of free Base Rent. For example, if Landlord delivers the Premises to Tenant
on October 1, 1999, then Tenant shall not be obligated to pay Base Rent for the
period commencing October 1, 1999 through October 30, 1999. As used herein,
"Landlord Delay" means any delay in the Substantial Completion of the Tenant
Improvements which is due to any act or omission of the Landlord (wrongful,
negligent or otherwise), its agents or contractors (including acts or omissions
while acting as agent or contractor for Tenant). The term Landlord Delay shall
include, but shall not be limited to any: (1) delay in the giving of
authorizations or approvals by Landlord beyond the time periods allowed for such
approvals in this Exhibit B; (2) delay attributable to the acts or failures to
act of Landlord or Landlord's agents or contractors, where such acts or failures
to act actually delay the Substantial Completion of Tenant Improvements; and (3)
delay attributable to the interference of Landlord, its agents or contractors
with the Substantial Completion of Tenant Improvements. No Landlord Delay shall
be deemed to have occurred unless Tenant has given Landlord written notice that
an act or omission by Landlord is about to occur or has occurred which will
cause a delay in construction of the Tenant Improvements, and Landlord has
failed to cure such delay within two (2) business days after Landlord's receipt
of such notice, in which case, the number of days of delay after such notice
shall constitute a Landlord Delay. Landlord shall pay all of the costs and
expenses incurred by Landlord which result from a Landlord Delay.

7. Tenant Delays. There shall be no extension of the scheduled Commencement Date
or Expiration Date of the term of the Lease (as otherwise permissibly extended
in accordance with the provisions of Section 6 above) if

                                       3
<PAGE>   39

the Work has not been Substantially Completed by the scheduled Commencement Date
due to any delay attributable to Tenant and/or Tenant's Representatives or
Tenant's intended use of the Premises (collectively, "Tenant Delays"),
including, but not limited to, any of the following described events or
occurrences: (a) delays related to changes made or requested by Tenant to the
Work and/or the Final Drawings; (b) the failure of Tenant to furnish all or any
plans, drawings, specifications, finish details or other information required
under Section 3 and 4 above; (c) the failure of Tenant to comply with the
requirements of Section 10 below; (d) Tenant's requirements for special work or
materials, finishes, or installations other than the building Standards or
Tenant's requirements for special construction or phasing (including, but not
limited to, the door proposed to be installed at the First floor lobby stairway,
and the folding wall proposed for the training room); (e) any changes required
by the fire department, building or planning department, building inspectors or
any other agency having jurisdiction over the Building, the Work and/or the
Tenant Improvements if such changes are directly attributable to Tenant's use or
Tenant's specialized tenant improvements; (f) the performance of any additional
work pursuant to a Change Request (defined below in Section 11) which is
requested by Tenant; (g) the performance of work in or about the Premises by any
person, firm or corporation employed by or on behalf of Tenant, including,
without limitation, any failure to complete or any delay in the completion of
such work; or (h) any and all delays caused by or arising from acts or omissions
of Tenant and/or Tenant's Representatives, in any manner whatsoever, including,
but not limited to, any and all revisions to the Final Drawings. Any delays in
the construction of the Tenant Improvements due to any of the events described
above, shall in no way extend or affect the date on which Tenant is required to
commence paying Rent under the terms of the Lease. It is the intention of the
parties that all of such delays will be considered Tenant Delays for which
Tenant shall be wholly and completely responsible for any and all consequences
related to such delays, including, without limitation, any costs and expenses
attributable to increases in labor or materials.

8. Tenant Improvement Allowance. Landlord and Tenant hereby acknowledge and
agree that the Tenant Improvement Costs (defined in Section 9 below) for the
Tenant Improvements, based upon the Initial Plans approved by Landlord and
Tenant in accordance with the provisions of Section 4 above, are estimated to be
approximately Three Hundred Twenty-nine Thousand Forty-eight Dollars
($329,048.00) (the "Estimated TI Costs"). If the actual Tenant Improvement Costs
varies from this estimate by more than twenty-five percent (25%), then Landlord
may required any of the following, in its sole discretion: (a) changes be made
to the Final Drawings to reduce the cost of the Tenant Improvements and Landlord
may refuse to sign any construction contract or Change Orders to the
construction contract, as the case may be, until such changes are made to the
sole satisfaction of Landlord; (b) Tenant to deposit into a separate escrow
account cash in an amount equal to the Excess Tenant Improvement Costs (defined
in Section 10 below); (c) Tenant to provide Landlord evidence satisfactory to
Landlord, in its sole discretion, that Tenant has adequate financial resources
to pay for the Excess Tenant Improvement Costs, as solely determined by
Landlord; and/or (a) Tenants to pay all of the Excess Tenant Improvement Costs
before Landlord's contribution of the Tenant Improvement Allowance (defined in
Section 10 below); provided, however, in no event or circumstance shall the
Tenant Improvement Costs exceed the maximum amount of Four Hundred Eleven
Thousand Three Hundred Ten Dollars ($411,310.00), which amount is based on the
amount of Ten Dollars ($10.00) per rentable square foot for 41,131 square feet
of the Premises which is to be improved, as described in the Initial Plans.
Subject to the foregoing, Landlord shall provide an allowance for the planning
and construction of the Tenant Improvements for the Work to be performed in the
Premises, as described in the Initial Plans and the Final Drawings, in the
amount of Three Hundred Twenty-nine Thousand Forty-eight Dollars ($329,048.00)
(the "Tenant Improvement Allowance") based upon an allowance of Eight Dollars
($8.00) per rentable square foot for 41,131 square feet of the Premises which is
to be improved, as described in the Initial Plans and the Final Drawings. Tenant
shall not be entitled to any credit, abatement or payment from Landlord in the
event that the amount of the Tenant Improvement Allowance specified above
exceeds the actual Tenant Improvement Costs. The Tenant Improvement Allowance
shall only be used for tenant improvements typically installed by Landlord in
office/R&D buildings. The Tenant Improvement Allowance shall be the maximum
contribution by Landlord for the Tenant Improvement Costs and shall be subject
to the provisions of Section 10 below.

9. Tenant Improvement Costs. The Tenant Improvements' cost ("Tenant Improvement
Costs") shall mean and include any and all costs and expenses of the Work,
including without limitation, all of the following:

         (a) All costs of preliminary space planning and final architectural and
engineering plans and specifications (including, without limitation, the scope
of work, all plans and specifications, the Initial Plans and the Final Drawings)
for the Tenant Improvements, and architectural fees, engineering costs and fees,
and other costs associated with completion of said plans;

                                       4
<PAGE>   40

         (b) All costs of obtaining building permits and other necessary
authorizations and approvals from the City of San Diego and other applicable
jurisdictions;

         (c) All costs of interior design and finish schedule plans and
specifications including as-built drawings;

         (d) All direct and indirect costs of procuring, constructing and
installing the Tenant Improvements in the Premises, including, but not limited
to, the construction fee for overhead and profit, the cost of all on-site
supervisory and administrative staff, office, equipment and temporary services
rendered by Landlord's consultants and the General Contractor in connection with
construction of the Tenant Improvements, and all labor (including overtime) and
materials constituting the Work;

         (e) All fees payable to the General Contractor, architect and
Landlord's engineering firm if they are required by Tenant to redesign any
portion of the Tenant Improvements following Tenant's approval of the Final
Drawings; and

         (f) A construction management fee payable to Landlord in the amount of
the following percentages of all direct and indirect costs of procuring,
constructing and installing the Tenant Improvements in the Premises and the
Building; five percent (5%) of the first $200,000; four percent (4%) of the next
$100,000; and three percent (3%) of the remainder;

         (g) All costs of design, fabrication, installation, and permitting of
Tenant identification signage, in accordance with Exhibit H.

10. Excess Tenant Improvement Costs. Prior to commencing the Work, Landlord
shall submit to Tenant a written statement of the actual Tenant Improvement
Costs (the "Actual TI Costs") (which shall include the amount of any overtime
projected as necessary to Substantially Complete the Work by the Completion
Date) as then known by Landlord, and such statement shall indicate the amount,
if any, by which the Actual TI Costs exceeds the Tenant Improvement Allowance
(the "Excess Tenant Improvement Costs"). The term "Excess Tenant Improvement
Costs" shall also include the costs related to any and all Change Orders. Tenant
agrees, within three (3) days after submission to it of such statement, to
execute and deliver to Landlord, in the form then in use by Landlord, an
authorization to proceed with the Work Tenant shall faithfully pay all of the
Excess Tenant Improvement Costs to Landlord in cash, concurrently with Tenant's
delivery to Landlord of the aforementioned signed written authorization to
proceed. No Work shall be commenced until Tenant has fully complied with the
preceding provisions of this Section 10. If Tenant fails to remit the sums so
demanded by Landlord pursuant to Section 8 above and this Section 10 within the
time periods required, Landlord may, at its option, declare Tenant in default
under the Lease.

11. Change Requests. No changes or revisions to the approved Final Drawings
shall be made by either Landlord or Tenant unless approved in writing by both
parties. Upon Tenant's request and submission by Tenant (at Tenant's sole cost
and expense) of the necessary information and/or plans and specifications for
any changes or revisions to the approved Final Drawings and/or for any work
other than the Work described in the approved Final Drawings ("Change Requests")
and the approval by Landlord of such Change Request(s), which approval Landlord
agrees shall not be unreasonably withheld, conditioned or delayed Landlord shall
perform the additional work associated with the approved Change Request(s), at
Tenant's sole cost and expense, subject, however, to the following provisions of
the Section 11. Prior to commencing any additional work related to the approved
Change Request(s), Landlord shall submit to Tenant a written statement of the
cost of such additional work and a proposed tenant change order therefor
("Change Order") in the standard form then in use by Landlord. Tenant shall
execute and deliver to Landlord such Change Order and shall pay the entire cost
of such additional work in the following described manner. Any costs related to
such approved Change Request(s), Change Order and any delays associated
therewith, shall be added to the Tenant Improvement Costs and shall be paid for
by Tenant as and with any Excess Tenant Improvement Costs as set forth in
Section 10 above. The billing for such additional costs to Tenant shall be
accompanied by evidence of the amounts billed as is customarily used in the
business. Costs related to approved Change Requests and Change Orders shall
include, without limitation, any architectural or design fees, Landlord's
construction fee for overhead and profit, the cost of all on-site supervisory
and administrative staff, office,

                                       5
<PAGE>   41

equipment and temporary services rendered by Landlord and/or Landlord's
consultants, and the General Contractor's price for offering the change. If
Tenant fails to execute or deliver such Change Order, or to pay the costs
related thereto, then Landlord shall not be obligated to do any additional work
related to such approved Change Request(s) and/or Change Orders, and Landlord
may proceed to perform only the Work, as specified in the Final Drawings.

12. Termination. If the Lease in terminated prior to Completion Date, for any
reason due to the default of Tenant hereunder, in addition to any other remedies
available to Landlord under the Lease, Tenant shall pay to Landlord as
Additional Rent under the Lease, within five (5) days of receipt of a statement
therefor, any and all costs incurred by Landlord and not reimbursed or otherwise
paid by Tenant through the date of termination in connection with the Tenant
Improvements to the extent planned, installed and/or constructed as of such date
of termination include, but not limited to, any costs related to the removal of
all or any portion of the Tenant Improvements and restorations costs related
thereto. Subject to the provisions of Section 10.2 of the Lease, upon the
expiration or earlier termination of the Lease, Tenant shall not be required to
remove the Tenant Improvements it being the intention of the parties that the
Tenant Improvements are to be considered incorporated into the Building.
Notwithstanding anything to the contrary contained herein, Landlord shall have
the right to terminate the Lease, upon written notice to Tenant, if Landlord is
unable to obtain a building permit for the Tenant Improvements with Sixty (60)
days from the date the Lease is signed by Tenant.

13. Tenant Access. Landlord shall grant Tenant a license to have access to the
Premises on August 1, 1999 (prior to the Completion Date) to allow Tenant to do
other work required by Tenant to make the Premises ready for Tenant's use,
consisting of installing telephone and computer wiring and systems, and
installing cubicles (the "Tenant's Pre-Occupancy Work"). It shall be a condition
to the grant by Landlord and continued effectiveness of such license that:

         (a) Tenant shall give to Landlord a written request to have such access
not less than two (2) business days prior to the date on which such proposed
access will commence (the "Access Notice"). The Access Notice shall contain or
be accompanied by each of the following items, all in form and substance
reasonably acceptable to Landlord: (i) a detailed description of and schedule
for Tenant's Pre-Occupancy Work; (ii) the names and addresses of all
contractors, subcontractors and material suppliers and all other representatives
of Tenant who or which will be entering the Premises on behalf of Tenant to
perform Tenant's Pre-Occupancy Work or will be supplying materials for such
work, and the approximate number of individuals, itemized by trade, who will be
present in the Premises; (iii) copies of all contracts, subcontracts, material
purchase orders, plans and specifications pertaining to Tenant's Pre-Occupancy
Work; (iv) copies of all licenses and permits required in connection with the
performance of Tenant's Pre-Occupancy Work; (v) certificates of insurance (in
amounts satisfactory to Landlord and with the parties identified in, or required
by, the Lease named as additional insureds) and instruments of indemnification
against all claims, costs, expenses, penalties, fines, and damages which may
arise in connection with Tenant's Pre-Occupancy Work; and (vi) assurances of the
ability of Tenant to pay for all of Tenant's Pre-Occupancy Work and/or a letter
of credit or other security deemed appropriate by Landlord securing Tenant's
lien-free completion of Tenant's Pre-Occupancy Work.

