Document:

<PAGE>   1

                                                                   EXHIBIT 4.1.2

                          AMENDMENT TO RIGHTS AGREEMENT

     This Amendment (this "AMENDMENT") to Rights Agreement (the "RIGHTS
AGREEMENT") is effective as of _______ __, 1999 by and between Western Digital
Corporation, a Delaware corporation (the "CORPORATION") and American Stock
Transfer & Trust Company, a New York corporation (the "RIGHTS AGENT").
Capitalized terms used herein but not defined herein shall have their defined
meanings set forth in the Rights Agreement.

                                   BACKGROUND

     A. The Corporation and the Rights Agent entered into the Rights Agreement
effective as of October 15, 1998.

     B. The Rights Agreement provides that the Continuing Directors have certain
powers to the exclusion of other directors.

     C. In response to a recent ruling by the Delaware Supreme Court, the
parties wish to amend the terms of the Rights Agreement to eliminate the concept
and powers of the Continuing Directors.

                                    AGREEMENT

     NOW, THEREFORE, the parties hereby agree as follows:

     1. Section 1(j) is hereby deleted in its entirety and the following is
inserted in lieu thereof:

     "[This Section intentionally left blank.]"

     2. Section 1(g)(g) is hereby deleted in its entirety and the following is
inserted in lieu thereof:

     "[This Section intentionally left blank.]"

     3. Section 11(a)(ii) is hereby deleted in its entirety and the following is
inserted in lieu thereof:

     (ii) Subject to Section 23(a) and Section 24, in the event any Person
(other than an Exempt Person), alone or together with its Affiliates and
Associates, shall, at any time after the Rights Dividend Declaration Date,
become the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, unless the event causing the 15% threshold to be crossed is a
transaction set forth in Section 13(a), or is an acquisition of shares of Common
Stock pursuant to a tender offer or an exchange offer for all outstanding shares
of Common Stock at a price and on

<PAGE>   2

terms determined by the Board of Directors of the Corporation after receiving
advice from one or more investment banking firms, to be (a) at a price which is
fair to stockholders of the Corporation (taking into account all factors which
such members of the Board deem relevant including, without limitation, prices
which could reasonably be achieved if the Corporation or its assets were sold on
an orderly basis designed to realize maximum value) and (b) otherwise in the
best interests of the Corporation and its stockholders, then, proper provision
shall be made so that each holder of a Right (except as provided below and in
Section 7(e)) shall thereafter have the right to receive, upon exercise thereof
at the then current Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-thousandths of a share of Preferred
Stock, such number of shares of Common Stock of the Corporation as shall equal
the result obtained by (x) multiplying the then current Purchase Price by the
then number of one one-thousandths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the occurrence of a Section 11(a)(ii)
Event, and (y) dividing that product (which, following such occurrence, shall
thereafter be referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the Current Market Price (determined
pursuant to Section 11(d)) per share of Common Stock on the date of such
occurrence (such number of shares is herein called the "Adjustment Shares");
provided that the Purchase Price and the number of Adjustment Shares shall be
further adjusted as provided in this Agreement to reflect any events occurring
after the date of such occurrence; and provided, further, that if the
transaction that would otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13, then only the provisions of Section 13
shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii).

     4. Section 23(a) is hereby deleted in its entirety and the following is
inserted in lieu thereof:

     "(a) The Board of Directors of the Corporation may, at its option, at any
time prior to the earlier of (i) the Close of Business on the tenth (10th) day
following the Stock Acquisition Date (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the Close of Business on the tenth
(10th) day following the Record Date), subject to extension as provided in
Section 27 or (ii) the Close of Business on the Final Expiration Date, redeem
all but not less than all the then outstanding Rights at a redemption price of
$.001 per Right, as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "REDEMPTION
PRICE"). Notwithstanding anything contained in this Agreement to the contrary,
the Rights shall not be exercisable after the occurrence of an event described
in Section 11(a)(ii) until such time as the Corporation's right of redemption
hereunder has expired. The Corporation may, at its option, pay the Redemption
Price in cash, shares of Common Stock (based on the Current Market Price, as
defined in Section 11(d)(i), of the Common Stock at the time of redemption) or
any other form of consideration deemed appropriate by the Board of Directors.
Such redemption of the Rights by the Corporation may be made effective at such
time, on such basis and with such conditions as the Board of Directors in its
sole discretion may establish."

     5. Section 24(a) is hereby deleted in its entirety and the following is
inserted in lieu thereof:

                                       2

<PAGE>   3

     "(a) Subject to applicable laws, rules and regulations, and subject to
subsection (c) below, at any time after the occurrence of a Triggering Event,
the Board of Directors of the Corporation, may cause the Corporation to exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section 7(e))
for Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "RATIO OF EXCHANGE"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such exchange
at any time after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Stock then outstanding."

     6. Section 24(c) is hereby deleted in its entirety and the following is
inserted in lieu thereof:

     "(c) In the event that there shall not be sufficient Common Stock
authorized but unissued to permit any exchange of Rights as contemplated in
accordance with Section 24(a), the Corporation shall either take such action as
may be necessary to authorize additional shares of Common Stock for issuance
upon exchange of the Rights or alternatively, at the option of the Board of
Directors, with respect to each Right (i) pay cash in an amount equal to the
Current Value (as hereinafter defined), in lieu of issuing Common Stock in
exchange therefor, or (ii) issue debt or equity securities or a combination
thereof, having a value equal to the Current Value, in lieu of issuing Common
Stock in exchange for each such Right, where the value of such securities shall
be determined by a nationally recognized investment banking firm selected by the
Board of Directors, or (iii) deliver any combination of cash, property, Common
Stock and/or other securities having a value equal to the Current Value in
exchange for each Right. For purposes of this Section 24(c) only, the "Current
Value" shall mean the product of the current per share market price of Common
Stock (determined pursuant to Section 11(d) on the date of the occurrence of the
event described above in subparagraph (a)) multiplied by the number of shares of
Common Stock for which the Right otherwise would be exchangeable if there were
sufficient shares available. To the extent that the Corporation determines that
some action need be taken pursuant to clauses (i), (ii), or (iii) of this
Section 24(c), the Board of Directors may temporarily suspend the exercisability
of the Rights for a period of up to sixty (60) days following the date on which
the event described in Section 24(a) shall have occurred, in order to seek any
authorization of additional Common Stock and/or to determine the appropriate
form of distribution to be made pursuant to the above provision and to determine
the value thereof. In the event of any such suspension, the Corporation shall
issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended."

     7. Section 24(e) is hereby deleted in its entirety and the following is
inserted in lieu thereof:

     "(e) The Corporation may, at the option of the Board of Directors, at any
time before any Person has become an Acquiring Person, exchange all or part of
the then outstanding Rights for rights of substantially equivalent value, as
determined reasonably and with good faith by the Board of Directors, based upon
the advice of one or more nationally recognized investment banking firms."

                                        3

<PAGE>   4

     8. Section 24(f) is hereby deleted in its entirety and the following is
inserted in lieu thereof:

     "(f) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to subsection (e) of this Section 24 and without
any further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of rights in exchange therefore as has been determined
by the Board of Directors in accordance with subsection (e) above. The
Corporation shall give public notice of any such exchange; provided, however,
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Corporation shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the transfer agent for the Common Stock of the
Corporation. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Rights will be
effected."

     9. Section 27 is hereby deleted in its entirety and the following is
inserted in lieu thereof:

     "27. SUPPLEMENTS AND AMENDMENTS.

     Prior to the Distribution Date and subject to the penultimate sentence of
this Section 27, the Board of Directors of the Corporation may, in its sole and
absolute discretion and the Rights Agent shall, if the Board of Directors so
directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common Stock,
whether or not such supplement or amendment is adverse to any holders of Rights.
From and after the Distribution Date, and subject to the penultimate sentence of
this Section 27, the Board of Directors may, and the Rights Agent shall, if the
Board of Directors so directs, supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order to (i) cure any
ambiguity, (ii) correct or supplement any provision contained herein which may
be defective or inconsistent with any other provisions hereunder, (iii) shorten
or lengthen any time period hereunder, or (iv) otherwise change or supplement
the provisions hereunder in any manner which the Board of Directors may deem
necessary or desirable and which shall not materially and adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring Person
or an Affiliate or Associate of any such Person); provided, however, this
Agreement may not be supplemented or amended after the Distribution Date to (A)
make the Rights again redeemable after the Rights have ceased to be redeemable,
or (B) change any other time period unless such change is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to the
holders of Rights (other than any Acquiring Person and its Associates or
Affiliates). Upon the delivery of a certificate from an appropriate officer of
the Corporation which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock."

                                       4

<PAGE>   5

     10. Section 29 is hereby deleted in its entirety and the following is
inserted in lieu thereof:

     "29. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.

     For all purposes of this Agreement, any calculation of the number of shares
of Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Corporation shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board of Directors of the
Corporation or to the Corporation, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including, but not limited to, a determination to redeem or not
redeem the Rights, or to amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors of the Corporation in good faith, shall (x) be final, conclusive
and binding on the Corporation, the Rights Agent, the holders of the Rights and
all other parties, and (y) not subject any member of the Board of Directors to
any liability to the holders of the Rights or to any other Person."

     11. Section 31 is hereby deleted in its entirety and the following is
inserted in lieu thereof:

     "31. SEVERABILITY.

     If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the Corporation
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23, if lapsed, shall be reinstated
and shall not expire until the Close of Business on the tenth (10th) Business
Day following the date of such determination by the Board of Directors of the
Corporation."

     12. Exhibit C is hereby deleted in its entirety and Exhibit C attached
hereto and incorporated herein by reference is inserted in lieu thereof.

     13. Except as expressly set forth in this Amendment all other terms of the
Rights Agreement shall remain in full force and effect.

                                       5

<PAGE>   6

     14. This Amendment shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts made and to be
performed entirely within such State.

     15. This Amendment may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.

     IN WITNESS WHEREOF, the Corporation and the Rights Agent have executed this
Amendment effective as of the date first above written.

                                THE CORPORATION:

                                WESTERN DIGITAL CORPORATION
                                A DELAWARE CORPORATION

                                By:
                                    --------------------------------------
                                    Michael A. Cornelius
                                    Vice President, Law and Administration
                                    and Secretary

                                THE RIGHTS AGENT:

                                AMERICAN STOCK TRANSFER & TRUST COMPANY,
                                A NEW YORK CORPORATION

                                By:
                                       -----------------------------------
                                Name:
                                       -----------------------------------
                                Title:
                                       -----------------------------------

                                       6

<PAGE>   7

                                    EXHIBIT C

                          SUMMARY OF RIGHTS TO PURCHASE
                                 PREFERRED STOCK
                                       OF
                           WESTERN DIGITAL CORPORATION

     On September 10, 1998 (the "RIGHTS DIVIDEND DECLARATION DATE") the Board of
Directors of Western Digital Corporation (the "CORPORATION") declared a dividend
of one Right (a "RIGHT") for each outstanding share of Corporation Common Stock
to be distributed to stockholders of record at the close of business on November
30, 1998. Each Right entitles the registered holder to purchase from the
Corporation one one-thousandth of a share (a "UNIT") of Series A Junior
Participating Preferred Stock (the "PREFERRED STOCK") at a "PURCHASE PRICE" of
$150, subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "RIGHTS AGREEMENT") between the Corporation and
American Stock Transfer & Trust Company, as Rights Agent.

     A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
November 19, 1998. A copy of the Rights Agreement is available free of charge
from the Corporation. This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference. A more detailed summary is
also attached to the Form 8-A and to the Corporation's current report on Form
8-K filed with the Securities and Exchange Commission in connection with the
adoption of the rights plan, and can be viewed on the Securities and Exchange
Commission's web site at www.sec.gov or obtained from the Corporation upon
request.

     Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed.

     Until the Distribution Date (as described below), (i) the Rights will be
evidenced by the Common Stock certificates and will be transferred with and only
with such Common Stock certificates, (ii) new Common Stock certificates issued
after November 30, 1998 will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any certificates
for Common Stock outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.

     The Rights are not exercisable until the Distribution Date and will expire
at the close of business on October 14, 2008, unless earlier redeemed or
exchanged by the Corporation as described below.

     The Rights will separate from the Common Stock and a Distribution Date will
occur (the "DISTRIBUTION DATE") upon the earlier of 10 days (or such longer time
as may be determined by the Corporation's board) following (i) a public
announcement (or determination by the Corporation's board) that a person or
group of affiliated or associated persons (an "ACQUIRING PERSON") has acquired,
or obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding shares of Common Stock (the "STOCK ACQUISITION DATE"), or (ii) the

<PAGE>   8

commencement of a tender offer or exchange offer that would result in a person
or group beneficially owning 15% or more of such outstanding shares of Common
Stock.

     As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights.

     In the event that on or at any time following the Rights Dividend
Declaration Date, a person becomes the beneficial owner of more than 15% of the
then outstanding shares of Common Stock (except pursuant to an offer for all
outstanding shares of Common Stock which the board of directors determines to be
fair to and otherwise in the best interests of the Corporation and its
stockholders), then each holder of a Right will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain circumstances, cash,
property or other securities of the Corporation) having a value equal to two
times the Purchase Price of the Right. Rights are exercisable following the
occurrence of the foregoing only after such time as the Rights are no longer
redeemable by the Corporation, as set forth below. Notwithstanding any of the
foregoing, following the occurrence of the event set forth in this paragraph,
all Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and
void.

     In the event that, at any time following the Stock Acquisition Date, (i)
the Corporation is acquired in a merger or other business combination
transaction in which the Corporation is not the surviving corporation or in
which the Corporation's outstanding Common Stock is exchanged for cash, stock or
other property (other than a merger which follows an offer for all outstanding
shares described in the preceding paragraph), or (ii) 50% or more of the
Corporation's assets or earning power is sold or transferred, each holder of a
Right (except Rights which previously have been voided as set forth above) shall
thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the Purchase Price of the
Right.

     The Purchase Price payable, and the number of Units of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution, as set forth in the Rights
Agreement. With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Rights, fractions of shares of Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a share), or
fractional shares of Common Stock will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of the Rights,
Preferred Stock, or Common Stock, respectively, on the last trading date prior
to the date of exercise.

     In general, the Corporation may redeem the Rights in whole, but not in
part, at a price of $.001 per Right, at any time until ten days following the
Stock Acquisition Date (or such later date as may be determined by the
Corporation's board). Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the $.001 redemption price.

                                       2

<PAGE>   9

     At any time after a person becomes beneficial owner of 15% or more of the
Common Stock then outstanding, and prior to the first date upon which that
person becomes the beneficial owner of at least 50% of the outstanding Common
Stock, the Corporation may, by majority vote of the board of directors, exchange
some or all of the outstanding Rights (other than those that have become void)
for shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted for splits, dividends, and similar transactions
(the "RATIO OF EXCHANGE"). Immediately upon the action of the Board of Directors
ordering the exchange of the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the number of Common Shares
equal to the Ratio of Exchange.

     Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Corporation, including, without limitation, the
right to vote or to receive dividends.

     Other than those provisions relating to the redemption price of the Rights,
any of the provisions of the Rights Agreement may be supplemented or amended by
the Board of Directors prior to the Distribution Date, without approval of the
Rights holders, whether or not a supplement or amendment is adverse to the
Rights holders. After the Distribution Date, the provisions of the Rights
Agreement (other than the provisions relating to the redemption price or the
final expiration date of the Rights) may be amended by the Board of Directors in
order to make changes which do not materially and adversely affect the interests
of holders of Rights (excluding the interests of any Acquiring Person),
provided, however, that the Rights Agreement may not be amended to (i) make the
Rights again redeemable after the Rights have ceased to be redeemable, or (ii)
change any other time period unless such change is for the benefit of the
holders (excluding any Acquiring Person).

                                       3<PAGE>   1

                                                                   EXHIBIT 10.23

                                      LEASE

                                       FOR

                              SERRANO CREEK CENTER

                                 BY AND BETWEEN

                              SERRANO JACK, L.L.C.
                                   "LANDLORD"

                                       AND

                           WESTERN DIGITAL CORPORATION
                                    "Tenant"

<PAGE>   2

                                      LEASE

This Lease dated for reference purposes as of May__, 2000, by and between
SERRANO JACK, L.L.C., a Delaware limited liability company ("Landlord") and
WESTERN DIGITAL CORPORATION, a Delaware corporation ("Tenant").

ARTICLE 1. BASIC LEASE INFORMATION:

        Each reference in the Lease to any of the Basic Lease Information shall
mean the respective information set forth below, and such information shall be
deemed incorporated as a part 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 Lease, the former shall control.

        1.1     Buildings:          Serrano Creek Center
                                    20411, 20511 and 20521 Lake Forest Drive
                                    Lake Forest, California

        1.2     Landlord:           Serrano Jack, L.L.C., a Delaware limited
                                    liability company

        1.3     Landlord's Address for Giving of Notices and Payment of Rent:

                                    Serrano Jack, L.L.C.
                           c/o      Birtcher Property Services
                                    Attn: Portfolio Manager
                                    27611 La Paz Rd
                                    PO Box 30009
                                    Laguna Niguel, CA 92607-0009
                                    Fax No.  (949) 643-7455
                                    Phone No.  (949) 643-7400

                                    With a Copy of Notices only to:

                                    Serrano Jack, L.L.C.
                                    c/o AmberJack Ltd.
                                    Attn:  Investment Dept. - Real Estate
                                    One State Farm Plaza, E-10
                                    Bloomington, IL  61710
                                    Fax No.  (309) 766-0442

                                    For overnight packages:

                                    27611 La Paz Rd.
                                    Laguna Niguel, CA 92677

        1.4     Tenant:             Western Digital Corporation, a Delaware
                                    corporation

        1.5     Tenant's Address for Giving of Notices:

                                    Western Digital Corp.
                                    Attn:  Real Estate Specialist
                                    8105 Irvine Center Drive
                                    Irvine, CA  92618
                                    Fax No.  (949) 932-5633
                                    Phone No.  (949) 932-5000

                                    After Commencement Date:

                                    20411 Lake Forest Drive
                                    Lake Forest, CA 92630

        1.6     Premises: All of the land described on Exhibit A attached hereto
                (the "Land") including the three (3) Buildings located thereon
                (Buildings A, B and C), consisting of an aggregate of 187,673
                square feet, with Building A comprised of 56,109 square feet,
                Building B comprised of 75,455 square feet and Building C
                comprised of 56,109 square feet, all as shown on Exhibit B
                attached hereto, together with all of the Park Common Areas
                located on the Land as depicted on Exhibit B.

        1.7     Park Common Areas: All areas of the Land situated outside of the
                exterior walls of the Buildings as outlined on Exhibit B
                attached hereto.

        1.8     Project: Project is synonymous with Premises as used and defined
                in this Lease.

        1.9     Parking: Parking shall be within parking spaces striped on the
                surface lot constructed on the Land as shown on Exhibit B and
                part of the Park Common Areas.

                                       1
<PAGE>   3

        1.10    Use of Premises: Offices, corporate headquarters, research and
                development laboratories, and related uses in connection
                therewith, all in compliance with applicable laws and private
                restrictions and pursuant to all required permits and approvals
                pertaining to Tenant's use to be obtained by Tenant at Tenant's
                expense. Tenant's initial use shall be electronic laboratories
                for product development, quality control and testing and
                engineering of computer disk drives and corporate headquarters
                and offices in connection therewith. (Article 3)

        1.11    Construction Information Submittal Dates: Tenant shall provide
                all of the construction information requested by Tenant's
                architect, Landlord and Landlord's architect in accordance with
                Exhibit D of this Lease.

        1.12    Construction Document Approval Dates: Landlord and Tenant shall
                approve the Working Drawings in accordance with the terms and
                conditions set forth in Exhibit D of this Lease.

        1.13    Anticipated Commencement Date: November 1, 2000. The actual
                Commencement Date shall be determined as set forth in Section
                2.3.

        1.14    Lease Term: One hundred twenty (120) months, commencing on the
                Commencement Date and expiring on the last day of the one
                hundred twentieth (120th) month from and after the Commencement
                Date (or from and after the first day of the next calendar month
                if the Commencement Date occurs on a date other than the first
                day of a calendar month). (Section 2.3)

        1.15    Base Rent:

<TABLE>
<CAPTION>
                            Months During Term                      Monthly Base Rent Amount
                            ------------------                      ------------------------
<S>                                                                 <C>
                            1-12                                    $253,358.55
                            13-24                                   $260,959.30
                            25-36                                   $268,788.07
                            37-48                                   $276,851.71
                            49-60                                   $285,157.26
                            61-72                                   $293,711.97
                            73-84                                   $302,523.32
                            85-96                                   $311,599.01
                            97-108                                  $320,946.98
                            109-120                                 $330,575.38
</TABLE>

                The months referred to above are the full calendar months after
                any first partial month of the Lease Term. The Base Rent for any
                such partial month shall be prorated based on the same rents as
                specified for the first full calendar month when Base Rent is
                payable. Upon Tenant's execution of this Lease, Tenant has
                deposited with Landlord $253,358.55 to be applied against the
                first month's Rent. (Section 2.4)

        1.16    Tenant's Percentage of Operating Expenses shall be one hundred
                percent (100%). (Section 6.2)

        1.17    Letters of Credit: See Article 7.

        1.18    Guarantor(s) Name and Address: N/A

        1.19    Brokers: Landlord: CB Richard Ellis, Inc.

                         Tenant: Daum Commercial Real Estate

                                       2
<PAGE>   4

LANDLORD                                     TENANT

SERRANO JACK, L.L.C.,                        WESTERN DIGITAL CORPORATION,
a Delaware limited liability company         a Delaware corporation

By:      AmberJack Ltd.,
         an Arizona corporation,             By: /s/  MATTHEW E. MASSENGILL
         Managing Member                        --------------------------------

         By: /s/  DAVID C. GRAVES            Name (print): Matthew E. Massengill
            -----------------------------                  ---------------------

         Name (print): David C. Graves       Title:   President  & CEO
                       ------------------          -----------------------------

         Title:   President                  Date:    May 30, 2000
               --------------------------         ------------------------------

         Date:    June 1, 2000               By: /s/  TERESA A. HOPP
              ---------------------------       --------------------------------

         By: /s/  EARLE B. JOHNSON           Name (print): Teresa A. Hopp
            -----------------------------                 ----------------------

         Name (print): Earle B. Johnson      Title:   CFO
                      -------------------          -----------------------------

         Title: Vice President               Date:    May 30, 2000
               --------------------------         ------------------------------

         Date:  June 1, 2000
              ---------------------------

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<PAGE>   5

                                 LEASE AGREEMENT

                              TERMS AND CONDITIONS

ARTICLE 2. DEMISE AND RENT:

        2.1 DEMISE: Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, upon and subject to the terms, covenants, provisions and
conditions of this Lease Agreement (herein called the "Lease"), the Premises
(including all Buildings [each individually a "Building"] and Park Common Areas)
located on the Land described on Exhibit A attached hereto and incorporated
herein. The Buildings and Park Common Area are more particularly depicted on
Exhibit B attached hereto and incorporated herein, and Landlord and Tenant
hereby stipulate and agree that the square footages of the Buildings as set
forth in Section 1.6 hereof shall be the square footages for all purposes of
this Lease without re-measurement or adjustment of any kind. The floor plans for
the Buildings are outlined on Exhibit C attached hereto and the Buildings shall
be delivered to Tenant complete and in substantial conformance with the
specifications outlined in Exhibit C-1 attached hereto, both of which are
incorporated herein by this reference.

        2.2 PREMISES: The Premises (herein called "Premises") leased to Tenant
are described in Section 1.6 hereof, constituting and located in the Buildings
described in Section 1.6 and Section 2.1 hereof, together with the Park Common
Areas.

        2.3 TERM AND COMMENCEMENT: Unless sooner terminated as provided herein,
the term of this Lease (the "Lease Term") shall be for that period of years and
months set forth in the Basic Lease Information, as the same may be extended in
accordance with any option or options to extend the Lease Term granted herein,
and shall commence (the "Commencement Date") on the earlier of (i) the date upon
which the last of the Premises is "substantially completed" as defined in the
Work Letter attached hereto as Exhibit D, or (ii) the date Tenant commences
occupancy of the last of the Premises for the conduct of business therein;
provided however, that with respect to clause (i) only, in no event shall the
Commencement Date be earlier than November 1, 2000. When the actual Commencement
Date has occurred, Landlord and Tenant shall execute a Commencement Date
Memorandum in the form shown in Exhibit E attached hereto. Landlord and Tenant
anticipate that the Lease Term will commence on the "Anticipated Commencement
Date" set forth in the Basic Lease Information, but the "Anticipated
Commencement Date" shall in no event affect the actual Commencement Date, which
shall be determined as set forth in this Section 2.3. Tenant shall have the
early possession rights as set forth in (and subject to the provisions of)
Section 30.1 below. Landlord agrees to prioritize completion of the laboratories
and data center portions of the Tenant Improvements, provided that (i) Tenant
submits to Landlord all specifications and requirements sufficient for Landlord
to be able to so prioritize such areas, and (ii) in no event shall Landlord be
required to delay other portions of the Tenant Improvements as part of such
prioritization. If Landlord has not delivered all of the Premises with the
Tenant Improvements substantially completed by February 1, 2001 plus Tenant
Delays and delays due to force majeure as defined in Section 31.5, Landlord
thereafter (so long as no Event of Default by Tenant is outstanding) shall pay
to Tenant an amount equal to the holdover rent on a per day basis required to be
paid by Tenant to The Irvine Company under its existing lease at 8105 Irvine
Center Drive pursuant to the terms and conditions of its existing lease (the
"Existing Lease") at such location (exclusive of operating expenses and net of
the rent in effect immediately prior to the expiration of the term of the
Existing Lease), up to a maximum amount of ($0.96 per square foot of the
Buildings which Landlord has not substantially completed as defined in Exhibit D
attached to this Lease) ~ 30, per day, for each day that Landlord has failed to
so deliver possession of all of the Premises to Tenant from the expiration of
such period until the earlier of (a) the date upon which Landlord has so
delivered all of the Premises to Tenant, or (b) sixty (60) days following the
commencement of such holdover rent payment obligation. Notwithstanding the
preceding sentence, (i) if Landlord has not delivered the portions of the
Premises containing the laboratories and data center with the Tenant
Improvements substantially completed by February 1, 2001 plus Tenant Delays and
delays due to force majeure as defined in Section 31.5, then the obligation of
Landlord to pay holdover rent on a per day basis as hereinabove described shall
be extended for the period of such failure to deliver the laboratory and data
center portions of the Premises up to a maximum of an additional sixty (60)
days, (ii) Landlord shall promptly notify Tenant if Landlord at any time
reasonably believes that Landlord will not have all or any portion of the
Premises available for occupancy by Tenant by February 1, 2001, and Tenant shall
thereafter seek to mitigate damages with The Irvine Company to the extent
reasonably possible, and (iii) to the extent applicable and appropriate under
the circumstances, Landlord shall make available for Tenant's temporary use
alternative space owned by Landlord in other properties in the general
geographic area of the Premises, on the same terms as set forth in this Lease
(except that Base Rent shall be at the same per square foot rate as under this
Lease for the amount of temporary space occupied by Tenant, and Tenant shall
have no right and Landlord shall have no obligation to alter, improve or modify
such temporary space) until such time as Landlord has made the Premises
available for occupancy by Tenant. The failure of Tenant to seek to reasonably
mitigate damages in accordance with clause (ii) of the preceding sentence or to
accept temporary space adequate for Tenant's temporary use in accordance with
clause (iii) of the preceding sentence shall render the obligations of Landlord
to pay holdover rent under this Section 2.3 void and of no further force or
effect.

