Document:

<PAGE>

                                                                 EXHIBIT 10.10
                                     LEASE
                                     -----

Landlord:   Hayward Point Eden I Limited Partnership

Tenant:     AllAdvantage.com

Date:       December 22, 1999

                               TABLE OF CONTENTS
                               -----------------
<TABLE>
<CAPTION>
                                                                        Page #
                                                                        ------
<S>                                                                     <C>
1. PREMISES............................................................   1
   1.1   Premises......................................................   1
   1.2   Landlord's Reserved Rights....................................   1
2. TERM  ..............................................................   1
   2.1   Term..........................................................   1
   2.2   Early Possession..............................................   2
   2.3   Delay in Possession...........................................   2
   2.4   Construction..................................................   2
   2.5   Acknowledgement Of Lease Commencement.........................   3
   2.6   Holding Over..................................................   3
   2.7   Termination Right.............................................   3
3. RENTAL..............................................................   4
   3.1   Minimum Rental................................................   4
   3.2   Late Charge...................................................   4
4. TAXES ..............................................................   5
   4.1   Personal Property.............................................   5
   4.2   Real Property.................................................   5
5. OPERATING EXPENSES..................................................   5
   5.1   Payment Of Operating Expenses.................................   5
   5.2   Definition Of Operating Expenses..............................   6
   5.3   Determination of Operating Expenses...........................   6
   5.4.  Final Accounting For Lease Year...............................   7
   5.5.  Proration.....................................................   7
6. UTILITIES...........................................................   7
   6.1.  Payment.......................................................   7
   6.2.  Interruption..................................................   7
7. ALTERATIONS.........................................................   7
   7.1.  Right To Make Alterations.....................................   7
   7.2.  Title To Alterations..........................................   8
   7.3.  Tenant Fixtures...............................................   8
   7.4.  No Liens......................................................   8
8. MAINTENANCE AND REPAIRS.............................................   8
   8.1.  Landlord's Work...............................................   8
   8.2.  Tenant's Obligation For Maintenance...........................   9
     (a)    Good Order, Condition And Repair...........................   9
</TABLE>

<PAGE>

<TABLE>
<S>                                                                   <C>
      (b)  Landlord's Remedy.........................................     9
      (c)  Condition Upon Surrender..................................     9
9.   USE OF PREMISES.................................................     9
    9.1.   Permitted Use.............................................    10
    9.2.   Requirement Of Continued Use..............................    10
    9.3.   No Nuisance...............................................    10
    9.4.   Compliance With Laws......................................    10
    9.5.   Liquidation Sales.........................................    11
    9.6.   Environmental Matters.....................................    11
10. INSURANCE AND INDEMNITY..........................................    11
    10.1.  Liability Insurance.......................................    11
    10.2.  Quality Of Policies And Certificates......................    12
    10.3.  Workers' Compensation.....................................    12
    10.4.  Waiver Of Subrogation.....................................    12
    10.5.  Increase In Premiums......................................    12
    10.6.  Indemnification...........................................    13
    10.7.  Blanket Policy............................................    13
11. SUBLEASE AND ASSIGNMENT..........................................    13
    11.1.  Assignment And Sublease Of Premises.......................    13
    11.2.  Rights Of Landlord........................................    14
12. RIGHT OF ENTRY AND QUIET ENJOYMENT...............................    14
    12.1.  Right Of Entry............................................    14
    12.2.  Quiet Enjoyment...........................................    15
13. CASUALTY AND TAKING..............................................    15
    13.1.  Termination Or Reconstruction.............................    15
    13.2.  Tenant's Rights...........................................    15
    13.3.  Lease To Remain In Effect.................................    15
    13.4.  Reservation Of Compensation...............................    15
    13.5.  Restoration Of Fixtures...................................    16
14. DEFAULT..........................................................    16
    14.1.  Events Of Default.........................................    16
      (a)  Abandonment...............................................    16
      (b)  NonPayment................................................    16
      (c)  Other Obligations.........................................    16
      (d)  General Assignment........................................    16
      (e)  Bankruptcy................................................    17
      (f)  Receivership..............................................    17
      (g)  Attachment................................................    17
      (h)  Insolvency................................................    17
    14.2.  Remedies Upon Tenant's Default............................    17
    14.3.  Remedies Cumulative.......................................    18
15. SUBORDINATION, ATTORNMENT AND SALE...............................    18
    15.1.  Subordination To Mortgage.................................    18
    15.2.  Sale Of Landlord's Interest...............................    19
    15.3.  Estoppel Certificates.....................................    19
    15.4.  Subordination to CC&Rs....................................    20
</TABLE>

                                     -ii-
<PAGE>

<TABLE>
<S>                                                                     <C>
16.  SECURITY..........................................................   20
     16.1.   Deposit...................................................   20
17.  MISCELLANEOUS.....................................................   20
     17.1.   Notices...................................................   20
     17.2.   Successors And Assigns....................................   21
     17.3.   No Waiver.................................................   21
     17.4.   Severability..............................................   22
     17.5.   Litigation Between Parties................................   22
     17.6.   Surrender.................................................   22
     17.7.   Interpretation............................................   22
     17.8.   Entire Agreement..........................................   22
     17.9.   Governing Law.............................................   22
     17.10.  No Partnership............................................   22
     17.11.  Financial Information.....................................   23
     17.12.  Costs.....................................................   23
     17.13.  Time......................................................   23
     17.14.  Rules And Regulations.....................................   23
     17.15.  Brokers...................................................   24
     17.16.  Memorandum Of Lease.......................................   24
     17.17.  Corporate Authority.......................................   24
     17.18.  Execution and Delivery....................................   24
     17.19.  Exercise of Option........................................   24
</TABLE>

                                     -iii-
<PAGE>

                                     LEASE
                                     -----

     THIS LEASE is made and entered into as of the 22nd day of December, 1999,
by and between Hayward Point Eden I Limited Partnership, a Delaware limited
partnership ("Landlord") and AllAdvantage.com a California corporation
              --------
("Tenant").
  ------

                         THE PARTIES AGREE AS FOLLOWS:

                                 1.  PREMISES
                                     --------

     1.1  Premises.  Landlord leases to Tenant and Tenant hires and leases
          --------
from Landlord, on the terms, covenants and conditions hereinafter set forth, the
premises (the "Premises") designated in Exhibit A attached hereto and
               --------                 ---------
incorporated herein by this reference, consisting of approximately 45,000 square
feet of space located within Building K (the "Building") in the Britannia Point
                                              --------
Eden Business Park (the "Center") in the City of Hayward, County of Alameda,
                         ------
State of California, commonly known as 4010 Point Eden Way, Hayward, California
94945, and located on the real property (the "Property") described in Exhibit B
                                              --------                ---------
attached hereto and incorporated herein by this reference, together with the
nonexclusive right to use any common areas designated from time to time in any
Declaration of Covenants, Conditions and Restrictions or similar document
affecting the Center.

     1.2  Landlord's Reserved Rights.  Landlord reserves the right from time
          --------------------------
to time to (i) install, use, maintain, repair and replace pipes, ducts,
conduits, wires and appurtenant meters and equipment for service to other parts
of the Building above the ceiling surfaces, below the floor surfaces, within the
walls or leading through the Premises in locations which will not materially
interfere with Tenant's use thereof, (ii) relocate any pipes, ducts, conduits,
wires and appurtenant meters and equipment included in the Premises which are so
located or located elsewhere outside the Premises, (iii) make alterations or
additions to the Building, (iv) construct, alter or add to other buildings or
improvements on the Property, (v) build adjoining to the Property, and (vi)
lease any part of the Property for the construction of improvements or
buildings.  Landlord may modify or enlarge the common area, alter or relocate
accesses to the Premises, or alter or relocate any common facility.  For any
work within the Building performed pursuant to this Section 1.2, Landlord shall
provide prior written notice of such work to Tenant before performing such work,
except in the event of an emergency.  Landlord shall not exercise rights
reserved to it pursuant to this Section 1.2 in such a manner as to materially
impair Tenant's ability to conduct its activities in the normal manner;
provided, however, that the foregoing shall not limit or restrict Landlord's
--------
right to undertake reasonable construction activity and Tenant's use of the
Premises shall be subject to reasonable temporary disruption incidental to such
activity diligently prosecuted.

                                   2.  TERM
                                       ----

     2.1  Term.  The term of this Lease shall commence on the earlier to occur
          ----
of (i) the date which is five (5) days after the date Landlord notifies Tenant
that Landlord's work pursuant to Section 2.4 is substantially complete, or (ii)
the date Tenant takes occupancy of the Premises, the earlier of such dates being
herein called the "Commencement Date," and shall end on the day immediately
                   -----------------
preceding the date thirty-six (36) months thereafter, unless sooner terminated
or
<PAGE>

extended (if applicable) as hereinafter provided. Landlord presently estimates
that the Commencement Date will be January 1, 2000.

     2.2  Early Possession.  If Landlord permits Tenant to occupy, use or take
          ----------------
possession of the Premises prior to the Commencement Date determined under
Section 2.1, such occupancy, use or possession shall be subject to and upon all
of the terms and conditions of this Lease, including the obligation to pay rent
and other charges, unless Landlord and Tenant agrees otherwise; provided,
                                                                --------
however, that such early possession shall not advance or otherwise affect the
Commencement Date or termination date determined under Section 2.1; and provided
                                                                        --------
further, that Tenant shall not interfere with or delay Landlord's contractors by
-------
such early possession and shall indemnify, defend and hold harmless Landlord and
its agents and employees from and against any and all claims, demands,
liabilities, actions, losses, costs and expenses, including (but not limited to)
reasonable attorneys' fees, arising out of or in connection with Tenant's early
entry upon the Premises hereunder.

     2.3  Delay in Possession.  Landlord agrees to use its best efforts to
          -------------------
complete promptly the work described in Section 2.4; provided, however, Landlord
                                                     --------
shall not be liable for any damages caused by any delay in the completion of
such work, nor shall any such delay affect the validity of this Lease or the
obligations of Tenant hereunder.

     2.4  Construction.  (a) The obligation of Landlord to perform work to
          ------------
improve the Premises for occupancy by Tenant is limited to the following, all of
which work shall be performed promptly, diligently and prior to the Commencement
Date (subject to delays for causes beyond Landlord's reasonable control), in a
neat and workmanlike manner, in compliance with all applicable governmental
codes, laws and regulations in force at the time such work is completed, and at
no expense to Tenant:  (i) Landlord shall install carpeting in the manufacturing
area of the Premises, the area of which is approximately 10,736 square feet and
(ii) Landlord shall remove the chain link fencing in the manufacturing area of
the Premises.  Except as specifically set forth in this Section 2.4(a), Landlord
shall have no responsibilities or obligations with respect to preparation of the
Premises for Tenant's occupancy and Tenant shall take possession of the Premises
in their presently existing condition "AS IS," in all respects.  Acceptance by
Tenant of possession of the Premises after performance of such work by Landlord
shall constitute acceptance by Tenant of such work in its then completed
condition and Landlord shall have no further responsibility of any kind or
character for improvement of the Premises or in connection with such work;
provided, however, that within fifteen (15) days after the Commencement Date,
--------
Tenant may furnish to Landlord a "punch list" identifying any items or matters
in the Premises which are not in the condition required hereunder and Landlord
shall promptly and diligently correct all such matters at its sole cost and
expense.  Upon request by Tenant, Landlord shall conduct a "walk-through" of the
Premises with Tenant prior to the Commencement Date in order to identify work
required to be performed in accordance with this Section 2.4.

          (b)  Tenant may make alterations to the Premises to prepare the
Premises for Tenant's occupancy, provided that such alterations are made in
accordance with Article 7 of this Lease and provided that Landlord has approved
the contractors performing the work.  Landlord will pay the cost of Fifty
Thousand Dollars ($50,000) of such alterations.  Landlord will make

                                      -2-
<PAGE>

the payment for such alterations (up to $50,000) directly to the contractors
performing such alterations promptly after Landlord receives invoices from such
contractors for work completed.

     2.5  Acknowledgement Of Lease Commencement. Upon commencement of the term
          -------------------------------------
of this Lease, Landlord and Tenant shall execute a written acknowledgement of
the Commencement Date, date of termination, square footage of the Premises and
related matters, substantially in the form attached hereto as Exhibit C
                                                              ---------
(with appropriate insertions), which acknowledgement shall be deemed to be
incorporated herein by this reference.  Notwithstanding the foregoing
requirement, the failure of one or both parties to execute such a written
acknowledgement shall not affect the determination of the Commencement Date,
date of termination, square footage of the Premises and related matters in
accordance with the provisions of this Lease.

     2.6  Holding Over.  If Tenant holds possession of the Premises after the
          ------------
term of this Lease with Landlord's written consent, then except as otherwise
specified in such consent, Tenant shall become a tenant from month to month at
one hundred twenty-five percent (125%) of the rental and otherwise upon the
terms herein specified for the period immediately prior to such holding over and
shall continue in such status until the tenancy is terminated by either party
upon not less than thirty (30) days prior written notice.  If Tenant holds
possession of the Premises after the term of this Lease without Landlord's
written consent, then Landlord in its sole discretion may elect (by written
notice to Tenant) to have Tenant become a tenant either from month to month or
at will, at one hundred fifty percent (150%) of the rental (prorated on a daily
basis for an at-will tenancy, if applicable) and otherwise upon the terms herein
specified for the period immediately prior to such holding over, or may elect to
pursue any and all legal remedies available to Landlord under applicable law
with respect to such unconsented holding over by Tenant.  Tenant shall indemnify
and hold Landlord harmless from any loss, damage, claim, liability, cost or
expense (including reasonable attorneys' fees) resulting from any delay by
Tenant in surrendering the Premises (except with Landlord's prior written
consent), including but not limited to any claims made by a succeeding tenant by
reason of such delay.  Acceptance of rent by Landlord following expiration or
termination of this Lease shall not constitute a renewal of this Lease.

     2.7  Termination Right.  Tenant may terminate the term of this Lease as
          -----------------
of any date after the eighteen (18) month anniversary of the Commencement Date,
provided that:  (a) Tenant gives Landlord written notice of Tenant's election to
terminate (which notice must specify the termination date) on or before March
30, 2001 and (b) Tenant pays Landlord the unamortized portion of the sum of (x)
         ---
Fifty Thousand Dollars ($50,000) plus (y) Landlord's costs to improve the
Premises for Tenant under Section 2.4(a).  The amortization referred to in
clause (b) of the preceding sentence will be calculated over a thirty-six (36)
month period with an eleven percent (11%) interest component.  Tenant shall
receive a credit against Tenant's payment to Landlord pursuant to clause (b) of
the preceding sentence if Tenant has reimbursed Landlord for the cost of
replacement for the HVAC equipment or related mechanical systems pursuant to the
last sentence of Section 8.2(a); the amount of such credit shall equal the
amount paid to Landlord for such replacement multiplied by a fraction, the
numerator of which is the number of months between the date the termination
becomes effective and the thirty-six (36) month anniversary of the Commencement
Date and the denominator of which is the number of months between the date of
such replacement and the thirty-six (36) month anniversary of the Commencement
Date.

                                      -3-
<PAGE>

                                  3.  RENTAL
                                      ------
     3.1  Minimum Rental.
          --------------

          (a)  Tenant shall pay to Landlord as minimum rental for the Premises,
in advance, without deduction, offset, notice or demand, on or before the
Commencement Date and on or before the first day of each subsequent calendar
month of the term of this Lease, the following amounts per month:

<TABLE>
<CAPTION>
          Months                             Minimum Rental
          ------                             --------------
          <S>                                <C>
           1 - 12                             $57,887.08
          13 - 24                              60,137.08
          25 - 36                              62,447.08
</TABLE>

If the obligation to pay minimum rental hereunder commences on other than the
first day of a calendar month or if the term of this Lease terminates on other
than the last day of a calendar month, the minimum rental for such first or last
month of the term of this Lease, as the case may be, shall be prorated based on
the number of days the term of this Lease is in effect during such month.  If an
increase in minimum rental becomes effective on a day other than the first day
of a calendar month, the minimum rental for that month shall be the sum of the
two applicable rates, each prorated for the portion of the month during which
such rate is in effect.

          (b)  The minimum rental amounts specified in this Section 3.1 are
based upon an estimated area of 45,000 square feet for the Premises. If the
actual area of the Premises, when completed, is greater or less than such
estimated area, then the minimum rentals specified in this Section 3.1 shall be
adjusted proportionately to the change in the area of the Premises, as
determined in good faith by Landlord's architect on a basis consistent with that
used in measuring other leased premises within the Center.

     3.2  Late Charge. If Tenant fails to pay when due rental or other amounts
          -----------
due Landlord hereunder, such unpaid amounts shall bear interest for the benefit
of Landlord at a rate equal to the lesser of fifteen percent (15%) per annum or
the maximum rate permitted by law, from the date due to the date of payment. In
addition to such interest, Tenant shall pay to Landlord a late charge in an
amount equal to ten percent (10%) of any installment of minimum rental and any
other amounts due Landlord if not paid in full on or before the fifth (5th) day
after such rental or other amount is due. Tenant acknowledges that late payment
by Tenant to Landlord of rental or other amounts due hereunder will cause
Landlord to incur costs not contemplated by this Lease, including, without
limitation, processing and accounting charges and late charges which may be
imposed on Landlord by the terms of any loan relating to the Property. Tenant
further acknowledges that it is extremely difficult and impractical to fix the
exact amount of such costs and that the late charge set forth in this Section
3.2 represents a fair and reasonable estimate thereof. Acceptance of any late
charge by Landlord shall not constitute a waiver of Tenant's default with
respect to overdue rental or other amounts, nor shall such acceptance prevent
Landlord from exercising any other rights and remedies available to it.
Acceptance of rent or other payments by Landlord shall not constitute a waiver
of late charges or interest accrued with respect to such rent or other payments
or any prior installments thereof, nor

                                      -4-
<PAGE>

of any other defaults by Tenant, whether monetary or non-monetary in nature,
remaining uncured at the time of such acceptance of rent or other payments.

                                   4.  TAXES
                                       -----

     4.1  Personal Property.  Tenant shall be responsible for and shall pay
          -----------------
prior to delinquency all taxes and assessments levied against or by reason of
all alterations and additions and all other items installed or paid for by
Tenant under this Lease, and the personal property, trade fixtures and other
property placed by Tenant in or about the Premises.  Upon request by Landlord,
Tenant shall furnish Landlord with satisfactory evidence of payment thereof.  If
at any time during the term of this Lease any of said alterations, additions or
personal property, whether or not belonging to Tenant, shall be taxed or
assessed as part of the Property, then such tax or assessment shall be paid by
Tenant to Landlord immediately upon presentation by Landlord of copies of the
tax bills in which such taxes and assessments are included and shall, for the
purposes of this Lease, be deemed to be personal property taxes or assessments
under this Section 4.1.

     4.2  Real Property. To the extent the real property taxes and assessments
          -------------
on the Premises are assessed separately from the remainder of the Property,
Tenant shall be responsible for and shall pay prior to delinquency all such
taxes and assessments levied against the Premises. Upon request by Landlord,
Tenant shall furnish Landlord with satisfactory evidence of payment thereof. To
the extent the Premises are taxed or assessed as part of the Property, such real
property taxes and assessments shall constitute Operating Expenses (as that term
is defined in Section 5.2 of this Lease) and shall be paid in accordance with
the provisions of Article 5 of this Lease.

                            5.  OPERATING EXPENSES
                                ------------------

     5.1  Payment Of Operating Expenses.
          -----------------------------

          (a)  Tenant shall pay to Landlord, at the time and in the manner
hereinafter set forth, as additional rental, an amount equal to sixty percent
(60%) ("Tenant's Operating Cost Share") of the Operating Expenses defined in
        -----------------------------
Section 5.2.

          (b)  Tenant's Operating Cost Share as specified in paragraph (a) of
this Section is based upon an estimated area of 45,000 square feet for the
Premises and upon an aggregate area of 75,000 square feet for the buildings
owned by Landlord on the Property.  If the actual area of the Premises (when
completed) or of the buildings owned by Landlord on the Property, as determined
in good faith by Landlord's architect on a basis consistent with that used in
measuring other leased premises within the Center, differs from the assumed
numbers set forth above, then Tenant's Operating Cost Share shall be adjusted to
reflect the actual areas so determined.

          (c)  If Landlord constructs additional buildings on the Property (or
on any adjacent property owned by Landlord and operated, for common area
purposes, on an integrated basis with the Property) from time to time, Tenant's
Operating Cost Share shall be adjusted to be equal to the percentage determined
by dividing the gross square footage of the Premises as they then exist by the
gross square footage of all buildings located on portions of the Property owned

                                      -5-
<PAGE>

by Landlord (or on any applicable adjacent property owned by Landlord as
described above). In determining said percentage, a building shall be taken into
account from and after the date on which a tenant first enters into possession
of the building or a portion thereof, and the good faith determination of the
gross square footage of any such building by Landlord's architects shall be
final and binding upon the parties.

     5.2  Definition Of Operating Expenses.  Subject to the exclusions and
          --------------------------------
provisions hereinafter contained, the term "Operating Expenses" shall mean the
                                            ------------------
total costs and expenses incurred by or allocable to Landlord for management,
operation and maintenance of the Building and the Property, including, without
limitation, costs and expenses of (i) insurance, property management,
landscaping and operations, repairs and maintenance of buildings and common
areas; (ii) all utilities and services; (iii) real and personal property taxes
and assessments or substitutes therefor, including (but not limited to) any
possessory interest, use, business, license or other taxes or fees, any taxes
imposed directly on rents or services, and assessments or charges for police or
fire protection, housing, transit, open space, street or sidewalk construction
or maintenance or other similar services from time to time by any governmental
or quasi-governmental entity, and any other new taxes on landlords in addition
to taxes now in effect; (iv) supplies, equipment, utilities and tools used in
management, operation and maintenance of the Property; (v) capital improvements
to the Property or the Building amortized over a reasonable period, (aa) which
reduce or will cause future reduction of other items of Operating Expenses for
which Tenant is otherwise required to contribute or (bb) which are required by
law, ordinance, regulation or order of any governmental authority or (cc) of
which Tenant has use or which benefit Tenant; and (vi) any other costs
(including, but not limited to, any parking or utilities fees or surcharges)
allocable to or paid by Landlord, as owner of the Property or Building, pursuant
to any applicable laws, ordinances, regulations or orders of any governmental or
quasi-governmental authority or pursuant to the terms of any declarations of
covenants, conditions and restrictions now or hereafter affecting the Property
(or any applicable adjacent property owned by Landlord as described above).
Operating Expenses shall not include any costs attributable to increasing the
size of or otherwise expanding the Building or the cost of the work for which
Landlord is required to pay under Section 2.4.  The distinction between items of
ordinary operating maintenance and repair and items of a capital nature shall be
made in accordance with generally accepted accounting principles applied on a
consistent basis.

     5.3  Determination of Operating Expenses.  On or before the Commencement
          -----------------------------------
Date and during the last month of each calendar year of the term of this Lease
("Lease Year"), or as soon thereafter as practical, Landlord shall provide
  ----------
Tenant notice of Landlord's estimate of the Operating Expenses for the ensuing
Lease Year or applicable portion thereof.  On or before the first day of each
month during the ensuing Lease Year or applicable portion thereof, beginning on
the Commencement Date, Tenant shall pay to Landlord Tenant's Operating Cost
Share of the portion of such estimated Operating Expenses allocable (on a
prorata basis) to such month; provided, however, that if such notice is not
                              --------
given in the last month of a Lease Year, Tenant shall continue to pay on the
basis of the prior year's estimate, if any, until the month after such notice is
given.  If at any time or times it appears to Landlord that the actual Operating
Expenses will vary from Landlord's estimate by more than five percent (5%),
Landlord may, by notice to Tenant, revise its estimate for such year and
subsequent payments by Tenant for such year shall be based upon such revised
estimate.

                                      -6-
<PAGE>

     5.4. Final Accounting For Lease Year.  Within ninety (90) days after the
          -------------------------------
close of each Lease Year, or as soon after such 90-day period as practicable,
Landlord shall deliver to Tenant a statement of Tenant's Operating Cost Share of
the Operating Expenses for such Lease Year prepared by Landlord from Landlord's
books and records, which statement shall be final and binding on Landlord and
Tenant.  If on the basis of such statement Tenant owes an amount that is more or
less than the estimated payments for such calendar year previously made by
Tenant, Tenant or Landlord, as the case may be, shall pay the deficiency to the
other party within thirty (30) days after delivery of the statement.  Failure or
inability of Landlord to deliver the annual statement within such ninety (90)
day period shall not impair or constitute a waiver of Tenant's obligation to pay
Operating Expenses, or cause Landlord to incur any liability for damages.

     5.5. Proration.  If the Commencement Date falls on a day other than the
          ---------
first day of a Lease Year or if this Lease terminates on a day other than the
last day of a Lease Year, the amount of Tenant's Operating Cost Share payable by
Tenant applicable to such first and last partial Lease Year shall be prorated on
the basis which the number of days during such Lease Year in which this Lease is
in effect bears to 365.  The termination of this Lease shall not affect the
obligations of Landlord and Tenant pursuant to Section 5.4 to be performed after
such termination.

                                 6.  UTILITIES
                                     ---------

     6.1. Payment. Commencing with the Commencement Date and thereafter
          -------
throughout the term of this Lease, Tenant shall pay, before delinquency, all
charges for water, gas, heat, light, electricity, power, sewer, telephone, alarm
system, janitorial and other services or utilities supplied to or consumed in or
upon the Premises, including any taxes on such services and utilities. It is the
intention of the parties that all such services shall be separately metered to
the Premises. In the event that any of such services supplied to the Premises
are not separately metered, then the amount thereof shall be an item of
Operating Expenses and shall be paid as provided in Article 5.

     6.2. Interruption.  There shall be no abatement of rent or other charges
          ------------
required to be paid hereunder and Landlord shall not be liable in damages or
otherwise for interruption or failure of any service or utility furnished to or
used in the Premises because of accident, making of repairs, alterations or
improvements, severe weather, difficulty or inability in obtaining services or
supplies, labor difficulties or any other cause.

                                7.  ALTERATIONS
                                    -----------

     7.1. Right To Make Alterations. Tenant shall make no alterations, additions
          -------------------------
or improvements to the Premises, other than interior non-structural alterations
costing less than Ten Thousand Dollars ($10,000.00) in each instance, without
the prior written consent of Landlord. All such alterations, additions and
improvements shall be completed with due diligence in a first-class workmanlike
manner and in material compliance with plans and specifications approved in
writing by Landlord and all applicable laws, ordinances, rules and regulations.

     7.2. Title To Alterations. All alterations, additions and improvements
          --------------------
installed in, on or about the Premises shall be part of the Building and the
property of Landlord, unless Landlord

                                      -7-
<PAGE>

elects to require Tenant to remove the same upon the termination of this Lease;
provided, however, that the foregoing shall not apply to Tenant's movable
--------
furniture and trade fixtures.

     7.3. Tenant Fixtures. Notwithstanding the provisions of Sections 7.1 and
          ---------------
7.2, Tenant may install, remove and reinstall trade fixtures without Landlord's
prior written consent, except that any fixtures which are affixed to the
Premises or which affect the exterior or structural portions of the Building
shall require Landlord's written approval. The foregoing shall apply to Tenant's
signs, logos and insignia, all of which Tenant shall have the right to place and
remove and replace solely with Landlord's prior written consent as to location,
size and composition. Tenant shall immediately repair any damage caused by
installation and removal of fixtures under this Section 7.3.

     7.4. No Liens. Tenant shall at all times keep the Premises free from all
          --------
liens and claims of any contractors, subcontractors &, materialmen, suppliers or
any other parties employed either directly or indirectly by Tenant in
construction work on the Premises. Tenant may contest any claim of lien, but
only if, prior to such contest, Tenant either (i) posts security in the amount
of the claim, plus estimated costs and interest, or (ii) records a bond of a
responsible corporate surety in such amount as may be required to release the
lien from the Premises. Tenant shall indemnify, defend and hold Landlord
harmless against any and all liability, loss, damage, cost and other expenses,
including, without limitation, reasonable attorneys' fees, arising out of claims
of any lien for work performed or materials or supplies furnished at the request
of Tenant or persons claiming under Tenant.

                          8.  MAINTENANCE AND REPAIRS
                              -----------------------

     8.1. Landlord's Work.  Landlord shall repair and maintain or cause to
          ----------------
be repaired and maintained those portions of the Building outside of the
Premises, the common areas of the Property, and the roof, exterior walls and
other structural portions of the Building.  The cost of all work performed by
Landlord under this Section 8.1 shall be an Operating Expense hereunder, except
to the extent such work (i) is required due to the negligence of Landlord or any
other tenant of the Building, (ii) is a service to a specific tenant or tenants,
other than Tenant, for which Landlord has received or has the right to receive
full reimbursement, (iii) is a capital expense not includible as an Operating
Expense under Section 5.2 hereof, or (iv) is required due to the negligence or
willful misconduct of Tenant or its agents, employees or invitees (in which
event Tenant shall bear the full cost of such work pursuant to the
indemnification provided in Section 10.6 hereof).  Tenant knowingly and
voluntarily waives the right to make repairs at Landlord's expense, or to offset
the cost thereof against rent, under any law, statute, regulation or ordinance
now or hereafter in effect.

     8.2. Tenant's Obligation For Maintenance.
          ------------------------------------

          (a)  Good Order, Condition And Repair.  By accepting possession of
               --------------------------------
the Premises, Tenant acknowledges that the Premises are in good and sanitary
order, condition and repair.  Except as provided in Section 8.1 hereof, Tenant
at its sole cost and expense shall keep and maintain in good and sanitary order,
condition and repair the Premises and every part thereof, wherever located,
including but not limited to the signs, interior, the face of the ceiling over
Tenant's floor space, HVAC equipment and related mechanical systems serving the

                                      -8-
<PAGE>

Premises (for which equipment and systems Tenant shall enter into a service
contract with a person or entity designated or approved by Landlord), all doors,
door checks, windows, plate glass, door fronts, exposed plumbing and sewage and
other utility facilities, fixtures, lighting, wall surfaces, floor surfaces and
ceiling surfaces and all other interior repairs, foreseen and unforeseen, as
required.  If (i) Tenant would otherwise be required to replace HVAC equipment
or related mechanical systems serving the Premises because such equipment or
systems are not functioning and (ii) the cost of such replacement would be
                            ---
considered a capital cost under generally accepted accounting principles, then
Landlord shall replace such HVAC equipment or related mechanical systems and
Tenant shall reimburse Landlord for a fraction of the cost of such replacement;
the numerator of such fraction shall equal the number of months remaining during
the term of this Lease and the denominator of such fraction shall equal the
useful life of the equipment or systems (as determined in accordance with
generally accepted accounting principles).

          (b)  Landlord's Remedy. If Tenant, after written notice from Landlord,
               ------------------
fails to make or perform promptly any repairs or maintenance which are the
obligation of Tenant hereunder, Landlord shall have the right, but shall not be
required, to enter the Premises and make the repairs or perform the maintenance
necessary to restore the Premises to good and sanitary order, condition and
repair. Immediately on demand from Landlord, the cost of such repairs shall be
due and payable by Tenant to Landlord.

          (c)  Condition Upon Surrender. At the expiration or sooner termination
               ------------------------
of this Lease, Tenant shall surrender the Premises, including any additions,
alterations and improvements thereto, broom clean, in good and sanitary order,
condition and repair, ordinary wear and tear excepted, first, however, removing
all goods and effects of Tenant and any and all fixtures and items required to
be removed or specified to be removed at Landlord's election pursuant to this
Lease, and repairing any damage caused by such removal. Tenant shall not have
the right to remove fixtures or equipment if Tenant is in default hereunder
unless Landlord specifically waives this provision in writing. Tenant expressly
waives any and all interest in any personal property and trade fixtures not
removed from the Premises by Tenant at the expiration or termination of this
Lease, agrees that any such personal property and trade fixtures may, at
Landlord's election, be deemed to have been abandoned by Tenant, and authorizes
Landlord (at its election and without prejudice to any other remedies under this
Lease or under applicable law) to remove and either retain, store or dispose of
such property at Tenant's cost and expense, and Tenant waives all claims against
Landlord for any damages resulting from any such removal, storage, retention or
disposal.

                              9.  USE OF PREMISES
                                  ---------------

     9.1. Permitted Use. Tenant shall use the Premises solely for general office
          -------------
and administrative purposes, and for no other purpose.

     9.2. Requirement Of Continued Use. Tenant shall not at any time leave the
          ----------------------------
Premises unoccupied or vacant, and shall continuously during the term of this
Lease (except during any period when the Premises are unusable by reason of
events described in Article 13 hereof) conduct and carry on in the Premises the
use permitted hereunder.

                                      -9-
<PAGE>

     9.3.  No Nuisance.  Tenant shall not use the Premises for or carry on or
           -----------
permit upon the Premises or any part thereof any offensive, noisy or dangerous
trade, business, manufacture, occupation, odor or fumes, or any nuisance or
anything against public policy, nor interfere with the rights or business of any
other tenants or of Landlord in the Building or the Property, nor commit or
allow to be committed any waste in, on or about the Premises, nor make any other
unreasonable use of the Premises.  Tenant shall not do or permit anything to be
done in or about the Premises, nor bring nor keep anything therein, which will
in any way cause the Premises to be uninsurable with respect to the insurance
required by this Lease or with respect to standard fire and extended coverage
insurance with vandalism, malicious mischief and riot endorsements.

     9.4.  Compliance With Laws. Tenant shall not knowingly use the Premises or
           --------------------
permit the Premises to be used in whole or in part for any purpose or use that
is in violation of any applicable laws, ordinances, regulations or rules of any
governmental agency or public authority. Tenant shall keep the Premises equipped
with all safety appliances required by law, ordinance or insurance on the
Premises, or any order or regulation of any public authority because of Tenant's
particular use of the Premises. Tenant shall procure all licenses and permits
required for use of the Premises. Tenant shall use the Premises in strict
accordance with all applicable ordinances, rules, laws and regulations and shall
comply with all requirements of all governmental authorities now in force or
which may hereafter be in force pertaining to the use of the Premises by Tenant,
including, without limitation, regulations applicable to noise, water, soil and
air pollution, and making such nonstructural alterations and additions thereto
as may be required from time to time by such laws, ordinances, rules,
regulations and requirements of governmental authorities or insurers of the
Premises (collectively, "Requirements") because of Tenant's construction of
                         ------------
improvements in or other particular use of the Premises.  Any structural
alterations or additions required from time to time by applicable Requirements
because of Tenant's construction of improvements in or other particular use of
the Premises shall, at Landlord's election, either (i) be made by Tenant, at
Tenant's sole cost and expense, in accordance with the procedures and standards
set forth in Section 7.1 for alterations by Tenant, or (ii) be made by Landlord
at Tenant's sole cost and expense, in which event Tenant shall pay to Landlord
as additional rent, within ten (10) days after demand by Landlord, an amount
equal to all costs incurred by Landlord in connection with such alterations or
additions.  The judgment of any court, or the admission by Tenant in any
proceeding against Tenant, that Tenant has violated any law, statute, ordinance
or governmental rule, regulation or requirement shall be conclusive of such
violation as between Landlord and Tenant.

     9.5.  Liquidation Sales. Tenant shall not conduct or permit to be conducted
           -----------------
any auction, bankruptcy sale, liquidation sale, or going out of business sale,
in, upon or about the Premises or the Property, whether said auction or sale be
voluntary, involuntary or pursuant to any assignment for the benefit of
creditors, or pursuant to any bankruptcy or other insolvency proceeding.

     9.6.  Environmental Matters.  Without limiting the generality of Tenant's
           ---------------------
obligations set forth in Section 9.4 of this Lease:

          (a)  Tenant shall not cause or permit any hazardous or toxic substance
or hazardous waste (as defined in any federal, state or local law, ordinance or
regulation applicable

                                      -10-
<PAGE>

to such substances or wastes) to be brought upon, kept, stored or used on or
about the Property without the prior written consent of Landlord.

           (b)  Tenant shall comply with all applicable laws, rules,
regulations, orders, permits, licenses and operating plans of any governmental
authority with respect to the receipt, use, handling, generation,
transportation, storage, treatment release and/or disposal of hazardous or toxic
substances or wastes in the course of or in connection with the conduct of
Tenant's business on the Property, and shall provide Landlord with copies of any
and all permits, licenses, registrations and other similar documents that
authorize Tenant to conduct any such activities in connection with Tenant's use
of the Property.

           (c)  Tenant shall indemnify, defend and hold Landlord harmless from
and against any and all claims, losses, damages, liabilities, costs, legal fees
and expenses of any sort arising out of or relating to (i) any failure by Tenant
to comply with any provisions of subparagraph (a) or (b) above, or (ii) any
receipt, use, handling, generation, transportation, storage, treatment, release
and/or disposal of any hazardous or toxic substances or wastes on or about the
Property in connection with Tenant's use or occupancy of the Property or as a
result of any intentional or negligent acts or omissions of Tenant or of any
agent or employee of Tenant.

           (d)  Landlord shall indemnify, defend and hold Tenant harmless from
and against any and all claims, losses, damages, liabilities, costs, legal fees
and expenses of any sort arising out of or relating to (i) the presence on the
Property of any hazardous or toxic substances or wastes present on the Property
as of the Commencement Date (except to the extent their presence is the result
of any intentional or negligent acts or omissions of Tenant or of any agent or
employee of Tenant), and/or (ii) any unauthorized release into the environment
of hazardous or toxic substances or wastes to the extent they result from the
negligence of or willful misconduct or omission by Landlord or its agents or
employees.