         (b) Such pre-term access by Tenant and Tenant's employees, agents,
contractors, consultants, workmen, mechanics, suppliers and invites shall be
subject to scheduling by Landlord.

         (c) Tenant's employees, agents, contractors, consultants, workmen,
mechanics, suppliers and invitees shall fully cooperate, work in harmony and
not, in any manner, interfere with Landlord or Landlord's agents or
representatives in performing the Work and any additional work pursuant to
approved Change Orders, Landlord's work in other areas of the Building or the
Park, or the general operation of the Building. If at any time any such person
representing Tenant shall not be cooperative or shall otherwise cause or
threaten to cause any such disharmony or interference, include, without
limitation, labor disharmony, and Tenant fails to immediately institute and
maintain corrective actions as directed by Landlord, then Landlord may revoke
such license upon twenty-four (24) hours' prior written notice to Tenant.
Landlord shall use commercially reasonable efforts (i) not to interfere with
Tenant's Pre-Occupancy Work and (ii) shall work in harmony with Tenant's agents
and representatives.

         (d) Any such entry into and occupancy of the Premises or any portion
thereof by Tenant or any person or entity working for or on behalf of Tenant
shall be deemed to be subject to all of the terms, covenants, conditions

                                       6
<PAGE>   42

and provisions of the Lease, excluding only the covenant to pay Rent. Landlord
shall not be liable for any injury, loss or damage which may occur to any of
Tenant's Pre-Occupancy Work made in or about the Premises or to any property
placed therein prior to the commencement of the term of the Lease, the same
being at Tenant's sole risk and liability. Tenant shall be liable to Landlord
for any damage to any portion of Premises, the Work or the additional work
related to any approved Change Orders caused by Tenant or any of Tenant's
employees, agents, contractors, consultants, workmen, mechanics, suppliers and
invitees. In the event that the performance of Tenant's Pre-Occupancy Work
causes extra costs to be incurred by Landlord or requires the use of other
Building services, Tenant shall promptly reimburse Landlord for such extra costs
and/or shall pay Landlord for such other Building services at Landlord's
standard rates then in effect.

14. Improvements by Landlord. Landlord and Tenant acknowledge and agree that, in
consideration of Tenant entering into this Lease, Landlord shall construct,
install or otherwise perform at its sole cost the following improvements:

         (a)  Installation of a security card key access system in the Building
              elevator and at the door proposed to be installed at the First
              Floor lobby stairway;

         (b)  Removal of eucalyptus trees (to be mutually approved by Landlord
              and Tenant) to allow reasonably unobstructed view of Tenant's
              exterior sign from Sorrento Valley Road;

         (c)  Construct acoustical ceiling, drop sprinkler heads, install carpet
              to reasonably match the existing carpet (if available), provide
              heating, ventilation and air conditioning, and demolish the
              demising walls separating the portions of the Premises currently
              in shell condition.

15. Lease Provisions; Conflict. The terms and provisions of the Lease, insofar
as they are applicable, in whole or in part, to this EXHIBIT B, are hereby
incorporated herein by reference, and specifically including all of the
provisions of Section 31 of the Lease. In the event of any conflict between the
terms of the Lease and this EXHIBIT B, the terms of this EXHIBIT B shall
prevail. Any amounts payable by Tenant to Landlord hereunder shall be deemed to
be Additional Rent under the Lease and, upon any default in the payment of same,
Landlord shall have all rights and remedies available to it as provided for in
the Lease.

                                       7
<PAGE>   43

                             SCHEDULE 1 OF EXHIBIT B
                                   PAGE 1 OF 3

                                    [PICTURE]

<PAGE>   44

                             SCHEDULE 1 OF EXHIBIT B
                                   PAGE 2 OF 3

                                    [PICTURE]

                                       2
<PAGE>   45

                             SCHEDULE 1 OF EXHIBIT B
                                   PAGE 3 OF 3

                                    [PICTURE]

                                       3
<PAGE>   46

                          EXHIBIT C TO LEASE AGREEMENT
                               RULES & REGULATIONS

This exhibit, entitled "Rules & Regulations", is and shall constitute EXHIBIT C
to that certain Lease Agreement dated June 21, 1999 (the "Lease"), by and
between Legacy-RECP Sorrento OPCO, LLC, a Delaware limited liability company
("Landlord") and NETPARTNERS INTERNET SOLUTIONS, Inc., a Delaware corporation
("Tenant") for the leasing of certain premises located at 10240 Sorrento Valley
Road, 1st (Storage Room), 2nd (All) and 3rd (All) Floors, San Diego, California
(the "Premises"). The terms, conditions and provisions of this EXHIBIT C are
hereby incorporated into and are made a part of the Lease. Any capitalized terms
used herein and not otherwise defined herein shall have the meaning ascribed to
such terms as set forth in the Lease:

1. No advertisement, picture or sign of any sort shall be displayed on or
outside the Premises or the Building without the prior written consent of
Landlord. Landlord shall have the right to remove any such unapproved item
without notice and at Tenant's expense.

2. Tenant shall not regularly park motor vehicles in designated parking areas
after the conclusion of normal daily business activity.

3. Tenant shall not use any method of heating or air conditioning other than
that supplied by Landlord without the prior written consent of Landlord.

4. All window coverings installed by Tenant and visible from the outside of the
Building require the prior written approval of Landlord.

5. Tenant shall not use, keep or permit to be used or kept any foul or noxious
gas or substance or any flammable or combustible materials on or around the
Premises, the Building or the Park.

6. Tenant shall not alter any lock or install any new locks or bolts on any door
at the Premises without the prior written consent of Landlord, unless said door
is part of a private office, in which case Landlord's prior consent is not
required.

7. Tenant agrees not to make any duplicate keys without the prior consent of
Landlord, unless said key operates a lock installed on a private office door, in
which case Landlord's prior consent is not required.

8. Tenant shall park motor vehicles in those general parking areas as designated
by Landlord except for loading and unloading. During those periods of loading
and unloading, Tenant shall not unreasonably interfere with traffic flow within
the Park and loading and unloading areas of other Tenants.

9. Tenant shall not disturb, solicit or canvas any occupant of the Building or
Park and shall cooperate to prevent same.

10. No person shall go on the roof without Landlord's permission.

11. Business machines and mechanical equipment belonging to Tenant which cause
noise or vibration that may be transmitted to the structure of the Building, to
such a degree as to be objectionable to Landlord or other Tenants, shall be
placed and maintained by Tenant, at Tenant's expense, on vibration eliminators
or other devices sufficient to eliminate noise or vibration.

12. All goods, including material used to store goods, delivered to the Premises
of Tenant shall be immediately moved into the Premises and shall not be left in
parking or receiving areas overnight.

13. Tractor trailers which must be unhooked or parked with dolly wheels beyond
the concrete loading areas must use steel plates or wood blocks under the dolly
wheels to prevent damage to the asphalt paving surfaces. No parking or storing
of such trailers will be permitted in the auto parking areas of the Park or on
streets adjacent thereto.

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<PAGE>   47

14. Forklifts which operate on asphalt paving areas shall not have solid rubber
tires and shall only use tires that do not damage the asphalt.

15. Tenant is responsible for the storage and removal of all trash and refuse.
All such trash and refuse shall be contained in suitable receptacles stored
behind screened enclosures at locations approved by Landlord.

16. Tenant shall not store or permit the storage or placement of goods, or
merchandise or pallets or equipment of any sort in or around the Premises, the
Building, the Park or any of the Common Areas of the foregoing. No displays or
sales of merchandise shall be allowed in the parking lots or other Common Areas.

17. Tenant shall not permit any animals, including, but not limited to, any
household pets, to be brought or kept in or about the Premises, the Building,
the Park or any of the Common Areas of the foregoing.

18. Tenant shall not permit any motor vehicles to be washed on any portion of
the Premises or in the Common Areas of the Park, nor shall Tenant permit
mechanical work or maintenance of motor vehicles to be performed on any portion
of the Premises or in the Common Areas of the Park.

19. Tenant shall not waste electricity, water or air conditioning and agrees to
cooperate fully with Landlord to assure the most effective operation of the
Building's heating, ventilation and air conditioning and to comply with any
governmental energy-saving rules, laws or regulations of which Tenant has
notice, and shall refrain from attempting to adjust controls other than room
thermostats installed for Tenant's use. Tenant shall keep corridor doors closed,
and shall close window coverings at the end of each business day. Heat and air
conditioning shall be provided during ordinary business hours of generally
recognized business days, but not less than the hours of 7:00 a.m. to 6:00 p.m.
on Monday through Friday and 8:00 a.m. to 1:00 p.m. on Saturday (excluding in
any event Sundays and legal holidays).

20. Tenant shall have access to the Premises at all times. However, Landlord
reserves the right to exclude from the Building (unless Tenant leases the entire
Building) between the hours of 6:00 p.m. and 7:00 a.m. the following day, or
such other hours as may be established from time to time by Landlord, and on
Saturdays, Sundays and legal holidays, any person unless that person is known to
the person or employee in charge of the Building, has a pass, is properly
identified, or has been authorized by Tenant (as long as Tenant has notified
Landlord in advance). Tenant shall be responsible for all persons for whom its
requests passes and shall be liable to Landlord for all acts or omissions of
such persons. Landlord shall not be liable for damages for any error with regard
to the admission to or exclusion from the Building of any person. Landlord
reserves the right to prevent access to the Building in case of invasion, mob,
riot, public excitement or other commotion by closing the doors or by other
appropriate action. Should Landlord install a security card key access system,
Tenant shall pay Landlord Landlord's actual cost for each security card issued
to Tenant (including new and replacement cards).

21. Tenant shall close and lock the doors of its Premises and entirely shut off
all water faucets or other water apparatus, and, except with regard to Tenant's
computers and other equipment which requires utilities on a twenty-four hours
basis, all electricity, gas or air outlets before Tenant and its employees leave
the Premises. Tenant shall be responsible for any damage or injuries sustained
by other tenants or occupants of the Building or by Landlord for noncompliance
with this rule.

22. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the tenant who, or whose employees or invoices, shall have caused
it.

23. Landlord reserves the right to exclude or expel from the Building any person
who, in Landlord's judgment, is intoxicated or under the influence of liquor or
drugs or who is in violation of any of the Rules and Regulations of the
Building.

24. Tenant shall not use in any space or in the public halls of the Building any
mailcarts or hand trucks except those equipped with rubber tires and side guards
or such other material handling equipment as Landlord may

                                       5
<PAGE>   48

approve. Tenant shall not bring any other vehicles of any kind into the Building
except as provided in the Parking Rules and Regulations.

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

26. Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed.

27. Landlord reserves the right to make such other and reasonable Rules and
Regulations (including Parking Rules and Regulations) as, in its judgment, may
from time to time be needed for safety and security, for care and cleanliness of
the Building and for the preservation of good order therein. Tenant agrees to
abide by all such Rules and Regulations hereinabove stated and any additional
rules and regulations which are adopted.

28. Tenant shall be responsible for the observation of all of the foregoing
rules by Tenant's employees, agents, representatives, contractors, consultants,
clients, customers, invitees, guests, subtenants and assignees.

                                       6
<PAGE>   49

                                    EXHIBIT E

                   HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE

Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Lessor (identified below) to evaluate and finalize a lease agreement
with you as lessee. After a lease agreement is signed by you and the Lessor (the
"Lease Agreement"), on an annual basis in accordance with the provisions of the
signed Lease Agreement, you are to provide an update to the information
initially provided by you in this certificate. The information contained in the
initial Hazardous Materials Disclosure Certificate and each annual certificate
provided by you thereafter will be maintained in confidentiality by Lessor
subject to release and disclosure as required by (i) any lenders and owners and
their respective environmental consultants, (ii) any prospective purchaser(s) of
all or any portion of the property on which the Premises are located, (iii)
Lessor to defend itself or its lenders, partners or representatives against any
claim or demand, and (iv) any laws, rules, regulations, orders, decrees or
ordinances, including, without limitation, court orders or subpoenas. Any and
all capitalized terms used herein, which are not otherwise defined herein, shall
have the same meaning ascribed to such term in the signed Lease Agreement. Any
questions regarding this certificate should be directed to, and when completed,
the certificate should be delivered to:

Lessor's Agent:       Legacy Partners Commercial, Inc.
                      6480 Weathers Place, Suite 245
                      San Diego, California  92121
                      Phone:  (619) 453-4800

Name of (Prospective) Lessee: __________________________________________________

Mailing Address: _______________________________________________________________

________________________________________________________________________________

Contact Person, Title and Telephone Number(s): _________________________________

Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s): ___________________________________________________________

________________________________________________________________________________

Address of (Prospective) Premises: _____________________________________________

Length of (Prospective) initial Term: __________________________________________

1.    GENERAL INFORMATION:

      Describe the initial proposed operations to take place in, on, or about
      the Premises, including, without limitation, principal products processed,
      manufactured or assembled services and activities to be provided or
      otherwise conducted. Existing lessees should describe any proposed changes
      to on-going operations.

