Document:

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                                                                  EXHIBIT 10.122

                         EXECUTIVE EMPLOYMENT AGREEMENT

        This Executive Employment Agreement ("Agreement") is entered into as of
the 14th day of December, 1999 (the "Effective Date"), by and between Michael C.
Venuti, Ph.D. ("Executive") and Axys Pharmaceuticals, Inc. (the "Company").

        WHEREAS, the Company desires to continue to employ Executive to provide
personal services to the Company, and wishes to provide Executive with certain
compensation and benefits in return for Executive's services; and

        WHEREAS, Executive wishes to continue to be employed by the Company and
provide personal services to the Company in return for certain compensation and
benefits;

        NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto as
follows:

                                    ARTICLE I
                                   DEFINITIONS

        For purposes of the Agreement, the following terms are defined as
follows:

1.1         "BOARD" means the Board of Directors of the Company.

1.2         "CAUSE" means:

            (a) Executive's intentional action or intentional failure to act
that was performed in bad faith and to the material detriment of the business of
the Company;

            (b) Executive's intentional refusal or intentional failure to act in
accordance with any lawful and proper direction or order of the Board or the
appropriate individual to whom Executive reports;

            (c) Executive's willful and habitual neglect of Executive's duties
of employment;

            (d) Executive's violation of any noncompetition or noninterference
agreement that Executive has entered into with the Company; or

            (e) Executive's conviction of a felony crime involving moral
turpitude;

provided, however, that if any of the foregoing events under clauses (a), (b),
(c) or (d) above is capable of being cured, the Company shall provide written
notice to Executive describing the nature of such event and Executive shall
thereafter have ten (10) business days to cure such event.

                                       1.
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1.3         "CHANGE IN CONTROL" means the occurrence of any of the following
events:

            (a) a dissolution, liquidation or sale of all or substantially all
of the assets of the Company;

            (b) a merger or consolidation in which the Company is not the
surviving corporation;

            (c) a reverse merger in which the Company is the surviving
corporation but shares outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise; or

            (d) the acquisition by any person, entity or group within the
meaning of Section 13(d) or 14(d) of the Exchange Act, or any comparable
successor provisions (excluding any employee benefit plan, or related trust,
sponsored or maintained by the Company or any Affiliate of the Company) of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act, or comparable successor rule) of securities of the Company
representing at least fifty percent (50%) of the combined voting power entitled
to vote in the election of directors.

1.4         "COMPANY" means Axys Pharmaceuticals, Inc. or, following a Change in
Control, the surviving entity resulting from such transaction.

1.5         "COVERED TERMINATION" means (i) an Involuntary Termination Without
Cause that occurs at any time, without regard to a Change in Control, or (ii) a
voluntary termination for Good Reason that occurs on or after the effective date
of a Change in Control.

1.6         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

1.7         "GOOD REASON" means that any of the following are undertaken without
Executive's express written consent:

            (a) the assignment to Executive of any duties or responsibilities
that results in any diminution or adverse change of Executive's position,
status, circumstances of employment or scope of responsibilities;

            (b) a reduction by the Company in Executive's annual base salary as
in effect on the effective date of the Change in Control;

            (c) the taking of any action by the Company that would adversely
affect Executive's participation in, or reduce Executive's benefits under, the
Company's benefit plans (including equity benefits) as of the effective date of
the Change in Control, except to the extent the benefits of all other executives
of the Company are similarly reduced;

            (d) a relocation of Executive's principal office to a location more
than forty (40) miles from the location at which Executive was performing
Executive's duties as

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of the effective date of the Change in Control, except for required travel by
Executive on the Company's business;

            (e) any material breach by the Company of any provision of this
Agreement; or

            (f) any failure by the Company to obtain the assumption of this
Agreement by any successor or assign of the Company.

1.8         "INVOLUNTARY TERMINATION WITHOUT CAUSE" means Executive's dismissal
or discharge other than for Cause. The termination of Executive's employment as
a result of Executive's death or disability will not be deemed to be an
Involuntary Termination Without Cause.

                                   ARTICLE II
                            EMPLOYMENT BY THE COMPANY

2.1 POSITION AND DUTIES. Subject to terms set forth herein, the Company agrees
to continue to employ Executive in the position of Senior Vice President,
Research and Preclinical Development and Chief Technical Officer and Executive
hereby accepts such continued employment. Executive shall serve in an executive
capacity and shall perform such duties as are customarily associated with the
position of Senior Vice President, Research and Preclinical Development and
Chief Technical Officer and such other duties as are assigned to Executive by
the Company's Chief Executive Officer. Executive will report to the Chief
Executive Officer. During the term of Executive's employment with the Company,
Executive will devote Executive's best efforts and substantially all of
Executive's business time and attention (except for vacation periods as set
forth herein and reasonable periods of illness or other incapacities permitted
by the Company's general employment policies or as otherwise set forth in this
Agreement) to the business of the Company.

2.2 EMPLOYMENT AT WILL. Both the Company and Executive shall have the right to
terminate Executive's employment with the Company at any time, with or without
Cause, and without prior notice. If Executive's employment with the Company is
terminated, Executive will be eligible to receive severance benefits to the
extent provided in this Agreement.

2.3 EMPLOYMENT POLICIES. The employment relationship between the parties shall
also be governed by the general employment policies and practices of the
Company, including those relating to protection of confidential information and
assignment of inventions, except that when the terms of this Agreement differ
from or are in conflict with the Company's general employment policies or
practices, this Agreement shall control.

                                       3.
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                                   ARTICLE III
                                  COMPENSATION

3.1 BASE SALARY. Executive shall receive for services to be rendered hereunder
an annual base salary of $250,000.00, payable on the regular payroll dates of
the Company, subject to increase in the sole discretion of the Board of
Directors.

3.2 BONUS. Executive shall be eligible for a discretionary bonus, in an amount
to be determined solely by the Company, in its discretion.

3.3 STANDARD COMPANY BENEFITS. Executive shall be entitled to all rights and
benefits for which Executive is eligible under the terms and conditions of the
standard Company benefits and compensation practices that may be in effect from
time to time and are provided by the Company to its executive employees
generally.

3.4 COMPENSATORY STOCK AWARD. At the Board's meeting on the date hereof, the
Board granted Executive an option to acquire seventy-five thousand (75,000)
shares of the common stock of the Company (the "Option"). The Option has been
granted pursuant to the Company's 1997 Equity Incentive Plan. The Option is an
incentive stock option for purposes of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), to the extent permitted under the Code. The
exercise price per share of the Option will be equal to one hundred percent
(100%) of the fair market value of the Company's common stock, as determined
pursuant to the Company's 1997 Equity Incentive Plan, on the date of grant.
Subject to Executive's continued employment by the Company, the Option vests as
to one-forty-eighth (1/48) of the shares of common stock subject to the Option
each calendar month for forty-eight (48) months, counted from the Option's date
of grant. In all other respects, the Option is to be governed by the terms of
the Plan, including the option agreement and grant notice thereunder.

                                   ARTICLE IV
                    SEVERANCE AND CHANGE IN CONTROL BENEFITS

4.1 SEVERANCE BENEFITS. If Executive's employment terminates due to a Covered
Termination after the date of execution of this Agreement, Executive shall
receive any annual base salary and bonus compensation that has accrued but is
unpaid as of the date of such Covered Termination. Within thirty (30) days
following the date on which the Release described in Section 4.4 below becomes
effective in accordance with its terms, Executive shall also receive a lump sum
payment equal to one hundred percent (100%) of Executive's annual base salary as
in effect during the last regularly scheduled payroll period immediately
preceding the Covered Termination, all of the foregoing subject to applicable
tax withholding. In addition, following a Covered Termination, Executive and
Executive's covered dependents shall be eligible to continue their health care
benefit coverage as permitted by COBRA (Internal Revenue Code Section 4980B) at
the same cost to Executive as in effect immediately prior to the Covered
Termination for the one (l)-year period following the Covered Termination.
Executive shall be entitled to maintain

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coverage for Executive and Executive's eligible dependents at Executive's own
expense for the balance of the period that Executive is entitled to coverage
under COBRA.

4.2 ACCELERATION OF VESTING OF OUTSTANDING OPTIONS.

            (a) If Executive's employment with the Company terminates due to a
Covered Termination within thirteen (13) months following the effective date of
a Change in Control, then the Option to purchase the Company's common stock
granted to Executive pursuant to Section 3.3 above shall become immediately
fully vested and exercisable as of the date of such Covered Termination.

            (b) Notwithstanding (a) above, if Executive's employment terminates
in connection with a Change in Control that is a transaction that is accounted
for as a pooling of interests for financial accounting purposes, then no portion
of Executive's Option shall accelerate unless the Company receives reasonable
assurances from its independent public accountants (and from the acquiring
party's independent public accountants) that in their good faith judgment such
acceleration will not affect the pooling of interests accounting treatment of
such Change in Control transaction.

4.3 PARACHUTE PAYMENTS. If any payment or benefit Executive would receive in
connection with a Change in Control from the Company or otherwise ("Payment")
would (i) constitute a "parachute payment" within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code"), and (ii) but for
this sentence, be subject to the excise tax imposed by Section 4999 of the Code
(the "Excise Tax"), then such Payment shall be reduced to the Reduced Amount.
The "Reduced Amount" shall be either (x) the largest portion of the Payment that
would result in no portion of the Payment being subject to the Excise Tax or (y)
the largest portion, up to and including the total, of the Payment, whichever
amount, after taking into account all applicable federal, state and local
employment taxes, income taxes, and the Excise Tax (all computed at the highest
applicable marginal rate), results in Executive's receipt, on an after-tax
basis, of the greater amount of the Payment notwithstanding that all or some
portion of the Payment may be subject to the Excise Tax. If a reduction in
payments or benefits constituting "parachute payments" is necessary so that the
Payment equals the Reduced Amount, reduction shall occur in the following order
unless Executive elects in writing a different order (provided, however, that
such election shall be subject to Company approval if made on or after the
effective date of the Change in Control): reduction of cash payments;
cancellation of accelerated vesting of stock awards; reduction of employee
benefits. In the event that acceleration of vesting of stock award compensation
is to be reduced, such acceleration of vesting shall be cancelled in the reverse
order of the date of grant of Executive's stock awards unless Executive elects
in writing a different order for cancellation.

        The accounting firm engaged by the Company for general audit purposes as
of the day prior to the effective date of the Change in Control shall perform
the foregoing calculations. If the accounting firm so engaged by the Company is
serving as accountant or auditor for the individual, entity or group effecting
the Change in Control, the Company shall appoint a nationally recognized
accounting firm to make the determinations required

                                       5.
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hereunder. The Company shall bear all expenses with respect to the
determinations by such accounting firm required to be made hereunder.

        The accounting firm engaged to make the determinations hereunder shall
provide its calculations, together with detailed supporting documentation, to
the Company and Executive within fifteen (15) calendar days after the date on
which Executive's right to a Payment is triggered (if requested at that time by
the Company or Executive) or such other time as requested by the Company or
Executive. If the accounting firm determines that no Excise Tax is payable with
respect to a Payment, either before or after the application of the Reduced
Amount, it shall furnish the Company and Executive with an opinion reasonably
acceptable to Executive that no Excise Tax will be imposed with respect to such
Payment. Any good faith determinations of the accounting firm made hereunder
shall be final, binding and conclusive upon the Company and Executive.

4.4 RELEASE. Upon the occurrence of a Covered Termination, and prior to the
receipt of any benefits under Section 4.1 (except pursuant to the first sentence
thereof) and Section 4.2 on account of the occurrence of such Covered
Termination, Executive shall execute a Release (the "Release") in the form
attached hereto as Exhibit A or Exhibit B, as appropriate. Such Release shall
specifically relate to all of Executive's rights and claims in existence at the
time of such execution and shall confirm Executive's obligations under the
Company's standard form of proprietary information agreement. It is understood
that Executive has a certain period to consider whether to execute such Release,
and Executive may revoke such Release within seven (7) business days after
execution. In the event Executive does not execute such Release within the
applicable period, or if Executive revokes such Release within the subsequent
seven (7) business day period, none of the aforesaid benefits shall be payable
under this Agreement and this Agreement shall be null and void.

4.5 MITIGATION. Executive shall not be required to mitigate damages or the
amount of any payment provided under this Agreement by seeking other employment
or otherwise, nor shall the amount of any payment provided for under this
Agreement be reduced by any compensation earned by Executive as a result of
employment by another employer or by any retirement benefits received by
Executive after the date of the Covered Termination, or otherwise.

                                    ARTICLE V
                       PROPRIETARY INFORMATION OBLIGATIONS

5.1 AGREEMENT. Executive agrees to execute and abide by the Proprietary
Information and Inventions Agreement attached hereto as Exhibit C.

5.2 REMEDIES. Executive's duties under the Proprietary Information and
Inventions Agreement shall survive termination of Executive's employment with
the Company and the termination of this Agreement. Executive acknowledges that a
remedy at law for any breach or threatened breach by Executive of the provisions
of the Proprietary Information and Inventions Agreement would be inadequate, and
Executive therefore agrees that the

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Company shall be entitled to injunctive relief in case of any such breach or
threatened breach.

                                   ARTICLE VI
                               OUTSIDE ACTIVITIES

6.1 Except with the prior written consent of the Board, Executive shall not
during the term of this Agreement undertake or engage in any other employment,
occupation or business enterprise, other than ones in which Executive is a
passive investor. Executive may engage in civic and not-for-profit activities so
long as such activities do not materially interfere with the performance of
Executive's duties hereunder.

6.2 During the term of Executive's employment by the Company, except on behalf
of the Company, Executive shall not directly or indirectly, whether as an
officer, director, stockholder, partner, proprietor, associate, representative,
consultant, or in any capacity whatsoever engage in, become financially
interested in, be employed by or have any business connection with any other
person, corporation, firm, partnership or other entity whatsoever which were
known by Executive to compete directly with the Company, throughout the world,
in any line of business engaged in (or planned to be engaged in) by the Company;
provided, however, that anything above to the contrary notwithstanding,
Executive may own, as a passive investor, securities of any competitor
corporation, so long as Executive's direct holdings in any one such corporation
shall not in the aggregate constitute more than 1% of the voting stock of such
corporation.

                                   ARTICLE VII
                                 NONINTERFERENCE

        While employed by the Company, and for one (1) year immediately
following the date on which Executive terminates employment or otherwise ceases
providing services to the Company, Executive agrees not to interfere with the
business of the Company by soliciting or attempting to solicit any employee of
the Company to terminate such employee's employment in order to become an
employee, consultant or independent contractor to or for any competitor of the
Company. Executive's duties under this Article 7 shall survive termination of
Executive's employment with the Company and the termination of this Agreement.

                                  ARTICLE VIII
                               GENERAL PROVISIONS

8.1 NOTICES. Any notices provided hereunder must be in writing and shall be
deemed effective upon the earlier of personal delivery (including personal
delivery by telex) or the third day after mailing by first class mail, to the
Company at its primary office location and to Executive at Executive's address
as listed on the Company payroll.

                                       7.
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8.2 SEVERABILITY. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained herein.

8.3 WAIVER. If either party should waive any breach of any provisions of this
Agreement, they shall not thereby be deemed to have waived any preceding or
succeeding breach of the same or any other provision of this Agreement.

8.4 COMPLETE AGREEMENT. This Agreement and its Exhibit A, Exhibit B and Exhibit
C constitute the entire agreement between Executive and the Company and are the
complete, final, and exclusive embodiment of their agreement with regard to this
subject matter. They are entered into without reliance on any promise or
representation other than those expressly contained herein or therein, and they
cannot be modified or amended except in a writing signed by an officer of the
Company.

8.5 COUNTERPARTS. This Agreement may be executed in separate counterparts, any
one of which need not contain signatures of more than one party, but all of
which taken together will constitute one and the same Agreement.

8.6 HEADINGS. The headings of the sections hereof are inserted for convenience
only and shall not be deemed to constitute a part hereof nor to affect the
meaning thereof.

8.7 SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and inure to the
benefit of and be enforceable by Executive and the Company, and their respective
successors, assigns, heirs, executors and administrators, except that Executive
may not assign any of Executive's duties hereunder and Executive may not assign
any of Executive's rights hereunder, without the written consent of the Company,
which shall not be withheld unreasonably.

8.8 ARBITRATION. Unless otherwise prohibited by law or specified below, all
disputes, claims and causes of action, in law or equity, arising from or
relating to this Agreement or its enforcement, performance, breach, or
interpretation shall be resolved solely and exclusively by final and binding
arbitration held in San Francisco County, California through Judicial
Arbitration & Mediation Services/Endispute ("JAMS") under the then existing JAMS
arbitration rules. However, nothing in this section is intended to prevent
either party from obtaining injunctive relief in court to prevent irreparable
harm pending the conclusion of any such arbitration. Each party in any such
arbitration shall be responsible for its own attorneys' fees, costs and
necessary disbursement; provided, however, that if one party refuses to
arbitrate and the other party seeks to compel arbitration by court order, if
such other party prevails, it shall be entitled to recover reasonable attorneys'
fees, costs and necessary disbursements. Pursuant to California Civil Code
Section 1717, each party warrants that it was represented by counsel in the

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negotiation and execution of this Agreement, including the attorneys' fees
provision herein.

8.9 ATTORNEYS' FEES. If either party hereto brings any action to enforce rights
hereunder, each party in any such action shall be responsible for its own
attorneys' fees and costs incurred in connection with such action.

8.10 CHOICE OF LAW. All questions concerning the construction, validity and
interpretation of this Agreement will be governed by the law of the State of
California.

        IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.

                                           AXYS PHARMACEUTICALS, INC.

                                           By: /s/ John P. Walker
                                              ---------------------------------

                                           Date:   12/14/99
                                                -------------------------------

Accepted and agreed this
14th day of December, 1999

/s/ Michael C. Venuti
----------------------------
MICHAEL C. VENUTI, PH.D.

Exhibit A:  Release (Individual Termination)
Exhibit B:  Release (Group Termination)
Exhibit C:  Proprietary Information and Inventions Agreement

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                                    EXHIBIT A

                                     RELEASE
                            (INDIVIDUAL TERMINATION)

        Certain capitalized terms used in this Release are defined in the
Executive Employment Agreement (the "Agreement") which I have executed and of
which this Release is a part.

        I hereby confirm my obligations under the Company's proprietary
information and inventions agreement.

        I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to my release of any claims I may
have against the Company.

        Except as otherwise set forth in this Release, in consideration of
benefits I will receive under the Agreement, I hereby release, acquit and
forever discharge the Company, its parents and subsidiaries, and their officers,
directors, agents, servants, employees, shareholders, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys' fees, damages, indemnities and obligations
of every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed (other than any claim for
indemnification I may have as a result of any third party action against me
based on my employment with the Company), arising out of or in any way related
to agreements, events, acts or conduct at any time prior to and including the
date I execute this Release, including, but not limited to: all such claims and
demands directly or indirectly arising out of or in any way connected with my
employment with the Company or the termination of that employment, including but
not limited to, claims of intentional and negligent infliction of emotional
distress, any and all tort claims for personal injury, claims or demands related
to salary, bonuses, commissions, stock, stock options, or any other ownership
interests in the Company, vacation pay, fringe benefits, expense reimbursements,
severance pay, or any other form of compensation; claims pursuant to any
federal, state or local law or cause of action including, but not limited to,
the federal Civil Rights Act of 1964, as amended; the federal Age Discrimination
in Employment Act of 1967, as amended ("ADEA"); the federal Employee Retirement
Income Security Act of 1974, as amended; the federal Americans with Disabilities
Act of 1990; the California Fair Employment and Housing Act, as amended; tort
law; contract law; statutory law; common law; wrongful discharge;
discrimination; fraud; defamation; emotional distress; and breach of the implied
covenant of good faith and fair dealing; provided, however, that nothing in this
paragraph shall be construed in any way to release the Company from its
obligation to indemnify me pursuant to the Company's indemnification obligation
pursuant to agreement or applicable law.

        I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under ADEA. I also acknowledge that the consideration
given under the Agreement

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for the waiver and release in the preceding paragraph hereof is in addition to
anything of value to which I was already entitled. I further acknowledge that I
have been advised by this writing, as required by the ADEA, that: (A) my waiver
and release do not apply to any rights or claims that may arise on or after the
date I execute this Release; (B) I have the right to consult with an attorney
prior to executing this Release; (C) I have twenty-one (21) days to consider
this Release (although I may choose to voluntarily execute this Release
earlier); (D) I have seven (7) days following the execution of this Release by
the parties to revoke the Release; and (E) this Release shall not be effective
until the date upon which the revocation period has expired, which shall be the
eighth (8th) day after this Release is executed by me.

                                              MICHAEL C. VENUTI, PH.D.

                                              ----------------------------------
                                              Date:
                                                   -----------------------------

                                       2.
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                                    EXHIBIT B

                                     RELEASE
                               (GROUP TERMINATION)

        Certain capitalized terms used in this Release are defined in the
Executive Employment Agreement (the "Agreement") which I have executed and of
which this Release is a part.

        I hereby confirm my obligations under the Company's proprietary
information and inventions agreement.

        I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to my release of any claims I may
have against the Company.

        Except as otherwise set forth in this Release, in consideration of
benefits I will receive under the Agreement, I hereby release, acquit and
forever discharge the Company, its parents and subsidiaries, and their officers,
directors, agents, servants, employees, shareholders, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys' fees, damages, indemnities and obligations
of every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed (other than any claim for
indemnification I may have as a result of any third party action against me
based on my employment with the Company), arising out of or in any way related
to agreements, events, acts or conduct at any time prior to and including the
date I execute this Release, including, but not limited to: all such claims and
demands directly or indirectly arising out of or in any way connected with my
employment with the Company or the termination of that employment, including but
not limited to, claims of intentional and negligent infliction of emotional
distress, any and all tort claims for personal injury, claims or demands related
to salary, bonuses, commissions, stock, stock options, or any other ownership
interests in the Company, vacation pay, fringe benefits, expense reimbursements,
severance pay, or any other form of compensation; claims pursuant to any
federal, state or local law or cause of action including, but not limited to,
the federal Civil Rights Act of 1964, as amended; the federal Age Discrimination
in Employment Act of 1967, as amended ("ADEA"); the federal Employee Retirement
Income Security Act of 1974, as amended; the federal Americans with Disabilities
Act of 1990; the California Fair Employment and Housing Act, as amended; tort
law; contract law; statutory law; common law; wrongful discharge;
discrimination; fraud; defamation; emotional distress; and breach of the implied
covenant of good faith and fair dealing; provided, however, that nothing in this
paragraph shall be construed in any way to release the Company from its
obligation to indemnify me pursuant to the Company's indemnification obligation
pursuant to agreement or applicable law.

        I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under ADEA. I also acknowledge that the consideration
given under the Agreement

                                       1.
<PAGE>   13

for the waiver and release in the preceding paragraph hereof is in addition to
anything of value to which I was already entitled. I further acknowledge that I
have been advised by this writing, as required by the ADEA, that: (A) my waiver
and release do not apply to any rights or claims that may arise on or after the
date I execute this Release; (B) I have the right to consult with an attorney
prior to executing this Release; (C) I have forty-five (45) days to consider
this Release (although I may choose to voluntarily execute this Release
earlier); (D) I have seven (7) days following the execution of this Release by
the parties to revoke the Release; (E) this Release shall not be effective until
the date upon which the revocation period has expired, which shall be the eighth
day (8th) after this Release is executed by me; and (F) I have received with
this Release a detailed list of the job titles and ages of all employees who
were terminated in this group termination and the ages of all employees of the
Company in the same job classification or organizational unit who were not
terminated.

                                              MICHAEL C. VENUTI, PH.D.

                                              ----------------------------------
                                              Date:
                                                   -----------------------------

                                       2.