           (e)  The provisions of this Section 9.6 shall survive the termination
of this Lease.

                         10.  INSURANCE AND INDEMNITY
                              -----------------------

     10.1. Liability Insurance.  Tenant shall procure and maintain in full
           -------------------
force and effect at all times during the term of this Lease, at Tenant's cost
and expense, comprehensive public liability and property damage insurance to
protect against any liability to the public, or to any invitee of Tenant or
Landlord, arising out of or related to the use of or resulting from any accident
occurring in, upon or about the Premises, with limits of liability of not less
than (i) One Million Dollars ($1,000,000.00) for injury to or death of one
person, (ii) Three Million Dollars ($3,000,000.00) for personal injury or death,
per occurrence, and (iii) Five Hundred Thousand Dollars ($500,000.00) for
property damage, or a combined single limit of public liability and property
damage insurance of not less than Five Million Dollars ($5,000,000.00).  Such
insurance shall name Landlord and its general partners and Managing Agent as
additional insureds thereunder.  The amount of such insurance shall not be
construed to limit any liability or obligation of Tenant under this Lease.

                                      -11-
<PAGE>

     10.2.  Quality Of Policies And Certificates.  All policies of insurance
            ------------------------------------
required hereunder shall be issued by responsible insurers and shall be written
as primary policies not contributing with and not in excess of any coverage that
Landlord may carry.  Tenant shall deliver to Landlord copies of policies or
certificates of insurance showing that said policies are in effect.  The
coverage provided by such policies shall include the clause or endorsement
referred to in Section 10.4.  If Tenant fails to acquire, maintain or renew any
insurance required to be maintained by it under this Article 10 or to pay the
premium therefor, then Landlord, at its option and in addition to its other
remedies, but without obligation so to do, may procure such insurance, and any
sums expended by it to procure any such insurance shall be repaid upon demand,
with interest as provided in Section 3.2 hereof.  Tenant shall obtain written
undertakings from each insurer under policies required to be maintained by it to
notify all insureds thereunder at least thirty (30) days prior to cancellation,
amendment or revision of coverage.

     10.3.  Workers' Compensation.  Tenant shall maintain in full force and
            ---------------------
effect during the term of this Lease workers' compensation insurance covering
all of Tenant's employees working on the Premises.

     10.4.  Waiver Of Subrogation. To the extent permitted by law and without
            ---------------------
affecting the coverage provided by insurance required to be maintained
hereunder, Landlord and Tenant each waive any right to recover against the other
(i) damages for injury to or death of persons, (ii) damage to property, (iii)
damage to the Premises or any part thereof, or (iv) claims arising by reason of
any of the foregoing, but only to the extent that any of the foregoing damages
and claims under subparts (i)-(iv) hereof are covered, and only to the extent of
such coverage, by casualty insurance actually carried or required to be carried
hereunder by either Landlord or Tenant. This provision is intended to waive
fully, and for the benefit of each party, any rights and claims which might give
rise to a right of subrogation in any casualty insurance carrier. Each party
shall procure a clause or endorsement on any casualty insurance policy required
under this Article 10 denying to the insurer rights of subrogation against the
other party to the extent rights have been waived by the insured prior to the
occurrence of injury or loss. Coverage provided by insurance maintained by
Tenant under this Article 10 shall not be limited, reduced or diminished by
virtue of the subrogation waiver herein contained.

     10.5.  Increase In Premiums. Tenant shall do all acts and pay all expenses
            --------------------
necessary to insure that the Premises are not used for purposes prohibited by
any applicable fire insurance, and that Tenant's use of the Premises complies
with all requirements necessary to obtain any such insurance. If Tenant uses or
permits the Premises to be used in a manner which increases the existing rate of
any insurance on the Premises carried by Landlord, Tenant shall pay the amount
of the increase in premium caused thereby, and Landlord's costs of obtaining
other replacement insurance policies, including any increase in premium, within
ten (10) days after demand therefor by Landlord.

     10.6.  Indemnification.
            ---------------

            (a) Tenant shall indemnify, defend and hold Landlord, its partners,
shareholders, officers, directors, affiliates, agents, employees and
contractors, harmless from any and all liability for injury to or death of any
person, or loss of or damage to the property of any

                                      -12-
<PAGE>

person, and all actions, claims, demands, costs (including, without limitation,
reasonable attorneys' fees), damages or expenses of any kind arising therefrom
which may be brought or made against Landlord or which Landlord may pay or incur
by reason of the use, occupancy and enjoyment of the Premises by Tenant or any
invitees, sublessees, licensees, assignees, employees, agents or contractors of
Tenant or holding under Tenant from any cause whatsoever other than negligence
or willful misconduct or omission by Landlord, its agents or employees.
Landlord, its partners, shareholders, officers, directors, affiliates, agents,
employees and contractors shall not be liable for, and Tenant hereby waives all
claims against such persons for, damages to goods, wares and merchandise in or
upon the Premises, or for injuries to Tenant, its agents or third persons in or
upon the Premises, from any cause whatsoever other than negligence or willful
misconduct or omission by Landlord, its agents or employees. Tenant shall give
prompt notice to Landlord of any casualty or accident in, on or about the
Premises.

           (b)  Landlord shall indemnify, defend and hold Tenant, its partners,
shareholders, officers, directors, affiliates, agents, employees and
contractors, harmless from any and all liability for injury to or death of any
person or loss of or damage to the property of any person, and all actions,
claims, demands, costs (including, without limitation, reasonable attorneys'
fees), damages or expenses of any kind arising therefrom which may be brought or
made against Tenant or which Tenant may pay or incur, to the extent such
liabilities, claims or other matters arise by reason of any negligence or
willful misconduct or omission by Landlord, its agents or employees.

     10.7. Blanket Policy.  Any policy required to be maintained hereunder may
           --------------
be maintained under a so-called "blanket policy" insuring other parties and
other locations so long as the amount of insurance required to be provided
hereunder is not thereby diminished.

                         11.   SUBLEASE AND ASSIGNMENT
                               -----------------------

     11.1. Assignment And Sublease Of Premises.  Tenant shall not have the right
           -----------------------------------
or power to assign its interest in this Lease, or make any sublease, nor shall
any interest of Tenant under this Lease be assignable involuntarily or by
operation of law, without on each occasion obtaining the prior written consent
of Landlord, which consent shall not be unreasonably withheld. Any purported
sublease or assignment of Tenant's interest in this Lease requiring but not
having received Landlord's consent thereto shall be void. Any dissolution,
consolidation, merger or other reorganization of Tenant, or any sale or transfer
of the stock of or other interest in Tenant, or any series of one or more of
such events, involving in the aggregate a change of fifty percent (50%) or more
in the beneficial ownership of Tenant or its assets shall be deemed to be an
assignment hereunder and shall be void without the prior written consent of
Landlord as required above. Notwithstanding anything to the contrary in this
paragraph, a transfer of Tenant's assets to a newly formed Delaware corporation
for the sole purpose of enabling that successor entity to Tenant to make an
initial public offering of shares will not require Landlord's consent.

     11.2. Rights Of Landlord.  Consent by Landlord to one or more assignments
           ------------------
of this Lease, or to one or more sublettings of the Premises, or collection of
rent by Landlord from any assignee or sublessee, shall not operate to exhaust
Landlord's rights under this Article 11, nor constitute consent to any
subsequent assignment or subletting. No assignment of Tenant's interest in this
Lease and no sublease shall relieve Tenant of its obligations hereunder,

                                      -13-
<PAGE>

notwithstanding any waiver or extension of time granted by Landlord to any
assignee or sublessee, or the failure of Landlord to assert its rights against
any assignee or sublessee, and regardless of whether Landlord's consent thereto
is given or required to be given hereunder.  In the event of a default by any
assignee, sublessee or other successor of Tenant in the performance of any of
the terms or obligations of Tenant under this Lease, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against any
such assignee, sublessee or other successor.  In addition, Tenant immediately
and irrevocably assigns to Landlord, as security for Tenant's obligations under
this Lease, all rent from any subletting of all or a part of the Premises as
permitted under this Lease, and Landlord, as Tenant's assignee and as attorney-
in-fact for Tenant, or any receiver for Tenant appointed on Landlord's
application, may collect such rent and apply it toward Tenant's obligations
under this Lease; except that, until the occurrence of an act of default by
Tenant, Tenant shall have the right to collect such rent; any amounts of such
rent collected by Landlord may not exceed the total rents due from Tenant during
the term of this Lease.

                    12.  RIGHT OF ENTRY AND QUIET ENJOYMENT
                         ----------------------------------

     12.1.  Right Of Entry.  Landlord and its authorized representatives shall
            --------------
have the right to enter the Premises at any time during the term of this Lease
during normal business hours and upon not less than twenty-four (24) hours prior
notice, except in the case of emergency (in which event no notice shall be
required and entry may be made at any time), for the purpose of inspecting and
determining the condition of the Premises or for any other proper purpose
including, without limitation, to make repairs, replacements or improvements
which Landlord may deem necessary, to show the Premises to prospective
purchasers, to show the Premises to prospective tenants, and to post notices of
nonresponsibility. Landlord shall not be liable for inconvenience, annoyance,
disturbance, loss of business, quiet enjoyment or other damage or loss to Tenant
by reason of making any repairs or performing any work upon the Premises, the
Building or the Property, and the obligations of Tenant under this Lease shall
not thereby be affected in any manner whatsoever, provided, however, Landlord
                                                  --------
shall use reasonable efforts to minimize the inconvenience to Tenant's normal
business operations caused thereby.

     12.2.  Quiet Enjoyment.  Landlord covenants that Tenant, upon paying the
            ---------------
rent and performing its obligations hereunder and subject to all the terms and
conditions of this Lease, shall peacefully and quietly have, hold and enjoy the
Premises throughout the term of this Lease, or until this Lease is terminated as
provided by this Lease.

                           13.   CASUALTY AND TAKING
                                 -------------------

     13.1.  Termination Or Reconstruction. If during the term of this Lease the
            -----------------------------
Premises or Building, or any substantial part of either, (i) is damaged
materially by fire or other casualty or by action of public or other authority
in consequence thereof, (ii) is taken by eminent domain or by reason of any
public improvement or condemnation proceeding, or in any manner by exercise of
the right of eminent domain (including any transfer in avoidance of an exercise
of the power of eminent domain), or (iii) receives irreparable damage by reason
of anything lawfully done under color of public or other authority, this Lease
shall terminate as to the entire Premises at Landlord's election by written
notice given to Tenant within sixty (60) days after the damage or taking has
occurred. If Landlord does not elect to terminate this Lease as hereinabove
provided,

                                      -14-
<PAGE>

Landlord shall repair any such damage and restore the Premises (to the extent of
Landlord's work therein under Section 2.4) and the Building as nearly as
reasonably possible to the condition existing before the damage or taking.

     13.2.  Tenant's Rights.  If any portion of the Premises is so taken by
            ---------------
condemnation, Tenant may elect to terminate this Lease if the portion of the
Premises taken is of such extent and nature as substantially to handicap, impede
or permanently impair Tenant's use of the balance of the Premises.  Tenant must
exercise its right to terminate by giving notice to Landlord within thirty (30)
days after the nature and extent of the taking have been finally determined.  If
Tenant elects to terminate this Lease, Tenant shall also notify Landlord of the
date of termination, which date shall not be earlier than thirty (30) days nor
later than ninety (90) days after Tenant has notified Landlord of its election
to terminate, except that this Lease shall terminate on the date of taking if
the date of taking falls on any date before the date of termination designated
by Tenant.

     13.3.  Lease To Remain In Effect. If neither Landlord nor Tenant terminates
            -------------------------
this Lease as hereinabove provided, this Lease shall continue in full force and
effect, except that minimum monthly rental and Tenant's Operating Cost Share
shall abate to the extent Tenant's use of the Premises is impaired for any
period that any portion of the Premises is unusable or inaccessible because of a
casualty or taking hereinabove described. Each party waives the provisions of
Code of Civil Procedure Section 1265.130, allowing either party to petition the
Superior Court to terminate this Lease in the event of a partial condemnation of
the Premises.

     13.4.  Reservation Of Compensation.  Landlord reserves, and Tenant waives
            ---------------------------
and assigns to Landlord, all rights to any award or compensation for damage to
the Premises, Building, Property and the leasehold estate created hereby,
accruing by reason of any taking in any public improvement, condemnation or
eminent domain proceeding or in any other manner by exercise of the right of
eminent domain or of anything lawfully done by public authority, except that
Tenant shall be entitled to any and all compensation or damages paid for or on
account of Tenant's moving expenses, trade fixtures, equipment and any leasehold
improvements in the Premises, the cost of which was borne by Tenant, but only to
the extent of the then remaining unamortized value of such improvements computed
on a straight-line basis over the term of this Lease.  Tenant covenants to
deliver such further assignments of the foregoing as Landlord may from time to
time request.

     13.5.  Restoration Of Fixtures. If Landlord repairs or causes repair of the
            -----------------------
Premises after such damage or taking, Tenant at its sole expense shall repair
and replace promptly all fixtures, equipment and other property of Tenant
located at, in or upon the Premises and all additions, alterations and
improvements and all other items installed or paid for by Tenant under this
Lease that were damaged or taken, so as to restore the same to a condition
substantially equal to that which existed immediately prior to the damage or
taking. Tenant shall have the right to make modifications to the Premises,
fixtures and improvements, subject to the prior written approval of Landlord. In
its review of Tenant's plans and specifications, Landlord may take into
consideration the effect of the proposed modifications on the exterior
appearance, the structural integrity and the mechanical and other operating
systems of the Building.

                                      -15-
<PAGE>

                                 14.  DEFAULT
                                      -------

     14.1. Events Of Default.  The occurrence of any of the following shall
           -----------------
constitute an event of default on the part of Tenant:

           (a) Abandonment.  Abandonment of the Premises. Tenant waives any
               -----------
right Tenant may have to notice under Section 1951.3 of the California Civil
Code, the terms of this subsection (a) being deemed such notice to Tenant as
required by said Section 1951.3;

           (b) NonPayment.  Failure to pay, when due, any amount payable to
               ----------
Landlord hereunder, such failure continuing for a period of five (5) days after
written notice of such failure; provided, however, that any such notice shall be
                                --------
in lieu of, and not in addition to, any notice required under California Code of
Civil Procedure Section 1161 et seq., as amended from time to time;
                             -- ---

           (c) Other Obligations.  Failure to perform any obligation, agreement
               -----------------
or covenant under this Lease other than those matters specified in subsection
(b) hereof, such failure continuing for fifteen (15) days after written notice
of such failure, or, if it is not possible to cure such default within fifteen
(15) days, failure to commence cure within said fifteen (15) day period and
thereafter to proceed diligently to complete cure; provided, however, that any
                                                   --------
such notice shall be in lieu of, and not in addition to, any notice required
under California Code of Civil Procedure Section 1161 et seq., as amended from
                                                      -- ---
time to time;

           (d) General Assignment. A general assignment by Tenant for the
               ------------------
benefit of creditors;

           (e) Bankruptcy.  The filing of any voluntary petition in bankruptcy
               ----------
by Tenant, or the filing of an involuntary petition by Tenant's creditors, which
involuntary petition remains undischarged for a period of thirty (30) days. In
the event that under applicable law the trustee in bankruptcy or Tenant has the
right to affirm this Lease and continue to perform the obligations of Tenant
hereunder, such trustee or Tenant shall, in such time period as may be permitted
by the bankruptcy court having jurisdiction, cure all defaults of Tenant
hereunder outstanding as of the date of the affirmance of this Lease and provide
to Landlord such adequate assurances as may be necessary to ensure Landlord of
the continued performance of Tenant's obligations under this Lease.
Specifically, but without limiting the generality of the foregoing, such
adequate assurances must include assurances that the Premises continue to be
operated only for the use permitted hereunder. The provisions hereof are to
assure that the basic understandings between Landlord and Tenant with respect to
Tenant's use of the Premises and the benefits to Landlord therefrom are
preserved, consistent with the purpose and intent of applicable bankruptcy laws;

           (f) Receivership.  The employment of a receiver appointed by court
               ------------
order to take possession of substantially all of Tenant's assets or the
Premises, if such receivership remains undissolved for a period of thirty (30)
days;

           (g) Attachment.  The attachment, execution or other judicial seizure
               ----------
of all or substantially all of Tenant's assets or the Premises, if such
attachment or other seizure remains undismissed or undischarged for a period of
thirty (30) days after the levy thereof, or

                                      -16-
<PAGE>

           (h) Insolvency.  The admission by Tenant in writing of its inability
               ----------
to pay its debts as they become due, the filing by Tenant of a petition seeking
any reorganization or arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, the filing by Tenant of an answer admitting or failing timely to
contest a material allegation of a petition filed against Tenant in any such
proceeding or, if within thirty (30) days after the commencement of any
proceeding against Tenant seeking any reorganization or arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such proceeding shall not have
been dismissed.

     14.2. Remedies Upon Tenant's Default.
           ------------------------------

          (a) Upon the occurrence of any event of default described in Section
14.1 hereof (meaning that the applicable cure period, if any, has lapsed),
Landlord, in addition to and without prejudice to any other rights or remedies
it may have, shall have the immediate right to re-enter the Premises or any part
thereof and repossess the same, expelling and removing therefrom all persons and
property (which property may be stored in a public warehouse or elsewhere at the
cost and risk of and for the account of Tenant), using such force as may be
necessary to do so (as to which Tenant hereby waives any claim for loss or
damage that may thereby occur).  In addition to or in lieu of such re-entry, and
without prejudice to any other rights or remedies it may have, Landlord shall
have the right either (i) to terminate this Lease and recover from Tenant all
damages incurred by Landlord as a result of Tenant's default, as hereinafter
provided, or (ii) to continue this Lease in effect and recover rent and other
charges and amounts as they become due.

          (b)  Even if Tenant has breached this Lease or abandoned the Premises,
this Lease shall continue in effect for so long as Landlord does not terminate
Tenant's right to possession under subsection (a) hereof and Landlord may
enforce all of its rights and remedies under this Lease, including the right to
recover rent as it becomes due, and Landlord, without terminating this Lease,
may exercise all of the rights and remedies of a lessor under California Civil
Code Section 1951.4 (lessor may continue lease in effect after lessee's breach
and abandonment and recover rent as it becomes due, if lessee has right to
sublet or assign, subject only to reasonable limitations), or any successor Code
section.  Acts of maintenance, preservation or efforts to relet the Premises or
the appointment of a receiver upon application of Landlord to protect Landlord's
interests under this Lease shall not constitute a termination of Tenant's right
to possession.

          (c)  If Landlord terminates this Lease pursuant to this Section 14.2,
Landlord shall have all of the rights and remedies of a landlord provided by
Section 1951.2 of the Civil Code of the State of California, or any successor
Code section, which remedies include Landlord's right to recover from Tenant (i)
the worth at the time of award of the unpaid rent and additional rent which had
been earned at the time of termination, (ii) the worth at the time of award of
the amount by which the unpaid rent and additional rent which would have been
earned after termination until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided, (iii) the
worth at the time of award of the amount by which the unpaid rent and additional
rent for the balance of the term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided, and (iv)

                                      -17-
<PAGE>

any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom, including, but not limited to, the cost of recovering possession of
the Premises, expenses of reletting, including necessary repair, renovation and
alteration of the Premises, reasonable attorneys' fees, and other reasonable
costs. The "worth at the time of award" of the amounts referred to in clauses
(i) and (ii) above shall be computed by allowing interest at ten percent (10%)
per annum from the date such amounts accrued to Landlord. The "worth at the time
of award" of the amounts referred to in clause (iii) above shall be computed by
discounting such amount at one percentage point above the discount rate of the
Federal Reserve Bank of San Francisco at the time of award.

     14.3.  Remedies Cumulative.  All rights, privileges and elections or
            -------------------
remedies of Landlord contained in this Article 14 are cumulative and not
alternative to the extent permitted by law and except as otherwise provided
herein.

                    15.  SUBORDINATION, ATTORNMENT AND SALE
                         ----------------------------------

     15.1.  Subordination To Mortgage.  This Lease, and any sublease entered
            -------------------------
into by Tenant under the provisions of this Lease, shall be subject and
subordinate to any ground lease, mortgage, deed of trust, sale/leaseback
transaction or any other hypothecation for security now or hereafter placed upon
the Building, the Property, or both, and the rights of any assignee of Landlord
or of any ground lessor, mortgagee, trustee, beneficiary or leaseback lessor
under any of the foregoing, and to any and all advances made on the security
thereof and to all renewals, modifications, consolidations, replacements and
extensions thereof. If any mortgagee, trustee, beneficiary, ground lessor,
sale/leaseback lessor or assignee elects to have this Lease be an encumbrance
upon the Property prior to the lien of its mortgage, deed of trust, ground lease
or leaseback lease or other security arrangement and gives notice thereof to
Tenant, this Lease shall be deemed prior thereto, whether this Lease is dated
prior or subsequent to the date thereof or the date of recording thereof.
Tenant, and any sublessee, shall execute such documents as may reasonably be
requested by any mortgagee, trustee, beneficiary, ground lessor, sale/leaseback
lessor or assignee to evidence the subordination herein set forth or to make
this Lease prior to the lien of any mortgage, deed of trust, ground lease,
leaseback lease or other security arrangement, as the case may be, and if Tenant
fails to do so within ten (10) days after demand from Landlord, Tenant
constitutes and appoints Landlord as Tenant's attorney-in-fact and in Tenant's
name, place and stead to do so. Upon any default by Landlord in the performance
of its obligations under any mortgage, deed of trust, ground lease, leaseback
lease or assignment, Tenant (and any sublessee) shall, notwithstanding any
subordination hereunder, attorn to the mortgagee, trustee, beneficiary, ground
lessor, leaseback lessor or assignee thereunder upon demand and become the
tenant of the successor in interest to Landlord, at the option of such successor
in interest, and shall execute and deliver any instrument or instruments
confirming the attornment herein provided for.

     15.2.  Sale Of Landlord's Interest.  Upon sale, transfer or assignment of
            ---------------------------
Landlord's entire interest in the Building and Property, Landlord shall be
relieved of its obligations hereunder with respect to liabilities accruing from
and after the date of such sale, transfer or assignment.

                                      -18-
<PAGE>

     15.3.  Estoppel Certificates.  Tenant shall at any time and from time to
            ---------------------
time, within ten (10) days after written request by Landlord, execute,
acknowledge and deliver to Landlord a certificate in writing stating:  (i) that
this Lease is unmodified and in full force and effect, or if there have been any
modifications, that this Lease is in full force and effect as modified and
stating the date and the nature of each modification (ii) the date to which
rental and all other sums payable hereunder have been paid; (iii) that Landlord
is not in default in the performance of any of its obligations under this Lease,
that Tenant has given no notice of default to Landlord and that no event has
occurred which, but for the expiration of the applicable time period, would
constitute an event of default hereunder, or if Tenant alleges that any such
default, notice or event has occurred, specifying the same in reasonable detail;
and (iv) such other matters as may reasonably be requested by Landlord or any
institutional lender, mortgagee, trustee, beneficiary, ground lessor,
sale/leaseback lessor or prospective purchaser of the Property.  Any such
certificate provided under this Section 15.3 may be relied upon by any lender,
mortgagee, trustee, beneficiary, assignee or successor in interest to Landlord,
by any prospective purchaser, by any purchaser on foreclosure or sale, by any
grantee under a deed in lieu of foreclosure of any mortgage or deed of trust on
the Property or Premises, or by any other third party.  Failure to execute and
return within the required time any estoppel certificate requested hereunder
shall be deemed to be an admission of the truth of the matters set forth in the
form of certificate submitted to Tenant for execution.

     15.4.  Subordination to CC&Rs.  This Lease, and any permitted sublease
            ----------------------
entered into by Tenant under the provisions of this Lease, shall be subject and
subordinate (a) to any declarations of covenants, conditions and restrictions
affecting the Property from time to time, provided that the terms of such
declarations are reasonable and do not discriminate against Tenant relative to
other similarly situated tenants occupying portions of the Property, and (b) to
the Declaration of Covenants, Conditions and Restrictions dated June 20, 1979
and recorded on July 5, 1979 as Instrument No.79-130777, Alameda County Records,
as amended from time to time (the "Master Declaration"), the provisions of which
                                   ------------------
Master Declaration are an integral part of this Lease.  Tenant agrees to
execute, upon request by Landlord, any documents reasonably required from time
to time to evidence such subordination.

                                 16.  SECURITY
                                      --------

     16.1.  Deposit.  Concurrently with Tenant's execution of this Lease,
            -------
Tenant shall deposit with Landlord the sum of Fifty-Six Thousand Two Hundred
Fifty Dollars ($56,250), which sum (the "Security Deposit") shall be held by
                                         ----------------
Landlord as security for the faithful performance of all of the terms,
covenants, and conditions of this Lease to be kept and performed by Tenant
during the term hereof.  If Tenant defaults with respect to any provision of
this Lease, including, without limitation, the provisions relating to the
payment of rental and other sums due hereunder, Landlord shall have the right,
but shall not be required, to use, apply or retain all or any part of the
Security Deposit for the payment of rental or any other amount which Landlord
may spend or become obligated to spend by reason of Tenant's default or to
compensate Landlord for any other loss or damage which Landlord may suffer by
reason of Tenant's default.  If any portion of the Security Deposit is so used
or applied, Tenant shall, within ten (10) days after written demand therefor,
deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to its original amount and Tenant's failure to do so shall be a material
breach of this Lease.  Landlord shall not be required to keep any deposit under
this Section separate from

                                      -19-
<PAGE>

Landlord's general funds, and Tenant shall not be entitled to interest thereon.
If Tenant fully and faithfully performs every provision of this Lease to be
performed by it, the Security Deposit, or any balance thereof, shall be returned
to Tenant or, at Landlord's option, to the last assignee of Tenant's interest
hereunder, at the expiration of the term of this Lease and after Tenant has
vacated the Premises. In the event of termination of Landlord's interest in this
Lease, Landlord shall transfer all deposits then held by Landlord under this
Section to Landlord's successor in interest, whereupon Tenant agrees to release
Landlord from all liability for the return of such deposit or the accounting
thereof.

                              17.  MISCELLANEOUS
                                   -------------

     17.1.  Notices.  All notices, consents, waivers and other communications
            -------
which this Lease requires or permits either party to give to the other shall be
in writing and shall be deemed given when delivered personally (including
delivery by private courier or express delivery service) or four (4) days after
deposit in the United States mail, registered or certified mail, postage
prepaid, addressed to the parties at their respective addresses as follows:

            To Tenant:        (until Commencement Date)

                              AllAdvantage.com
                              25954 Eden Landing Road
                              Hayward, CA  94545
                              Attn:  Jamin Seid

                              (after Commencement Date)

                              AllAdvantage.com
                              4010 Point Eden Way
                              Hayward, CA  94545
                              Attn:  Jamin Seid

            To Landlord:      Hayward Point Eden I Limited Partnership
                              c/o Britannia Developments, Inc.
                              1939 Harrison Street, Suite 715
                              Park Plaza Building
                              Oakland, CA  9461.2
                              Attn:  T. J. Bristow

            with copy to:     Folger Levin & Kahn LLP
                              Embarcadero Center West
                              275 Battery Street, 23rd Floor
                              San Francisco, CA  94111
                              Attn:  Donald E. Kelley, Jr.

or to such other address as may be contained in a notice at least fifteen (l5)
days prior to the address change from either party to the other given pursuant
to this Section.  Rental payments and other sums required by this Lease to be
paid by Tenant shall be delivered to Landlord at

                                      -20-
<PAGE>

Landlord's address provided in this Section, or to such other address as
Landlord may from time to time specify in writing to Tenant, and shall be deemed
to be paid only upon actual receipt.

     17.2.  Successors And Assigns.  The obligations of this Lease shall run
            ----------------------
with the land, and this Lease shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that the
original Landlord named herein and each successive Landlord under this Lease
shall be liable only for obligations accruing during the period of its ownership
of the Property, said liability terminating upon termination of such ownership
and passing to the successor lessor.

     17.3.  No Waiver.  The failure of Landlord to seek redress for violation,
            ---------
or to insist upon the strict performance, of any covenant or condition of this
Lease shall not be deemed a waiver of such violation, or prevent a subsequent
act which would originally have constituted a violation from having all the
force and effect of an original violation.

     17.4.  Severability.  If any provision of this Lease or the application
            ------------
thereof is held to be invalid or unenforceable, the remainder of this Lease or
the application of such provision to persons or circumstances other than those
as to which it is invalid or unenforceable shall not be affected thereby, and
each of the provisions of this Lease shall be valid and enforceable, unless
enforcement of this Lease as so invalidated would be unreasonable or grossly
inequitable under all the circumstances or would materially frustrate the
purposes of this Lease.

     17.5.  Litigation Between Parties.  In the event of any litigation or
            --------------------------
other dispute resolution proceedings between the parties hereto arising out of
or in connection with this Lease, the prevailing party shall be reimbursed for
all reasonable costs, including, but not limited to, reasonable accountants'
fees and attorneys' fees, incurred in connection with such proceedings
(including, but not limited to, any appellate proceedings relating thereto) or
in connection with the enforcement of any judgment or award rendered in such
proceedings.  "Prevailing party" within the meaning of this Section shall
               ----------------
include, without limitation, a party who dismisses an action for recovery
hereunder in exchange for payment of the sums allegedly due, performance of
covenants allegedly breached or consideration substantially equal to the relief
sought in the action.

     17.6.  Surrender.  A voluntary or other surrender of this Lease by
            ---------
Tenant, or a mutual termination thereof between Landlord and Tenant, shall not
result in a merger but shall, at the option of Landlord, operate either as an
assignment to Landlord of any and all existing subleases and subtenancies, or a
termination of all or any existing subleases and subtenancies.  This provision
shall be contained in any and all assignments or subleases made pursuant to this
Lease.

     17.7.  Interpretation.  The provisions of this Lease shall be construed
            --------------
as a whole, according to their common meaning, and not strictly for or against
Landlord or Tenant.  The captions preceding the text of each Section and
subsection hereof are included only for convenience of reference and shall be
disregarded in the construction or interpretation of this Lease.

     17.8.  Entire Agreement.  This written Lease, together with the exhibits
            ----------------
hereto, contains all the representations and the entire understanding between
the parties hereto with respect to the

                                      -21-
<PAGE>

subject matter hereof. Any prior correspondence, memoranda or agreements are
replaced in total by this Lease and the exhibits hereto. This Lease may be
modified only by an agreement in writing signed by each of the parties.

     17.9.   Governing Law.  This Lease and all exhibits hereto shall be
             -------------
construed and interpreted in accordance with and be governed by all the
provisions of the laws of the State of California.

     17.10.  No Partnership.  The relationship between Landlord and Tenant is
             --------------
solely that of a lessor and lessee.  Nothing contained in this Lease shall be
construed as creating any type or manner of partnership, joint venture or joint
enterprise with or between Landlord and Tenant.

     17.11.  Financial Information.  From time to time Tenant shall promptly
             ---------------------
provide directly to prospective lenders and purchasers of the Property
designated by Landlord such financial information pertaining to the financial
status of Tenant as Landlord may reasonably request; provided, Tenant shall be
                                                     --------
permitted to provide such financial information in a manner which Tenant deems
reasonably necessary to protect the confidentiality of such information.  In
addition, from time to time, Tenant shall provide Landlord with such financial
information pertaining to the financial status of Tenant as Landlord may
reasonably request.  Landlord agrees that all financial information supplied to
Landlord by Tenant shall be treated as confidential material, and shall not be
disseminated to any person or entity without Tenant's prior written consent,
except that Landlord shall be entitled to provide such information, subject to
reasonable precautions to protect the confidential nature thereof, (i) to
Landlord's partners and professional advisors, solely for use in connection with
Landlord's execution and enforcement of this Lease, and (ii) to prospective
lenders and/or purchasers of the Property, solely for use in connection with
their bona fide consideration of a proposed financing or purchase of the
Property, provided that such prospective lenders and/or purchasers are not
          ---------
engaged in businesses directly competitive with the business then being
conducted by Tenant.  For purposes of this Section, without limiting the
generality of the obligations provided herein, it shall be deemed reasonable for
Landlord to request copies of Tenant's most recent audited annual financial
statements, or, if audited statements have not been prepared, unaudited
financial statements for Tenant's most recent fiscal year, accompanied by a
certificate of Tenant's chief financial officer that such financial statements
fairly present Tenant's financial condition as of the date(s) indicated.

          Landlord and Tenant recognize the need of Tenant to maintain the
confidentiality of information regarding its financial status and the need of
Landlord to be informed of, and to provide to its partners and to prospective
lenders and purchasers of the Property financial information pertaining to,
Tenant's financial status.  Landlord and Tenant agree to cooperate with each
other in achieving these needs within the context of the obligations set forth
in this Section.

     17.12.  Costs.  If Tenant requests the consent of Landlord under any
             -----
provision of this Lease for any act that Tenant proposes to do hereunder,
including, without limitation, assignment or subletting of the Premises, Tenant
shall, as a condition to doing any such act and the receipt of such consent,
reimburse Landlord promptly for any and all reasonable costs and expenses
incurred by Landlord in connection therewith, including, without limitation,
reasonable attorneys' fees.

                                      -22-
<PAGE>

     17.13.  Time.  Time is of the essence of this Lease, and of every term and
             ----
condition hereof.

     17.14.  Rules And Regulations.  Tenant shall observe, comply with and
             ---------------------
obey, and shall cause its employees, agents and, to the best of Tenant's
ability, invitees to observe, comply with and obey such rules and regulations as
Landlord may promulgate from time to time for the safety, care, cleanliness,
order and use of the Premises, the Building and the Property.

     17.15.  Brokers.  Landlord agrees to pay a brokerage commission to Cornish
             -------
& Carey Commercial in connection with the consummation of this Lease in
accordance with a separate agreement. Tenant represents and warrants that no
other broker participated in the consummation of this Lease and agrees to
indemnify, defend and hold Landlord harmless against any liability, cost or
expense, including, without limitation, reasonable attorneys' fees, arising out
of any claims for brokerage commissions or other similar compensation in
connection with any conversations, prior negotiations or other dealings by
Tenant with any other broker.

     17.16.  Memorandum Of Lease.  At any time during the term of this Lease,
             -------------------
either party, at its sole expense, shall be entitled to record a memorandum of
this Lease and, if either party so elects, both parties agree to cooperate in
the preparation, execution, acknowledgement and recordation of such document in
reasonable form.

     17.17.  Corporate Authority.  The person signing this Lease on behalf of
             -------------------
Tenant warrants that he or she is fully authorized to do so and, by so doing, to
bind Tenant.

     17.18.  Execution and Delivery.  Submission of this Lease for examination
             ----------------------
or signature by Tenant does not constitute an agreement or reservation of or
option for lease of the Premises. This instrument shall not be effective or
binding upon either party, as a lease or otherwise, until executed and delivered
by both Landlord and Tenant. This Lease may be executed in one or more
counterparts and by separate parties on separate counterparts, but each such
counterpart shall constitute an original and all such counterparts together
shall constitute one and the same instrument.

     17.19.  Exercise of Option.  The effectiveness of this Lease is conditioned
             ------------------
on Tenant's proper exercise, on or before the effective date of this Lease, of
its option to lease from Landlord premises it is currently subleasing from
Worldcom, pursuant to that certain Option Agreement between Landlord and Tenant
dated September ___, 1999.

                                      -23-
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the day and year first set forth above.

          "Landlord"                                "Tenant"

Hayward Point Eden I Limited                 AllAdvantage.com,
Partnership, a Delaware limited              a California corporation
partnership

By:  Britannia Developments, Inc.,
     a California corporation, Its           By: /S/ JAMIN SEID
                                                 --------------
     General Partner                             Its:  Director of Real Estate.

     By: /S/T.J. BRISTOW
         ---------------
         T.J. Bristow                        By:_______________________________
         President                              Its:___________________________

                                      -24-
<PAGE>

                               EXHIBITS
                               --------

                EXHIBIT A    Location of Premises

                EXHIBIT B    Real Property Description

                EXHIBIT C    Acknowledgement of Lease Commencement

                                      -25-
<PAGE>

                             LOCATION OF PREMISES
                             --------------------

                          [LOCATION OF PREMISES MAP]

                                   EXHIBIT A
                                   ---------

<PAGE>

                           REAL PROPERTY DESCRIPTION
                           -------------------------

THE PROPERTY

Improved real property located in the City of Hayward, County of Alameda, State
of California more particularly described as follows:

Lot 7, Tract 4019, filed June 28, 1979, Map Book 100, Pages 97, 98 and 99,
Alameda County Records.

Subject to easements, restrictions and other matters of record affecting title.

THE CENTER

Improved real property located in the City of Hayward, County of Alameda, State
of California, more particularly described as follows:

Lots 1,2,3,4,5 and 7, Tract 4019, filed June 28, 1979, Map Book 100, Pages
97,98 and 99, Alameda County Records.

Subject to easements, restrictions and other matters of record affecting title.

                                   EXHIBIT B
                                   ---------

<PAGE>

                     ACKNOWLEDGEMENT OF LEASE COMMENCEMENT
                     -------------------------------------

     This Acknowledgement is executed as of January 11, 2000, by Hayward Point
Eden I Limited Partnership, a Delaware limited partnership ("Landlord"), and
                                                             --------
AllAdvantage.com, a California corporation ("Tenant"), pursuant to Section 2.5
                                             ------
of the Lease dated December 22, 1999 between Landlord and Tenant (the "Lease")
                                                                       -----
covering premises located at 4010 Point Eden Road, Hayward, CA  94545 (the
"Premises").
---------

     Landlord and Tenant hereby acknowledge and agrees as follows:

     1.  The Commencement Date under the Lease is January, 2000.

     2.  The termination date under the Lease shall be December 31, 2000,
subject to any applicable provisions of the Lease for extension or early
termination thereof.