      __________________________________________________________________________
      __________________________________________________________________________

                                       1
<PAGE>   50

2.    USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS

      2.1   Will any Hazardous Materials be used, generated, stored or disposed
            of in, on or about the Premises? Existing lessees should describe
            any Hazardous Materials which continue to be used, generated, stored
            or disposed of in, on or about the Premises.

            Wastes                   Yes [ ]               No [ ]
            Chemical Products        Yes [ ]               No [ ]
            Other                    Yes [ ]               No [ ]

            If Yes is marked, please explain: __________________________________
            ____________________________________________________________________
            ____________________________________________________________________

      If Yes is marked in Section 2.1, attach a list of any Hazardous Materials
      to be used, generated, stored or disposed of in, on or about the Premises,
      including the applicable hazard class and an estimate of the quantities of
      such Hazardous Materials at any given time; estimated annual throughput;
      the proposed location(s) and method of storage (excluding nominal amounts
      of ordinary household cleaners and janitorial supplies which are not
      regulated by any Environmental Laws); and the proposed location(s) and
      method of disposal for each Hazardous Material, including, the estimated
      frequency, and the proposed contractors or subcontractors. Existing
      lessees should attach a list setting forth the information requested above
      and such list should include actual data from on-going operations and the
      identification of any variations in such information from the prior year's
      certificate.

3.    STORAGE TANKS AND SUMPS

      3.1   Is any above or below ground storage of gasoline, diesel, petroleum,
            or other Hazardous Materials in tanks or sumps proposed in, on or
            about the Premises? Existing lessees should describe any such actual
            or proposed activities.

            Yes [ ]              No [ ]

            If Yes, please explain: ____________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

4.    WASTE MANAGEMENT

      4.1   Has your company been issued an EPA Hazardous Waste Generator I.D.
            Number? Existing lessees should describe any additional
            identification numbers issued since the previous certificate.

            Yes [ ]              No [ ]

      4.2   Has your company filed a biannual or quarterly reports as a
            hazardous waste generator? Existing lessees should describe any new
            report filed.

            Yes [ ]              No [ ]

            If yes, attach a copy of the most recent report filed.

5.    WASTEWATER TREATMENT AND DISCHARGE

      5.1   Will your company discharge wastewater or other wastes to:

            ______ storm drain?             ______ sewer?
            ______ surface water?           ______ no wastewater or other wastes
                                                   discharged

                                       2
<PAGE>   51

            Existing lessees should indicate any actual discharges. If so,
            describe the nature of any proposed or actual discharge(s).

            ____________________________________________________________________
            ____________________________________________________________________

      5.2   Will any such wastewater or waste be treated before discharge?

            Yes [ ]              No [ ]

            If yes, describe the type of treatment proposed to be conducted.
            Existing lessees should describe the actual treatment conducted.

            ____________________________________________________________________
            ____________________________________________________________________

6.    AIR DISCHARGES

      6.1   Do you plan for any air filtration systems or stacks to be used in
            your company's operations in, on or about the Premises that will
            discharge into the air; and will such air emissions be monitored?
            Existing lessees should indicate whether or not there are any such
            air filtration systems or stacks in use in, on or about the Premises
            which discharge into the air and whether such air emissions are
            being monitored.

            Yes [ ]              No [ ]

            If Yes, please describe: ___________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

      6.2   Do you propose to operate any of the following types of equipment,
            or any other equipment requiring an air emissions permit? Existing
            lessees should specify any such equipment being operated in, on or
            about the Premises.

            ______ Spray booth(s)           ______ Incinerator(s)
            ______ Dip tank(s)              ______ Other (Please describe)
            ______ Drying oven(s)           ______ No Equipment Requiring Air
                                                   Permits

            If Yes, please describe: ___________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

7.    HAZARDOUS MATERIALS DISCLOSURES

      7.1   Has your company prepared or will it be required to prepare a
            Hazardous Materials management plan ("Management Plan") pursuant to
            Fire Department or other governmental or regulatory agencies'
            requirements? Existing lessees should indicate whether or not a
            Management Plan is required and has been prepared.

            Yes [ ]              No [ ]

            If yes, attach a copy of the Management Plan. Existing lessees
            should attach a copy of any required updates to the Management Plan.

                                       3
<PAGE>   52

      7.2   Are any of the Hazardous Materials, and in particular chemicals,
            proposed to be used in your operations in, on or about the Premises
            regulated under Proposition 65? Existing lessees should indicate
            whether or not there are any new Hazardous Materials being so used
            which are regulated under Proposition 65.

            Yes [ ]              No [ ]

            If Yes, please explain: ____________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

8.    ENFORCEMENT ACTIONS AND COMPLAINTS

      8.1   With respect to Hazardous Materials or Environmental Laws, has your
            company ever been subject to any agency enforcement actions,
            administrative orders, or consent decrees or has your company
            received requests for information, notice or demand letters, or any
            other inquiries regarding its operations? Existing lessees should
            indicate whether or not any such actions, orders or decrees have
            been, or are in the process of being, undertaken or if any such
            requests have been received.

            Yes [ ]              No [ ]

            If yes, describe the actions, orders or decrees and any continuing
            compliance obligations imposed as a result of these actions, orders
            or decrees and also describe any requests, notices or demands, and
            attach a copy of all such documents. Existing lessees should
            describe and attach a copy of any new actions, orders, decrees,
            requests, notices or demands not already delivered to Lessor
            pursuant to the provisions of Section 29 of the signed Lease
            Agreement.

            ____________________________________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

      8.2   Have there ever been, or are there now pending, any lawsuits against
            your company regarding any environmental or health and safety
            concerns?

            Yes [ ]              No [ ]

            If yes, describe any such lawsuits and attach copies of the
            complaint(s), cross-complaint(s), pleadings and all other documents
            related thereto as requested by Lessor. Existing lessees should
            describe and attach a copy of any new complaint(s),
            cross-complaint(s), pleadings and other related documents not
            already delivered to Landlord pursuant to the provisions of Section
            29 of the signed Lease Agreement.

            ____________________________________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

                                       4
<PAGE>   53

      8.3   Have there been any problems or complaints from adjacent tenants,
            owners or other neighbors at your company's current facility with
            regard to environmental or health and safety concerns? Existing
            lessees should indicate whether or not there have been any such
            problems or complaints from adjacent tenants, owners or other
            neighbors at, about or near the Premises.

            Yes [ ]              No [ ]

            If yes, please describe. Existing lessees should describe any such
            problems or complaints not already disclosed to Lessor under the
            provisions of the signed Lease Agreement

            ____________________________________________________________________
            ____________________________________________________________________

9.    PERMITS AND LICENSES

      9.1   Attach copies of all Hazardous Materials permits and licenses
            including a Transporter Permit number issued to your company with
            respect to its proposed operations in, on or about the Premises,
            including, without limitation, any wastewater discharge permits, air
            omissions permits, and use permits or approvals. Existing lessees
            should attach copies of any new permits and licenses as well as any
            renewals of permits or licenses previously issued.

The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Lessee shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Lessor's receipt and/or approval of such certificate. Lessee
further agrees that none of the following described acts or events shall be
construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Lessee from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Lessee's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Lessor, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Lessee is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Lessor and/or Lessor's acceptance of such
certificate, (ii) Lessor's review and approval of such certificate, (iii)
Lessor's failure to obtain such certificate from Lessee at any time, or (iv)
Lessor's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Lessee or Lessee's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Lessor and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement.

I, (print name) ________________________________, acting with full authority to
bind the (proposed) Lessee and on behalf of the (proposed) Lessee, certify,
represent and warrant that the information contained in this certificate is true
and correct.

TENANT

By: ___________________________________

Title: ________________________________

Date: _________________________________

                                       5
<PAGE>   54

                                    EXHIBIT F

                       FIRST AMENDMENT TO LEASE AGREEMENT
                           CHANGE OF COMMENCEMENT DATE

This First Amendment to Lease Agreement (the "Amendment") is made and entered
into to be effective as of __________________________________, by and between
________________________ ("Landlord"), and ________________________ ("Tenant"),
with reference to the following facts:

    RECITALS

A.  Landlord and Tenant have entered into that certain Lease Agreement dated
    ______________ (the "Lease"), for the leasing of certain premises containing
    approximately _______________ rentable square feet of space located at
    ________________________________________, California (the "Premises") as
    such Premises are more fully described in the Lease.

B.  Landlord and Tenant wish to amend the Commencement Date of the Lease.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:

    1.  Recitals: Landlord and Tenant agree that the above recitals are true and
        correct.

    2.  The Commencement Date of the Lease shall be _______________________.

    3.  The last day of the Term of the Lease (the "Expiration Date") shall be
        ______________________.

    4.  The dates on which the Base Rent will be adjusted are:

        for the period __________ to __________ the monthly Base Rent shall be
        $_______________;
        for the period __________ to __________ the monthly Base Rent shall be
        $_______________; and
        for the period __________ to __________ the monthly Base Rent shall be
        $_______________.

    5.  Effect of Amendment: Except as modified herein, the terms and conditions
        of the Lease shall remain unmodified and continue in full force and
        effect. In the event of any conflict between the terms and conditions of
        the Lease and this Amendment, the terms and conditions of this Amendment
        shall prevail.

    6.  Definitions: Unless otherwise defined in this Amendment, all terms not
        defined in this Amendment shall have the meaning set forth in the Lease.

    7.  Authority: Subject to the provisions of the Lease, this Amendment shall
        be binding upon and inure to the benefit of the parties hereto, their
        respective heirs, legal representatives, successors and assigns. Each
        party hereto and the persons signing below warrant that the person
        signing below on such party's behalf is authorized to do so and to bind
        such party to the terms of this Amendment.

    8.  The terms and provisions of the Lease are hereby incorporated in this
        Amendment.

                                       1
<PAGE>   55

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

TENANT

By: ___________________________________

Title: ________________________________

Date: _________________________________

LANDLORD
Legacy Partners Commercial, Inc.

By: ___________________________________

                                       2
<PAGE>   56

                           EXHIBIT G (TENANT/LANDLORD)

           TENANT'S INITIAL HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE

Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as tenant. After a lease agreement is signed by you and the Landlord
(the "Lease Agreement"), on an annual basis in accordance with the signed Lease
Agreement, you are to provide an update to the information initially provided by
you in this certificate. The information contained in the initial Hazardous
Materials Disclosure Certificate and each annual certificate provided by you
thereafter will be maintained in confidentiality by Landlord subject to release
and disclosure as required by (i) any lenders and owners and their respective
environmental consultants, (ii) any prospective purchaser(s) of all or any
portion of the property on which the Premises are located, (iii) Landlord to
defend itself or its lenders, partners or representatives against any claim or
demand, and (iv) any laws, rules, regulations, orders, decrees, or ordinances,
including, without limitation, court orders or subpoenas. Any and all
capitalized terms used herein, which are not otherwise defined herein, shall
have the same meaning ascribed to such term in the signed Lease Agreement. Any
questions regarding this certificate should be directed to, and when completed,
the certificate should be delivered to:

Lessor:     Legacy-RECP Sorrento OPCO, LLC
            c/o Legacy Partners Commercial, Inc.
            6480 Weathers Place, Suite 245
            San Diego, California 92121
            Phone: (619) 453-4800

Name of (Prospective) Lessee:  NETPARTNERS INTERNET SOLUTIONS, Inc.

Mailing Address: _______________________________________________________________
________________________________________________________________________________

Contact Person, Title and Telephone Number(s): _________________________________

Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s): ___________________________________________________________

Address of (Prospective) Premises:  10240 Sorrento Valley Road, 2nd and 3rd
Floors, San Diego, CA

Length of (Prospective) initial Term:  Three (3) years

1.    GENERAL INFORMATION:

      Describe the initial proposed operations to take place in, on, or about
      the Premises, including, without limitation, principal products processed,
      manufactured or assembled services and activities to be provided or
      otherwise conducted. Existing tenants should describe any proposed changes
      to on-going operations.

      __________________________________________________________________________
      __________________________________________________________________________

                                       1
<PAGE>   57

2.    USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS

      2.1   Will any Hazardous Materials be used, generated, stored or disposed
            of in, on or about the Premises? Existing tenants should describe
            any Hazardous Materials which continue to be used, generated, stored
            or disposed of in, on or about the Premises.