        2.4 RENT: The rents shall be and consist of a Base Rent (herein called
"Base Rent") and Additional Rent (herein called "Additional Rent"). For purposes
of this Lease Agreement, Base Rent and Additional Rent are referred to
collectively as "Rent." Base Rent shall be the amount indicated in the Basic
Lease Information. Base Rent shall be payable in equal monthly installments in
advance on the first day of each and every calendar month during the term of
this Lease (except to the extent otherwise specifically provided elsewhere in
this Lease and except that Tenant shall pay, upon the execution and delivery of
this

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<PAGE>   6

Lease by Tenant, the sum indicated in the Basic Lease Information, to be applied
against the first installment of Base Rent becoming due under this Lease).
Additional Rent shall consist of all other sums of money as shall become due
from and payable by Tenant to Landlord under this Lease. All Rent shall be paid
in lawful money of the United States of America to Landlord at its office or
such other place as Landlord shall designate by notice to Tenant. Tenant shall
pay the Base Rent and Additional Rent promptly when due without notice or demand
and without any abatement (except as expressly provided in Sections 3.3.8, 15.3,
19.1 and 19.2 of this Lease), deduction or offset for any reason whatsoever. If
the Commencement Date occurs on a day other than the first day of a calendar
month, the Base Rent for that partial calendar month shall be prorated as
provided in Section 31.8.

        2.5 LATE CHARGE: Tenant agrees that if Rent from Tenant to Landlord
remains unpaid five (5) days after said amount is due, the amount of such unpaid
Rent or other payments shall be increased by a late charge to be paid to
Landlord by Tenant in an amount equal to the greater of (i) five percent (5%)of
the amount of the delinquent Rent or other payment, or (ii) an amount equal to
any late charge imposed upon Landlord under any Superior Lease or Superior
Mortgage (as defined in Section 8.1 below), plus two percent (2%) of the amount
of the delinquent Rent or other payment, in no event however to exceed any
maximum amount permitted by applicable law, and provided further that if Tenant
is so delinquent more than two (2) times in any twelve (12) month period, the
percentage in clause (i) hereof shall be increased to ten percent (10%) for
every late payment charge after the second in a twelve-month period. The
provisions of this Section in no way relieve Tenant of the obligation to pay
Rent or other payments on or before the date on which they are due, nor do the
terms of this Section in any way affect Landlord's remedies pursuant to Article
22 of this Lease in the event Rent is past due.

        2.6 CONFIDENTIALITY: Tenant shall use reasonable good faith efforts not
to disclose and shall instruct its employees and representatives not to disclose
the Rent and other material terms of this Lease except to the extent disclosure
is reasonably necessary in the conduct of Tenant's business or as otherwise
required by applicable law.

ARTICLE 3. USE:

        3.1 Tenant shall use the Premises only for the use specified in Section
1.10 of the Basic Lease Information and for no other purpose without the prior
written consent of Landlord. If any governmental license or permit, other than a
certificate of occupancy, shall be required for the proper and lawful conduct of
Tenant's business in the Premises or any part thereof, Tenant, at its expense,
shall duly procure and thereafter maintain such license or permit and submit the
same to Landlord for inspection. Tenant shall at all times comply with the terms
and conditions of each such license or permit. Tenant shall not do or permit
anything to be done in, on, or about the Project or bring or keep anything
therein which will: (i) in any way obstruct or interfere with the rights of any
neighboring properties to the Project, or injure or unreasonably annoy the
owners or occupants of such properties; (ii) use or allow the Project to be used
for any unlawful purpose; (iii) use or allow the Premises to be used for
schools, government offices or other uses inconsistent with comparable Class A
office, headquarters and research and development buildings; (iv) cause or
maintain or permit any nuisance, nor commit or allow the commission of any
waste, nor use or permit anything to be done which will in any way conflict with
any law, statute, ordinance, or governmental rule or regulation applicable to
Tenant now in force or which may hereafter be enacted or promulgated; and (v) in
any way increase the rate of any insurance upon the Project or any of its
contents or cause a cancellation of said insurance or otherwise affect said
insurance in any adverse manner. Tenant shall, at its sole cost and expense,
promptly comply with all laws, statutes, ordinances, and governmental rules,
regulations, or requirements ("Legal Requirements") applicable to Tenant's
particular use of the Premises now in force or which may hereafter be in force,
and with the requirements of any board of fire underwriters or similar body now
or hereafter constituted relating to or affecting Tenant's particular use,
alteration, or occupancy of the Premises. Tenant shall also promptly comply with
all private restrictions now or at any time hereafter encumbering the Project,
including without limitation that certain Declaration, Covenant for Easement and
Maintenance Agreement and that certain Grant of Trail Easement and Maintenance
Agreement to be recorded against the Project, provided however, that with
respect to any other future private restriction which Landlord voluntarily
elects (and not mandated by any governmental authority or otherwise required due
to Tenant's particular use of the Premises) to record as an encumbrance against
the Project, Tenant shall have the right to review and reasonably approve any
provisions of such voluntary private restrictions to the extent that the same
limit any of Tenant's rights or increase any of Tenant's obligations under this
Lease. Tenant shall not be required to make structural changes to the Buildings
or the Park Common Areas to comply with Legal Requirements, unless related to or
affected by: (i) alterations or improvements made by or for Tenant, including
without limitation any structural or other changes resulting from Tenant's use
of or acts at the Premises; or (ii) Tenant's use or acts, and in all other
events, Landlord shall be responsible for such structural changes, subject to
reimbursement to the extent reimbursable under Article 5 below. Similarly,
Tenant shall not be required to incur expenses in connection with compliance of
the Buildings or Park Common Areas with Legal Requirements in effect at the time
of construction of the Buildings or Park Common Areas to the extent that the
Buildings or Park Common Areas are not so in compliance and were not in
compliance with such Legal Requirements at the time of their construction, and
Landlord shall, at Landlord's expense, be responsible for bringing the Buildings
and Park Common Areas into compliance with all such Legal Requirements in effect
at the time of construction of the Buildings or Park Common Areas if, as and
when required by applicable governmental authorities. The judgment of any court
of competent jurisdiction or the admission of Tenant in an action against
Tenant, whether Landlord be a party thereto or not, that Tenant has so violated
any Legal Requirements, shall be conclusive of such violation as between
Landlord and Tenant. Tenant shall use its best efforts to prevent any violation
of applicable Legal Requirements by its

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<PAGE>   7

directors, officers, agents, employees, contractors, customers, invitees,
subsidiaries, affiliates, subtenants, successors and/or assigns (collectively
the "Tenant Parties").

        3.2 [INTENTIONALLY DELETED]

        3.3 HAZARDOUS SUBSTANCES: Except for storage and use that has been
expressly permitted in this Section 3.3, Tenant shall not cause or permit the
release, discharge, or disposal nor the presence, use, transportation,
generation, or storage of any Hazardous Material (as defined below) in, on,
under, about, to, or from the Buildings, the Land or the Park Common Areas by
either Tenant or any Tenant Parties. Tenant further agrees and covenants to
Landlord, its employees, property managers, independent contractors, affiliates,
shareholders, directors and officers (collectively the "Landlord Parties") that:

             3.3.1 Tenant shall comply and shall use reasonable efforts to cause
all Tenant Parties to comply (but in any event shall be responsible for
non-compliance by any Tenant Parties) with all Environmental Laws (as defined
below) in effect, or that may come into effect, applicable to the Tenant or
Tenant's use and occupancy of the Project;

             3.3.2 Tenant shall immediately notify Landlord, in writing, of any
existing, pending or threatened (a) investigation, inquiry, claim or action by
any governmental authority in connection with any Environmental Laws of which
Tenant receives notice; (b) third party claims of which Tenant receives notice
with respect to the Project; (c) regulatory actions of which Tenant receives
notice with respect to the Project; and/or (d) contamination of the Project;

             3.3.3 Tenant shall, at Tenant's expense, investigate, monitor,
remediate, and/or clean up any Hazardous Material or other environmental
condition on, about, or under the Project required as a result of Tenant's or
any Tenant Parties' use or occupancy of the Project;

             3.3.4 Tenant shall keep the Project free of any lien imposed
pursuant to any Environmental Laws; and

             3.3.5 Tenant shall indemnify, defend, and save Landlord and all
Landlord Parties harmless for, from and against any and all claims (including
personal injury, real, or personal property damage), actions, judgments,
damages, penalties, fines, costs, liabilities, interest, or attorney fees that
arise, directly or indirectly, from Tenant's or any Tenant Parties' violation of
any Environmental Laws or the presence of any Hazardous Materials on, under or
about the Project caused or permitted by Tenant or any Tenant Parties.

The Tenant's obligations, responsibilities, and liabilities under this Section
shall survive the expiration or termination of the Lease.

For purposes of this Section the following definitions apply:

"Hazardous Materials" shall mean: (1) any "hazardous waste" and/or "hazardous
substance" defined pursuant to any Environmental Laws; (2) asbestos or any
substance containing asbestos; (3) polychlorinated biphenyls; (4) lead; (5)
radon; (6) pesticides; (7) petroleum or any other substance containing
hydrocarbons; (8) any substance which, when on the Project, is prohibited by any
Environmental Laws; (9) petroleum; and (10) any other substance, material, or
waste which, (i) by any Environmental Laws requires special handling or
notification of any governmental authority in its collection, storage,
treatment, or disposal or (ii) is defined or classified as hazardous, dangerous
or toxic pursuant to any Environmental Laws.

"Environmental Laws" shall mean: any and all federal, state and local laws,
statutes, codes, ordinances, regulations, rules or other requirements, relating
to human health or safety or to the environment, including, but not limited to,
those applicable to the storage, treatment, disposal, handling and release of
any Hazardous Materials, all as amended or modified from time to time.

             3.3.6 Notwithstanding the foregoing, Tenant shall have the right,
without obtaining prior written consent of Landlord, to utilize within the
Buildings standard office products that may contain Hazardous Materials (such as
photocopy toner, "White Out", and the like), provided however, that (i) Tenant
shall maintain such products in their original retail packaging, shall follow
all instructions on such packaging with respect to the storage, use and disposal
of such products, and shall otherwise comply with all applicable laws with
respect to such products, and (ii) all of the other terms and provisions of this
Section 3.3 shall apply with respect to Tenant's storage, use and disposal of
all such products. In addition, subject to all of the other terms and provisions
of this Section 3.3 (including without limitation as set forth in the balance of
this Subsection 3.3.6), Landlord shall not withhold its consent to Tenant
storing and using upon the Premises those Hazardous Materials and in the
quantities listed on Exhibit G attached hereto, subject to Tenant's compliance
with any conditions of approval contained therein or any reasonable conditions
of approval contained in a separate writing from Landlord, and provided such
storage and use is in accordance with all applicable Legal Requirements and
permits and the provisions of this Section 3.3. Landlord may, in its reasonable
discretion, place such conditions as Landlord deems appropriate with respect to
any of such Hazardous Materials, or any other Hazardous Materials Tenant may
request to use at the Premises; and in connection therewith, Tenant understands
that Landlord may utilize an environmental consultant to assist in determining
conditions of approval of the storage, generation, release, disposal or use of
Hazardous Materials by Tenant on or about the Premises, and/or to conduct
periodic inspections of the storage, generation, use, release and/or disposal of
such Hazardous Materials by Tenant on and from the Premises, and Tenant agrees
that any reasonable costs incurred by Landlord in connection with (i)
determining such conditions, and (ii) conducting up to one (1) inspection per
calendar year (unless a release or noncompliance has occurred or is discovered,
in which event additional inspection(s) with respect to such release(s) may
occur at Tenant's expense) shall be reimbursed by Tenant to Landlord as
Additional Rent hereunder upon demand.

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                    Subject to the restrictions on entry set forth in Article 16
below, Landlord and its representatives shall have the right, but not the
obligation, to inspect, sample and/or monitor the Premises and/or the soil or
groundwater thereunder at any time upon prior notice to Tenant's corporate
services department to determine whether Tenant is complying with the terms of
this Section 3.3, and in connection therewith Tenant shall provide Landlord with
full access to all relevant facilities, records and personnel. Any sampling and
monitoring shall be at Landlord's expense unless the same reveals a
noncompliance by Tenant under this Section 3.3, in which event Tenant shall
reimburse to Landlord all costs reasonably incurred in connection therewith as
Additional Rent upon demand. If Tenant is not in compliance with any of the
provisions of this Section 3.3, or in the event of a release of any Hazardous
Material on, under or about the Premises caused or permitted by Tenant, or any
Tenant Parties, Landlord and its representatives shall have the right, but not
the obligation, without limitation upon any of Landlord's other rights and
remedies under this Lease, to immediately enter upon the Premises (subject to
the restrictions on entry set forth in Article 16 below unless such entry arises
out of a release of any Hazardous Material, in which event such restrictions
shall not apply) and to discharge Tenant's obligations under this Section 3.3 at
Tenant's expense, including without limitation the taking of emergency or
long-term remedial action. Landlord and its representatives shall, except in an
emergency, coordinate any such entry with Tenant following reasonable prior
notice to Tenant, and shall endeavor to minimize interference with Tenant's
business in connection therewith, but shall not be liable for any such
interference unless such interference arises out of willful misconduct of
Landlord. In addition, Landlord, at Tenant's expense, shall have the right, but
not the obligation, to join and participate in any legal proceedings or actions
initiated in connection with any claims arising out of the storage, generation,
use, release and/or disposal by Tenant or any Tenant Parties, of Hazardous
Materials on, under, from or about the Premises.

                    Promptly upon the expiration or sooner termination of this
Lease, Tenant shall at Tenant's expense obtain a report prepared by a qualified
licensed and certified environmental engineer, certifying to Landlord and Tenant
that there are no Hazardous Materials on, under or about the Premises as a
result of any acts or omissions of Tenant or any Tenant Parties. If Tenant or
such report discloses the existence of Hazardous Materials on, under or about
the Premises, or if Landlord at any time discovers that Tenant or any Tenant
Parties caused or permitted the release of a Hazardous Material on, under, from
or about the Premises, Tenant shall, at Landlord's request, immediately prepare
and submit to Landlord within thirty (30) days after such request a
comprehensive plan, subject to Landlord's approval, specifying the actions to be
taken by Tenant to return the Premises to the condition existing prior to the
introduction of such Hazardous Materials. Upon Landlord's approval of such clean
up plan, Tenant shall, at Tenant's sole cost and expense, without limitation on
any rights and remedies of Landlord under this Lease or at law or in equity,
immediately implement such plan and proceed to clean up such Hazardous Materials
in accordance with all Environmental Laws and as required by such plan and this
Lease.

             3.3.7 On each anniversary of the Commencement Date until the
expiration or sooner termination of this Lease, Tenant shall disclose to
Landlord in writing the names and amounts of all Hazardous Materials which were
stored, generated, used, released and/or disposed of on, under or about the
Premises for the twelve-month period prior thereto, and which Tenant desires to
store, generate, use, release and/or dispose of on, under or about the Premises
for the succeeding twelve-month period. In addition, to the extent Tenant is
permitted to utilize Hazardous Materials upon the Premises, Tenant shall
promptly provide Landlord upon request with complete and legible copies of all
the following environmental documents relating thereto: reports filed pursuant
to any self-reporting requirements; permit applications, permits, monitoring
reports, work place exposure and community exposure warnings or notices and all
other reports, disclosures, plans or documents (even those which may be
characterized as confidential) relating to water discharges, air pollution,
waste generation or disposal, and underground storage tanks for Hazardous
Materials. Tenant shall promptly provide Landlord, without the need for request
from Landlord, with complete and legible copies of: orders, reports, notices,
listings and correspondence (even those which may be considered confidential) of
or concerning the release, investigation of, compliance, cleanup, remedial and
corrective actions, and abatement of Hazardous Materials; and all complaints,
pleadings and other legal documents filed by or against Tenant related to
Tenant's use, handling, storage, release and/or disposal of Hazardous Materials.

             3.3.8 If the presence or release of Hazardous Materials caused
solely by Landlord renders the Premises untenantable in whole or in part or
results in Tenant being required to vacate the Premises in whole or in part
pursuant to an order or requirement of any governmental agency or authority,
then the Rent, Taxes, insurance premiums, and other charges, if any, payable by
Tenant hereunder applicable to any such Building area so untenantable, if any,
for the period during which such Building area remains so impaired, shall be
abated in proportion to the degree to which Tenant's use of such Building area
is impaired and for the period of such impairment, provided however, that to the
extent that Tenant's business interruption insurance, if any, or other insurance
would cover such obligations, Tenant shall either cause such proceeds to be paid
to Landlord or this abatement provision shall not apply.

        3.4 ANTENNA USES: Landlord hereby grants Tenant the right to install and
maintain a satellite dish and related facilities and antenna (collectively the
"Antenna") on the roofs of the Buildings, at Tenant's expense, which Antenna and
its location shall be reasonably approved by Landlord and shall be in compliance
with the following terms, requirements and conditions:

             3.4.1 The size, location and placement, as well as the manner and
method of installation and removal of the Antenna and related equipment, shall
be subject to the prior written approval of Landlord, which shall not be
unreasonably withheld. The Antenna and related equipment shall not penetrate the
roof membrane and shall be adequately screened from view. If Landlord elects to
hire structural, mechanical, roofing and/or other engineers or consultants to
review such plans and specifications, Tenant shall reimburse Landlord for the
reasonable costs thereof, whether or not Landlord grants such approval.

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<PAGE>   9

             3.4.2 Tenant shall pay for all utilities consumed to install,
maintain, operate and remove its Antenna and equipment, as well as the
reasonable costs of any engineers or consultants employed by Landlord to review
the same.

             3.4.3 Prior to the installation of said Antenna and equipment,
Tenant shall secure and shall at all times thereafter maintain all required
approvals and permits of the Federal Communications Commission and all other
governmental bodies having jurisdiction over its business, including its
communications, operations, and facilities. Tenant shall at all times comply
with all laws and ordinances and all rules and regulations of municipal, state
and federal governmental authorities relating to the installation, maintenance,
height, location, use, operation, and removal of said Antenna and equipment and
shall fully indemnify Landlord and all Landlord Parties against any loss, cost,
or expense which may be sustained or incurred by it as a result of the
installation, maintenance, operation, or removal of said Antenna and equipment.
Landlord makes no representation that applicable laws, ordinances or regulations
permit the installation or operation of antennas on the Project.

             3.4.4 Landlord hereby grants unto Tenant the right, to be exercised
as herein set forth, to enter upon the roofs of the Buildings for the sole
purpose of gaining access to the Tenant's installation. In addition thereto,
Landlord grants unto Tenant the right, to be exercised as herein set forth, to
install such equipment, conduits, chases, utility closets and other facilities
as is reasonably necessary to connect Tenant's Antenna to Tenant's other
machinery and equipment in other parts of the Buildings, subject to the
requirements of any permits and the codes, regulations and rules of any
governmental body, agency or authority. Landlord further grants to Tenant the
right of access for the purposes of maintaining, repairing, testing and
replacing the connecting equipment. Tenant shall promptly reimburse Landlord for
the costs of repairs of any damage to the Premises (including the roofs of the
Buildings) directly or indirectly caused by Tenant's installations or the
operation, maintenance or removal thereof.

             3.4.5 Tenant, at its expense, shall be solely responsible for and
shall maintain its Antenna and related equipment in a safe, structural, sound,
clean and sightly condition and shall indemnify and save harmless Landlord
against all liens and claims of mechanics and materialmen furnishing labor and
materials in the construction and maintenance of same.

             3.4.6 Tenant agrees to defend, indemnify and save harmless Landlord
and all Landlord Parties and to assume all liability for death or injury to any
persons and all liability for loss, damage or injury to any property incurred or
sustained by Tenant or any other person arising from, growing out of or
resulting from Tenant's installation or its use of the roofs of the Buildings or
any other areas in the Premises where Tenant's antenna-related equipment is
located, including costs, attorney's fees and other expenses incurred by
Landlord in defending any such claim.

             3.4.7 Landlord shall have the right to terminate the rights under
this Section 3.4 upon written notice to Tenant, in the event that: (a) it shall
be determined that such installation or use materially interferes with the
operation of machinery and apparatus of the Buildings, such as the elevators; or
(b) it is found by public authority having jurisdiction over the Buildings that
such installation and use constitute a nuisance or hazard to the public or to
the occupants of the Buildings; or (c) the expiration or earlier termination of
this Lease.

             3.4.8 Upon the expiration or earlier termination of this Lease or
the termination of Tenant's rights under this Section 3.4, the Antenna and the
related equipment installed under the terms hereof shall be removed by Tenant
and the area of the Buildings where they were installed shall be restored by
Tenant to as good condition as existed immediately prior to installation of such
Antenna and related equipment.

ARTICLE 4. TENANT'S ACCEPTANCE AND MAINTENANCE OF PREMISES:

        4.1 ACCEPTANCE OF PREMISES: Subject to the provisions of Section 4.2
below relating to latent defects and warranty items, and the punch list items
identified in Exhibit C-2 attached to this Lease and as provided for in Exhibit
D, and subject to all other obligations of Landlord contained in this Lease, by
taking possession of each Building, Tenant accepts such Building as being in the
condition in which Landlord is obligated to deliver it and otherwise in good
order, condition and repair. Except as set forth in Section 4.2 below and any
punchlist items, Landlord shall have no obligation to repair or maintain the
Premises, and except for Landlord's work described in Exhibit D, Landlord shall
have no obligation to alter, remove, improve, decorate, or paint the Premises or
any part thereof. Tenant acknowledges that neither Landlord nor any of
Landlord's agents or employees has made any representations or warranties as to
the suitability or fitness of the Premises for the conduct of Tenant's business,
including, but not limited to, any representations or warranties regarding
zoning or other land use matters, or for any other purpose, and that neither
Landlord nor any of Landlord's representatives or employees has agreed to
undertake any alterations or additions or construct any Tenant Improvements to
the Premises except as expressly provided in Exhibit D attached to this Lease.

        4.2 LANDLORD'S OBLIGATIONS: Subject to the provisions of Section 4.3 and
Article 19, Landlord shall, at Landlord's expense (and not reimbursed as part of
Operating Expenses) for the initial Lease Term only, repair (i) any latent
defects to the foundation, footings, roof structure, underground plumbing,
underground electrical lines and pipes and underground storm drains owned by
Landlord within the Project, load-bearing walls of the Buildings, parking lot
areas within the Park Common Areas, and light standards within such parking lot
areas, which defects pose an imminent threat of injury to persons, damage to
property, or inability of Tenant to occupy the Buildings; and (ii) any other
defects in the construction of the Buildings, the Park Common Areas or the
Tenant Improvements covered by any warranty or guaranty during the length of any
warranty or guaranty period.

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<PAGE>   10

             Landlord shall, subject to receiving Tenant's payment of Operating
Expenses as defined in Article 5, and subject to Section 4.3 and Article 19,
maintain in good condition and repair the Park Common Areas, including but not
limited to, landscaping (including replacement thereof), sprinkler systems,
walkways, parking areas, the exterior surfaces of the exterior walls of the
Buildings, all exterior glass, window seals and vents of the Buildings, fencing
and exterior lighting; and the electrical, mechanical, heating, ventilation and
air conditioning installed by Landlord ("HVAC"), elevators, and plumbing systems
of the Buildings, and fire/life safety and sprinkler systems. Such maintenance
shall include restriping of the parking areas, periodic window washing of the
exterior windows of the Buildings (but in no event less than 4 times per year),
and painting of the exterior walls of the Buildings, as and when the same
becomes necessary in Landlord's reasonable discretion or as requested by Tenant.
Such maintenance shall further include the roofs of the Buildings. Landlord's
regularly scheduled maintenance under this Section 4.2 shall generally conform
to the specifications set forth in Exhibit I attached to this Lease. Landlord
shall not be required to make any repairs unless and until Tenant has notified
Landlord in writing of the need for such repair and Landlord shall have a
reasonable period of time thereafter to commence and complete said repair, if
warranted. The cost of any maintenance, repairs and/or replacements on the part
of Landlord provided for in this Section 4.2 shall be considered part of
Operating Expenses and paid by Tenant in the manner set forth in Article 5,
except as provided in the first sentence hereof and except that repairs which
Landlord reasonably deems arise out of any act or omission of Tenant or any
Tenant Parties shall be made at the immediate expense of Tenant. Landlord's
obligation to repair and maintain hereunder shall be limited to the cost of
effecting such repair and maintenance and in no event shall Landlord be liable
for any costs or expenses in excess of said amounts, including but not limited
to any consequential damages, opportunity costs or lost profits incurred or
suffered by Tenant. Upon Tenant's request, Landlord agrees to provide to Tenant
copies of all guaranties and warranties applicable to any portions of the
Project. Notwithstanding the foregoing, Landlord may, by written notice to
Tenant, elect at any time to cease maintaining all or any portion of the Park
Common Areas and/or the roofs of the Buildings, in which event Tenant shall be
responsible for such maintenance as set forth in Section 4.3 below.

