Document:

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                                                                    EXHIBIT 10.3

                                      LEASE

THIS LEASE (this "Lease") is made as of July ___, 1999, by and between

"Landlord"        TC Boulder Office, LP, a Delaware limited partnership

                  and

"Tenant"          Interactive Knowledge, Inc., a Delaware corporation doing
                  business as netLibrary, Inc.

<TABLE>
                          SECTION A: TABLE OF CONTENTS

<S>     <C>                                                                                                                     <C>
SECTION 1:        DEFINITIONS...................................................................................................2

SECTION 2:        PREMISES AND TERM.............................................................................................5
         2.1      Lease of Premises.............................................................................................5
         2.2      Lease Term....................................................................................................5
         2.3      Commencement Date.............................................................................................5
         2.4      Payment of Tenant Improvement Costs...........................................................................5
         2.5      Memorandum of Commencement Date...............................................................................5
         2.6      Use and Conduct of Business...................................................................................5
         2.7      Compliance with Applicable Laws and Rules and Regulations.....................................................6

SECTION 3:        BASE RENT, ADDITIONAL RENT AND OTHER SUMS PAYABLE UNDER LEASE.................................................6
         3.1      Payment of Rental.............................................................................................6
         3.2      Base Rent.....................................................................................................6
         3.3      Security Deposit..............................................................................................6
         3.4      Additional Rent...............................................................................................6
         3.5      Utilities.....................................................................................................7
         3.6      Holdover......................................................................................................7
         3.7      Late Charge...................................................................................................7
         3.8      Default Rate..................................................................................................8

SECTION 4:        GENERAL PROVISIONS............................................................................................8
         4.1      Maintenance and Repair by Landlord............................................................................8
         4.2      Maintenance and Repair by Tenant..............................................................................8
         4.3      Common Areas/Security.........................................................................................9
         4.4      Tenant Alterations............................................................................................9
         4.5      Tenant's Work Performance.....................................................................................9
         4.6      Surrender of Possession......................................................................................10
         4.7      Removal of Property..........................................................................................10
         4.8      Access.......................................................................................................10
         4.9      Damage or Destruction........................................................................................10
         4.10     Condemnation.................................................................................................11
         4.11     Parking......................................................................................................12
         4.12     Indemnification..............................................................................................13
         4.13     Tenant Insurance.............................................................................................13
         4.14     Landlord's Insurance.........................................................................................13
         4.15     Waiver of Subrogation........................................................................................14
         4.16     Assignment and Subletting by Tenant..........................................................................14
         4.17     Assignment by Landlord.......................................................................................16
         4.18     Estoppel Certificates and Financial Statements...............................................................16
         4.19     Modification for Lender......................................................................................16
         4.20     Hazardous Substances.........................................................................................16
         4.21     Applicable Laws..............................................................................................17
         4.22     Quiet Enjoyment..............................................................................................17
         4.23     Signs........................................................................................................17
         4.24     Subordination................................................................................................17
         4.25     Workers Compensation Immunity................................................................................18
         4.26     Brokers......................................................................................................18
         4.27     Exculpation and Limitation of  Liability.....................................................................18
         4.28     Mechanic's Liens and Tenant's Personal Property Taxes........................................................18
         4.29     Landlord's Security Interest.................................................................................18

SECTION 5:        DEFAULT AND REMEDIES.........................................................................................18
         5.1      Events of Default............................................................................................18
         5.2      Remedies.....................................................................................................19
         5.3      Right to Perform.............................................................................................20
         5.4      Landlord's Default...........................................................................................20

SECTION 6:        MISCELLANEOUS PROVISIONS.....................................................................................21
         6.1      Notices......................................................................................................21
         6.2      Attorney's Fees and Expenses.................................................................................21
         6.3      No Accord and Satisfaction...................................................................................21
         6.4      Successors; Joint and Several Liability......................................................................21
         6.5      Choice of Law................................................................................................21
         6.6      No Waiver of Remedies........................................................................................21
         6.7      Offer to Lease...............................................................................................21
         6.8      Force Majeure................................................................................................21
         6.9      Severability; Captions.......................................................................................22
         6.10     Interpretation...............................................................................................22
         6.11     Incorporation of Prior Agreement; Amendments.................................................................22
         6.12     Authority....................................................................................................22
         6.13     Time of Essence..............................................................................................22
         6.14     Survival of Obligations......................................................................................22
         6.15     Consent to Service...........................................................................................22
         6.16     Waiver of Jury Trial.........................................................................................22

SECTION 7:        ADDITIONAL PROVISIONS........................................................................................22
         7.1      Option to Renew..............................................................................................22
         7.2      Landlord not to Construct....................................................................................22
         7.3      Conversion of Production Building............................................................................23
         7.4      Binding Effect of Lease......................................................................................23
         7.5      Year 2000 Compliance.........................................................................................23
</TABLE>

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LISTING OF EXHIBITS

Exhibit A         Legal Description of the Land
Exhibit B         Drawing Showing Location of the Premises
Exhibit C         Listing of Plans and Specifications for Tenant Improvements
Exhibit D         Form of Memorandum of Commencement Date
Exhibit E         Rules and Regulations
Exhibit F         Description of Permitted Exterior Signs
Exhibit G         Base Rental Rate
Exhibit H         Option Rental Rate
Exhibit I         Form Letter of Credit
Exhibit J         Deferred maintenance to be completed by Landlord
Exhibit K         Rooftop License Agreement
Exhibit L         Schedule of Cleaning Services

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                             SECTION 1: DEFINITIONS

1.1      DEFINITIONS. Each underlined term in this section shall have the
         meaning set forth next to that underlined term.

1.2      ADA: Defined in paragraph captioned "Corporation With Applicable Laws
         and Rules and Regulations."

1.3      ADDITIONAL RENT: Defined in paragraph captioned "Additional Rent".

1.4      APPLICABLE LAWS: All laws, codes, ordinances, rules, orders, directives
         and regulations of any Governmental Agency.

1.5      BASE AMOUNT ALLOCABLE TO THE PREMISES: Defined in paragraph captioned
         "Additional Rent".

1.6      BASE RENT: Base Rent shall be as set forth on Exhibit G attached hereto
         and made a part hereof.

1.7      BROKERS: Tenant was represented in this transaction by Gibbons-White,
         Inc., a licensed real estate broker. Landlord was represented in this
         transaction by Trammell Crow Company, a licensed real estate broker.

1.8      BUILDING: The building located on the Land at Center Green Drive,
         Boulder, Colorado, commonly known as 3080, 3085 and 3090 Center Green
         Drive and containing approximately 101,573 Rentable Square Feet. The
         Building shall include the UPS, the Liebert and the Ed-Pac
         (collectively, "Existing Equipment") that are currently in the
         Buildings. Notwithstanding anything to the contrary contained in this
         Lease, the Existing Equipment will be included in the Building in an
         "AS-IS, WHERE-IS" condition and Landlord shall have no obligation to
         maintain, repair or replace these items.

1.9      BUSINESS DAY: Each day of the week occurring from Monday through Friday
         exclusive of holidays (such as New Year's Day, Martin Luther King Day,
         Presidents Day, Good Friday, Memorial Day, Independence Day, Labor Day,
         Thanksgiving Day, Christmas, and any other holiday observed by national
         banks in Denver, Colorado).

1.10     CLAIMS: An individual and collective reference to any and all claims,
         demands, damages, injuries, losses, liens, liabilities, penalties,
         fines, lawsuits, actions, and other proceedings and all expenses
         (including attorneys' fees and expenses) incurred in connection with
         the proceeding whether at trial or on appeal.

1.11     COMMENCEMENT DATE: September 1, 1999.

1.12     CONVERSION ALLOWANCE: Defined in paragraph captioned "Conversion of the
         Production Building".

1.13     DAYS: Calendar days.

1.14     DEFAULT RATE: Defined in paragraph captioned "Default Rate".

1.15     EMERGENCY: Defined in paragraph captioned "Maintenance and Repair by
         Landlord".

1.16     EVENTS OF DEFAULT: One or more of those events or states of facts
         defined in the paragraph captioned "Events of Default".

1.17     GOVERNMENTAL AGENCY: The United States of America, the state in which
         the Land is located, any county, city, district, municipality or other
         governmental subdivision, court or agency or quasi-governmental agency
         having jurisdiction over the Land and any board, agency or authority
         associated with any such governmental entity, including the fire
         department having jurisdiction over the Land.

1.18     HAZARDOUS SUBSTANCE(S): Asbestos, PCBs, petroleum or petroleum-based
         chemicals or substances, urea formaldehyde or any chemical, infectious
         substance, material, element, compound, solution, mixture, substance or
         other matter of any kind whatsoever which is now or later defined,
         classified, listed, designated or regulated as hazardous, toxic or
         radioactive by any Governmental Agency.

1.19     IPO: Defined in paragraph captioned "Assignment and Subletting by
         Tenant".

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1.20     LAND: The land upon which the Building is located in Boulder County,
         Colorado, as legally described in Exhibit A attached to this Lease.

1.21     LANDLORD: The corporation named as landlord on the first page of this
         Lease, or its successors and assigns as provided in paragraph captioned
         "Assignment by Landlord".

1.22     LANDLORD'S AGENTS: Any and all partners, officers, agents, managers,
         members, employees and trustees of Landlord.

1.23     LANDLORD'S CASUALTY NOTICE: Defined in paragraph captioned "Damage or
         Destruction".

1.24     LEASE TERM: The period commencing on the Commencement Date and ending
         August 31, 2006, unless extended by Tenant subject to Section 7.1.

1.25     LETTER OF CREDIT: Defined in paragraph captioned "Security Deposit".

1.26     MANAGER: Trammell Crow Denver, Inc., a Delaware corporation, or its
         replacement as specified by written notice from Landlord to Tenant.

1.27     MANAGER'S ADDRESS: 7535 East Hampden Avenue, Suite 650, Denver,
         Colorado 80231, which address may be changed by written notice from
         Landlord to Tenant.

1.28     OFFICE EXPANSION: Defined in paragraph captioned "Conversion of the
         Production Building".

1.29     OPERATING COSTS: Defined in paragraph captioned "Additional Rent".

1.30     PARKING RATIO: 4.2 stalls per 1000 Rentable Square Feet of the Premises
         inclusive of handicapped and visitors spaces.

1.31     PERMANENT TAKING: Defined in paragraph captioned "Condemnation".

1.32     PERMITTED USE: Shall mean general office uses including computer design
         and development, technical office uses, data processing,
         telecommunications, production, publishing, software development,
         electronic commerce and ancillary uses. In no event shall any use
         violate then existing zoning with the City or County of Boulder,
         Colorado.

1.33     PLANS AND SPECIFICATIONS: (a) Those certain plans and specifications
         for the Tenant Improvements as listed in Exhibit C and any
         modifications to them approved in writing by Landlord and Tenant; or
         (b) if Exhibit C does not include a listing of such plans and
         specifications, then such plans and specifications shall be prepared by
         Oz Architecture (the "Preparing Party") and delivered to Landlord (the
         "Receiving Party"). Landlord shall have ten (10) Business Days to
         review the Plans and Specifications when submitted by or on behalf of
         Tenant subject to the provisions of Section 4.4.

1.34     PREPAID RENT: $0.

1.35     PREMISES: The portion of the Building depicted on the plan attached to
         this Lease as Exhibit B, containing approximately 101,573 Rentable
         Square Feet.

1.36     PREPARING PARTY: Defined in paragraph captioned "Plans and
         Specifications".

1.37     PRIME RATE: The rate published as the Prime Rate in the Western Edition
         of the Wall Street Journal under "Money Rates." If for any reason the
         Prime Rate is no longer published by the Wall Street Journal, then
         Landlord shall select another financial publication and reasonably
         equivalent announced rate as the "Prime Rate."

1.38     PRODUCTION BUILDING: Defined in paragraph captioned "Conversion of the
         Production Building".

1.39     PROJECT: The buildings, including the Building, and all improvements
         therein located on the Land.

1.40     PROPERTY TAXES: (a) Any form of ad valorem real personal property tax,
         fee, or assessment imposed by any Governmental Agency on the Land,
         Project, Building, related improvements or any personal property owned
         by Landlord for the purposes of maintaining the Land, Building or
         related improvements; (b) any other form of tax or assessment, license
         fee, license tax, tax

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         or excise on rent or any other levy, charge, expense or imposition made
         or required by any Governmental Agency on any interest of Landlord in
         such Land, Building, related improvements or personal property; (c) any
         fee for services charged by any Governmental Agency for any services
         such as fire protection, street, sidewalk and road maintenance, refuse
         collection, school systems or other services provided or formerly
         provided to property owners and residents within the general area of
         the Land; (d) any governmental impositions allocable to or measured by
         the area of any or all of such Land, Project, Building, related
         improvements or personal property or the amount of any base rent,
         additional rent or other sums payable under any lease for any or all of
         such Land, Building, related improvements or personal property,
         including any tax on gross receipts or any excise tax or other charges
         levied by any Governmental Agency with respect to the possession,
         leasing, operation, maintenance, alteration, repair, use or occupancy
         of any or all of such Land, Project, Building, related improvements,
         personal property or the rent earned by any part of or interest in such
         Land, Building, related improvements or personal property; (e) any
         impositions by any Governmental Agency on any transaction evidenced by
         a lease of any or all of such Land, Building, related improvements or
         personal property; and (f) any increase in any of the foregoing based
         upon construction of improvements or change of ownership of any or all
         of such Land, Project, Building, related improvements or personal
         property. Property Taxes shall not include taxes on Landlord's net
         income or any inheritance, estate or gift taxes.

1.41     PUNCH LIST WORK: Minor items of repair, correction, adjustment or
         completion to the Building structure or Building operating systems in
         existence on the execution date of this Lease necessary to cause such
         Building operating systems to be in good working order and in
         compliance with all Applicable Laws on the date of execution of this
         Lease.

1.42     RECEIVING PARTY: Defined in paragraph captioned "Plans and
         Specifications".

1.43     RENTABLE SQUARE FEET: Shall mean 101,573 square feet.

1.44     SECURITY DEPOSIT: $123,705.17 plus an irrevocable, unconditional,
         transferable demand letter of credit in the amount of $1,200,000.00
         with a bank and in a form reasonably acceptable to Landlord with a term
         renewing annually for five (5) years ("Letter of Credit"). If there is
         no then uncured default under the Lease, the Letter of Credit shall
         reduce by $240,000.00 on each yearly anniversary of the Commencement
         Date during the first five (5) years of the Lease Term. If there is a
         default or breach of this Lease, Landlord may make a demand on the
         Letter of Credit if the default is not cured within the earlier of two
         (2) Business Days prior to the expiration of the term of the Letter of
         Credit or the date which is ten (10) Business Days following notice of
         default to Tenant. If Landlord makes a demand on the Letter of Credit
         the funds so demanded shall be held as a Security Deposit in accordance
         with the terms of the Lease, provided that if Tenant subsequently cures
         such default, Landlord shall return the funds received by Landlord as a
         result of Landlord's demand on the Letter of Credit to Tenant promptly
         after Tenant provides Landlord with a replacement Letter of Credit
         acceptable to Landlord. The form of Letter of Credit is attached as
         Exhibit I hereto. Tenant shall deliver the Letter of Credit to Lender
         on or before the Commencement Date. In the event Tenant cannot obtain a
         five (5) year term on the Letter of Credit, Tenant may provide a Letter
         of Credit with a one (1) year term, provided that the Letter of Credit
         allows for Landlord to draw the full amount of the Letter of Credit if
         it is not renewed at least sixty (60) days prior to its expiration.
         Landlord may only draw on the Letter of Credit in an amount sufficient
         to pay all unpaid Base Rent, Additional Rent and other amounts due and
         owing to Landlord from Tenant under the Lease, any other amount which
         Landlord may spend or become obligated to spend by reason of Tenant's
         default, and to compensate Landlord for any other loss or damage which
         Landlord may suffer by reason of Tenant's default (including all costs,
         fees and expenses incurred by Landlord in connection with such
         default).

1.45     SUBSTANTIAL COMPLETION: The date that the Tenant Improvements have been
         completed substantially in accordance with the Plans and
         Specifications, subject to Punch List Work.

1.46     TAKING: Defined in paragraph captioned "Condemnation".

1.47     TENANT: The corporation named as tenant on the first page of this
         Lease.

1.48     TENANT ALTERATIONS: Defined in paragraph captioned "Tenant
         Alterations".

1.49     TENANT IMPROVEMENT ALLOWANCE: The maximum amount to be expended by
         Landlord, if any, for the cost of Tenant Improvements (including
         architectural, engineering, permitting and space planning fees), which
         maximum shall not exceed seven hundred seven thousand four hundred
         fifty-six and no/100ths Dollars ($707,456.00).

1.50     TENANT IMPROVEMENTS: Those alterations or improvements to the Premises
         as appear and are depicted in the Plans and Specifications.

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1.51     TENANT'S AGENTS: Any and all officers, partners, contractors,
         subcontractors, consultants, licensees, agents, concessionaires,
         subtenants, servants, employees, customers, guests, invitees or
         visitors of Tenant.

1.52     TENANT'S CASUALTY NOTICE: Defined in paragraph captioned "Damage or
         Destruction".

1.53     TENANT'S PRO RATA SHARE: One hundred percent (100%).

1.54     TERMINATION ELECTION: Defined in paragraph captioned "Conversion of the
         Production Building".

1.55     YEAR: A calendar year commencing January 1 and ending December 31.

                          SECTION 2: PREMISES AND TERM

2.1 LEASE OF PREMISES. Landlord leases the Premises to Tenant, and Tenant leases
the Premises from Landlord, upon the terms and conditions set forth in this
Lease.

2.2 LEASE TERM. The Lease Term shall be for the period stated in the definition
of that term, unless earlier terminated as provided in this Lease.

2.3 COMMENCEMENT DATE. The Commencement Date is September 1, 1999. Tenant
acknowledges that no representations as to the condition of the Premises have
been made by Landlord. If on the Commencement Date, Punch List Work remains to
be completed, Landlord and Tenant shall agree on such Punch List Work prior to
sixty (60) Days after occupancy by Tenant and Landlord will promptly complete
such work. In no event shall Tenant's or Landlord's refusal or failure to agree
on the nature and extent of Punch List Work or the existence of items of Punch
List Work delay or postpone the occurrence of the Commencement Date.

2.4 PAYMENT OF TENANT IMPROVEMENT COSTS. Tenant shall complete all Tenant
Improvements at its expense under its direction, lien free, in accordance with
the Plans and Specifications, in a good and workman like manner, in accordance
with all Applicable Laws, and subject to the reasonable approval of Landlord
with respect to contractor and all subcontractors and the insurance of such
parties. No more than once per month, Tenant shall submit to Landlord invoices
for reimbursement together with (a) a certification by the Preparing Party or
other architect preparing the Plans and Specifications that such work has been
completed, and (b) executed lien waivers from all applicable contractors and
subcontractors. Landlord shall then reimburse such expenses to the extent they
do not exceed the Tenant Improvement Allowance. Tenant shall be responsible for
all costs of any nature in excess of the Tenant Improvement Allowance. All
Tenant Improvements, exclusive of any of Tenant's trade fixtures, furniture, and
equipment, regardless of which party paid for them, shall become the property of
Landlord upon expiration or earlier termination of the Lease and shall remain
upon and be surrendered with the Premises. Landlord (or its representatives)
shall have the right (but not the obligation) to inspect the Tenant Improvements
from time to time.

2.5 MEMORANDUM OF COMMENCEMENT DATE. At Landlord's election and request, Tenant
shall execute a Memorandum of Commencement Date in the form attached as Exhibit
D. In no event shall Tenant record this Lease, any memorandum of this Lease, or
the Memorandum of Commencement Date.

2.6 USE AND CONDUCT OF BUSINESS. The Premises are to be used only for the
Permitted Uses, and for no other business or purpose. Tenant shall, at its own
cost and expense, obtain and maintain any and all licenses, permits, and
approvals necessary or appropriate for its use, occupation and operation of the
Premises. Tenant's inability to obtain or maintain any such license, permit or
approval necessary or appropriate for its use, occupation or operation of the
Premises shall not relieve it of its obligations under this Lease, including the
obligation to pay Base Rent and Additional Rent. No act shall be done in or
about the Premises that is unlawful or that will increase the existing rate of
insurance on any or all of the Project or Building. Landlord makes no
representation or warranty as to the suitability of the Premises or zoning for
Tenant's intended use. Tenant shall not commit or allow to be committed or
exist: (a) any waste upon the Premises, (b) any public or private nuisance, or
(c) any act or condition which disturbs the quiet enjoyment of any other tenant
in the Building, violates any of Landlord's contracts affecting any or all of
the Project or Building, creates or contributes to any work stoppage, strike,
picketing, labor disruption or dispute, interferes in any way with the business
of Landlord or any other tenant in the Project or with the rights or privileges
of any contractors, subcontractors, licensees, agents, concessionaires,
subtenants, servants, employees, customers, guests, invitees or visitors or any
other persons lawfully in and upon the Project or Building, or causes any
impairment or reduction of the good will or reputation of the Project.