            Wastes                  Yes [ ]               No [ ]
            Chemical Products       Yes [ ]               No [ ]
            Other                   Yes [ ]               No [ ]

            If Yes is marked, please explain: __________________________________
            ____________________________________________________________________
            ____________________________________________________________________

      2.2   If Yes is marked in Section 2.1, attach a list of any Hazardous
            Materials to be used, generated, stored or disposed of in, on or
            about the Premises, including the applicable hazard class and an
            estimate of the quantities of such Hazardous Materials at any given
            time; estimated annual throughput; the proposed location(s) and
            method of storage (excluding nominal amounts of ordinary household
            cleaners and janitorial supplies which are not regulated by any
            Environmental Laws); and the proposed location(s) and method of
            disposal for each Hazardous Material, including, the estimated
            frequency, and the proposed contractors or subcontractors. Existing
            tenants should attach a list setting forth the information requested
            above and such list should include actual data from on-going
            operations and the identification of any variations in such
            information from the prior year's certificate.

3.    STORAGE TANKS AND SUMPS

      3.1   Is any above or below ground storage of gasoline, diesel, petroleum,
            or other Hazardous Materials in tanks or sumps proposed in, on or
            about the Premises? Existing tenants should describe any such actual
            or proposed activities.

            Yes [ ]              No [ ]

            If Yes, please explain: ____________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

4.    WASTE MANAGEMENT

      4.1   Has your company been issued an EPA Hazardous Waste Generator I.D.
            Number? Existing tenants should describe any additional
            identification numbers issued since the previous certificate.

            Yes [ ]              No [ ]

      4.2   Has your company filed a biannual or quarterly reports as a
            hazardous waste generator? Existing tenants should describe any new
            report filed.

            Yes [ ]              No [ ]

            If yes, attach a copy of the most recent report filed.

5.    WASTEWATER TREATMENT AND DISCHARGE

      5.1   Will your company discharge wastewater or other wastes to:

            ______ storm drain?           ______ sewer?

                                       2
<PAGE>   58

            ______ surface water?         ______ no wastewater or other wastes
                                                 discharged

            Existing tenants should indicate any actual discharges. If so,
            describe the nature of any proposed or actual discharge(s).

            ____________________________________________________________________
            ____________________________________________________________________

      5.2   Will any such wastewater or waste be treated before discharge?

            Yes [ ]              No [ ]

            If yes, describe the type of treatment proposed to be conducted.
            Existing tenants should describe the actual treatment conducted.

            ____________________________________________________________________
            ____________________________________________________________________

6.    AIR DISCHARGES

      6.1   Do you plan for any air filtration systems or stacks to be used in
            your company's operations in, on or about the Premises that will
            discharge into the air; and will such air emissions be monitored?
            Existing tenants should indicate whether or not there are any such
            air filtration systems or stacks in use in, on or about the Premises
            which discharge into the air and whether such air emissions are
            being monitored.

            Yes [ ]              No [ ]

            If Yes, please describe: ___________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

      6.2   Do you propose to operate any of the following types of equipment,
            or any other equipment requiring an air emissions permit? Existing
            tenants should specify any such equipment being operated in, on or
            about the Premises.

            ______ Spray booth(s)        ______ Incinerator(s)
            ______ Dip tank(s)           ______ Other (Please describe)
            ______ Drying oven(s)        ______ No Equipment Requiring Air
                                                Permits

            If Yes, please describe: ___________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

7.    HAZARDOUS MATERIALS DISCLOSURES

      7.1   Has your company prepared or will it be required to prepare a
            Hazardous Materials management plan ("Management Plan") pursuant to
            Fire Department or other governmental or regulatory agencies'
            requirements? Existing tenants should indicate whether or not a
            Management Plan is required and has been prepared.

            Yes [ ]              No [ ]

            If yes, attach a copy of the Management Plan. Existing tenants
            should attach a copy of any required updates to the Management Plan.

                                       3
<PAGE>   59

      7.2   Are any of the Hazardous Materials, and in particular chemicals,
            proposed to be used in your operations in, on or about the Premises
            regulated under Proposition 65? Existing tenants should indicate
            whether or not there are any new Hazardous Materials being so used
            which are regulated under Proposition 65.

            Yes [ ]              No [ ]

            If Yes, please explain: ____________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

8.    ENFORCEMENT ACTIONS AND COMPLAINTS

      8.1   With respect to Hazardous Materials or Environmental Laws, has your
            company ever been subject to any agency enforcement actions,
            administrative orders, or consent decrees or has your company
            received requests for information, notice or demand letters, or any
            other inquiries regarding its operations? Existing tenants should
            indicate whether or not any such actions, orders or decrees have
            been, or are in the process of being, undertaken or if any such
            requests have been received.

            Yes [ ]              No [ ]

            If yes, describe the actions, orders or decrees and any continuing
            compliance obligations imposed as a result of these actions, orders
            or decrees and also describe any requests, notices or demands, and
            attach a copy of all such documents. Existing tenants should
            describe and attach a copy of any new actions, orders, decrees,
            requests, notices or demands not already delivered to Landlord
            pursuant to the provisions of Section 29 of the signed Lease
            Agreement.

            ____________________________________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

      8.2   Have there ever been, or are there now pending, any lawsuits against
            your company regarding any environmental or health and safety
            concerns?

            Yes [ ]              No [ ]

            If yes, describe any such lawsuits and attach copies of the
            complaint(s), cross-complaint(s), pleadings and all other documents
            related thereto as requested by Landlord. Existing tenants should
            describe and attach a copy of any new complaint(s),
            cross-complaint(s), pleadings and other related documents not
            already delivered to Landlord pursuant to the provisions of Section
            29 of the signed Lease Agreement.

            ____________________________________________________________________
            ____________________________________________________________________
            ____________________________________________________________________

      8.3   Have there been any problems or complaints from adjacent tenants,
            owners or other neighbors at your company's current facility with
            regard to environmental or health and safety concerns? Existing
            tenants should indicate whether or not there have been any such
            problems or complaints from adjacent tenants, owners or other
            neighbors at, about or near the Premises.

            Yes [ ]              No [ ]

                                       4
<PAGE>   60

            If yes, please describe. Existing tenants should describe any such
            problems or complaints not already disclosed to Lessor under the
            provisions of the signed Lease Agreement

            ____________________________________________________________________
            ____________________________________________________________________

9.    PERMITS AND LICENSES

      9.1   Attach copies of all Hazardous Materials permits and licenses
            including a Transporter Permit number issued to your company with
            respect to its proposed operations in, on or about the Premises,
            including, without limitation, any wastewater discharge permits, air
            omissions permits, and use permits or approvals. Existing tenants
            should attach copies of any new permits and licenses as well as any
            renewals of permits or licenses previously issued.

            The undersigned hereby acknowledges and agrees that (A) this
            Hazardous Materials Disclosure Certificate is being delivered in
            connection with, and as required by, Landlord in connection with the
            evaluation and finalization of a Lease Agreement and will be
            attached thereto as an exhibit; (B) that this Hazardous Materials
            Disclosure Certificate is being delivered in accordance with, and as
            required by, the provisions of Section 29 of the Lease Agreement;
            and (C) that Tenant shall have and retain full and complete
            responsibility and liability with respect to any of the Hazardous
            Materials disclosed in the HazMat Certificate notwithstanding
            Landlord's/Tenant's receipt and/or approval of such certificate.
            Tenant further agrees that none of the following described acts or
            events shall be construed or otherwise interpreted as either (a)
            excusing, diminishing or otherwise limiting Tenant from the
            requirement to fully and faithfully perform its obligations under
            the Lease with respect to Hazardous Materials, including, without
            limitation, Tenant's indemnification of the Indemnitees and
            compliance with all Environmental Laws, or (b) imposing upon
            Landlord, directly or indirectly, any duty or liability with respect
            to any such Hazardous Materials, including, without limitation, any
            duty on Lessor to investigate or otherwise verify the accuracy of
            the representations and statements made therein or to ensure that
            Tenant is in compliance with all Environmental Laws; (i) the
            delivery of such certificate to Landlord and/or Landlord's
            acceptance of such certificate, (ii) Tenant's review and approval of
            such certificate, (iii) Landlord's failure to obtain such
            certificate from Tenant at any time, or (iv) Landlord's actual or
            constructive knowledge of the types and quantities of Hazardous
            Materials being used, stored, generated, disposed of or transported
            on or about the Premises by Tenant or Tenant's Representatives.
            Notwithstanding the foregoing or anything to the contrary contained
            herein, the undersigned acknowledges and agrees that Landlord and
            its partners, lenders and representatives may, and will, rely upon
            the statements, representations, warranties, and certifications made
            herein and the truthfulness thereof in entering into the Lease
            Agreement and the continuance thereof throughout the term, and any
            renewals thereof, of the Lease Agreement.

I, (print name) ________________________________, acting with full authority to
bind the (proposed) Tenant and on behalf of the (proposed) Tenant, certify,
represent and warrant that the information contained in this certificate is true
and correct.

TENANT
NETPARTNERS INTERNET SOLUTIONS, Inc.

By: ___________________________________

Title: ________________________________

Date: _________________________________

                                       5
<PAGE>   61

                                    EXHIBIT H
                                  SIGN CRITERIA

Tenant shall be entitled to display its business name on signs to be mounted in
the following locations, provided such exact locations shall be subject to
Landlord's reasonable approval:

(A)   Tenant's name and logo on the cast fascia of the Building;

(B)   Tenant's name and logo in the Building's first-floor lobby at the bottom
      of the second-floor "catwalk,"

(C)   Tenant's name and logo adjacent to Tenant's Premises entry doors on the
      second and third floors;

(D)   Tenant's name and logo on a monument sign to be installed at the entrance
      to the driveway on Sorrento Valley Road. (Tenant shall pay one-half of the
      costs of the monument sign structure, in addition to the entire cost of
      Tenant's name and logo);

(E)   Tenant's name and logo on the west fascia of the Building, but only if
      signage rights at this location are also granted to one or more other
      tenants.

In addition to the above, Landlord shall construct a "way-finding" sign at a
locations near the bridge showing the addresses of the Buildings within the Park
with arrows pointing in the direction such building is located. The cost of such
sign shall be divided equally between Landlord and Tenant.

Notwithstanding the above, all aspects of said signage (including, but not
limited to, size, font, color, location, etc.) shall be subject to Landlord's
reasonable approval, and must meet governmental and quasi-governmental
regulations. Furthermore, all signage shall be non-exclusive and may be shared
by other tenants.

The fabrication and installation of all Tenant signage shall be at Tenant's sole
expense. The removal of said signage and repair of any damage caused by such
removal at the end of the Term shall also be at Tenant's sole expense.

<PAGE>   62

                                  ADDENDUM ONE
                           OPTION TO EXTEND THE LEASE

The Addendum One ("Addendum") is incorporated as a part of that certain Lease
Agreement dated June 21, 1999 (the "Lease"), by and between Legacy-RECP Sorrento
OPCO, LLC, a Delaware limited liability company ("Landlord") and NETPARTNERS
INTERNET SOLUTIONS, Inc., a Delaware corporation ("Tenant") for the leasing of
certain premises located at 10240 Sorrento Valley Road, 1st (Storage Room), 2nd
(All) and 3rd (All) Floors, San Diego, California as more particularly described
in Exhibit A to the Lease (the "Premises"). Any capitalized terms used herein
and not otherwise defined herein shall have the meaning ascribed to such terms
as set forth in the Lease.

1. Grant of Extension Option. Subject to the provisions of this Addendum, if
tenant has not at any time been in default of its obligations beyond applicable
cure periods more than three (3) times during any twelve (12) month period of
the initial term of this Lease (a "Chronic Default"), or is not in default in
the performance of any of its obligations under this Lease beyond applicable
cure periods at the time of Tenant's exercise of this option to extend the
initial term of this Lease, Tenant shall have the right, at its option (the
"Option"), to extend the initial term of the Lease for one (1) additional Three
(3) year period (the "Extended Term").

2. Tenant's Option Notice. If Landlord does not receive written notice from
Tenant of its exercise of this Option on date which is not more than two hundred
seventy (270) days nor less than one hundred eighty (180) days prior to the end
of the initial term of the Lease ("Option Notice"), all rights under this Option
shall automatically lapse and terminate and shall be of no further force or
effect. Time is of the essence herein.

3. Establishing the Monthly Base Rent for the Extended Term. The monthly Base
Rent for the Extended Term shall be the then current market rent for similar
space within the competitive market area of the Premises (the "Fair Rental
Value") agreed upon by and between Landlord and Tenant and their agents
appointed for this purpose. The "Fair Rental Value" of the Premises shall be
defined to mean the current market rental value of the Premises as of the
commencement of the Extended Term, taking into consideration all relevant
factors, including length of term, the uses permitted under the Lease, the
quality size, design and location of the Premises, including the condition and
value of the existing tenant improvements, and the monthly base rent paid by
tenants for premises comparable to the Premises, and located within the
competitive market area of the Premises.

