Document:

<PAGE>

                                                                    EXHIBIT 10.4

                               BOFI HOLDING, INC.

                        2004 EMPLOYEE STOCK PURCHASE PLAN

      The following constitute the provisions of the 2004 Employee Stock
Purchase Plan of BofI Holding, Inc.

      1.    Purpose. The purpose of the Plan is to provide Employees of the
Company and its Designated Parents or Subsidiaries with an opportunity to
purchase Common Stock of the Company through accumulated payroll deductions. It
is the intention of the Company to have the Plan qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Code and the applicable regulations
thereunder. The provisions of the Plan, accordingly, shall be construed so as to
extend and limit participation in a manner consistent with the requirements of
that Section 423 of the Code.

      2.    Definitions. As used herein, the following definitions shall apply:

            (a)   "Administrator" means either the Board or a committee of the
Board that is responsible for the administration of the Plan as is designated
from time to time by resolution of the Board.

            (b)   "Applicable Laws" means the legal requirements relating to the
administration of employee stock purchase plans, if any, under applicable
provisions of federal securities laws, state corporate and securities laws, the
Code and the applicable regulations thereunder, the rules of any applicable
stock exchange or national market system, and the rules of any foreign
jurisdiction applicable to participation in the Plan by residents therein.

            (c)   "Board" means the Board of Directors of the Company.

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

            (e)   "Common Stock" means the common stock of the Company.

            (f)   "Company" means BofI Holding, Inc., a Delaware corporation.

            (g)   "Compensation" means an Employee's base salary from the
Company or one or more Designated Parents or Subsidiaries, including such
amounts of base salary as are deferred by the Employee (i) under a qualified
cash or deferred arrangement described in Section 401(k) of the Code, or (ii) to
a plan qualified under Section 125 of the Code. Compensation does not include
overtime, bonuses, annual awards, other incentive payments, reimbursements or
other expense allowances, fringe benefits (cash or noncash), moving expenses,
deferred compensation, contributions (other than contributions described in the
first sentence) made on the Employee's behalf by the Company or one or more
Designated Parents or Subsidiaries under any employee benefit or welfare plan
now or hereafter established, and any other payments not specifically referenced
in the first sentence.

            (h)   "Corporate Transaction" means any of the following
transactions:

                                        1

<PAGE>

                  (1)   a merger or consolidation in which the Company is not
the surviving entity, except for a transaction the principal purpose of which is
to change the state in which the Company is incorporated;

                  (2)   the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the capital stock of
the Company's subsidiary corporations);

                  (3)   the complete liquidation or dissolution of the Company;

                  (4)   any reverse merger or series of related transactions
culminating in a reverse merger (including, but not limited to, a tender offer
followed by a reverse merger) in which the Company is the surviving entity but
(A) the shares of Common Stock outstanding immediately prior to such merger are
converted or exchanged by virtue of the merger into other property, whether in
the form of securities, cash or otherwise, or (B) in which securities possessing
more than forty percent (40%) of the total combined voting power of the
Company's outstanding securities are transferred to a person or persons
different from those who held such securities immediately prior to such merger
or the initial transaction culminating in such merger, but excluding any such
transaction or series of related transactions that the Administrator determines
shall not be a Corporate Transaction; or

                  (5)   acquisition in a single or series of related
transactions by any person or related group of persons (other than the Company
or by a Company-sponsored employee benefit plan) of beneficial ownership (within
the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the Company's
outstanding securities but excluding any such transaction or series of related
transactions that the Administrator determines shall not be a Corporate
Transaction.

            (i)   "Designated Parents or Subsidiaries" means the Parents or
Subsidiaries that have been designated by the Administrator from time to time as
eligible to participate in the Plan.

            (j)   "Effective Date" means the date determined by the Board.
However, should any Parent or Subsidiary become a Designated Parent or
Subsidiary after such date, then the Administrator, in its discretion, shall
designate a separate Effective Date with respect to the employee-participants of
such Designated Parent or Subsidiary.

            (k)   "Employee" means any individual, including an officer or
director, who is an employee of the Company or a Designated Parent or Subsidiary
for purposes of Section 423 of the Code. For purposes of the Plan, the
employment relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by the
individual's employer. Where the period of leave exceeds three (3) months and
the individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship will be deemed to have terminated on the
day three (3) months and one (1) day after the commencement of such leave, for
purposes of determining eligibility to participate in the Plan.

            (l)   "Enrollment Date" means the first day of each Offer Period.

                                        2

<PAGE>

            (m)   "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

            (n)   "Exercise Date" means the last day of each Purchase Period.

            (o)   "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

                  (1)   If the Common Stock is listed on one or more established
stock exchanges or national market systems, including without limitation The
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on the principal exchange or
system on which the Common Stock is listed (as determined by the Administrator)
on the date of determination (or, if no closing sales price or closing bid was
reported on that date, as applicable, on the last trading date such closing
sales price or closing bid was reported), as reported in The Wall Street Journal
or such other source as the Administrator deems reliable;

                  (2)   If the Common Stock is regularly quoted on an automated
quotation system (including the OTC Bulletin Board) or by a recognized
securities dealer, its Fair Market Value shall be the closing sales price for
such stock as quoted on such system or by such securities dealer on the date of
determination, but if selling prices are not reported, the Fair Market Value of
a share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the date of determination (or, if no such prices
were reported on that date, on the last date such prices were reported), as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable; or

                  (3)   In the absence of an established market for the Common
Stock of the type described in (1) and (2), above, the Fair Market Value thereof
shall be determined by the Administrator in good faith.

            (p)   "Offer Period" means an Offer Period established pursuant to
Section 4 hereof.

            (q)   "Parent" means a "parent corporation" of the Company, whether
now or hereafter existing, as defined in Section 424(e) of the Code.

            (r)   "Participant" means an Employee of the Company or Designated
Parent or Subsidiary who has completed a subscription agreement as set forth in
Section 5(a) and is thereby enrolled in the Plan.

            (s)   "Plan" means this Employee Stock Purchase Plan.

            (t)   "Purchase Period" means a period of approximately six months,
commencing on May 15 and November 15 of each year and terminating on the next
following November 14 or May 14, respectively; provided, however, that the first
Purchase Period shall commence on the Effective Date and shall end on May 14,
2005.

                                        3

<PAGE>

            (u)   "Purchase Price" shall mean an amount, as determined by the
Board prior to the Enrollment Date of a particular Offer Period, equal to no
less than 85% of the Fair Market Value of a share of Common Stock on the
Enrollment Date or on the Exercise Date, whichever is lower.

            (v)   "Reserves" means, as of any date, the sum of (1) the number of
shares of Common Stock covered by each then outstanding option under the Plan
which has not yet been exercised and (2) the number of shares of Common Stock
which have been authorized for issuance under the Plan but not then subject to
an outstanding option.

            (w)   "Subsidiary" means a "subsidiary corporation" of the Company,
whether now or hereafter existing, as defined in Section 424(f) of the Code.

      3.    Eligibility.

            (a)   General. Any individual who is an Employee on a given
Enrollment Date shall be eligible to participate in the Plan for the Offer
Period commencing with such Enrollment Date. No individual who is not an
Employee shall be eligible to participate in the Plan.

            (b)   Limitations on Grant and Accrual. Any provisions of the Plan
to the contrary notwithstanding, no Employee shall be granted an option under
the Plan (i) if, immediately after the grant, such Employee (taking into account
stock owned by any other person whose stock would be attributed to such Employee
pursuant to Section 424(d) of the Code) would own stock and/or hold outstanding
options to purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or of any
Parent or Subsidiary, or (ii) which permits the Employee's rights to purchase
stock under all employee stock purchase plans of the Company and its Parents or
Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars
(US$25,000) worth of stock (determined at the Fair Market Value of the shares at
the time such option is granted) for each calendar year in which such option is
outstanding at any time. The determination of the accrual of the right to
purchase stock shall be made in accordance with Section 423(b)(8) of the Code
and the regulations thereunder.

            (c)   Other Limits on Eligibility. Notwithstanding SubSection (a),
above, the following Employees shall not be eligible to participate in the Plan
for any relevant Offer Period: (i) Employees whose customary employment is 20
hours or less per week; (ii) Employees whose customary employment is for not
more than 5 months in any calendar year; (iii) Employees who have been employed
for fewer than 5 days; and (iv) Employees who are subject to rules or laws of a
foreign jurisdiction that prohibit or make impractical the participation of such
Employees in the Plan.

      4.    Offer Periods.

            (a)   The Plan shall be implemented through overlapping or
consecutive Offer Periods until such time as (i) the maximum number of shares of
Common Stock available for issuance under the Plan shall have been purchased or
(ii) the Plan shall have been sooner terminated in accordance with Section 19
hereof. The maximum duration of an Offer Period shall be twenty-seven (27)
months. Initially, the Plan shall be implemented through overlapping

                                        4

<PAGE>

Offer Periods of twenty-four (24) months' duration commencing each May 15 and
November 15 following the Effective Date (except that the initial Offer Period
shall commence on the Effective Date and shall end on May 14, 2006).

            (b)   A Participant shall be granted a separate option for each
Offer Period in which he or she participates. The option shall be granted on the
Enrollment Date and shall be automatically exercised in successive installments
on the Exercise Dates ending within the Offer Period.

            (c)   If on the first day of any Purchase Period in an Offer Period
in which an Employee is a Participant, the Fair Market Value of the Common Stock
is less than the Fair Market Value of the Common Stock on the Enrollment Date of
the Offer Period (after taking into account any adjustment during the Offer
Period pursuant to Section 18(a)), the Offer Period shall be terminated
automatically and the Participant shall be enrolled automatically in the new
Offer Period which has its first Purchase Period commencing on that date,
provided the Employee is eligible to participate in the Plan on that date and
has not elected to terminate participation in the Plan.

            (d)   Except as specifically provided herein, the acquisition of
Common Stock through participation in the Plan for any Offer Period shall
neither limit nor require the acquisition of Common Stock by a Participant in
any subsequent Offer Period.

      5.    Participation.

            (a)   An eligible Employee may become a Participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan (or such other form or method (including electronic
forms) as the Administrator may designate from time to time) and filing it with
the designated payroll office of the Company at least five (5) business days
prior to the Enrollment Date for the Offer Period in which such participation
will commence, unless a later time for filing the subscription agreement is set
by the Administrator for all eligible Employees with respect to a given Offer
Period.

            (b)   Payroll deductions for a Participant shall commence with the
first partial or full payroll period beginning on the Enrollment Date and shall
end on the last complete payroll period during the Offer Period, unless sooner
terminated by the Participant as provided in Section 10.

      6.    Payroll Deductions.

            (a)   At the time a Participant files a subscription agreement, the
Participant shall elect to have payroll deductions made during the Offer Period
in amounts between one percent (1%) and not exceeding fifteen percent (15%) of
the Compensation which the Participant receives during the Offer Period.

            (b)   All payroll deductions made for a Participant shall be
credited to the Participant's account under the Plan and will be withheld in
whole percentages only. A Participant may not make any additional payments into
such account.

                                        5

<PAGE>

            (c)   A Participant may discontinue participation in the Plan as
provided in Section 10, or may increase or decrease the rate of payroll
deductions during the Offer Period by completing and filing with the Company a
change of status notice in the form of Exhibit B to this Plan (or such other
form or method (including electronic forms) as the Administrator may designate
from time to time) authorizing an increase or decrease in the payroll deduction
rate. Any increase or decrease in the rate of a Participant's payroll deductions
shall be effective with the first full payroll period commencing five (5)
business days after the Company's receipt of the change of status notice unless
the Company elects to process a given change in participation more quickly. A
Participant's subscription agreement (as modified by any change of status
notice) shall remain in effect for successive Offer Periods unless terminated as
provided in Section 10. The Administrator shall be authorized to limit the
number of payroll deduction rate changes during any Offer Period.

            (d)   Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) herein, a
Participant's payroll deductions shall be decreased to 0%. Payroll deductions
shall recommence at the rate provided in such Participant's subscription
agreement, as amended, at the time when permitted under Section 423(b)(8) of the
Code and Section 3(b) herein, unless such participation is sooner terminated by
the Participant as provided in Section 10.

      7.    Grant of Option. On the Enrollment Date, each Participant shall be
granted an option to purchase (at the applicable Purchase Price) a number of
shares of the Common Stock as determined by the Administrator, subject to
adjustment as provided in Section 18 hereof; provided that such option shall be
subject to the limitations set forth in Sections 3(b), 6 and 12 hereof. The
Administrator shall also determine the maximum number of shares of Common Stock
that a Participant may purchase on each Exercise Date within the particular
Offer Period. Exercise of the option shall occur as provided in Section 8,
unless the Participant has withdrawn pursuant to Section 10, and the option, to
the extent not exercised, shall expire on the last day of the Offer Period with
respect to which such option was granted. Notwithstanding the foregoing, shares
subject to the option may only be purchased with accumulated payroll deductions
credited to a Participant's account in accordance with Section 6 of the Plan. In
addition, to the extent an option is not exercised on each Exercise Date, the
option shall lapse and thereafter cease to be exercisable.

      8.    Exercise of Option. Unless a Participant withdraws from the Plan as
provided in Section 10, below, the Participant's option for the purchase of
shares of Common Stock will be exercised automatically on each Exercise Date, by
applying the accumulated payroll deductions in the Participant's account to
purchase the number of full shares subject to the option by dividing such
Participant's payroll deductions accumulated prior to such Exercise Date and
retained in the Participant's account as of the Exercise Date by the applicable
Purchase Price. No fractional shares will be purchased; any payroll deductions
accumulated in a Participant's account which are not sufficient to purchase a
full share shall be carried over to the next Purchase Period or Offer Period,
whichever applies, or returned to the Participant, if the Participant withdraws
from the Plan. Notwithstanding the foregoing, any amount remaining in a
Participant's account on the Exercise Date due to the application of Section
423(b)(8) of the Code or Section 7, above, shall be returned to the Participant
and shall not be carried over to the

                                        6

<PAGE>

next Offer Period or Purchase Period. During a Participant's lifetime, a
Participant's option to purchase shares hereunder is exercisable only by the
Participant.

      9.    Delivery. Upon receipt of a request from a Participant after each
Exercise Date on which a purchase of shares occurs, the Company shall arrange
the delivery to such Participant, as promptly as practicable, of a certificate
representing the shares purchased upon exercise of the Participant's option.

      10.   Withdrawal; Termination of Employment.

            (a)   A Participant may either (i) withdraw all but not less than
all the payroll deductions credited to the Participant's account and not yet
used to exercise the Participant's option under the Plan or (ii) terminate
future payroll deductions, but allow accumulated payroll deductions to be used
to exercise the Participant's option under the Plan at any time by giving
written notice to the Company in the form of Exhibit B to this Plan (or such
other form or method (including electronic forms) as the Administrator may
designate from time to time). If the Participant elects withdrawal alternative
(i) described above, all of the Participant's payroll deductions credited to the
Participant's account will be paid to such Participant as promptly as
practicable after receipt of notice of withdrawal, such Participant's option for
the Offer Period will be automatically terminated, and no further payroll
deductions for the purchase of shares will be made during the Offer Period. If
the Participant elects withdrawal alternative (ii) described above, no further
payroll deductions for the purchase of shares will be made during the Offer
Period, all of the Participant's payroll deductions credited to the
Participant's account will be applied to the exercise of the Participant's
option on the next Exercise Date (subject to Sections 3(b), 6, 7 and 12), and
after such Exercise Date, such Participant's option for the Offer Period will be
automatically terminated and all remaining accumulated payroll deduction amounts
shall be returned to the Participant. If a Participant withdraws from an Offer
Period, payroll deductions will not resume at the beginning of the succeeding
Offer Period unless the Participant delivers to the Company a new subscription
agreement.

            (b)   Upon termination of a Participant's employment relationship
(as described in Section 2(k)) at a time more than three (3) months from the
next scheduled Exercise Date, the payroll deductions credited to such
Participant's account during the Offer Period but not yet used to exercise the
option will be returned to such Participant or, in the case of his/her death, to
the person or persons entitled thereto under Section 14, and such Participant's
option will be automatically terminated without exercise of any portion of such
option. Upon termination of a Participant's employment relationship (as
described in Section 2(k)) within three (3) months of the next scheduled
Exercise Date, the payroll deductions credited to such Participant's account
during the Offer Period but not yet used to exercise the option will be applied
to the purchase of Common Stock on the next Exercise Date, unless the
Participant (or in the case of the Participant's death, the person or persons
entitled to the Participant's account balance under Section 14) withdraws from
the Plan by submitting a change of status notice in accordance with subSection
(a) of this Section 10. In such a case, no further payroll deductions will be
credited to the Participant's account following the Participant's termination of
employment and the Participant's option under the Plan will be automatically
terminated after the purchase of Common Stock on the next scheduled Exercise
Date.

                                        7

<PAGE>

      11.   Interest. No interest shall accrue on the payroll deductions
credited to a Participant's account under the Plan.

      12.   Stock.

            (a)   Subject to adjustment upon changes in capitalization of the
Company as provided in Section 18, the maximum number of shares of Common Stock
which shall be made available for sale under the Plan shall be Five Hundred
Thousand (500,000) shares. With respect to any amendment to increase the total
number of shares of Common Stock under the Plan, the Administrator shall have
discretion to disallow the purchase of any increased shares of Common Stock for
Offer Periods in existence prior to such increase. If the Administrator
determines that on a given Exercise Date the number of shares with respect to
which options are to be exercised may exceed (x) the number of shares then
available for sale under the Plan or (y) the number of shares available for sale
under the Plan on the Enrollment Date(s) of one or more of the Offer Periods in
which such Exercise Date is to occur, the Administrator may make a pro rata
allocation of the shares remaining available for purchase on such Enrollment
Dates or Exercise Date, as applicable, in as uniform a manner as shall be
practicable and as it shall determine to be equitable, and shall either continue
all Offer Periods then in effect or terminate any one or more Offer Periods then
in effect pursuant to Section 19, below. Any amount remaining in a Participant's
payroll account following such pro rata allocation shall be returned to the
Participant and shall not be carried over to any future Purchase Period or Offer
Period, as determined by the Administrator.

            (b)   A Participant will have no interest or voting right in shares
covered by the Participant's option until such shares are actually purchased on
the Participant's behalf in accordance with the applicable provisions of the
Plan. No adjustment shall be made for dividends, distributions or other rights
for which the record date is prior to the date of such purchase.

            (c)   Shares to be delivered to a Participant under the Plan will be
registered in the name of the Participant or in the name of the Participant and
his or her spouse, as designated in the Participant's subscription agreement.

      13.   Administration. The Plan shall be administered by the Administrator
which shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Administrator shall, to the full extent permitted by
Applicable Law, be final and binding upon all persons.

      14.   Designation of Beneficiary.

            (a)   Each Participant will file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
Participant's account under the Plan in the event of such Participant's death.
If a Participant is married and the designated beneficiary is not the spouse,
spousal consent shall be required for such designation to be effective.

            (b)   Such designation of beneficiary may be changed by the
Participant (and the Participant's spouse, if any) at any time by written
notice. In the event of the death of a

                                        8

<PAGE>

Participant and in the absence of a beneficiary validly designated under the
Plan who is living (or in existence) at the time of such Participant's death,
the Company shall deliver such shares and/or cash to the executor or
administrator of the estate of the Participant, or if no such executor or
administrator has been appointed (to the knowledge of the Administrator), the
Administrator shall deliver such shares and/or cash to the spouse (or domestic
partner, as determined by the Administrator) of the Participant, or if no spouse
(or domestic partner) is known to the Administrator, then to the issue of the
Participant, such distribution to be made per stirpes (by right of
representation), or if no issue are known to the Administrator, then to the
heirs at law of the Participant determined in accordance with Section 27.

      15.   Transferability. No payroll deductions credited to a Participant's
account, options granted hereunder, or any rights with regard to the exercise of
an option or to receive shares under the Plan may be assigned, transferred,
pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution, or as provided in Section 14 hereof) by the
Participant. Any such attempt at assignment, transfer, pledge or other
disposition shall be without effect, except that the Administrator may, in its
sole discretion, treat such act as an election to withdraw funds from an Offer
Period in accordance with Section 10.

      16.   Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions or hold them
exclusively for the benefit of Participants. All payroll deductions received or
held by the Company may be subject to the claims of the Company's general
creditors. Participants shall have the status of general unsecured creditors of
the Company. Any amounts payable to Participants pursuant to the Plan shall be
unfunded and unsecured obligations for all purposes, including, without
limitation, Title I of the Employee Retirement Income Security Act of 1974, as
amended. The Company shall retain at all times beneficial ownership of any
investments, including trust investments, which the Company may make to fulfill
its payment obligations hereunder. Any investments or the creation or
maintenance of any trust or any Participant account shall not create or
constitute a trust or fiduciary relationship between the Administrator, the
Company or any Designated Parent or Subsidiary and a Participant, or otherwise
create any vested or beneficial interest in any Participant or the Participant's
creditors in any assets of the Company or a Designated Parent or Subsidiary. The
Participants shall have no claim against the Company or any Designated Parent or
Subsidiary for any changes in the value of any assets that may be invested or
reinvested by the Company with respect to the Plan.

      17.   Reports. Individual accounts will be maintained for each Participant
in the Plan. Statements of account will be given to Participants at least
annually, which statements will set forth the amounts of payroll deductions, the
Purchase Price, the number of shares purchased and the remaining cash balance,
if any.

      18.   Adjustments Upon Changes in Capitalization; Corporate Transactions.

            (a)   Adjustments Upon Changes in Capitalization. Subject to any
required action by the stockholders of the Company, the Reserves, the Purchase
Price, the maximum number of shares that may be purchased in any Offer Period or
Purchase Period, as well as any other terms that the Administrator determines
require adjustment shall be proportionately

                                        9

<PAGE>

adjusted for (i) any increase or decrease in the number of issued shares of
Common Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, (ii) any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company, or (iii) as the Administrator may determine in
its discretion, any other transaction with respect to Common Stock including a
corporate merger, consolidation, acquisition of property or stock, separation
(including a spin-off or other distribution of stock or property),
reorganization, liquidation (whether partial or complete) or any similar
transaction; provided, however that conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Administrator and its
determination shall be final, binding and conclusive. Except as the
Administrator determines, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason hereof shall be made with respect to, the
Reserves and the Purchase Price.

            (b)   Corporate Transactions. In the event of a proposed Corporate
Transaction, each option under the Plan shall be assumed by such successor
corporation or a parent or subsidiary of such successor corporation, unless the
Administrator, in the exercise of its sole discretion and in lieu of such
assumption, determines to shorten the Offer Period then in progress by setting a
new Exercise Date (the "New Exercise Date"). If the Administrator shortens the
Offer Period then in progress in lieu of assumption in the event of a Corporate
Transaction, the Administrator shall notify each Participant in writing at least
ten (10) business days prior to the New Exercise Date, that the Exercise Date
for the Participant's option has been changed to the New Exercise Date and that
either:

                  (1)   the Participant's option will be exercised automatically
on the New Exercise Date, unless prior to such date the Participant has
withdrawn from the Offer Period as provided in Section 10; or

                  (2)   the Company shall pay to the Participant on the New
Exercise Date an amount in cash, cash equivalents, or property as determined by
the Administrator that is equal to the difference in the Fair Market Value of
the shares subject to the option and the Purchase Price due had the
Participant's option been exercised automatically under SubSection (b)(i) above.

      For purposes of this Subsection, an option granted under the Plan shall be
deemed to be assumed if, in connection with the Corporate Transaction, the
option is replaced with a comparable option with respect to shares of capital
stock of the successor corporation or Parent thereof. The determination of
option comparability shall be made by the Administrator prior to the Corporate
Transaction and its determination shall be final, binding and conclusive on all
persons.

      19.   Amendment or Termination.

            (a)   The Administrator may at any time and for any reason terminate
or amend the Plan. Except as provided in Section 18, no such termination can
affect options previously granted, provided that the Plan or any one or more
Offer Periods may be terminated by the

                                       10

<PAGE>

Administrator on any Exercise Date or by the Administrator establishing a new
Exercise Date with respect to any Offer Period and/or any Purchase Period then
in progress if the Administrator determines that the termination of the Plan or
such one or more Offer Periods is in the best interests of the Company and its
stockholders. Except as provided in Section 18 and this Section 19, no amendment
may make any change in any option theretofore granted which adversely affects
the rights of any Participant without the consent of affected Participants. To
the extent necessary to comply with Section 423 of the Code (or any successor
rule or provision or any other Applicable Law), the Company shall obtain
stockholder approval in such a manner and to such a degree as required.

            (b)   Without stockholder consent and without regard to whether any
Participant rights may be considered to have been "adversely affected," the
Administrator shall be entitled to limit the frequency and/or number of changes
in the amount withheld during Offer Periods, change the length of Purchase
Periods within any Offer Period, determine the length of any future Offer
Period, determine whether future Offer Periods shall be consecutive or
overlapping, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, establish additional terms, conditions, rules
or procedures to accommodate the rules or laws of applicable foreign
jurisdictions, permit payroll withholding in excess of the amount designated by
a Participant in order to adjust for delays or mistakes in the Company's
processing of properly completed withholding elections, establish reasonable
waiting and adjustment periods and/or accounting and crediting procedures to
ensure that amounts applied toward the purchase of Common Stock for each
Participant properly correspond with amounts withheld from the Participant's
Compensation, and establish such other limitations or procedures as the
Administrator determines in its sole discretion advisable and which are
consistent with the Plan.

      20.   Notices. All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Administrator at the location,
or by the person, designated by the Administrator for the receipt thereof.

      21.   Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all Applicable Laws
and shall be further subject to the approval of counsel for the Company with
respect to such compliance. As a condition to the exercise of an option, the
Company may require the Participant to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned Applicable Laws. In addition, no options shall be exercised
or shares issued hereunder before the Plan shall have been approved by
stockholders of the Company as provided in Section 23.

