Document:

<PAGE>

                                                                   EXHIBIT 10.11

                        EXTENSION #2 TO PROMISSORY NOTE

$400,000.00              San Diego, San Diego County,         September 30, 2001
-----------                                                   ------------------
                                   California

FOR VALUE RECEIVED, the undersigned, L. Donald Speer, II and Kelly Elizabeth
Speer, ("Makers"), and Venture Catalyst Incorporated, a Utah corporation or its
assigns ("Holder") hereby enter into this extension ("Extension") to that
certain advance promissory note ("Note"), dated September 1, 2000, as follows:

                                   RECITALS

A.       In accordance with the Section 1 of the Note, the principal amount of
the Note and all unpaid interest, if any, are due and payable in full on March
31, 2001, subsequently extended to September 30, 2001, per the terms of the
Extension to Promissory Note, dated March 31, 2001.

B.       Holder has determined that it is in its best interest to extend the
Note for an additional three months, the unpaid principal amount and accrued but
unpaid interest, if any, thereby due and payable in full on December 31, 2001,
provided that the Makers pay all outstanding and accrued interest incurred
through September 30, 2001, on or before September 30, 2001. As of September 30,
2001, the aggregate unpaid principal on the Note is $37,466.51 and accrued but
unpaid interest on the Note is $2,229.96.

                                   AGREEMENT

         NOW, THEREFORE, in consideration of the premises and agreements
contained herein and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, and intending to be legally bound, the
Makers and Holder hereby agree as follows:

         1.   Capitalized  Terms.  Capitalized terms used herein shall have the
              ------------------
same meanings ascribed to such terms in the Note unless otherwise defined
herein.

         2.   Payment.  Section 1(a) of the Note is hereby amended to extend the
              -------
date of Mandatory payment from March 31, 2001 to December 31, 2001.

         3.   Incorporation by Reference. The parties hereto incorporate by
              --------------------------
reference herein each and every covenant, term and condition contained in the
Note as if more fully set forth herein, subject only to the amendment and
modifications contained in this Extension, the same which shall supercede any
term or condition set forth in the Note that may be in conflict herewith.

         4.   Incorporation.  This Extension shall be deemed a part of and
              -------------
incorporated into the Note and is hereby ratified, approved and confirmed in
each and every respect. All references to the Note or this Extension in any
other document, instrument, agreement or writing shall hereafter be deemed to
refer to the Note as modified hereby.

                                       1
<PAGE>

         5.   Successor and Assigns.  This Extension shall be binding upon
              ---------------------
Borrower, her successors and assigns, and shall inure to the benefit of Lender,
its successor and assigns.

         6.   Applicable Law. THIS EXTENSION SHALL BE GOVERNED BY, AND CONSTRUED
              --------------
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OFA THE STATE OF CALIFORNIA, WIHTOUT
GIVING NOTICE TO THE PRINCIPLES OF CONFLICT OF LAWS OR THE STATE OF CALIFORNIA.
THIS FIRST EXTENSION MAY BE ENFORCED IN SAN DIEGO COUNTY SUPERIOR COURT BY
AGREEMENT OF THE PARTIES HERETO.

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

         Venture Catalyst Incorporated,          Makers
         a Utah corporation

         By:/s/ Kevin McIntosh                   /s/ L. Donald Speer II
           ------------------------              -------------------------------
             Kevin McIntosh,                     L. Donald Speer, II
             Chief Financial Officer

                                                 /s/ Kelly Elizabeth Speer
                                                 -------------------------------
                                                 Kelly Elizabeth Speer

                                       2<PAGE>

                                                                   EXHIBIT 10.43
                                                                   -------------
                          EX-10.43-Material Contract

                                 OFFICE LEASE
                                 ------------

                        MISSION VALLEY FINANCIAL CENTER
                        -------------------------------

                            AGBRI MISSION, L.L.C.,
                     a Delaware limited liability company

                                 as Landlord,

                                      and

                        VENTURE CATALYST INCORPORATED,
                              a Utah corporation

                                   as Tenant

                                   --Page 1
<PAGE>

                        MISSION VALLEY FINANCIAL CENTER
                        -------------------------------

                      SUMMARY OF BASIC LEASE INFORMATION
                      ----------------------------------

The undersigned hereby agree to the following terms of this Summary of Basic
Lease Information (the "Summary"). This Summary is hereby incorporated into and
made a part of the attached Office Lease (the "Office Lease") which pertains to
the "Project," as that term is defined in the Office Lease, commonly known as
"Mission Valley Financial Center" located in San Diego, California. This Summary
and the Office Lease are collectively referred to herein as the "Lease". Each
reference in the Office Lease to any term of this Summary shall have the meaning
set forth in this Summary for such term. In the event of a conflict between the
terms of this Summary and the Office Lease, the terms of the Office Lease shall
prevail. Any capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in the Office Lease.

     TERMS OF LEASE
(References are to the Office Lease)         DESCRIPTION
------------------------------------         -----------

1.   Date:                              5-23, 2001

2.   Landlord:                          AGBRI MISSION, L.L.C.,
                                        a Delaware limited liability company
                                        c/o Mr. Marc Brutten
                                        The Shidler Group
                                        4660 La Jolla Village Drive, Suite 800
                                        San Diego, CA 92122

3.   Tenant:                            VENTURE CATALYST INCORPORATED,
                                        a Utah corporation
                                        16868 Via Del Campo Court
                                        Suite 200
                                        San Diego, 92127

4.   Premises (Article 1).
     4.1  Building Address:             591 Camino De La Reina
                                        San Diego, California 92108.

     4.2  Premises:                     1,487 rentable square feet of space
                                        located in Suite 418 on the forth (4th)
                                        floor of the Building, as further set
                                        forth in Exhibit A to the Office Lease.

5.   Lease Term (Article 2).

     5.1  Length of Term:               Thirty-Six (36) months.

     5.2  Option Term(s):               None.

     5.3  Lease Commencement            The Lease Commencement Date shall occur
          Date:                         as set forth in Article 2 of the Office
                                        Lease. The Lease Commencement Date is
                                        anticipated to be June 1, 2001.

5.4  Lease Expiration Date:             The last day of the month in which the
                                        third (3/rd/) anniversary of the Lease
                                        Commencement Date occurs.

                                      (i)
<PAGE>

6.   Base Rent (Article 3):

                                         Monthly        Monthly Rental Rate
                                     Installment of         Per Rentable
    Lease Year    Annual Base Rent      Base Rent           Square Foot
----------------  ----------------  ----------------   ---------------------
         1          $34,795.80          $2,899.65              $1.95
         2          $36,580.20          $2,899.35              $2.05
         3          $38,364.60          $3,197.05              $2.15

7.   Additional Rent (Article 4).

     7.1   Base Expenses:          For all Project Expenses other than
                                   utilities, "Base Expenses" shall mean the
                                   amount of such expenses incurred in the
                                   calendar year 2001 ("Base Year"). For the
                                   portion of Project Expenses attributable
                                   to utilities, "Base Expenses" shall mean all
                                   utility expenses equal to $2.04 per rentable
                                   square foot per annum.

     7.2  Tenant's Share:          0.872% (1,487 rentable square feet within
                                   the Premises multiplied by 100 divided by
                                   170,537 rentable square feet within the
                                   Building).

8.   Security Deposit (Article
     21):                          $3,197.05

9.   Guarantor(s) (Article 21):    None.

10.  Parking Pass Ratio            Three (3)parking passes for every 1,000
     (Article 28):                 rentable square feet of the Premises (five
                                   (5) passes). Such parking passes shall permit
                                   Tenant and its employees to use, on a
                                   nonexclusive, as available basis, together
                                   with other tenants and their respective
                                   employees, any undesignated, unreserved
                                   spaces available in such parking areas from
                                   time to time.

11.  Broker(s) (Section 29.18):    Jim Laing of Burnham Real Estate Services,
                                   representing Landlord.

12.  Address of Tenant             VENTURE CATALYST INCORPORATED
     Section 29.13):               16868 Via Del Campo Court
                                   Suite 200
                                   San Diego, CA 92127
                                   Attention: Kevin McIntosh
                                   (Prior to Lease Commencement Date)

                                                         and

                                   591 Camino De La Reina, Suite 418
                                   San Diego, California 92108
                                   Attention: Kevin McIntosh
                                   (After Lease Commencement Date)

13.  Tenant Improvement            None.
     Allowance (Exhibit E):

                                     (ii)

<PAGE>

      The foregoing terms of this Summary are hereby agreed to by
      Landlord and Tenant.

      "LANDLORD":                 AGBRI MISSION, L.L.C.,
                                  a Delaware limited liability company

                                  By:   Shidler West Investment Corporation,
                                        a Delaware corporation
                                  Its:  Authorized Agent

                                        By: /s/ Jim Ingebritz
                                            ----------------------------------
                                            Name: Jim Ingebritz
                                                 -----------------------------
                                            Title:   CFO
                                                  ----------------------------

      "TENANT":                   VENTURE CATALYST INCORPORATED,
                                  a Utah corporation

                                  By:   /s/ Kevin McIntosh
                                        --------------------------------------
                                        Name:  KEVIN McINTOSH
                                              --------------------------------
                                        Title: SENIOR VICE PRESIDENT & CFO
                                               ---------------------------

                                  By:   /s/ Glenn Smith
                                        --------------------------------------
                                        Name:  GLENN SMITH
                                               -------------------------------
                                        Title: EXECUTIVE VICE PRESIDENT
                                               -------------------------------

                                     (iii)
<PAGE>

                        MISSION VALLEY FINANCIAL CENTER
                        -------------------------------

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

<TABLE>
<CAPTION>
ARTICLE          SUBJECT MATTER                                         PAGE
-------          --------------                                         ----
<S>            <C>                                                   <C>
ARTICLE 1      PREMISES, BUILDING, PROJECT, AND COMMON AREAS............  1
ARTICLE 2      LEASE TERM...............................................  2
ARTICLE 3      BASE RENT................................................  4
ARTICLE 4      ADDITIONAL RENT..........................................  4
ARTICLE 5      USE OF PREMISES..........................................  8
ARTICLE 6      SERVICES AND UTILITIES...................................  8
ARTICLE 7      REPAIRS..................................................  9
ARTICLE 8      ADDITIONS AND ALTERATIONS................................  9
ARTICLE 9      COVENANT AGAINST LIENS................................... 11
ARTICLE 10     INSURANCE................................................ 11
ARTICLE 11     DAMAGE AND DESTRUCTION................................... 15
ARTICLE 12     NONWAIVER................................................ 16
ARTICLE 13     CONDEMNATION ............................................ 16
ARTICLE 14     ASSIGNMENT AND SUBLETTING................................ 17
ARTICLE 15     SURRENDER OF PREMISES; REMOVAL OF TRADE FIXTURES......... 20
ARTICLE 16     HOLDING OVER............................................. 21
ARTICLE 17     ESTOPPEL CERTIFICATES.................................... 21
ARTICLE 18     SUBORDINATION............................................ 21
ARTICLE 19     DEFAULTS; REMEDIES....................................... 22
ARTICLE 20     COVENANT OF QUIET ENJOYMENT.............................. 23
ARTICLE 21     SECURITY DEPOSIT AND GUARANTY............................ 24
ARTICLE 22     SUBSTITUTION OF OTHER PREMISES........................... 24
ARTICLE 23     SIGNS.................................................... 24
ARTICLE 24     COMPLIANCE WITH LAW...................................... 25
ARTICLE 25     LATE CHARGES............................................. 25
ARTICLE 26     LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT..... 25
ARTICLE 27     ENTRY BY LANDLORD........................................ 26
ARTICLE 28     TENANT PARKING........................................... 26
</TABLE>

                                     (iv)
<PAGE>

ARTICLE 29  MISCELLANEOUS PROVISIONS.......................... 27

EXHIBIT A   OUTLINE OF FLOOR PLAN OF PREMISES
EXHIBIT B   NOTICE OF LEASE TERM DATES
EXHIBIT C   RULES AND REGULATIONS
EXHIBIT D   FORM OF TENANT'S ESTOPPEL CERTIFICATE
EXHIBIT E   TENANT WORK LETTER

                                      (v)
<PAGE>

                        MISSION VALLEY FINANCIAL CENTER
                        -------------------------------

                            INDEX OF DEFINED TERMS
                            ----------------------

Additional Rent.......................................................         4
Alterations...........................................................         9
Approved Working Drawings............................................. Exhibit E
Architect............................................................. Exhibit E
Arroyo Parkway Plaza..................................................         1
Base Expenses.........................................................         4
Base Rent.............................................................         4
Base, Shell, and Core................................................. Exhibit E
Brokers...............................................................        29
Building..............................................................         1
Building Common Areas.................................................         1
Child Care Facilities.................................................        27
Child Care Provider...................................................        27
Common Areas..........................................................         1
Construction Drawings................................................. Exhibit E
Contractor............................................................ Exhibit E
Cost Pools............................................................         5
Cost Proposal......................................................... Exhibit E
Cost Proposal Delivery Date........................................... Exhibit E
Engineers............................................................. Exhibit E
Estimate..............................................................         7
Estimate Statement....................................................         7
Estimated Excess......................................................         7
Excess................................................................         6
Expense Year..........................................................         4
Final Space Plan...................................................... Exhibit E
Final Working Drawings................................................ Exhibit E
Force Majeure.........................................................        28
Hazardous Material....................................................        29
Holidays..............................................................         8
Interest Notice.......................................................         2
Landlord..............................................................         1
Landlord Parties......................................................        11
Landlord Supervision Fee.............................................. Exhibit E
Landlord Work......................................................... Exhibit E
Lease.................................................................         1
Lease Commencement Date...............................................         2
Lease Expiration Date.................................................         2
Lease Term............................................................         2
Lease Year............................................................         2
Notices...............................................................        28
Operating Expenses....................................................         4
Option Notice.........................................................         2
Option Rent...........................................................         2
Option Rent Notice....................................................         3
Option Term...........................................................         2
Original Tenant.......................................................         2
Other Improvements....................................................        30
Outside Agreement Date................................................         3
Over-Allowance Amount................................................. Exhibit E
Partial Cost Proposal................................................. Exhibit E
Permits............................................................... Exhibit E
Plans................................................................. Exhibit E
Premises..............................................................         1
Project...............................................................         1
Project Common Areas..................................................         1
Project Expenses......................................................         5
Proposition 13........................................................         6
Rent..................................................................         4
Security Deposit......................................................        23
Specifications........................................................ Exhibit E
Standard Improvement Package.......................................... Exhibit E
Statement.............................................................         7
Structural Items...................................................... Exhibit E
Structural Permits.................................................... Exhibit E
Subject Space.........................................................        17

                                     (vi)
<PAGE>

Subleasing Costs..............................................           18
Substantial Completion........................................            2
Summary.......................................................            1
Tax Expenses..................................................            5
Tenant........................................................            1
Tenant Delays.................................................    Exhibit E
Tenant Improvement Allowance..................................    Exhibit E
Tenant Improvement Allowance Items............................    Exhibit E
Tenant Improvements...........................................    Exhibit E
Tenant Work...................................................            2
Tenant's Share................................................            6
Time Deadlines................................................    Exhibit E
Transfer Notice...............................................           17
Transfer Premium..............................................           18
Transferee....................................................           17
Transfers.....................................................           17

                                     (vii)
<PAGE>

                        MISSION VALLEY FINANCIAL CENTER
                        -------------------------------

                                 OFFICE LEASE
                                 ------------

   This Office Lease, which includes the preceding Summary of Basic Lease
Information (the "Summary") attached hereto and incorporated herein by this
reference (the Office Lease and Summary are sometimes collectively referred to
herein as the "Lease"), dated as of the date set forth in Section 1 of the
Summary is made by and between AGBRI MISSION, L.L.C., a Delaware limited
liability company ("Landlord"), and VENTURE CATALYST INCORPORATED, a Utah
corporation ("Tenant").

                                   ARTICLE 1
                                   ---------

               PREMISES, BUILDING, PROJECT, AND COMMON AREAS
               ---------------------------------------------

     1.1       Premises, Building, Project and Common Areas.
               --------------------------------------------

               1.1.1 The Premises. Upon and subject to the terms
                     ------------
hereinafter set forth in this Lease, Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord the premises set forth in Section 4.2 of
the Summary (the "Premises"), which Premises are located in the "Building,"
as that term is defined in Section 1.1.2, below. The outline of the Premises
is set forth in Exhibit A attached hereto.

               1.1.2 The Building and the Project. The Premises are a part of
                     ----------------------------
the building set forth in Section 4.1 of the Summary (the "Building") located in
San Diego, California. The Building is part of a project known as "Mission
Valley Financial Center". The term "Project," as used in this Lease, shall mean
(i) the Building and the "Common Areas", as that term is defined in Section
1.1.3 below, (ii) the land (which is improved with landscaping, parking
facilities and other improvements) upon which the Building, parking garage and
the Common Areas are located, and (iii) at Landlord's discretion, any additional
real property, areas, buildings or other improvements added thereto pursuant to
the terms of Section 1.1.3 of this Lease.

               1.1.3 Common Areas. Tenant shall have the non-exclusive right to
                     ------------
use in common with other tenants in the Project, and subject to the rules and
regulations referred to in Article 5 of this Lease, those portions of the
Project which are provided, from time to time, for use in common by Landlord,
Tenant and any other tenants of the Project, whether or not those areas are open
to the general public (such areas, together with such other portions of the
Project designated by Landlord, in its discretion, including certain areas
designated for the exclusive use of certain tenants, or to be shared by Landlord
and certain tenants, such as balconies abutting tenants' premises, are
collectively referred to herein as the "Common Areas"). The Common Areas shall
consist of the "Project Common Areas" and the "Building Common Areas". The term
"Project Common Areas", as used in this Lease, shall mean the portion of the
Project designated as such by Landlord. "Building Common Areas", as used in this
Lease, shall mean the portions of the Common Areas located within the Building
designated as such by Landlord from time to time. The manner in which the Common
Areas are maintained and operated shall be at the sole discretion of Landlord.
Landlord reserves the right to make alterations or additions to, or to change
the location of, elements of the Project and the Common Areas.

     1.2  Number of Square Feet of Premises, Building, and Project. For purposes
          --------------------------------------------------------
of this Lease, and unless otherwise provided herein, "usable square feet" and
"rentable square feet" and any other statement of square footage set forth in
this Lease for the Premises, the Building, the Project, or any portion thereof,
or that may otherwise be used in calculating amounts owed Landlord by Tenant,
including but not limited to rental, security deposit, additional rental and/or
Tenant's Share of Operating Expenses, is an approximation which Landlord and
Tenant agree is reasonable and the rental and Tenant's Share based thereon is
not subject to revision whether or not the actual square footage is more or
less.

     1.3  Base, Shell and Core Work in the Premises. Except as specifically set
          -----------------------------------------
forth in this Lease and in the Tenant Work Letter attached hereto as Exhibit E
(if applicable), Landlord shall

<PAGE>

not be obligated to provide or pay for any improvement work or services related
to the improvement of the Premises. Tenant also acknowledges that Landlord has
made no representation or warranty regarding the condition of the Premises or
the Project except as specifically set forth in this Lease and the Tenant Work
Letter.

                                   ARTICLE 2
                                   ---------

                                  LEASE TERM
                                  ----------

     2.1  Lease Term.    The terms and provisions of the Lease shall be
          ----------
effective as of the date of this Lease. The term of this Lease (the "Lease
Term") shall be as set forth in Section 5.1 of the Summary, shall commence on
the date which is the earlier to occur of (i) the date Tenant opens for business
in the Premises, and (ii) the date of "Substantial Completion", as that term is
defined in the Article 2, of the Premises by Landlord ("Lease Commencement
Date"), and shall terminate on the date set forth in Section 5.4 of the Summary
(the "Lease Expiration Date") unless this Lease is sooner terminated as
hereinafter provided. For purposes of this Lease, the term "Lease Year" shall
mean each consecutive twelve (12) month period during the Lease Term; provided,
however, that the first Lease Year shall commence on the Lease Commencement Date
and end on the last day of the eleventh month thereafter and the second and
each succeeding Lease Year shall commence on the first day of the next calendar
month; and further provided that the last Lease Year shall end on the Lease
Expiration Date. For purposes of this Lease, "Substantial Completion" of the
Premises shall occur upon completion of construction, as reasonably determined
by Landlord, of the "Tenant Improvements," as that term is defined in the Tenant
Work Letter, in the Premises pursuant to the plans and drawings which are
prepared pursuant to the terms of the Tenant Work Letter, with the exception of
any punch list items and any tenant fixtures, work-stations, built-in furniture,
or equipment to be installed by Tenant in the Premises pursuant to the terms of
the Tenant Work Letter or to be installed under the supervision of "Contractor"
as that term is defined in the Tenant Work Letter (the "Tenant Work"). At any
time during the Lease Term, Landlord may deliver to Tenant a notice in the form
as set forth in Exhibit B, attached hereto which notice Tenant shall execute and
return to Landlord within five (5) days prior of receipt thereof.