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                                    EXHIBIT C

                PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

<PAGE>   15

                        ARRIS PHARMACEUTICAL CORPORATION

                    EMPLOYMENT, CONFIDENTIAL INFORMATION AND
                         INVENTION ASSIGNMENT AGREEMENT

        As a condition of my employment with ARRIS Pharmaceutical Corporation
("ARRIS"), and in consideration of my employment with ARRIS and my receipt of
the compensation now and hereafter paid to me by ARRIS, I agree to the
following:

        1. AT-WILL EMPLOYMENT. I understand and acknowledge that my employment
with ARRIS is for an unspecified duration and constitutes "at-will" employment.
I acknowledge that this employment relationship may be terminated at any time,
with or without cause, at the option of either ARRIS or myself, with or without
notice.

        2. CONFIDENTIAL INFORMATION.

            (a) ARRIS AND THIRD PARTY INFORMATION. I agree at all times during
the term of my employment and thereafter, to hold in strictest confidence, and
not to use, except for the benefit of ARRIS, or to disclose to any person, firm
or corporation without written authorization of an officer of ARRIS, any
Confidential Information of ARRIS. I understand that "Confidential Information"
means any ARRIS proprietary information, technical data, trade secrets or
know-how, including, but not limited to, research and product plans, products,
services, customer lists and customers (including, but not limited to, customers
of ARRIS on whom I called or with whom I became acquainted during the term of my
employment), markets, developments, inventions, processes, formulas, technology,
marketing, finances or other business information disclosed to me by ARRIS
either directly or indirectly in writing, orally or otherwise. I recognize that
ARRIS has received and in the future will receive from third parties their
confidential or proprietary information subject to a duty on ARRIS's part to
maintain the confidentiality of such information and to use it only for certain
limited purposes, and I understand that such information is also Confidential
Information. I further understand that Confidential Information does not include
any of the foregoing items that has become publicly known and made generally
available through no wrongful act of mine or of others who were under
confidentiality obligations as to the item or items involved.

            (b) FORMER EMPLOYER INFORMATION. I agree that I will not, during my
employment with ARRIS, improperly use or disclose any proprietary information or
trade secrets of any former or concurrent employer or other person or entity and
that I will not bring onto the premises of ARRIS any unpublished document or
proprietary information belonging to any such employer, person or entity unless
consented to in writing by such employer, person or entity.

                                       1
<PAGE>   16

        3. INVENTIONS.

            (a) INVENTIONS RETAINED AND LICENSED. I have attached hereto, as
Exhibit A, a list describing all inventions, original works of authorship,
developments, improvements, and trade secrets that were made by me prior to my
employment with ARRIS (collectively referred to as "Prior Inventions"), that
belong to me, that relate to ARRIS's proposed business, products or research and
development, and that are not assigned to ARRIS hereunder; or, if no such list
is attached, I represent that there are no such Prior Inventions. If in the
course of my employment with ARRIS, I incorporate into a ARRIS product, process
or machine a Prior Invention owned by me or in which I have an interest, ARRIS
is hereby granted and will have a non-exclusive, royalty-free, irrevocable,
perpetual, worldwide license, with the right to grant sublicenses, to make, have
made, modify, use, and sell such Prior Invention as part of or in connection
with such product, process or machine.

            (b) ASSIGNMENT OF INVENTIONS. I agree that I will promptly make full
written disclosure to ARRIS, and will hold in trust for the sole right and
benefit of ARRIS, and hereby assign to ARRIS, or its designee, all my right,
title, and interest in and to any and all inventions, original works of
authorship, developments, concepts, improvements or trade secrets, whether or
not patentable or registrable under patent, copyright or similar laws, that I
may solely or jointly conceive or develop or reduce to practice, or cause to be
conceived or developed or reduced to practice, during the period of time I am in
the employ of ARRIS (collectively referred to as "Inventions"), except as
provided in Section 3(e) below. I further acknowledge that all original works of
authorship that are made by me (solely or jointly with others) within the scope
of and during the period of my employment with ARRIS and that are protectable by
copyright are works made for hire," as that term is defined in the United States
Copyright Act.

            (c) MAINTENANCE OF RECORDS. I agree to keep and maintain adequate
and current written records of all inventions made by me (solely or jointly with
others) during the term of my employment with ARRIS. The records will be in the
form of notes, sketches, drawings, and any other format that may be specified by
ARRIS. The records will be available to and remain the sole property of ARRIS at
all times.

            (d) PATENT AND COPYRIGHT REGISTRATIONS. I agree to assist ARRIS's,
or its designee, at ARRIS's expense, in every way to secure ARRIS' rights in the
Inventions and any copyrights, patents, mask work rights or other intellectual
property rights relating thereto in any and all countries, including disclosing
to ARRIS all pertinent information and data with respect thereto, and executing
all applications, specifications, oaths, assignments and all other instruments
that ARRIS shall deem necessary in order to apply for and obtain such rights and
in order to assign and convey to ARRIS, its successors, assigns and nominees the
sole and exclusive rights, title and interest in and to such Inventions, and any
copyrights, patents, mask work rights or other intellectual property rights
relating thereto. I further agree that my obligation to execute or cause to be
executed, when it is in my power to do so, any such instrument or papers will
continue after the termination of this Agreement. If ARRIS is unable because of
my

                                       2
<PAGE>   17

mental of physical incapacity or for any other reason to secure my signature to
apply for or to pursue any application for any United States or foreign patents
or copyright registrations covering Inventions or original works of authorship
assigned to ARRIS as above, then I hereby irrevocably designate and appoint
ARRIS and its duly authorized officers and agents as my agent and attorney in
fact, to act for and in my behalf and stead to execute and file any such
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of letters patent or copyright registrations thereon
with the same legal force and effect as if executed by me.

            (e) EXCEPTION TO ASSIGNMENTS. I understand that the provisions of
this Agreement requiring assignment of Inventions to ARRIS do not apply to any
invention that qualifies fully under the provisions of California Labor Code
Section 2870 (attached hereto as Exhibit B). I will advise ARRIS promptly in
writing of any inventions that I believe meet the criteria in California Labor
Code Section 2870 and that are not otherwise disclosed in Exhibit A.

        4. CONFLICTING EMPLOYMENT. I agree that, during the term of my
employment with ARRIS, I will not engage in any other employment, occupation,
consulting or other business activity directly related to the business in which
ARRIS is now involved or becomes involved during the term of my employment, nor
will I engage in any other activities that conflict with my obligations to
ARRIS.

        5. RETURNING ARRIS DOCUMENTS. I agree that, at the time of leaving the
employ of ARRIS, I will deliver to ARRIS (and will not keep in my possession,
recreate or deliver to anyone else) any and all documents or property, or
reproductions of any such documents or property, developed by me pursuant to my
employment with ARRIS or otherwise belonging to ARRIS, its successors or
assigns.

        6. SOLICITATION OF EMPLOYEES. I agree that for a period of twelve (12)
months immediately following the termination of my relationship with ARRIS for
any reason, whether with or without cause, I will not either directly or
indirectly solicit, induce, recruit or encourage any of ARRIS's employees to
leave their employment, or take away such employees, or attempt to solicit,
induce, recruit, encourage or take away employees of the ARRIS, either for
myself or for any other person or entity.

        7. REPRESENTATIONS. I agree to execute any proper oath or verify any
proper document requested by ARRIS to carry out the terms of this Agreement. I
represent that my performance of all the terms of this Agreement will not breach
any agreement to keep in confidence proprietary information acquired by me in
confidence or in trust prior to my employment by ARRIS. I have not entered into,
and I agree I will not enter into, any oral or written agreement in conflict
with the terms of this Agreement.

                                       3
<PAGE>   18

        8. ARBITRATION AND EQUITABLE RELIEF.

            (a) ARBITRATION. Except as provided in Section 8(b) below, I agree
that any dispute or controversy arising out of or relating to any
interpretation, construction, performance or breach of this Agreement, will be
settled by arbitration to be held in San Mateo County, California, in accordance
with the rules then in effect of the American Arbitration Association. The
arbitrator may grant injunctions or other relief in such dispute or controversy.
The decision of the arbitrator will be final, conclusive and binding on the
parties to the arbitration. Judgment may be entered on the arbitrator's decision
in any court having jurisdiction. ARRIS and I will each pay one-half of the
costs and expenses of such arbitration, and each of us will separately pay our
counsel fees and expenses.

            (b) EQUITABLE REMEDIES. I agree that it would be impossible or
inadequate to measure and calculate ARRIS's damages for any breach of the
covenants set forth in Sections 2,3, and 5 herein. Accordingly, I agree that if
I breach my obligations under any of such Sections, ARRIS will have, in addition
to any other right or remedy available, the right to obtain injunction from a
court of competent jurisdiction restraining such breach or threatened breach and
to specific performance of any such provision of this Agreement. I further agree
that no bond or other security will be required in obtaining such equitable
relief and I hereby consent to the issuance of such injunction and to the
ordering of specific performance. I hereby further consent to the personal
jurisdiction of the state and federal courts located in California for any
lawsuit filed there against me by ARRIS arising from or relating to this
Agreement.

        9. GENERAL PROVISIONS

            (a) GOVERNING LAW. This agreement will be governed by the laws of
the State of California without reference to conflicts of laws principles.

            (b) ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
and understanding between ARRIS and me relating to the subject matter hereof and
merges all prior discussions between us. No modification of or amendment to this
Agreement, or any waiver of any rights under this Agreement, will be effective
unless in writing signed by the party to be charged. Any subsequent change or
changes in my duties, salary or compensation will not affect the validity or
scope of this Agreement.

                                       4
<PAGE>   19

            (c) SEVERABILITY. If one or more of the provisions in this Agreement
are deemed void by law, then the remaining provisions will continue in full
force and effect.

            (d) SUCCESSORS AND ASSIGNS. This Agreement will be binding upon my
heirs, executors, administrators and other legal representatives and will be for
the benefit of ARRIS, its successors, and its assigns.

    Date:    11/4/94                         Signature:  /s/ Michael C. Venuti
           ------------------------------               ------------------------

                                               Michael C. Venuti
                                             --------------------------------
                                             Name of Employee (typed or printed)

     ARRIS Pharmaceuticals, Inc.

     Name: /s/ Linda Ballenger
          -------------------------------
     Print Name: Linda Ballenger
                -------------------------
     Title:  Comp. & Benefits Manager
            -----------------------------

                                       5
<PAGE>   20

                                    EXHIBIT A
                            LIST OF PRIOR INVENTIONS
                        AND ORIGINAL WORKS OF AUTHORSHIP

                                                                Identifying # or
Title __________________________________ Date _______________ Brief Description

 X  No inventions or improvements

_____ Additional sheets attached

Signature of Employee /s/ Michael C. Venuti
                      ----------------------
Print Name of Employee Michael C. Venuti
                      ----------------------
Date 11/4/94
     -------

Signature of Supervisor Heinz Gschwend
                        ------------------
Print Name of Supervisor Heinz Gschwend
                        ------------------
Date  11/9/94
      -------

                                       6
<PAGE>   21

                                    EXHIBIT B
                       CALIFORNIA LABOR CODE SECTION 2870
                   EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS

        "(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:

                (1) Relate at the time of conception or reduction to practice of
            the invention to the employer's business, or actual or demonstrably
            anticipated research or development of the employer.

                (2) Result from any work performed by the employee for the
            employer.

                (3) To the extent a provision in an employee agreement purports
            to require an employee to assign an invention otherwise excluded
            from being required to be assigned under subdivision (a), the
            provision is against the public policy of this state and is
            unenforceable."

                                       7<PAGE>   1

                                                                    EXHIBIT 10.1

                               222 SUTTER STREET
                                  OFFICE LEASE

                         CONFIRMATION OF TERM OF LEASE

     This confirmation of term of lease is made on August 8, 1996, between 222
SUTTER STREET PARTNERS, LTD., a California limited partnership ("Landlord") and
MAIDEN INTERACTIVE, a California corporation doing business as Ironlight
Digital ("Tenant"), who agree as follows:

     1.   Landlord and Tenant entered into a lease dated August 8, 1996 (the
"Lease"), in which Landlord leased to Tenant and Tenant leased from Landlord
the premises described in Section 1.14 ("Premises").

     2.   Under Section 3 of the Lease, Landlord and Tenant agree to confirm
the Commencement and Expiration Dates of the Term:

          a.   August 9, 1996 is the Commencement Date of the Lease.

          b.   August 8, 2001 is the Expiration Date of the Lease.

     3.   Tenant further confirms that:

          a.   It has accepted possession of the Premises as provided in the
Lease, and that the Premises at the time it accepted possession were in
satisfactory condition and in conformity with the provisions of the Lease in
all respects; and

          b.   Landlord has fulfilled all of its duties of an inducement
nature, including completion of the Tenant Improvements, if any.

LANDLORD:                                   TENANT:
222 SUTTER STREET PARTNERS, LTD.            MAIDEN INTERACTIVE
A California limited partnership            a California corporation

By:  G&E Investor Associates IV,            By: /s/ [Signature Illegible]
     Ltd., a California limited                ---------------------------
     partnership, its general partner       Its: President
                                                --------------------------
                                            Date:   8/8/96
                                                 -------------------------

     By:  G&E Investor Properties I,        By: /s/ [Signature Illegible]
          Inc., its general partner            ---------------------------
                                            Its: Secretary
                                                --------------------------
                                            Date:   8/8/96
                                                 -------------------------
          By: /s/ [Signature Illegible]
             ---------------------------
          Its: VP
              --------------------------
          Date:   8/8/96
               -------------------------
<PAGE>   2
                               222 SUTTER STREET
                                  OFFICE LEASE

          THIS LEASE is made and entered into this 8 day of August, 1996,
between 222 SUTTER STREET PARTNERS, LTD., a California limited partnership
("Landlord") and MAIDEN INTERACTIVE, a California corporation, doing business as
Ironlight Digital ("Tenant").

          Landlord and Tenant hereby covenant and agree as follows:

1.   Definitions. As used herein, the following terms shall have the following
meanings:

     1.1  "Additional Rent" shall mean all obligations of Tenant hereunder other
     than the obligation for payment of Basic Rent.

     1.2  "Alterations" shall mean any alterations, additions, improvements,
     changes or installation in or to the Premises other than Tenant
     Improvements.

     1.3  "Basic Lease Information" shall mean the respective information set
     forth in the Basic Lease Information sheet which is attached to this Lease
     and made a part hereof by reference.

     1.4  "Basic Operating Cost" shall have the meaning given in Section 6.2

     1.5  "Basic Operating Cost Adjustment" shall have the meaning given in
     Section 6.2.

     1.6  "Building" shall mean the real property known as 222 Sutter, San
     Francisco, California together with the building constructed thereon and
     all other improvements thereon or appurtenances thereto.

     1.7  "Commencement Date" shall mean August 9, 1996.

     1.8  "Common Areas" shall mean the areas on individual floors of the
     Building devoted to non-exclusive uses such as corridors, fire vestibules,
     elevator foyers, lobbies, electric and telephone closets, restrooms,
     mechanical rooms, janitor closets and other similar facilities for the
     benefit of all tenants (or invitees) on the particular floor and other
     floors and shall also mean those areas of the Building devoted to
     mechanical and service rooms servicing more than one floor or the Building
     as a whole.

     1.9  "Estimated Basic Operating Cost" for any calendar year shall mean
     Landlord's estimate of Basic Operating Cost for
<PAGE>   3
such calendar year.

1.10 "Expiration Date" shall mean the date specified on the Basic Lease
Information sheet when the Term shall end unless sooner terminated pursuant to
the terms of this Lease.

1.11 "Fair Market Rent" shall mean the rate being charged for space of similar
type, age and location.

1.12 "Net Rentable Area" shall mean the area or areas of space within the
Building determined as follows: (i) Net Rentable Area on a single tenancy floor
is determined by measuring from the inside surface of the outer glass and
extensions of the plane thereof in non-glass areas to the inside surface of the
opposite outer glass and extensions of the plane thereof in non-glass areas and
shall include all areas within the outside walls, excluding vertical
penetrations such as building stairs, elevator shafts, flues, vents, stacks,
pipe shafts and vertical ducts; provided, however, vertical penetrations which
are for the specific use of Tenant, such as special stairs or elevators, shall
be included as Net Rentable Area; and (ii) Net Rentable Area for a partial
floor shall include all space within the demising walls (measured from the
midpoint of demising walls and in the case of exterior walls, measured as
defined in (i) above plus Tenant's Share of any Common Area. The Net Rentable
Area in the Premises has been calculated on the basis of the foregoing
definition and is hereby stipulated for all purposes hereof to be the amount
stated on the Basic Lease Information.

1.13 "Permitted Use" shall mean the specific use of the Premises set forth
in the Basic Lease Information.

1.14 "Premises" shall mean the cross-hatched floor area more particularly shown
on the Exhibit A floor plan attached hereto, containing the Net Rentable Area
specified in the Basic Lease Information.

1.15 "Project" shall mean 222 Sutter Street, San Francisco, California.

1.16 "Rent" shall mean Basic Rent plus all Additional Rent.

1.17 "Security Deposit" shall mean the amount specified in the Basic Lease
Information paid by Tenant to Landlord to be held pursuant to Section 7 hereof.

1.18 "Tenant Improvements" shall mean the improvement of the Premises to be
provided by Tenant in accordance with Exhibit B.

                                      -2-
<PAGE>   4
     1.19 "Tenant's Share" is specified in the Basic Lease Information and is
     based on the percentage which the Net Rentable Area of the Premises bears
     to ninety-five percent (95%) of the total Net Rentable Area of the Building
     or to the total Net Rentable Area leased in the Building (if such total is
     greater than ninety-five percent (95%) of the total Rentable Area).

     1.20 "Term" shall mean a period commencing with the Commencement Date and
     ending on the Expiration Date stated in the Basic Lease Information sheet.

     1.21 Other Terms used in this Lease and in the Basic Lease Information
     sheet shall have the meanings given them thereon and herein.

2.   Premises. Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the Premises for the Term and upon all the terms, conditions and
covenants of this Lease.

3.   Term. Except as otherwise provided herein, the Term shall commence upon
the Commencement Date and shall continue in full force until the Expiration
Date set forth in the Basic Lease Information. On the Commencement Date,
Landlord and Tenant shall execute a Confirmation of Term of Lease in the form
attached as Exhibit D hereto.

4.   Improvements and Acceptance. As promptly as practicable after the date of
execution of this Lease, Tenant shall undertake to complete the Tenant
Improvements in accordance with the provisions of Exhibit B. Tenant shall
accept possession of the Premises in their then existing "as is" condition, and
the taking of possession or use of the Premises by Tenant shall constitute and
establish that the Premises were at such time in satisfactory condition and in
conformity with the provisions of this Lease in all respects. The Confirmation
of Term of Lease to be executed pursuant to Section 3 above shall include
confirmation by the Tenant of the above. Tenant acknowledges that no
representations as to the repair of the Premises, nor promises to alter,
remodel or improve the Premises, other than those contained in Exhibit B, have
been made by Landlord.

5.   Basic Rent, Additional Rent and Late Charges.

     5.1 Tenant shall pay the Basic Rent for the Premises in the amount set
     forth in the Basic Lease Information (subject to adjustment as set forth
     herein). Basic Rent for the first month of the Term shall be paid by
     Tenant upon execution of this Lease. Commencing with the first day of the
     second calendar month of the first year of the Term, Tenant shall pay Rent
     in equal monthly installments on or before the first day of each calendar
     month during the Term in advance and without

                                      -3-
<PAGE>   5
     demand. If the Term commences on other than the first day of a month, then
     Rent provided for such partial month shall be prorated and the prorated
     installment shall be paid on the first day of the calendar month next
     succeeding the Commencement Date. If the Term terminates on other than the
     last day of a calendar month, then Rent provided for such partial month
     shall be prorated and the prorated installment shall be paid on the first
     day of such calendar month. In addition to said Basic Rent, Tenant agrees
     to pay the Additional Rent as and when herein provided in this Lease. Rent
     shall be payable to Landlord, without deduction or offset, in lawful money
     of the United States of America at the address for Landlord set forth in
     the Basic Lease Information, or to such other person or at such other place
     as Landlord may from time to time designate in writing.

     5.2  Tenant shall pay to Landlord all charges and other amounts whatsoever
     as provided in this Lease as Additional Rent as and when due and payable
     under the provisions of this Lease. Landlord shall have the same remedies
     for Tenant's failure to pay any item of Additional Rent when due as for
     failure to pay any installment of Basic Rent when due.

     5.3  Tenant hereby acknowledges that late payment to Landlord of Basic Rent
     or any item of Additional Rent will cause Landlord to incur costs not
     contemplated by this Lease, the exact amount of which will be extremely
     difficult to ascertain. Such costs include, but are not limited to,
     processing and accounting charges, and late charges which may be imposed on
     Landlord by the terms of any ground lease, underlying lease, mortgage or
     trust deed covering the Building. Accordingly, if any installment of Basic
     Rent or any payment of Additional Rent is not received by Landlord within
     five (5) calendar days of its due date, Tenant shall pay Landlord a late
     charge equal to five percent (5%) of such overdue amount. If during the
     twelve (12) month period preceding any late payment of Basic Rent or
     Additional Rent Tenant has incurred two or more late charges, the late
     charge shall equal ten percent (10%) of the overdue amount, rather than
     five percent (5%) of the overdue amount. The parties agree that such
     charges represent a fair and reasonable estimate of the costs Landlord will
     incur by reason of a late payment by Tenant. Acceptance of such late charge
     by Landlord shall in no event constitute a waiver of Tenant's default with
     respect to such overdue amount, nor prevent Landlord from exercising any of
     its rights or remedies granted hereunder.

6.   Tenant's Share of Increase in Basic Operating Cost.

     6.1  In addition to the Basic Rent to be paid hereunder, Tenant shall pay
     as Additional Rent, Tenant's Share of the increase in Basic Operating Cost
     (as hereinafter defined) in

                                      -4-
<PAGE>   6
     the manner set forth below. The provisions for payment of the increase in
     Basic Operating Cost by means of periodic payment of Tenant's Share of the
     increase in Estimated Basic Operating Cost and the Basic Operating Cost
     Adjustment are intended to pass on to Tenant and reimburse Landlord for
     Tenant's Share of all increases in costs and expenses over 1997 described
     in this Section 6 below.

     6.2  For purposes of this Section, the following terms shall have the
     meaning hereinafter set forth:

          (a) "Basic Operating Cost" shall mean the total cost and expenses paid
          or incurred by Landlord in connection with the management, operation,
          maintenance and preservation of the Building, including without
          limitation, (1) Taxes (as herein defined); (2) wages, salaries and
          related expenses and benefits of all parties and individuals engaged
          in the operation, management, maintenance and security of the
          Building and the costs of an office in the Building; (3) supplies,
          materials and equipment rental used in operation and maintenance of
          the Building; (4) utilities, including without limitation water and
          power, air conditioning, heating, lighting and ventilating the
          Building; (5) all maintenance, janitorial and service agreements for
          the Building and the equipment therein, including without limitation,
          alarm service, window cleaning, elevator maintenance, sidewalks,
          landscaping, Building exterior and service areas; (6) reasonable
          management fees of all contractors engaged by Landlord or charged by
          Landlord if Landlord performs management services in connection with
          the Building; (7) reasonable legal and accounting services for the
          Building; provided, however, that legal expense shall not include the
          cost of negotiating leases, collecting rents, or legal costs incurred
          in proceedings against any specific tenant; (8) all insurance
          premiums and costs, including but not limited to, the premiums and
          cost of fire, casualty and liability coverage and rental abatement
          and earthquake insurance (if Landlord elects to provide such
          coverage) applicable to the Building and Landlord's personal property
          used in connection therewith; (9) repair, replacements and general
          maintenance (except for repairs paid by proceeds of insurance or by
          Tenant or other third parties, and alterations attributable solely to
          tenants of the Building other than Tenant); (10) the cost of any
          capital improvements made to the Building after completion of its
          construction as a labor-saving device or to effect other economies in
          the operation or maintenance of the Building, or made to the Building
          after the date of this Lease, that are required under any
          governmental law or regulation that was not applicable to the
          Building at the

                                      -5-
<PAGE>   7
time that permits for the construction thereof were obtained, such cost to be
amortized over such reasonable period as Landlord shall determine, together with
interest on the unamortized balance at the rate of ten percent (10%) per annum
or such higher rate as may have been paid by Landlord on funds borrowed for the
purpose of constructing such capital improvements; and (11) any other reasonable
expense incurred in managing, operating, maintaining and repairing the Building.
In the event that the Building is not 95% occupied during any Expense Year as
determined by Landlord, an adjustment shall be made in computing the Basic
Operating Cost for such Expense Year so that Basic Operating Cost shall be
computed as though the Building had been ninety-five percent (95%) occupied;
provided, however, that in no event shall Landlord be entitled to collect in
excess of ninety-five percent (95%) of the total Basic Operating Costs from all
of the Tenants in the Building including Tenant. All costs and expenses shall be
determined in accordance with generally accepted accounting principles which
shall be consistently applied. Basic Operating Cost shall not include specific
costs incurred for the account of, separately billed to and paid by specific
tenants.