If Landlord and Tenant are unable to agree on the Fair Rental Value for the
Extended Term within ten (10) days of receipt by Landlord of the Option Notice,
Landlord and Tenant each, at its cost and by giving notice to the other party,
shall appoint a competent and disinterested commercial real estate MAI appraiser
(hereinafter "appraiser") with at least ten (10) years' full-time commercial
real estate appraisal experience in the geographical area of the Premises to set
the Fair Rental Value for the Extended Term. If either Landlord or Tenant does
not appoint an appraiser within ten (10) days after the other party has given
notice of the name of its appraiser, the single appraiser appointed shall be the
sole appraiser and shall set the Fair Rental Value for the Extended Term. If two
(2) appraisers are appointed by Landlord the Tenant as stated in this paragraph,
they shall meet promptly and attempt to set the Fair Rental Value. If the two
(2) appraiser are unable to agree within ten (10) days after the second
appraiser has been appointed, they shall attempt to select a third appraiser,
meeting the qualifications stated in this paragraph within ten (10) days after
the last day the two (2) appraisers agree given to set the Fair Rental Value. If
they are unable to agree on the third appraiser, either Landlord or Tenant by
giving ten (10) days' notice to the other party, can apply to the Presiding
Judge of the Superior Court of the county in which the Premises is located for
the selection of a third appraiser who meets the qualifications stated in this
paragraph. Landlord and Tenant each shall bear on one-half (1/2) of the cost of
appointing the third appraiser and of paying the third appraiser's fee. The
third appraiser, however selected, shall be a person who has not previously
acted in any capacity for either Landlord or Tenant. Within fifteen (15) days
after the selection of the third appraiser, the third appraiser shall determine
the Fair Rental Value for the Extended Term, which Fair Rental Value shall not
be higher than the highest Fair Rental Value nor lower than the lowest Fair
Rental Value submitted by the first two appraisers as the Fair Rental Value for
the Extended Term. If either of the first two appraisers fails to submit their
opinion of the Fair Rental Value , then the single Fair Rental Value submitted
shall automatically be the monthly Base Rent for the Extended Term.

<PAGE>   63

Upon determination of the initial monthly Base Rental for the Extended Term,
pursuant to the terms outlined above, Landlord and Tenant shall immediately
execute an amendment to the Lease. Such amendment, shall set forth among other
things, the initial monthly Base Rent for the Extended Term, and the actual
commencement date and expiration date of the Extended Term and shall otherwise
be on the same terms and provisions of the Lease to the extent then applicable
(by way of example only, the provisions of Exhibit B to the Lease may not be
applicable during the Extended Term). Tenant shall have no other right to
further extend the term of the Lease under this Addendum unless Landlord and
Tenant otherwise expressly agree in writing.

4. Condition of Premises and Brokerage Commissions for the Extended Term. If
Tenant timely and properly exercises this Option, in accordance with the terms
contained herein: (1) Tenant shall accept the Premises in its then "As-Is"
condition and, accordingly, Landlord shall not be required to perform any
additional improvements to the Premises; and (2) Tenant hereby agrees that it
will solely be responsible for any and all brokerage commissions and finder's
fees payable to any broker now or hereafter procured for hired by Tenant or who
otherwise claims a commission based on any act or statement of Tenant ("Tenant's
Broker") in connection with this Option; and Tenant hereby further agrees that
Landlord shall in no event or circumstance be responsible for the payment of any
such commissions and fees to Tenant's Broker.

5. Limitations On, and Conditions To, Extension Option. At Landlord's option,
all rights of Tenant under this Option shall terminate and be of no force or
effect if any of the following individual events occur or any combination
thereof occur: (1) Tenant has been in Chronic Default at any time during the
initial term of the Lease, or is in default in the performance of any of its
obligations under this Lease beyond any applicable cure periods at the time of
Tenant's exercised of this Option; and/or (2) Tenant's financial condition is
unacceptable to Landlord at the time of Tenant's delivery to Landlord of the
Option Notice (provided, however, if there is not any substantial adverse change
in Tenant's net profits during the prior three (3) fiscal quarters of Tenant's
operations then Tenant's then existing financial condition shall be acceptable
to Landlord); and/or (3) Tenant has failed to exercise properly the Option
described in this Addendum in a timely manner in strict accordance with the
provisions of this Addendum, and/or (4) Tenant no longer has lawful possession
of the Premises under the Lease, or if the Lease has been terminated earlier,
pursuant to the terms of the Lease.

6. Time is of the Essence. Time is of the essence with respect to each and every
time period set forth in this Addendum.

<PAGE>   64

                                  ADDENDUM TWO
                             RIGHT OF FIRST REFUSAL

This Addendum Two is incorporated as a part of that certain Lease Agreement
dated June 21, 1999 (the "Lease"), by and between Legacy-RECP Sorrento OPCO,
LLC, a Delaware limited liability company ("Landlord") and NETPARTNERS INTERNET
SOLUTIONS, Inc., a Delaware corporation ("Tenant") for the leasing of certain
premises located at 10240 Sorrento Valley Road, 1st (Storage Room), 2nd (All)
and 3rd (All) Floors, San Diego, California (the "Premises").

During the initial term of the Lease only, Tenant shall have a continuous First
Right to Lease ("Right of First Refusal") all or a portion of the continuous
space within the First Floor of Building 10240 (consisting of approximately
24,086 square feet), and the vacant space at Building 10220 (consisting of
approximately 15,590 square feet), as outlined on Exhibit A attached hereto and
made a part hereof (the "Expansion Space"). Tenant's right, as granted herein,
is subject tot he following conditions:

      i.    Tenant's Right of First Refusal shall be void if Tenant is currently
in default or has been in default more than three (3) times during any twelve
(12) month period of the initial Term of this Lease, in the performance of any
of its obligations under the Lease;

      ii.   Tenant's Right of First Refusal shall be subject to Landlord's
review and approval of Tenant's then current financial condition; and

      iii.  Tenant's Right of First Refusal shall be subject to the rights of
the then existing tenant pursuant to its existing Lease, as such Lease may be
modified, amended or extended.

Provided the above conditions are satisfied, and upon Landlord's receipt of a
third party offer to lease the Expansion Space which Landlord is willing to
accept, Landlord will offer this Right of First Refusal to Tenant in writing
stating all material terms on which Landlord proposes to lease such Expansion
Space to Tenant and Tenant shall have five (5) business days after deliver of
such notice to notify Landlord in writing ("Election Notice") of Tenant's
election to lease all the Expansion Space upon those terms. If Tenant fails to
notify Landlord of Tenant's election to lease the Expansion Space within the
time specified herein, it shall be deemed that (i) Tenant has elected not to
lease said Expansion Space, and (ii) Landlord may thereafter enter into a Lease
Agreement with a third party. Time is of the essence herein.

In the event Tenant exercises this Right of First Refusal as herein provided,
Tenant shall provide Landlord an additional Security Deposit equal to the Rent
due for the first month of Tenant's lease term for the Expansion Space, and the
parties shall have ten (10) working days after Landlord receives the Election
Notice from Tenant in which to execute an amendment to the Lease setting forth
the agree-upon terms. Upon full execution of an amendment for the Expansion
Space, the nonrefundable deposit shall be credited toward Rent or security
deposit for the Expansion Space, as agreed between the parties.

This Right of Refusal shall terminate and be of no force and effect if, at any
time, Tenant is or has been in default of the performance of any of the
covenants, conditions or agreements to be performed under this Lease, or the
Premises are being subleased at the time of this Right of First Refusal is
offered.

This Right of First Refusal is personal to Tenant and may not be assigned,
voluntarily or involuntarily, separate from or as a part of the Lease.

Should Tenant exercise the Right herein, Landlord and Tenant shall execute an
amendment to this Lease, adding the Expansion Space to the Premises and
adjusting the Rent and Tenant's Share set forth in the Basic Lease Information.
If Tenant does not elect to exercise the Right herein, based upon the material
terms proposed by Landlord, all Rights under this Right of First Refusal shall
terminate and be of no further force and effect.

<PAGE>   65

                       FIRST AMENDMENT TO LEASE AGREEMENT

This First Amendment to Lease Agreement (the "Amendment") is made and entered
into to be effective as of August 2, 1999, by and between Legacy-RECP Sorrento
OPCO, LLC, a Delaware limited liability company ("Landlord"), and WebSENSE,
Inc., a Delaware corporation ("Tenant"), with reference to the following facts:

                                    RECITALS

A.    Landlord and NetPartners Internet Solutions Inc., have entered into that
      certain Lease Agreement dated June 21, 1999 (the "Lease"), for the leasing
      of certain premises containing approximately 41,259 rentable square feet
      of space located at 10240 1st (Storage Room), 2nd (All) and 3rd (All)
      Floors, San Diego, California (the "Premises") as such Premises are more
      fully described in the Lease.

B.    NetPartners Internet Solutions, Inc., has changed it's name to WebSENSE,
      Inc.

C.    Landlord and Tenant wish to amend the location of the Storage Room of the
      First Floor.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:

      1.    Recitals: Landlord and Tenant agree that the above recitals are true
            and correct.

      2.    Exhibit A. ("Premises") of the Lease is hereby deleted in its
            entirety and replaced with Exhibit A attached hereto.

      3.    Effect of Amendment: Except as modified herein, the terms and
            conditions of the Lease shall remain unmodified and continue in full
            force and effect. In the event of any conflict between the terms and
            conditions of the Lease and this Amendment, the terms and conditions
            of this Amendment shall prevail.

      4.    Definitions: Unless otherwise defined in this Amendment, all terms
            not defined in this Amendment shall have the meaning set forth in
            the Lease.

      5.    Authority: Subject to the provisions of the Lease, this Amendment
            shall be binding upon and inure to the benefit of the parties
            hereto, their respective heirs, legal representatives, successors
            and assigns. Each party hereto and the persons signing below warrant
            that the persons signing below on such party's behalf is authorized
            to do so and to bind such party to the terms of this Amendment.

      6.    The terms and provisions of the Lease are hereby incorporated in
            this Amendment.

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

TENANT:                                   LANDLORD:

WebSENSE, Inc.                            Legacy-RECP Sorrento OPCO, LLC
a Delaware corporation                    a Delaware limited liability company

By:   /s/ [illegible]                     By: Legacy Partners Commercial, Inc.
      -------------------------------
Its:  VP Financing                            As Manager and Agent of Landlord
      -------------------------------
Date: August 4, 1999
      -------------------------------     By:   /s/ [illegible]
                                                -------------------------------
By:   /s/ [illegible]
      -------------------------------
Its:  CEO                                 Date: 9/1/99
      -------------------------------
Date: August 4, 1999
      -------------------------------

<PAGE>   66

                                    EXHIBIT A
                                   (CONTINUED)

                                    [PICTURE]

                                    [PICTURE]

                                       11
<PAGE>   67

                              EXHIBIT A - PREMISES

This exhibit, entitled "Premises", is and shall constitute EXHIBIT A to that
certain First Amendment to Lease Agreement dated August 2, 1999 (the
"Amendment"), by and between Legacy-RECP Sorrento OPCO, LLC, a Delaware limited
liability company ("Landlord") and WEBSENSE, Inc., a Delaware corporation
("Tenant") for the leasing of certain premises at 10240 Sorrento Valley Road,
1st (Storage Room), 2nd (All) and 3rd (All) Floors, San Diego, California (the
"Premises").

The premises consist of the rentable square footage of space specified in the
Base Lease Information and has the address specified in the Base Lease
Information. The Premises are a part of and are contained in the Building
specified in the Base Lease Information. The cross-hatched area depicts the
Premises within the Building.

                                    [PICTURE]

                                    [PICTURE]

                                       12
<PAGE>   68

                              ESTOPPEL CERTIFICATE

<TABLE>
<CAPTION>
<S>     <C>
RE:      Netpartners Internet Solutions, Inc., a Delaware corporation
         ----------------------------------------------------------------------
         Tenant's Full Name

         10240 Sorrento Valley Road Suite No.:
         --------------------------            ----------------
         Full Address

         San Diego, CA  92121
         ------------------------------------------------------
         City, State, Zip

         Legacy RECP Sorrento QPCO, LLC
         ------------------------------------------------------
         (Borrower)

TO:      FREMONT INVESTMENT & LOAN
         ------------------------------------------------------
         (Lender)
         ATTN: Debi Williams
</TABLE>

Sir/Madam:

                                    RECITALS

1.    Borrower is either Lessor or the successor-in-interest to Lessor and has
      applied for a loan (the "loan") from Lender.

2.    The proposed Loan will be secured by, among other things, the Lease
      Agreement (the "Lease") reference herein.