     2.2  Option Term.   Landlord hereby grants to the Tenant originally named
          -----------
in the Lease ("Original Tenant") the number of options to extend the Lease Term
of the period of years set forth in the Summary of Basic Lease Information (the
"Option Term"), which option shall be exercisable only by written notice
("Option Notice") delivered by Tenant to Landlord as provided in Section 2.2.2
below, provided that, as of the date of delivery of such notice and, at
Landlord's option, as of the last day of the initial Lease Term, Tenant is not
in default under this Lease after expiration of applicable cure periods. The
right contained in this Section 2.2 shall be personal to the Original Tenant and
may only be exercised by the Original Tenant (and not any assignee, sublessee or
other transferee of the Original Tenant's interest in this Lease) if the
Original Tenant occupies the entire Premises as of the date of the Option
Notice.

          2.2.1 Option Rent. The Rent payable by Tenant during the Option Term
                -----------
(the "Option Rent") shall be equal to the then prevailing fair market rent for
the Premises as of the commencement date of the Option Term, but below the sum
of the Base Rent plus Tenant's Share of Operating Expenses payable by Tenant
immediately prior to the Option Term. The then prevailing fair market rent shall
be the rental rate, including all escalations, at which new, non-renewal
tenants, as of the commencement of the Option Term, are leasing non-sublease,
non-encumbered space comparable in size, location and quality to the Premises
for a comparable term, which comparable space is located in comparable buildings
in the San Diego area, taking into consideration the following concessions:
(a) rental abatement concessions, if any, being granted such tenants in
connection with such comparable space and (b) tenant improvements or allowances
provided or to be provided for such comparable space, taking into account, and
deducting the value of, the existing improvements in the Premises, with such
value to be based upon the age, quality and layout of the improvements and the
extent to which the same could be utilized by Tenant based upon the fact that
the precise tenant improvements existing in the Premises are specifically
suitable to Tenant. In no event shall the Option Rent be less than the monthly
rent being paid in the last month of the initial Term.

                                      -2-

<PAGE>

     2.2.2  Exercise of Option.  The option contained in this Section 2.2 shall
            ------------------
be exercised by Tenant, if at all , only in the following manner: (i) Tenant
shall deliver written notice ("Interest Notice") to Landlord on or before the
date which is six (6) months prior to the expiration of the initial Lease Term,
stating that Tenant is interested in exercising its option; (ii) Landlord, after
receipt of Tenant's notice, shall deliver notice (the "Option Rent Notice") to
Tenant not less than four (4) months prior to the expiration of the initial
Lease Term, setting forth the Option Rent; and (iii) if Tenant wishes to
exercise such option, Tenant shall, on or before the earlier of (A) the date
occurring three (3) months prior to the expiration of the initial Lease Term,
and (B) the date occurring thirty (30) days after Tenant's receipt of the Option
Rent Notice, exercise the option by delivering the Option Notice to Landlord and
upon, and concurrent with, such exercise, Tenant may, at its option, object to
the Option Rent determined by Landlord. Failure of Tenant to deliver the
Interest Notice to Landlord on or before the date specified in (i) above or to
deliver the Option Notice to Landlord on or before the date specified in (iii)
above shall be deemed to constitute Tenant's failure to exercise its option to
extend. If Tenant timely and properly exercises its option to extend, the Lease
Term shall be extended for the Option Term upon all of the terms and conditions
set forth in this Lease, except that the Rent shall be as indicated in the
Option Rent Notice unless Tenant, concurrently with its exercise, objects to the
Option Rent contained in the Option Rent Notice in which case the parties shall
follow the procedure, and the Option Rent shall be determined, as set forth in
Section 2.2.3. below.

     2.2.3  Determination of Option Rent.  In the event Tenant exercises its
            ----------------------------
option to extend but objects to Landlord's determination of the Option Rent
concurrently with its exercise of the option to extend, Landlord and Tenant
shall attempt to agree in good faith upon the Option Rent. If Landlord and
Tenant fail to reach agreement within thirty (30) days following Tenant's
delivery of the Option Notice (the "Outside Agreement Date"), the each party
shall make a separate determination of the Option Rent within five (5) business
days after the Outside Agreement Date, concurrently exchange such determinations
and such determinations shall be submitted to arbitration in accordance with
Sections 2.2.3.1 through 2.2.3.7 below.

            2.2.3.1  Landlord and Tenant shall each appoint one arbitrator who
shall by profession be a real estate broker or appraiser who shall have been
active over the five (5) year period ending on the  date of such appointment
in the leasing (or appraisal, as the case may be) of commercial high-rise
properties in the San Diego, California area. The determination of the
arbitrators shall be limited solely to the issue of whether Landlord's or
Tenant's submitted Option Rent is the closest to the actual Option Rent, as
determined by the arbitrators, taking into account the requirements of Section
2.2.1 of this Lease (i.e., the arbitrators may only select Landlord's or
Tenant's determination and shall not be entitled to make a compromise
determination). Each such arbitrator shall be appointed within fifteen (15)
business days after the applicable Outside Agreement Date.

            2.2.3.2  The two (2) arbitrators so appointed shall within five (5)
days of the date of the appointment of the last appointed arbitrator agree upon
and appoint a third arbitrator who shall be qualified under the same criteria
set forth herein above for qualification of the initial two (2) arbitrators.

            2.2.3.3  The three (3) arbitrators shall within five (5) days of the
appointment of the third arbitrator reach a decision as to whether the parties
shall use Landlord's or Tenant's submitted Option Rent and shall notify Landlord
and Tenant thereof.

            2.2.3.4  The decision of the majority of the three (3) arbitrators
shall be binding upon Landlord and Tenant.

            2.2.3.5  If either Landlord or Tenant fails to appoint an arbitrator
within fifteen (15) business days after the applicable Outside Agreement Date,
the arbitrator appointed by one of them shall reach a decision, notify Landlord
and Tenant thereof, and such arbitrator's decision shall be binding upon
Landlord and Tenant.

            2.2.3.6  If the two (2) arbitrators fail to agree upon and appoint a
third arbitrator, or both parties fail to appoint an arbitrator, then the
appointment of the third arbitrator or any arbitrator shall be dismissed and the
Option Rent be decided shall be forthwith submitted

                                      -3-

<PAGE>

to arbitration under the provisions of the American Arbitration Association, but
subject to the instruction set forth in this Section 2.2.3.

           2.2.3.7  The cost of arbitration shall be paid by Landlord and
Tenant equally.

                                   ARTICLE 3
                                   ---------

                                   BASE RENT
                                   ---------

     Tenant shall pay, without notice or demand, to Landlord or Landlord's agent
at the management office of the Project, or at such other place as Landlord may
from time to time designate in writing in currency or a check for currency
which, at the time of payment, is legal tender for private or public debts in
the United States of America, base rent ("Base Rent") as set forth in Section 6
of the Summary, payable in equal monthly installments as set forth in Section 6
of the Summary in advance on or before the first day of each and every month
during the Lease Term, without any setoff or deduction whatsoever. The Base Rent
for the first full month of the Lease Term shall be paid at the time of Tenant's
execution of this Lease. If any Rent payment date (including the Lease
Commencement Date) falls on a day of the month other than the first day of such
month or if any payment of Rent is for a period which is shorter than one month,
the Rent for any fractional month shall accrue on a daily basis for the period
from the date such payment is due to the end of such calendar month or to the
end of the Lease Term at a rate per day which is equal to 1/365 of the Rent. All
other payments or adjustments required to be made under the terms of this Lease
that require proration on a time basis shall be prorated on the dame basis.

                                   ARTICLE 4
                                   ---------

                                ADDITIONAL RENT
                                ---------------

     4.1  General Terms.  As set forth in this Article 4, in addition to paying
          -------------
the Base Rent specified in Article 3 of this Lease, Tenant shall pay "Tenant's
Share" of the annual "Project Expenses," as those terms are defined in Sections
4.2.6 and 4.2.4 of this Lease, respectively, allocated to the tenants of the
Building pursuant to the terms of Section 4.3 below, to the extent such Project
Expenses allocated to the tenants of the Building are in excess of the "Base
Expenses", as that term is defined in Section 7.1 of the Summary. Such payments
by Tenant, together with any and all other amounts payable by Tenant to Landlord
pursuant to the terms of this Lease, are hereinafter collectively referred to as
the "Additional Rent", and the Base Rent and the Additional Rent are sometimes
herein collectively referred to as "Rent." All amounts due under this Article 4
as Additional Rent shall be payable for the same periods and in the same manner
as the Base Rent. Without limitation on other obligations of Tenant which
survive the expiration of the Lease Term, the obligations of Tenant which
survive the expiration of the Lease Term, the obligations of Tenant to pay the
Additional Rent provided for in this Article 4 shall survive the expiration of
the Lease Term.

     4.2  Definitions.  As used in this Article 4, the following terms shall
          -----------
have the meanings hereinafter set forth:

          4.2.1  "Base Expenses" shall mean the base expenses set forth in
Section 7.1 of the Summary.

          4.2.2  "Expense Year" shall mean each calendar year in which any
portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires.

          4.2.3  "Operating Expenses" shall mean all expenses, costs and amounts
of every kind and nature incurred in connection with the ownership, management,
maintenance, repair, replacement, restoration or operation of the Project,
including, without limitation, any amounts paid or incurred for (i) the cost of
supplying all utilities, the cost of operating, maintaining, repairing,
renovating, complying with conservation measures in connection with, and
managing the utility systems, mechanical systems, sanitary and storm drainage
systems, and elevator systems, and the cost of supplies and equipment,
maintenance, and service contracts in connection therewith; (ii) the cost of
licenses, certificates, permits and inspections and the cost of

                                      -4-

<PAGE>

contesting the validity or applicability of any governmental enactments which
may affect Operating Expenses, and the costs incurred in connection with the
implementation and operation of a transportation system management program or a
municipal or public shuttle service or parking program; (iii) the cost of all
insurance carried in connection with the Project, or any portion thereof; (iv)
the cost of landscaping, relamping, and all supplies, tools, equipment and
materials used in the operation, repair and maintenance of the Project, or any
portion thereof; (v) the cost of parking area repair, restoration, and
maintenance, including, but not limited to, resurfacing, repainting, restriping,
and cleaning; (vi) fees, charges and other costs, including consulting fees,
legal fees and accounting fees, of all contractors and consultants; (vii)
payments under any equipment rental agreements or management agreements
(including the cost of any management fee and the fair rental value of any
office space provided thereunder); (viii) wages, salaries and other compensation
and benefits of all persons engaged in the operation, maintenance, management,
or security of the Project, or any portion thereof, including employer's Social
Security taxes, unemployment taxes or insurance, and any other taxes which may
be levied on such wages, salaries, compensation and benefits; (ix) payments
under any easement, license, operating agreement, declaration, covenant,
conditions and restrictions, or any other instrument pertaining to the sharing
of costs by the Project, or any portion thereof; (x) the cost of operation,
repair, maintenance and replacement of all systems and equipment which serve the
Project in whole or part; (xi) the cost of janitorial services, alarm and
security service, window cleaning, trash removal, replacement of wall and floor
coverings, ceiling tiles and fixtures in lobbies, corridors, restrooms and other
common or public areas or facilities, maintenance and replacement of curbs and
walkways, repair to roofs and re-roofing; and (xii) the cost of any capital
improvements made to the Project which are intended as a labor-saving device or
to effect other economies in the operation or maintenance of the Project, or any
portion thereof, or made to all or any portion of the Project, or any portion
thereof, after the Lease Commencement Date that are required under any
governmental law or regulation that was not applicable to the Project at the
time that permits for the construction of the Building were obtained; provided,
however, that each such permitted capital expenditure shall be amortized
(including interest on the umamortized cost) over its useful life as Landlord
shall reasonably determine. If Landlord is not furnishing any particular work or
service (the cost of which, if performed by Landlord, would be included in
Operating Expenses) to a tenant who has undertaken to perform such work or
service in lieu of the performance thereof by Landlord, Operating Expenses shall
be deemed to be increased by an amount equal to the additional Operating
Expenses which would reasonably have incurred during such period by Landlord if
it had at its own expense furnished such work or service to such tenant. If the
Building is not fully occupied during all or a portion of any Expense Year,
including that portion of any Expense Year occurring during the Base Year,
Landlord shall make an appropriate adjustment to the variable components of
Operating Expenses for such year or applicable portion thereof, employing sound
accounting and management principles, to determine the amount of Operating
Expenses that would have been paid had the Building been fully occupied.
Landlord shall have the right, from time to time, to equitably allocate some or
all of the Operating Expenses among different tenants of the Building or the
Project (the "Cost Pools"). Notwithstanding anything to the contrary set forth
in this Article 4, when calculating Operating Expenses for the Base Year,
Operating Expenses shall exclude market-wide labor rate increases due to
extraordinary circumstances including, but not limited to, boycotts and strikes,
amortization of the cost of any capital improvements and utility rare increases
due to extraordinary circumstances including, but not limited to , conservation
surcharges, boycotts, embargoes or other shortages.

           4.2.4  "Project Expenses" shall mean the sum of "Operating Expenses"
and "Tax Expenses."

           4.2.5  "Tax Expenses" shall mean all federal, state, county, or local
governmental or municipal taxes, fees, charges or other impositions of every
kind and nature, whether general, special, ordinary or extraordinary (including,
without limitation, real estate taxes, general and special assessments, transit
taxes, leasehold taxes or taxes based upon the receipt of rent, including gross
receipts or sales taxes applicable to the receipt of rent, unless required to be
paid by Tenant, personal property taxes imposed upon the fixtures, machinery,
equipment, apparatus, systems and equipment, appurtenances, furniture and other
personal property used in connection with all or any portion of the Project),
which shall be paid during any Expense Year (without regard to any different
fiscal year used by such governmental or

                                      -5-
<PAGE>

municipal authority) because of or in connection with the ownership, leasing and
operation of the Project, or any portion thereof. For purposes of this Lease,
Tax Expenses shall be calculated as if the Tenant Improvements in the Building
were fully constructed and the Building and all Tenant Improvements in the
Building were fully assessed for real estate tax purposes.

                 4.2.5.1  Tax Expenses shall include, without limitation:

                       (i)  Any assesment, tax, fee, levy or charge in addition
to, or in substitution, partially or totally, of any assessment, tax, fee, levy
or charge previously included within the definition of real property tax, it
being acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election ("Proposition 13")
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants, and, in further
recognition of the decrease in the level and quality of governmental services
and amenities as a result of Proposition 13, Tax Expenses shall also include any
governmental or private assessments or the Project's contribution towards a
governmental or private cost-sharing agreement for the purpose of augmenting or
improving the quality of services and amenities normally provided by
governmental agencies. It is the intention of Tenant and Landlord that all such
new and increased assessments, taxes, fees, levies, and charges and all similar
assessments, taxes, fees, levies and charges be included within the definition
of Tax Expenses for the purposes of this Lease;

                       (ii)  Any assessment, tax, fee, levy or charge allocable
to or measured by the area of the Premises or the Rent payable hereunder,
including, without limitation, any gross income tax with respect to the receipt
of such rent, or upon or with respect to the possession, leasing, operating,
management, maintenance, alteration, repair, use or occupancy by Tenant of the
Premises, or any portion thereof;

                      (iii)  Any assessment, tax, fee, levy or charge, upon this
transaction or any document to which Tenant is a party, creating or transferring
an interest or an estate in the Premises; and

                       (iv)  Any possessory taxes charged or levied in lieu of
real estate taxes.

                 4.2.5.2  In no event shall Tax Expenses for any Expense Year be
less than Tax Expenses for the Base Year. In addition, notwithstanding anything
to the contrary set forth in this Article 4, when calculating Tax Expenses for
the Base Year, such tax expenses shall not include any increase in Tax Expenses
for the Base Year, such Tax Expenses shall not include any increase in Tax
attributable to special assessments, charges, costs, or fees, or due to
modifications or changes in governmental laws or regulations, including, but not
limited to, the institution of a split tax roll.

           4.2.6  "Tenant's Share" shall mean the percentage set forth in
Section 7.2 of the Summary. Tenant's share was calculated by multiplying the
number of rentable square feet of the Premises by 100, and dividing the product
by the total rentable square feet in the Building. It is understood and agreed
that the square footage figures set forth in the Basic Lease Provisions may not
be strictly calculated pursuant to BOMA standards and are approximations which
Landlord and Tenant agree are reasonable and shall not be subject to revision
except in connection with an actual change in the size of the Premises or a
change in the space available for lease in the Building or in the Project, as
determined by Landlord.

     4.3  Allocation of Project Expenses to Tenants of the Building.  Project
          ---------------------------------------------------------
Expenses (i.e., Operating Expenses and Tax Expenses) are determined annually for
the Project as a whole. Since the Building is only one of the buildings which
constitute the Project, Project Expenses shall be allocated by Landlord, in its
reasonable discretion, to both the tenants of the Building and the tenants of
the other buildings in the Project. The portion of Project Expenses allocated to
the tenants of the Building shall consist of (i) all Project Expenses
attributable solely to the Building and (ii) an equitable portion of Project
Expenses attributable to the Project as a whole and not attributable solely to
the Building or to any other building of the Project.

                                      -6-

<PAGE>

     4.4  Calculation and Payment of Additional Rent.
          ------------------------------------------

           4.4.1  Calculation of Excess.  If for any Expense Year ending or
                  ---------------------
commencing within the Lease Term, Tenant's Share of Project Expenses allocated
to the tenants of the Building pursuant to Section 4.3 above for such Expense
Year exceeds Tenant's Share of the Base Expenses (as defined in Section 7.1 of
the Summary) allocated to the tenants of the Building, then Tenant shall pay to
Landlord, in the manner set forth in Section 4.4.2, below, and as Additional
Rent, an amount equal to Tenant's Share of the excess (the "Excess").

            4.4.2  Statement of Actual Project Expenses and Payment by Tenant.
                   ----------------------------------------------------------
Landlord shall endeavor to give to Tenant on or before the first day of April
following the end of each Expense Year, a statement (the "Statement") which
shall state the Project Expenses incurred or accrued for such preceding Expense
Year and the amount thereof allocated to the tenants of the Building, and which
shall indicate the amount, if any, of any Excess. Upon receipt of the Statement
for each Expense Year ending during the Lease Term, if an Excess is present,
Tenant shall pay, with its next installment of Base Rent due, the full amount of
the Excess for such Expense Year, less the amounts, if any, paid during such
Expense Year as " Estimated Excess," as that term is defined in Section 4.4.3,
below. The failure of Landlord to timely furnish the Statement for any Expense
Year shall not prejudice Landlord or Tenant from enforcing its rights under this
Article 4. Even though the Lease Term has expired and Tenant has vacated the
Premises, when the final determination is made of Tenant's Share of Project
Expenses allocated to the tenants of the Building for the Expense Year in which
this Lease terminates, if an Excess is present, Tenant shall immediately pay to
Landlord an amount as calculated pursuant to the provisions of Section 4.4.1 of
this Lease. The provisions of this Section 4.4.2 shall survive the expiration or
earlier termination of the Lease Term.