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2.7 COMPLIANCE WITH APPLICABLE LAWS AND RULES AND REGULATIONS. Subject to
Landlord's obligation to complete the items set forth on Exhibit J, Tenant shall
comply with all Applicable Laws relating to its use, occupancy and operation of
the Premises and shall observe such reasonable rules and regulations as may be
adopted and published by Landlord from time to time for the safety, care and
cleanliness of the Premises, the Project and the Building, and for the
preservation of good order in the Premises, Building, and Project including the
Rules and Regulations attached to this Lease as Exhibit E. Subject to Landlord's
obligation to complete the items set forth on Exhibit J, Landlord represents to
Tenant that it has not received any notice that the Premises are in violation of
any Applicable Laws in effect on the execution date of this Lease, including but
not limited to, building and zoning codes, Americans with Disabilities Act
("ADA") and other statutes, ordinances, or regulations governing the use or
occupancy of the Premises, or, in the event that Landlord has received such
notice, Landlord has taken appropriate remedial action to cause the Premises to
comply with Applicable Laws. Subject to Landlord's obligation to complete the
items set forth on Exhibit J, Landlord further represents that, to the best of
its knowledge, the Premises comply with Applicable Laws in effect on the
execution date of the Lease, excluding requirements such Applicable Laws
(including without limitation, the ADA) which could be imposed on the Premises
or the Project due to the financial condition or unique business characteristics
of Tenant or Tenant's design of the Premises or Project for Tenant's use of the
Premises and the Project.

    SECTION 3: BASE RENT, ADDITIONAL RENT AND OTHER SUMS PAYABLE UNDER LEASE

3.1 PAYMENT OF RENTAL. Tenant agrees to pay Base Rent, Additional Rent and any
other sum due under this Lease to Landlord without demand, deduction, credit,
adjustment or offset of any kind or nature, in lawful money of the United States
when due under this Lease, at the offices of Manager at Manager's Address, or to
such other party or at such other place as Landlord may from time to time
designate in writing.

3.2 BASE RENT. On execution of this Lease, Tenant shall pay to Landlord the
amount specified in the definition of Prepaid Rent for the month specified in
the definition of that term. Tenant agrees to pay Base Rent to Landlord without
demand, in advance on or before the first day of each calendar month of the
Lease Term. Base Rent for any partial month at the beginning or end of the Lease
Term shall be prorated. Base Rent for any partial month at the beginning of the
Lease Term shall be paid by Tenant on the Commencement Date.

3.3 SECURITY DEPOSIT. On execution of this Lease, Tenant shall pay to Landlord
the sum specified in the definition of the term Security Deposit, as security
for the full and faithful payment of all sums due under this Lease and the full
and faithful performance of every covenant and condition of this Lease to be
performed by Tenant. If Tenant shall breach or default with respect to any
payment obligation or other covenant or condition of this Lease, Landlord may
apply all or any part of the Security Deposit to the payment of any sum in
default or any damage suffered by Landlord as a result of such breach or
default, and in such event, Tenant shall, upon demand by Landlord, deposit with
Landlord the amount so applied so that Landlord shall have the full Security
Deposit on hand at all times during the Lease Term. Landlord's use or
application of all or any portion of the Security Deposit shall not impair any
other rights or remedies provided under this Lease or under Applicable Law and
shall not be construed as a payment of liquidated damages. If Tenant shall have
fully complied with all of the covenants and conditions of this Lease, the
Security Deposit shall be repaid to Tenant, without interest, within thirty (30)
Days after the expiration of this Lease. Tenant may not mortgage, assign,
transfer or encumber the Security Deposit and any such act on the part of Tenant
shall be without force or effect. In the event any bankruptcy, insolvency,
reorganization or other creditor-debtor proceedings shall be instituted by or
against Tenant, the Security Deposit shall be deemed to be applied first to the
payment of Base Rent, Additional Rent and all other sums payable under this
Lease to Landlord for all periods prior to the institution of such proceedings
and the balance, if any, may be retained by Landlord and applied against
Landlord's damages. In the event of transfer of Landlord's interest, the Letter
of Credit shall be assignable at no cost or expense to Landlord. If for any
reason the Letter of Credit is void or dishonored, Tenant will obtain a
replacement Letter of Credit consistent with the terms hereof.

3.4 ADDITIONAL RENT. Tenant agrees to pay to Landlord additional rent as
computed in this paragraph (individually and collectively the "Additional
Rent").

         3.4.1 This Lease is a "triple net" lease. As more particularly set
forth below, Tenant shall pay all costs and expenses related to the use,
operation, maintenance and repair of the Project, including without limitation,
all costs and expenses related to the utilities serving the Project, all
Property Taxes, and all costs and expenses related to the use, operation and
maintenance of the Project (collectively "Operating Costs"). Notwithstanding the
forgoing, Tenant shall not be responsible for those items that are Landlord's
responsibility as specifically set forth in Paragraph 4.1 below.

         3.4.2 Tenant shall pay all Property Taxes on or before the date such
taxes become due and payable. If under Applicable Law, any Property Tax, at the
option of the taxpayer, may be paid in installments (whether or not interest
accrues on the unpaid balance of the tax), Tenant may elect to pay the tax (and
any accrued interest on the unpaid balance of the tax) in installments. In the
event of such election, Tenant shall pay the installments that become due during
the Lease Term as they become due and before any fine, penalty, further

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interest, or cost may be added to them. Any tax, including taxes that have been
converted into installment payments, relating to a fiscal period of the taxing
authority, a part of which period is included within the Lease Term and a part
of which is included in a period of time prior to the Commencement Date or after
the expiration or earlier termination of this Lease, whether or not such tax or
installments are assessed, levied, confirmed, imposed upon or in respect of, or
become a lien upon the Project or any part thereof, or become payable, during
the Lease Term, will be adjusted between Landlord and Tenant as of the
Commencement Date or end of the Lease Term, so that Tenant will pay that portion
of the Property Taxes or installments thereof which the part of the fiscal
period included in the Lease Term bears to the fiscal period, and Landlord will
pay the remainder. Tenant shall have the right to contest the amount or validity
of any Property Tax by appropriate proceedings diligently conducted in good
faith, only after paying the tax or posting such bond or security as Landlord
may reasonably require in order to protect the Project against loss or
forfeiture. Upon termination of such proceedings, Tenant shall pay the amount of
the Property Tax determined in such proceedings (less any payments applicable
thereto previously made by Tenant), together with any costs, fees, interest,
penalties or other related proceedings, immediately after determination.
Notwithstanding the foregoing, Landlord may, in its sole discretion, decide to
contest Property Taxes, in which case, Landlord, without obligation or liability
to Tenant shall contest such Property Taxes pursuant to appropriate proceedings
diligently conducted in good faith.

         3.4.3 Tenant shall pay the appropriate suppliers for all water, gas,
electricity, light, heat, telephone, power and all other utility and
communication services and all janitorial and other services used by Tenant (and
any parties acting for, on behalf of or under Tenant) in the use, operation,
maintenance and repair of the Project during the Lease Term, whether or not the
services are billed directly to Tenant or Landlord. Tenant shall also procure,
or cause to be procured, without cost to Landlord, any and all necessary
permits, licenses, or other authorizations required for the lawful and proper
installation and maintenance of wires, pipes, conduits, tubes, and other
equipment and appliances for use in supplying any of such utilities and services
to and within the Premises.

         3.4.4 In the event Landlord makes any capital improvements or
structural repairs and replacements to the Project (except as set forth in
Paragraph 4.1 below) during the Lease Term (including without limitation
replacements of the heating, ventilation and air conditioning equipment serving
the Project), the costs of such capital improvements and structural repairs and
replacements made in or to the Project shall be amortized at a market rate of
return over the longest period allowable for amortization of such item under the
applicable tax laws on a straight line basis (as reasonably determined by
Landlord's accountants) and paid by Tenant to Landlord on a monthly basis at the
same time as Base Rent.

         3.4.5 Tenant shall pay to Landlord the cost of Landlord to maintain the
insurance on the Project maintained by Landlord pursuant to this Agreement
within fifteen (15) Days of Landlord's request therefor.

         3.4.6 Tenant shall pay to Landlord an annual administrative fee equal
to one percent (1%) of the Base Rent amount. Tenant shall pay to Landlord one
twelfth (1/12) of such fee monthly with each payment of Base Rent.

         3.4.7 Any sums payable under this Lease pursuant to this paragraph or
otherwise shall be Additional Rent and, in the event of nonpayment of such sums,
Landlord shall have the same rights and remedies with respect to such nonpayment
as it has with respect to nonpayment of the Base Rent due under this Lease.

3.5 UTILITIES. Tenant shall have from time to time select the company or
companies providing electricity, gas, fuel, local telephone, telecommunication
and any other utility services to the Building. Tenant shall contract directly
and pay for all water, gas, heat, light, power, telephone, telecommunications,
sewer, sprinkler charges and other utilities used on or from the Project
together with any taxes, penalties, surcharges or similar charges relating to
such utilities.

3.6 HOLDOVER. If Tenant, without the prior consent of Landlord, holds over after
the expiration or termination of the Lease Term, Tenant shall be deemed to be
occupying the Premises under a month-to-month tenancy, which tenancy may be
terminated as provided by the laws of the state in which the Premises are
located. During such tenancy, Tenant agrees to pay to Landlord one hundred fifty
percent (150%) of the rate of Base Rent in effect on the expiration or
termination of the Lease Term, plus all Additional Rent and other sums payable
under this Lease, and to be bound by all of the other covenants and conditions
specified in this Lease, so far as applicable. The preceding provisions shall
not be construed as consent for Tenant to hold over. If Tenant holds over
without Landlord's prior written consent, Tenant shall be liable for all actual
damages arising from such wrongful holdover and Landlord shall be entitled to
exercise all remedies at law or in equity including an unlawful detainer action.

3.7 LATE CHARGE. If Tenant fails to make any payment of Base Rent, Additional
Rent or other amount within five (5) Business Days of becoming due under this
Lease, a late charge is immediately due and payable by Tenant equal to five
percent (5%) of the amount of any such payment. Landlord and Tenant agree that
this charge compensates Landlord for the administrative costs caused by the
delinquency. The parties agree that Landlord's damage would be difficult to
compute and the amount stated in this paragraph represents

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<PAGE>   9

a reasonable estimate of such damage. Assessment or payment of the late charge
contemplated in this paragraph shall not excuse or cure any Event of Default or
breach by Tenant under this Lease or impair any other right or remedy provided
under this Lease or under law.

3.8 DEFAULT RATE. Any Base Rent, Additional Rent or other sum payable under this
Lease which is not paid when due shall bear interest at a rate equal to the
lesser of: (a) the Prime Rate then in effect, plus seven (7) percentage points,
or (b) eighteen percent (the "Default Rate"), but the payment of such interest
shall not excuse or cure any Event of Default or breach by Tenant under this
Lease or impair any other right or remedy provided under this Lease or under
law.

                          SECTION 4: GENERAL PROVISIONS

4.1 MAINTENANCE AND REPAIR BY LANDLORD.

         4.1.1 Subject to the paragraphs captioned "Damage or Destruction" and
"Condemnation", Landlord shall, at its sole cost and expense, (a) maintain the
base structural items of the Building, (b) replace the roof of the Building if
the roof, in the reasonable determination of Landlord, must be replaced, (c)
replace any exterior pavement and any concrete around the exterior of the
Building if such pavement and concrete, in the reasonable determination of
Landlord, must be replaced, and (d) replace any HVAC systems in the Building
that, in the reasonable determination of Landlord, need to be replaced provided
that (i) if such replacement occurs during the first forty-eight months of the
Lease Term, such replacement shall be at Landlord's sole cost and expense and
(ii) if such replacement occurs after the forty-eighth month of the Lease Term,
all costs associated with such replacement shall be initially paid by Landlord
and reimbursed by Tenant through the amortization provisions set forth in
Paragraph 3.4.4. of this Lease. Landlord shall not have any obligation to
maintain and replace the items mentioned above if the damages are occasioned by
the act or omission of Tenant or Tenant's Agents, in which case, such amounts
shall be paid for entirely by Tenant upon demand by Landlord. In the event any
or all of the Building becomes in need of maintenance or repair which Landlord
is required to make under this Lease, Tenant shall immediately give written
notice to Landlord, and Landlord shall not be obligated in any way to commence
such maintenance or repairs until a reasonable time elapses after Landlord's
receipt of such notice, and thereafter, Landlord shall diligently pursue
completion of such items until substantial completion thereof. Landlord shall
provide the Premises to Tenant in compliance with Applicable Laws (except to the
extent Tenant is obligated for such compliance pursuant to this Lease, including
Paragraph 4.21.3). In connection therewith, the parties acknowledge that
Landlord has deferred completion of the items identified by the Landlord as
deferred maintenance on Exhibit J attached hereto. Such items and any other
items necessary to make the Premises comply with Applicable Laws (to the extent
they are Landlord's obligation under this Lease) shall be repaired by Landlord
at its expense. To the extent that Landlord maintains any of the items set forth
above, the costs of maintenance shall be Additional Rent. Capital costs
associated with replacing the roof, the parking, concrete or any base structural
items shall be an expense of Landlord's unless the replacement was necessitated
by an act or negligence of Tenant or Tenant's Agents, in which event Tenant
shall reimburse Landlord for the costs of the same.

         4.1.2 In the event an Emergency is then in existence, Tenant may (but
shall not be obligated) to take all actions required to be taken by Landlord
pursuant to subparagraph 4.1.1. If reasonably possible, Tenant shall give notice
to Landlord prior to taking such actions. In any event, Tenant shall give
written notice of such Emergency promptly after taking such actions. Once Tenant
has given such notice of such actions to Landlord along with a description of
the actions taken by Tenant, all supporting documentation and all lien waivers
required by Landlord, Landlord shall reimburse Tenant for the actual cost of
Tenant in taking such actions (to the extent such actions were Landlord's
responsibility pursuant to subparagraph 4.1.1) within thirty (30) days of
Landlord's receipt of the documentation described in this subparagraph 4.1.2.
For purposes hereof, the term "Emergency" shall mean an unexpected occurrence
that requires immediate remedial measures in order to avoid substantial damage
to property, to avoid a substantial threat to life and safety of persons, or
avoid substantial and material interruption of Tenant's business operated from
the Project.

4.2 MAINTENANCE AND REPAIR BY TENANT. Except as is expressly set forth as
Landlord's responsibility pursuant to the paragraph captioned "Maintenance and
Repair by Landlord," Tenant shall, at Tenant's sole cost and expense, keep and
maintain the Premises in good condition and repair, including (a) interior
painting, (b) cleaning of the entire Project, including the interior and
exterior sides of all exterior glass, (c) plumbing and utility fixtures and
installations, (d) carpets and floor coverings, (e) all interior and exterior
wall surfaces and coverings including tile and paneling, (f) replacement of all
broken windows (including without limitation any exterior windows), (g) exterior
and interior doors to the Premises, (g) light bulb replacement, (h) reasonable
preventative maintenance of the entire Project, including any and all heating,
ventilation and air conditioning equipment. If Tenant fails to maintain or
repair the Project in accordance with this paragraph, then Landlord may, but
shall not be required to, enter the Premises upon five (5) Business Days prior
written notice to Tenant (or immediately without any notice in the case of an
emergency) to perform such maintenance or repair at Tenant's sole cost and
expense. Tenant shall pay to Landlord the reasonable cost of such maintenance or
repair plus a ten percent (10%) administration fee within ten (10) Days of
written demand from Landlord. Tenant shall contract directly with contractors
reasonably acceptable to Landlord for the completion of Tenant's maintenance and
repair obligations set forth above. The contracts with such contractors shall be
in form

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<PAGE>   10

and substance reasonably acceptable to Landlord. The contractors shall have a
good business reputation, shall be bonded in a manner reasonably acceptable to
Landlord in accordance with Applicable Law, and shall maintain and carry such
insurance as Landlord may reasonably require.

4.3 COMMON AREAS/SECURITY. Subject to Section 7.2, Landlord reserves the
exclusive right as it deems necessary or desirable, so long as Landlord does not
materially interfere with Tenant's use of the Project, to install, construct,
remove, maintain and operate lighting systems, facilities, improvements,
equipment and signs on, in or to all parts of the common areas; change the
number, size, height, layout, or locations of walks, driveways and truckways or
parking areas now or later forming a part of the Land, Project or Building; make
alterations or additions to the Building, Project or common area; close
temporarily all or any portion of the common areas to make repairs, changes or
to avoid public dedication; grant easements to which the Land will be subject,
replat, subdivide, or make other changes to the Land; place, relocate and
operate utility lines through, over or under the Land, the Project and Building;
and use or permit the use of all or any portion of the roofs of the Building
(subject to Tenant's Rights pursuant to Exhibit K). Landlord has no duty or
obligation to provide any security services in, on or around the Premises, Land
or Building, and Tenant recognizes that security services, if any, provided by
Landlord will be for the sole benefit of Landlord and the protection of
Landlord's property and under no circumstances shall Landlord be responsible
for, and Tenant waives any rights with respect to, Landlord providing security
or other protection for Tenant or Tenant's Agents or property in, on or about
the Premises, Project, Land or Building. Landlord reserves the right to relocate
parking areas, assign or restrict parking and driveways and to build additional
improvements in the common areas so long as Tenant's Parking Ratio is
maintained.

4.4 TENANT ALTERATIONS. Tenant shall not make any alterations, additions or
improvements in or to the Premises, or make changes to locks on doors, or add,
disturb or in any way change any floor covering, wall covering, fixtures,
plumbing or wiring (individually and collectively "Tenant Alterations"), without
first obtaining the consent of Landlord which may not be unreasonably withheld.
Tenant shall deliver to Landlord full and complete plans and specifications for
any proposed Tenant Alterations and, if consent by Landlord is given, all such
work shall be performed at Tenant's expense by Tenant. Without limiting the
generality of the foregoing, Landlord may require Tenant, at Tenant's sole cost
and expense, to obtain and provide Landlord with proof of insurance coverage and
lien waivers, in forms, amounts and by companies acceptable to Landlord. All
Tenant Alterations to the Premises (excluding trade fixtures, furniture, and
equipment), regardless of which party constructed them or paid for them, shall
become the property of Landlord and shall remain upon and be surrendered with
the Premises upon the expiration or earlier termination of this Lease, unless
Landlord's consent to such Tenant Alterations is conditioned upon Tenant
removing the Tenant Alterations upon the expiration or earlier termination of
this Lease and repair all damage caused thereby. If Tenant fails to remove any
such Tenant Alterations as required by Landlord's consent, Landlord may do so
and Tenant shall pay the entire cost thereof plus a ten percent (10%)
administrative fee to Landlord within ten (10) Days after Tenant's receipt of
Landlord's written demand therefor. Tenant shall reimburse Landlord, upon
receipt of demand therefor, for all reasonable out-of-pocket costs and expenses
incurred by Landlord related to its review of Tenant's plans and specifications
(regardless of whether Landlord approves Tenant's request). Nothing contained in
this paragraph or the paragraph captioned "Tenant's Work Performance" shall be
deemed a waiver of the provisions of the paragraph captioned "Mechanic's Liens".
Landlord shall have ten (10) Business Days to approve any plans for Tenant
Alterations submitted by Tenant. In the event Landlord does not either accept
such plans or reject such plans (and give reasons for objection) within such ten
(10) Business Day period, Landlord shall be deemed to have accepted such plans.

4.5 TENANT'S WORK PERFORMANCE. Tenant Alterations shall performed by contractors
employed by Tenant under one or more construction contracts, in form and content
approved in advance in writing by Landlord (which approval shall be subject to
Landlord's reasonable discretion). Tenant's contractors, workers and suppliers
shall work in harmony with and not interfere with workers or contractors of
Landlord or other tenants of Landlord. If Tenant's contractors, workers or
suppliers do, in the opinion of Landlord, cause such disharmony or interference,
Landlord's consent to the continuation of such work may be withdrawn upon
written notice to Tenant. All Tenant Alterations shall be (a) completed in
accordance with the plans and specifications approved by Landlord; (b) completed
in accordance with all Applicable Laws; (c) carried out promptly in a lien free,
good and workmanlike manner; (d) of all new materials; and (e) free of defect in
materials and workmanship. Tenant shall pay for all damage to the Premises,
Building, Project and Land caused by Tenant or Tenant's Agents. Tenant shall
indemnify, defend and hold harmless Landlord and Landlord's Agents from any
Claims arising as a result of any defect in design, material or workmanship of
any Tenant Alterations unless caused by Landlord or its agents. Landlord shall
have three (3) Business Days after receipt of the names of such contractors (and
such other information regarding such contractors as Landlord shall reasonably
request) to approve Tenant's contractors. In the event Landlord does not either
accept or reject such contractors within such three (3) Business Day period,
Landlord shall be deemed to have accepted such Contractors. Any approval of
contractors by Landlord shall be approval for the Tenant Alterations being made
at the time in question and not for further or future Tenant Alterations.

                                       9
<PAGE>   11

4.6 SURRENDER OF POSSESSION. Subject to the last subparagraph of the paragraph
captioned "Insurance", Tenant shall, at the expiration or earlier termination of
this Lease, surrender and deliver the Premises to Landlord in as good condition
as when received by Tenant from Landlord or as later improved, reasonable use
and wear excepted.