     3.  The agreed square footage of the Premises, as built, is 45,000 square
feet.

     4.  Tenant accepts the Premises and acknowledges the satisfactory
completion of all improvements therein (if any) required to be made by Landlord,
subject only to any applicable "punch list" or similar procedures specifically
provided under the Lease.

     EXECUTED as of the date first set forth above.

          "Landlord"                                  "Tenant"
Hayward Point Eden I Limited                AllAdvantage.com,
Partnership, a Delaware limited             a California corporation
partnership

By: Britannia Developments, Inc.,
a California corporation, Its               By:  /S/ JAMIN SEID
                                                 ---------------
General Partner                             Its: Director of Real Estate.

By: /S/ T.J. BRISTOW
    ----------------
    T.J. Bristow                            By:________________________________
    President                                  Its:____________________________

                                   EXHIBIT C
                                   ---------<PAGE>

                                                                   EXHIBIT 10.11

                            Basic Lease Information

                            Date: January 21, 2000

                          Tenant: AllAdvantage.com

                         Address: Prior to Lease Commencement Date:

                                  25954 Eden Landing Road
                                  Hayward, California 94545

                                  From and after Lease Commencement Date:

                                  801 Gateway Boulevard
                                  South San Francisco, California 94080

                        Landlord: HMS Gateway Office, L.P.

                         Address: c/o Hines Interests Limited Partnership
                                  651 Gateway Boulevard, Suite 1140
                                  South San Francisco, California 94080

                 Leased Premises: Building commonly known as 801 Gateway
                                  Boulevard, South San Francisco, California
                                  94080

               Net Rentable Area: One Hundred Thirty Five Thousand (135,000)
                                  square feet

Scheduled Term Commencement Date: September 15, 2000

          Rent Commencement Date: December 15, 2000

                            Term: Ten (10) years, commencing on the Rent
                                  Commencement Date and expiring on the day
                                  immediately preceding the tenth (10th)
                                  anniversary of the Rent Commencement Date
<PAGE>

<TABLE>
<CAPTION>
                                  Base Rent:                      Monthly Amount/
                                                    Year             Square Foot                 Amount/Month
                                  <S>               <C>           <C>                            <C>

                                                      1                   $2.50                    $337,500.00

                                                      2                   $2.58                    $348,300.00

                                                      3                   $2.65                    $357,750.00

                                                      4                   $2.73                    $368,550.00

                                                      5                   $2.81                    $379,350.00

                                                      6                   $2.90                    $391,500.00

                                                      7                   $2.99                    $403,650.00

                                                      8                   $3.07                    $414,450.00

                                                      9                   $3.17                    $427,950.00

                                                     10                   $3.26                    $440,100.00
</TABLE>

Tenant Improvements Allowance: Four Million Fifty Thousand Dollars
                               ($4,050,000.00) (viz., $30.00 per rentable square
                               foot)

     Tenant Improvements Loan: Six Hundred Seventy Five Thousand Dollars
                               ($675,000.00) (viz., $5.00 per rentable square
                               foot)

     Tenant's Milestone Dates: Conceptual/Space Plans Submittal Date:
                               March 15, 2000

                               Construction Documents Submittal Date:
                               July 15, 2000

             Letter of Credit: Letter of Credit in the amount of Six Million
                               Three Hundred Thousand Dollars ($6,300,000),
                               which Letter of Credit shall be subject to
                               reduction in accordance with Section 5.13(b) of
                               the Lease.

                      Parking: Four Hundred Five (405) parking spaces

                       Broker: Grubb & Ellis Company (Tenant's Broker)
<PAGE>

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

                             Office Building Lease

                                by and between

                           HMS Gateway Office, L.P.,
                        a Delaware limited partnership

                                      and

                               AllAdvantage.com,
                           a California corporation

          =======================================================
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
Article 1   Definitions...................................................     1
     1.01   "801 Gateway Preliminary Specifications"......................     1
     1.02   "Additional Rent".............................................     1
     1.03   "Additional Sublease Information".............................     1
     1.04   "Adjacent Parcels"............................................     1
     1.05   "Alterations".................................................     1
     1.06   "Alternate Parking Spaces"....................................     1
     1.07   "Applicable Requirements".....................................     2
     1.08   "Arbitration Notice"..........................................     2
     1.09   "Assumption Agreement"........................................     2
     1.10   "Availability Notice".........................................     2
     1.11   "Bank"........................................................     2
     1.12   "Base Building Improvements"..................................     2
     1.13   "Base Building Improvements Construction Commencement Date"...     2
     1.14   "Base Rent"...................................................     2
     1.15   "Basic Operating Cost"........................................     2
     1.16   "Basic Operating Cost Adjustment".............................     2
     1.17   "Basic Operating Cost Statement"..............................     2
     1.18   "Basic Services"..............................................     3
     1.19   "Building"....................................................     3
     1.20   "Building Standard Improvements"..............................     3
     1.21   "Business Day"................................................     3
     1.22   "Business Hours"..............................................     3
     1.23   "Claims"......................................................     3
     1.24   "Common Areas"................................................     3
     1.25   "Conceptual/Space Plans"......................................     3
     1.26   "Conceptual/Space Plans Submittal Date".......................     3
     1.27   "Condemnation"................................................     4
     1.28   "Construction Documents"......................................     4
     1.29   "Construction Documents Submittal Date".......................     4
     1.30   "Designated Parking Areas"....................................     4
     1.31   "Election Notice".............................................     4
     1.32   "Electronic Payment Arrangement"..............................     4
     1.33   "Estimated Basic Operating Cost"..............................     4
     1.34   "Event of Default"............................................     4
     1.35   "Existing Tenants"............................................     4
     1.36   "Expansion Transaction".......................................     4
     1.37   "Expenses"....................................................     4
     1.38   "Fair Market Rent"............................................     4
     1.39   "First Renewal Option"........................................     5
     1.40   "First Renewal Term"..........................................     5
     1.41   "FMR Notice"..................................................     5
     1.42   "GAAP"........................................................     5
</TABLE>

                                       i
<PAGE>

<TABLE>
     <S>                                                                      <C>
     1.43   "Governmental Agency".........................................     5
     1.44   "Gross Rent"..................................................     5
     1.45   "Guarantor"...................................................     5
     1.46   "Hazardous Material"..........................................     5
     1.47   "Hazardous Materials Claims"..................................     6
     1.48   "Hazardous Materials Laws"....................................     6
     1.49   "Landlord Parties"............................................     6
     1.50   "Landlord's Architect"........................................     6
     1.51   "Landlord's Contamination"....................................     6
     1.52   "Landlord's Review Period"....................................     7
     1.53   "Laws"........................................................     7
     1.54   "LC Face Amount"..............................................     7
     1.55   "LC Termination Date".........................................     7
     1.56   "Leased Premises".............................................     7
     1.57   "Letter of Credit"............................................     7
     1.58   "Letter of Credit Early Cancellation Date"....................     7
     1.59   "Letter of Credit Proceeds"...................................     7
     1.60   "Limited Sublease"............................................     7
     1.61   "Major Tenant"................................................     8
     1.62   "Major Vertical Penetrations".................................     8
     1.63   "Market Capitalization".......................................     8
     1.64   "Mortgage Lender".............................................     8
     1.65   "Negotiation Notice"..........................................     8
     1.66   "Net Profits".................................................     8
     1.67   "Net Rentable Area"...........................................     9
     1.68   "Nondisturbance Agreement"....................................     9
     1.69   "Off-Site Conditions".........................................     9
     1.70   "Permitted Alterations".......................................     9
     1.71   "Permitted Hazardous Materials"...............................     9
     1.72   "Permitted Use"...............................................     9
     1.73   "Post Clause (ii) Reduction Face Amount"......................    10
     1.74   "Pre-Existing Contamination"..................................    10
     1.75   "Prime".......................................................    10
     1.76   "Project".....................................................    10
     1.77   "REAs"........................................................    10
     1.78   "Renewal Options".............................................    10
     1.79   "Renewal Terms"...............................................    10
     1.80   "Rent"........................................................    11
     1.81   "Rent Commencement Date"......................................    11
     1.82   "Rescission Notice"...........................................    11
     1.83   "Satellite Dish"..............................................    11
     1.84   "Second Renewal Option".......................................    11
     1.85   "Second Renewal Term".........................................    11
     1.86   "Security Deposit"............................................    11
     1.87   "Specified Contamination".....................................    11
     1.88   "Specified Percentage"........................................    11
</TABLE>

                                      ii
<PAGE>

<TABLE>
<S>                                                                           <C>
     1.89   "Sublease/Assignment Costs"...................................    11
     1.90   "Subordination Agreement".....................................    12
     1.91   "Subtenant Interview".........................................    12
     1.92   "Tenant Affiliate"............................................    12
     1.93   "Tenant Extra Improvements"...................................    12
     1.94   "Tenant Improvements".........................................    12
     1.95   "Tenant Improvements Allowance"...............................    12
     1.96   "Tenant Improvements Construction Commencement Date"..........    12
     1.97   "Tenant Improvements Cost"....................................    13
     1.98   "Tenant Improvements Loan"....................................    13
     1.99   "Tenant Improvements Substantial Completion Date".............    13
     1.100  "Tenant Parties"..............................................    13
     1.101  "Tenant's Architect"..........................................    13
     1.102  "Tenant's Construction Manager"...............................    13
     1.103  "Tenant Delay"................................................    13
     1.104  "Tenant's Initial Tenant Improvements Contribution"...........    13
     1.105  "Tenant's Personal Property"..................................    13
     1.106  "Tenant's Proportionate Share"................................    13
     1.107  "Term"........................................................    14
     1.108  "Term Commencement Date"......................................    14
     1.109  "Term Expiration Date"........................................    14

Article 2   Leased Premises...............................................    14
     2.01   Lease.........................................................    14
     2.02   Landlord's Reserved Rights....................................    14
     2.03   Construction of Base Building Improvements and Tenant
            Improvements..................................................    15

Article 3   Rent, Term, Use and Basic Operating Costs.....................    15
     3.01   Term..........................................................    15
     3.02   Options to Extend Term........................................    16
     3.03   Use...........................................................    19
     3.04   Payment of Base Rent and Tenant's Proportionate Share(s) of
            Estimated Basic Operating Cost................................    19
     3.05   Net Lease.....................................................    19
     3.06   Basic Operating Cost..........................................    20
     3.07   Adjustment For Variation Between Estimated and Actual.........    24
     3.08   Computation of Basic Operating Cost Adjustment................    24
     3.09   Tenant's Right to Audit Basic Operating Cost..................    24

Article 4   Landlord Covenants............................................    25
     4.01   Basic Services................................................    25
     4.02   Extra Services................................................    26
     4.03   Graphics and Signage..........................................    27
     4.04   Repair Obligation.............................................    27
     4.05   Peaceful Enjoyment............................................    28
</TABLE>

                                      iii
<PAGE>

<TABLE>
<S>                                                                           <C>
Article 5   Tenant's Covenants............................................    28
     5.01   Payments By Tenant............................................    28
     5.02   Taxes On Personal Property and Tenant Extra Improvements......    28
     5.03   Repairs By Tenant.............................................    28
     5.04   Waste.........................................................    29
     5.05   Assignment or Sublease........................................    29
     5.06   Alterations, Additions or Improvements........................    31
     5.07   Liens.........................................................    33
     5.08   Compliance With Laws, Insurance Standards and Non-
            Discrimination................................................    33
     5.09   Entry For Repairs, Inspection, Posting Notices, Etc...........    34
     5.10   No Nuisance...................................................    34
     5.11   Subordination; Mortgagee Protection; Reciprocal Easement
            Agreements....................................................    34
     5.12   Estoppel Certificate..........................................    36
     5.13   Letter of Credit..............................................    36
     5.14   Security Deposit..............................................    40
     5.15   Tenant's Remedies.............................................    41
     5.16   Rules and Regulations.........................................    41
     5.17   Prohibition and Indemnity With Respect To Hazardous Material..    41
     5.18   Surrender of Premises On Termination..........................    42
     5.19   Window Coverings..............................................    43

Article 6   Condition and Operation of the Building.......................    43
     6.01   Exhibit B Controls............................................    43
     6.02   Alteration....................................................    43

Article 7   Casualty, Eminent Domain and Miscellaneous Matters............    44
     7.01   Landlord's Casualty Insurance.................................    44
     7.02   Liability Insurance...........................................    44
     7.03   Tenant's Casualty Insurance and Additional Tenant Insurance
            Requirements..................................................    45
     7.04   Indemnity and Exoneration.....................................    45
     7.05   Waiver of Subrogation Rights..................................    46
     7.06   Condemnation and Loss or Damage...............................    46
     7.07   Damage and Destruction........................................    47
     7.08   Default By Tenant.............................................    48
     7.09   No Waiver.....................................................    52
     7.10   Statutory Waivers.............................................    52
     7.11   Holding Over..................................................    52
     7.12   Attorneys' Fees...............................................    53
     7.13   Amendments....................................................    53
     7.14   Transfers By Landlord.........................................    53
     7.15   Severability..................................................    53
     7.16   Notices.......................................................    53
     7.17   No Option.....................................................    54
     7.18   Integration and Interpretation................................    54
     7.19   Quitclaim.....................................................    54
</TABLE>

                                      iv
<PAGE>

<TABLE>
     <S>                                                                      <C>
     7.20   No Easement For Light, Air and View...........................    54
     7.21   No Merger.....................................................    54
     7.22   Memorandum of Lease...........................................    55
     7.23   Survival......................................................    55
     7.24   Financial Statements..........................................    55
     7.25   No Joint Venture..............................................    55
     7.26   Successors and Assigns........................................    55
     7.27   Applicable Law................................................    55
     7.28   Time of the Essence...........................................    56
     7.29   Interpretation................................................    56
     7.30   Parking.......................................................    56
     7.31   Brokers.......................................................    57
     7.32   Security......................................................    57
     7.33   Satellite Dish................................................    58
     7.34   Right of First Negotiation....................................    58
     7.35   Delivery of Alternate Security................................    59
     7.36   Counterparts..................................................    59
</TABLE>

       Exhibit

         A-1    Site Plan

         A-2    Project

          B     Base Building Improvements Construction Agreement

         B-1    Preliminary Specifications for Base Building Improvements

          C     Tenant Improvements Construction Agreement

         C-1    Definition of Building Standard Improvements

          D     Building Rules and Regulations

          E     Sample Form of Lease Commencement Certificate

          F     Tenant Improvements Loan Amortization Memorandum

                                       v
<PAGE>

                               801 Gateway Lease

     This Lease is made and entered into as of the date specified in the Basic
Lease Information Sheet attached hereto and incorporated herein by this
reference, by and between HMS GATEWAY OFFICE, L.P., a Delaware limited
partnership ("Landlord"), and the Tenant identified in the Basic Lease
Information Sheet.

     In consideration of the mutual covenants and agreements contained in this
Lease, the parties agree as follows:

                                   ARTICLE 1

                                  Definitions
                                  -----------

     Certain terms used in this Lease and the Exhibits hereto shall have the
meaning set forth below for each such term. Certain other terms shall have the
meaning set forth elsewhere in this Lease and the Exhibits hereto.

     1.01   "801 Gateway Preliminary Specifications" shall mean those
             --------------------------------------
preliminary specifications for construction of the Base Building Improvements
described on Exhibit B-1.

     1.02   "Additional Rent" shall mean all obligations of Tenant hereunder
             ---------------
other than the obligation for payment of Gross Rent.

     1.03   "Additional Sublease Information" shall have the meaning set forth
             -------------------------------
in Section 5.05(b).

     1.04   "Adjacent Parcels" shall have the meaning set forth in Section 7.34.
             ----------------

     1.05   "Alterations" shall have the meaning set forth in Section 5.06(a).
             -----------

     1.06   "Alternate Parking Spaces" shall have the meaning set forth in
             ------------------------
Section 7.30(b).

     1.07   "Applicable Requirements" shall have the meaning set forth in
             -----------------------
Section 7.33.

     1.08   "Arbitration Notice" shall have the meaning set forth in Section
             ------------------
3.02(b).

     1.09   "Assumption Agreement" shall have the meaning set forth in Section
             --------------------
7.14.

     1.10   "Availability Notice" shall have the meaning set forth in Section
             -------------------
7.34.

     1.11   "Bank" shall have the meaning set forth in Section 5.13(c).
             ----

     1.12   "Base Building Improvements" shall mean those improvements of the
             --------------------------
Leased Premises that are described on Exhibit B-1.

                                       1
<PAGE>

     1.13   "Base Building Improvements Construction Commencement Date" shall
             ---------------------------------------------------------
mean the date Landlord commences construction of the Base Building Improvements
pursuant to Exhibit B.

     1.14   "Base Rent" shall mean the basic rent payable by Tenant to Landlord
             ---------
in the amounts shown on the Basic Lease Information sheet and in the manner
provided in Section 3.04.

     1.15   "Basic Operating Cost" shall have the meaning set forth in Section
             --------------------
3.06.

     1.16   "Basic Operating Cost Adjustment" for any calendar year shall mean
             -------------------------------
the difference, if any, between Estimated Basic Operating Cost and Basic
Operating Cost for that calendar year.

     1.17   "Basic Operating Cost Statement" shall have the meaning set forth in
             ------------------------------
Section 3.08.

     1.18   "Basic Services" shall mean the services provided pursuant to
             --------------
Section 4.01.

     1.19   "Building" shall mean the five (5) story building to be constructed
             --------
by Landlord on the Project and to be commonly known as 801 Gateway Boulevard,
South San Francisco, California.

     1.20   "Building Standard Improvements" shall mean those improvements of
             ------------------------------
the Leased Premises that are described on Exhibit C-1.

     1.21   "Business Day" shall mean Monday through Friday, except holidays;
             ------------
"holiday" means those holidays specified by the laws of the United States or the
State of California and all holidays to which maintenance employees of the
Building are entitled from time to time under their union contract or other
agreement.

     1.22   "Business Hours" shall mean the Building hours of operation set
             --------------
forth in the Building Rules and Regulations attached hereto as Exhibit D.

     1.23   "Claims" shall have the meaning set forth in Section 5.17(a).
             ------

     1.24   "Common Areas" shall mean (i) with respect to the Building, the
             ------------
total square footage of areas of the Building devoted to non-exclusive uses such
as lobbies, fire vestibules, rest rooms, mechanical areas, loading areas, trash
areas, tenant and ground floor corridors, elevator foyers, electrical and
janitorial closets, ground floor lobbies, telephone and equipment rooms, and
other similar facilities maintained for the benefit of Building tenants and
invitees, but shall not mean Major Vertical Penetrations and (ii) with respect
to the Project (excluding the Building), all walkways, roadways, sidewalks,
parkways, driveways, landscaped areas or other similar facilities maintained for
the benefit of Project Tenants and invitees.

     1.25   "Conceptual/Space Plans" shall have the meaning set forth in Exhibit
             ----------------------
C.

                                       2
<PAGE>

     1.26   "Conceptual/Space Plans Submittal Date" shall mean the date stated
             -------------------------------------
on the Basic Lease Information Sheet for delivery of Conceptual/Space Plans
pursuant to Exhibit C.

     1.27   "Condemnation" shall have the meaning set forth in Section 7.06(a).
             ------------

     1.28   "Construction Documents" shall have the meaning set forth in Exhibit
             ----------------------
C.

     1.29   "Construction Documents Submittal Date" shall mean the date stated
             -------------------------------------
on the Basic Lease Information Sheet for delivery of Construction Documents
pursuant to Exhibit C.

     1.30   "Designated Parking Areas" shall have the meaning set forth in
             ------------------------
Section 7.30(a).

     1.31   "Election Notice" shall have the meaning set forth in Section
             ---------------
3.02(a).

     1.32   "Electronic Payment Arrangement" shall have the meaning set forth in
             ------------------------------
Section 7.08(a)(ii).

     1.33   "Estimated Basic Operating Cost" for any calendar month shall mean
             ------------------------------
Landlord's estimate of Basic Operating Cost for the calendar year within which
such month falls divided by twelve (12) equal monthly installments.

     1.34   "Event of Default" shall have the meaning set forth in Section
             ----------------
7.08(a).

     1.35   "Existing Tenants" shall have the meaning set forth in Section 7.34.
             ----------------

     1.36   "Expansion Transaction" shall have the meaning set forth in Section
             ---------------------
7.34.

     1.37   "Expenses" shall have the meaning set forth in Section 3.06(a).
             --------

     1.38   "Fair Market Rent" shall mean the rate being charged for comparable
             ----------------
space in class "A" properties similar to the Building in northern San Mateo
County (which shall include, but not be limited to, South San Francisco,
Brisbane and San Bruno), taking into consideration: the location of the
comparable space within the relevant buildings, tenant improvements or
allowances existing or to be provided, rental abatements, lease
takeovers/assumptions, moving expenses and other forms of rental concessions,
proposed term of lease, extent of service provided or to be provided, whether or
not the transaction is a sublease, the time the particular rate under
consideration became or is to become effective and any other relevant terms or
conditions.

     1.39   "First Renewal Option" shall have the meaning set forth in Section
             --------------------
3.02(a).

     1.40   "First Renewal Term" shall have the meaning set forth in Section
             ------------------
3.02(a).

     1.41   "FMR Notice" shall have the meaning set forth in Section 3.02(b).
             ----------

     1.42   "GAAP" shall mean generally accepted accounting principles,
             ----
consistently applied.

                                       3
<PAGE>

     1.43   "Governmental Agency" has the meaning specified within the
             -------------------
definition of "Permitted Use."

     1.44   "Gross Rent" shall mean the total of Base Rent and Tenant's
             ----------
Proportionate Share(s) of Estimated Basic Operating Cost.

     1.45   "Guarantor" shall mean any guarantor of any of Tenant's obligations
             ---------
under this Lease.

     1.46   "Hazardous Material" shall mean any: (a) oil, flammable substances,
             ------------------
explosives, radioactive materials, hazardous wastes or substances, toxic wastes
or substances or any other wastes, materials or pollutants which (i) pose a
hazard to the Project or to persons on or about the Project or (ii) cause the
Project to be in violation of any Hazardous Materials Laws; (b) asbestos in any
form, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, or
radon gas; (c) chemical, material or substance defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous waste", "restricted hazardous waste", or "toxic substances"
or words of similar import under any applicable local, state or federal law or
under the regulations adopted or publications promulgated pursuant thereto,
including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. (S).9601, et seq.;
the Hazardous Materials Transportation Act, as amended, 49 U.S.C. (S).1801, et
seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. (S).1251,
et seq.; Sections 25115, 25117, 25122.7, 25140, 25249.8, 25281, 25316, and 25501
of the California Health and Safety Code; (d) other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
governmental authority or may or could pose a hazard to the health and safety of
the occupants of the Project or the owners and/or occupants of property adjacent
to or surrounding the Project, or any other Person coming upon the Project or
adjacent property; and (e) other chemicals, materials or substances which may or
could pose a hazard to the environment.

     1.47   "Hazardous Materials Claims" shall mean any enforcement, cleanup,
             --------------------------
removal, remedial or other governmental or regulatory actions, agreements or
orders instituted pursuant to any Hazardous Materials Laws; and any claims made
by any third party against Landlord, Tenant or the Project relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from the
presence, release or discharge of any Hazardous Materials.

     1.48   "Hazardous Materials Laws" shall mean any federal, state or local
             ------------------------
laws, ordinances, orders, rules, regulations or policies, now or hereafter in
force, as amended from time to time, in any way relating to the environment,
health and safety, and Hazardous Materials (including, without limitation, the
use, handling, transportation, production, disposal, discharge or storage
thereof) or to industrial hygiene or the environmental conditions on, under or
about the Project, including, without limitation, soil, groundwater and indoor
and ambient air conditions. Landlord hereby notifies Tenant in accordance with
California Health & Safety Code Section 25359.7 that in 1981-82, the Project was
the subject of a state-supervised cleanup of hazardous waste disposed of on the
site by prior occupants. As part of the cleanup approved by the applicable
agencies, some soils containing heavy metals were left in place, covered by
clean

                                       4
<PAGE>

fill. These soils are managed in accordance with the requirements of the
applicable agencies and a Declaration of Covenants, Conditions and Restrictions
imposed by Homart Development Co.

     1.49   "Landlord Parties" means the employees, agents, contractors,
             ----------------
officers, directors, partners, licensees, invitees and guests of Landlord,
Landlord's affiliates, Landlord's general partners and limited partners.

     1.50   "Landlord's Architect" shall have the meaning set forth in Exhibit
             --------------------
B.

     1.51   "Landlord's Contamination" shall have the meaning set forth in
             ------------------------
Section 5.17(a).

     1.52   "Landlord's Review Period" shall mean (A) in the case of a proposed
             ------------------------
assignment or subletting affecting not more than one floor of the Building, a
period of fifteen (15) days following the Subtenant Interview and receipt of the
Additional Sublease Information (or twenty-five (25) days from the date of
Tenant's original notice if Landlord does not request Additional Sublease
Information or a Subtenant Interview), and (B) in the case of a proposed
assignment or subletting affecting more than one floor of the Building, a period
of twenty (20) days following the Subtenant Interview and receipt of the
Additional Sublease Information (or thirty (30) days from the date of Tenant's
original notice if Landlord does not request Additional Sublease Information or
a Subtenant Interview).

     1.53   "Laws" shall have the meaning set forth in Section 5.08(a).
             ----

     1.54   "LC Face Amount" shall have the meaning set forth in Section
             --------------
5.13(a).

     1.55   "LC Termination Date" shall have the meaning set forth in Section
             -------------------
5.13(a).

     1.56   "Leased Premises" shall mean the Building (expressly excluding,
             ---------------
however, any Common Areas therein), which Building shall contain the Net
Rentable Area specified on the Basic Lease Information sheet (which Net Rentable
Area shall be subject to confirmation on or about the Term Commencement Date as
contemplated under Section 1.108 below). The Leased Premises shall be situated
substantially in the area indicated on the site plan attached hereto as Exhibit
A-1. If at any time during the Term, Tenant is leasing, in accordance with the
terms and conditions of this Lease, less than the entire Building, the "Leased
Premises" shall be deemed to include only that portion of the Building then
leased by Tenant pursuant to this Lease.

     1.57   "Letter of Credit" shall have the meaning set forth in Section
             ----------------
5.13(c).

     1.58   "Letter of Credit Early Cancellation Date" shall have the meaning
             ----------------------------------------
set forth in Section 5.13(b)(iv).

     1.59   "Letter of Credit Proceeds" shall have the meaning set forth in
             -------------------------
Section 5.13(a).

     1.60   "Limited Sublease" shall mean a sublease affecting sixty percent
             ----------------
(60%) or more of the Net Rentable Area of the Building for a term not exceeding
thirty (30) months and expiring not less than twenty-four (24) months prior to
the Term Expiration Date.

                                       5
<PAGE>

     1.61   "Major Tenant" shall have the meaning set forth in Section 4.03.
             ------------

     1.62   "Major Vertical Penetrations" shall mean the area or areas within
             ---------------------------
Building stairs (excluding the landing at each floor), elevator shafts, flues,
vents, stacks, pipe shafts and vertical ducts and the like, that service more
than one floor of the Building. The area with Major Vertical Penetrations shall
be bounded and defined by the interior surface of the perimeter walls thereof
(or the extended plane of such walls over areas that are not enclosed). Major
Vertical Penetrations shall exclude, however, areas for the specific use of
Tenant or installed at the request of Tenant, such as special stairs or
elevators.

     1.63   "Market Capitalization" shall mean Tenant's equity market
             ---------------------
capitalization, calculated as the total number of fully diluted shares of common
stock and common stock equivalents outstanding, as derived from the latest
corporate document on file with the Securities and Exchange Commission ("SEC"),
on an as-converted basis, at the closing price (averaged over a ten (10) day
period prior to the date of calculation) on the public market on which the
common stock is traded. Common stock equivalents include, but are not limited,
to preferred stock, convertible preferred stock, convertible debt, warrants and
options issued, outstanding and in-the-money.

     1.64   "Mortgage Lender" shall have the meaning set forth in Section
             ---------------
5.11(a).

     1.65   "Negotiation Notice" shall have the meaning set forth in Section
             ------------------
7.34.

     1.66   "Net Profits" shall mean, if Tenant is a public company, the
             -----------
positive net income of Tenant for the applicable calendar quarter, calculated in
accordance with GAAP, as reported on Tenant's most recent Form 10-K or 10-Q
filed with the SEC, and, if Tenant is not a public company, the positive net
income of Tenant for the applicable calendar quarter, as reflected on the
financial statements of Tenant for such quarter, which financial statements
shall be certified by the Chief Financial Officer of Tenant and shall be
accompanied by an unqualified opinion of an independent, qualified certified
public accounting firm of national standing reasonably satisfactory to Landlord,
which opinion shall state that such financial statements fairly present the
financial condition of Tenant for the applicable period and were prepared in
accordance with GAAP.

     1.67   "Net Rentable Area" shall mean the area or areas of space within the
             -----------------
Project determined pursuant to the Standard Method for Measuring Floor Area in
Office Buildings, ANSI Z65.1-1996 (the "BOMA Standard"). The parties acknowledge
that, as of the date of this Lease, the Net Rentable Area of the Leased Premises
set forth on the Basic Lease Information Sheet is an approximation only and the
actual Net Rentable Area shall be subject to confirmation by measurement by
Landlord's Architect, based on the BOMA Standard, on or about the Term
Commencement Date. Landlord's Architect shall consult with Tenant's Architect in
performing such measurement; provided, however, that in the event of any
disagreement between such professionals, the determination of Landlord's
Architect shall prevail. Any such changes to the Net Rentable Area in the Leased
Premises shall be reflected in the Lease Commencement Certificate, a sample form
of which is attached hereto as Exhibit E to be executed by Tenant promptly after
the Term Commencement Date. In the event of any such change in the Net Rentable
Area, all amounts, percentages and figures appearing or referred to in this
Lease based

                                       6
<PAGE>

upon such Net Rentable Area (including, without limitation, the amounts of the
Base Rent, Tenant Improvements Allowance, Tenant Improvements Loan and Review
Fee, and Tenant's Proportionate Share(s)) shall be modified in accordance with
such determination. The Net Rentable Area and/or the aforesaid amounts,
percentages and figures shall be subject to further adjustment by Landlord from
time to time for a remeasurement of or changes in the physical size of the
Leased Premises, the Building or the Project, whether such changes in size are
due to an addition to or a sale or conveyance of a portion of the Building or
the Project or otherwise.

     1.68   "Nondisturbance Agreement" shall have the meaning set forth in
             ------------------------
Section 5.11(a).

     1.69   "Off-Site Conditions" shall have the meaning set forth in Section
             -------------------
4.01(b).

     1.70   "Permitted Alterations" shall have the meaning set forth in Section
             ---------------------
5.06(a).

     1.71   "Permitted Hazardous Materials" shall mean Hazardous Materials which
             -----------------------------
are contained in ordinary office supplies of a type and in quantities typically
used in the ordinary course of business within general offices of similar size
and location, but only if and to the extent that such supplies are transported,
stored and used in full compliance with all Hazardous Materials Laws and
otherwise in a safe and prudent manner. Hazardous Materials which are contained
in ordinary office supplies but which are transported, stored and used in a
manner which is not in full compliance with all Hazardous Materials Laws or
which is not in any respect safe and prudent shall not be deemed to be
"Permitted Hazardous Materials" for the purposes of this Lease.

     1.72   "Permitted Use" shall mean general office uses in the Leased
             -------------
Premises of a kind appropriate in a building of the type and quality of the
Building; provided, however, that for the purpose of limiting the type of use
permitted by Tenant, or an assignee of Tenant, but without limiting Landlord's
right to lease any portion of the Building to a tenant of Landlord's choice,
"Permitted Use" shall not include (i) offices of any agency or bureau of the
United States or any state or political subdivision thereof (a "Governmental
Agency"), (ii) offices or agencies of any foreign government or political
subdivision thereof, (iii) offices of any health care professionals or service
organization, except for administrative offices where no diagnostic, treatment
or laboratory services are performed, (iv) schools or other training facilities
(excluding facilities for the training of Tenant's employees in connection with
the operation of Tenant's business in the Leased Premises), (v) retail or
restaurant uses, (vi) broadcast studios or other broadcast production
facilities, such as radio and/or television stations, (vii) product display or
demonstration facilities, (viii) offices at which deposits or bills are
regularly paid in person by customers, and (ix) personnel agencies, except
offices of executive search firms.

     1.73   "Post Clause (ii) Reduction Face Amount" shall have the meaning set
             --------------------------------------
forth in Section 5.13(b)(ii).

     1.74   "Pre-Existing Contamination" shall have the meaning set forth in
             --------------------------
Section 5.17(a).

     1.75   "Prime" means the "prime" or "reference" rate announced by Bank of
             -----
America from time to time at its main branch in San Francisco, California.

                                       7
<PAGE>

     1.76   "Project" shall mean the real property (including, without
             -------
limitation, the Building, the Common Areas and any other present or hereafter
existing improvements), as such real property may be reduced or expanded from
time to time by Landlord in accordance with Section 2.02 below, situated in the
City of South San Francisco, County of San Mateo and more particularly described
on Exhibit A-2.

     1.77   "REAs" shall have the meaning set forth in Section 5.11(e).
             ----

     1.78   "Renewal Options" shall have the meaning set forth in Section
             ---------------
3.02(a).

     1.79   "Renewal Terms" shall have the meaning set forth in Section 3.02(a).
             -------------

     1.80   "Rent" shall mean Gross Rent, Additional Rent and any and all other
             ----
charges of any nature payable by Tenant to Landlord under this Lease.

     1.81   "Rent Commencement Date" shall mean the date that is the earlier of
             ----------------------
(i) December 15, 2000, or (ii) the Tenant Improvements Substantial Completion
Date.

     1.82   "Rescission Notice" shall have the meaning set forth in Section
             -----------------
3.02(b).

     1.83   "Satellite Dish" shall have the meaning set forth in Section 7.33.
             --------------

     1.84   "Second Renewal Option" shall have the meaning set forth in Section
             ---------------------
3.02(a).

     1.85   "Second Renewal Term" shall have the meaning set forth in Section
             -------------------
3.02(a).

     1.86   "Security Deposit" shall have the meaning set forth in Section 5.14.
             ----------------

     1.87   "Specified Contamination" shall have the meaning set forth in
             -----------------------
Section 3.06(a)(xiii).

     1.88   "Specified Percentage" shall have the meaning set forth in Section
             --------------------
3.06(a)(vii).

     1.89   "Sublease/Assignment Costs" shall mean the sum of (i) the following
             -------------------------
costs and expenses, but solely to the extent actually paid by Tenant in
connection with such sublease or assignment transaction: (A) reasonable and
customary market-based leasing commissions, (B) reasonable legal fees, and (C)
reasonable costs of Alterations required to be made by Tenant to the Leased
Premises in connection with such sublease or assignment, which commissions, fees
and costs shall, for purposes of the calculation contemplated under Section
5.05(e), be amortized on a straight-line basis over the term of the applicable
assignment or sublease, and (ii) the then-unamortized portion of Tenant's
Initial Tenant Improvements Contribution (calculated as of the commencement of
the proposed sublease or assignment) allocable to the space subject to the
sublease or assignment transaction. For purposes of the aforesaid clause (ii),
Tenant's Initial Tenant Improvements Contribution shall be (1) amortized on a
straight-line basis over the period commencing on the Rent Commencement Date and
ending on the Term Expiration Date (including any extension thereof pursuant to
a Renewal Option theretofore exercised by Tenant), together with interest
thereon at the rate of Prime plus two percent (2%) per annum, and (2) allocated
to the entire Leased Premises on an equal amount per square foot. By way of

                                       8
<PAGE>

example only, if the Net Rentable Area of the Leased Premises is 135,000 square
feet and Tenant's Initial Tenant Improvements Contribution equals $1,350,000.00,
then Tenant's Initial Tenant Improvements Contribution shall be allocated to the
Leased Premises at the rate of $10.00 per square foot.

     1.90   "Subordination Agreement" shall have the meaning set forth in
             -----------------------
Section 5.11(a).

     1.91   "Subtenant Interview" shall have the meaning set forth in Section
             -------------------
5.05(b).

     1.92   "Tenant Affiliate" shall mean any legal entity (i) which shall be
             ----------------
controlled by, under the control of, or under common control with, Tenant, (ii)
which results from a merger of, reorganization of, or consolidation with,
Tenant, or (iii) which acquires all or substantially all of the stock or assets
of Tenant; and a party shall be deemed to "control" another party for purposes
of clause (i) above only if the first party owns fifty percent (50%) or more of
the outstanding shares, partnership or limited liability company membership
interests, or other beneficial interests of, the second party.

     1.93   "Tenant Extra Improvements" shall mean the extent to which the
             -------------------------
Tenant Improvements in the Leased Premises would exceed in quality or quantity
the Building Standard Improvements. In instances where this Lease refers to
Tenant Extra Improvements as a standard for the provision of services,
maintenance, repair or replacement by Tenant or Landlord, such reference shall
be to the difference in required services, maintenance, repairs or replacements
between the Tenant Improvements as constructed in the Leased Premises and the
Building Standard Improvements had the Building Standard Improvements been
constructed in the Leased Premises.