           4.4.3  Statement of Estimated Project Expenses.  In addition,
                  ---------------------------------------
Landlord shall endeavor to give Tenant a yearly expense estimate statement (the
"Estimate Statement") which shall set forth Landlord's reasonable estimate (the
"Estimate") of what the total amount of Project Expenses for the then-current
Expense Year shall be, the amount thereof to be allocated to the tenants of the
Building, and the estimated Excess (the "Estimated Excess") as calculated by
comparing Tenant's Share of Project Expenses allocated to the tenants of the
Building, which shall be based upon the Estimate, to Tenant's Share of the Base
Expenses. The failure of Landlord to timely furnish the Estimate Statement for
any Expense Year shall not preclude Landlord from enforcing its rights to
collect any Estimated Excess under this Article 4. If pursuant to the Estimate
Statement an Estimated Excess is calculated for the then-current Expense Year,
Tenant shall pay, with its next installment of Base Rent due, a fraction of the
Estimated Excess for the then-current Expense Year (reduced by any amounts paid
pursuant to the last sentence of this Section 4.4.3). Such fraction shall have
as its numerator the number of months which have elapsed in such current Expense
Year, including the month of such payment, and twelve (12) as its denominator.
Until a new Estimate Statement is furnished (which Landlord shall have the right
to deliver to Tenant at any time), Tenant shall pay monthly, with the monthly
Base Rent installments, an amount equal to one-twelfth (1/12) of the total
Estimated Excess set forth in the previous Estimate Statement delivered by
Landlord to Tenant.

     4.5  Taxes and Other Charges for Which Tenant is Directly Responsible.
          ----------------------------------------------------------------
Tenant shall reimburse Landlord upon demand for any and all taxes required to be
paid by Landlord, excluding state, local and federal personal or corporate
income taxes measured by the net income of Landlord from all sources and estate
and inheritance taxes, whether or not now customary or within the contemplation
of the parties hereto, when:

           4.5.1 Said taxes are measured by or reasonably attributable to the
cost or value of Tenant's equipment, furniture, fixtures and other personal
property located in the Premises, or by the cost or value of any leasehold
improvements made in or to the Premises by or for Tenant, to the extent the
cost or value of such leasehold improvements exceeds the cost or value of a
building standard build-out as determined by Landlord regardless of whether
title to such improvements shall be vested in Tenant or Landlord;

           4.5.2  Said taxes are assessed upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any portion of the Project (including
the Project parking facility); or
                                      -7-
<PAGE>

           4.5.3  Said taxes are assessed upon this transaction or any document
to which Tenant is a party creating or transferring an interest or an estate in
the Premises.

                                   ARTICLES
                                   --------

                                USE OF PREMISES
                                ---------------

     Tenant shall use the Premises solely for general office purposes consistent
with the character of the Building as a first-class office building, and Tenant
shall not use or permit the Premises to be used for any other purpose or
purposes whatsoever.  Tenant further covenants and agrees that Tenant shall not
use, or suffer or permit any person or persons to use, the Premises or any part
thereof for any use or purpose contrary to the provisions of the Rules and
Regulations set forth in Exhibit C, attached hereto, or in violation of the laws
of the United States of America, the State of California, or the ordinances,
regulations or requirements of the local municipal or county governing body or
other lawful authorities having jurisdiction over the Project. Tenant shall
comply with all recorded covenants, conditions, and restrictions now or
hereafter affecting the Project. Tenant shall not use or allow another person or
entity to use any part of the Premises for the storage, use, treatment,
manufacture or sale of "Hazardous Material," as that term is defined in Section
29.23 of this Lease.

                                   ARTICLE 6
                                   ---------

                            SERVICES AND UTILITIES
                            ----------------------

     6.1   Standard Tenant Services.  Landlord shall provide the following
           ------------------------
services on all days (unless otherwise stated below) during the Lease Term.

           6.1.1   Subject to all governmental rules, regulations and guidelines
applicable thereto, Landlord shall provide heating and air conditioning when
necessary for normal comfort for normal office use in the Premises, from Monday
through Friday, during the period from 8 A.M. to 6 P.M. and on Saturday during
the period from 9 A.M. to 1 P.M., except for the date of observation of New
Year's Day, Presidents Day, Independence Day, Labor Day, Memorial Day,
Thanksgiving Day, Christmas Day and, at Landlord's discretion, other locally or
nationally recognized holidays (collectively, the "Holidays").

           6.1.2.  Landlord hall provide adequate electrical wiring and
facilities and power for normal general office use as determined by Landlord.
Tenant shall bear the cost of replacement of lamps, starters and ballasts for
lighting fixtures within the Premises.

           6.1.3   Landlord shall provide city water from the regular Building
outlets for drinking, lavatory and toilet purposes

           6.1.4   Landlord shall provide janitorial services five (5) days per
week except the date of observation of the Holidays, in and about the Premises
and window washing services in a manner consistent with other first-class office
buildings in the San Diego area.

     6.2.  Overstandard Tenant Use.  Tenant shall not, without Landlord's prior
           -----------------------
written consent, use heat-generating machines, machines other than normal
machines, or equipment or lighting other than Building standard lights in the
Premises, which may affect the temperature otherwise maintained by the air
conditioning system or increase the water normally furnished for the Premises by
Landlord pursuant to the terms of Section 6.1 of this Lease. If such consent is
given, Landlord shall have the right to install supplementary air conditioning
units or other facilities in the Premises, including supplementary or additional
metering devices, and the cost thereof, including the cost of installation,
operation and maintenance, increased wear and tear on existing equipment and
other similar charges, shall be paid by Tenant to Landlord upon billing by
Landlord. If Tenant uses water, electricity, heat or air conditioning in excess
of that supplied by Landlord pursuant to Section 6.1 of this Lease, Tenant shall
pay to Landlord, upon billing, the cost of such excess consumption, the cost of
the installation, operation, and maintenance of equipment which is installed in
order to supply such excess consumption, and the cost of the increased wear and
tear on existing equipment caused by such excess consumption; and Landlord may
install devices to separately meter any increased use and in such event Tenant

                                      -8-
<PAGE>

shall pay the increased cost directly to Landlord, on demand, including the cost
of such additional metering devices.  If Tenant desires to use heat, ventilation
or air conditioning during hours other than those for which Landlord is
obligated to supply such utilities pursuant to the terms of Section 6.1 of this
Lease, Tenant shall give Landlord such prior notice, as Landlord shall from time
to time establish as appropriate, of Tenant's desired use and Landlord shall
supply such utilities to Tenant at such hourly cost to Tenant as Landlord shall
from time to time establish.  Amounts payable by Tenant to Landlord for such use
of additional utilities shall be deemed Additional Rent hereunder and shall be
billed on a monthly basis.

     6.3   Interruption of Use.  Tenant agrees that Landlord shall not be liable
           -------------------
for damages, by abatement of Rent or otherwise, for failure to furnish or delay
in furnishing any service (including telephone and telecommunication services),
or for any diminution in the quality or quantity thereof, when such failure or
delay or diminution is occasioned, in whole or in part, by repairs,
replacements, or improvements, by any strike, lockout or other labor trouble, by
inability to secure electricity, gas water, or other fuel at the Building or
Project after reasonable effort to do so, by any accident or casually
whatsoever, by act or default of Tenant or other parties, or by any other cause
beyond Landlord's reasonable control; and such failures or delays or diminution
shall never be deemed to constitute an eviction or disturbance of Tenant's use
and possession of the Premises or relieve Tenant from paying Rent or performing
any of its obligations under this Lease. Furthermore, Landlord shall not be
liable under any circumstances for a loss of, or injury to, property or for
injury to, or interference with, Tenant's business, including, without
limitation, loss of profits, however occurring, through or in connection with or
incidental to a failure to furnish any of the services or utilities as set forth
in this Article 6.

     6.4.  Additional Services.  Landlord shall also have the exclusive right,
           -------------------
but not the obligation, to provide any additional services which may be required
by Tenant, including, without limitation, locksmithing, lamp replacement,
additional janitorial service, and additional repairs and maintenance, provided
that Tenant shall pay to Landlord upon billing, the sum of all cost to Landlord
of such additional services plus an administration fee. Charges for any service
for which Tenant is required to pay from time to time hereunder shall be deemed
Additional Rent hereunder and shall be billed on a monthly basis.

                                   ARTICLE 7
                                   ---------

                                    REPAIRS
                                    -------

     Tenant shall, at Tenant's own expense, keep the Premises, including all
improvements, fixtures and furnishing therein, in good order, repair and
condition at all times during the Lease Term.  In addition, Tenant shall, at
Tenant's own expense, but under the supervision and subject to the prior
approval of Landlord, and within any reasonable period of time specified by
Landlord, promptly and adequately repair all damage to the Premises and replace
or repair all damaged, broken, or worn fixtures and appurtenances; provided
however, that, at Landlord's option, or if Tenant fails to make such repairs,
Landlord may, but need not, make such repairs and replacement, and Tenant shall
pay Landlord the cost thereof, including a percentage of the cost thereof (to be
uniformly established for the Building and/or the Project) sufficient to
reimburse Landlord for all overhead, general conditions, fees and other costs or
expenses arising from Landlord's involvement with such repairs and replacement
forthwith upon being billed for same. Landlord may, but shall not be required
to, enter the Premises at all reasonable times to make such repairs,
alterations, improvements or additions to the Premises or to the Project or to
any equipment located in the Project as Landlord shall desire or deem necessary
or as Landlord may be required to do by governmental or quasi-governmental
authority or court order or decree. Tenant hereby waives and releases its right
to make repairs at Landlord's expense under Section 1941 and 1942 of the
California Civil code or under any similar law, statute, or ordinance now or
hereafter in effect.

                                   ARTICLE 8
                                   ---------

                           ADDITIONS AND ALTERATIONS
                           -------------------------

     8.1   Landlord's Consent to Alterations.  Tenant may not make any
           ---------------------------------
improvements, alterations, additions or changes to the Premises (collectively,
the "Alterations") without first

                                      -9-
<PAGE>

procuring the prior written consent of Landlord to such Alterations, which
consent shall be requested by Tenant not less than thirty (30) days prior to the
commencement thereof, and which consent shall not be unreasonably withheld by
Landlord; provided however, that Tenant may make strictly cosmetic changes to
the finish work in the Premises, not requiring any structural or other
substantial modifications to the Premises, upon thirty (30) days prior notice to
Landlord. The construction of the initial improvements to the Premises shall be
governed by the terms of the Tenant Work Letter and not the terms of this
Article 8.

     8.2  Manner of Construction. Landlord may impose, as a condition of its
          ----------------------
consent to any and all Alterations or repairs of the Premises or about the
Premises, such requirements as Landlord in its sole discretion may deem
desirable, including, but not limited to, the requirement that upon Landlord's
request, Tenant shall, at Tenant's expense, remove such Alterations upon the
expiration or any early termination of the Lease Term, and/or the requirement
that Tenant utilize for such purposes only contractors, materials, mechanics and
materialmen selected by Landlord. Tenant shall construct such Alterations and
perform such repairs in conformance with any and all applicable federal, state,
county or municipal laws, rules and regulations and pursuant to a valid
building permit, issued by the City of San Diego, all in conformance with
Landlord's construction rules and regulations. All work with respect to any
Alterations must be done in a good and workmanlike manner and diligently
prosecuted to completion to the end that the Premises shall at all times be a
complete unit except during the period of work. In performing the work of any
such Alterations, Tenant shall have the work performed in such manner so as not
to obstruct access to the Project or any portion thereof, by any other tenant of
the Project, and so as not to obstruct the business of Landlord or other tenants
in the Project, or interfere with the labor force working in the Project. In
addition to the Tenant's obligations under Article 9 of this Lease, upon
completion of any Alterations, Tenant agrees to cause a Notice of Completion to
be recorded in the office of the Recorder of the County of San Diego in
accordance with Section 3093 of the Civil Code of the State of California or any
successor statute, and Tenant shall deliver to the Project management office a
reproducible copy of the "as built" drawings of the Alterations.

     8.3  Payment for Improvements. In the event Tenant orders any Alterations
          ------------------------
or repair work directly from Landlord, or from the contractor selected by
Landlord, the charges for such work shall be deemed Additional Rent under this
Lease, payable within five (5) days of billing therefor, either periodically
during construction or upon the substantial completion of such work, at
Landlord's option. Upon completion of such work, Tenant shall deliver to
Landlord evidence of payment, contractors' affidavits and full and final waivers
of all liens for labor, services or materials. Tenant shall pay to the Landlord
a percentage of the cost of such work sufficient to compensate Landlord for all
overhead, general conditions, fees and other costs and expenses arising from
Landlord's involvement with such work.

     8.4  Construction Insurance. In the event that Tenant makes any Alterations
          ----------------------
Tenant agrees to carry "Builder's All Risk" insurance in an amount approved by
Landlord covering the construction of such Alterations, and such other insurance
as Landlord may require, it being understood and agreed that all of such
Alterations shall be insured by Tenant pursuant to Article 10 of this Lease
immediately upon completion thereof. In addition, Landlord may, in its
discretion, require Tenant to obtain a lien and completion thereof. In addition,
Landlord may, in its discretion, require Tenant to obtain a lien and completion
bond or some alternate form of security satisfactory to Landlord in an amount
sufficient to ensure the lien-free completion of such Alterations and naming
Landlord as a co-obligee.

     8.5  Landlord's Property. All Alterations, improvements, fixtures and/or
          -------------------
equipment which may be installed or placed in or about the Premises, and all
signs installed in, on or about the Premises, from time to time, shall be at the
sole cost of Tenant and shall be and become the property of Landlord, except
that Tenant may remove any Alterations, improvements, fixtures and/or equipment
which Tenant can substantiate to Landlord have not been paid for with any Tenant
improvement allowance funds provided to Tenant by Landlord, provided Tenant
repairs any damage to the Premises and Building caused by such removal.
Furthermore, if Landlord, as a condition to Landlord's consent to any
Alteration, requires that Tenant remove any Alteration upon the expiration or
early termination of the Lease Term. Landlord may, by written notice to Tenant
prior to the end of the Lease Term, or given following any earlier termination
of this Lease, require Tenant, at Tenant's expense, to remove such Alterations
and to repair any damage to the Premises and Building caused by such removal. If
the Tenant fails to complete such removal

                                     -10-

<PAGE>

and/or to repair any damage caused by the removal of any Alternations, Landlord
may do so and may charge the cost thereof to Tenant.

                                   ARTICLE 9
                                   ---------

                            COVENANT AGAINST LIENS
                            ----------------------

     Landlord shall have the right at all times to post and keep posted on the
Premises any notice which it deems necessary for protection from such liens.
Tenant covenants and agrees not to suffer or permit any lien of mechanics or
materialmen or others to be placed against the Project, the Building or the
Premises, or any portion thereof, with respect to work or services claimed to
have been performed for or materials claimed to have been furnished to Tenant or
the Premises, and, in case of any such lien attaching or notice of any lien,
Tenant covenants and agrees to cause it to be immediately released and removed
of record. Notwithstanding anything to the contrary set forth in this Lease, in
the event that such lien is not released and removed on or before the date
occurring five (5) days after notice of such lien is delivered by Landlord to
Tenant, Landlord, at its sole option, may immediately take all action necessary
to release and remove such lien, without any duty to investigate the validity
thereof, and all sums, costs and expenses, including reasonable attorneys' fees
and costs, incurred by Landlord in connection with such lien shall be deemed
Additional Rent under this Lease and shall immediately be due and payable by
Tenant.

                                  ARTICLE 10
                                  ----------

                                   INSURANCE
                                   ---------

     10.1 Indemnification and Waiver.  To the extent not prohibited by law,
          --------------------------
Landlord, its partners, subpartners and their respective officers, agents,
servants, employees, and independent contractors (collectively, "Landlord
Parties") shall not be liable for, any damage either to person or property or
resulting from the loss of use thereof, which damage is sustained by Tenant.
Tenant shall indemnify, defend, protect, and hold harmless Landlord Parties from
any and all loss, cost, damage, expense and liability (including without
limitation court costs and reasonable attorneys' fees) incurred in connection
with or arising from any cause in, on or about the Premises, either prior to,
during, or after the expiration of the Lease Term, provided that the terms of
the foregoing indemnity shall not apply to the gross negligence or willful
misconduct of Landlord.  In no event, however, shall Landlord's liability for
any act or omission exceed the amount of insurance proceeds available to
Landlord pursuant to the insurance carried by Landlord hereunder.  The
provisions of this Section 10.1 shall survive the expiration or sooner
termination of this Lease with respect to any claims or liability occurring
prior to such expiration or termination.

     10.2 Landlord's Insurance.  At all times during the term of this Lease,
          --------------------
Landlord will purchase and maintain, as part of the Common Area Maintenance
Expenses, Commercial General Liability Insurance and Commercial Property
Insurance covering the Building and Landlord's equipment and furnishings in such
reasonable amounts and with such reasonable amounts and with such reasonable
coverages as determined by Landlord. Tenant acknowledges that it shall not be a
named insured on such policies and that it has no right to receive any proceeds
from any such insurance policies carried by Landlord. Tenant further
acknowledges that Landlord shall not be required to carry insurance covering (1)
Tenant's property described in Section 10.3.3 below; (2) Business Income
Insurance against, or be responsible for, any loss suffered by tenant due to
interruption of Landlord's business from any cause; (3) loss to Building
resulting from Flood, Earthquake, Windstorm or Hurricane; and (4) any other type
of property. Tenant shall cooperate with Landlord's insurance companies in the
adjustment of any claims for any damage to the Building.

     10.3 Tenant's Insurance.  At all times during the term of this Lease,
          ------------------
Tenant will purchase and maintain, at Tenant's sole expense, the following
insurance, in amounts not less than those specified below or such other amounts
as Landlord may from time to time reasonably request, with insurance companies
and on forms satisfactory to Landlord.

          10.3.1  Commercial General Liability Insurance written on an I.S.O.
"occurrence" form or its equivalent covering the use, occupancy and maintenance
of the Premises and all

                                     -11-

<PAGE>

operations of the Tenant. Such coverage shall include (a) Premises Operations;
(b) Independent Contractors; (c) Products - Completed Operations; (d) Broad Form
Property Damage; (e) Blanket Contractual Liability; (f) Personal and Advertising
Injury; (g) Fire Legal Liability; (h) Employees Named as Additional Insureds;
and (i) Severability

               10.3.1.1  Limits for such coverage shall be:

                         Bodily Injury and property Damage Combined Single Limit

                              $1,000,000     per Occurrence
                              $2,000,000     General Aggregate
                              $2,000,000     Products and Completed Operations
                                             Aggregate

                         Personal and Advertising Injury

                              $1,000,000     Per Person/Organization
                              subject to:
                              $2,000,000     General Aggregate

                         Fire Legal Liability

                              $250,000       Any One Fire
                              subject to:
                              $2,000,000     General Aggregate

               10.3.1.2  The policy shall further contain a provision that the
General Aggregate limited applies exclusively to the Premises.

               10.3.1.3  The policy shall contain an endorsement specifically
naming the following as additional insureds: (i) AGBRI Mission, LLC and (ii)
Shidler West Investment Corporation, and its officers and employees, with
respect to the Tenant's use, occupancy or maintenance of the Premises.

               10.3.1.4  The policy shall also contain an endorsement amending
the "Other Insurance" clause as follows:

          "The insurance afforded to Additional Insureds
          under this policy is primary insurance and the
          insurer will not seek contribution from other
          insurance available to the Additional Insureds."

               10.3.1.5 The policy shall contain a waiver of subrogation
endorsement which specifically states:

          "The insurer waives any right of recovery they may
          have against (i) AGBRI Mission, LLC and (ii)
          Shidler West Investment Corporation, and their
          officers and employees, because of payments made
          under this policy."

          10.3.2  Umbrella Liability Insurance to be excess over the Commercial
General Liability, Automobile Liability and Employers' Liability Insurance.  The
Umbrella Liability policy shall be written on an "occurrence" form with a limit
of liability of $5,000,000 and a Self-Insured Retention no greater than
$10,000.

               10.3.2.1  The policy shall contain an endorsement naming the
following as additional insureds following the form of the underlying Commercial
General Liability and Automobile Liability policies: (i) AGBRI Mission, LLC and
(ii) Shidler West Investment Corporation, and their officers and employees.

               10.3.2.2  The policy shall also contain an endorsement amending
the "Other Insurance" clause as follows:

                                     -12-
<PAGE>

          "Subject to the terms and conditions of this
          policy, the insurance afforded to Additional
          Insureds, (i) AGBRI Mission, LLC and (ii) Shidler
          West Investment Corporation, under this policy
          shall be considered to be primary to any insurance
          they may have in force which also applies to a
          loss covered hereunder and, further, the insurer
          shall not seek contribution from other insurance
          available to the Additional Insureds."

               10.3.2.3  The policy shall contain a waiver of subrogation
endorsement which specifically states:

          "The insurer waives any right of recovery they may
          have against (i) AGBRI Mission, LLC and (ii)
          Shidler West Investment Corporation, and their
          officers and employees because of payments made
          under this policy."