(b) "Taxes" shall mean all taxes, assessments and charges levied upon or with
respect to the Building or any personal property of Landlord used in the
operation thereof, or Landlord's interest in the Building or such personal
property, including, but not limited to, all general real property taxes and
general and special assessments, charges, fees or assessments for transit, child
care, housing, police, fire of other governmental services or purported benefits
to the Building, service payments in lieu of taxes, and any tax, fee or excise
on the act of entering into this Lease or any other lease of space in the
Building, or on the use or occupancy of the Building or any part thereof, or on
the rent payable under any lease or in connection with the business or of
renting space in the Building, that are now or hereafter levied or assessed
against Landlord by the United States of America, the State of California, or
any political subdivision, public corporation, district or other political or
public entity, and shall also include any other tax, fee or other excise,
however described, that may be levied or assessed as a substitute for, or as an
addition to, in whole or in part, any other Taxes, whether or not now customary
or in the contemplation of the parties on the date of this Lease. Taxes shall
not include franchise, transfer, inheritance or capital stock taxes or income
taxes measured by the net income of Landlord from all sources, unless, due to a
change in the

                                      -6-

<PAGE>   8
     method of taxation, any of such taxes are levied or assessed against
     Landlord as a substitute for, or as an addition to, in whole or in part,
     any other tax that would otherwise constitute Taxes. Taxes shall also
     include actual legal and consulting fees, costs and disbursements incurred
     in connection with applications or proceedings to reasonably contest,
     determine or reduce Taxes.

     (c) "Expense Year" shall mean each twelve (12) consecutive month period
     commencing January 1st of each year during the Term of this Lease, provided
     that Landlord, upon notice to Tenant, may change the Expense Year from time
     to time to any other twelve (12) consecutive month period and, in the event
     of any such change, Tenant's Share of Basic Operating Cost shall be
     equitably adjusted for the Expense Years involved in any such change.

     (d) "Estimated Basic Operating Cost" for any particular Expense Year shall
     mean Landlord's estimate of the Basic Operating Cost for such Expense Year.

     (e) "Basic Operating Cost Adjustment" shall mean the difference between
     Basic Operating Cost and Estimated Basic Operating Cost for any Expense
     Year.

     (f) "1997 Expense Year" shall mean the Expense Year beginning January 1,
     1997 and ending December 31, 1997.

6.3 Tenant shall pay to Landlord as Additional Rent one-twelfth (1/12th) of
Tenant's Share of the increase in the Estimated Basic Operating Cost for each
Expense Year over the Basic Operating Cost during the 1997 Expense Year, on or
before the first day of each month, in advance, during the Term and commencing
with January 1, 1998, in an amount estimated by Landlord and billed by Landlord
to Tenant; provided that Landlord shall have the right initially to determine
monthly estimates and to revise such estimates from time to time. Within one
hundred twenty (120) calendar days after the end of each Expense Year after the
1997 Expense Year, or as soon thereafter as practicable, Landlord shall furnish
Tenant with a statement (herein called "Landlord's Expense Statement"), setting
forth in reasonable detail the Basic Operating Cost for such Expense Year, the
Basic Operating Cost for the 1997 Expense Year and Tenant's Share of the
increase in such Basic Operating Cost. If Tenant's share of the increase in
Basic Operating Cost for such Expense Year exceeds the increase in the Estimated
Basic Operating Cost paid by Tenant for such Expense Year, Tenant shall pay to
Landlord the difference between the amount paid by Tenant and the increase of
the Basic Operating Cost, for which Tenant is

                                      -7-

<PAGE>   9
        responsible, within fifteen (15) calendar days after the receipt of
        Landlord's Expense Statement. If the total increase in the Estimated
        Basic Operating Cost paid by Tenant for any such Expense Year shall
        exceed Tenant's share of the increase in Basic Operating Cost for such
        Expense Year, the excess paid by Tenant shall be credited against the
        next installment of the increase in the Estimated Basic Operating Cost
        due from Tenant to Landlord hereunder.

        6.4     If the Expiration Date fixed for this Lease shall occur on a
        date other than the end of an Expense Year, Tenant's Share of the
        increase in Basic Operating cost for the Expense Year in which the
        Expiration Date falls shall be in the proportion that the number of
        calendar days from and including the first day of the Expense Year in
        which the Expiration Date occurs to and including the Expiration Date
        bears to 365. After Tenant's share of such increase in Basic Operating
        Cost has been finally determined and Landlord's Expense Statement has
        been furnished to Tenant pursuant to this Section and if there shall
        have been an underpayment of Tenant's Share of the increase in Basic
        Operating Cost, Tenant shall remit the amount of such underpayment to
        Landlord within fifteen (15) calendar days of receipt of such statement,
        and if there shall have been an overpayment, Landlord shall remit the
        amount of any such overpayment, less any amounts then owed to Landlord
        by Tenant under this Lease, to Tenant within fifteen (15) calendar days
        of the issuance of such statement.

        6.5     In the event that Tenant shall dispute the amount set forth in
        Landlord's Expense Statement for any year, and provided that Tenant is
        not then in default hereunder, Tenant shall have the right, not later
        than thirty (30) calendar days following the receipt of such statement,
        to cause Landlord's books and records with respect to Basic Operating
        Cost for such year to be audited by certified public accountants
        selected by Tenant and subject to Landlord's reasonable right of
        approval. The Basic Operating Cost Adjustment shall be appropriately
        adjusted on the basis of such audit. If such audit discloses a liability
        for a refund in excess of ten percent (10%) of Tenant's Share of the
        increase in Basic Operating Cost previously reported, the cost of such
        audit shall be borne by Landlord; otherwise the cost of such audit shall
        be paid by Tenant. If Tenant shall not request an audit in accordance
        with the provisions of this Section 6.5 within twenty (20) calendar days
        after receipt of Landlord's Expense Statement, such statement shall be
        final and binding for all purposes hereof.

                                      -8-
<PAGE>   10
7.   Security Deposit and Letter of Credit.

     7.1  Concurrently with the execution of this Lease, the Tenant has paid and
     deposited with Landlord the sum set forth in the Basic Lease Information as
     the Security Deposit for the full and faithful performance of every
     provision of this Lease to be performed by Tenant. If Tenant defaults with
     respect to any provision of this Lease, without waiving any of Landlord's
     other rights and remedies, Landlord may use, apply or retain all or any
     part of this Security Deposit for the payment of any Rent or any other sum
     in default, the payment of any other amount which Landlord may spend or
     become obligated to spend by reason of Tenant's default or to compensate
     Landlord for any other loss or damage which Landlord may suffer by reason
     of Tenant's default to the full extent permitted by law. If any portion of
     said Security Deposit is so used or applied, Tenant shall within ten (10)
     calendar 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 material breach of this Lease.
     Landlord shall not be required to keep this Security Deposit separate from
     its general funds, and Tenant shall not be entitled to interest on such
     deposit. 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 within fourteen (14) calendar days
     after termination of this Lease but only after delivery of possession of
     the entire Premises to Landlord and the performance by Tenant of all
     obligations required hereunder.

     7.2  Concurrently with the execution of this Lease, Tenant has deposited
     with Landlord an unconditional, irrevocable letter of credit (the "Letter
     of Credit") in the amount specified in the Basic Lease Information (the
     "Letter of Credit Amount"). The Letter of Credit shall be in the form
     attached as Exhibit F hereto and shall be issued by a bank selected by
     Tenant and reasonably acceptable to Landlord. Tenant shall pay all
     expenses, points, or fees incurred by Tenant in obtaining the Letter of
     Credit. Tenant shall cause the Letter of Credit to be in effect during the
     initial five-year Term of the Lease. Tenant may, from time to time, replace
     any existing Letter of Credit with a new Letter of Credit if the new Letter
     of Credit: (a) becomes effective at least thirty (30) days before
     expiration of the Letter of Credit it replaces; (b) is in the required
     amount; (c) is issued by a bank reasonably acceptable to Landlord; and (d)
     otherwise complies with the requirements of this Section 7.2. Landlord
     shall hold the Letter of Credit as security for the full and faithful
     performance of every provision of this Lease to be performed by Tenant. If
     Tenant defaults with respect to any provision of this Lease, without
     waiving any of Landlord's other rights and remedies, Landlord

                                      -9-

<PAGE>   11
     may draw on that portion of the Letter of Credit necessary to pay any Rent
     or any other sum in default, any other amount which Landlord may spend or
     become obligated to spend by reason of Tenant's default or to compensate
     Landlord for any other loss or damage which Landlord may suffer by reason
     of Tenant's default to the full extent permitted by law. If Tenant fails to
     renew or replace the letter of Credit at least thirty (30) days before its
     expiration, Landlord may, without prejudice to any other remedy it has,
     draw on all of the Letter of Credit. Any amount of the Letter of Credit
     that is drawn on by Landlord but not applied by Landlord shall be held by
     Landlord as a security deposit (the "Letter of Credit Security Deposit").
     If Landlord draws on any portion of the Letter of Credit, Tenant shall
     within ten (10) calendar days after written demand therefor either (a)
     deposit cash with Landlord in an amount that, when added to the amount
     remaining under the Letter of Credit and the amount of any Letter of Credit
     Security Deposit, shall equal the Letter of Credit amount then required
     under this Section 7.2, or (b) reinstate the Letter Credit to the Letter of
     Credit amount then required under this Section 7.2. If Landlord applies any
     portion of the Letter of Credit Security Deposit, Tenant shall, within ten
     (10) calendar days after written demand therefor, deposit cash with
     Landlord in an amount sufficient to restore the Letter of Credit Security
     Deposit to the amount then required under this Section 7.2. Tenant's
     failure to do so shall be a materially breach of this Lease. If Tenant
     shall fully and faithfully perform every provision of this Lease to be
     performed by it, the Letter of Credit or any balance thereof shall be
     returned to Tenant within fourteen (14) calendar days after the earlier of
     (i) the end of the initial five-year term of the Lease or (ii) termination
     of this Lease but in such case only after delivery of possession of the
     entire Premises to Landlord and the performance by Tenant of all
     obligations required hereunder.

8.   Use.

     8.1  The Premises shall be used for the Permitted Use and no other use or
     purpose. Tenant shall not do or permit to be done in or about the Premises,
     nor bring or keep or permit to be brought or kept therein, anything which
     is prohibited by or will in any way conflict with any law, statute,
     ordinance or governmental rule or regulation now in force or which may
     hereafter be enacted or promulgated, including but not limited to laws
     governing hazardous or toxic substances, or which is prohibited by the
     standard form of fire and extended coverage insurance policy, or will in
     any way increase the existing rate of or affect any fire or other insurance
     upon the Building or any of its contents, or cause a cancellation of any
     insurance policy covering the Building or any part thereof or any of its
     contents. Tenant shall not do or permit

                                      -10-

<PAGE>   12

        anything to be done in or about the Premises which will in any way
        obstruct or interfere with the rights of other tenants of the Building,
        or injure or annoy them, or use or allow the Premises to be used for any
        improper, immoral, unlawful or objectionable purpose, nor shall Tenant
        cause, maintain or permit any nuisance, including but not limited to the
        emanation of any objectionable or unpleasant odors, smoke, dust, gas,
        noise or vibrations, in, on or about the Premises or commit or suffer to
        be committed any waste in, on or about the Premises.

        8.2 For purposes of this Section, the following terms shall have the
        meaning hereinafter set forth:

                (a)     "Hazardous Materials" shall include all solid, liquid or
                gaseous materials defined or regulated as wastes under any
                federal statute or regulation or any state of local law,
                regulation, ordinance and shall further include all other
                substances defined or regulated as pollutants or as hazardous,
                toxic, infectious, or radioactive substances under any federal
                statute or regulation or any state or local law, regulation or
                ordinance, all as amended from time to time.

                (b)     "Hazardous Materials Activities" shall mean the use,
                generation, storage or disposal of Hazardous Materials on, under
                or about, or the transportation of Hazardous Materials to or
                from, the Premises or the Building.

        8.3     Tenant shall not cause or permit any Hazardous Materials
        Activities to be conducted on, under or about the Premises or the
        Building except in compliance with all applicable federal, state and
        local laws, regulations, ordinances and orders governing Hazardous
        Materials or Hazardous Materials Activities, which compliance shall be
        at Tenant's sole cost and expense. Additionally, Tenant shall not cause
        or permit any Hazardous Materials to be disposed of on, under or about
        the Premises or the Building without the prior written consent of
        Landlord, which may be withheld for any reason and may be revoked at any
        time.

        8.4     Landlord shall not be liable to Tenant or to any other party for
        any Hazardous Materials Activities conducted or permitted on, under or
        about the Premises or the Building by Tenant or by Tenant's employees,
        agents, contractors, licensees or invitees, and Tenant shall indemnify,
        defend and hold Landlord harmless from any claims, damages, fines,
        penalties, losses, judgments, costs and liabilities arising out of or
        related to any Hazardous Materials Activities conducted or permitted on,
        under or about the Premises or the Building by Tenant or by Tenant's
        employees, agents, contractors, licensees or invitees, regardless of
        whether

                                      -11-
<PAGE>   13
     Landlord shall have had notice of such Hazardous Materials Activities. The
     provisions of this Section 8.4 shall survive the expiration or earlier
     termination of this Lease.

     8.5 At the expiration or earlier termination of this Lease, Tenant shall
     remove from the Premises and the Building, at Tenant's sole cost and
     expense, all Hazardous Materials which Tenant has stored or disposed of on,
     under or about the Premises and Building.

9.   Utilities and Services.

     9.1 Subject to the provisions of this Lease and the Rules and Regulations
     of the Building, Landlord shall furnish to the Premises (i) water at those
     points of supply for general use by tenants in the Building, (ii)
     electricity for Building Standard lighting, typewriters, computers, copy
     machines, telecopiers and other office machines of similar low electrical
     consumption, 24 hours a day, 7 days a week, (iii) heat and air conditioning
     reasonably required for the comfortable occupation of the Premises and as
     permitted by applicable law and governmental regulation, from 8:00 A.M. to
     6:00 P.M., Monday through Friday, excluding holidays, or on other days
     and/or at other times as requested by Tenant with 24 hour prior written
     notice, (iv) elevator service, (v) lighting replacement (for Building
     Standard lights), (vi) restroom supplies, and (vii) window washing with
     reasonable frequency, all during the times and in the manner that such
     services are customarily furnished in comparable office buildings in the
     area; provided, however, that all electricity provided to the "Computer
     Room" as shown on Exhibit A shall be separately metered (a separate meter
     shall be installed as part of the Tenant Improvements) and paid for by
     Tenant. Landlord shall be responsible for furnishing janitorial service on
     the Premises at the times and days determined by Landlord. Landlord shall
     not be in default hereunder or be liable for any damages directly or
     indirectly resulting from, nor shall the Rent be abated, except as provided
     below, by reason of the installation, use or interruption of use, of any
     equipment in connection with the furnishing of any of the foregoing
     services or the failure to furnish or the delay in furnishing any such
     services when such failure or delay is caused by accident or any condition
     beyond the control of Landlord or by the making of necessary repairs or
     improvements to the Premises or the Building, or the limitation,
     curtailment, rationing or restriction on use of water or electricity, gas
     or any other form of energy or utility serving the Premises or the
     Building. Landlord shall use reasonable efforts to remedy any interruption
     in the furnishing of such services. However, when Tenant cannot conduct
     normal business practice because of such interruption of service for a
     period of more than ten (10) consecutive

                                      -12-
<PAGE>   14
      working days, rent shall be waived until such time that normal business
      practice can once again commence.

      9.2   Whenever heat generating machines or equipment or lighting other
      than Building Standard lights are used in the Premises by Tenant which
      affect the temperature otherwise maintained by the air conditioning
      system, Landlord shall have the right to install supplementary air
      conditioning units in the Premises, and the costs thereof shall be paid by
      Tenant to Landlord upon billing by Landlord. Tenant also shall pay as
      Additional Rent the cost of providing all heating or cooling energy to the
      Premises in excess of that required for normal office use or during hours
      requested by Tenant when heat or air conditioning is not otherwise
      furnished by Landlord. If Tenant installs lighting requiring power in
      excess of that required for normal office use in the Building or if Tenant
      installs equipment requiring power in excess of 110 volts, Tenant shall
      pay the cost of installing any additional risers, transformers, panels or
      other facilities that may be necessary to furnish such excess power to the
      Premises.

      9.3   Notwithstanding any other provision hereof, in the event that any
      law, ordinance or other governmental regulation now or hereafter in effect
      shall impose a limit on the allocation to the Building or any utility or
      other service, whether or not the same is to be supplied to the Premises
      by Landlord under this Section, then Tenant shall not use or cause to be
      consumed on the Premises, nor shall Landlord be required to provide to the
      Premises hereunder, such utility or other service in an amount or in a
      manner which would result in the violation by Landlord or Tenant of such
      law, ordinance or regulation.

10.   Alterations and Tenant's Property.

      10.1  Tenant shall not make or suffer to be made any Alterations in or to
      the Premises without first obtaining Landlord's prior written consent,
      which consent shall not be unreasonably withheld or delayed. All
      permitted Alterations shall be done solely at Tenant's expense, in
      accordance with all applicable laws, ordinances and regulations, and all
      requirements of Landlord's and Tenant's insurance policies and only in
      accordance with plans and specifications approved by Landlord, shall be
      performed only by such contractors, mechanics or workmen as are approved
      in writing by Landlord and shall be subject to such other conditions as
      Landlord may reasonably require. All such Alterations shall become the
      property of Landlord and shall be surrendered with the Premises, as a part
      thereof at the end of the Term hereof or upon earlier vacating of the
      Premises, provided that Landlord may by written notice to Tenant, given
      at the time consent to the Alterations is given, require Tenant to remove
      all

                                      -13-
<PAGE>   15

     Alterations. If Tenant does not obtain Landlord's prior written consent to
     any Alterations for which such consent is required, Landlord may by written
     notice to Tenant, given thirty (30) calendar days following the expiration
     or termination of this Lease, require Tenant to remove such Alterations.
     Tenant shall upon demand by Landlord, at Tenant's sole cost and expense and
     with all due diligence, remove all Alterations made by or for the account
     of Tenant, as designated by Landlord to be removed, and Tenant shall with
     all due diligence, at its sole cost and expense, repair and restore the
     Premises to their original condition.

     10.2  All articles of personal property and all business and trade
     fixtures, equipment and furniture owned by Tenant or installed by Tenant at
     its expense in the Premises shall be and remain the property of the Tenant
     (herein "Tenant's Property"). Tenant shall remove all Tenant's Property, at
     its sole cost and expense, prior to the expiration of the Term or earlier
     vacating of the Premises. Tenant shall repair any damage to the Premises or
     the Building caused by the bringing in or the removal of Tenant's Property.

11.  Liens.  Tenant shall keep the Premises and Building free from, and defend
and hold harmless Landlord from, any and all liens or claims arising out of any
work performed, materials furnished or obligations incurred by or for the
account of Tenant. Landlord shall have the right to post and keep posted on the
Premises any notices that may be provided by law or which Landlord deems proper
for the protection of Landlord, the Premises and the Building from such liens or
claims. Prior to the commencement of any permitted work of alteration, addition
or improvement to the Premises, Tenant shall give Landlord at least ten (10)
working days prior written notice of the proposed commencement of such work.

12.  Maintenance and Repairs.

     12.1  Tenant agrees and shall, at its own cost and expense, take good care
     of the Premises and maintain said Premises in good condition and repair,
     ordinary wear and tear excepted. In addition, Tenant shall be responsible
     for and reimburse Landlord for all repairs and replacements to the
     Premises, the Building or any Common Area, structural or otherwise, which
     are necessitated or result from the acts, omissions or negligence of Tenant
     or any person or entity claiming through or under Tenant, or any of their
     servants, employees, contractors, agents, visitors, or the occupancy of the
     Premises by Tenant or any such person or entity.

     12.2  Subject to the foregoing paragraph and the provisions of this Lease
     as to damage or destruction, Landlord shall repair and maintain the roof,
     exterior walls and Common Areas of the Building and the plumbing, heating,
     ventilating and electrical

                                      -14-

<PAGE>   16
     systems serving the Premises. Tenant shall immediately give Landlord
     written notice of a need for repairs or maintenance, after which Landlord
     shall have a reasonable opportunity to make such repairs or perform such
     maintenance. Landlord's liability for any failure to make repairs or to
     perform any maintenance for which Landlord is responsible under any of the
     provisions of this Lease shall be limited to the cost of such repairs or
     maintenance, unless or to the extent Tenant suffers damages as a result of
     the same caused by Landlord's gross negligence or willful misconduct.
     Except as otherwise set forth in the last sentence of Section 9.1, there
     shall be no abatement of Rent and no liability of Landlord by reason of any
     injury to or interference with Tenant's business arising from the making of
     any repairs, alterations or improvements in fixtures, appurtenances and
     equipment therein; provided, however, that in making such repairs,
     alterations or improvements, Landlord shall interfere as little as
     reasonably practicable with the conduct of Tenant's business in the
     Premises, notwithstanding Section 9.1 herein. As a material inducement to
     Landlord entering into this Lease, Tenant waives and releases its right to
     make repairs other than in the event of an emergency at Landlord's expense
     under any applicable statute, law, regulation or ordinance now or hereafter
     in effect.

13.  Access to Premises.  Upon reasonable notice to Tenant except in the event
of an emergency, Landlord reserves and shall at all times have the right to
enter the Premises to inspect same, to supply any service to be provided by
Landlord to Tenant hereunder, to show the Premises to prospective purchasers,
mortgagees or to post notices of nonresponsibility, and to alter, improve or
repair the Premises and portions of the Building, and may for that purpose
erect, use and maintain scaffolding, pipes, conduits and other necessary
structures in and through the Premises where required by the character of the
work performed, or for any other purpose Landlord may deem necessary; provided,
however, that any such access by Landlord shall not unreasonably interfere with
the business of Tenant. Tenant hereby waives any claim for damages for any
injury or inconvenience to or interference with Tenant's business, any loss of
occupancy for quiet enjoyment of the Premises or any other loss occasioned
thereby, other than any rent abatement as provided in Section 9.1 of this Lease.
For each of the aforesaid purposes, Landlord shall at all times have and retain
a key with which to unlock all doors in, upon and about the Premises, excluding
Tenant's vaults and safes, or special security areas (designated in advance),
and Landlord shall have the right to use any and all means that Landlord may
deem necessary or proper to open said doors in an emergency, in order to obtain
entry to any portion of the Premises, and any entry to the Premises or portions
thereof obtained by Landlord by any of said means, or otherwise, shall not under
any circumstances be construed or deemed to be

                                      -15-

<PAGE>   17

forcible or unlawful entry into, or a detainer of, the Premises, or an
eviction, actual or constructive, of Tenant from the Premises or any portion
thereof. Tenant shall not be entitled to any abatement of Rent by reason of the
exercise by Landlord of such right of entry. Landlord shall also have the right
at any time, without same constituting an actual or constructive eviction and
without incurring any liability to Tenant therefor, to change the arrangement
and/or location of entrances or passageways, doors and doorways, and corridors,
elevators, stairs, toilets and other public parts or Common Areas of the
Building.