        4.3 TENANT'S OBLIGATIONS: Except for Landlord's obligations stated in
Section 4.2 above, Tenant shall, at all times during the term hereof at Tenant's
sole cost and expense, keep the Premises in good order, condition and repair,
which obligation shall include, without limitation, the obligation to maintain,
repair and replace as necessary: (i) floor coverings; (ii) wall coverings; (iii)
paint on the interior of the Buildings; (iv) casework; (v) ceiling tiles; (vi)
supplemental heating, ventilating and air conditioning systems serving the
Premises and installed by or at the request of Tenant ("Supplemental HVAC
Systems"); (vii) window coverings; (viii) lights and ballasts; (ix) locks and
hardware; (x) all of Tenant's Property (as defined in Section 14.2 herein); (xi)
any and all Tenant Improvements (as defined in Exhibit D); (xii) interior window
glass and door glass in the Buildings (including any replacement thereof and
periodic washing of the interior surfaces); (xiii) public lobbies, stairs,
corridors and rest rooms; (xiv) all required janitorial and trash removal
services to the Premises; and (xv) all security systems, card key systems, and
other similar systems serving the Project.

             During the Lease Term, Tenant agrees to employ a contractor or
qualified internal employee reasonably approved by Landlord to perform Tenant's
obligations for maintenance of the Supplemental HVAC System on the Premises.
Such maintenance shall include at least quarterly inspections and cleaning of
said units and systems, together with such adjustments and servicings as each
inspection discloses to be required. In addition, Tenant shall perform all
repair, testing and servicing as shall be necessary or reasonably required by
Landlord or Landlord's insurance underwriter. Upon Landlord's request, Tenant
shall provide to Landlord complete, accurate and legible copies of all periodic
maintenance contracts required hereunder and of the results of any periodic
inspections, testing and repair.

        4.4 TENANT IMPROVEMENTS: A description of the tenant improvements to be
performed by Landlord ("Tenant Improvements") and the terms under which they are
to be executed is attached hereto as Exhibit D. Landlord shall construct the
Tenant Improvements in accordance with Exhibit D and in a good and workmanlike
manner.

ARTICLE 5. OPERATING EXPENSES AND TAXES:

        5.1 OPERATING EXPENSES: For the purpose of this Lease, the term
"Operating Expenses" shall mean all expenses paid or incurred by Landlord (or on
Landlord's behalf) as reasonably determined by Landlord to be necessary or
appropriate for the efficient use, operation, maintenance, repair and
replacement of the Project, including without limitation:

             5.1.1 All costs and expenses to Landlord in maintaining fire and
extended coverage insurance including an all risk endorsement on the property,
public liability, fidelity, rent loss insurance, difference in conditions and
any other insurance maintained by Landlord covering the use and operation of the
Project as set forth in Section 11.2 below, and the part of any claim required
to be paid under the deductible portion of any insurance policies carried by
Landlord in connection with the Project (other than the deductibles under any
earthquake insurance maintained by Landlord for all or any portion of the
Premises, for which Tenant shall not be liable or responsible hereunder), and
subject to the limitation contained in the first sentence of Section 11.2 below.

             5.1.2 Reasonable costs incurred by accountants, attorneys or other
experts or consultants incurred in connection with (i) any items requested by
Tenant, (ii) any matters arising out of or attributable to the acts or omissions
of Tenant or any Tenant Parties, (iii) attempts to reduce Operating Expenses in
other areas, or to reduce Taxes, and (iv) the operation or maintenance of the
Premises, excluding however, any internal costs incurred or required by Landlord
in connection with the Premises (such as, for example, audits

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<PAGE>   11

conducted solely for the benefit of Landlord, disputes between Landlord and its
property manager or any Superior Mortgagee or Superior Lessor, and the like) or
otherwise as limited under Section 5.2 below.

             5.1.3 All costs and expenses incurred by Landlord in operating,
managing (including a commercially reasonable market rate management fee),
maintaining and repairing the Project, including without limitation: (i) all
sums expended in connection with the Park Common Areas for general maintenance
and repairs, resurfacing, painting, restriping, cleaning, sweeping, sidewalks,
curbs, sprinkler systems, planting and landscaping; (ii) maintenance, repair and
replacement of any storm drainage systems; (iii) cost of all tools, equipment
and supplies and personnel specifically utilized to implement such services at
the Project only and to generally monitor and maintain the Project; (iv)
reasonable rental and/or depreciation of machinery and equipment used in such
maintenance and services; (v) the cost of any capital improvements, repairs and
replacements made by or on behalf of Landlord to the Project, net of any
reserves collected therefor; (vi) the cost of any capital improvements, repairs
and replacements made by or on behalf of Landlord for which no reserves were
collected to the extent of the amortized cost thereof over the useful life
thereof calculated at a market cost of funds at the time the expense is
incurred, all as reasonably determined by Landlord; (vii) establishment of
reasonable reserves for replacements and/or repairs to Park Common Areas, roofs
and exterior Premises painting in accordance with the schedule attached hereto
as Exhibit I or otherwise in accordance with generally acceptable accounting
principals and practices; (viii) costs incurred in connection with compliance
with laws (other than building codes in effect at the time of construction of
the Buildings) or changes in laws applicable to the Project; (ix) commercially
reasonable premiums and other commercially reasonable costs for worker's
compensation insurance, salaries, wages, withholding taxes, social security
taxes, medical, surgical, union and general welfare benefits (including without
limitation, group life insurance), and pension or other retirement payments of
employees of Landlord or Landlord's property manager engaged in the repair,
maintenance and operation of the Project; (x) personal property taxes, fees for
required licenses and permits, supplies and charges; (xi) all other costs
incurred by Landlord under Section 4.2 above; and (xii) all other charges
allocable to the operation, maintenance and repair of the Project.

        5.2 EXCLUSIONS FROM OPERATING EXPENSES: Operating Expenses shall not
include: (i) depreciation or amortization and other "non-cash" expense items
(except as provided above in Section 5.1.3); (ii) interest on and amortization
of debts; (iii) Tenant Improvements under Exhibit D; (iv) leasing commissions,
attorneys' fees and other expenses incurred in connection with negotiating this
Lease; (v) costs associated with defense of Landlord's title to or interests in
the Project; (vi) refinancing costs; (vii) advertising and promotional expenses;
(viii) repairs and other work occasioned by fire or other casualty to the extent
Landlord is actually reimbursed or entitled to reimbursements by insurance
proceeds; (ix) fines or penalties incurred due to violations by Landlord of
governmental laws, regulations, orders and the like; (x) all overhead, costs and
expenses associated with the operation of Landlord's business, as distinguished
from costs and expenses associated with the operation of the Project, such as,
without limitation, corporate accounting and legal fees, costs and expense of
defending or prosecuting litigation not related to the Project, and costs and
expense of selling, syndicating, financing or mortgaging Landlord's interest in
the Project; (xi) any items of expense as to which the Landlord is reimbursed by
means other than Operating Expenses such as through insurance proceeds or
litigation against the party who wrongfully caused the expense; (xii) costs of
correcting structural or other construction defects, including any allowances
for same, in the construction of the Buildings or Park Common Areas (including
latent defects) or equipment used therein (or the replacement of defective
equipment) but only to the extent described as a Landlord expense in Section 4.2
above, or costs of repairs covered by any warranties or guaranties; (xiii)
services, items and benefits for which Tenant specifically reimburses Landlord
or for which Tenant pays third persons; (xiv) penalties for late payment,
including, without limitation, with respect to taxes, equipment leases, etc.,
unless arising out of any late payment by Tenant; (xv) costs directly resulting
from the willful misconduct of Landlord, its employees, representatives and/or
contractors; (xvi) costs or expenses for sculpture, paintings or other works of
art (other than on-site sculpture, paintings, or art in place as of the
Commencement Date), including costs incurred with respect to the purchase,
ownership, leasing, showing, promotion, repair and/or maintenance of same;
(xvii) costs of restoration or repair of the Buildings as a result of total or
partial destruction or condemnation thereof, such costs to be handled pursuant
to Article 19 of this Lease; (xviii) contributions to charitable organizations;
(xix) the costs of any initial construction "tap fees" or one-time lump sum
sewer or water connection fees for the Buildings; (xx) compensation in the form
of wages, salaries and such other compensation and benefits, as well as any
adjustments thereto, for all employees and personnel of Landlord not providing
services to the Project; (xxi) fees, costs, reimbursements and other sums paid
to affiliates of Landlord for services provided to the Project to the extent
that such fees, costs, reimbursements or other sums are in excess of prevailing
market amounts for comparable services provided by unaffiliated third parties;
(xxii) any costs, expenses, losses or liabilities relating to the public trail
easement through the Park Common Areas for which Landlord is reimbursed or
indemnified by the County of Orange pursuant to any indemnity or insurance
provisions benefiting Landlord under the easement agreement therefor; (xxiii)
costs paid directly by the County of Orange to maintain and repair the public
trail easement through the Park Common Areas; and (xxiv) costs incurred by
Landlord in connection with responding to any Hazardous Materials release by a
third party who is not a Tenant Party migrating onto the Land.

        5.3 TAXES: The term "Taxes" shall include (i) all real property taxes
and assessments and personal property taxes, charges, rates, duties and
assessments charged, levied or imposed by any governmental authority with
respect to the Project, and any improvements, fixtures and equipment located
therein or thereon, and with respect to all other property of Landlord, real or
personal, used in connection with the operation of the Project or any obligation
to any governmental entity assessed upon Landlord as a result of its ownership
or operation; (ii) any tax in lieu of a real property tax; (iii) any tax or
excise levied or assessed by

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<PAGE>   12

any governmental authority on the rentals payable under this Lease or rentals
accruing from the use of the Project; (iv) any tax or excise imposed or assessed
against Landlord which is measured or based in whole or in part on the capital
employed by Landlord to improve the Project, or to construct the Buildings; (v)
any assessments, levies or charges imposed by any quasi governmental authority,
association, declarant, or similar entity pursuant to any covenant, restriction
or other encumbrance upon or relating to the Project, except to the extent
arising out of the non-performance by Landlord of any Landlord obligations under
any such covenant, restriction or other encumbrance upon or relating to the
Project; and (vi) all reasonable costs and expenses incurred by Landlord in
contesting or negotiating the same with governmental authority if Landlord, in
its reasonable discretion, elects to contest or negotiate the same.
Notwithstanding the foregoing, Taxes shall not include federal or state
corporate or personal income, excess profits, estate, business, inheritance,
succession, transfer or franchise taxes or assessments upon Landlord.

             Tenant may contest the amount or validity of any Taxes or taxes
levied on Tenant's personal property by appropriate proceedings, provided that
Tenant gives Landlord prior written notice of any such contest and keeps
Landlord advised as to all proceedings, and provided further that Tenant shall
continue to reimburse Landlord for Tenant's Pro Rata Share of such Taxes unless
such proceedings shall operate to prevent or stay such payment and the
collection of the Taxes so contested. Landlord shall join in any such
proceedings if any applicable laws shall so require, provided that Tenant shall
indemnify, protect, hold harmless and defend Landlord from and against any
liability, claim, demand, cost or expense in connection therewith, including but
not limited to, attorneys' fees and costs reasonably incurred.

ARTICLE 6. PAYMENT OF OPERATING EXPENSES:

        6.1 OPERATING YEAR: As used in this Article 6, the term "Operating Year"
shall mean each calendar year of the Lease Term and in the event this Lease
begins or ends on any date other than the first day of the calendar year, the
calculations, costs and payments referred to herein shall be prorated as
provided in Section 31.8.

        6.2 TENANT'S PRO RATA SHARE: Throughout the entire Lease Term, Tenant
shall pay, as Additional Rent, the Tenant's Pro Rata Share of the Operating
Expenses and Taxes. If in any Operating Year Tenant occupies the Premises or any
portion thereof for less than the full Operating Year, Tenant's Pro Rata Share
of Operating Expenses and Taxes shall be pro rated accordingly. "Tenant's
Percentage" shall mean a percentage, the numerator of which is the number of
rentable square feet of the Premises and the denominator of which is the total
number of rentable square feet of the Project, whether or not such space is
actually rented. The initial Tenant's Percentage is specified in Section 1.16 of
the Basic Lease Information. "Tenant's Pro Rata Share" shall mean Tenant's
Percentage multiplied by the total Operating Expenses and Taxes for the
applicable Operating Year.

        6.3 WRITTEN STATEMENT OF ESTIMATE: Prior to each Operating Year during
the Lease Term, Landlord shall furnish Tenant for Tenant's review with a written
statement setting forth Tenant's Pro Rata Share of the estimated Operating
Expenses and Taxes for the next Operating Year. Such statement shall (a)
reasonably demonstrate that the amounts charged under each line item of expense
conform to the specifications set forth in Exhibit I attached to this Lease (or,
if there is a deviation from such specifications, include a brief description of
the reasonable basis for such deviation), and (b) for any change in the
amortization amount of any reserves included in such statement, a certification
by Landlord's consultant with respect to such reserve item (or, upon Tenant's
request, by a mutually acceptable third party consultant experienced with such
reserve item) providing a reasonable basis for such change. Tenant shall have
the right to meet with Landlord to (i) confer with Landlord regarding any such
deviations, (ii) propose to Landlord alternatives or options seeking to reduce
Operating Expenses including the right to require competitive bidding for major
line item services (e.g., landscaping, window washing, etc.), without, however,
compromising the quality of any services or compromising any of Landlord's
rights or obligations under this Lease, and (iii) with respect to parking lot
sweeping, steam cleaning, and window washing, Tenant shall have the right to
approve the frequency of such services. It is understood and agreed that,
notwithstanding Tenant's rights to confer with Landlord as set forth in the
preceding sentence, other than with respect to the items under clause (iii) of
said sentence, the decisions of Landlord with respect to service specifications
required to properly maintain the Premises as a Class A building project shall
be final and controlling. Tenant shall pay to Landlord as Additional Rent
commencing on January 1 of the Operating Year, and thereafter on the first day
of each calendar month, an amount equal to one-twelfth of the amount of Tenant's
Pro Rata Share of such Operating Expenses and Taxes. In the event Landlord
delivers the written statement late, Tenant shall continue to pay to Landlord an
amount equal to one-twelfth of Tenant's Pro Rata Share of the Operating Expenses
and Taxes for the immediately preceding Operating Year until Landlord furnishes
the written statement, at which time Tenant shall pay the amount of any excess
of the Tenant's Pro Rata Share for the expired portion of the current Operating
Year over the Tenant's actual payments during such time; any excess payments by
Tenant shall be credited to the next due payment of Additional Rent from Tenant.
The late delivery of any written statement by Landlord shall not constitute a
waiver of Tenant's obligation to pay Tenant's Pro Rata Share of the Operating
Expenses and Taxes, nor subject the Landlord to any liability, but Landlord
shall use reasonable efforts to deliver such written statements of Operating
Expenses and Taxes as soon as reasonably possible.

        6.4 REESTIMATIONS: At any time from time to time during each Operating
Year, not more frequently than once per Operating Year, Landlord may furnish
Tenant with written notice of a reestimation of the annual Operating Expenses
and Taxes to reflect more accurately Landlord's most recent estimate of the
current Operating Expenses and Taxes. Commencing with the first day of the
calendar quarter following delivery of such notice to Tenant, and continuing on
the first day of each calendar month during the Lease

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<PAGE>   13

Term (until subsequently reestimated), Tenant shall pay to Landlord one twelfth
(1/12th) of the Tenant's Pro Rata Share of the estimated Operating Expenses and
Taxes, as reestimated.

        6.5 ANNUAL ADJUSTMENTS: Within ninety (90) days following the end of
each calendar year during the Lease Term, Landlord shall furnish to Tenant an
itemized statement certified by Landlord, setting forth the total Operating
Expenses and Taxes for the preceding calendar year, the amount of Tenant's Pro
Rata Share of such Operating Expenses and the payments made by Tenant with
respect to such calendar year. If Tenant's Pro Rata Share of the actual
Operating Expenses and Taxes for such year exceeds the payment so made by
Tenant, based on the Landlord's estimate, Tenant shall pay Landlord the
deficiency within thirty (30) days after receipt of said statement. If said
payments by Tenant, based on Landlord's estimate, exceed Tenant's Pro Rata Share
of the actual Operating Expenses and Taxes, Landlord will credit the amount of
such overpayment against Tenant's next Operating Expense and Tax payment due;
or, if the Lease has expired or terminated, Landlord will refund such amount to
Tenant within thirty (30) days after the date of such estimate, subject to set
off by Landlord against any sums then due Landlord by Tenant.

        6.6 TENANT EXAMINATION: In addition, Tenant or an authorized
representative of Tenant may at any time during business hours, upon at least
five days advance written notice to Landlord, examine any invoices, receipts,
canceled checks, vouchers or other instruments used to support the figures shown
on any statement of Operating Expenses and Taxes for the Project; provided,
however, that Tenant shall only be entitled to such an examination once in each
Operating Year, and the examination shall not be conducted by anyone who is
engaged on a contingent fee basis to represent Tenant or who is a competitor of
Landlord. Property managers and commercial building owners shall be deemed
competitors of Landlord. The person conducting the examination on behalf of
Tenant shall enter into a confidentiality agreement reasonably satisfactory to
Landlord. In the event the examination discovers an overcharge in excess of 5%
of the Operating Expense payments during the Operating Year covered by the
examination, Landlord shall reimburse Tenant for the actual out-of-pocket costs
reasonably incurred by Tenant due to the examination. In the event the
examination fails to discover an overcharge in excess of 5% of the Operating
Expense payments during the Operating Year covered by the examination, Tenant
shall reimburse Landlord for the actual costs incurred by Landlord due to the
examination.

        6.7 DISPUTES: Each statement given by Landlord pursuant to this Section
shall be conclusive and binding upon Tenant unless within the earlier of (i) one
(1) year plus sixty (60) days after the receipt of such statement, or (ii) sixty
(60) days after Tenant completes any examination under Section 6.6 above, Tenant
notifies Landlord that it disputes the correctness of the statement, specifying
the particular respects in which the statement is claimed to be incorrect. If
such disputes shall not have been settled by agreement, either party, within
sixty (60) days after receipt of such statement, may pursue its available legal
remedies. Tenant hereby agrees that a dispute over the statement or any good
faith error by Landlord in interpreting or applying Article 5 or in calculating
the amounts in the statement shall not be a breach of this Lease by Landlord. If
any legal proceeding over the statement is resolved against Landlord, this Lease
shall remain in full force and effect and Landlord shall not be liable for any
consequential damages, and pending the determination of such dispute, Tenant,
within thirty (30) days of receipt of such statement, shall pay Additional Rent
in accordance with the statement, without prejudice to Tenant's positions. If
the dispute shall be determined in Tenant's favor, Landlord shall forthwith pay
to Tenant the amount of Tenant's overpayment of Additional Rents resulting from
compliance with the statement; or if the Lease has expired or earlier terminated
pursuant to Section 30.4 below, Landlord will promptly refund such amount to
Tenant.

        6.8 PAYMENT: If an Operating Year ends after the expiration or
termination of this Lease, the Additional Rent in respect thereof payable under
this Section shall be paid by Tenant within ten (10) days of its receipt of the
itemized statement for such Operating Year; or, if applicable, Landlord will
deliver any excess amount paid by Tenant concurrently with such itemized
statement.

ARTICLE 7. LEASE SECURITY:

             7.1 Security Deposit: Concurrently with the execution of this
Lease, Tenant shall deposit with Landlord in cash or by wire transfer of funds,
the sum of One Million Eight Hundred Thousand Dollars ($1,800,000.00) (the
"Security Deposit"), to be held by Landlord as security for the full and
faithful performance by Tenant of all of the terms, covenants and conditions of
this Lease to be performed by Tenant during the Term until such time as Tenant
shall deposit with Landlord the first Letter of Credit described in Section 7.2
(i) below, at which time Landlord shall return the Security Deposit to Tenant,
less any amounts properly applied by Landlord by reason of any Tenant Event of
Default under this Lease. The Security Deposit shall be placed in a federally
insured interest bearing account reasonably acceptable to Tenant, with all
interest accruing thereon to be paid to Tenant upon return of the Security
Deposit to Tenant. Prior to the substitution of the first Letter of Credit for
the Security Deposit, upon the occurrence of an Event of Default, including
without limitation any default by Tenant in the payment of Base Rent and
Additional Rent beyond applicable cure periods under this Lease, Landlord may
(but shall not be required to) without waiver of any other rights or remedies
Landlord may have under this Lease or at law or in equity, use, apply or retain
all or any part of the Security Deposit for the payment of any Base Rent and
Additional Rent or any other sums owed to Landlord by reason of such Event of
Default or for any such sums which Landlord may expend or may be required to
expend by reason of such Event of Default, including, but not limited to,
unamortized Tenant Improvement costs, unamortized leasing commissions, and any
damages or deficiency in the reletting of the Premises, whether such damages or
deficiency accrue before or after summary proceedings or other re-entry by
Landlord. If any portion of the Security Deposit is so used or

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<PAGE>   14

applied, Tenant shall, within ten (10) days after demand therefor, deposit with
Landlord in cash or by wire transfer of funds, an amount sufficient to restore
the Security Deposit to its original amount.

             7.2 Letters of Credit: Tenant shall deposit with Landlord two (2)
unconditional, irrevocable sight draft letters of credit in the amounts and for
the purposes set forth below (each hereinafter a "Letter of Credit" and
collectively the "Letters of Credit"). The form and content of each Letter of
Credit shall conform to International Standby Practices 1998 International
Chamber of Commerce Publication No. 590, shall name Landlord as beneficiary
thereunder, shall be freely transferable by Landlord, and shall otherwise be
acceptable to Landlord in its reasonable discretion (including, without
limitation, a provision that any termination or cancellation thereof not be
effective until at least sixty (60) days after delivery of written notice to
Landlord of such termination or cancellation) and shall be drawn on Bank of
America, GE Capital, or another comparable commercial lender reasonably
acceptable to Landlord. Each Letter of Credit shall have a term of twelve (12)
months and shall be replaced or renewed by Tenant annually effective as of each
anniversary of the Commencement Date for consecutive twelve (12) month terms as
set forth below. Landlord shall have the right to obtain written assurances from
the issuer(s) at any time that any of such Letters of Credit are still valid and
enforceable. Upon the occurrence of an Event of Default, including without
limitation any default by Tenant in the payment of Base Rent and Additional Rent
beyond applicable cure periods under this Lease, or if Landlord has not received
replacement Letters of Credit or written confirmation of renewal of any expiring
Letter of Credit at least thirty (30) days prior to its expiration, Landlord
may, without waiver of any other rights or remedies Landlord may have under this
Lease or at law or in equity, draw upon each or all of the Letters of Credit in
whole or in part, and hold same as a cash Security Deposit (if drawn on for
failure to replace or renew) or (if drawn on by reason of the occurrence of an
Event of Default) apply the proceeds thereof to the payment of any Base Rent and
Additional Rent or any other sums owed to Landlord by reason of the occurrence
of such Event of Default or for any such sums which Landlord may expend or may
be required to expend by reason of such Event of Default, including, but not
limited to, unamortized Tenant Improvement costs, unamortized leasing
commissions, and any damages or deficiency in the reletting of the Premises,
whether such damages or deficiency accrue before or after summary proceedings or
other re-entry by Landlord, and Landlord may hold the cash balance as a cash
Security Deposit, provided that at such time as Tenant shall have cured all such
Event(s) of Default and shall have replaced and/or restored the subject
Letter(s) of Credit to their then required full amount(s), and provided further
that Landlord shall not have exercised its right to terminate this Lease as a
result of such Event of Default, Landlord shall return all cash previously drawn
by Landlord less all amounts properly applied by Landlord to any amounts
hereunder and Landlord shall thereafter continue to hold the Letter(s) of Credit
in accordance with the terms of this Article 7.

             The terms of the Letters of Credit shall be as follows:

                    (i) One Letter of Credit shall be for the amount of Three
Million Five Hundred Thousand and 00/100 Dollars ($3,500,000.00). Such Letter of
Credit shall be delivered by Tenant to Landlord at or before the Commencement
Date and have a term of twelve (12) months and shall be replaced or renewed by
Tenant annually at least thirty (30) days prior to expiration (i.e., at least
thirty (30) days prior to each anniversary of the Commencement Date) throughout
the first seven (7) years of the Lease Term as provided herein, in each instance
for a consecutive term of twelve (12) months. At each annual replacement or
renewal during the first seven (7) years of the Lease Term, provided the issuer
has received written authorization from Landlord as set forth below, the face
amount of the renewal or replacement Letter of Credit available for drawing by
Landlord shall be reduced, by the amount of Five Hundred Thousand Dollars
($500,000.00) until the final replacement or renewal Letter of Credit shall
expire and Tenant shall have no further obligation to renew or replace the
Letter of Credit; provided, however, that if as of any anniversary of the
Commencement Date, Landlord shall have drawn upon the Letter of Credit as a
result of an Event of Default under this Lease, or if there shall be outstanding
any of the matters set forth in Section 3.3.2 above, then Tenant shall restore
or replace the Letter of Credit as of such anniversary of the Commencement Date
to the full amount of the prior Letter of Credit in effect immediately prior to
such Event of Default or the commencement of such matter under Section 3.3.2, as
applicable (i.e., without regard to such scheduled reduction), and such
replacement Letter of Credit shall not reduce again until the next succeeding
anniversary of the Commencement Date and then shall reduce only if Landlord has
not exercised its right to terminate this Lease as a result of such Event of
Default and if such matter under Section 3.3.2 is not still outstanding . At
least forty-five (45) days prior to each annual anniversary of the Commencement
Date, Tenant shall send to Landlord a written notice certifying to Landlord (in
the same manner as set forth in Section 28.1 below) that there is no outstanding
Event of Default by Tenant under this Lease and that there are no matters
outstanding under Section 3.3.2 of this Lease, and requesting that Landlord
therefor authorize the reduction of this Letter of Credit; and unless Landlord
disagrees with Tenant's notice, Landlord shall authorize the issuer of the
Letter of Credit to so reduce the same. If Landlord disputes Tenant's
certification, Landlord shall promptly notify Tenant in writing, which writing
shall set forth in reasonable detail the basis of Landlord's dispute.