3.    The undersigned (hereinafter called "Lessee") is the Lessee of the
      above-referenced property under the following lease agreement:

      3.1   Date of Lease:  June 21, 1999
                          ------------------------------------------------------

      3.2   Name of Original Lessor:  RECP Sorrento OPCO, LLC
                                    --------------------------------------------

      3.3   Name of Original Lessee:  NETPARTNERS INTERNET SOLUTIONS, Inc.,
                                    --------------------------------------------
            company name was changed to WebSENSE, Inc. per the First Amendment
            --------------------------------------------------------------------
            to Lease
            --------------------------------------------------------------------

      3.4   Suite or Unit Number:  10240 Sorrento Valley Road
                                 -----------------------------------------------

      3.5   Net Rentable S.F.:  41,259 square feet
                              --------------------------------------------------

      3.6   Expiration date of existing term:  August 31, 2002
                                             -----------------------------------

      3.7   Number and length of options (if none, write none):  One additional
                                                               -----------------
            3 years
            --------------------------------------------------------------------

      3.8   There are no Assignments, Amendments, Addendums, Modifications,
            Extensions and/or Options to the Lease, except for (if none, write
            none): Addendum 1, Option To Extend The Lease (dated 6/21/99),
                  --------------------------------------------------------------
            Addendum 2, Right of First Offer (dated 6/21/99), and First
            --------------------------------------------------------------------
            Amendment To Lease Agreement Change of Commencement Date, (dated
            --------------------------------------------------------------------
            6/2/99)
            --------------------------------------------------------------------

      3.9   Current Fixed Monthly Base Rent:  $54,452.00
                                            ------------------------------------

      3.10  Current Total Monthly Expense Reimbursement (if none, write none):
            $9,065.00

      3.11  Total Parking Spaces Leased (if none, write none): One exclusive and
                                                              ------------------
            designated
            --------------------------------------------------------------------

      3.12  Total Current Parking Rent (if none, write none):  None
                                                             -------------------

      3.13  Present or Future Rent Abatement (if none, write none):  None
                                                                   -------------

4.    Said lease agreement, together with the assignments, amendments,
      addendums, modifications, extensions and/or options described above
      (collectively called "Lease") constitute the entire agreement between
      Lessee and Lessor with respect to the Leased Premises.

<PAGE>   69

Fremont Investment & Loan
Estoppel Certificate
Page 2

5.    As of this date the Lease is in full force and effect.

      5.1   Lessee is the actual occupant and is in possession of the Leased
            Premises.

      5.2   Lessee has not assigned, transferred or hypothecated it's interest
            under the Lease.

      5.3   All construction and installation of tenant improvements required to
            be performed by, or paid by Lessor, under the Lease have been
            completed and the Leased Premises has been accepted by Lessee. All
            expenditures have been made and costs paid that are required of the
            Lessee under the lease.

6.    As of this date, no breach exists on the part of Lessee under the Lease.

7.    To the best knowledge of Lessee, as of this date, no breach exists on the
      part of Lessor under the Lease.

8.    As to the rent:

      8.1   No rent has been prepaid more than thirty (30) days in advance of
            its' due date.

      8.2   Lessee has no offsets or credits against rents payable.

      8.3   Lessee has no claim against Lessor for any security or other
            deposits other than the sum, which was paid pursuant to the terms of
            the Lease.

      8.4   The Fixed Monthly Base Rent, referenced above, does not include any
            expense reimbursement or reimbursement for tenant improvements or
            rental charges based on a percentage of sales.

9.    Lessee does not engage in any activity on or about the Leased Premises
      which constitutes or causes a Hazardous Substance Activity and Lessee does
      not know of, nor has any reasonable cause to believe that a Hazardous
      Substance, or a condition involving or resulting from the same, has come
      to be located in, or, under or about the Leased Premises except for the
      following.

      (if none write "none"): __________________________________________________

The term "Hazardous Substance Activity" means any actual, proposed or threatened
storage, holding, existence, release, omission, discharge, generation,
processing, treatment, abatement, removal, disposition, handling or
transportation by any person of any Hazardous Substance from, under, into or on
the Leased Premises or the real property and improvements of which the Leased
Premises is a part, or surrounding property. The term "Hazardous Substance"
means (a) any chemical, compound, material, mixture or substance that is now or
hereafter defined or listed in, or otherwise classified pursuant to, any
Environmental Laws as a "hazardous substance", "hazardous material", "hazardous
waste", "extremely hazardous waste", "acutely hazardous waste", "radioactive
waste", "infectious waste", "biohazardous waste", "toxic substance",
"pollutant", "toxic pollutant", "contaminant" as well as any formulation not
mentioned herein intended to define, list or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "EP toxicity", or "TCLP
toxicity"; (b) petroleum, natural gas, natural gas liquids, liquefied natural
gas, synthetic gas usable for fuel (or mixtures of natural gas and such
synthetic gas) and ash produced by a resource recovery facility utilizing a
municipal solid waste stream, and drilling fluids, produced waters and other
wastes associated with the exploration, development or production of crude oil,
natural gas, or geothermal resources; (c) "hazardous substance" as defined in
Section 25281(f) of the California Health and Safety Code; (d) "waste" as
defined in Section 13050(d) of the California Water Code; (e) asbestos in any
form; (f) urea formaldehyde foam insulation; (g) polychlorinated biphenyls
(PCBs); (h) radon; and (i) any other chemical, material, or substance exposure
to which is limited or regulated by any Governmental Agency because of its
quantity, concentration, or physical or chemical characteristics, or which poses
a significant present or potential hazard to human health or safety or to the
environment if released into the workplace or the environment. "Hazardous
Substances" shall not include ordinary

<PAGE>   70

Fremont Investment & Loan
Estoppel Certificate
Page 3

office supplies and repair, maintenance and cleaning supplies maintained in
reasonable and necessary quantities and used in accordance with all
Environmental Laws. The term "Environmental Laws" means any and all present and
future federal, state and local laws, ordinances, regulations, policies and any
other requirements of any governmental agency exercising jurisdiction over the
Leased Premises, Lessee or Lessor relating to health, safety, the environment or
to any Hazardous Substances, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), the
Resource Conservation Recovery Act (RCRA), the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the California
Environmental Quality Act and the applicable provisions of the California Health
and Safety Code, California Labor Code and the California Water Code, each
Endangered Species Act, the Clean Water Act, the Occupational Safety and Health
Act, as hereafter amended from time to time, and the present and future rules,
regulations and guidance documents promulgated under any of the foregoing.

10.   Except as may be specifically set forth in the Lease, Lessee does not have
      any right to renew or extend the term of the Lease nor any option or
      preferential right to purchase all or any part of the Leased Premises or
      all or any part of the building and premises of which the Leased Premises
      are a part, nor any right, title or interest with respect to the Leased
      Premises other than as Lessee under the lease.

11.   Lessee understands that Lendor may make a loan secured by the Leased
      Premises and that if it does so, it's action will be in material reliance
      on this certificate.

LESSEE:

Dated: _________, ____  ____________________  _________________  _______________
                        Authorized Signature  (Notary Required)  Title/Position

<PAGE>   71

Fremont Investment & Loan
Estoppel Certificate
Page 4

ACKNOWLEDGEMENT (to be completed by Notary)

State of California          )
                             )  ss.
County of _________________  )

On ____________________ before me, ___________________________, Notary Public,
personally appeared _______________________________________, personally know to
me (or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her authorized capacity, and that by his/her
signature on the instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.

                                          WITNESS my hand and official seal.

                                          ______________________________________
                                          Signature of Notary Public

LESSOR:
The undersigned Lessor under the above-described Lease hereby certifies that the
information contained in the foregoing certificate is true and correct and that
the party to whom this statement is addressed may rely upon said information.

Dated: _________, ____  _______________________________________  _______________
                        Authorized Signature                     Title/Position

            Terry Thompson, Vice President

Date:__________________________________<PAGE>   1
                                                                    EXHIBIT 10.7

                      NETPARTNERS INTERNET SOLUTIONS, INC,

                           1998 EQUITY INCENTIVE PLAN

                             ADOPTED APRIL 28, 1998

                   APPROVED BY STOCKHOLDERS ON APRIL 28, 1998

1. PURPOSES.

        (a) The purpose of this Plan is to provide a means by which selected
Employees and Directors of and Consultants to the Company, and its Affiliates,
may be given an opportunity to benefit from increases in value of the stock of
the Company through the granting of (i) Incentive Stock Options, (ii)
Nonstatutory Stock Options, (iii) stock bonuses, and (iv) rights to purchase
restricted stock, all as defined below.

        (b) The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees or Directors of or Consultants to the Company or
its Affiliates, to secure and retain the services of new Employees, Directors
and Consultants, and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its Affiliates.

        (c) The Company intends that the Stock Awards issued under the Plan
shall, in the discretion of the Board or any Committee to which responsibility
for administration of the Plan has been delegated pursuant to subsection 3(c),
be either (i) Options granted pursuant to Section 6 hereof, including Incentive
Stock Options and Nonstatutory Stock Options, or (ii) stock bonuses or rights to
purchase restricted stock granted pursuant to Section 7 hereof. All Options
shall be separately designated Incentive Stock Options or Nonstatutory Stock
Options at the time of grant, and in such form as issued pursuant to Section 6,
and a separate certificate or certificates will be issued for shares purchased
on exercise of each type of Option.

2. DEFINITIONS.

        (a) "Affiliate" means any parent corporation or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections 424(e)
and (f) respectively, of the Code.

        (b) "BOARD" means the Board of Directors of the Company.

        (c) "CODE" means the Internal Revenue Code of 1986, as amended.

        (d) "COMMITTEE" means a Committee appointed by the Board in accordance
with subsection 3(c) of the Plan.

        (e) "COMPANY" means NetPartners Internet Solutions, Inc., a Delaware
corporation.

                                       1
<PAGE>   2
        (f) "CONSULTANT" means any person, including an advisor, engaged by the
Company or an Affiliate to render consulting services and who is compensated for
such services, provided that the term "Consultant" shall not include Directors
who are paid only a director's fee by the Company or who are not compensated by
the Company for their services as Directors.

        (g) "CONTINUOUS STATUS AS AN EMPLOYEE, DIRECTOR OR CONSULTANT" means
that the service of an individual to the Company, whether as an Employee,
Director or Consultant, is not interrupted or terminated. The Board or the chief
executive officer of the Company may determine, in that party's sole discretion,
whether Continuous Status as an Employee, Director or Consultant shall be
considered interrupted in the case of: (i) any leave of absence approved by the
Board or the chief executive officer of the Company, including sick leave,
military leave or any other personal leave; or (ii) transfers between the
Company, Affiliates or their successors.

        (h) "COVERED EMPLOYEE" means the chief executive officer and the four
(4) other highest compensated officers of the Company for whom total
compensation is required to be reported to stockholders under the Exchange Act,
as determined for purposes of Section 162(m) of the Code.

        (i) "DIRECTOR" means a member of the Board.

        (j) "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.

        (k) "EXCHANGE ACt" means the Securities Exchange Act of 1934, as
amended.

        (l) "FAIR MARKET VALUE" means the value of the common stock as
determined in good faith by the Board.

        (m) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

        (n) "LISTING DATE" means the first date upon which any security of the
Company is listed (or approved for listing) upon notice of issuance on any
securities exchange, or designated (or approved for designation) upon notice of
issuance as a national market security on an interdealer quotation system.

        (o) "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or subsidiary, does not
receive compensation (directly or indirectly) from the Company or its parent or
subsidiary for services rendered as a consultant or in any capacity other than
as a Director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
("Regulation S-K")), does not possess an interest in any other transaction as to
which disclosure would be required under Item 404(a) of Regulation S-K, and is
not engaged in

                                       2
<PAGE>   3

a business relationship as to which disclosure would be required under 404(b) of
Regulation S-K; or (ii) is otherwise considered a "non-employee director" for
purposes of Rule 16b-3

        (p) "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify
as an Incentive Stock Option.

        (q) "OFFICER" means (i) prior to the Listing Date, any person designated
by the Company as an officer and (ii) from and after the Listing Date, a person
who is an officer of the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder.

        (r) "OPTION" means a stock option granted pursuant to the Plan.

        (s) "OPTION AGREEMENT" means a written agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.

        (t) "OPTIONEE" means a person to whom an Option is granted pursuant to
the Plan or, if applicable, such other person who holds an outstanding Option.

        (u) "OUTSIDE DIRECTOR" means a Director who either (i) is not a current
employee of the Company or an "affiliated corporation" (within the meaning of
the Treasury regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an "affiliated corporation"
at any time, and is not currently receiving direct or indirect remuneration from
the Company or an "affiliated corporation" for services in any capacity other
than as a Director, or (ii) is otherwise considered an "outside director" for
purposes of Section 162(m) of the Code.

        (v) "PLAN" means this 1998 Equity Incentive Plan.

        (w) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect with respect to the Company at the time discretion
is being exercised regarding the Plan.

        (x) "SECURITIES ACT" means the Securities Act of 1933, as amended.

        (y) "STOCK AWARD" means any right granted under the Plan, including any
Option, any stock bonus, and any right to purchase restricted stock.

        (z) "STOCK AWARD AGREEMENT" means a written agreement between the
Company and a holder of Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.

                                       3
<PAGE>   4

3. ADMINISTRATION.

        (a) The Plan shall be administered by the Board unless and until the
Board delegates administration to a Committee, as provided in subsection 3(c).

        (b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:

            (1) To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how each Stock Award
shall be granted; whether a Stock Award will be an Incentive Stock Option, a
Nonstatutory Stock Option, a stock bonus, a right to purchase restricted stock,
or a combination of the foregoing; the provisions of each Stock Award granted
(which need not be identical), including the time or times when a person shall
be permitted to receive stock pursuant to a Stock Award; and the number of
shares with respect to which a Stock Award shall be granted to each such person.

            (2) To construe and interpret the Plan and Stock Awards granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award Agreement,
in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.

            (3) To amend the Plan or a Stock Award as provided in Section 13.