      22.   Term of Plan. The Plan shall become effective upon its approval by
the stockholders of the Company. It shall continue in effect for a term of ten
(10) years unless sooner terminated under Section 19.

                                       11

<PAGE>

      23.   Stockholder Approval. The Plan shall be subject to approval by the
stockholders of the Company. Such stockholder approval shall be obtained in the
degree and manner required under Applicable Laws.

      24.   No Employment Rights. The Plan does not, directly or indirectly,
create any right for the benefit of any employee or class of employees to
purchase any shares under the Plan, or create in any employee or class of
employees any right with respect to continuation of employment by the Company or
a Designated Parent or Subsidiary, and it shall not be deemed to interfere in
any way with such employer's right to terminate, or otherwise modify, an
employee's employment at any time.

      25.   No Effect on Retirement and Other Benefit Plans. Except as
specifically provided in a retirement or other benefit plan of the Company or a
Designated Parent or Subsidiary, participation in the Plan shall not be deemed
compensation for purposes of computing benefits or contributions under any
retirement plan of the Company or a Designated Parent or Subsidiary, and shall
not affect any benefits under any other benefit plan of any kind or any benefit
plan subsequently instituted under which the availability or amount of benefits
is related to level of compensation. The Plan is not a "Retirement Plan" or
"Welfare Plan" under the Employee Retirement Income Security Act of 1974, as
amended.

      26.   Effect of Plan. The provisions of the Plan shall, in accordance with
its terms, be binding upon, and inure to the benefit of, all successors of each
Participant, including, without limitation, such Participant's estate and the
executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such
Participant.

      27.   Governing Law. The Plan is to be construed in accordance with and
governed by the internal laws of the State of California without giving effect
to any choice of law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of California to the
rights and duties of the parties, except to the extent the internal laws of the
State of California are superseded by the laws of the United States. Should any
provision of the Plan be determined by a court of law to be illegal or
unenforceable, the other provisions shall nevertheless remain effective and
shall remain enforceable.

      28.   Administration and Interpretation. Any question or dispute regarding
the administration or interpretation of the Plan shall be submitted by the
Participant or by the Company to the Administrator. The resolution of such
question or dispute by the Administrator shall be final and binding on all
persons.

      29.   Venue and Waiver of Jury Trial. The parties agree that any suit,
action, or proceeding arising out of or relating to the Notice, the Plan or this
Option Agreement shall be brought in the United States District Court for the
Southern District of California (or should such court lack jurisdiction to hear
such action, suit or proceeding, in a California state court in the County of
San Diego) and that the parties shall submit to the jurisdiction of such court.
The parties irrevocably waive, to the fullest extent permitted by law, any
objection the party may have to the laying of venue for any such suit, action or
proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT
THEY HAVE OR MAY HAVE TO A

                                       12

<PAGE>

JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions
of this Section 29 shall for any reason be held invalid or unenforceable, it is
the specific intent of the parties that such provisions shall be modified to the
minimum extent necessary to make it or its application valid and enforceable.

                                       13

<PAGE>

                                    EXHIBIT A

                            BofI Holding, Inc. 2004 Employee Stock Purchase Plan

                                                          SUBSCRIPTION AGREEMENT

                                   Effective with the Offer Period beginning on:

     [  ] ESPP Effective Date    [  ] May 15, 2005   or   [  ] November 15, 2005

1. PERSONAL INFORMATION [MODIFY DATA REQUESTED AS APPROPRIATE]

   Legal Name (Please Print) _________________________   __________  ___________
                              (Last)  (First)  (MI)      Location    Department

   Street Address_____________________________________   _______________________
                                                         Daytime Telephone

   City, State/Country, Zip____________________________  _______________________
                                                         E-Mail Address

   Social                                       Employee
    Security No. __ __ __ - __ __ - __ __ __ __  I.D. No. ______________________
                                                          Manager   Mgr.Location

2. ELIGIBILITY. Any Employee whose customary employment is more than 20 hours
   per week and more than 5 months per calendar year and who does not hold
   (directly or indirectly) five percent (5%) or more of the combined voting
   power of the Company, a parent or a subsidiary, whether in stock or options
   to acquire stock is eligible to participate in the BofI Holding, Inc. 2004
   Employee Stock Purchase Plan (the "ESPP"); provided, however, that Employees
   who are subject to the rules or laws of a foreign jurisdiction that prohibit
   or make impractical the participation of such Employees in the ESPP are not
   eligible to participate.

3. DEFINITIONS. Each capitalized term in this Subscription Agreement shall have
   the meaning set forth in the ESPP.

4. SUBSCRIPTION. I hereby elect to participate in the ESPP and subscribe to
   purchase shares of the Company's Common Stock in accordance with this
   Subscription Agreement and the ESPP. I have received a complete copy of the
   ESPP and a prospectus describing the ESPP and understand that my
   participation in the ESPP is in all respects subject to the terms of the
   ESPP. The effectiveness of this Subscription Agreement is dependent on my
   eligibility to participate in the ESPP.

5. PAYROLL DEDUCTION AUTHORIZATION. I hereby authorize payroll deductions from
   my Compensation during the Offer Period in the percentage specified below
   (payroll reductions may not exceed 15% of Compensation nor the limitation
   under Section 423(b)(8) of the Code and the regulations thereunder):

<TABLE>
<S>                                     <C>  <C>     <C>     <C>     <C>     <C>     <C>
Percentage to be Deducted (circle one)  1%    2%      3%      4%      5%      6%      7%
                                 8%     9%   10%     11%     12%     13%     14%     15%
</TABLE>

6. ESPP ACCOUNTS AND PURCHASE PRICE. I understand that all payroll deductions
   will be credited to my account under the ESPP. No additional payments may be
   made to my account. No interest will be credited on funds held in the account
   at any time including any refund of the account caused by withdrawal from the
   ESPP. All payroll deductions shall be accumulated for the purchase of Company
   Common Stock at the applicable Purchase Price determined in accordance with
   the ESPP.

7. WITHDRAWAL AND CHANGES IN PAYROLL DEDUCTION. I understand that I may
   discontinue my participation in the ESPP at any time prior to an Exercise
   Date as provided in Section 10 of the

                                       A-1

<PAGE>

    ESPP, but if I do not withdraw from the ESPP, any accumulated payroll
    deductions will be applied automatically to purchase Company Common Stock. I
    may increase or decrease the rate of my payroll deductions in whole
    percentage increments to not less than one percent (1%) on one occasion
    during any Purchase Period by completing and timely filing a Change of
    Status Notice. Any increase or decrease will be effective for the full
    payroll period occurring after five (5) business days from the Company's
    receipt of the Change of Status Notice.

8.  PERPETUAL SUBSCRIPTION. I understand that this Subscription Agreement shall
    remain in effect for successive Offer Periods until I withdraw from
    participation in the ESPP, or termination of the ESPP.

9.  TAXES. I have reviewed the ESPP prospectus discussion of the federal tax
    consequences of participation in the ESPP and consulted with tax consultants
    as I deemed advisable prior to my participation in the ESPP. I hereby agree
    to notify the Company in writing within thirty (30) days of any disposition
    (transfer or sale) of any shares purchased under the ESPP if such
    disposition occurs within two (2) years of the Enrollment Date (the first
    day of the Offer Period during which the shares were purchased) or within
    one (1) year of the Exercise Date (the date I purchased such shares), and I
    will make adequate provision to the Company for foreign, federal, state or
    other tax withholding obligations, if any, which arise upon the disposition
    of the shares. In addition, the Company may withhold from my Compensation
    any amount necessary to meet applicable tax withholding obligations incident
    to my participation in the ESPP, including any withholding necessary to make
    available to the Company any tax deductions or benefits contingent on such
    withholding.

10. ADMINISTRATION AND INTERPRETATION. Any question or dispute regarding the
    administration or interpretation of the Plan shall be submitted to the
    Administrator. The resolution of such question or dispute by the
    Administrator shall be final and binding on all persons.

11. DESIGNATION OF BENEFICIARY. In the event of my death, I hereby designate the
    following person or trust as my beneficiary to receive all payments and
    shares due to me under the ESPP:

                  [  ]  I am single  [  ]  I am married

   Beneficiary
    (please print) _______________________  Relationship to Beneficiary (if any)
                   (Last)   (First)   (MI)

   Street Address ________________________________ ____________________________

   City, State/Country, Zip ______________________

12. TERMINATION OF ESPP I understand that the Company has the right, exercisable
    in its sole discretion, to amend or terminate the ESPP at any time, and a
    termination may be effective as early as an Exercise Date, including the
    establishment of an alternative date for an Exercise Date within each
    outstanding Offer Period.

    Date: _________________     Employee Signature:_____________________________

                        ________________________________________________________
                        Spouse's signature (if beneficiary is other than spouse)

                                       A-2

<PAGE>

                                    EXHIBIT B

                            BofI Holding, Inc. 2004 Employee Stock Purchase Plan

                                                         CHANGE OF STATUS NOTICE

__________________________________________
Participant Name (Please Print)

__________________________________________
Social Security Number

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

      WITHDRAWAL FROM ESPP

      I hereby withdraw from the BofI Holding, Inc. 2004 Employee Stock Purchase
      Plan (the "ESPP") and agree that my option under the applicable Offer
      Period will be automatically terminated and all accumulated payroll
      deductions credited to my account will be refunded to me or applied to the
      purchase of Common Stock depending on the alternative indicated below. No
      further payroll deductions will be made for the purchase of shares in the
      applicable Offer Period and I shall be eligible to participate in a future
      Offer Period only by timely delivery to the Company of a new Subscription
      Agreement.

[ ]   WITHDRAWAL AND PURCHASE OF COMMON STOCK

      Payroll deductions will terminate, but your account balance will be
      applied to purchase Common Stock on the next Exercise Date. Any remaining
      balance will be refunded.

[ ]   WITHDRAWAL WITHOUT PURCHASE OF COMMON STOCK

      Entire account balance will be refunded to me and no Common Stock will be
      purchased on the next Exercise Date provided this notice is submitted to
      the Company ten (10) business days prior to the next Exercise Date.

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

[ ]   CHANGE IN PAYROLL DEDUCTION

      I hereby elect to change my rate of payroll deduction under the ESPP as
      follows (select one):

<TABLE>
<S>                                          <C>     <C>     <C>     <C>     <C>     <C>     <C>
Percentage to be Deducted (circle one)        1%      2%      3%      4%      5%      6%     7%
                              8%       9%    10%     11%     12%     13%     14%     15%
</TABLE>

      An increase or a decrease in payroll deduction will be effective for the
      first full payroll period commencing no fewer than five (5) business days
      following the Company's receipt of this notice, unless this change is
      processed more quickly.

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

                                       B-1

<PAGE>

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

[  ]  CHANGE OF BENEFICIARY           [  ] I am single         [  ]I am married

      This change of beneficiary shall terminate my previous beneficiary
      designation under the ESPP. In the event of my death, I hereby designate
      the following person or trust as my beneficiary to receive all payments
      and shares due to me under the ESPP:

Beneficiary
 (please print) __________________________  Relationship to Beneficiary (if any)
                 (Last)    (First)    (MI)

Street Address __________________________________________  _____________________

City, State/Country, Zip ________________________________

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

Date: _____________________     Employee Signature:_____________________________

                    ____________________________________________________________
                    Spouse's signature (if new beneficiary is other than spouse)

                                       B-2<PAGE>
                                                                    Exhibit 10.5

                      ASSIGNMENT AND ASSUMPTION AGREEMENT
                            AND CONSENT TO ASSIGNMENT

                            EXECUTIVE CENTER DEL MAR

         This Assignment and Assumption Agreement and Consent to Assignment
(this "AGREEMENT") is made as of September 22, 1999, by and among PRENTISS
PROPERTIES ACQUISITION PARTNERS, L.P., a Delaware limited partnership
("LANDLORD") and CONTIASSET RECEIVABLES MANAGEMENT LLC, a Delaware limited
liability company ("TENANT"), and BOFI.COM HOLDING, INC., a Delaware corporation
("ASSIGNEE"), and CONTIFINANCIAL CORPORATION, a Delaware corporation
("GUARANTOR").

                                R E C I T A L S :

         A. Reference is hereby made to that certain Lease dated March 16, 1999,
by and between Landlord and Tenant (the "LEASE"), for space on a portion of the
second (2nd) floor commonly known as Suite 220 (the "PREMISES") in that certain
office building located at 12220 El Camino Real, San Diego, California (the
"BUILDING").

         B. Pursuant to the terms of Article VIII of the Lease, Tenant has
requested Landlord's consent with respect to the assignment (the" ASSIGNMENT")
by Tenant of its rights, title, interest and obligations under the Lease to
Assignee. Landlord is willing to consent to the Assignment on the terms and
conditions contained herein.

         C. All defined terms not otherwise expressly defined herein shall have
the respective meanings given in the Lease.

                               A G R E E M E N T :

         1. Landlord's Consent. Landlord hereby consents to the Assignment;
provided, however, such consent is granted by Landlord only upon the terms and
conditions set forth in this Agreement. This Agreement shall not be construed to
modify, waive or amend any of the terms, covenants and conditions of the Lease
or to waive any breach thereof or any of Landlord's rights or remedies
thereunder or to enlarge or increase any obligations of Landlord under the
Lease. Any terms of the Assignment which are inconsistent with the terms of the
Lease or this Agreement shall be of no force or effect.

         2. Non-Release of Tenant and Guarantor; Further Transfers. Neither the
Assignment nor this consent thereto shall release or discharge Tenant and
Guarantor from any liability, whether past, present or future, under the Lease
or alter the primary liability

<PAGE>

of the Tenant to pay the rent and perform and comply with all of the obligations
of Tenant to be performed under the Lease. Neither the Assignment nor this
consent thereto shall be construed as a waiver of Landlord's right to consent to
any subletting by the Assignee or to any assignment by the Assignee of its
rights, title, interest and obligations under the Lease, or as a consent to any
portion of the Premises being used or occupied by any other party. Landlord may
consent to subsequent sublettings and assignments of the Lease or any amendments
or modifications thereto without notifying Tenant or Guarantor or anyone else
liable under the Lease and without obtaining their consent. No such action by
Landlord shall relieve such persons from any liability to Landlord or otherwise
with regard to the Premises.

         3. Assignment and Assumption of Lease and Indemnification.

                  a. Assumption. Without limiting Tenant's and Guarantor's
continuing liability under the Lease, Tenant hereby assigns to Assignee, as of
12:01 a.m. on September 22, 1999 (the "EFFECTIVE DATE"), all of its right,
title, and interest in and to the Lease, subject to the execution and delivery
of this Agreement by all the parties hereto. Further, without limiting Tenant's
and Guarantor's continuing liability under the Lease, Assignee hereby accepts
the above assignment from Tenant, and assumes all of Tenant's obligations and
duties under the Lease as of the Effective Date. Assignee agrees fully and
timely to satisfy, uphold, and perform all duties and obligations of Tenant
pursuant to the Lease, including, but not limited to, the payment of Rent as
referenced therein, accruing from the Effective Date forward. Assignee shall
have no liability to Tenant or to any other party (including Landlord) for any
payments due or other obligations which accrued or were required to be performed
under the Lease prior to the Effective Date. Upon execution of this Agreement by
all of the parties thereto, Assignee hereby agrees to deliver a check payable to
the order of Tenant in an amount equal to Three Thousand Three Hundred
Sixty-Eight and 70/100 Dollars ($3.368.70), which represents Assignee's pro rata
portion of the monthly rent due under the Lease for September, 1999. As of
October 1, 1999, Assignee shall pay all monthly rent due under the Lease
directly to Landlord. In addition to the above, commencing as of October l,
1999, Assignee shall pay to Landlord any additional charges for supplemental air
conditioning to the extent supplied to the Premises, which charges are currently
approximately Three Hundred Dollars ($300.00) per month; Landlord hereby
acknowledges and agrees that Tenant has paid such supplemental air conditioning
charges owing through September 30, 1999.

                  b. Representations and Warranties of Tenant. Tenant represents
and warrants to Assignee that, to its knowledge (i) the Lease is in full force
and effect, covers the Premises, and has not been amended or modified by any
agreements, whether written or oral, except this Assignment, (ii) Tenant has not
assigned the Lease, or sublet any portion of the Premises, to any other party,
and (iii) Tenant is not in default under, or

<PAGE>

breach of, any provision of the Lease, and no event or circumstance has occurred
that upon notice or the lapse of time, or both, would, constitute a default
under, or breach of, any provision of the Lease.

                  c. Operating Costs. Tenant hereby agrees to pay Landlord its
prorata share of all Operating Costs and Additional Rent set forth in the Lease
for the portion of the calendar year 1999 ending on the Effective Date within
thirty (30) days of the date hereof. If such amount can only be estimated by
Landlord as of the date of such payment, Tenant shall pay such estimated amount
within said thirty (30)-day period and Assignee and Tenant shall settle any
overpayment or deficiency within thirty (30) days after Landlord bills Assignee
for such items for the full year.

                  d. Indemnification by Tenant. Tenant for itself, its (past and
present) partners, officers, directors, shareholders, attorneys, legal
representatives, and constituent parent, subsidiary and affiliate corporations,
including but not limited to Guarantor, and each of their past and present
partners, officers, agents and employees, and each of their successors and
assigns (collectively, the "TENANT PARTIES") hereby indemnifies, defends and
holds Assignee (and/or any one (1) or more of the "ASSIGNEE PARTIES" (as defined
below)) wholly free and harmless from and against any and all claims, demands,
obligations, duties, liabilities, damages, expenses, indebtedness, debts,
breaches of contract, duty or relationship, acts, omissions, misfeasance,
malfeasance, causes of action, sums of money, accounts, compensation, contracts,
controversies, promises, damages, costs, losses and remedies therefore, causes
of action, rights of indemnity or liability of any type, kind, nature,
description or character whatsoever, and irrespective of how, why or by reason
of what facts, whether known or unknown, whether heretofore existing or
hereafter arising, whether liquidated or unliquidated related to the Lease or
the Premises (collectively, "CLAIMS") which Assignee may incur or which may be
asserted against Assignee by reason of any breach of any representation or
warranty of Tenant set forth herein, or any alleged obligation or undertaking of
Tenant as lessee under the Lease, which Claims arise from events occurring or
circumstances existing prior to the Effective Date.

                  e. Indemnification by Assignee. Assignee for itself, its (past
and present) partners, officers, directors, shareholders, attorneys, legal
representatives, and constituent parent, subsidiary and affiliate corporations
and each of their past and present partners, officers. agents and employees, and
each of their successors and assigns (collectively, the "ASSIGNEE PARTIES")
hereby indemnifies, defends and holds Tenant (and/or any one (1) or more of the
"TENANT PARTIES") wholly free and harmless from and against any and all Claims
(as defined above) which Tenant and/or Guarantor may incur or which may be
asserted against Tenant and/or Guarantor by reason of any alleged obligation or
undertaking of Assignee as Lessee under the Lease, which Claims arise from
events occurring on or after the Effective Date.

<PAGE>

         4. Security Deposit. Upon execution of this Agreement by all of the
parties thereto, Assignee shall deliver a check payable to the order of Landlord
in an amount equal to Thirty Three Thousand Six Hundred Eighty Nine and 70/100
Dollars ($33,689.70) as a security deposit (the "SECURITY DEPOSIT"). Landlord
shall release an amount equal to Twenty Two Thousand Four Hundred Fifty Nine and
80/100 Dollars ($22.459.80) from the Security Deposit (and the Security Deposit
shall thereafter be deemed to have been reduced by such amount released) within
thirty (30) days after authorization by notice from Assignee's counsel, Heller
Ehrman White & McAuliffe, certifying that the following conditions have been
satisfied. Landlord is hereby authorized, and agrees, to release the
aforementioned amount upon the satisfaction of both of the following conditions:
(i) Assignee is authorized to commence operations as a newly chartered federal
savings association by the Office of Thrift Supervision; and (ii) Assignee
receives irrevocable investor subscriptions in the amount of at least Thirteen
Million Dollars ($13,000,000.00). The Security Deposit shall be treated as
security for the performance of this Agreement and the Lease by the Assignee and
shall be held by Landlord in accordance with Article XXI of the Lease. The
receipt of the aforementioned investor subscriptions, and the issuance of shares
of Assignee's stock represented thereby, shall not constitute an "assignment"
for purposes of the Lease.

         5. Notice and Cure Period. Assignee shall provide written notice of any
Event of Default (as defined in the Lease) to Tenant and Guarantor within five
(5) days of its occurrence. Upon the occurrence of an Event of Default, Landlord
agrees that it will not exercise any of its remedies under the Lease if Tenant
and/or Guarantor takes all action and pays all amounts necessary to cure such
Event of Default within the time periods specified in Article XIII of the Lease
after Landlord delivers notice to Tenant and/or Guarantor as, and if, required
in accordance with Article XIII of the Lease.

         6. General Provisions.

                  6.1 Brokerage Commission. Assignee hereby agrees that under no
circumstances shall Landlord, Tenant or Guarantor be liable for any brokerage
commission or other charge or expense in connection with the Assignment and
Assignee agrees to protect, defend, indemnify and hold Landlord, Tenant and
Guarantor harmless from the same and from any cost or expense (including, but
not limited to, attorney's fees) incurred by Landlord, Tenant and/or Guarantor
in resisting any claim for any such brokerage commission. Upon execution of,
this Agreement by all of the parties thereto, Assignee hereby agrees to deliver
a check payable to the order, of Colliers International in an amount equal to
Twenty Two Thousand and 00/100 Dollars ($22.000.00) in full and complete
satisfaction of Colliers International's commission and other charges and
expenses due in connection with the assignment of lease contemplated hereby.

<PAGE>

                  6.2 Controlling Law. The terms and provisions of this
Agreement shall be construed in accordance with and governed by the laws of the
State of California.

                  6.3 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, their heirs, successors and assigns.
As used herein, the singular number includes the plural and the masculine gender
includes the feminine and neuter.

                  6.4 Captions. The paragraph captions utilized herein are in no
way intended to interpret or limit the terms and conditions hereof; rather, they
are intended for purposes of convenience only.

                  6.5 Partial Invalidity. If any term, provision or condition
contained in this Agreement shall, to any extent, be invalid or unenforceable,
the remainder of this Agreement, or the application of such term, provision or
condition to persons or circumstances other than those with respect to which it
is invalid or unenforceable, shall not be affected thereby, and each and every
other term, provision and condition of this Agreement shall be valid and
enforceable to the fullest extent possible permitted by law.

                  6.6 Attorney's Fees. If either party commences litigation
against the other for the specific performance of this Agreement, for damages
for the breach hereof or otherwise for enforcement of any remedy hereunder, the
parties hereto agree to and hereby do waive any right to a trial by jury and, in
the event of any such commencement of litigation, the prevailing party shall be
entitled to recover from the other party such costs and reasonable attorneys'
fees as may have been incurred.

                  6.7 Landlord's Costs. Within thirty (30) days after written
request by Landlord, Tenant shall, in accordance with Section 8.4 of the Lease,
pay to Landlord any costs and reasonable attorneys' fees incurred by Landlord in
connection with the Assignment.

                  6.8 Guarantor's Consent. By its execution below, Guarantor
consents to the Assignment and acknowledges and agrees that the Lease Guaranty
(of even date with the Lease (and attached thereto as Exhibit "E")) shall remain
in full force and effect during the initial Term of the Lease. Further, the
parties hereto agree and acknowledge that the Option granted to Tenant in
accordance with Section 3.6 of the Lease shall not apply to Assignee, in
accordance with the terms of the Lease.

                  6.9 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original and all of which
shall be one and the same Agreement.

<PAGE>

                  6.10 Tenant's Costs. Within thirty (30) days after written
request by Tenant, Assignee shall pay to Tenant any costs and reasonable
attorneys' fees incurred by Landlord in connection with the Assignment,
including, but not limited to, Landlord's costs under Section 6.7 above;
provided that nothing in this Section 6.10 shall relieve Tenant of its
obligation to pay Landlord's costs as set forth in Section 6.7 above.

                  6.11 Addresses for Notice. Any notices required to be sent to
Tenant and Guarantor or Assignee pursuant to the Lease or this Agreement shall
be sent to the following addresses:

         To Tenant:            ContiAsset Receivables Management LLC
                               C/o ContiFinancial Corporation
                               277 Park Avenue
                               New York, New York 10172
                               Attn: President
                               Phone #: (212) 207-2800
                               Fax #: (212) 207-5251

         To Guarantor:         ContiFinancial Corporation
                               277 Park Avenue
                               New York, New York 10172
                               Attn: President
                               Phone #: (212) 207-2800
                               Fax #: (212) 207-5251

(provided that one (1) notice sent to the above address shall satisfy the notice
requirement for both Tenant and Guarantor)

         With a copy To:

                               ContiFinancial Corporation
                               277 Park Avenue
                               New York, New York 10172
                               Attn: General Counsel
                               Phone #: (212) 207-2800
                               Fax #: (212) 207-2937

         To Assignee:          BofI.com Holding, Inc.
                               12220 El Camino Real, Suite 220
                               San Diego, California 92130
                               Attn: President

<PAGE>

                               Phone #: (858) 350-6200
                               Fax #: (858) 350-9870

         With a copy to:

                               Heller, Ehrman, White & McAuliffe
                               4250 Executive Square, 7th Floor
                               La Jolla, California 92037-9103
                               Attn: Alan Jacobs, Esq.
                               Phone #: (858) 450-8400
                               Fax #: (858) 450-8499

                  6.12 Tenant's Bill of Sale. Upon execution of this Agreement
by all of the parties thereto, Assignee hereby agrees to deliver a check payable
to the order of Tenant in an amount equal to Ten Thousand and 00/100 Dollars
($10,000.00) for the purchase of all of Tenant's office furnishings, fixtures,
computers, servers, software, licenses and artwork as further detailed in that
certain Bill of Sale, dated September 21, 1999, which shall be contemporaneously
executed and delivered by Tenant.