     1.94   "Tenant Improvements" shall have the meaning set forth in Exhibit C.
             -------------------

     1.95   "Tenant Improvements Allowance" shall have the meaning set forth in
             -----------------------------
Exhibit C.

     1.96   "Tenant Improvements Construction Commencement Date" shall mean the
             --------------------------------------------------
date Tenant commences construction of the Tenant Improvements pursuant to
Exhibit C.

     1.97   "Tenant Improvements Cost" shall have the meaning set forth in
             ------------------------
Exhibit C.

     1.98   "Tenant Improvements Loan" shall have the meaning set forth in
             ------------------------
Exhibit C.

     1.99   "Tenant Improvements Substantial Completion Date" shall have the
             -----------------------------------------------
meaning set forth in Exhibit C.

     1.100  "Tenant Parties" shall mean the employees, agents, contractors,
             --------------
officers, directors, partners, licensees, invitees and guests of Tenant.

     1.101  "Tenant's Architect" shall have the meaning set forth in Exhibit C.
             ------------------

     1.102  "Tenant's Construction Manager" shall have the meaning set forth in
             -----------------------------
Exhibit C.

                                       9
<PAGE>

     1.103  "Tenant Delay" shall have the meaning set forth in Exhibit C.
             ------------

     1.104  "Tenant's Initial Tenant Improvements Contribution" shall mean the
             -------------------------------------------------
aggregate cost expended by Tenant out of its own funds (specifically excluding
the Tenant Improvements Allowance and the proceeds of the Tenant Improvements
Loan) toward the Tenant Improvements Cost.

     1.105  "Tenant's Personal Property" shall have the meaning set forth in
             --------------------------
Section 7.01.

     1.106  "Tenant's Proportionate Share" shall mean (i) with respect to
             ----------------------------
Expenses which Landlord allocates to the Building, the percentage that the Net
Rentable Area of the Leased Premises bears to ninety-five percent (95%) of the
total Net Rentable Area of the Building or to the total Net Rentable Area leased
in the Building (if such total is greater than ninety-five percent (95%) of the
total Net Rentable Area) as calculated for each calendar year of the Term, and
(ii) with respect to Expenses which Landlord allocates to the Project as a whole
or to only a portion of the Project, a percentage calculated by Landlord from
time to time in its reasonable discretion and furnished to Tenant in writing.
Notwithstanding the foregoing, Landlord may equitably adjust Tenant's
Proportionate Share(s) for all or part of any item of expense or cost
reimbursable by Tenant that relates to a repair, replacement, or service that
benefits only the Leased Premises or only a portion of the Building and/or the
Project or that varies with the occupancy of the Building and/or the Project.

     1.107  "Term" shall mean the period from the Term Commencement Date and
             ----
ending on the Term Expiration Date. The Scheduled Term Commencement Date stated
on the Basic Lease Information sheet represents merely the parties' estimate of
the Term Commencement Date.

     1.108  "Term Commencement Date" shall have the meaning set forth in Section
             ----------------------
3.01.

     1.109  "Term Expiration Date" shall mean the date that is the number of
             --------------------
years set forth on the Basic Lease Information after the Rent Commencement Date
or such earlier date upon which this Lease is terminated pursuant to the terms
hereof.

                                   ARTICLE 2

                                 Leased Premises
                                 ---------------

     2.01   Lease. Landlord leases to Tenant and Tenant leases from Landlord the
            -----
Leased Premises upon all of the terms, covenants and conditions set forth
herein.

     2.02   Landlord's Reserved Rights. Landlord reserves from the leasehold
            --------------------------
estate hereunder, in addition to all other rights reserved by Landlord under
this Lease: (i) all exterior walls and windows bounding the Leased Premises, and
all space located within the Leased Premises for Major Vertical Penetrations,
conduits, electric and all other utilities, air-conditioning, sinks or other
Building facilities that do not constitute Tenant Extra Improvements, the use
thereof and access thereto through the Leased Premises for operation,
maintenance, repair or replacement thereof, and (ii) the right from time to
time, without unreasonable

                                       10
<PAGE>

interference with Tenant's use, (A) to install, remove or relocate any of the
foregoing for service to any part of the Building to locations that will not
materially interfere with Tenant's use of the Leased Premises, to alter or
relocate any portion of the Common Areas or any other common facility; (B) to
close temporarily any of the Common Areas for maintenance or construction
purposes so long as reasonable access to the Leased Premises remains available;
(C) to add additional buildings and improvements to the Common Areas or remove
existing buildings or improvements therefrom; (D) to use the Common Areas while
engaged in making additional improvements, repairs or alterations to the Project
or any portion thereof so long as reasonable access to the Leased Premises and
the loading area serving the Leased Premises remains available; and (E) to make
changes or alterations or additions to the Project or any portion thereof.
Notwithstanding the foregoing, without the prior written consent of Tenant,
Landlord shall not alter any portion of the Common Areas in a manner that causes
the Common Areas to materially deviate from the depiction thereof shown on the
site plan attached hereto as Exhibit A-1; provided, however, that Tenant shall
not withhold its consent to any such alteration that does not materially
interfere with Tenant's use and occupancy of the Leased Premises or enjoyment of
the Common Areas. Landlord shall have the right from time to time to expand or
to reduce the parcels of real property constituting the Project; provided,
however, that Tenant shall have the right to approve any such reduction or
expansion that materially interferes with Tenant's use and occupancy of the
Leased Premises. Subject to the rights of Tenant specified in this Lease as to
the non-exclusive use of certain portions of the Common Areas, Landlord shall
have the sole and exclusive right to possession and control of the Common Areas
and all other areas of the Project outside the Leased Premises.

     2.03   Construction of Base Building Improvements and Tenant Improvements.
            ------------------------------------------------------------------
Landlord shall cause the construction of the Base Building Improvements in
accordance with the terms and conditions of the Base Building Improvements
Construction Agreement attached hereto as Exhibit B. The Base Building
Improvements are generally described on Exhibit B-1 hereto. Additionally, Tenant
shall cause the construction of certain tenant improvements in the interior of
the Leased Premises in accordance with the terms and conditions of the Tenant
Improvement Construction Agreement attached hereto as Exhibit C. Landlord and
Tenant agree to and shall be bound by the terms and provisions of said Exhibits
B and C.

                                   ARTICLE 3

                   Rent, Term, Use and Basic Operating Costs
                   -----------------------------------------

     3.01   Term. Except as otherwise provided herein, the Term shall commence
            ----
on the date (the "Term Commencement Date") Landlord delivers possession of the
Leased Premises to Tenant for the construction of the Tenant Improvements and
shall continue in full force for the Term. Subject to Paragraphs 4(b)(iii) and
4(b)(iv) of Exhibit B hereto, if the actual Term Commencement Date does not
occur on or before by the Scheduled Term Commencement Date for any reason, this
Lease shall not be void or voidable, nor shall Landlord be liable for any
claims, damages or liabilities by reason thereof. Should the Term Commencement
Date be a date other than the Scheduled Term Commencement Date, either Landlord
or Tenant, at the request of the other, shall promptly execute a declaration
specifying the Term Commencement Date. Tenant's obligations under this Lease
shall commence upon the Term Commencement

                                       11
<PAGE>

Date, excluding only the obligation to pay Gross Rent, which shall commence upon
the Rent Commencement Date.

     3.02   Options to Extend Term.
            ----------------------

     (a)    Subject to the terms of this Section 3.02, Tenant shall have two (2)
options (the "First Renewal Option" and the "Second Renewal Option,"
respectively, and collectively, the "Renewal Options") to extend the Term of
this Lease, with respect to three (3) or more full floors of the Building, for
successive periods of five (5) years each beyond the Term Expiration Date (the
"First Renewal Term" and the "Second Renewal Term," respectively, and
collectively, the "Renewal Terms"). Tenant understands and acknowledges that if
it exercises a Renewal Option with respect to less than the entire Building, it
shall have the right only to renew in full floor increments, and, in any event,
shall not have the right to renew with respect to less than three (3) full
floors. The Renewal Options are personal to Tenant and may not be exercised by
or on behalf of any sublessee or assignee, or by or on behalf of any other
successor or assign of Tenant, except for a Tenant Affiliate to whom Tenant
assigns its entire right, title and interest in and to this Lease pursuant to
Section 5.05 below. The Renewal Options shall be effective only if (i) no Event
of Default is occurring under this Lease, nor is any event then occurring which
with the giving of notice or the passage of time, or both, would constitute an
Event of Default hereunder, either at the time of exercise of the respective
Renewal Option or the time of commencement of the respective Renewal Term, and
(ii) Tenant has a Market Capitalization equal to or greater than One Billion
Dollars ($1,000,000,000.00) at the time of exercise of the respective Renewal
Option and at the time of commencement of the respective Renewal Term. The
Second Renewal Option shall be effective only if Tenant has validly exercised
the First Renewal Option and occupied the Leased Premises (or the portion
thereof actually leased by Tenant during the First Renewal Term) throughout the
First Renewal Term. If Tenant leases less than the entire Leased Premises during
the First Renewal Term, then the Second Renewal Option shall be available only
with respect to the portion of the Leased Premises actually leased by Tenant
during the First Renewal Term. The Renewal Options must be exercised, if at all,
by written notice (each, an "Election Notice") from Tenant to Landlord given not
more than twelve (12) months nor less than nine (9) months prior to the
expiration of the initial Term or the First Renewal Term, as the case may be.
Any such Election Notice must specify the number of floors in the Building
Tenant elects to lease during the applicable Renewal Term. In the event Tenant
exercises a Renewal Option with respect to less than the entire Building, then
Landlord shall have the right to approve the actual floors leased by Tenant
during the applicable Renewal Term. Any such Election Notice given by Tenant to
Landlord shall be irrevocable. If Tenant fails to exercise a Renewal Option in a
timely manner as provided for above, the Renewal Option shall be void. The
Renewal Terms shall be upon the same terms and conditions as the initial Term,
except that the annual Base Rent during each Renewal Term shall be equal to the
Fair Market Rent as of the commencement of such Renewal Term.

     (b)   Fair Market Rent for each Renewal Term shall be determined by
Landlord with written notice (a "FMR Notice") given to Tenant prior to the
commencement of the applicable Renewal Term, subject to Tenant's rights of
termination pursuant to this Section 3.02(b) and arbitration pursuant to Section
3.02(c) below. In the event Tenant disagrees with Landlord's determination of
Fair Market Rent, then Tenant shall have the right to either (i) rescind its
Election Notice by written notice of rescission (a "Rescission Notice")
delivered to Landlord

                                       12
<PAGE>

within ten (10) days of Tenant's receipt of the applicable FMR Notice, in which
case this Lease shall expire upon the original Term Expiration Date and Tenant
shall have no further rights under this Section 3.02, or (ii) elect to submit
the dispute to arbitration pursuant to Section 3.02(c) below by delivering
written notice (an "Arbitration Notice") to Landlord within thirty (30) days of
Tenant's receipt of the applicable FMR Notice. Tenant's Arbitration Notice shall
include Tenant's determination of Fair Market Rent. Failure on the part of
Tenant to deliver a Rescission Notice or an Arbitration Notice to Landlord in a
timely manner as provided above, time being of the essence, shall bind Tenant to
the Fair Market Rent as determined by Landlord. Should Tenant elect to arbitrate
and should the arbitration not have been concluded prior to the commencement of
the applicable Renewal Term, Tenant shall pay Gross Rent to Landlord during the
Renewal Term, including Base Rent adjusted to reflect Fair Market Rent as
Landlord has so determined. If the amount of Fair Market Rent as determined by
arbitration is greater than or less than Landlord's determination, then any
adjustment required to correct the amount previously paid shall be made by
payment by the appropriate party within ten (10) days after such determination
of Fair Market Rent.

     (c)  If Tenant disputes the amount claimed by Landlord as Fair Market Rent
and delivers an Arbitration Notice to Landlord in a timely manner as provided
above, and if Landlord and Tenant are not otherwise able to agree upon the Fair
Market Rent (Landlord reserving the right to resubmit its determination of Fair
Market Rent to Tenant), the dispute shall be submitted to arbitration. The award
rendered in any such arbitration may be entered in any court having jurisdiction
and shall be final and binding between the parties. The arbitration shall be
conducted and determined in the San Francisco Bay Area in accordance with the
then-prevailing commercial arbitration rules of the American Arbitration
Association or its successor for arbitration of commercial disputes except to
the extent that the procedures mandated by said rules shall be modified as
follows:

          (i)  Tenant shall deliver an Arbitration Notice to Landlord within
thirty (30) days after Tenant's receipt of the FMR Notice, specifying therein
the name and address of the person to act as the arbitrator on its behalf. The
arbitrator shall be a real estate broker with not less than five (5) years
experience negotiating commercial lease transactions in northern San Mateo
County who would qualify as an expert witness over objection to give testimony
addressed to the issue in a court of competent jurisdiction. Failure on the part
of Tenant to make a timely and proper demand for such arbitration shall
constitute a waiver of the right thereto. Within ten (10) Business Days after
the service of Tenant's demand for arbitration, Landlord shall have the right to
give notice in writing to Tenant of Landlord's adjusted determination of Fair
Market Rent. Within ten (10) Business Days following Tenant's receipt of such
notice, if Tenant and Landlord have not agreed upon Fair Market Rent, Tenant
shall notify Landlord in writing that Tenant desires to renew its demand for
arbitration. Failure on the part of Tenant to give such notice shall constitute
a waiver of the right to such arbitration, and Tenant shall be deemed to have
accepted Landlord's adjusted determination of Fair Market Rent. Within ten (10)
Business Days after the receipt of such notice, Landlord shall give notice to
Tenant, specifying the name and address of the person designated by Landlord to
act as arbitrator on its behalf who shall be similarly qualified. If Landlord
fails to notify Tenant of the appointment of its arbitrator, within or by the
time above specified, then the arbitrator appointed by Tenant shall be the
arbitrator to determine the issue.

                                       13
<PAGE>

          (ii)   If two (2) arbitrators are chosen pursuant to Section
3.02(c)(i) above, the arbitrators so chosen shall meet within ten (10) Business
Days after the second arbitrator is appointed and, if within ten (10) Business
Days after such first meeting the two arbitrators shall be unable to agree
promptly upon a determination of Fair Market Rent, they shall appoint a third
arbitrator, who shall be a competent and impartial person with qualifications
similar to those required of the first two arbitrators pursuant to Section
3.02(c)(i) above. If they are unable to agree upon such appointment within five
(5) Business Days after expiration of said ten (10) day period, the third
arbitrator shall be selected by the parties themselves, if they can agree
thereon, within a further period of ten (10) Business Days. If the parties do
not so agree, then either party, on behalf of both, may request appointment of
such a qualified person by the then Chief Judge of the United States District
Court having jurisdiction over the City of South San Francisco, acting in his
private non-judicial capacity. Request for appointment shall be made in writing
with a copy given to the other party. Each party agrees that said Judge shall
have the power to make the appointment; provided, however, that if the Chief
Judge does not make a determination within ten (10) days of request by either
party for the appointment of a third arbitrator, appointment of such third
arbitrator shall be made in accordance with the selection procedure of the
commercial arbitration rules of the American Arbitration Association or its
successor for arbitration of commercial disputes. The three (3) arbitrators
shall decide the dispute, if it has not previously been resolved, by following
the procedure set forth in Section 3.02(c)(iii) below.

          (iii)  Where the issue cannot be resolved by agreement between the two
arbitrators selected by Landlord and Tenant or settlement between the parties
during the course of arbitration, the issue shall be resolved by the three
arbitrators in accordance with the following procedure. The arbitrators selected
by each of the parties shall state in writing his determination of the Fair
Market Rent, supported by the reasons therefor with counterpart copies to each
party. The arbitrators shall arrange for a simultaneous exchange of such
proposed resolutions. The role of the third arbitrator shall be to select which
of the two proposed resolutions most closely approximates his determination of
Fair Market Rent. The third arbitrator shall have no right to propose a middle
ground or any modification of either of the two proposed resolutions. The
resolution he chooses as most closely approximating his determination shall
constitute the decision of the arbitrators and be final and binding upon the
parties.

          (iv)   If any arbitrator fails, refuses or is unable to act, his
successor shall be appointed by the party who originally appointed him, but in
the case of the third arbitrator, his successor shall be appointed in the same
manner as provided for appointment of the third arbitrator. The arbitrators
shall attempt to decide the issue within ten (10) Business Days after the
appointment of the third arbitrator. Any decision in which the arbitrator
appointed by Landlord and the arbitrator appointed by Tenant concur shall be
binding and conclusive upon the parties. Each party shall pay the fees and costs
of its own counsel. The party not prevailing shall pay the fees and costs of the
arbitrators. For purposes hereof, the "prevailing party" shall be that party
whose selected arbitrator's statement of Fair Market Rent was selected by the
third arbitrator or, if a decision is reached by the two arbitrators selected by
the parties and a third arbitrator is not chosen, the party whose original
determination of Fair Market Rent (as specified in Landlord's FMR Notice or
Tenant's Arbitration Notice, as applicable) is closest in amount to the Fair
Market Rent ultimately determined by the arbitrators.

                                       14
<PAGE>

          (v)  The arbitrators shall render their decision and award in writing
with counterpart copies to each party. The arbitrators shall have no power to
modify the provisions of this Lease.

     3.03 Use. Tenant shall use the Leased Premises solely for the Permitted Use
          ---
and for no other use or purpose. Nothing contained herein shall be deemed to
limit or restrict Landlord from leasing any portion of the Building to any
tenant for any use whatsoever, including, without limitation, any of the uses
described in clauses (i) through (ix) of Section 1.72, provided only that
Landlord shall not lease any portion of the Building to any Governmental Agency
for a use that would include offices which members of the public would regularly
visit and would likely lead to a substantially greater number of people entering
and exiting the Building on a daily basis than would be the case with general
office uses.

     3.04 Payment of Base Rent and Tenant's Proportionate Share(s) of Estimated
          ---------------------------------------------------------------------
Basic Operating Cost. Tenant shall pay the Base Rent with adjustments and in the
--------------------
manner hereinafter set forth.

     Commencing on the Rent Commencement Date, Base Rent shall be payable in
advance on or before the first day of each calendar month during the Term and
any extensions or renewals thereof; provided, however, that Base Rent for the
first full calendar month following the Rent Commencement Date shall be paid in
advance on or before the Tenant Improvements Construction Commencement Date.
Commencing on the Rent Commencement Date, Tenant's Proportionate Share(s) of
Estimated Basic Operating Cost shall be payable in advance on or before the
first day of each calendar month during the Term and any extensions or renewals
thereof. If the Rent Commencement Date occurs on other than the first day of a
calendar month, then Gross Rent (consisting of Base Rent plus Tenant's
Proportionate Share(s) of Estimated Basic Operating Cost) provided for such
partial calendar month shall be prorated and the prorated amount shall be paid
on the first day of the calendar month following the Rent Commencement Date
together with any other amounts payable on that day. If the Term terminates on
other than the last day of a calendar month, then Gross Rent provided for such
partial calendar month shall be prorated and the prorated installment shall be
paid on the first day of the calendar month preceding the Term Expiration Date.
All payments due under this paragraph shall be payable in advance, without
demand and without reduction, abatement, counterclaim or setoff, at the address
specified on the Basic Lease Information or at such other address as may be
designated by Landlord in the manner provided for giving notice under Section
7.16.

     3.05 Net Lease. Except as otherwise provided herein, this is a Net Lease
          ---------
and Base Rent shall be paid to Landlord absolutely net of all costs and
expenses. The provisions for payment of Basic Operating Cost by means of
periodic payment of Tenant's Proportionate Share(s) of Estimated Basic Operating
Cost and the Basic Operating Cost Adjustment are intended to pass on to Tenant
and reimburse Landlord for Tenant's Proportionate Share(s) of all costs and
expenses of the nature described in Section 3.06.

                                       15
<PAGE>

     3.06 Basic Operating Cost.
          --------------------

     (a)  Basic Operating Cost shall mean all expenses and costs (but not
specific costs that are separately billed to and paid by specific tenants) of
every kind and nature that Landlord shall pay or incur or become obligated to
pay or incur (including, without limitation, costs incurred by managers and
agents that are reimbursed by Landlord) because of or in connection with the
management, maintenance, preservation and operation of the Project and its
supporting facilities directly servicing the Project (as allocated to the
Project in accordance with generally accepted accounting principles,
consistently applied) including, but not limited to, the following
(collectively, "Expenses"):

          (i)    Wages, salaries and reimbursable expenses and benefits of all
on-site and off-site personnel engaged in the operation and maintenance of the
Project and the direct costs of training such employees limiting such charges
only to amounts directly allocable to services rendered by the employees and
personnel for the benefit of the Project.

          (ii)   Costs of the property management office and office operation.

          (iii)  All supplies, materials and rental equipment used in the
operation and maintenance of the Project, including, without limitation,
temporary lobby displays and events, the cost of erecting, maintaining and
dismantling art work and similar decorative displays commensurate with operation
of a class "A" office building; provided, however, that so long as Tenant is the
sole tenant of the Building, Landlord shall not provide such lobby displays or
artwork in the Building unless requested by Tenant.

          (iv)   Utilities, including, without limitation, water, power, gas,
sewer, waste disposal, communication and cable TV facilities, heating, cooling,
lighting and ventilation of the Project.

          (v)    Assessments, fees or other charges levied by the Gateway
Owners' Association or other similar body with respect to the maintenance,
repair and operation of the Gateway development.

          (vi)   All maintenance, janitorial and service agreements for the
Project and the equipment therein, including, but not limited to, alarm service,
window cleaning, elevator maintenance, and maintenance and repair of sidewalks,
landscaping, Building exterior and service areas.

          (vii)  A management cost recovery equal to the Specified Percentage
(as hereinafter defined) of all revenue (excluding such management cost
recovery) derived from the Project, without limitation, all Rent hereunder, all
rent and other payments derived from other tenants in the Building, parking
revenues from the Project and other revenues derived from licensees of any other
part of or right in the Building. As used herein, "Specified Percentage" means
(A) so long as Tenant is the sole tenant of the Building, two percent (2%), and
(B) at all other times, three percent (3%).

          (viii) Legal and accounting services for the Project, including, but
not limited to, the costs of audits by certified public accountants of Basic
Operating Cost records; provided,

                                       16
<PAGE>

however, that legal expense shall not include the cost of (A) negotiating lease
terms for prospective tenants, (B) negotiating termination or extension of
leases with existing tenants, (C) proceedings against any other specific tenant
relating solely to the collection of rent or other sums due to Landlord from
such tenant, or (D) legal costs incurred in connection with development and/or
construction of the Project.

          (ix)   All insurance premiums and costs, including, but not limited
to, the premiums and costs of fire, casualty, liability, rental abatement and
earthquake insurance applicable to the Project and Landlord's personal property
used in connection therewith (and all amounts paid as a result of loss sustained
that would be covered by such policies but for "deductible" or self-insurance
provisions); provided, however, that Landlord may, but shall not be obligated
to, carry earthquake insurance. Notwithstanding the foregoing, (A) in the event
Landlord maintains fire and casualty insurance coverage (specifically excluding
earthquake coverage) for the Building through a policy of insurance covering
only the Building (and specifically excluding a blanket policy covering
additional properties), Landlord shall not carry a deductible greater than Fifty
Thousand Dollars ($50,000.00) on such policy, and (B) in the event Landlord
makes a claim on its policy of earthquake insurance, if any, during the Term,
the deductible under such policy shall be amortized over a period of ten (10)
years, irrespective of when such claim is made, and Tenant shall be required to
pay only the pro rata share of such deductible falling due within the Term
(including any Renewal Term) based upon the aforesaid amortization of such
deductible; provided, however, that in no event shall the portion of the
earthquake deductible payable by Tenant hereunder during any calendar year
exceed ten percent (10%) of the aggregate Basic Operating Cost for such year;
and provided, further, that, notwithstanding the aforesaid ten-year amortization
period, any portion of such deductible which is excluded from Basic Operating
Cost pursuant to the foregoing proviso shall be deferred and added to Basic
Operating Cost during succeeding calendar years, subject to the limitation for
such succeeding calendar years pursuant to the foregoing proviso, until the full
amount so deferred has been included in Basic Operating Cost in succeeding
calendar years.

          (x)    Repairs, replacements and general maintenance (except for
repairs and replacements (A) which are capital in nature and are covered by
Section 3.06(a)(xii) below, (B) paid for from the proceeds of insurance, (C)
paid for directly by Tenant, other tenants or any third party, or (D) for the
benefit solely of tenants of the Project other than Tenant to the extent that
Tenant could not obtain similar services from Landlord without an obligation to
reimburse Landlord for the entire cost thereof under the provisions of this
Lease).

          (xi)   All real estate or personal property taxes, possessory interest
taxes, business or license taxes or fees, service payments in lieu of such taxes
or fees, annual or periodic license or use fees, including, but not limited to,
all of the following: (A) all real estate taxes and assessments, and all other
taxes relating to, or levied, assessed or imposed on, the Project, or any
portion thereof, or interest therein; (B) all taxes, assessments, charges,
levies, fees, excises or penalties, general and special, ordinary and
extraordinary, unforeseen as well as foreseen, of any kind and nature imposed,
levied upon, measured by or attributable to Landlord's equipment, furniture,
fixtures and other property located in, or used in connection with, the Project,
or levied upon, measured by or reasonably attributable to the cost or value of
any of the foregoing; (C) all other taxes (including, without limitation, value
added taxes), assessments, charges, levies, fees, or penalties, general and
special, ordinary and extraordinary, unforeseen as

                                       17
<PAGE>

well as foreseen, of any kind and nature imposed, levied, assessed, charged or
collected by any governmental authority or other entity either directly or
indirectly (1) for or in connection with public improvements, user, maintenance
or development fees, transit, parking, housing, employment, police, fire, open
space, streets, sidewalks, utilities, job training, child care or other
governmental services or benefits, (2) upon or with respect to the development,
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy of, or business operations in, the Project, (3) upon, against or
measured by the area of the Project, or uses made thereof, or leases made to
tenants thereof, or all or any part of the rents collected or collectible from
tenants thereof, and (4) for environmental matters (other than Pre-Existing
Contamination and Landlord's Contamination) or as a result of the imposition of
mitigation measures, including parking taxes, employer parking regulations, or
fees, charges or assessments as a result of the treatment of the Project, or any
portion thereof or interest therein, as a source of pollution or storm water
runoff; (D) any tax or excise, however described, imposed in addition to, or in
substitution partially or totally of, any or all of the foregoing taxes,
assessments, charges or fees; and (E) any and all costs, expenses and attorneys'
fees paid or incurred by Landlord in connection with any proceeding or action to
contest in whole or in part, formally or informally, the imposition, collection
or validity of any of the foregoing taxes, assessments, charges or fees. If by
law any Real Property Taxes may be paid in installments at the option of the
taxpayer, then Landlord shall include within Real Property Taxes only those
installments (including interest, if any) which would become due by exercise of
such option. Real estate taxes shall not include (1) inheritance or estate taxes
imposed upon or assessed against the Project, or any part thereof or interest
therein, or (2) taxes computed upon the basis of the net income derived from the
Project by Landlord or the owner of any interest therein.

          (xii)  Amortization (together with reasonable financing charges) of
capital improvements made to the Project (A) to comply with the requirements of
law, ordinance, rule or regulation, (B) to replace items which Landlord would be
obligated to maintain under this Lease, or (C) to improve the operating
efficiency of the Project. As used in this Section 3.06(a)(xii), "amortization"
shall mean allocation of the cost equally to each year of useful life of the
items being amortized or a shorter period equal to the number of years required
to recover the cost of said item of capital improvement out of the savings in
operating efficiency derived therefrom. Notwithstanding the foregoing, however,
Landlord may treat as expenses (chargeable in the year incurred) and not as
capital costs items that are less than two percent (2%) of Estimated Basic
Operating Cost for the year in question.

          (xiii) All costs and expenses incurred in connection with any
investigation of site conditions or any clean-up, remedial, removal or
restoration work required by any federal, state or local governmental agency or
political subdivision or any other remediation undertaken by Landlord because of
Hazardous Materials that migrate into the soil or groundwater on or under the
Leased Premises or the Project during the Term from off-site sources or
otherwise become present in, on or about the Leased Premises or the Project
during the Term other than as the result of the actions or activities of
Landlord, Tenant or any Tenant Parties (collectively, "Specified
Contamination").

                                       18
<PAGE>

     (b)  Notwithstanding anything to the contrary contained in Section 3.06(a)
above, "Basic Operating Costs" shall not include:

          (i)    costs of alterations of tenant premises;

          (ii)   costs of capital improvements other than capital improvements
identified in Section 3.06(a)(xii);

          (iii)  interest and principal payments on mortgages or any other debt
costs, or rental payments on any ground lease affecting the Project;

          (iv)   real estate brokers' leasing commissions;

          (v)    legal fees, space planner fees and advertising expenses
incurred with regard to leasing the Building or portions thereof;

          (vi)   any cost or expenditure for which Landlord is actually
reimbursed by others (e.g., insurance proceeds or recoveries under warranties);

          (vii)  the cost of any service furnished exclusively to and paid for
by any tenant of the Project, which service Landlord does not make available to
Tenant and which does not benefit Tenant in any manner;

          (viii) depreciation, amortization and other "non-cash" items;

          (ix)   expense reserves;

          (x)    franchise or income taxes imposed upon Landlord;

          (xi)   legal and auditing fees incurred by Landlord in collecting
delinquent rents and preparing tax returns, but specifically excluding any legal
or auditing fees incurred by Landlord in connection with the management,
maintenance, preservation and operation of the Project, including, without
limitation, any fees incurred by Landlord in connection with the preparation of
operating statements, management reports and Basic Cost Operating Statements;

          (xii)  a reasonable allocation of the wages of any employee whose
duties include work on other buildings or projects;

          (xiii) fines, penalties and interest imposed upon Landlord, other than
due to the late payment of Rent by Tenant hereunder;

     (c)  Notwithstanding any other provision herein to the contrary, if the
Project is not fully occupied during any year of the Term, an adjustment shall
be made in computing Basic Operating Cost for such year so that Basic Operating
Cost shall be computed as though ninety-five percent (95%) of the Net Rentable
Area had been occupied during such year; provided, however, that in no event
shall Landlord collect in total, from Tenant and all other tenants of the
Project, an amount greater than one hundred percent (100%) of the actual Basic
Operating Cost during any year of the Term. Tenant acknowledges that the Basic
Operating Costs shall include

                                      19
<PAGE>

expenses and costs associated with the management, maintenance, preservation and
operation of the Common Areas that are, from time to time, allocated by
Landlord, in its sole but reasonable discretion, between the Building and other
buildings, presently or hereafter existing at the Project, and Tenant agrees to
pay as Additional Rent, Tenant's share, as reasonably determined by Landlord, of
such Basic Operating Cost as so allocated by Landlord.

     3.07  Adjustment For Variation Between Estimated and Actual.  If the Basic
           -----------------------------------------------------
Operating Cost Adjustment for any calendar year is a positive number (i.e.,
actual cost exceeds estimated cost) Tenant shall pay to Landlord, pursuant to
Landlord's billing therefor (submitted pursuant to Section 3.08), Tenant's
Proportionate Share(s) of the Basic Operating Cost Adjustment within thirty (30)
days after presentation of Landlord's statement. If the Basic Operating Cost
Adjustment for any calendar year is a negative number (i.e., estimated cost
exceeds actual cost), then Landlord at Landlord's option shall pay Tenant's
Proportionate Share(s) of the Basic Operating Cost Adjustment to Tenant in cash,
within ten (10) days after the Basic Operating Cost Adjustment is finally
determined, or credit said amount against future installments of Estimated Basic
Operating Cost payable by Tenant hereunder. Should the Term commence or
terminate at any time other than the first day of a calendar year, Tenant's
Proportionate Share(s) of the Basic Operating Cost Adjustment shall be prorated
for the exact number of calendar days during such calendar year that fall within
the Term.

     3.08  Computation of Basic Operating Cost Adjustment.  Landlord shall,
           ----------------------------------------------
within a reasonable period of time after the end of any calendar year for which
Estimated Basic Operating Cost differs from Basic Operating Cost, give written
notice thereof to Tenant. The notice shall contain or be accompanied by a
statement (the "Basic Operating Cost Statement") of the Basic Operating Cost
during such calendar year (prepared by a certified public accountant), and a
computation of Basic Operating Cost Adjustment. Landlord's failure to give such
notice and Basic Operating Cost Statement within a reasonable period of time
after the end of any calendar year for which a Basic Operating Cost Adjustment
is due shall not release either party from the obligation to make the adjustment
provided for in Section 3.07.

     3.09  Tenant's Right to Audit Basic Operating Cost.  Provided that no Event
           --------------------------------------------
of Default is then occurring hereunder (nor is any event occurring which with
the giving of notice or the passage of time, or both, would constitute an Event
of Default hereunder), Tenant, at its sole expense, shall have the right within
one hundred eighty (180) days after the delivery of each Basic Operating Cost
Statement to review and audit Landlord's books and records regarding such Basic
Operating Cost Statement for the sole purpose of determining the accuracy
thereof. Such review or audit shall be performed by a nationally recognized
accounting firm that calculates its fees with respect to hours actually worked
and that does not discount its time or rate (as opposed to a calculation based
upon percentage of recoveries or other incentive arrangement), shall take place
during Business Hours in the office of Landlord or Landlord's property manager
and shall be completed within ten (10) days after the commencement thereof. If
Tenant does not so review or audit Landlord's books and records, Landlord's
Basic Operating Cost Statement shall be final and binding upon Tenant. In the
event that Tenant determines on the basis of its review of Landlord's books and
records that the amount of Basic Operating Cost paid by Tenant pursuant to
Section 3.06 above for the period covered by such Basic Operating Cost Statement
is less than or greater than the actual amount properly payable by Tenant under
the terms of this Lease, Tenant shall promptly pay any deficiency to Landlord
or, if Landlord

                                      20
<PAGE>

concurs with the results of such audit, Landlord shall promptly refund any
excess payment to Tenant, as the case may be.

                                   ARTICLE 4

                              Landlord Covenants
                              ------------------

     4.01  Basic Services.  Landlord shall:
           ---------------

     (a)   Furnish Tenant during Tenant's occupancy of the Leased Premises:

           (i)   Hot and cold water at those points of supply provided for
general use of other tenants in the Project; central heat and air conditioning
in season during Business Hours at such temperatures and in such amounts as are
required for comfortable occupancy of the Leased Premises, as reasonably
determined by Landlord, or as may be permitted or controlled by applicable laws,
ordinances, rules and regulations.

           (ii)  Routine maintenance, repairs, structural and exterior
maintenance (including exterior glass and glazing), painting and electric
lighting service for all public areas and special service areas of the Project
in the manner and to the extent deemed by Landlord to be standard, subject to
the limitation contained in Section 4.05.

           (iii) Janitorial service on a five (5) day week basis, excluding
holidays.

           (iv)  An electrical system to convey power delivered by public
utility or other providers selected by Landlord, in its sole and absolute
discretion (and Tenant hereby acknowledges and agrees not to obtain any
electrical or other utility services from vendors other than those so selected
or approved by Landlord in writing) in amounts sufficient for normal office
operations as provided in similar office buildings, but not to exceed a total
allowance of five (5) watts per square foot of Net Rentable Area (which includes
an allowance for lighting of the Leased Premises at the maximum wattage per
square foot of Net Rentable Area permitted under applicable laws, ordinances,
orders, rules and regulations). If Tenant's electrical requirements, as
estimated by Landlord based upon rated capacity (or based upon metered
consumption, at Landlord's option and at Tenant's expense), exceed such amounts,
Tenant shall pay the full amount of such excess together with any additional
cost necessary to provide such excess capacity; and provided that, if the
installation and operation of said electrical equipment requires additional air
conditioning capacity above that provided by the Building Standard Improvements,
then the additional air conditioning installation and operating costs shall be
paid by Tenant.

           (v)   Initial lamps, bulbs and ballasts used in the Leased Premises
(but solely to the extent such lamps, bulbs and ballasts conform to
Exhibit C-1).

           (vi)  Public elevator service on a 24-hour a day, 7-day a week basis,
and a freight elevator serving the floors on which the Leased Premises are
situated during hours designated by Landlord; provided, however, that so long as
Tenant is the sole tenant of the

                                      21
<PAGE>

Building, Tenant shall have the right to use the freight elevator on a 24-hour a
day, 7-day a week basis.

     (b)  Landlord shall not be liable for damages to either person or property,
nor shall Landlord be deemed to have evicted Tenant, nor shall there be any
abatement of Rent, nor shall Tenant be relieved from performance of any covenant
on its part to be performed hereunder by reason of (i) deficiency in the
provision of Basic Services, (ii) breakdown or malfunction of lines, cables,
wires, pipes, equipment or machinery utilized in supplying or permitting Basic
Services or telecommunications, or (iii) curtailment or cessation of Basic
Services due to causes or circumstances beyond the reasonable control of
Landlord. Landlord shall use reasonable diligence to make such repairs as may be
required to lines, cables, wires, pipes, equipment or machinery within the
Project to provide restoration of Basic Services and, where the cessation or
interruption of Basic Service has occurred due to circumstances or conditions
beyond Project boundaries (collectively, "Off-Site Conditions"), to cause the
same to be restored, by diligent application or request to the provider thereof.
Notwithstanding the initial sentence of this Section 4.01(b), in the event
Tenant is precluded from operating its business in the Leased Premises at any
time during the Term as the result of the cessation of Basic Service due to Off-
Site Conditions, then Gross Rent shall abate hereunder during the period that
Tenant is so precluded from operating its business in the Leased Premises, but
solely to the extent of proceeds actually collected by Landlord under any policy
of off-premises services interruption insurance maintained by Landlord with
respect to the Leased Premises. In no event shall any mortgagee or the
beneficiary under any deed of trust referred to in Section 5.11 be or become
liable for any default of Landlord under this Section 4.01(b).