14.  Damage or Destruction.

     14.1 If the Premises or the Building are damaged by any casualty insured
     against by Landlord to an extent not exceeding twenty-five percent (25%)
     of the then replacement value thereof and if the damage is such that
     repairs can, in Landlord's opinion, be made within one hundred eighty
     (180) calendar days after notice to Landlord of the occurrence of such
     damage and Landlord will receive insurance proceeds sufficient to cover
     the costs of such repairs, Landlord shall commence and diligently proceed
     with the repair of such damage and this Lease shall continue in full force
     and effect.

     14.2 If the Premises or the Building are damaged by any casualty not
     insured against by Landlord, or if such damage exceeds twenty-five percent
     (25%) of the then replacement value thereof, or if such repairs cannot, in
     Landlord's reasonable opinion, be made within such one hundred eighty
     (180) calendar day period Landlord may, at its option, make such repairs
     within a reasonable time and in such event this Lease shall continue in
     effect. However, Tenant may, at its option, decide to cancel this Lease if
     repairs are estimated to take or do take more than 180 calendar days or if
     more than twenty-five percent (25%) of the Premises are destroyed such
     that Tenant cannot reasonably operate its business. If Tenant does not
     terminate this Lease, Landlord's election to make such repairs must be
     evidenced by written notice to Tenant within thirty (30) calendar days
     after notice to Landlord of the occurrence of the damage advising Tenant
     whether or not Landlord will make such repairs. If Landlord does not so
     elect to make such repairs under this paragraph, then either party may by
     written notice to the other cancel this Lease as of the date of the
     occurrence of such damage.

     14.3 Notwithstanding anything to the contrary in this Section, Landlord
     shall not have any obligation whatsoever to repair any damage resulting
     from any casualty occurring during the last six (6) months of the Term of
     this Lease, and Tenant has the right to terminate this Lease if Landlord
     does not repair such damage.

                                      -16-
<PAGE>   18
          14.4  No damages, compensation or claim shall be payable by Landlord
          for inconvenience, loss of business or annoyance arising from any
          repair or restoration of any portion of the Premises or any portion of
          the Building. Landlord shall use its reasonable efforts to effect such
          repair or restoration promptly in such manner as not to unreasonably
          interfere with Tenant's use and occupancy. Landlord shall not be
          required to carry insurance of any kind on Tenant's property and shall
          not be obligated to repair any damage thereto or replace the same
          except to the extent such damage was caused by Landlord's gross
          negligence or willful misconduct. With respect to any damage which
          Landlord is obligated to repair or elects to repair, Tenant, as a
          material inducement to Landlord entering into this Lease, waives and
          releases its rights under the provisions of California Civil Code
          Sections 1941 and 1942.

          14.5  During such periods of time that the Premises shall not be
          tenantable as a result of the damage to the Premises or the Building,
          the Rent shall abate proportionately based on the ratio that the
          portion of the Premises which is not tenantable bears to the entire
          Premises; provided, however, that there shall be no abatement of Rent
          if the damage is due to the act or negligence of Tenant or any of its
          employees, servants, agents, representatives, licensees, invitees, or
          visitors and all such damage or destruction shall be repaired by
          Tenant, at its sole expense (to the extent not covered by insurance;
          provided, however, that if such damage or destruction results in an
          increase in the insurance premium for the Building, such increase
          shall be billed to Tenant), and as soon as practicable. For purposes
          herein the term "tenantable" shall mean the state of the Premises in
          which use and occupancy by Tenant, including reasonable access, are
          reasonably available.

     15.  Indemnity.

          15.1  Tenant agrees to defend, indemnify and hold harmless Landlord,
          its agents and representatives, the lessor or lessors under all ground
          and underlying leases, and the successors and assigns of such parties,
          from and against any and all claims or liability for any injury, loss
          or damage to any person or property occurring in or about the Premises
          or the Building and from and against any and all costs, expenses and
          liabilities (including without limitation court costs and attorneys'
          fees) incurred in connection with or arising from (i) any act,
          omission or negligence of Tenant or any person claiming through or
          under Tenant, or its agents, servants, employees, contractors,
          visitors, guests, invitees or licensees, (ii) the use or occupancy or
          manner of use and occupancy of the Premises or the Building by Tenant
          or any person claiming through or under Tenant, or (iii) any default
          or failure by Tenant to observe or perform the terms and conditions of
          this Lease.

                                      -17-
<PAGE>   19
     15.2 Landlord shall not be responsible or liable to Tenant, and Tenant
     hereby waives any claims against Landlord, for any injury, loss or damage
     to any person or property in or about the Premises or the Building arising
     from or by any cause whatsoever, including without limitation any injury,
     loss or damage resulting from theft, or caused by electrical, heating,
     pluming, sewer or other systems in the Premises or Building, or water
     leakage of any kind from the roof, walls, or other portion of the Building,
     or the acts or omissions of any other tenant, or occupant of the Building
     except such as is caused by reason of the gross negligence or willful acts
     of Landlord, or its agents, servants or employees.

16.  Tenant's Insurance.

     16.1 Tenant shall, at all times during the Term hereof and at Tenant's sole
     cost and expense, obtain, maintain and keep in full force and effect the
     following insurance:

          (a)  Comprehensive General Liability Insurance insuring Tenant against
          any liability arising out of the leasing, use, occupancy or
          maintenance of the Premises and the roof area of the Building on which
          Tenant's antennae are located, and all areas appurtenant thereto. Such
          insurance shall be in the amount of $1,000,000.00 Combined Single
          Limit for injury to, or death of one or more persons in an occurrence,
          and for damage to tangible property (including loss of use) in an
          occurrence. The policy shall insure the hazards of premises and
          operations, independent contractors, contractual liability (covering
          Tenant's indemnity hereunder) and shall name Landlord as an additional
          insured and shall provide that the insurance maintained by Tenant is
          primary insurance and not excess over, or contributory with, any other
          insurance available to the Landlord.

          (b)  Worker's Compensation and Employer's Liability insurance (as
          required by state law).

          (c)  Any other form or forms of insurance as Landlord or any ground
          lessor or mortgagee of Landlord may reasonably require from time to
          time in form, in amounts and for insurance risks against which a
          prudent tenant would protect itself.

     16.2 All insurance policies shall be written in a form satisfactory to
     Landlord and shall be taken out with insurance companies holding a general
     Policyholders Rating of "A" and a Financial Rating of "X" or better, as set
     forth in the most current issue of Best's Insurance Guide. Tenant shall
     deliver to Landlord prior to the time Tenant takes possession of the
     premises for any reason, copies of policies or certificates

                                      -18-
<PAGE>   20
      evidencing the existence of the amounts and forms of coverage
      satisfactory to Landlord. No such policy shall be cancelable, nor shall
      the insurance provided under any such policy be reduced, except after
      thirty (30) calendar days prior written notice to Landlord and the policy
      shall so provide. Tenant shall, within ten (10) working days prior to the
      expiration of such policies, furnish Landlord with renewals or "binders"
      thereof, or Landlord may order such insurance and charge the cost thereof
      to Tenant as Additional Rent.

17.   Insurance Subrogation. Landlord and Tenant shall each obtain from their
respective insurers under all policies of fire and other property insurance now
or hereafter maintained by either of them at any time during the Term hereof
insuring or covering the Building or any portion thereof or operations therein a
waiver of all rights of subrogation which the insurer of the insured party might
have against the other party, provided such a waiver is available. The cost of
obtaining any such waiver shall be borne by the party who bears the cost of the
policy to which such a waiver is attached. Landlord and Tenant each shall
indemnify the other against any loss or expense, including attorney's fees,
resulting from the failure to obtain any such waiver, provided the same is
available.

18.   Eminent Domain. If the whole of the Premises or so much thereof as to
render the balance unusable by Tenant shall be taken under power of eminent
domain, this Lease shall automatically terminate as of the date of such
condemnation, or as of the date possession is taken by the condemning
authority, whichever is earlier. No award for any partial or entire taking
shall be apportioned, and Tenant hereby assigns to Landlord any award which may
be made in such taking or condemnation, together with any and all rights of
Tenant now or hereafter arising in or to the same or any part thereof;
provided, however, that nothing contained herein shall be deemed to give
Landlord any interest in or to require Tenant to assign to Landlord any award
made to Tenant for the taking of personal property and fixtures belonging to
Tenant and/or for the interruption of, or damage to, Tenant's business and/or
for Tenant's separate moving expenses (to the extent such award for separate
moving expenses does not reduce any award made to Landlord). In the event of a
partial taking which does not result in a termination of this Lease, Rent shall
be abated in proportion to the part of the Premises so made unusable to Tenant.
No temporary taking of the Premises and/or Tenant's rights therein or under
this Lease shall terminate this Lease or give Tenant any right to any abatement
of Rent hereunder; any award made to Tenant by reason of any such temporary
taking shall belong entirely to Tenant and Landlord shall not be entitled to
share therein.

19.   Assignment and Subletting.

      19.1  Tenant shall not directly or indirectly, voluntarily or by
      operation of law, sell, assign, encumber, pledge or

                                      -19-
<PAGE>   21
otherwise transfer or hypothecate all or any part of the Premises or Tenant's
leasehold estate hereunder or permit the Premises to be occupied by anyone
other than Tenant or assign or sublet the Premises or any portion thereof
without Landlord's prior written consent in each instance, which consent shall
not be unreasonably withheld or delayed. Any sale or other transfer, including
by consolidation, merger or reorganization, of a majority of the voting stock
of Tenant, if Tenant is a corporation, or any sale or other transfer of a
majority of the partnership interests in Tenant, if Tenant is a partnership,
shall be deemed an assignment for purposes of this Section. Tenant may,
however, assign the Lease at any time, or sublease all of part of the Premises,
without Landlord's consent, to any entity which is the successor to Tenant by
consolidation, merger or reorganization, or which has acquired all or
substantially all of the assets of Tenant, or which is controlled directly or
indirectly by Tenant, or which controls, directly or indirectly, Tenant, or
which is under common control with Tenant, provided the financial condition of
such assignee or sublessee is equal to or better than that of Tenant and further
provided that no such sublease shall relieve Tenant of its obligations
hereunder. A party shall be deemed to "control" another party for purposes of
this Section 19.1 only if the first party owns more than fifty percent (50%) of
the voting stock or other beneficial interests of the second party.

19.2 If Tenant desires at any time to enter into an assignment or sublease of
the Premises, or any portion thereof, it shall make a written request for
consent of the Landlord at least thirty (30) calendar days prior to the
proposed assignment or sublease which request shall contain (a) the name of the
proposed assignee or subtenant, (b) the nature of the proposed assignee's or
subtenant's business to be carried out on the Premises, (c) the terms and
provisions of the proposed assignment or sublease, including proposed effective
date, and (d) such financial information as Landlord may request concerning the
proposed assignee or subtenant. Landlord shall then have a period of ten (10)
working days following receipt of such request within which to notify Tenant in
writing that Landlord either (i) elects to terminate the Lease as to the space
so affected as of the date so specified by Tenant in which event Tenant will be
relieved of all further obligations hereunder as to such space, or (ii) elects
to permit Tenant to assign or sublet such space to the assignee or subtenant
named in the request, or (iii) will not consent to the proposed assignment or
sublease. If Landlord should fail to notify Tenant in writing of its decision
within said 10-day period, Landlord shall be deemed to have elected option
(iii) above. Any net effective rent or other economic consideration realized by
Tenant under any such sublease or assignment in excess of the Rent payable
hereunder, after

                                      -20-
<PAGE>   22
     actual subletting and assignment costs, commissions, tenant improvements or
     any costs incurred by Tenant subleasing space, shall be paid fifty percent
     (50%) to Landlord and fifty percent (50%) to Tenant. Tenant's obligation to
     pay over Landlord's portion of the consideration shall constitute an
     obligation for Rent hereunder.

     19.3  No consent by Landlord to any assignment or sublease by Tenant shall
     relieve Tenant of any obligation to be performed by Tenant under this
     Lease. The consent by Landlord to any assignment or sublease shall not
     relieve Tenant from the obligation to obtain Landlord's express written
     consent to any other assignment or sublease. Any assignment or sublease
     that is not in compliance with this Section shall be void and, at the
     option of Landlord, shall constitute a default by Tenant under this Lease.
     The acceptance of Rent by Landlord from a proposed assignee or subtenant
     shall not constitute the consent to such assignment or sublease by
     Landlord.

     19.4  Each assignee, subtenant or other transferee to which consent has
     been given by Landlord shall execute such documents in writing as shall be
     satisfactory to Landlord. Each assignee or other transferee (other than a
     subtenant) shall assume and be liable jointly and severally for all
     obligations of Tenant under this Lease; provided, however, that the
     assignee or other transferee shall be liable to Landlord for rent only in
     the amount set forth in the assignment or transfer document.

     19.5  In the event Tenant requests Landlord to consent to a proposed
     assignment, subletting, or transfer, Tenant shall pay to Landlord, whether
     or not such consent is ultimately given, Landlord's administrative fee in
     connection with such request in the amount of $500.00 for each request for
     consent per potential assignee, subtenant or transferee.

20.  Defaults and Remedies.

     20.1  The occurrence of any of the following events ("Event of Default")
     shall constitute a material default and breach of this Lease by Tenant:

           (a)  The failure by Tenant to pay any Basic Rent or Additional Rent,
           if not paid within three (3) days of the date when the same becomes
           due and payable; or

           (b)  The failure by Tenant to pay any other sum when and as the same
           becomes due and payable and such failure continues for more than ten
           (10) calendar days; or

           (c)  Tenant's failure to cause to be released any mechanic's liens
           recorded against the Premises for work

                                      -21-
<PAGE>   23
          ordered by Tenant within ten (10) calendar days after the date same
          shall have been filed; or

          (d)  The failure by Tenant to observe or perform any provision of
          this Lease to be observed or performed by Tenant, other than as
          specified in (a)-(c) above, where such failure continues for thirty
          (30) calendar days after the written notice thereof by Landlord to
          Tenant; provided, however, that if the nature of such default is such
          that the same cannot reasonably be cured within such thirty (30)
          calendar day period, Tenant shall not be deemed to be in default if
          Tenant shall within such period commence such cure and thereafter
          diligently prosecute the same to completion; or

          (e)  The making by Tenant of any general assignment for the benefit
          of creditors; the filing by or against Tenant of a petition to have
          Tenant adjudged a bankrupt or of a petition for reorganization or
          arrangement under any law relating to bankruptcy (unless, in the case
          of a petition filed against Tenant, the same is dismissed within
          thirty (30) calendar days); the appointment of a trustee or receiver
          to take possession of substantially all of Tenant's assets located at
          the Premises or of Tenant's interest in this Lease, where possession
          is not restored to Tenant within thirty (30) calendar days; or the
          attachment, execution, or other judicial seizure of substantially all
          of Tenant's assets located at the Premises or of Tenant's interest in
          this Lease, where such seizure is not discharged within thirty (30)
          calendar days.

     20.2 If an Event of Default shall occur, then in addition to any other
     rights or remedies available to Landlord at law or in equity all of which
     rights and remedies shall be cumulative, Landlord at any time thereafter
     may give a written termination notice to Tenant, and on the date specified
     in such notice (which shall be not less than three (3) calendar days after
     the giving of such notice) Tenant's right to possession shall terminate
     and this Lease shall terminate, unless on or before such date all arrears
     of Rent and all other sums payable by Tenant under this Lease (together
     with the late charges and interest provided for herein) and all costs and
     expenses incurred by or on behalf of Landlord hereunder shall have been
     paid by Tenant and all other breaches of this Lease by Tenant at the time
     existing shall have been fully remedied to the satisfaction of Landlord.
     In the event that Landlord shall elect to terminate this Lease then
     Landlord may recover from Tenant:

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

                                      -22-
<PAGE>   24
          plus

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

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

          (d)  Any other amount reasonably necessary to compensate Landlord for
          all the detriment proximately caused by Tenant's failure to perform
          his obligations under this Lease or which in the ordinary course of
          things would be likely to result therefrom; and

          (e)  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. As used in subsections 20.2(a) and (b) above, the
          "worth at the time of award" shall be computed by allowing interest
          at the rate of eighteen percent (18%) per annum or the maximum rate
          permitted by law, whichever is lower. As used in subsection 20.2(c)
          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%). The
          term "rent" as used in this Section 20.2 shall be deemed to be and to
          mean the Basic Rent and all other sums required to be paid by Tenant
          pursuant to the terms of this Lease. All such sums, other than the
          Basic Rent, shall be computed based on the amounts payable by Tenant
          hereunder.

     20.3 If an Event of Default shall occur, then if Landlord does not elect
     to terminate this Lease as provided above, 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. In such event, Landlord shall have the right to re-enter and take
     possession of the Premises and remove all persons and property therefrom,
     which property may be stored by Landlord at a warehouse or elsewhere at
     the risk, expense and for the account of Tenant. Acts of maintenance or
     preservation or efforts to relet the Premises or the appointment of a
     receiver upon the initiative of Landlord to protect Landlord's interest
     under this Lease shall not constitute a termination of Tenant's right to
     possession.

                                      -23-
<PAGE>   25
21.  Subordination. Without the necessity of any additional documents being
executed by Tenant for the purpose of effecting a subordination, Tenant agrees
that this Lease shall be subject and subordinate at all times to (i) all ground
leases or underlying leases that may now exist or hereafter be executed
affecting the Building, and (ii) the lien of any mortgages or deeds of trust in
any amount that may now exist or hereafter be placed on the Building, ground
leases or underlying leases, or Landlord's interest or estate therein, or
portion thereof and which is specified as security. Notwithstanding the
foregoing, Landlord shall have the right to subordinate, or cause to be
subordinated, any such ground leases or underlying leases or any such liens to
this Lease. Notwithstanding such subordination, in the event that any ground
lease or underlying lease terminates for any reason or any mortgage or deed of
trust is foreclosed or a conveyance in lieu of foreclosure is made for any
reason, Tenant's right to possession of the premises shall not be disturbed if
Tenant shall not be then in default in the terms of the Lease, including the
payment of Rent, and Tenant shall attorn to the lessor under any ground lease or
underlying lease or to any purchaser of the Building or, shall at such lessor's
or purchaser's option, enter into a new lease for the balance of the Term upon
the same terms and conditions of this Lease. Tenant covenants and agrees to
execute and deliver, upon demand by Landlord and in the form requested by
Landlord, any additional documents evidencing the priority or subordination of
this Lease with respect to any such ground leases or underlying leases or the
lien of any such mortgage or deed of trust. If Tenant fails to execute and
deliver any such documents within five (5) business days after receipt thereof,
Tenant irrevocably constitutes and appoints Landlord as Tenant's special
attorney-in-fact to execute and deliver any such documents. Tenant agrees not to
look to the lessor under any ground lease or underlying lease or the mortgagee
or beneficiary under any deed of trust, as mortgagee or beneficiary, mortgagee
in possession, or successor entitled to the Building, for accountability for the
Security Deposit, unless the Security Deposit has been received by such person
as security for Tenant's performance of this Lease.

22.  Notices. Any bills, statements, notices, demands, requests or other
communications given or required to be given under this Lease shall be
effective only if rendered or given in writing, sent by registered or certified
mail or delivered personally to Tenant (i) at the Tenant's address set forth in
the Basic Lease Information, if sent prior to Tenant's taking possession of the
Premises, or (ii) at the Building if sent subsequent to Tenant's taking
possession of the Premises, or (iii) at any place where Tenant may be found if
sent subsequent to Tenant's vacating, deserting, abandoning or surrendering the
Premises, and to Landlord at Landlord's address set forth in the Basic Lease
Information, or to such other address as either Landlord or Tenant may
designate as its new address for such purpose by notice given to the other in
accordance with the provisions of this Section. Any such bill, statement,
notice,

                                      -24-
<PAGE>   26
demand, request or other communication shall be deemed to have been rendered or
given two (2) calendar days after the date when it shall have been mailed as
provided in this Section if sent by registered or certified mail, or upon the
date personal delivery is made.

23.  Waiver; Amendments.

     23.1  No failure by Landlord to insist upon the strict performance of any
     obligation of Tenant under this Lease or to exercise any right, power or
     remedy consequent upon a breach thereof, no acceptance of full or partial
     Rent during the continuance of any such breach, and no acceptance of the
     keys to or possession of the Premises prior to the termination of the Term
     by Landlord or its agent, shall constitute a waiver of any such breach or
     of such term, covenant or condition or operate as a surrender of this
     Lease. No payment by Tenant or receipt by Landlord of a lesser amount than
     the aggregate of all Rent then due under this Lease shall be deemed to be
     other than on account of the first items of such Rent then accruing or
     becoming due, unless Landlord elects otherwise; and no endorsement or
     statement on any check and no letter accompanying any check or other such
     payment by Tenant shall constitute an accord and satisfaction, and
     Landlord may accept such check or payment without prejudice to Landlord's
     right to recover the balance of such Rent or to pursue any other legal
     remedy.

     23.2  Neither this Lease nor any term or provision hereof may be amended,
     changed, waived, discharged or terminated orally, and no written
     amendment, change, waiver, discharge or termination shall be effective
     unless signed by the party against which the enforcement of the amendment,
     change, waiver, discharge or termination is sought. No waiver of any
     breach shall affect or alter this Lease, but each and every term, covenant
     and condition of the Lease shall continue in full force and effect with
     respect to any other existing or subsequent breach thereof.

24.  Estoppel Certificate. Tenant, at any time and from time to time within ten
(10) calendar days after written request therefor by Landlord, will execute,
acknowledge and deliver to Landlord and, at Landlord's request, to any
purchaser, ground or underlying lessor or mortgagee of any part of the
Building, a certificate of Tenant stating: (a) that Tenant has accepted the
Premises (or, if Tenant has not done so, that Tenant has not accepted the
Premises and specifying the reasons therefor), (b) the Commencement and
Expiration Dates of this Lease, (c) that this Lease is unmodified and in full
force and effect (or, if there have been modifications, that same is in full
force and effect as modified and stating the modifications), (d) to the
best of Tenant's knowledge, whether or not there are then existing any defenses
against the enforcement of

                                      -25-
<PAGE>   27
any of the obligations of Tenant under this Lease (and, if so, specifying same),
(e) to the best of Tenant's knowledge, whether or not there are then existing
any defaults by Landlord in the performance of its obligations under this Lease
(and, if so, specifying same), (f) the dates, if any, to which the Basic Rent
and Additional Rent and other charges under this Lease have been paid, and (g)
any other information that may reasonably be required by any of such persons. It
is intended that any such certificate of Tenant delivered pursuant to this
Section may be relied upon by Landlord and any purchaser, ground or underlying
lessor, or mortgagee of the Building. If Tenant fails to deliver such
certificate within the ten-day period, it shall be conclusively deemed to mean
that (a) Tenant has accepted the Premises, (b) the Commencement and Expiration
Dates of this Lease are as shown on the certificate, (c) this Lease is
unmodified and in full force and effect (or, if there have been modifications,
this Lease is in full force and effect as modified and the modifications are
those stated on the certificate), (d) there are no existing defenses against the
enforcement of any of the obligations of Tenant under this Lease, (e) there are
no existing defaults by Landlord in the performance of its obligations under
this Lease, and (f) there have been no advance payments of Basic Rent or
Additional Rent or other charges except as set forth in this Lease.

25.  Rules and Regulations. Tenant shall faithfully observe and comply with the
Rules and Regulations attached to this Lease as Exhibit C and to all
modifications thereof and additions thereto from time to time put into effect by
Landlord and Landlord shall not be responsible for the nonperformance by any
other tenant or occupant of the Building of any of said rules and regulations;
provided, however, that Landlord shall use reasonable efforts to enforce the
rules and regulations against all tenants of the Building. In the event of an
express and direct conflict between the terms, covenants, agreements and
conditions of this Lease and the terms, covenants, agreements and conditions of
such Rules and Regulations, as modified and amended from time to time by
Landlord, this Lease shall control.