                  6.13 Further Assurances. The parties hereto shall execute and
deliver such further documents and instruments as any party hereto shall
reasonably request to carry out the purpose and intent of this Agreement and to
acknowledge and affirm the transfer and assignment of the leasehold interest
conveyed hereby.

            [The remainder of this page was intentionally left blank]

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Consent to
Assignment Agreement as of the day and year first above written.

"LANDLORD"                    PRENTISS PROPERTIES ACQUISITION
                              PARTNERS, L.P.,
                              a Delaware limited partnership

                              By:      Prentiss Properties I, Inc.
                                       a Delaware corporation
                                       its sole general partner

                                       By:      /s/ Christopher M. Hipps
                                                --------------------------------
                                                Name:  Christopher M. Hipps
                                                Title:  Senior Vice President

"TENANT"                      CONTIASSET RECEIVABLES MANAGEMENT, LLC,
                              a Delaware limited liability company

                              By: /s/ Mitch Bonilla
                                  ----------------------
                                  MITCH BONILLA
                                  Its:  Vice President

                              By: /s/ Glenn Goldman
                                  ----------------------
                                  GLENN GOLDMAN
                                  Its:  Chairman

"ASSIGNEE"                    BOFI.COM HOLDING, INC.,
                              a Delaware corporation

                              By: /s/ Jerry Englert
                                  ----------------------
                                  JERRY ENGLERT
                                  Its:  President

<PAGE>

"GUARANTOR"                   CONTIFINANCIAL CORPORATION,
                              a Delaware corporation

                              By: /s/ Glenn Goldman
                                  --------------------------
                                  GLENN GOLDMAN
                                  Its:  Authorized Signatory

<PAGE>

                                 LEASE AGREEMENT

                                     BETWEEN

                 PRENTISS PROPERTIES ACQUISITION PARTNERS, L.P.,

                         A DELAWARE LIMITED PARTNERSHIP

                                   (LANDLORD)

                                       AND

                     CONTIASSET RECEIVABLES MANAGEMENT LLC,

                      A DELAWARE LIMITED LIABILITY COMPANY

                                    (TENANT)

                            EXECUTIVE CENTER DEL MAR

                              SAN DIEGO, CALIFORNIA

                              Dated: March 16, 1998

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                       PAGE

<S>                            <C>                                                                      <C>
ARTICLE I                      BASIC LEASE INFORMATION AND CERTAIN DEFINITIONS..........................1
ARTICLE II                     PREMISES AND QUIET ENJOYMENT.............................................4
ARTICLE III                    TERM; COMMENCEMENT DATE DELIVERY AND ACCEPTANCE OF PREMISES..............4
ARTICLE IV                     RENT.....................................................................8
ARTICLE V                      OPERATING COSTS..........................................................9
ARTICLE VI                     PARKING.................................................................13
ARTICLE VII                    UTILITIES AND SERVICES..................................................14
ARTICLE VIII                   ASSIGNMENT AND SUBLETTING...............................................17
ARTICLE IX                     REPAIRS.................................................................19
ARTICLE X                      ALTERATIONS.............................................................21
ARTICLE XI                     LIENS...................................................................22
ARTICLE XII                    ARTICLE XU USE AND COMPLIANCE WITH LAWS.................................23
ARTICLE XIII                   DEFAULT AND REMEDIES....................................................24
ARTICLE XIV                    INSURANCE...............................................................26
ARTICLE XV                     DAMAGE BY FIRE OR OTHER CAUSE...........................................28
ARTICLE XVI                    CONDEMNATION............................................................29
ARTICLE XVII                   INDEMNIFICATION.........................................................31
ARTICLE XVIII                  SUBORDINATION AND ESTOPPEL CERTIFICATES.................................32
ARTICLE XIX                    SURRENDER OF THE PREMISES...............................................34
ARTICLE XX                     LANDLORD'S RIGHT TO INSPECT.............................................34
ARTICLE XXI                    SECURITY DEPOSIT........................................................35
ARTICLE XXII                   BROKERAGE...............................................................35
ARTICLE XXIII                  OBSERVANCE OF RULES AND REGULATIONS.....................................36
ARTICLE XXIV                   NOTICES.................................................................36
ARTICLE XXV                    MISCELLANEOUS...........................................................36
ARTICLE XXVI                   SUBSTITUTION SPACE......................................................40
ARTICLE XXVII                  OTHER DEFINITIONS.......................................................42
ARTICLE XXVIII                 RIGHT OF FIRST OFFER....................................................44

                               EXHIBIT AND RIDERS

EXHIBIT A             -             FLOOR PLAN OF THE PREMISES
EXHIBIT B             -             THE LAND
EXHIBIT C             -             WORK LETTER AGREEMENT
EXHIBIT D             -             FORM OF COMMENCEMENT NOTICE
EXHIBIT E             -             LEASE GUARANTY
EXHIBIT F             -             SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
RIDER NO. 1           -             RULES AND REGULATIONS

</TABLE>

                                       i
<PAGE>

                             INDEX OF DEFINED TERMS

               Definitions of certain terms used in this Lease are found in the
following sections:

<TABLE>
<CAPTION>

TERM                                                                      LOCATION OF DEFINITION
<S>                                                                       <C>
Additional Rent.................................................................Section 1.1N
Bankruptcy Code ................................................................Section 8.6
Base Rent.......................................................................Section 1.1M
Basic Lease Information and Certain Definitions.................................Article 1
Broker(s).......................................................................Section 1.1S
Building........................................................................Section 1.1B
Building Standard...............................................................Exhibit C
Business Days...................................................................Article 27
Central Areas...................................................................Article 27
Central Systems.................................................................Exhibit C
Commencement Date...............................................................Section 1.1F
Common Areas....................................................................Article 27
Comparison Area.................................................................Section 7.1A
control.........................................................................Section 8.3
Controllable Operating Costs....................................................Section 5.1
days............................................................................Article 27
Economic Terms..................................................................Section 28.2
Events of Default ..............................................................Section 13.1
Expiration Date.................................................................Section 3.4
First Offer Notice..............................................................Section 28.1
First Offer Space...............................................................Article 28
Guarantor(s)....................................................................Section 1.1W
herein, hereof, hereby, hereunder and words of similar import...................Article 27
Holidays........................................................................Article 27
include and including...........................................................Article 27
Interest Rate...................................................................Section 4.2
Land............................................................................Section 1.1C
Landlord........................................................................Preamble
Landlord's Address for Notice...................................................Section 1.1T
Landlord's Address for Payment..................................................Section 1.1U
Landlord's Operating Costs Estimate.............................................Section 5.1
Leasehold Improvements..........................................................Exhibit C
Net Rentable Area...............................................................Article 27
Net Rentable Area of the Building...............................................Section 1.1J
Net Rentable Area of the Premises...............................................Section 1.1I
Non-Disturbance Agreement.......................................................Section 18.4
Operating Costs.................................................................Section 5.2A
Original Tenant.................................................................Section 3.7
Parking Facility................................................................Section 1.1D
Parking Permits.................................................................Section 1.1P
Project.........................................................................Section 1.1E

</TABLE>

                                      -ii-
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                             <C>
Premises .......................................................................Section 1.1A
Rent............................................................................Section 1.1L
repair..........................................................................Article 27
Security Deposit................................................................Section 1.1R
Service Areas...................................................................Article 27
Space Availability Notice.......................................................Section 28.1
Substitution Space..............................................................Section 26.1
Successor Landlord..............................................................Section 18.2
Superior Leases.................................................................Article 28
Superior Rights.................................................................Article 28
Taxes...........................................................................Section 5.2
Tenant .........................................................................Preamble & Article 27
Tenant Delay ...................................................................Exhibit C
Tenant's Address for Notice ....................................................Section 1.1V
Tenant's Operating Costs Payment................................................Section 5.1
Tenant's Permitted Uses.........................................................Section 1.1Q
Tenant's Property...............................................................Section 14.1A(a)
Tenant's Share..................................................................Section 1.1K
Term............................................................................Section 1.1H
Termination Effective Date......................................................Article 3
Termination Notice..............................................................Article 3
termination of this Lease and words of like import..............................Article 27
terms of this Lease.............................................................Article 27
Trustee.........................................................................Section 8.6A
Usable Area of Premises.........................................................Section 1.1G
year............................................................................Article 27

</TABLE>

                                      -iii-
<PAGE>

                               COMMENCEMENT NOTICE

         This Commencement Notice is delivered this 22nd day of June, 1998, by
Prentiss Properties Acquisition Partners, L.P., a Delaware limited partnership
("LANDLORD") to ContiAsset Receivables Management LLC, a Delaware limited
liability company ("TENANT"), pursuant to the provisions of Section 3.3 of that
certain Lease Agreement (the "LEASE") dated March 16, 1998, by and between
Landlord and Tenant covering certain space in the Building known as 12220 EI
Camino Real, San Diego, CA 92130. All terms used herein with their initial
letter capitalized shall have the meaning assigned to such terms in the Lease.

                              W I T N E S S E T H:

         1. The Building, the Premises, the Parking Facility, and all other
improvements required to be constructed and furnished by Landlord in accordance
with the terms of the Lease have been satisfactorily completed by the Landlord
and accepted by the Tenant.

         2. The Premises have been delivered to, and accepted by, the Tenant,
subject to the completion of "punch list" items.

         3. The Commencement Date of the Lease is the 15th day of June, 1998,
and the Expiration Date is the 30th day of June, 2003.

         4. The Premises consist of 5,478 square feet of Net Rentable Area on
the second (2nd) floor of the Building.

         5. The Base Rent is $131,472.00 per annum, payable in monthly
installments of $10,956.00, subject, however, to the provisions of the Lease
relating to adjustments of Tenant's Base Rent and Operating Costs Payment.

         6. Remittance of the foregoing payments shall be made on the first day
of each month in accordance with the terms and conditions of the Lease at the
following address:

                           Prentiss Properties Acquisition Partners, L.P.
                           P.O. Box 100435
                           Pasadena, California 91189-0435

<PAGE>

         IN WITNESS WHEREOF, this instrument has been duly executed by Landlord
as of the date first written above.

     LANDLORD:    Prentiss Properties Acquisition Partners, L.P., a Delaware
                  limited partnership

                  By:      Prentiss Properties I, Inc., general partner

                  By:      /s/ Louay Alsadek
                           -------------------------
                           Louay Alsadek
                           Vice President

                  By:      /s/ J. Kevan Dilbeck
                           -------------------------
                           J. Kevan Dilbeck
                           Vice President

<PAGE>

                                 LEASE AGREEMENT

         THIS LEASE AGREEMENT ("this Lease") is made and entered into by and
between PRENTISS PROPERTIES ACQUISITION PARTNERS, L.P., a Delaware limited
partnership ("Landlord"), and CONTIASSET RECEIVABLES MANAGEMENT LLC, a Delaware
limited liability company ("Tenant"), upon all the terms set forth in this Lease
and in all Exhibits and Riders hereto, to each and all of which terms Landlord
and Tenant hereby mutually agree.

                                   ARTICLE I
                 BASIC LEASE INFORMATION AND CERTAIN DEFINITIONS

         1.1 Each reference in this Lease to information and definitions
contained in !he Basic Lease Information and Certain Definitions and each use of
the terms capitalized and defined in this Section 1.1 shall be deemed to refer
to, and shall have the respective meaning set forth in, this Section 1.1.

<TABLE>
<CAPTION>

      <S>      <C>                                    <C>
      A.       Premises:                              That certain space identified by diagonal lines or
                                                      shaded area on the floor plan attached hereto as
                                                      Exhibit "A," commonly known as Suite 220 on the second
                                                      (2nd) floor of the Building.

      B.       Building:                              The building to be constructed at 12220 EI Camino
                                                      Real, San Diego, California 92130

      C.       Land:                                  Those certain parcels of land underlying the Project.

      D.       Parking Facility:                      The parking structure located on the Land.

      E.       Project:                               The Land and all improvements thereon, including the
                                                      Building, the Parking Facility, and all Common
                                                      Areas, initially and substantially as shown on Exhibit
                                                      "B" attached hereto.

      F.       Commencement Date:                     The date defined in Section 3.1 hereof.

      G.       Usable Area of the Premises:           4,729 square feet.

      H.       Term:                                  Five (5) years, unless this Lease is sooner terminated
                                                      as provided herein, beginning on the Commencement Date.

      I.       Net Rentable Area of the Premises:     5,478 square feet

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

      <S>      <C>                                    <C>
      J.       Net Rentable Area of the Building:     56,551 square feet.

      K.       Tenant's Share:                        9.68%, representing a fraction, the numerator of which
                                                      is the Net Rentable Area of the Premises and the
                                                      denominator of which is the Net Rentable Area of the
                                                      Building, subject to future adjustment pursuant to the
                                                      provisions of Section 5.4 hereof.

      L.       Rent:                                  The Base Rent and the Additional Rent.

      M.       Base Rent:                             The Base Rent shall be as shown in this Section 1.l(M)
                                                      below.  Base Rent includes Base Year Operating Costs.

                                                        Month of     Monthly Base Rent    Monthly Base Rent
                                                       Lease Term                         per Square Foot of
                                                                                          Net Rentable Area
                                                          1-12          $ 10,956.00             $2.00
                                                          13-24         $ 11,229.90             $2.05
                                                          25-36         $ 11,503.80             $2.10
                                                          37-48         $ 11,777.70             $2.15
                                                          49-60         $ 12,051.60             $2.20

      N.       Additional Rent:                       The Additional Rent shall be all other sums due and
                                                      payable by Tenant under the Lease, including, but not
                                                      limited to, Tenant's Share of Operating Costs.

      O.       Base Year Operating Costs:             The grossed up (to 95% occupancy) Operating Costs for
                                                      the calendar year 1998.

      P.       Parking Permits:                       Tenant shall be entitled to take, at no charge during
                                                      the initial Term, twenty-four (24) Parking Permits
                                                      consisting of (i) nineteen (19) unassigned parking
                                                      spaces to be used in common with others in the Parking
                                                      Facility and (ii) five (5) reserved parking spaces in
                                                      the Parking Facility.

      Q.       Tenant's Permitted Uses:               Tenant may use the Premises for general office use and
                                                      for no other purpose.

      R.       Security Deposit:                      None.

</TABLE>

                                      -2-
<PAGE>

<TABLE>
<CAPTION>
      <S>      <C>                                    <C>
      S.       Broker(s):                             Colliers Iliff Thorn representing Tenant and Business
                                                      Real Estate Brokerage Company representing Landlord.

      T.       Landlord's Address for Notice:         Prentiss Properties Acquisition Partners, L.P.
                                                      3890 West Northwest Highway, Suite 400
                                                      Dallas, Texas 75220
                                                      Attention: Thomas F. August

                                                      With a copy to:

                                                      Prentiss Properties Acquisition Partners, L.P.
                                                      970 West 190th Street, Suite 550
                                                      Torrance, California 90502
                                                      Attention: Louay Alsadek

     U.       Landlord's Address for Payment:        Prentiss Properties Acquisition Partners, L.P.
                                                      P.O. Box 100435
                                                      Pasadena, California 91189-0435

     V.       Tenant's Address for Notice:           ContiAsset Receivables Management LLC
                                                      l2220 El Camino Real, Suite 220
                                                      San Diego, California 92130
                                                      Attention:        Mitchell J. Bonilla, Vice President
                                                                        and General Manager

                                                      with a copy to:

                                                      ContiFinancial Corporation
                                                      277 Park Avenue
                                                      New York, NY 10172
                                                      Attention:        Michael Valentino, Director
                                                                        Alan Langus, General Counsel

      W.       Guarantor(s):                          ContiFinancial Corporation, a Delaware corporation

      X.       Extension Option(s):                   See Section 3.6 hereof.

      Y.       Allowance for Leasehold Improvements:  See Exhibit "C"
</TABLE>

                                      -3-
<PAGE>

                                   ARTICLE II
                          PREMISES AND QUIET ENJOYMENT

         2.1 Landlord hereby leases the Premises to Tenant, and Tenant hereby
rents and hires the Premises from Landlord, for the Term. During the Term,
Tenant shall have the right to use, in common with others and in accordance with
the Rules and Regulations, the Common Areas.

         2.2 Provided that Tenant fully and timely performs all the terms of
this Lease on Tenant's part to be performed, including payment by Tenant of all
Rent, Tenant shall have, hold and enjoy the Premises during the Term without
hindrance or disturbance from or by Landlord; subject., however, to all of the
terms, conditions and provisions of any and all ground leases, deeds to secure
debt, mortgages, restrictive covenants, easements, and other encumbrances now or
hereafter affecting the Premises or the Project.

                                  ARTICLE III
                             TERM; COMMENCEMENT DATE
                       DELIVERY AND ACCEPTANCE OF PREMISES

         3.1 The Commencement Date shall be the earlier of (a) the date the
Premises are deemed available for occupancy pursuant to Section 3.2 hereof or
(b) the date Tenant, or anyone claiming by, through or under Tenant, occupies
any portion of the Premises for the purpose of the conduct of Tenant's (or such
other person's) business therein.

         3.2 A. The Premises shall be deemed available for occupancy as soon as
the following conditions have been met: (a) the Leasehold Improvements (as
defined in Exhibit "C" to the Lease) have been substantially completed as
determined by Landlord's architect or space planner; (b) either a certificate of
occupancy (temporary or final) or other certificate permitting the lawful
occupancy of the Premises has been issued for the Premises, or such portion of
the Premises, as the case may be, by the appropriate governmental authority; and
(c) at least three (3) Business Days' notice of the anticipated occurrence of
the conditions in clauses (a) and (b) above has been given to Tenant.

             B. Notwithstanding anything to the contrary contained herein, if
there is a delay in the availability for occupancy of the Premises as provided
in Section 3.2.A. above due to Tenant Delays (as defined in Exhibit "C" to the
Lease), then the Premises shall be deemed available for occupancy on the date on
which the Premises would have been available for occupancy but for such Tenant
Delay, even though a certificate of occupancy or other certificate permitting
the lawful occupancy of the Premises has not been issued or the Leasehold
Improvements have not been commenced or completed.

             C. In the event that the Premises is not available for occupancy by
the "Outside Date," which shall be July 1, 1998, as such July 1, 1998 date may
be extended by the number of days of Tenant Delays and by the number of days of
"Force Majeure Delays" (as defined below), then the sole remedy of Tenant shall
be the right to deliver a notice to Landlord (the "Termination Notice") electing
to terminate this Lease effective upon receipt of the Termination Notice by
Landlord (the "Termination Effective Date"). Except as provided hereinbelow, the
Termination Notice must be delivered by Tenant to Landlord, if at all, not

                                      -4-
<PAGE>

earlier than the Outside Date and not later than five (5) business days after
the Outside Date. If Tenant delivers the Termination Notice to Landlord, then
Landlord shall have the right to suspend the Termination Effective Date for a
period ending thirty (30) days after the original Termination Effective Date. In
order to suspend the Termination Effective Date, Landlord must deliver to
Tenant, within five (5) business days after receipt of the Termination Notice,
a certificate of the general contractor certifying that it is such contractor's
best good faith judgment that the Premises will be available for occupancy
within thirty (30) days after the original Termination Effective Date. If the
Premises is available for occupancy within said thirty (30) day suspension
period, then the Termination Notice shall be of no further force and effect; if,
however, the Premises is not available for occupancy within said thirty (30) day
suspension period, then this Lease shall terminate as of the date of expiration
of such thirty (30) day period. If prior to the Outside Date Landlord determines
that the Premises will not be available for occupancy by the Outside Date,
Landlord shall have the right to deliver a written notice to Tenant stating
Landlord's opinion as to the date by which the Premises will be available for
occupancy and Tenant shall be required, within five (5) business days after
receipt of such notice, to either deliver the Termination Notice (which will
mean that this Lease shall thereupon terminate and shall be of no further force
and effect) or agree to extend the Outside Date to that date which is set by
Landlord. Failure of Tenant to so respond in writing within said five (5)
business day period shall be deemed to constitute Tenant's agreement to extend
the Outside Date to that date which is set by Landlord. If the Outside Date is
so extended, Landlord's right to request Tenant to elect to either terminate or
further extend the Outside Date shall remain and shall continue to remain, with
each of the notice periods and response periods set forth above, until the
Premises is available for occupancy or until this Lease is terminated. For
purposes of this Section 3.2C, "Force Majeure Delays" shall mean and refer to a
period of delay or delays encountered by Landlord affecting the work of
construction of the Leasehold Improvements because of delays due to excess time
in obtaining governmental permits or approvals beyond the time period normally
required to obtain such permits or approvals for similar space, similarly
improved, in first-class office buildings in the San Diego County area; fire,
earthquake or other acts of God; acts of the public enemy; riot; insurrection;
governmental regulations of the sales of materials or supplies or the
transportation thereof; strikes or boycotts; shortages of material or labor or
any other cause beyond the reasonable control of Landlord.

         3.3 The Net Rentable Area of the Premises and the Building are as
stated in Sections 1.1I and J, respectively. By written instrument substantially
in the form of Exhibit "D" attached hereto, Landlord shall notify Tenant of the
Commencement Date, the Net Rentable Area of the Premises and all other matters
stated therein. The Commencement Notice shall be conclusive and binding on
Tenant as to all matters set forth therein, unless within ten (10) days
following delivery of such Commencement Notice, Tenant contests any of the
matters contained therein by notifying Landlord in writing of Tenant's
objections. The foregoing notwithstanding, Landlord's failure to deliver any
Commencement Notice to Tenant shall not affect Landlord's determination of the
Commencement Date.

         3.4 Except as otherwise provided in Section 9 of Exhibit "C," Tenant
may not enter or occupy the Premises prior to the Commencement Date without
Landlord's express written consent and any entry by Tenant shall be subject to
all of the terms of this Lease; provided however, that no such early entry shall
change the Commencement Date or the date on which the Term expires (the
"Expiration Date").

                                      -5-
<PAGE>

         3.5 Occupancy of the Premises or any portion thereof by Tenant or
anyone claiming through or under Tenant for the conduct of Tenant's or such
other person's business therein shall be conclusive evidence that Tenant and all
parties claiming through or under Tenant (a) have accepted the Premises or such
portion as suitable for the purposes for which the Premises are leased
hereunder, (b) have accepted the Common Areas as being in a good and
satisfactory condition, and (c) have waived any defects in the Premises and the
Project; provided however, that, if any Leasehold Improvements have been
constructed and installed to prepare the Premises for Tenant's occupancy,
Tenant's acceptance of the Premises, and waiver of any defect therein, shall
occur upon Landlord's substantial completion of the Leasehold Improvements in
accordance with the terms of Exhibit "C" hereof, subject only to Landlord's
completion of items on Landlord's punchlist and latent defects of which Tenant
has given Landlord notice within forty five (45) days following the date on
which Landlord first makes the Premises available to Tenant for any work in the
Premises to be undertaken by Tenant.

         3.6 A. Subject to the terms of this Section 3.6 and Section 3.7,
Landlord hereby grants to Tenant an option (the "Extension Option") to extend
the Term of this Lease with respect to the entire Premises for one (1)
additional period of five (5) years (the "Option Term"), on the same terms,
covenants and conditions as provided for in this Lease during the initial Lease
Term, except that all economic terms such as, without limitation, monthly Base
Rent, a new Base Year for Operating Costs, if appropriate, parking charges,
etc., shall be established based on the "fair market rental rate" for the
Premises for the Option Term as defined and determined in accordance with the
provisions of this Section 3.6 below.

             B. The Extension Option must be exercised, if at all, by written
notice ("Extension Notice") delivered by Tenant to Landlord no earlier than the
date which is twelve (12) months, and no later than the date which is six (6)
months, prior to the expiration of the then current Term of this Lease.

             C. The term "fair market rental rate" as used herein shall mean the
annual amount per rentable square foot, projected during the relevant period,
that a willing, comparable, non-equity tenant (excluding sublease and assignment
transactions) would pay, and a willing, comparable landlord of a comparable
quality building located in the Comparison Area would accept, at arm's length
(what Landlord is accepting in current transactions for the Building may be
considered), for space comparable in size, quality and floor height as the
leased area at issue taking into account the age, quality and layout of the
existing improvements in the leased area at issue and taking into account items
that professional real estate brokers customarily consider, including, but not
limited to, rental rates, office space availability, tenant size, tenant
improvement allowances, operating expenses and allowance, parking charges, and
any other amounts then being charged by Landlord or the lessors of such similar
office buildings.

             D. Landlord's determination of fair market rental rate shall be
delivered to Tenant in writing not later than thirty (30) days following
Landlord's receipt of Tenant's Extension Notice. Tenant will have thirty (30)
days ("Tenant's Review Period") after receipt of Landlord's notice of the fair
market rental rate within which to accept such fair market rental rate or to
object thereto in writing. Tenant's failure to accept the fair market rental
rate submitted by Landlord in writing within Tenant's Review Period will
conclusively be deemed Tenant's disapproval thereof if Tenant objects to the
fair market rental rate submitted by Landlord within

                                      -6-
<PAGE>

Tenant's Review Period, then Landlord and Tenant win attempt in good faith to
agree upon such fair market rental rate using their best good faith efforts. If
Landlord and Tenant fail to reach agreement on such fair market rental rate
within fifteen (15) days following the expiration of Tenant's Review Period (the
"Outside Agreement Date"), then Tenant may, within five (5) business days
following the Outside Agreement Date, demand by written notice to Landlord that
each party's determination be submitted to appraisal in accordance with the
provisions below. Tenant's failure to timely demand appraisal will constitute
Tenant's rescission of its Extension Notice and the Extension Option will be
void and of no further force or effect.

         E. (1) Landlord and Tenant shall each appoint one independent,
unaffiliated appraiser who shall by profession be a real estate broker who has
been active over the five (5) year period ending on the date of such appointment
in the leasing of high-rise office space in the Comparison Area. Each such
appraiser will be appointed within thirty (30) days after the Outside Agreement
Date.