     4.02  Extra Services.
           --------------

     (a)   In addition to the Basic Services described in Section 4.01(a) above,
Landlord shall provide to Tenant at Tenant's sole cost and expense (and subject
to the limitations hereinafter set forth) the following extra services:

           (i)   Such extra cleaning and janitorial services required by reason
of any Tenant Improvements in excess of that which would be required for
Building Standard Improvements;

           (ii)  Additional air conditioning and ventilating capacity required
by reason of any electrical, data processing or other equipment or facilities or
services required to support the same, in excess of that which would be required
for Building Standard Improvements;

           (iii) Maintaining and replacing lamps, bulbs, and ballasts after
initial installation;

           (iv)  Heating, ventilation, air conditioning or extra electrical
service provided by Landlord to Tenant (i) during hours other than Business
Hours, (ii) on Saturdays, Sundays, or holidays, said heating, ventilation and
air conditioning or extra service to be furnished solely upon the prior written
request of Tenant given with such advance notice as Landlord may reasonably
require;

                                      22
<PAGE>

           (v)   Repair and maintenance service which is the obligation of
Tenant hereunder;

           (vi)  Any Basic Service in amounts determined by Landlord to exceed
the amounts required to be provided under Section 4.01(a), but only if Landlord
elects to provide such additional or excess service.

     (b)   Provided that Tenant is the sole tenant of the Building, the costs of
furnishing the extra services described in Section 4.02(a) above shall be
charged to Tenant as part of the Basic Operating Cost. If at any time during the
Term (including any Renewal Term) Tenant is not the sole tenant of the Building,
then the costs of furnishing such extra services shall not be included within
Basic Operating Cost and Tenant shall pay Landlord the costs thereof, together
with an administration fee equal to ten percent (10%) of such costs, within ten
(10) days following presentation of an invoice therefor by Landlord to Tenant.
The cost, if any, chargeable to Tenant for all extra services under this Section
4.02 shall constitute Additional Rent.

     4.03  Graphics and Signage.  For so long as Tenant is the Major Tenant,
           --------------------
Tenant shall have the exclusive right to maintain an identification sign on the
exterior of the Building, subject to Landlord's written approval of the
location, size, style and design of such sign, and further subject to the
obtaining by Tenant of a signage permit from the City of South San Francisco and
compliance by Tenant with all applicable Laws. All signs, notices and graphics
of every kind or character, visible in or from public corridors, the Common Area
or the exterior of the Leased Premises shall be subject to Landlord's prior
written approval which Landlord shall have the right to withhold in its absolute
and sole discretion. For purposes of this Section 4.03, Tenant shall be deemed
to be the "Major Tenant" so long as Tenant personally (and specifically
excluding any assignees or sublessees of Tenant, other than a Tenant Affiliate
to whom Tenant assigns its entire right, title and interest in and to this Lease
pursuant to Section 5.05(d) below) leases and occupies sixty percent (60%) or
more of the Net Rentable Area of the Building.

     4.04  Repair Obligation.  Landlord's obligation with respect to repair as
           -----------------
part of Basic Services shall be limited to (i) the structural portions of the
Building, (ii) the exterior wall of the Building, including glass and glazing,
(iii) the roof, (iv) mechanical, electrical, plumbing and life safety systems
that are considered Base Building Improvements, and (v) Common Areas. Landlord
shall have the right but not the obligation to undertake work of repair that
Tenant is required to perform under this Lease and that Tenant fails or refuses
to perform in a timely and efficient manner; provided, however, that except in
the case of an emergency, Landlord shall afford Tenant the cure period provided
in Section 7.08(a)(iii) below prior to undertaking any such repairs on Tenant's
behalf. All costs incurred by Landlord in performing any such repair for the
account of Tenant shall be repaid by Tenant to Landlord upon demand, together
with an administration fee equal to fifteen percent (15%) of such costs;
provided, however, that administration fees shall not be included in "income"
for purposes of calculating Landlord's management cost recovery under Section
3.06(a)(vii).

     4.05  Peaceful Enjoyment. Tenant shall peacefully have, hold and enjoy the
           ------------------
Leased Premises, subject to the other terms hereof, provided that Tenant pays
the Rent and performs all of Tenant's covenants and agreements herein contained.
This covenant and the other covenants of Landlord contained in this Lease shall
be binding upon Landlord and its successors only with

                                      23
<PAGE>

respect to breaches occurring during its and their respective ownership of
Landlord's interest hereunder.

                                   Article 5

                              Tenant's Covenants
                              ------------------

     5.01  Payments By Tenant.  Tenant shall pay Rent at the times and in the
           ------------------
manner herein provided. All obligations of Tenant hereunder to make payments to
Landlord shall constitute Rent and failure to pay the same when due shall give
rise to the rights and remedies provided for in Section 7.08.

     5.02  Taxes On Personal Property and Tenant Extra Improvements.  In
           --------------------------------------------------------
addition to, and wholly apart from its obligation to pay Tenant's Proportionate
Share(s) of Basic Operating Costs, Tenant shall be responsible for and shall pay
prior to delinquency taxes or governmental service fees, possessory interest
taxes, fees or charges in lieu of any such taxes, capital levies, or other
charges imposed upon, levied with respect to or assessed against its personal
property, on the value of its Tenant Extra Improvements, on its interest
pursuant to this Lease or on any use made of the Leased Premises or the Common
Areas by Tenant in accordance with this Lease. To the extent that any such taxes
are not separately assessed or billed to Tenant, Tenant shall pay the amount
thereof as invoiced to Tenant by Landlord. Landlord may require by written
notice to Tenant that Tenant shall install and maintain all required
intrabuilding network cable and other communications wires and cables necessary
to serve the Leased Premises from the point of presence in the Building from a
telecommunications provider selected by Tenant and approved by Landlord in its
reasonable discretion.

     5.03  Repairs By Tenant.  Tenant shall maintain and repair the Leased
           -----------------
Premises and keep the same in good condition. Tenant's obligation shall include,
without limitation, the obligation to maintain and repair all walls, floors,
ceilings and fixtures and to repair all damage caused by Tenant or Tenant
Parties to the utility outlets and other installations in the Leased Premises or
anywhere in the Project, whatever the scope of the work of maintenance or repair
required. Tenant shall repair all damage caused by removal of Tenant's movable
equipment or furniture or the removal of any Tenant Extra Improvements or
Alterations (hereinafter defined) permitted or required by Landlord, all as
provided in Section 5.18. At the request of Tenant, Landlord shall perform the
work of maintenance and repair constituting Tenant's obligation pursuant to this
Section 5.03 and as an "extra service" to be rendered pursuant to Section
4.02(a)(v) at Tenant's sole cost and expense including the administration fee
referred to therein. Any work of repair and maintenance performed by or for the
account of Tenant by persons other than Landlord shall be performed by
contractors approved by Landlord prior to commencement of the work and in
accordance with procedures Landlord shall from time to time establish. All such
work shall be performed in compliance with all applicable laws, ordinances,
rules and regulations and Tenant shall provide to Landlord copies of all permits
and records of inspection issued or obtained by Tenant in connection therewith
to establish such compliance. Nothing herein contained, however, shall be deemed
to impose upon Tenant the obligation to perform work of maintenance or repair
required by reason of Landlord's negligence or wrongful acts or those of
Landlord Parties. In performing the obligations under this Section, Tenant shall

                                      24
<PAGE>

notify Landlord of any repairs that could affect the mechanical, electrical,
HVAC, life safety or other systems of the Building.

     5.04  Waste.  Tenant shall not commit or allow any waste or damage to be
           ------
committed in any portion of the Leased Premises.

     5.05  Assignment or Sublease.
           -----------------------

     (a)   If Tenant intends to assign this Lease or sublet the Leased Premises
or any part thereof, Tenant shall give Landlord written notice of such intent.
Tenant's notice shall set forth the name and address of the proposed assignee or
subtenant, the nature and character of the business of the proposed assignee or
subtenant and the proposed date such assignment or sublease shall commence, and
shall be accompanied by current and prior financial statements for the proposed
assignee or subtenant prepared in accordance with GAAP. Tenant shall further
provide Landlord with (i) any additional information or documents reasonably
requested by Landlord (collectively, "Additional Sublease Information") within
ten (10) days after receiving Tenant's notice, and (ii) an opportunity to meet
and interview the proposed assignee or subtenant (collectively, a "Subtenant
Interview"), if requested by Landlord.

     (b)   Landlord shall have the right during Landlord's Review Period to
notify Tenant in writing that Landlord elects either (i) to terminate this Lease
as to the space so affected as of the date so specified by Tenant in its notice
under Section 5.05(a) above, in which event Tenant will be relieved of all
further obligations hereunder as to such space, or (ii) to provisionally permit
Tenant to assign this Lease or sublet such space, subject, however, to further
written approval by Landlord in accordance with Section 5.05(c) below.
Notwithstanding the foregoing, Landlord shall not have the right to terminate
this Lease under the aforesaid clause (i) if (A) following the completion of the
purported assignment or sublease, Tenant personally (and specifically excluding
any assignees or sublessees of Tenant, other than a Tenant Affiliate to whom
Tenant assigns its entire right, title and interest in and to this Lease
pursuant to Section 5.05(d) below) leases and occupies forty percent (40%) or
more of the Net Rentable Area of the Building, or (B) Tenant proposes to enter
into a Limited Sublease. If Landlord fails to notify Tenant in writing of its
election within Landlord's Review Period, Landlord shall be deemed to have
waived option (i) above (to the extent applicable), but written approval by
Landlord of the proposed assignee or sublessee shall be required. Failure by
Landlord to approve a proposed subtenant or assignee shall not cause a
termination of this Lease, and the sole remedy of Tenant shall be an action for
injunctive or declaratory relief.

     (c)   In the event Landlord provisionally permits Tenant to assign this
Lease or sublet the all or a portion of the Leased Premises in accordance with
clause (ii) of Section 5.05(b) above, then Tenant shall negotiate the terms of
the assignment or sublease transaction with the proposed assignee or sublessee
and, when such negotiations have been concluded, deliver to Landlord an exact
copy of the proposed agreements between Tenant and the proposed assignee or
subtenant, together with any additional information or documents requested by
Landlord. Landlord shall have a period of ten (10) days following its receipt of
the aforesaid documentation to notify Tenant in writing that Landlord either
approves or disapproves the proposed transaction; provided, however, that
Landlord shall not unreasonably withhold its approval of such transaction; and
provided, further, that Landlord shall not disapprove such transaction on

                                      25
<PAGE>

the basis of information that was furnished to Landlord prior to the granting of
provisional approval under clause (ii) of Section 5.05(b) above. Without
otherwise limiting the criteria upon which Landlord may withhold its consent to
a proposed assignment or sublease under Section 5.05(b) above or this Section
5.05(c), Landlord shall be entitled to consider all reasonable criteria
including, but not limited to, the following: (i) whether the use of the Leased
Premises by such proposed assignee or sublessee would be a Permitted Use; (ii)
whether the proposed assignee or sublessee is of sound financial condition as
determined by Landlord; (iii) whether the proposed assignee's or sublessee's use
will involve the storage, use, treatment or disposal of any Hazardous Material
(except for Permitted Hazardous Materials transported, stored and used in
accordance with the provisions of this Lease); (iv) whether the proposed use or
the proposed assignee or sublessee would cause the violation of any covenant or
agreement of Landlord to any third party or would permit any other tenant to
terminate its lease; and (v) whether the proposed subtenant or assignee does
then lease or occupy any other space in the Building.

     (d)   Notwithstanding the terms of Sections 5.05(a) through (c) above, but
subject to compliance with the requirements of Sections 5.05(e) through (l)
below, Tenant shall have the right to assign this Lease or to sublease the
Leased Premises with prior written notice to, but without the consent of,
Landlord to a Tenant Affiliate.

     (e)   Except in the case of a sublease or assignment to a Tenant Affiliate,
any rent or other consideration realized by Tenant under any sublease and
assignment in excess of the Rent payable hereunder, after amortization of
Tenant's Sublease/Assignment Costs, shall be divided and paid fifty percent
(50%) to Tenant and fifty percent (50%) to Landlord; provided, however, that in
the case of a Limited Sublease, one hundred percent (100%) of any rent or other
consideration realized by Tenant under such Limited Sublease in excess of the
Rent payable hereunder, after amortization of Tenant's Sublease/Assignment
Costs, shall be paid to Landlord.

     (f)   In any subletting undertaken by Tenant, Tenant shall diligently seek
to obtain not less than Fair Market Rent for the space so sublet. In any
assignment of this Lease in whole or in part, Tenant shall seek to obtain from
the assignee consideration reflecting a value of not less than Fair Market Rent
for the space subject to such assignment. Tenant shall provide to Landlord, upon
Landlord's demand, true and correct executed copies of the documents
constituting such sublease or assignment and any amendments thereof during the
Term.

     (g)   No assignment or subletting by Tenant shall relieve Tenant of any
obligation under this Lease. Any assignment or subletting that conflicts with
the provisions hereof shall be void. No consent by Landlord to any subletting or
assignment shall constitute a consent to any other assignment or subletting nor
shall it constitute a waiver of any of the provisions of this Section 5.05 as
they apply to any such future sublettings or assignments.

     (h)   Any assignee shall assume in writing, for the express benefit of
Landlord, all of the obligations of Tenant under this Lease, provided that no
such assumption shall be deemed a novation or other release of the prior Tenant.
Following any assignment, the obligations for which the prior Tenant remains
liable under this Lease shall include, without limitation, any obligations
arising in connection with any amendments to this Lease executed by Landlord and

                                      26
<PAGE>

the assignee, whether or not such amendments are made with knowledge or consent
of the prior Tenant.

     (i)   Tenant shall not enter into any subletting or assignment of this
Lease until after the Rent Commencement Date has occurred; provided, however,
that subject to compliance with the terms and provisions of this Section 5.05,
Tenant shall have the right prior to the Rent Commencement Date to enter into a
sublease affecting not more than one (1) floor of the Building and for a term
not exceeding eighteen (18) months from the Rent Commencement Date.

     (j)   Any improvements, additions, or alterations to the Building or the
Project that are required by any law, ordinance, rule or regulation, or are
deemed necessary or appropriate by Landlord as a result of any subletting or
assignment hereunder, shall be installed and provided without cost or expense to
Landlord. Landlord may condition its consent to any proposed sublessee or
assignee on the construction of improvements deemed necessary or appropriate by
Landlord by reason of the subletting or assignment.

     (k)   Landlord may hire outside consultants to review all assignment and
subletting documents and information. Tenant shall reimburse Landlord for the
cost thereof, including reasonable attorneys' fees, on demand. Such costs
actually paid by Tenant under this Section 5.05(j) shall not be deemed
"Expenses" for purposes of Section 3.06 above.

     (l)   Without liability to Tenant, Landlord shall have the right to offer
and to lease space in the Building, or in any other property, to any party,
including, without limitation, parties with whom Tenant is negotiating, or with
whom Tenant desires to negotiate, concerning assignment or subletting the Leased
Premises, or any portion thereof.

     5.06  Alterations, Additions or Improvements.
           ---------------------------------------

     (a)   Tenant shall not make or allow to be made any alterations, additions
or improvements in or to the Leased Premises (collectively, "Alterations")
without obtaining the prior written consent of Landlord. Landlord's consent
shall not be unreasonably withheld with respect to proposed Alterations that (i)
comply with all applicable laws, ordinances, rules and regulations, (ii) are
compatible with the Building and its mechanical, electrical, HVAC and life
safety systems, (iii) will not interfere with the use and occupancy of any other
portion of the Building by any other tenant or their invitees, (iv) do not
affect the structural portions of the Building, and (v) do not and will not,
whether alone or taken together with other improvements, require the
construction of any other improvements or alterations within the Building.
Notwithstanding the foregoing, Tenant shall have the right to make Alterations
to the Leased Premises with prior notice to but without the consent of Landlord,
provided that such Alterations (A) satisfy the criteria set forth in the
foregoing clauses (i) through (v) and are constructed and performed in full
compliance with all Laws and the terms of Section 5.06(b) below (including,
without limitation, the delivery of the documentation and information required
under said Section 5.06(b)), (B) do not require work to be performed inside the
walls or above the ceiling of the Leased Premises, (C) do not require the
issuance of building permits or approvals from any governmental agency, and (D)
do not exceed twenty five thousand dollars ($25,000) in cost individually or in
the aggregate during any twelve (12) month period or two hundred fifty thousand
dollars ($250,000) in cost in the aggregate over the Term (collectively,
"Permitted

                                      27
<PAGE>

Alterations"). For purposes of the foregoing clause (D), "costs" shall refer
only to "hard" costs and shall exclude architectural fees, permitting costs and
other "soft" costs.

     (b)  In determining whether or not to consent to proposed Alterations under
Section 5.06(a) above, Landlord shall have the right (without limitation) to
review plans and specifications for proposed Alterations, construction means and
methods, the identity of any contractor or subcontractor to be employed on the
work of Alterations, and the time for performance of such work. Tenant shall
supply to Landlord any documents and information requested by Landlord in
connection with the exercise of its rights hereunder. Landlord may hire outside
consultants to review such documents and information and Tenant shall reimburse
Landlord for the cost thereof, including reasonable attorneys' fees, upon
demand. All Alterations permitted hereunder shall be made and performed by
Tenant or, at Landlord's election, may be performed by Landlord, without cost or
expense to Landlord. Tenant shall pay Landlord, upon completion of any
Alteration, a reasonable fee for Landlord's supervision and administration of
the installation thereof; provided, however, that such fee shall not be deemed
to be "income" for purposes of calculating management cost recovery under
Section 3.06(a)(vii). All additions to or improvements of the Leased Premises,
whether of Building Standard Improvements, Tenant Extra Improvements or
Alterations, shall be and become the property of Landlord upon installation and
shall, subject to Section 5.06(c) below, be surrendered to Landlord upon
termination of this Lease by lapse of time or otherwise. Although Tenant Extra
Improvements become the property of Landlord upon installation, they are
intended to be for the convenience of Tenant and are not intended to be a
substitute for Rent or any part thereof. The obligations of the parties with
respect to removal of Alterations shall be controlled by Section 5.18.

     (c)  In the event Landlord consents to a proposed Alteration, such consent
shall include Landlord's advice whether or not such proposed Alteration shall be
required to be removed at the expiration or termination of the Term; provided,
however, that in no event shall Tenant be required to remove any Alterations
that are consistent with general office uses commonly found in class "A" office
properties owned by Landlord, as reasonably determined by Landlord. If Landlord
fails to so advise Tenant regarding whether or not a proposed Alteration must be
removed at the expiration or termination of this Lease, then Tenant shall be
required to remove such Alteration upon such expiration or termination date.

     5.07 Liens. Tenant shall keep the Leased Premises and the Project free from
          ------
any liens arising out of any (i) work performed or material furnished to or for
the Leased Premises, and (ii) obligations incurred by or for Tenant or any
person claiming through or under Tenant. Tenant shall, within ten (10) days of
obtaining knowledge of the imposition of any such lien, cause such lien to be
released of record by payment or posting of a bond fully satisfactory to
Landlord in form and substance. Landlord shall have the right at all times to
post and keep posted on the Leased Premises any notices permitted or required by
law, or that Landlord shall deem proper for the protection of Landlord, the
Leased Premises, the Project and any other party having an interest therein,
from mechanics', materialmen's and other liens. Landlord may cause such liens to
be released by any means it deems proper, including, without limitation, payment
of any such lien, at Tenant's sole cost and expense. All costs and expenses
incurred by Landlord in causing such liens to be released shall be repaid by
Tenant to Landlord immediately upon demand, together with an administration fee
equal to twenty percent (20%) of such costs and

                                       28
<PAGE>

expenses. In addition to all other requirements contained in this Lease, Tenant
shall give to Landlord at least ten (10) Business Days prior written notice
before commencement of any construction on the Leased Premises including,
without limitation, any Permitted Alterations.

     5.08 Compliance With Laws, Insurance Standards and Non-Discrimination.
          -----------------------------------------------------------------

     (a)  Tenant shall comply with all federal, state and local laws,
ordinances, orders, rules, regulations and policies (collectively, "Laws"), now
or hereafter in force, as amended from time to time, in any way related to the
use, condition or occupancy of the Leased Premises, regardless of when they
become effective, including, without limitation, all applicable Hazardous
Materials Laws and the Americans with Disabilities Act of 1990, as amended, but
excluding any Laws relating to the original construction of the Base Building
Improvements, which shall be the responsibility of Landlord. Tenant shall
immediately deliver to Landlord a copy of any notices received from any
governmental agency in connection with the Leased Premises. It is the intention
of Tenant and Landlord that the obligations of Tenant under this Section 5.08
shall apply irrespective of the scope of work required to achieve such
compliance. Tenant shall promptly cure and satisfy all Hazardous Materials
Claims arising out of or by reason of the activities or businesses of Tenant,
its sub-tenants, or Tenant Parties or any employees, agents, contractors,
officers, directors, partners, licensees, invitees and guests of Tenant's sub-
tenant. Nothing done by Tenant in its use or occupancy of the Leased Premises
shall create, require or cause imposition of any requirement by any governmental
authority for structural or other upgrading of or improvement to the Project.

     (b)  Tenant shall not occupy or use, or permit any portion of the Leased
Premises to be occupied or used, for any business or purpose that is
disreputable or productive of fire hazard, or permit anything to be done that
would increase the rate of fire or other insurance coverage on the Project
and/or its contents. If Tenant does or permits anything to be done that shall
increase the cost of any insurance policy required to be carried hereunder, then
Tenant, at Landlord's option, shall not be in default under this Lease, but
shall reimburse Landlord, upon demand, for any such additional premiums.
Landlord shall deliver to Tenant a written statement setting forth the amount of
any such insurance cost increase and showing in reasonable detail the manner in
which it has been computed.

     (c)  Landlord and Tenant herein each covenant by and for itself and its
successors and assigns, and all persons claiming under or through it, and this
Lease is made and accepted upon and subject to the following conditions: That
there shall be no discrimination against, or segregation of, any person or group
of persons on account of race, color creed, religion, sex, marital status,
national origin or ancestry in the leasing, subleasing, transferring, use'
occupancy, tenure or enjoyment of the Leased Premises herein leased, nor shall
Landlord or Tenant, or any person claiming under or through it, establish or
permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees in the Leased Premises herein leased.

                                       29
<PAGE>

     5.09 Entry For Repairs,  Inspection,  Posting  Notices,  Etc.  After
          --------------------------------------------------------
reasonable notice (except in emergencies where no such notice shall be
required), Landlord or Landlord Parties shall have the right to enter the Leased
Premises to inspect the same, to clean, to perform such work as may be permitted
or required hereunder, to make repairs to or alterations of the Project or other
tenant spaces therein, to deal with emergencies, to post such notices as may be
permitted or required by law to prevent the perfection of liens against
Landlord's interest in the Project or to exhibit the Leased Premises to
prospective tenants, purchasers, encumbrancers or others, or for any other
purpose as Landlord may deem necessary or desirable; provided, however, that
Landlord shall not unreasonably interfere with Tenant's business operations.
Tenant shall not be entitled to any abatement of Rent by reason of the exercise
of any such right of entry.

     5.10 No Nuisance. Tenant shall conduct its business and control Tenant
          ------------
Parties without creating any nuisance, or interfering with, annoying,
endangering or disturbing any other tenant or Landlord in its operation of the
Project. Tenant shall not place any loads upon the floor, walls or ceiling of
the Leased Premises that endanger the structure nor place any harmful liquids or
Hazardous Material in the drainage system of the Building. Tenant shall not
permit any vibration, noise or odor to escape from the Leased Premises and shall
not do or permit anything to be done within the Leased Premises which would
adversely affect the quality of the air in the Building.

     5.11 Subordination; Mortgagee Protection; Reciprocal Easement Agreements.
         --------------------------------------------------------------------

     (a)  Tenant agrees that this Lease and the rights of Tenant hereunder are
subject and subordinate to the holder of or beneficiary under any mortgage or
deed of trust whether now or in the future encumbering the Project (the
"Mortgage Lender") and to any and all advances made thereunder, and interest
thereon, and all modifications, renewals, supplements, consolidations and
replacements thereof; provided only, and as a condition precedent to any such
subordination of this Lease to a mortgage or deed of trust hereafter executed
covering the Project, the applicable Mortgage Lender shall agree in writing
(such writing being herein referred to as a "Nondisturbance Agreement") to
recognize Tenant's rights under this Lease upon the foreclosure of such mortgage
or deed of trust as long as Tenant shall pay the Rent and observe and perform
all the provisions of this Lease to be observed and performed by Tenant.
Notwithstanding the foregoing, Tenant agrees that the Mortgage Lender may at its
option, unilaterally elect to subordinate, in whole or in part, by an instrument
in form and substance satisfactory to such Lender, the lien of such mortgage or
deed of trust to this Lease. Tenant agrees to execute promptly and to deliver to
Landlord or any Mortgage Lender any subordination instrument or instruments
(collectively, a "Subordination Agreement") requested by such Mortgage Lender,
provided that, if such Subordination Agreement purports to make this Lease
subject and subordinate to the lien of the Mortgage Lender's mortgage or deed of
trust, the Mortgage Lender shall execute a commercially reasonable
Nondisturbance Agreement consistent with the terms of this Section 5.11(a) and
otherwise reasonably acceptable to Landlord, Tenant and such Mortgage Lender.
Tenant agrees that if it fails or refuses to execute a Subordination Agreement
or a Nondisturbance Agreement, as applicable, within fifteen (15) days after
written request therefor by Landlord or such Mortgage Lender, such failure or
refusal shall constitute a default by Tenant under this Lease, but such failure
or refusal shall in no way affect the validity or enforceability of any such
subordination made by such Mortgage Lender.

                                       30
<PAGE>

     (b)  In the event a Mortgage Lender requires Tenant to execute a
Subordination Agreement or a Nondisturbance Agreement which provides by its
terms that, following the foreclosure of the lien of the applicable mortgage or
deed of trust, the Mortgage Lender shall be liable to Tenant for the return of
the Letter of Credit only if the Mortgage Lender has actually taken possession
of the Letter of Credit, then concurrently with or prior to the execution by
Tenant of such Subordination Agreement or Nondisturbance Agreement, as the case
may be, Landlord shall deliver the Letter of credit to such Mortgage Lender, and
Landlord shall thereafter permit the Mortgage Lender to retain possession of the
Letter of Credit and any Letter of Credit Proceeds not applied in accordance
with the terms of Section 5.13 below until the obligations secured by the
applicable mortgage or deed of trust have been fully satisfied. In the event
Tenant provides a Security Deposit to Landlord pursuant to Section 5.14 below,
then for purposes of this Section 5.11(b), the term "Letter of Credit" shall
include such Security Deposit.

     (c)  Any successor in interest to any Mortgage Lender shall not be bound by
(i) any payment of Gross Rent for more than one (1) month in advance, or (ii)
any amendment or modification of this Lease made without the written consent of
the Mortgage Lender. Nothing herein contained shall be deemed to impose upon the
person or party succeeding to the interest of Landlord as a result of the
enforcement of such mortgage or first deed of trust by any Mortgage Lender, any
obligation for defaults on the part of Landlord, and any person or party
succeeding to possession of the Project as a successor to Landlord shall be
subject to Landlord's obligations hereunder only during the period of such
persons' or party's ownership.

     (d)  Tenant shall not sue, seek any remedy or enforce any right against
Landlord until (i) Tenant gives written notice to any Mortgage Lender, and (ii)
a reasonable time for such Mortgage Lender, at its option, to remedy the act or
omission has elapsed following the giving of notice by Tenant to Mortgage Lender
required hereunder, including, without limitation, time to obtain possession
from Landlord by power of sale or judicial foreclosure, it being agreed that the
Mortgage Lender shall have no obligation to Tenant to cure or remedy any act or
omission of Landlord.

     (e) Tenant agrees that this Lease and the rights of Tenant hereunder are
subject and subordinate to any reciprocal easement agreements whether now or in
the future affecting the Project (the "REAs"); provided, however, that any
future REAs shall not materially adversely affect any specific rights granted to
Tenant hereunder with respect to parking or access. Tenant agrees to execute
promptly and to deliver to Landlord any subordination instrument or instruments
requested by Landlord and agrees that if it fails or refuses to do so within
fifteen (15) days after written request therefor by Landlord, such failure or
refusal shall constitute a default by Tenant under this Lease, but such failure
or refusal shall in no way affect the validity or enforceability of any such
subordination.

     5.12 Estoppel Certificate. Within fifteen (15) days of a written request
          ---------------------
from Landlord, Tenant shall execute estoppel certificates addressed to (i) any
mortgagee or prospective mortgagee of Landlord or, (ii) any purchaser or
prospective purchaser of all or any portion of, or interest in, the Project, on
a form specified by Landlord, certifying as to such facts (if true) and agreeing
to such notice provisions and other matters as such mortgagee(s) or purchaser(s)
may reasonably require; provided, however, that in no event shall any such
estoppel certificate require an amendment of the provisions hereof, although
Tenant shall be bound by the

                                       31
<PAGE>

statements made in such certificate. In the event that Tenant fails or refuses
to deliver such an estoppel certificate to Landlord within fifteen (15) days of
a written request from Landlord, then Landlord may give to Tenant a second
notice, reiterating the request that Tenant execute an estoppel certificate in
the form specified by Landlord and stating that, if Tenant fails to do so within
five (5) days of the receipt by Tenant of such second notice from Landlord,
Tenant shall be deemed to be bound by the statements set forth in the form of
certificate which Landlord requested that Tenant deliver. In the event that
Tenant fails to deliver an estoppel certificate in the form specified by
Landlord within five (5) days of the receipt by Tenant of such second notice
from Landlord, Tenant shall conclusively be deemed, without exception, to have
acknowledged the correctness of the statements set forth in the form of
certificate which Landlord requested that Tenant deliver, and Tenant shall be
estopped from denying the correctness of each such statement, such that a
mortgage or purchaser may rely on the correctness of the statements in such form
of certificate, as if made and certified by Tenant. A failure by Tenant to
deliver an estoppel certificate in the form specified by Landlord within fifteen
(15) days of the receipt by Tenant of an initial request from Landlord for such
certificate shall also constitute a material breach of this Lease by Tenant.

     5.13 Letter of Credit.
          -----------------

     (a)  Within seven (7) Business Days after the full execution of this Lease,
Tenant shall deliver to Landlord, at Tenant's sole cost and expense, the Letter
of Credit described below in the initial amount of Two Million Dollars
($2,000,000.00) (the "LC Face Amount") as security for Tenant's performance of
all of Tenant's covenants and obligations under this Lease. Tenant shall
thereafter cause the Bank (as defined below) to increase the LC Face Amount to
the sum of Four Million Dollars ($4,000,000.00) on or before the Base Building
Improvements Construction Commencement Date, and to the sum of Six Million Three
Hundred Thousand Dollars ($6,300,000.00) on or before the Tenant Improvements
Construction Commencement Date. Tenant understands and agrees that neither the
Letter of Credit nor any Letter of Credit Proceeds (as defined below) shall be
deemed an advance rent deposit or an advance payment of any other kind, or a
measure of Landlord's damages upon a default on the part of Tenant. Subject to
Section 5.13(b) below, the Letter of Credit shall be maintained in effect from
the date hereof through the date that is sixty (60) days after the Term
Expiration Date (the "LC Termination Date"). On the LC Termination Date,
Landlord shall return to Tenant the Letter of Credit and any Letter of Credit
Proceeds then held by Landlord (other than those Letter of Credit Proceeds
Landlord is entitled to retain under the terms of this Section 5.13(a));
provided, however, that in no event shall any such return be construed as an
admission by Landlord that Tenant has performed all of its obligations
hereunder. Landlord shall not be required to segregate the Letter of Credit
Proceeds from its other funds and no interest shall accrue or be payable to
Tenant with respect thereto. Landlord may (but shall not be required to) draw
upon the Letter of Credit and use the proceeds therefrom (the "Letter of Credit
Proceeds") or any portion thereof as may be reasonably necessary (i) to cure a
default by Tenant under this Lease and to compensate Landlord for any loss or
damage Landlord incurs as a result of Tenant's failure to perform any of its
covenants or obligations hereunder, (ii) to repair damage to the Leased Premises
caused by Tenant, (iii) to clean the Leased Premises upon termination of this
Lease, and (iv) to reimburse Landlord for the payment of any amount which
Landlord may for any other purpose spend or be required to spend by reason of a
default on the part of Tenant, it being understood that any use of the Letter of
Credit Proceeds shall not constitute a bar or defense to any of Landlord's
remedies

                                       32
<PAGE>

under this Lease, at law or in equity. In such event and upon written
notice from Landlord to Tenant specifying the amount of the Letter of Credit
Proceeds so utilized by Landlord and the particular purpose for which such
amount was applied, Tenant shall immediately deliver to Landlord an amendment to
the Letter of Credit or a replacement Letter of Credit in an amount equal to the
then-full LC Face Amount. Tenant's failure to deliver such replacement Letter of
Credit to Landlord within ten (10) days of Landlord's notice shall constitute an
immediate Event of Default hereunder. In the event Landlord transfers its
interest in this Lease, Landlord shall transfer the Letter of Credit and any
Letter of Credit Proceeds then held by Landlord to Landlord's successor in
interest, and thereafter Landlord shall have no further liability to Tenant with
respect to such Letter of Credit or Letter of Credit Proceeds.

     (b)  Notwithstanding the terms of Section 5.13(a) above, Tenant shall be
eligible to reduce the LC Face Amount on the terms and subject to the conditions
set forth in subsections (i) through (iv) below:

     (i)  In the event Tenant has a Market Capitalization of less than Five
Hundred Million Dollars ($500,000,000) on the first (1st) anniversary of the
Rent Commencement Date, then the Face Amount shall not be reduced on said first
(1st) anniversary and shall remain at Six Million Three Hundred Thousand Dollars
($6,300,000) until the second (2nd) anniversary of the Rent Commencement Date.
Thereafter, commencing on the second (2nd) anniversary of the Rent Commencement
Date and continuing on each successive anniversary date through and including
the sixth (6th) anniversary of the Rent Commencement Date, Tenant shall have the
right to reduce the then-Face Amount on each anniversary date by the applicable
amount specified below:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                             PERCENTAGE REDUCTION
                                        (expressed as a percentage of
                                          the initial Face Amount of
     ANNIVERSARY DATE                           $6,300,000.00)                    ACTUAL PERMITTED REDUCTION
----------------------------------------------------------------------------------------------------------------------
<S>                                      <C>                                      <C>
Second (2nd) anniversary of
Rent Commencement Date                               15%                               $     945,000.00
----------------------------------------------------------------------------------------------------------------------
Third (3rd) anniversary of
Rent Commencement Date                                18%                                  1,134,000.00
----------------------------------------------------------------------------------------------------------------------
Fourth (4th) anniversary of
Rent Commencement Date                                20%                                  1,260,000.00
----------------------------------------------------------------------------------------------------------------------
Fifth (5th) anniversary of
Rent Commencement Date                                22%                                  1,386,000.00
----------------------------------------------------------------------------------------------------------------------
Sixth (6th) anniversary of
Rent Commencement Date                                25%                                  1,575,000.00
----------------------------------------------------------------------------------------------------------------------
</TABLE>

     (ii) If Tenant has a Market Capitalization equal to or greater than Five
Hundred Million Dollars ($500,000,000) on the first (1st) anniversary of the
Rent

                                       33
<PAGE>

Commencement Date, then Tenant shall be entitled to reduce the Face Amount
on said first (1st) anniversary by the applicable amount specified below:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------

             MARKET CAPITALIZATION                     PERCENTAGE REDUCTION            ACTUAL PERMITTED REDUCTION
----------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                             <C>
Equal to or greater than $500 million                           5%                          $     315,000.00
----------------------------------------------------------------------------------------------------------------------
Equal to or greater than $1 billion                             10%                               630,000.00
----------------------------------------------------------------------------------------------------------------------
Equal to or greater than $1.5 billion                           15%                               945,000.00
----------------------------------------------------------------------------------------------------------------------
Equal to or greater than $2 billion                             20%                             1,260,000.00
----------------------------------------------------------------------------------------------------------------------
Equal to or greater than $2.5 billion                           25%                             1,575,000.00
----------------------------------------------------------------------------------------------------------------------
Equal to or greater than $3 billion                             30%                             1,890,000.00
----------------------------------------------------------------------------------------------------------------------
</TABLE>

                           Notwithstanding the foregoing, Tenant shall be
entitled to a percentage reduction greater than twenty percent (20%) under this
subsection (ii) only if Tenant has exhibited Net Profits for a minimum of two
(2) consecutive calendar quarters ending on or before the first (1st)
anniversary of the Rent Commencement Date.

                           The Face Amount of the Letter of Credit, after
reduction in accordance with this clause (ii), shall be referred to herein as
the "Post Clause (ii) Reduction Face Amount."