26.  Interest. Any amount due to Landlord pursuant to the provisions of this
Lease, if not received by Landlord within five (5) calendar days of its due
date, shall bear interest from the date due until paid at the rate of twelve
percent (12%) per annum or the maximum rate permitted by law, whichever is
lower, provided that interest shall not be payable on late charges incurred by
Tenant. Payment of interest shall not excuse or cure any default hereunder by
Tenant.

27.  Tax on Tenant's Personal Property. Prior to delinquency Tenant shall pay
all taxes levied or assessed upon Tenant's equipment, furniture, fixtures and
other personal property located in or about the Premises. If the assessed value
of Landlord's property is increased by the inclusion therein of a value placed

                                      -26-

<PAGE>   28
upon Tenant's equipment, furniture, fixtures or other personal property, Tenant
shall pay to Landlord, upon written demand, the taxes so levied against
Landlord, or the proportion thereof resulting from said increase in assessment.
The portion of taxes payable by Tenant pursuant to this Section and by other
tenants of the Building pursuant to similar provisions of their leases shall be
excluded from Taxes for purposes of Section 6.2 hereof.

28.  Authority. If Tenant is a corporation or a partnership, each of the
persons executing this Lease on behalf of Tenant does hereby covenant and
warrant that Tenant is a duly organized and existing entity, that Tenant has
full right and authority to enter into this Lease, and that each person signing
on behalf of Tenant is authorized to do so. Upon Landlord's request, Tenant
shall provide Landlord with certified copies of resolutions confirming the
foregoing covenants and warranties.

29.  Brokers. Landlord and Tenant represent and warrant that they have no
agreement, contract or dealings regarding this Lease with any licensed real
estate broker except the brokers set forth in the Basic Lease Information. In
the event that any other broker or finder perfects a claim for commission for
finder's fee in connection with this Lease, the party through whom the broker
or finder makes its claim shall indemnify, hold harmless and defend the other
party from said claims and all costs and expenses, including actual attorneys'
fees, incurred by the other party in defending against the same.

30.  Terms and Headings. The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular. The words used in the neuter
include the masculine and feminine. If there is more than one Tenant, the
obligations under this Lease imposed on Tenant shall be joint and several. The
captions preceding the sections of this Lease have been inserted solely as a
matter of convenience and such captions in no way define or limit the scope or
intent of any provision of this Lease.

31.  Successors and Assigns. The terms, covenants and conditions contained in
this Lease shall bind and inure to the benefit of Landlord and Tenant and,
subject to the provisions of this Lease, their respective personal
representatives and successors and assigns; provided, however, upon the sale,
assignment or transfer by the Landlord named herein (or by any subsequent
landlord) of its interest in the Building, including any transfer by operation
of law, the Landlord (or subsequent landlord) shall be relieved from all
subsequent obligations or liabilities under this Lease, and all obligations
subsequent to such sale, assignment or transfer (but not any obligations or
liabilities that have accrued prior to the date of such sale, assignment or
transfer) shall be binding upon the grantee, assignee or other transferee of
such interest, and any such grantee, assignee or transferee, by accepting such
interest, shall be deemed to have assumed such subsequent obligations and

                                      -27-

<PAGE>   29
liabilities.

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

33.  Applicable Law. This Lease shall be governed by, construed and enforced in
accordance with the laws of the State of California.

34.  Review by Landlord. The review, approval, inspection or examination by
Landlord of any item submitted by Tenant to be reviewed, approved, inspected or
examined by Landlord under the terms of this Lease or the exhibits attached
hereto shall not constitute the assumption of any responsibility by Landlord
for either the accuracy or sufficiency of any such item or the quality or
suitability of such item for its intended use. Any such review, approval,
inspection or examination by Landlord is for the sole purpose of protecting
Landlord's interests in the Building under this Lease, and no third parties,
including, without limitation, Tenant or any person or entity claiming through
or under Tenant, or the contractors, agents, servants, employees, visitors or
licensees of Tenant or any such person or entity shall have any rights against
Landlord.

35.  Costs and Fees. In the event that either Landlord or Tenant fails to
perform any of its obligations under this Lease or in the event a dispute
arises concerning the meaning or interpretation of any provision of this Lease,
the defaulting party or the party not prevailing in such dispute, as the case
may be, shall pay any and all costs and expenses incurred by the other party in
enforcing or establishing its rights hereunder, including, without limitation,
court costs and attorney's fees.

36.  Examination 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.

37.  Entire Agreement. This instrument, including the Exhibits hereto, which
are made a part of this Lease, contains the entire agreement between the
parties with respect to the Lease of the Premises and all prior negotiations and
agreements are merged herein. Neither Landlord nor Landlord's agents have made
any representations or warranties with respect to the Premises, the Building or
this Lease except as expressly set forth herein, and no rights, easements or
licenses are or shall be acquired by Tenant by

                                      -28-

<PAGE>   30
implication or otherwise unless expressly set forth herein.

38.  Surrender of Premises. Upon the expiration or sooner termination of the
Term, Tenant will quietly and peacefully surrender to Landlord the Premises in
the condition in which they are required to be kept and maintained as provided
in this Lease, ordinary wear and tear excepted. Tenant shall give written
notice to Landlord at least thirty (30) calendar days prior to vacating the
Premises and shall arrange to meet with Landlord for a joint inspection of the
Premises prior to vacating. In the event of Tenant's failure to give such
notice or to arrange such joint inspection, Landlord's inspection at or after
Tenant's vacating the Premises shall be conclusively deemed correct for
purposes of determining Tenant's responsibility for repairs and restoration.

39.  Quiet Enjoyment. Upon Tenant paying the Rent and performing all of
Tenant's obligations under this Lease, Tenant may peacefully and quietly enjoy
the Premises during the Term as against all persons or entities lawfully
claiming by or through Landlord subject to the provisions of this Lease.

40.  No Light, Air or View Easement. Tenant covenants and agrees that no
diminution of light, air or view by any structure that may hereafter be erected
(whether or not by Landlord) whether on the Project or on lands adjacent to the
Building shall entitle Tenant to any reduction of Rent under this Lease, result
in any liability of Landlord to Tenant, or in any way affect this Lease or
Tenant's obligation hereunder.

41.  Holding Over. Any holding over after the expiration of the Term without
Landlord's consent shall constitute a default by Tenant and entitle Landlord
to reenter the Premises as provided in this Lease. Tenant shall pay to Landlord
for each day of such unauthorized hold-over one hundred fifty percent (150%) of
the daily Basic Monthly Rent in effect at the end of the Term, together with
all amounts payable as Additional Rent hereunder. All terms and conditions
herein specified so far as applicable shall apply during the hold-over period.
In the event of any holding over, Tenant shall also indemnify Landlord against
all claims for damages by any other tenant to whom Landlord may have leased all
or any part of the Premises covered hereby affective upon the termination of
this Lease. Landlord agrees to provide Tenant with notice that it has entered
into a lease for all or any part of the Premises within five (5) business days
of execution of such lease. No holding over by Tenant shall operate to extend
this Lease. The preceding provisions of this Section 41 shall not be construed
as consent for Tenant to hold over.

42.  Changes in Building. Landlord reserves the right, without incurring any
liability to Tenant therefor, to make such changes in or to the Building and the
fixtures and equipment thereof, as well as in or to the street entrances, halls,
passages, elevators, stairways and other improvements thereof, as Landlord may
deem

                                      -29-
<PAGE>   31
necessary or desirable; provided, however, that Landlord takes reasonable steps
to limit interference with Tenant's business. Landlord may adopt any name for
the Building and Landlord reserves the right to change the name and/or address
of the Building at any time, and Landlord agrees to give Tenant no less than
three (3) months written notice.

43.  Time. Time is of the essence of this Lease.

44.  Public Areas. Tenant shall have the nonexclusive right in common with
others to the use of entrances, lobbies, elevators, stairs and similar access
and service ways and public areas in and adjacent to the Building of which the
Premises are a part subject to such nondiscriminatory rules and regulations as
may be adopted by Landlord.

45.  Recording. Tenant agrees that without the prior written consent of Landlord
it will not record this Lease or any memorandum thereof. Tenant further agrees
that at the request of Landlord it will execute, acknowledge and deliver to
Landlord a short form memorandum of this Lease for recording purposes.

46.  Exhibits. The Exhibits and Addendum, if any, as specified in the Basic
Lease Information are attached to and made a part of this Lease by reference.

47.  Signage. Landlord will provide a building standard directory strip for
Tenant at Landlord's expense. Any other signage for the benefit of Tenant will
be at Tenant's expense and requires the prior written approval of Landlord.

48.  Roof Access. Tenant shall have access to the roof of the Building during
normal business hours except in the case of an emergency for the purpose of
installing, maintaining and repairing no more than five (5) transmission
antennae utilizing spread spectrum, laser, microwave and satellite technologies,
with a line of sight to 49 Geary Street; provided, however, that Tenant shall
not except in case of emergency have access to the roof unless accompanied by
the building engineer. Tenant shall also have access to a four inch (4") conduit
from the Premises to the roof of the Building to accommodate fiber optic,
coaxial and 100 Base T Ethernet runs to the transmission antennae. Tenant shall
also have access to AC power on the roof of the Building to support test
equipment and provide power for the transmission antennae; which power usage
shall be sub-metered and paid by Tenant. No antenna shall have a radius in
excess of four (4) feet. Tenant shall remove all antennae and cable installed by
Tenant at the end of the Term and restore the part of the roof of the Building
on which the antennae were located and the conduit to the condition in which
they were found on the Commencement Date.

     IN WITNESS HEREOF, Landlord and Tenant have executed

                                      -30-
<PAGE>   32
this Lease the day and year first above written.

LANDLORD:                                  TENANT:
222 SUTTER STREET PARTNERS, LTD.           MAIDEN INTERACTIVE
A California limited partnership           a California corporation

By:  G&E Investor Associates IV,           By: /s/ [SIGNATURE ILLEGIBLE]
     Ltd., a California limited               --------------------------
     partnership, its general partner      Its: President
                                               -------------------------
                                           Date: 8/8/96
                                                ------------------------

     By: G&E Investor Properties I,        By: /s/ [SIGNATURE ILLEGIBLE]
         Inc., its general partner            --------------------------
                                           Its: Secretary
                                               -------------------------
         By: /s/ [SIGNATURE ILLEGIBLE]     Date: 8/8/96
            --------------------------          ------------------------
         Its: VP
             -------------------------
         Date: 8/7/96
              ------------------------

                                      -31-
<PAGE>   33

                                  [6th Floor]

                             Exhibit "A" (Premises)

<PAGE>   34
                               222 SUTTER STREET
                                  OFFICE LEASE

                                   EXHIBIT B
                               TENANT WORK LETTER

          This Tenant Work Letter is made a part of that lease (the "Lease")
between 222 Sutter Street Partners, Ltd., a California Limited Partnership
("Landlord") and Maiden Interactive, a California corporation, doing business
as Interlight Digital ("Tenant") dated August 8, 1996 for approximately 14,122
square feet located on the sixth floor of the building commonly known as 222
Sutter Street, San Francisco, California (the "Premises").

1.   On the Commencement Date, Landlord shall deliver to Tenant possession of
the Premises, and Tenant shall accept possession of the Premises in its then
existing "as is" condition. Tenant shall construct certain tenant improvements
which are to be permanently affixed to the Premises (hereinafter and in the
Lease referred to as "Tenant Improvements").

2.   Tenant shall select and retain an architect to design, and a general
contractor to construct, the Tenant Improvements. The architect and the general
contractor, as well as all subcontractors, laborers, materialmen, and suppliers
used by Tenant (such subcontractors, laborers, materialmen and suppliers, and
the architect and general contractor to be known collectively as "Tenant's
Agents") must be approved in writing by Landlord, which approval shall not be
unreasonably withheld or delayed. Tenant shall prepare plans and specifications
for the Tenant Improvements and deliver a complete set of such plans and
specifications to Landlord. Landlord shall, within five (5) days of receipt of
such plans and specifications, either approve such plans, which approval shall
not be unreasonably withheld, or disapprove such plans and specify the changes
necessary in order to modify the plans to make them acceptable to Landlord. If
such plans are not approved, Landlord and Tenant shall negotiate in good faith
in an attempt to agree upon plans and specifications acceptable to both
parties. Upon approval by Landlord of plans and specifications, such plans and
specifications shall become the "Approved Plans and Specifications". Tenant may
submit the Approved Plans and Specifications to the City of San Francisco for
all applicable building permits. Tenant hereby agrees that Landlord is not
responsible for obtaining any building permit or certificate of occupancy for
the Premises and that obtaining the same shall be Tenant's responsibility;
provided, however, that Landlord shall cooperate with Tenant in executing
permit applications and performing other ministerial acts reasonably necessary
to enable Tenant to obtain any such permit or certificate of occupancy. No
changes, modifications or alterations in the Approved Plans and Specifications
may be made without the prior written consent of

                                      -33-

<PAGE>   35
Landlord, which consent may not be unreasonably withheld.

3.    The Tenant Improvements shall comply in all respects with the following:
(i) all state, federal, city or quasi-governmental laws, codes, ordinances and
regulations, as each may apply to the rulings of the controlling public
official, agent or other person, including all laws pertaining to handicapped
accessibility for the common area and the restroom facilities located on the
sixth floor of the Building; (ii) applicable standards of the American
Insurance Association (formerly the National Board of Fire Underwriters) and
the National Electrical Code; and (iii) building material manufacturer's
specifications. Tenant shall have no responsibility under this Lease for the
failure of any part of the Building (including specifically the elevator
system) which is not part of the Premises or the common area on the sixth
floor, to comply with any of the above.

4.    Tenant shall cause the work to be constructed pursuant to the Approved
Plans and Specifications in a good and workmanlike manner, in compliance with
all laws, and free of defects. Landlord shall contribute towards the cost of
constructing the Tenant Improvements an amount (the "Improvement Allowance")
equal to a maximum of Two Hundred Eighty-Two Thousand Four Hundred Forty
Dollars ($282,440) which amount is Twenty Dollars ($20) per rentable square
foot. Such amount shall be payable as the Tenant Improvement work is completed
as follows:

      A.    Landlord shall make five (5) disbursements of the Improvement
      Allowance, twenty percent ($56,488.00) within five (5) business days of
      execution of the Lease, twenty-three and one-third percent ($65,902.67)
      upon completion of twenty-five percent (25%) of the construction,
      twenty-three and one-third percent ($65,902.67) after completion of fifty
      percent (50%) of the construction, twenty-three and one-third percent
      ($65,902.66) upon completion of construction, and the remaining ten
      percent ($28,244.00) upon receipt by Tenant of a final certificate of
      occupancy for the Premises.

      B.    Tenant shall deliver to Landlord with the second and third requests
      for disbursement of the Improvement Allowance invoices for an amount
      equal to twenty-five percent (25%) of the total construction cost for the
      second disbursement and fifty percent (50%) for the third disbursement
      along with conditional lien releases from the contractors and
      subcontractors to be paid pursuant to such draw request, final lien
      releases with respect to payments made pursuant to any previous draw
      request for which final lien releases have not previously been delivered,
      and a certificate from Tenant's architect or general contractor stating
      the percentage of construction which has been completed.

      C.    Upon receipt of such documents, Landlord shall have the

                                      -34-
<PAGE>   36
opportunity, within five (5) days of receipt, to examine such work and determine
that it has been done in accordance with the Approved Plans and Specifications.
If Landlord determines that the work has been done in accordance with the
Approved Plans and Specifications, Landlord shall disburse the required funds
within five (5) business days of such determination.

D.   If Landlord determines in its reasonable belief that all or any portion of
such work has not been completed in accordance with the Approved Plans and
Specifications, Landlord may withhold from the draw request that portion
relating to the work determined to not have been so property completed.

E.   Upon completion of construction, Tenant shall deliver to Landlord final
lien releases for all work as well as evidence that a notice of completion has
been recorded and a request for the fourth disbursement of the Improvement
Allowance. Upon receipt of such documents, Landlord shall have the opportunity,
within five (5) days of receipt, to examine the completed work and determine
that it has been done in accordance with the Approved Plans and Specifications.
Upon making such determination, Landlord shall distribute the fourth
disbursement of the Improvement Allowance within five (5) business days of
making such determination.

F.   Upon receipt by Tenant of a final certificate of occupancy for the
Premises, Tenant shall deliver to Landlord a copy of the final certificate of
occupancy and a request for disbursement of the remainder of the Improvement
Allowance. Within five (5) business days of receipt of such documents, Landlord
shall distribute the remainder of the Improvement Allowance.

G.   The Improvement Allowance shall be disbursed by Landlord only for the
following items and costs: (i) payment of the fees of Tenant's Agents in
connection with the Tenant Improvements, (ii) payment of plan check, permit and
license fees relating to the construction of the Tenant Improvements, (iii) the
cost of construction of the Tenant Improvements, (iv) the cost of any changes to
the Plans and Specifications required by the applicable building code; (v) sales
and use taxes incurred in connection with the construction of the Tenant
Improvements, and (vi) all other costs incurred in connection with and directly
related to the construction of the Tenant Improvements.

H.   The failure of Landlord to inspect the work shall not be deemed a waiver of
the right of Landlord to require such work for which Landlord has made payment
to be redone in accordance with the Approved Plans and Specifications and
otherwise in accordance with this Tenant Work Letter.

                                      -35-
<PAGE>   37
     I. In no event shall Landlord be obligated to provide Tenant with an amount
     in excess of the amount of the Improvement Allowance to Tenant and Tenant
     shall have the sole obligation to pay all costs and expenses incurred in
     completing the Tenant Improvements in excess of such Improvement Allowance.

5.   Notwithstanding any provision to the contrary contained in this Lease, if
an Event of Default has occurred at any time on or before the issuance of a
final certificate of occupancy for the Premises, then (i) in addition to all
other rights and remedies granted to Landlord pursuant to this Lease, Landlord
shall have the right to withhold payment of all or any portion of the
Improvement Allowance and/or Landlord may cause the 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), and (ii) all other obligations of Landlord under the terms of this
Tenant Work Letter shall be forgiven until such time as such Event of Default is
cured pursuant to the terms of this Lease (in which case, Tenant shall be
responsible for any delay in the substantial completion of the Premises caused
by such inaction by Landlord).

6.   Tenant's indemnity of Landlord as set forth in Section 15.1 of this Lease
shall also apply with respect to any and all costs, losses, damages, injuries
and liabilities related in any way to any act or omission of Tenant, or Tenant's
Agents, or anyone directly or indirectly employed by any of them, or in
connection with Tenant's non-payment of any amount arising out of the Tenant
Improvements and/or Tenant's disapproval of all or any portion of any request
for payment. Such indemnity by Tenant shall also apply with respect to any and
all costs, losses, damages, injuries and liabilities related in any way to
Landlord's performance of any ministerial acts reasonably necessary (i) to
permit Tenant to complete the Tenant Improvements, and (ii) to enable Tenant to
obtain any building permit or certificate of occupancy for the Premises.

7.   All of Tenant's Agents shall carry worker's compensation insurance covering
all of their respective employees, and shall also carry public liability
insurance, including property damage, all with limits, in form and with
companies as required to be carried by Tenant as set forth in Section 16 of this
Lease. Tenant shall carry "Builder's All Risk" insurance in an amount approved
by Landlord covering the construction of the Tenant Improvements, and such other
insurance as Landlord may require. Such insurance shall be in amounts and shall
include such extended coverage endorsements as may be reasonably required by
Landlord including, but not limited to, the requirement that all of Tenant's
Agents shall carry excess liability and Products and Completed Operation
Coverage Insurance.

                                      -36-
<PAGE>   38
                               222 SUTTER STREET
                                  OFFICE LEASE

                                   EXHIBIT C
                             RULES AND REGULATIONS

1.  The sidewalks, entrances, exits, passages, elevators, vestibules, stairways,
corridors or halls shall not be obstructed or used for any purpose other than
ingress and egress. The halls, passages, exits, entrances, elevators, stairways
and roof are not for the use of the general public, and Landlord shall in all
cases retain the right to control or prevent access thereto by all persons
whose presence in the judgment of Landlord shall be prejudicial to the safety,
character, reputation or interests of the Building and its Tenants, provided
that nothing herein contained shall be construed to prevent such access by
persons with whom the Tenant normally deals in the ordinary course of its
business unless such persons are engaged in illegal activities. No Tenant, or
employees, or invitees of any Tenant, shall go upon the roof of the Building
except as authorized by Landlord.

2.  No curtains, blinds, drapes, shutters, shades or screens shall be attached
to or hung in, or used in connection with, any window or door of the Premises
other than approved by Landlord. Neither the interior nor exterior of any
windows shall be coated or otherwise sun screened without the express written
consent of Landlord. No articles shall be placed or kept on the window sills or
placed against the windows so as to be visible from the exterior of the
Building. The windows, glass and doors that reflect or admit light and air into
halls, passages or other common areas in the Building shall not be covered or
obstructed by Tenant.

3.  No sign, placard, picture, name, advertisement or notice shall be
exhibited, painted or affixed by any Tenant on any part of the Premises or the
Building without the prior written consent of the Landlord. In the event of the
violation of the foregoing by any Tenant, Landlord may remove same without any
liability, and may charge the expense incurred in such removal to the Tenant
violating this rule. Interior signs on doors and the Building directory shall be
inscribed, painted or affixed for each Tenant by the Landlord at the expense of
such Tenant, and shall be of a size, color and style acceptable to the
Landlord. The Building directory will be provided exclusively for the display
of the name and location of Tenants only and Landlord reserves the right to
exclude any other names therefrom. Any changes or additions to the Building
directory by Landlord shall be at Tenant's expense. Nothing may be placed on
the exterior or corridor walls or corridor doors other than Landlord's standard
lettering.

4.  The water and wash closets and other plumbing fixtures shall not be used
for any purpose other than those for which they were constructed, and no foreign
substances shall be thrown therein.

                                      -37-
<PAGE>   39
All damages resulting from any misuse of the fixtures by the Tenant, or any
employee, agent, visitor or invitee of Tenant, shall be repaired at the expense
of Tenant.

5.  All contractors and technicians rendering any installation service to
Tenant shall be subject to Landlord's approval and supervision prior to
performing services. This applies to all work performed in the Building,
including, but not limited to, installation and location of telephone,
telegraph equipment, and electrical devices, as well as all installations
affecting floors, walls, woodwork, windows, ceilings, and any other physical
portion of the Building. No boring, cutting or stringing of wires or laying of
linoleum, tile, carpet or other similar floor coverings shall be permitted,
except with the prior written consent of the Landlord and as the Landlord may
direct. No Tenant shall attach any device or apparatus to the exterior walls or
the roof of the Building. No Tenant shall interfere with any radio, television
or electronic transmission or reception from or in the Building. No Tenant
shall place a load upon any floor of the Premises which exceeds the load per
square foot which such floor was designed to carry and which is allowed by law.

6.  No bicycles, vehicles, birds or animals of any kind shall be brought in or
kept in or about the Premises.

7.  No cooking shall be done or permitted by any Tenant on its Premises (except
that use by the Tenant of Underwriters' Laboratory approved equipment for the
preparation of employees' foods, coffee, tea, hot chocolate and similar
beverages for Tenants and their employees shall be permitted, provided that such
equipment and use is in accordance with all applicable federal, state and city
laws, codes, ordinances, rules and regulations).

8.  The Premises shall not be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the Permitted Use of the
Premises. The Premises shall not be used for lodging or for any immoral or
illegal purposes.

9.  No Tenant shall throw or sweep into the corridors, halls, elevator shafts or
stairways or bring or keep anything on the Premises which shall in any way
increase the rate of fire insurance on the Building. No Tenant shall obstruct or
interfere with the regulations of the Fire Department or the fire laws, or with
any insurance policy upon the Building, or any part thereof, or with any rules
and ordinances established by the Board of Health or other governmental
authority.