          10.3.3  Commercial Property Insurance covering all Tenant's furniture,
fixtures, machinery, equipment, stock and any other personal property owned
and/or used in Tenant's business and all tenant improvements, whether made or
acquired at the Tenant's expense or Landlord's expense, plate glass that is part
of the Premises and any other property in the Premises that Tenant is
responsible for repairing or replacing under this lease, in an amount equal to
their full replacement cost without deduction for depreciation. At a minimum,
such policy shall insure against destruction or damage by fire and other perils
covered on an ISO Causes of Loss - Special Form including wind and hurricane.
Such policy shall further provide Replacement Cost Coverage. Such policy shall
not contain a per occurrence deductible greater than $1,000. Tenant, with all
reasonable speed, will use all proceeds of such insurance, so long as this lease
remains in effect, for rebuilding, repairing, replacing or otherwise reinstating
the improvements and all other fixed property Tenant is responsible for
repairing in a good and substantial manner pursuant to applicable building laws
and codes and the plan as shall have been approved in writing by Landlord.
Tenant will make up from its own funds any deficiency in such insurance
proceeds.

               10.3.3.1  Further, the policy shall contain a provision
specifically naming the following as additional insureds as their interest may
appear: (i) AGBRI Mission, LLC and (ii) Shidler West Investment Corporation.

          10.3.4  Business Income and/or Extra Expense Insurance in an amount
sufficient to insure payment of rent and all other expenses to be borne by
Tenant under this lease, for a period of not less than 12 months, during any
interruption of Tenant's business by reason of the Premises or personal property
being damaged by fire or other perils covered on an ISO Causes of Loss - Special
Form or its equivalent. In addition, such coverage shall be written on an Agreed
Amount Basis. Tenant acknowledges that it assumes all risks of loss due to
interruption of Tenant's business by any cause.

          10.3.5  If required by Landlord because of special environmental
concerns regarding the Tenant's operations, Pollution Legal Liability Insurance
and/or Environmental Impairment Insurance covering claims for damage or injury
caused by hazardous materials, including, without limitation, bodily injury,
wrongful death, property damage, including loss of use, removal, cleanup and
restoration of work and materials necessary to return the premises and any other
property of whatever nature located on the premises to their condition existing
prior to the appearance of Tenant's hazardous materials on the premises. The
policy shall contain a provision specifically naming Landlord and Landlord's
officers and employees as additional insureds. If such coverage is required,
limits of liability shall be determined by Landlord.

          10.3.6  Automobile Liability Insurance to include coverage for any
owned, non-owned or hired automobiles entering and exiting from the premises and
automobile contractual liability with limits of: $500,000 per Person/$500,000
per Accident - Bodily Injury; $250,000 per

                                     -13-

<PAGE>

Accident - Property Damage; and Basic No-Fault coverage as required by law or
regulation if any, in the State in which the Premises is located.

          10.3.7  Workers' Compensation coverage shall be carried as required by
law in the State in which the employees are hired and to further include:
Voluntary Compensation Coverage and Other States' Coverage, if applicable, with
statutory limits for Workers' Compensation and limits for Employers' Liability
of: $500,000 Each Accident; $500,000 Disease - Policy Limit; and $500,000
Disease - Each Employee.

                  10.3.7.1  The policy shall further contain an endorsement
providing a waiver of subrogation in favor of (i) AGBRI Mission, LLC and (ii)
Shidler West Investment Corporation, and their officers and employees.

     10.4 Tenant's Compliance with Landlord's Fire and Casualty Insurance.
          ---------------------------------------------------------------
Tenant shall, at Tenant's expense, comply with all insurance company
requirements pertaining to the use of the Premises.  If Tenant's conduct or use
of the Premises causes any increase in the premium for such insurance policies
then Tenant shall reimburse Landlord for any such increase.  Tenant, at Tenant's
expense, shall comply with all rules, orders, regulations or requirements of the
America Insurance Association (formerly the National Board of Fire Underwriters)
and with any similar body.

     10.5 General Requirements.
          --------------------

          10.5.1  Certificates of Insurance evidencing all such insurance and
acceptable to the Landlord shall be filed with Landlord prior to occupancy of
the Premises and at least ten (10) days prior to the expiration of the term of
each policy thereafter. Such Certificates of Insurance must specifically show
all the special policy conditions required in this Article including "additional
insured", "waiver of subrogation", "notice of cancellation", and "primary
insurance" wording applicable to each policy. Alternatively, a certified, true
and complete copy of each properly endorsed policy may be submitted;

          10.5.2  All coverage shall be written by an admitted insurer in the
State in which the Premises is located with a current Best Rating A-:10 or
better.

          10.5.3  All insurance policies required hereunder shall be
specifically endorsed to state that coverages afforded under the policies will
be cancelled or allowed to expire for any reason until at least 60 days' prior
written notice has been mailed to the Landlord. The Certificate of Insurance for
each policy must state that "the issuing company will mail 60 days' written
notice of cancellation or modification to the certificate holder." The words
"endeavor to" and "failure to mail such notice shall impose no obligation for
liability ..." are unacceptable and these two phrases must be crossed out if
they appear in the printed certificate form.

          10.5.4  If the limits of available liability coverage required herein
become substantially reduced as a result of claim payments, Tenant shall
immediately, at its own expense, purchase insurance to reinstate the limits of
liability coverage required by this lease.

          10.5.5  Tenant shall not settle any claim or accept any proceeds in
satisfaction of any claim involving damage to the premises or liability of
Landlord without Landlord's expense prior written consent.

          10.5.6  Tenant may maintain the insurance required under this Article
under blanket or umbrella policies, as applicable, issued to Tenant covering
other properties owned or leased by tenant; provided that the policies otherwise
comply with this Article and allocate to the premises the coverage specified by
this Article, without possibility of reduction or coinsurance penalty by reason
of, or damage to, any other properties named therein, and if the insurance
required by this Article shall be effected by any such blanket or umbrella
policies, Tenant shall furnish to Landlord certified copies of policies with
schedules thereto attached showing the amount of insurance afforded by such
policies to the premises.

     10.6 Adequacy of Coverage.  Landlord, its agents and employees, make no
          --------------------
representation that the limits of liability specified to be carried by Tenant
pursuant to this Article are adequate to protect Tenant. If Tenant believes that
any of such insurance coverage is

                                     -14-

<PAGE>

inadequate, Tenant will obtain such additional insurance coverage as Tenant
deems adequate, at Tenant's sole expense.

     10.7  Reservation of Rights -  Changes.  Landlord hereby reserves the right
           --------------------------------
to make changes at any time to the Insurance Requirement herein should new
exposures be brought to light or new insurance products become available during
the term of this lease. Tenant shall add as additional insured to the insurance
policies required by this Article such other persons as Landlord may from time
to time reasonably require.

     10.8  Waiver of Subrogation. Tenant hereby waives, on Tenant's behalf and
           ---------------------
on behalf of any insurance carrier of Tenant, any claim which Tenant might
otherwise have against Landlord and Landlord's Affiliates, arising our of loss
or damage, including consequential loss or damage, to any property of Tenant
within the Building or the Project from any risk required to be insured against
by Tenant.

                                  ARTICLE 11
                                  ----------

                            DAMAGE AND DESTRUCTION
                            ----------------------

     11.1  Repair of Damage to Premises by Landlord.  Tenant shall promptly
           ----------------------------------------
notify Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any Common Areas serving or providing access to the
Premises shall be damaged by fire or other casualty, Landlord shall promptly and
diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord's reasonable control, and subject to all other terms of
this Article 11, restore the Base, Shell, and Core of the Premises and such
Common Areas.  Such restoration shall be to substantially the same condition of
the Base, Shell, and Core of the Premises and the Common Areas prior to the
casualty, except for modifications required by zoning and building codes and
other laws or by the holder of mortgage on the Building or Project or any other
modifications to the Common Areas deemed desirable by Landlord, provided that
access to the Premises and any common restrooms serving the Premises shall not
be materially impaired.  Upon the occurrence of any damage to the Premises,
Tenant shall assign to the Landlord (or to any party designated by Landlord) all
insurance proceeds payable to Tenant under Tenant's insurance required under
Section 10.5 of this Lease, and Landlord shall repair any injury or damage to
the Tenant Improvements installed in the Premises and shall return such Tenant
Improvements to their original condition; provided that if the cost of such
repair by Landlord exceeds the amount of insurance proceeds received by
Landlord from Tenant's insurance carrier, as assigned by Tenant, the cost of
such repairs shall be paid by Tenant to Landlord prior to the Landlord's repair
of the damage.  In connection with such repairs and replacements, Tenant shall,
prior to the commencement of construction submit to Landlord, for Landlord's
review and approval, all plans, specifications and working drawings relating
thereto, and Landlord shall select the contractors to perform such improvement
work. Landlord shall not be liable for any inconvenience or annoyance to Tenant
or its visitor, or injury to Tenant's business resulting in any way from such
damage or the repair thereof; provided however, that if such fire or other
casualty shall have damaged the Premises or Common Areas necessary to Tenant's
occupancy, and if such damage is not the result of the negligence or willful
misconduct of Tenant or Tenant's employees, contractors, licensees, or invitees,
Landlord shall allow Tenant a proportionate abatement of Rent to the extent
Landlord is reimbursed from the proceeds of rental interruption insurance
purchased by Landlord as part of Operating Expenses, during the time and to the
extent the Premises are unfit for occupancy for the purposes permitted under
this Lease, and not occupied by Tenant as a result thereof.

     11.2  Landlord's Option to Repair.  Notwithstanding the terms of Section
           ---------------------------
11.1 of this Lease, Landlord may elect not to rebuild and/or restore the
Premises, Building and/or Project; and instead terminate this Lease by notifying
Tenant in writing of such termination within sixty (60) days after the date
Landlord learns of the necessity for repairs as the result of damage, such
notice to include a termination date giving Tenant ninety (90) days to vacate
the Premises, but Landlord may so elect only if the Building or Project shall be
damaged by fire or other casualty or cause, whether or not the Premises are
affected, and one or more of the following conditions is present; (i) repairs
cannot reasonably be completed within one hundred twenty (120 days after the
date Landlord learns of the necessity for repairs as the result of damage (when
such repairs are made without the payment of overtime or other premiums); (ii)
the holder of any mortgage on

                                     -15-
<PAGE>

the Building or Project or ground lessor with respect to the Building or Project
shall require that the insurance proceeds or any portion thereof be used to
retire the mortgage debt, or shall terminate the ground lease, as the case may
be; (iii) the damage is not fully covered, except for deductible amounts, by
Landlord's insurance policies; or (iv) any owner of any other portion of the
Project, other than Landlord, does not intend to repair the damage to such
portion of the Project.

      11.3  Waiver of Statutory Provisions. The provisions of this Lease,
            ------------------------------
including this Article 11, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building or the Project, and any statute or regulation of
the State of California, including, without limitation, Sections 1932(2) and
1933(4) of the California Civil Code, with respect to any rights or obligations
concerning damage or destruction in the absence of an express agreement between
the parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all or
any part of the Premises, the Building or the Project.

      11.4  Damage Near End of Term. In the event that the Premises, the
            -----------------------
Building, or the Project is destroyed or damaged to any substantial extent
during the last nine (9) months of the Lease Term, then notwithstanding anything
contained in this Article 11, Landlord shall have the option to terminate this
Lease by giving written notice to Tenant of the exercise of such option within
thirty (30) days after Landlord learns of the necessity for repairs as the
result of such damage or destruction, in which event this Lease shall cease and
terminate as of the date of such notice, Tenant shall pay the Base Rent and
Additional Rent, properly apportioned up to such date of damage, and both
parties hereto shall thereafter be freed and discharged of all further
obligations hereunder, except as provided for in provisions of this Lease which
by their terms survive the expiration or earlier termination of the Lease Term.

                                  ARTICLE 12
                                  ----------

                                   NONWAIVER
                                   ---------

      No waiver of any provision of this Lease shall be implied by any failure
of Landlord to enforce any remedy on account of the violation of such provision,
even if such violation shall continue or be repeated subsequently, and any
waiver by Landlord of any provision of this Lease may only be in writing.
Additionally, no express waiver shall affect any provision other than the one
specified in such waiver and then only for the time and in the manner
specifically stated. No receipt of monies by Landlord from Tenant after the
termination of this Lease shall in any way alter the length of the Lease Term or
of Tenant's right of possession hereunder, or after the giving of any notice
shall reinstate, continue or extend the Lease Term or affect any notice given
Tenant prior to the receipt of such monies, it being agreed that after the
service of notice or the commencement of a suit, or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due, and
the payment of said Rent shall not waive or affect said notice, suit or
judgment.

                                  ARTICLE 13
                                  ----------

                                 CONDEMNATION
                                 ------------

      13.1  Permanent Taking. If the whole or any part of the Premises, Building
            ----------------
or Project shall be taken by power of eminent domain or condemned by any
competent authority for any public or quasi-public use or purpose, or if
Landlord shall grant a deed or other instrument in lieu of such taking by
eminent domain or condemnation, Landlord shall have the option to terminate this
Lease upon ninety (90) days' notice, provided such notice is given no later than
one hundred eighty (180) days after the date of such taking, condemnation,
reconfiguration, vacation, deed or other instrument. If more than twenty-five
percent (25%) of the rentable square feet of the Premises is taken, Tenant shall
have the option to terminate this Lease upon ninety (90) days' notice, provided
such notice is given no later than one hundred eighty (180) days after the date
of such taking. Landlord shall be entitled to the entire award or payment in
connection therewith, except that Tenant shall have the right to file any
separate claim available to Tenant for any taking of Tenant's personal property
and fixtures belonging to Tenant and removable by Tenant

                                     -16-

<PAGE>

upon expiration of the Lease Term pursuant to the terms of this Lease, and for
moving expenses, so long as such claims do not diminish the award available to
Landlord, its ground lessor with respect to the Building or Project or its
mortgagee, and such claim is payable separately to Tenant. All Rent shall be
apportioned as of the date of such termination, or the date of such taking,
whichever shall first occur. If any part of the Premises shall be taken, and
this Lease shall not be so terminated, the Rent shall be proportionately abated.
Tenant hereby waives any and all rights it might otherwise have pursuant to
Section 1265.130 of The California Code of Civil Procedure.

      13.2   Temporary Taking.  Notwithstanding anything to the contrary
             ----------------
contained in this Article 13, in the event of a temporary taking of all or any
portion of the Premises for a period of one hundred and eighty (180) days or
less, then this Lease shall not terminate but the Base Rent and the Additional
Rent shall be abated for the period of such taking in proportion to the ratio
that the number of rentable square feet of the Premises taken bears to the total
number of rentable square feet of the Premises. Landlord shall be entitled to
receive the entire award made in connection with any such temporary taking.

                                  ARTICLE 14
                                  ----------

                           ASSIGNMENT AND SUBLETTING
                           -------------------------

      14.1   Transfers.  Tenant shall not, without the prior written consent of
             ---------
Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to
attach to, or otherwise transfer, this Lease or any interest hereunder, permit
any assignment, or other transfer of this Lease or any interest hereunder by
operation of law, sublet the Premises or any part thereof, or permit the use of
the Premises by any persons other than Tenant and its employees (all of the
foregoing are hereinafter sometimes referred to collectively as "Transfers" and
any person to whom any Transfer is made or sought to be made is hereinafter
sometimes referred to as a "Transferee"). If Tenant desires Landlord's consent
to any Transfer, Tenant shall notify Landlord in writing, which notice (the
"Transfer Notice") shall include (i) the proposed effective date of the
Transfer, which shall not be less than forty-five (45) days nor more than one
hundred eighty (18O) days after the date of delivery of the Transfer Notice,
(ii) a description of the portion of the Premises to be transferred (the
"Subject Space"), (iii) all of the material terms of the proposed Transfer and
the consideration therefor (including calculation of the "Transfer Premium", as
that term is defined in Section 14.3 below, in connection with such Transfer),
the name and address of the proposed Transferee, and a copy of all existing
executed and/or proposed documentation pertaining to the proposed Transfer,
including all existing operative documents to be executed to evidence such
Transfer or the agreements incidental or related to such Transfer, and (iv)
current financial statements of the proposed Transferee certified by an officer,
partner or owner thereof, and any other information reasonably required by
Landlord to determine the financial responsibility, character, and reputation
of the proposed Transferee, nature of such Transferee's business and proposed
use of the Subject Space, and such other information as Landlord may reasonably
require. Any Transfer made without Landlord's prior written consent shall, at
Landlord's option, be null, void and of no effect, and shall, at Landlord's
option, constitute a default by Tenant under Section 19.1.7 of this Lease.
Whether or not Landlord consents to any proposed Transfer, Tenant shall pay
Landlord's review and processing fees, as well as any reasonable legal fees
incurred by Landlord, within thirty (30) days after written request by Landlord.

      14.2  Landlord's Consent.  Landlord shall not unreasonably withhold its
            ------------------
consent to any proposed Transfer of the Subject Space to the Transferee on the
terms specified in the Transfer Notice. Without limitation as to other
reasonable grounds for withholding consent, the parties hereby agree that it
shall be reasonable under this Lease and under any applicable law for Landlord
to withhold consent to any proposed Transfer where one or more of the following
apply:

            14.2.1   The Transferee is of a character or reputation or engaged
in a business which is not consistent with the quality of the Building or the
Project, or would be a significantly less prestigious occupant of the Building
than Tenant;

            14.2.2   The Transferee is either a governmental agency or
instrumentality thereof;

                                     -17-

<PAGE>

            14.2.3  The Transferee intends to use the Subject Space for purposes
which are not permitted under this Lease;

            14.2.4  The Transfer will result in more than a reasonable and safe
number of occupants per floor within the Subject Space;

            14.2.5  The Transferee is not a party of reasonable financial worth
and/or financial stability in light of the responsibilities involved under the
Lease on the date consent is requested;

            14.2.6  The proposed Transfer would cause a violation of another
lease for space in the Project, or would give an occupant of the Project a right
to cancel its lease;

            14.2.7 The terms of the proposed Transfer will allow the Transferee
to exercise a right of renewal, right of expansion, right of first offer, or
other similar right held by Tenant (or will allow the Transferee to occupy space
leased by Tenant pursuant to any such right); or

            14.2.8  Either the proposed Transferee, or any person or entity
which directly or indirectly, controls, is controlled by, or is under common
control with, the proposed Transferee, (i) occupies space in the Project at the
time of the request for consent, (ii) is negotiating with Landlord to lease
space in the Project at such time, or (iii) has negotiated with Landlord during
the twelve (12)-month period immediately preceding the Transfer Notice.

            If Landlord consents to any Transfer pursuant to the terms of this
Section 14.2 (and does not exercise any recapture rights Landlord may have under
Section 14.4 of this Lease), Tenant may within six (6) months after Landlord's
consent, but not later than the expiration of said six-month period, enter into
such Transfer of the Premises or portion thereof, upon substantially the same
terms and conditions as are set forth in the Transfer Notice furnished by Tenant
to Landlord pursuant to Section 14.1 of this Lease, provided that if there are
any material changes in the terms and conditions from those specified in the
Transfer Notice (i) such that Landlord would initially have been entitled to
refuse its consent to such Transfer under this Section 14.2, or (ii) which would
cause the proposed Transfer to be more favorable to the Transferee than the
terms set forth in Tenant's original Transfer Notice, Tenant shall again submit
the Transfer to Landlord for its approval and other action under this Article 14
(including Landlord's right of recapture, if any, under Section 14.4 of this
Lease). Notwithstanding any contrary provisions of this Lease, if Tenant or any
proposed Transferee claims that Landlord has unreasonably withheld or delayed
its consent to a proposed Transfer or otherwise has breached its obligations
under this Article, Tenant's and such Transferee's only remedy shall be to seek
a declaratory judgment and/or injunctive relief, and Tenant, on behalf of itself
and, to the extent permitted by law, such proposed Transferee, waives all other
remedies against Landlord, including without limitation, the right to seek
monetary damages or terminate this Lease.