         (2) The two (2) appraisers so appointed will within fifteen (15) days
of the date of the appointment of the last appointed appraiser agree upon and
appoint a third appraiser who shall be qualified under the same criteria set
forth herein above for qualification of the initial two (2) appraisers.

         (3) The determination of the appraisers shall be limited solely to the
issue of whether Landlord's or Tenant's last proposed (as of the Outside
Agreement Date) new monthly Base Rent for the Premises is the closest to the
actual new monthly Base Rent for the Premises as determined by the appraisers,
taking into account the requirements of Paragraph C and this Paragraph E
regarding same.

         (4) The three (3) appraisers shall within thirty (30) days of the
appointment of the third appraiser reach a decision as to whether the parties
shall use Landlord's or Tenant's submitted new monthly Base Rent, and shall
notify Landlord and Tenant thereof.

         (5) The decision of the majority of the three (3) appraisers shall be
binding upon Landlord and Tenant. The cost of each party's appraiser shall be
the responsibility of the party selecting such appraiser, and the cost of the
third appraiser (or arbitration, if necessary) shall be shared equally by
Landlord and Tenant.

         (6) If either Landlord or Tenant fails to appoint an appraiser within
the time period in Paragraph E(l) herein above, the appraiser appointed by one
of them shall reach a decision, notify Landlord and Tenant thereof and such
appraiser's decision shall be binding upon Landlord and Tenant.

         (7) If the two (2) appraisers fail to agree upon and appoint a third
appraiser, both appraisers shall be dismissed and the matter to be decided shall
be forthwith submitted to arbitration under the provisions of the American
Arbitration Association.

         (8) In the event that the new Monthly Base Rent is not established
prior to end of the initial Term of the Lease, the monthly Base Rent immediately
payable at the commencement of such Option Term shall be the monthly Base Rent
payable in the immediately preceding month. Notwithstanding the above, once the
fair market rental is determined in

                                      -7-
<PAGE>

accordance with this section, the parties shall settle any underpayment on the
next monthly Base Rent payment date falling not less than thirty (30) days after
such determination.

         3.7 A. As used in this Section, the word "Option" means the Extension
Option pursuant to Section 3.6 herein.

             B. The Option is personal to the original Tenant executing this
Lease ("Original Tenant") or any successor by merger or acquisition of all or
substantially all of Tenant's assets (the "Permitted Transferee") and may be
exercised only by the original Tenant executing this Lease or a Permitted
Transferee while occupying the entire Premises and without the intent of
thereafter assigning this Lease or subletting the Premises and may not be
exercised or be assigned, voluntarily or involuntarily, by any person or entity
other than the original Tenant executing this Lease or a Permitted Transferee.
The Option is not assignable separate and apart from this Lease, nor may the
Option be separated from this Lease in any manner, either by reservation or
otherwise.

             C. Tenant shall have no right to exercise the Option,
notwithstanding any provision of the grant of Option to the contrary, and
Tenant's exercise of the Option may be nullified by Landlord and deemed of no
further force or effect, if (i) Tenant shall be in default of any monetary
obligation or material non-monetary obligation under the terms of this Lease as
of Tenant's exercise of the Option or at any time after the exercise of such
Option and prior to the commencement of the Option event, or (ii) Landlord has
given Tenant two (2) or more notices of monetary default, whether or not such
defaults are subsequently cured, during any twelve (12) consecutive month period
of the Lease.

                                   ARTICLE IV
                                      RENT

         4.1 Tenant shall pay to Landlord, without notice, demand, offset or
deduction, in lawful money of the United States of America, at Landlord's
Address for Payment, or at such other place as Landlord shall designate in
writing from time to time: (a) the Base Rent in equal monthly installments, in
advance, on the first day of each calendar month during the Term, and (b) the
Additional Rent, at the respective times required hereunder. The first monthly
installment of Base Rent and the Additional Rent payable under Article 5 hereof
shall be paid in advance on the date of Tenant's execution of this Lease and
applied to the first installments of Base Rent and such Additional Rent coming
due under this Lease. Payment of Rent shall begin on the Commencement Date;
provided, however, that, if either the Commencement Date or the Expiration Date
falls on a date other than the first day of a calendar month, the Rent due for
such fractional month shall be prorated on a per diem basis between Landlord and
Tenant so as to charge Tenant only for the portion of such fractional month
falling within the Term.

         4.2 All installments of Rent not paid within five (5) days after notice
that such amount is due shall be subject to a late charge of five percent (5%)
of the amount of the late payment and shall further bear interest until paid at
a rate per annum (the "Interest Rate") equal to the greater of fifteen percent
(15%) or four percent (4%) above the prime rate of interest from time to time
publicly announced by Bank of America, a national banking association, or any
successor thereof; provided, however, that, if at the time such interest is
sought to be imposed the

                                      -8-
<PAGE>

rate of interest exceeds the maximum rate permitted under federal law or under
the laws of the State of California, the rate of interest on such past due
installments of Rent shall be the maximum rate of interest then permitted by
applicable law.

                                   ARTICLE V
                                 OPERATING COSTS

         5.1 Tenant shall pay to Landlord, as Additional Rent, for each year or
fractional year during the Term, an amount ("Tenant's Operating Costs Payment")
of money equal to Tenant's Share of Operating, Costs, for such year in excess of
Tenant's Share of Base Year Operating Costs, such amount to be calculated and
paid as follows:

             A. Beginning on January 1st of the year following the year in which
the Commencement Date occurs, and on the first day of January of each year
during the Term thereafter, or as soon thereafter as is practicable, Landlord
shall furnish Tenant with a statement ("Landlord's Operating Costs Estimate")
setting forth Landlord's reasonable estimate of grossed up Operating Costs for
the forthcoming year and Tenant's Operating Costs Payment for such year. On the
first day of each calendar month during such year, Tenant shall pay to Landlord
one-twelfth (1/12th) of Tenant's Operating Costs Payment as estimated on
Landlord's Operating Costs Estimate. If for any reason Landlord has not provided
Tenant with Landlord's Operating Costs Estimate on the first day of January of
any year during the Term, then (a) until the first day of the calendar month
following the month in which Tenant is given Landlord's Operating Costs
Estimate, Tenant shall continue to pay to Landlord on the first day of each
calendar month the sum, if any, payable by Tenant under this Section 5.1 for the
month of December of the preceding year, and (b) promptly after Landlords'
Operating Costs Estimate is furnished to Tenant, Landlord shall give notice to
Tenant stating whether the installments of Tenant's Operating Costs Payments
previously made for such year were greater or less than the installments of
Tenant's Operating Costs Payments to be made for such year, and (i) if there
shall be a deficiency, Tenant shall pay the amount thereof to Landlord within
ten (10) days after the delivery of Landlord's Operating Costs Estimate, or (ii)
if there shall have been an overpayment, Landlord shall apply such overpayment
as a credit against the next accruing monthly installment(s) of Tenant's
Operating Costs Payment due from Tenant until fully credited to Tenant (or pay
such amount to Tenant if this Lease has expired or terminated), and (iii) on the
first day of the calendar month following the month in which Landlord's
Operating Costs Estimate is given to Tenant and on the first day of each
calendar month throughout the remainder of such year, Tenant shall pay to
Landlord an amount equal to one twelfth (1/12th) of Tenant's Operating Costs
Payment.

             B. On the first day of March of each year during the Term
(beginning on the first day of March of the second year following the year in
which the Commencement Date occurs), or as soon thereafter as is practicable,
Landlord shall furnish Tenant with a statement of the grossed up Operating Costs
for the preceding year. Within thirty (30) days after Landlord's giving of such
statement, Tenant shall make a lump sum payment to Landlord in the amount, if
any, by which Tenants' Operating Costs Payment for such preceding year as shown
on such Landlord's statement, exceeds the aggregate of the monthly installments
of Tenant's Operating Costs Payments paid during such preceding year. If
Tenant's Operating Costs Payment, as shown on such Landlord's statement, is
less than the aggregate of the monthly installments of

                                      -9-
<PAGE>

Tenant's Operating Costs Payment actually paid by Tenant during such preceding
year, then Landlord shall apply such amount to the next accruing monthly
installment(s) of Tenant's Operating Costs Payment due from Tenant until fully
credited to Tenant.

             C. If the Term ends on a date other than the last day of December,
the actual Operating Costs for the year in which the Expiration Date occurs
shall be prorated so that Tenant shall pay that portion of Tenant's Operating
Costs Payment for such year represented by a fraction, the numerator of which
shall be the number of days during such fractional year falling within the Term,
and the denominator of which is 365 (or 366, in the case of a leap year). The
provisions of this Section 5.1 shall survive the Expiration Date or any sooner
termination provided for in this Lease.

             D. The term "Controllable Operating Costs" shall mean those
Operating Costs described in subsections 5.2(A)(a) and 5.2(A)(b) below.
Notwithstanding anything to the contrary contained herein, the aggregate
Controllable Operating Costs for any year after the 1998 Base Year shall not
increase more than seven percent (7%) over the maximum permitted Controllable
Operating Costs for the immediately preceding year. There shall be no maximum
permitted Controllable Operating Costs for the 1995 Base Year and the maximum
permitted Controllable Operating Costs for the calendar year 1999 shall be one
hundred seven percent (107%) of the actual Controllable Operating Costs for the
1998 Base Year (all calculated on a grossed up basis). By way of example only,
not as a limitation upon the foregoing, the following chart illustrates maximum
Controllable Operating Costs:

        Year           Actual Operating Costs        Maximum Controllable
                       (per Square Foot of Net    Operating Costs (Per Square
                           Rentable Area)         Foot of Net Rentable Area)
        1998                    $3.00                        $3.00
        1999                    $3.25                        $3.11
        2000                    $3.40                        $3.43
        2001                    $3.70                        $3.68
        2001                    $3.83                        $3.93

         5.2 A. For purposes of this Lease, the term "Operating Costs" shall
mean any and all expenses, costs and disbursements of every kind which Landlord
pays, incurs or becomes obligated to pay in connection with the operation,
management, repair and maintenance of all portions of the Project. All Operating
Costs shall be determined according to generally accepted accounting principles
which shall be consistently applied. Operating Costs include the following: (a)
Wages, salaries, benefits and fees (including all reasonable education, travel
and professional fees) of all personnel or entities to the extent engaged in the
operation, repair, maintenance, management, or safekeeping of the Project,
including taxes, insurance, and benefits relating thereto and tile costs of all
supplies and materials (including work clothes and uniforms) used in the
operation, repair, maintenance and security of tile Project; (b) Cost of
performance by Landlord's personnel of, or of all service agreements for,
maintenance, janitorial services, access control, alarm service, window
cleaning, elevator maintenance and landscaping for the Project. Such cost shall
include the rental of personal property used by Landlord's personnel in the

                                      -10-
<PAGE>

maintenance and repair of the Project; (c) Cost of utilities for the
Project, including water, sewer, power, electricity for common areas, gas, fuel,
lighting and all air-conditioning, heating and ventilating costs; (d) Cost of
all insurance, including casualty and liability insurance applicable to the
Project and to Landlord's equipment, fixtures and personal property used in
connection therewith, business interruption or rent insurance against such
perils as are commonly insured against by prudent landlords, such other
insurance as may be required by any lessor or mortgagee of Landlord, and such
other insurance which Landlord considers reasonably necessary in the operation
of the Project, together with all appraisal and consultants' fees in connection
with such insurance; (e) All Taxes. For purposes hereof, the term "Taxes" shall
mean, all taxes, assessments, and other governmental charges, applicable to or
assessed against the Project or any portion thereof, or applicable to or
assessed against Landlord's personal property used in connection therewith,
whether federal, state, county or municipal and whether assessed by taxing
districts or authorities presently taxing the Project or the operation thereof
or by other taxing authorities subsequently created, or otherwise, and any other
taxes and assessments attributable to or assessed against all or any part of the
Project or its operation: including any reasonable expenses, including fees and
disbursements of attorneys, tax consultants, arbitrators, appraisers, experts
and other witnesses, incurred by Landlord in contesting any taxes or the
assessed valuation of all or any part of the Project. If at any time during the
Term there shall be levied, assessed, or imposed on Landlord or all or any part
of the Project by any governmental entity any general or special ad valorem or
other charge or tax directly upon rents received under leases, or if any fee,
tax, assessment, or other charge is imposed which is measured by or based, in
whole or in part, upon such rents, or if any charge or tax is made based
directly or indirectly upon the transactions represented by leases or the
occupancy or use of the Project or any portion thereof, such taxes, fees,
assessments or other charges shall be deemed to be Taxes; provided, however,
that any (a) franchise, corporation, income or net profits tax, unless
substituted for real estate taxes or imposed as additional charges in connection
with the ownership of the Project, which may be assessed against Landlord or the
Project or both, (b) transfer taxes assessed against Landlord or the Project or
both, (c) penalties or interest on any late payments of Landlord, and (d)
personal property taxes of Tenant or other tenants in the Project, shall be
excluded from Taxes. If, as of the Commencement Date, the Project has not been
fully assessed as a completed project, for purposes of computing the Operating
Costs (including the Operating Costs for the Base Year), Taxes shall be adjusted
to reflect full completion and occupancy of the Project. If any or all of the
Taxes paid hereunder are by law permitted to be paid in installments,
notwithstanding how Landlord pays the same, then, for purposes of calculating
Operating Costs, such Taxes shall be deemed to have been divided and paid in the
maximum number of installments permitted by law, and there shall be included in
Operating Costs for each year only such installments as are required by law to
be paid within such year, together with interest thereon and on future such
installments as provided by law; (f) Legal and accounting costs incurred by
Landlord or paid by Landlord to third parties (exclusive of legal fees with
respect to disputes with individual tenants, negotiations of tenant leases, or
with respect to the ownership rather than the operation of the Project),
appraisal fees, consulting fees, all other professional fees and disbursements
and all association dues; (g) Cost of non-capitalized repairs and general
maintenance for the Project (excluding repairs and general maintenance paid by
proceeds of insurance or by Tenant, other tenants of the Project or other third
parties); (h) Amortization of the cost of improvements or equipment which are
capital in nature and which (i) are for the purpose of reducing Operating Costs
for the Project, up to the amount saved as a result of the

                                      -11-
<PAGE>

installation thereof, as reasonably estimated by Landlord, or (ii) are required
by any governmental authority, or (iii) replace any Building equipment needed to
operate the Project at the same quality levels as prior to the replacement. All
such costs, including interest thereon, shall be amortized on a straight-line
basis over the useful life of the capital investment items, as reasonably
determined by Landlord, but in no event beyond the reasonable useful life of the
Project as a first class office project; (i) the Project management office rent
or rental value; (j) a management fee of three percent (3%) of revenues from the
Building (whether or not Landlord engages a manager for the Project or manages
the Project with Landlord's personnel) and all items reimbursable to the Project
manager, if any, pursuant to any management contract for the Project; and (k)
amounts payable to any associations created under any instruments of record
affecting the Building or the Land, as amended from time to time.

             B. "Operating Costs" shall not include (a) specific costs for any
capital repairs, replacements or improvements, except as provided above; (b)
expenses for which Landlord is reimbursed or indemnified (either by an insurer,
condemnor, tenant, warrantor or otherwise), to the extent of funds received by
Landlord; (c) expenses incurred in leasing or procuring tenants (including lease
commissions, advertising expenses and expenses of renovating space for tenants);
(d) payments for rented equipment, the cost of which would constitute a capital
expenditure not permitted pursuant to the foregoing if the equipment were
purchased; (e) interest or amortization payments on any mortgages; (f) net basic
rents under ground leases; (g) costs representing an amount paid to an affiliate
of Landlord which is in excess of the amount which would have been paid in the
absence of such relationship; (h) costs specifically billed to and paid by
specific tenants; (i) damage and repairs to the extent actually covered under
any insurance policy carried by Landlord in connection with the Building, Common
Areas or Parking Facilities; (j) Landlord's general overhead expenses not
related to the Building, Common Areas or Parking Facility; (k) costs (including
permit, license and inspection fees) incurred in renovating or otherwise
improving, decorating, painting or altering space for other tenants or other
occupants of the vacant space within the Building; or (l) costs incurred due to
a violation by Landlord or any other tenant in the Building of the terms and
conditions of any lease. There shall be no duplication of costs or reimbursement
Operating Costs attributable to the Common Areas or Parking Facilities in
general will be equitably prorated among all of the buildings in the Project and
Tenant shall be responsible for Tenant's Share of those costs attributable to
the Building. In the event of any dispute as to the amount of Tenant's Share of
Operating Costs, Tenant or an accounting firm selected by Tenant and reasonably
satisfactory to Landlord (billing hourly and not on a contingency fee basis)
will have the right, by prior written notice ("Audit Notice") given within sixty
(60) days ("Audit Period") following receipt of Landlord's annual reconciliation
("Actual Statement") and at reasonable times during normal business hours, to
audit Landlord's accounting records with respect to Operating Costs relative to
the year to which such Actual Statement relates at the offices of Landlord's
property manager. In no event will Landlord or its property manager be required
to (i) photocopy any accounting records or other items or contracts, (ii) create
any ledgers or schedules not already in existence, (iii) incur any costs or
costs relative to such inspection, or (iv) perform any other tasks other than
making available such accounting records as aforesaid. Neither Tenant nor its
auditor may leave the offices of Landlord's property manager with copies of any
materials supplied by Landlord. Tenant must pay its Share of Operating Costs
when due pursuant to the terms of this Lease and may not withhold payment of
Operating Costs or any other rent pending results of the audit or during a
dispute regarding Operating Costs. The audit must be completed within thirty
(30) days

                                      -12-
<PAGE>

of the date of Tenant's Audit Notice and the results of such audit
shall be delivered to Landlord within forty-five (45) days of the date of
Tenant's Audit Notice. If Tenant does not comply with any of the aforementioned
time frames, then such Actual Statement will be conclusively binding on Tenant.
If such audit or review correctly reveals that Landlord has overcharged Tenant
then within thirty (30) days after the results of such audit are made available
to Landlord, Landlord agrees to reimburse Tenant the amount of such overcharge.
If the audit reveals that Tenant was undercharged, then within thirty (30) days
after the results of the audit are made available to Tenant, Tenant agrees to
reimburse Landlord the amount of such undercharge. In all cases, Tenant agrees
to pay the cost of such audit Tenant agrees to keep the results of the audit
confidential and will cause its agents, employees and contractors to keep such
results confidential. To that end, Landlord may require Tenant and its auditor
to execute a confidentiality agreement provided by Landlord.

         5.3 If The Building is not fully occupied (meaning ninety-five percent
(95%) of the Net Rentable Area of the Building) during any full or fractional
year of the Term, the actual Operating Costs shall be adjusted for such year to
an amount which Landlord estimates would have been incurred in Landlord's
reasonable judgment had the Building been ninety-five percent (95%) occupied.

         5.4 If during the Term any change occurs in either the number of square
feet of the Net Rentable Area of the Premises or of the Net Rentable Area of the
Building, Tenant's Share of Operating Costs shall be adjusted, effective as of
the date of any such change. Landlord shall promptly notify Tenant in writing of
such change and the reason therefor. Any changes made pursuant to this Section
5.4 shall not alter the computation of Operating Costs as provided in this
Article 5, but, on and after the date of any such change, Tenant's Operating
Costs Payment pursuant to Section 5.1A shall be computed upon Tenant's Share
thereof, as adjusted. If such estimated payments of Tenant's Share are so
adjusted during a year, a reconciliation payment for Tenant's Share of Operating
Costs pursuant to this Article 5 for the calendar year in which such change
occurs shall be computed pursuant to the method set forth in Section 5.1B, such
computation to take into account the daily weighted average of Tenant's Share of
Operating Costs during such year.

                                   ARTICLE VI
                                     PARKING

         6.1 Subject to the terms hereof, Landlord hereby grants to Tenant,
throughout the Term of this Lease, a license to use in common with other tenants
and with the public the Parking Facility and shall issue Parking Permits for
such use. Each unassigned Parking Permit shall entitle Tenant to one (1)
unassigned parking space in the Parking Facility. Each reserved Parking Permit
shall entitle Tenant to one (1) reserved parking space in the Parking Facility
in a location to be designated by Landlord from time to time. Any costs incurred
by Landlord to designate Tenant's reserved parking spaces as reserved for Tenant
shall be paid by Tenant, as additional rent, within ten (10) days after Tenant's
receipt of an invoice therefor. All such parking shall be free of charge
throughout the initial Lease Term. Thereafter, Landlord shall have the right to
charge Tenant for all such parking to the extent that landlords of buildings
comparable to the Building in the general vicinity of the Building are charging
their tenants for comparable parking privileges; provided, however, that any
such parking charge parable by

                                      -13-
<PAGE>

Tenant hereunder shall not exceed the prevailing rate charged by such landlords
of comparable buildings for comparable parking privileges. The number of Parking
Permits to be issued to Tenant is set forth in Section 1.1P. Landlord shall not
be obligated to provide Tenant with any additional Parking Permits. If Tenant
fails to observe the Rules and Regulations with respect to the Parking Facility,
then Landlord, at its option, shall have the right to treat such failure as a
default under this Lease and to terminate Tenant's Parking Permits, without
legal process, and to remove Tenant's vehicles and those of its employees,
licensees or invitees and all of Tenant's personal property from the Parking
Facility. If all or any portion of the Parking Facility shall be damaged or
rendered unusable by fire or other casualty or any taking pursuant to eminent
domain proceeding (or deed in lieu thereof), and as a result thereof Landlord or
the garage operator is unable to make available to Tenant the parking provided,
for herein, then the number of cars which Tenant shall be entitled to park
hereunder shall be proportionately reduced so !hat the number of cars which
Tenant may park in the Parking Facility after the casualty or condemnation in
question shall bear the same ratio to the total number of cars which can be
parked in the Parking Facility at such time as the number of cars Tenant had the
right to park in the Parking Facility prior to such casualty condemnation bore
to the aggregate number of cars which could be parked therein at that time.

                                  ARTICLE VII
                             UTILITIES AND SERVICES

         7.1 A. During the Term, Landlord shall furnish Tenant with the
following services: (a) hot and cold water in Building Standard bathrooms and
chilled water in Building Standard drinking fountains; (b) heating, ventilating
or air-conditioning, as appropriate, during Business Hours at such temperatures
and in such amounts as customarily and seasonally provided to tenants occupying
comparable space in first-class office buildings in the San Diego Corporate
Center of Del Mar Heights office submarket area ("Comparison Area"); (c)
electric lighting for the Common Areas of the Project; (d) passenger elevator
service, in Common with others for access to and from the Premises twenty-four
(24) hours per day, seven (7) day per week; provided, however, that Landlord
shall have the right to limit the number of (but not cease to operate all)
elevators to be operated after Business Hours and on Saturdays, Sundays and
Holidays; (e) janitorial cleaning services; (f) facilities for Tenant's loading,
unloading, delivery and pick-up activities, including access thereto during
Business Hours, subject to the Rules and Regulations, the type of facilities,
and other limitations of such loading facilities; and (g) replacement, as
necessary, of all Building Standard lamps and ballasts in Building Standard
light fixtures within the Premises. All services referred to in this Section
7.1A shall be provided by Landlord and paid for by Tenant as part of Tenant's
Operating Costs Payment.

             B. If Tenant requires air-conditioning, heating or other services,
including cleaning services, routinely supplied by Landlord for hours or days in
addition to the hours and days specified in Section 7.1A, Landlord shall make
reasonable efforts to provide such additional service after reasonable prior
written request therefor from Tenant, and Tenant shall reimburse Landlord for
the cost of such additional service plus an administrative fee of ten percent
(10%). Landlord shall have no obligation to provide any additional service to
Tenant at any time Tenant is in default under this Lease unless Tenant pays to
Landlord, in advance, the cost of such additional service. If any machinery or
equipment which generates abnormal heat or otherwise creates unusual demands on
the air-conditioning or heating system serving the Premises is used

                                      -14-
<PAGE>

in the Premises and if Tenant has not, within five (5) days after demand from
Landlord, taken such steps, at Tenant's expense, as shall be necessary to cease
such adverse affect on the air-conditioning or heating system, Landlord shall
have the right to install supplemental air-conditioning or heating units in the
Premises, and the fun cost of such supplemental units (including the cost of
acquisition, installation, operation, use and maintenance thereof) shall be paid
by Tenant to Landlord in advance or on demand. Subject to Tenant's compliance
with the terms of Article 10 of this Lease, Tenant shall have the right to
install a supplemental HVAC unit on the roof of the Building without additional
charge. Said HVAC unit shall be installed, operated, screened, maintained,
repaired and removed at the sole expense of Tenant.

             C. All charges for electricity used within the Premises shall be
separately metered and billed directly to Tenant by the electricity supplier.
Tenant therefore covenants to contract directly with the electricity supplier
for service to the Premises; and at its sole cost and expense, shall pay all
service establishment fees, other service fees which may be imposed by the
supplier in conjunction with its service to Tenant, and all charges for electric
current used by Tenant during the Term of this Lease within the Premises. Tenant
shall make all such payments directly to the electricity supplier as and when
bills are rendered. Should Tenant fail to pay such amounts, Landlord shall have
the right to pay same on Tenant's behalf and Tenant shall reimburse Landlord for
all costs and expenses incurred by Landlord in conjunction with such payment
within ten (10) days after demand therefor. All such costs and expenses incurred
by Landlord on Tenant's behalf shall be deemed Additional Rent payable by Tenant
and collectible by Landlord as such. Notwithstanding any contrary provision
herein, Tenant acknowledges that in addition to the foregoing charges, Tenant's
Share of electricity charges for the Common Areas of the Project shall be
included as part of Tenant's Share of Operating Costs, Throughout the Term,
Tenant shall keep its electricity meter and appurtenant equipment in good
working order and condition, and shall repair and if necessary, replace same at
Tenant's sole cost and expense should Tenant fail to so repair and maintain the
meter and equipment, Landlord may, but shall have no obligation to, cause such
meter and equipment to be repaired or replaced at Tenant's sole cost and
expense, in which event Tenant shall pay to Landlord as Additional Rent, all
costs and expenses incurred by Landlord in conjunction with maintenance, repair
and/or replacement of the electricity meter and equipment. Any such amounts
shall be due and payable by Tenant within ten (10) days after demand therefor
from Landlord. At no time shall use of electricity in the Premises exceed the
capacity of existing feeders and risers to or wiring in the Premises. Any risers
or wiring to meet Tenant's excess electrical requirements shall, upon Tenant's
written request, be installed by Landlord, at Tenant's sole cost, if, in
Landlord's reasonable judgment, the same are necessary and shall not (i) cause
permanent damage or injury to the Project, the Building or, the Premises, (ii)
cause or create a dangerous or hazardous condition, (iii) entail excessive or
unreasonable alterations, repairs or expenses, or (iv) interfere with or disturb
other tenants or occupants of the Building.