10. No Tenant or any of Tenant's servants, employees, agents, visitors or
licensees, shall at any time bring or keep upon the premises any inflammable,
combustible or explosive fluid, chemical or substance other than limited
quantities reasonably necessary for operation and maintenance of office
equipment.

                                      -38-

<PAGE>   40
11.   No Tenant shall alter any lock or access device or install a new
additional lock or access device or any bolt or any door or window on its
Premises without the prior written consent of Landlord. If Landlord shall give
its consent, the Tenant shall in each case furnish Landlord with a key for any
such lock or device. Landlord will furnish Tenant with a reasonable number of
initial keys for entrance doors into the Premises, and may charge Tenant for
additional keys thereafter. All such keys shall remain the property of Landlord
and Tenant shall not make any duplicate keys, except those provided by
Landlord, and upon termination of its Lease Tenant shall return to Landlord all
keys to the Premises and toilet rooms and in the event of the loss of any keys
so furnished, such Tenant shall pay to the Landlord the cost of replacing the
same or of changing the locks or devices opened by such lost key if Landlord
shall deem it necessary to make such change.

12.   Movement in or out of the Building of furniture, office equipment, or
other material which requires the use of elevators, stairways, or Building
entrance and lobby shall be restricted to hours and subject to rules
established by Landlord. All such movement shall be at Tenant's expense and
shall be under Landlord's supervision, and the use of any elevator for such
movements shall be restricted to the Building's freight elevators.
Prearrangements with Landlord shall be made regarding the time, method, and
routing of such movement, and Tenant shall assume all risks of damage and pay
the cost of repairing or providing compensation for damage to the Building, to
articles moved and injury to persons or public resulting from such moves.
Landlord shall not be liable for any acts or damages resulting from any such
activity.

13.   No Tenant shall purchase or otherwise obtain for use in the Premises
janitorial, maintenance or other like services, except from persons authorized
by Landlord, and at hours and under regulations fixed by Landlord.

14.   Without the prior written consent of Landlord, Tenant shall not use the
name of the Building in connection with or in promoting or advertising the
business of Tenant except as Tenant's address.

15.   No Tenant shall employ any person or persons other than the janitor of
Landlord for the purpose of cleaning the Premises, unless otherwise agreed to
by Landlord in writing. Except with the written consent of Landlord, no person
or persons other than those approved by Landlord shall be permitted to enter
the Building for the purpose of cleaning the same. No Tenant shall cause any
unnecessary labor by reason of such Tenant's carelessness or indifference in
the preservation of good order and cleanliness. Janitor service will not be
furnished on nights when rooms are occupied after 9:30 p.m. unless, by
agreement in writing, service is extended to a later hour for specifically
designated rooms.

                                      -39-
<PAGE>   41
16.  Landlord reserves the right to exclude from the Building between the hours
of 6:00 p.m. and 8:00 a.m. and at all hours of Saturdays, Sundays and holidays
all persons who are not Tenants but not including Tenant guests. Tenant shall
be responsible for all persons for whom it allows entry to the Building and
shall be liable to Landlord for all acts of such persons. Tenant shall comply
with all requirements necessary for the security of the Building, including the
use of service passes issued by Landlord for after hours movement of office
equipment/packages, and signing security register in Building lobby after
hours. Landlord shall in no case be liable for damages for error with regard to
admission of or exclusion from the Building of any person. In case of any mob,
riot, public excitement or other circumstance rendering such action advisable
in Landlord's opinion, Landlord reserves the right to prevent access to the
Building by closing the doors, or otherwise, for the safety of Tenants and
protection of the Building and property in the Building.

17.  Each Tenant shall see that the doors of its Premises are closed and locked
and that all water faucets, water apparatus and utilities are shut off before
Tenant or Tenant's employees leave the Premises, so as to prevent waste or
damage, and for any default or carelessness in this regard Tenant shall make
good all injuries sustained by other Tenants or occupants of the Building or
Landlord.

18.  All doors opening into public corridors or common areas shall be kept
closed at all times except when in use for ingress or egress.

19.  The requirements of Tenants will be attended to only upon application to
the Office of the Building by an authorized individual.

20.  Canvassing, soliciting, peddling and distribution of handbills or other
written materials in the Building are prohibited and each Tenant shall
cooperate to prevent the same.

21.  All office equipment of any electrical or mechanical nature shall be
placed by Tenant in the Premises in settings approved by Landlord, to absorb or
prevent any vibration, noise or annoyance.

22.  No heat, air conditioning unit or other similar apparatus shall be
installed or used by any Tenant without the prior written consent of Landlord
which may be withheld or conditioned as Landlord may determine in its sole
discretion.

23.  There shall not be used in any premises, or in the public halls of the
Building, either by any Tenant or others, any hand carts except those equipped
with rubber tires and side guards.

                                      -40-
<PAGE>   42
24.  Landlord shall have the right, with no less than (3) three months notice
to Tenant, to change the name and address of the Building.

25.  Tenants shall cooperate with Landlord to obtain maximum, effectiveness of
the heating and cooling system. Tenant shall not obstruct, alter, or in any way
impair the efficient operation of Landlord's heating, lighting, ventilating and
air conditioning system and shall not place any object or article on the
induction unit enclosure so as to interfere with air flow. Tenant shall not
tamper with or change the setting of any thermostats or temperature control
valves affecting the common areas of the Building.

26.  All common areas and other public areas forming a part of the Building
shall be under the sole and absolute control of Landlord with the exclusive
right to regulate and control these areas. Tenant agrees to conform to the
rules and regulations that may be established from time to time by Landlord
for these areas.

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

28.  No vending machine of any description shall be installed, maintained or
operated upon the Premises without prior written consent of Landlord.

29.  Landlord is not responsible to any Tenant for the non-observance or
violation of the rules and regulations by any other Tenant.

30.  Except with the prior written consent of Landlord, no Tenant shall sell,
or permit the sale at retail, of newspapers, magazines, periodicals, theatre
tickets or any goods or merchandise to the general public in, on or about the
Building.

31.  Each Tenant shall store all its trash and garbage within the interior of
its Premises. No material shall be placed in the trash boxes or 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 City
of San Francisco without being in violation of any law or ordinance governing
such disposal.

32.  Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular Tenant or Tenants, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of any
other Tenant or Tenants, nor prevent Landlord from thereafter enforcing any
such Rules and Regulations against any or all of the Tenants of the Building.

                                      -41-
<PAGE>   43
33.  These Rules and Regulations are in addition to and shall not be construed
to in any way modify or amend in whole or in part, the terms, covenants,
agreements and conditions of any lease of premises in the Building.

34.  Landlord reserves the right to make such other rules and regulations as in
Landlord's judgment may from time to time be needed for the safety, care and
cleanliness of the Building and for the preservation of good order therein.

35.  This is a non-smoking building.

                                      -42-
<PAGE>   44
                               222 SUTTER STREET
                                  OFFICE LEASE

                                   EXHIBIT D
                         CONFIRMATION OF TERM OF LEASE

          This confirmation of term of lease is made on            , 1996,
                                                        -----------
between 222 SUTTER STREET PARTNERS, LTD., a California limited partnership
("Landlord") and MAIDEN INTERACTIVE, a California corporation doing business as
Interlight Digital ("Tenant"), who agree as follows:

          1.   Landlord and Tenant entered into a lease dated           , 199_
                                                             -----------
(the "Lease"), in which Landlord leased to Tenant and Tenant leased from
Landlord the premises described in Section 1.14 ("Premises").

          2.   Under Section 3 of the Lease, Landlord and Tenant agree to
confirm the Commencement and Expiration Dates of the Term:

               a.            , 199_ is the Commencement Date of the Lease.
                  -----------

               b.            , 199_ is the Expiration Date of the Lease.
                  -----------

          3.   Tenant further confirms that:

               a.   It has accepted possession of the Premises as provided in
the Lease, and that the Premises at the time it accepted possession were in
satisfactory condition and in conformity with the provisions of the Lease in
all respects; and

               b.   Landlord has fulfilled all of its duties of an inducement
nature, including completion of the Tenant Improvements, if any.

LANDLORD:                                    TENANT:
222 SUTTER STREET PARTNERS, LTD.             MAIDEN INTERACTIVE
A California limited partnership             a California corporation

By:  G&E Investor Associates IV,             By:
     Ltd.,                                       -----------------------
     its general partner                     Its:
                                                 -----------------------
                                             Date:
                                                  ----------------------
     By:  G&E Investor Properties I,         By:
          Ltd., a California limited             -----------------------
          partnership, its general partner   Its:
                                                 -----------------------
                                             Date:
                                                  ----------------------
By:
    -----------------------
Its:
    -----------------------
Date:
     ----------------------

                                      -43-
<PAGE>   45
                               222 SUTTER STREET
                                  OFFICE LEASE

                                   EXHIBIT E
                             OPTION TO EXTEND TERM

1.    Option to Extend Term. Landlord grants Tenant one option to extend the
term ("Extension Option"), with respect to the entire Premises for five (5)
additional year(s) (the "Extension Term"). The Extension Option may be
exercised by Tenant upon notice to Landlord no later than one hundred eighty
(180) calendar days prior to the end of the initial Term hereunder.

2.    Base Rent and Other Terms. If Tenant elects to exercise the Extension
Option, the Extension Term shall be upon and subject to all of the terms,
covenants, and conditions of this Lease, except as otherwise set forth below:

      (a)   The Base Rent applicable to the Premises shall be adjusted to
      ninety-five percent (95%) of the Fair Market Rent for the Premises.
      Within thirty (30) calendar days after receipt by Landlord of notice from
      Tenant under Paragraph 1 of its exercise of the Extension Option,
      Landlord shall notify Tenant of its determination of the Fair Market Rent
      and of its Base Rent for the Extension Term. If Tenant disputes
      Landlord's determination of the Fair Market Rent, Tenant shall give
      notice thereof to Landlord within thirty (30) calendar days after receipt
      of notice of Landlord's determination. Within fifteen (15) calendar days
      after the date of Tenant's notice that it disputes Landlord's
      determination of Fair Market Rent ("Tenant's Notice of Dispute"),
      Landlord and Tenant shall meet and attempt in good faith to resolve the
      dispute. If Landlord and Tenant are unable to agree on a determination of
      Fair Market Rent within thirty (30) calendar days after the date of
      Tenant's Notice of Dispute, Tenant may, within sixty (60) calendar days
      after the date of Tenant's Notice of Dispute, notify Landlord that it
      withdraws its exercise of the Extension Option. If Tenant fails to
      withdraw its exercise of the Extension Option, Fair Market Rent and Basic
      Rent for the Extension Term shall be the amounts initially determined by
      Landlord.

      (b)   The Expiration Date shall be the expiration date of the Extension
      Term.

                                      -44-
<PAGE>   46
                               222 SUTTER STREET
                                  OFFICE LEASE

                                   EXHIBIT F
                            FORM OF LETTER OF CREDIT

                                      -45-
<PAGE>   47
                          [SIGNET BANK LETTERHEAD]

                     IRREVOCABLE STAND-BY LETTER OF CREDIT

IRREVOCABLE STANDBY LETTER OF CREDIT NO. S-64013

ISSUED IN BALTIMORE, MARYLAND on 08 AUG 1996

APPLICANT:                              BENEFICIARY:
 IRONLIGHT DIGITAL                       222 SUTTER STREET PARTNERS, LTD
 1000 WILSON BLVD., STE. 800             1 MONTGOMERY ST., 9TH FLOOR
 ARLINGTON, VIRGINIA 22209               SAN FRANCISCO, CALIFORNIA 94104

APPLICANT'S BANK:
 SIGNET BANK
 7 ST. PAUL STREET
 BALTIMORE, MARYLAND 21202
 ATTN: INTERNATIONAL DIVISION

AMOUNT: USD  ***356,928.32              DATE AND PLACE OF EXPIRY:
 THREE HUNDRED FIFTY SIX THOUSAND        31 JUL 2001
 NINE HUNDRED TWENTY EIGHT AND           BALTIMORE, MARYLAND
 32/100 UNITED STATES DOLLARS

DEBIT AVAILABLE WITH:
 SIGNET BANK
 BALTIMORE, MARYLAND

BY: PAYMENT

AVAILABLE BY DRAFTS AT SIGHT DRAWN ON:
 SIGNET BANK

WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. S-64013 IN
YOUR FAVOR AVAILABLE BY YOUR DRAFT(S) AT SIGHT BEARING THE CLAUSE "DRAWN UNDER
SIGNET BANK, LETTER OF CREDIT NO S-64013 DATED AUGUST 7, 1996" WHEN ACCOMPANIED
BY THE FOLLOWING DOCUMENTS:

  1.  THIS ORIGINAL LETTER OF CREDIT AND ALL SUBSEQUENT AMENDMENTS; AND

  2.  THE BENEFICIARY'S WRITTEN STATEMENT, SIGNED BY AN "AUTHORIZED
REPRESENTATIVE", CERTIFYING THAT "THE AMOUNT OF THE DRAFT DRAWN HEREUNDER
REPRESENTS FUNDS DUE AND PAYABLE BECAUSE IRONLIGHT DIGITAL HAS FAILED TO COMPLY
WITH THE TERMS AND CONDITIONS OF A LEASE DATED AUGUST 1, 1996, BETWEEN
IRONLIGHT DIGITAL AND 222 SUTTER STREET PARTNERS, LTD."

THIS LETTER OF CREDIT WILL DECREASE AUTOMATICALLY ACCORDING TO THE FOLLOWING
SCHEDULE:

DATE             DECREASE AMOUNT              LETTER OF CREDIT BALANCE
<PAGE>   48
                     IRREVOCABLE STAND-BY LETTER OF CREDIT

                                                                  L/C #: S-64013
                                                                  PAGE   2
--------------------------------------------------------------------------------
<TABLE>
<S>                      <C>                      <C>
1/31/97                  $35,692.86               $221,235.46
7/31/97                   35,692.86                285,542.60
1/31/98                   35,692.86                249,849.74
7/31/98                   35,692.86                214,156.88
1/31/99                   35,692.86                178,464.02
7/31/99                   35,692.86                142,771.16
1/31/2000                 35,692.86                107,078.30
7/31/2000                 35,692.86                 71,385.44
1/31/2001                 35,692.86                 35,692.58
7/31/2001                 35,692.58                 --0--- AT 5:00 P.M. EST
</TABLE>

WE HEREBY AGREE WITH YOU THAT ALL DRAFT(S) DRAWN UNDER AND IN COMPLIANCE WITH
THE TERMS OF THIS LETTER OF CREDIT WILL BE DULY HONORED UPON PRESENTATION TO
SIGNET BANK, 7 ST. PAUL STREET, BALTIMORE, MARYLAND, 21202, ATTN: INTERNATIONAL
DIVISION.

EXCEPT AS OTHERWISE SPECIFIED, THIS LETTER OF CREDIT IS SUBJECT TO THE "UNIFORM
CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS" (1992 REVISION), INTERNATIONAL
CHAMBER OF COMMERCE BROCHURE NO. 5Q0.

                                                  /s/ JoLYNN MARKIEWICZ
                                             -----------------------------------
                                                   AUTHORIZED SIGNATURE

                                                    JoLynn Markiewicz
                                                  Assistant Vice President
<PAGE>   49

                               222 SUTTER STREET

                                  OFFICE LEASE

                             BASIC LEASE INFORMATION

Lease Date:                 August 8, 1996

Landlord:                   222 SUTTER STREET PARTNERS, LTD., A California
                            Limited Partnership

Landlord's Address:         One Montgomery Street, 8th Floor
                            San Francisco, CA 94104

Tenant:                     MAIDEN INTERACTIVE, a California corporation doing
                            business as Ironlight Digital

Tenant's Address:           1704 Union Street
         Contact:           San Francisco, CA 94123
       Telephone:           Anthony Westreich
                            (415) 292-4400

section 1:                  Definitions

Section 2:                  Net Rentable Area of Premises; approximately 14,122
                            rentable square feet
                            Floor Level: 6th Floor

Section 3:                  Lease Term: 5 years
                            Commencement Date: August 9, 1996
                            Expiration Date:   August 8, 2001

Section 4:                  Improvements and Acceptance

Section 5:                  Basic Rent: $9.50 per rentable sq. ft./yr. during
                            the first 8 months of the Term. $19.00 per rentable
                            sq. ft./yr. during the next 16 months of the Term,
                            $20.00 per rentable sq. ft./yr. during the next 24
                            months of the Term, and $21.00 per rentable sq.
                            ft./yr. during the last 12 months of the Term.

Section 6:                  Tenant's Share of the Increase in Basic Operating
                            Cost: 10.68%

Section 7:                  Security Deposit: $22,360
                            Letter of Credit Amount: $356,928.32, which amount,
                            if Tenant is not in default under this Lease, shall
                            be eliminated over a period of five years by
                            reducing the Letter of Credit amount on a
                            straight-line basis in ten equal semiannual
                            installments, beginning on the first day of the
                            seventh month of the Term and ending on the fifth
                            anniversary of the

                                      -46-
<PAGE>   50

                            Commencement Date. If, on the date of any scheduled
                            reduction, Tenant is in default under this Lease,
                            the Letter of Credit Amount shall not be reduced on
                            that date. If Tenant cures the default, the Letter
                            of Credit Amount shall be reduced on the date of
                            that cure as if the default had not occurred.

Section 8:                  Permitted Use: General office use.

Section 9:                  Utilities and Services

Section 10:                 Alterations and Tenant Property

Section 11:                 Liens

Section 12:                 Maintenance and Repairs

Section 13:                 Access to Premises

Section 14:                 Damage or Destruction

Section 15:                 Indemnity

Section 16:                 Tenant's Insurance

Section 17:                 Insurance Subrogation

Section 18:                 Eminent Domain

Section 19:                 Assignment and Subletting

Section 20:                 Defaults and Remedies

Section 21:                 Subordination

Section 22:                 Notices

Section 23:                 Waiver; Amendments

Section 24:                 Estoppel Certificate

Section 25:                 Rules and Regulations

Section 26:                 Interest

Section 27:                 Tax on Tenant's Personal Property

Section 28:                 Authority

Section 29:                 Brokers:

                                      -47-
<PAGE>   51

                            For Landlord, Grubb & Ellis Company
                            For Tenant, Stubbs, Collenette Associates

Section 30:                 Terms and Headings

Section 31:                 Successors and Assigns

Section 32:                 Separability

Section 33:                 Applicable Law

Section 34:                 Review by Landlord

Section 35:                 Costs and Fees

Section 36:                 Examination of Lease

Section 37:                 Entire Agreement

Section 38:                 Surrender of Premises

Section 39:                 Quiet Enjoyment

Section 40:                 No Light, Air or View Easement

Section 41:                 Holding Over

Section 42:                 Changes in Building

Section 43:                 Time

Section 44:                 Public Areas

Section 45:                 Recording

Section 46:                 Exhibits
                            Exhibit A - Floor Plan
                            Exhibit B - Tenant Work Letter
                            Exhibit C - Rules and Regulations
                            Exhibit D - Confirmation of Term of Lease
                            Exhibit E - Option to Extend Term

      Section 47:                 Signage

      Section 48:                 Roof Access

      The Basic Lease Information and each reference in this lease to any Basic
      Lease Information shall mean the respective information set forth above
      and shall be construed to incorporate all of the terms provided under the
      particular Lease section pertaining to such information. In the event of
      any conflict between any Basic Lease Information and the particular Lease
      section, the latter shall

                                      -48-
<PAGE>   52

CONTROL.

LANDLORD:                                 TENANT:
222 SUTTER STREET PARTNERS, LTD.          MAIDEN INTERACTIVE
A California limited partnership          a California corporation

By: G&E Investor Associates IV,           BY:  /s/ [SIGNATURE ILLEGIBLE]
    Ltd., a California limited               -----------------------------------
    partnership, its general partner      Its:  PRESIDENT
                                              ----------------------------------
                                          Date:   8/8/96
                                               ---------------------------------

    By: G&E Investor Properties I,        BY:  /s/ [SIGNATURE ILLEGIBLE]
        Inc., its general partner            -----------------------------------
                                          Its:  SECRETARY
                                              ----------------------------------
                                          Date:    8/8/96
                                               ---------------------------------

        BY:  /s/ [SIGNATURE ILLEGIBLE]
           ---------------------------
        Its: VP
            --------------------------
        Date:   8/8/96
             -------------------------

                                      -49-
<PAGE>   53
                                                                   EXHIBIT 10.14

                   SECOND MODIFICATION AND AMENDMENT TO LEASE

        THIS SECOND MODIFICATION AND AMENDMENT TO LEASE ("MODIFICATION NO. 2")
is made to be effective as of the __th day of November, 1999 ("EFFECTIVE DATE"),
by and between 222 SUTTER LIMITED PARTNERSHIP, a Delaware limited partnership
("LANDLORD"), and MAIDEN INTERACTIVE STUDIO CORP., a California corporation dba
NOVO INTERACTIVE ("TENANT").

                                    RECITALS

        A. Landlord (or its predecessor in interest) and Tenant (or its
predecessor in interest) have heretofore entered into that certain 222 Sutter
Street Office Lease Agreement dated August 8, 1996 (as first amended on
September 15, 1999) (together the "LEASE"), pursuant to which Tenant leased from
Landlord certain office space in Suite 600 on the sixth (6th) floor (the
"ORIGINAL PREMISES") plus certain additional office space in Suite 500 on the
fifth (5th) floor (the "FIRST EXPANSION SPACE") (which together contain a total
of 16,707 Net Rentable Area) (the Original Premises and the First Expansion
Space are hereinafter referred to as the "INITIAL EXPANSION PREMISES") in the
building ("BUILDING") located at 222 Sutter Street in the City and County of San
Francisco, State of California.

        B. In accordance with the terms and conditions hereinafter set forth,
Landlord and Tenant have agreed to amend and modify the Lease to provide, among
other things, for the expansion of the Initial Expansion Premises to include
certain additional office space in Suite 450 on the fourth (4th) floor of the
Building and in Suite 500 on the fifth (5th) floor of the Building (the
"ADDITIONAL EXPANSION SPACE"), as the same is more particularly shown by the
cross-hatched on the "FLOOR PLAN" attached hereto as Exhibit "A" and
incorporated herein by reference.

        C. Capitalized terms not defined herein shall have the same meaning as
in Lease.

        NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the undersigned hereby agree as
follows:

        1. Recitals. The foregoing Recitals are incorporated by reference as if
fully set forth herein.

                                       1             November 22, 1999 (1:10pm)
<PAGE>   54

        2. Modifications to Lease. The Lease is hereby modified and amended as
follows:

        a. Section 1 - Definitions. The definitions set forth in Sections 1.7,
1.10, 1.12, 1.14, 1.18 and 1.20 of the Lease are each hereby deleted in their
entirety and replaced with the following new Sections 1.7, 1.10, 1.12, 1.14,
1.18 and 1.20:

            1.7(a) "DATE OF TURNOVER OF POSSESSION" shall mean the date which is
five (5) calendar days following the date that Landlord delivers to Tenant a
written notice ("NOTICE OF TURNOVER OF POSSESSION") stating that (i) possession
of the Additional Expansion Space shall be delivered to Tenant on the Date of
Turnover of Possession, and (ii) as of said Date the Additional Expansion Space
shall be ready and available for Tenant's construction and installation of the
Fourth/Fifth Floor Tenant Improvements (as that term is defined in the
"FOURTH/FIFTH FLOOR TENANT IMPROVEMENT AGREEMENT" attached hereto as Exhibit "B"
and incorporated herein by reference). Tenant shall not conduct any business of
any kind from the Additional Expansion Space prior to the Date of Turnover of
Possession; however, Tenant shall have the opportunity to inspect the Premises
prior to the Date of Turnover of Possession. From and after the Date of Turnover
of Possession, Tenant shall be deemed to have accepted possession of the
Additional Expansion Space, the Additional Expansion Space shall become part of
the Premises, and except for payment of Base Rent for the Additional Expansion
Space (which shall commence on the Rent Start Date defined below), the
Additional Expansion Space shall be subject to each and every term and condition
of the Lease. Landlord will endeavor to cause the existing tenant in the
Additional Expansion Space to vacate the same on or about December 17, 1999, but
does not guarantee, represent or warrant that the same can or will be
accomplished by that date; however, Landlord does agree that it will deliver a
Notice of Turnover of Possession to Tenant within five (5) business days from
the date the existing tenant delivers possession of the Additional Expansion
Space to Landlord.