      14.3  Transfer Premium.
            ----------------

            14.3.1  Definition of Transfer Premium. If Landlord consents to a
                    ------------------------------
Transfer, as a condition thereto which the parties hereby agree is reasonable,
Tenant shall pay to Landlord 50% of any "Transfer Premium," as that term is
defined in this Section 14.3, received by Tenant from such Transferee. "Transfer
Premium" shall mean all rent, additional rent or other consideration payable by
such Transferee in excess of the Rent and Additional Rent payable by Tenant
under this Lease on a per rentable square foot basis if less than all of the
Premises is transferred, after deducting the reasonable expenses incurred by
Tenant for (i) any changes, alterations and improvements to the Premises in
connection with the Transfer, and (ii) any brokerage commissions in connection
with the Transfer (collectively, the "Subleasing Costs"). "Transfer Premium"
shall also include, but not be limited to, key money and bonus money paid by
Transferee to Tenant in connection with such Transfer, and any payment in excess
of fair market value for services rendered by Tenant to Transferee or for
assets, fixtures, inventory, equipment, or furniture transferred by Tenant to
Transferee in connection with such Transfer.

            14.3.2  Payment of Transfer Premiums. The determination of the
                    ----------------------------
amount of the Transfer Premium shall be made on an annual basis in accordance
with the terms of this Section 14.3.2, but an estimate of the amount of the
Transfer Premium shall be made each month and one-twelfth of such estimated
amount shall be paid to Landlord promptly, but in no event

                                     -18-

<PAGE>

later than the next date for payment of Base Rent hereunder, subject to an
annual reconciliation on each anniversary date of the Transfer. If the payments
to Landlord under this Section 14.3.2 during the twelve (12) months preceding
each annual reconciliation exceed the amount of Transfer Premium determined on
an annual basis, then Landlord shall credit the overpayment against Tenant's
future obligations under this Section 14.3.2 or if the overpayment occurs during
the last year of the Transfer in question, refund the excess to Tenant. If
Tenant has underpaid the Transfer Premium, as determined by such annual
reconciliation, Tenant shall pay the amount of such deficiency to Landlord
promptly, but in no event later than the next date for payment of Basic Rent
hereunder. For purposes of calculating the Transfer Premium on an annual basis,
Tenant's Subleasing Costs shall be deemed to be offset against the first rent,
additional rent or other consideration payable by the Transferee, until such
Subleasing Costs are exhausted.

            14.3.3  Calculations of Rent.  In the calculation of the Rent, as it
                    --------------------
relates to the Transfer Premium calculated under Section 14.3.1 above, the Rent
paid during each annual period for the Subject Space by Tenant, shall be
computed after adjusting such rent to the actual effective rent to be paid,
taking into consideration any and all leasehold concessions granted in
connection therewith, including, but not limited to, any rent credit and tenant
improvement allowance. For purposes of calculating any such effective rent, all
such concessions shall be amortized on a straight-line basis over the relevant
term.

      14.4  Landlord's Option as to Subject Space.  Notwithstanding anything to
            -------------------------------------
the contrary contained in this Article 14, Landlord shall have the option, by
giving written notice to Tenant within thirty (30) days after receipt of any
Transfer Notice, to (i) recapture the Subject Space, or (ii) take an assignment
or sublease of the Subject Space from Tenant. Such recapture, or sublease or
assignment notice, shall cancel and terminate this Lease, or create a sublease
or assignment, as the case may be, with respect to the Subject Space as of the
date stated in the Transfer Notice as the effective date of the proposed
Transfer until the last day of the term of the Transfer as set forth in the
Transfer Notice. In the event of a recapture by Landlord, if this Lease shall be
canceled with respect to less than the entire Premises, the Rent reserved herein
shall be prorated on the basis of the number of rentable square feet retained by
Tenant in proportion to the number of rentable square feet contained in the
Premises, and this Lease as so amended shall continue thereafter in full force
and effect, and upon request of either party, the parties shall execute written
confirmation of the same. If the Subject Space shall be assigned or subleased by
Tenant to Landlord, the rent for the Subject Space payable by Landlord to Tenant
shaI1 be the lesser of (i) the effective Base Rent plus the Additional Rent
payable by Tenant under this Lease for the Subject Space on a prorated basis
based upon the number of rentable square feet in the Subject Space, or (ii) the
effective rent (taking into account all concessions made by Tenant to the
Transferee) set forth in the Transfer Notice, and all other provisions of this
Lease shall remain in full force and effect, and upon request of either party,
the parties shall execute a written confirmation of the same. If Landlord
declines, or fails to timely elect to recapture the Subject Space under this
Section 14.4, then, provided Landlord has consented to the proposed Transfer,
Tenant shall be entitled to transfer the Subject Space to the proposed
Transferee, subject to the provisions of this Article 14.

      14.5  Effect of Transfer. If Landlord consents to a Transfer, (i) the
            ------------------
terms and conditions of this Lease shall in no way be deemed to have been waived
or modified, (ii) such consent shall not be deemed consent to any further
Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver to
Landlord, promptly after execution, an original executed copy of all
documentation pertaining to the Transfer in form reasonably acceptable to
Landlord, (iv) Tenant shall furnish upon Landlord's request a complete
statement, certified by an independent certified public accountant, or Tenant's
chief financial officer, setting forth in detail the computation of any Transfer
Premium Tenant has derived and shall derive from such Transfer, and (v) no
Transfer relating to this Lease or agreement entered into with respect thereto,
whether with or without Landlord's consent, shall relieve Tenant or any
guarantor of the Lease from liability under this Lease. Landlord or its
authorized representatives shall have the right at all reasonable times to audit
the books, records and papers of Tenant relating to any Transfer, and shall have
the right to make copies thereof. If the Transfer Premium respecting any
Transfer shall be found understated, Tenant shall, within thirty (30) days after
demand, pay the deficiency and Landlord's costs of such audit, and if
understated by more than ten percent (10%), Landlord shall have the right to
cancel this Lease upon thirty (30) days' notice to Tenant.

                                     -19-

<PAGE>

     14.6  Additional Transfers. For purposes of this Lease, the term "Transfer"
           --------------------
shall also include (i) if Tenant is a partnership, the withdrawal or change,
voluntary, involuntary or by operation of law, of twenty-five percent (25%) or
more of the partners, or transfer of twenty-five percent or more of partnership
interests, within a twelve (12)-month period, or the dissolution of the
partnership without immediate reconstitution thereof, and (ii) if Tenant is a
closely held corporation (i.e., whose stock is not publicly held and not traded
through an exchange or over the counter), (A) the dissolution, merger,
consolidation or other reorganization of Tenant or, (B) the sale or other
transfer of more than an aggregate of twenty-five percent (25%) of the voting
shares of Tenant (other than to immediate family members by reason of gift or
death) within a twelve (12)-month period, or (C) the sale, mortgage,
hypothecation or pledge of more than an aggregate of twenty-five percent (25%)
of the value of the unencumbered assets of Tenant within a twelve (12)-month
period.

                                  ARTICLE 15
                                  ----------

                            SURRENDER OF PREMISES;
                             ---------------------
                           REMOVAL OF TRADE FIXTURES
                           -------------------------

     15.1  Surrender of Premises. No act or thing done by Landlord or any agent
           ---------------------
or employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in a writing signed by Landlord. The delivery of keys
to the Premises to Landlord or any agent or employee of Landlord shall not
constitute a surrender of the Premises or effect a termination of this Lease,
whether or not the keys are thereafter retained by Landlord, and notwithstanding
such delivery Tenant shall be entitled to the return of such keys at any
reasonable time upon request until this Lease shall have been properly
terminated. The voluntary or other surrender of this Lease by Tenant, whether
accepted by Landlord or not, or a mutual termination hereof, shall not work a
merger, and at the option of Landlord shall operate as an assignment to Landlord
of all subleases or subtenancies affecting the Premises.

     15.2  Removal of Tenant Property by Tenant. Upon the expiration of the
           ------------------------------------
Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject
to the provisions of this Article 15, quit and surrender possession of the
Premises to Landlord in as good order and condition as when Tenant took
possession and as thereafter improved by Landlord and/or Tenant, reasonable wear
and tear and repairs which are specifically made the responsibility of Landlord
hereunder excepted. Upon such expiration or termination, Tenant shall, without
expense to Landlord, remove or cause to be removed from the Premises all debris
and rubbish, and such items of furniture, equipment, free-standing cabinet work,
and other articles of personal property owned by Tenant or installed or placed
by Tenant at its expense in the Premises, and such similar articles of any other
persons claiming under Tenant, as Landlord may, in its sole discretion, require
to be removed, and Tenant shall repair at its own expense all damage to the
Premises and Building resulting from such removal.

     15.3  Removal of Tenant's Property by Landlord. Whenever Landlord shall re-
           ----------------------------------------
enter the Premises as provided in this Lease, any personal property of Tenant
not removed by Tenant upon the expiration of the Lease Term, or within forty-
eight (48) hours after a termination by reason of Tenant's default as provided
in this Lease, shall be deemed abandoned by Tenant and may be disposed of by
Landlord in accordance with Sections 1980 through 1991 of the California Civil
Code and Section 1174 of the California Code of Civil Procedure, or in
accordance with any laws or judicial decisions which may supplement or supplant
those provisions from time to time.

     15.4  Landlord's Actions on Premises. Tenant hereby waives, and releases
           ------------------------------
Landlord from, all claims for damages or other liability in connection with
Landlord's or its agents' or representatives' reentering and taking possession
of the Premises or removing, retaining, storing or selling the property of
Tenant as herein provided, and Tenant hereby indemnifies and holds Landlord
harmless from any such damages or other liability, and no such re-entry shall be
considered or construed to be a forcible entry.

                                     -20-
<PAGE>

                                  ARTICLE 16
                                  ----------

                                 HOLDING OVER
                                 ------------

     If Tenants holds over after the expiration of the Lease Term hereof, with
or without the express or implied consent of Landlord, such tenancy shall be
from month-to-month only, and shall not constitute a renewal hereof or an
extension for any further term, and in such case Base Rent shall be payable
at a monthly rate equal to twice the Base Rent applicable during the last rental
period of the Lease Term under this Lease. Such month-to-month tenancy shall be
subject to every other applicable term, covenant and agreement contained herein.
Nothing contained in this Article 16 shall be construed as consent by Landlord
to any holding over by Tenant, and Landlord expressly reserves the right to
require Tenant to surrender possession of the Premises to Landlord as provided
in this Lease upon the expiration or other termination of this Lease. The
provisions of this Article 16 shall not be deemed to limit or constitute a
waiver of any other rights or remedies of Landlord provided herein or at law. If
Tenant fails to surrender the Premises upon the termination or expiration of
this Lease, in addition to any other liabilities to Landlord accruing therefrom,
Tenant shall protect, defend, indemnify and hold Landlord harmless from all
loss, costs (including reasonable attorneys' fees) and liability resulting from
such failure, including, without limiting the generality of the foregoing, any
claims made by any succeeding tenant founded upon such failure to surrender
(including such tenant's lost profits) and any lost profits to Landlord
resulting therefrom.

                                  ARTICLE 17
                                  ----------

                             ESTOPPEL CERTIFICATES
                             ---------------------

     Within ten (10) days following a request in writing by Landlord, Tenant
shall execute and deliver to Landlord an estoppel certificate, which, as
submitted by Landlord, shall be substantially in the form of Exhibit D, attached
hereto (or such other form as may be required by any prospective mortgagee or
purchaser of the Project, or any portion thereof), indicating therein any
exceptions thereto that may exist at that time, and shall also contain any other
information reasonably requested by Landlord or Landlord's mortgagee or
prospective mortgagee. Tenant shall execute and deliver whatever other
instruments may be reasonably required for such purposes. Failure of Tenant to
timely execute and deliver such estoppel certificate or other instruments shall
constitute an acceptance of the Premises and an acknowledgement by Tenant that
statements included in the estoppel certificate are true and correct, without
exception.

                                  ARTICLE 18
                                  ----------

                                 SUBORDINATION
                                 -------------

     This Lease shall be subject and subordinate to all present and future
ground or underlying leases of the Building or Project and to the lien of any
first mortgage or trust deed, now or hereafter in force against the Building or
Project, if any, and to all renewals, extensions,modifications, consolidations
and replacements thereof, and to all advances made or hereafter to be made upon
the security of such mortgages or trust deeds, unless the holders of such
mortgages or trust deeds, or the lessors under such ground lease or underlying
leases, require in writing that this Lease be superior thereto. Tenant
covenants and agrees in the event any proceedings are brought for the
foreclosure of any such mortgage or deed in lieu thereof, to attorn, without any
deductions or set-offs whatsoever, to the purchaser or any successors thereto
upon any such foreclosure sale or deed in lieu thereof if so requested to do so
by such purchaser, and to recognize such purchaser as the lessor under this
Lease. Tenant shall, within five (5) days of request by Landlord, execute such
further instruments or assurances as Landlord may reasonably deem necessary to
evidence or confirm the subordination or superiority of this Lease to any such
mortgages, trust deeds, ground leases or underlying leases. Tenant waives the
provisions of any current or future statute, rule or law which may give or
purport to give Tenant any right or election to terminate or otherwise adversely
affect this Lease and the obligations of the Tenant hereunder in the event of
any foreclosure proceeding or sale.

                                     -21-

<PAGE>

                                  ARTICLE 19
                                  ----------

                              DEFAULTS; REMEDIES
                              ------------------

     19.1 Defaults. The occurrence of any of the following shall constitute a
          --------
default of this Lease by Tenant:

          19.1.1 Any failure by Tenant to pay any Rent or any other charge
required to be paid under this Lease, or any part thereof, when due; or

          19.1.2 Any failure by Tenant to observe or perform any other
provision, covenant or condition of this Lease to be observed or performed by
Tenant where such failure continues for fifteen (15) days after written notice
thereof from Landlord to Tenant; or

          19.1.3 Abandonment or vacation of the Premises by Tenant; or

          19.1.4 To the extent permitted by law, a general assignment by Tenant
or any guarantor of the Lease for the benefit of creditors, or the filing by or
against Tenant or any guarantor of any proceeding under an insolvency or
bankruptcy law, unless in the case of a proceeding filed against Tenant or any
guarantor the same is dismissed within sixty (60) days, or the appointment of a
trustee or receiver to take possession of all or substantially all of the assets
of Tenant or any guarantor, unless possession is restored to Tenant or such
guarantor within thirty (30) days, or any execution or other judicially
authorized seizure of all or substantially all of Tenant's assets located upon
the Premises or of Tenant's interest in this Lease, unless such seizure is
discharged within thirty (30) days; or

          19.1.5 The hypothecation or assignment of this Lease or subletting of
the Premises, or attempts at such actions, in violation of Article 14 hereof.

     19.2 Remedies Upon Default. Upon the occurrence of any event of default by
          ---------------------
Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity, the option to pursue any one or more of the
following remedies, each and all of which shall be cumulative and nonexclusive,
without any notice or demand whatsoever.

          19.2.1 Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
without prejudice to any other remedy which it may have for possession or
arrearages in rent, enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying the Premises or any part
thereof, without being liable for prosecution or any claim or damages therefor;
and Landlord may recover from Tenant the following:

                    (i)   The worth at the time of award of any unpaid rent
     which has been earned at the time of such termination; plus

                    (ii)  The worth at the time of award of the amount by which
     the unpaid rent which would have been earned after termination until the
     time of award exceeds the amount of such rental loss that Tenant proves
     could have been reasonably avoided; plus

                    (iii) The worth at the time of award of the amount by which
     the unpaid rent for the balance of the Lease Term after the time of award
     exceeds the amount of such rental loss that Tenant proves could have been
     reasonably avoided; plus

                    (iv)  Any other amount necessary to compensate Landlord for
     all the detriment proximately caused by Tenant's failure to perform its
     obligations under this Lease or which in the ordinary course of things
     would be likely to result therefrom, specifically including but not limited
     to, brokerage commissions and advertising expenses incurred, expenses of
     remodeling the Premises or any portion thereof for a new tenant, whether
     for the same or a different use, and any special concessions made to obtain
     a new tenant; and

                    (v)   At Landlord's election, such other amounts in addition
     to or in lieu of the foregoing as may be permitted from time to time by
     applicable law.

                                     -22-

<PAGE>

            The term "rent" as used in this Section 19.2 shall be deemed to be
and to mean all sums of every nature required to be paid by Tenant pursuant to
the terms of this Lease, whether to Landlord or to others. As used in Sections
19.2.1(i) and (ii), above, the "worth at the time of award" shall be computed by
allowing interest at the rate set forth in Article 25 of this Lease, but in no
case greater than the maximum amount of such interest permitted by law. As used
in Section 19.2.l(iii) above, the "worth at the time of award" 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%).

            19.2.2  Landlord shall have the remedy described in California Civil
Code Section 1951.4 (lessor may continue lease in effect after lessee's breach
and abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all Rent as it becomes due.

      19.3  Sublessees of Tenant. Whether or not Landlord elects to terminate
            --------------------
this Lease on account of any default by Tenant as set forth in this Article 19,
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed
to Tenant's interest in such subleases, licenses, concessions or arrangements.
In the event of Landlord's election to succeed to Tenant's interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date
of notice by Landlord of such election, have no further right to or interest in
the rent or other consideration receivable thereunder.

      19.4  Form of Payment After Default. Following the occurrence of an event
            -----------------------------
of default by Tenant, Landlord shall have the right to require that any or all
subsequent amounts paid by Tenant to Landlord hereunder, whether in the cure of
the default in question or otherwise, be paid in the form of cash, money order,
cashier's or certified check drawn on an institution acceptable to Landlord, or
by other means approved by Landlord, notwithstanding any prior practice of
accepting payments in any different form.

      19.5  Waiver of Default. No waiver by Landlord or Tenant of any violation
            -----------------
or breach of any of the terms, provisions and covenants herein contained shall
be deemed or construed to constitute a waiver of any other or later violation or
breach of the same or any other of the terms, provisions, and covenants herein
contained. Forbearance by Landlord in enforcement of one or more of the remedies
herein provided upon an event of default shall not be deemed or construed to
constitute a waiver of such default. The acceptance of any Rent hereunder by
Landlord following the occurrence of any default, whether or not known to
Landlord, shall not be deemed a waiver of any such defauIt, except only a
default in the payment of the Rent so accepted.

      19.6  Efforts to Relet. For the purposes of this Article 19, Tenant's
            ----------------
right to possession shall not be deemed to have been terminated by efforts of
Landlord to relet the Premises, by its acts of maintenance or preservation with
respect to the Premises, or by appointment of a receiver to protect Landlord's
interests hereunder. The foregoing enumeration is not exhaustive, but merely
illustrative of acts which may be performed by Landlord without terminating
Tenant's right to possession.

                                  ARTICLE 20
                                  ----------

                          COVENANT OF QUIET ENJOYMENT
                          ---------------------------

      Landlord covenants that Tenant, on paying the Rent, charges for services
and other payments herein reserved and on keeping, observing and performing all
the other terms, covenants, conditions, provisions and agreements herein
contained on the part of Tenant to be kept, observed and performed, shall,
during the Lease Term, peaceably and quietly have, hold and enjoy the Premises
subject to the terms, covenants, conditions, provisions and agreements hereof
without interference by any persons lawfully claiming by or through Landlord.
The foregoing covenant is in lieu of any other covenant express or implied.

                                     -23-

<PAGE>

                                  ARTICLE 21
                                  ----------

                         SECURITY DEPOSIT AND GUARANTY
                         -----------------------------

     Concurrent with Tenant's execution of this Lease, Tenant shall deposit
with Landlord a security deposit (the "Security Deposit") in the amount set
forth in Section 8 of the Summary. The Security Deposit shall be held by
Landlord as security for the faithful performance by Tenant of all the terms,
covenants, and conditions of this Lease to be kept and performed by Tenant
during the Lease Term. If Tenant defaults with respect to any provisions of this
Lease, including, but not limited to, the provisions relating to the payment of
Rent, Landlord may, but shall not be required to, use, apply or retain all or
any part of the Security Deposit for the payment of any Rent or any other sum in
default, or for the payment of any amount that Landlord may spend or become
obligated to spend by reason of Tenant's default, or to compensate Landlord for
any other loss or damage that Landlord may suffer by reason of Tenant's default.
If any portion of the Security Deposit is so used or applied, Tenant shall,
within five (5) days after written demand therefor, deposit cash with Landlord
in an amount sufficient to restore the Security Deposit to its original amount,
and Tenant's failure to do so shall be a default under this Lease. If Tenant
shall fully and faithfully perform every provision of this Lease to be performed
by it, the Security Deposit, or any balance thereof, shall be returned to
Tenant, or, at Landlord's option, to the last assignee of Tenant's interest
hereunder, within sixty (60) days following the expiration of the Lease Term.
Tenant shall not be entitled to any interest on the Security Deposit. Tenant
hereby waives the provisions of Section 1950.7 of the California Civil Code, and
all other provisions of law, now or hereafter in force, which provide that
Landlord may claim from a security deposit only those sums reasonably necessary
to remedy defaults in the payment of rent, to repair damage caused by Tenant or
to clean the Premises, it being agreed that Landlord may, in addition, claim
those sums reasonably necessary to compensate Landlord for any other loss or
damage, foreseeable or unforeseeable, caused by the acts or omissions of Tenant
or any officer, employee, agent, contractor or invitee of Tenant.