                    (iii)  In the event Tenant is entitled to reduce the Face
Amount on the first (1st) anniversary of the Rent Commencement Date in
accordance with subsection (ii) above, then Tenant shall have the further right,
commencing on the first (1st) anniversary of the Rent Commencement Date and
continuing on each successive anniversary date through and including the fifth
(5th) anniversary of the Rent Commencement Date, to reduce the then-Face Amount
on each anniversary date by the applicable percentage of the Post Clause (ii)
Reduction Face Amount specified below:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                            PERCENTAGE REDUCTION
                              (expressed as a percentage of the Post Clause (ii)
     ANNIVERSARY DATE                      Reduction Face Amount)
--------------------------------------------------------------------------------
<S>                           <C>
  First (1st) anniversary of
  Rent Commencement Date                         15%
--------------------------------------------------------------------------------
  Second (2nd) anniversary of
  Rent Commencement Date                         18%
--------------------------------------------------------------------------------
  Third (3rd) anniversary of
  Rent Commencement Date                         20%
--------------------------------------------------------------------------------
</TABLE>

                                       34
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                            PERCENTAGE REDUCTION
                              (expressed as a percentage of the Post Clause (ii)
     ANNIVERSARY DATE                      Reduction Face Amount)
--------------------------------------------------------------------------------
<S>                           <C>
  Fourth (4th) anniversary of
  Rent Commencement Date                         22%
--------------------------------------------------------------------------------
  Fifth (5th) anniversary of
  Rent Commencement Date                         25%
--------------------------------------------------------------------------------
</TABLE>

                           By way of example only, if Tenant has a Market
Capitalization of One Billion Dollars ($1,000,000,000.00) on the first (1st)
anniversary of the Rent Commencement Date and is therefore entitled to a
reduction in the Face Amount of $630,000.00 pursuant to clause (ii) above, then
the Face Amount shall be further reduced pursuant to this clause (iii) by the
amounts of $850,500.00, $1,020,600.00, $1,134,000.00, $1,247,400.00 and
$1,417,500.00, respectively, on the first (1st), second (2nd), third (3rd),
fourth (4th) and fifth (5th) anniversaries of the Rent Commencement Date.

                  (iv)     Tenant shall have the right to cancel the Letter of
Credit in its entirety on or after the third (3rd) anniversary of the Rent
Commencement Date, provided that (A) at the time Tenant seeks to cancel the
Letter of Credit (the "Letter of Credit Early Cancellation Date"), Tenant has a
Market Capitalization equal to or greater than Five Billion Dollars
($5,000,000,000), (B) Tenant has exhibited Net Profits for a minimum of four (4)
consecutive calendar quarters ending on or before the Letter of Credit Early
Cancellation Date, and (C) no Event of Default (or event or condition which with
the giving of notice or the passage of time, or both, would constitute an Event
of Default hereunder) shall be occurring on the Letter of Credit Early
Cancellation Date.

          (c)  As used herein, Letter of Credit shall mean an unconditional,
standby irrevocable letter of credit (herein referred to as the "Letter of
Credit") issued by the San Francisco office of Bank of America, Wells Fargo Bank
or another major national bank insured by the Federal Deposit Insurance
Corporation and otherwise satisfactory to Landlord (the "Bank"), naming Landlord
as beneficiary, in the amount of the LC Face Amount, and otherwise in form and
substance satisfactory to Landlord. The Letter of Credit shall be for a one-year
term and shall provide: (i) that Landlord may make partial and multiple draws
thereunder, up to the face amount thereof, (ii) that Landlord may draw upon the
Letter of Credit up to the full amount thereof and the Bank will pay to Landlord
the amount of such draw upon receipt by the Bank of a sight draft signed by
Landlord and accompanied by a written certification from Landlord to the Bank
stating either that: (A) an Event of Default has occurred and is continuing
under this Lease and any applicable grace period has expired, or Landlord is
otherwise entitled to draw upon the Letter of Credit pursuant to the terms of
this Lease, or (B) Landlord has not received notice from the Bank at least
thirty (30) days prior to the then current expiry date of the Letter of Credit
that the Letter of Credit will be renewed by the Bank for at least one (1) year
beyond the relevant annual expiration date or, in the case of the last year of
the Term, sixty (60) days after the Term Expiration Date, together with a
replacement Letter of Credit or a modification to the existing Letter of Credit
effectuating such renewal, and Tenant has not otherwise furnished Landlord with

                                       35
<PAGE>

a replacement Letter of Credit as hereinafter provided; and (iii) that, in the
event of Landlord's assignment or other transfer of its interest in this Lease,
the Letter of Credit shall be freely transferable by Landlord, without recourse
and without the payment of any fee or consideration in excess of one quarter
(1/4) of one percent (1%) of the then LC Face Amount, to the assignee or
transferee of such interest and the Bank shall confirm the same to Landlord and
such assignee or transferee. Landlord shall be responsible for the payment of
the aforesaid fee in connection with any such transfer of the Letter of Credit.
In the event that the Bank shall fail to (y) notify Landlord that the Letter of
Credit will be renewed for at least one (1) year beyond the then applicable
expiration date (or, in the case of the last year of the Term, sixty (60) days
after the Term Expiration Date), and (z) deliver to Landlord a replacement
Letter of Credit or a modification to the existing Letter of Credit effectuating
such renewal, and Tenant shall not have otherwise delivered to Landlord, at
least thirty (30) days prior to the relevant annual expiration date, a
replacement Letter of Credit in the amount required hereunder and otherwise
meeting the requirements set forth above, then Landlord shall be entitled to
draw on the Letter of Credit as provided above, and shall hold the proceeds of
such draw as Letter of Credit Proceeds pursuant to Section 5.13(a) above;
provided, however, that in and only in such event, Landlord shall deposit such
Letter of Credit Proceeds in an interest-bearing account at a bank selected by
Landlord and all interest accrued thereon shall be added to and deemed a part of
the Letter of Credit Proceeds for all purposes of this Section 5.13.

     5.14 Security Deposit.(a) Upon the written request of Tenant, Landlord
          -----------------
shall permit Tenant to deliver to Landlord a cash security deposit (the
"Security Deposit") equal to the amount of the Letter of Credit then required to
be maintained pursuant to Section 5.13 above, whereupon Landlord shall return
the Letter of Credit to Tenant for cancellation. Tenant understands and agrees
that the Security Deposit shall not be deemed an advance rent deposit or an
advance payment of any other kind, or a measure of Landlord's damages upon a
default on the part of Tenant. Tenant shall have the right from time to time to
reduce the amount of the Security Deposit on the terms and subject to the
conditions set forth in Section 5.13 above for the reduction of the LC Face
Amount. The Security Deposit shall serve as security for the full and faithful
performance of Tenant's obligations under this Lease. Landlord may (but shall
not be required to) use the Security Deposit or any portion thereof for any
purpose for which Landlord is entitled to use the Letter of Credit or any Letter
of Credit Proceeds pursuant to Section 5.13 above, it being understood that any
use of the Security Deposit shall not constitute a bar or defense to any of
Landlord's remedies under this Lease, at law or in equity. In such event, and
upon written notice from Landlord to Tenant specifying the amount of the
Security Deposit so utilized by Landlord and the particular purpose for which
such amount was applied, Tenant shall immediately deposit with Landlord an
amount sufficient to return the Security Deposit to the amount that would then
be required under Section 5.13 above if Tenant had not delivered the Security
Deposit to Landlord and the Letter of Credit was still in place. Tenant's
failure to deliver such amount to Landlord within ten (10) days of Landlord's
notice shall constitute an immediate Event of Default hereunder. Landlord shall
deposit the Security Deposit in an interest-bearing account at a bank selected
by Landlord and all interest accrued thereon shall be added to and deemed a part
of the Security Deposit for all purposes of this Section 5.14. Not later than
sixty (60) days after the Term Expiration Date, Landlord shall return to Tenant
the Security Deposit (other than those portions of the Security Deposit Landlord
is entitled to apply under the terms of this Section 5.14); provided, however,
that in no event shall any such return be construed as an admission by Landlord
that Tenant has performed all of its obligations

                                       36
<PAGE>

hereunder. If Landlord conveys or transfers its interest in this Lease, the
Security Deposit shall be transferred to Landlord's successor and Landlord shall
be released and discharged from any further liability to Tenant with respect to
such Security Deposit.

     5.15  Tenant's Remedies.  Tenant shall look solely to Landlord's interest
           -----------------
in the Project for recovery of any judgment from Landlord. Landlord and Landlord
Parties shall not be personally liable for any such judgment. Any lien obtained
to enforce any such judgment and any levy of execution thereon shall be subject
and subordinate to any lien, mortgage or deed of trust to which Section 5.11
applies or may apply.

     5.16  Rules and  Regulations.  Tenant shall comply with the Rules and
           ----------------------
Regulations for the Project attached as Exhibit D and such amendments thereto as
Landlord may adopt from time to time with prior notice to Tenant. Landlord shall
not be liable to Tenant for or in connection with the failure of any other
tenant of the Project to comply with any rules and regulations applicable to
such other tenant under its lease.

     5.17  Prohibition and Indemnity With Respect To Hazardous Material.
           ------------------------------------------------------------

     (a)   Tenant shall not cause or permit any Hazardous Material to be brought
upon, kept or used in or about the Leased Premises by Tenant or Tenant Parties
without the prior written consent of Landlord, save and except only for
Permitted Hazardous Materials, which Tenant may bring, store and use in
reasonable quantities for their intended use in the Leased Premises, but only in
full compliance with all Hazardous Materials Laws and otherwise in a safe and
prudent manner. If (i) Tenant breaches the obligations stated in the preceding
sentence, or (ii) contamination of the Leased Premises by Hazardous Material
occurs for which Tenant is or Tenant Parties are found to be responsible, or
(iii) Tenant's activities or those of Tenant Parties (or those of its
subtenants) result in or cause a Hazardous Materials Claim, then Tenant shall
indemnify, defend, protect and hold Landlord and Landlord Parties harmless from
and against any and all claims, judgments, damages, penalties, fines, costs,
expenses, liabilities or losses (including, without limitation, diminution in
value of the Leased Premises, damages for the loss or restriction on use of
rentable or usable space or of any amenity of the Leased Premises, damages
arising from any adverse impact on marketing of space, and sums paid in
settlement of claims, attorneys' fees, consultants' fees and experts' fees)
(collectively, "Claims") which arise during or after the Term as a result of
such contamination. This indemnification of Landlord by Tenant includes, without
limitation, costs incurred in connection with any investigation of site
conditions or any clean-up, remedial, removal or restoration work required by
any federal, state or local governmental agency or political subdivision because
of Hazardous Material present in the soil or ground water on or under the Leased
Premises. The foregoing indemnity shall survive the expiration or earlier
termination of this Lease.

     (b)   Notwithstanding anything to the contrary contained in Section 5.17(a)
above, Tenant shall not be responsible under this Section 5.17 for any costs
incurred in cleaning up or remediating (i) contamination by Hazardous Materials
existing in the soil or groundwater on or under the Leased Premises prior to the
Term Commencement Date ("Pre-Existing Contamination"), (ii) contamination by
Hazardous Materials placed, stored or disposed of by Landlord or the Landlord
Parties on or about the Project at any time ("Landlord's Contamination"), or
(iii) Specified Contamination, except, in any of the foregoing instances, to

                                       37
<PAGE>

the extent that Tenant or the Tenant Parties have contributed to or exacerbated
the presence of or contamination caused by such Hazardous Materials.

     5.18  Surrender of Premises On Termination.  On or before the ninetieth
           ------------------------------------
(90th) day preceding the Term Expiration Date, Tenant shall notify Landlord in
writing of the precise date upon which Tenant plans to surrender the Leased
Premises to Landlord. On expiration of the Term, Tenant shall quit and surrender
the Leased Premises to Landlord, broom clean, in good order, condition and
repair as required by Section 5.03, with all of Tenant's movable equipment,
furniture, trade fixtures and other personal property removed therefrom. Subject
to Section 5.06(c) above and Paragraph 3(c)(ii) of Exhibit C hereto, all
Alterations and Tenant Improvements shall be surrendered with the Leased
Premises in good condition and repair, reasonable wear and tear (but only to an
extent consistent with the Leased Premises remaining in good condition and
repair) and casualty damage excepted. Any property of Tenant not removed
hereunder shall be deemed, at Landlord's option, to be abandoned by Tenant and
Landlord may store such property in Tenant's name at Tenant's expense, and/or
dispose of the same in any manner permitted by law. Tenant shall repair at its
sole cost and expense, all damage caused to the Leased Premises or the Project
by removal of Tenant's movable equipment or furniture and such Tenant
Improvements and Alterations as Tenant shall be allowed or required to remove
from the Leased Premises by Landlord. If the Leased Premises are not surrendered
as of the end of the Term in the manner and condition herein specified, Tenant
shall indemnify, defend, protect and hold Landlord and Landlord Parties harmless
from and against any and all Claims resulting from or caused by Tenant Delays or
failure in so surrendering the Leased Premises, including, without limitation,
any Claims made by any succeeding tenant due to such delay or failure. Tenant
acknowledges that Landlord will be attempting to lease the Leased Premises with
any such lease to be effective upon expiration of the Term, and failure to
surrender the Leased Premises could cause Landlord to incur liability to such
successor tenant for which Tenant shall be responsible hereunder to the full
extent thereof.

     5.19  Window Coverings.  All window coverings shall be provided by Tenant,
           ----------------
at its sole cost and expense (except for window coverings installed in
connection with the Tenant Improvements, which may be paid for with the Tenant
Improvements Allowance and the proceeds of the Tenant Improvements Loan), and
shall comply with Landlord's standard Building window covering. Tenant shall not
place or maintain any window coverings, blinds or drapes on any exterior window,
other than those in compliance with Landlord's standards, without Landlord's
prior written approval which Landlord shall have the right to grant or withhold
in its absolute and sole discretion. Tenant acknowledges that breach of this
covenant will directly and adversely affect the exterior appearance of the
Project or the operation of the heating, ventilation or air conditioning
systems.

                                   ARTICLE 6

                    Condition and Operation of the Building
                    ---------------------------------------

     6.01  Exhibit B Controls.  Landlord's entire obligation with respect to the
           ------------------
condition of the Leased Premises, its suitability for Tenant's uses and the
improvement requirements with respect thereto shall be as stated in Exhibit B.
Landlord shall have no other obligation of any kind

                                       38
<PAGE>

or character, express or implied, with respect to the condition of the Leased
Premises, Building or Project or the suitability thereof for Tenant's purposes,
and Tenant acknowledges that it has neither received nor relied upon any
representation or warranty made by or on behalf of Landlord with respect to such
matters.

     6.02  Alteration.  Subject to any contrary provisions of Section 2.02
           ----------
above, Landlord may, at any time and from time to time: (i) make structural or
seismic modifications to the Building; (ii) change, add to, eliminate or reduce
the extent, size, shape or configuration of any aspect of or improvement
(including the Building) within the Project or its operations; provided,
however, that Landlord shall not alter any of the Common Areas within the
Project in a manner that is inconsistent with a class "A" office project; (iii)
change the arrangement, character, use or location of corridors, stairs,
toilets, mechanical, plumbing, electrical or other operating systems or any
other parts of the Building; and (iv) change the name, number or designation by
which the Building or the Project is commonly known. None of the foregoing acts
shall be deemed an actual or constructive eviction of Tenant, shall entitle
Tenant to any reduction of Rent or shall result in any liability of Landlord to
Tenant. Landlord shall have the exclusive rights to the airspace above and
around, and the subsurface below, the Leased Premises and other portions of the
Building, including, without limitation, the exclusive right to use all exterior
walls, roofs and other portions of the Building for signs, notices and other
promotional purposes.

                                   ARTICLE 7

              Casualty, Eminent Domain and Miscellaneous Matters
              --------------------------------------------------

     7.01  Landlord's Casualty Insurance.  Landlord shall maintain, or cause to
           -----------------------------
be maintained, a policy or policies of "all-risk" insurance with the premiums
thereon fully paid in advance, issued by and binding upon an insurance company
of good financial standing, insuring the Base Building Improvements and the
Tenant Improvements (including any Tenant Extra Improvements) against loss or
damage by fire or other insurable hazards (that may include earthquake loss if
Landlord elects to maintain such coverage) and contingencies for the full
insurable value thereof, exclusive of excavations and foundations; provided,
however, that Landlord shall not be obligated to insure any of Tenant's
furniture, equipment, machinery, trade-fixtures, goods or supplies ("Tenant's
Personal Property"), or Alterations that Tenant may make upon the Leased
Premises. If the annual premiums charged Landlord for such casualty insurance
exceed the standard premium rates because the nature of Tenant's operations
result in extra-hazardous or higher than normal risk exposure, then Tenant
shall, upon receipt of appropriate premium invoices, reimburse Landlord for such
increases in premium. All insurance proceeds payable under Landlord's insurance
carried hereunder shall be payable solely to Landlord, and Tenant shall have no
interest therein. Tenant shall from time to time provide Landlord with such
information as may be requested by Landlord or its insurers concerning the value
of the Tenant Improvements (including any Tenant Extra Improvements).

     7.02  Liability Insurance.  Landlord (with respect to the Project) and
           -------------------
Tenant (with respect to the Leased Premises and Project) shall each maintain or
cause to be maintained a policy or policies of commercial general liability
insurance with the premiums thereon fully paid in advance, issued by and binding
upon an insurance company of good financial standing, such

                                       39
<PAGE>

insurance to afford minimum protection of not less than Five Million Dollars
($5,000,000.00) combined single limit for bodily injury, death and property
damage in any one occurrence. The coverages required to be carried shall be
extended to include, but not to be limited to, blanket contractual liability,
personal injury liability (libel, slander, false arrest and wrongful eviction),
and broad form property damage liability. Tenant's contractual liability
insurance shall apply, without limitation, to all of Tenant's indemnity
obligations under this Lease. The certificate evidencing Tenant's insurance
coverage required hereunder shall state that the insurance includes the
liability assumed by Tenant under this Lease and that Tenant's insurance is
primary with any other insurance available to Landlord or any other named
insured being excess. Upon request of Tenant, Landlord shall provide Tenant
reasonable evidence that the insurance required to be maintained hereunder by
Landlord is in full force and effect.

     7.03  Tenant's Casualty Insurance and Additional Tenant Insurance
           -----------------------------------------------------------
Requirements.
------------

     (a)   Tenant shall provide insurance coverage during the Term against loss
or damage by fire and such other risks as are from time to time included in an
"all risk" policy (including, without limitation, sprinkler leakage and water
damage), insuring the full insurable value of any Alterations, Tenant's trade
fixtures, furnishings, equipment, and all other items of personal property of
Tenant, insuring the full replacement cost thereof.

     (b)   All policies required to be carried by Tenant under this Article 7
shall be written with financially responsible companies with a Best & Company
rating of "A-:X" or better, and all evidence of insurance provided to Landlord
shall contain an endorsement showing that Landlord and Mortgage Lender are
included as an additional insured and an endorsement whereby the insurer agrees
not to cancel or alter the policy without at least thirty (30) days' prior
written notice to Landlord and all named and additional insureds. Any deductible
or self-insurance provisions under any insurance policies maintained by Tenant
shall be subject to Landlord's prior written approval which shall not be
unreasonably withheld.

     (c)   Prior to the Term Commencement Date and thereafter, from time to
time, promptly upon request by Landlord, Tenant shall furnish Landlord and any
additional insureds with copies of policies or certificates of insurance,
evidencing Tenant's maintenance and renewal of the required coverages. If Tenant
fails to provide such evidence of insurance required hereunder, Landlord shall
be authorized (but not required) to procure such coverage in the amounts stated
with all costs thereof to be charged to Tenant and paid upon written invoice
therefor as Additional Rent together with an administrative fee equal to twenty
percent (20%) of such costs.

     7.04  Indemnity and Exoneration.
           -------------------------

     (a)   Tenant shall indemnify and hold harmless Landlord and the Landlord
Parties against and from any and all claims, liabilities, judgments, costs,
demands, causes of action and expenses (including, without limitation,
reasonable attorneys' fees) arising from (i) the use of the Leased Premises, the
Building or the Project by Tenant or the Tenant Parties, or from any activity
done, permitted or suffered by Tenant or the Tenant Parties in or about the
Leased Premises, the Building or the Project, and (ii) any act, neglect, fault,
willful misconduct or

                                       40
<PAGE>

omission of Tenant or the Tenant Parties, or from any breach or default in the
terms of this Lease by Tenant or the Tenant Parties, and (iii) any action or
proceeding brought on account of any matter in items (i) or (ii). If any action
or proceeding is brought against Landlord by reason of any such claim, upon
notice from Landlord, Tenant shall defend the same at Tenant's expense by
counsel reasonably satisfactory to Landlord. As a material part of the
consideration to Landlord, Tenant hereby releases Landlord and the Landlord
Parties from responsibility for, waives its entire claim of recovery for and
assumes all risk of (A) damage to property or injury to persons in or about the
Leased Premises, the Building or the Project from any cause whatsoever (except
that which is caused by the negligence or willful misconduct of Landlord or the
Landlord Parties or by the failure of Landlord to observe any of the terms and
conditions of this Lease, if such failure has persisted for an unreasonable
period of time after written notice of such failure), or (B) loss resulting from
business interruption or loss of income at the Leased Premises. The obligations
of Tenant under this Section 7.04 shall survive any termination of this Lease.

     (b)  Landlord shall indemnify and hold harmless Tenant against and from any
and all claims, liabilities, judgments, costs, demands, causes of action and
expenses (including, without limitation, reasonable attorneys' fees) arising
from (i) the negligence of Landlord or from any breach or default in the terms
of this Lease by Tenant, and (ii) any action or proceeding brought on account of
any matter in item (i). If any action or proceeding is brought against Tenant by
reason of any such claim, upon notice from Tenant, Landlord shall defend the
same at Landlord's expense by counsel reasonably satisfactory to Tenant. The
obligations of Landlord under this Section 7.04(b) shall survive any termination
of this Lease.

     (c)  The foregoing indemnities shall not relieve any insurance carrier of
its obligations under any policies required to be carried by either party
pursuant to this Lease, to the extent that such policies cover the peril or
occurrence that results in the claim that is subject to the foregoing indemnity.

     7.05 Waiver of Subrogation Rights. Anything in this Lease to the contrary
          ----------------------------
notwithstanding, Landlord and Tenant each waive all rights of recovery, claim,
action or cause of action, against the other, Tenant Parties or Landlord
Parties, as applicable, for any loss or damage that may occur to the Leased
Premises, or any improvements thereto, or the Project or any personal property
of such party therein, by reason of fire, the elements, or any other cause that
could be insured against under the terms of an "all risk" insurance policy or
other casualty insurance coverages which are required to be obtained pursuant to
this Lease, regardless of cause or origin, including negligence of the other
party, Landlord Parties or Tenant Parties, as applicable; and each party
covenants that no insurer shall hold any right of subrogation against such other
party. Each party hereto shall advise its insurers of the foregoing and such
waiver shall be a part of each policy maintained by Landlord or Tenant that
applies to the Leased Premises, any part of the Project or Tenant's use and
occupancy of any part thereof.

     7.06 Condemnation and Loss or Damage.
          -------------------------------

     (a)  If the Leased Premises or any portion of the Project shall be taken or
condemned for any public purpose (herein, a "Condemnation") to such an extent as
to render the Leased Premises untenantable as reasonably determined by Landlord,
this Lease shall, at the option of either party, forthwith cease and terminate
as of the date of taking. All proceeds from any

                                       41
<PAGE>

Condemnation of the Leased Premises shall belong to and be paid to Landlord
subject to the rights of any Mortgage Lender; provided, however, that Landlord
shall cooperate with Tenant if Tenant seeks to recover at its cost and expense,
proceeds, damages or awards paid to compensate for damage to or taking of
Tenant's Personal Property.

     (b)  If a temporary Condemnation of all or a portion of the Leased Premises
occurs, there shall be no abatement of Rent and Tenant shall remain fully
obligated for performance of all of the covenants and obligations on its part to
be performed pursuant to the terms of this Lease. All proceeds awarded or paid
with respect thereto shall belong to Tenant.

     7.07 Damage and Destruction. If a fire or other casualty in the Leased
          ----------------------
Premises occurs, Tenant shall immediately give notice thereof to Landlord. The
following provision shall then apply:

     (a)  If the damage is limited solely to the Leased Premises and the Leased
Premises can, in the reasonable opinion of Landlord, be made tenantable with all
damage repaired within six (6) months from the date of damage or destruction,
then Landlord shall diligently rebuild the same, including any Tenant
Improvements; provided, however, that Landlord shall be required to repair and
restore Tenant Improvements only to the extent that Landlord actually receives
proceeds therefor ("Tenant Improvements Proceeds") under the policy of casualty
insurance maintained by Landlord pursuant to Section 7.01 above ("Landlord's
Casualty Policy"). If Landlord rebuilds the Leased Premises, Tenant shall repair
and restore any Tenant Improvements to the extent that the cost thereof exceed
the Tenant Improvements Proceeds received by Landlord and any Alterations, or,
at Landlord's election, Landlord may repair and rebuild such Tenant Improvements
and Alterations at Tenant's expense.

     (b)  If portions of the Project outside the boundaries of the Leased
Premises are damaged or destroyed (whether or not the Leased Premises are also
damaged or destroyed) and the Leased Premises and the Project can, in the
reasonable opinion of Landlord, both be made tenantable with all damage repaired
within six (6) months from the date of damage or destruction, and provided that
Landlord determines that such reconstruction is economically feasible, then
Landlord shall be obligated to do so; provided, however, that Landlord shall be
required to repair and restore Tenant Improvements only to the extent that
Landlord actually receives Tenant Improvements Proceeds under Landlord's
Casualty Policy. If Landlord rebuilds the Leased Premises and the Project,
Tenant shall repair and restore any Tenant Improvements to the extent that the
cost thereof exceed the Tenant Improvements Proceeds received by Landlord and
any Alterations, or, at Landlord's election, Landlord may repair and rebuild
such Tenant Improvements and Alterations at Tenant's expense.

     (c)  If neither Section 7.07(a) nor 7.07(b) above applies, Landlord shall
have the right, but not the obligation, to reconstruct the Project and the
Leased Premises. Within sixty (60) days after the date of such damage and
destruction, Landlord shall notify Tenant in writing of the estimated period of
restoration and whether Landlord elects to reconstruct the Project and the
Leased Premises, in which event this Lease shall remain in full force and
effect, or to terminate this Lease effective as of the date specified in such
notice. If Landlord rebuilds the Project and the Leased Premises, Landlord shall
be required to repair and restore Tenant Improvements only to the extent that
Landlord actually receives Tenant Improvements Proceeds under Landlord's

                                       42
<PAGE>

Casualty Policy. Tenant shall repair and restore any Tenant Improvements to the
extent that the cost thereof exceed the Tenant Improvements Proceeds received by
Landlord and any Alterations or, at Landlord's election, Landlord may repair and
rebuild such Tenant Improvements and Alterations at Tenant's expense.
Notwithstanding the foregoing, if the Leased Premises is damaged or destroyed to
the extent that the Leased Premises cannot be substantially repaired or restored
by Landlord within three hundred sixty-five (365) days from the date of damage
or destruction, Tenant may terminate this Lease immediately upon notice thereof
to Landlord, which notice shall be given, if at all, not later than ten (10)
days after Landlord notifies Tenant of Landlord's estimate of the period of time
required to repair such damage or destruction.

     (d)  During any period when Tenant's use of the Leased Premises is
significantly affected by damage or destruction, Gross Rent shall abate
proportionately until such time as the Leased Premises are made tenantable, and
Tenant has had a reasonable period of time to reinstall its trade fixtures,
furnishing and equipment in and to move into the Leased Premises, as reasonably
determined by Landlord, and no portion of the Rent so abated shall be subject to
subsequent recapture; provided, however, that there shall be no such abatement
except to the extent that the amount thereof is compensated for and recoverable
from the proceeds of rental abatement or business interruption insurance
maintained by Landlord with respect to this Lease, the Leased Premises or the
Project.

     (e)  The proceeds from any insurance paid by reason of damage to or
destruction of the Building or any part thereof, the Tenant Improvements or any
other element, component or property insured by Landlord shall belong to and be
paid to Landlord subject to the rights of any mortgagee of Landlord's interest
in the Project or the beneficiary of any deed of trust that constitutes an
encumbrance thereon. If this Lease is terminated by either party as a
consequence of a casualty in accordance with any of the provisions of this
Section 7.07, all proceeds of insurance required to be maintained either by
Landlord or Tenant shall be paid to Landlord subject to the rights of any
mortgagee of Landlord's interest in the Project or the beneficiary of any deed
of trust that constitutes an encumbrance thereon; provided, however, that Tenant
shall be paid all proceeds of insurance payable in connection with Tenant's
trade fixtures, furnishings, equipment and all other items of personal property
of Tenant.

     (f)  If the Leased Premises, or any part thereof, or any portion of the
Building necessary for Tenant's use of the Leased Premises, are damaged or
destroyed during the last twelve (12) months of the Term, or any extension
thereof, Landlord or Tenant may terminate this Lease by giving written notice
thereof to the other party within thirty (30) days after the date of the
casualty, in which case this Lease shall terminate as of the date of the
casualty.

     7.08 Default By Tenant.
          -----------------

     (a)  Events of Default. The occurrence of any of the following shall
          -----------------
constitute an event of default ("Event of Default") on the part of Tenant:

          (i)  Abandonment.  Abandonment of the Leased Premises for a continuous
               -----------
period in excess of five (5) Business Days. Notwithstanding the foregoing, in
the event Tenant seeks to assign its interest under this Lease or to sublease
the Leased Premises in accordance with Section 5.05 above, Tenant shall have the
right to vacate the Leased Premises, provided that

                                       43
<PAGE>

(A) throughout such period, Tenant diligently attempts to procure a suitable
assignee or subtenant and to complete an assignment or sublease transaction, (B)
Tenant takes all actions required by Landlord to secure and safeguard the Leased
Premises during such period, and (C) Tenant reimburses Landlord upon demand for
any additional costs and expenses incurred by Landlord (including, without
limitation, insurance expenses and costs of security) as a result of Tenant's
vacation of the Leased Premises. Tenant waives any right to notice Tenant may
have under Section 1951.3 of the Civil Code of the State of California, the
terms of this Section 7.08(a)(i) being deemed such notice to Tenant as required
by said Section 1951.3;

          (ii)  Nonpayment of Rent. Failure to pay any installment of Gross Rent
                ------------------
or items of Additional Rent within three (3) days after the date when payment is
due. Notwithstanding the foregoing, if Tenant establishes and maintains
throughout the Term a direct payment or debit arrangement with a bank or
financial institution pursuant to which the Gross Rent due hereunder is
automatically paid to Landlord by electronic transfer on the first day of each
month (an "Electronic Payment Arrangement"), and if Tenant provides Landlord
with evidence of such Electronic Payment Arrangement, then Landlord shall
provide Tenant with notice of any nonpayment of Gross Rent or Additional Rent
and a three (3) day grace period after the giving of such notice before such
nonpayment constitutes an "Event of Default" hereunder;

          (iii) Other Obligations. Failure to perform any obligation, agreement
                -----------------
or covenant under this Lease other than those matters specified in Sections
7.08(a)(i) and 7.08(a)(ii), such failure continuing for thirty (30) days after
written notice of such failure (or with respect to non-monetary obligations
only, such longer period as is reasonably necessary to remedy such default,
provided that Tenant shall continuously and diligently pursue such remedy at all
times until such default is cured);

          (iv)  General Assignment. A general assignment by Tenant or Guarantor
                ------------------
for the benefit of creditors;

          (v)   Bankruptcy. The filing of any voluntary petition in bankruptcy
                ----------
by Tenant or Guarantor, or the filing of an involuntary petition by Tenant's or
Guarantor's creditors, which involuntary petition remains undischarged for a
period of thirty (30) days. If under applicable law the trustee in bankruptcy or
Tenant has the right to affirm this Lease and continue to perform the
obligations of Tenant hereunder, such trustee or Tenant shall, in such time
period as may be permitted by the bankruptcy court having jurisdiction, cure all
defaults of Tenant hereunder outstanding as of the date of the affirmance of
this Lease and provide to Landlord such adequate assurances as may be necessary
to ensure Landlord of the continued performance of Tenant's obligations under
this Lease;

          (vi)  Receivership. The employment of a receiver to take possession of
                ------------
substantially all of Tenant's assets or the Leased Premises, if such
receivership remains undissolved for a period of ten (10) Business Days after
creation thereof;

          (vii) Attachment. The attachment, execution or other judicial seizure
                ----------
of all or substantially all of Tenant's assets or the Leased Premises, if such
attachment or other seizure

                                       44
<PAGE>

remains undismissed or undischarged for a period of ten (10) Business Days after
the levy thereof;

          (viii)  Insolvency. The admission by Tenant or Guarantor in writing of
                  ----------
its inability to pay its debts as they become due, the filing by Tenant or
Guarantor of a petition seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, the filing by Tenant or Guarantor of an
answer admitting or failing timely to contest a material allegation of a
petition filed against Tenant or Guarantor in any such proceeding or, if within
thirty (30) days after the commencement of any proceeding against Tenant or
Guarantor seeking any reorganization, or arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, such proceeding shall not have been dismissed; and

          (ix)    Restoration of Letter of Credit. The failure of Tenant to
                  -------------------------------
restore the Letter of Credit to the amount and within the time period provided
in Section 5.13(c).

     (b)  Remedies Upon Default.
          ---------------------

          (i)     Termination. If an Event of Default occurs, Landlord shall
                  -----------
have the right, with or without notice or demand, immediately (after expiration
of the applicable grace periods specified herein) to terminate this Lease, and
at any time thereafter recover possession of the Leased Premises or any part
thereof and expel and remove therefrom Tenant and any other person occupying the
same, by any lawful means, and again repossess and enjoy the Leased Premises
without prejudice to any of the remedies that Landlord may have under this
Lease, or at law or equity by reason of Tenant's default or of such termination.

          (ii)    Continuation After Default. Even though Tenant has breached
                  --------------------------
this Lease and/or abandoned the Leased Premises, this Lease shall continue in
effect for so long as Landlord does not terminate Tenant's right to possession
under Section 7.08(b)(i), and Landlord may enforce all of its rights and
remedies under this Lease, including, without limitation, the right to recover
Rent as it becomes due. Landlord has the remedy described in Section 1951.4 of
the Civil Code of the State of California or any successor code section
(Landlord may continue the Lease in effect after Tenant's breach and abandonment
and recover rent as it becomes due, if Tenant has the right to sublet or assign,
subject only to reasonable limitations). Acts of maintenance, preservation or
efforts to lease the Leased Premises or the appointment of receiver upon
application of Landlord to protect Landlord's interest under this Lease shall
not constitute an election to terminate Tenant's right to possession.

     (c)  Damages Upon Termination. Should Landlord terminate this Lease
          ------------------------
pursuant to the provisions of Section 7.08(b)(i), Landlord shall have all the
rights and remedies of a landlord provided by Section 1951.2 of the Civil Code
of the State of California, or successor code section. Upon such termination, in
addition to any other rights and remedies to which Landlord may be entitled
under applicable law, Landlord shall be entitled to recover from Tenant: (i) the
worth at the time of award of the unpaid Rent and other amounts which had been
earned at the time of termination; (ii) the worth at the time of award of the
amount by which the unpaid Rent which would have been earned after termination
until the time of award exceeds the amount of such Rent loss that the Tenant
proves could have been reasonably avoided; (iii) the worth at the

                                       45
<PAGE>

time of award of the amount by which the unpaid Rent for the balance of the Term
after the time of award exceeds the amount of such Rent loss that the Tenant
proves could be reasonably avoided; and (iv) any other amount necessary to
compensate Landlord for all the detriment proximately caused by Tenant's failure
to perform its obligations under this Lease or which, in the ordinary course of
things, would be likely to result therefrom. The "worth at the time of award" of
the amounts referred to in (i) and (ii) shall be computed with interest at
eighteen percent (18%) per annum or the highest lawful rate, whichever is the
lower. The "worth at the time of award" of the amount referred to in (iii) shall
be computed by discounting such amount at the "discount rate" of the Federal
Reserve Bank of San Francisco in effect as of time of award plus one percent
(1%) and, where rental value is a material issue, shall be based upon competent
appraisal evidence.

     (d)  Computation of Rent For Purposes of Default. For purposes of computing
          -------------------------------------------
unpaid Rent that would have accrued and become payable under this Lease pursuant
to the provisions of Section 7.08(c), unpaid Rent shall consist of the sum of:

          (i)  the total Base Rent for the balance of the Term, plus

          (ii) a computation of the Basic Operating Cost for the balance of the
Term, the assumed Basic Operating Cost for the calendar year of the default and
each future calendar year in the Term to be equal to the Basic Operating Cost
for the calendar year prior to the year in which default occurs compounded at a
per annum rate equal to the mean average rate of inflation for the preceding
five (5) calendar years as determined by reference to the Consumer Price Index--
all items for the San Francisco-Oakland-San Jose Area, All Urban Consumers,
published by the Bureau of Labor Statistics of the United States Department of
Labor (Base Year 1982-84=100), or such successor index as may be established to
provide a measure of the current purchasing power of the dollar.

     (e)  Late Charge. Notwithstanding any other provision of this Lease, Tenant
          -----------
hereby acknowledges that late payment to Landlord of Rent or other amounts due
hereunder will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. If any Rent or
other sums due from Tenant are not received by Landlord or by Landlord's
designated agent within three (3) days after the date the same is due hereunder,
then Tenant shall pay to Landlord a late charge equal to five percent (5%) of
such overdue amount, plus any costs and attorneys' fees incurred by Landlord by
reason of Tenant's failure to pay Rent and/or other charges when due hereunder;
provided, however, that if Tenant establishes and maintains throughout the Term
an Electronic Payment Arrangement as contemplated in Section 7.08(a)(ii) above,
then Landlord shall provide Tenant with notice of any late payment of Rent and a
three (3) day grace period after the giving of such notice prior to the
imposition of a late charge. Landlord and Tenant hereby agree that the late
charges provided for in this Section 7.08(e) represent a fair and reasonable
estimate of the cost that Landlord will incur by reason of Tenant's late payment
and shall not be construed as a penalty. Landlord's acceptance of such late
charges shall not constitute a waiver of Tenant's default with respect to such
overdue amount or estop Landlord from exercising any of the other rights and
remedies granted under this Lease.