4.7 REMOVAL OF PROPERTY. Upon expiration or earlier termination of this Lease,
Tenant may remove its personal property, trade fixtures, voice and data cabling,
office supplies and office furniture and equipment if (a) such items are readily
moveable and are not attached to the Premises; (b) such removal is completed
prior to the expiration or earlier termination of this Lease; (c) Tenant is not
in default of any covenant or condition of this Lease at the time of such
removal; and (d) Tenant immediately repairs all damage caused by or resulting
from such removal. All other property in the Premises and any Tenant Alterations
(including, wall-to-wall carpeting, paneling, wall covering or lighting fixtures
and apparatus) or any other article affixed to the floor, walls, ceiling or any
other part of the Premises or Building, shall become the property of Landlord
and shall remain upon and be surrendered with the Premises, except as may be
otherwise provided in the paragraph captioned "Tenant Alterations" or the
paragraph captioned "Payment of Tenant Improvement Costs". Tenant waives all
rights to any payment or compensation for such property. If, at the expiration
or earlier termination of this Lease or at such time as Landlord exercises its
right of reentry, Tenant has failed to remove any property from the Premises,
Project, Building or Land which it is entitled or required to remove as provided
in this Lease, Landlord may, at its option, remove and store such property
without liability for loss of or damage to such property, such storage to be for
the account and at the expense of Tenant. If Tenant fails to pay the cost of
storing any such property, Landlord may, at its option, after it has been stored
for a period of twenty (20) Days or more, sell or permit to be sold, any or all
such property at public or private sale (and Landlord may become a purchaser at
such sale), in such manner and at such times and places as Landlord in its sole
discretion may deem proper, without notice to Tenant, and Landlord shall apply
the proceeds of such sale: first, to the cost and expense of such sale,
including reasonable attorney's fees actually incurred; second, to the payment
of the costs or charges for storing any such property; third, to the payment of
any other sums of money which may then be or later become due Landlord from
Tenant under this Lease; and, fourth, the balance, if any, to Tenant.

4.8 ACCESS. Tenant shall permit Landlord and any Landlord authorized manager,
contractor, agent or employee to enter into the Premises at any time on at least
one (1) Business Day's notice (except in case of emergency), for the purpose of
inspecting the same or for the purpose of repairing, altering or improving the
Premises or the Building. Nothing contained in this paragraph shall be deemed to
impose any obligation upon Landlord not expressly stated elsewhere in this
Lease. When reasonably necessary, Landlord may temporarily close Building,
Project or Land entrances, Building doors or other facilities, without liability
to Tenant by reason of such closure and without such action by Landlord being
construed as an eviction of Tenant or as relieving Tenant from the duty of
observing or performing any of the provisions of this Lease so long as Landlord
gives Tenant at least two (2) weeks notice and diligently pursues completion of
such activities. In accessing the Premises as permitted in this paragraph,
Landlord shall use good faith efforts to minimize the interruption impact on
Tenant's permitted use of the Property except in the case of an emergency.
Landlord shall have the right to enter the Premises for the purpose of showing
the Premises to prospective tenants within the period of nine (9) months prior
to the expiration or sooner termination of this Lease and to erect on the
Premises a suitable sign indicating the Premises are available. Tenant shall
give written notice to Landlord at least twenty (20) Days prior to vacating the
Premises and shall arrange to meet with Landlord for a joint inspection of the
Premises prior to vacating. In the event of Tenant's failure to give such notice
or arrange such joint inspection, Landlord's inspection at or after Tenant's
vacating the Premises shall be presumed correct for purposes of determining
Tenant's responsibility for repairs and restoration.

4.9 DAMAGE OR DESTRUCTION.

         4.9.1 If the Premises are damaged by fire, earthquake or other
casualty, Tenant shall give immediate written notice thereof to Landlord
("Tenant's Casualty Notice"). Within ten (10) Business Days after receipt of
Tenant's Casualty Notice, Landlord shall send Tenant a notice ("Landlord's
Casualty Notice") specifying the length of time in which Landlord has reasonably
estimated that the damage can be repaired.

         4.9.2 If Landlord estimates that the damage to the Premises (exclusive
of the Tenant Improvements, Tenant Alterations and any fixtures and personal
property of Tenant on the Property, all of which are insured by Tenant under
this Lease) can be repaired within one hundred-eighty (180) Days after
Landlord's receipt of Tenant's Casualty Notice and if Landlord determines within
sixty (60) Days of receipt of Tenant's Casualty Notice that there are sufficient
insurance proceeds (including deductible amounts) available to repair such
damage to the Premises (exclusive of the Tenant Improvements, Tenant Alterations
and any fixtures and personal property of Tenant on the Property, all of which
are insured by Tenant under this Lease), then Landlord shall proceed with
reasonable diligence to restore the Building (exclusive of the Tenant
Improvements, Tenant Alterations and any fixtures and personal property of
Tenant on the Property, all of which are insured by Tenant under this Lease) to
substantially the condition which existed prior to the damage, this Lease shall
not terminate, and Tenant shall have no right to terminate this Lease.

                                       10
<PAGE>   12

         4.9.3 If Landlord estimates that the damage can be repaired in more
than one hundred-eighty (180) Days but within three hundred sixty (360) Days
after Landlord's receipt of Tenant's Casualty Notice, Tenant, within ten (10)
days after Tenant's receipt of Landlord's Casualty Notice, shall elect to either
terminate this Lease with respect to the damaged Building(s) only or request
Landlord to repair such damage. If Tenant has not elected to terminate this
Lease with respect to the damaged Building(s) and if Landlord determines within
sixty (60) Days of receipt of Tenant's Casualty Notice that there are sufficient
insurance proceeds (including deductible amounts) available to repair such
damage to the Premises (exclusive of the Tenant Improvements, Tenant Alterations
and any fixtures and personal property of Tenant on the Property, all of which
are insured by Tenant under this Lease), then Landlord shall proceed with
reasonable diligence to restore the Building (exclusive of the Tenant
Improvements, Tenant Alterations and any fixtures and personal property of
Tenant on the Property, all of which are insured by Tenant under this Lease) to
substantially the condition which existed prior to the damage, this Lease shall
not terminate, and Tenant shall have no right to terminate this Lease. If the
insurance proceeds are insufficient to repair such damage, Landlord may elect in
its absolute discretion to either: (a) terminate this Lease with respect to the
damaged Building or (b) restore the damaged Premises (exclusive of the Tenant
Improvements, Tenant Alterations and any fixtures and personal property of
Tenant on the Property, all of which are insured by Tenant under this Lease) to
substantially the condition which existed prior to the damage, in which case
this Lease will continue.

         4.9.4 If Landlord estimates that the damage cannot be repaired within
three hundred sixty (360) Days after Landlord's receipt of Tenant's Casualty
Notice, Tenant, within ten (10) days after Tenant's receipt of Landlord's
Casualty Notice, shall elect to either terminate this Lease with respect to the
damaged Building(s) only, elect to terminate this Lease, or request Landlord to
repair such damage. If Tenant has not elected to terminate this Lease with
respect to the damaged Building(s) or terminate this Lease and if Landlord
determines within sixty (60) Days of receipt of Tenant's Casualty Notice that
there are sufficient insurance proceeds (including deductible amounts) available
to repair such damage to the Premises (exclusive of the Tenant Improvements,
Tenant Alterations and any fixtures and personal property of Tenant on the
Property, all of which are insured by Tenant under this Lease), then Landlord
shall proceed with reasonable diligence to restore the damaged Premises
(exclusive of the Tenant Improvements, Tenant Alterations and any fixtures and
personal property of Tenant on the Property, all of which are insured by Tenant
under this Lease) to substantially the condition which existed prior to the
damage, this Lease shall not terminate, and Tenant shall have no right to
terminate this Lease. If the insurance proceeds are insufficient to repair such
damage, Landlord may elect in its absolute discretion to either: (a) terminate
this Lease with respect to the damaged Building, (b) terminate this Lease, or
(b) restore the damaged Premises (exclusive of the Tenant Improvements, Tenant
Alterations and any fixtures and personal property of Tenant on the Property,
all of which are insured by Tenant under this Lease) to substantially the
condition which existed prior to the damage, in which case this Lease will
continue.

         4.9.5 If Landlord restores the Premises under this paragraph, then (a)
the Lease Term shall be extended by the time required to complete such
restoration, (b) Landlord shall not be required to repair or restore Tenant
Improvements, Tenant Alterations, or any or all furniture, fixtures, equipment,
inventory, improvements or other property which was in or about the Premises at
the time of the damage and was not owned by Landlord. Base Rent, Additional Rent
and any other sum due under this Lease during any reconstruction period shall
not be abated. Tenant agrees to look to the provider of Tenant's insurance for
coverage for the loss of Tenant's use of the Premises and any other related
losses or damages incurred by Tenant during any reconstruction period.

         4.9.6 If the Building is damaged by fire, earthquake or other casualty
and more than fifty percent (50%) of the Building is rendered untenantable,
without regard to whether the Premises are affected by such damage, Landlord may
in its absolute discretion and without limiting any other options available to
Landlord under this Lease or otherwise, elect to terminate this Lease by notice
in writing to Tenant within ninety (90) Days after the occurrence of such
damage. Such notice shall be effective twenty (20) Days after receipt by Tenant
unless a later date is set forth in Landlord's notice.

         4.9.7 Notwithstanding anything contained in this Lease to the contrary,
if there is damage to the Premises, or Building and the holder of any
indebtedness secured by a mortgage or deed of trust covering any such property
requires that the insurance proceeds be applied to such indebtedness, then
Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within twenty (20) Days after such requirement
is made by such holder.

4.10 CONDEMNATION.

         4.10.1 If the entire Premises is taken by virtue of a Permanent Taking,
then this Lease shall automatically terminate on the date Tenant is deprived of
the use thereof or the date title is vested in the condemning authority. For
purposes hereof, a "Taking" shall mean a taking by eminent domain, condemnation
proceedings, or a transfer in lieu thereof, conducted by a Governmental Agency
under Applicable Law. For purposes hereof, a "Permanent Taking" shall mean a
Taking lasting six (6) or more months in duration.

                                       11
<PAGE>   13

         4.10.2 If as a result of a Permanent Taking, Tenant's ability to
operate its business from the Project is materially and substantially impaired
in the reasonable opinion of Landlord, then Tenant may elect to terminate this
Lease as of the date of the Permanent Taking by giving notice to Landlord of
such election to terminate within ninety (90) Days after the date of the Taking.
In this event, neither party shall have any further liability for obligations
pursuant to this Lease accruing after the date of termination.

         4.10.3 In the event of a Permanent Taking of any portion of the
Premises, and if this Lease is not terminated as hereinabove provided, this
Lease shall continue as to that portion of the Premises which shall not have
been Taken. In the event of such Permanent Taking and, if this Lease is not
terminated as hereinabove provided, the Base Rent shall be reduced from and
after the date of such Permanent Taking in the proportion that the rentable
square footage contained in the Building as restored by Tenant after the
Permanent Taking bears to the total square footage of the Building as set forth
in this Lease.

         4.10.4 If all or any portion of the Premises is Taken by competent
authority for temporary use, being less than six (6) months, except as set forth
below, the termination provisions of this paragraph shall be inapplicable
thereto, this Lease shall continue in full force and effect without reduction or
abatement of Base Rent and Additional Rent, and Tenant alone shall be entitled
to make claim for, recover and retain any award recoverable in respect of such
temporary use (but only for a period during the Lease Term) whether in the form
of rental or otherwise. If the award is made in a lump sum covering a period
beyond the expiration of the Lease Term, Landlord shall be entitled to make
claim for and participate in the award equitably. If the award is made in a lump
sum covering the entire period or substantially the entire period of such
temporary use and if it includes the amount of the Base Rent and Additional Rent
for such period, such lump sum shall be paid to Tenant and Tenant shall continue
to pay Base Rent, Additional Rent, and other charges hereunder. If any portion
of the award for such temporary use is intended to cover the cost of restoring
the Premises, the Tenant Improvements, Tenant Alterations or any portion thereof
to the condition they were in prior to such temporary use or to make repairs
occasioned by or resulting from such temporary use, such portion when received
shall be paid to the Tenant who upon receipt of such proceeds shall, at its
cost, promptly and with due diligence restore the Premises, the Tenant
Improvements and the Tenant Alterations in the manner set forth under this
Lease.

         4.10.5 Tenant shall be entitled to participate in all hearings relating
to any Taking of the Project during the term of this Lease, and, in furtherance
thereof, Landlord shall provide at least thirty (30) Days' advance notice to
Tenant of all hearings relating to any Taking of which Landlord has knowledge.
Landlord shall permit Tenant to submit proof of Tenant's damages to the
condemning authority, including the amount of Tenant's unamortized leasehold
improvements, Tenant's relocation expenses and Tenant's loss of good will.

         4.10.6 Except as otherwise set forth herein, Landlord reserves all
rights to damages or awards for any Taking relating to the Premises, Building,
Land and the unexpired term of this Lease. Tenant assigns to Landlord any right
Tenant may have to such damages or awards and Tenant shall make no claim against
Landlord for damages for termination of its leasehold interest or interference
with Tenant's business. Tenant shall have the right, however, to claim and
recover from the condemning Governmental Agency compensation for any loss to
which Tenant may be entitled for Tenant's moving expenses, unamortized tenant
improvements, or other relocation costs; provided that, such expenses or costs
may be claimed only if they are awarded separately in the Taking proceedings and
not as a part of the damages recoverable by Landlord. The unamortized portion of
Tenant's leasehold improvements shall be determined by multiplying Tenant's
actual cost therefor by a fraction, the numerator of which shall be the number
of remaining years of the Lease Term at the time of such Taking and the
denominator of which shall be the number of remaining years of the Lease Term at
the time such costs were incurred.

         4.10.7 In the event this Lease shall be terminated pursuant to this
Section, any Base Rent or Additional Rent, if any, which is unearned shall be
promptly refunded to Tenant, provided, however, Landlord's mortgagee, if any,
shall have no obligation to return any monies which it has applied to the
payment of the unpaid principal amount of the obligations owing from Landlord to
such mortgagee and all accrued and unpaid interest thereon. Tenant shall,
however, be entitled to recover any such unearned Base Rent or Additional Rent
from any condemnation proceeds, and Landlord's receipt of such award shall be
reduced by such amount.

4.11 PARKING. Tenant shall have the nonexclusive privilege to use parking spaces
on the Land. Tenant's parking privileges shall be subject to the reasonable
rules and regulations relating to parking adopted by Landlord from time to time.
In no event shall the number of parking stalls used by Tenant and Tenant's
Agents exceed the number of stalls allocated to Tenant in the definition of the
Parking Ratio. Landlord shall have no obligation whatsoever to monitor, secure
or police the use of the parking or other common areas.

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<PAGE>   14

4.12 INDEMNIFICATION.

         4.12.1 Tenant shall indemnify, defend and hold harmless Landlord and
Landlord's directors, partners, members, agents, managers and employees from and
against any and all Claims arising in whole or in part out of (a) the
possession, use or occupancy of the Premises or the business conducted in the
Premises, (b) any act, omission or negligence of Tenant or Tenant's Agents, or
(c) any breach or default under this Lease by Tenant.

         4.12.2 Landlord shall indemnify, defend and hold harmless Tenant from
and against any and all Claims arising in whole or in part out of any act,
omission or negligence of Landlord or Landlord's Agent.

         4.12.3 Notwithstanding the foregoing, neither Landlord nor Landlord's
Agents shall, to the extent permitted by law, have any liability to Tenant, or
to Tenant's Agents, for any Claims arising out of any cause whatsoever,
including repair to any portion of the Premises; interruption in the use of the
Premises or any equipment therein; any accident or damage resulting from any use
or operation by Landlord, Tenant or any person or entity of heating, cooling,
electrical, sewerage or plumbing equipment or apparatus; termination of this
Lease by reason of damage to the Premises or Building; fire, robbery, theft,
vandalism, mysterious disappearance or any other casualty; actions of any other
tenant of the Building or of any other person or entity; inability to furnish
any service required of Landlord as specified in this Lease; or leakage in any
part of the Premises or the Building from rain, ice or snow, or from drains,
pipes or plumbing fixtures in the Premises or the Building; except to the extent
of Claims arising out of the gross negligence or willful misconduct of Landlord;
provided that, in no event shall Landlord be responsible for any insurable
interruption to Tenant's business or for any indirect or consequential losses
suffered by Tenant or Tenant's Agents. The obligations of this paragraph shall
be subject to the paragraph captioned "Waiver of Subrogation".

4.13 TENANT INSURANCE.

         4.13.1 Tenant shall, throughout the Lease Term, at its own expense,
keep and maintain in full force and effect:

                  (a) A policy of comprehensive general liability insurance,
including a contractual liability endorsement covering Tenant's obligations
under the paragraph captioned "Indemnification", insuring against claims of
bodily injury and death or property damage or loss with a combined single limit
at the Commencement Date of this Lease of not less than Two Million Dollars
($2,000,000.00), which limit shall be reasonably increased during the Lease Term
at Landlord's request to reflect both increases in liability exposure arising
from inflation as well as from changing use of the Premises or changing legal
liability standards, which policy shall be payable on an "occurrence" rather
than a "claims made" basis, and which policy names Landlord and Manager and, at
Landlord's request Landlord's mortgage lender(s) or investment advisors, as
additional insureds;

                  (b) A policy of extended property insurance (which is commonly
called "all risk") covering Tenant Improvements, Tenant Alterations, and any and
all furniture, fixtures, equipment, inventory, improvements and other property
in or about the Premises which is not owned by Landlord, for one hundred percent
(100%) of the then current replacement value of such property; and

                  (c) Business interruption insurance in an amount sufficient to
cover costs, damages, lost income, expenses, Base Rent, Additional Rent and all
other sums payable under this Lease, should any or all of the Premises not be
usable for a period of up to twelve (12) months.

         4.13.2 All insurance policies required under this paragraph shall be
with companies reasonably approved by Landlord and each policy shall provide
that it is not subject to cancellation or reduction in coverage except after
thirty (30) Days' written notice to Landlord. Tenant shall deliver to Landlord
and, at Landlord's request Landlord's mortgage lender(s), prior to the
Commencement Date and from time to time thereafter, certificates evidencing the
existence and amounts of all such policies.

         4.13.3 If Tenant fails to acquire or maintain any insurance or provide
any certificate required by this paragraph, Landlord may, but shall not be
required to, obtain such insurance or certificates and the costs associated with
obtaining such insurance or certificates shall be payable by Tenant to Landlord
on demand.

4.14 LANDLORD'S INSURANCE. Landlord shall, throughout the Lease Term, keep and
maintain in full force and effect:

         4.14.1 A policy of commercial general liability insurance, insuring
against claims of bodily injury and death or property damage or loss with a
combined single limit at the Commencement Date of not less than Five Million
Dollars ($5,000,000.00), which policy shall be payable on an "occurrence" rather
than a "claims made" basis; and

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<PAGE>   15

         4.14.2 A policy of extended property insurance (what is commonly called
"all risk") covering the Building and Landlord's personal property, if any,
located on the Land in the amount of one hundred percent (100%) of the then
current replacement value of such property, subject to a deductible of $50,000.

         4.14.3 Landlord may, but shall not be required to, maintain property
insurance coverage for earthquakes and floods in such amounts as Landlord deems
appropriate. Such policies may be "blanket" policies which cover other
properties owned by Landlord.

4.15 WAIVER OF SUBROGATION. Notwithstanding anything in this Lease to the
contrary, Landlord and Tenant hereby each waive and release the other from any
and all Claims (including, without limitation, business interruption and loss of
rent) arising out of any loss or damage that may occur to the Land, Project,
Building, Premises, or personal property located therein, by reason of fire or
other casualty regardless of cause or origin, including the negligence or
misconduct of Landlord, Tenant, Landlord's Agents or Tenant's Agents, but only
to the extent of the insurance proceeds paid to such releasing party under its
policies of insurance or, if it fails to maintain the required policies, the
insurance proceeds that would have been paid to such releasing party if it had
maintained such policies. Each party to this Lease shall promptly give to its
insurance company written notice of the mutual waivers contained in this
subparagraph, and shall cause its insurance policies to be properly endorsed, if
necessary, to prevent the invalidation of any insurance coverages by reason of
the mutual waivers contained in this subparagraph.

4.16 ASSIGNMENT AND SUBLETTING BY TENANT.

         4.16.1 Tenant shall not have the right to assign, transfer, mortgage or
encumber this Lease in whole or in part, nor sublet the whole or any part of the
Premises, nor allow the occupancy of all or any part of the Premises by another,
without first obtaining Landlord's consent which shall not be unreasonably
withheld. Notwithstanding any permitted assignment or subletting, Tenant shall
at all times remain directly, primarily and fully responsible and liable for the
payment of all sums payable under this Lease and for compliance with all of its
other obligations as tenant under this Lease. Upon the occurrence of an Event of
Default, if the Premises or any part of the Premises are then subject to an
assignment or subletting, Landlord, in addition to any other remedies provided
in this Lease or by law, may at its option collect directly from such assignee
or subtenant all rents becoming due to Tenant under such assignment or sublease
and apply such rents against any sums due to Landlord from Tenant under this
Lease, and no such collection shall be construed to constitute a novation or
release of Tenant from the further performance of Tenant's obligations under
this Lease. Tenant makes an absolute assignment to Landlord of such assignments
and subleases and any rent, security deposits and other sums payable under such
assignments and subleases as collateral to secure the performance of the
obligations of Tenant under this Lease.