         7.2 Landlord's obligation to furnish the utility services specified
herein shall be subject to the rules and regulations of the supplier of such
electricity of other utility services and the rules and regulations of any
municipal or other governmental authority regulating the business of providing
electricity and other utility services. Landlord shall have the right, at
Landlord's option, upon not less than thirty (30) days' prior written notice to
Tenant (provided such prior notice will be less if either the discontinuance of
such service is required by applicable law or Landlord receives shorter notice
from the utility company providing electricity or other

                                      -15-
<PAGE>

utility service), to discontinue utility services to the Premises and arrange
for a direct connection thereof through a public utility supplying such service.
If Landlord gives such notice of discontinuance, Landlord shall make all
necessary arrangements with the public utility supplying such utility service
directly to the Building to furnish such utility service to the Premises, and,
unless prohibited by law or regulations of such public utility, Landlord shall
not discontinue such utility service to the Premises until such public utility
is ready to supply service to the Premises, Tenant shall, however, be
responsible for contracting promptly and directly with such public utility
supplying such service and for paying all deposits for, and all costs relating
to, such service.

         7.3 No failure to furnish, or any stoppage of, the services referred to
in this Article 7 resulting from any, cause shall make Landlord liable in any
respect for damages to any person, property or business, or be construed as an
eviction of Tenant, or entitle, except as expressly provided below in Section
7.4, Tenant to any abatement of Rent or other relief from any of Tenant's
obligations under this Lease. Should any malfunction of any systems or
facilities occur within the Project or should maintenance or alterations of such
systems or facilities become necessary, Landlord shall repair the same promptly
and with reasonable diligence, and Tenant shall have no claim for rebate,
abatement of Rent, or damages because of malfunctions or any such interruptions
in service. Tenant hereby waives the provisions of California Civil Code Section
1932(1) or any other applicable existing or future law, ordinance or
governmental regulation permitting the termination of this Lease due to an
interruption, failure or inability to provide any services.

         7.4 Notwithstanding anything above to the contrary, in the event that
Tenant is prevented from using, and does not use, the Premises or any portion
thereof, as a result of any failure to provide services to the Premises (an
"ABATEMENT EVENT"), then Tenant shall give Landlord notice ("ABATEMENT NOTICE")
of such Abatement Event, and if such Abatement Event continues beyond the
"Eligibility Period" (as that term is defined below), then the Base Rent and
Tenant's Share of Operating Costs and Tenant's obligation to pay for parking (if
any) shall be abated entirely or reduced, as the case may be, after expiration
of the Eligibility Period for such time that Tenant continues to be so prevented
from using, and does not use, the Premises or a portion thereof, in the
proportion that the rentable area of the portion of the Premises that Tenant is
prevented from using, and does not use, bears to the total rentable area of the
Premises; provided, however, in the event that Tenant is prevented from using,
and does not use, a portion of the Premises for a period of time in excess of
the Eligibility Period and the remaining portion of the Premises is not
sufficient to allow Tenant to effectively conduct its business therein, and if
Tenant does not conduct its business from such remaining portion, then for such
time after expiration of the Eligibility Period during which Tenant is so
prevented from effectively conducting its business therein, the Base Rent and
Tenant's Share of Operating Costs and Tenant's obligation to pay for parking (if
any) for the entire Premises shall be abated entirely for such time as Tenant
continues to be so prevented from using, and does not use the Premises. If,
however, Tenant reoccupies any portion of the Premises during such period, the
rent allocable to such reoccupied portion, based on the proportion that the
rentable area of such reoccupied portion of the Premises bears to the total
rentable area of the Premises, shall be payable by Tenant from the date Tenant
reoccupies such portion of the Premises. The term "ELIGIBILITY PERIOD" shall
mean a period of three (3) consecutive business days after Landlord's receipt of
any Abatement Notice(s). Such right to abate Base Rent and Tenant's Share of
Operating Costs

                                      -16-
<PAGE>

shall be Tenant's sole and exclusive remedy at law or in equity
for an Abatement Event. This paragraph shall not apply in case of damage to, or
destruction of, the Premises or the Building, or any eminent domain proceedings
which shall be governed by separate provisions of this Lease.

                                  ARTICLE VIII
                            ASSIGNMENT AND SUBLETTING

         8.1 Neither Tenant nor its legal representatives or successors in
interest shall, by operation of law or otherwise, assign, mortgage, pledge,
encumber or otherwise transfer this Lease or any part hereof, or the interest of
Tenant under this Lease, or in any sublease or the rent thereunder. The Premises
or any part thereof shall not be sublet, occupied or used for any purpose by
anyone other than Tenant, without Tenant's obtaining in each instance the prior
written consent of Landlord in the manner hereinafter provided. As indicated in,
and subject to, Section 8.4 below, Landlord's consent shall not be unreasonably
withheld, conditioned or delayed. Tenant shall not modify, extend, or amend a
sublease previously consented to by Landlord without obtaining Landlord's prior
written consent thereto.

         8.2 An assignment of this Lease shall be deemed to have occurred (a)
if, in a single transaction or in a series of transactions, a more than 50%
interest in Tenant, any guarantor of this Lease, or any subtenant (whether
stock, partnership, interest or otherwise) is transferred, diluted, reduced, or
otherwise affected with the result that the present holder or owners of Tenant,
such guarantor, or such subtenant have less than a 50% interest in Tenant, such
guarantor or such subtenant, or (b) if Tenant's obligations under this Lease are
taken over or assumed in consideration of Tenant leasing space in another office
building. The transfer of the outstanding capital stock of any corporate Tenant,
guarantor or subtenant through the "over-the-counter" market or any recognized
national securities exchange (other than by persons owning 5% or more of the
voting calculation of such 50% interest of clause 8.2(a) above) shall not be
included in the calculation of such 50% interest in clause (a) above.

         8.3 Notwithstanding anything to the contrary in Section 8.1, Tenant
shall have the right, upon notice to Landlord, to (a) sublet all or part of the
Premises to any related corporation or other entity which controls Tenant, is
controlled by Tenant or is under common control with Tenant; or (b) assign this
Lease to a successor corporation into which or with which Tenant is merged or
consolidated or which acquired substantially all of Tenant's assets and
property; provided that (i) such successor corporation assumes substantially all
of the obligations and liabilities of Tenant and shall have assets,
capitalization and net worth at least sufficient to perform the obligations of
Tenant under this Lease, accounting for the obligations assumed by such
successor in such transaction, and (ii) Tenant shall provide in its notice to
Landlord the information required in Section 8.4. No such transaction shall
operate to release Tenant from any liability under this Lease. For the purpose
hereof "control" shall mean ownership of not less than 50% of all the voting
stock or legal and equitable interest in such corporation or entity.

         8.4 If Tenant should desire to assign this Lease or sublet the Premises
(or any part thereof), Tenant shall give Landlord written notice no later than
the time required for notice under Section 8.3 in the case of an assignment or
subletting, or thirty (30) days in advance of the proposed effective date of any
other proposed assignment or sublease, specifying (a) the name, current address,
and business of the proposed assignee or sublessee, {b) the amount "and

                                      -17-
<PAGE>

location of the space within the Premises proposed to be so subleased, (c) the
proposed effective date and duration of the assignment or subletting, and (d)
the proposed rent or consideration to be paid to Tenant by such assignee or
sublessee. Tenant shall promptly supply Landlord with financial statements and
other information as Landlord may reasonably request to evaluate the proposed
assignment or sublease. For assignments and sublettings other than those
permitted by Section 8.3, Landlord shall have fifteen (15) days following
receipt of such notice and other information requested by Landlord within which
to notify Tenant in writing that Landlord elects: (i) to terminate this Lease as
to the space so affected as of the proposed effective date set forth in Tenant's
notice, in which event Tenant shall be relieved of all further obligations
hereunder as to such space, except for obligations under Articles 17, 19 and 22
and all other provisions of this Lease which expressly survive the termination
hereof; or (ii) to permit Tenant to assign or sublet such space; provided,
however, that, if the rent rate agreed upon between Tenant and its proposed
subtenant is greater than the rent rate that Tenant must pay Landlord hereunder
for that portion of the Premises, or if any consideration shall be promised to
or received by Tenant in connection with such proposed assignment or sublease
(in addition to rent), then fifty percent (50%) of such excess rent and other
consideration shall be considered Additional Rent owed by Tenant to Landlord
(less brokerage commissions, attorneys' fees and other disbursements reasonably
incurred by Tenant for such assignment and subletting if acceptable evidence of
such disbursements is delivered to Landlord), and shall be paid by Tenant to
Landlord in the case of excess rent, in the same manner that Tenant pays Base
Rent and, in the case of any other consideration, within ten (10) Business Days
after receipt thereof by Tenant; or (iii) to refuse, in Landlord's reasonable
discretion, to consent to Tenant's assignment or subleasing of such space and to
continue this Lease in full force and effect as to the entire Premises. Landlord
cannot unreasonably withhold, condition or delay its consent, but the parties
agree that Landlord may reasonably refuse to consent to an assignment or
subletting if the proposed assignee or subtenant is not financially
creditworthy, is a governmental authority or agency, an organization or person
enjoying sovereign or diplomatic immunity, a medical or dental practice or a
user that will attract a volume, frequency or type of visitor or employee to the
Building which is not consistent with the standards of a high quality office
building or that will impose an excessive demand on or use of the facilities or
services of the Building. It shall also be reasonable for Landlord to refuse to
consent to any assignment or subletting if (x) Tenant is then in default under
this Lease, or (y) such assignment of subletting would cause a default under
another lease in the Building or under any ground lease, deed of trust,
mortgage, restrictive ,covenant, easement or other encumbrance affecting the
Project. If Landlord should fail to notify Tenant in writing of such election
within the aforesaid fifteen (15) day period, Landlord shall be deemed to have
elected option (iii) above. Tenant agrees to reimburse Landlord for reasonable
legal fees and any other reasonable costs incurred by Landlord in connection
with any permitted assignment or subletting and such payment shall not be
deducted from the Additional Rent owed to Landlord pursuant to subsection (ii)
above. Tenant shall deliver to Landlord copies of all documents executed in
connection with any permitted assignment or subletting, which documents shall be
in form and substance reasonably satisfactory to Landlord and which shall
require any assignee to assume performance of all terms of this Lease to be
performed by Tenant or any subtenant to comply with all the terms of this Lease
to be performed by Tenant. No acceptance by Landlord of any Rent or any other
sum of money from any assignee, sublessee or other category of transferee shall
be deemed to constitute Landlord's consent to any assignment, sublease, or
transfer.

                                      -18-
<PAGE>

         8.5 Any attempted assignment or sublease by Tenant in violation of the
terms and provisions of this Article 8 shall be void and shall constitute a
material breach of this Lease. In no event, shall any assignment, subletting or
transfer, whether or not with Landlord's consent, relieve Tenant of its primary
liability under this Lease for the entire Term, and Tenant shall in no way be
released from the full and complete performance of all the terms hereof. If
Landlord takes possession of the Premises before the expiration of the Term of
this Lease, Landlord shall have the right, at its option, to terminate all
subleases, or to take over any sublease of the Premises or any portion thereof
and such subtenant shall attorn to Landlord, as its landlord, under all the
terms and obligations of such sublease occurring from and after such date, but
excluding previous acts, omissions, negligence, or defaults of Tenant and any
repair or obligation in excess of available net insurance proceeds or
condemnation award.

         8.6 A. Tenant acknowledges that this Lease is a lease of nonresidential
real property and therefore agrees that Tenant, as the debtor in possession, or
the trustee for Tenant (collectively the "Trustee") in any proceeding under
Title 11 of the United State Bankruptcy Code relating to Bankruptcy, as amended
(the "Bankruptcy Code"), shall not seek or request any extension of time to
assume or reject this Lease or to perform any obligations of this Lease which
arise from or after the order of relief.

             B. The Trustee shall have the right to assume or assign Tenant's
rights and obligations under this Lease only if the Trustee: (a) promptly cures
or provides adequate assurance that the Trustee will promptly cure any default
under the Lease; (b) compensates or provides adequate assurance that the Trustee
will promptly compensate Landlord for any actual pecuniary loss incurred by
Landlord as a result of Tenant's default under this Lease; and (c) provides
adequate assurance of future performance under the Lease. All payments of Rent
required of Tenant under this Lease, whether or not expressly denominated as
such in this Lease, shall constitute rent for the purposes of Title 11 of the
Bankruptcy Code.

         8.7 The term "Landlord," as used in this Lease, so far as covenants or
obligations on the part of Landlord are concerned, shall be limited to mean and
include only the owner or owners, at the time in question, of the fee title to,
or a lessee's interest in a ground lease of, the Land or the Building. In the
event of any transfer, assignment or other conveyance or transfers of any such
title or interest, Landlord herein named (and in case of any subsequent
transfers or conveyances, the then grantor) shall be automatically freed and
relieved from and after the date of such transfer, assignment or conveyance of
all liability as respects the performance of any covenants or obligations on the
part of Landlord contained in this Lease thereafter to be performed and, without
further agreement, the transferee of such title or interest shall be deemed to
have assumed and agreed to observe and perform any and all obligations of
Landlord hereunder, during its ownership of the Project. Landlord may transfer
its interest in the Project without the consent of Tenant and such transfer or
subsequent transfer shall not be deemed a violation on Landlord's part of any of
the terms of this Lease.

                                   ARTICLE IX
                                     REPAIRS

         9.1 Landlord agrees to repair and maintain the structural portions of
the Building and the plumbing, heating, ventilating, air conditioning and
electrical systems installed or furnished

                                      -19-
<PAGE>

by Landlord, unless such maintenance and repairs are (i) attributable to items
installed in the Premises by Tenant or which are above standard interior
improvements (such as, for example, custom lighting, special HVAC and/or
electrical panels or systems, kitchen or restroom facilities and appliances
constructed or installed within the Premises) or (ii) caused by the negligence
or willful misconduct or gross negligence of Tenant or its agents, contractors,
invitees and licensees, in which case Tenant will pay to Landlord, as additional
rent, the cost of such maintenance and repair plus a fee equal to ten percent
(10%) of the actual costs to cover overhead and a fee for Landlord's agent or
manager. Amounts payable by Tenant pursuant to this Section 9.1 shall be payable
on demand after receipt of an invoice therefor from Landlord. Landlord has no
obligation and has made no promise to maintain, alter, remodel, improve, repair,
decorate, or paint the Premises or any part thereof, except as specifically set
forth in this Lease. In no event shall Landlord have any obligation to maintain,
repair or replace any furniture, furnishings, fixtures or personal property of
Tenant. Tenant hereby waives the provisions of California Civil Code Sections
1932(1), 1941 and 1942 and of any similar law, statute or ordinance now or
hereafter in effect.

         9.2 Tenant shall keep the Premises (including the Leasehold
Improvements) in good order and in a safe, neat and clean condition, and, when
and if needed, at Tenant's sole cost and expense, shall make all repairs to the
Premises and every part thereof. No representations respecting the condition of
the Premises or the Building or the other portions of the Project have been made
by Landlord to Tenant except as specifically set forth in this Lease. In the
event Tenant fails to promptly commence and diligently pursue the performance of
such maintenance or the making of such repairs or replacements, then Landlord,
at its option, may perform such maintenance or make such repairs and Tenant
shall reimburse Landlord, on demand after Tenant receives an invoice therefor,
the cost thereof plus a fee equal to fifteen percent (15%) of the actual costs
to cover overhead and a fee for Landlord's agent or manager.

         9.3 All repairs made by Tenant pursuant to Section 9.2 shall be
performed in a good and workmanlike manner by contractors or other repair
personnel selected by Tenant from an approved list of contractors and repair
personnel maintained by Landlord in the Project's management office; provided,
however, that neither Tenant nor its contractors or repair personnel shall be
permitted to do any work affecting the Central Systems. In no event shall such
work be done for Landlord's account or in a manner which allows any liens to be
filed in violation of Article 11. To the extent any repairs involve the making
of alterations to the Premises, Tenant shall comply with the provisions of
Article 10.

         9.4 Subject to the other provisions of this Lease imposing obligations
regarding repair upon Tenant, Landlord shall repair all machinery and equipment
necessary to provide the services of Landlord described in Article 7 (provided
that Tenant shall pay the costs of any repair to such systems or any part
thereof damaged by Tenant and Tenant's employees, customers, clients, agents,
licensees and invitees) and for repair of all portions of the Project which do
not comprise a part of the Premises and are not leased to others.

                                      -20-
<PAGE>

                                   ARTICLE X
                                   ALTERATIONS

         10.1 Tenant shall not at any time during the Term make any alterations
to the Premises without first obtaining Landlord's written consent thereto,
which consent Landlord shall not reasonably withhold or delay; provided,
however, that Landlord shall not be deemed unreasonable by refusing to consent
to any alterations which are visible from the exterior of the Building or the
Project, which will or are likely to cause any weakening of any part of the
structure of the Premises, the Building or the Project or which will or are
likely to cause damage or disruption to the Central Systems or which are
prohibited by any underlying ground lease or mortgage. Notwithstanding the
foregoing, Landlord's prior approval will not be required for any cosmetic,
alterations to the interior of the Premises which are not visible from the
exterior of the Premises which are either cosmetic in nature (such as floor or
wall coverings) or are nonstructural in nature and do not affect any Central
Systems and cost less than Five Thousand Dollars ($5,000), provided Landlord
receives prior notice thereof and the other conditions set forth in this Article
X are satisfied. Should Tenant desire to make any alterations to the Premises,
Tenant shall submit all plans and specifications for such proposed alterations
to Landlord for Landlord's review before Tenant allows any such work to
commence, and Landlord shall promptly approve or disapprove such plans and
specifications for any of the reasons set forth in this Section 10.1 or for any
other reason reasonably deemed sufficient by Landlord. Tenant shall select and
use only contractors, subcontractors or other repair personnel from those listed
on Landlord's approved list maintained by Landlord in the Project management
office. Upon Tenant's receipt of written approval from Landlord, and upon
Tenant's payment to Landlord of a reasonable fee prescribed by Landlord for the
work of Landlord and Landlord's employees and representatives in reviewing and
approving such plans and specifications, Tenant shall have the right to proceed
with the construction of all approved alterations, but only so long as such
alterations are in strict compliance with the plans and specifications so
approved by Landlord and with the provisions of this Article 10. All alterations
shall be made at Tenant's sole cost and expense, either by Tenant's contractors
or, at Tenant's option, by Landlord on terms reasonably satisfactory to Tenant,
including a fee of ten percent (10%) of the actual costs of such work to cover
Landlord's overhead and a fee for Landlord's agent or manager in supervising and
coordinating such work. In no event, however, shall anyone other than Landlord
or Landlord's employees or representatives perform work to be done which affects
the Central Systems.

         10.2 All construction, alterations and repair work done by or for
Tenant shall (a) be performed in such a manner as to maintain harmonious labor
relations; (b) not adversely affect the safety of the Project, the Building or
the Premises or the systems thereof and not affect the Central Systems; (c)
comply with all building, safety, fire, plumbing, electrical, and other codes
and governmental and insurance requirements; (d) not result in any usage in
excess of Building Standard of water; electricity, gas, or other utilities or of
heating, ventilating or air-conditioning (either during or after such work)
unless prior written arrangements satisfactory to Landlord are made with respect
thereto; (e) be completed promptly and in a good and workmanlike manner and in
compliance with all rules and regulations promulgated by Landlord; and (f) not
disturb Landlord or other tenants in the Building. After completion of any
alterations to the Premises, Tenant will deliver to Landlord a copy of "as
built" plans and specifications depicting and describing such alterations.

                                      -21-
<PAGE>

         10.3 All Leasehold Improvements, alterations and other physical
additions made to or installed by or for Tenant in the Premises shall be and
remain Landlord's property (except for Tenant's furniture, personal property and
movable trade fixtures) and shall not be removed without Landlord's written
consent; provided, however, Landlord may, by notice to Tenant given concurrently
with Landlord's approval of any alterations or physical additions made to the
Premises after the Commencement Date, elect to require Tenant to remove same
upon the expiration or earlier termination of the Term of this Lease. Tenant
agrees to remove, at its sole cost and expense, all of Tenant's furniture,
personal property and movable trade fixtures, and, if directed to or permitted
to do so by Landlord in writing, all, or any part of, the alterations and other
physical additions made by Tenant to the Premises, on or before the Expiration
Date or any earlier date of termination of this Lease. Tenant shall repair, or
promptly reimburse Landlord for the cost of repairing, all damage done to the
Premises or the Building by such removal. Any alterations or physical additions
made by Tenant which Landlord does not direct or permit Tenant to remove at any
time during or at the end of the Term shall become the property of Landlord at
the end of the Term without any payment to Tenant. Landlord reserves the right
to require Tenant to remove any alterations or physical additions made by Tenant
to which Landlord did not expressly consent. If Tenant fails to remove any of
Tenant's furniture, personal property or movable trade fixtures by the
Expiration Date or any sooner date of termination of the Lease or, if Tenant
fails to remove any alterations and other physical additions made by Tenant to
the Premises which Landlord has in writing directed Tenant to remove, Landlord
shall have the right, on the fifth (5th) day after Landlord's delivery of
written notice to Tenant to deem such property abandoned by Tenant and to
remove, store, sell, discard or otherwise deal with or dispose of such abandoned
property in a commercially reasonable manner. Tenant shall be liable for all
costs of such disposition of Tenant's abandoned property, and Landlord shall
have no liability to Tenant in any respect regarding such property of Tenant.
The provisions of this Section 10.3 shall survive the expiration or any earlier
termination of this Lease.

                                   ARTICLE XI
                                      LIENS

         11.1 Tenant shall keep the Project, the Building and the Premises and
Landlord's interest therein from any liens arising from any work performed,
materials furnished, or obligations incurred by, or on behalf of Tenant (other
than by Landlord pursuant to Exhibit "C"). Notice is hereby given that neither
Landlord nor any mortgagee or Lessor of Landlord shall be liable for any labor
or materials furnished to Tenant except as furnished to Tenant by Landlord
pursuant to Exhibit "C". If any lien is filed for such work or materials, such
lien shall encumber only Tenant's interest in leasehold improvements on the
Premises. Within ten (10) days after Tenant learns of the filing of any such
lien, Tenant shall notify Landlord of such lien and shall either discharge and
cancel such lien of record or post a bond sufficient under the laws of the State
of California to cover the amount of the lien claim plus any penalties,
interest, attorneys' fees, court costs, and other legal expenses in connection
with such lien. If Tenant fails to so discharge or bond such lien within ten
(10) calendar days after written demand from Landlord, Landlord shall have the
right, at Landlord's option, to pay the full amount of such lien without inquiry
into the validity thereof, and Landlord shall be promptly reimbursed by Tenant,
as Additional Rent, for all amounts so paid by Landlord, including expenses,
interest, and attorneys' fees.

                                      -22-
<PAGE>

                                  ARTICLE XII
                          USE AND COMPLIANCE WITH LAWS

         12.1 The Premises shall be used only for executive and administrative
offices for the uses specifically set forth in Section 1.1Q and for no other
purposes whatsoever. Tenant shall use and maintain the Premises in a clean,
careful, safe, lawful and proper manner and shall not allow within the Premises,
any offensive noise, odor, conduct or private or public nuisance or permit
Tenant's employees, agents, licensees or invitees to create a public or private
nuisance or act in a disorderly manner within the Building or in the Project.
Any statement as to the particular nature of the business to be conducted by
Tenant in the Premises and uses to be made thereof by Tenant as set forth in
Section 1.1Q hereof shall not constitute a representation or warranty by
Landlord that such business or uses are lawful or permissible under any
certificate or occupancy for the Premises or the Building or are otherwise
permitted by law. Landlord does, however, represent that any certificate of
occupancy issued with respect to the Premises shall allow use for executive and
administrative offices.

         12.2 Tenant shall, at Tenant's sole expense, (a) comply with all laws,
orders, ordinances, and regulations of federal, state, county, and municipal
authorities having jurisdiction over the Premises, (b) comply with any
directive, order or citation made pursuant to Law by any public officer
requiring abatement of any nuisance or which imposes upon Landlord or Tenant any
duty or obligation arising from Tenant's occupancy or use of the Premises or
from conditions which have been created by or at the request or insistence of
Tenant, or required by reason of a breach of any of Tenant's obligations
hereunder or by or through other fault of Tenant, (c) comply with all insurance
requirements applicable to the Premises and (d) indemnify and hold Landlord
harmless from any loss, cost, claim or expense which Landlord incurs or suffers
by reason of Tenant's failure to comply with its obligations under clauses (a),
(b) or (c) above. If Tenant receives notice of any such directive, order
citation or of any violation of any law, order, ordinance, regulation or any
insurance requirement, Tenant shall promptly notify Landlord in writing of such
alleged violation and furnish Landlord with a copy of such notice. Nothing
contained herein shall be interpreted to require Tenant to perform structural or
capital improvement work unless required due to Tenant's specific use of the
Premises as opposed to office use in general. Landlord shall be responsible for
compliance pursuant to subparagraphs (a), (b) and (c) above to the extent such
compliance relates to the Building or the Project (exclusive of the Premises),
which compliance costs shall be part of Operating Costs, subject to the terms of
Section 5.2A above. If Tenant receives notice of any such directive, order,
citation or of any violation of any law, order, ordinance, regulation or any
insurance requirement, Tenant shall promptly notify Landlord in writing of such
alleged violation and furnish Landlord with a copy of such notice.