                (i) Notwithstanding the foregoing, the Date of Turnover of
Possession shall be deemed not to have occurred if for any reason Landlord fails
to deliver actual possession of the Additional Expansion Space to Tenant on the
Date of Turnover of Possession scheduled in the Notice of Turnover of
Possession. In said event, the Date of Turnover of Possession shall be delayed
one (1) day for each one (1) day that Landlord delays in actually delivering
possession of the Additional Expansion Space to Tenant.

            1.7(b) "RENT START DATE" shall mean the date which is the first to
occur of (i) one hundred twenty (120) calendar days following the Date of
Turnover of Possession, or (ii) the date the Fourth/Fifth Floor Improvements
have been "substantially completed" as that term is defined in paragraph 3 of
the Fourth/Fifth Floor Tenant Improvement Agreement.

            1.10 "EXTENDED TERM EXPIRATION DATE" shall mean the date which is
sixty (60) calendar months from the Rent Start Date; provided, however if the
Rent Start Date is other than the first day of the month, then the sixty (60)
calendar month period shall actually commence on the first day of the month next
following the month in which the Rent

                                       2              November 22, 1999 (1:10pm)

<PAGE>   55

Start Date occurs and shall expire on the last day of the sixtieth (60th)
calendar month thereafter.

            1.12 From and after the Date of Turnover of Possession, the phrase
"NET RENTABLE AREA OF THE PREMISES" shall mean approximately thirty four
thousand five hundred eighty five (34,585) rentable square feet in the Premises
(inclusive of the Additional Expansion Space), consisting of approximately
thirteen thousand nine hundred sixty six (13,966) rentable square feet in Suite
600; approximately thirteen thousand nine hundred sixty six (13,966) rentable
square feet in Suite 500; and approximately six thousand six hundred sixty three
(6,653) rentable square feet in Suite 450, all of which Landlord and Tenant have
stipulated as the Net Rentable Area of the Premises, all in accordance with the
current BOMA standard. Tenant acknowledges the following: (i) prior to the Date
of Turnover of Possession, Tenant had the opportunity to measure the Premises
(including the Additional Expansion Space) and verify the accuracy of the
foregoing square footage number; and (b) the Net Rentable Area of the Premises
includes the usable area without deduction for columns or projections,
multiplied by an add-on load factor to reflect a share of certain areas, which
may include lobbies, corridors, mechanical, utility, janitorial, boiler and
service rooms and closets, restrooms and other public, common and service areas
of the Building, all in accordance with the current BOMA standard.

            1.14 From and after the Date of Turnover of Possession, the term
"PREMISES" shall mean the cross-hatched floor area more particularly shown on
the Floor Plan (inclusive of the Additional Expansion Space). The Premises
contain the Net Rentable Area set forth in Section 1.12 above.

            1.18 "FOURTH/FIFTH FLOOR TENANT IMPROVEMENTS" shall mean the
improvements to a portion of the fourth (4th) and the entire fifth (5th) floors
of the Building (consisting of the Initial Expansion Space and the Additional
Expansion Space) that Tenant shall construct and install pursuant to the
Fourth/Fifth Floor Tenant Improvement Agreement.

            1.20 From and after the Date of Turnover of Possession, "TERM" shall
mean the period which commenced on the original Commencement Date of this Lease
and which shall expire on the Extended Term Expiration Date, unless earlier
terminated as herein provided.

        b. Section 2 - Premises. Section 2 of the Lease is hereby amended by
adding the following new sentence to the end thereof:

         "From and after the Date of Turnover of Possession, the Net Rentable
         Area of the Premises (including the Additional Expansion Space) shall
         be approximately thirty four thousand five hundred eighty five (34,585)
         rentable square feet in the Premises (inclusive of the Additional
         Expansion Space), consisting of approximately thirteen thousand nine
         hundred sixty six (13,966) rentable square feet in Suite 600;
         approximately thirteen thousand nine hundred sixty six (13,966)
         rentable square feet in Suite 500; and approximately six thousand six
         hundred sixty three (6,653) rentable square feet in Suite 450."

                                       3              November 22, 1999 (1:10pm)
<PAGE>   56

              c. Section 3 - Term. Section 3 of the Lease is hereby deleted in
its entirety and replaced with the following new Section 3:

        "Section 3 - Term. The Term of this Lease commenced on the original
        Commencement Date set forth in the original Lease and shall expire on
        the Extended Term Expiration Date, unless earlier terminated as herein
        provided. Each consecutive twelve (12) month period following the Rent
        Start Date shall constitute a "LEASE YEAR". There are five (5) Lease
        Years between the Rent Start Date and the Extended Term Expiration Date;
        however, if the Rent Start Date is other than the first day of the
        month, then the first Lease Year shall be extended to include the number
        of days between the Rent Start Date and the end of the month in which
        the Rent Start Date occurs."

              d. Section 4 - Fourth/Fifth Floor Tenant Improvements. Section 4
of the Lease is hereby amended by adding the following new Section 4.1 to the
end thereof:

        "4.1. Tenant shall complete the Fourth/Fifth Floor Tenant Improvements
        in the condition required by and pursuant to the Fourth/Fifth Floor
        Tenant Improvement Agreement. From and after the Date of Turnover of
        Possession, Tenant shall accept possession of the Additional Expansion
        Space in its then existing "AS IS" condition. By continuing in
        possession of the Initial Expansion Premises and by accepting possession
        of the Additional Expansion Space, Tenant acknowledges and agrees that
        the same are in satisfactory condition and in conformity with the
        provisions of this Lease in all respects. Tenant acknowledges and agrees
        that no representations to the repair of the Premises, nor promises to
        alter, remodel or improve the Premises have been made by Landlord,
        except as otherwise specifically set forth in this Lease."

              e. Section 5.1 - Basic Rent. Section 5.1 of the Lease is hereby
deleted in its entirety and replaced with the following new Section 5.1:

        "5.1 - Basic Rent. Between the Effective Date hereof and the Rent Start
        Date, Tenant shall continue to pay Basic Rent on the terms and
        conditions set forth in the Lease. From and after the Rent Start Date,
        Tenant shall pay the Basic Rent for the Premises (inclusive of the
        Initial Expansion Premises and the Additional Expansion Space) in the
        amount set forth in this Section 5.1 (subject to adjustment as provided
        in Section 6) in equal monthly installments on or before the first (1st)
        day of each calendar month during the Term, in advance, without demand,
        offset, credit or deduction. From and after the Rent Start Date, "BASIC
        RENT" shall mean One Hundred Fifteen Thousand Eighty Two and 01/100
        Dollars ($115,082.01) per month for the first Lease Year. Commencing on
        the first (1st) day of the second (2nd) Lease Year and on the first
        (1st) day of each Lease Year thereafter during the Term, Basic Rent
        shall be increased to the amounts set forth below:

                                       4              November 22, 1999 (1:10pm)
<PAGE>   57

<TABLE>
         Lease Year Following Rent Start Date             Monthly Basic Rent
         ------------------------------------             ------------------
<S>                                                       <C>
                Second Lease Year:                        $118,534.47
                Third Lease Year:                         $122,090.50
                Fourth Lease Year:                        $125,753.22
                Fifth Lease Year:                         $129,525.82
</TABLE>

             5.1.1. On the Effective Date of this Modification No. 2, Tenant
        shall pay to Landlord the amount of One Hundred Fifteen Thousand Eighty
        Two and 01/100 Dollars ($115,082.01), which amount shall be applied to
        payment of Basic Rent for the first full month of the first Lease Year
        following the Rent Start Date.

             5.1.2. In addition to the foregoing, if the actual Rent Start Date
        is other than the first (1st) day of the month, then on the actual Rent
        Start Date Tenant shall pay Landlord that amount which is equal to Three
        Thousand Eight Hundred Thirty Six and 07/100 Dollars ($3,836.07)
        multiplied by the number of calendar days between the actual Rent Start
        Date and the end of the month in which the actual Rent Start Date
        occurred."

        f. Section 6.Y - Tenant's Share of Increases in Basic Operating Costs.
Effective as of the Rent Start Date, Section 6.1 of the Lease shall be deleted
in its entirety and replaced with the following new Section 6.1:

        "6.1 From and after December 31, 2000, Tenant shall pay Landlord (in
        addition to the Basic Rent) Tenant's Share of the increase in Basic
        Operating Costs and Taxes over the Basic Operating Costs and Taxes paid,
        incurred or attributable to the Base Expense Year, as Additional Rent,
        in the manner set forth below. The provisions for payment of the
        increase in Basic Operating Costs and Taxes by means of periodic payment
        of Tenant's Share of the Increase in Estimated Basic Operating Costs and
        Taxes and the Basic Operating Cost and Tax Adjustment are intended to
        pass on to Tenant and reimburse Landlord for Tenant's Share of all
        increases in Basic Operating Costs and Taxes over the Base Expense Year.

             6.1.1. From and after the Rent Start Date, the Expense Year for
        purposes of calculating increases in Basic Operating Costs and Taxes
        shall be calendar year 2000 (the "BASE EXPENSE YEAR").

             6.1.2. Landlord and Tenant agree that the Net Rentable Area of the
        Building is approximately 132,228 rentable square feet, all in
        accordance with the current BOMA standard. From and after the Rent Start
        Date, Tenant's Share of Increases in Basic Operating Costs and Taxes
        shall be twenty six and sixteen hundredths percent (26.16%)."

        g. Section 6.2(c) - Expense Year. Effective as of the Rent Start Date,
Section 6.2(c) of the Lease shall be deleted in its entirety and replaced with
the following new Section 6.2(c):

                                       5              November 22, 1999 (1:10pm)
<PAGE>   58

               "(c) "Expense YEAR" shall mean each twelve (12) consecutive month
        period commencing January 1st of each year during the Term of this
        Lease."

                h. Section 6.2(d) - Estimated Basic Operating Costs. Effective
as of the Rent Start Date, Section 6.2(d) of the Lease shall be deleted in its
entirety and replaced with the following new Section 6.2(d):

               "(d) "ESTIMATED BASIC OPERATING COSTS AND TAXES" for any
        particular Expense Year shall mean Landlord's estimated Basic Operating
        Costs and Taxes for such Expense Year."

                i. Section 6.2(e) - Basic Operating Cost and Tax Adjustment.
Effective as of the Rent Start Date, Section 6.2(e) of the Lease shall be
deleted in its entirety and replaced with the following new Section 6.2(e):

               "(e) "BASIC OPERATING COST AND TAX ADJUSTMENT" shall mean the
        difference between Basic Operating Costs and Taxes and Estimated Basic
        Operating Costs and Taxes for any Expense Year."

                j. Section 6.2(f) - Base Expense Year. Effective as of the Rent
Start Date, Section 6.2(f) of the Lease shall be deleted in its entirety and
replaced with the following new Section 6.2(f):

               "(f) From and after the Rent Start Date, the Expense Year for
        purposes of calculating increases in Basic Operating Costs and Taxes
        shall be calendar year 2000 (the "BASE EXPENSE YEAR").

                k. Section 8.1.1 - Use of Internal Staircase. The following new
Section 8.1.1 is hereby added to the Lease:

               "8.1.1. On condition that Tenant first constructs and installs,
        at its sole cost and expense, a key-pad security system providing
        security to the fifth (5th) and sixth (6th) floor portions of the
        Premises (which security system must be approved in writing by Landlord,
        said approval not to be unreasonably or untimely withheld), Tenant is
        hereby granted the non-exclusive right to use in common with others the
        internal staircase between the fifth (5th) and sixth (6th) to facilitate
        travel for its employees between said floors, and for no other purpose."

                l. Section 29 - Brokers. The first sentence in Section 29 of the
Lease is hereby deleted and replaced with the following new sentence:

        "Landlord and Tenant represent and warrant that (except as described in
        the next sentence) they have no agreement, contract or dealings
        regarding the Lease with any license real estate broker except Grubb &
        Ellis Company and Madison Marquette Retail Services, Inc. both of which
        are acting as agent for Landlord and Tenant and both of which will be
        reimbursed by Landlord."

                                       6              November 22, 1999 (1:10pm)
<PAGE>   59

            m. Exhibit E - Option To Extend Term. The Option to Extend Term set
forth in Exhibit "E" to the Lease is terminated, canceled and shall have no
further force as of the Effective Date of this Modification No. 2.

            n. Modification No. 1 to Lease. From and after the Rent Start Date,
Modification No. 1 to Lease, executed by Landlord and Tenant on September 15,
1999, shall cease to have any continuing effect and Tenant's rights, duties and
obligations with respect to the Initial Expansion Space and the Additional
Expansion Space shall be pursuant to the Lease as modified by this Modification
No. 2.

        3. Agreement to Lease Premises and Pay Basic Monthly Rent, Additional
Rent and Other Charges. Between the Effective Date hereof and the Rent Start
Date, Tenant shall continue to lease the Premises and pay Basic Rent, Additional
Rent and Other Charges on the terms and conditions required by the Lease. From
and after the Rent Start Date, Tenant agrees to and shall lease from Landlord,
and Landlord hereby agrees to and shall, lease the Premises (inclusive of the
Additional Expansion Space) to Tenant for the period up to and including the
Extended Term Expiration Date, on the terms and conditions set forth in the
Lease as amended and modified by this Modification No. 2. From and after the
Rent Start Date, during each and every month of each Lease Year thereafter,
Tenant agrees to and shall pay Landlord the monthly Basic Rent set forth in this
Modification No. 2; and from and after December 31, 2000, Tenant agrees to and
shall pay Tenant's Share of Increases in Basic Operating Costs and Taxes over
the Basic Operating Costs and Taxes paid or incurred by Landlord during the Base
Expense Year.

        4. Landlord's Obligations. At Landlord's cost and expense, but which
cost and expense shall be included in Basic Operating Costs:

            a. Landlord shall be responsible for placing and keeping the
Building and all Building systems located outside the Premises (including,
without limitation, fire, safety, security and elevators) in compliance with all
governmental regulations, codes, rules, laws, including environmental laws and
the Americans with Disabilities Act.

            b. Not later than May 31, 2000, Landlord shall replace the component
systems (i.e., the relays, switches, motors and electrical devices but not the
elevator cars or doors) servicing the three (3) passenger elevators in the
Building.

        5. Whole Agreement. This Modification No. 2 sets forth the entire
agreement between the parties with respect to the matters set forth herein.
There have been no additional oral or written representations or agreements
concerning the subject matter of this Modification No. 2. As amended herein, the
Lease between the parties shall remain in full force and effect. In case of any
inconsistency between the provisions of the Lease and this Modification No. 2,
the latter provisions shall govern and control. Under no circumstances shall
this Modification No.2 be deemed to grant any right to Tenant to further expand
the Premises or extend the term.

                                       7              November 22, 1999 (1:10pm)
<PAGE>   60

        6. Not An Offer. Submission of this Modification No. 2 by Landlord to
Tenant is not an offer to enter this Modification No. 2, but a solicitation for
such an offer from Tenant. Landlord shall not be bound by this Modification No.
2 until Landlord has executed and delivered the same to Tenant.

        IN WITNESS WHEREOF, the Landlord and Tenant have duly executed this
Modification No. 2 as of the date set forth below, in San Francisco, California.
Notwithstanding the actual date of execution, this Modification No. 2 shall for
all purposes be deemed effective as of the Effective Date first above written.

LANDLORD                                        TENANT
--------                                        ------
222 SUTTER LIMITED PARTNERSHIP,                 MAIDEN INTERACTIVE STUDIO CORP.,
a Delaware limited partnership,                 a California corporation dba
                                                NOVO INTERACTIVE

By:  MRP DEVELOPMENT 222 SUTTER,
     INC., a Delaware corporation, as
     general partner
                                                By:   /s/ KIM VOGEL
                                                    ----------------------------
                                                Name:
                                                     ---------------------------
     By:                                        Title:
        ---------------------------------              -------------------------
     Name:
          -------------------------------
     Title:
           ------------------------------
                                                By:
                                                    ----------------------------
                                                Name:
                                                     ---------------------------
     Date:                                      Date:
          -------------------------------              -------------------------

                                       8              November 22, 1999 (1:10pm)
<PAGE>   61

                        EXHIBIT "A" TO MODIFICATION NO. 2

                FLOOR PLAN FOR PREMISES (INCLUDING THE ADDITIONAL
                                EXPANSION SPACE)

                                 TO BE ATTACHED

                                       1              November 22, 1999 (1:10pm)
<PAGE>   62

                        EXHIBIT "B" TO MODIFICATION NO. 2

                 FOURTH/FIFTH FLOOR TENANT IMPROVEMENT AGREEMENT

                             [TENANT PERFORMS WORK]
                                   [ALLOWANCE]

        This FOURTH/FIFTH FLOOR TENANT IMPROVEMENT AGREEMENT ("WORK LETTER") is
executed simultaneously with that certain SECOND MODIFICATION AND AMENDMENT TO
LEASE ("MODIFICATION No. 2") dated November  , 1999 ("EFFECTIVE DATE"), by and
between 222 SUTTER LIMITED PARTNERSHIP, a Delaware limited partnership
("LANDLORD"), and MAIDEN INTERACTIVE STUDIO CORP., a California corporation dba
NOVO INTERACTIVE ("TENANT"). This Modification No. 2 modifies and amends that
certain 222 Sutter Street office Lease dated August 8, 1996 (as first amended on
September 15, 1999) by and between Landlord and Tenant for certain space in the
building ("BUILDING") located at 222 Sutter Street in the City and County of San
Francisco, California. This Work Letter pertains to a portion of the fourth
(4th) floor and the entire fifth (5th) floor ("4TH & 5TH FLOOR SPACE") in the
Building. Capitalized terms used herein, unless otherwise defined in this Work
Letter, shall have the respective meanings ascribed to them in the Lease and or
Modification No. 2, as appropriate.

        For and in consideration of the agreements set forth in the Lease and in
Modification No. 2, Landlord and Tenant hereby agree as follows:

        1. TENANT'S INITIAL PLANS; THE WORK. Tenant shall perform certain
leasehold improvement work in the 4th & 5th Floor Space in substantial
accordance with the plan or plans (collectively, the "INITIAL PLAN") prepared by
Lundberg Design dated      and last revised       , a copy or copies of which
is/are attached hereto as Schedule "1". Such work, as shown in the Initial Plan
and as more fully detailed in the Working Drawings (as defined and described in
Paragraph 2 below), shall be hereinafter referred to as the "FOURTH/FIFTH FLOOR
TENANT IMPROVEMENTS". Prior to commencing the Fourth/Fifth Floor Tenant
Improvements, Tenant shall furnish Landlord with working drawings, ("WORKING
DRAWINGS") consistent with the Initial Plan. All plans, drawings, specifications
and other details describing the Fourth/Fifth Floor Tenant Improvements which
have been or are hereafter furnished by or on behalf of Tenant shall be subject
to Landlord's approval, which approval shall not be unreasonably withheld,
conditioned or delayed. Landlord shall not be deemed to have acted unreasonably
if it withholds its approval of any plans, specifications, drawings or other
details or of any Additional Fourth/Fifth Floor Tenant Improvements (as defined
in Paragraph 7 below) because, in Landlord's reasonable opinion, the work, as
described in any such item, or the Additional Fourth/Fifth Floor Tenant
Improvements, as the case may be: (a) is likely to adversely affect Building
systems, the structure of the Building or the safety of the Building and/or
their occupants; (b) might impair Landlord's ability to furnish services to
Tenant or other tenants in the Building; (c) would violate any governmental
laws, rules or ordinances (or interpretations thereof); (d) contains or uses
hazardous or toxic materials or substances (except as customarily used or
contained in similar

                                        1             November 22, 1999 (1:10pm)
<PAGE>   63

work); (e) would in Landlord's reasonable opinion adversely affect the exterior
appearance of the Building; (f) adversely affects another tenant's premises in
the Building; or (g) is prohibited by any ground lease affecting the Building or
any mortgage, trust deed or other instrument encumbering the Building. The
foregoing reasons, however, shall not be the only reasons for which Landlord may
withhold its approval, whether or not such other reasons are similar or
dissimilar to the foregoing. The approval by Landlord of the Fourth/Fifth Floor
Tenant Improvements or the Initial Plan or any other plans, drawings,
specifications or other items associated with the Fourth/Fifth Floor Tenant
Improvements shall not constitute any warranty by Landlord to Tenant of the
adequacy of the design for Tenant's intended use of the 4th & 5th Floor Space.

        2. PERFORMANCE OF THE FOURTH/FIFTH FLOOR TENANT IMPROVEMENTS: ALLOWANCE.
Tenant and Tenant's contractors (who are approved by Landlord in advance) shall
perform the work of installing and constructing the Fourth/Fifth Floor Tenant
Improvements. Landlord shall pay for a portion of the cost thereof (the "COST OF
THE FOURTH/FIFTH FLOOR TENANT IMPROVEMENTS") in an amount not to exceed Four
Hundred Twelve Thousand Three Hundred Eighty and no/l00 dollars ($412,380.00)
(such amount being $20.00 per square foot of Net Rentable Area of the 4th & 5th
Floor Space which is to be improved, as described in the Working Drawings) (the
"ALLOWANCE"), and Tenant shall pay for the entire Cost of the Fourth/Fifth Floor
Tenant Improvements in excess of the Allowance. Tenant shall not be entitled to
any credit, abatement or payment from Landlord in the event that the amount of
the Allowance specified above exceeds the Cost of the Fourth/Fifth Floor Tenant
Improvements. For purposes of this Agreement, the term "COST OF THE FOURTH/FIFTH
FLOOR TENANT IMPROVEMENTS" shall mean and include any and all costs and expenses
of the Fourth/Fifth Floor Tenant Improvements, including, without limitation,
the cost of the Working Drawings and of all labor (including overtime) and
materials constituting the Fourth/Fifth Floor Tenant Improvements, plus a fee
equal to three percent (3%) of the Cost of the Fourth/Fifth Floor Tenant
Improvements for Landlord's administration, overhead and field supervision
associated therewith.

        3. SUBSTANTIAL COMPLETION. The Work shall be deemed to be "substantially
completed" for all purposes under this Work Letter and the Lease if and when (a)
Landlord, Tenant and Landlord's architect have conducted a final walk-through
physical inspection of the 4th & 5th Floor Space and have agreed in good faith
on any "punchlist" items that remain to be completed, and (b) Tenant's architect
issues a written certificate to Landlord and Tenant, certifying that the
Fourth/Fifth Floor Tenant Improvements has been substantially completed (i.e.,
completed except for the referenced "punchlist" items agreed in good faith by
the parties) in substantial compliance with the Working Drawings.

        4. PAYMENT OF ALLOWANCE. Landlord shall pay the Allowance to Tenant (or
upon the written instruction of Tenant, directly to Tenant's general contractor
or Tenant's architect) in four (4) installments: the first, second and third
installments shall each be in that amount which is equal to thirty percent
(30%) of the Allowance; and the fourth installment shall be in that amount which
is equal to ten (10%) of the Allowance.

                                       2              November 22, 1999 (1:10pm)
<PAGE>   64

            (a) The first installment of thirty percent (30%) of the Allowance
will be due and payable by Landlord within ten (10) business days of the date
which is the last of:

                (i) The date Tenant's architect issues and delivers to Landlord
a certificate to the effect that approximately one-third (1/3) of the
Fourth/Fifth Floor Tenant Improvements have been completed in a good and
workmanlike fashion in accordance with the Working Drawings.