         4.16.2 In the event Tenant desires to assign this Lease or to sublet
all or any portion of the Premises, Tenant shall give written notice of such
desire to Landlord setting forth the name of the proposed subtenant or assignee,
the proposed term, the nature of the proposed subtenant's or assignee's business
to be conducted on the Premises, the rental rate, and any other particulars of
the proposed subletting or assignment that Landlord may reasonably request.
Without limiting the preceding sentence, Tenant shall also provide Landlord
with: (a) such financial information as Landlord may reasonably request
concerning the proposed subtenant or assignee, including recent financial
statements certified as accurate and complete by a certified public accountant
or by the president, managing partner or other appropriate officer of the
proposed subtenant or assignee; (b) proof satisfactory to Landlord that the
proposed subtenant or assignee will immediately occupy and thereafter use the
entire Premises (or any sublet portion of the Premises) for the remainder of the
Lease Term (or for the entire term of the sublease, if shorter) in compliance
with the terms of this Lease; and (c) a copy of the proposed sublease or
assignment or letter of intent. At the same time that Tenant provides Landlord
with notice of its desire to assign or sublease, Tenant shall pay to Landlord
the sum of $750 as Landlord's fee for processing such proposed assignment and
sublease. Receipt of such fee shall not obligate Landlord to approve the
proposed assignment or sublease. There shall be no additional attorneys fees
charged for Landlord's approval if the sublease or assignment is on Landlord's
approved forms. If the sublease or assignment is not on Landlord's approved
forms, Tenant will pay all of Landlord's reasonable attorneys fees incurred in
reviewing same.

         4.16.3 In determining whether to grant or withhold consent to a
proposed assignment or sublease, Landlord may consider, and weigh, any
commercial factor it deems relevant. Without limiting what may be construed as a
factor considered by Landlord in good faith, Tenant agrees that any one or more
of the following will be proper grounds for Landlord's disapproval of a proposed
assignment or sublease:

                  (a) The proposed assignee or subtenant does not, in Landlord's
good faith judgment, have sufficient financial worth to insure full and timely
performance under this Lease;

                  (b) Landlord has received insufficient evidence of the
financial worth or creditworthiness of the proposed assignee or subtenant to
make the determination set forth in clause (a);

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<PAGE>   16

                  (c) Intentionally Omitted;

                  (d) Landlord has received from any prior lessor of the
proposed assignee or subtenant a materially negative report concerning such
prior lessor's experience with the proposed assignee or subtenant within one (1)
year prior to Landlord's receipt of Tenant's request for Landlord for consent to
the assignment or subletting to the proposed assignee or subtenant;

                  (e) Landlord has had prior materially negative leasing
experience with the proposed assignee or subtenant within one (1) year prior to
Landlord's receipt of Tenant's request for Landlord for consent to the
assignment or subletting to the proposed assignee or subtenant;

                  (f) Intentionally Omitted;

                  (g) In Landlord's reasonable judgment, the proposed assignee
or subtenant is engaged in a business, or the Premises or any part of the
Premises will be used in a manner, that is not in keeping with the then
standards of the Project, or that is not compatible with the businesses of other
tenants in the Project, or that is inappropriate for the Project, or that will
violate any negative covenant as to use contained in any other lease of space in
the Project, or that is otherwise prohibited in the Project;

                  (h) The use of the Premises by the proposed assignee or
subtenant will violate any Applicable Laws;

                  (i) Tenant is in default of any obligation of Tenant under
this Lease;

                  (j) Landlord does not approve of any of the tenant
improvements required for the proposed assignee or subtenant; or

                  (k) The proposed assignment or subletting extends beyond the
term of the Lease, amends the Lease or changes in any manner the rights and
obligations of either Tenant or Landlord under the Lease.

         Notwithstanding the foregoing, Landlord hereby consents and
acknowledges that Tenant may make a number of smaller, short term subleases. So
long as Tenant makes subleases (1) of less than 2,500 Rentable Square Feet
individually, (2) of no more than 12,000 Rentable Square Feet in the aggregate,
and (3) of a term of twenty-four (24) months or less, Landlord's consent shall
be deemed granted.

         4.16.4 Within five (5) Business Days after Landlord's receipt of all
required information to be supplied by Tenant pursuant to this paragraph,
Landlord shall notify Tenant of Landlord's approval, disapproval or conditional
approval of any proposed assignment or subletting. Landlord shall have no
obligation to respond unless and until all required information has been
submitted. In the event Landlord approves of any proposed assignment or
subletting, Tenant and the proposed assignee or sublessee shall execute and
deliver to Landlord an assignment (or subletting) and assumption agreement in
form and content satisfactory to Landlord.

         4.16.5 Any transfer, assignment or hypothecation of any of the stock or
interest in, or the assets of, Tenant which is either: (a) greater than fifty
percent (50%) of such stock, interest or assets or (b) intended as a subterfuge
denying Landlord the benefits of this paragraph, shall be deemed to be an
assignment within the meaning and provisions of this paragraph and shall be
subject to the provisions of this paragraph. The following transactions, even if
otherwise representing a transfer of greater than fifty percent (50%) of the
stock or interest in, or assets of, Tenant, shall not be considered to be within
subparagraph 4.16.5(a) above if (i) the surviving entity obligated under this
Lease after such transaction possesses a net equity exclusive of goodwill (as
reasonably determined by Landlord) ("Net Equity") immediately after the
transaction in question which is greater than Tenant's Net Equity at the date of
this Lease or (ii) if the Net Equity test set forth in subparagraph (i) above is
not met, Landlord possesses a Letter of Credit under this Lease or Tenant
provides Landlord with a Letter of Credit that complies with the terms and
conditions of this Lease with an undrawn face amount equal to or greater than
six (6) months of Base Rental. Additional Rental and all other rents due under
this Lease at the time of such transaction: (A) the issuance of stock by Tenant
for cash or other assets; (B) the transfer of assets by Tenant to a corporation,
partnership, limited liability company or other entity in exchange for an
interest in such entity; (C) an initial public offering of its capital stock or
other equity securities to the public in accordance with the Securities Act of
1933 (as amended), the Securities Exchange Act of 1934 (as amended), and any
other Applicable Laws (including state blue sky laws) ("IPO") provided (I)
Tenant receives at least fifty percent (50%) of proceeds from the IPO, and (II)
after the IPO, Tenant's stock is traded on one of the following exchanges:
NASDAQ National Markets, New York Stock Exchange, American Stock Exchange or any
similarly recognized exchange in a major international city; or (D) an
acquisition or merger.

                                       15
<PAGE>   17

         4.16.6 If Landlord consents to any assignment or sublease related to
the Premises and Tenant receives rent or any other consideration in connection
with such assignment or sublease related to the Premises, either initially or
over the term of the assignment or sublease, in excess of the Base Rent and
Additional Rent (or, in the case of a sublease of a portion of the Premises, in
excess of the Base Rent paid by Tenant on a square footage basis under this
Lease), Tenant shall pay to Landlord fifty percent (50%) of such excess.

4.17 ASSIGNMENT BY LANDLORD. Landlord shall have the right to transfer and
assign, in whole or in part, its rights and obligations under this Lease and in
any and all of the Land or Building. If Landlord sells or transfers any or all
of the Building, including the Premises, Landlord's Agents shall, upon
consummation of such sale or transfer, be released automatically from any
liability relating to obligations or covenants under this Lease to be performed
or observed after the date of such transfer, and in such event, Tenant agrees to
look solely to Landlord's successor-in-interest with respect to such liability;
provided that, as to the Security Deposit and Prepaid Rent, Landlord shall not
be released from liability therefor unless Landlord has delivered (by direct
transfer or credit against the purchase price) the Security Deposit or Prepaid
Rent to its successor-in-interest and provided written verification thereof to
Tenant.

4.18 ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS. Tenant shall, from time to
time, upon the written request of Landlord, execute, acknowledge and deliver to
Landlord or its designee a written statement stating: (a) the date this Lease
was executed and the date it expires; (b) the date Tenant entered into occupancy
of the Premises; (c) the amount of monthly Base Rent and Additional Rent and the
date to which such Base Rent and Additional Rent have been paid; and (d)
certifying that (1) this Lease is in full force and effect and has not been
assigned, modified, supplemented or amended in any way (or specifying the date
of the agreement so affecting this Lease); (2) Landlord is not in breach of this
Lease (or, if so, a description of each such breach) and that no event, omission
or condition has occurred which would result, with the giving of notice or the
passage of time, in a breach of this Lease by Landlord; (3) this Lease
represents the entire agreement between the parties with respect to the
Premises; (4) the extent of any required contributions by Landlord to Tenant on
account of Tenant Improvements that have not been received; (5) on the date of
execution, there exist no defenses or offsets which the Tenant has against the
enforcement of this Lease by the Landlord; (6) no Base Rent, Additional Rent or
other sums payable under this Lease have been paid in advance except for Base
Rent and Additional Rent for the then current month; (7) no security has been
deposited with Landlord (or, if so, the amount of such security); (8) it is
intended that any Tenant's statement may be relied upon by a prospective
purchaser or mortgagee of Landlord's interest or an assignee of any such
mortgagee; (9) such other information as may be reasonably requested by
Landlord. If Tenant fails to respond within ten (10) Days of its receipt of a
written request by Landlord as provided in this paragraph, such shall be a
breach of this Lease and Tenant shall be deemed to have admitted the accuracy of
any information supplied by Landlord to a prospective purchaser, mortgagee or
assignee. In addition, Tenant shall, from time to time, upon the written request
of Landlord, deliver to or cause to be delivered to Landlord or its designee
then current financial statements (including a statement of operations and
balance sheet) certified as accurate by a certified public accountant and
prepared in conformance with generally accepted accounting principles for (i)
Tenant, (ii) any corporate parent of Tenant, if available, (iii) any entity the
controlling interest of which is owned by Tenant, (iv) any successor entity to
Tenant by merger or operation of law, and (v) any guarantor of this Lease.

4.19 MODIFICATION FOR LENDER. If, in connection with obtaining construction,
interim or permanent financing for the Building or Land, Landlord's lender, if
any, shall request reasonable modifications to this Lease as a condition to such
financing, Tenant will not unreasonably withhold or delay its consent to such
modifications; provided that, such modifications do not increase the obligations
of Tenant under this Lease or materially adversely affect Tenant's rights under
this Lease.

4.20 HAZARDOUS SUBSTANCES.

         4.20.1 Tenant agrees that neither Tenant, any of Tenant's Agents nor
any other person will store, place, generate, manufacture, refine, dispose of,
handle, or locate on, in, under or around the Land or Building any Hazardous
Substance, except for storage, handling and use of de minimis quantities and
types of cleaning fluids and office supplies in the Premises in the ordinary
course and the prudent conduct of Tenant's business in the Premises, provided
that, (a) the storage, handling and use of such permitted Hazardous Substances
must at all times conform to all Applicable Laws and to applicable fire, safety
and insurance requirements; (b) the types and quantities of permitted Hazardous
Substances which are stored in the Premises must be reasonable and appropriate
to the nature and size of Tenant's operation in the Premises and reasonable and
appropriate for a first-class building of the same or similar use and in the
same market area as the Building; (c) no Hazardous Substance shall be spilled or
disposed of on, in, under or around the Land, Project or Building or otherwise
discharged from the Premises or any area adjacent to the Land, Project or
Building; and (d) in no event will Tenant be permitted to store, handle or use
on, in, under or around the Premises any Hazardous Substance which will increase
the rate of fire or extended coverage insurance on the Land or Building.

         4.20.2 Tenant shall indemnify, defend and hold harmless Landlord and
Landlord's Agents from and against any and all Claims arising out of any breach
of any provision of this paragraph, which expenses shall also include laboratory
testing fees, personal injury claims, clean-up costs and environmental
consultants' fees. Tenant agrees that Landlord may be irreparably harmed by
Tenant's breach

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<PAGE>   18

of this paragraph and that a specific performance action may appropriately be
brought by Landlord; provided that, Landlord's election to bring or not bring
any such specific performance action shall in no way limit, waive, impair or
hinder Landlord's other remedies against Tenant.

         4.20.3 As of the execution date of this Lease, Tenant represents and
warrants to Landlord that, except as otherwise disclosed by Tenant to Landlord,
Tenant shall not and has no intent to bring any Hazardous Substances on, in or
under the Premises except for the type and quantities authorized in the first
paragraph of the paragraph captioned "Hazardous Substances."

4.21 APPLICABLE LAWS.

         4.21.1 Tenant agrees to notify Landlord immediately if Tenant receives
notification or otherwise becomes aware of: (a) any condition or situation on,
in, under or around the Land, Project or Building which may constitute a
violation of any Applicable Laws or (b) any threatened or actual lien, action or
notice that the Land or Building is not in compliance with any Applicable Laws.
If Tenant is responsible for such condition, situation, lien, action or notice
under this paragraph, Tenant's notice to Landlord shall include a statement as
to the actions Tenant proposes to take in response to such condition, situation,
lien, action or notice.

         4.21.2 Tenant shall not alter or permit any assignee or subtenant or
any other person to alter the Premises in any manner which would violate any
Applicable Laws or increase Landlord's responsibilities for compliance with
Applicable Laws, without the prior approval of the Landlord. In connection with
any such approval, Landlord may require a certificate of compliance with
Applicable Laws from an architect, engineer or other person acceptable to
Landlord. Tenant agrees to pay the reasonable fees incurred by such architect,
engineer or other third party in connection with the issuance of such
certificate of compliance. Landlord's consent to any proposed Tenant Alteration
shall (a) not relieve Tenant of its obligations or indemnities contained in this
paragraph or this Lease or (b) be construed as a warranty that such proposed
alternation complies with any Applicable Law.

         4.21.3 Tenant shall be solely responsible for all costs and expenses
relating to or incurred in connection with: (a) failure of the Premises to
comply with the Applicable Laws to the extent noncompliance is attributable to
Tenant alterations or use of the Premises; and (b) bringing the Building and the
common areas of the Building into compliance with Applicable Laws, if and to the
extent such noncompliance arises out of or relates directly or indirectly to:
(1) Tenant's use or occupancy of the Premises, including the hiring of
employees; (2) any Tenant Alterations to the Premises; or (3) any Tenant
Improvements constructed in the Premises at the request of Tenant, regardless of
whether such improvements are constructed prior to or after the Commencement
Date.

4.22 QUIET ENJOYMENT. Subject to the terms of this Lease, Landlord covenants
that Tenant, upon paying Base Rent, Additional Rent and all other sums payable
under this Lease and performing all covenants and conditions required of Tenant
under this Lease shall and may peacefully have, hold and enjoy the Premises
without hindrance or molestation by any party claiming possession by or through
Landlord.

4.23 SIGNS. Subject to compliance with all Applicable Laws, Tenant shall at
Tenant's expense, have the right to install and remove signs related to Tenant's
business (e.g. a lighted sign of Tenant's name) in or on the Building exterior
so long as (a) the installation or removal of such signs do not alter or damage
the structure of any Building and (b) such signage complies with all Applicable
Laws. Tenant shall not be permitted to install (i) any signage for other persons
or entities that are not tenants in the Building or (ii) any advertising signs,
without Landlord's prior written consent, which consent may be withheld in
Landlord's sole discretion. Tenant shall remove such signage and repair any
damage caused thereby upon the expiration or earlier termination of this Lease.
Any and all costs in connection with the permitting, fabrication, installation,
maintenance and removal of Tenant's signs (including the cost of removal of the
signs and repair to the Building caused by such removal) shall be borne by
Tenant. Tenant agrees to maintain each such sign, awning, canopy, decoration,
lettering, advertising matter or other thing as may be approved, in good
condition at all times.

4.24 SUBORDINATION. Tenant subordinates this Lease and all rights of Tenant
under this Lease to any mortgage, deed of trust, ground lease or vendor's lien,
or similar instrument which may from time to time be placed upon the Premises
(and all renewals, modifications, replacements and extensions of such
encumbrances), and each such mortgage, deed of trust, ground lease or lien or
other instrument shall be superior to and prior to this Lease. Notwithstanding
the foregoing Tenant shall execute a subordination agreement evidencing same on
such mortgagees' or lender's form within ten (10) Days of receipt of same from
Landlord. Tenant further covenants and agrees that if the lender or ground
lessor acquires the Premises as a purchaser at any foreclosure sale or
otherwise, Tenant shall recognize and attorn to such party as landlord under
this Lease, and shall make all payments required hereunder to such new landlord
without deduction or set-off and, upon the request of such purchaser or other
successor, execute, deliver and acknowledge documents confirming such
attornment. Tenant waives the provisions of any law or regulation, now or
hereafter in effect, which may give or purport to give Tenant any right to
terminate or otherwise adversely affect this Lease or the obligations of Tenant
hereunder in the event that any such foreclosure or

                                       17
<PAGE>   19

termination or other proceeding is prosecuted or completed. The subordination of
this Lease is conditioned upon confirmation that any senior lienholder shall not
disturb the occupancy of Tenant if Tenant is not otherwise in default of this
Lease.

4.25 WORKERS COMPENSATION IMMUNITY. Intentionally Omitted.

4.26 BROKERS. Except for the commissions to Brokers set forth in Paragraph 1.6
(which shall be paid by Landlord), each party to this Lease shall indemnify,
defend and hold harmless the other party from and against any and all Claims
asserted against such other party by any real estate broker, finder or
intermediary relating to any act of the indemnifying party in connection with
this Lease.

4.27 EXCULPATION AND LIMITATION OF LIABILITY. The obligations of Landlord under
this Lease are solely the obligations of TC Boulder Office, LP and do not
constitute personal obligation of Property Manager, or of the individual
partners, directors, officers, shareholders, agents or employees of Landlord or
Property Manager, and Tenant shall have no claim or cause of action against any
of them.

4.28 MECHANIC'S LIENS AND TENANT'S PERSONAL PROPERTY TAXES.

         4.28.1 Tenant shall have no authority, express or implied, to create or
place any lien or encumbrance of any kind or nature whatsoever upon, or in any
manner to bind, the interest of Landlord or Tenant in the Premises or to charge
the rentals payable under this Lease for any Claims in favor of any person
dealing with Tenant, including those who may furnish materials or perform labor
for any construction or repairs. Tenant shall pay or cause to be paid all sums
legally due and payable by it on account of any labor performed or materials
furnished in connection with any work performed on the Premises on which any
lien is or can be validly and legally asserted against its leasehold interest in
the Premises and Tenant shall indemnify, defend and hold harmless Landlord from
any and all Claims arising out of any such asserted Claims and shall have the
right to contest and if not released within ten (10) Days, immediately pay or
post a bond for any asserted lien claim pursuant to Applicable Laws. Tenant
agrees to give Landlord immediate written notice of any such Claim. Tenant shall
notify Landlord at least ten (10) Days prior to the commencement of any work so
that Landlord may post notices and otherwise avail itself of the rights set
forth in Section 38-22-105(2) of the Colorado Revised Statutes.

         4.28.2 Tenant shall be liable for all taxes levied or assessed against
personal property, furniture or fixtures placed by Tenant in the Premises. If
any such taxes for which Tenant is liable are levied or assessed against
Landlord or Landlord's property and Landlord elects to pay them or if the
assessed value of Landlord's property is increased by inclusion of such personal
property, furniture or fixtures and Landlord elects to pay the taxes based on
such increase, Tenant shall reimburse Landlord for the sums so paid by Landlord,
upon demand by Landlord.

4.29 LANDLORD'S SECURITY INTEREST. Landlord shall have and Tenant hereby grants
to Landlord a continuing security interest for all Base Rent, Additional Rent
and other sums becoming due under this Lease from Tenant, upon all goods, wares,
equipment, fixtures, furniture, inventory, accounts, intangibles, chattel paper
and other personal property of Tenant situated in or arising out of the
Premises, subject to any senior financing, and all proceeds thereof and
replacements thereto, and such property shall not be removed therefrom without
the consent of Landlord until all arrearages in Base Rent, Additional Rent and
other sums due under this Lease shall first have been paid and discharged. On
the occurrence of an Event of Default, Landlord shall have, in addition to any
other remedies provided herein or by law, all rights and remedies under the
Uniform Commercial Code, including, the right to sell the property described in
this paragraph at public or private sale upon five (5) Days notice to Tenant.

                         SECTION 5: DEFAULT AND REMEDIES

5.1 EVENTS OF DEFAULT.

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

                  (a) unapproved vacation or abandonment of all or any portion
of the Premises;

                  (b) failure by Tenant to make any payment of Base Rent,
Additional Rent or any other sum payable by Tenant under this Lease within three
(3) Days after written notice (such notice may be coincident with the statutory
posting period);

                  (c) failure by Tenant to observe or perform any covenant or
condition of this Lease, other than the making of payments, where such failure
shall continue for a period of twenty (20) Days after written notice from
Landlord; however, if the default cannot reasonably be cured within such twenty
(20) Day period then Tenant shall not be in default if it commences to cure
within such

                                       18
<PAGE>   20

twenty (20) Day period, diligently and continuously prosecutes same to
completion and promptly provides Landlord with reasonable evidence of its
efforts, as requested by Landlord;

                  (d) (1) the making by Tenant of any general assignment or
general arrangement for the benefit of creditors; (2) the filing by or against
Tenant of a petition in bankruptcy, including reorganization or arrangement,
unless, in the case of a petition filed against Tenant, unless the same is
dismissed within ninety (90) Days; (3) the appointment of a trustee or receiver
to take possession of substantially all of Tenant's assets located in the
Premises or of Tenant's interest in this Lease; (4) any execution, levy,
attachment or other process of law against any property of Tenant or Tenant's
interest in this Lease, unless the same is dismissed within ninety (90) Days;
(5) adjudication that Tenant is bankrupt; (6) the making by Tenant of a transfer
in fraud of creditors; or (7) the failure of Tenant to generally pay its debts
as they become due; or

                  (e) Tenant assigns, sublets, or transfers its interest in
violation of the terms of this Lease.