         12.3 After completion of the Leasehold Improvements in the Premises,
Tenant shall be responsible for causing, at Tenant's sole cost and expense, the
Premises to comply with the Americans With Disabilities Act of 1990, as
subsequently amended (then ADAM), and all similar federal, state and local laws,
rules and regulations and subsequent amendments thereof. Landlord shall also be
responsible for causing the initial Leasehold Improvements to comply with the
requirements of the ADA then in effect. Landlord shall be responsible for
causing, as and when deemed appropriate by Landlord, the Common Areas to comply
with the ADA, the costs for which shall constitute a component of Operating
Costs, except to the extent such costs

                                      -23-
<PAGE>

are incurred as a result of Tenant's specific use of the Premises, or as a
result of any alterations to the Premises made by or on behalf of Tenant, in
which case such costs will be the sole responsibility of Tenant.

                                  ARTICLE XIII
                              DEFAULT AND REMEDIES

         13.1 The occurrence of any one or more of the following events shall
constitute an Event of Default (herein so called) of Tenant under this Lease:
(a) if Tenant fails to pay any Rent hereunder as and when such Rent becomes due
and such failure shall continue for more than five (5) days after Landlord gives
Tenant notice of past due Rent; (b) if an Event of Default in Tenant's
obligation to pay Rent hereunder occurs more than twice in any period of twelve
(12) months; (c) if the Premises are abandoned; (d) if Tenant permits to be done
anything which creates a lien upon the Premises and fails to discharge or bond
such lien or post such security with Landlord as is required by Article 11; (e)
if Tenant violates the provisions of Article 8 by attempting to make an
unpermitted assignment or sublease; (f) if Tenant fails to maintain in force all
policies of insurance required by this Lease and such failure shall continue for
more than ten (10) days after Landlord gives Tenant notice of such failure; (g)
if any petition is filed by or against Tenant or any guarantor of this Lease
under any present or future Section or chapter of the Bankruptcy Code, or under
any similar law or statute of the United States or any state thereof (which, in
the case of an involuntary proceeding, is not permanently discharged, dismissed,
stayed, or vacated, as the case may be, within sixty (60) days of commencement),
or if any order for relief shall be entered against Tenant or any guarantor of
this Lease in any such proceedings; (h) if Tenant or any guarantor of this Lease
becomes insolvent or makes a transfer in fraud of creditors or makes an
assignment for the benefit of creditors; (i) if a receiver, custodian, or
trustee is appointed for the Premises or for all or substantially all of the
assets of Tenant or of any guarantor of this Lease, which appointment is not
vacated within sixty (60) days following the date of such appointment; or (j) if
Tenant fails to perform or observe any other terms of this Lease and such
failure shall continue for more than thirty (30) days after Landlord gives
Tenant notice of such failure, or, if such failure cannot be corrected within
such thirty (30) day period, if Tenant does not commence to correct such default
within said thirty (30) day period .and thereafter diligently prosecute the
correction of same to completion within a reasonable time and in any event prior
to the time a failure to complete such correction could cause Landlord to be
subject to prosecution for violation of any law, rule, ordinance or regulation
or causes, or could cause, a default under any mortgage, underlying lease,
tenant leases or other agreements applicable to the Project. The provisions of
any notice given pursuant to the foregoing will be in lieu of, and not in
addition to, any notice required under applicable law (including, without
limitation, California Code of Civil Procedure Section 1161 regarding unlawful
detainer actions and any successor statute or similar law).

         13.2 If an Event of Default occurs, Landlord shall have the right at
any time to give a written termination notice to Tenant and, on the date
specified in such notice, Tenant's right to possession shall terminate and this
Lease shall terminate. Upon such termination, Landlord shall have the right to
recover from Tenant:

              A. The worth at the time of award of all unpaid Base Rent and
Additional Rent which had been earned at the time of termination;

                                      -24-
<PAGE>

              B. The worth at the time of award of the amount by which all
unpaid Base Rent and Additional Rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided;

              C. The worth at the time of award of the amount by which all
unpaid Base Rent and Additional Rent for the balance of the term of this Lease
after the time of award exceeds the amount of such rental loss that Tenant
proves could be reasonably avoided; and

              D. All other amounts necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform all of Tenant's
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom. The "worth at the time of award" of the amounts
referred to in clauses (a) and (b) above shall be computed by allowing interest
at the Interest Rate. The "worth at the time of award" of the amount referred to
in clause (c) above shall be computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%).

         Notwithstanding the occurrence of an Event of Default, pursuant to
California Civil Code Section 1951.4, or any successor statute thereof, Landlord
may continue this Lease in effect after Tenant's breach and abandonment and
recover all rent as it becomes due, if Tenant has the right to sublet or assign,
subject only to reasonable restrictions. Acts of maintenance or preservation or
efforts to relet the Premises or the appointment of a receiver upon initiative
of Landlord to protect Landlord's interest under this Lease shall not constitute
a termination of Tenant's right to possession unless written notice of
termination is given by Landlord to Tenant. The remedies provided for in this
Lease are in addition to all other remedies available to Landlord at law or in
equity by statute or otherwise.

         13.3 No agreement to accept a surrender of the Premises and no act or
omission by Landlord or Landlord's agents during the Term shall constitute an
acceptance or surrender of the Premises unless made in writing and signed by
Landlord. No re-entry or taking possession of the Premises by Landlord shall
constitute an election by Landlord to terminate this Lease unless a written
notice of such intention is given to Tenant.

         13.4 No provision of this Lease shall be deemed to have been waived by
Landlord unless such waiver is in writing and signed by Landlord. Landlord's
acceptance of Rent following an Event of Default hereunder shall not be
construed as a waiver of such Event of Default. No custom or practice which may
arise between the parties in connection with the terms of this Lease shall be
construed to waive or lessen Landlord's right to insist upon strict performance
of the terms of this Lease, without a written notice thereof to Tenant from
Landlord.

         13.5 The rights granted to Landlord in this Article 13 shall be
cumulative of every other right or remedy provided in this Lease or which
Landlord may otherwise have at law or in equity or by statute, and the exercise
of one or more rights or remedies shall not prejudice or impair the concurrent
or subsequent exercise of other rights or remedies or constitute a forfeiture or
waiver of Rent or damages accruing to Landlord by reason of any Event of Default
under this Lease. Tenant agrees to pay to Landlord all costs and expenses
incurred by Landlord in the

                                      -25-
<PAGE>

enforcement of this Lease, including all attorneys' fees incurred in connection
with the collection of any sums due hereunder or the enforcement of any right or
remedy of Landlord.

         13.6 Landlord win not be in default in the performance of any
obligation required to be performed by Landlord under this Lease unless Landlord
fails to perform such obligation within thirty (30) days after the receipt of
written notice from Tenant specifying in detail Landlord's failure to perform;
provided however, that if the nature of Landlord's obligation is such that more
than thirty (30) days are required for performance, then Landlord will not be
deemed in default if it commences such performance within such thirty (30) day
period and thereafter diligently pursues the same to completion. Upon any
default by Landlord, Tenant may exercise any of its rights provided at law or in
equity, subject to the limitations on liability set forth in Section 25.5 of
this Lease. Tenant shall also be entitled to its professional fees from Landlord
to the extent Tenant is the prevailing party in any action against Landlord as
provided in Section 25.1 hereof.

                                  ARTICLE XIV
                                   INSURANCE

         14.1 A. Tenant, at its sole expense, shall obtain and keep in force
during the Term the following insurance: (a) "All Risk" insurance insuring all
property located in the Premises, including furniture, equipment, fittings,
installations, fixtures, supplies and any other personal property, leasehold
improvements and alterations, other than the Leasehold Improvements ("Tenant's
Property"), in an amount equal to the full replacement value, it being
understood that no lack or inadequacy of insurance by Tenant shall in any event
make Landlord subject to any claim by virtue of any theft of or loss or damage
to any uninsured or inadequately insured property; (b) Business Interruption
insurance in an amount that will reimburse Tenant for direct or indirect loss of
earnings attributable to all perils insured against under Section 14.1(a) or
attributable to the prevention of access to the Premises by civil authority; and
sufficient to reimburse Tenant for Rent in the event of a casualty to, or
temporary taking of the Building or the Premises; (c) Commercial general public
liability insurance including personal injury, bodily injury, broad form
property damage, operations hazard, owner's protective coverage, contractual
liability, with a cross liability clause and a severability of interests clause
to cover Tenant's indemnities set forth herein, and products and completed
operations liability, in limits not less than $2,000,000.00 inclusive per
occurrence or such higher limits as Landlord may reasonably require from time to
time during the Term; (d) Worker's Compensation and Employer's Liability
insurance, with a waiver of subrogation endorsement, in form and amount as
required by applicable law for Worker's Compensation, and $1,000,000 per
occurrence for Employer's Liability; and (e) any other form or forms of
insurance or any changes or endorsements to the insurance required herein as
Landlord, or any mortgagee or lessor of Landlord may reasonably require, from
time to time, in form or in amount, and for insurance risks against which a
prudent tenant would protect itself, but only to the extent coverage for such
risks and amounts are available in the insurance market at commercially
acceptable rates.

              B. Tenant shall have the right to include the insurance required
by Section l4.1A under Tenant's policies of "blanket insurance," provided that
no other loss which may also be insured by such blanket insurance shall affect
the insurance coverages required hereby and further provided that Tenant
delivers to Landlord a certificate specifically stating that such

                                      -26-
<PAGE>

coverages apply to Landlord, the Premises and the Project. All policies of
insurance required by Section 14.1A(c) shall name Landlord as additional insured
and shall also name all mortgagees and lessors of Landlord, of which Tenant has
been notified, additional insureds, all as their respective interest may appear.
An such policies or certificates shall be issued by insurers reasonably
acceptable to Landlord and in form satisfactory to Landlord. Tenant shall
deliver to Landlord certificates with copies of policies, together with
satisfactory evidence of payment of premiums for such policies, by the
Commencement Date and, with respect to renewals of such policies, not later than
thirty (30) days prior to the end of the expiring term of coverage. All policies
of insurance shall be endorsed to be primary and noncontributory to any
insurance which may be carried by Landlord. All such policies shall contain an
agreement by the insurers that the insurers shall notify Landlord and any
mortgagee or lessor of Landlord in writing, by certified mail, return receipt
requested, not less than thirty (30) days before any material change, reduction
in coverage, cancellation, including cancellation for nonpayment of premium, or
other termination thereof or change therein and shall (with respect to the
insurance required by clauses (a) and (b) of Section 14.1A) include a clause or
endorsement denying the insurer any rights or subrogation against Landlord.

         14.2 Landlord shall insure the Building and Leasehold Improvements
against damage with property insurance and shall carry commercial general public
liability insurance, all in such amounts and with such deductible as Landlord
reasonably deems appropriate. Notwithstanding any contribution by Tenant to the
cost of insurance premiums, as provided hereinabove, Landlord shall not be
required to carry insurance of any kind on Tenant's Property, and Tenant hereby
agrees that Tenant shall have no right to receive any proceeds from any
insurance policies carried by Landlord.

         14.3 Tenant shall not knowingly conduct or permit to be conducted in
the Premises any activity, or place any equipment in or about the Premises or
the Building, which will invalidate the insurance coverage in effect or increase
the rate of insurance on the Premises or the Building, and Tenant shall comply
with all requirements and regulations of Landlord's insurers. If any
invalidation of coverage or increase in the rate of fire insurance or other
insurance occurs or is threatened by any insurance company due to any act or
omission by Tenant, or its agents, employees, representatives, or contractors,
such statement or threat shall be conclusive evidence that the increase in such
rate is due to such act of Tenant or the contents or equipment in or about the
Premises, and, as a result thereof, Tenant shall be liable for such increase and
shall be considered Additional Rent payable with the next monthly installment of
Base Rent due under this Lease. In no event shall Tenant introduce or permit to
be kept on the Premises or brought into the Building any dangerous, noxious,
radioactive or explosive substance.

         14.4 Landlord and Tenant each hereby waive any right of subrogation and
right of recovery or cause of action for injury or loss to the extent that such
injury or loss is covered by fire, extended coverage, "All Risk" or similar
policies covering real property or personal property (or which would have been
covered if Tenant or Landlord, as the case may be, was carrying the insurance
required by this Lease). Said waivers shall be in addition to, and not in
limitation or derogation of, any other waiver or release contained in this
Lease. Insurance policies shall be properly endorsed, if necessary, to prevent
the invalidation of said policies by reason of such waivers.

                                      -27-
<PAGE>

                                   ARTICLE XV
                          DAMAGE BY FIRE OR OTHER CAUSE

         15.1 Within sixty (60) days after the date Landlord learns of the
necessity for repairs as a result of a casualty, Landlord shall notify Tenant
("Damage Repair Estimate") of Landlord's estimated assessment of the period of
time in which the repairs will be completed, which assessment shall be based
upon the opinion of a contractor reasonably selected by Landlord and experienced
in comparable repairs of comparable buildings. If the Premises or the Building
or any portion thereof (exclusive of the Premises) is damaged or destroyed by
any casualty to the extent that, in Landlord's reasonable judgment, (a) repair
of such damage or destruction would not be economically feasible, or (b) the
damage or destruction to the Building and/or the Premises cannot be repaired
within one hundred eighty (180) days after the date Landlord learns (if the
necessity for repairs as a result of such damage or destruction, or if the
proceeds from insurance remaining after any required payment to any mortgagee or
lessor of Landlord are insufficient to repair such damage or destruction,
Landlord shall have the right, at Landlord's option, to terminate this Lease
(provided Landlord terminates, with respect to a damage or destruction to the
Building only, the leases of all of the other tenants of the Building similarly
situated) by giving Tenant notice of such termination, within sixty (60) days
after the date Landlord learns of the necessity for repairs as a result of such
damage or destruction.

         15.2 If Landlord does not elect to terminate this Lease pursuant to
Landlord's termination right as provided above, and the Damage Repair Estimate
indicates that repairs cannot be completed within one hundred eighty (180) days
after being commenced, Tenant may elect, not later than thirty (30) days after
Tenant's receipt of the Damage Repair Estimate, to terminate this Lease by
written notice to Landlord effective as of the date specified in Tenant's
notice.

         15.3 In the event of partial destruction or damage to the Building or
the Premises which is not subject to Section 15.1 or 15.2, but which renders the
Premises partially but not wholly untenantable, this Lease shall not terminate
and Rent shall be abated in proportion to the area of the Premises which cannot
be used or occupied by Tenant as a result of such casualty. Landlord shall in
such event, within a reasonable time after the date of such destruction or
damage, subject to force majeure (as defined in Section 25.6) or to Tenant Delay
and to the extent and availability of insurance proceeds, restore the Premises
to as near the same condition as existed prior to such partial damage or
destruction. If Landlord fails to proceed with reasonable diligence to rebuild
the Premises, or if the Premises are not repaired or rebuilt within one hundred
eighty (180) days, for a reason other than force majeure or Tenant Delays, then
Tenant may, at Tenant's sole option, elect to terminate this Lease upon thirty
(30) days written notice to Landlord, unless Landlord cures the failure within
such thirty (30) day period of time, in which case Tenant's termination notice
shall be of no effect. In no event shall Rent abate (except to the extent
Landlord recovers insurance therefor) or shall any termination by Tenant occur
if damage to or destruction of the Premises is the result of the negligence or
willful act of Tenant, or Tenant's agents, employees, representatives,
contractors, successors, assigns, licensees or invitees.

         15.4 If any material portion of the Premises is destroyed by fire or
other causes at any time during the last year of the Term, such that the
Premises or a material portion thereof cannot

                                      -28-
<PAGE>

be occupied for in excess of thirty (30) days as a result thereof, then either
Landlord or Tenant shall have the right, at the option of either party, to
terminate this Lease by giving written notice to the other within fifteen (15)
days after the date of such destruction.

         15.5 Landlord shall have no liability to Tenant for inconvenience, loss
of business, or annoyance arising from any repair of any portion of the Premises
or the Building, provided that Landlord shall use good faith efforts to minimize
such inconvenience, loss or annoyance. Tenant hereby waives California Civil
Code Sections 1932(2) and 1933(4), providing for termination of hiring upon
destruction of the thing hired and Sections 1941 and 1942, providing for repairs
to and of the Premises.

         15.6 In the event of termination of this Lease pursuant to Sections
15.1, 15.2 or 15.4, all Rent shall be apportioned and paid to the date on which
possession is relinquished or the date of such damage, whichever last occurs,
and Tenant shall immediately vacate the Premises according to such notice of
termination: provided, however, that those provisions of this Lease which are
designated to cover matters of termination and the period thereafter shall
survive the termination hereof.

                                  ARTICLE XVI
                                  CONDEMNATION

         16.1 In the event the whole or substantially the whole of the Building
or the Premises are taken or condemned by eminent domain or by any conveyance in
lieu thereof (such taking, condemnation or conveyance in lieu thereof being
hereinafter referred to as "condemnation"), this Lease shall terminate on the
earlier of the date the condemning authority takes possession or the date title
vests in the condemning authority.

         16.2 In the event any portion of the Building shall be taken by
condemnation (whether or not such taking includes any portion of the Premises),
which taking, in Landlord's judgment, is such that the Building cannot be
restored in an economically feasible manner for use substantially as originally
designed, then Landlord shall have the right, at Landlord's option, to terminate
this Lease (provided Landlord also terminates the leases of the other tenants of
the Building similarly situated), effective as of the date specified by Landlord
(at least sixty (60) days in the future) in a written notice of termination from
Landlord to Tenant.

         16.3 In the event any portion of the Parking Facility shall be taken by
condemnation, which taking in Landlord's judgment is such that the Parking
Facility cannot be restored in an economically feasible manner for use
substantially as originally designed, including in such consideration the
possible use of additional Parking Facility in the vicinity of the Building,
then Landlord shall have the right, at Landlord's option, to terminate this
Lease (provided Landlord also terminates the leases of the other tenants of the
Building similarly situated), effective as of the date specified by Landlord (at
least sixty (60) days in the future) in a written notice of termination from
Landlord to Tenant. In addition, Tenant shall have the right to terminate this
Lease if twenty-five percent (25%) or more of the parking spaces in the Parking
Facility is taken and Landlord does not provide reasonably suitable alternative
parking within walking distance from the Building.

                                      -29-
<PAGE>

         16.4 In the event that a portion, but less than substantially the
whole, of the Premises shall be taken by condemnation, then this Lease shall be
terminated as of the date of such condemnation as to the portion of the Premises
so taken, and unless Landlord exercises its option to terminate this Lease
pursuant to Section 16.2 or Tenant exercises its option to terminate this Lease
pursuant to this Section 16.4 below, this Lease shall remain in full force and
effect as to the remainder of the Premises. If (i) more than ten percent (10%)
of the Net Rentable Area of the Premises shall be taken by condemnation and such
condemnation renders the Premises unusable for the business of Tenant, as
reasonably determined by Tenant, or (ii) a substantial portion of the Building
or the Parking Facility is taken by condemnation rendering the Premises unusable
for the business of Tenant, as reasonably determined by Tenant, or (iii) all or
any portion of the Premises is taken by condemnation for a period in excess of
sixty (60) days, then in any such event Tenant may elect to terminate this Lease
as of the date specified by Tenant in a written notice of termination from
Tenant to Landlord, which date shall not be later than sixty (60) days following
the date of the taking. If such condemnation is not sufficiently extensive to
render the Premises unusable for the business of Tenant as reasonably determined
by Tenant, and Landlord has not elected to terminate this Lease in accordance
with the provisions of Section 16.2, 16.3 or this Section 16.4, then Landlord
shall promptly restore the Premises to a condition comparable to its condition
immediately prior to such condemnation (excluding Tenant's alterations,
furniture, fixtures and equipment), less the portion thereof lost in such
condemnation, and this Lease shall continue in full force and effect, except
that after the date of any such taking of the Premises, the Rent shall be
equitably apportioned from and after such date.

         16.5 In the event of termination of this Lease pursuant to the
provisions of Section 16.1, 16.2, or 16.3, the Rent shall be apportioned as of
such date of termination; provided, however, that those provisions of this Lease
which are designated to cover matters of termination and the period thereafter
shall survive the termination hereof.

         16.6 All compensation awarded or paid upon a condemnation of any
portion of the Project shall belong to and be the property of Landlord without
participation by Tenant. Nothing herein shall be construed, however, to preclude
Tenant from prosecuting any claim directly against the condemning authority for
loss of business, loss of good will, moving expenses, damage to, and cost of
removal of, trade fixtures, furniture and other personal property belonging to
Tenant.

         16.7 If any portion of the Project other than the Building or the
Parking Facility is taken by condemnation, or if the temporary use or occupancy
of all or any part of the Premises shall be taken by condemnation during the
Term for a period of less than sixty (60) days, this Lease shall, subject to
Section 16.4 above, be and remain unaffected by such condemnation, and Tenant
shall continue to pay in full the Rent payable hereunder. In the event of any
such temporary taking for use or occupancy of all or any part of the Premises,
Tenant shall be entitled to appear, claim, prove and receive the portion of the
award for such taking that represents compensation for use or occupancy of the
Premises during the Term and Landlord shall be entitled to appear, claim, prove
and receive the portion of the award that represents the cost of restoration of
the Premises and the use or occupancy of the Premises after the end of the Term
hereof. In the event of any such condemnation of any portion of the Project
other than the Building, Landlord shall be entitled to appear, claim, prove and
receive all of that award. In the event of any permanent taking of the Premises,
Tenant will have the right to recover from the

                                      -30-
<PAGE>

condemning authority (but not from Landlord) any compensation as may be
separately awarded or recoverable by Tenant for the taking of Tenant's
furniture, fixtures, equipment and other personal property within the Premises,
for Tenant relocation expenses, and for any loss of good will or other damage to
Tenant's business by reason of such taking, but Tenant will not be entitled to
any so-called bonus or excess value of this Lease, which will be the sole
property of Landlord.

         16.8 Landlord and Tenant each hereby waive the provisions of California
Code of Civil Procedure Section 1265.130 and any other applicable existing or
future law, ordinance or governmental regulation providing for, or allowing
either party to petition the courts of the state in which the Project is located
for, a termination of this Lease upon a partial taking of the Premises and/or
the Building.

                                  ARTICLE XVII
                                 INDEMNIFICATION

         17.1 Except as otherwise expressly provided in this Article XVII,
Tenant shall, and hereby agrees to, indemnify, defend and hold Landlord harmless
from any Claims (as such term is defined below) arising from the use or
occupancy of the Common Areas and the Premises by Tenant or any Tenant Party (as
such term is defined below). Notwithstanding the foregoing, Tenant shall not be
required to indemnify, defend, and/or hold Landlord harmless from any Claims to
the extent any such Claim results from the negligence or willful misconduct of
Landlord or any Landlord Party (as such term is defined below). Additionally,
without limiting the foregoing, because Landlord maintains insurance on the
Building and the Leasehold Improvements pursuant to Section 14.2 of this Lease,
and because Tenant compensates Landlord for such insurance as part of Tenant's
Share of Operating Costs, and because of the existence of waivers of subrogation
set forth in Section 14.4 of this Lease, the foregoing obligation of Tenant to
indemnify, defend and hold harmless Landlord shall not apply to any Claims
pertaining to loss or damage to any property to the extent such Claim is covered
by such insurance required to be carried by Landlord under this Lease, even if
such Claim results in whole or in part from the negligent acts, omissions/or
willful misconduct of Tenant or any Tenant Party. If Landlord is made a party to
any litigation commenced by or against Tenant pertaining to any Claim caused or
alleged to have been caused by Tenant or any Tenant Party for which Tenant is
obligated pursuant to the foregoing to indemnify Landlord, and provided that in
any such litigation Landlord or a Landlord Party is not finally adjudicated to
be at fault, then Tenant shall pay all costs and expenses, including attorneys'
fees and court costs, incurred by or imposed upon Landlord because of any such
litigation, and the amount of all such costs and expenses, including attorneys'
fees and court costs, shall be a demand obligation owing by Tenant to Landlord.

         17.2 Except as otherwise expressly provided in this Article XVII,
Landlord shall, and hereby agrees to, indemnify, defend, and hold harmless
Tenant from any Claims which result from the negligent or willful misconduct of
Landlord or any Landlord Party. Notwithstanding the foregoing, Landlord shall
not be required to indemnify, defend, and/or hold Tenant harmless from any
Claims to the extent any such Claim results from the negligence or willful
misconduct of Tenant or any Tenant Party. Without limiting the foregoing,
Landlord shall not be liable for any Claims caused by other tenants or persons
in the Building or by occupants of adjacent property thereto, or by the public,
or caused by construction (except if such construction is

                                      -31-
<PAGE>

carried out by or under the direction of Landlord or any Landlord Party), or by
any private, public, or quasi-public work. Additionally, without limiting the
foregoing, because Tenant is required to carry insurance covering Tenant's
Property pursuant to Section 14.1 of this Lease, and because of the existence of
waivers of subrogation set forth in Section 14.4 of this Lease, the foregoing
obligation of Landlord to indemnify, defend, and hold harmless Tenant shall not
apply to any Claims pertaining to loss or damage to any of Tenant's Property to
the extent such Claim is covered by such insurance required to be carried by
Tenant under this Lease, even if such Claim results in whole or in part from the
negligent acts, omissions, or willful misconduct of Landlord or any Landlord
Party. If Tenant is made a party to any litigation commenced by or against
Landlord pertaining to any Claim caused or alleged to have been caused by
Landlord or any Landlord Party for which Landlord is obligated pursuant to the
foregoing to indemnify Tenant, and provided that in any such litigation Tenant
or a Tenant Party is not finally adjudicated to be at fault, then Landlord shall
pay all costs and expenses, including reasonable attorneys' fees and court
costs, incurred by or imposed upon Tenant because of any such litigation, and
the amount of all such costs and expenses, including reasonable attorneys' fees
and court costs, shall be a demand obligation owing by Landlord to Tenant.