                                       46
<PAGE>

     (f)  Interest. Notwithstanding any other provision of this Lease, any
          --------
installment of Rent and any other sum due from Tenant under this Lease which is
not received by Landlord within five (5) days after the date the same is due
shall bear interest from the date such payment was originally due under this
Lease until paid at an annual rate equal to the maximum rate of interest
permitted by law. Payment of such interest shall not excuse or cure any Event of
Default on the part of Tenant. In addition, Tenant shall pay all costs and
reasonable attorneys' fees incurred by Landlord in collection of such amounts.

     (g)  Remedies Cumulative. All of the remedies permitted or available to
          -------------------
Landlord under this Lease, or at law or in equity, shall be cumulative and not
alternative and invocation of any such right or remedy shall not constitute a
waiver or election of remedies with respect to any other permitted or available
right or remedy.

     7.09 No Waiver. Failure of Landlord or Tenant to declare any default
          ---------
immediately upon occurrence thereof, or delay in taking any action in connection
therewith, shall not waive such default, but Landlord or Tenant, as the case may
be, shall have the right to declare any such default at any time thereafter. No
waiver by Landlord of an Event of Default, or any agreement, term, covenant or
condition contained in this Lease, shall be effective or binding on Landlord
unless made in writing and no such waiver shall be implied from any omission by
Landlord to take action with respect to such Event of Default or other such
matter. No express written waiver by Landlord of any Event of Default, or other
such matter, shall affect or cover any other Event of Default, matter or period
of time, other than the Event of Default, matter and/or period of time specified
in such express waiver. One or more written waivers by Landlord of any Event of
Default, or other matter, shall not be deemed to be a waiver of any subsequent
Event of Default, or other matter, in the performance of the same provision of
this Lease. Acceptance of Rent by Landlord hereunder, or endorsement of any
check, shall not, in and of itself, constitute a waiver of any breach or Event
of Default or of any agreement, term, covenant or condition of this Lease,
except as to the payment of Rent so accepted, regardless of Landlord's knowledge
of any concurrent Event of Default or matter. Landlord may, at its election,
apply any Rent received from Tenant to the oldest obligation outstanding from
Tenant to Landlord, any endorsement or other statement of Tenant to the contrary
notwithstanding. No course of conduct between Landlord and Tenant, and no
acceptance of the keys to or possession of the Leased Premises before the
termination of the Term by Landlord or any employee of Landlord shall constitute
a waiver of any such breach or of any term, covenant or condition of this Lease
or operate as a surrender of this Lease. All of the remedies permitted or
available to Landlord under this Lease, or at law or in equity, shall be
cumulative and not alternative and invocation of any such right or remedy shall
not constitute a waiver or election of remedies with respect to any other
permitted or available right or remedy.

                                       47
<PAGE>

     7.10 Statutory Waivers. Tenant hereby waives the benefits of: (i) Sections
          -----------------
1932 and 1933(4) of the California Civil Code (pertaining to the termination of
a hiring); (ii) 1941 and 1942 of the California Civil Code (pertaining to the
obligations of a landlord to maintain premises and the rights of a tenant to
make certain repairs or terminate a lease); (iii) Section 1263.260 of the
California Code of Civil Procedure (pertaining to the removal of improvements
upon condemnation); and (iv) Section 1265.130 of the California Code of Civil
Procedure (pertaining to the termination of a lease upon condemnation).

     7.11 Holding Over. If Tenant holds over after expiration or termination of
          ------------
this Lease without the written consent of Landlord, Tenant shall pay for each
month of hold-over tenancy twice the Gross Rent that Tenant was obligated to pay
for the month immediately preceding the end of the Term for each month or any
part thereof of any such hold-over period together with such other amounts as
may become due hereunder. No holding over by Tenant after the Term shall operate
to extend the Term. If Tenant holds over without consent, Tenant shall
indemnify, defend, protect and hold Landlord and Landlord Parties harmless from
and against any and all claims, judgments, damages, penalties, fines, costs,
expenses, liabilities or losses for damages by any other tenant or third person
to whom Landlord may have leased or offered to lease all or any part of the
Leased Premises covered hereby effective on or after the termination of this
Lease, together with all loss, cost, expense, damages and liabilities in
connection with any such reletting, including, without limitation, attorneys'
fees and Landlord's lost revenues. Any holding over with the consent of Landlord
in writing shall thereafter constitute this Lease a lease from month to month.

     7.12 Attorneys' Fees. If either party places the enforcement of this Lease,
          ---------------
or any part thereof, or the collection of any Rent due, or to become due
hereunder, or recovery of the possession of the Leased Premises in the hands of
an attorney or collection agency, or files suit upon the same, or seeks a
judicial declaration of rights hereunder, the prevailing party shall recover its
reasonable attorneys' fees, court costs and collection agency charges. As used
herein, "prevailing party" shall mean the party who substantially prevails in
the matter at issue, including, without limitation, a party who dismisses an
action for recovery hereunder in exchange for payment of the sums allegedly due,
performance of covenants allegedly breached or consideration substantially equal
to the relief sought in the action.

     7.13 Amendments. This Lease may not be altered, changed or amended, except
          ----------
by an instrument in writing signed by both parties.

     7.14 Transfers By Landlord. Landlord shall have the right to transfer and
          ---------------------
assign, in whole or in part, all of its rights and obligations hereunder and in
the Project. Upon transfer by Landlord of its interest in the Project, and upon
the transferee's written assumption (such writing being hereinafter referred to
as an "Assumption Agreement") of Landlord's obligations accruing hereunder from
and after the date of such transfer, no further liability or obligations shall
thereafter accrue against the transferring or assigning person as Landlord
hereunder. Landlord or such transferee shall provide a copy of the Assumption
Agreement to Tenant upon request.

     7.15 Severability. If any term or provision of this Lease, or the
          ------------
application thereof to any person or circumstances, shall to any extent be
invalid or unenforceable, the remainder of this Lease, or the application of
such provision to persons or circumstances other than those as to

                                       48
<PAGE>

which it is invalid or unenforceable, shall not be affected thereby, and each
provision of this Lease shall be valid and shall be enforceable to the extent
permitted by law.

     7.16 Notices. All notices, demands, consents and approvals that may or are
          -------
required to be given by either party to the other hereunder shall be in writing
and shall be sent by personal delivery, overnight courier, or United States
mail, certified or registered, postage prepaid, and addressed to the party to be
notified at the address for such party specified on the Basic Lease Information
sheet, or to such other place as the party to be notified may from time to time
designate by at least fifteen (15) days notice to the notifying party. Personal
delivery of notices to Tenant may in all events be made by leaving a copy of the
notice, addressed to Tenant, at the Leased Premises. Tenant appoints as its
agent to receive the service of all default notices and notice of commencement
of unlawful detainer proceedings the person in charge of or apparently in charge
of or occupying the Leased Premises at the time. Notices shall be deemed given
upon actual receipt (or attempted delivery if delivery is refused).

     7.17 No Option. Submission of this instrument for examination or signature
          ---------
by Tenant does not constitute a reservation of or an option for lease, and it is
not effective as a lease or otherwise until execution and delivery by both
Landlord and Tenant.

     7.18 Integration and Interpretation. The terms of this Lease are intended
          ------------------------------
by the parties as a final expression of their agreement with respect to such
terms as are included in this Lease and may not be contradicted by evidence of
any prior or contemporaneous agreement, arrangement, understanding or
negotiation (whether oral or written). The parties further intend that this
Lease constitutes the complete and exclusive statement of its terms, and no
extrinsic evidence whatsoever may be introduced in any judicial proceeding
involving this Lease. The language in all parts of this Lease shall in all cases
be construed as a whole and in accordance with its fair meaning and not
restricted for or against any party, regardless of which party may have drafted
the provision in question, it being agreed that this is a negotiated agreement.

     7.19 Quitclaim. Upon expiration or earlier termination of this Lease,
          ---------
Tenant shall, immediately upon request of Landlord, execute, acknowledge and
deliver to Landlord a recordable deed quit-claiming to Landlord all interest of
Tenant in the Leased Premises, the Project and this Lease.

     7.20 No Easement For Light, Air and View. This Lease conveys to Tenant no
          -----------------------------------
rights for any light, air or view. No diminution of light, air or view, or any
impairment of the visibility of the Leased Premises from inside or outside the
Building, by any structure or other object that may hereafter be erected
(whether or not by Landlord) shall entitle Tenant to any reduction of Rent under
this Lease, constitute an actual or constructive eviction of Tenant, result in
any liability of Landlord to Tenant, or in any other way affect this Lease or
Tenant's obligations hereunder.

     7.21 No Merger. The voluntary or other surrender or termination of this
          ---------
Lease by Tenant, or a mutual cancellation thereof shall not work a merger, but,
at Landlord's sole option, shall either terminate all existing subleases or
subtenancies or shall operate as an assignment to Landlord of all such subleases
or subtenancies.

                                       49
<PAGE>

     7.22 Memorandum of Lease. Tenant shall, upon request of Landlord, execute,
          -------------------
acknowledge and deliver a short form memorandum of this Lease (and any amendment
hereto or consolidation hereof), in form suitable for recording. In no event
shall this Lease or any memorandum thereof be recorded without the prior written
consent of Landlord, and any attempt to do so shall constitute a default by
Tenant.

     7.23 Survival. All of Tenant's covenants and obligations contained in this
          --------
Lease shall survive the expiration or earlier termination of this Lease. No
provision of this Lease providing for termination in certain events shall be
construed as a limitation or restriction of Landlord's rights and remedies at
law or in equity available upon a breach by Tenant of this Lease.

     7.24 Financial Statements. If Landlord intends to sell all or any portion
          --------------------
of the Building or Project (or any interest therein), or obtain a loan secured
by the Building or Project (or any interest therein), then Tenant shall, within
fifteen (15) days of Landlord's written request, furnish Landlord with financial
statements, dated no earlier than one (1) year before such request, certified as
accurate by Tenant, or, if available, audited financial statements prepared by
an independent certified public accountant with copies of the auditor's
statement, reflecting Tenant's then current financial condition, or the
financial condition of the individuals comprising Tenant, in such form and
detail as Landlord may reasonably request. In addition, if Landlord finances the
construction of improvements on and to the Building or Project, or otherwise
procures financing secured by the Building or Project, or any portion thereof or
interest therein, then the terms and provisions of this Lease may be subject to
review and approval by the financial source providing such financing.

     7.25 No Joint Venture. This Lease shall not be construed to create a
          ----------------
partnership, joint venture or similar relationship or arrangement between
Landlord and Tenant hereunder.

     7.26 Successors and Assigns. This Lease shall be binding upon and inure to
          ----------------------
the benefit of Landlord, its successors and assigns (subject to the provisions
hereof, including, without limitation, Section 5.15); and shall be binding upon
and inure to the benefit of Tenant, its successors, and to the extent assignment
may be approved by Landlord hereunder, Tenant's assigns.

     7.27 Applicable Law. All rights and remedies of Landlord and Tenant under
          --------------
this Lease shall be construed and enforced according to the laws of the State of
California. Any actions or proceedings brought under this Lease, or with respect
to any matter arising under or out of this Lease, shall be brought and tried
only in courts located in the County of San Mateo, California (excepting
appellate courts).

     7.28 Time of the Essence. Time is of the essence of each and every covenant
          -------------------
herein contained.

     7.29 Interpretation. Except as specifically provided otherwise in this
          --------------
Lease, Landlord may act in its sole and absolute discretion when required to act
hereunder. The term, "including" shall mean "including, without limitation." All
indemnities contained herein shall survive termination of this Lease with
respect to any act, condition or event that is the subject matter of such
indemnity and that occurs prior to the Term Expiration Date. Notwithstanding
anything

                                       50
<PAGE>

herein to the contrary, all provisions of this Lease which require the payment
of money or the delivery of property after the Term Expiration Date shall
survive termination of the Lease.

     7.30 Parking.
          -------

     (a)  Subject to the terms of this Section 7.30, unless Tenant is in default
hereunder, Tenant shall be entitled to the non-preferential and non-exclusive
use of the number of parking spaces set forth in the Basic Lease Information in
the areas within the Project designated by Landlord (the "Designated Parking
Areas"), for which right Tenant shall pay the monthly fee per space established
by Landlord from time to time for the applicable type of space, plus any tax or
assessment imposed by any governmental authority in connection with the parking
privileges provided to Tenant pursuant to this Lease. Said monthly fees shall be
paid whether or not Tenant uses said spaces; provided, however, that Landlord
hereby waives its right to collect such parking fees from Tenant for the spaces
during the initial term of this Lease, except to the extent that Landlord is
required to impose a parking fee by any governmental regulation now or hereafter
applicable to any part of all of the Project, or to Landlord or Tenant. Landlord
may assign any unreserved and unassigned parking spaces and/or make all or a
portion of such spaces reserved, if it determines that it is necessary for
orderly and efficient parking. In the event Landlord develops additional
buildings on parcels owned by Landlord in the Gateway Center, Landlord shall
take appropriate measures with respect to parking such that Tenant shall at all
times have the right to use the number of parking spaces set forth in the Basic
Lease Information. Notwithstanding the foregoing provisions of this Section
7.30(a), Landlord shall have the right to relocate Tenant's parking from time to
time to other areas within the Gateway Center, to provide parking spaces to
Tenant in surface parking lots, parking structures, subterranean parking
facilities or other areas within the Gateway Center now or hereafter designated
by Landlord as the Project's parking areas, and to provide parking to Tenant
through tandem-style parking or the use of valets or parking attendants,
provided only that Tenant shall at all times have parking for the number of
automobiles contemplated under this Lease. Landlord shall consult with Tenant in
connection with the relocation of Tenant's parking spaces, but Landlord shall
make the final determination as to the location of such spaces.

     (b)  Notwithstanding the terms of Section 7.30(a) above, in the event any
of the parking spaces in the Designated Parking Areas are taken or otherwise
eliminated as a result of any Condemnation or casualty event affecting such
Designated Parking Areas, and if as a result thereof Landlord is unable to
provide Tenant with the number of parking spaces specified in the Basic Lease
Information (taking into account Landlord's rights under the penultimate
sentence of Section 7.30(a) above), and if such reduction would materially and
adversely impact Tenant's ability to conduct its business in the Leased
Premises, then Tenant shall have the right to terminate this Lease by written
notice to Landlord given not later than fifteen (15) days after Landlord
notifies Tenant of such reduction in parking spaces; provided, however, that
Tenant shall have no right to terminate this Lease if Landlord is able to
provide Tenant with a sufficient number of parking spaces in an alternate
location (the "Alternate Parking Spaces") such that the sum of the parking
spaces allocated to Tenant in the Gateway Center and the Alternate Parking
Spaces equal or exceed the number of parking spaces specified in the Basic Lease
Information. In the event the Alternate Parking Spaces are not reasonably
proximate to the Gateway Center, then Landlord shall arrange for a shuttle
service or other means of transportation between the Alternate Parking Spaces
and the Gateway Center.

                                       51
<PAGE>

     7.31 Brokers. Tenant and Landlord each represent and warrant to the other
          -------
that it has had no dealing with any broker or agent other than the Broker set
forth on the Basic Lease Information. Tenant and Landlord each indemnify, defend
and hold the other party harmless from and against any and all liabilities for
commissions or other compensation or charges claimed by any other broker or
agent based on dealings with the indemnifying party with respect to this Lease.
The foregoing indemnity shall survive termination or earlier expiration of this
Lease.

     7.32 Security.
          --------

     (a)  Tenant acknowledges and agrees that Landlord is not required and does
not intend to provide any security services with respect to the Leased Premises,
the Building or the Project (other than the security systems described on
Exhibit B-1) and that Landlord shall not be liable to Tenant for, and Tenant
waives any claim against Landlord with respect to, any loss by theft or any
other damage suffered or incurred by Tenant in connection with any unauthorized
entry into the Leased Premises or any other breach of security with respect to
the Leased Premises, the Building or the Project. In the event that Landlord
shall at any time elect to provide such security services with respect to the
Leased Premises, the Building and/or the Project, the costs and expenses
incurred by Landlord in connection therewith shall be included within the
definition of "Basic Operating Cost" for all purposes of this Lease.

     (b)  Tenant hereby agrees to the exercise by Landlord of security measures
such as, but not limited to, the evacuation of the Leased Premises, the Building
or the Project for cause, suspected cause or for drill purposes, the denial of
any access to the Leased Premises, the Building or the Project and other
similarly related actions that Landlord deems necessary, in its sole and
absolute discretion, to prevent any threat of property damage or bodily injury.
The exercise of such security measures by Landlord, and the resulting
interruption of service and cessation of Tenant's business, if any, shall not be
deemed an eviction or disturbance of Tenant's use and possession of the Leased
Premises, or any part thereof, or render Landlord liable to Tenant for any
resulting damages, or relieve Tenant from Tenant's obligations under this Lease.

     7.33 Satellite Dish. Subject to Landlord's prior written approval of the
          --------------
plans and specifications therefor (including, without limitation, the location,
size, and color of the equipment), during the Term, Tenant may, at its sole cost
and expense, construct and maintain a satellite dish on the roof of the Building
(the "Satellite Dish"); provided, however, that Landlord shall have the right to
withhold its approval of the plans and specifications, in its sole and absolute
discretion, if the Satellite Dish will affect the structural integrity of the
roof. Without limiting the foregoing, the plans and specifications shall
include, and Landlord shall have the right to approve, diagrams showing the
location of all associated cabling and wiring installed by Tenant throughout the
Building. Upon receipt of Landlord's prior written approval of the plans and
specifications as set forth herein, Tenant shall erect the Satellite Dish in
accordance with the approved plans and specifications, in a good and workmanlike
manner, in accordance with all applicable Laws now in force or hereafter enacted
and all other requirements of Landlord, and after Tenant has received all
requisite approvals therefor (the "Applicable Requirements"), and in a manner so
as not to interfere with the use of the Building or any other building by any
other tenant or occupant. Tenant shall at all times maintain the Satellite Dish
and all associated cabling and wiring in a good, clean and safe condition, in
accordance with the Applicable

                                       52
<PAGE>

Requirements, and in a manner so as not to interfere with the use of the
Building or any adjacent building by any other tenant or occupant. Tenant shall
provide Landlord with reasonable advance written notice prior to entering upon
the roof so that Landlord may, if it so desires, have a representative accompany
Tenant onto the roof. Upon the expiration or sooner termination of this Lease or
Tenant's right to possession of the Leased Premises, Tenant shall, at Tenant's
sole cost and expense, promptly remove the Satellite Dish and repair any damage
to the Building resulting therefrom. If Tenant fails to remove the Satellite
Dish on or before the expiration or sooner termination of this Lease or Tenant'
right to possession of the Leased Premises, Landlord may, at Tenant's expense,
remove the Satellite Dish and perform the related restoration and repair work,
and use, dispose of or take such other actions with respect to the Satellite
Dish as Landlord may deem appropriate, all without compensation or payment to
Tenant. Tenant shall defend, indemnify and hold harmless Landlord from all
losses, claims, liabilities, judgments, costs, demands, causes of action and
expenses (including, without limitation, attorneys' fees) arising from or
relating to the construction, installation, maintenance, use or removal of the
Satellite Dish. The rights granted to Tenant pursuant to this Section 7.33 may
not be assigned.

     7.34 Right of First Negotiation. Tenant understands that Landlord is the
          --------------------------
owner of fee title to certain parcels of real property situated adjacent to the
Project (the "Adjacent Parcels"), as more particularly shown on the site plan
attached hereto as Exhibit G, and that existing tenants (the "Existing Tenants")
have options to lease the Adjacent Parcels on the terms and conditions set forth
in their lease agreements. In the event the Existing Tenants do not exercise
their options to lease either or both of the Adjacent Parcels, then prior to
offering the Adjacent Parcel(s) for lease to third-parties, Landlord shall
provide written notice to Tenant (the "Availability Notice") of the availability
of the applicable Adjacent Parcel(s) and the general economic terms upon which
Landlord would consider entering into a transaction with Tenant pursuant to
which Landlord would lease the Adjacent Parcel(s) to Tenant and thereafter
develop an office building thereon similar to the Building for occupancy by
Tenant (an "Expansion Transaction"). In the event Tenant desires to enter into
such negotiations with Landlord, Tenant shall provide written notice thereof
(the "Negotiation Notice") to Landlord within ten (10) Business Days after
Tenant's receipt of the Availability Notice; provided, however, that Tenant
shall have the right to deliver a Negotiation Notice to Landlord only if (i) no
Event of Default is occurring under this Lease, nor is any event then occurring
which with the giving of notice or the passage of time, or both, would
constitute an Event of Default hereunder, either at the time of Tenant's receipt
of the Availability Notice or Tenant's delivery of the Negotiation Notice, and
(ii) Tenant has a Market Capitalization equal to or greater than One Billion
Dollars ($1,000,000,000.00) (with respect to the first Adjacent Parcel which
Tenant desires to lease) and One Billion Two Hundred Fifty Million Dollars
($1,250,000,000.00) (with respect to the second Adjacent Parcel which Tenant
desires to lease) at the time of Tenant's receipt of the Availability Notice and
Tenant's delivery of the Negotiation Notice. In the event Tenant delivers a
Negotiation Notice to Landlord on a timely basis as provided herein, and subject
to the satisfaction of the foregoing conditions precedent, then Landlord and
Tenant shall promptly meet and attempt to negotiate the definitive terms of an
Expansion Transaction and thereafter enter into a binding lease agreement
encompassing such terms, said terms and said lease agreement to be acceptable to
Landlord and Tenant, each in the exercise of its sole and absolute discretion.
If Tenant fails to deliver a Negotiation Notice to Landlord in a timely manner
as provided above, or if Tenant delivers such a Negotiation Notice and Landlord
at any time thereafter determines that the parties will for any reason be unable
to enter into an Expansion Agreement, then Tenant's rights under this

                                       53
<PAGE>

Section 7.34 shall lapse and shall thereafter forever be null and void and
Landlord shall have the right to lease the Adjacent Parcels(s) to third parties
on terms deemed acceptable to Landlord in its sole and absolute discretion.

     7.35 Delivery of Alternate Security. Tenant shall have the right during the
          ------------------------------
Term to request that Landlord return the Letter of Credit to Tenant and accept
substitute security for the performance of Tenant's obligations under this
Lease. Notwithstanding the foregoing, Tenant acknowledges that Landlord shall
have the right, in its sole and absolute discretion, to accept or reject any
such substitute security proposed by Tenant. Tenant further acknowledges and
agrees that the delivery of the Letter of Credit to Landlord is a material
component of the consideration to Landlord for the execution of this Lease, that
Landlord would not enter into this Lease but for the delivery of the Letter of
Credit, that Landlord shall have the right, in its unfettered discretion, to
accept or refuse to accept any substitute security for any reason or no reason
at all, and that Landlord shall have no obligation to return the Letter of
Credit or any Letter of Credit Proceeds to Tenant except in accordance with the
terms and provisions of Section 5.13. Nothing contained in this Section 7.35
shall limit the rights of Tenant to deliver a Security Deposit to Landlord
pursuant to Section 5.14 above.

                                       54
<PAGE>

     7.36  Counterparts. This Lease may be signed in multiple counterparts, each
           ------------
of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.

     In witness whereof, the parties hereto have executed this Lease as of the
day and year first above written.

                       Landlord:   HMS Gateway Office, L.P.,
                                   a Delaware limited partnership

                                   By: Hines Gateway Office, L.P.,
                                       General Partner

                                       By:  Hines Interests Limited Partnership,
                                            General Partner

                                            By: Hines Holdings, Inc.,
                                                General Partner

                                                   By: /S/ JAMES C. BUIE
                                                      ------------------
                                                      James C. Buie, Jr.
                                                   Executive Vice President

                       Tenant:   AllAdvantage.com,
                                 a California corporation

                                              By: /S/ JIM JORGENSEN
                                                  -----------------
                                                   Jim Jorgensen
                                                  Chief Executive Officer

                                       55
<PAGE>

                                  Exhibit A-1

                                  "Site Plan"

                                   [to come]

                                     A-1-1
<PAGE>

                                  Exhibit A-2

                                   "Project"

     Lot 5C as shown on the Tentative Parcel Map filed with the City of South
San Francisco in January, 2000.

                                     A-2-1
<PAGE>

                                   Exhibit B

               Base Building Improvements Construction Agreement

     This exhibit, entitled "Base Building Improvements Construction Agreement",
is and shall constitute Exhibit B to the Lease Agreement, dated as of January
21, 2000, by and between Landlord and Tenant (the "Lease"). The terms and
conditions of this Exhibit B are hereby incorporated into and are made a part of
the Lease.

     Subject to the terms and conditions set forth herein and in the Lease,
Landlord shall cause construction of the Building in accordance with the
procedures set forth below:

1.   Definitions

     (a)  "801 Gateway Preliminary Specifications" shall mean those preliminary
specifications for construction of the Base Building Improvements described on
the attached Exhibit B-1.

     (b)  "Base Building Improvements" shall mean a five (5) story building,
containing approximately 135,000 square feet, all exterior surfaces, utilities,
landscaping and parking, all in substantial compliance with those items listed
on the 801 Gateway Preliminary Specifications and located substantially in
accordance with the site plan attached to the Lease as Exhibit A-1.

     (c)  "Base Building Outside Date" is defined in Paragraph 4(b)(vii).

     (d)  "Base Building Plans and Specifications" is defined in Paragraph 2.

     (e)  "Base Building Improvements Substantial Completion Date" means the
date on which the Base Building Improvements have been Substantially Completed.

     (f)  "Base Building Trigger Date" is defined in Paragraph 4(b)(vi).

     (g)  "Force Majeure Events" means strikes, embargoes, governmental
regulations, acts of God, war, civil commotion or other strife, inability to
obtain required materials (provided that the party who is unable to obtain such
materials has attempted to obtain reasonable substitutes for such unavailable
materials), and other events beyond the reasonable control of the party whose
performance is affected thereby.

     (h)  "Foundation Termination Date" is defined in Paragraph 4(b)(iii).

     (i)  "Foundation Termination Notice Date" is defined in Paragraph
4(b)(iii).

     (j)  "Initial Milestone" shall mean the completion of the Building
foundation.

     (k)  "Initial Milestone Date" is defined in Paragraph 4(b)(i).

     (l)  "Landlord's Architect" shall mean Hellmuth, Obata & Kassabaum or
another architect selected by Landlord for the design of the Base Building
Improvements.

                                      B-
<PAGE>

     (m)  "Landlord's Contractor" shall mean a licensed general contractor
selected by Landlord for the construction of the Base Building Improvements.

     (n)  "Rent Commencement Date" shall have the meaning set forth in the
Lease.

     (o)  "Secondary Milestone" shall mean the completion of the Building
structural framing system (specifically excluding the pouring of the slab and
concrete decks within the Building).

     (p)  "Secondary Milestone Date" is defined in Paragraph 4(b)(i).

     (q)  "Specified CD-Check Set Sheets" means the following sheets contained
in the 801 Gateway CD-Check Set prepared or assembled by Landlord's Architect,
dated January 17, 2000: Sheet 2.1-0 ("Site Plan"), Sheet 2.1-1 ("Grading Plan -
Area `A'"), Sheet 2.5-1 ("Planting Plan - Area `A'"), Sheet 3.2-2 ("Office
Second Floor Framing Plan"), Sheet 3.2-22 ("Garage Second Level Framing Plan"),
Sheet 4.2-1 ("Floor Plan - Ground Level"), Sheet 4.2-2 ("Floor Plan - Level 2-
5"), Sheet 4.2-3 ("Roof Plan"), Sheet 4.2-20 ("Floor Plan - Garage Lower
Level"), Sheet 4.2-21 ("Floor Plan - Garage Ground Level"), Sheet 4.2-22 ("Floor
Plan -Second Level"), Sheet 4.2-23 ("Floor Plan - Third Level"), Sheet 4.5-1
("North & East Elevations"), Sheet 4.5-2 ("South & West Elevation"), Sheet 4.5-
20 ("South Elevations - Garage"), Sheet 4.5-21 ("North Elevations - Garage"),
Sheet 4.7B-20 ("Building Sections - Garage"), and Sheet 4.7B-21 ("Building
Sections -Garage").

     (r)  "Structural Termination Date" is defined in Paragraph 4(b)(iv).

     (s)  "Structural Termination Notice Date" is defined in Paragraph 4(b)(iv).

     (t)  "Substantial Completion" and "Substantially Completed" shall mean, and
the Base Building Improvements shall be deemed "Substantially Complete" when (i)
Landlord has received electrical, plumbing, mechanical, and fire prevention
final approval from the City of South San Francisco, (ii) Tenant has direct
access to the elevator lobby on the floors where the Leased Premises are
located, and (iii) Basic Services are available to the Leased Premises.
Substantial Completion shall be deemed to have occurred notwithstanding a
requirement to complete "punchlist" or similar corrective work.

     (u)  "Tenant Improvements Allowance" is defined in Exhibit C.

     (v)  "Tenant Improvements Loan" is defined in Exhibit C.

     (w)  "Tenant's Architect" is defined in Exhibit C.

     Capitalized  terms not  otherwise  defined in this Exhibit B shall have
the meanings ascribed to them in the Lease.

2.   Base Building Plans and Specifications

     At Landlord's sole cost and expense, Landlord's Architect shall prepare
plans and specifications for the Base Building Improvements substantially in
accordance with the

                                      B-
<PAGE>

801 Gateway Preliminary Specifications (the "Base Building Plans and
Specifications"). Landlord shall not cause the Base Building Plans and
Specifications to materially deviate from the specifications shown in the
Specified CD-Check Set Sheets without the prior written consent of Tenant, which
consent shall not be unreasonably withheld, conditioned or delayed. In the event
Tenant fails to respond within five (5) days following Landlord's request for
consent of any such material deviation, Tenant shall be conclusively deemed to
have given its consent to the matter submitted by Landlord. Notwithstanding the
foregoing, Landlord may without the written consent of Tenant change the Base
Building Plans and Specifications as may be required by any governmental agency
or as necessary to comply with any governmental requirements or to address
structural or unanticipated field conditions or which, in the reasonable
discretion of Landlord, will not have a material effect on Tenant's use of the
Premises or a material effect on the aesthetic appearance or impression relating
to the Base Building Improvements.

3.   Construction

     The Base Building Improvements shall be constructed, without cost or
expense to Tenant, by Landlord's Contractor substantially in accordance with the
Base Building Plans and Specifications, as the same may be amended or modified
from time to time by Landlord, subject to the provisions of Paragraph 2 above.

4.   General

     (a)  Failure to Obtain Building Permits. Landlord and Tenant acknowledge
that construction of the Base Building Improvements and all matters relating
thereto are subject to Landlord obtaining all necessary governmental permits,
authorizations and approvals therefor. Landlord shall use commercially
reasonable efforts to obtain such permits; however, if Landlord is unable to
obtain the building permit required for the commencement of construction of Base
Building Improvements by May 15, 2000, either party shall have the right to
terminate the Lease by delivering written notice of termination to the other
party on or before May 25, 2000. If written notice of termination is given in a
timely manner, the Lease shall immediately terminate, except for any obligations
which by their terms survive the termination or earlier expiration of the Lease.
Notwithstanding anything herein to the contrary, Landlord shall not be liable to
Tenant for any loss or damage resulting from any delay in constructing or
developing the Base Building Improvements, nor shall such failure affect the
obligations of Tenant under the Lease, except as otherwise expressly set forth
in Paragraph 4(b) below.

     (b)  Consequences of Failure to Meet Construction Timetable. In the event
Landlord fails to perform the construction tasks set forth below within the time
periods described in this Section 4(b), then Tenant shall have the rights set
forth in clauses (i) through (v) below, which rights shall be exclusive and
shall be Tenant's sole and absolute rights and remedies for such failure:

          (i)  In the event Landlord fails to perform the Initial Milestone on
or before July 15, 2000 (the "Initial Milestone Date") and/or the Secondary
Milestone on or before September 18, 2000 (the "Secondary Milestone Date") for
reasons other than Tenant Delays and Force Majeure Events, and if as a result
thereof Tenant's Contractor is prevented from substantially completing the
Tenant Improvements on or before December 15, 2000, then and

                                      B-
<PAGE>

only then the Rent Commencement Date shall be delayed beyond December 15, 2000
by one (1) day for each day of delay caused by Landlord's failure to complete
the applicable Milestone(s) on or before the aforesaid dates (but in no event
longer than the actual number of days Tenant's Contractor is prevented from
substantially completing the Tenant Improvements).

          (ii) Notwithstanding the terms of Paragraph 4(b)(i) above, (1) if
Landlord is delayed in completing the Initial Milestone on or before the Initial
Milestone Date and/or the Secondary Milestone on or before the Secondary
Milestone Date due to Tenant Delays, the Initial Milestone Date or the Secondary
Milestone Date, as appropriate, shall be extended for a period equal to the
length of the delay caused by such Tenant Delays, but the Rent Commencement Date
shall not be extended beyond December 15, 2000, and (2) if Landlord is delayed
in completing the Initial Milestone on or before the Initial Milestone Date
and/or the Secondary Milestone on or before the Secondary Milestone Date due to
Force Majeure Events, the Initial Milestone Date or the Secondary Milestone
Date, as appropriate, and the Rent Commencement Date shall each be extended by
one (1) day for each day of delay caused by such Force Majeure Events (but in no
event shall the Rent Commencement Date be delayed longer than the actual number
of days Tenant's Contractor is prevented from substantially completing the
Tenant Improvements). Tenant acknowledges that the length of any Tenant Delay or
Force Majeure Event is to be measured by the duration of the delay in completing
the Initial Milestone and/or the Secondary Milestone, as applicable, caused by
the event or conduct constituting the Tenant Delay or the Force Majeure Event,
which may exceed the duration of such event or conduct due to the necessity of
rescheduling work or other causes.

          (iii)In the event Landlord fails to perform the Initial Milestone on
or before the Foundation Termination Date (as hereinafter defined), then Tenant
shall have the right to terminate this Lease by delivering written notice of
termination to Landlord not later than the Foundation Termination Notice Date
(as hereinafter defined). If Tenant fails to deliver a termination notice to
Landlord in a timely manner as provided herein, then Tenant shall be deemed to
have waived its right to terminate this Lease under this Paragraph 4(b)(iii) and
this Lease shall continue in full force and effect. As used herein, "Foundation
Termination Date" means August 23, 2000 and "Foundation Termination Notice Date"
means August 31, 2000; provided, however, that if Landlord is delayed in
completing the Initial Milestone on or before the Foundation Termination Date
due to Tenant Delays or Force Majeure Events, the Foundation Termination Date
and the Foundation Termination Notice Date shall each be extended for a period
equal to the length of such delay. Tenant acknowledges that the length of any
Tenant Delay or Force Majeure Event is to be measured by the duration of the
delay in completing the Initial Milestone caused by the event or conduct
constituting the Tenant Delay or the Force Majeure Event, which may exceed the
duration of such event or conduct due to the necessity of rescheduling work or
other causes.

          (iv) In the event Landlord fails to perform the Second Milestone on or
before the Structural Termination Date (as hereinafter defined), then Landlord
and Tenant shall each have the right to terminate this Lease by delivering
written notice of termination to the other party not later than the Structural
Termination Notice Date (as hereinafter defined). If neither party delivers a
termination notice to the other in a timely manner as provided herein, then the
parties shall be deemed to have waived their respective rights to terminate this
Lease under this Paragraph 4(b)(iv) and this Lease shall continue in full force
and effect. As used herein,

                                      B-
<PAGE>

(A) "Structural Termination Date" means April 15, 2001; provided, however, that
if Landlord is delayed in completing the Second Milestone on or before the
Structural Termination Date due to Tenant Delays, then Landlord's right to
terminate this Lease pursuant to this Paragraph 4(b)(iv) shall not be affected
or delayed, but solely with respect to Tenant's right to terminate this Lease
under this Paragraph 4(b)(iv), the Structural Termination Date shall be extended
for a period equal to the length of such delay; and (B) "Structural Termination
Notice Date" shall mean April 25, 2001; provided, however, that if the
Structural Termination Date is extended with respect to Tenant in accordance
with the foregoing proviso, then the Structural Termination Notice Date shall be
extended with respect to Landlord and Tenant to the date that is ten (10) days
after the Structural Termination Date, as so extended. Tenant acknowledges that
the length of any Tenant Delay is to be measured by the duration of the delay in
completing the Second Milestone caused by the event or conduct constituting the
Tenant Delay, which may exceed the duration of such event or conduct due to the
necessity of rescheduling work or other causes.

          (v)  If Landlord fails to Substantially Complete the Base Building
Improvements on or before the Rent Commencement Date for reasons other than
Tenant Delays, then and only then the Rent Commencement Date shall be delayed by
one (1) day for each day that Landlord so delays in Substantially Completing the
Base Building Improvements. Tenant acknowledges that the length of any Tenant
Delay is to be measured by the duration of the delay in Substantially Completing
the Base Building Improvements caused by the event or conduct constituting the
Tenant Delay, which may exceed the duration of such event or conduct due to the
necessity of rescheduling work or other causes.