     Concurrent with Tenant's execution of this Lease, Tenant shall cause the
individuals or entities set forth in Section 9 of the Summary to execute the
Guarantee of Lease attached hereto as Exhibit F and made a part hereof.

                                  ARTICLE 22
                                  ----------

                        SUBSTITUTION OF OTHER PREMISES
                        ------------------------------

     Landlord shall have the right to move Tenant to other space in the Building
comparable to the Premises, and all terms hereof shall apply to the new space
with equal force. In such event, Landlord shall give Tenant prior notice, shall
provide Tenant, at Landlord's sole cost and expense, with tenant improvements at
least equal in quality to those in the Premises and shall move Tenant's effects
to the new space at Landlord's sole cost and expense at such time and in such
manner as to inconvenience Tenant as little as reasonably practicable. The new
space shall be delivered to Tenant with improvements substantially similar to
those improvements existing in the Premises at the time of Landlord's
notification to Tenant of the relocation. Simultaneously with such relocation of
the Premises, the parties shall immediately execute an amendment to this Lease
stating the relocation of the Premises.

                                  ARTICLE 23
                                  ----------

                                     SIGNS
                                     -----

     Tenant's identifying signage shall be provided by Landlord, at Tenant's
cost, and such 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 be
listed, at Tenant's sole cost and expense, on a directory sign in the main lobby
of the Building. Tenant shall be entitled to a maximum of three (3) lines on the
building directory, at Tenant's sole cost and expense. 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

                                     -24-

<PAGE>

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 24
                                  ----------

                              COMPLIANCE WITH LAW
                              -------------------

      Tenant shall not do anything or suffer anything to be done in or about the
Premises which will in any way conflict with any law, statute, ordinance or
other governmental rule, regulation or requirement now in force or which may
hereafter be enacted or promulgated. At its sole cost and expense, Tenant shall
promptly comply with all such governmental measures, other than the making of
structural changes or changes to the Building's life safety system. Should any
standard or regulation now or hereafter be imposed on Landlord or Tenant by a
state, federal or local governmental body charged with the establishment,
regulation and enforcement of occupational, health of safety standards for
employers, employees, landlords or tenants, then Tenant agrees, at its sole cost
and expense, to comply promptly with such standards or regulations. The
judgement of any court competent jurisdiction or the admission of Tenant in any
judicial action, regardless of whether Landlord is a party thereto, that Tenant
has violated any of said governmental measures, shall be conclusive of that fact
as between Landlord and Tenant.

                                  ARTICLE 25
                                  ----------

                                 LATE CHARGES
                                 ------------

      If any installment of Rent or any other sum due from Tenant shall not be
received by Landlord or Landlord's designee within five (5) days after said
amount is due, then Tenant shall pay to Landlord a late charge equal to five
percent (5%) of the overdue amount plus any attorney's fees incurred by Landlord
by reason of Tenant's failure to pay Rent and/or other charges when due
hereunder. The late charge shall be deemed Additional Rent and the right to
require it shall be in addition to all of Landlord's other rights and remedies
hereunder or at law and shall not be construed as liquidated damages or as
limiting Landlord's remedies in any manner. In addition to the late charge
described above, any Rent or other amounts owing hereunder which are not paid
within five (5) days after the date they are due shall bear interest from the
date when due until paid at a rate per annum equal to the lesser of (i) eighteen
percent (18%) per annum or (ii) the highest rate permitted by applicable law.

                                  ARTICLE 26
                                  ----------

                       LANDLORD'S RIGHT TO CURE DEFAULT;
                       ---------------------------------
                               PAYMENT BY TENANT
                               -----------------

     26.1  Landlord's Cure. All covenants and agreements to be kept or
            ---------------
performed by Tenant under this Lease shall be performed by Tenant at Tenant's
sole cost and expense and without any reduction of Rent. If Tenant shall fail to
perform any of its obligation under this Lease, within a reasonable time after
such performance is required by the terms of this Lease, Landlord may, but shall
not be obligated to, after reasonable prior notice to Tenant (except in the case
of an emergency), make any such payment or perform any such act on Tenant's part
without waiving its rights based upon any default of Tenant and without
releasing Tenant from any obligations hereunder.

     26.2  Tenant's Reimbursement. Except as may be specifically provided to the
           ----------------------
contrary in this Lease, Tenant shall pay to Landlord, within fifteen (15) days
after delivery by Landlord to Tenant of statements therefor: (i) sums equal to
expenditures reasonably made and obligations incurred by Landlord in connection
with the remedying by Landlord of Tenant's defaults pursuant to the provisions
of Section 26.1; (ii) sums equal to all losses, costs, liabilities, damages and
expenses referred to in Article 10 of this Lease; and (iii) sums equal to all
expenditures made and obligations incurred by Landlord in collecting or
attempting to collect the Rent or in enforcing or attempting to enforce any
rights of Landlord under this Lease or pursuant to law, including, without
limitation, all legal fees and other amounts so expended. Tenant's obligations
under this section 26.2 shall survive the expiration or sooner termination of
the Lease Term.

                                     -25-
<PAGE>

                                  ARTICLE 27
                                  ----------

                               ENTRY BY LANDLORD
                               -----------------

      Landlord reserves the right at all reasonable times and upon reasonable
notice to Tenant (except in the case of an emergency) to enter the Premises to
(i) inspect them; (ii) show the Premises to prospective purchasers, mortgagees
or tenants, or to the ground or underlying lessors; (iii) post notices of
nonresponsibility; or (iv) alter, improve or repair the Premises or the Building
if necessary to comply with current building codes or other applicable laws, or
for structural alterations, repairs or improvements to the Building.
Notwithstanding anything to the contrary contained in this Article 27, Landlord
may enter the Premises at any time to (A) perform services required of Landlord;
(B) take possession due to any breach of this Lease in the manner provided
herein; and (C) perform any covenants of Tenant which Tenant fails to perform.
Landlord may make any such entries without the abatement of Rent and may take
such reasonable steps as required to accomplish the stated purposes. Tenant
hereby waives any claims for damages or for any injuries or inconvenience to or
interference with Tenant's business, lost profits, any loss of occupancy or
quiet enjoyment of the Premises, and any other loss occasioned thereby. For each
of the above purposes, Landlord shall at all times have a key with which to
unlock all the doors in the Premises, excluding Tenant's vaults, safes and
special security areas designated in advance by Tenant. In an emergency,
Landlord shall have the right to use any means that Landlord may deem proper to
open the doors in and to the Premises. Any entry into the Premises by Landlord
in the manner hereinbefore described shall not be deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an actual or
constructive eviction of Tenant from any portion of the Premises.

                                  ARTICLE 28
                                  ----------

                                TENANT PARKING
                                --------------

      Tenant hereby rents from Landlord, commencing on the Lease Commencement
Date, the number of parking passes set forth in Section 10 of the Summary, on a
monthly basis throughout the Lease Term, which parking passes shall pertain to
the Project parking facility. Such parking passes shall permit Tenant and its
employees to use, on a nonexclusive, as-available basis, together with other
tenants and their respective employees, any undesignated, unreserved spaces
available in such parking facility from time to time. Tenant shall pay to
Landlord for automobile parking passes on a monthly basis the prevailing rate
charged from time to time for parking passes in the Project, which shall be
$0.00 per pass per month for the initial Lease Term. Additional parking passes
may be rented by Tenant at the prevailing rate charged for such passes, subject
to Landlord's determination that such additional passes are available. The
parking rates shall be exclusive of any parking tax or other charges imposed by
governmental authorities in connection with the use of such parking, which taxes
and/or charges shall be paid directly by Tenant or the parking users, or, if
directly imposed against Landlord, Tenant shall reimburse Landlord for all such
taxes and/or charges concurrent with its payment of the parking rates described
herein. Tenant's continued right to use the parking passes is conditioned upon
Tenant abiding by all rules and regulations which are prescribed from time to
time for the orderly operation and use of the Project parking facility and upon
Tenant's cooperation in seeing that Tenant's employees and visitors also comply
with such rules and regulations. Such rules and regulations shall provide that
Tenant shall pay Landlord's then current charge for any replacement of any
Tenant parking pass card which is lost, stolen, damaged or destroyed. Landlord
specifically reserves the right to change the size, configuration, design,
layout and all other aspects of the Project parking facility at any time and
Tenant acknowledges and agrees that Landlord may, without incurring any
liability to Tenant and without any abatement of Rent under this Lease, from
time to time, close-off or restrict access to the Project parking facility for
purposes of permitting or facilitating any such construction, alteration or
improvements. Landlord may delegate its responsibilities hereunder to a parking
operator in which case such parking operator shall have all the rights of
control attributed hereby to the Landlord. The parking passes rented by Tenant
pursuant to this Article 28 are provided to Tenant solely for use by Tenant's
own personnel and such passes may not be transferred, assigned, subleased or
otherwise alienated by Tenant without Landlord's prior approval. Tenant's
invitees and guests may use parking spaces in such parking facility which are
not allocated or reserved for Tenant or

                                     -26-
<PAGE>

other occupants or visitors of the Building or Project on a first-come,
first-serve basis, upon payment of Landlord's then prevailing parking rate. The
parking passes allocated to Tenant are not for long term (i.e., more than 48
hours) storage of automobiles, or for short or long term storage of boats,
trailers, recreational vehicles, motorcycles or other vehicles or equipment.

                                  ARTICLE 29
                                  ----------

                           MISCELLANEOUS PROVISIONS
                           ------------------------

     29.1  Binding Effect. Subject to all other provisions of this Lease, each
           --------------
of the provisions of this Lease shall extend to and shall, as the case may
require, bind or inure to the benefit not only of Landlord and of Tenant, but
also of their respective successors or assigns, provided this clause shall not
permit any assignment by Tenant contrary to the provisions of Article 14 of this
Lease.

     29.2  Modification of Lease. Should any current or prospective mortgagee or
           ---------------------
ground lessor for the Building or Project require a modification or
modifications of this Lease, which modification or modifications will not cause
an increased cost or expense to Tenant or in any other way materially and
adversely change the rights and obligations of Tenant hereunder, then and in
such event, Tenant agrees that this Lease may be so modified and agrees to
execute whatever documents are reasonably required therefor and to deliver the
same to Landlord within ten (10) days following a request therefor. Should
Landlord or any such prospective mortgagee or ground lessor require execution of
a short form of Lease for recording, containing, among other customary
provisions, the names of the parties, a description of the Premises and the
Lease Term, Tenant agrees to execute and deliver such short form of Lease to
Landlord within ten (10) days following the request therefor.

     29.3  Transfer of Landlord's Interest. Tenant acknowledges that Landlord
           -------------------------------
has the right to transfer all or any portion of its interest in the Project or
Building and in this Lease, and Tenant agrees that in the event of any such
transfer, Landlord shall automatically be released from all liability under this
Lease and Tenant agrees to look solely to such transferee for the performance of
Landlord's obligations hereunder after the date of transfer. Tenant further
acknowledges that Landlord may assign its interest in this Lease to the holder
of any mortgage or deed of trust as additional security, but agrees that an
assignment shall not release Landlord from its obligations hereunder and Tenant
shall continue to look to Landlord for the performance of its obligations
hereunder.

     29.4  Prohibition Against Recording. Except as provided in Section 29.2 of
           -----------------------------
this Lease, neither this Lease, nor any memorandum, affidavit or other writing
with respect thereto, shall be recorded by Tenant or by anyone acting through,
under or on behalf of Tenant, and the recording thereof in violation of this
provision shall make this Lease null and void at Landlord's election.

     29.5  Captions. The captions of Articles and Sections are for convenience
           --------
only and shall not be deemed to limit, construe, affect or alter the meaning of
such Articles and Sections.

     29.6  Time of Essence. Time is of the essence of this Lease and each of its
           ---------------
provisions.

     29.7  Partial Invalidity. If any term, provision or condition contained in
           ------------------
this Lease shall, to any extent, be invalid or unenforceable, the remainder of
this Lease, 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 Lease shall be valid and enforceable to the
fullest extent possible permitted by law.

     29.8  No Warranty. In executing and delivering this Lease, Tenant has not
           -----------
relied on any representations, including, but not limited to, any representation
as to the amount of any item comprising Additional Rent or the amount of the
Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in
one or more of the exhibits attached hereto.

                                     -27-

<PAGE>

     29.9  Child Care Facilities. Tenant acknowledges that any child care
           ---------------------
facilities located in the Project (the "Child Care Facilities") which are
available to Tenant and Tenant's employees are provided by a third party (the
"Child Care Provider") which is leasing space in the Project, and not by
Landlord. If Tenant or its employees choose to use the Child Care Facilities,
Tenant acknowledges that Tenant and Tenant's employees are not relying upon any
investigation which Landlord may have conducted concerning the Child Care
Provider or any warranties or representation with respect thereto, it being the
sole responsibility of Tenant and the individual user of the Child Care
Facilities to conduct any and all investigations of the Child Care Facilities
prior to making use thereof. Accordingly, Landlord shall have no responsibility
with respect to the quality or care provided by the Child Care Facilities, or
for any acts or omissions of the Child Care Provider. Furthermore, Tenant, for
Tenant and for Tenant's employees, hereby agrees that Landlord, its partners,
subpartners and their respective officers, agents, servants, employees, and
independent contractors shall not be liable for, and are hereby released from
any responsibility for any loss, cost, damage, expense or liability, either to
person or property, arising from the use of the Child Care Facilities by Tenant
or Tenant's employees. Tenant hereby covenants that Tenant shall inform all of
Tenant's employees of the provisions of this Section 29.9 prior to such
employees' use of the Child Care Facilities. Nothing contained herein is
intended to be a representation nor warranty by Landlord that any Child Care
Facilities will be available during the Lease Term and Landlord shall have no
obligation to provide, or to make available, any such Child Care Facilities,

     29.10  Entire Agreement. It is understood and acknowledged that there are
            ----------------
no oral agreements between the parties hereto affecting this Lease and this
Lease supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease. This Lease and
any side letter or separate agreement executed by Landlord and Tenant in
connection with this Lease and dated of even date herewith, contain all of the
terms, covenants, conditions, warranties and agreements of the parties relating
in any manner to the rental, use and occupancy of the Premises and shall be
considered to be the only agreements between the parties hereto and their
representatives and agents. None of the terms, covenants, conditions or
provisions of this Lease can be modified, deleted or added to except in writing
signed by the parties hereto.

     29.11  Right to Lease. Landlord reserves the absolute right to effect such
            --------------
other tenancies in the Project as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building or
Project. Tenant does not rely on the fact, nor does Landlord represent, that any
specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.

     29.12 Force Majeure. Any prevention, delay or stoppage due to strikes,
           -------------
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease (collectively, the "Force Majeure"), notwithstanding
anything to the contrary contained in this Lease, shall excuse the performance
of such party for a period equal to any such prevention, delay or stoppage and,
therefore, if this Lease specifies a time period for performance of an
obligation of either party, that time period shall be extended by the period of
any delay in such party's performance caused by a Force Majeure.

     29.13  Notices. All notices, demands, statements, designations, approvals
            -------
or other communications (collectively, "Notices") given or required to be given
by either party to the other hereunder shall be in writing, shall be sent by
United States certified or registered mail, postage prepaid, return receipt
requested, or delivered personally (i) to Tenant at the appropriate address set
forth in Section 12 of the Summary, or to such other place as Tenant may from
time to time designate in a Notice to Landlord; or (ii) to Landlord at the
following addresses, or to such other firm or to such other place as Landlord
may from time to time designate in a Notice to Tenant:

                                     -28-

<PAGE>

                         AGBRI Mission, L.L.C.
                         591 Camino De La Reina
                         Building Management Office
                         San Diego , California 91105
                         Attn: Building Manager

                         with copies to:

                         AGBRI Mission, L.L.C.
                         c/o Marc R. Brutten
                         The Shidler Group
                         4660 La Jolla Village Drive, Suite 800
                         San Diego, CA 92122

Any Notice will be deemed given on the date it is mailed as provided in this
Section 29.13 or upon the date personal delivery is made. If Tenant is notified
of the identity and address of the holder of any deed of trust or ground or
underlying lessor, Tenant shall give to such mortgagee or ground or underlying
lessor written notice of any default by Landlord under the terms of this Lease
by registered or certified mail, and such mortgagee or ground or underlying
lessor shall be given a reasonable opportunity to cure such default prior to
Tenant's exercising any remedy available to Tenant.

     29.14  Joint and Several. If there is more than one Tenant, the obligations
            -----------------
imposed upon Tenant under this Lease shall be joint and several.

     29.15  Authority. If Tenant is a corporation or partnership, each
            ---------
individual executing this Lease 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 full right and authority to execute
and deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so.

     29.16  Governing Law. This Lease shall be construed and enforced in
            -------------
accordance with the laws of the State of California.

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

     29.18  Brokers. Landlord and Tenant hereby warrant to each other that they
            -------
have had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 11 of the Summary (the "Brokers"), and that they know of no
other real estate broker or agent who is entitled to a commission in connection
with this Lease. Each party agrees to indemnify and defend the other party
against and hold the other party harmless from any and all claims, demands,
losses, liabilities, lawsuits, judgments, and costs and expenses (including
without limitation reasonable attorneys' fees) with respect to any leasing
commission or equivalent compensation alleged to be owing on account of any
dealings with any real estate broker or agent, other than the Brokers, occurring
by, through, or under the indemnifying party.

     29.19 Independent Covenants. This Lease shall be construed as though the
           ---------------------
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord's expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord; provided, however, that the foregoing shall in no
way impair the right of Tenant to commence a separate action against Landlord
for any violation by Landlord of the provisions hereof so long as notice is
first given to Landlord and any holder of a mortgage or deed of trust covering
the Building or Project or any portion thereof, whose address has theretofore
been given to Tenant, and an opportunity is granted to Landlord and such holder
to correct such violations as provided above.

                                     -29-

<PAGE>

     29.20  Project or Building Name and Signage. Landlord shall have the right
            -------------------------------------
at any time to change the name of the Project or Building and to install, affix
and maintain any and all signs on the exterior and on the interior of the
Project or Building as Landlord may, in Landlord's sole discretion, desire.
Tenant shall not use the name of the Project or Building or use pictures or
illustrations of the Project or Building in advertising or other publicity,
without the prior written consent of Landlord.

     29.21  Transportation Management. Tenant shall fully comply with all
            -------------------------
present or future programs intended to manage parking, transportation or traffic
in and around the Project or Building, and in connection therewith, Tenant shall
take responsible action for the transportation planning and management of all
employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other transportation-
related committees or entities. Such programs may include, without limitation:
(i) restrictions on the number of peak-hour vehicle trips generated by Tenant;
(ii) increased vehicle occupancy; (iii) implementation of an in-house
ridesharing program and an employee transportation coordinator; (iv) working
with employees and any Project, Building or area-wide ridesharing program
manager; (v) instituting employer-sponsored incentives (financial or in-kind) to
encourage employees to rideshare; and (vi) utilizing flexible work shifts for
employees.

     29.22  No Discrimination. Tenant covenants by and for itself, its heirs,
            -----------------
executors, administrators and assigns, and all persons claiming under or through
Tenant, and this Lease is made and accepted upon and subject to the following
conditions: that there shall be no discrimination against or segregation of any
person or group of persons, on account of race, color, creed, sex, religion,
marital status, ancestry or national origin in the leasing, subleasing,
transferring, use, or enjoyment of the Premises, nor shall Tenant itself, or any
person claiming under or through Tenant, establish or permit such practice or
practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy, of tenants, lessees, sublessees, subtenants
or vendees in the Premises.