        (c) The Board may delegate administration of the Plan to a committee of
the Board composed of not fewer than two (2) members (the "Committee"), all of
the members of which Committee may be, in the discretion of the Board,
Non-Employee Directors and/or Outside Directors. If administration is delegated
to a Committee, the Committee shall have, in connection with the administration
of the Plan, the powers theretofore possessed by the Board, including the power
to delegate to a subcommittee of two (2) or more Outside Directors any of the
administrative powers the Committee is authorized to exercise (and references in
this Plan to the Board shall thereafter be to the Committee or such a
subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan. Additionally, prior to the Listing Date, and
notwithstanding anything to the contrary contained herein, the Board may
delegate administration of the Plan to any person or persons and the term
"Committee" shall apply to any person or persons to whom such authority has been
delegated. Notwithstanding anything in this Section 3 to the contrary, the Board
or the Committee may delegate to a committee of one or more members of the Board
the authority to grant Stock Awards to eligible persons who (1) are not then
subject to Section 16 of the Exchange Act and/or (2) are either (i) not then
Covered Employees and are not expected to be Covered Employees at the time of
recognition of income resulting from such Stock Award, or (ii) not persons with
respect to whom the Company wishes to comply with Section 162(m) of the Code.

                                       4
<PAGE>   5

4. SHARES SUBJECT TO THE PLAN.

        (a) Subject to the provisions of Section 13 relating to adjustments upon
changes in stock, the stock that may be issued pursuant to Stock Awards shall
not exceed in the aggregate Two Million (2,000,000) shares of the Company's
common stock. If any Stock Award shall for any reason expire or otherwise
terminate, in whole or in part, without having been exercised in full, the stock
not acquired under such Stock Award shall revert to and again become available
for issuance under the Plan.

        (b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.

5. ELIGIBILITY

        (a) Incentive Stock Options may be granted only to Employees. Stock
Awards other than Incentive Stock Options and may be granted only to Employees,
Directors or Consultants.

        (b) No person shall be eligible for the grant of an Option or an award
to purchase restricted stock if, at the time of grant, such person owns (or is
deemed to own pursuant to Section 424(d) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or of any of its Affiliates unless the exercise price of such Option
is at least one hundred ten percent (110%) of the Fair Market Value of such
stock at the date of grant and the Option is not exercisable after the
expiration of five (5) years from the date of grant, or in the case of a
restricted stock purchase award, the purchase price is at least one hundred
percent (100%) of the Fair Market Value of such stock at the date of grant.

        (c) Subject to the provisions of Section 13 relating to adjustments upon
changes in stock, no person shall be eligible to be granted Options covering
more than Five Hundred Thousand (500,000) shares of the Company's common stock
in any twelve (12)-month period; provided, however, that to the extent that
Options are granted in connection with the commencement of employment of any
person, the total number of shares of Company's common stock covered under such
Options may equal to an amount not to exceed Five Hundred Thousand (500,000)
shares. This subsection 5(c) shall not apply prior to the Listing Date and,
following the Listing Date, shall not apply until (i) the earliest of: (A) the
first material modification of the Plan (including any increase to the number of
shares reserved for issuance under the Plan in accordance with Section 4); (B)
the issuance of all of the shares of common stock reserved for issuance under
the Plan; (C) the expiration of the Plan; or (D) the first meeting of
stockholders at which directors are to be elected that occurs after the close of
the third calendar year following the calendar year in which occurred the first
registration of an equity security under section 12 of the Exchange Act; or (ii)
such other date required by Section 162(m) of the Code and the rules and
regulations promulgated thereunder.

6. OPTION PROVISIONS.

        Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each

                                       5
<PAGE>   6

Option shall include (through incorporation of provisions hereof by reference in
the Option or otherwise) the substance of each of the following provisions:

        (a) TERM. No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted.

        (b) PRICE. The exercise price of each Incentive Stock Option shall be
not less than one hundred percent (100%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted; the exercise price or
each Nonstatutory Stock Option shall be not less than eighty-five percent (85%)
of the Fair Market Value of the stock subject to the Option on the date the
Option is granted. Notwithstanding the foregoing, an Option (whether an
Incentive Stock Option or a Nonstatutory Stock Option) may be granted with an
exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option
in a manner satisfying the provisions of Section 424(a) of the Code.

        (c) CONSIDERATION. The purchase price of stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is exercised, or (ii) at
the discretion of the Board or the Committee, at the time of the grant of the
Option, (A) by delivery to the Company of other common stock of the Company, (B)
according to a deferred payment or other arrangement (which may include, without
limiting the generality of the foregoing, the use of other common stock of the
Company) with the person to whom the Option is granted or to whom the Option is
transferred pursuant to subsection 6(d), or (C) in any other form of legal
consideration that may be acceptable to the Board. In the case of any deferred
payment arrangement, interest shall be compounded at least annually and shall be
charged at the minimum rate of interest necessary to avoid the treatment as
interest, under any applicable provisions of the Code, of any amounts other than
amounts stated to be interest under the deferred payment arrangement. In
addition, to the extent required by applicable law, the "par value" of the stock
will not be subject to any deferred payment arrangement and will be paid in cash
at the time the Option is exercised.

        (d) TRANSFERABILITY. Prior to the Listing Date, an Option (whether an
Incentive Stock Option or a Nonstatutory Stock Option) shall not be transferable
except by will or by the laws of descent and distribution, and shall be
exercisable during the lifetime of the person to whom the Option is granted only
by such person. From and after the Listing Date, a Nonstatutory Stock Option may
be transferable to the extent provided in the Option Agreement; provided,
however, that if the Option Agreement does not specifically provide for
transferability, then such Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution. Notwithstanding the
foregoing, the person to whom the Option is granted may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionee, shall thereafter be
entitled to exercise the Option.

        (e) VESTING. The total number of shares of stock subject to an Option
may, but need not, be allotted in periodic installments (which may, but need
not, be equal). The Option Agreement may provide that from time to time during
each of such installment periods, the

                                       6
<PAGE>   7

Option may become exercisable ("vest") with respect to some or all of the shares
allotted to that period, and may be exercised with respect to some or all of the
shares allotted to such period and/or any prior period as to which the Option
became vested but was not fully exercised. The Option may be subject to such
other terms and conditions on the time or times when it may be exercised (which
may be based on performance or other criteria) as the Board may deem
appropriate. The vesting provisions of individual Options may vary, provided,
however that prior to the Listing Date, each Option will provide for vesting of
at least twenty percent (20%) per year of the total number of shares subject to
the Option. Notwithstanding the foregoing, an Option granted to an Officer,
Director or Consultant may become fully exercisable, subject to reasonable
conditions such as continued employment, at any time or during any period
established by the Company or of any of its Affiliates. The provisions of this
subsection 6(e) are subject to any Option provisions governing the minimum
number of shares as to which an Option may be exercised.

        (f) TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS A DIRECTOR OR
CONSULTANT. In the event an Optionee's Continuous Status as an Employee,
Director or Consultant terminates (other than upon the Optionee's death or
disability), the Optionee may exercise his or her Option (to the extent that the
Optionee was entitled to exercise it as of the date of resignation) but only
within such period of time ending on the earlier of (i) the date three (3)
months following the termination of the Optionee's Continuous Status as an
Employee, Director or Consultant (or such longer or shorter period, which shall
not be less than thirty (30) days, specified in the Option Agreement), or (ii)
the expiration of the term of the Option as set forth in the Option Agreement;
provided however, if the Optionee is terminated for cause, then the Option shall
terminate on the date Optionee's Continuous Service ceases. If, at the date of
termination, the Optionee is not entitled to exercise his or her entire Option,
the shares covered by the unexercisable portion of the Option shall revert to
and again become available for issuance under the Plan. If, after termination,
the Optionee does not exercise his or her Option within the time specified in
the Option Agreement, the Option shall terminate, and the shares covered by such
Option shall revert to and again become available for issuance under the Plan.

        An Optionee's Option Agreement may also provide that if the exercise of
the Option following the termination of the Optionee's Continuous Status as an
Employee, Director, or Consultant (other than upon the Optionee's death or
disability) would result in liability under Section 16(b) of the Exchange Act,
then the Option shall terminate on the earlier of (i) the expiration of the term
of the Option set forth in the Option Agreement, or (ii) the tenth (10th) day
after the last date on which such exercise would result in such liability under
Section 16(b) of the Exchange Act. Finally, an Optionee's Option Agreement may
also provide that if the exercise of the Option following the termination of the
Optionee's Continuous Status as an Employee, Director or Consultant (other than
upon the Optionee's death or disability) would be prohibited at any time solely
because the issuance of shares would violate the registration requirements under
the Securities Act, then the Option shall terminate on the earlier of (i) the
expiration of the term of the Option set forth in the first paragraph of this
subsection 6(f), or (ii) the expiration of a period of three (3) months after
the termination of the Optionee's Continuous Status as an Employee, Director or
Consultant during which the exercise of the Option would not be in violation of
such registration requirements.

                                       7
<PAGE>   8

        (g) DISABILITY OF OPTIONEE. In the event an Optionee's Continuous Status
as an Employee, Director or Consultant terminates as a result of the Optionee's
disability, the Optionee may exercise his or her Option (to the extent that the
Optionee was entitled to exercise it as of the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period, which in no
event shall be less than six (6) months, specified in the Option Agreement), or
(ii) the expiration of the term of the Option as set forth in the Option
Agreement. If, at the date of termination, the Optionee is not entitled to
exercise his or her entire Option, the shares covered by the unexercisable
portion of the Option shall revert to and again become available for issuance
under the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified herein, the Option shall terminate, and the
shares covered by such Option shall revert to and again become available for
issuance under the Plan.

        (h) DEATH OF OPTIONEE. In the event of the death of an Optionee during,
or within a period specified in the Option Agreement after the termination of,
the Optionee's Continuous Status as an Employee, Director or Consultant, the
Option may be exercised (to the extent the Optionee was entitled to exercise the
Option as of the date of death) by the Optionee's estate, by a person who
acquired the right to exercise the Option by bequest or inheritance or by a
person designated to exercise the option upon the Optionee's death pursuant to
subsection 6(d), but only within the period ending on the earlier of (i) the
date eighteen (18) months following the date of death (or such longer or shorter
period, which in no event shall be less than six (6) months, specified in the
Option Agreement), or (ii) the expiration of the term of such Option as set
forth in the Option Agreement. If, at the time of death, the Optionee was not
entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under the Plan. If, after death, the Option is not exercised within
the time specified herein, the Option shall terminate, and the shares covered by
such Option shall revert to and again become available for issuance under the
Plan.

        (i) EARLY EXERCISE. The Option may, but need not, include a provision
whereby the Optionee may elect at any time while an Employee, Director or
Consultant to exercise the Option as to any part or all of the shares subject to
the Option prior to the full vesting of the Option. Any unvested shares so
purchased shall be subject to a repurchase right in favor of the Company, with
the repurchase price to be equal to the original purchase price of the stock, or
to any other restriction the Board determines to be appropriate. Prior to the
Listing Date, however, any unvested shares so purchased shall be subject to a
repurchase right in favor of the Company, with the repurchase price to be equal
to the original purchase price of the stock, or to any other restriction the
Board determines to be appropriate; provided, however, that (i) the right to
repurchase at the original purchase price shall lapse at a minimum rate of
twenty percent (20%) per year over five (5) years from the date the Option was
granted, and (ii) such right shall be exercisable only within (A) the ninety
(90)-day period following the termination of employment or the relationship as a
Director or Consultant, or (B) such longer period as may be agreed to by the
Company and the Optionee (for example, for purposes of satisfying the
requirements of Section 1202(c)(3) of the Code (regarding "qualified small
business stock")), and (iii) such right shall be exercisable only for cash or
cancellation of purchase money indebtedness for the shares. Notwithstanding the
foregoing, shares received on exercise of an Option by an Officer, Director or
Consultant may be subject to additional or greater restrictions.

                                       8
<PAGE>   9

        (j) RIGHT OF REPURCHASE. The Option may, but need not, include a
provision whereby the Company may elect, prior to the Listing Date, to
repurchase all or any part of the vested shares exercised pursuant to the
Option; provided, however, that (i) such repurchase right shall be exercisable
only within (A) the ninety (90) day period following the termination of
employment or the relationship as a Director or Consultant (or in the case of a
post-termination exercise of the Option, the ninety (90)-day period following
such post-termination exercise), or (B) such longer period as may be agreed to
by the Company and the Optionee (for example, for purposes of satisfying the
requirements of Section 1202(c)(3) of the Code (regarding "qualified small
business stock")), (ii) such repurchase right shall be exercisable for less than
all of the vested shares only with the Optionee's consent, and (iii) such right
shall be exercisable only for cash or cancellation of purchase money
indebtedness for the shares at a repurchase price equal to the greater of (A)
the stock's Fair Market Value at the time of such termination. Notwithstanding
the foregoing, shares received on exercise of an Option by an Officer, Director
or Consultant may be subject to additional or greater restrictions specified in
the Option Agreement.