                    (ii) The second Letter of Credit shall be in the amount of
One Million Five Hundred Thousand and 00/100 Dollars ($1,500,000.00). Such
Letter of Credit shall be delivered by Tenant to Landlord at or before the
Commencement Date and have a term of twelve (12) months and shall be replaced or
renewed by Tenant annually at least thirty (30) days prior to expiration (i.e.,
at least thirty (30) days prior to each anniversary of the Commencement Date)
for a period through and including ninety (90) days beyond the initial Lease
Term, in each instance for a consecutive term of twelve (12) months.

             7.3 Uses and Disposition of Letters of Credit: If Landlord shall
draw upon the whole or any part of the Letters of Credit as provided in Section
7.2, Tenant shall upon demand immediately cause the Letters of Credit to be
fully restored to their original amounts (or, if drawn in full, deliver to
Landlord replacement Letters of Credit), and upon such restoration or
replacement, provided all Events of Default have been cured and Landlord has not
exercised its right to terminate this Lease as a result of such Event of
Default, Landlord shall immediately return to Tenant all Letter of Credit
proceeds previously drawn by Landlord and not

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<PAGE>   15

applied by Landlord in accordance with Section 7.2. In the event of any sale of
Landlord's interest in the Buildings or any master lease of the Buildings by
Landlord to a third party, whether or not in connection with a sale or leasing
of the Land, Landlord shall either transfer the Letters of Credit to the vendee
or master lessee, or the vendee or master lessee shall assume Landlord's
obligations under this Lease in respect of the Letters of Credit, and upon
written request by Landlord or such vendee or master lessee, Tenant shall cause
the issuer of the Letters of Credit to certify or reissue such Letters of Credit
to the vendee or master lessee. Notice to Tenant of any such transfer shall not
be a condition to the validity of such transfer, but Landlord agrees to notify
Tenant of any such transfer. Upon transfer of the Letters of Credit to the
vendee or master lessee, and provided Landlord also transfers to such vendee or
master lessee all proceeds from any Letter(s) of Credit held at that time by
Landlord which have not been applied by Landlord to an Event of Default,
Landlord shall thereupon be released by Tenant from all liability for the return
or payment thereof; and if the vendee or master lessee expressly assumes
Landlord's obligations in respect of the Letters of Credit, Tenant shall look
solely to the new landlord for the return or payment of the same. Further, the
provisions hereof shall apply to every transfer or assignment made of the same
to a new landlord. Tenant shall not assign or encumber or attempt to assign or
encumber the Letters of Credit and neither Landlord nor its successors or
assigns shall be bound by any such assignment, encumbrance, attempted assignment
or attempted encumbrance.

ARTICLE 8. SUBORDINATION, NOTICE TO SUPERIOR LESSORS AND MORTGAGEES:

        8.1 SUBORDINATION: Any lease to which this Lease is, at the time
referred to, subject and subordinate is herein called "Superior Lease" and the
lessor of a Superior Lease or its successor in interest, at the time referred
to, is herein called "Superior Lessor," and any mortgage to which this Lease is,
at the time referred to, subject and subordinate is herein called "Superior
Mortgage" and the holder of a Superior Mortgage, or its successor in interest,
at the time referred to, is herein called "Superior Mortgagee." This Lease, and
all rights of Tenant hereunder, are and shall be subject and subordinate to any
ground leases covering the Land and/or the Project now or hereafter existing,
and to all mortgages which may now or hereafter affect the Land and/or the
Project and/or any of such leases, whether or not such mortgages shall also
cover other lands and/or buildings and/or leases, to each and every advance made
or hereafter to be made under such mortgages, and to all renewals,
modifications, replacements and extensions of such leases and such mortgages,
subject however to Tenant's rights under Section 8.3 below. In confirmation of
such subordination, Tenant shall execute, acknowledge or deliver any instrument
that Landlord, any Superior Lessor or any Superior Mortgagee may reasonably
request to evidence such subordination within fifteen (15) days after written
demand from Landlord, provided that such subordination further confirms the
attornment and nondisturbance protections set forth in Section 8.3 below.

        8.2 NOTICE: If any act or omission of Landlord would give Tenant the
right, immediately or after lapse of a period of time, to cancel or terminate
this Lease, or to claim a partial or total eviction, Tenant shall not exercise
such right: (i) until it has given written notice of such act or omission to
Landlord and each Superior Mortgagee and each Superior Lessor whose name and
address shall previously have been furnished to Tenant; and (ii) until a
reasonable period of time for such parties to cure the condition has passed.

        8.3 NONDISTURBANCE AND ATTORNMENT: For the purposes of this Section, the
term "Successor Landlord" shall mean the Superior Lessor or Superior Mortgagee
if the same succeeds to the rights of Landlord under this Lease, whether through
possession or foreclosure action or delivery of a new lease or deed, or any
third party that succeeds to the rights of Landlord under this Lease by virtue
of having purchased the Land, one or more of the Buildings, or the Park Common
Areas at a foreclosure sale. So long as Tenant is not in default of this Lease
beyond any notice and/or cure period at the time of succession, the Successor
Landlord shall accept Tenant's attornment and shall not disturb Tenant's quiet
possession of the Premises in accordance with the terms of this Lease. Tenant
shall attorn to and recognize such Successor Landlord as Tenant's Landlord under
this Lease and shall promptly execute and deliver any instrument that such
Successor Landlord may reasonably request to evidence such attornment provided
such instrument also evidences the non-disturbance protection for Tenant
described in this Section 8.3.

        8.4 MODIFICATIONS FOR SUPERIOR MORTGAGEE: If any Superior Mortgagee
shall require any modification(s) of this Lease, Tenant upon ten (10) days prior
written notice of Landlord's request, shall execute and deliver to Landlord such
instruments effecting such modification(s) as Landlord shall require, provided
that such modification(s) do not increase any of Tenant's obligations or
diminish any of Tenant's rights under this Lease and Landlord pays Tenant's
reasonable out-of-pocket attorneys' fees and costs in connection with such
request and evaluation of such modifications.

ARTICLE 9. QUIET ENJOYMENT:

        So long as Tenant pays all of the Base Rent and Additional Rent and
performs all of Tenant's other obligations hereunder, Tenant shall peaceably and
quietly have, hold and enjoy the Premises and its nonexclusive rights in the
Park Common Areas without hindrance, ejection or molestation by Landlord or any
person lawfully claiming through or under Landlord, subject nevertheless, to the
provisions of this Lease.

ARTICLE 10. ASSIGNMENT AND SUBLETTING:

        10.1 GENERALLY: Except as set forth in Section 10.3 below, Tenant shall
not sell, assign, sublet, or otherwise transfer by operation of law or otherwise
this Lease or any interest herein, or the Premises, its rights in the Park
Common Areas, or any portion of any of them, without the prior written consent
of Landlord (which Landlord shall not unreasonably withhold, condition or
delay), nor shall Tenant encumber any of the same, nor

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<PAGE>   16

shall Tenant permit any lien to be placed on the Tenant's interest by operation
of law or otherwise. Notwithstanding the foregoing, Landlord agrees not to
unreasonably withhold or delay its consent to any personal property financing by
Tenant at the Premises and agrees to confirm any granted consent in writing,
upon written request therefor, so long as (i) such consent is on Landlord's
standard form or includes Landlord's required protections, (ii) in no event
shall Landlord be required to amend or modify this Lease or waive any of
Landlord's rights under this Lease other than subordinating lien rights with
respect to personal property collateral, and (iii) the provisions of Section
31.14.3 shall apply to any such consent. Any change in effective control of a
corporation, partnership, limited liability company, or other entity which is
Tenant shall be deemed a transfer of this Lease except as permitted in Section
10.3 below. Regardless of Landlord's consent, no transfer hereunder by Tenant
shall release or discharge Tenant from its obligations or liability under this
Lease. This Lease shall bind any assignee, transferee or sublessee. Any sale,
assignment, encumbrance, subletting, occupation, lien or other transfer of this
Lease which does not comply with the provisions of this Article 10 shall be
void. Consent to one transfer, assignment or sublease shall not be deemed
consent to a subsequent transfer, assignment or sublease. Any listing on
Building directories or other signage using a name other than Tenant's in
conjunction with the Premises will not be deemed and it will not substitute for,
Landlord's consent, as required by this Lease, to any sublease, assignment or
other occupancy of the Premises or any portion thereof.

             10.1.1 Tenant shall, by written notice, advise Landlord of its
desire from and after a stated date (which shall not be less than thirty (30)
days after the date of Tenant's notice), to transfer its interest in the
Premises or any portion thereof for any part of the term hereof; and such notice
by Tenant shall state the name and address and business of the proposed
transferee, include a true, complete counterpart of the proposed transfer
instrument with said notice, financial statements of the proposed transferee,
the intended use of the Premises and such other information as the Landlord may
reasonably request.

             10.1.2 Upon any request by Tenant to transfer all or any part of
the Premises, Landlord shall have the right to either: (i) permit the transfer
on the conditions referred to in Section 10.2 and any other reasonable
conditions Landlord may impose; (ii) reasonably deny Tenant's request, in which
event this Lease shall continue in full force and effect and unmodified; or
(iii) for an assignment of this Lease or subletting of the Premises or any
Building in its entirety for the remainder of the Term only, terminate this
Lease with respect to the entire Premises or such Building within thirty (30)
days unless Tenant withdraws its proposed transfer within ten (10) days after
the date of Landlord's written notice of its intent to terminate. If Tenant
fails to timely withdraw its proposed transfer, Landlord may then terminate this
Lease with respect to the entire Premises or the portion of the Premises
described in Tenant's notice and if Landlord desires, Landlord may then lease
such space to any party, including the transferee identified in Tenant's notice,
at whatever terms Landlord establishes. Any such termination with respect to
less than all of the Premises shall result in a reduction in Rent equal to the
percentage of the Premises as to which the Lease is terminated. With respect to
option (iii) of this section only, Tenant shall have the right to offer the
Premises (or any portion thereof) to Landlord prior to seeking a specific
transfer, and if Landlord fails to exercise its rights under such option, then
provided Tenant engages a broker to seek a transferee within 30 days after
Landlord's rejection (or deemed rejection) of such offer and completes such
transfer with a transferee consented to by Landlord pursuant to this Article 10
within 12 months after Landlord's rejection (or deemed rejection) of such offer,
Landlord shall not have the right to option (iii) for any subsequent transfer of
such portion of the Premises so offered.

        10.2 CONDITIONS OF LANDLORD'S CONSENT: As a condition to Landlord's
prior written consent as provided for in this Article 10, (i) Tenant shall pay
to Landlord a nonrefundable review fee of $500.00 plus Landlord's reasonable
legal fees and costs incurred due to the request to transfer; (ii) the
transferee(s) shall agree in writing to comply with and be bound by all of the
terms, covenants, conditions, provisions and agreements of this Lease; and (iii)
Tenant shall deliver to Landlord, promptly after execution, an executed original
of each transfer instrument and an agreement of said compliance by each
transferee. Tenant agrees, by way of example and without limitation, that it
shall not be unreasonable for Landlord to withhold its consent to a proposed
assignment or subletting if (a) Landlord determines in Landlord's reasonable
discretion that the proposed assignee's or sublessee's use of the Premises
conflicts with Article 3 or conflicts with any other provision under this Lease;
(b) Landlord determines in Landlord's reasonable discretion that the proposed
assignment or subletting would breach a covenant, condition or restriction in
any encumbrance, financing agreement or other agreement relating to the Project
or this Lease; (c) if the proposed assignee or sublessee proposes to use
Hazardous Materials, the proposed assignee or sublessee has not been required by
any prior landlord, lender or governmental authority to take remedial action in
connection with Hazardous Materials contaminating a property arising out of the
proposed assignee's or sublessee's actions or use of the property in question
constituting a facility or for a use comparable to the Premises; or (d) an Event
of Default under Article 21 has occurred and Tenant does not provide Landlord
with reasonable assurances that the Event of Default will be cured as part of
the assignment or subletting. Tenant acknowledges that if Tenant has any
exterior sign rights under this Lease, such rights are personal to Tenant and
may not be transferred to any sublessee of all or any portion of the Premises
without Landlord's prior written consent, which consent may be withheld in
Landlord's sole and absolute discretion. Landlord may further require as a
condition of granting consent to a transfer that Tenant pay to Landlord 50% of
profits from the transfer determined by deducting from the total consideration
paid directly or indirectly to or for the benefit of Tenant or its designee for
the transferred interest, the reasonable costs of the transfer incurred by the
Tenant and subtracting the remaining rent obligation of the Tenant at such time
under this Lease. For purposes of determining all profits from the transfer,
substance shall control over form such that Landlord may ignore any attempt by
Tenant to inflate the purchase price of any other assets transferred in an
attempt to conceal the profit on the transfer of the Tenant's interest in this
Lease. Sums payable hereunder shall be paid to Landlord as and when paid by the
transferee to Tenant.

                                       15
<PAGE>   17

        10.3 PERMITTED TRANSFERS: Notwithstanding the foregoing provisions of
this Article 10, Landlord's consent shall not be required for (a) the subleasing
of all or any portion of the Premises to an entity owned and controlled by
Tenant or which owns or controls Tenant, so long as (i) Tenant shall provide to
Landlord, prior to such sublease, written notice of such sublease and such
sublease documentation and other information as Landlord may request in
connection therewith, and (ii) all of the other terms and requirements of this
Article 10 (other than the sharing of profits) shall apply with respect to such
sublease, or (b) the assignment or effective transfer of this Lease as a result
of a sale of a controlling interest in the stock of Tenant, a sale of
substantially all of the assets of Tenant, or a merger by Tenant with or into
another entity, including without limitation a reorganization pursuant to
Delaware Corporations Code Section 251(g), so long as (i) the financial
statements of the successor entity of such sale or merger immediately following
the sale or merger is at least equal to the amounts set forth in Exhibit J
attached hereto and incorporated herein, evidence of which, satisfactory to
Landlord, shall be presented to Landlord prior to such merger, (ii) Tenant shall
provide to Landlord, prior to such sale or merger, written notice of such sale
or merger and such assignment documentation and other information as Landlord
may reasonably request in connection therewith, and (iii) all of the other terms
and requirements of this Article 10 (other than the sharing of profits) shall
apply with respect to such assignment.

ARTICLE 11. INSURANCE:

        11.1 PUBLIC LIABILITY INSURANCE: Tenant at its expense, shall maintain
at all times during the term of this Lease, commercial public liability
insurance, contractual liability insurance and property damage liability
insurance in respect of the Premises and the conduct or operation of business
therein, with Landlord, its asset manager and property manager, if any, and any
Superior Lessor or Superior Mortgagee whose name and address shall previously
have been furnished to Tenant by written notice, as additional insureds, with
Five Million and No/100 Dollars ($5,000,000.00) minimum combined single limit
coverage, or its equivalent. Tenant shall have the right to satisfy such minimum
insurance coverage requirements through umbrella or excess coverage policies.
The limits of such insurance shall not limit the liability of Tenant. All such
insurance shall insure the performance by Tenant of the indemnity provisions of
Article 18 as to liability for injury to, illness of, or death of persons and
damage to property. In addition, all such insurance shall be primary and shall
provide that any insurance of Landlord shall be noncontributing, except with
respect to sole active negligence, gross negligence or willful misconduct of
Landlord, or Landlord's property manager. For insurance required to be
maintained by Tenant pursuant to Sections 11.1 and 11.2, Tenant shall deliver to
Landlord and any additional insured ACORD Form 27 evidence of insurance, or any
other form reasonably requested by Landlord, issued by the insurance company or
its authorized agent, at least ten (10) days before Tenant commences occupancy
of any portion of the Premises. Tenant shall procure and pay for renewals of
such insurance from time to time before the expiration thereof, and Tenant shall
deliver to Landlord and any additional insured such renewal certificate at least
thirty (30) days before the expiration of any existing policy. For insurance
required to be maintained by Tenant pursuant to Sections 11.1 and 11.2, all such
policies shall provide that they shall not be amended in any way that would
effect the interests of Landlord or any such additional insureds, or cancelled,
without at least thirty (30) days prior written notice to Landlord and such
additional insureds.

        11.2 PROPERTY INSURANCE: Landlord shall maintain fire and extended
coverage insurance on the Project, including without limitation all Tenant
Improvements constructed in accordance with Exhibit D, subject to such
reasonable deductibles as Landlord may establish, but which shall not exceed
$25,000 per occurrence per policy year so long as the same is commercially
reasonably available. Landlord shall have the right to place on all or any
portion of the Project any other insurance Landlord deems necessary, including
without limitation earthquake, flood, and loss of rent insurance not exceeding
two (2) years. Tenant shall obtain and bear the expense of casualty insurance
insuring (i) the property of Tenant on the Premises, and (ii) any Alterations
constructed by Tenant under Article 13 below, against such risks. As Additional
Rent for the Premises covered under Operating Expenses, Tenant shall reimburse
Landlord for the cost of all insurance maintained by Landlord with respect to
the Project as set forth in Section 5.1.1.

        11.3 ACCEPTABLE INSURANCE COMPANIES: All insurance policies required to
be carried by Tenant hereunder shall be issued by responsible insurance
companies authorized to issue insurance in the State of California rated A-X or
higher by Best's Insurance Rating Service.

        11.4 INCREASE IN COVERAGE: Landlord may from time to time, but not more
frequently than once every five (5) years, require that the amount of commercial
public liability insurance to be maintained by Tenant under Section 11.1 be
increased so that the amount thereof adequately protects the Landlord's interest
based on amounts of coverage required of comparable tenants in comparable
buildings.

        11.5 WAIVER OF SUBROGATION: The insurance coverage required by this
Article 11 shall contain a clause pursuant to which the insurance carriers waive
all rights of subrogation against Landlord or Tenant, as the case may be, with
respect to losses payable under such policies. Tenant and Landlord each waives
any and all right of recovery against the other, or against the officers,
directors, shareholders, employees, agents and representatives of the other, for
loss of or damage to property or the property of others under its control, if
and to the extent that such loss or damage is insured against under any
insurance policy in force at the time of such loss or damage, or which is to be
insured against under the terms of this Lease. Any applicable deductible amount
or self-insured amount shall be treated as though it were recoverable under such
policies. The provisions of this Section shall not limit the indemnification
provisions elsewhere contained in this Lease.

ARTICLE 12. RULES AND REGULATIONS:

        Tenant shall faithfully observe and comply and shall cause all Tenant
Parties to faithfully observe and comply with the rules and regulations printed
on or annexed to this Lease as Exhibit F and all reasonable and

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<PAGE>   18

non-discriminatory modifications thereof and additions thereto from time to time
established by Landlord by written notice to Tenant.

ARTICLE 13. ALTERATIONS:

        13.1 REQUIREMENTS: Tenant shall not make or suffer to be made any
alterations, additions, or improvements ("Alterations") in, on, or to the
Project or any part thereof without the prior written consent of Landlord.
Subject to the remaining provisions of this Article 13, Tenant shall have the
right, without the need of written consent from (but with prior written notice
to) Landlord, to make Alterations provided (i) the Alterations are
nonstructural, do not impair the strength of any Building or any part thereof
and are not visible from the exterior of the Premises; (ii) the Alterations do
not affect the proper functioning of the HVAC System, mechanical, electrical,
sanitary or other utilities, systems and services of any Building; (iii)
materials used are consistent with the existing materials in the Premises and
comply with Building standards as established by Landlord, and do not include
any Hazardous Materials; and (iv) the cost of any such individual Alteration
does not exceed $25,000.00.

             Whether or not Landlord's consent is required for any Alterations,
(i) Tenant shall provide to Landlord final plans and specifications for the
Alterations and (with respect to Alterations for which Landlord has the right of
consent) Landlord shall have approved in writing such plans and specifications
and all contractors who will perform the Alterations (and, to the extent that
such contractors are licensed and bondable, such consent shall not be
unreasonably withheld); (ii) Tenant pays to Landlord a fee for Landlord's
indirect costs, field supervision or coordination in connection with the
Alterations equal to a reasonable hourly fee for the time spent on such matters;
and (iii) for Alterations requiring Landlord's consent only and for which
Landlord reasonably determines that the cost to repair and restore the Premises
(1) with respect to removal of such Alteration alone will exceed $500,000.00, or
(2) with respect to removal of such Alteration together with costs for removal
of all prior Alterations made by Tenant will exceed $500,000.00 in the
aggregate, then, if requested by Landlord, Tenant shall provide for added
security (including without limitation providing an additional Letter of Credit
or depositing with Landlord cash security) as Landlord may reasonably require
for any obligations of Tenant to remove such Alterations and repair any damage
and accomplish any restoration caused thereby at the expiration or earlier
termination of the Lease Term. Unless all of the foregoing conditions are
satisfied, Tenant shall not have the right to make such Alterations, and
Landlord shall have the right to withhold its consent to the Alterations in
Landlord's sole and absolute discretion.

        13.2 REMOVAL AND RESTORATION: After the expiration or sooner termination
of the Lease Term and upon demand by Landlord, Tenant shall remove any or all
Alterations made by or for the account of Tenant, and Tenant shall repair and
restore the Premises to their original condition, subject to ordinary wear and
tear. Such removal, repair and restoration work shall be done promptly and with
all due diligence at Tenant's sole cost and expense. The provisions of this
Article 13 shall not apply to the initial Tenant Improvements described in this
Lease, unless such improvements have been designated by Landlord to be removed
in Exhibit D attached to this Lease.

        13.3 COMPLIANCE: All Alterations shall comply with applicable laws in
effect at the time they are made, the other terms of this Lease, and plans and
specifications approved by Landlord. Landlord shall have no duty to Tenant with
respect to the safety, adequacy, construction, efficiency or compliance with
laws, with regard to the design of the Alterations, the plans or specifications
therefore, or any other matter related to the Alterations, nor shall the
approval by Landlord of any such Alterations be deemed to be a representation as
to the safety, adequacy, construction, efficiency or compliance of said
Alterations.

        13.4 NO LIENS: Except to the extent of any initial Tenant Improvements
described in Exhibit D which are to be performed by or on behalf of Landlord,
Tenant, at its expense, and with diligence and dispatch, shall procure the
cancellation or discharge of all notices of violation arising from or otherwise
connected with Alterations, or any other work, labor, services, equipment, or
materials done for or supplied to Tenant, or any other person claiming through
or under Tenant, which shall be issued by any public authority having or
asserting jurisdiction. Tenant shall notify Landlord of, and shall defend,
indemnify and save harmless Landlord and any Superior Lessor or Superior
Mortgagee from and against any and all construction and other liens and
encumbrances filed in connection with Alterations, or any other work, labor,
services or materials done for or supplied to Tenant, or any person claiming
through or under Tenant, including, without limitation, security interests in
any materials, fixtures, equipment, or articles so installed in and constituting
part of the Premises and against all costs, expenses and liabilities incurred in
connection with any such lien or encumbrance or any action or proceeding brought
thereon. Tenant, at its expense, shall procure the satisfaction or discharge of
record of all such liens and encumbrances within thirty (30) days after the
filing thereof. Nothing herein contained shall prevent Tenant from contesting,
in good faith and at its own expense, any notice of violation, or lien provided
Tenant posts for the protection of Landlord security acceptable to Landlord.

ARTICLE 14. LANDLORD'S AND TENANT'S PROPERTY:

        14.1 LANDLORD'S PROPERTY: All fixtures and equipment (other than those
described in 14.2 below), carpeting, improvements and appurtenances attached to
or built into the Premises at the commencement of or during the Lease Term,
whether or not by or at the expense of Tenant, shall upon the expiration or
earlier termination of the Lease be and remain a part of the Premises, shall be
deemed the property of Landlord and shall not be removed by Tenant, except as
provided in Section 13.2 and 14.2 of this Lease or in Exhibit D; provided, that
at Landlord's written request, Tenant shall, at its sole expense and upon the
expiration or earlier termination of the Lease, remove those items specified by
Landlord in writing during the Lease Term, including any or all fixtures,
equipment, improvements, appurtenances and other personal property, which are
deemed

                                       17
<PAGE>   19

herein the property of Landlord, but not including the initial Tenant
Improvements provided by Landlord pursuant to Exhibit D of this Lease except as
may be otherwise expressly set forth in Exhibit D. Tenant's covenant to remove
property specified by Landlord shall survive the expiration or earlier
termination of this Lease.

        14.2 TENANT'S PROPERTY: All business and trade fixtures, machinery and
equipment, computer and communications equipment and office equipment which are
installed in the Premises or other portions of the Project by or for the account
of Tenant without expense to Landlord and which can be removed without
structural damage to the Buildings and all furniture, furnishings (excluding
window coverings) and other articles of movable personal property owned by
Tenant and located in the Premises (herein collectively called "Tenant's
Property") shall be and remain the property of Tenant and may be removed by
Tenant at any time during the term of this Lease; provided, that if any of
Tenant's Property is removed, Tenant shall repair or pay the cost of repairing
any damage to the Premises or any other portion of the Project resulting from
the installation and/or removal thereof. Any equipment or other property for
which Landlord shall have granted any allowance, credit or other type of
accommodation to Tenant shall be deemed not to have been installed by or for the
account of Tenant without expense to Landlord, shall not be considered Tenant's
Property, and shall be deemed the property of Landlord. Tenant shall also remove
prior to the expiration or earliest termination of the Lease Term, at Tenant's
sole cost and expense, all telephone, computer and other electronic wiring and
cabling installed for the benefit of Tenant within the Premises and within the
common ducts and shafts of the Building. Tenant shall use all necessary care in
removing such wires and cables in order to avoid any damage to or any disruption
of services and Tenant agrees to be solely liable for any such damage or
disruption of service caused by its removal. If Tenant fails to remove such
wiring and cabling prior to the expiration or earlier termination of the Lease
Term, Landlord may remove such wires and cables and Tenant shall pay the cost of
such removal within ten (10) days after delivery of a bill thereof.