         17.3 For purposes of this Article XVII: "Claims" shall mean and refer
to any damage to any property or injury to, or death of, any person, including,
without limitation, attorneys' fees and costs; "Landlord Party" and "Tenant
Party," respectively, shall mean and refer to Landlord and Tenant, and their
respective agents, employees, representatives, contractors, successors, assigns,
and licensees. The provisions of this Article XVII shall survive the expiration
or earlier termination of this Lease with respect to any Claims arising before
such expiration or termination.

                                 ARTICLE XVIII
                     SUBORDINATION AND ESTOPPEL CERTIFICATES

         18.1 This Lease and all rights of Tenant hereunder are subject and
subordinate to all underlying leases now or hereafter in existence, and to any
supplements, amendments, modifications, and extensions of such leases heretofore
or hereafter made and to any deeds to secure debt, mortgages, or other security
instruments which now or hereafter cover all or any portion of the Project or
any interest of Landlord therein, and to any advances made on the security
thereof, and to any increases, renewals, modifications, consolidations,
replacements, and extensions of any of such mortgages. Except as expressly
provided in this Section 18.1 below, this provision is declared by Landlord and
Tenant to be self-operative and no further instrument shall be required to
effect such subordination of this Lease. Upon demand, however, Tenant shall
execute, acknowledge, and deliver to Landlord any further instruments and
certificates evidencing such subordination as Landlord, and any mortgagee or
lessor of Landlord shall reasonably require, and if Tenant fails to so execute,
acknowledge and deliver such Instruments within ten (10) days after Landlord's
request, Tenant shall be in default of this Lease. Tenant shall not unreasonably
withhold, delay, or defer its written consent reasonable modifications in this
Lease which are a condition of any construction, interim or permanent financing
for the Project or any reciprocal easement agreement with facilities in the
vicinity of the Building, provided that such modifications do not increase the
obligations of Tenant hereunder or materially and adversely affect Tenant's use
and enjoyment of the Premises. This Lease is further subject and subordinate to:
(a) all applicable ordinances of any government authority

                                      -32-
<PAGE>

having jurisdiction over the Project, relating to easements, franchises, and
other interests or rights upon, across, or appurtenant to the Project; and (b)
all utility easements and agreements, now or hereafter created for the benefit
of the Project. Notwithstanding anything above to the contrary, Landlord agrees
to provide Tenant with commercially reasonable non-disturbance agreement(s) in
favor of Tenant from any ground lessors, mortgage holders and deed of trust
beneficiaries of Landlord acquiring an interest in the Building or the
underlying land after the date of this Lease until the expiration of the Term of
this Lease in consideration of, and as an express condition precedent to, any
subordination of the Lease provided hereunder. Further, Landlord agrees to use
commercially reasonable efforts to provide to Tenant, within ninety (90) days
after the date hereof, the Subordination, Non-Disturbance and Attornment
Agreement substantially in the form of Exhibit "F" attached hereto and made a
part hereof, in recordable form, fully executed by any ground lessors, mortgage
holders and deed of trust beneficiaries in existence as of the date hereof,
which Subordination, Non-Disturbance and Attornment Agreement Tenant shall
execute and deliver to Landlord within ten (10) days of Tenant's receipt
thereof.

         18.2 Notwithstanding the generality of the foregoing provisions of
Section 18.1, any mortgagee or lessor of Landlord shall have the right at any
time to subordinate any such mortgage or underlying lease to this Lease, or to
any of the provisions hereof, on such terms and subject to such conditions as
such mortgagee or lessor of Landlord may consider appropriate in its discretion.
At any time, before or after the institution of any proceedings for the
foreclosure of any such mortgage, or the sale of the Building under any such
mortgage, or the termination of any underlying lease, Tenant shall, upon request
of such mortgagee or any person or entities succeeding to the interest of such
mortgagee or the purchaser at any foreclosure sale ("Successor Landlord"),
automatically become the Tenant (or if the Premises has been validly subleased,
the subtenant) of the Successor Landlord, without change in the terms or other
provisions of this Lease (or, in the case of a permitted sublease, without
change in this Lease or in the instrument setting forth the terms of such
sublease); provided, however, that the Successor Landlord shall not be (i) bound
by any payment made by Tenant of Rent or Additional Rent for more than one (1)
month in advance, except for a Security Deposit previously paid to Landlord (and
then only if such Security Deposit has been deposited with and is under the
control of the Successor Landlord), (ii) bound by any termination, modification,
amendment or surrender of the Lease done without the Successor Landlord's
consent, (iii) liable for any damages or subject to any offset or defense by
Tenant to the payment of Rent by reason of any act or omission of any prior
landlord (including Landlord), or (iv) personally or corporately liable, in any
event, beyond the limitations on liability set forth in Section 25.5 of this
Lease. This agreement of Tenant to attorn to a Successor Landlord shall survive
any such foreclosure sale, trustee's sale conveyance in lieu thereof or
termination of any underlying lease. Tenant shall upon demand at any time,
before or after any such foreclosure or termination execute, acknowledge, and
deliver to the Successor Landlord any written instruments and certificates
evidencing such attornment as such Successor Landlord may reasonably require;
provided, however, that Landlord shall use its reasonable efforts to require
that such agreement provide that upon such attornment, as long as Tenant is not
in default hereunder, Tenant's possession of the Premises under this Lease shall
not be disturbed.

         18.3 Tenant shall, from time to time, within ten (10) days after
request from Landlord, or from any mortgagee or lessor of Landlord, execute,
acknowledge and deliver in recordable form a certificate certifying, to the
extent true, that this Lease is in full force and effect and

                                      -33-
<PAGE>

unmodified (or, if there have been modifications, that the same is in full force
and effect as modified and stating the modifications); that the Term has
commenced and the full amount of the Rent then accruing hereunder; the dates to
which the Rent has been paid; that Tenant has accepted possession of the
Premises and that any improvements required by the terms of this Lease to be
made by Landlord have been completed to the satisfaction of Tenant; the amount,
if any, that Tenant has paid to Landlord as a Security Deposit; that no Rent
under this Lease has been paid more than thirty (30) days in advance of its due
date; that the address for notices to be sent to Tenant is as set forth in this
Lease (or has been changed by notice duly given and is as set forth in the
certificate); that Tenant, as of the date of such certificate, has no charge,
lien, or claim of offset under this Lease or otherwise against Rent or other
charges due or to become due hereunder; that, to the knowledge of Tenant,
Landlord is not then in default under this Lease; and such other matters as may
be requested by Landlord or any mortgagee or lessor of Landlord. Any such
certificate may be relied upon by Landlord, any Successor Landlord, or any
mortgagee or lessor of Landlord.

                                  ARTICLE XIX
                            SURRENDER OF THE PREMISES

         19.1 Upon the Expiration Date or earlier termination of this Lease, or
upon any re-entry of the Premises by Landlord in accordance with this Lease
without terminating this Lease pursuant to Section 13.2, Tenant, at Tenant's
sole cost and expense, shall peacefully vacate and surrender the Premises to
Landlord in good order, broom clean and in the same condition as at the
beginning of the Term or as the Premises may thereafter have been improved by
Landlord or Tenant (subject to Section 10.3 hereof), reasonable use and wear
thereof and repairs which are Landlord's obligations under Articles 9, 15 and l6
only excepted, and Tenant shall remove all of Tenant's Property and turn over
all keys for the Premises to Landlord. No provision of this Lease shall impose
upon Landlord any obligation to care for or preserve any of Tenant's Property
left upon the Premises, and Tenant hereby waives and releases Landlord from any
claim or liability in connection with the removal of such property from the
Premises and the storage thereof and specifically waives the provisions of
California Civil Code Section 1542 with respect to such release. Should Tenant
continue to hold the Premises after the expiration or earlier termination of
this Lease, such holding over, unless otherwise agreed to by Landlord in
writing, shall constitute and be construed as a tenancy at sufferance at monthly
installments of Rent equal to one hundred fifty percent (150%) of the monthly
portion of Rent in effect as of the date of expiration or earlier termination,
and subject to all of the other terms, charges and expenses set forth herein
except any right to renew this Lease or to expand the Premises or any right to
additional services. Tenant shall also be liable to Landlord for all damage
which Landlord suffers because of any holding over by Tenant, and Tenant shall
indemnify Landlord against all claims made by any other tenant or prospective
tenant against Landlord resulting from delay by Landlord in delivering
possession of the Premises to such other tenant or prospective tenant. The
provisions of this Article 19 shall survive the expiration or earlier
termination of this Lease.

                                   ARTICLE XX
                           LANDLORD'S RIGHT TO INSPECT

         20.1 Landlord shall retain duplicate keys to all doors of the Premises.
Tenant shall provide Landlord with new keys should Tenant receive Landlord's
consent to change the locks.

                                      -34-
<PAGE>

Landlord shall have the right to enter the Premises to provide janitorial
service as required under this Lease and other times at reasonable hours
following reasonable prior notice (or, in the event of an emergency, at any
hour) (a) to exhibit the same to present to prospective mortgagees, lessors or
purchasers during the Term and to prospective tenants during the last year of
the Term, (b) to inspect the Premises, (c) to confirm that Tenant is complying
with all of Tenant's covenants and obligations under this Lease, (d) to make
repairs required of Landlord under the terms of this Lease, (e) to make repairs
to areas adjoining the Premises, and (f) to repair and service utility lines or
other components of the Building; provided, however, Landlord shall use
reasonable efforts to minimize interference with Tenant's business.

                                  ARTICLE XXI
                                SECURITY DEPOSIT

         21.1 Tenant's Security Deposit shall be held by Landlord, without
liability for interest except to the extent required by law, as security for the
performance of Tenant's obligations under this Lease. Unless required by
applicable law, Landlord shall not be required to keep the Security Deposit
segregated from other funds of Landlord. Tenant shall not assign or in any way
encumber the Security Deposit. Upon the occurrence of any Event of Default by
Tenant, Landlord shall have the right, without prejudice to any other remedy, to
use the Security Deposit, or portions thereof, to the extent necessary to pay
any arrearages in Rent, and any other damage, injury or expense. Following any
such application of all or any portion of the Security Deposit, Tenant shall pay
to Landlord, on demand, the amount so applied in order to restore the Security
Deposit to its original amount. If Tenant is not in default at the termination
of this Lease, any remaining balance of the Security Deposit shall be returned
to Tenant, provided that Tenant surrenders the Premises without damage pursuant
to Article 19 hereof. If Landlord transfers its interest in the Premises during
the Term, Landlord shall assign the Security Deposit to the transferee, and
thereafter Landlord shall have no further liability to Tenant for the Security
Deposit.

                                  ARTICLE XXII
                                    BROKERAGE

         22.1 Tenant and Landlord each represent and warrant to the other that
it has not entered into any agreement with, or otherwise had any dealings with,
any broker or agent in connection with the negotiation or execution of this
Lease which could form the basis of any claim by any such broker or agent for a
brokerage fee or commission, finder's fee, or any other compensation of any kind
or nature in connection herewith, other than with Broker(s) (who shall be paid
by Landlord in accordance with Landlord's separate agreement(s) with the
Broker(s)) and each party shall, and hereby agrees to, indemnity and hold the
other harmless from all costs (including court costs, investigation costs, and
attorneys' fees), expenses, or liability for commissions or other compensation
claimed by any broker or agent with respect to this Lease which arise out of any
agreement or dealings, or alleged agreement or dealings, between the
indemnifying party and any such agent or broker, other than with Broker(s). This
provision shall survive the expiration or earlier termination of this Lease.

                                      -35-
<PAGE>

                                 ARTICLE XXIII
                       OBSERVANCE OF RULES AND REGULATIONS

         23.1 Tenant and Tenant's servants, employees, agents, visitors, and
licensees shall observe faithfully and comply strictly with all Rules and
Regulations (herein so called) attached to this Lease as such Rules and
Regulations may be changed from time to time. Landlord shall at all times have
the right to make reasonable changes in and additions to such Rules and
Regulations; provided Landlord gives Tenant prior notice of such changes and
provided that such new rules and regulations or changes in existing rules and
regulations do not conflict with this Lease, and do not materially interfere
with the lawful conduct of Tenant's business in the Premises. Any failure by
Landlord to enforce any of the Rules and Regulations now or hereafter in effect,
either against Tenant or any other tenant in the Building, shall not constitute
a waiver of any such Rules and Regulations. Landlord shall not be liable to
Tenant for the failure or refusal by any other tenant, guest, invitee, visitor,
or occupant of the Building to comply with any of the Rules and Regulations.

                                  ARTICLE XXIV
                                     NOTICES

         24.1 All notices, consents, demands, requests, documents, or other
communications (other than payment of Rent) required or permitted hereunder
(collectively, "notices") shall be deemed given, whether actually received or
not, when dispatched for hand delivery or delivery by air express courier (with
signed receipts) to the other party, or on the second Business Day after deposit
in the United States mail, postage prepaid, certified, return receipt requested,
except for notice of change of address which shall be deemed given only upon
actual receipt. The addresses of the parties for notices are set forth in
Article 1, or any such other addresses subsequently specified by each party in
notices given pursuant to this Section 24.1.

                                  ARTICLE XXV
                                  MISCELLANEOUS

         25.1 Professional Fees. In any action or proceeding brought by either
party against the other under this Lease, the prevailing party shall be entitled
to recover from the other party its professional fees for attorneys, appraisers
and accountants, its investigation costs, and any other legal expenses and court
costs incurred by the prevailing party in such action or proceeding.

         25.2 Reimbursements. Wherever the Lease requires Tenant to reimburse
Landlord for the cost of any item, such costs will be the reasonable and
customary charge periodically established by Landlord for such item. Landlord
shall keep in its on-site manager's office a schedule of such charges (which
Landlord may periodically change) for Tenant's examination. The schedule of
charges may include, at the discretion of Landlord, a reasonable allocation of
overhead, administrative, and related costs and a reasonable fee for Landlord's
agent or manager who performs such services or arranges for performance of such
services. All such charges shall be payable upon demand as Additional Rent.

         25.3 Severability. Every agreement contained in this Lease is, and
shall be construed as, a separate and independent agreement. If any term of this
Lease or the application thereof to

                                      -36-
<PAGE>

any person or circumstances shall be invalid or unenforceable, the remaining
agreements contained in this Lease shall not be affected.

         25.4 Non-Merger. There shall be no merger of this Lease with any ground
leasehold interest or the fee estate in the Project or any part thereof by
reason of the fact that the same person may acquire or hold, directly or
indirectly, this Lease or any interest in this Lease as well as any ground
leasehold interest or fee estate in the Project or any interest in such fee
estate.

         25.5 Landlord's Liability. Anything contained in this Lease to the
contrary notwithstanding, Tenant agrees that Tenant shall look solely to the
estate and property of Landlord in the Project for the collection of any
judgment or other judicial process requiring the payment of money by Landlord
for any default or breach by Landlord under this Lease, subject, however, to the
prior rights of any mortgagee or lessor of the Project. No other assets of
Landlord or any members, partners, shareholders, or other principals of Landlord
shall be subject to levy, execution or other judicial process for the
satisfaction of Tenant's claim.

         25.6 Force Majeure. Whenever the period of time is herein prescribed
for action to be taken by Landlord or Tenant, Landlord or Tenant shall not be
liable or responsible for, and there shall be excluded from the computation for
any such period of time, any delays due to force majeure, which term shall
include strikes, riots, acts of God, shortages of labor or materials, war,
governmental approvals, laws, regulations, or restrictions, or any other cause
of any kind whatsoever which is beyond the reasonable control of Landlord or
Tenant. Force Majeure shall not excuse or delay Tenant's obligation to pay Rent
or any other amount due under this Lease.

         25.7 Headings. The article headings contained in this Lease are for
convenience only and shall not enlarge or limit the scope or meaning of the
various and several articles hereof. Words in the singular number shall be held
to include the plural, unless the context otherwise requires. All agreements and
covenants herein contained shall be binding upon the respective heirs, personal
representatives, and successors and assigns of the parties thereto.

         25.8 Successors and Assigns. All agreements and covenants herein
contained shall be binding upon the respective heirs, personal representatives,
successors and assigns or the parties hereto. If there be more than one Tenant;
the obligations hereunder imposed upon Tenant shall be joint and several. If
there is a guarantor of Tenant's obligations hereunder, Tenant's obligations
shall be joint and several obligations of Tenant and such guarantor, and
Landlord need not first proceed against Tenant hereunder before proceeding
against such guarantor, and any such guarantor shall not be released from its
guarantee for any reason, including any amendment of this Lease, any forbearance
by Landlord or waiver of any of Landlord's rights, the failure to give Tenant or
such guarantor any notices, or the release of any party liable for the payment
or performance of Tenant's obligations hereunder. Notwithstanding the foregoing,
nothing contained in this Section 25.8 shall be deemed to override Article 8.

         25.9 Landlord's Representations. Neither Landlord nor Landlord's agents
or brokers have made any representations or promises with respect to the
Premises, the Building, the Parking Facility, the Land, or any other portions of
the Project except as herein expressly set forth and all reliance with respect
to any representations or promises is based solely on those

                                      -37-
<PAGE>

contained herein. No rights, easements, or licenses are acquired by Tenant under
this Lease by implication or otherwise except as, and unless, expressly set
forth in this Lease.

         25.10 Entire Agreements; Amendments. This Lease and the Exhibits and
Riders attached hereto set forth the entire agreement between the parties and
cancel all prior negotiations, arrangements, brochures, agreements, and
understandings, if any, between Landlord and Tenant regarding the subject matter
of this Lease. No amendment or modification of this Lease shall be binding or
valid unless expressed in writing executed by both parties hereto.

         25.11 Tenant's Authority. If Tenant signs as a corporation, execution
hereof shall constitute a representation and warranty by Tenant that Tenant is a
duly organized and existing corporation, that Tenant has been and is qualified
to do business in the State of California and in good standing with the State of
California, that the corporation has full right and authority to enter into this
Lease, and that all persons signing on behalf of the corporation were authorized
to do so by appropriate corporate action. If Tenant signs as a limited liability
company, partnership, trust; or other legal entity, execution hereof shall
constitute a representation and warranty by Tenant that Tenant has complied with
all applicable laws, rules, and governmental regulations relative to Tenant's
right to do business in the State of California, that such entity has the full
right and authority to enter into this Lease, and that all persons signing on
behalf of Tenant were authorized to do so by any and all necessary or
appropriate company, partnership, trust, or other actions.

         25.12 Governing Law. This Lease shall be governed by and construed
under the laws of the State of California. Should any provision of this Lease
require judicial interpretation, Landlord and Tenant hereby agree and stipulate
that the court interpreting or considering same shall not apply the presumption
that the terms hereof shall be more strictly construed against a party by reason
of any rule or conclusion that a document should be construed more strictly
against the party who itself or through its agents prepared the same, it being
agreed that all parties hereto have participated in the preparation of this
Lease and that each Party had full opportunity to consult legal counsel of its
choice before the execution of this Lease.

         25.13 Tenant's Use of Name of the Building. Tenant shall not, without
the prior written consent of Landlord, use the name of the Building for any
purpose other than as the address of the business to be conducted by Tenant in
the Premises, and Tenant shall not do or permit the doing of anything in
connection with Tenant's business or advertising (including brokers' flyers
promoting sublease space) which in the reasonable judgment of Landlord may
reflect unfavorably on Landlord or the Building or confuse or mislead the public
as to any apparent connection or relationship between Tenant and Landlord, the
Building, or the Land.

         25.14 Ancient Lights. Any elimination or shutting off of light, air, or
view by any structure which may be erected on lands adjacent to the Building
shall in no way affect this Lease and Landlord shall have no liability to Tenant
with respect thereto.

         25.15 Changes to Project by Landlord. Landlord shall have the
unrestricted right to make changes to all portions of the Project in Landlord's
reasonable discretion for the purpose of improving access or security to the
Project or the flow of pedestrian and vehicular traffic therein.

                                      -38-
<PAGE>

Landlord shall have the right at any time, without the same constituting an
actual or constructive eviction and without incurring any liability to Tenant
therefor, to change the arrangement or location of entrances or passageways,
doors and doorways, corridors, elevators, stairs, bathrooms, or any other Common
Areas so long as reasonable access to the Premises remains available. Landlord
shall also have the right to (a) rearrange, change, expand or contract portions
of the Project constituting Common Areas, (b) to use Common Areas while engaged
in making improvements, repairs or alterations to the Project, or any portion
thereof, and (c) to do and perform such other acts and make such other changes
in to or with respect to the Project, or any portion thereof, as Landlord may,
in the exercise of sound business judgment, deem to be appropriate. Landlord
shall be entitled to change the name or address of the Building or the Project.
Landlord shall have the right to close, from time to time, the Common Areas and
other portions of the Project for such temporary periods as Landlord deems
legally sufficient to evidence Landlord's ownership and control thereof and to
prevent any claim of adverse possession by, or any implied or actual dedication
to, the public or any party other than Landlord.

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

         25.17 Landlord's Acceptance of Lease. The submission of this Lease to
Tenant shall not be construed as an offer and Tenant shall not have any rights
with respect thereto unless said Lease is consented to by mortgagee, and any
lessor of Landlord, to the extent such consent is required, and Landlord
executes a copy of this Lease and delivers the same to Tenant.

         25.18 Performance by Tenant. All covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed by
Tenant, at Tenant's sole cost and expense, and without any abatement of Rent. If
Tenant shall fail to pay any Rent, other than Base Rent, required to be paid by
it hereunder or shall fail to perform any other act on its part to be performed
hereunder, and such failure shall continue for longer than the period of cure,
if any, permitted in Section 13.l, Landlord may, at its option, without waiving
or releasing Tenant from obligations of Tenant, make any such payment or perform
any such other act on behalf of Tenant. All sums so paid by Landlord and all
necessary incidental costs, together with interest thereon at the Interest Rate,
from the date of such payment by Landlord, shall be payable to Landlord on
demand. Tenant covenants to pay any such sums, and Landlord shall have (in
addition to any other right or remedy of Landlord) the same rights and remedies
in the event of the non-payment thereof by Tenant as in the case of default by
Tenant in the payment of Rent.

         25.19 Financial Statements. At any time during the term of this Lease,
Tenant shall, upon ten (10) days prior written notice from Landlord, provide
Landlord with, if available, the most recent existing financial statement and
existing financial statements of the two (2) years prior to the most recent
financial statement year. Such statements shall be prepared in accordance with
generally accepted accounting principles and, if such is the normal practice of
Tenant, shall be audited by an independent certified public accountant.

         25.20 Guaranty. For the benefit of Landlord, this Lease is subject to
and conditional upon the Guarantor(s)' delivery to Landlord, concurrently with
Tenant's execution and delivery of this Lease to Landlord, of Guaranty in the
form of and upon the terms contained in Exhibit

                                      -39-
<PAGE>

"E" attached hereto and incorporated herein by this reference, which shall be
fully executed by the Guarantor(s) specified in Section 1.1W of Article I of
this Lease.

         25.21 Quiet Enjoyment. Landlord covenants and agrees with Tenant that
upon Tenant paying the rent required under this Lease and paying all other
charges and performing all of the covenants and provisions on Tenant's part to
be observed and performed under this Lease, Tenant may peaceably and quietly
have, hold and enjoy the Premises in accordance with this Lease without
hindrance or molestation by Landlord or its employees or agents.

         25.22 Directory; Signs. Landlord shall provide to Tenant entry door
signage at Tenant's cost, and such entry door signage shall be comparable to
that used by Landlord for other similar floors in the Building and shall comply
with Landlord's Building standard signage program. Tenant shall also be entitled
to have Tenant's name, as well as the names of Tenant's employees, at Tenant's
sole cost and expense, listed on a directory sign in the main lobby of the
Building, up to a maximum of five (5) directory strips. Any signs, notices,
logos, pictures, names or advertisements which are installed and that have not
been separately approved by Landlord may be removed without notice by Landlord
at the sole expense of Tenant. Tenant may not install any signs on the exterior
or roof of the Project or the Common Areas. Any signs, window coverings, or
blinds (even if the same are located behind the Landlord-approved window
coverings for the Building), or other items visible from the exterior of the
Premises or Building, shall be subject to the prior approval of Landlord, in its
sole discretion.

                                  ARTICLE XXVI
                               SUBSTITUTION SPACE

         26.1 Landlord shall have a one-time right, which right may be exercised
by Landlord at any time prior to the end of the Term of this Lease, or any
renewal or extension hereof, to substitute, instead of the Premises, other space
within the Project (which space shall have a Net Rentable Area of not less than
the Net Rentable Area in the Premises as of the date of such substitution and
shall be located on a floor of a building in the Project no lower than the floor
on which the original Premises are located and in an area substantially similar
to the location of the original Premises in the Building), hereinafter called
the "Substitution Space".

         26.2 If Landlord desires to exercise such right prior to the
Commencement Date, Landlord shall give written notice thereof to Tenant not
later than thirty (30) days prior to the effective date of such substitution,
which notice shall specify the Substitution Space in question and the
description of the Premises set forth in this Lease shall, without further act
on the part of Landlord or Tenant, be deemed amended so that the Substitution
Space shall, for all purposes, be deemed the Premises hereunder and all of the
terms, covenants, conditions, provisions, and agreements of this Lease,
including those agreements to pay Rent, shall continue in full force and effect
and shall apply to the Substitution Space. The Leasehold Improvements in the
Substitution Space shall be completed in the manner set forth in Exhibit "C" of
this lease, and the costs thereof shall be allocated between Landlord and Tenant
as described therein; provided, however, that if, prior to Landlord's notice of
its election to substitute the Substitution Space for the Premises, Tenant has
reasonably incurred costs or expenses in connection with planning or
construction of the Leasehold Improvements in the original Premises and Tenant
is (i) unable to use the plans or materials in question in connection with the
Leasehold Improvements in the

                                      -40-
<PAGE>

Substitution Space or (ii) unable to cancel orders for or return the materials
in question for credit. Landlord shall reimburse Tenant for such costs and
expenses (net of all applicable credits) upon presentation by Tenant of
appropriate invoices and other substantiating materials therefor.