        (k) RIGHT OF FIRST REFUSAL. The Option may, but need not, include a
provision whereby the Company may elect, prior to the Listing Date, to exercise
a right of first refusal following receipt of notice from the Optionee of the
intent to transfer all or any part of the shares exercised pursuant to the
Option.

7. TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.

        Each stock bonus or restricted stock purchase agreement shall be in such
form and shall contain such terms and conditions as the Board or the Committee
shall deem appropriate. The terms and conditions of stock bonus or restricted
stock purchase agreements may change from time to time, and the terms and
conditions of separate agreements need not be identical, but each stock bonus or
restricted stock purchase agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions as appropriate:

        (a) PURCHASE PRICE. The purchase price under each restricted stock
purchase agreement shall be such amount as the Board or Committee shall
determine and designate in such Stock Award Agreement, but in no event shall the
purchase price be less than eighty-five percent (85%) of the stock's Fair Market
Value on the date such award is made. In addition, any Stock Award made to a 10%
stockholder (as defined in Section 5(b)) shall have a purchase price not less
than one hundred and ten percent (110%) of the stock's Fair Market Value on the
date such award is made. Notwithstanding the foregoing, the Board or the
Committee may determine that eligible participants in the Plan may be awarded
stock pursuant to a stock bonus agreement in consideration for past services
actually rendered to the Company or for its benefit.

        (b) TRANSFERABILITY. Rights under a stock bonus or restricted stock
purchase agreement shall be transferable by the grantee only upon such terms and
conditions as are set forth in the applicable Stock Award Agreement, as the
Board or the Committee shall determine

                                       9
<PAGE>   10

in its discretion, so long as stock awarded under such Stock Award Agreement
remains subject to the terms of the agreement.

        (c) CONSIDERATION. The purchase price of stock acquired pursuant to a
stock purchase agreement shall be paid either: (i) in cash at the time of
purchase; (ii) at the discretion of the Board or the Committee, according to a
deferred payment or other arrangement with the person to whom the stock is sold;
or (iii) in any other form of legal consideration that may be acceptable to the
Board or the Committee in its discretion. Notwithstanding the foregoing, the
Board or the Committee to which administration of the Plan has been delegated
may award stock pursuant to a stock bonus agreement in consideration for past
services actually rendered to the Company or for its benefit.

        (d) VESTING. Shares of stock sold or awarded under the Plan may, but
need not, be subject to a repurchase option in favor of the Company in
accordance with a vesting schedule to be determined by the Board or the
Committee. The applicable agreement shall provide (i) that the right to
repurchase at the original purchase price shall lapse at a minimum rate of
twenty percent (20%) per year over five (5) years from the date the Stock Award
was granted, and (ii) such right shall be exercisable only (A) within the ninety
(90) day period following the termination of employment or the relationship as a
Director or Consultant, or (B) such longer period as may be agreed to by the
Company and the holder of the Stock Award (for example, for purposes of
satisfying the requirements of Section 1202(c)(3) of the Code (regarding
"qualified small business stock")), and (iii) such right shall be exercisable
only for cash or cancellation of purchase money indebtedness for the shares.
Should the right of repurchase be assigned by the Company, the assignee shall
pay the Company cash equal to the difference between the original purchase price
and the stock's Fair Market Value if the original purchase price is less than
the stock's Fair Market Value.

        (e) TERMINATION OF EMPLOYMENT OR RELATIONSHIP AS A DIRECTOR OR
CONSULTANT. In the event a Participant's Continuous Status as an Employee,
Director or Consultant terminates, the Company may repurchase or otherwise
reacquire, subject to the limitations described in subsection 7(d), any or all
of the shares of stock held by that person which have not vested as of the date
of termination under the terms of the stock bonus or restricted stock purchase
agreement between the Company and such person.

8. CANCELLATION AND RE-GRANT OF OPTIONS.

        (a) The Board or the Committee shall have the authority to effect, at
any time and from time to time, (i) the repricing of any outstanding Options
under the Plan and/or (ii) with the consent of the affected holders of Options,
the cancellation of any outstanding Options under the Plan and the grant in
substitution therefor of new Options under the Plan covering the same or
different numbers of shares of stock, but having an exercise price per share not
less than eighty-five percent (85%) of the Fair Market Value (one hundred
percent (100%) of the Fair Market Value in the case of an Incentive Stock
Option) or, in the case of a 10% stockholder (as described in subsection 5(b)),
not less than one hundred ten percent (110%) of the Fair Market Value) per share
of stock on the new grant date. Notwithstanding the foregoing, the Board or the

                                       10
<PAGE>   11

Committee may grant an Option with an exercise price lower than that set forth
above if such Option is granted as part of a transaction to which section 424(a)
of the Code applies.

        (b) Shares subject to an Option canceled under this Section 8 shall
continue to be counted against the maximum award of Options permitted to be
granted pursuant to subsection 5(c) of the Plan. The repricing of an Option
under this Section 8, resulting in a reduction of the exercise price, shall be
deemed to be a cancellation of the original Option and the grant of a substitute
Option; in the event of such repricing, both the original and the substituted
Options shall be counted against the maximum awards of Options permitted to be
granted pursuant to subsection 5(c) of the Plan. The provisions of this
subsection 8(b) shall be applicable only to the extent required by Section
162(m) of the Code.

9. COVENANTS OF THE COMPANY.

        (a) During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of stock required to satisfy such
Stock Awards.

        (b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the Stock Award; provided,
however, that this undertaking shall not require the Company to register under
the Securities Act either the Plan, any Stock Award or any stock issued or
issuable pursuant to any such Stock Award. If, after reasonable efforts, the
Company is unable to obtain from any such regulatory commission or agency the
authority which counsel for the Company deems necessary for the lawful issuance
and sale of stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell stock upon exercise of such Stock Awards
unless and until such authority is obtained.

10. USE OF PROCEEDS FROM STOCK.

        (a) Proceeds from the sale of stock pursuant to Stock Awards shall
constitute general funds of the Company.

11. MISCELLANEOUS.

        (a) The Board shall have the power to accelerate the time at which a
Stock Award may first be exercised or the time during which a Stock Award or any
part thereof will vest pursuant to subsection 6(e), 7(d) or 8(b),
notwithstanding the provisions in the Stock Award stating the time at which it
may first be exercised or the time during which it will vest.

        (b) Neither an Employee, Director or Consultant nor any person to whom a
Stock Award is transferred under subsection 6(d), 7(b), or 8(b) shall be deemed
to be the holder of, or to have any of the rights of a holder with respect to,
any shares subject to such Stock Award unless and until such person has
satisfied all requirements for exercise of the Stock Award pursuant to its
terms.

                                       11
<PAGE>   12

        (c) Throughout the term of any Stock Award, the Company shall deliver to
the holder of such Stock Award, not later than one hundred twenty (120) days
after the close of each of the Company's fiscal years during the term of such
Stock Award, a balance sheet and an income statement. This subsection shall not
apply (i) after the Listing Date, or (ii) when issuance is limited to key
employees whose duties in connection with the Company assure them access to
equivalent information.

        (d) Nothing in the Plan or any instrument executed or Stock Award
granted pursuant thereto shall confer upon any Employee, Director, Consultant or
other holder of Stock Awards any right to continue in the employ of the Company
or any Affiliate (or to continue acting as a Director or Consultant) or shall
affect the right of the Company or any Affiliate to terminate the employment of
any Employee with or without cause the right of the Company's Board of Directors
and/or the Company's stockholders to remove any Director as provided in the
Company's By-Laws and the provisions of the General Corporations Law of the
State of Delaware, or the right to terminate the relationship of any Consultant
subject to the terms of such Consultant's agreement with the Company or
Affiliate.

        (e) To the extent that the aggregate Fair Market Value (determined at
the time of grant) of stock with respect to which Incentive Stock Options are
exercisable for the first time by any Optionee during any calendar year under
all plans of the Company and its Affiliates exceeds one hundred thousand dollars
($100,000), the Options or portions thereof which exceed such limit (according
to the order in which they were granted) shall be treated as Nonstatutory Stock
Options.

        (f) The Company may require any person to whom a Stock Award is granted,
or any person to whom a Stock Award is transferred pursuant to subsection 6(d),
7(b) or 8(b), as a condition of exercising or acquiring stock under any Stock
Award, (1) to give written assurances satisfactory to the Company as to such
person's knowledge and experience in financial and business matters and/or to
employ a purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters, and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (2) to
give written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the Stock Award for such person's own account and
not with any present intention of selling or otherwise distributing the stock.
The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (i) the issuance of the shares upon the
exercise or acquisition of stock under the Stock Award has been registered under
a then currently effective registration statement under the Securities Act, or
(ii) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under the
then applicable securities laws. The Company may, upon advice of counsel to the
Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer
of the stock.

        (g) To the extent provided by the terms of a Stock Award Agreement, the
person to whom a Stock Award is granted may satisfy any federal, state or local
tax withholding obligation

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<PAGE>   13

relating to the exercise or acquisition of stock under a Stock Award by any of
the following means or by a combination of such means: (1) tendering a cash
payment; (2) authorizing the Company to withhold shares from the shares of the
common stock otherwise issuable to the participant as a result of the exercise
or acquisition of stock under the Stock Award; or (3) delivering to the Company
owned and unencumbered shares of the common stock of the Company.

12. ADJUSTMENTS UPON CHANGES IN STOCK.

        (a) If any change is made in the stock subject to the plan, or subject
to any Stock Award (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be appropriately
adjusted in the type(s) and maximum number of securities subject to the Plan
pursuant to subsection 4(a) and the maximum number of securities subject to
award to any person during any twelve (12) month period pursuant to subsection
5(c), and the outstanding Stock Awards will be appropriately adjusted in the
type(s) and number of securities and price per share of stock subject to such
outstanding Stock Awards. Such adjustments shall be made by the Board or the
Committee, the determination of which shall be final, binding and conclusive.
(The conversion of any convertible securities of the Company shall not be
treated as a "transaction not involving the receipt of consideration by
Company.")

        (b) In the event of: (1) a merger or consolidation in which the Company
is not the surviving corporation; or (2) a reverse merger in which the Company
is the surviving corporation but the shares of the Company's common stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise; then: (i) any surviving corporation or acquiring corporation shall
assume any Stock Awards outstanding under the Plan or shall substitute similar
stock awards (including an award to acquire the same consideration paid to the
stockholders in the transaction described in this subsection 12(b)) for those
outstanding under the Plan, or (ii) in the event any surviving corporation or
acquiring corporation refuses to assume such Stock Awards or to substitute
similar stock awards for those outstanding under the Plan, (A) with respect to
Stock Awards held by persons then performing services as Employees, Directors or
Consultants, the vesting of such Stock Awards (and, if applicable, the time
during which such Stock Awards may be exercised) shall be accelerated prior to
such event and the Stock Awards terminated if not exercised after such
acceleration and at or prior to such event, and (B) with respect to any other
Stock Awards outstanding under the Plan, such Stock Awards shall be terminated
if not exercised prior to such event. In the event of: (x) a, dissolution or
liquidation, or (y) a sale of all or substantially all of the assets of the
Company, the outstanding Options shall terminate if not exercised prior to such
event; unless, in the event of such a sale of all or substantially all of the
assets of the Company, the acquiring person or entity agrees to assume the
Options outstanding under the Plan.

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<PAGE>   14

13. AMENDMENT OF THE PLAN AND STOCK AWARDS.

        (a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 12 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the Company to the extent stockholder approval is necessary for the Plan to
satisfy the requirements of Section 422 of the code, Rule 16b-3 under the
Exchange Act or any Nasdaq or securities exchange listing requirements.

        (b) The Board may in its sole discretion submit any other amendment to
the Plan for stockholder approval, including, but not limited to, amendments to
the Plan intended to satisfy the requirements of Section 162(m) of the Code and
the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.

        (c) It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide eligible Employees
with the maximum benefits provided or to be provided under the provisions of the
Code and the regulations promulgated thereunder relating to Incentive Stock
Options and/or to bring the Plan and/or Incentive Stock Options granted under it
into compliance therewith.

        (d) Rights and obligations under any Stock Award granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the person to whom the Stock Award was
granted and (ii) such person consents in writing.

        (e) The Board at any time, and from time to time, may amend the terms of
any one or more Stock Award; provided, however, that the rights and obligations
under any Stock Award shall not be impaired by any such amendment unless (i) the
Company requests the consent of the person to whom the Stock Award was granted
and (ii) such person consents in writing.

14. TERMINATION OR SUSPENSION OF THE PLAN.

        (a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on August 28, 2008, which date shall
be within ten (10) years from the date the Plan is adopted by the Board or
approved by the stockholders of the Company, whichever is earlier. No Stock
Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.

        (b) Rights and obligations under any Stock Award granted while the Plan
is in effect shall not be impaired by suspension or termination of the Plan,
except with the written consent of the person to whom the Stock Award was
granted.

15. EFFECTIVE DATE OF PLAN.

        The Plan shall become effective as determined by the Board, but no Stock
Awards granted under the Plan shall be exercised unless and until the Plan has
been approved by the stockholders of the Company, which approval shall be within
twelve (12) months before or after the date the Plan is adopted by the Board.

                                       14

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