        14.3 ABANDONMENT: Any items of Tenant's Property may be deemed, at the
option of Landlord, to have been abandoned if left in the Premises or at the
Project after the Abandonment Deadline, and in such case such items may be
retained by Landlord, without accountability, in such a commercially reasonable
manner as Landlord shall determine at Tenant's expense. The "Abandonment
Deadline" means the earlier of the expiration date of this Lease and delivery to
Tenant of written notice that such property remains at the Premises, or five (5)
days following an earlier termination date and delivery to Tenant of written
notice that such property remains at the Premises, or three (3) business days
following entry of an order of possession for restoration of the Premises to
Landlord; subject however, to the provisions and requirements of any applicable
California laws relating to abandoned property in a leasehold.

ARTICLE 15. SERVICES AND UTILITIES:

        15.1 UTILITIES: Tenant shall be responsible for and shall directly
contract with and pay promptly directly to the appropriate supplier, all charges
for gas, electricity, heat, light, power, telephone, refuse pickup, janitorial
service, interior landscape maintenance and all other utilities, materials and
services furnished directly to Tenant or the Premises or used by Tenant in, or
about the Premises during the Lease Term, together with any taxes thereon.
Landlord shall contract for water service to the Project and bill the cost
thereof to Tenant as part of Operating Expenses. Tenant also agrees at all times
to cooperate fully with Landlord and to abide by all the non-discriminatory
regulations and requirements which Landlord may prescribe for the proper
functioning and protection of the HVAC System. Any sums payable under this
Article 15 shall be considered Additional Rent and may be added to any
installment of Base Rent thereafter becoming due, and Landlord shall have the
same remedies for a default in payment of such sum as for a default in the
payment of Base Rent.

        15.2 [INTENTIONALLY DELETED]

        15.3 DISCLAIMER: Landlord shall not be in default hereunder or be liable
for any damages directly or indirectly resulting from, or by reason of (i) the
installation, use or interruption of use of any equipment in connection with the
furnishing of the foregoing utilities and services, (ii) failure to furnish or
delay in furnishing any such utilities or services when such failure or delay is
caused by acts of God or the elements, labor disturbances of any character, any
other accidents or other condition beyond the reasonable control of Landlord, or
by the making of regular maintenance repairs or improvements to the Premises, or
(iii) the limitation, curtailment, rationing or restriction on use of water or
electricity, gas or any other form of energy or any other service or utility
whatsoever serving the Premises or the Project. Nothing contained hereunder
shall abrogate Landlord's obligations under Section 4.2 above. Notwithstanding
the foregoing, if any failure or interruption of electrical service to any
Building is due to the sole active negligence, gross negligence or willful
misconduct of Landlord or its property manager or any of their employees, and
such failure or interruption prevents Tenant from carrying on its business
within such Building for a period of more than two (2) consecutive business days
following written notice to Landlord, then Tenant's Base Rent shall thereafter
be abated in the proportion that and in the degree to which Tenant's use of such
Building area is prevented, provided however, that to the extent that Tenant's
business interruption insurance, if any, would cover such obligations, Tenant
shall either cause such proceeds to be paid to Landlord or this abatement
provision shall not apply, and provided further, that if Landlord is diligently
pursuing the repair necessary to reinstate such service and Landlord provides
substitute electrical service reasonably suitable for Tenant's purposes, then
this abatement provision also shall not apply. Furthermore, Landlord shall be
entitled to cooperate voluntarily in a reasonable manner with the efforts of
national, state or local governmental agencies or utilities suppliers in
reducing energy or other resource consumption. Tenant hereby further
acknowledges that Landlord shall have no obligation whatsoever to provide guard
service or other security measures for the benefit of the Premises or

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<PAGE>   20

the Project. Tenant waives and releases all claims of responsibility by Landlord
for the protection of Tenant, all Tenant Parties and the property of Tenant and
of all Tenant Parties from acts of third parties.

        15.4 USE OF PARK COMMON AREAS AND FACILITIES: Landlord shall have the
right to temporarily close from time to time all or any portion of the Park
Common Areas to such extent as, in the reasonable opinion of Landlord's legal
counsel, may be legally sufficient to prevent a dedication thereof or the
accrual of any rights to any person (other than Tenant) or the public therein;
provided at all times Tenant shall be provided with reasonable access to the
Premises, the Buildings and Tenant's parking to be provided herein If the amount
of such Park Common Areas is diminished, Landlord shall not be subject to any
liability nor shall Tenant be entitled to any compensation or diminution or
abatement of Rent, nor shall such diminution of such Park Common Areas be deemed
constructive or actual eviction.

        15.5 PARKING FACILITIES: Tenant shall have the right throughout the
Lease Term to use all parking spaces located within the Project, on a
non-exclusive basis with other occupants, if any, of the Project, subject to the
Rules and Regulations attached hereto as Exhibit F and any amendments thereto
from time to time in accordance with said Exhibit F. All parking spaces shall be
used only for parking by vehicles no larger than full size passenger
automobiles, vans, sport utility vehicles or pick-up trucks. No parking shall be
permitted in any driveways, accessways or in any area which would prohibit or
impede the free flow of traffic within the Park Common Areas. Tenant shall have
the right to mark parking spaces as reserved for Tenant's customers or
employees. Subject to the other provisions and requirements of this Lease,
washing, waxing and cleaning of the automobiles of Tenant's employees shall be
permitted in the paved parking areas. Servicing of vehicles is prohibited in the
Park Common Areas.

        15.6 SIGNAGE: Tenant shall not install or keep any signs in, on or about
the Project or Premises, which are visible from any public areas, without the
prior written consent of Landlord which Landlord shall not unreasonably
withhold. Any such sign request shall be made in accordance with the application
process in place at the time of the request, and all such signs shall be in
compliance with Landlord's signage program for the Project set forth in Exhibit
H attached hereto and incorporated herein by this reference (the "Signage
Program"), any covenants and restrictions encumbering the Project, and all
conditions and requirements of the City. Notwithstanding the foregoing, Landlord
hereby grants Tenant the exclusive right to install and maintain its business
identification signage ("Signage") in an area approved by Landlord, at Tenant's
expense, in accordance with Landlord's Signage Program, all covenants and
restrictions encumbering the Project, and all requirements of the City, and
subject to Landlord's written approval which shall not be unreasonably withheld.
Tenant shall submit to Landlord all plans and specifications for the
installation of the Signage. Tenant covenants and agrees to indemnify, defend
and hold harmless Landlord against any loss, cost or expense (including
reasonable attorney fees) which may be sustained or incurred by it, and assume
all liability for any property damage or bodily injuries in any manner related
to Tenant's installation, maintenance, operation or removal of the Signage.
Tenant agrees to pay all taxes, permit fees, insurance premiums, and repairs to
the area where the Signage has been installed resulting from the installation of
the Signage. If any sign is placed on or about the Premises or Project without
the consent of Landlord, Landlord may remove any such signs and Tenant shall pay
Landlord the cost of removal together with interest as set forth in Section 22.3
from date of expenditure until payment is made in full. Tenant shall pay
promptly after Landlord invoices Tenant for such costs. Tenant shall pay all
costs of permitted signs (including the Signage) and all costs and expenses of
installation and maintenance of such signs. Tenant shall repair any damage which
alteration, renovation or removal of its signs may cause during the Lease Term.
Tenant, at its expense, shall remove its signs (including the Signage) from the
Premises or Project at the termination or expiration of this Lease and repair
any damage and restore the Premises or Project to the same condition as existed
prior to the installation of such signs, reasonable wear and tear excepted.

ARTICLE 16. ACCESS:

        Landlord reserves, and shall at all times have, the right to re-enter
the Premises (other than Tenant's Secured Areas as designated in writing by
Tenant to Landlord unless accompanied by a representative of Tenant), upon 72
hours' prior notice to Tenant (except for regularly scheduled maintenance
personnel, in an emergency, and following an Event of Default, in which cases,
no notice shall be necessary) to inspect the same, to perform any service or
repair obligation to be provided by Landlord to Tenant under this Lease, to show
the Premises to prospective purchasers, mortgagees or tenants (provided,
Landlord shall only show the Premises to prospective tenants during the last one
hundred eighty (180) days of the Lease Term), to post notices of
non-responsibility, and to alter, improve or repair the Premises and any other
portion of the Project, without abatement of Rent. For such purpose, Landlord
may erect, use and maintain scaffolding, pipes, conduits and other necessary
structures in and through the Premises and the Project where reasonably required
by the character of the work to be performed, provided that such work is
performed in compliance with all health and safety requirements, the entrance to
the Premises shall not be blocked thereby, and further provided that the
business of Tenant shall not be interfered with unreasonably. Tenant hereby
waives any claim for damages for any injury or inconvenience to or interference
with Tenant's business, any loss of occupancy or quiet enjoyment of the Premises
and any other loss occasioned by Landlord's conduct pursuant to and in
compliance with this Section. Landlord shall have the right to use all
reasonable means under the circumstances to open all doors in an emergency, in
order to obtain entry to any portion of the Premises, and any entry to any
portion of the Premises obtained by Landlord by any such means, or otherwise
shall not under any circumstances be construed or deemed to be forcible or
unlawful entry into, or a detainer of, the Premises, or an eviction, actual or
constructive, of Tenant from all or part of the Premises. Landlord shall have
the right to change the name, number or designation by which any Building is
commonly known provided Tenant is given written notice of such change. Nothing
in this Article 16 shall be deemed to relieve Landlord from any liability for
the willful misconduct of Landlord or its employees. Tenant may designate
certain areas of the Premises as

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<PAGE>   21

"Secured Areas" should Tenant require such areas for the purpose of securing
certain valuable property or confidential information. Landlord may not enter
such Secured Areas except in the case of emergency or in the event of a Landlord
inspection.

ARTICLE 17. NOTICE OF OCCURRENCES:

        Tenant shall give prompt notice to Landlord of: (i) any known occurrence
in or about the Project for which Landlord might be held liable; (ii) any known
fire or other casualty in the Project; (iii) any known damage to or defect in
the Project, the repair of which Landlord might be responsible; and (iv) known
damage to or defect in any part or appurtenances of the sanitary, electrical,
heating, ventilating, air-conditioning, elevator or other systems located in or
passing through the Project or any part thereof.

ARTICLE 18. NONLIABILITY AND INDEMNIFICATION:

        18.1 WAIVER: Neither Landlord nor any Landlord Parties shall be liable
to Tenant for any loss, injury or damage to Tenant or to any other person, or to
its or their property, irrespective of the cause of such injury, damage or loss
except for Landlord to the extent caused by or resulting from the sole gross
active negligence, intentional torts or willful misconduct of Landlord and
Landlord's employees, it being the intent of the parties that it be Tenant's
obligation to carry and look to its own insurance policies for coverage of any
such item resulting from an accident even if caused by the passive, simple or
comparative negligence of Landlord or any Landlord Parties. Further, neither
Landlord nor any Landlord Parties shall be liable: (i) for any such injury,
damage or loss in, upon or about the Project, or caused by operations in
construction of any private, public or quasi-public work; or (ii) in any event
for consequential damages, including lost profits, of Tenant or any person
claiming through or under Tenant or any Tenant Parties.

        18.2 INDEMNIFICATION: Tenant shall defend, indemnify and hold harmless
Landlord and all Landlord Parties, Superior Lessors and/or Superior Mortgagees
for, from and against any and all (i) third party claims for bodily injury
and/or property damage arising from or in connection with any accident, injury
or damage whatever (except as caused by the sole active negligence, gross
negligence, willful misconduct or intentional torts of Landlord or any Landlord
Parties) occurring in, at or upon the Project, and (ii) claims arising from
Tenant's or any Tenant Parties' acts, omissions or breach of this Lease;
together with all reasonable costs, reasonable expenses and liabilities incurred
or in connection with each such claim or action or proceeding brought thereon,
including, without limitation, all reasonable attorneys' fees and expenses at
trial and upon appeal. The foregoing indemnity obligation of Tenant shall not
apply to any claims relating to the public trail easement through the Park
Common Areas to the extent that any indemnity or insurance of the County of
Orange pursuant to the easement agreement relating to such public trail easement
provides coverage, defense and indemnity to Landlord and the Landlord Parties.

        18.3 DUTY TO DEFEND: In case any action or proceeding is brought against
Landlord and/or any Landlord Parties, Superior Lessor and/or Superior Mortgagee
and such claim is a claim from which Tenant is obligated to indemnify Landlord
pursuant to Section 18.2, Tenant, upon notice from Landlord or such Superior
Lessor or Superior Mortgagee, shall resist and defend such action or proceeding
(by counsel reasonably satisfactory to Landlord). The obligation of Tenant under
this Article 18 shall survive termination of this Lease.

ARTICLE 19. DAMAGE OR DESTRUCTION:

        19.1 CASUALTY: If the Premises or the Park Common Areas are damaged by
fire or other casualty, Landlord shall forthwith repair the same unless this
Lease is terminated as permitted herein. If (i) Landlord reasonably determines
that the cost of repair is not covered by Landlord's fire and extended coverage
insurance or any other applicable insurance coverage of Landlord maintained
under Section 11.2 above, plus such additional amounts Tenant elects, at its
option, to contribute, excluding however the standard fire and casualty
insurance deductible (for which Tenant shall be responsible); (ii) Landlord
reasonably determines that the Premises cannot, with reasonable diligence, be
fully repaired by Landlord (or cannot be safely repaired because of the presence
of hazardous factors, including without limitation Hazardous Materials,
earthquake faults, and other similar dangers) within three hundred sixty (360)
days after the date of the damage; (iii) an Event of Default by Tenant has
occurred and is continuing at the time of such damage; or (iv) the damage occurs
during the final twelve (12) months of the Term and Tenant has not previously
exercised any available option to extend the Lease Term pursuant to Section 30.3
below, then Landlord may elect to terminate this Lease. Should Landlord elect
not to repair the damage for one of the preceding reasons, Landlord shall so
notify Tenant in writing within sixty (60) days after the damage occurs and this
Lease shall terminate sixty (60) days after the date of that notice.
Notwithstanding the foregoing, if Landlord elects to terminate this Lease
pursuant to clause (i) above, Tenant shall have the right, by written notice to
Landlord within ten (10) days after delivery of Landlord's termination notice,
that Tenant desires to reinstate this Lease. Within ten (10) days of Landlord's
receipt of such notice, Landlord shall deliver written notice to Tenant of
Landlord's reasonable good faith estimate of the shortfall between the amount to
repair and the amount of insurance proceeds available therefor (the "Estimated
Shortfall"); and within ten (10) days after Landlord's delivery of its written
notice of the Estimated Shortfall, Tenant shall deposit with Landlord the full
amount thereof. Upon Landlord's receipt of the Estimated Shortfall, this Lease
shall be deemed reinstated, and Landlord shall repair the Premises pursuant to
the terms and requirements of this Section 19.1. Upon completion of the repairs,
Landlord shall deliver to Tenant a reconciliation of the actual costs of repairs
against the actual insurance proceeds received therefor and the Estimated
Shortfall paid by Tenant, and if the actual cost is less than the amount so paid
to Landlord, then Landlord shall reimburse such overage to Tenant or the
insurance carrier, as applicable, within thirty (30) days, or if the actual cost
is greater than the amount so paid to Landlord, then Tenant shall pay to
Landlord the shortfall balance within thirty (30) days. The failure of Tenant to
timely

                                       20
<PAGE>   22

deliver to Landlord its reinstatement notice, or to timely and fully pay to
Landlord the Estimated Shortfall, shall automatically terminate any rights of
Tenant to reinstate this Lease as hereinabove provided. If Landlord does not
have the right, or has the right but does not elect, to terminate this Lease as
hereinabove provided, this Lease shall remain in full force and effect, except
the Rent shall be reasonably abated during the period of repair based on that
portion of the rentable square feet of the Buildings not reasonably useable by
Tenant. Landlord shall not be required to repair any damage by fire or other
cause to the property of Tenant, any Tenant alterations or any specialized
improvements of Tenant.

             Unless Landlord elects to terminate this Lease in accordance with
the preceding paragraph, this Lease shall continue in effect for the remainder
of the Lease Term; provided that so long as no Event of Default by Tenant has
occurred and is continuing under this Lease, if more than one (1) Building is
damaged by fire or other casualty and (i) such damage is so extensive that
Landlord reasonably determines that the Buildings cannot, with reasonable
diligence, be repaired by Landlord (or cannot be safely repaired because of the
presence of hazardous factors, earthquake faults, and other similar dangers) so
as to allow Tenant's substantial use and enjoyment of the Buildings within three
hundred sixty (360) days after the date of the damage, or (ii) the damage occurs
during the final twelve (12) months of the Lease Term, Tenant has not previously
exercised the options to extend the Lease Term under Section 30.3 below, and
Landlord reasonably determines that the Buildings cannot, with reasonable
diligence, be repaired by Landlord so as to allow Tenant's substantial use and
enjoyment of the Buildings within ninety (90) days after the date of the damage,
then Tenant may elect to terminate this Lease by written notice to Landlord
within thirty (30) days after delivery of Landlord's estimate of the time to
repair hereunder, and this Lease shall automatically terminate thirty (30) days
after the date of such notice. Notwithstanding the foregoing, Tenant shall not
be entitled to the termination rights set forth herein if the damage giving rise
to such termination right is due to the fault or neglect of Tenant or any Tenant
Parties.

        19.2 CONDEMNATION: If more than twenty-five percent (25%) of the Land
and/or Premises shall be taken or appropriated under the power of eminent domain
or conveyed in lieu thereof, Landlord shall have the right to terminate this
Lease. If this Lease is terminated, Landlord shall receive (and Tenant shall
assign to Landlord upon demand from Landlord) any and all income, rent, award or
any interest thereon which may be paid or owned in connection with the exercise
of such power of eminent domain or conveyance in lieu thereof, and Tenant shall
have no claim against the agency exercising such power or receiving such
conveyance, for any part of such sum paid by virtue of such proceedings, whether
or not attributable to the value of the unexpired term of this Lease. So long as
Tenant is entitled to a separate award and Landlord's award is not diminished
thereby, nothing contained herein shall be deemed to prevent Tenant from seeking
any award against the taking authority for the taking of personal property and
fixtures belonging to Tenant, for relocation or business interruption expenses
recoverable by Tenant directly from the taking authority, or for loss of
Tenant's goodwill. If a part of the Land and/or Premises shall be so taken or
appropriated or conveyed and Landlord hereto shall elect not to terminate this
Lease, Landlord shall nonetheless receive (and Tenant shall assign to Landlord
upon demand from Landlord) any and all income, rent, award or any interest
thereon paid or owed in connection with such taking, appropriation or
conveyance; and if the Premises have been damaged as a consequence of such
partial taking or appropriation or conveyance, Landlord shall restore the
Premises and this Lease shall remain in full force and effect except that the
Rent shall be equitably adjusted according to the remaining rentable area of the
Buildings while such restoration is being made by Landlord. Notwithstanding the
foregoing, Landlord's obligation to restore the Premises if this Lease is not
terminated, shall be limited to the extent of available condemnation proceeds.
Such proportionate reduction shall be based upon the extent to which the
restoration being made by Landlord shall interfere with the business carried on
by Tenant in the Buildings. Landlord will not be required to repair or restore
any injury or damage to the property of Tenant.

ARTICLE 20. SURRENDER AND HOLDING OVER:

        20.1 GENERAL: On the last day of the term of this Lease, or upon
re-entry by Landlord upon the Premises, Tenant shall quit and surrender the
Premises to Landlord "broom-clean" and in good order, condition and repair,
except for ordinary wear and tear, and in accordance with the restoration
provisions of Articles 13 and 14, Sections 3.3, 3.4 and 15.6, and Exhibit D of
this Lease.

        20.2 SURRENDER: No agreement relating to the surrender of the Premises
by Tenant shall be valid unless in writing and signed by Landlord.

        20.3 HOLDING OVER: If Tenant shall retain possession of the Premises or
any part thereof or of the Project with Landlord's consent (express or implied)
following the expiration or sooner termination of this Lease for any reason,
then, for the first ninety (90) days of any such holdover Tenant shall pay to
Landlord for each day of such retention one hundred ten percent (110%) of the
daily prorated amount of the Rent for the last period prior to the date of such
expiration or termination, subject to adjustment as provided in Article 5. After
the expiration of any such ninety (90) day holdover period, Tenant shall pay to
Landlord for each day of such retention one hundred fifty percent (150%) of the
daily prorated amount of the Rent for the last period prior to the date of such
expiration or termination. Tenant shall also defend, indemnify and hold harmless
Landlord from any loss or liability resulting from delay by Tenant in
surrendering the Premises and the Project, including, without limitation, any
claims made by any succeeding tenant founded on such delay, provided Landlord
provides to Tenant written notice of the existence of any such succeeding tenant
and Landlord's potential loss and/or liability resulting from any continued
holdover by Tenant. Holding over with Landlord's consent shall constitute
renewal of this Lease from month to month. Acceptance of Rent by Landlord
following expiration or termination shall not constitute a renewal of this
Lease, and nothing contained in this Section shall waive Landlord's right of
re-entry or any other right. Tenant shall be only a tenant at sufferance,
whether or not Landlord accepts any Rent from Tenant while Tenant is holding
over.

                                       21
<PAGE>   23

ARTICLE 21. EVENTS OF DEFAULT:

        21.1 EVENTS OF DEFAULT: The occurrence of any one or more of the
following events of default ("Events of Default") shall constitute a breach of
this Lease by Tenant:

             21.1.1 If Tenant shall default in the payment of any Security
Deposit, Base Rent or Additional Rent, and such default shall continue for five
(5) days after written notice from Landlord to Tenant;

             21.1.2 If Tenant shall fail to comply with the provisions of
Section 8.1 regarding execution and delivery of subordination agreements,
Section 8.4 regarding modifications for Superior Mortgagees, Section 11.1
regarding delivery of insurance certificates, or Section 28 regarding completion
and delivery of executed estoppel certificates, within the time periods required
in each respective Section therefor;

             21.1.3 If Tenant shall, whether by action or inaction, be in
default of any of its obligations under this Lease (other than under Sections
21.1.1 or 21.1.2 hereof) and such default shall continue and not be remedied
within thirty (30) days after Landlord shall have given to Tenant a notice
specifying the same, or, in the case of a default which cannot with due
diligence be cured within such time period and the continuance of which for the
period required for cure will not subject Landlord or any Superior Lessor to
prosecution for a crime or termination of any Superior Lease or foreclosure of
any Superior Mortgage, if Tenant shall not, (i) within such time period advise
Landlord of Tenant's intention to take all steps necessary to remedy such
default; (ii) duly commence within such time period, and thereafter diligently
prosecute to completion all steps necessary to remedy the default; and (iii)
complete such remedy within a reasonable time after the date of said notice of
Landlord not exceeding ninety (90) days from the date of Landlord's notice;

             21.1.4 If any event shall occur whereby this Lease or the estate
hereby granted or the unexpired balance of the term hereof would, by operation
of law or otherwise, be transferred to any person, firm or corporation, except
as expressly permitted by Article 10;

             21.1.5 If Tenant or any guarantor of Tenant's obligations shall
make a general assignment for the benefit of creditors, or shall be unable to
pay its debts as they become due, or shall file a petition in bankruptcy, or
shall be adjudicated as bankrupt or insolvent or have entered an order for
relief under any insolvency or bankruptcy laws, or shall file a petition seeking
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or shall fail timely to contest the material allegations of a
petition filed against it in any such proceeding, or shall seek or consent to or
acquiesce in the appointment of any trustee, receiver or liquidator of Tenant or
any material part of its properties;

             21.1.6 If within sixty (60) days after the commencement of any
proceeding against Tenant seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, such proceeding shall not have been dismissed
or if, within sixty (60) days after the appointment without the consent or
acquiescence of Tenant of any trustee, receiver or liquidator of Tenant or of
any material part of its properties, such appointment shall not have been
vacated; or

             21.1.7 If this Lease or any estate of Tenant hereunder shall be
levied upon under any attachment or execution and such attachment or execution
is not vacated within ten (10) days.

Any written notice given under this Section 21.1 shall be in lieu of, and not in
addition to, the notice requirements of Section 1161 et seq. of the California
Code of Civil Procedure, any amendment or restatement thereof, or any other or
similar statute or law.

        21.2 LANDLORD'S BREACH OF LEASE: Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord under this Lease
within thirty (30) calendar days after written notice by Tenant to Landlord
specifying wherein Landlord has failed to perform such obligations; provided,
however, that if the nature of Landlord's obligation is such that more than
thirty (30) calendar days are required for performance, then Landlord shall not
be in default if Landlord commences performance within such thirty (30) calendar
day period and thereafter diligently prosecutes the same to completion. If
Landlord shall default in the performance of any of its obligations under the
Lease (after notice and an opportunity to cure as provided herein), Tenant shall
have the right to pursue any and all remedies available to it as set forth in
this Lease, at law, or in equity, including, without limitation, the remedies
provided for in Section 25.2 to the extent applicable, all subject however to
the limitation contained in Section 31.4.

ARTICLE 22. REMEDIES UPON DEFAULT:

        22.1 REMEDIES: Upon the occurrence of an Event of Default constituting a
breach of this Lease under Article 21, Landlord may exercise any one or more of
the remedies set forth in this Article 22 or in Article 25, or any other remedy
available under applicable law or contained in this Lease.

             22.1.1 Landlord or any authorized Landlord Parties may immediately
or at any time thereafter re-enter the Premises, or any part thereof or of the
Project, either by summary eviction proceedings or by any suitable action or
proceeding at law, and may repossess the same, and may remove any person
therefrom, to the end that Landlord may have, hold and enjoy the Premises and
the Project.

             22.1.2 Landlord at its option may relet the whole or any part of
the Premises and/or the Project from time to time, either in the name of the
Landlord or otherwise, to such tenants, for such terms

                                       22
<PAGE>   24

ending before, on or after the expiration date of the Lease Term, at such
rentals and upon such other conditions (including concessions, tenant
improvements, and free rent periods) as Landlord may determine to be
appropriate. Landlord at its option may make such physical changes to the
Premises and/or the Project as Landlord considers advisable or necessary in
connection with any such reletting or proposed reletting, without relieving
Tenant of any liability under this Lease or otherwise affecting Tenant's
liability.