         5.1.2 Tenant shall notify Landlord promptly of any Event of Default or
any facts, conditions or events which, with the giving of notice or passage of
time or both, would constitute an Event of Default.

         5.1.3 If a petition in bankruptcy is filed by or against Tenant, and if
this Lease is treated as an "unexpired lease" under applicable bankruptcy law in
such proceeding, then Tenant agrees that Tenant shall not attempt nor cause any
trustee to attempt to extend the applicable time period within which this Lease
must be assumed or rejected.

5.2 REMEDIES. If any Event of Default occurs, Landlord may at any time after
such occurrence, with or without notice or demand except as stated in this
paragraph, and without limiting Landlord in the exercise of any right or remedy
at law which Landlord may have by reason of such Event of Default, exercise the
rights and remedies, either singularly or in combination, as are specified or
described in the subparagraphs of this paragraph.

         5.2.1 Landlord may terminate this Lease and all rights of Tenant under
this Lease either immediately or at some later date by giving Tenant written
notice that this Lease is terminated. If Landlord so terminates this Lease, then
Landlord may recover from Tenant the sum of:

                  (a) the unpaid Base Rent, Additional Rent and all other sums
payable under this Lease which have been earned at the time of termination; plus

                  (b) interest at the Default Rate on the unpaid Base Rent,
Additional Rent and all other sums payable under this Lease which have been
earned at the time of termination; plus

                  (c) the amount by which the unpaid Base Rent, Additional Rent
and all other sums payable under this Lease which would have been earned after
termination until the time of award exceeds the amount of such rental loss, if
any, as Tenant affirmatively proves could have been reasonably avoided and
interest on such excess at the Default Rate; plus

                  (d) the amount by which the aggregate of the unpaid Base Rent,
Additional Rent and all other sums payable under this Lease for the balance of
the Lease Term after the time of award exceeds the amount of such rental loss,
if any, as Tenant affirmatively proves could be reasonably avoided, which amount
shall be discounted to a present value using a discount rate equal to the Prime
Rate; plus

                  (e) any other amount necessary to compensate Landlord for the
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease or which, in the ordinary course of things, would be likely to
result from such failure; plus

                  (f) all such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by Applicable Law.

         5.2.2 Landlord shall also have the right, with or without terminating
this Lease, to re-enter the Premises and remove all persons and property from
the Premises. Landlord may cause property so removed from the Premises to be
stored in a public warehouse or elsewhere at the expense and for the account of
Tenant.

                                       19
<PAGE>   21

         5.2.3 Landlord shall also have the right, without terminating this
Lease, to accelerate and recover from Tenant (1) the sum of all unpaid Base
Rent, Additional Rent and all other sums payable under the then remaining term
of the Lease, less (2) the amount of any rental loss, if any, as Tenant proves
could have been reasonably avoided. Both (1) and (2) in the preceding sentence
shall be calculated to a present value using a discount rate equal to the Prime
Rate.

         5.2.4 If Tenant vacates, abandons or surrenders the Premises without
Landlord's consent, or if Landlord re-enters the Premises as provided in
subparagraph 5.2.2 or takes possession of the Premises pursuant to legal
proceedings or through any notice procedure provided by law, then, if Landlord
does not elect to terminate this Lease, Landlord may, from time to time, without
terminating this Lease, either (a) recover all Base Rent, Additional Rent and
all other sums payable under this Lease as they become due or (b) relet the
Premises or any part of the Premises on behalf of Tenant for such term or terms,
at such rent or rents and pursuant to such other provisions as Landlord, in its
sole discretion, may deem advisable, all with the right, at Tenant's cost, to
make alterations and repairs to the Premises and recover any deficiency from
Tenant as set forth in subparagraph 5.2.5.

         5.2.5 None of the following remedial actions, singly or in combination,
shall be construed as an election by Landlord to terminate this Lease unless
Landlord has in fact given Tenant written notice that this Lease is terminated:
an act by Landlord to maintain or preserve the Premises; any efforts by Landlord
to relet the Premises; any repairs or alterations made by Landlord to the
Premises; re-entry, repossession or reletting of the Premises by Landlord
pursuant to this paragraph; or the appointment of a receiver, upon the
initiative of Landlord, to protect Landlord's interest under this Lease. If
Landlord takes any of the foregoing remedial actions without terminating this
Lease, Landlord may nevertheless at any time after taking any such remedial
action terminate this Lease by written notice to Tenant.

         5.2.6 If Landlord relets the Premises, Landlord shall apply the revenue
from such reletting as follows: first, to the payment of any indebtedness of
Tenant to Landlord other than Base Rent, Additional Rent or any other sums
payable by Tenant under this Lease; second, to the payment of Landlord's costs
of reletting to the extent necessary to compensate Landlord for the detriment
proximately caused by Tenant's failure to perform Tenant's obligations under
this Lease or when, in the ordinary course of things, would be likely to result
from such failure; and third, to the payment of Base Rent, Additional Rent and
other sums due and payable and unpaid under this Lease. Landlord shall hold and
apply the residue, if any, to payment of future Base Rent, Additional Rent and
other sums payable under this Lease as the same become due, and shall deliver
the eventual balance, if any, to Tenant. Should revenue from letting during any
month, after application pursuant to the foregoing provisions, be less than the
sum of the Base Rent, Additional Rent and other sums payable under this Lease
and Landlord's expenditures for the Premises during such month, Tenant shall be
obligated to pay such deficiency to Landlord as and when such deficiency arises.

         5.2.7 Intentionally Omitted.

         5.2.8 Pursuit of any of the foregoing remedies shall not preclude
pursuit of any of the other remedies provided in this Lease or by law (all such
remedies being cumulative), nor shall pursuit of any remedy provided in this
Lease constitute a forfeiture or waiver of any Base Rent, Additional Rent or
other sum payable under this Lease or of any damages accruing to Landlord by
reason of the violation of any of the covenants or conditions contained in this
Lease.

         5.2.9 Landlord agrees to use commercially reasonable efforts to
mitigate its damages however in no event shall Landlord be required to lease
less than a full floor of any Building, lease this space prior to any other
available space in the Project or, lease the space at rates lower than market
rates for the Project or lease space to a tenant that would not otherwise meet
Landlord's leasing standards for the Project.

5.3 RIGHT TO PERFORM. If Tenant shall fail to pay any sum of money, other than
Base Rent or Additional Rent, required to be paid by it under this Lease or
shall fail to perform any other act on its part to be performed under this
Lease, and such failure shall continue for ten (10) Days after notice of such
failure by Landlord, or such shorter time if reasonable under the circumstances,
Landlord may, but shall not be obligated to, and without waiving or releasing
Tenant from any obligations of Tenant, make such payment or perform such other
act on Tenant's part to be made or performed as provided in this Lease. Landlord
shall have (in addition to any other right or remedy of Landlord) the same
rights and remedies in the event of the nonpayment of sums due under this
paragraph as in the case of default by Tenant in the payment of Base Rent.

5.4 LANDLORD'S DEFAULT. In the event that Landlord defaults under or breaches
this Lease, Tenant shall notify Landlord of such default or breach in writing,
and Tenant shall not exercise any right or remedy which Tenant may have under
this Lease or at law if Landlord commences to cure such default or breach within
twenty (20) Days after receipt of Tenant's notice and thereafter diligently
prosecutes the cure to completion.

                                       20
<PAGE>   22

                       SECTION 6: MISCELLANEOUS PROVISIONS

6.1 NOTICES. Any notice, request or written communication required or permitted
to be delivered under this Lease shall be: (a) in writing; (b) transmitted by
personal delivery, express or courier service, United States Postal Service in
the manner described below, or electronic means of transmitting written material
providing confirmation of receipt; and (c) deemed to be delivered on the earlier
of the date received or four (4) Days after having been deposited with the
United States Postal Service, postage prepaid. Such writings shall be addressed
to Landlord or Tenant, as the case may be, at the respective designated
addresses set forth opposite their signatures, or at such other address(es) as
they may, after the execution date of this Lease, specify by written notice
delivered in accordance with this paragraph, with copies to the persons at the
addresses, if any, designated opposite each party's signature. Those notices
which contain a notice of breach or default or a demand for performance may be
sent by any of the methods described in clause (b) above, but if transmitted by
personal delivery or electronic means, shall also be sent concurrently by
certified or registered mail, return receipt requested.

6.2 ATTORNEY'S FEES AND EXPENSES. In the event either party requires the
services of an attorney in connection with enforcing the terms of this Lease, or
in the event suit is brought for the recovery of Base Rent, Additional Rent or
any other sums payable under this Lease or for the breach of any covenant or
condition of this Lease, or for the restitution of the Premises to Landlord or
the eviction of Tenant during the Lease Term or after the expiration or earlier
termination of this Lease, the non-breaching party shall be entitled to a
reasonable sum for attorney's and paralegal's fees, expenses and court costs,
including those relating to any appeal.

6.3 NO ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord of
an amount less than the Base Rent or Additional Rent or any other sum due and
payable under this Lease shall be deemed to be other than a payment on account
of the Base Rent, Additional Rent or other such sum, nor shall any endorsement
or statement on any check or any letter accompanying any check or payment be
deemed an accord and satisfaction, nor preclude Landlord's right to recover the
balance of any amount payable or Landlord's right to pursue any other remedy
provided in this Lease or at law.

6.4 SUCCESSORS; JOINT AND SEVERAL LIABILITY. Except as provided in the paragraph
captioned "Exculpation and Limitation of Liability" and subject to the paragraph
captioned "Assignment and Subletting by Landlord", all of the covenants and
conditions contained in this Lease shall apply to and be binding upon Landlord
and Tenant and their respective heirs, executors, administrators, successors and
assigns. In the event that more than one person, partnership, company,
corporation or other entity is included in the term "Tenant," then each such
person, partnership, company, corporation or other entity shall be jointly and
severally liable for all obligations of Tenant under this Lease.

6.5 CHOICE OF LAW. This Lease shall be construed and governed by the laws of the
state in which the Land is located. Tenant consents to Landlord's choice of
venue for any legal proceeding brought by Landlord or Tenant to enforce the
terms of this Lease.

6.6 NO WAIVER OF REMEDIES. The waiver by Landlord of any covenant or condition
contained in this Lease shall not be deemed to be a waiver of any subsequent
breach of such covenant or condition nor shall any custom or practice which may
develop between the parties in the administration of this Lease be construed to
waive or lessen the rights of Landlord to insist on the strict performance by
Tenant of all of the covenants and conditions of this Lease. No act or thing
done by Landlord or Landlord's Agents during the Lease Term shall be deemed an
acceptance or a surrender of the Premises, and no agreement to accept a
surrender of the Premises shall be valid unless made in writing and signed by
Landlord. The mention in this Lease of any particular remedy shall not preclude
Landlord from any other remedy it might have, either under this Lease or at law,
nor shall the waiver of or redress for any violation of any covenant or
condition in this Lease or in any of the rules or regulations attached to this
Lease or later adopted by Landlord, prevent a subsequent act, which would have
originally constituted a violation, from having all the force and effect of an
original violation. The receipt by Landlord of Base Rent, Additional Rent or any
other sum payable under this Lease with knowledge of a breach of any covenant or
condition in this Lease shall not be deemed a waiver of such breach. The failure
of Landlord to enforce any of the rules and regulations attached to this Lease
or later adopted, against Tenant or any other tenant in the Building, shall not
be deemed a waiver. Any waiver by Landlord must be in writing and signed by
Landlord to be effective.

6.7 OFFER TO LEASE. The submission of this Lease to Tenant or its broker or
other agent does not constitute an offer to Tenant to lease the Premises. This
Lease shall have no force or effect until: (a) it is executed and delivered by
Tenant to Landlord; and (b) it is executed and delivered by Landlord to Tenant.

6.8 FORCE MAJEURE. Except for the payment of money, in the event that either
party shall be delayed, hindered in or prevented from the performance of any act
or obligation required under this Lease by reason of acts of God, strikes,
lockouts, labor troubles or disputes, inability to procure or shortage of
materials or labor, failure of power or utilities, delay in transportation,
fire, vandalism, accident, flood, severe weather, other casualty, Applicable
Laws (including mandated changes in the Plans and Specifications or the Tenant
Improvements

                                       21
<PAGE>   23

resulting from changes in pertinent Applicable Laws or interpretations thereof),
riot, insurrection, civil commotion, sabotage, explosion, war, natural or local
emergency, acts or omissions of others, including Tenant, or other reasons of a
similar or dissimilar nature not solely the fault of, or under the exclusive
control of either party then performance of such act or obligation shall be
excused for the period of the delay and the period for the performance of any
such act or obligation shall be extended for the period equivalent to the period
of such delay.

6.9 SEVERABILITY; CAPTIONS. If any clause or provision of this Lease is
determined to be illegal, invalid, or unenforceable under present or future
laws, the remainder of this Lease shall not be affected by such determination,
and in lieu of each clause or provision that is determined to be illegal,
invalid or unenforceable, there be added as a part of this Lease a clause or
provision as similar in terms to such illegal, invalid or unenforceable clause
or provision as may be possible and be legal, valid and enforceable. Headings or
captions in this Lease are added as a matter of convenience only and in no way
define, limit or otherwise affect the construction or interpretation of this
Lease.

6.10 INTERPRETATION. Whenever a provision of this Lease uses the term (a)
"include" or "including", that term shall not be limiting but shall be construed
as illustrative, (b) "covenant", that term shall include any covenant,
agreement, term or provision, (c) "at law", that term shall mean at law or in
equity, or both, and (d) "day", that uncapitalized word shall mean a calendar
day. This Lease shall be given a fair and reasonable interpretation of the words
contained in it without any weight being given to whether a provision was
drafted by one party or its counsel.

6.11 INCORPORATION OF PRIOR AGREEMENT; AMENDMENTS. This Lease contains all of
the agreements of the parties to this Lease with respect to any matter covered
or mentioned in this Lease, and no prior agreement or understanding pertaining
to any such matter shall be effective for any purpose. No provision of this
Lease may be amended or added to except by an agreement in writing signed by the
parties to this Lease or their respective successors in interest.

6.12 AUTHORITY. If Tenant is a partnership, company, corporation or other
entity, each individual executing this Lease on behalf of Tenant represents and
warrants to Landlord that he or she is duly authorized to so execute and deliver
this Lease and that all partnership, company, corporation or other entity
actions and consents required for execution of this Lease have been given,
granted or obtained. If Tenant is a partnership, company, corporation or other
business organization, it shall, within ten (10) Days after demand by Landlord,
deliver to Landlord satisfactory evidence of the due authorization of this Lease
and the authority of the person executing this Lease on its behalf.

6.13 TIME OF ESSENCE. Time is of the essence with respect to the performance of
every covenant and condition of this Lease.

6.14 SURVIVAL OF OBLIGATIONS. Notwithstanding anything contained in this Lease
to the contrary or the expiration or earlier termination of this Lease, any and
all obligations of either party accruing prior to the expiration or termination
of this Lease shall survive the expiration or earlier termination of this Lease,
and either party shall promptly perform all such obligations whether or not this
Lease has expired or terminated. Such obligations shall include any and all
indemnity obligations set forth in this Lease.

6.15 CONSENT TO SERVICE. Tenant irrevocably consents to the service of process
of any action or proceeding at the address of the Premises. Nothing in this
paragraph shall affect the right to serve process in any other manner permitted
by law.

6.16 WAIVER OF JURY TRIAL. Landlord and Tenant agree to waive trial by jury in
any action, proceeding or counterclaim brought by either against the other on
any matter arising out of or relating in any way to this Lease.

                        SECTION 7: ADDITIONAL PROVISIONS

7.1 OPTION TO RENEW. So long as there are no uncured defaults under this Lease,
Tenant shall have the option to extend for two (2) additional terms of five (5)
years each. Tenant may exercise each option by delivering written notice of such
election to Landlord on or before six (6) months prior to expiration of the then
current term of the Lease. The rental for each such extension shall be as set
forth in Exhibit H.

7.2 LANDLORD NOT TO CONSTRUCT. Landlord covenants that it will not construct the
twenty thousand (20,000) square foot expansion to the Project that Landlord is
currently entitled to construct without the written consent of the Tenant, which
it may withhold in its sole discretion.

                                       22
<PAGE>   24
7.3 CONVERSION OF THE PRODUCTION BUILDING. Landlord will use reasonable efforts
to obtain approval from the City of Boulder for the conversion of the use of the
3090 Center Green Drive building (the "Production Building") for use by Tenant
of the Production Building as a "production center". The term "production
center" shall mean space used for the conversion of printed media to an
electronic format and customer service operations.

         7.3.1 In the event that Landlord is successful in obtaining such
approval, Landlord shall provide Tenant with an additional allowance which shall
be included in the Tenant Improvement Allowance equal to the amount that
Landlord (in conjunction with Tenant and Tenant's architect) reasonably
determines is necessary to complete the conversion (the "Conversion Allowance").
The annual Base Rent for the Production Building shall be increased by an amount
equal to the amount of the Conversion Allowance multiplied by twelve percent
(12%). Promptly after determining the Conversion Allowance, Landlord shall
notify Tenant in writing of the amount of the Conversion Allowance and the
change in Base Rent payable over the Lease Term (and the first extension
thereof). Within ten (10) days of such notification, Landlord and Tenant shall
execute a written amendment to the Lease setting forth the Conversion Allowance
and the modified Base Rent. Notwithstanding the foregoing, if any Tenant
Improvement Allowance remains unused after full completion of the initial Tenant
Improvements, such unused amounts may, upon request by Tenant, be applied toward
completing the conversion of the Production Building as contemplated in this
paragraph and shall result in a reduction in the Conversion Allowance.

         7.3.2 In the event that Landlord is unsuccessful in obtaining approval
on or before December 31, 1999 or Landlord reasonably determines that the cost
of conversion will exceed five hundred fifty thousand and no/100ths dollars
($550,000.00), then Landlord shall deliver written notice to Tenant. Tenant,
within twenty (20) Days of receipt of such notice, may elect to terminate this
Lease with respect to the Production Building (a "Termination Election") by
delivering written notice to Landlord within such twenty (20) Day period. In the
event Tenant fails to give such notice, this Lease shall continue in full force
and effect.

         7.3.3 In the event of a Termination Election:

                  (a) Landlord and Tenant will within ten (10) Days of the
Termination Election execute an amendment to this Lease reflecting the removal
of the Premises from this Lease, which amendment shall include, among other
things, modifications to reflect the following: reduction of Base Rent, making
Landlord obligated to maintain the common areas in the Project, requiring
Landlord to pay real estate taxes for the Project, and requiring Tenant to pay
its pro rata share of Landlord's operation, maintenance and repair of all common
areas, and all real estate taxes for the Project as Additional Rent.

                  (b) Tenant may request Landlord, in writing, to expand 3080
Center Green Drive by approximately 20,000 rentable square feet (the "Office
Expansion"). Landlord will use commercially reasonable efforts to obtain a
building permit from the City of Boulder and financing on terms reasonably
acceptable to Landlord for the Office Expansion. If Landlord is successful in
these efforts, Landlord will construct the Office Expansion to a similar level
of finish as exists in the 3080 Center Green Drive building at the time of
execution of this Lease. The Base Rent for the expansion shall be (1) $19.50 per
rentable square foot as measured on the final construction plans, multiplied by
(2) the greater of (A) one or (B) a ratio, the numerator of which shall be the
sum of 4.25% plus the yield of the 30 Year Treasury Bond as of the date of the
written request for the Office Expansion and the denominator of which shall be
10.24% (which is equal to 4.25% plus the yield on the 30 year Treasury Bond as
of July 8, 1999).

7.4 BINDING EFFECT OF LEASE. This Lease shall not become legally binding until
fully executed by both Landlord and Tenant and shall not be relied upon in any
way by either party until such time as it is fully executed by both parties.
Tenant acknowledges that Landlord does not yet have title to the Project. In the
event that Landlord has not acquired the Project on or before August 15, 1999,
this Lease shall become null and void and neither party shall have any further
obligations to the other party under this Lease from and after such date.

7.5 YEAR 2000 COMPLIANCE. Landlord has obtained (or, promptly upon the execution
of this Lease, will obtain) an engineering audit of the Building and its
mechanical systems by personnel qualified to determine whether the operation of
such Building and systems will be materially detrimentally affected by what is
commonly referred to as the "Y2K Problem." Landlord agrees to use commercially
reasonable efforts to perform all work specified in such audit in order to bring
the Building and its mechanical systems into repair so that they are not
materially detrimentally affected on or before December 1, 1999; provided,
however, that Landlord shall have no responsibility to determine the Y2K
compliance of any Tenant Improvement. The cost of such work shall be borne by
Landlord, without contribution or reimbursement by Tenant.

                                       23
<PAGE>   25

IN WITNESS WHEREOF, this Lease has been executed the day and year first above
set forth.