     29.23  Hazardous Material. As used herein, the term "Hazardous Material"
            ------------------
means any hazardous or toxic substance, material or waste which is or becomes
regulated by, or is dealt with in, any local governmental authority, the State
of California or the Unites States Government. Tenant acknowledges that Landlord
may incur costs (a) for complying with laws, codes, regulations or ordinances
relating to Hazardous Material, or (b) otherwise in connection with Hazardous
Material including, without limitation, the following: (i) Hazardous Material
present in soil or ground water, (ii) Hazardous Material that migrates, flows,
percolates, diffuses or in any way moves onto or under the Project, (iii)
Hazardous Material present on or under the Project as a result of any discharge,
dumping or spilling (whether accidental or otherwise) on the Project by other
tenants of the Project or their agents, employees, contractors or invitees, or
by others, and (iv) material which becomes Hazardous Material due to a change in
laws, codes, regulations or ordinances which relate to hazardous or toxic
material, substances or waste. Tenant agrees that the costs incurred by Landlord
with respect to, or in connection with, the Project for complying with laws,
codes, regulations or ordinances relating to Hazardous Material shall be an
Operating Expense, unless the cost of such compliance, as between Landlord and
Tenant, is made the responsibility of Tenant under this Lease. To the extent any
such Operating Expense relating to Hazardous Material is subsequently recovered
or reimbursed through insurance, or recovery from responsible third parties, or
other action, Tenant shall be entitled to a proportionate share of such
Operating Expense to which such recovery or reimbursement relates.

     29.24  Development of the Project.
            --------------------------

            29.24.1  Subdivision. Tenant acknowledges that the Project is
                     -----------
comprised of separate legal lots. Landlord reserves the right to further
subdivide or sell a11 or a portion of the buildings and Common Areas in the
Project. Tenant agrees to execute and deliver, upon demand by Landlord and in
the form requested by Landlord, any additional documents needed to conform this
Lease to the circumstances resulting from such a subdivision or sale and any and
all ancillary transactions in connection therewith.

            29.24.2  The Other Improvements. If portions of the Project or
                     ----------------------
property adjacent to the Project (collectively, the "Other Improvements") are
owned by an entity other than Landlord, Landlord, at its option, may enter into
an agreement with the owner or owners of any

                                     -30-

<PAGE>

of the Other Improvements to provide (i) for reciprocal rights of access, use
and/or enjoyment of the Project and the Other Improvements, (ii) for the common
management, operation, maintenance, improvement and/or repair of all or any
portion of the Project and all or any portion of the Other Improvements, (iii)
for the allocation of a portion of the Project Expenses to the Other
Improvements and the allocation of a portion of the operating expenses and taxes
for the Other Improvements to the Project, (iv) for the use or improvement of
the Other Improvements and/or the Project in connection with the improvement,
construction, and/or excavation of the Other Improvements and/or the Project,
and (v) for any other matter which Landlord deems necessary. Nothing contained
herein shall be deemed or construed to limit or otherwise affect Landlord's
right to sell all or any portion of the Project or any other of Landlord's
rights described in this Lease.

            29.24.3  Construction of Project and Other Improvements. Tenant
                     ----------------------------------------------
acknowledges that portions of the Project and/or the Other Improvements may be
under construction following Tenant's occupancy of the Premises, and that such
construction may result in levels of noise, dust, obstruction of access, etc.
which are in excess of that present in a fully constructed project. Tenant
hereby waives any and all rent offsets or claims of constructive eviction which
may arise in connection with such construction.

     29.25  Landlord Exculpation. It is expressly understood and agreed that
            --------------------
notwithstanding anything in this Lease to the contrary, and notwithstanding any
applicable law to the contrary, the liability of Landlord hereunder (including
any successor landlord hereunder) and any recourse by Tenant against Landlord
shall be limited solely and exclusively to the lesser of (a) the equity interest
of Landlord in the Building or (b) the equity interest Landlord would have in
the Building if the Building were encumbered by third-party debt in an amount
equal to eighty percent (80%) of the value of the Building (as such value is
determined by Landlord), and neither Landlord, nor any of its constituent
partners or subpartners, shall have any personal liability therefor, and Tenant,
on behalf of itself and all persons claiming by, through or under Tenant, hereby
expressly waives and releases Landlord and such partners and subpartners from
any and all personal liability.

     29.26  Waiver of Redemption by Tenant. Tenant hereby waives for Tenant and
            ------------------------------
for all those claiming under Tenant, all rights now or hereafter existing to
redeem by order or judgment of any court or by any legal process or writ,
Tenant's right of occupancy of the Premises after any termination of this Lease.

     29.27  Attorneys' Fees. If either party commences litigation against the
            ---------------
other for the specific performance of this Lease, 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, including any and all costs incurred in enforcing,
perfecting and executing such judgment.

                                     -31-

<PAGE>

      IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.

      "LANDLORD":                    AGBRI MISSION, L.L.C.,
                                     a Delaware limited liability company

                                     By:   Shidler West Investment Corporation
                                           a Delaware corporation
                                     Its:  Authorized Agent

                                           By: /s/ Jim [ILLEGIBLE]
                                              ---------------------------------
                                              Name: Jim [ILLEGIBLE]
                                                   ----------------------------
                                              Title: CFO
                                                    ---------------------------

      "TENANT":                      VENTURE CATALYST INCORPORATED,
                                     a Utah corporation

                                     By:    /s/ Kevin McIntosh
                                           ------------------------------------
                                           Name: Kevin McIntosh
                                                -------------------------------
                                           Title: SVP & CFO
                                                 ------------------------------

                                     By:    /s/ Glenn  Smith
                                           ------------------------------------
                                           Name: Glenn  Smith
                                                -------------------------------
                                           Title: EVP
                                                 ------------------------------

                                    -32-
<PAGE>

                                   EXHIBIT A
                                   ---------

                        MISSION VALLEY FINANCIAL CENTER
                        -------------------------------

                              OUTLINE OF PREMISES
                              -------------------

     Landlord and Tenant acknowledge that this plot plan is for general
information purposes only. Landlord shall not be liable and makes no
representation or warranty whatsoever concerning the existence or further
existence or accuracy of description or location, any buildings or improvements
whatsoever depicted herein shall be subject to correction modification or change
at any time without notice at Landlord's sole discretion. The parties hereby
acknowledge that the actual Premises may vary as to size, dimensions and/or
location from the description of same hereinabove set forth. The aforesaid
description of the Premises represents an approximation only and Landlord makes
no representation or warranty concerning the accuracy thereof in any respect.
Landlord hereby waives any and all claims, damages and/or right of recovery
against Landlord, it's officers, agents, representatives, and employees, arising
on account or by reason of the description of the Premises hereinabove set
forth.

                               EXHIBIT A--Page 1

<PAGE>

                                   EXHIBIT B
                                   ---------

                        MISSION VALLEY FINANCIAL CENTER
                        -------------------------------

                          NOTICE OF LEASE TERM DATES
                          --------------------------

To:  ___________________
     ___________________
     ___________________

     Re:   Office Lease dated ______________, 200_ between AGBRI MISSION,
L.L.C., a Delaware limited liability company ("Landlord"), and VENTURE CATALYST
INCORPORATED, a Utah corporation ("Tenant") concerning Suite 418 on floor four
of the office building located at 591 Camino De La Reina, San Diego, California.

Gentlemen:

     In accordance with the referenced Office Lease (the "Lease:), we wish to
advise you and/or confirm as follows:

     1.  The Substantial Completion of the Premises has occurred, and the Lease
term shall commence on or has commenced on ____________ for a term of __________
ending on _______________.

     2.  Rent commenced to accrue on ____________, in the amount of ___________.

     3.  If the Lease Commencement Date is other than the first day of the
month, the first billing will contain a pro rata adjustment. Each billing
thereafter, with the exception of the final billing, shall be for the full
amount of the monthly installment as provided for in the Lease.

     4.  Your rent checks should be made payable to ______________ at __________
_______________________________________________.

     5.  The exact number of rentable square feet within the Premises is _______
square feet.

     6.  Base Rent, as adjusted based upon the exact number of rentable square
feet within the Premises, is as follows: _______________________________________
_____________________.

                               EXHIBIT B--Page 1

<PAGE>

     7.  Tenant's Share, as adjusted based upon the exact number of rentable
square feet within the Premises, is ______%.

     "LANDLORD":                AGBRI MISSION, L.L.C.
                                a Delaware limited liability company

                                By:   Shidler West Investment Corporation
                                      a Delaware corporation
                                Its:  Authorized Agent

                                      By: _________________________
                                          Name:____________________
                                          Title:___________________

Agreed to and Accepted as
of ____________, 200_.

     "TENANT":

VENTURE CATALYST INCORPORATED,
a Utah corporation

By:  ________________________
     Name:___________________
     Title:__________________

By:  ________________________
     Name:___________________
     Title:__________________

                               EXHIBIT B--Page 2

<PAGE>

                                   EXHIBIT C
                                   ---------

                        MISSION VALLEY FINANCIAL CENTER
                        -------------------------------

                             RULES AND REGULATIONS
                             ---------------------

     Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Projects.

     1.  Tenant shall not alter any lock or install any new or additional locks
or bolts on any doors or windows of the Premises without obtaining Landlord's
prior written consent. Tenant shall bear the cost of any lock changes or repairs
required by Tenant. Two keys will be furnished by Landlord for the Premises, and
any additional keys required by Tenant must be obtained from Landlord at a
reasonable cost to be established by Landlord.

     2.  All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises.

     3.  Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is considered to be after normal
business hours for the Building will be required to sign the Building register.
Access to the Building may be refused unless the person seeking access has
proper identification or has a previously arranged pass for access to the
Building. The Landlord and his agents shall in no case be liable for damages for
any error with regard to the admission to or exclusion from the Building of any
person. In case of invasion, mob, riot, public excitement, or other commotion,
Landlord reserves the right to prevent access to the Building or the Project
during the continuance thereof by any means it deems appropriate for the safety
and protection of life and property.

     4.  No furniture, freight or equipment of any kind shall be brought into
the Building without prior notice to Landlord. All moving activity into or out
of the Building shall be scheduled with Landlord and done only at such time and
in such manner as Landlord designates. Service deliveries (other than messenger
services) shall be allowed only during hours reasonably approved by Landlord.
Landlord shall have the right to prescribe the weight, size and position of all
safes and other heavy property brought into the Building and also the times and
manner of moving the same in and out of the Building. Safes and other heavy
objects shall, if considered necessary by Landlord, stand on supports of such
thickness as is necessary to properly distribute the weight. Landlord will not
be responsible for loss of or damage to any such safe or property in any case.
Any damage to any part of the Building, its contents, occupants or visitors by
moving or maintaining any such safe or other property shall be the sole
responsibility and expense of Tenant.

     5.  No furniture, package, supplies, equipment or merchandise will be
received in the Building  or carried up or down in the elevators, except between
such hours and in such specific elevator as shall be designated by Landlord.

     6.  Any requests of Tenant shall be directed to the management office for
the Project or at such office location designated by Landlord. Employees of
Landlord shall not perform any work or do anything outside their regular duties
unless under special instructions from Landlord.

     7.  Tenant shall not disturb, solicit, or canvass any occupant of the
Project and shall cooperate with Landlord and its agents to prevent such
activities.

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

                               EXHIBIT C--Page 1
<PAGE>

     9.   Tenant shall not overload the floor of the Premises, nor mark, drive
nails or screws, or drill into the partitions, woodwork or plaster or in any way
deface the Premises or any part thereof without Landlord's consent first had and
obtained.

     10.  Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machines other than fractional horsepower
office machines shall be installed, maintained or operated upon the Premises
without the written consent of Landlord.

     11.  Tenant shall not use or keep in or on the Premises, the Building, or
the Project any kerosene, gasoline or other inflammable or combustible fluid or
material.

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

     13.  Tenant shall not use, keep or permit to be used or kept, any foul or
noxious gas or substance in or on the Premises, or permit or allow the Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Project by reason of noise, odors, or vibrations, or
interfere in any way with other tenants or those having business therein.

     14.  Tenant shall not bring into or keep within the Project, the Building
or the Premises any animals, birds, bicycles or other vehicles.

     15.  No cooking shall be done or permitted on the Premises, nor shall the
Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters' laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors, provided that such use is in accordance
with all applicable federal, state and city laws, codes, ordinances, rules and
regulations.

     16.  Landlord will approve where and how telephone and telegraph wires are
to be introduced to the Premises. No boring or cutting for wires shall be
allowed without the consent of Landlord. The location of telephone, call boxes
and other office equipment affixed to the Premises shall be subject to the
approval of Landlord.

     17.  Landlord reserves the right to exclude or expel from the Project any
person who, in the judgment of Landlord, is intoxicated or under the influence
of liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.

     18.  Tenant, its employees and agents shall not loiter in the entrances or
corridors, nor in any way obstruct the sidewalk, lobby, halls, stairways or
elevators, and shall use them only as a means of ingress and egress for the
Premises.

     19.  Tenant shall not waste electricity, water or air conditioning and
agrees to cooperate fully with Landlord to ensure the most effective operation
of the Building's heating and air conditioning system, and shall refrain from
attempting to adjust any controls.

     20.  Tenant shall store all its trash and garbage within the interior of
the Premises. No material shall be placed in the trash boxes and receptacles if
such material is of such nature that it may not be disposed of in the ordinary
and customary manner of removing and disposing of trash and garbage in the
"Mission Valley" area of San Diego, California without violation of any law or
ordinance governing such disposal. All trash, garbage and refuse disposal shall
be made only through entry-ways and elevators provided for such purposes at such
times as Landlord shall designate.

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

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

                               EXHIBIT C--Page 2

<PAGE>

     23.  No awnings or other projection shall be attached to the outside walls
of the Building without the prior written consent of Landlord. No curtains,
blinds, shades or screens shall be attached to or hung in, or used in connection
with, any window or door of the Premises without the prior written consent of
Landlord. All electrical ceiling fixtures hung in offices or spaces along the
perimeter of the Building must be fluorescent and/or of a quality, type, design
and bulb color approved by Landlord. Tenant shall abide by Landlord's
regulations concerning the opening and closing of window coverings which are
attached to the windows in the Premises, if any, which have a view of any
interior portion of the Building or Building Common Areas.

     24.  The sashes, sash doors, skylights, windows, and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the windowsills.

     Landlord reserves the right at any time to change or rescind any one or
more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Premises,
Building, the Common Areas and the Project, and for the preservation of good
order therein, as well as for the convenience of other occupants and tenants
therein. Tenant shall be deemed to have read these Rules and Regulations and to
have agreed to abide by them as a condition of its occupancy of the Premises.
Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular tenants, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of any other
tenant, nor prevent Landlord from thereafter enforcing any such Rules or
Regulations against any or all tenants of the Project.

                               EXHIBIT C-Page 3

<PAGE>

                                   EXHIBIT D
                                   ---------

                        MISSION VALLEY FINANCIAL CENTER
                       --------------------------------

                     FORM OF TENANT'S ESTOPPEL CERTIFICATE
                     -------------------------------------

     The undersigned as Tenant under that certain Office Lease (the "Lease")
made and entered into as of_________, 200_ by and between AGBRI MISSION, L.L.C.,
a Delaware limited liability company as Landlord, and the undersigned as Tenant,
for Premises on the ______ (__) floor(s) of the office building located at 591
Camino De La Reina, San Diego, California 92108, certifies as follows:

     1.   Attached hereto as Exhibit A is a true and correct copy of the Lease
and all amendments and modifications thereto. The documents contained in
Exhibit A represent the entire agreement between the parties as to the Premises.

     2.   The undersigned currently occupies the Premises described in the
Lease.

     3.   The Lease Term commenced on ____________________, and the Lease Term
expires on __________________.

     4.   Base Rent became payable on _____________________.

     5.   The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.

     6.   Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:

     7.   Tenant shall not modify the documents contained in Exhibit A without
the prior written consent of the holder of the first deed of trust on the
Premises.

     8.   All monthly installments of Base Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through _________. The current monthly installment of Base Rent is $________.

     9.   All conditions of the Lease to be performed by Landlord necessary to
the enforceability of the Lease have been satisfied and Landlord is not in
default thereunder.

     10.  The current amount of the Security Deposit held by Landlord is $_____.

     11.  No rental has been paid more than thirty (30) days in advance and no
security has been deposited with Landlord except as provided in the Lease.

     12.  As of the date hereof, there are no existing defenses or offsets that
the undersigned has against Landlord nor have any events occurred that with the
passage of time or the giving of notice, or both, would constitute a default on
the part of Landlord under the Lease.

     13.  The undersigned acknowledges that this Estoppel certificate may be
delivered to Landlord or to a prospective mortgagee, or a prospective purchaser,
and acknowledges that said prospective mortgagee or prospective purchaser will
be relying upon the statements contained herein in making the loan or acquiring
the property of which the Premises are a part and that receipt by it of this
certificate is a condition of making of such loan or acquisition of such
property.

     14.  If Tenant is a corporation or partnership, each individual executing
this Estoppel Certificate 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 full right and authority to execute and deliver
this Estoppel Certificate and that each person signing on behalf of Tenant is
authorized to do so.

                               EXHIBIT D--Page 1
<PAGE>

Executed at ___________________ on the _____ day of ________________, 200_.

"TENANT"                        VENTURE CATALYST INCORPORATED,
                                a Utah corporation

                                By:  _________________________
                                     Name:____________________
                                     Title:___________________

                                By:  _________________________
                                     Name:____________________
                                     Title:___________________

                               EXHIBIT D--Page 2
<PAGE>

                                   EXHIBIT E
                                   ---------

                        MISSION VALLEY FINANCIAL CENTER
                        -------------------------------

                              TENANT WORK LETTER
                              ------------------

     This Tenant Work Letter shall set forth the terms and conditions relating
to the construction of the tenant improvements in the Premises. This Tenant Work
Letter is essentially organized chronologically and addresses the issues of the
construction of the Premises, in sequence, as such issues will arise during the
actual construction of the Premises. All capitalized terms used but not defined
herein shall have the meanings given such terms in the Lease. All references in
this Tenant Work Letter to Articles or Sections of "this Lease" shall mean the
relevant portion of Articles 1 through 29 of this Office Lease to which this
Tenant Work Letter is attached as Exhibit E and of which this Tenant Work Letter
forms a part, and all references in this Tenant Work Letter to Sections of "this
Tenant Work Letter" shall mean the relevant portion of Sections 1 through 6 of
this Tenant Work Letter.

                                   SECTION 1
                                   ---------

                LANDLORD'S INITIAL CONSTRUCTION IN THE PREMISES
                -----------------------------------------------

     1.1  Base, Shell and Core of the Premises as Constructed by Landlord.
          ---------------------------------------------------------------
Landlord has constructed, or shall construct, at its sole cost and expense, the
base, shell and core (i) of the Premises and (ii) of the floor of the Building
on which the Premises is located (collectively, the "Base, Shell and Core") in
accordance with the plans and specifications for the Base, Shell, and Core and
on an unoccupied basis (the "Plans"). The Base, Shell and Core shall be provided
in its existing "as-is" condition.

     1.2  Landlord Work.  Landlord shall, at Landlord's sole cost and expense,
          -------------
cause the construction and installation of the following items on the floor of
the Building containing the Premises (collectively, the "Landlord Work"), which
Landlord Work (as well as the Base, Shell and Core work and Building standard
mechanical and electrical engineering, and lifesafety work) shall be installed
or constructed in compliance with the Plans, and shall, unless otherwise
indicated, be installed and constructed in compliance with, and only to the
extent required by, Code and on an unoccupied basis.

          1.2.1  Replace carpet with building-standard carpeting, color to be
chosen by Tenant. Paint and patch drywall (where necessary) the Premises with
building-standard paint, color to be chosen by Tenant.

                                   SECTION 2
                                   ---------

                              TENANT IMPROVEMENTS
                              -------------------

     2.1  Tenant Improvement Allowance.  Tenant shall be entitled to a one-time
          ----------------------------
tenant improvement allowance (the "Tenant Improvement Allowance") in the amount
of up to the sum set forth in the Summary of Basic Lease Information for the
costs relating to the initial design and construction of Tenant's improvements,
including the Landlord Work, which are permanently affixed to the Premises (the
"Tenant Improvements"). In no event shall Landlord be obligated to make
disbursements pursuant to this Tenant Work Letter in a total amount which
exceeds the Tenant Improvement Allowance.