             22.1.3 Whether or not Landlord retakes possession or relets the
Premises, Landlord shall have the right to recover unpaid rent and all damages
caused by the default as well as all costs and expenses incurred in the
connection with the enforcement of this Lease, including reasonable attorney
fees and court costs. Damages shall include, without limitation: (i) all rentals
lost; (ii) all legal expenses and other related costs incurred by Landlord
following Tenant's default; (iii) all costs incurred by Landlord in restoring
the Premises to good order and condition, or in remodeling, renovating or
otherwise preparing the Premises for reletting; (iv) all unamortized tenant
improvement allowance and lease commissions; and (v) all costs incurred by
Landlord in reletting the Premises, including, without limitation, any brokerage
commissions and the value of Landlord's time.

             22.1.4 To the extent permitted under applicable law, Landlord may
sue periodically for damages as they accrue without barring a later action for
further damages. Landlord may in one action recover accrued damages plus damages
attributable to the remaining Lease Term equal to the difference between the
Rent reserved in this Lease (including an estimated amount of Additional Rent as
determined by Landlord) for the balance of the Lease Term after the time of
award, and the fair rental value of the Premises for the same discounted to the
time of award at the rate of the discount rate of the Federal Reserve Bank of
San Francisco at the time of the award plus one percent (1%). If Landlord has
relet the Premises for the period which otherwise would have constituted the
unexpired portion of the Lease Term or any part, the amount of rent reserved
upon such reletting shall be deemed, prima facie, to be the fair and reasonable
rental value for the part or the whole of the Premises so relet during the term
of the reletting.

             22.1.5 To seize and dispose of Tenant's Property (as that term is
defined in Section 14.2) in any manner permitted by law.

        22.2 TERMINATION: Upon occurrence of an Event of Default, this Lease may
be terminated at the option of Landlord by Landlord giving written notice to
Tenant. If this Lease is not terminated by election of Landlord or otherwise,
Landlord shall be entitled to recover damages from Tenant for the default. If
this Lease is terminated, Tenant's liability to Landlord for damages shall
survive such termination, and Landlord may re-enter, take possession of the
Premises, and remove any persons or property by appropriate legal action and
without liability for damages to Tenant, its property, any other persons, and/or
their property. Acts of maintenance or preservation or efforts to relet the
Premises or the appointment of a receiver upon initiative of Landlord to protect
Landlord's interest under this Lease shall not constitute a termination of
Tenant's contractual liability under this Lease unless written release of
liability is given by Landlord to Tenant.

        22.3 INTEREST ON DAMAGES: In addition to any other remedies Landlord may
have under this Lease, and without reducing or adversely affecting any of
Landlord's rights and remedies under this Article 22, if any Base Rent,
Additional Rent or other amounts payable hereunder by Tenant to Landlord are not
paid within ten (10) days after Tenant's receipt of Landlord's written demand
therefor, the same shall bear interest at the annual rate of eleven percent
(11%) or the maximum rate permitted by law, whichever is less, calculated
monthly from the due date thereof until paid, and the amount of such interest
shall be included as Additional Rent.

        22.4 CUMULATIVE REMEDIES: The remedies provided for in this Lease are
cumulative and are not intended to be exclusive of any other remedies to which
Landlord may lawfully be entitled at any time.

ARTICLE 23. [INTENTIONALLY DELETED]

ARTICLE 24. NO WAIVERS OF PERFORMANCE:

        The failure of either party to insist in any one or more instances upon
the strict performance of any one or more of the obligations of the other party
under this Lease, or to exercise any election herein contained, shall not be
construed as a waiver or relinquishment for the future of the performance of
such one or more obligations or any other obligations of such other party under
this Lease or of the right to exercise such election, but the same shall
continue and remain in full force and effect with respect to any subsequent
breach, act or omission. The receipt by Landlord of Rent with knowledge of a
breach by Tenant of any obligation of this Lease shall not be deemed a waiver of
such breach.

ARTICLE 25. CURING DEFAULTS:

        25.1 TENANT DEFAULTS: All covenants and agreements to be performed by
Tenant under any of the terms of this Lease shall be performed by Tenant at
Tenant's sole cost and expense and without any abatement of Rent except as
otherwise provided in this Lease. If Tenant shall fail to pay any sum of money,
other than Rent, required to be paid by it hereunder or shall fail to perform
any other act on its part to be performed hereunder, and such failure shall
continue beyond the periods referred to in Article 21 hereof, Landlord may make
any such payment or perform any such act on Tenant's part to be made or
performed as in this Lease provided but shall not be obligated so to do. Any
such payment or performance shall not be a waiver or release of Tenant's
obligations. All sums so paid by Landlord and all necessary incidental costs
together with interest thereon at the rate specified in Section 22.3 from the
date of such payment by Landlord

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<PAGE>   25

until paid shall be payable as Additional Rent to Landlord on demand, and Tenant
covenants to pay any such sums, and Landlord shall have, in addition to any
other right or remedy of Landlord, the same rights and remedies in the event of
the nonpayment thereof by Tenant as in the case of default by Tenant in the
payment of Rent. Except in an emergency or to prevent imminent threat of injury
to persons or damage to the Premises, as reasonably determined by Landlord,
Landlord shall provide Tenant with written notice and the appropriate cure
period provided in the Lease before performing any act on behalf of Tenant, and
will in all events provide Tenant with written request for any reimbursement
payable under this Article 25.

        25.2 LANDLORD DEFAULTS: If Landlord defaults in accordance with Section
21.2 above by failing to commence any repairs which Landlord is obligated to
make under Section 4.2 above within thirty (30) days following Tenant's written
request for such repairs, and the failure to make such repairs will result in an
imminent threat of injury to persons or damage to personal property upon the
Premises, or the inability of Tenant to occupy the Buildings, then provided no
Event of Default by Tenant has occurred and is continuing, Tenant may elect to
make such repairs strictly in accordance with the following: (i) before making
any such repair, Tenant shall deliver to Landlord a second notice of the need
for such repair, which notice shall specifically advise Landlord that Tenant
intends to exercise its self-help right hereunder ("Self-Help Notice"); (ii)
should Landlord further fail, within ten (10) days following its receipt of the
Self-Help Notice, to commence the necessary repairs or to make other
arrangements reasonable under the circumstances, then Tenant shall have the
right to make only such repairs as are necessary to secure the Premises from the
imminent threat of injury to persons or damage to personal property, or to
permit Tenant to occupy the Buildings; (iii) any such repairs undertaken by
Tenant shall be performed and completed in accordance with the Tenant's
obligations for its own repairs and alterations under Section 4.3 above and
Article 12 above, and only using contractors and materials reasonably approved
by Landlord; and (iv) Tenant shall be responsible for obtaining any necessary
governmental permits before commencing the repair work, and Tenant shall assume
the risk of any damage, loss or injury resulting from such work. All costs of
any repairs on the part of Landlord provided hereunder shall be considered part
of Operating Expenses unless Landlord is obligated to make such repairs at
Landlord's expense pursuant to the first sentence of Section 4.2 above, in which
event, unless Landlord reasonably disputes the need for such repairs or the
costs thereof, Landlord shall reimburse Tenant for its actual costs reasonably
incurred in making such repairs upon written demand from Tenant accompanied by
copies of paid invoices to unaffiliated third parties for such repairs and
copies of lien release waivers in connection therewith. If Landlord disputes the
need for such repairs or the costs thereof, the parties will meet and confer in
good faith to seek to resolve Landlord's objection. If the parties are unable to
resolve Landlord's objection, then either party may, by written notice to the
other, submit such dispute to a reference pursuant to Section 638 et seq. of the
California Code of Civil Procedure. The parties shall seek to agree upon a
single referee (as contemplated in California Code of Civil Procedure Section
640) within fifteen (15) business days after delivery of such notice; if they
are unable to agree, then they shall petition the Superior Court of Orange
County to appoint a single referee in accordance with Section 640 of the
California Code of Civil Procedure. The decision of the referee as to such
dispute shall be binding and controlling on the parties. In no event shall
Tenant have the right to offset the cost of any such repairs against Rent or
other sums due under this Lease.

ARTICLE 26. BROKERS:

        Tenant and Landlord covenant, warrant and represent that no Brokers
except as provided in the Basic Lease Information (the "Brokers") was
instrumental in bringing about or consummating this Lease and that neither party
has had conversations or negotiations with any brokers except the Brokers
concerning the leasing of the Premises. Tenant and Landlord agree to indemnify
and hold harmless each other against and from any claims for any brokerage
commissions and all reasonable costs, expenses and liabilities in connection
therewith, including without limitation, reasonable attorneys' fees and
expenses, arising out of any conversations or negotiations had by Tenant or
Landlord, as applicable, with any Brokers other than the Brokers. Landlord shall
pay any brokerage commissions due the Brokers as per a separate agreement
between Landlord and the Brokers.

ARTICLE 27. NOTICES:

        Any notice, statement, demand, consent, approval or other communication
required or permitted to be given, rendered or made by either party to the
other, pursuant to this Lease or pursuant to any applicable law or requirement
of public authority, shall be in writing (whether or not so stated elsewhere in
this Lease). Notices shall be deemed to have been properly given, rendered or
made: upon delivery if delivered in person or by a recognized reputable
overnight delivery service to the Landlord or Tenant or by confirmed facsimile;
or, if sent postage prepaid by registered or certified mail, return receipt
requested, effective on that date actually received or refused as indicated by
the attached return receipt, addressed to the other party at the address
designated by the party (except that after the Commencement Date, Tenant's
address, unless Tenant shall give notice to the contrary, shall be the Tenant's
address at the Premises). Either party may, by notice as aforesaid, designate a
different address or addresses for notices, statements, demands, consents,
approvals or other communications intended for it.

ARTICLE 28. ESTOPPEL CERTIFICATES:

        28.1 TENANT ESTOPPEL CERTIFICATES. Tenant agrees, at any time and from
time to time, as requested by Landlord with not less than ten (10) business days
prior notice, to execute and deliver to Landlord a statement certifying that
this Lease is unmodified and in full force and effect (or if there have been
modifications, that the same is in full force and effect as modified and stating
the modifications), certifying the dates to which the Base Rent and Additional
Rent have been paid, stating whether or not, to the best knowledge of the
Tenant, the Landlord is in default in performance of any of its obligations
under this Lease, and, if so, specifying each such default of which the Tenant
shall have knowledge, and stating whether or not, to the best knowledge of
Tenant, any event has occurred which with the giving of notice or passage of
time, or both, would constitute such a default, and, if so, specifying each such
event, it being intended that any such statement delivered pursuant hereto shall
be deemed a representation and warranty to be relied upon by the

                                       24
<PAGE>   26

Landlord and by others with whom Landlord may be dealing, regardless of
independent investigation. Tenant also shall include in any such statement such
other information concerning this Lease as Landlord may reasonably request. If
Tenant fails to respond within ten (10) business days of receipt by Tenant of a
written request for such a statement, such failure shall constitute an Event of
Default and Tenant shall be deemed to have given such statement and shall be
deemed to have admitted the accuracy of any information contained in the request
for such statement and that the Lease is unmodified and in full force and
effect, that there are not uncured defaults in Landlord's performance, and that
not more than one (1) month's Rent has been paid in advance.

        28.2 LANDLORD ESTOPPEL CERTIFICATES. Landlord agrees, not more than once
in each calendar year, as requested by Tenant with not less than fifteen (15)
business days prior notice, to execute and deliver to Tenant a statement
certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications, that the same is in full force and effect as
modified and stating the modifications), certifying the dates to which the Base
Rent and Additional Rent have been paid, stating whether or not, to the actual
knowledge of the Landlord, the Tenant is in default in performance of any of its
obligations under this Lease, and, if so, specifying each such default of which
the Landlord shall have knowledge, and stating whether or not, to the actual
knowledge of Landlord, any event has occurred which with the giving of notice or
passage of time, or both, would constitute such a default, and, if so,
specifying each such event, it being intended that any such statement delivered
pursuant hereto shall be deemed a representation and warranty to be relied upon
by the Tenant and by others with whom Tenant may be dealing, regardless of
independent investigation. Landlord also shall include in any such statement
such other information concerning this Lease as Tenant may reasonably request.

ARTICLE 29. MEMORANDUM OF LEASE:

        Tenant shall not record this Lease. Upon execution of this Lease,
however, Landlord shall execute, acknowledge and deliver to Tenant a memorandum
of lease in respect of this Lease sufficient for recording, which Tenant may
record in the Official Records of Orange County, California at any time, and
Tenant shall (at the time of obtaining of the memorandum from Landlord and at
any time thereafter upon request of Landlord) execute, acknowledge and deliver
to Landlord a quitclaim deed of this Lease, which Landlord shall hold and may
record at any time after the expiration or earlier termination of the Lease
Term. Such memorandum shall not be deemed to change or otherwise affect any of
the obligations or provisions of this Lease.

ARTICLE 30. ADJUSTMENT OF COMMENCEMENT DATE AND LEASE TERM:

        30.1 EARLY POSSESSION: From and after November 1, 2000, Tenant shall
have the right and obligation to accept each Building and to begin paying Base
Rent and Additional Rent therefore as the Tenant Improvements as described in
Exhibit D are "substantially completed" for each Building as provided in Exhibit
D, and the provisions of this Lease shall begin to apply with respect to each
Building immediately upon the substantial completion of the Tenant Improvements
in each Building and notwithstanding that the Commencement Date may not yet have
occurred; however, before Tenant shall be permitted occupancy of each such
Building, (i) Tenant shall pay for and provide evidence of the insurance to be
provided by Tenant pursuant to the provisions of Section 11, (ii) Tenant shall
contract for direct payment of all utility, service and maintenance charges for
such Building, and (iii) Tenant shall not unreasonably interfere, delay or
hinder Landlord, its representatives, contractors or subcontractors in the
construction of the Tenant Improvements in the balance of the Premises in
accordance with the provisions of this Lease. Prior to November 1, 2000, Tenant
shall have the right to enter into each Building on the Premises up to thirty
(30) days prior to the substantial completion of the Tenant Improvements for
each Building to install phone systems, computer systems, furniture, fixtures
and equipment, etc., within each Building on a phased basis during such thirty
(30) day period prior to substantial completion (except that with respect to
cabling, Tenant and Landlord shall coordinate in good faith for Tenant to be
permitted to install its cabling prior to Landlord's installing drop ceilings),
which early entry shall be subject to all terms of this Lease, but shall not
constitute occupancy for operation of Tenant's business and shall not trigger
the Commencement Date or Tenant's obligation to pay Rent or any other amounts
due under this Lease; provided, however, (i) Tenant shall pay for and provide
evidence of the insurance to be provided by Tenant pursuant to the provisions of
Section 11, (ii) Tenant shall contract for direct payment of all utility,
service and maintenance charges for such Building, and (iii) Tenant shall not
unreasonably interfere, delay or hinder Landlord, its agents, contractors or
subcontractors in the construction of the Tenant Improvements in the balance of
the Premises in accordance with the provisions of this Lease. Early possession
by Tenant in accordance with this Section 30.1 shall not constitute occupancy of
the Premises for purposes of establishing the Commencement Date.

        30.2 DELAY IN COMMENCEMENT: If Landlord fails to deliver the last of the
Premises with the last of the Tenant Improvements described in Exhibit D
substantially complete by the "Anticipated Commencement Date" due to the fault
of the Landlord or due to the occurrence of an event of force majeure, Landlord
shall not be considered in default of this Lease, but the Commencement Date
shall be deferred until the last of the Premises are so delivered, subject
however to Tenant's rights under Section 2.3 above. Tenant shall be considered
to have caused any delay in the preparation of the Premises resulting from
Tenant's failure to sign this Lease on or before the Construction Information
Submittal Date specified in Exhibit D or, in the alternative, to provide
Landlord by such date a written agreement in form and content satisfactory to
Landlord guarantying Tenant will pay Landlord for any and all costs incurred in
connection with the work done prior to execution of this Lease to prepare the
Premises for Tenant. If the last of the Tenant Improvements are not completed on
the "Anticipated Commencement Date" due to (i) the failure of Tenant to fulfill
any obligation pursuant to the terms of this Lease or any exhibit hereto,
including without limitation, Tenant's failure to comply with the Construction
Information Submittal Dates and Construction Approval Dates specified in Exhibit
D, or (ii) any changes in the Tenant Improvements requested by Tenant after
Landlord's approval of the plans, or (iii) any

                                       25
<PAGE>   27

other Tenant Delay as described in Exhibit D, then the Commencement Date shall
be the later of the Anticipated Commencement Date specified in the Basic Lease
Information or such earlier date that the last of the Tenant Improvements would
have been substantially completed but for such Tenant delay. For purposes
hereof, "substantial completion" shall be as described in Exhibit D attached to
this Lease.

        30.3 OPTION TO EXTEND LEASE TERM: Tenant shall have the right to extend
the term of this Lease for two (2) additional consecutive periods of five (5)
years each (each hereinafter an "Extension Term"), such rights to be exercised
by written notice from Tenant to Landlord given not less than three hundred
sixty-five (365) days prior to the applicable expiration date of the Lease Term.
Each extension right may only be exercised if no Event of Default by Tenant
under the Lease has occurred and is continuing, either at the time of the
exercise of the extension right or at the commencement of such extension. In the
event this Lease is terminated for any reason, the rights granted to Tenant in
this paragraph shall also terminate at the same time. In the event Tenant
exercises the right to extend the term of this Lease as provided herein and
subsequently an Event of Default by Tenant occurs prior to commencement of an
Extension Term, Landlord may elect, by written notice to Tenant, to terminate
Tenant's prior election to exercise its right to extend the term hereof, in
which event Tenant shall have no rights with respect to the Extension Term or
any subsequent Extension Term. Tenant's failure or inability to timely and
properly exercise its right to the first Extension Term shall automatically
terminate the second Extension Term. The right to extend the term of this Lease
may only be exercised by Tenant and any permitted assignee under Article 10
above, and may not be transferred outside of this Lease or exercised by any
other person or entity.

        The leasing of the Premises during any Extension Term shall be upon the
same terms and conditions as are contained herein with respect to the initial
term, and the Lease Term shall be deemed to include such Extension Term, except
that (1) there shall be no further options to extend the term hereof after the
Extension Term unless expressly granted by the Landlord in writing, (2) the
provisions of this Lease shall not apply that are in the nature of concessions
to induce Tenant to enter into this Lease such as rent abatement, tenant
allowances, tenant improvements and the like, and (3) the monthly Base Rent rate
per rentable square foot during each Extension Term shall be the then fair
market rent as reasonably determined by Landlord (including periodic increases
to Base Rent during each Extension Term), but in no event less than the Base
Rent rate payable during the final month of the previous Lease Term. The fair
market rent determined by Landlord shall be based on rents for comparable space
of comparable size with a comparable level of tenant improvements for a similar
term and commencement date for tenants of similar credit to that of Tenant, by
reference to first-class space in other buildings comparable to the Buildings in
age, quality and location (south Orange County office buildings in office/
business centers or parks as defined by CB Richard Ellis as of the date of this
Lease).

        Upon notification from Tenant of the exercise of each extension option,
Landlord shall, at least one hundred fifty (150) days prior to the commencement
of the Extension Term, notify Tenant in writing of the proposed rental for the
extension term; Tenant shall within fifteen (15) business days following receipt
of same notify Landlord in writing of the acceptance or rejection of the
proposed rental. TENANT'S FAILURE TO TIMELY PROVIDE SUCH NOTICE SHALL CONSTITUTE
ACCEPTANCE OF THE PROPOSED RENTAL. In the event of rejection by Tenant, the
extension rental shall be determined as follows:

        Within fifteen (15) days following notification of rejection, Landlord
and Tenant shall each appoint a disinterested and qualified real estate
professional (but not an appraiser). If these two real estate professionals
cannot agree upon an extension rental within fifteen (15) days following their
appointment, the two appointees shall forthwith select a third disinterested and
qualified real estate professional, and the decision of any two of the three
real estate professionals shall be binding. Notification in writing of this
decision shall be made by the real estate professionals to Landlord and Tenant
within thirty (30) days following the selection of the third real estate
professional. Landlord and Tenant shall bear the expense of the real estate
professional appointed by each, and the expense of the third real estate
professional shall be shared equally by both parties. During such process for
establishing rent, Tenant shall pay rent for the Extension Term at Landlord's
rate, with retroactive adjustment made if a different rate is established as
provided above.

        Within fifteen (15) days after the rental has been finally determined,
the parties shall execute a written confirmation of the Extension Term and
extension Base Rent. Failure or refusal of Tenant to execute the confirming
memorandum shall be an Event of Default.

        30.4 EARLY TERMINATION OPTION: Tenant shall have the option to terminate
this Lease effective as of the end of the sixtieth (60th) month of the Lease
Term or effective as of the end of the eighty-fourth (84th) month of the Lease
Term only. To exercise this option, Tenant must give Landlord not less than
twelve (12) months written notice prior to the elected termination date of
exercise and pay (with the notice) the Termination Fee to Landlord. The
"Termination Fee" shall be equal to the sum of (i) the unamortized cost of all
Tenant Improvements paid for by Landlord under Paragraphs 5 and 6 of Exhibit D
of this Lease (determined by amortizing in equal payments over the first ten
(10) years of the Lease Term with respect to Paragraph 5 costs and over the
first seven (7) years of the Lease Term with respect to Paragraph 6 costs and
all calculated at an interest rate of eleven percent (11%) per annum), plus (ii)
thirty (30) months of monthly Base Rent and Operating Expenses and Taxes for the
first termination right (i.e., effective as of the end of the 60th month of the
Lease Term), or six (6) months of monthly Base Rent and Operating Expenses and
Taxes for the second termination right. As a condition to any such early
termination, Tenant shall also pay all amounts owing to Landlord through to the
date of such early termination. The right to exercise the terms of this Section
30.4 shall be personal to Tenant only and shall automatically expire upon any
transfer, assignment or subletting of Tenant's interest in this Lease including
such transfer as may be permitted pursuant to Article 10 of this Lease.

                                       26
<PAGE>   28

ARTICLE 31. MISCELLANEOUS:

        31.1 MERGER: All understandings and agreements heretofore had between
the parties are merged in this Lease, which alone fully and completely expresses
the agreement of the parties and which is entered into after full investigation,
neither party relying upon any statement or representation not embodied in this
Lease.

        31.2 MODIFICATIONS: No agreement shall be effective to change, modify,
waive, release, discharge, terminate or effect an abandonment of this Lease, in
whole or in part, unless such agreement is in writing, refers expressly to this
Lease and is signed by the party against whom enforcement is sought.

        31.3 SUCCESSORS AND ASSIGNS: Except as otherwise expressly provided in
this Lease, the obligations of this Lease shall bind and benefit the successors
and permitted assigns of the parties hereto.

        31.4 NONRECOURSE LEASE: Tenant shall look only to Landlord's estate and
property in the Land and the Premises (including the rents, issues, profits and
proceeds thereof) for the satisfaction of Tenant's remedies for the collection
of a judgment (or other judicial process) requiring the payment of money by
Landlord in the event of any default by Landlord hereunder, and no other
property or assets of Landlord or any Landlord Parties, disclosed or
undisclosed, shall be subject to levy, execution or other enforcement procedure
for the satisfaction of Tenant's remedies under or with respect to this Lease,
the relationship of Landlord and Tenant hereunder or Tenant's use or occupancy
of the Premises or Project.

        31.5 FORCE MAJEURE: The non-monetary obligations of Tenant and Landlord
shall be subject to, and neither Landlord nor Tenant shall have any liability
whatsoever to the other, because:

             31.5.1 Such party is unable to fulfill, or is delayed in
fulfilling, any of its non-monetary obligations under this Lease by reason of
strike, other labor trouble, governmental pre-emption of priorities or other
controls in connection with a national or other public emergency or shortages of
fuel, supplies or labor resulting therefrom, delays in governmental processing,
approvals, and issuance of permits and/or inspections, or any other cause,
whether similar or dissimilar, beyond such party's reasonable control; or

             31.5.2 of any failure or defect in the supply, quantity or
character of electricity, water or other utilities furnished to the Project, by
reason of any requirement, act or omission of the public utility or others
serving the Project with electric energy, steam, oil, gas or water, or for any
other reason whether similar or dissimilar, beyond such party's reasonable
control;

provided however, that to avail oneself of a "force majeure" excuse for delay,
the party claiming such delay must notify the other party in writing within ten
(10) business days of the occurrence of such delay and describe in reasonable
detail the scope and anticipated extent of such delay. If a party timely and
properly gives such notice, the "force majeure" delay shall relate back to the
date of initial delay. If such notice is not given within the ten (10) business
day period, then any "force majeure" delay claim shall only be effective
commencing from and after the date of delivery of such notice.

        Nothing contained in this Section 31.5 shall affect, impair or excuse
the obligations of Tenant to pay all Base Rent and Additional Rent in full and
when due under this Lease.

        31.6 DEFINITIONS: For the purpose of this Lease, the following terms
have the meanings indicated:

             31.6.1 The term "mortgage" shall include a mortgage and/or deed of
trust, and the term "holder of a mortgage" or "mortgagee" or words of similar
import shall include a mortgagee of a mortgage or a beneficiary of a deed of
trust.

             31.6.2 The term "laws" and "requirements of any public authorities"
and words of similar import shall mean laws and ordinances of any or all of the
federal, state, regional, city, and county governments and rules, regulations,
orders and directives of any and all departments, subdivisions, bureaus,
agencies or offices thereof, and of any other governmental, public or
quasi-public authorities having jurisdiction over the Land, Park Common Areas
and/or the Premises, and the direction of any public officer pursuant to law,
whether now or hereinafter in force.

             31.6.3 The term "requirements of insurance bodies" and words of
similar import shall mean rules, regulations, orders, and other requirements of
the California Surveying and Rating Bureau and/or any other similar body
performing the same or similar functions and having jurisdiction or cognizance
over the Land, Park Common Areas and/or the Premises, whether now or hereafter
in force.

             31.6.4 The term "Tenant" shall mean the Tenant herein named or any
assignee or other successor in interest (immediate or remote) of Tenant herein
named, which at the time in question is the owner of Tenant's estate and
interest granted by this Lease; but the foregoing provisions of this subsection
shall not be construed to permit any assignment of this Lease or to relieve
Tenant herein named or any assignee or other successor in interest (whether
immediate or remote) of Tenant herein named from the full and prompt payment,
performance and observance of the covenants, obligations and conditions to be
paid, performed and observed by Tenant under this Lease.