<TABLE>
<S>                                              <C>
Designated Address for Landlord:                 LANDLORD:
c/o Trammell Crow Company
Attn:  Stephen M. Moyski
7535 East Hampden Avenue, Suite 600              TC Boulder Office, LP, a Delaware limited partnership
Denver, Colorado  80231-4845

with a copy to Manager at:                       By: Trammell Crow Denver Development, Inc., a Delaware
Trammell Crow Denver, Inc.                           corporation, its general partner
Attn: Property Management
7535 East Hampden Avenue, Suite 650
Denver, CO  80231                                         By: /s/  STEPHEN M. MOYSKI
                                                             -----------------------------------------------
                                                          Name: Stephen M. Moyski
                                                          Its: President

Designated Address for Tenant:                            TENANT:

1033 Walnut Street
----------------------------------------------------      Interactive Knowledge, Inc., a Delaware corporation
Boulder, CO 80302                                         doing business as NetLibrary, inc.
----------------------------------------------------

----------------------------------------------------      By: /s/ TIM SHIEWE
                                                             --------------------------------------------------
----------------------------------------------------      Name: Tim Shiewe
                                                               ------------------------------------------------
Facsimile: 303-415-0468                                   Its:  President
          ------------------------------------------          -------------------------------------------------
</TABLE>

                                       24
<PAGE>   26

                             LANDLORD ACKNOWLEDGMENT

City of Boulder      )
---------------------
                     ) ss.
County of Boulder    )
---------------------

         On this 16th day of July, 1999, before me personally appeared Stephen
M. Moyski, to me known to be the President of Trammell Crow Denver Development,
Inc., a Delaware corporation, as General Partner of TC Boulder Office, LP, a
Delaware limited partnership, and acknowledged said instrument to be the free
and voluntary act and deed of said corporation and partnership, for the uses and
purposes therein mentioned, and on oath stated that he was authorized to execute
said instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.

<TABLE>
<S>                                                                         <C>
                                             /s/ JOYCE A. AYRES
                                       ------------------------------------------------------------------
                                       Name: Joyce A. Ayres
                                            -------------------------------------------------------------
                                       NOTARY PUBLIC in and for the  city    and County of Boulder
                                                                    --------               --------------
                                       residing at 1033 Walnut Street, Boulder, CO 80302
                                                   ------------------------------------------------------
</TABLE>

My commission expires: 01-11-2002
                      ------------------------

[NOTARIAL SEAL]

                              TENANT ACKNOWLEDGMENT

City of Boulder      )
---------------------
                     ) ss.
County of Boulder    )
---------------------

On this 16th day of July, 1999, before me, a Notary Public in and for the State
of Colorado, personally appeared T. R. Schiewe, the President of Interactive
Knowledge, Inc., the Delaware corporation that executed the within and foregoing
instrument, and acknowledged said instrument to be the free and voluntary act
and deed of said corporation for the uses and purposes therein mentioned, and on
oath stated that s/he/they was/were authorized to execute said instrument.

         WITNESS my hand and official seal hereto affixed the day and year first
as above written.

<TABLE>
<S>                                                                         <C>
                                             /s/ JOYCE A. AYRES
                                       ------------------------------------------------------------------
                                       Name: Joyce A. Ayres
                                            -------------------------------------------------------------
                                       NOTARY PUBLIC in and for the  city    and County of Boulder
                                                                    --------               --------------
                                       residing at 1033 Walnut Street, Boulder, CO 80302
                                                   ------------------------------------------------------
</TABLE>

My commission expires: 01-11-2002
                      ------------------------

[NOTARIAL SEAL]

                                       25
<PAGE>   27

                               EXHIBIT A TO LEASE

                            LEGAL DESCRIPTION OF LAND

PARCEL A

LOT 7, CENTER GREEN, RECORDED JUNE 11, 1979, IN PLANFILE P-8, F-2, #23, AS
AMENDED BY AFFIDAVIT RECORDED AUGUST 20, 1981 ON FILM 1177 AS RECEPTION NO.
460420, COUNTY OF BOULDER, STATE OF COLORADO.

PARCEL B

LOT 6A, CENTER GREEN REPLAT "A", RECORDED MARCH 2,1989, IN PLANFILE P-23, F-1,
#24, COUNTY OF BOULDER, STATE OF COLORADO.

THE ADDRESSES FOR PARCELS A AND B ARE AS FOLLOWS: 3080 CENTER GREEN DRIVE, 3085
CENTER GREEN DRIVE, AND 3090 CENTER GREEN DRIVE, BOULDER, COLORADO 80301

                                       A-1
<PAGE>   28

                               EXHIBIT B TO LEASE

                    DRAWING SHOWING LOCATION OF THE PREMISES

                                       B-1
<PAGE>   29

                               EXHIBIT C TO LEASE

           LISTING OF PLANS AND SPECIFICATIONS FOR TENANT IMPROVEMENTS

ALL PLANS AND SPECIFICATIONS FOR TENANT IMPROVEMENTS ARE TO BE IN ACCORDANCE
WITH SECTION 4.5 TENANT'S WORK PERFORMANCE OF THE LEASE ATTACHED HERETO. IT IS
CONTEMPLATED BY TENANT THAT TENANT IMPROVEMENTS AND TENANT ALTERATIONS WILL BE
PERFORMED ON AN ONGOING OR INTERMITTENT BASIS, AND AS SUCH ALL PLANS AND
SPECIFICATIONS WILL BE SUBMITTED TO LANDLORD FOR ITS APPROVAL UPON COMPLETION OF
SAID DRAWINGS.

                                       C-1
<PAGE>   30

                               EXHIBIT D TO LEASE

                     FORM OF MEMORANDUM OF COMMENCEMENT DATE

         TC Boulder Office, LP, as Landlord, and Interactive Knowledge, Inc. dba
NetLibrary, Inc., as Tenant, executed that certain Lease dated as of July
_________, 1999 (the "Lease").

         The Lease contemplates that upon satisfaction of certain conditions
Landlord and Tenant will agree and stipulate as to certain provisions of the
Lease. All such conditions precedent to that stipulation have been satisfied.

         Landlord and Tenant agree as follows:

         2.       The Commencement Date of the Lease is September 1, 1999.

         3.       The Termination Date of the Lease is  August 31, 2006.

         4.       The Premises consist of 101,573 Rentable Square Feet.

         5.       Base Rent is as set forth on Exhibit G attached to the Lease.

         6.       Tenant's Pro Rata Share is one hundred percent (100%).

         IN WITNESS WHEREOF, the parties have caused this Memorandum to be duly
executed as of ____________________, 199____.

<TABLE>
<S>                                                             <C>
                                                     LANDLORD:

                                                     TC Boulder Office, LP, a Delaware limited partnership

                                                     By: Trammell Crow Denver Development, Inc., a Delaware corporation, its
                                                         general partner

                                                         By:
                                                            ----------------------------------------------------------------
                                                         Name:
                                                              --------------------------------------------------------------
                                                         Its:
                                                             ---------------------------------------------------------------
</TABLE>

                                       D-1
<PAGE>   31

<TABLE>
<S>                                                             <C>
                                                     TENANT:

                                                     Interactive Knowledge, Inc., a Delaware corporation dba Net Library, Inc.

                                                     By:
                                                        ----------------------------------------------------------------------
                                                     Name:
                                                          --------------------------------------------------------------------
                                                     Its:
                                                         ---------------------------------------------------------------------
</TABLE>

                                       D-2
<PAGE>   32

                               EXHIBIT E TO LEASE

                              RULES AND REGULATIONS

         1. Except as set forth in the Lease, no sign, placard, picture,
advertisement, name or notice shall be installed or displayed on any part of the
outside or inside of the Building, Project or Land without the prior written
consent of the Landlord. Landlord shall have the right to remove, at Tenant's
expense and without notice, any sign installed or displayed in violation of this
rule. All approved signs or lettering on doors and walls shall be printed,
painted, affixed or inscribed at the expense of Tenant in a professional manner.

         2. If Landlord objects in writing to any curtains, blinds, shades,
screens or hanging plants or other similar objects attached to or used in
connection with any window or door of the Premises, Tenant shall immediately
discontinue such use. No awning shall be permitted on any part of the Premises.
Tenant shall not place anything against or near glass partitions or doors or
windows which may appear unsightly from outside the Premises.

         3. Tenant shall provide its own cleaning and janitorial services five
(5) days per week. Exhibit L to the Lease sets forth the schedule of the
cleaning services that Tenant shall provide. Tenant shall not cause any
unnecessary labor by carelessness or indifference to the good order and
cleanliness of the Premises.

         4. Landlord will furnish Tenant, free of charge, two (2) keys to each
door lock in the Premises. Landlord may make a reasonable charge for any
additional keys. Tenant shall not make or have made additional keys, and Tenant
shall not alter any lock or install a new additional lock or bolt on any door of
its Premises. Tenant, upon the termination of its tenancy, shall deliver to
Landlord the keys of all doors which have been furnished to Tenant, and in the
event of loss of any keys so furnished, shall pay Landlord therefor.

         5. Tenant shall not place a load upon any floor of the Premises which
exceeds the load per square foot which such floor was designed to carry and
which is allowed by applicable law. Landlord shall have the right to prescribe
the weight, size and position of all equipment, materials, furniture or other
property brought into the Building. Heavy objects shall, if considered necessary
by Landlord, stand on such platforms as determined by Landlord to be necessary
to properly distribute the weight. Business machines and mechanical equipment
belonging to Tenant, which cause noise or vibration that may be transmitted to
the structure of the Building or to any space in the Building, shall be placed
and maintained by Tenant, at Tenant's expense, on vibration eliminators or other
devices sufficient to eliminate noise or vibration. The persons employed to move
such equipment in or out of the Building must be acceptable to Landlord.
Landlord will not be responsible for loss of, or damage to, any such equipment
or other property from any cause, and all damage done to the Building by
maintaining or moving such equipment or other property shall be repaired at the
expense of Tenant.

         6. Tenant shall not use or keep in the Premises any kerosene, gasoline
or inflammable or combustible fluid or material other than those limited
quantities permitted by the Lease. Tenant shall not use or permit to be used in
the Premises any foul or noxious gas or substance, or permit or allow the
Premises to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Building by reason of noise, odors or
vibrations nor shall Tenant bring into or keep in or about the Premises any
birds or animals.

         7. Tenant shall not use any method of heating or air-conditioning other
than that supplied by Landlord.

         8. Tenant shall not waste any utility provided by Landlord and agrees
to cooperate fully with Landlord to assure the most effective operation of the
Building's heating and air-conditioning and to comply with any governmental
energy-saving rules, laws or regulations of which Tenant has actual notice.

         9. Tenant shall close and lock the doors of its Premises and entirely
shut off all water faucets or other water apparatus, and electricity, gas or air
outlets before Tenant and its employees leave the Premises. Tenant shall be
responsible for any damage or injuries sustained Landlord for noncompliance with
this rule.

         10. The toilet rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be deposited
in them. The expenses of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by Tenant if it or its employees or
invitees shall have caused it.

         11. Tenant shall not sell, or permit the sale at retail, of newspapers,
magazines, periodicals, theater tickets or any other goods or merchandise to the
general public in or on the Premises. Tenant shall not use the Premises for any
business or activity other than that specifically provided for in the Lease.

                                       E-1
<PAGE>   33

         12. Except as set forth on Exhibit K to the Lease, Tenant shall not
install any radio or television antenna, loudspeaker or other device on the roof
or exterior walls of the Building. Tenant shall not interfere with radio or
television broadcasting or reception from or in the Building or elsewhere.

         13. Tenant may mark, drive nails, screws or drill into the partitions,
woodwork or plaster but shall not otherwise in any way deface the Premises.
Landlord reserves the right to direct electricians as to where and how telephone
and telegraph wires are to be introduced to the Premises. Tenant shall not cut
or bore holes for wires. Tenant shall not affix any floor covering to the floor
of the Premises in any manner except as approved by Landlord. Tenant shall
repair any damage resulting from any of its work done in compliance with this
paragraph.

         14. Canvassing, soliciting and distribution of handbills or any other
written material, and peddling in the Building or Land are prohibited, and
Tenant shall cooperate to prevent the same.

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

         16. Tenant shall store all of its trash and garbage within the
Premises. Tenant shall not place in any trash box or receptacle any material
which cannot be disposed of in the ordinary and customary manner of trash and
garbage disposal. All garbage and refuse disposal shall be made in accordance
with directions issued from time to time by Landlord.

         17. The Premises shall not be used for lodging or any improper or
immoral or objectionable purpose. No cooking shall be done or permitted by
Tenant, except that use by Tenant of Underwriters' Laboratory approved equipment
for brewing coffee, tea, hot chocolate and similar beverages shall be permitted;
provided that, such equipment and its use is in accordance with all Governmental
Requirements.

         18. Tenant shall not use in the Premises or in the public halls of the
Building any hand truck except those equipped with rubber tires and side guards
or such other material-handling equipment as Landlord may approve. Tenant shall
not bring any other vehicles of any kind into the Building including bicycles.

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

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

         21. The requirements of Tenant will be attended to only upon
appropriate application to the Manager of the Building by an authorized
individual. Employees of Landlord are not required to perform any work or do
anything outside of their regular duties unless under special instructions from
Landlord, and no employee of Landlord is required to admit Tenant to any space
other than the Premises without specific instructions from Landlord.

         22. Landlord may waive any one or more of these Rules and Regulations
for the benefit of Tenant or any other tenant, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of any
other person, nor prevent Landlord from thereafter revoking such waiver and
enforcing any such Rules and Regulations Tenant.

         23. These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the covenants and
conditions of Tenant's Lease of premises in the Building. If any provision of
these Rules and Regulations conflicts with any provision of the Lease, the terms
of the Lease shall prevail.

         24. Tenant shall not permit Tenant's Agents or its invitees to carry or
keep in, on or about the Project, the Premises or the Building firearms of any
kind.

         25. Tenant shall not permit Tenant's Agents to smoke in the common
areas of the Building or the Project.

         26. Landlord reserves the right to make such other and reasonable Rules
and Regulations as, in its judgment, may from time to time be needed for safety
and security, the care and cleanliness of the Building and Land and the
preservation of good order in the

                                       E-2
<PAGE>   34

Building. Tenant agrees to abide by all the Rules and Regulations stated in this
exhibit and any additional rules and regulations which are so made by Landlord.

         27. Tenant shall be responsible for the observance of all of the
foregoing rules by Tenant and Tenant's Agents.

                                       E-3
<PAGE>   35

                               EXHIBIT F TO LEASE

                     DESCRIPTION OF PERMITTED EXTERIOR SIGNS

LANDLORD WILL ALLOW TENANT TO INSTALL ITS' NAME EITHER ON THE BUILDING AND/OR
MONUMENT SIGNAGE AT ITS' SOLE EXPENSE, OR AS PART OF ITS' TENANT IMPROVEMENT
ALLOWANCE AS REASONABLY APPROVED BY LANDLORD AND SUBJECT TO ALL APPLICABLE CITY,
COUNTY, AND STATE ZONING AND/OR OTHER RESTRICTIVE COVENANTS GOVERNING SUCH
SIGNAGE. SEE PARAGRAPH 4.23 FOR FURTHER TERMS AND CONDITIONS FOR SUCH SIGNAGE.

                                       F-1
<PAGE>   36

                               EXHIBIT G TO LEASE

                                BASE RENTAL RATE

<TABLE>
<CAPTION>
                         Period                                                Base Rental
                         ------                                                -----------
<S>                                                                       <C>
          September 1, 1999 - November 31, 1999                           $ 70,330.17 per month
           December 1, 1999 - February 29, 2000                           $108,147.67 per month
              March 1, 2000 - August 31, 2000                             $123,705.17 per month
          September 1, 2000 - August 31, 2001                             $145,099.50 per month
          September 1, 2001 - August 31, 2002                             $146,771.64 per month
          September 1, 2002 - August 31, 2003                             $153,086.40 per month
          September 1, 2003 - August 31, 2004                             $157,137.76 per month
          September 1, 2004 - August 31, 2005                             $160,333.14 per month
          September 1, 2005 - August 31, 2006                             $165,425.73 per month
</TABLE>

                                       G-1
<PAGE>   37

                               EXHIBIT H TO LEASE

                               OPTION RENTAL RATE

FIRST FIVE YEAR RENEWAL OPTION:

         Base Rent for the first five year renewal ("First Renewal Term") under
the Lease shall be as follows: (A) for the first renewal year from September 1,
2006 through August 31, 2007 ("First Renewal Year"), Base Rent for each month of
the First Renewal Year shall equal the Base Rent for the last month of the Lease
Term plus three percent (3%) of the then Base Rent for the last month of the
Lease Term and (B) for each subsequent renewal year during the First Renewal
Term (each period from September 1 through the following August 31 after the
First Renewal Year) (each a "Subsequent Renewal Year"), the monthly Base Rent
for each month of the Subsequent Renewal Year in question shall equal the
monthly Base Rent for the prior year (whether the First Renewal Year or a
Subsequent Renewal Year) plus three (3%) of the monthly Base Rent for the prior
year (whether the First Renewal Year or a Subsequent Renewal Year).

SECOND FIVE YEAR OPTION

         Base Rent for the second five year renewal option shall be determined
as follows:

         A. Within ten (10) Days after Landlord's receipt of Tenant's notice of
its desire to exercise its option to renew the Lease for a second five (5) year
term as permitted in Paragraph 7.1 of the Lease, Landlord shall submit in
writing a proposal for the then current Market Base Rental Rate (defined below)
per rentable square foot per annum for the extended term. As used herein,
"Market Base Rental Rate" shall mean the then base rental rate for buildings of
comparable size, location, age, and configuration in the county in which the
Property is located, at such time, taking into account the following factors:
(a) rent per rentable square foot; (b) operating expenses and real estate tax
payments; (c) current rental escalators; (d) rental concessions, if any, as
applicable to market renewals of leases, and (e) number of tenants in the
building (whether single-tenant or multi-tenant occupancy).

         B. Tenant shall have ten (10) days from the receipt of said notice to
either (i) accept the proposed Market Base Rental Rate in writing to Landlord,
(ii) to reject the proposed Market Base Rental Rate and elect the appraisal
process set forth below, or (iii) elect not to extend. If Tenant elects not to
extend or fails to timely exercise its option, time being of the essence, the
second option to renew shall automatically terminate and be of no further force
and effect and this Lease shall terminate upon expiration of the then Lease
term.

         C. If Tenant, by written notice delivered no later than ten (10) Days
after the date Landlord notifies Tenant of the Market Base Rental Rate, objects
to the Market Base Rental Rate determined by Landlord and elects to submit the
rate determination to appraisal, then, within seven (7) days of the date of
Tenant's objection, each party shall appoint a non-affiliated certified M.A.I.
Appraiser that has at least five (5) years' full-time commercial appraisal
experience in Boulder County, Colorado to determine the Market Base Rental Rate.
If a party does not appoint a qualified appraiser within such seven (7) day
period, then the single appraiser shall be the sole appraiser and shall set the
Market Base Rental Rate.

         D. The appraisers appointed by the parties shall meet promptly and
attempt to set the Market Base Rental Rate. If they the two appraisers are
unable to agree on the Market Base Rental Rate within twenty (20) days after the
second appraiser is appointed but the determinations of Market Base Rental Rate
by such appraisers vary by less than ten percent (10%) of the lower
determination of Market Base Rental Rate, the two determinations shall be
averaged and the average shall be the Market Base Rental Rate.

         E. If the appraisers are unable to agree on the Market Base Rental Rate
and their determinations differ by ten percent (10%) or more of the lower
determination of Market Base Rental Rate, within twenty (20) days after the date
the second appraiser has been appointed, the two appraisers select a third
appraiser meeting the qualifications stated above within seven (7) days after
the last day the two (2) appraisers are to set the Market Base Rental Rate. If
the appraisers are unable to agree on the third appraiser within said time
frame, either of the parties to this Lease, after giving five (5) days' prior
written notice to the other party, may apply to the then president of the real
estate board of Denver, Colorado for the selection of a third appraiser who
meets the qualifications stated above, which selection shall be made within
three (3) Business Days. The third appraiser, however selected, shall be a
person who has not previously acted in any capacity for either party. The third
appraiser shall set the Market Base Rental Rate. If the third appraiser's
determination of the Market Base Rental Rate is equal to one of the
determinations of the Market Base Rental Rate by the two appraisers or is
between the Market Base Rental Rate determined by the two appraisers, the amount
determined by the third appraiser shall be the Market Base Rental Rate. If the
third appraiser's determination of the Market Base Rental Rate is greater or
less than the determinations of Market Base Rental Rate made by the two
appraisers, the Market Base Rental Rate shall be the amount determined by the
two appraisers that is nearest to the

                                       H-1
<PAGE>   38

Market Base Rental Rate (e.g. if the Market Base Rental Rate determined by
Landlord's and Tenant's appraisers were $25.00 and $20.00 per rentable square
foot per annum, respectively, and the third appraiser determined the Market Base
Rental Rate to be $26.00 per rentable square foot per annum, the Market Base
Rental Rate would equal $25.00 per rentable square foot per annum).

         F. All determinations of Market Base Rental Rate shall be subject to
the limitations on Market Base Rental Rate set forth herein. Each of the parties
shall pay for the appraiser appointed by it and shall bear one-half of the cost
of appointing the third appraiser and of paying the third appraiser's fee.