         26.3 If Landlord desires to exercise such right after the Commencement
Date, Landlord shall give Tenant at least sixty (60) days' prior written notice
thereof specifying the effective date of such substitution, whereupon, as of
such effective date: (a) the description of the Premises set forth in this Lease
shall, without further act on the part of Landlord or Tenant, be deemed amended
so that the Substitution Space shall, for all purposes, be deemed the Premises
hereunder, and all of the terms, covenants, conditions, provisions, and
agreements of this Lease, including those agreements to pay Rent, shall, subject
to adjustment as provided in Section 26.6 below, continue in full force and
effect and shall apply to the Substitution Space, and (b) Tenant shall move from
the present Premises into the Substitution Space and shall vacate and surrender
possession to Landlord of the present Premises, and if Tenant continues to
occupy the present Premises after such effective date, then thereafter, during
the period of such occupancy, Tenant shall pay Rent for the present Premises as
set forth in this Lease, in addition to the Rent for the Substitution Space at
the above-described rates. Tenant shall accept possession of the Substitution
Space in its "as-is" condition as of such effective date.

         26.4 Notwithstanding the provisions of Section 26.3 above, if Landlord
exercises its right to substitute the Substitution Space for the Premises after
the Commencement Date, then Tenant shall have the option to require Landlord, at
Landlord's expense, to alter the Substitution Space in a manner substantially
similar to the manner as the present Premises were finished out or altered
pursuant to this Lease. Such option shall be exercised, if at all, by notice
from Tenant to Landlord within fifteen (15) days after the aforesaid notice from
Landlord to Tenant of such proposed substitution; otherwise, such option in
favor of Tenant shall be null and void. If such option is validly so exercised
by Tenant: (a) Tenant shall continue to occupy the present Premises (upon all of
the terms, covenants, conditions, provisions, and agreements of this Lease,
including the covenant for the payment of Rent) until the date on which Landlord
shall have substantially completed such alteration work in the Substitution
Space such that Tenant can commence business operations from the Substitution
Space; and (b) Tenant shall move from the present Premises into the Substitution
Space immediately upon the date of such substantial completion by Landlord and
shall vacate and surrender possession to Landlord of the present Premises after
such date, and if Tenant continues to occupy the present Premises following such
date of substantial completion, then, thereafter during the period of such
occupancy, Tenant shall pay Rent for the present Premises as set forth in this
lease in addition to the Rent for the Substitution Space at the above-described
rates. Landlord shall use its good faith efforts to allow Tenant to move into
the Substitution Space over the weekend immediately prior to the date of
substantial completion of the same. With respect to such alteration work in the
Substitution Space, if Tenant requests materials or installations other than
those originally installed by Landlord, or if Tenant shall make changes in the
work (such non-original materials or installations or changes being subject to
Landlord's prior written approval), and if such non-original materials or
installations or changes shall delay the work to be performed by Landlord, or if
Tenant shall otherwise delay the substantial completion of the work, the
occurrence of such delays shall in no event postpone the date for the
commencement of the payment of Rent for such Substitution Space beyond the date
on which such work would have been substantially completed but for such delays,
and in addition, Tenant shall continue to pay Rent for the present

                                      -41-
<PAGE>

Premises as set forth in this Lease until it vacates and surrenders same as
aforesaid. Landlord at its discretion may substitute materials of like quality
for the materials originally utilized.

         26.5 If Landlord exercises this relocation right after the Commencement
Date, Landlord shall reimburse Tenant for Tenant's reasonable out-of-pocket
expenses for moving Tenant's furniture, equipment (including computer
equipment), supplies and telephones and telephone equipment from the present
Premises to the Substitution Space and for reprinting Tenant's stationery of the
same quality and quantity of Tenant's stationery supply on hand immediately
prior to Landlord's notice to Tenant of the exercise of this substitution right.

         26.6 Notwithstanding anything above to the contrary, in the event the
Net Rentable Area of the Substitution Space is greater than the Net Rentable
Area of the Premises, then Tenant's Share and Base Rent shall be proportionately
adjusted (but shall not be increased by more than five percent (5%).

                                 ARTICLE XXVII
                                OTHER DEFINITIONS

         When used in this Lease, the terms set forth hereinbelow shall have the
following meanings:

         (a) "BUSINESS DAYS" shall mean Monday through Friday (except for
Holidays); "Business Hours" shall mean 8:00 a.m. to 6:00 p.m. on Monday through
Friday and 9:00 a.m. to 1:00 p.m. on Saturdays (except for Holidays); and
"Holidays" shall mean those holidays designated by Landlord, which holidays
shall be consistent with those holidays designated by landlords of other
first-class office buildings in the Comparison Area.

         (b) "COMMON AREAS" shall mean those certain areas and facilities of the
Building and the Parking Facility and those certain improvements to the Land
which are from time to time provided by Landlord for the use of tenants of the
Building and their employees, clients, customers, licensees and invitees or for
use by the public, which facilities and improvements include any and all
corridors, elevator foyers, vending areas, bathrooms, electrical and telephone
rooms, mechanical rooms, janitorial areas and other similar facilities of the
Building and of the Parking Facility and any and all grounds, parks, landscaped
areas, outside sitting areas, sidewalks, walkways, tunnels, pedestrian ways,
skybridges, and generally all other improvements located on the Land, or which
connect the Land to other buildings.

         (c) The words "DAY" or "DAYS" shall refer to calendar days, except
where "Business Days" are specified.

         (d) The words "HEREIN", "HEREOF", "HEREBY", "HEREUNDER" and words of
similar import shall be construed to refer to this Lease as a whole and not to
any particular Article or Section thereof unless expressly so stated.

         (e) The wards "INCLUDE" and "INCLUDING" shall be construed as if
followed by the phrase "without being limited to."

                                      -42-
<PAGE>

         (f) "NET RENTABLE AREA" and "USABLE AREA" shall mean "Net Rentable
Area" and "Usable Area" (as applicable) determined in accordance with the
Standard Method For Measuring Floor Area in Office Buildings ANSI/BOMA
Z265.1-1996 ("BOMA STANDARD"); Landlord shall have the right, within ninety (90)
days after the Commencement Date, to verify the Net Rentable Area and/or Usable
Area of the Premises in accordance with the BOMA Standard. If, as a result of
such verification, it is determined that the Net Rentable Area and/or Usable
Area of the Premises are different than the amounts set forth in Section 1.1
above, all corresponding amounts set forth this Lease (including, without
limitation, Tenant's Share, the amount of monthly Base Rent, the amount of the
Security Deposit and the Allowance) shall be retroactively adjusted and
appropriate payments, if applicable, shall be made by Landlord to Tenant or
Tenant to Landlord (as applicable) within ten (10) days after written notice of
such determination is delivered to Tenant. Both parties agree to execute a
commercially reasonable instrument in order to document such revised amounts.

         (g) Reference to Landlord as having "NO LIABILITY TO TENANT" or being
"WITHOUT LIABILITY TO TENANT" or words of like import shall mean that Tenant is
not entitled to terminate this Lease, or to claim actual or constructive
eviction, partial or total, or to receive any abatement or diminution of rent,
or to be relieved in any manner of any of Tenant's other obligations hereunder,
or to be compensated for loss or injury suffered or to enforce any other right
or kind of liability whatsoever against Landlord under or with respect to this
Lease or with respect to Tenant's use or occupancy of the Premises.

         (h) A "REPAIR" shall be deemed to include such rebuilding, replacement
and restoration as may be necessary to achieve and maintain good working order
and condition.

         (i) The "TERMINATION OF THIS LEASE" and words of like import includes
the expiration of the Term or the cancellation of this Lease pursuant to any of
the provisions of this Lease or to law. Upon the termination of this Lease, the
Term shall end at 11:59 p.m. (local time for the Building) on the date of
termination as if such date were the Expiration Date, and neither party shall
have any further obligation or liability to the other after such termination
except (i) as shall be expressly provided for in this Lease and (ii) for such
obligations as by their nature or under the circumstances can only be, or by the
provisions of this Lease, may be, performed after such termination and, in any
event, unless expressly otherwise provided in this Lease, any liability for a
payment (which shall be apportioned as of the date of such termination) which
shall have accrued to or with respect to, any period ending at the time of
termination shall survive the termination of this Lease.

         (j) The "TERMS OF THIS LEASE" shall be deemed to include all terms,
covenants, conditions, provisions, obligations, limitations, restrictions,
reservations and agreements contained in this Lease.

         (k) "TENANT" shall be deemed to include Tenant's successors and assigns
(to the extent permitted by Landlord) and any and all occupants of the Premises
permitted by Landlord and claiming by, through or under Tenant.

         (l) A "YEAR" shall mean twelve (12) consecutive months.

                                      -43-
<PAGE>

                                 ARTICLE XXVIII
                              RIGHT OF FIRST OFFER

         Landlord hereby grants to Tenant a right of first offer with respect to
the remaining space on the second (2nd) floor of the Building ("First Offer
Space"). Notwithstanding the foregoing (i) such first offer right of Tenant
shall commence only following the expiration or ear1ier termination of any then
existing lease pertaining to the First Offer Space (collectively, the "Superior
Leases"), including any renewal or extension of such lease(s), whether or not
such renewal or extension is pursuant to an express written provision in such
lease(s), and regardless of whether any such renewal or extension is consummated
pursuant to a lease amendment or a new lease, and (ii) such first offer right
shall be subordinate and secondary to all rights of expansion, first refusal,
first offer or similar rights granted to (A) the tenants of the Superior Leases
and (B) any other tenant of the Project (the rights described in items (i) and
(ii), above to be known collectively as "Superior Rights"). Tenant's right of
first offer shall be on the terms and conditions set forth in this Article 28.

         28.1 Procedure for Offer. Tenant may, at any time during the Lease
Term, provide written notice to Landlord (the "Space Availability Notice") that
Tenant requests a list of any First Offer Space then available for lease;
provided, however, that Tenant may not provide a Space Availability Notice to
Landlord more than one (1) time in any ninety (90) day period. Within ten (10)
business days after Landlord's receipt of a Space Availability Notice, Landlord
shall provide Tenant with written notice (the "First Offer Notice") listing any
then available First Offer Space and offering Tenant the opportunity to lease
such space. The First Offer Notice shall describe the space so offered to Tenant
and shall set forth Landlord's proposed economic terms and conditions applicable
to Tenant's lease of such space (collectively, the "Economic Terms").
Notwithstanding the foregoing, Landlord's obligation to deliver the First Offer
Notice shall not apply during the last six (6) months of the initial Lease Term
unless Tenant has exercised its Extension Option pursuant to Section 3.6 above.

         28.2 Procedure for Acceptance. If Tenant wishes to exercise Tenant's
right of first offer with respect to the space described in the First Offer
Notice, then within five (5) business days after delivery of the First Offer
Notice to Tenant, Tenant shall deliver notice to Landlord of Tenant's intention
to exercise its right of first offer with respect to the entire space described
in the First Offer Notice. If concurrently with Tenant's exercise of the first
offer right, Tenant notifies Landlord that it does not accept the Economic Terms
set forth in the First Offer Notice, Landlord and Tenant shall, for a period of
fifteen (15) days after Tenant's exercise, negotiate in good faith to reach
agreement as to such Economic Terms. If Tenant does not so notify Landlord that
it does not accept the Economic Terms set forth in the First Offer Notice
concurrently with Tenant's exercise of the first offer right, the Economic Terms
shall be as set forth in the First Offer Notice. In addition, if Tenant does not
exercise its right of first offer within the five (5) business day period, or,
if Tenant exercises its first offer right but timely objects to Landlord's
determination of the Economic Terms and if Landlord and Tenant are unable to
reach agreement on such Economic Terms within said fifteen (15) day period, then
Landlord shall be free to lease the space described in the First Offer Notice to
anyone to whom Landlord desires on any terms Landlord desires and Tenant's right
of first offer shall terminate as to the First Offer Space described in the
First Office Notice. Notwithstanding anything to the contrary contained herein,
Tenant must elect to exercise its right of first offer, if at all, with respect
to all of the space

                                      -44-
<PAGE>

offered by Landlord to Tenant at any particular time, and Tenant may not elect
to lease only a portion thereof.

         28.3 Construction of First Offer Space. Except as included in the
Economic Terms, Tenant shall take the First Offer Space in its "as-is"
condition.

         28.4 Lease of First Offer Space. If Tenant timely exercises Tenant's
right to lease the First Offer Space as set forth herein, Landlord and Tenant
shall execute an amendment adding such First Offer Space to this Lease upon the
same non-economic terms and conditions as applicable to the initial Premises,
and the economic terms and conditions as provided in this Article 28. Tenant
shall commence payment of rent for the First Offer Space and the Lease Term of
the First Offer Space shall commence upon the date of delivery of such space to
Tenant. The Lease Term for the First Offer Space shall expire co-terminously
with Tenant's lease of the initial Premises.

         28.5 No Defaults. The rights contained in this Article 28 shall be
personal to the Original Tenant or any Permitted Transferee, and may only be
exercised by the Original Tenant or any Permitted Transferee (and not any other
assignee, sublessee or other transferee of the Tenant's interest in this Lease)
if Tenant occupies the entire Premises as of the date of the First Offer Notice.
Tenant shall not have the right to lease First Office Space as provided in this
Article 28 if, as of the date of the First Offer Notice, or, at Landlord's
option, as of the scheduled date of delivery of such First Offer Space to
Tenant, Tenant is in default under this Lease or Tenant has previously been in
default under this Lease more than once.

                                      -45-
<PAGE>

         IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the date set forth on the cover page hereof.

TENANT*:                          LANDLORD:

                                  PRENTISS PROPERTIES ACQUISITION
CONTIASSET RECEIVABLES            PARTNERS, L.P., a Delaware limited partnership
MANAGEMENT LLC, a Delaware
limited liability company         By:      Prentiss Properties I, Inc.
                                           Its:  General Partner
By:    /s/ Glenn S. Goldman
       --------------------
       Name: Glenn S. Goldman     By:      /s/ Louay Alsadek
       Title: Chairman                     -----------------
                                           Name: Louay Alsadek
                                           Title: Vice President

By:    /s/ Samir M. Shah
       -----------------          By:      /s/ J. Kevan Dilbeck
       Name: Samir M. Shah                 ----------------------
       Title: Vice President               Name: J. Kevan Dilbeck
                                           Title: Vice President

------------------
*        NOTE:

         If Tenant is a California corporation, then one of the following
         alternative requirements must be satisfied:

         (A)      This Lease must be signed by two (2) officers of such
                  corporation: one being the chairman of the board, the
                  president or a vice president, and the other being the
                  secretary, an assistant secretary, the chief financial officer
                  or an assistant treasurer. If one (1) individual is signing in
                  two (2) of the foregoing capacities, that individual must sign
                  twice; once as one officer and again as the other officer.

         (B)      If there is only one (1) individual signing in two (2)
                  capacities, or if the two (2) signatories do not satisfy the
                  requirements of (A) above, then Tenant shall deliver to
                  Landlord a certified copy of a corporate resolution acceptable
                  to Landlord authorizing the signatory(ies) to execute this
                  Lease.

                                      -46-
<PAGE>

                            FIRST AMENDMENT TO LEASE
                           (EXECUTIVE CENTER DEL MAR)

         THIS FIRST AMENDMENT TO LEASE ("FIRST AMENDMENT") is made and entered
into as of the 15th day of November, 2002, by and between PRENTISS PROPERTIES
ACQUISITION PARTNERS, L.P., a Delaware limited partnership ("LANDLORD") and BANK
OF INTERNET U.S.A., a Federal Savings Bank ("TENANT").

                               R E C I T A L S :

         A. Landlord and ContiAsset Receivables Management, LLC, a Delaware
limited liability company ("ORIGINAL TENANT") entered into that certain Lease
Agreement dated as of March 16, 1998 (the "Lease"), whereby Landlord leased to
Original Tenant and Original Tenant leased from Landlord certain office space
located in that certain building located and addressed at 12220 El Camino Real,
San Diego, California (the "BUILDING"). Tenant is the successor-in-interest in
the Lease to Bofi.com Holding, Inc. a Delaware corporation,
successor-in-interest in the Lease to Original Tenant pursuant to that certain
Assignment and Assumption Agreement and Consent to Assignment dated as of
September 22, 1999 by and between Landlord, Original Tenant (as assignor),
Tenant (as assignee), and ContiFinancial Corporation, a Delaware corporation (as
"GUARANTOR" under the Lease).

         B. By this First Amendment, Landlord and Tenant desire to (i) expand
the Existing Premises (as defined below), (ii) extend the Term of the Lease, and
(iii) otherwise modify the Lease as provided herein.

         C. Unless otherwise defined herein, capitalized terms as used herein
shall have the same meanings as given thereto in the Lease.

         NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

                               A G R E E M E N T :

         1. The Existing Premises. Landlord and Tenant hereby agree that
pursuant to the Lease, Landlord currently leases to Tenant and Tenant currently
leases from Landlord that certain office space in the Building containing 5,478
square feet of Net Rentable Area (4,729 square feet of Usable Area) located on
the second (2nd) floor of the Building and known as Suite 220 (the "EXISTING
PREMISES"), as outlined on Exhibit "A" to the Lease.

         2. Expansion of the Existing Premises. That certain space contiguous to
the Existing Premises located on the second (2nd) floor of the Building and
outlined on the floor plan attached hereto as Exhibit "A" and made a part
hereof, may be referred to herein as the "EXPANSION SPACE." Landlord and Tenant
hereby stipulate that the Expansion Space contains 2,251 square feet of Net
Rentable Area (1,743 square feet of Usable Area). Effective as of the earlier of
(i) the date of substantial completion of Landlord's Work (as defined in Section
5.2 below); or (ii) the date Tenant commences business operations in all or any
portion of the

                                      -1-
<PAGE>

Expansion Space ("EXPANSION COMMENCEMENT DATE"), Tenant shall, subject to
Section 13 below, lease from Landlord and Landlord shall lease to Tenant the
Expansion Space. Accordingly, effective upon the Expansion Commencement Date,
the Existing Premises shall, subject to Section 13 below, be increased to
include the Expansion Space. Landlord and Tenant hereby agree that such addition
of the Expansion Space to the Existing Premises shall, effective as of the
Expansion Commencement Date (but subject to Section 13 below), increase the
number of square feet leased by Tenant in the Building to a total of 7,729
square feet of Net Rentable Area (6,472 square feet of Usable Area). Effective
as of the Expansion Commencement Date, all references to the "Premises" shall
mean and refer to the Existing Premises as expanded by the Expansion Space. The
anticipated Expansion Commencement Date is February 1, 2003.

         3. Expansion Space Term and Monthly Base Rent for the Expansion Space.
The Lease Expiration Date of June 30, 2003 shall be extended by two (2) years
such that the Lease shall terminate on June 30, 2005 ("NEW TERMINATION DATE").
The Term for Tenant's lease of the Expansion Space ("EXPANSION SPACE TERM")
shall, subject to Section 13 below, commenced on the Expansion Commencement Date
and shall expire co-terminously with Tenant's lease of the Existing Premises on
New Termination Date. During the Expansion Space Term, Tenant shall pay, in
accordance with the provisions of this Section 3, monthly Base Rent for the
Premises (including the Existing Premises and the Expansion Space) as follows:

                                                   MONTHLY BASE RENT PER
                                                    SQUARE FOOT OF NET
     TIME PERIOD           *MONTHLY BASE RENT     RENTABLE AREA OF PREMISES
     -----------           ------------------      ------------------------
 Expansion Commencement       $17,003.80                     $2.20
   Date -06/30/03

  07/01/03-06/30/04           $17,776.70                     $2.30

  07/01/04-06/30/05           $18,317.73                     $2.37

         4. Tenant's Share and Base Year. Notwithstanding anything to the
contrary in the Lease, during the Expansion Space Term, Tenant's Share of any
increase in Operating Costs for the Premises (including the Existing Premises
and the Expansion Space) shall be 13.67%. Accordingly, effective as of the
Expansion Commencement Date, Tenant's Share, as set forth in Section 1.1.K of
the Basic Lease Information of the Lease, shall be deemed revised to be 13.67%.
Effective as of July 1, 2003, the Base Year set forth in Section 1.1.0 of the
Lease shall be deemed revised to be the calendar year 2003.

         5. Condition of Expansion Space and Tenant Improvements.

            5.1 Condition of Expansion Space. Tenant hereby agrees to accept the
Expansion Space in its "as-is" condition and Tenant hereby acknowledges that
Landlord, except as otherwise provided in this First Amendment, shall not be
obligated to provide or pay for any improvement work or services related to the
improvement of the Expansion space. Tenant also acknowledges that Landlord has
made no representation or warranty regarding the condition of the Expansion
Space.

                                      -2-
<PAGE>

             5.2 Tenant Improvements. As soon as reasonably possible after the
date of the full execution and delivery of this First Amendment by Landlord and
Tenant, Landlord shall, at Landlord's sole cost and expense using
Building-standard materials and in Landlord's Building-standard manner, perform
the improvement work in the Expansions Space described on Exhibit "B" attached
hereto ("LANDLORD'S WORK").

         6. Parking. Effective as of the Expansion Commencement Date and
continuing throughout the Expansion Space Term, Tenant shall have the right (but
not the obligation) to use, at no additional cost to Tenant, a total of
thirty-four (34) Parking Permits consisting of twenty-seven (27) unreserved
Parking Permits and seven (7) reserved Parking Permits for use in the Building's
Parking Facility. Tenant's use of such Parking Permits shall be in accordance
with, and subject to, all of the provisions of Article VI of the Lease.

         7. Security Deposit. Tenant has previously deposited with Landlord
Thirty-Three Thousand Six Hundred Eighty-Nine And 70/100 Dollars ($33,689.70) as
a Security Deposit under the Lease. Landlord shall continue to hold the Security
Deposit in accordance with the terms and conditions of Article XXI of the Lease.

         8. Commencement Notice. Landlord may deliver to Tenant a Commencement
Notice in a form substantially similar to that attached hereto as Exhibit "C"
and made a part hereof at any time after the Expansion Commencement Date. The
Commencement Notice shall be conclusive and binding upon Tenant as to all
matters set forth herein unless Tenant objects thereto in writing within five
(5) days following delivery of such Commencement Notice.

         9. Brokers. Except for Prentiss Properties Management, LP. ("LANDLORD'S
BROKER"), each party represents and warrants to the other that no broker, agent
or finder negotiated or was instrumental in negotiating or consummating this
First Amendment. Each party further agrees to defend, indemnify and hold
harmless the other party from and against any claim for commission or finder's
fee by any entity (other than Landlord's Broker) who claims or alleges that they
were retained or engaged by the first party or at the request of such party in
connection with this First Amendment.

         10. Defaults. Tenant hereby represents and warrants to Landlord that,
as of the date of this First Amendment, Tenant is in full compliance with all
terms, covenants and conditions of the Lease and that there are no breaches or
defaults under the Lease by Landlord or Tenant.

         11. Signing Authority. Each individual executing this First Amendment
on behalf of Tenant hereby represents and warrants that Tenant is a duly formed
and existing entity qualified to do business in California and that Tenant has
the full right and authority to execute and deliver this First Amendment and
that each person signing on behalf of Tenant is authorized to do so.

         12. No Further Modification. Except as set forth in this First
Amendment, all of the terms and provisions of the Lease shall apply with respect
to the Expansion Space and shall remain unmodified and in full force and effect.

         13. Condition Precedent. Notwithstanding anything above to the
contrary, Landlord and Tenant acknowledge and agree that the rights and
obligations of Landlord and Tenant under this First Amendment are expressly
conditioned upon the full execution and delivery by

                                      -3-
<PAGE>

Landlord and Smith Consulting Architects ("SMITH") of a lease amendment
pertaining to a reduction of a portion of Smith's premises in the Building
(i.e., the Expansion Space), and Smith's surrender, vacation and delivery of the
Expansion Space to Landlord when and as required by Landlord, which lease
amendment shall be on terms and conditions acceptable to Landlord in Landlord's
sole and absolute discretion (collectively, the "CONDITION PRECEDENT"). Landlord
and Tenant acknowledge and agree that if the Condition Precedent is not
satisfied on or before December 1, 2002, either party may terminate this First
Amendment (but not the Lease) by giving the other written notice thereof.

         14. Release of Guarantor. Effective as of the Expansion Commencement
Date, Guarantor is hereby released from all obligations under the Lease accruing
after the Expansion Commencement Date.

                                      -4-
<PAGE>

         IN WITNESS WHEREOF, this First Amendment has been executed as of the
day and year first above written.

"LANDLORD"                    PRENTISS PROPERTIES ACQUISITION PARTNERS, L.P.,
                              a Delaware limited partnership

                              By:      Prentiss Properties I, Inc.
                                       a Delaware corporation
                                       general partner

                                       By:   /s/ Deborah Street
                                             -----------------------------------
                                             Print Name:  Deborah Street
                                             Print Title:  Vice President

                                       By:   /s/ J. Kevan Dilbeck
                                             -----------------------------------
                                             Print Name:  J. Kevan Dilbeck
                                             Print Title:  Senior Vice President

"TENANT"                     BANK OF INTERNET U.S.A.,
                             a Federal Savings Bank

                             By:    /s/ Gary Evans
                                    ----------------------------------
                                    Print Name:  Gary Evans
                                    Print Title:  President and CEO

                                      -5-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00075-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00075-of-00352.parquet"}]]