                                       27
<PAGE>   29

             31.6.5 The term "Land" shall mean the real property, lot or parcel
upon which the Project is located including without limitation Buildings,
parking areas, landscaped areas, walkways, driveways, sidewalks and curbs.

             31.6.6 The term "Landlord" shall mean only the owner at the time in
question of a Building or of a lease of a Building, so that in the event of any
transfer or transfers of title to a Building or of Landlord's interest in a
lease of a Building, the transferor shall be and hereby is relieved and freed of
all obligations of Landlord under this Lease accruing after such transfer with
respect to such Building, provided that such transferee has assumed and agreed
in writing to perform and observe all obligations of Landlord herein with
respect to such Building during the period it is the holder of the Landlord's
interest under this Lease with respect to such Building.

             31.6.7 The term "herein," hereof" and "hereunder," and words of
similar import, shall be construed to refer to this Lease as a whole, and not to
any particular Article, Section or subsection, unless expressly so stated.

             31.6.8 The term "and/or" when applied to two or more matters or
things shall be construed to apply to any one or more or all thereof as the
circumstances warrant at the time in question.

             31.6.9 The term "person" shall mean natural person or persons, a
partnership, a corporation and any other form of business or legal association
or entity.

        31.7 EFFECT OF EXPIRATION: Upon the expiration or other termination of
this Lease, neither party shall have any further obligation or liability to the
other except as otherwise expressly provided in this Lease (including without
limitation any indemnity obligations which shall expressly survive such
expiration or termination) and except for such obligations as by their nature or
under the circumstances can only be, or by the provisions of this Lease, may be,
performed after such expiration or other termination; and, in any event, unless
otherwise expressly provided in this Lease, any liability for a payment
(including, without limitation, Additional Rent, herein) which shall have
accrued to or with respect to any period ending at the time of expiration or
other termination of this Lease shall survive the expiration or other
termination of this Lease.

        31.8 PRORATIONS: Any appointments or prorations of Base Rent or
Additional Rent to be made under this Lease shall be computed on the basis of a
three hundred sixty (360) day year, with twelve (12) months of thirty (30) days
each.

        31.9 GOVERNING LAW: Regardless of the place of execution or performance,
this Lease shall be governed by and construed in accordance with the laws of the
State of California. If any provision of this Lease or the application thereof
to any person or circumstances shall, for any reason and to any extent, be
invalid or unenforceable, the remainder of this Lease and the application of
that provision to other persons or circumstances shall not be affected but
rather shall be enforced to the extent permitted by law. The table of contents,
captions, heading and titles in this Lease are solely for convenience or
reference and shall not affect its interpretation. Each covenant, agreement,
obligation or other provision of this Lease on Tenant's part to be performed,
shall be deemed and construed as a separate and independent covenant of Tenant,
not dependent on any other provision of this Lease. All terms and words used in
this Lease, regardless of the number or gender in which they are used, shall be
deemed to include any other number and any other gender as the context may
require. Time is of the essence of this Lease and all of its provisions.

        31.10 LIGHT, AIR AND VIEW: Any diminution or shutting off of light, air
or view by any structure which may be erected on lands adjacent to or near the
Premises shall in no way affect this Lease or impose any liability on Landlord.

        31.11 REPRESENTATIONS RE: AUTHORITY: Tenant does hereby covenant and
warrant that:

             31.11.1 Tenant is duly organized and validly existing under the
laws of its state of formation, and, if such entity is existing under the laws
of a jurisdiction other than California, qualified to transact business in
California;

             31.11.2 Tenant has full right and authority to enter into this
Lease and to perform all Tenant's obligations hereunder; and

             31.11.3 Each person signing this Lease on behalf of Tenant is duly
and validly authorized to do so.

        Landlord does hereby covenant and warrant that:

             31.11.4 Landlord is duly organized and validly existing under the
laws of its state of formation, and, if such entity is existing under the laws
of a jurisdiction other than California, is qualified to transact business in
California to the extent required by California law;

             31.11.5 Landlord has full right and authority to enter into this
Lease and to perform all Landlord's obligations hereunder; and

             31.11.6 Each person signing this Lease on behalf of Landlord is
duly and validly authorized to do so.

                                       28
<PAGE>   30

        31.12 DEFINED TERMS: Words capitalized other than as the first word of a
sentence are defined terms and have the meaning, throughout this Lease, given to
them when they are first used with an initial capital or when used in quotation
marks.

        31.13 COUNTERPARTS: This Lease may be executed in one or more
counterparts by separate signature, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument, binding
on all parties hereto, even though all parties are not signatories to the
original or to the same counterpart. Any counterpart of this Lease that has
attached to it separate signature pages, which together contain the signatures
of all parties, shall for all purposes be deemed a fully-executed instrument,
and in making proof of this Lease, it shall not be necessary to produce or
account for more than one such counterpart.

        31.14 COSTS AND ATTORNEY FEES:

             31.14.1 NO SUIT OR ACTION FILED: If this Lease is placed in the
hands of an attorney due to a default in the payment or performance of any of
its terms, the defaulting party shall pay, immediately upon demand, all of the
other party's costs and expenses associated with enforcing the Lease, including
reasonable attorney fees and collection costs even though no suit or action is
filed thereon, and any other fees or expenses incurred by the nondefaulting
party.

             31.14.2 LITIGATION OR ARBITRATION: If legal action is instituted to
enforce or interpret any of the terms of this Lease or if legal action is
instituted in a Bankruptcy Court for a United States District Court to enforce
or interpret any of the terms of this Lease, to seek relief from an automatic
stay, to obtain adequate protection, or to otherwise assert the interest of
Landlord in a bankruptcy proceeding, the party not prevailing shall pay the
prevailing party's reasonable and actual costs and disbursements, the reasonable
and actual fees and expenses of expert witnesses in determining reasonable
attorney fees, and such sums as the court may determine to be reasonable for the
prevailing party's attorney fees connected with the trial and any appeal and by
petition for review thereof.

             31.14.3 LANDLORD'S CONSENTS: Wherever in this Lease or otherwise
the consent of Landlord is required or requested, Tenant shall pay to Landlord
its actual reasonable costs and expenses (including but not limited to
architects', attorneys', engineers' or other consultants' fees) incurred in
consideration of, or response to, the granting or withholding of such consent,
including without limitation, consents to an assignment or subletting, waivers
or approvals to Tenant equipment or other financing, and the like. Tenant shall
pay such costs and expenses to Landlord immediately upon demand; provided,
however, that as a condition to considering any request for consent, Landlord
may require that Tenant deposit with Landlord an amount reasonably calculated by
Landlord to represent the estimated costs and expenses Landlord will incur in
considering and responding to such request, and in such event any unused portion
of such deposit shall be refunded to Tenant without interest. The foregoing
payment of costs and expenses shall be in addition to, and not in lieu of, any
other fees or amounts which Landlord may be entitled to under this Lease or at
law with respect to its response to or consideration of any request for consent.

             31.14.4 DEFINITIONS: For purposes of this Lease, the term "attorney
fees" includes all charges of the prevailing party's attorneys and their staff
(including without limitation legal assistants, paralegals, word processing, and
other support personnel) and any postpetition fees in a bankruptcy court. For
purposes of this Lease, the term fees and expenses includes but is not limited
to long-distance telephone charges; expenses of facsimile transmission; expenses
for postage (including costs of registered or certified mail and return
receipts), express mail, or parcel delivery; mileage and all deposition charges,
including but not limited to court reporters' charges, appearance fees, and all
costs of transcription; costs incurred in searching records.

        31.15 EFFECT OF FAILURE TO CONSENT: Except where a different standard is
expressly provided in this Lease, the Landlord may grant or refuse to consent or
approve any item in its sole discretion. Where this Lease states that a consent
or approval may not be unreasonably withheld, and a party unreasonably withholds
or conditions such consent, the other party shall not be entitled to any damages
or termination of this Lease for such withholding, it being intended that the
sole remedy shall be to obtain an injunction compelling such consent or
approval.

                                       29
<PAGE>   31

             IN WITNESS WHEREOF, Landlord and Tenant have duly executed this
Lease Agreement as of the date and year first above written.

LANDLORD                                     TENANT

SERRANO JACK, L.L.C.,                        WESTERN DIGITAL CORPORATION,
a Delaware limited liability company         a Delaware corporation

By:      AmberJack Ltd.,
         an Arizona corporation,             By: /s/  MATTHEW E. MASSENGILL
         Managing Member                        --------------------------------

         By: /s/  DAVID C. GRAVES            Name (print): Matthew E. Massengill
            -----------------------------                  ---------------------

         Name (print): David C. Graves       Title:   President  & CEO
                       ------------------          -----------------------------

         Title:   President                  Date:    May 30, 2000
               --------------------------         ------------------------------

         Date:    June 1, 2000               By: /s/  TERESA A. HOPP
              ---------------------------       --------------------------------

         By: /s/  EARLE B. JOHNSON           Name (print): Teresa A. Hopp
            -----------------------------                 ----------------------

         Name (print): Earle B. Johnson      Title:   CFO
                      -------------------          -----------------------------

         Title: Vice President               Date:    May 30, 2000
               --------------------------         ------------------------------

         Date:  June 1, 2000
              ---------------------------

                                       30
<PAGE>   32

                                    EXHIBIT A

                                      LEASE

                           LEGAL DESCRIPTION FOR LAND

        PARCELS 1, 2, 3 AND LETTERED LOT A OF PARCEL MAP NO. 97-230 AS SHOWN ON
        A MAP FILED IN BOOK 313, PAGES 22 TO 26 INCLUSIVE OF PARCEL MAPS,
        RECORDS OF ORANGE COUNTY, CALIFORNIA.

<PAGE>   33

                                    EXHIBIT B

                                      LEASE

                         BUILDINGS AND PARK COMMON AREAS

<PAGE>   34

                                    EXHIBIT C

                                      LEASE

                          FLOOR PLAN FOR EACH BUILDING

                                 [SEE ATTACHED]

<PAGE>   35

                                   EXHIBIT C-1

                       OUTLINE SPECIFICATIONS OF BUILDINGS

                                 [SEE ATTACHED]

<PAGE>   36

                             OUTLINE SPECIFICATIONS
                            FOR SERRANO CREEK CENTER
                               REVISED 05/04/2000

SHELL BUILDING CONSTRUCTION:

     GENERAL:

          1.   Gross Building Area      Building A & C       56,109 S.F.
                                        Building B           75,455 S.F.
                                                            ------------
                                        TOTAL:              187,673 S.F.

     STANDARD SITE:

          1.   CONSTRUCTION
               Asphalt with concrete curbs, concrete curb and gutter wherever
               storm water will collect and flow adjacent to curb - also, storm
               drain on site.

          2.   DESIGN
               In accordance with site planning and design criteria of City of
               Lake Forest Off-Street Parking Guidelines.
               Buildings to meet current ADA and Title 24 requirements.

          3.   ELECTRICAL SERVICE
               277/480-volt, three phase, 4 wire service.

          4.   PARKING LOT LIGHTING
               High-pressure sodium, pole top, minimum lighting levels per City
               of Lake Forest security ordinance.

     SHELL:

          1.   ON GRADE FLOOR SYSTEM
               Concrete slab 5 inch thick with #4 at 18" o.c. over 2" sand over
               6 mil. Visqueen.

          2.   COLUMNS
               All columns will be tube steel.

          3.   INSULATION
               R-19 BATT at roof.

                                      -1-

<PAGE>   37

     4.   ROOFING
          4-ply built-up roof over plywood sheathing consisting of 3
          plys of roofing material with mineral cap sheet.

     5.   2nd FLOOR SYSTEM
          (100 lbs. Reducible)
          Metal deck over steel beams and Vulcraft trusses, 1/2" structural
          grade plywood with 1" gyp-crete fill over metal deck.

     6.   ROOF SYSTEM
          OSB or plywood over Vulcraft open web trusses.

     7.   CONCRETE TILE-UP PANELS
          Concrete panels 10" + thick w/ integrated reveals and painted finish.
          Concrete panel shear walls.
          Interior concrete panels will be furred out at lobby. Rest of interior
          walls will be furred out as part of the tenant improvement package,
          when number and locations of wall plugs can be determined.

     8.   EXTERIOR DOOR
          Glass doors.

     9.   FIRE PROTECTION
          Looped site system.
          All buildings fully sprinklered (drops by tenant).
          Systems designed for ordinary hazard.

ARCHITECTURAL TREATMENT:

     1.   GLAZING
          High performance glass on aluminum mullion system finished w/ Kynar
          finish.

     2.   EXTERIOR PAINT
          Three color scheme.

     3.   EXTERIOR SOFFIT MATERIAL
          Material shall be metal (Alcan Planar Plus).

     4.   CONCRETE ENTRY
          Concrete walk entry shall be scored washed aggregate concrete.

     5.   MAIN DOOR
          Arcadia narrow stile.

                                      -2-

<PAGE>   38

STANDARD TOILET ROOMS

     1.   FLOORS AND WALLS
          Wet walls and floor shall be covered with tile. Tile shall be 12" x
          12" Chrometech Hauteville mate on 5/8" water resistant gypsum on 3-
          5/8" metal studs with 3-1/2" acoustic batt insulation.

     2.   CEILING
          Painted smooth finish drywall.

     3.   TOILET COMPARTMENTS
          Floor-to-ceiling mount support partition to be Bobrick Plastic
          laminate or equal.

     4.   LAVATORIES
          Granite top with porcelain sink hung under granite top.

     5.   MIRRORS
          Vision quality mirrors above lavatories, as shown on plans. One
          mirror per toilet room.

     6.   ACCESSORIES
          Bobrick stainless steel, recessed and semi-recessed.

LOBBY

     1.   WALLS
          Insulated interior walls.

     2.   FLOOR/CEILING
          Lobby flooring tile/carpet    Ceiling drywall.
                         -----------            -------
          2 story lobby at Buildings A and C.

     3.   LOBBY INTERIOR DOORS
          3' x 8' solid core, plain sliced cherry wood. Flat Profile clear
          anodized aluminum door frames, Schlage L and D series, brushed
          aluminum finish, concealed auto flush bolts for pairs.

     4.   LOBBY LIGHT FIXTURES
          Recessed Can lighting.

     5.   HVAC DIFFUSERS AT LOBBY
          Linear diffusers.

                                      -3-

<PAGE>   39

SECONDARY EXIT

     1.   Secondary Exit provided for ingress and egress.

MECHANICAL SYSTEM FOR SHELL

     HVAC

     1.   Air conditioning is provided by roof mounted VAV units.

     2.   Main trunk distribution will be part of the shell.

     3.   Exhaust air from restrooms will be provided by roof mounted exhaust
          fans with duct work extended to these areas.

     4.   A concrete roof platform will be provided under VAV unites to
          attenuate noise.

MECHANICAL SCREEN

     1.   Acrylic plaster over metal studs at 16" o.c.
          Paint to match concrete panels in color and texture.

     2.   Angle bracing for supports.

PLUMBING (SHELL)

     1.   RESTROOMS
          Core restroom included w/ floor drains and flush valve fixtures.

     2.   HOSE BIBBS
          Hose bib on roof and at rear of building and where service enters
          building.

     3.   JANITOR'S CLOSET
          Janitor sinks at each core.

     4.   DRINKING FOUNTAINS
          High/Low Upgraded refrigerated drinking fountains in core at each
          floor.

                                      -4-

<PAGE>   40

STANDARD ELECTRICAL

     ELECTRICAL SYSTEM

          o    277/480-volt three phase, 4 wire service

                    Building A & C      800 amps
                    Building B         1200 amps

          o    Transformer on grade underground utility secondary conduits.

          o    Electrical service capacity suitable for approximately 22 watts
               per square foot to accommodate HVAC, lighting, data processing,
               computer loads and convenience outlets.

          o    Main electrical room supplied with underground pull section,
               house meter and main circuit breaker. One 277/480-volt and one
               120/208-volt house panel with space for tenants' meters (triple
               net lease).

          o    Two (2) 4" underground incoming C.O. for telephone service - main
               building.

          o    Conduit sized for 2000 amp service.

          o    Two (2) 4" conduits interconnect electrical rooms of all
               buildings on site and extend to public utility easement(s) for
               connection to data/fiber-optic service as available.

               o    Four (4) conduits, from Bldg. B to Bldg. A and from Bldg. B
                    to Bldg. C

               o    Two (2) conduits from building to street

STANDARD ELEVATORS AND CABS

     PASSENGER ELEVATOR

          o    Hydraulic

          o    Speed: 125 feet per minute

          o    Capacity: 2500#

          o    Cab under top: 9'-7"

          o    Cab return and door: Polished stainless steel

          o    Cab ceiling: Polished stainless steel

          o    Cab floor: Future carpet to match lobby carpet

          o    Cab Walls: Plastic laminate panels

          o    Cab Base: Polished stainless steel

          o    Cab Rail: Satin stainless steel

          o    Cab Lighting: Down lights

                                      -5-

<PAGE>   41

                                   EXHIBIT C-2

                            BUILDING PUNCHLIST ITEMS

             1. Tenant will be given a carpet allowance of $18.00 per square
yard of existing lobby areas in each Building for carpeting of the lobbies. Any
cost of carpeting the lobbies in excess of this allowance shall be paid by
Tenant in cash in the same manner as set forth in the Work Letter attached to
this Lease for excess Tenant Improvement Costs.

             2. Landlord shall complete tile work along the stair rails in each
Building.

             3. Tenant has been unable to date to confirm elevator power. Tenant
shall have the right to confirm that elevators are operational once power is
made available.

<PAGE>   42

                                    EXHIBIT D

                                   WORK LETTER

                         (Tenant Improvement Allowance)
                           (Pending Preliminary Plans)

1.      APPLICATION OF EXHIBIT

        Capitalized terms used and not otherwise defined herein shall have the
same definitions as set forth in the Lease. The provisions of this Work Letter
shall apply to the planning and completion of leasehold improvements requested
by Tenant (the "Tenant Improvements") for the fitting out of the Premises, as
more fully set forth herein.

2.      LANDLORD AND TENANT PRE-CONSTRUCTION OBLIGATIONS

        (a) PRELIMINARY PLANS. Within the time periods following full execution
of the Lease by both Landlord and Tenant set forth below (the last day of each
such period, including the last day for full execution of the Lease as set forth
below, are hereinafter referred to as "Construction Information Submittal
Dates"), Tenant's architect shall prepare and Tenant shall approve in writing
preliminary space plans for the Tenant Improvements (the "Preliminary Plans")
which shall include, without limitation, sketches and/or drawings showing the
locations of doors, partitioning, electrical fixtures, outlets and switches,
plumbing fixtures, floor loads and other requirements, and a list including all
specifications and requirements of all specialized installations and
improvements and upgrade specifications determined by Tenant as required for its
use of the Premises. Tenant agrees to and shall promptly and fully cooperate
with Tenant's architect and shall supply all information Tenant's architect
deems necessary for the preparation of the Preliminary Plans. Tenant
acknowledges that the Preliminary Plans shall be prepared by Tenant's architect
after consultation and cooperation between Tenant, Tenant's architect, Landlord
and Landlord's architect regarding the proposed Tenant Improvements and Tenant's
requirements. Landlord and Landlord's architect shall be entitled, in all
respects, to rely upon all information supplied by Tenant regarding the Tenant
Improvements. The costs associated with preparation of the Preliminary Plans
shall be paid as set forth in Sections 5 and 6 of this Work Letter.

        (b) WORKING DRAWINGS. Within thirty (30) business days following
submittal of the Preliminary Plans for each Building, Landlord's architect shall
prepare working drawings (the "Working Drawings") for the Tenant Improvements
based upon the approved Preliminary Plans. The Working Drawings shall include
architectural, mechanical and electrical construction drawings for the Tenant
Improvements based on the Preliminary Plans. Notwithstanding the Preliminary
Plans, in all cases the Working Drawings (i) shall be subject to Landlord's
final approval, which approval shall not be unreasonably withheld, (ii) shall
not be in conflict with building codes for the City or with insurance
requirements for a fire resistive Class A building, (iii) shall comply with all
applicable building, fire, health and sanitary codes, regulations and
requirements, and (iv) shall be in a form satisfactory to appropriate
governmental authorities responsible for issuing permits and licenses required
for construction. The costs associated with preparation of the Working Drawings
shall be paid as set forth in Sections 5 and 6 of this Work Letter.

        (c) APPROVAL OF WORKING DRAWINGS. Landlord or Landlord's architect shall
submit the Working Drawings to Tenant for Tenant's review, and Tenant shall
notify Landlord and Landlord's architect within five (5) business days after
delivery thereof of any requested revisions. Within five (5) business days after
receipt of Tenant's notice, Landlord's architect shall make all approved
revisions to the Working Drawings and submit two (2) copies thereof to Tenant
for its final review and approval, which approval shall be given within three
(3) business days thereafter. Concurrently with the above review and approval
process, Landlord may submit all plans and specifications to City and other
applicable governmental agencies in an attempt to expedite City approval and
issuance of all necessary permits and licenses to construct the Tenant
Improvements as shown on the Working Drawings. Any changes or ancillary
improvements (including without limitation improvements outside of the Premises)
which are required by City or other governmental agencies shall be immediately
submitted to Landlord for Landlord's review and reasonable approval, and
Landlord shall promptly notify Tenant of such changes. If approved by Landlord,
such changes and/or improvements shall be added to the Working Drawings and be
deemed part of the Tenant Improvements. The last day of each period in which
Tenant is required to give its approval under this paragraph is hereafter
sometimes referred to as a "Construction Document Approval Date".

        (d) SCHEDULE OF CRITICAL DATES. Set forth below is a schedule of certain
critical dates relating to Landlord's and Tenant's respective obligations for
the design and construction of the Tenant Improvements, including the
Construction Information Submittal Dates and the Construction Document Approval
Dates. Such dates and the respective obligations of Landlord and Tenant are more
fully described elsewhere in this Work Letter. The purpose of the following
schedule is to provide a reference for Landlord and Tenant and to make certain
the final approval of the Working Drawings by Tenant for each Building
(hereafter each a "Final Approval Date") occurs as set forth herein. Following
the Final Approval Date for each Building, Tenant shall be deemed to have
released Landlord to commence construction of the Tenant Improvements for such
Building as set forth in Section 4 below.

<TABLE>
<CAPTION>
                                                                                                    RESPONSIBLE
          REFERENCE                       DATE DUE                                                     PARTY
          ---------                       --------                                                     -----
<S>                                       <C>                                                       <C>
A.        Execution Deadline for Lease    May 26, 2000                                                 Landlord and
                                                                                                       Tenant

B.        Preliminary Plan Completion:
              (i)   First Building        May 26,2000                                                  Tenant
             (ii)   Second Building       May 26, 2000                                                 Tenant
            (iii)   Third Building        May 26, 2000                                                 Tenant
</TABLE>

                                        1
<PAGE>   43

<TABLE>
<S>                                       <C>                                                          <C>
C.        Working Drawings Completion:
              (i)  First Building         30 business days after submittal of Preliminary Plans        Landlord
                                          signed off by Tenant
             (ii)  Second Building        30 business days after submittal of Preliminary Plans        Landlord
                                          signed off by Tenant
            (iii)  Third Building         30 business days after submittal of Preliminary Plans        Landlord
                                          signed off by Tenant

D.        Working Drawings Review:
              (i)  First Building         5 business days after submittal of Working Drawings          Tenant
             (ii)  Second Building        5 business days after submittal of Working Drawings          Tenant
            (iii)  Third Building         5 business days after submittal of Working Drawings          Tenant

E.        Working Drawings Revisions:
              (i)  First Building         5 business days after return of Working Drawings             Landlord
             (ii)  Second Building        5 business days after return of Working Drawings             Landlord
            (iii)  Third Building         5 business days after return of Working Drawings             Landlord

F.        Final Approval Dates:
              (i)  First Building         3 business days after submittal of revised Working Drawings  Tenant
             (ii)  Second Building        3 business days after submittal of revised Working Drawings  Tenant
            (iii)  Third Building         3 business days after submittal of revised Working Drawings  Tenant
</TABLE>

3.      BUILDING PERMIT

        After the Final Approval Date has occurred for each Building, Landlord
shall, if Landlord has not already done so, submit the Working Drawings for such
Building to the appropriate governmental body or bodies for final plan checking
and a building permit. Landlord, with Tenant's cooperation, shall cause to be
made any change in the Working Drawings necessary to obtain the building permit;
provided, however, after the Final Approval Date, no changes shall be made to
the Working Drawings without the prior written approval of both Landlord and
Tenant which approval shall not be unreasonably withheld, and then only after
agreement by Tenant to pay any reasonably and actual excess costs resulting from
such changes to the extent such changes cause the cost of the work to exceed the
Tenant Improvement Allowance.

4.      CONSTRUCTION OF TENANT IMPROVEMENTS

        After the Final Approval Date for each Building has occurred and a
building permit for the work for such Building has been issued, Landlord shall,
through a guaranteed maximum construction contract providing for not more than
one (1) draw request for funds each month ("Construction Contract") with Coastal
Pacific Construction, Ticon Construction Company or another reputable, licensed
contractor selected by Landlord and reasonably approved by Tenant
("Contractor"), cause the construction of the Tenant Improvements for each
Building to be carried out in substantial conformance with the Working Drawings
in a good and workmanlike manner using first-class materials. The costs
associated with the construction of the Tenant Improvements shall be paid as set
forth in Sections 5 and 6 of this Work Letter. Landlord shall cause the
Contractor to competitively bid all major subcontract trades by at least three
(3) subcontractors for each such trade selected by Landlord or the Contractor
and approved by Landlord. Landlord shall cause the Contractor to award each
subcontract trade to the lowest bidder; unless such lowest bidder has presented
an incomplete bid, or does not reasonably appear able to commence and complete
its work in a manner and within a time frame reasonably determined necessary to
complete the Tenant Improvements as required under this Work Letter, or
otherwise does not reasonably appear to be best qualified to perform its trade
within the time and in the manner contemplated in this Work Letter, and in any
of such events Landlord shall have the right, in its reasonable discretion, to
cause the Contractor to award the subcontract for such trade to the most
appropriate bidder under the circumstances. Landlord agrees to advise and
consult with Tenant throughout the bidding and contract process, so long as such
consultation does not delay or interfere with Landlord's obligations in
connection herewith, and in all events Landlord's determinations as to bid and
contract decisions shall be final. Landlord shall see that the construction
complies with all applicable building, fire, health, and sanitary codes and
regulations, the satisfaction of which shall be evidenced by a certificate of
occupancy for such Building.