         G. Any such extension shall be upon all of the terms, conditions and
covenants of this Lease except as to (i) the amount of Base Rent, which shall be
determined as set forth herein, (ii) options to extend, expand or rights of
refusal, which shall not be applicable, and (iii) Tenant Improvement Allowances
or other concessions which shall not be applicable to the extension term.

         H. If the Market Base Rental Rate is not established for the extended
term prior to its commencement, Tenant shall continue to pay the applicable Base
Rent required for the last full month of the Lease term until the appraisers
have made their determination. The Market Base Rental Rate in question, when
finally determined by the appraisers, shall be retroactive to the commencement
of the extension term, and the first Base Rent payment becoming due after the
determination of the applicable Market Base Rental Rate shall include the
retroactive amounts of monthly Base Rent installments accrued and unpaid. In no
event may either Landlord or Tenant elect not to extend the Lease based upon the
Market Base Rental Rate established in accordance herewith.

                                       H-2
<PAGE>   39

                               EXHIBIT I TO LEASE

                            FORM OF LETTER OF CREDIT

[Insert name and address of issuing bank]

[Insert date]

IRREVOCABLE LETTER OF CREDIT NO. [Insert number]

[Insert name and address of owner]

Dear Sir:

         At the request and for the account of [insert name of tenant] located
at [insert address of tenant] (hereinafter called "Applicant"), we hereby
establish our Irrevocable Letter of Credit No. [insert number] in your favor and
authorize you to draw on us up to the aggregate amount of US $ [insert amount of
letter of credit] available by your draft(s) at sight drawn on us and
accompanied by the following:

         A written statement by you that:

                  (i) "Applicant is in default under that certain lease, dated
         as of [insert date of lease] between you, as landlord, and Applicant,
         as tenant (the 'Lease');" or

                  (ii) "Applicant has failed to deliver timely a renewal Letter
         of Credit as provided in the Lease."

         This Irrevocable Letter of Credit will be duly honored by us at sight
upon delivery of the statement set forth above without inquiry as to the
accuracy of such statement and regardless of whether Applicant disputes the
content of such statement.

         We hereby engage with you that all drafts drawn under and in compliance
with the terms of this Irrevocable Letter of Credit will be duly honored by us
if presented at [insert address of issuing bank] no later than [insert
expiration date of Letter of Credit], it being a condition of this Irrevocable
Letter of Credit that it shall be automatically extended for periods of at least
one year from the present and each future expiration date unless, at least sixty
(60) days prior to the relevant expiration date, we notify you, by certified
mail, return receipt requested, that we elect not to extend this Irrevocable
Letter of Credit for any additional period.

         This Irrevocable Letter of Credit is transferable at no charge to
landlord or any transferee of landlord upon notice to the undersigned from you
and such transferee.

         This Irrevocable Letter of Credit is subject to the Uniform Customs and
Practices for Documentary Credits (1983-Rev) International Chamber of Commerce
Publication #400.

                                       Sincerely yours,

                                       [Insert authorized signature]

                                       I-1
<PAGE>   40

                               EXHIBIT J TO LEASE

                       DEFERRED MAINTENANCE SCOPE OF WORK

<TABLE>
<CAPTION>
                           DESCRIPTION                                            ESTIMATED QUANTITY
                           -----------                                            ------------------
<S>                                                                               <C>
1.  Replace the deteriorated concrete curb at the site boundary                     120 Linear Feet
to the south of the 3085 Building.

2.  Remove and replace damaged asphalt in the flow line to the                      600 square feet
west of the 3085 Building.

3.  Remove and replace damaged concrete paving in two areas                         1,200 square feet
to the north of the 3080 Building.

4.  Repair the damaged end of the concrete masonry                                  As Needed
unit wall to the north of the 3080 Building.

5.  Mudjack or remove and replace settled areas of concrete                         As Needed
sidewalk at the south and north entrance plazas at the 3080
Building.

6.  Clean, prepare and sealcoat the asphalt paving                                  18,900 square feet
adjacent to and beneath the 3085 Building.

7.  Clean and restripe all of the parking areas.                                    As Needed

8.  Clean and recaulk the open joints in the east screen structure                  As Needed
one bay north of the north wall of the 3080 Building.

9.  Inspect and repair the tears in the west parapet                                As Needed
flashing of the 3085 Building.

10.  Furnish and install lever handles in the lavatories and                        As Needed
audible/visual strobe type fire alarm signals in the 3080 and
3085 buildings.
</TABLE>

                                       J-1
<PAGE>   41

                                    EXHIBIT K
                            ROOFTOP LICENSE AGREEMENT

         THIS ROOFTOP LICENSE AGREEMENT ("License") is made and entered into
this ____ day of July, 1999 by and between TC Boulder Office, LP, a Delaware
limited partnership ("Grantor"), and Interactive Knowledge, Inc., a Delaware
corporation doing business as netLibrary, Inc. ("Licensee").

                                    RECITALS

         A. Grantor and Licensee have entered into a Lease dated July _____,
1999 (the "Lease") for premises located in those certain buildings known as
3080, 3085, and 3090 Center Green Drive, Boulder, Colorado (individually a
"Building", and collectively, the "Building"); and

         B. Licensee is desirous of locating transmitters and receivers or an
antenna on the roof of the Buildings; and

         C. Grantor is willing to permit same only upon the following terms and
conditions.

                                   AGREEMENTS

         NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties hereto agree as follows:

         1. Grant of License. Provided Licensee provides Grantor with detailed
information regarding each transmitter, receiver, and antenna for Grantor's
prior review and approval (which will not be unreasonably withheld by Grantor),
Grantor grants to Licensee a non-exclusive license for the term of the Lease,
said term being more specifically described in Section 3 below, for the purpose
of installing, maintaining and operating such transmitters and receivers or
antennae not to exceed four (4) on each Building rooftop (each an "Antenna" and
collectively the "Antennae") on the portion of the roofs of the Buildings as is
reasonably designated by Grantor from time to time (the "Roof Space"). The
actual location of the Antennae in the Roof Space shall be in Grantor's
reasonable discretion. The grant of this License is for the sole benefit of and
use by Licensee and the use of the Antennae shall be personal to and may not be
assigned, sublet or transferred in whole or in part except pursuant to an
assignment or sublease according to the Lease to be used solely by such
sublessee or assignee for its own purposes. No third party may use the Antennae
nor may Licensee receive any fees or other payment for the use of such Antennae.
Grantor makes no representation or warranty as to the fitness for any purpose of
the Roof Space and shall have no liability of any kind or nature directly or
indirectly arising from or related to the Antennae, the Walkways, and Related
Equipment.

         2. Installation. Licensee shall be permitted to install the Antennae.
All installation expenses shall be at Licensee's sole cost and expense.
Installation expenses shall include, but not be limited to, all of the
incremental costs related to repairing or replacing the roof of the Building in
conjunction with such installation and the cost of installation of walkways
providing access to the Antennae (each a "Walkway"). Prior to commencing the
installation of any Antennae and any related equipment, conduits, cables and
materials located on the Roof Space or in other parts of a Building
(collectively, the "Related Equipment"), Licensee shall submit plans and
specifications regarding installation of such Antennae and any Related Equipment
to Grantor for review and reasonable approval. Licensee shall have a reasonable
right of access to the chases, telephone and electrical closets located in the
Buildings for purposes of installing, repairing and maintaining the Related
Equipment, provided, however, such access shall be subject to the reasonable
approval of Grantor. The Related Equipment shall be installed in the telephone
and electrical closets of the respective Building. The plans and specifications
shall include load factors, electrical platforms leading to the Antennae and any
other specifications as Grantor may reasonably require. Licensee agrees that
Grantor may require certain aesthetic specifications concerning the appearance
of the Antennae and any Related Equipment, which specifications shall be in the
reasonable discretion of Grantor.

         3. Term. Licensee's right to use the Roof Space shall commence on the
date on which Licensee commences installation of the Antennae or any of the
Related Equipment, and shall terminate upon the termination of the Lease (the
"Term") as such Lease may be extended. If the Lease terminates for a Building
(but remains in effect for other Buildings), this License, with respect to such
Building, shall also terminate and be of no further force and effect. Upon the
termination hereof, the Antennae, the Walkways and the Related Equipment shall
be removed by Licensee at Licensee's expense, and Licensee shall repair any
damage to the building and roof caused by the removal and restore the roof.

                                       K-1
<PAGE>   42

         4. Reroofing and Repair. Licensee acknowledges that Grantor may repair
or install a new roof on any Building during the term of this License. Grantor,
the roofing contractor or consultant and Licensee shall coordinate the repair
and/or reroofing of the Roof and Licensee shall pay in advance on demand all
increases in costs of repair or reroofing arising from or related to the
Antennae, the Walkways and the Related Equipment. Furthermore, to the extent
that the Antennae, Walkways or any Related Equipment need to be dismantled,
relocated, repaired or replaced in conjunction with such reroofing or repair,
all costs and expenses shall be borne by Licensee, and Grantor shall have no
liability in connection therewith, including, without limitation, any
interruption in service.

         5. Permits. Prior to commencing the installation of any Antenna,
Walkway and/or Related Equipment, Licensee shall, at its own cost and expense,
obtain each and every permit including building permits and approvals of any
applicable architectural control committee for same and deliver same to Grantor.
Grantor makes no representations or warranties with respect to zoning or any
other approvals. If Licensee cannot obtain such necessary permits or such
permits affect the Building or the Roof Space in any way by means of additional
requirements, then this License shall be deemed null and void and of no further
force and effect, unless Grantor in writing waives the conditions set forth
herein.

         6. Repair and Maintenance of Antenna and Related Equipment. Licensee
agrees that it shall keep and maintain the Antennae, Walkways and the Related
Equipment in good condition and repair, at Licensee's sole cost and expense, in
such a manner so as not to conflict or interfere with the use of other
facilities installed in the Building and consistent with first-class office
buildings in the north Denver/Boulder, Colorado area. Furthermore, Licensee
agrees that it shall not damage nor shall it permit any damage to the roof of
any Building, the Roof Space related to any Building or any Building in
conjunction with the Antennae and the Related Equipment. Licensee agrees that
the Antennae and the Related Equipment shall be of such types and frequencies
that will not cause interference with other antennas or dishes in the north
Denver/Boulder, Colorado area in operation at the time of Licensee's
installation. In the event the Antennae or the Related Equipment cause such
interference, Licensee shall immediately take all steps necessary to correct and
eliminate the interference. If Licensee cannot eliminate the interference within
a reasonable time of notification thereof, it shall remove the Antennae and
Related Equipment causing the interference. Licensee shall use its best efforts
to notify any telephone and/or electrical service persons of the location of the
Related Equipment in the Building in order to minimize any interference with
such equipment.

         7. Repair and Maintenance of the Roof. Licensee hereby acknowledges and
agrees that Grantor, its agents, employees, contractors or anyone else permitted
by Grantor to be on the roof of any Building may from time to time inspect,
repair, replace or maintain the roof or any part or parts thereof, or install
additional improvements or fixtures on any said roof. Licensee shall maintain
the Walkways at it sole expense, except Grantor shall be liable for the cost of
repairs or maintenance to the Antennae, Walkways and Related Equipment caused by
Grantor's misconduct or gross negligence.

         8. Compliance with Law and Warranties. Licensee, at Licensee's sole
cost and expense, agrees to install, keep, maintain, operate and remove the
Antennae, Walkways and the Related Equipment in accordance with all applicable
laws, rules, regulations, statutes, ordinances or other requirements of any kind
or nature of any governmental or quasi-governmental authority or the
requirements of Grantor's insurance underwriters and in compliance with any
roofing warranties.

         9. Alterations and Mechanic's Liens. Licensee shall not without the
prior written consent of Grantor, which consent shall not be unreasonably
withheld, make any alterations, improvements or additions to the Antennae,
Walkways and Related Equipment or any other materials related thereto. Licensee
agrees that it shall not alter, add to or move the Antennae, the Walkways or
Related Equipment without Grantor's consent, which consent shall not be
unreasonably withheld by Grantor. In the event that Licensee desires to perform
any alterations, improvements, additions, repairs or other work on the Antennae,
Walkways or the Related Equipment, Licensee shall first submit to Grantor a
written request therefor outlining the repairs, alterations, or other matters
which Licensee is requesting Grantor's consent. The work necessary to perform
any of the repairs or alterations under this section shall be done by employees
or contractors approved in advance by Licensee subject to written contracts
containing all conditions Grantor may reasonably impose, including insurance and
mechanics lien waiver provisions. Licensee agrees that it shall defend and hold
Grantor and each Building harmless from all costs, damages, liens, for labor,
services or materials related to any work done on the additions by Licensee.

         10. Damage by Licensee. Subject to the waiver of subrogation as set
forth in Section 4.15 of the Lease, which is incorporated herein by reference,
if the Building, Building Complex, elevators, boilers, engines, pipes,
electrical apparatus, or any other elements of the Building or the Building roof
or any portion thereof, become damaged or destroyed through any act of Licensee,
its servants, agents, employees, contractors or anyone permitted by Licensee to
be working in any Building or on the Antennae, Walkways or the Related
Equipment, whether or not such act was a result of the negligence or willful
misconduct of Licensee or any such party, then the cost of any repairs,
replacements, alterations and all damages incurred by Grantor shall be borne by
Licensee who shall, within thirty (30) days of demand, pay the same to Grantor.

                                       K-2
<PAGE>   43

         11. Licensee's Insurance. Licensee shall with respect solely to the
Antennae, during the entire term of this License, at its sole cost and expense,
obtain, maintain, and keep in full force and effect insurance with coverages,
amounts, with companies and in form reasonably acceptable to Grantor naming
Grantor and Grantor's lender as insureds thereunder. If the cost of Grantor's
insurance increases as a result directly or indirectly of this License, the
Antennae or the Related Equipment then Licensee shall pay the costs of such
increases directly to Grantor upon demand.

         12. Attorneys' Fees. In the event of any litigation or arbitration
between Grantor and Licensee to enforce any provision of this License or any
right of either party hereto, the unsuccessful party to such litigation or
arbitration shall pay to the successful party all costs and expenses, including
reasonable attorneys' fees, incurred therein.

         13. Indemnification; Release. Subject to Section 4.15 of the Lease,
from and after the Effective Date, Licensee hereby agrees to indemnify, defend,
and save Grantor harmless from and against all claims, demands, liability, loss,
cost, damage, or expense, including attorneys' fees, incurred by or asserted
against Grantor as a result of or arising out of this License including the
installation, use or existence of the Antennae, Walkways and Related Equipment
by Licensee. This indemnity shall survive expiration or termination of this
License and/or the Lease. Licensee hereby irrevocably releases Grantor, its
agents, employees, invitees or contractors, from any claims, damages, expenses
or costs of any kind or nature, whether known or unknown, arising from or
related to this License or any act or the negligence of Grantor, its employees,
agents, invitees or contractors (but not from any gross negligence or willful
conduct of such parties), it being understood and agreed that the Antennae and
Related Equipment are at the sole risk, cost and expense of Licensee.

         14. Default by Licensee. Each one of the following events is herein
referred to as an "event of default":

                  (a) Licensee shall default on any term or condition to be
         performed by it under the Lease and such default is not cured within
         the applicable cure period, if any;

                   (b) This License or the estate of Licensee hereunder shall be
         transferred to or shall pass to or devolve upon any other person or
         party except in the manner set forth in Section 1; or

                   (c) Licensee shall fail to perform any of the other
         agreements, terms, covenants or conditions hereof on Licensee's part to
         be performed, and such non-performance shall continue for a period of
         ten (10) days after written notice thereof by Grantor to Licensee, or
         if such performance cannot be reasonably had within such ten (10) day
         period, Licensee shall not in good faith have commenced such
         performance within such ten (10) day period and shall not thereafter
         diligently proceed to completion.

         15. Remedies of Grantor. If any one or more events of default shall
happen, then Grantor shall have the right, at Grantor's election, to terminate
this License by written notice to Licensee, and to pursue any other remedy
provided in law or in equity for damages incurred by Grantor.

         16. Notice. Any notice from Grantor to Licensee or from Licensee to
Grantor shall be in writing and shall be delivered in accordance with the terms
of the Lease.

         17. Transmitter/Receiver. Licensee hereby agrees that its transmitter
and receiver may not interfere with any antenna now placed upon the roof by
Grantor or another tenant, nor may such transmitter and receiver cause any
interference with any tenant's use of their Premises and equipment therein nor
may the transmitter and receiver cause or pose any possible health risk of any
kind or nature.

                                       K-3
<PAGE>   44

         IN WITNESS WHEREOF, Grantor and Licensee have executed this License the
day and year first above written.

<TABLE>
<S>                                               <C>
                                       GRANTOR:

                                       TC Boulder Office, LP, a Delaware limited partnership

                                       By: Trammell Crow Denver Development, Inc., a Delaware corporation, its
                                           general partner

                                           By:
                                              ----------------------------------------------------------------
                                           Name:  Stephen M. Moyski
                                           Title: President

                                       LICENSEE:

                                       Interactive Knowledge, Inc., a Delaware corporation doing business as netLibrary,
                                       Inc.

                                       By:
                                          ---------------------------------------------------------------------
                                       Name:
                                            -------------------------------------------------------------------
                                       Title:
                                             ------------------------------------------------------------------
</TABLE>

                                       K-4
<PAGE>   45

                               EXHIBIT L TO LEASE

                          SCHEDULE OF CLEANING SERVICES

Introductory Note: All services set forth in this Exhibit shall only be
performed if and to the extent the applicable surface to be vacuumed, buffed,
polished, swept, moped, dusted, wiped, washed or otherwise cleaned is exposed
and readily accessible.

Daily Cleaning Services

1.       Empty waste baskets and remove refuse to designated area. Reline and
         wipe clean receptacles as needed.

2.       Break down all boxes or any items marked trash and remove to designated
         areas.

3.       Thorough vacuuming of all carpeted area, including corner and crevice
         vacuuming in all tenant spaces and common areas.

4.       Vacuum upholstered chairs and sofas where necessary.

5.       Sweep all hard floors (tile, wood, etc.).

6.       Sweep and damp mop all vinyl, marble and quarry tile floors. Spot buff
         as needed.

7.       Spot clean all tenant and common area carpets as needed. Shampoo all
         common area high traffic lanes as needed.

8.       Dust and/or wipe clean the following surfaces:

         o        desks
         o        chairs
         o        file cabinets
         o        tables
         o        telephones
         o        pictures and frames
         o        doors
         o        lamps
         o        ledges and shelves
         o        desk/furniture partitions
         o        any other horizontal surface of a fixture or furniture subject
                  to collecting dust

9.       Wipe clean the following surfaces:

         o        window sills and ledges
         o        counter tops and kitchen cabinets
         o        switch plates
         o        private entrance doors
         o        glass, mirrored and wood doors, panels, windows and walls
         o        walls in kitchen and disposal area
         o        conference tables

10.      Wash, clean and disinfect water fountains and/or coolers. Give special
         attention to adjacent floor areas.

11.      Establish regular cleaning maintenance program for floor in public
         lobby area in conjunction with Property Manager; standard necessary to
         maintain is high quality shine with no water marks, stains, scuffing or
         other signs of wear.

12.      Wipe and polish all glass, chrome and metal surfaces such as windows
         (interior and up to standard ceiling height), partitions, banisters,
         door knobs, light switch plates, kick plates, directional signs and
         door saddles.

13.      Dust and wipe clean sand urns.

                                       L-1
<PAGE>   46

14.      Polish directory.

15.      Vacuum and spot shampoo all carpet entrance mats.

16.      Spot clean all wall surfaces.

17.      Clean all entrance doors.

Daily Elevators

1.       Wash and polish wood and stainless walls, doors and hall plate. Keep
         tracks clean of dust, dirt and debris. Vacuum carpet. Spot clean carpet
         as needed.

Daily Vending Areas

1.       Thoroughly vacuum carpeting and damp mop tile flooring daily.

2.       Thoroughly wipe all tops and sides of vending machines and express mail
         box cabinets with damp cloth. Spot clean all wall surfaces. Thoroughly
         clean microwave inside and outside.

3.       Empty trash and reline can daily.

4.       Wash trash container as needed.

Daily Lavatories

1.       Sweep and wet mop all tile floors using disinfectant.

2.       Thoroughly clean all mirrors, top to bottom.

3.       Scour, wash and disinfect all sink basins, counter tops, bowls,
         urinals, including undersides.

4.       Wash toilet seats, both sides.

5.       Wipe clean all partitions.

6.       Wipe clean all wall tile as needed.

7.       Remove all trash and sanitary waste, wash receptacles as necessary.
         Remove rubbish to designated area.

8.       Restock hand soap and paper products.

9.       Polish all stainless dispensers.

Weekly Cleaning Services

1.       Wash and sanitize metal partitions. Dust horizontal surfaces exceeding
         70" height. Damp clean ceiling and exhaust fans.

2.       Wash all interior glass, including hallways, windows (excluding second
         story atrium windows), lobby doors, partitions and glass door panels.

3.       Dust all blinds in common areas.

                                       L-2
<PAGE>   47

4.       Sweep fire tower stairwells. Wet mop as needed. Wipe hand rails and
         dust metalwork.

5.       Wipe clean all desk tops and credenzas.

6.       Remove all finger prints and dirt from door frames, kick and push
         plates, handles and railings.

7.       Wet wipe all horizontal surfaces to 70" including moldings, shelves,
         etc.

8.       Polish all fine wood furniture including desks, chairs and cabinets.

9.       Spray buff all vinyl tiles floors as necessary.

10.      Machine buff other hard surfaces, floors to include ceramic, quarry and
         marble title as necessary.

11.      Wipe clean all plant containers in common areas.

Monthly / Quarterly Cleaning Services

1.       Thoroughly wipe clean all ceiling vents and exhaust fans and area
         immediately adjacent: monthly to quarterly, as needed.