                (ii) The date Tenant delivers to Landlord fully executed
Conditional Lien Releases Upon Receipt of Payment from Tenant's general
contractor and each subcontractor working on the Fourth/Fifth Floor Tenant
Improvements.

            (b) The second installment of thirty percent (30%) of the Allowance
will be due and payable by Landlord within ten (10) business days of the date
which is the last to occur of:

                (i) The date Tenant's architect issues and delivers to Landlord
a certificate to the effect that approximately two-thirds (2/3's) of the
Fourth/Fifth Floor Tenant Improvements have been completed in a good and
workmanlike fashion in accordance with the Working Drawings.

                (ii) The date Tenant delivers to Landlord fully executed
Conditional Lien Releases Upon Receipt of Payment from Tenant's general
contractor and each subcontractor working on the Fourth/Fifth Floor Tenant
Improvements.

            (c) The third installment of thirty percent (30%) of the Allowance
will be due and payable by Landlord within ten (10) business days of the date
which is the last to occur of:

                (i) The date Landlord, Tenant and Landlord's architect have
completed a final walk-through physical inspection of the 4th & 5th Floor Space
and have agreed in good faith on any "punchlist' items that remain to be
completed.

                (ii) The date Tenant's architect delivers to Landlord a written
certificate that the Fourth/Fifth Floor Tenant Improvements have been
substantially completed.

                (iii) The date Tenant delivers to Landlord fully executed
Conditional Lien Releases Upon Receipt of Payment from Tenant's general
contractor and each subcontractor working on the Fourth/Fifth Floor Tenant
Improvements.

            (d) The fourth installment of ten percent (10%) of the Allowance
will be due and payable by Landlord within ten (10) business days from the date
which is the last to occur of:

                (i) The date Tenant's architect issues and delivers a written
certificate to Landlord certifying that the Fourth/Fifth Floor Tenant
Improvements have been

                                       3              November 22, 1999 (1:10pm)
<PAGE>   65

finally completed (i.e., all "punchlist items" have been completed, all
certificates of occupancy have been issued by all governmental agencies
asserting jurisdiction over the Building and the Fourth/Fifth Floor Tenant
Improvements) in compliance with the Initial Plan and the Working Drawings
(hereinafter, the "DATE OF FINAL COMPLETION");

                (ii) The date which is thirty-five (35) calendar days following
the Date of Final Completion.

                (iii) The date Tenant delivers to Landlord fully executed
Unconditional Lien Releases Upon Receipt of Final Payment from Tenant's general
contract and each subcontractor working on the Fourth/Fifth Floor Tenant
Improvements.

        5. TENANT ACCESS. Landlord shall grant Tenant access to the 4th & 5th
Floor Space on the Extended Term Commencement Date, or if said space is vacant
prior to the Extended Term Commencement Date then prior to said Date (at
Landlord's discretion), to allow Tenant to construct and install the
Fourth/Fifth Floor Tenant Improvements in the 4th & 5th Floor Space. Tenant's
access to the 5th Floor Premises shall be subject to the following conditions:

            (a) Tenant shall deliver to Landlord each of the following items,
all in form and substance reasonably acceptable to Landlord: (i) a detailed
description of and schedule for the construction and installation of the
Fourth/Fifth Floor Tenant Improvements; (ii) the names and addresses of all
contractors, subcontractors and material suppliers and all other representatives
of Tenant who or which will be entering the 4th & 5th Floor Space on behalf of
Tenant to perform the Fourth/Fifth Floor Tenant Improvements or will be
supplying materials for such work, and the approximate number of individuals,
itemized by trade, who will be present in the 4th & 5th Floor Space; (iii)
copies of all contracts, subcontracts and material purchase orders pertaining to
Fourth/Fifth Floor Tenant Improvements; (iv) copies of all plans and
specifications pertaining to the Fourth/Fifth Floor Tenant Improvements; (v)
copies of all licenses and permits required in connection with the performance
of the Fourth/Fifth Floor Tenant Improvements; (vi) certificates of insurance
(in amounts satisfactory to Landlord and with the parties identified in, or
required by, the Lease named as additional insureds) and instruments of
indemnification against all claims, costs, expenses, damages and liabilities
which may arise in connection with the Fourth/Fifth Floor Tenant Improvements;
and (vii) assurances of the ability of Tenant to pay for all of the Fourth/Fifth
Floor Tenant Improvements and/or a letter of credit or other security deemed
appropriate by Landlord securing Tenant's lien-free completion of the
Fourth/Fifth Floor Tenant Improvements.

            (b) Such access by Tenant and its representatives shall be subject
to scheduling approved by Landlord.

            (c) Tenant's employees, agents, contractors, workmen, mechanics,
suppliers and invitees shall work in harmony and not interfere with Landlord's
work in common areas of the Building, or the general operation of the Building.
If at any time any such person representing Tenant shall cause or threaten to
cause such disharmony or interference, including labor disharmony, and Tenant
fails to immediately institute and maintain such

                                       4              November 22, 1999 (1:10pm)
<PAGE>   66

corrective actions as directed by Landlord, then Landlord may remove said person
or persons from the Building.

            (d) Any such entry into and occupancy of the 4th & 5th Floor Space
prior to the Extended Term Commencement Date by Tenant or any person or entity
working for or on behalf of Tenant shall be deemed to be subject to all of the
terms, covenants, conditions and provisions of the Lease and excluding only the
covenant to pay Basic Rent. Landlord shall not be liable for any injury, loss or
damage which may occur to any of the Fourth/Fifth Floor Tenant Improvements made
in or about the 4th & 5th Floor Space or to property placed therein prior to the
Extended Term Commencement Date, the same being at Tenant's sole risk and
liability. Tenant shall be liable to Landlord for any damage to the 4th & 5th
Floor Space or to any portion of the Fourth/Fifth Floor Tenant Improvements
caused by Tenant or any of Tenant's employees, agents, contractors, workmen or
suppliers. In the event that the performance of the Fourth/Fifth Floor Tenant
Improvements Tenant's causes extra costs to Landlord or requires the use of
elevators during hours other than 8:00 a.m. to 6:00 p.m. on Monday through
Friday (excluding holidays) or of other Building services, Tenant shall
reimburse Landlord for such extra cost and/or shall pay Landlord for such
elevator service or other Building services at Landlord's standard rates then in
effect.

        6. LEASE PROVISIONS. The terms and provisions of the Lease, Insofar as
they are applicable to this Fourth/Fifth Floor Tenant Improvements Letter, are
hereby incorporated herein by reference.

        7. MISCELLANEOUS.

            (a) This Fourth/Fifth Floor Tenant Improvements Letter shall be
governed by the laws of the State of California.

            (b) This Fourth/Fifth Floor Tenant Improvements Letter may not be
amended except by a written instrument signed by the party or parties to be
bound thereby.

            (c) Any person signing this Fourth/Fifth Floor Tenant Improvements
Letter on behalf of Tenant warrants and represents he/she has authority to sign
and deliver this Fourth/Fifth Floor Tenant Improvements Letter and bind Tenant.

            (d) Notices under this Fourth/Fifth Floor Tenant Improvements Letter
shall be given in the same manner as under the Lease.

            (e) The headings set forth herein are for convenience only.

            (f) This Fourth/Fifth Floor Tenant Improvements Letter sets forth
the entire agreement of Tenant and Landlord regarding the Fourth/Fifth Floor
Tenant Improvements.

            (g) In the event that the final Working Drawings are included as
part of the Initial Plan attached hereto, or in the event Tenant performs the
Fourth/Fifth Floor Tenant Improvements without the necessity of preparing
Working Drawings, then whenever the term

                                       5              November 22, 1999 (1:10pm)
<PAGE>   67

Working Drawings is used in this Fifth Floor Tenant Improvement Letter, such
term shall be deemed to refer to the Initial Plan and all supplemental plans and
specifications approved by Landlord.

        8. EXCULPATION OF LANDLORD AND MADISON MARQUETTE RETAIL SERVICES, INC.
Notwithstanding anything to the contrary contained in this Fourth/Fifth Floor
Tenant Improvements Letter, it is expressly understood and agreed by and between
the parties hereto that:

            (a) The recourse of Tenant or its successors or assigns against
Landlord with respect to the alleged breach by or on the part of Landlord of any
representation, warranty, covenant, undertaking or agreement contained in this
Fourth/Fifth Floor Tenant Improvements Letter (collectively, "LANDLORD'S
FOURTH/FIFTH FLOOR TENANT IMPROVEMENTS LETTER UNDERTAKINGS") shall extend only
to Landlord's interest in the Building and not to any other assets of Landlord
or its officers, directors or shareholders; and

            (b) Except to the extent of Landlord's interest in the Building, no
personal liability or personal responsibility of any sort with respect to any of
Landlord's Fourth/Fifth Floor Tenant Improvements Letter Undertakings or any
alleged breach thereof is assumed by, or shall at any time be asserted or
enforceable against, Landlord or Madison Marquette Realty Services, Inc. or
against any of their respective directors, officers, employees, agents,
constituent partners, beneficiaries, trustees or representatives.

        IN WITNESS WHEREOF, this Fourth/Fifth Floor Tenant Improvements Letter
Agreement is executed as of the ________ day of ____________________, 1999

LANDLORD                                TENANT

222 SUTTER LIMITED PARTNERSHIP,         MAIDEN INTERACTIVE STUDIO CORP.,
a Delaware limited partnership,         a California corporation dba
                                        NOVO INTERACTIVE

By:   MRP DEVELOPMENT 222 SUTTER,
      INC., a Delaware corporation, as
      general partner
                                                By:
                                                    ----------------------------
                                                Name:
                                                     ---------------------------
     By:                                        Title:
        ---------------------------------              -------------------------
     Name:
          -------------------------------
     Title:
           ------------------------------
                                                By:
                                                    ----------------------------
                                                Name:
                                                     ---------------------------
     Date:                                      Date:
          -------------------------------              -------------------------

                                       6              November 22, 1999 (1:10pm)
<PAGE>   68
<TABLE>
<S><C>

                                                       [ONELEASE LETTERHEAD]

INFORMATION TECHNOLOGY
   LEASE AGREEMENT

====================================================================================================================================
LESSEE INFORMATION
====================================================================================================================================
LESSEE LEGAL NAME                                                               ADDRESS
                                NOVO MEDIA GROUP                                             222 SUTTER STREET, 6TH FLOOR
------------------------------------------------------------------------------------------------------------------------------------
CITY                            COUNTY              STATE                       ZIP                    PHONE NUMBER
     SAN FRANCISCO                                          CA                      94108              (415) 646-7000
====================================================================================================================================
EQUIPMENT DESCRIPTION
====================================================================================================================================
     DESCRIPTION OF EQUIPMENT LEASED         MAKE AND TYPE          MODEL NUMBER          SERIAL NUMBER          UNIT QUANTITY
     NEW (X) USED ( ) REFURBISHED ( )
------------------------------------------------------------------------------------------------------------------------------------
            See Schedule A
------------------------------------------------------------------------------------------------------------------------------------

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

------------------------------------------------------------------------------------------------------------------------------------
   EQUIPMENT LOCATION SAME (X) OTHER ( )    ADDRESS                            CITY                STATE         ZIP
====================================================================================================================================
TERM AND PAYMENT SCHEDULE
====================================================================================================================================
     TERM IN MONTHS     LEASE PAYMENTS: (X) MONTHLY ( ) QUARTERLY ( ) OTHER       AT THE TIME OF THIS LEASE AGREEMENT YOU AGREE TO
          24            $    2,067.37                 _____MONTHS AT $_____     PAY: 2 LEASE PAYMENT(S), IN ADVANCE AND INCLUDE A
                         ------------------           _____MONTHS AT $_____     CHECK IN THE AMOUNT OF:
                           (TAX INCLUDED)             _____MONTHS AT $_____                    $    4,134.74
--------------------------------------------------------------------------------               -----------------
AT THE EXPIRATION OF THIS LEASE,             FAIR MARKET VALUE PURCHASE OPTION    IF MORE THAN ONE LEASE PAYMENT IS REQUIRED IN
AND IF YOU ARE NOT IN DEFAULT, YOU WILL  ---                                    ADVANCE THE ADDITIONAL AMOUNT (LESS APPLICABLE TAX
HAVE THE FOLLOWING PURCHASE OPTION           10% PURCHASE OPTION                ASSOCIATED WITH THE FIRST PAYMENT) WILL BE HELD AS
                                         ---                                    SECURITY AND APPLIED AT THE END OF THE ORIGINAL
                                          X  $1.00 PURCHASE                     LEASE TERM.
                                         ---                                       IF YOU ARE TAX EXEMPT PLEASE ATTACH CERTIFICATE
                                                                                AND WRITE YOUR TAX EXEMPT #__________________.
====================================================================================================================================
LESSEE SIGNATURE
====================================================================================================================================
LESSEE LEGAL NAME                                     LEASE GUARANTY
                   NOVO MEDIA GROUP                   THE UNDERSIGNED GUARANTEES THAT THE LESSEE WILL MAKE ALL PAYMENTS AND ALL
----------------------------------------------------  OTHER CHARGES REQUIRED UNDER THIS LEASE AGREEMENT WHEN THEY ARE DUE AND WILL
AUTHORIZED SIGNATURE                                  PERFORM ALL OTHER OBLIGATIONS UNDER THIS LEASE AGREEMENT. THE UNDERSIGNED
(X)  /S/ KIM VOGEL                                    ALSO WAIVES ANY NOTIFICATION IF THE LESSEE IS IN DEFAULT AND CONSENTS TO ANY
----------------------------------------------------  EXTENSIONS OR MODIFICATIONS GRANTED TO THE LESSEE. IN THE EVENT OF A DEFAULT
PRINT AUTHORIZED SIGNATURE                            THE UNDERSIGNED WILL IMMEDIATELY PAY IN ACCORDANCE WITH ANY DEFAULT PROVISIONS
     KIM VOGEL                                        OF THIS LEASE AGREEMENT AND ALL SUMS DUE UNDER THE TERMS OF THIS LEASE
----------------------------------------------------  AGREEMENT.
AUTHORIZED SIGNOR TITLE           DATED
     CFO                                 7/7/99       SIGNED (X) /S/ ANTHONY WESTREICH     SIGNED (X)
                                                             ----------------------------         ----------------------------
                                                      PRINT NAME  Anthony Westreich        PRINT NAME
                                                                  -----------------------             ------------------------
                                                                                    (DO NOT PRINT TITLE)
====================================================================================================================================
LEASE AGREEMENT
====================================================================================================================================

Throughout this agreement the words "We," "Our," and "Us" refer to the lessor indicated below and the words "You" and "Your" refer
to the lessee indicated above. You agree to lease the equipment described above and agree to the terms and conditions of this Lease
Agreement. You agree to pay the lease payments shown above in accordance with the payment schedule outlined. We may adjust your
payment up or down by no more than 15% if the invoiced costs are different than the amount we used to calculate the lease payments
shown above. You are responsible for arranging delivery of the equipment described above. The lease will begin when the equipment
described above is delivered and installed. Unless you notify us within 10 days of installation, you unconditionally accept the
equipment. We may require you to provide us a signed delivery and acceptance certificate.

FAXED AND COPIED DOCUMENT:

The parties intend and agree that a carbon copy, photocopy or facsimile of this document with their signature thereon shall be
treated as an original, and shall be deemed to be as binding, valid, genuine, and authentic as an original signature document for
all purposes, including all matters of addenda and the "best address" rules.

LATE FEES AND COLLECTION CHARGES:

If any lease payment or other amount payable to us is not paid within ten (10) days of its due date, you agree to pay us a late
charge of 15% of the amount which is late, or if less, the maximum amount allowable under applicable law. You also agree to pay us
twenty dollars ($20.00) for each check returned for insufficient funds.

NO WARRANTY:

We are leasing the equipment to you as is. You acknowledge that we do not manufacture the equipment and that you have selected the
equipment and the supplier based on your own judgment. We grant no warranties, express or implied, including warranties of
merchantability or fitness for a particular purpose in connection with this agreement. You agree to continue making payments to
us under this lease regardless of any claims you make against the manufacturer or supplier. We transfer to you for the term of this
lease any warranties made by the manufacturer or the supplier.

EQUIPMENT/SOFTWARE LOCATION USE AND REPAIR:

You will keep and use the equipment/software only at the location shown above. You agree that the equipment/software cannot be
moved without advance written permission. You are responsible for keeping the equipment/software in good repair, condition, and
working order. Lessee may make alterations, modifications or attachments to the Software and Equipment so long as not in violation
of the Software License Agreement. Any alterations, unless consented to by the Software Licensor, shall not be made to the
original Software, but only copy. All alterations, modifications and attachments to the Equipment/Software which cannot be readily
removed without damaging the function, use or economic value of the Equipment/Software shall immediately become a part of the
Equipment/Software and property of the Lessor. The bankruptcy of the Software Licensor or Equipment/Software manufacturer or
vendor shall not be a valid excuse for Lessee to terminate Lease Payments of Lessor. Lessee shall take all action necessary to
protect Lessor's rights to use the Software under Section 365 of the Bankruptcy Code. Lessee shall elect to retain its rights
under the Bankruptcy Code to use the Software, and to the extent the Software License grants customer access to the source code,
Lessee shall make written request under the Bankruptcy Code of the Bankruptcy Trustee to obtain the source code. Except for normal
wear and tear, you are responsible to protect the equipment/software from damage or any kind of loss and will continue to make
payments if any damage or loss occurs. We are not responsible for any losses or damages caused by the installation or use of the
equipment/software, or from any other kind of loss while you have the equipment/software. Unless you notify us at least 30 days
prior to the expiration of the lease of your intention to exercise a purchase option if outlined above, this lease will
automatically renew for successive 30 day periods until you exercise an option or return the equipment/software and the original
and all backup copies of the software, including documentation, to us. If you elect to return the equipment/software to us, it
must be returned to the location that we designate at your expense. In addition, you agree to pay us a "restocking fee" equal to
one (1) base lease payment.

OWNERSHIP AND TITLE:

We are the owner of the equipment and have title to the equipment. You authorize us to record UCC financing statements and appoint
us as attorney-in-fact to execute on your behalf any financing statements to show our interest in the equipment.

INSURANCE:

You will provide at your expense, property insurance for the equipment, naming us as loss payee. You will also obtain a public
liability insurance policy covering any personal injury or third-party property damage, naming us as an additional insured. You will
provide us evidence of such insurance when requested. If you do not, we may at our option buy such insurance for you and include
such insurance costs and our fees to the payment amounts due from you under this lease or charge you a monthly risk charge of $7.50
per month plus administrative expenses.

TAXES AND UCCs:

You will pay when due, all taxes, fines and penalties relating to the use or our ownership of the equipment under this lease. Your
payments shown above do not include any applicable fees. We will include any applicable taxes and fees, and invoice you for those
taxes. You agree to pay the taxes and fees in addition to your payment. If we pay any taxes, fees or penalties for you, you will
pay us on demand the amount we had paid on your behalf plus an administrative fee equal to 10% of the property tax bill as per our
invoice. You agree to pay us a documentation fee of $75.00 to cover our expenses in processing this lease and filing documents
presented by the Uniform Commercial Code or other laws associated with the equipment described above.

DEFAULTS:

If you do not pay your monthly payment within ten (10) days of its due date, or you breach any of the terms or conditions of this
lease, you will be in default of this lease and any other agreement with us or any of our other affiliates. If you default, we may
require any consideration of the following: (1) pay the remaining balance of the lease, (2) pay the residual value of the lease, (3)
return all of the equipment. We can use any and all remedies available to use under the Uniform Commercial Code or any other laws.
If we have to take possession of the equipment, you agree to pay the cost of repossession. You agree we are not responsible for any
consequential or incidental damages related to the default or actions taken by us in the event of a default. You agree to pay us
reasonable attorney's fees and costs connected with any legal action we may take in the event of your default. In the event of your
default under this lease, we may retain any security deposits to insure your performance under this lease. At the termination of
this lease, if you are not in default, any security deposit will be refunded to you with interest.

ASSIGNMENT:

You have the right to sell, transfer, assign or sublease the equipment or this lease. We may sell, assign or transfer this lease or
our rights in the equipment without notice to you. You agree that if we sell, assign or transfer this lease, the new owner will have
the same rights or benefits we have now. You agree that the rights of the new owner will not be subject to any claim, defense or
setoff that you may have against us.

ARTICLE 2A RIGHTS AND REMEDIES:

You agree that this lease is a finance lease as that term is defined in Article 2A of the Uniform Commercial Code ("UCC"). You
hereby agree to waive any and all rights and remedies granted to you by sections 2A-508 through 2A-522 of the UCC.

CHOICE OF LAW:

You agree that, because we countersigned and accepted the terms of this lease in West Chester, Pennsylvania, that this lease was
entered into in the Commonwealth of Pennsylvania and that this lease shall be governed by and interpreted according to the laws of
the Commonwealth of Pennsylvania. You and we expressly waive any right to a trial by jury.

ABSOLUTE OBLIGATIONS:

Your obligation to pay the lease payments and other sums and all other obligations hereunder shall be absolute and unconditional and
are not subject to any abandonment, set-off, defense or counterclaim for any reason whatsoever. You agree that the terms and
conditions contained in this lease make up the entire agreement between you and us regarding the lease of the equipment. Any change
in any of the terms and conditions of this lease shall be in writing and signed by us. You agree that any delay or failure to
enforce our rights under this lease does not prevent us from enforcing any right at a later date. All of our rights and indemnities
will survive the termination of this agreement.
====================================================================================================================================

This lease may not be terminated early. This lease is not binding on us until we sign below. This lease and the equipment are
intended for business purposes only.

------------------------------------------------------------------------------------------------------------------------------------
LESSOR:                                 BY:                            TITLE                  ACCEPTED ON

FIDELITY LEASING, INC.
------------------------------------------------------------------------------------------------------------------------------------
                                                 THIS IS THE ENTIRE LEASE AGREEMENT
                                   The OneLease program is administered by Fidelity Leasing, Inc.
</TABLE>
<PAGE>   69
                                   SCHEDULE A

SCHEDULE FORMING PART OF LEASE BETWEEN FIDELITY LEASING, INC., LESSOR AND NOVO
MEDIA GROUP-d/b/a NOVO INTERACTIVE LESSEE. DATED JULY 7, 1999, LEASE NUMBER
53331.

AltiGen All-In One Communications Server
-  Complete NT FILE Server-Intel P II 333 MHz CPU, 256 MB, (2) 9.1 GB UW SCSI,
   3.5 Floppy, 32 X CD ROM, 3 Com 905TX
   -  1 T1 Card
   -  7 AltiGen Quantum Boards providing 4 analog trunks 80 extensions
   -  42 Ports of VoiceMail
   -  AltiWare Software OE 3.0 Port License 128
   -  AltiConsole Software
   -  Installation of Hardware & Software
   -  Configuration of Phone System including Music on Hold
   -  Training of Telephone System Administrator & End Users
   -  One Year Warranty
   -  30 Norel 9216 Refurbished Telephones

Valcom Mode V2006A Paging System

THIS SCHEDULE SHALL HEREAFTER FORM PART OF THE AFOREMENTIONED LEASE.

------------------------------------------------------------------------------
LESSEE:          NOVO MEDIA GROUP d/b/a NOVO INTERACTIVE

AUTHORIZED SIGNATURE: /s/ KIM VOGEL
                     --------------------------------------------------------

PRINT NAME   Kim Vogel      TITLE      CFO            DATE      7/7/99
          -----------------      --------------------     -------------------
------------------------------------------------------------------------------

------------------------------------------------------------------------------
LESSOR:          FIDELITY LEASING, INC.

AUTHORIZED SIGNATURE:
                     --------------------------------------------------------

PRINT NAME                  TITLE                     DATE
          -----------------      --------------------     -------------------
------------------------------------------------------------------------------

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