        For purposes of the Lease and this Work Letter, "substantial completion"
and "substantially completed" means, with respect to each Building, (i) the City
of Lake Forest ("City") has approved of the Tenant Improvements for such
Building in accordance with its building code, as evidenced by its written
approval thereof in accordance with the building permits issued for the Tenant
Improvements for such Building, and (ii) Landlord's architect has certified in
writing that the Tenant Improvements for such Building have been completed in
accordance with the final Working Drawings therefor and any authorized change
orders, except for minor details of construction, mechanical adjustments or
decorations which do not materially interfere with Tenant's use and enjoyment of
such Building (items normally referred to as "punchlist" items). Issuance of a
certificate of occupancy shall not be required for "substantial completion",
provided however, that Landlord shall deliver to Tenant a certificate of
occupancy (temporary or otherwise) from the City for such Building within ten
(10) business days after the last to occur of the approvals under clauses (i) or
(ii) of the preceding sentence. If Landlord fails to obtain a certificate of
occupancy (temporary or otherwise) within such period, substantial completion
shall be deemed not to have occurred until such certificate of occupancy or
temporary certificate of occupancy is received, unless Landlord is unable to
obtain such certificate of occupancy or temporary certificate of occupancy
because of any acts or omissions of Tenant or any Tenant Parties, in which event
the requirement of a certificate of occupancy (temporary or otherwise) in
connection with substantial completion shall be waived. Within five (5) business
days after substantial completion with respect to each Building, and prior to
Tenant's move-in date, Tenant, Landlord and Landlord's architect shall jointly
conduct a walk-through of the Building and create a mutually acceptable written
punchlist setting forth any corrective work with respect to the Tenant
Improvements in

                                       2
<PAGE>   44

such Building which the parties believe is required to be performed. In the
event that no such punchlist is provided within said period through no fault of
either Landlord or Landlord's architect, Tenant shall be deemed to have waived
the right to such punchlist. Landlord shall use all reasonable efforts to
complete all of the items on the punchlist for each Building within forty-five
(45) days of receipt of the punchlist therefore. Nothing contained herein shall
expand Landlord's maintenance and repair obligations set forth in Section 4.2 of
the Lease.

5.      TENANT IMPROVEMENT ALLOWANCE

        Landlord shall provide Tenant with a Tenant Improvement Allowance in the
amount of up to Four Million Four Hundred Forty-Three Thousand One Hundred
Twenty-Five Dollars ($4,443,125.00) towards the cost of the design, purchase and
construction of the Tenant Improvements to the Premises, including without
limitation design, engineering and consulting fees (collectively, the "Tenant
Improvement Costs"). Tenant shall not be entitled to retain or receive any part
of the Tenant Improvement Allowance not actually used to pay Tenant Improvement
Costs. The Tenant Improvement Allowance shall be used for payment of the
following Tenant Improvement Costs:

             (i) Preparation of the Preliminary Plans and the Working Drawings
        as provided in Section 2 of this Work Letter, including without
        limitation all fees charged by City (including without limitation fees
        for building permits and plan checks) in connection with the Tenant
        Improvements work in the Premises;

             (ii) Construction work for completion of the Tenant Improvements
        and any ancillary improvements required by any applicable governmental
        agency or authority arising out of the Tenant Improvements, as reflected
        in the Working Drawings and Construction Contract; and

             (iii) All contractors' charges, general conditions, performance
        bond premiums, and construction fees as reflected in the Construction
        Contract.

6.      COSTS IN EXCESS OF TENANT IMPROVEMENT ALLOWANCE AT TENANT'S EXPENSE

        (a) COST APPROVAL. Tenant shall pay the excess of the Tenant Improvement
Costs over the amount of the Tenant Improvement Allowance available to defray
such costs. Concurrent with the plan checking referred to in Section 3 of this
Work Letter, Landlord shall prepare and submit to Tenant a written estimate of
the amount of the remaining Tenant Improvement Costs and the cost of the Tenant
Improvement Allowance still available to defray such costs (after preparation of
the Preliminary Plans and Working Drawings). Tenant shall approve or disapprove
any such estimate by written notice to Landlord within three (3) days after
receipt thereof. If Tenant fails to notify Landlord of its disapproval within
such three (3) day period, Tenant shall be deemed to have approved such
estimate. If Tenant disapproves such estimate within the three (3) day period,
Tenant shall be required to direct Landlord and Landlord's architect to amend
the Working Drawings in a manner satisfactory to Landlord so as to reduce the
estimated costs to an amount acceptable to Tenant, and any excess estimated
costs remaining after such amendment shall be paid by Tenant in the manner
described in the preceding sentence. Tenant shall additionally pay any costs
resulting from such amendment and Tenant shall be liable for the delay in
completing the Tenant Improvements and the increased costs, if any, resulting
from such delay. If Tenant is unwilling or unable to amend the Working Drawings
in a manner acceptable to Landlord, then Tenant shall be deemed to have approved
of the estimate for the Working Drawings as prepared, and shall pay the amount
of any excess estimated costs together with any costs arising from delay as a
result of Tenant's actions hereunder, in the manner provided below. Tenant shall
pay the amount of such excess on a pro rata basis with the amounts to be funded
by Landlord under Section 5 and Section 6(b) of this Work Letter, within five
(5) days after written notice from Landlord setting forth the amounts to be
funded by Landlord under each draw request submitted by the Contractor under the
Construction Contract and approved by Landlord. The failure of Tenant to timely
and fully pay any installment of excess amounts hereunder shall constitute a
Tenant Delay and, at Landlord's option, without waiver of Landlord's right to
declare an Event of Default by Tenant pursuant to Section 21.1.1 of the Lease,
Landlord may cease further work on the Tenant Improvements until such
installment has been fully paid, and any additional costs or delays arising out
of such cessation of work by Landlord shall be additional Tenant Delay and shall
be paid by Tenant.

        (b) AMORTIZATION OF EXCESS COSTS. Provided that no Event of Default
under the Lease has occurred and is continuing, Tenant may elect, by written
notice delivered to Landlord within the time that Tenant is to pay to Landlord
any excess Tenant Improvement Costs, to have such excess costs up to a maximum
amount of One Million Seven Hundred Seventy-Seven Thousand Two Hundred Fifty
Dollars ($1,777,250.00) amortized over the first seven (7) years of the Lease
Term only at a rate of eleven percent (11%) per annum, compounded ("Amortization
Rate"), with all such amortized amounts paid by Tenant to Landlord as Additional
Rent at the time and in the manner required for Tenant to pay Base Rent as set
forth in the Lease. The parties acknowledge that if the full amount of
$1,777,250.00 is amortized hereunder, the monthly payment shall be $30,430.85.
Upon the occurrence of any Event of Default by Tenant under the Lease, Landlord
shall have the right to accelerate the remaining principal balance of excess
Tenant Improvement Costs amortized hereunder and to require that the entire
amount thereof be immediately paid in full by Tenant. Should Tenant fail to pay
such remaining principal amount within five (5) business days after any such
election by Landlord, such principal amount shall thereafter bear interest at
the greater of the Amortization Rate or the rate described in Section 22.3 of
the Lease until paid.

        (c) FINAL COSTS. Within sixty (60) days after completion by Landlord of
the Tenant Improvements to the Premises, Landlord shall determine the actual
final Tenant Improvements Costs and shall submit a written statement of such
amount to Tenant. If any estimate previously paid by Tenant exceeds the amount
due hereunder from Tenant for such work, such excess shall be refunded to
Tenant. If any amount is still due from Tenant for such work, then Tenant shall
pay such amount in full within ten (10) days of receipt of Landlord's statement
or, if available, by written notice to Landlord within such 10-day period, elect
to have such amount or portion thereof amortized as provided in paragraph (b)
next above.

                                       3
<PAGE>   45

7.      CHANGE ORDERS

        Tenant may from time to time request and obtain change orders during the
course of construction provided that: (i) each such request shall be reasonable,
shall be in writing and signed by or on behalf of Tenant, and shall not result
in any structural change in the Building, as reasonably determined by Landlord;
(ii) all additional charges and costs, including without limitation
architectural and engineering costs, construction and material costs, processing
costs of any governmental entity, and increased construction, shall be the sole
and exclusive obligation of Tenant; and (iii) any resulting delay in the
completion of the Tenant Improvements shall be deemed a Tenant Delay and in no
event shall extend the Commencement Date of the Lease. Upon Tenant's request for
a change order, Landlord shall as soon as reasonably possible submit to Tenant a
written estimate of the increased or decreased cost and anticipated delay, if
any, attributable to such requested change. Within three (3) days of the date
such estimated cost adjustment and delay are delivered to Tenant, Tenant shall
advise Landlord whether it wishes to proceed with the change order, and if
Tenant elects to proceed with the change order, Tenant shall remit, concurrently
with Tenant's notice to proceed, the amount of the increased cost, if any,
attributable to such change order. Unless Tenant includes in its initial change
order request that the work in process at the time such request is made be
halted pending approval and execution of a change order, Landlord shall not be
obligated to stop construction of the Tenant Improvements, whether or not the
change order relates to the work then in process or about to be started.

8.      TENANT DELAYS

        In no event shall the Commencement Date of the Lease be extended or
delayed due or attributable to delays due to the fault of Tenant ("Tenant
Delays"). Tenant Delays shall include, but are not limited to, delays caused by
or resulting from any one or more of the following:

             (a) Tenant's failure to promptly cooperate with the architects and
        furnish information for the preparation of the Preliminary Plans and
        Working Drawings, or to prepare and submit to Landlord the Preliminary
        Plans within the applicable Construction Information Submittal Dates;

             (b) Tenant's failure to timely review and reasonably approve the
        Working Drawings by the applicable Construction Document Approval Dates;

             (c) Tenant's request for or use of special materials, finishes or
        installations which are not readily available, provided that Landlord
        shall notify Tenant in writing that the particular material, finish, or
        installation is not readily available promptly upon Landlord's discovery
        of same;

             (d) Delay attributable to failure by Tenant to timely provide, or
        changes (including without limitation changes in location) to,
        specifications relating to the laboratories, data center, or any of the
        other specialized improvements;

             (e) Change orders requested by Tenant which actually delay the
        completion of the Tenant Improvements;

             (f) Interference by Tenant or by any Tenant Parties with Landlord's
        construction activities;

             (g) Tenant's failure to approve any other item or perform any other
        obligation in accordance with and by the dates specified herein or in
        the Construction Contract;

             (h) Requested or required changes in the Preliminary Plans, Working
        Drawings or any other plans and specifications after the approval
        thereof by Tenant or submission thereof by Tenant to Landlord;

             (i) Unavailability of or delay in the ability to timely procure
        equipment or materials specified for the build-out of the laboratories,
        data center or other specialized improvements, provided that Landlord
        shall notify Tenant in writing that the particular equipment or material
        is not readily available promptly upon Landlord's discovery of same;

             (j) Tenant's failure to timely approve written estimates of costs
        or to timely pay excess costs not timely elected to be amortized in
        accordance with this Work Letter; and

             (k) Tenant's obtaining or failure to obtain any necessary
        governmental approvals or permits for Tenant's intended use of the
        Premises.

If the Commencement Date of the Lease is delayed by any Tenant Delays, whether
or not within the control of Tenant, then the Commencement Date of the Lease and
the payment of Rent shall be accelerated by the number of days of such delay.
Landlord shall give Tenant written notice within ten (10) business days
following Landlord's discovery of any circumstance that Landlord believes
constitutes a Tenant Delay, and in the event of such timely notice the Tenant
Delay shall relate back to the date such Tenant Delay began. If such notice is
not given within ten (10) business days following Landlord's discovery of the
circumstances that Landlord believes constitutes the Tenant Delay, then the
Tenant Delay claim shall only be effective commencing from and after the date of
delivery of such notice.

9.      TRADE FIXTURES AND EQUIPMENT

        Tenant acknowledges and agrees that Tenant is solely responsible for
obtaining, delivering and installing in the Premises all necessary and desired
furniture, trade fixtures, equipment and other similar items, and that Landlord
shall have no responsibility whatsoever with regard thereto. Any Tenant
expenditures on the same shall not be reimbursable or amortizable as Tenant
Improvements. Tenant further acknowledges and agrees that neither the
Commencement Date of the Lease nor the payment of Rent shall be delayed for any
period of time whatsoever due to any delay in the furnishing of the Premises
with such items.

                                       4
<PAGE>   46

10.     FAILURE OF TENANT TO COMPLY

        Any failure of Tenant to comply with any of the provisions contained in
this Work Letter within the times for compliance herein set forth shall be
deemed a default under the Lease. In addition to the remedies provided to
Landlord in this Work Letter upon the occurrence of such a default by Tenant,
Landlord shall have all remedies available at law or equity to a landlord
against a defaulting tenant pursuant to a written lease, including but not
limited to those set forth in the Lease.

11.     COORDINATION OF LABOR

        Landlord and Tenant shall cause their respective contractors, employees,
servants and agents to work in harmony with each other so as not to interfere
with any labor employed by the other on the Premises.

12.     REMOVAL OF SPECIALIZED IMPROVEMENTS

        Upon the expiration or earlier termination of the Lease Term and upon
demand by Landlord, Tenant shall remove all or any portion of those certain
specialized improvements installed as part of the Tenant Improvements more
particularly described in Schedule "1" attached to this Work Letter, and Tenant
shall repair and restore any damages occasioned thereby and shall leave the area
in which such specialized improvements are located in a clean shell condition
(with respect to the laboratory and data center areas in the Buildings) and in
the condition existing prior to the installation of all exterior specialized
improvements (ordinary wear and tear excepted), and otherwise in conformance
with the requirements of Schedule "1" attached to this Work Letter. Such
removal, repair and restoration shall be done promptly and with all due
diligence at Tenant's sole cost and expense.

                                       5
<PAGE>   47

                                  SCHEDULE "1"
                           TO EXHIBIT D (WORK LETTER)

                SPECIALIZED IMPROVEMENTS TO BE REMOVED BY TENANT

             Upon the expiration or earlier termination of the Lease Term, upon
Landlord's request in accordance with the provisions of the Lease, Tenant shall
be responsible for removing (and repairing and restoring the Premises as
appropriate) the following Tenant Improvements:

             A.      Exterior Improvements.

                     1.       Exterior pad and structure.

                     2.       All equipment within the exterior structure
                              and electrical, gas and water lines
                              connecting such equipment to the Buildings.

                     3.       Restore landscaping in the area where
                              exterior pad and structure are located to
                              condition matching landscaping in vicinity
                              of such area.

                     4.       Re-asphalt and stripe parking stalls in the
                              area where exterior pad and structure are
                              located.

             B.      Interior Improvements.

                     1.       All cabling.

                     2.       All specialized equipment and supporting
                              electrical, gas and water lines.

                     3.       All personalized equipment.

                     4.       Specialized improvements including, but not
                              limited to flooring, ceiling, and walls and
                              millwork in the laboratory and data center areas.

                                       1
<PAGE>   48

                                    EXHIBIT E

                          COMMENCEMENT DATE MEMORANDUM

DATE:    ______________________________, 200_

RE:     Net Lease dated May __, 2000, by and between SERRANO JACK, L.L.C., a
        Delaware limited liability company, as "Landlord" and WESTERN DIGITAL
        CORPORATION, a Delaware corporation, as "Tenant", for the Premises known
        as 20411, 20511 and 20521 Lake Forest Drive, Lake Forest, California.

        Agreement

        The undersigned hereby agree as follows:

        1. The Tenant Improvements (as defined in the Lease) to the Premises
have been substantially completed in accordance with the terms and conditions of
the Lease, subject only to "punch list" items agreed to by Landlord and Tenant
pursuant to the terms of the Work Letter.

        2. The Commencement Date, as defined in and determined in accordance
with the Lease, is hereby stipulated for all purposes to be
_____________________________________________________________. Unless sooner
terminated pursuant to the terms of the Lease, the expiration date of the Lease
is ________________________ (i.e., the last day of the 120th month following the
Commencement Date).

        3. Pursuant to Paragraph 6(b) of Exhibit D attached to the Lease, Tenant
has elected to amortize $__________________ of excess Tenant Improvement Costs
as Additional Rent, and the monthly amount of Additional Rent attributable
thereto (calculated in accordance with Paragraph 6(b) of Exhibit D and payable
at the same time and in the same manner as Base Rent) is $_____________ per
month during the first seven (7) years of the Lease Term.

        4. Pursuant to Section 30.3 of the Lease, the last day for Tenant to
exercise each option to extend the Term is ____________________________________
for the first option, and _______________________ for the second option.

        5. Pursuant to Section 30.4 of the Lease, the last day for Tenant to
exercise each option for early termination of the Lease Term is
____________________ for the first option and __________________ for the second
option.

                                       "Landlord"

                                       SERRANO JACK, L.L.C.,
                                       a Delaware limited liability company

                                       By:
                                          --------------------------------------
                                       Name (print):
                                                    ----------------------------
                                       Title:
                                             -----------------------------------
                                       Date:
                                            ------------------------------------

                                       By:
                                          --------------------------------------
                                       Name (print):
                                                    ----------------------------
                                       Title:
                                             -----------------------------------
                                       Date:
                                            ------------------------------------

                                       "Tenant"

                                       WESTERN DIGITAL CORPORATION,
                                       a Delaware corporation

                                       By:
                                          --------------------------------------
                                       Name (print):
                                                    ----------------------------
                                       Title:
                                             -----------------------------------
                                       Date:
                                            ------------------------------------

                                       By:
                                          --------------------------------------
                                       Name (print):
                                                    ----------------------------
                                       Title:
                                             -----------------------------------
                                       Date:
                                            ------------------------------------

<PAGE>   49

                                    EXHIBIT F

                                      LEASE

                              RULES AND REGULATIONS

The following rules and regulations shall apply to the Project and the use and
occupancy thereof. All capitalized terms used in these rules and regulations and
in any amendments or additions thereto shall, unless otherwise defined, have the
same meaning as given in the Lease to which these rules and regulations are
attached.

        A. The sidewalks, entries, passages, corridors and stairways of a
Building shall not be obstructed or used for any purpose other than ingress or
egress to and from the Building. Further, Tenant shall not misuse or in any
manner damage the landscaped or other Park Common Areas. No furniture,
equipment, or picnic tables or chairs may be placed in the Project Common Areas
unless they conform to Landlord's standard furniture for outside Buildings or
are otherwise approved by Landlord, such approval not to be unreasonably
withheld or delayed. Tenant shall be permitted to place moveable, non-fixed
basketball hoops in the parking lot portion of the Park Common Areas, and,
subject to the provisions of Article 13 of the Lease, to install a volleyball
court in place of the existing Bocci ball court in the Park Common Areas.

        B. In the event Tenant or any Tenant Parties damages any parts of a
Building during any move-in of furniture, equipment or supplies at any time,
Tenant shall forthwith pay to Landlord the amount required to repair said
damage.

        C. No safe or article, the weight of which may, in the opinion of
Landlord, constitute a hazard or damage to a Building or its equipment, shall be
moved into the Building without prior written consent of Landlord, which shall
not be unreasonably withheld. If such consent is granted, such article may be
moved into the Building and located in the Building only in the manner
designated by Landlord.

        D. Omitted.

        E. Water closets and other water fixtures shall not be used for any
purpose other than that for which the same are intended, and any damage
resulting to the same from misuse on the part of Tenant or any Tenant Parties
shall be paid for by Tenant. No person shall waste water by tying back or
wedging the faucets or by any other means.

        F. Omitted.

        G. There shall be no obstruction of common roadways or drives of the
Park Common Areas. Further, no unlicensed vehicles may be parked in any common
parking or drives, or truck loading areas of the Park Common Areas and no
vehicles or bicycles may be stored in any Park Common Areas, except where
designated.

        H. Tenant shall not allow anything to be placed on the outside of the
Premises, other than permitted signs, and then only to the extent expressly
provided in the Lease, nor shall anything be thrown by Tenant or any Tenant
Parties out of the windows of any Building. Landlord shall have the right to
remove all non-permitted signs, or non-permitted furniture, equipment or
supplies located in any Park Common Areas without notice to Tenant and at the
expense of Tenant.

        I. Omitted.

        J. No awning shall be placed over the windows, except with the prior
written consent of Landlord.

        K. Omitted.

        L. Omitted.

        M. Tenant shall comply with all applicable laws and regulations of any
public authority affecting the Project or the use thereof, and correct at
Tenant's expense any failure to comply created through Tenant's or any Tenant
Parties' fault or by reason of Tenant's or any Tenant Parties' use.

        N. Except with the prior written consent of Landlord, Tenant shall not
conduct any retail sales in or from the Project, or any business other than that
specifically provided for in the Lease.

        O. Omitted.

        P. The sashes, sash doors, windows, glass lights, and any lights or
skylights that reflect or admit light into the halls or other places of the
Buildings shall not be covered or obstructed. The toilet rooms, water and wash
closets and other water apparatus shall not be used for any purpose other than
that for which they were constructed, and no foreign substances of any kind
whatsoever shall be thrown therein, and the expense of any breakage, stoppage or
damage, resulting from the violation of this rule shall be borne by Tenant.

        Q. In order to maintain the outward professional appearance of the
Project, all window coverings to be installed at the Premises shall be subject
to Landlord's prior approval, which approval shall not be unreasonably withheld.
If Landlord, by a notice in writing to Tenant, shall object to any curtain,
blind, shade or screen attached to, or hung in, or used in connection with, any
window or door of the Premises, such use of such curtain, blind, shade or screen
shall be forthwith discontinued by Tenant.

                                       1
<PAGE>   50

        R. No cooking shall be done or permitted by Tenant on the Project other
than (i) in a cafeteria operated in compliance with law and applicable covenants
affecting the Premises, or (ii) the use of a microwave oven for food or
Underwriter's Laboratory approved equipment for brewing coffee, tea, and similar
beverages, provided that the use is in compliance with law. Offices in the
Premises shall not be used for lodging.

        S. Tenant shall not lay linoleum or other similar floor covering so that
the same be affixed to the floor of the Premises in any manner except by a
paste, or other material which may easily be removed with water, the use of
cement or other similar adhesive materials being expressly prohibited. The
method of affixing any such linoleum or other similar floor covering to the
floor, as well as the method of affixing carpets or rugs to the Premises, shall
be subject to approval by Landlord, which approval shall not be unreasonably
withheld. Tenant shall not drill through or similarly alter or damage any
designer flooring in the common areas of any Building with Landlord's prior
written consent. The expense of repairing any damage resulting from a violation
of this rule shall be borne by Tenant.

        T. Omitted.

        U. Smoking is prohibited in all areas of the Buildings, and smoking will
be permitted only in those outdoor areas of the Project.

Landlord may reasonably amend, modify, delete or add new and additional rules
and regulations regarding the use and care of the Premises and Project. Tenant
and Tenant Parties shall comply with all such rules and regulations upon notice
thereof to Tenant from Landlord. In addition, Landlord shall have the right to
enact customary reasonable additional rules and regulations if the Project
becomes multi-tenant as a result of surrender of any portion thereof by Tenant
to Landlord which has been agreed upon in writing by Landlord. Any breach by
Tenant or Tenant Parties of any rules and regulations herein set forth or any
nondiscriminatory amendments, modifications or additions thereto beyond any
applicable notice and/or care period, shall constitute an Event of Default by
Tenant under the Lease and Landlord shall have all rights and remedies set forth
therein.

                                       2
<PAGE>   51

                                    EXHIBIT G

                            HAZARDOUS MATERIALS LIST

                                 [SEE ATTACHED]

                                       1
<PAGE>   52

                                    EXHIBIT H

                                 SIGNAGE PROGRAM

                                 [SEE ATTACHED]

                                       1
<PAGE>   53

                                    EXHIBIT I

                           MAINTENANCE SPECIFICATIONS

<TABLE>
<CAPTION>
EXPENSE DESCRIPTION                                         COMMENTS
-------------------                                         --------
<S>                             <C>
Parking Lot Sweeping            Sweep parking lot one time per week
Parking Lot Lights              Light inspection/service one time per month
Pest Control                    One time per month exterior service
Steam Cleaning                  One time per year steam clean exterior walkways
Window Washing                  Three times per year exterior window washing
Water                           Landscape irrigation
HVAC                            Monthly equipment inspections and filter changes as required
Landscape - Exterior            Weekly service to include mowing, weeding, fertilizing and trimming
Landscape - Miscellaneous       Flower replacement quarterly
Management Fee                  2.5% of Gross Receipts
Administrative Fees             Office supplies, telephones, answering service, postage, etc.
Roof                            Semi-annual roof inspections
Insurance                       Property Insurance including earthquake insurance
Taxes                           Property Taxes
Association Fees                Foothill Ranch Community Association fees
Maintenance Salary              Exterior maintenance 2 hours per day - 5 days per week
Elevators                       Monthly contract service
Elevator Phones                 Monthly elevator emergency phone lines
Building Maintenance            Miscellaneous building maintenance
Tools & Equipment               Miscellaneous tools and equipment
Building Electrical Supplies    Miscellaneous electrical supplies
Fire Protection                 Monitoring of fire, life safety systems (smoke detectors, sprinklers, alarms, etc.)
Building                        Contingency account for miscellaneous electrical supplies
Plumbing                        Contingency account for miscellaneous plumbing repairs
Building Contingency            Miscellaneous
Life Safety                     Annual certification of fire alarm system and start up of tenant evacuation program
</TABLE>

                                       1
<PAGE>   54

                                    EXHIBIT J

                     TRANSFEREE MINIMUM FINANCIAL PARAMETERS

<TABLE>
<CAPTION>
                  CATEGORY                                             MINIMUM AMOUNT
                  --------                                             --------------
<S>                                                                    <C>
                  Cash balance plus line of credit availability        $200,000,000.00*

                  Tangible net worth                                   $100,000,000.00

                  EBITDA w/o nonrecurring                              $  5,000,000.00
</TABLE>

             *      Cash balance portion must be at least $50,000,000.00

                                       1

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