2.       Strip and refinish all tile floors including restroom floors on a
         quarterly basis.

3.       Wipe clean and remove all fingerprints from full height doors.

4.       Vacuum all upholstered chairs.

5.       Thoroughly clean all venetian blinds, pipes, ventilating and air
         conditioning louvers, ducts and high molding: monthly to quarterly, as
         needed.

6.       Wipe clean as needed all vinyl base. Vacuum as needed all carpet cove
         base: monthly to quarterly, as needed.

7.       Thoroughly wash all trash receptacles, inside and outside.

8.       Spot clean all vertical surfaces.

9.       Spray buff all vinyl floors (both tenant and common areas) quarterly.

Semi-Annual Cleaning Services

1.       Wash all common area walls including wallcovering, paint, marble and
         vinyl base.

                                       L-3<PAGE>   1
                                                                    EXHIBIT 10.4

                           INTERACTIVE KNOWLEDGE, INC.

                       FOUNDER'S STOCK PURCHASE AGREEMENT

         THIS FOUNDER'S STOCK PURCHASE AGREEMENT (the "AGREEMENT") is made by
and between Interactive Knowledge, Inc., a Delaware corporation (the "COMPANY"),
and Timothy R. Schiewe and Lori Gulstrom Schiewe, joint tenants with rights of
survivorship (the "PURCHASER"), as of the 1st day of August, 1998.

         WHEREAS the Purchaser is an employee, director or consultant of the
Company and the Purchaser's continued service to the Company is considered by
the Company to be important for the Company's continued growth;

         WHEREAS in order to give the Purchaser an opportunity to acquire an
equity interest in the Company as an incentive for the Purchaser to participate
in the affairs of the Company, the Company is willing to sell to the Purchaser
and the Purchaser desires to purchase shares of the Company's $.001 par value
common stock ("the Common Stock") according to the terms and conditions
contained herein; and

         WHEREAS, the issuance of Common Stock hereunder is in connection with
and in furtherance of the Company's compensatory benefit plan for participation
of the Company's employees, directors, officers, consultants and advisors and is
intended to comply with the provisions of Rule 701 promulgated by the Securities
and Exchange Commission under the Securities Act of 1933, as amended (the
"Act").

         NOW THEREFORE, in consideration of the premises set forth herein, and
for other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:

         1.       SALE OF STOCK. The Company hereby agrees to sell to the
Purchaser and the Purchaser hereby agrees to purchase an aggregate of One
Million Four Hundred Eighty-Five Thousand One Hundred Forty-Eight (1,485,148)
shares of the Company's Common Stock (the "Shares") in consideration of the
transfer of assets to, and/or the performance of services for, the Company, such
assets and/or services having a value in the aggregate amount of One Hundred
Forty-Eight Thousand Five Hundred Fourteen Dollars and Eighty Cents
($148,514.80).

         2.       PAYMENT OF PURCHASE PRICE. The purchase price for the Shares
has been paid by assignment to or performance for the Company, at the time of
execution of this Agreement, of the specified assets and/or services.

<PAGE>   2

         3.       REPURCHASE OPTION.

                  (a) In the event of any voluntary or involuntary termination
of Purchaser's employment by or services to the Company for any or no reason
(including death or disability) before all of the Shares are released from the
Company's repurchase option (the "Repurchase Option") (see Section 4), the
Company shall, upon the date of such termination (as reasonably fixed and
determined by the Company) have an irrevocable, exclusive option for a period of
90 days (or such longer period of time mutually agreed to by Purchaser and the
Company) from such date to repurchase some or all of the Unreleased Shares (as
defined in Section 4) at such time at the original purchase price per share (the
"REPURCHASE PRICE").

                  (b) Said option shall be exercised by the Company by written
notice as provided in Section 12(a) to the Purchaser or the Purchaser's executor
and, at the Company's option, (i) by delivery to the Purchaser or the
Purchaser's executor with such notice of a check in the amount of the purchase
price for the Shares being repurchased, or (ii) by cancellation by the Company
of as amount of the Purchaser's indebtedness to the Company in an amount equal
to the purchase price for the Shares being repurchased, or (iii) by a
combination of (i) and (ii) so that the combined payment and cancellation of
indebtedness equals such Repurchase Price. Upon delivery of such notice and the
payment of the purchase price by any method described above, the Company shall
become the legal and beneficial owner of the Shares being repurchased and all
rights and interests therein or relating thereto, and the Company shall have the
full right and authority to transfer on its books to its own name the number of
Shares being repurchased by the Company.

                  (c) Nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Company, or a parent or subsidiary of the
Company, to terminate Purchaser's employment or consulting relationship, for any
reason, with or without cause.

                  (d) The Company may assign its rights under this Section 3.

         4.       RELEASE OF SHARES FROM REPURCHASE OPTION.

                  (a) The number of Shares to be released from the Company's
Repurchase Option is set forth in a schedule attached hereto as Exhibit A,
provided, that, in the case of a termination without cause (as defined below)
and subject to Purchaser releasing the Company of all claims of Purchaser
arising from the employment relationship (other than claims arising from wilful
misconduct by the Company), the date of cessation of employment used to
calculate the number of Shares released from the Company's Repurchase Option
shall be deemed to be a date six months after the actual date of termination,
and provided further, that, as to each incremental period resulting in the
release of Shares from such Repurchase Option, that the Purchaser's employment
or services have not been terminated prior to the date of any such release.

                                       2
<PAGE>   3

                  (b) Any of the Shares which have not yet been released from
the Company's Repurchase Option are referred to herein as "UNRELEASED SHARES."

                  (c) For purposes of Section 4(a), a termination without cause
shall mean (i) any action by the officers, or Board of Directors of the Company
to terminate or not to renew Purchaser's employment by the Company, other than
as a result of [A] Purchaser's refusal or failure to perform his duties as
reasonably prescribed by the officers or the Board of Directors (if such failure
or refusal is not cured within 30 days after notice thereof by the Company), [B]
a material breach by Purchaser of the Company's written policies and procedures,
or of any agreement between Purchaser and the Company, or [C] conviction of
Purchaser of a felony, or (ii) the resignation by Purchaser, or other action by
Purchaser to terminate his employment, under circumstances where there has been
a material reduction in his duties, responsibilities or position with the
Company, or where there have been actions by the Company or its officers to
create a working environment that materially impedes Purchaser's ability to
satisfy his employment obligations to the Company.

         5.       RESTRICTIONS ON TRANSFER.

                  (a) Except for the escrow described in Section 6, none of the
Shares or any beneficial interest therein shall be transferred, encumbered or
otherwise disposed of until the release of such Shares from the Company's
Repurchase Option in accordance with the provisions of this Agreement. Any sale
or transfer, or purported sale or transfer, of securities of the Company shall
be null and void unless the terms, conditions and provisions of this Agreement
are strictly observed.

                  (b) The Shares may not be sold, offered for sale, pledged,
hypothecated or otherwise transferred in the absence of an effective
registration statement under the Securities Act with respect to such Shares or
an opinion of counsel reasonably acceptable to the Company that such
registration is not required. The Company shall not be required to transfer on
its books any portion of such Shares purchased hereunder which shall have been
sold or transferred in violation of any of the provisions set forth in this
Agreement, or to treat as the owner of such shares or to accord the right to
vote as such owner or to pay dividends to any transferee to whom such shares
shall have been so transferred.

                  (c) The Purchaser hereby agrees that during the one hundred
eighty (180) day period following the effective date of a registration statement
of the Company filed under the Securities Act, the Purchaser shall not, to the
extent requested by the Company and the managing underwriter, sell or otherwise
transfer or dispose of (other than to donees who agree to be similarly bound)
any Shares or other securities of the Company held by Purchaser at any time
during such period except Shares included in such registration; provided, that,
all officers and directors of the Company enter into similar agreements. In
order to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such one hundred eighty (180) day period.

                                       3
<PAGE>   4

         6.       ESCROW. As security for Purchaser's faithful performance of
the terms of this Agreement and to insure that the Shares will be available for
delivery upon exercise of the Repurchase Option as herein provided, Purchaser
agrees to deliver to and deposit with the Secretary of the Corporation (the
"ESCROW AGENT"), as escrow agent in this transaction, a Stock Assignment duly
endorsed (with date and number of shares blank) substantially in the form of
Exhibit B attached hereto, together with the certificate or certificates
evidencing the Shares; said documents are to be held by the Escrow Agent and
delivered by the Escrow Agent pursuant to the Joint Escrow Instructions of the
Company and Purchaser substantially in the form of Exhibit C attached hereto,
which instructions shall also be delivered to the Escrow Agent at the closing
hereunder.

         7.       CHANGES IN CAPITALIZATION; CONSOLIDATION; MERGER; SALE OF
ASSETS

                  (a) If during the term of the Repurchase Option, there is any
stock dividend or liquidating dividend of cash and/or property, stock split or
other change in the character or amount of any of the outstanding securities of
the Company, then any and all new, substituted or additional securities or other
property to which Purchaser is entitled by reason of Purchaser's ownership of
the Shares shall be immediately subject to the Repurchase Option and be included
in the word "Shares" for all purposes of the Repurchase Option with the same
force and effect under the terms of Sections 2 hereof, as the Shares subject to
the Repurchase Option. With respect to the Repurchase Option, while the total
Repurchase Price shall remain the same after each such event, the Repurchase
Price per Share upon exercise of the Repurchase Option shall be appropriately
adjusted.

                  (b) If during the term of the Repurchase Option there is a
Corporate Transaction (as defined below), then immediately prior to the
occurrence of such event, the Repurchase Option shall automatically lapse in its
entirety, except to the extent the Repurchase Option is to be assigned to the
successor corporation (or its parent company) in connection with such Corporate
Transaction. To the extent the Repurchase Option remains in effect following a
Corporate Transaction, the right shall apply to the new capital stock or other
property (including cash paid other than as a regular cash dividend) received in
exchange for the Shares in consummation of the Corporate Transaction, but only
to the extent the Shares are at the time covered by such right. Appropriate
adjustments shall be made to the price per share payable upon exercise of the
Repurchase Option to reflect the effect of the Corporate Transaction upon the
Corporation's capital structure; provided, however, that the aggregate price
shall remain the same.

         A "CORPORATE TRANSACTION" shall mean one or more of the following
events: (i) (A) any consolidation or merger of the Company with or into any
other corporation or other entity or person, or any other corporate
reorganization, in which the stockholders of the Company immediately prior to
such consolidation, merger or reorganization, own less than 50% of the Company's
voting power immediately after such consolidation, merger or reorganization;
provided, that, the foregoing shall only be deemed a Corporate Transaction if
the stockholders of the Company or its successor immediately prior to such
consolidation, merger or reorganization;

                                       4
<PAGE>   5

(1) hold less than 50% of the outstanding securities of the surviving company
following the merger or consolidation or, (2) in the event that the securities
of an affiliated entity of the surviving corporation are issued to the
stockholders of the Company in the transaction, hold less than 50% of the
outstanding securities of such affiliated entity, or (B) any transaction or
series of related transactions in which in excess of fifty percent (50%) of the
Company's voting power is transferred; or (ii) a sale, lease or other
disposition of all or substantially all of the assets of the Company.

         8.       TAX CONSEQUENCES. The Purchaser has reviewed with the
Purchaser's own tax advisors the federal, state, local and foreign tax
consequences of this investment and the transactions contemplated by this
Agreement. The Purchaser is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents. The Purchaser
understands that the Purchaser (and not the Company) shall be responsible for
the Purchaser's own tax liability that may arise as a result of this investment
or the transactions contemplated by this Agreement. The Purchaser understands
that Section 83 of the Internal Revenue Code of 1986, as amended (the "CODE"),
taxes as ordinary income the difference between the amount paid for the Shares
and the fair market value of the Shares as of the date any restrictions on the
Shares lapse. In this context, "restriction" includes the right of the Company
to buy back the Shares pursuant to its Repurchase Option. Purchaser understands
that Purchaser may elect to be taxed at ordinary income rates on the difference,
if any, between the amount paid for the Shares and the fair market value of the
Shares at the time the Shares are purchased, rather than when and as the
Repurchase Option lapses, by filing an election under Section 83(b) of the Code
with the Internal Revenue Service within thirty (30) days from the date of
purchase. Even if the fair market value of the Shares equals the amount paid for
the Shares, the election must be made to avoid taxation as the restrictions
expire. After Purchaser files an election under Section 83(b), any subsequent
increase in the fair market value of the Shares will not be taxed as the
restrictions expire, and any gain thereafter realized on the sale of the Share
will be taxed as capital gain. Purchaser further understands that if Purchaser
files such an election under Section 83(b) of the Code, and the Company
subsequently exercises the Repurchase Option with regard to all or part of the
Shares, Purchaser might not be eligible to claim a loss deduction in the amount
of taxable income which was previously recognized, or the amount of tax paid, as
a consequence of the election under Section 83(b) with regard to the Shares
repurchased. PURCHASER UNDERSTANDS THAT FAILURE TO MAKE THIS FILING IN A TIMELY
MANNER WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME BY PURCHASER, AS THE
REPURCHASE OPTION LAPSES, ON ANY DIFFERENCE BETWEEN THE PURCHASE PRICE AND THE
FAIR MARKET VALUE OF THE STOCK AT THE TIME SUCH RESTRICTIONS LAPSE.

         THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S OR THE COMPANY'S COUNSEL TO FILE TIMELY THE
ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS
REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER'S BEHALF.

         9.       PURCHASER REPRESENTATIONS.  In connection with the purchase of
the Shares, Purchaser represents to the Company the following:

                                       5
<PAGE>   6

                  (a) Purchaser is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Shares. Purchaser is
purchasing the Shares for investment for Purchaser's own account only and not
with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act. Purchaser also represents that the
entire legal and beneficial interest of the Shares is being purchased, and will
be held, for Purchaser's own account.

                  (b) Purchaser understands that the Shares have not been
registered under the Securities Act by reason of a specific exemption therefrom,
which exemption depends upon, among other things, the bona fide nature of
Purchaser's investment intent as expressed herein.

                  (c) Purchaser further acknowledges and understands that the
Shares must be held indefinitely unless the Shares are subsequently registered
under the Securities Act or an exemption from such registration is available.
Purchaser further acknowledges and understands that the Company is under no
obligation to register the Shares. Purchaser understands that the certificate
evidencing the Shares will be imprinted with a legend which prohibits the
transfer of the Shares unless the Shares are registered or such registration is
not required in the opinion of counsel for the Company.

                  (d) Purchaser is familiar with the provisions of Rules 144 and
701 under the Securities act, as in effect from time to time, which, in
substance, permit limited public resale of "restricted securities" acquired,
directly or indirectly, from the issuer thereof (or from an affiliate of such
issuer), in a non-public offering subject to the satisfaction of certain
conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the
time of issuance of the securities, such issuance will be exempt from
registration under the Securities Act. In the event the Company becomes subject
to the reporting requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the securities exempt under Rule 701 may be sold by
Purchaser ninety (90) days thereafter.

                           In the event that the sale of the Shares does not
qualify under Rule 701 at the time of purchase, then the Shares may be resold by
Purchaser in certain limited circumstances subject to the provisions of Rule
144, which requires, among other things: (i) the availability of certain public
information about the Company and (ii) the resale occurring following the
required holding period under Rule 144 after the Purchaser has purchased, and
made full payment of (within the meaning of Rule 144), the securities to be
sold.

                  (e) Purchaser further understands that at the time Purchaser
wishes to sell the Shares there may be no public market upon which to make such
a sale, and that, even if such a public market then exists, the Company may not
be satisfying the current public current information requirements of Rule 144 or
701, and that, in such event, Purchaser would be precluded from selling the
Shares under Rule 144 or 701 even if the minimum holding period requirement had
been satisfied.

                                       6
<PAGE>   7

         10.      RESTRICTIVE LEGENDS. All certificates representing the Shares
shall have endorsed thereon legends in substantially the following forms:

                  (a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED."

                  (b) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
A REPURCHASE OPTION SET FORTH IN AN AGREEMENT BETWEEN THE CORPORATION AND THE
REGISTERED HOLDER, OR ITS PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT
THE PRINCIPAL OFFICE OF THE CORPORATION. ANY TRANSFER OR ATTEMPTED TRANSFER OF
ANY SHARES SUBJECT TO SUCH OPTION IS VOID WITHOUT THE PRIOR EXPRESS WRITTEN
CONSENT OF THE CORPORATION."

                  (c) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
A RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE CORPORATION AND/OR ITS
ASSIGNEE(S), AS PROVIDED IN THE BYLAWS OF THE CORPORATION.

                  (d) Any legend required to be placed thereon by appropriate
Blue Sky officials.

         11.      STOCKHOLDER RIGHTS. Subject to the provisions of Section 5
above, Purchaser (but not any unapproved transferee) shall, during the term of
this Agreement, exercise all rights and privileges of a stockholder of the
Company with respect to the Company deposited in said escrow.

         12.      MISCELLANEOUS.

                  (a) NOTICES. Any notice required or permitted hereunder shall
be given in writing and shall be deemed effectively given upon personal delivery
or sent by telegram or fax or upon deposit in the United States Post Office, by
registered or certified mail with postage and fees prepaid, addressed to the
other party hereto at his address hereinafter shown below or at such other
address as such party may designate by ten (10) days' advance written notice to
the other party hereto.

                  (b) SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns,

                                       7
<PAGE>   8

heirs, executors and administrators of the parties hereto and shall inure to the
benefit of and be enforceable by each person who shall be a holder of the Shares
from time to time.

                  (c) GOVERNING LAW; VENUE. This Agreement shall be governed by
and construed in accordance with the laws of the State of Colorado. The parties
agree that any action brought by either party to interpret or enforce any
provision of this Agreement shall be brought in, and each party agrees to, and
does hereby, submit to the jurisdiction and venue of, the appropriate state or
federal court for the district encompassing the Company's principal place of
business.

                  (d) ENTIRE AGREEMENT; AMENDMENT; FURTHER EXECUTION. This
Agreement constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes and merges all prior agreements or
understandings, whether written or oral. This Agreement may not be amended,
modified or revoked, in whole or in part, except by an agreement in writing
signed by each of the parties hereto. The parties agree to take all such further
action as may reasonably be necessary to carry out the intent of this Agreement.

                  (e) SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, portions of such provisions,
or such provisions in their entirety, to the extent necessary, shall be severed
from the Agreement, and the balance of the Agreement shall be interpreted as if
such provisions were so excluded and shall be enforceable in accordance with its
terms.

                  (f) COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

                  (g) REVIEW OF AGREEMENT. Purchaser has reviewed this Agreement
in its entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions of this Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       8
<PAGE>   9

         IN WITNESS WHEREOF, the parties have duly executed this Founder's Stock
Purchase Agreement as of the day and year first set forth above.

INTERACTIVE KNOWLEDGE, INC.                          PURCHASER:

By: /s/ TIMOTHY R. SCHIEWE                 Timothy R. Schiewe and Lori Gulfstrom
   -----------------------------------     Schiewe, joint tenants with rights
Timothy R. Schiewe, President              of survivorship

Address: 1033 Walnut Street, Suite 200
         Boulder, CO 80302
                                            /s/ TIMOTHY R. SCHIEWE
                                           -------------------------------------
                                           Timothy R. Schiewe

                                            /s/ LORI GULSTROM SCHIEWE
                                           -------------------------------------
                                           Lori Gulfstrom Schiewe

<PAGE>   10

                                    EXHIBIT A

              SCHEDULE OF RELEASE OF SHARES FROM REPURCHASE OPTION

                                                 PERCENT OF SHARES RELEASED
IF CESSATION OF EMPLOYMENT OCCURS BEFORE:         FROM REPURCHASE OPTION:

         September 1, 1998                        33.3333% of the Shares
         October 1, 1998                          36.1111% of the Shares
         November 1, 1998                         38.8889% of the Shares
         December 1, 1998                         41.6667% of the Shares
         January 1, 1999                          44.4445% of the Shares
         February 1, 1999                         47.2223% of the Shares
         March 1, 1999                            50.0001% of the Shares
         April 1, 1999                            52.7778% of the Shares
         May 1, 1999                              55.5557% of the Shares
         June 1, 1999                             58.3335% of the Shares
         July 1, 1999                             61.1113% of the Shares
         August 1, 1999                           63.8891% of the Shares
         September 1, 1999                        66.6667% of the Shares
         October 1, 1999                          69.4445% of the Shares
         November 1, 1999                         72.2223% of the Shares
         December 1, 1999                         75.0001% of the Shares
         January 1, 2000                          77.7777% of the Shares
         February 1, 2000                         80.5555% of the Shares
         March 1, 2000                            83.3335% of the Shares
         April 1, 2000                            86.1113% of the Shares
         May 1, 2000                              88.8891% of the Shares
         June 1, 2000                             91.6669% of the Shares
         July 1, 2000                             94.4447% of the Shares
         August 1, 2000                           97.2225% of the Shares
         September 1, 2000                        100% of the Shares

                                      A-1

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