     2.2  Disbursement of the Tenant Improvement Allowance.  Except as otherwise
          ------------------------------------------------
set forth in this Tenant Work Letter, the Tenant Improvement Allowance shall be
disbursed by Landlord (each of which disbursements shall be made pursuant to
Landlord's disbursement process) only for the following items and costs
(collectively, the "Tenant Improvement Allowance Items"):

          2.2.1  Payment of the fees of the "Space Planner," "Architect" and the
"Engineers," as those terms are defined in Section 3.1 of this Tenant Work
Letter, which payment shall, notwithstanding anything to the contrary contained
in this Tenant Work Letter,

                               EXHIBIT E--Page 1
<PAGE>

not exceed an aggregate amount equal to One Dollar ($1.00) per usable square
foot of the Premises, and payment of the fees incurred by, and the cost of
documents and materials supplied by, Landlord and Landlord's consultants in
connection with the preparation and review of the "Construction Drawings," as
that term is defined in Section 3.1 of this Tenant Work Letter;

          2.2.2  The payment of plan check, permit and license fees relating to
the construction of the Tenant Improvements;

          2.2.3  The cost of construction of the Tenant Improvements, including,
without limitation, testing and inspection costs, freight elevator usage,
hoisting and trash removal costs, and contractors' fees and general conditions;

          2.2.4  The cost of any changes in the Base, Shell and Core work or the
Landlord Work when such changes are required by the Construction Drawings
(including if such changes are due to the fact that such work is prepared on an
unoccupied basis), such cost to include all direct architectural and/or
engineering fees and expenses incurred in connection therewith;

          2.2.5  The cost of any changes to the Construction Drawings, Tenant
Improvements or Landlord's Work required by Code;

          2.2.6  Sales and use taxes and Title 24 fees;

          2.2.7  The cost of the Landlord Work;

          2.2.8  "Landlord's Supervision Fee", as that term is defined in
Section 4.3.2 of this Tenant Work Letter; and

          2.2.9  All other costs to be expended by Landlord in connection with
the construction of the Tenant Improvements.

     2.3  Standard Tenant Improvement Package.  Landlord has established
          -----------------------------------
specifications (the "Specifications") for some of the Building standard
components which Tenant may elect to construct in the Premises (collectively,
the "Standard Improvement Package"), which shall be available to Tenant upon
request. Landlord may make changes to the Specifications and the Standard
Improvement Package from time to time.

                                   SECTION 3
                                   ---------

                            CONSTRUCTION DRAWINGS
                            ----------------------

     3.1  Selection of Space Planner/Architect/Construction Drawings.  Landlord
          ----------------------------------------------------------
shall retain an architect/space planner (the "Architect") which will, at
Tenant's option, be either (i) Landlord's designated architect/space planner, or
(ii) an architect/space planner approved by Landlord, which approval shall not
be unreasonably withheld by Landlord, to prepare the "Final Space Plan", as that
term is defined in Section 3.2 below. Tenant shall either select Landlord's
designated architect/space planner or shall designate an alternative
architect/space planner for Landlord's approval by written notice to Landlord
within five (5) days after the date of this Lease. Tenant's failure to so notify
Landlord in writing within said five (5) day period shall be deemed to
constitute Tenant's selection of Landlord's designated architect/space planner.
If Tenant designates an alternative Architect/Space Planner for Landlord's
approval and if Landlord disapproves Tenant's selection, Tenant shall designate
a new architect/space planner for Landlord's approval within three (3) days
after Landlord's disapproval of Tenant's previous selection and this process
shall continue until an Architect has been selected. Tenant's failure to so
designate a new architect/space planner within any such three (3) day period
shall be deemed to constitute Tenant's selection of Landlord's designated
architect/space planner. The Architect shall prepare the "Construction Drawings"
(as that term is defined in this Section 3.1 below). In addition, Landlord shall
retain engineering consultants (the "Engineers") selected by Landlord to prepare
all plans and engineering working drawings relating to the structural,
mechanical, electrical, plumbing, HVAC, lifesafety, and sprinkler work in the
Premises, which work is not part of the Base, Shell and Core work or Landlord
Work. The plans and drawings to be prepared by Architect and the Engineers
hereunder shall be known collectively as the "Construction Drawings." Landlord's
review of the Final Space Plan, as set forth in this Section 3, shall be for

                               EXHIBIT E--Page 2
<PAGE>

its sole purpose and shall not imply Landlord's review of the same, or obligate
Landlord to review the same, for quality, design, Code compliance or other like
matters. Accordingly, notwithstanding that Landlord shall retain the Architect
and Engineers and that the Final Space Plan is reviewed by Landlord or its
consultants, and notwithstanding any advice or assistance which may be rendered
to Tenant by Landlord or Landlord's consultants, Landlord shall have no
liability whatsoever in connection therewith and shall not be responsible for
any omissions or errors contained in the Construction Drawings.

     3.2  Final Space Plan.  On or before the date set forth in Schedule 1,
          ----------------
attached hereto, Tenant and the Architect shall prepare the final space plan for
Tenant Improvements in the Premises, shall receive preliminary plan check
approval for the same from the Department of Building and Safety of the City of
San Diego (collectively, the "Final Space Plan") and shall deliver the Final
Space Plan and proof of receipt of preliminary plan check approval to Landlord
for Landlord's approval. The Final Space Plan shall include a layout and
designation of all offices, rooms and other partitioning, their intended use,
and equipment to be contained therein. If Landlord shall disapprove of any
portion of the Final Space Plan, Landlord shall specify in writing to Tenant and
the Architect the reasons for Landlord's disapproval and the Architect and
Tenant shall then revise the Final Space Plan and resubmit the Final Space Plan
for Landlord's approval within three (3) business days after Landlord's
disapproval thereof. This process shall continue until the Final Space Plan has
been approved by Landlord.

     3.3  Non-Standard Improvement Package Items.  On or before the date set
          --------------------------------------
forth in Schedule 1, (i) Tenant shall submit to Landlord, for Landlord's
approval, all necessary information, details, and specifications to allow
Landlord to immediately prepare an appropriate "Partial Cost Proposal," as that
term is defined below in Section 4.2 of this Tenant Work Letter, for all
materials necessary to the construction of (A) the structural portions of any
interior stairway, and the openings (and required structural support areas)
necessary to accommodate the placement of such interior stairways in the
Premises and (B) all other structural supports and reinforcements necessary to
the construction of the Tenant Improvements (collectively, the "Structural
Items"); and (ii) Tenant shall provide Landlord, for Landlord's approval, with
complete specifications, details and information to allow Landlord to
immediately prepare a Partial Cost Proposal for all materials, components,
finishes, equipment, and improvements which are not part of the Standard
Improvement Package.

     3.4  Final Working Drawings.  Promptly after Landlord's approval of the
          ----------------------
Final Space Plan, the Architect and the Engineers shall complete the
architectural and engineering drawings for the Premises, and the final
architectural working drawings in a form which is complete to allow
subcontractors to bid on the work, to obtain all applicable permits, and to
subsequently construct the work (collectively, the "Final Working Drawings").
Tenant shall approve or reasonably disapprove by written notice to Landlord
(with a detailed description of Tenant's reasons for such disapproval) of any
draft of the Final Working Drawings within three (3) business days after
Tenant's receipt thereof. Tenant's failure to approve or reasonably disapprove
any draft of the Final Working Drawings by written notice to Landlord within
said three (3) business day period shall be deemed to constitute Tenant's
approval thereof. If Tenant so notifies Landlord of its disapproval of any draft
of the Final Working Drawings, Landlord shall cause the Architect and the
Engineers to revise the Final Working Drawings and to resubmit the Final Working
Drawings for Tenant's approval. This process shall continue until the Final
Working Drawings have been approved or are deemed to have been approved by
Tenant.

     3.5  Permits.
          -------

          3.5.1  Structural Permits.  Simultaneously with Tenant's submittal of
                 ------------------
the items described in Sections 3.3(i)(A) and 3.3(i)(B), above, Tenant shall use
its best, good faith efforts and all due diligence to cooperate with Architect,
the Engineers, Landlord and "Contractor," as that term is defined in Section
4.1, below, to do all acts necessary, including cooperation in the preparation
of shop drawings, if necessary, to obtain permits (the "Structural Permits") for
the immediate construction of the Structural Items.

          3.5.2  Other Permits.  After the approval of the Final Working
                 -------------
Drawings by Landlord (the "Approved Working Drawings"), Landlord shall cause the
Architect to submit same to the City of San Diego for all applicable building
permits (except the Structural Permits

                                EXHIBIT--Page 3
<PAGE>

to the extent the same have already been received pursuant to the terms of
Section 3.5.1, above) necessary to allow Contractor to commence and fully
complete the construction of the Tenant Improvements (the "Permits"). Tenant
shall use its best, good faith efforts and all due diligence to cooperate with
Architect, the Engineers, Landlord and Contractor to obtain the Permits as soon
as reasonably possible.

          3.5.3  Other Terms.  No changes, modifications or alterations in the
                 -----------
Approved Working Drawings may be made without the prior written consent of
Landlord, provided that Landlord may withhold its consent, in its sole
discretion, to any change in the Approved Working Drawings, if such change would
directly or indirectly delay the Substantial Completion of the Premises.

     3.6  Time Deadlines.  Tenant shall use its best, good faith efforts and all
          --------------
due diligence to cooperate with Architect, the Engineers, and Landlord to
complete all phases of the Construction Drawings and the permitting process, and
with Contractor for approval of the Cost Proposal, as soon as possible after the
execution of the Lease. The applicable dates for approval of items, plans and
drawings as described in this Section 3, Section 4, below, and in this Tenant
Work Letter are set forth and further elaborated upon in Schedule 1 (the "Time
Deadlines"), attached hereto. Tenant agrees to comply with the Time Deadlines.

                                   SECTION 4
                                   ---------

                    CONSTRUCTION OF THE TENANT IMPROVEMENTS
                    ---------------------------------------

     4.1  Contractor.  A contractor retained by Landlord (the "Contractor"),
          ----------
shall construct the Tenant Improvements.

     4.2  Cost Proposal.  After the Approved Working Drawings are signed by
          -------------
Landlord and Tenant, Landlord shall provide Tenant with a cost proposal in
accordance with the Approved Working Drawings, which cost proposal shall
include, as nearly as possible, the cost of all Tenant Improvement Allowance
Items to be incurred in connection with the construction of the Tenant
Improvements (the "Cost Proposal"). Landlord and Tenant shall work together in
good faith in an attempt to agree upon a mutually acceptable Cost Proposal as
soon as reasonably possible and in any event within the Time Deadlines set
forth in Schedule 1. Notwithstanding the foregoing, portions of the cost of the
Tenant Improvements may be delivered to Tenant as such portions of the Tenant
Improvements are priced by Contractor (on an individual item-by-item or
trade-by-trade basis), even before the Approved Working Drawings are completed
(the "Partial Cost Proposal") for purposes of facilitating the early purchase of
items and construction of the same. Tenant shall approve and deliver the Cost
Proposal to Landlord within five (5) business days of the receipt of the same,
or, as to a Partial Cost Proposal within two (2) business days of receipt of the
same, and upon receipt of the same by Landlord, Landlord shall be released by
Tenant to purchase the items set forth in the Cost Proposal or Partial Cost
Proposal, as the case may be, and to commence the construction relating to such
items. The date by which Tenant must approve and deliver the Cost Proposal or
the last Partial Cost Proposal to Landlord, as the case may be, shall be known
hereafter as the "Cost Proposal Delivery Date". The total of all Partial Cost
Proposals, if any, shall be known as the Cost Proposal.

     4.3  Construction of Tenant Improvements by Landlord's Contractor under the
          ----------------------------------------------------------------------
Supervision of Landlord.
-----------------------

          4.3.1  Over-Allowance Amount.  On the Cost Proposal Delivery Date,
                 ---------------------
Tenant shall deliver to Landlord an amount (the "Over-Allowance Amount") equal
to the difference between (i) the amount of the Cost Proposal and (ii) the
amount of the Tenant Improvement Allowance (less any portion thereof already
disbursed by Landlord, or in the process of being disbursed by Landlord, on or
before the Cost Proposal Delivery Date). The Over-Allowance Amount shall be
disbursed by Landlord prior to the disbursement of any then remaining portion of
the Tenant Improvement Allowance, and such disbursement shall be pursuant to the
same procedure as the Tenant Improvement Allowance. In the event that, after the
Cost Proposal Date, any revisions, changes, or substitutions shall be made to
the Construction Drawings or the Tenant Improvements, any additional costs which
arise in connection with such revisions, changes or

                               EXHIBIT E--Page 4
<PAGE>

substitutions or any other additional costs shall be paid by Tenant to Landlord
immediately upon Landlord's request as an addition to the Over-Allowance Amount.

          4.3.2  Landlord's Retainment of Contractor.  Landlord shall
                 -----------------------------------
independently retain Contractor to construct the Tenant Improvements in
accordance with the Approved Working Drawings and the Cost Proposal and Tenant
shall pay (as part of the Tenant Improvement Allowance) a construction
supervision and management fee (the "Landlord Supervision Fee") to Landlord in
an amount equal to five percent (5%) of all Tenant Improvement Allowance Items.

          4.3.3  Contractor's Warranties and Guaranties.  Landlord hereby
                 --------------------------------------
assigns to Tenant all warranties and guaranties by Contractor relating to the
Tenant Improvements, and Tenant hereby waives all claims against Landlord
relating to, or arising out of the construction of, the Tenant Improvements.
Such warranties and guaranties of Contractor shall guarantee that the Tenant
Improvements shall be free from any defects in workmanship and materials for a
period of not less than one (1) year from the date of completion thereof, and
Contractor shall be responsible for the replacement or repair, without
additional charge, of the Tenant Improvements that shall become defective within
one (1) year after Substantial Completion of the Premises. The correction of
such work shall include, without additional charge, all additional expenses and
damages in connection with such removal or replacement of all or any part of the
Tenant Improvements.

          4.3.4  Tenant's Covenants.  Tenant hereby indemnifies Landlord for any
                 ------------------
loss, claims, damages or delays arising from the actions of the Architect and
the Engineers on the Premises or in the Building. Tenant, immediately after the
Substantial Completion of the Premises, shall have prepared and delivered to the
Building management office a copy of the "as built" plans and specifications
(including all working drawings) for the Tenant Improvements.

                                   SECTION 5
                                   ---------

                    COMPLETION OF THE TENANT IMPROVEMENTS;
                    --------------------------------------
                            LEASE COMMENCEMENT DATE
                            -----------------------

     Except as provided in this Section 5, the Lease Commencement Date shall
occur as set forth in Article 2 of this Lease. If there shall be a delay or
there are delays in the Substantial Completion of the Premises or in the
occurrence of any of the other conditions precedent to the Lease Commencement
Date, as set forth in Article 2 of this Lease, as a direct, indirect, partial,
or total result of any of the following (collectively, "Tenant Delays"):

     5.1  Tenant's failure to comply with the Time Deadlines;

     5.2  Tenant's failure to timely approve any matter requiring Tenant's
approval;

     5.3  A breach by Tenant of the terms of this Tenant Work Letter or the
Lease;

     5.4  Changes in any of the Construction Drawings after disapproval of the
same by Landlord or because the same do not comply with Code or other applicable
laws;

     5.5  Tenant's request for changes in the Final Working Drawings or the
Approved Working Drawings;

     5.6  Tenant's requirement for materials, components, finishes or
improvements which are not available in a commercially reasonable time given the
anticipated date of Substantial Completion of the Premises, as set forth in the
Lease, or which are different from, or not included in, the Standard
Improvements Package;

     5.7  Changes to the Base, Shell and Core work or Landlord Work required by
the Approved Working Drawings; or

     5.8  Any other acts or omissions of Tenant, or its agents, or employees.

                               EXHIBIT E--Page 5
<PAGE>

     Then, notwithstanding anything to the contrary set forth in this Lease or
this Tenant Work Letter and regardless of the actual date of the Substantial
Completion of the Premises, the Lease Commencement Date shall be deemed to be
the date the Lease Commencement Date would have occurred if no Tenant Delays, as
set forth above, had occurred.

                                   SECTION 6
                                   ---------

                                 MISCELLANEOUS
                                 -------------

     6.1  Tenant's Entry Into the Premises Prior to Substantial Completion.
          ----------------------------------------------------------------
Provided that Tenant and its agents do not interfere with Contractor's work in
the Project and the Premises, Contractor shall allow Tenant access to the
Premises prior to the Substantial Completion of the Premises (but if such access
is to be prior to the issuance of the Temporary Certificate of Occupancy for the
Building, then such access shall be only as allowed by the City of San Diego)
for the purpose of Tenant installing overstandard equipment or fixtures
(including Tenant's data and telephone equipment) in the Premises. Prior to
Tenant's entry into the Premises as permitted by the terms of this Section 6.1,
Tenant shall submit a schedule to Landlord and Contractor, for their approval,
which schedule shall detail the timing and purpose of Tenant's entry. Tenant
shall hold Landlord harmless from and indemnify, protect and defend Landlord
against any loss or damage to the Project or Premises and against injury to any
persons caused by Tenant's actions pursuant to this Section 6.1

     6.2  Freight Elevators.  Landlord shall, consistent with its obligations to
          -----------------
other tenants of the Building, and subject to the needs of Landlord with respect
to the construction of the Base, Shell and Core of the Building, make the
freight elevator reasonably available to Tenant in connection with initial
decorating, furnishing and moving into the Premises.

     6.3  Tenant's Representative.  Tenant has designated ______________________
          -----------------------
_______________ (or if no person is specified then the Tenant's representative
for receipt of notices set forth in the Summary of Basic Lease Information) as
its sole representative with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Landlord, shall have full authority
and responsibility to act on behalf of the Tenant as required in this Tenant
Work Letter.

     6.4  Landlord's Representative.  Landlord has designated Meissner Jacquet
          -------------------------
Investment Services as its sole representative with respect to the matters set
forth in this Tenant Work Letter, who, until further notice to Tenant, shall
have full authority and responsibility to act on behalf of the Landlord as
required in this Tenant Work Letter.

     6.5  Time of the Essence in this Tenant Work Letter.  Unless otherwise
          ----------------------------------------------
indicated, all references herein to a "number of days" shall mean and refer to
calendar days. In all instance where Tenant is required to approve or deliver an
item, if no written notice of approval is given or the item is not delivered
within the stated time period, at Landlord's sole option, at the end of such
period the item shall automatically be deemed approved or delivered by Tenant
and the next succeeding time period shall commence.

     6.6  Tenant's Lease Default.  Notwithstanding any provision to the contrary
          ----------------------
contained in this Lease, if an event of default as described in Section 19.1 of
this Lease, or a default by Tenant under this Tenant Work Letter, has occurred
at any time on or before the Substantial Completion of the Premises, then (i) in
addition to all other rights and remedies granted to Landlord pursuant to the
Lease, Landlord shall have the right to withhold payment of all or any portion
of the Tenant Improvement Allowance and/or Landlord may cause Contractor to
cease the construction of the Premises (in which case, Tenant shall be
responsible for any delay in the Substantial Completion of the Premises caused
by such work stoppage as set forth in Section 5.3 of this Tenant Work Letter),
and (ii) all other obligations of Landlord under the terms of this Tenant Work
Letter shall be forgiven until such time as such default is cured pursuant to
the terms of the Lease.

                               EXHIBIT E--Page 6
<PAGE>

                                  SCHEDULE 1
                                  ----------

                                TIME DEADLINES
                                --------------

               Dates                           Actions to be Performed
               -----                           -----------------------

A.   _________________, 200_ (if no     Final Space Plan to be completed by
     date is specified, then as         Tenant and delivered to Landlord.
     soon as reasonably possible)

B.   _________________, 200_ (if no     Information concerning punch-out
     date is specified, then as         openings, structural supports, and
     soon as reasonably possible)       Non-Standard Improvement Package items
                                        to be delivered by Tenant to Landlord.

C.   Five (5) business days after       Tenant to approve all or a portion of
     the receipt by Tenant of all       Cost Proposal and deliver all or a
     or a portion of the Cost           portion of Cost Proposal to Landlord or
     Proposal or Final Working          approve Final Working Drawings, as the
     Drawings, as the case may be.      case may be.

                              SCHEDULE 1--Page 1

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