          (vi) If Landlord fails to Substantially Complete the Base Building
Improvements on or before the Base Building Trigger Date (as hereinafter
defined) for reasons other than Tenant Delays or Force Majeure Events, then and
only then the Rent Commencement Date shall be delayed beyond the Base Building
Trigger Date by one and one-half (1 1/2) days for each day that Landlord so
delays in Substantially Completing the Base Building Improvements beyond the
Base Building Trigger Date. As used herein, "Base Building Trigger Date" means
January 15, 2001; provided, however, that if Landlord is delayed in
Substantially Completing the Base Building Improvements due to Tenant Delays or
Force Majeure Events, the Base Building Trigger Date shall be extended for a
period equal to the length of such delay. Tenant acknowledges that the length of
any Tenant Delay or Force Majeure Event is to be measured by the duration of the
delay in Substantially Completing the Base Building Improvements caused by the
event or conduct constituting the Tenant Delay or the Force Majeure Event, which
may exceed the duration of such event or conduct due to the necessity of
rescheduling work or other causes.

          (vii)If Landlord fails to Substantially Complete the Base Building
Improvements on or before the Base Building Outside Date (as hereinafter
defined) for reasons other than Tenant Delays or Force Majeure Events, then and
only then the Rent Commencement Date shall be delayed beyond the Base Building
Outside Date by two (2) days for each day that Landlord so delays in
Substantially Completing the Base Building Improvements beyond the Base Building
Outside Date. As used herein, "Base Building Outside Date" means February 15,
2001; provided, however, that if Landlord is delayed in Substantially Completing
the Base Building Improvements due to Tenant Delays or Force Majeure Events, the
Base Building Outside Date shall be extended for a period equal to the length of
such delay. Tenant

                                      B-
<PAGE>

acknowledges that the length of any Tenant Delay or Force Majeure Event is to be
measured by the duration of the delay in Substantially Completing the Base
Building Improvements caused by the event or conduct constituting the Tenant
Delay or the Force Majeure Event, which may exceed the duration of such event or
conduct due to the necessity of rescheduling work or other causes.

          (viii) Notwithstanding anything to the contrary contained in this
Exhibit B, if the Tenant Improvements Substantial Completion Date has not
occurred on or before the Rent Commencement Date solely due to Force Majeure
Events, then and only then the Rent Commencement Date shall be delayed by one
(1) day for each day that the Tenant Improvements Substantial Completion Date is
so delayed; provided, however, that in no event shall the Rent Commencement Date
be delayed pursuant to this Section 4(b)(viii) beyond April 14, 2001, and
Tenant's obligation to pay Rent under the Lease shall commence on April 15, 2001
irrespective of any such Force Majeure Event. Landlord acknowledges that the
length of any such delay is to be measured by the duration of the delay in the
Tenant Improvements Substantial Completion Date caused by the Force Majeure
Event, which may exceed the duration of such Force Majeure Event due to the
necessity of rescheduling work or other causes.

                                      B-
<PAGE>

                                  Exhibit B-1

                        Preliminary Specifications for
                          Base Building Improvements

     The base building shall be constructed per all governmental codes by
Landlord for Tenant, including, but not limited to, the following:

Structure/Envelope

 .    Concrete foundation to be reinforced grade beams with spread footings or
     other system as specified by geotechnical and engineering consultants.

 .    Ground floor to be concrete slab on grade, minimum thickness 5, or as
     required by geotechnical and engineering consultants.

 .    Elevated floors to be constructed of vented metal deck with reinforced
     concrete that meets fire code requirements.

 .    Building structural framing to consist of steel "braced frame" with beams
     and columns constructed structural rolled shapes.

 .    Non-bearing exterior facade consisting of EIFS or GFRC with decorative
     metal panels. An exterior containing a minimum average of 40% glass of
     ribbon or punched opening windows with high performance glass.

 .    Floor system designed with minimum live load capacity of 50 psf and dead
     load capacity of 20 psf. Select central core areas to have increased floor
     loading capacity of 100 psf.

 .    Roof live load to be 20 psf except where mechanical loads are imposed.

 .    Floor to floor heights to be approximately 15-0.

 .    Base building roof drains and drain lines with connection to site storm
     drain system.

 .    Surface and/or structured parking adjacent to premises as required to
     provide tenant with 3.0 spaces per 1,000 rentable square feet.

 .    Roof screens up to 11-0 in height above the roof as required by City of
     South San Francisco.

 .    Roofing membrane to be a built-up roof over rigid insulation on top of
     metal roof deck construction.

 .    Two internal fire rated stairways serving all floors. One stairway to
     continue to roof via a ship ladder. Security system for access between
     floors to be provided by Tenant.

                                     B-1-
<PAGE>

 .    One complete and finished base building male and female restroom at each
     floor. Finishes to include stone countertops, ceramic tile walls and
     floors. Accessible showers located on first floor.

 .    Fire proofing of building structure, as required, per building code.

 .    Fire safing between floors to maintain code required separations.

 .    Perimeter walls and roof insulation per Title 24 requirements.

Electrical

 .    4,000 amp 277/480 volt, 3-phase electric service and transformer with
     underground electrical to main base building switch and meter section.

 .    Switchgear as required to service base building systems, parking structure,
     site lighting and irrigation.

 .    Emergency generator for base building life safety systems. Conduit provided
     for Tenant exterior generator adjacent to base building generator.

 .    Vertical electrical service distribution to each floor to be provided via
     busways. Horizontal switchgear and distribution by Tenant.

Mechanical

 .    Rooftop mounted heating, ventilation and air conditioning systems with
     vertical distribution provided to each floor but exclusive of horizontal
     distribution and control equipment.

 .    Domestic water, sanitary sewer, plumbing vent and exhaust systems provided
     at each floors restroom core.

 .    Base building domestic water service with meters, backflow preventers and
     check assembly located per California Water Service requirements.

 .    Base building sanitary sewer line under ground floor slab.

 .    Complete base building light hazard automatic fire sprinkler system to meet
     NFPA standards (excluding tenant branch lines and drops to suspended
     ceilings).

Miscellaneous

 .    Two elevators. One passenger car and one "swing" car for passenger and
     freight service.

 .    Base building fire and life safety systems shall meet all applicable codes
     and capable of being extended beyond the core to accommodate tenant
     improvements.

 .    Base building security systems to provide for after hours access and
     controls at ground floor exterior lobby doors.

                                     B-1-
<PAGE>

 .    Two (2), 4 underground telephone/data conduits from Gateway Blvd to base
     building main telecommunications room. Two 4 sleeves to be provided in each
     telephone room at each elevated floor.

 .    Loading area to be at grade.

 .    Landscaping, hardscapes and automatic irrigation systems, including control
     systems.

 .    One (1) monument sign at each main entrance along Gateway Boulevard
     identifying The Gateway North Campus and the building address.

 .    Controlled site lighting to provide a minimum of one (1) foot candle per
     square foot.

                                     B-1-
<PAGE>

                                   Exhibit C

                  Tenant Improvements Construction Agreement

         This exhibit, entitled "Tenant Improvements Construction Agreement", is
and shall constitute Exhibit C to the Lease Agreement, dated as of January 21,
2000, by and between Landlord and Tenant (the "Lease"). The terms and conditions
of this Exhibit C are hereby incorporated into and are made a part of the Lease.

         Subject to the terms and  conditions set forth herein and in the Lease,
Landlord shall allow the construction or installation of the improvements in the
interior of the Leased  Premises in  accordance  with the  procedures  set forth
below:

1.       Definitions

         (a)   "Approved Contractors" shall have the meaning set forth within
the definition of "Tenant's Contractor."

         (b)   "Base Building Improvements" is defined in Exhibit B to the
Lease.

         (c)   "Construction Payment" is defined in Paragraph 8(a).

         (d)   "Construction Schedule" is defined in Paragraph 11(a).

         (e)   "Landlord's Contractor" shall mean the general contractor
retained by Landlord pursuant to Exhibit B to the Lease.

         (f)   "Preliminary Ground Floor Plans" shall mean Sheet 4.2-1 ("Floor
Plan -Ground Level") contained in the 801 Gateway CD-Check Set prepared or
assembled by Landlord's Architect, dated January 17, 2000.

         (g)   "Review Fee" is defined in Paragraph 3(e).

         (h)   "Target Dates" is defined in Paragraph 11(a).

         (i)   "Tenant Delays" is defined in Paragraph 10.

         (j)   "Tenant Improvements" shall mean all improvements made to the
Leased Premises other than the Base Building Improvements, which Tenant
Improvements shall be furnished and installed in the Leased Premises in
accordance with the Construction Documents. Without limiting the generality of
the foregoing, the Tenant Improvements shall include and Tenant shall be
responsible for the installation of any upgrades to Base Building Improvements.

         (k)   "Tenant Improvements Allowance" is defined in Paragraph 9(a).

         (l)   "Tenant Improvements Cost" shall mean all costs associated with
the design and construction of the Tenant Improvements, including, without
limitation, all building permit fees, payments to design consultants for
services and disbursements, all preparatory work, premiums for insurance and
bonds, general conditions, such inspection fees as Landlord may incur,

                                      C-
<PAGE>

reimbursement to Landlord for permit and other fees Landlord may incur that are
fairly attributable to the Tenant Improvements work and the cost of installing
any additional electrical capacity or telecommunications capacity required by
Tenant.

     (m)  "Tenant Improvements Loan" is defined in Paragraph 9(b).

     (n)  "Tenant Improvements Substantial Completion Date" is defined in
Paragraph 6.

     (o)  "Tenant's Architect" shall mean SMP/SHG Incorporated or another
California licensed architect selected by Tenant and approved by Landlord.

     (p)  "Tenant's Construction Manager" shall be Grubb & Ellis Management
Services or another construction manager approved by Landlord.

     (q)  "Tenant's Contractor" shall mean the general contractor retained by
Tenant and approved by Landlord for the construction of the Tenant Improvements.
Landlord hereby approves the following general contractors for the construction
of the Tenant Improvements: Dinwiddie Hathaway; Rudolph & Sletten; South Bay;
Swinerton & Walberg; and Turner Whiting Turner (collectively, the "Approved
Contractors"). Tenant shall have the right to retain any one of the Approved
Contractors as "Tenant's Contractor" without further approval from Landlord.

     (r)  "Tenant's Representative" is defined in Paragraph 7.

     Capitalized terms not otherwise defined in this Exhibit C shall have the
meanings ascribed to them in the Lease.

2.   Tenant's Architect, Engineers and Contractors

     Tenant shall select architects, engineers and contractors from a list of
approved architects, engineers and contractors to be provided to Tenant by
Landlord. In the event that Tenant desires to use an architect, engineer or
contractor not on the list provided by Landlord, Tenant may request the consent
of Landlord to the use of such architect, engineer or contractor, which consent
may be given or withheld in Landlord's reasonable discretion. Notwithstanding
the foregoing, Tenant shall retain Middlebrook + Louie as the structural
engineer and Flack & Kurtz Consulting Engineers, LLP as the mechanical,
electrical and plumbing engineer for the construction of the Tenant
Improvements. The cost of preparing all plans and specifications for the Tenant
Improvements (including, without limitation, the Conceptual/Space Plans referred
to in Paragraph 3(a) of this Exhibit C and the Construction Documents referred
to in Paragraph 3(c)(i) of this Exhibit C), and the cost of preparing any change
thereto shall be paid by Tenant, although Tenant may apply the Tenant
Improvements Allowance and the Tenant Improvements Loan to the payment of such
costs in accordance with the provisions of Paragraphs 9(a) and (b) of this
Exhibit C.

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3.   Submittal of Base Building Improvements Backgrounds, Conceptual/Space Plans
     and Construction Documents

     (a)  Submittal of Base Building Improvements Backgrounds. Not later than
February 10, 2000, Landlord shall provide to Tenant on electronic media
backgrounds of the Base Building Improvements for floors 1 through 5 of the
Building.

     (b)  Submittal of Conceptual/Space Plans. Not later than March 15, 2000
(the "Conceptual/Space Plans Submittal Date"), Tenant shall submit to Landlord
architectural plans, reflected ceiling plans, furniture layout and power signal
plans (collectively, "Conceptual/Space Plans") prepared by Tenant's Architect
for the Tenant Improvements. Tenant's Conceptual/Space Plans and Construction
Documents for the ground floor of the Building shall be consistent with the
Preliminary Ground Floor Plans. Tenant's Conceptual/Space Plans shall be for the
general information of Landlord, but receipt of such Conceptual/Space Plans by
Landlord shall not constitute an approval by Landlord of the design or
specifications shown thereon. Landlord shall, within five (5) Business Days
following receipt of such plans from Tenant, review, comment on and return the
Conceptual/Space Plans to Tenant, marked "Approved," "Approved as Noted" or
"Disapproved as Noted, Revise and Resubmit." Landlord shall have the right to
review the Conceptual/Space Plans in its reasonable discretion; provided,
however, that Landlord shall have the right to approve, in its sole and absolute
discretion, any improvements proposed by Tenant which affect the structural
components of the Building or the Building's mechanical, electrical, plumbing,
HVAC or life safety systems. If the Conceptual/Space Plans are returned to
Tenant marked "Approved," the Conceptual/Space Plans shall be deemed approved by
Landlord and the procedure set forth in Paragraph 3(c)(i) below shall be
followed. If the Conceptual/Space Plans are returned to Tenant marked "Approved
as Noted," the Conceptual/Space Plans so submitted shall be deemed approved by
Landlord and the procedure set forth in Paragraph 3(c)(i) below shall be
followed; provided, however, that in preparing the Construction Documents,
Tenant shall cause Tenant's Architect to incorporate Landlord's noted items into
the Construction Documents. If the Conceptual/Space Plans are returned to Tenant
marked "Disapproved as Noted, Revise and Resubmit," Tenant shall cause such
plans to be revised, taking into account the reasons for Landlord's disapproval,
and shall resubmit revised plans to Landlord for review within five (5) days
after return of the Conceptual/Space Plans to Tenant by Landlord. The same
procedure shall be repeated until Landlord fully approves the Conceptual/Space
Plans.

     (c)  Submittal of Construction Documents.

          (i)  Following the approval by Landlord of the Conceptual/Space Plans,
and in any event not later than July 15, 2000 (the "Construction Documents
Submittal Date"), Tenant shall deliver to Landlord one (1) set of reproducible
sepia and three (3) sets of blue-lined prints wet signed and stamped by Tenant's
Architect of detailed drawings and specifications, including, without
limitation, full architectural plans, full electrical, mechanical and plumbing
plans, furniture plans, life safety plans and additional documents as required
by the City of South San Francisco for permitting and construction of the Tenant
Improvements (collectively, the "Construction Documents"). If the draft of the
Construction Documents was prepared on a computer-assisted design ("CAD")
system, Tenant shall also deliver to Landlord a diskette containing the
Construction Documents in the AutoCAD format. Landlord shall, within ten (10)

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Business Days following receipt of such Construction Documents from Tenant,
return to Tenant one (1) sepia set of the Construction Documents marked
"Approved," "Approved as Noted" or "Disapproved as Noted, Revise and Resubmit."
Landlord shall have the right to review the Construction Documents in its
reasonable discretion; provided, however, that Landlord shall have the right to
approve, in its sole and absolute discretion, any improvements proposed by
Tenant which affect the structural components of the Building or the Building's
mechanical, electrical, plumbing, HVAC or life safety systems. If the
Construction Documents are returned to Tenant marked "Approved," the
Construction Documents, as so submitted, shall be deemed approved by Landlord.
If the Construction Documents are returned to Tenant marked "Approved as Noted,"
the draft of the Construction Documents shall be deemed approved by Landlord;
provided, however, that in preparing the final approved Construction Documents,
Tenant shall cause Tenant's Architect to incorporate Landlord's noted items into
the Construction Documents. If the Construction Documents are returned to Tenant
marked "Disapproved as Noted, Revise and Resubmit," Tenant shall cause such
Construction Documents to be revised, taking into account the reasons for
Landlord's disapproval and shall resubmit revised plans to Landlord for review.
The same procedure shall be repeated until Landlord fully approves the
Construction Documents. The Construction Documents shall be consistent with, and
a logical extension of, the Conceptual/Space Plans approved by Landlord in
accordance with Paragraph 3(a) of this Exhibit C. Tenant shall be solely
responsible for: (A) the completeness of the Construction Documents; (B) the
conformity of the Construction Documents with the physical conditions in the
Building and the Leased Premises; (C) the compatibility of the Construction
Documents with the shell or the core or the mechanical, plumbing, life safety or
electrical systems of the Building (including obtaining, at Tenant's sole cost
and expense, mechanical and electrical drawings from Flack & Kurtz Consulting
ENGINEERS, LLP); and (D) the compliance of the Construction Documents with all
applicable Laws, including, without limitation, the Americans With Disabilities
Act. When the Construction Documents are approved by Landlord and Tenant, they
shall be acknowledged as such by Landlord and Tenant signing each sheet of the
Construction Documents. Tenant shall cause Tenant's Architect to deliver to
Landlord the number of copies of the Construction Documents which Landlord may
request. In addition, if the Construction Documents were prepared on a computer-
assisted design ("CAD") system, Tenant shall also deliver to Landlord a diskette
containing the approved Construction Documents in the AutoCAD format.

          (ii)      Landlord shall, concurrently with its review and approval of
the Construction Documents, advise Tenant whether or not any or all of the
Tenant Extra Improvements shall be required to be removed at the expiration or
termination of the Term; provided, however, that in no event shall Tenant be
required to remove any Tenant Extra Improvements that are consistent with
general office uses commonly found in class "A" office properties owned by
Landlord, as reasonably determined by Landlord. If Landlord fails to so advise
Tenant regarding whether or not any proposed Tenant Extra Improvements must be
removed at the expiration or termination of this Lease, then Tenant shall be
required to remove such Tenant Extra Improvements upon such expiration or
termination date.

     (d)  Landlord's Review Responsibilities. Tenant acknowledges and agrees
that Landlord's review and approval, if granted, of all Conceptual/Space Plans
and Construction Documents is solely for the benefit of Landlord and to protect
the interests of Landlord in the Building and the Leased Premises, and Landlord
shall not be the guarantor of, nor in any way or

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to any extent responsible for, the correctness or accuracy of any
Conceptual/Space Plans or Construction Documents or of the compliance of the
Conceptual/Space Plans or Construction Documents with applicable Laws or of the
conformance or compatibility of the Conceptual/Space Plans or Construction
Documents with physical conditions in the Building or Leased Premises or with
the shell or the core or the mechanical, plumbing, life safety or electrical
systems of the Building. Tenant shall require and be solely responsible for
insuring that its architects, engineers and contractors verify all physical
conditions in the Building, insofar as they are relevant to, or may affect, the
design and construction of the Tenant Improvements, and Landlord shall have no
liability to Tenant for any inaccuracy or incorrectness in any of the
information supplied by Landlord with regard to physical conditions. Tenant
shall be solely responsible for, and Landlord specifically reserves the right to
require Tenant to make at any time and from time to time during the construction
of the Tenant Improvements, any changes to the Conceptual/Space Plans and
Construction Documents necessary to obtain any governmental permits,
authorizations and approvals or to comply with all applicable Laws or to achieve
the compatibility, as reasonably determined by Landlord, of the Conceptual/Space
Plans and Construction Documents with the shell and the core and the mechanical,
plumbing, life safety and electrical systems of the Building and any third-party
warranties.

     (e)  Landlord's Review Fee. Landlord shall receive a fee (the "Review Fee")
of Twenty Seven Thousand Dollars ($27,000.00) (viz., $0.20 per rentable square
foot) for reviewing the Conceptual/Space Plans and the Construction Documents
and assisting with the obtaining of governmental permits, authorizations and
approvals for the Tenant Improvements. Landlord may debit the Tenant
Improvements Allowance and/or the Tenant Improvements Loan to pay such fee.

4.   Pricing the Work

     (a)  Upon completion of the Construction Documents for the Tenant
Improvements, Tenant shall cause Tenant's Contractor to furnish Tenant and
Landlord with an estimate of the cost of the Tenant Improvements as shown on the
Construction Documents.

     (b)  On or before the Tenant Improvements Construction Date, Tenant shall
deposit the Construction Payment with Landlord for payment in accordance with
Paragraph 8. Landlord shall not authorize construction of the Tenant
Improvements to commence until Landlord has received the Construction Payment.

5.   Tenant Improvements Construction

     (a)  Tenant shall cause Tenant's Contractor to construct and install all
Tenant Improvements in the Leased Premises in accordance with the Construction
Documents and all Laws. Tenant shall engage Tenant's Construction Manager to
coordinate and supervise all aspects of the construction of the Tenant
Improvements. Tenant shall be solely responsible for the fees and costs of
Tenant's Construction Manager. Landlord shall have no obligation to Tenant for
defects in design, workmanship or materials in connection with the Tenant
Improvements. Any changes to the approved Construction Documents shall require
the written approval of Landlord and Tenant. All such changes must be evidenced
by a written change order executed by Landlord and Tenant or their respective
representatives describing the change

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required in the Construction Documents, and the cost of such changes shall be
paid in accordance with the terms of this Exhibit C.

     (b)  From and after the completion by Landlord of the Second Milestone,
Landlord's Contractor and Tenant's Contractor will jointly occupy the Building
in order to complete the construction of the key components of the Base Building
Improvements and the Tenant Improvements, as the case may be, on or before the
applicable Target Dates set forth in the Construction Schedule. Landlord and
Tenant shall each be responsible for ensuring that their respective contractors
coordinate their efforts in order that Landlord and Tenant may meet their
respective Target Dates contained in the Construction Schedule. Notwithstanding
the foregoing, in the event of any scheduling conflicts between Landlord's
Contractor and Tenant's Contractor, Landlord's Contractor shall have priority
with respect to any work that, in the reasonable discretion of Landlord's
Contractor, needs to be completed prior to the applicable portion of Tenant's
work. Subject to the foregoing, Tenant shall cause Tenant's Contractor to
construct the Tenant Improvements in a manner designed to avoid interference
with the construction of the Base Building Improvements, and Tenant's work of
installation shall be handled in such a manner as to maintain harmonious labor
relations and as not to interfere with or delay the work of Landlord's
contractors. No portion of the work to be performed by Landlord's Contractor
shall be dependent upon completion of any work of construction or installation
to be performed by Tenant. Tenant's contractors, subcontractors and materialmen
shall be subject to prior approval by Landlord and shall be subject to the
administrative supervision of Landlord or Landlord's general contractor and
rules of the site. Contractors, subcontractors and materialmen engaged by Tenant
shall take the necessary steps to insure, so far as may be possible, the
progress of the work without interruption on account of strikes, work stoppage
or similar causes for delay. In the event that Tenant's contractors or
subcontractors do not promptly cause any pickets to be withdrawn and all other
disruptions to the operations of the Building promptly to cease, or in the event
that Landlord notifies Tenant that Landlord has in good faith concluded that
picketing or other disruptive activities are an imminent threat, Tenant shall
immediately cause the withdrawal from the job of all its contractors,
subcontractors or materialmen involved in the dispute. In the event Landlord's
Contractor is delayed by the actions or inaction of Tenant's contractors,
subcontractors or materialmen, Tenant shall be obligated to pay any additional
costs and expenses incurred by Landlord in connection therewith.

     (c)  Subject to Paragraph 5(b) above, Landlord shall provide access and
entry to the Leased Premises to Tenant's contractors at times consistent with
Landlord's schedule for the work subject to all the terms and conditions of the
Lease and this Exhibit C. Upon and following any entry into the Leased Premises
by Tenant's contractors prior to the commencement of its Term, Tenant's
contractors shall perform all of the obligations of Tenant applicable under the
Lease during the Term (except the obligation to pay Base Rent and Additional
Rent), including, without limitation, obligations pertaining to insurance,
indemnity, compliance with laws, and hazardous materials. In addition to the
indemnity obligations of Tenant under the Lease, Tenant shall indemnify, defend
and protect Landlord and hold Landlord harmless of and from any and all claims,
proceedings, loss, cost, damage, causes of action, liabilities, injury or
expense arising out of or related to claims of injury to or death of persons or
damage to property occurring or resulting directly or indirectly from the
presence in the Leased Premises or the Project of Tenant's contractors or
representatives or the activities of Tenant or its contractors or
representatives in or about the Leased Premises or Project during the
construction period, such

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indemnity to include, but without limitation, the obligation to provide all
costs of defense against any such claims. This indemnity shall survive the
expiration or sooner termination of the Lease.

     (d)  In addition to and without limitation on the requirements set forth in
the Lease, Tenant shall ensure that Tenant's Contractor and all subcontractors
and materialmen procure and maintain in full force and effect during the course
of construction all worker's compensation insurance required by Law and a "broad
form" commercial general liability and property damage policy of insurance
naming, Landlord, Tenant and Landlord's lenders as additional insureds. The
minimum limit of coverage of the aforesaid commercial general liability policy
shall be in the amount of not less than Five Million Dollars ($5,000,000) for
injury or death of one person in any one accident or occurrence and in the
amount of not less than Five Million Dollars ($5,000,000) for injury or death of
more than one person in any one accident or occurrence, and shall contain a
severability of interest clause or a cross liability endorsement. Such insurance
shall further insure Landlord and Tenant against liability for property damage
of at least Three Million Dollars ($3,000,000).

6.   Obligation of Tenant To Provide As-Built Plans

     Within thirty (30) day after the Tenant Improvements Substantial Completion
Date, Tenant shall cause Tenant's Architect to provide Landlord with a complete
set of plans on Mylar and specifications reflecting the actual conditions of the
Tenant Improvements as constructed in the Leased Premises, together with a copy
of such plans on diskette in the AutoCAD format or such other format as may then
be in common use for computer assisted design purposes. For purposes of this
Lease, "Tenant Improvements Substantial Completion Date" shall mean the date on
which the Tenant Improvements have been substantially completed in accordance
with the Construction Documents, subject only to items of a "punch-list" nature
which do not affect the use or functionality of the Leased Premises.

7.   Designation of Tenant's Representative

     Tenant hereby designates Jamin Seid as its representative ("Tenant's
Representative") in connection with the design and construction of the Tenant
Improvements, and Landlord shall be entitled to rely upon the decisions and
agreements made by Tenant's Representative as binding upon Tenant. Tenant shall
have the right from time to time to designate a new or replacement Tenant's
Representative, subject to reasonable advance notice to Landlord.

8.   Tenant Payments

     (a)  On or before the Tenant Improvements Construction Commencement Date,
Tenant shall deposit with Landlord, for payment in accordance with this
Paragraph 8(a), an amount (the "Construction Payment") equal to the difference
between the Tenant Improvements Allowance and the Tenant Improvements Cost.
Landlord shall not authorize construction of the Tenant Improvements to commence
until Landlord has received the Construction Payment. Landlord shall make
progress payments on a pro rata basis from the Tenant Improvements Allowance and
the Construction Payment (in the proportion that the Tenant Improvements
Allowance and the Construction Payment bear to the Tenant Improvements Cost)
from time to time as the Tenant Improvements are constructed, subject to a
reasonable retention as required

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by landlord, Notwithstanding the foregoing, (i) prior to the making of any
disbursement hereunder, Landlord shall have the right to inspect the
improvements for which the applicable disbursement is requested to confirm that
the improvements have been constructed in accordance with the approved
Construction Documents, all Laws and the terms of this Exhibit C; and (ii)
Landlord shall not be required to make any progress payment until such time as
Landlord receives from Tenant an unconditional lien waiver duly executed by
Tenant's Contractor as to the previous progress payment and a conditional lien
waiver for the progress payment then due. All lien waivers shall comply with
California law regarding materialmen's and mechanics' liens. If for any reason
the Construction Payment, together with the Tenant Improvements Allowance, is
not adequate to fully pay the Tenant Improvement Cost, Tenant shall pay to
Landlord within ten (10) days after billing by Landlord such additional amounts
required. Statements or invoices may be rendered by Landlord during the progress
of the work so as to enable Landlord to pay all contractors, subcontractors,
architects and engineers without advancing Landlord's funds (other than the
Tenant Improvements Allowance) to pay the cost of Tenant Improvements. Landlord
shall be entitled to suspend or terminate construction of the Tenant
Improvements and to declare Tenant in default in accordance with the terms of
the Lease if payment by Tenant of any amounts required to be paid by Tenant
under this Paragraph 8(a) are not received when due.

     (b)  Notwithstanding the terms of Paragraph 8(a) above, Landlord shall
waive Tenant's obligation to deposit the Construction Payment with Landlord
prior to the commencement of Tenant Improvements if Tenant demonstrates to
Landlord's sole and absolute discretion that (i) Tenant is in possession of the
funds required to pay the Tenant Improvements Cost (less the Tenant Improvements
Allowance), and (ii) all amounts required to be paid by Tenant hereunder toward
the Tenant Improvements Cost shall be paid in full when due. Without limiting
the foregoing, Landlord shall have the right to require that Tenant deposit the
aforesaid funds in a bank account requiring dual signatures (including the
signature of Landlord) or take other action to ensure that adequate funds shall
at all times be available to pay all amounts required to be paid by Tenant
hereunder when due. In the event Landlord waives Tenant's obligation to deposit
the Construction Payment with Landlord in accordance with this Paragraph 8(b),
then Landlord and Tenant shall make progress payments on a pro rata basis (in
the proportion that the Tenant Improvements Allowance and the costs payable by
Tenant bear to the Tenant Improvements Cost) from time to time as the Tenant
Improvements are constructed, subject to a reasonable retention as required by
Landlord and the requirements set forth in clauses (i) and (ii) of Paragraph
8(a).

9.   Tenant Improvements Allowance and Tenant Improvements Loan

     (a)  Tenant Improvements Allowance. Landlord shall provide a total of up to
Four Million Fifty Thousand Dollars ($4,050,000.00) (viz., $30.00 per rentable
square foot) (the "Tenant Improvements Allowance"), as provided in this
Paragraph 9(a), toward the payment of the Tenant Improvements Costs; provided,
however, that not more than fifteen cents ($0.15) per square foot of the Tenant
Improvements Allowance may be used to pay the fees of Tenant's Architect for the
preparation of space plans. The Tenant Improvements Allowance shall be subject
to adjustment upon the final determination of the Leased Premises square footage
by Landlord's Architect. The obligation of Landlord to make any one or more
payments pursuant to the provisions of this Paragraph 9(a) or to proceed with
the construction of the Tenant Improvements shall be suspended without further
act of the parties during any such time as there

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exists an event of default under the Lease or any event or condition which, with
the passage of time or the giving of notice or both would constitute such an
event of default. Nothing in this Paragraph 9(a) shall affect the obligations of
Tenant under the Lease with respect to any alterations, additions and
improvements within the Leased Premises, including, without limitation, any
obligation to obtain the prior written consent of Landlord hereto.

     (b)  Tenant Improvements Loan. In addition to the Tenant Improvements
Allowance, Landlord agrees to lend to Tenant in a single-disbursement up to Six
Hundred Seventy Five Thousand Dollars ($675,000.00) (viz., $5.00 per rentable
square foot) (the "Tenant Improvements Loan") to reimburse Tenant for amounts
actually paid by Tenant to Landlord pursuant to Paragraph 8 above, but not to
exceed the amount of the Construction Payment or, if Landlord waives the
obligation of Tenant to make the Construction Payment in accordance with
Paragraph 8(b), the actual amount paid by Tenant out of its own funds toward the
Tenant Improvements Cost. The available principal amount of the Tenant
Improvements Loan shall be subject to adjustment upon the final determination of
the Leased Premises square footage by Landlord's Architect. The Tenant
Improvements Loan shall be disbursed by Landlord following the completion of the
Tenant Improvements and the submission by Tenant to Landlord of invoices,
receipts, lien waivers and other documents requested by Landlord substantiating
the Tenant Improvements Cost and the lien-free completion of the Tenant
Improvements in accordance with all Laws. The Tenant Improvements Loan shall be
repayable by Tenant to Landlord in substantially equal self-amortizing monthly
installments over the initial Term of the Lease, together with interest on the
balance outstanding from time to time from the date of disbursement at the rate
of eleven percent (11%) per annum. Such installments shall be payable on the
first day of each month concurrently with the payment of monthly Base Rent, and
shall be deemed a part of the "Rent" hereunder for all purposes of this Lease.
Promptly following the completion of the Tenant Improvements and the calculation
of the actual Tenant Improvements Loan, Landlord and Tenant shall execute a
Tenant Improvements Loan Amortization Memorandum in the form of Exhibit F
hereto. Notwithstanding anything herein to the contrary, in the event the Lease
shall terminate for any reason prior to the scheduled expiration thereof, the
Tenant Improvements Loan and all accrued and unpaid interest thereon shall
immediately become due and payable in full.

     (c)  Restrictions on Use of Funds. Tenant understands and agrees that (i)
no portion of the Tenant Improvements Allowance or the Tenant Improvements Loan
shall be available to pay the cost of any Tenant Improvements that constitute
furniture, equipment or trade fixtures or result in changes to the Base Building
Improvements, and (ii) the Tenant Improvements Allowance and the Tenant
Improvements Loan shall be available to pay the costs of Tenant's
telecommunications and data infrastructure only with Landlord's prior written
approval and after all other Tenant Improvements Costs have been fully paid.

     (d)  Failure to Disburse Tenant Improvements Allowance and/or Tenant
Improvements Loan. In the event Landlord fails to disburse the Tenant
Improvements Allowance and/or the Tenant Improvements Loan when required in
accordance with this Exhibit C, Tenant shall give written notice of such failure
to Landlord and shall provide Landlord with a period of thirty (30) days to cure
such default. If Landlord thereafter fails to make the required disbursement
within such period, Tenant shall have the right to make such disbursement

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out of its own funds and to offset such amount actually paid against the Rent
next coming due under the Lease.

10.  Tenant Delays

     If Landlord shall be delayed in completing the Base Building Improvements
on or before the Rent Commencement Date as a result of:

     (a)  Subject to compliance by Landlord with its obligations set forth in
Paragraph 3(a) of Exhibit C, Tenant's failure to submit the initial
Conceptual/Space Plans to Landlord on or before the Conceptual/Space Plans
Submittal Date; or

     (b)  Tenant's failure to submit the initial Construction Documents to
Landlord on or before the Construction Documents Submittal Date; or

     (c)  Tenant's change(s) in Construction Documents after approval of the
Construction Documents by Landlord, provided that Tenant shall not change the
Construction Documents without the prior written consent of Landlord, which
consent shall not be unreasonably withheld unless such change could reasonably
be expected to delay the Base Building Improvements Substantial Completion Date;
or

     (d)  Any changes initiated by reason of the disapproval of any Construction
Documents or bids; or

     (e)  Tenant's failure to comply with the Construction Schedule; or

     (f)  An event of default by Tenant under the Lease or the existence of any
event or condition which, with the passage of time or the giving of notice or
both would constitute such an event of default; or

     (g)  Delays caused by Tenant or Tenant's Contractor, subcontractors or
materialmen in construction,

(all of the foregoing being referred to herein collectively as "Tenant Delays"),
then the Rent Commencement Date shall be the earlier of the Tenant Improvements
Substantial Completion Date or the date that would have been the Tenant
Improvements Substantial Completion Date if there had been no Tenant Delays.
Tenant acknowledges that the length of any Tenant Delay is to be measured by the
duration of the delay in the Base Building Improvements Substantial Completion
Date or the Tenant Improvements Substantial Completion Date, as applicable,
caused by the event or conduct constituting the Tenant Delay, which may exceed
the duration of such event or conduct due to the necessity of rescheduling work
or other causes.

11.  Preparation of Construction Schedule

     (a)  Landlord and Tenant shall cooperate in good faith to prepare, on or
before April 15, 2000, a schedule (the "Construction Schedule") of target dates
(the "Target Dates") for the completion of key components of the Base Building
Improvements and the Tenant Improvements, as agreed-upon by the parties hereto,
each in the exercise of its reasonable

                                      C-1
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discretion. In the event Landlord fails to complete any of the key components of
the Base Building Improvements on or before the applicable Target Date(s) set
forth on the Construction Schedule and if, as a result thereof, Tenant is
delayed in completing any affected portion of the Tenant Improvements, then
Landlord shall not be in default hereunder, but such delay by Tenant shall not
be deemed a "Tenant Delay" for purposes of this Lease.

     (b)  Landlord shall use its best reasonable efforts to complete the
construction of the key components of the Base Building Improvements on or
before the applicable Target Dates set forth in the Construction Schedule;
provided, however, that Landlord shall not be required to pay overtime wages or
expedited delivery costs, or to otherwise expend funds in excess of the amounts
that would be paid by Landlord if the construction of the Base Building
Improvements progressed on a normal basis, without delays or unusual or
unforeseen circumstances, and in accordance with Landlord's original schedule
therefor.

12.  General

     (a)  The Tenant Improvements Allowance and the Tenant Improvements Loan
shall be used by Tenant to construct Tenant Improvements in the entire Premises
and may not be used to improve only a portion or portions of the Leased
Premises.

     (b)  Any failure by Tenant to pay any amounts due hereunder shall have the
same effect under the Lease as a failure to pay Rent, and any failure by Tenant
to perform any of its other obligations hereunder shall be subject to Section
7.08(b) of the Lease.

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<PAGE>

                                  EXHIBIT C-1

                 DEFINITION OF BUILDING STANDARD IMPROVEMENTS

For the purposes of the  definition  set forth in  Section  1.20 of the Lease,
               Building Standard Improvements would consist of:

A.   Partitions.
     ----------

     One (1) linear foot of ten (10) foot high partition per twelve (12) square
feet of Net Rentable Area less Common Areas. Partitions to be constructed of 2
1/2 metal studs at 24 on center, gypsum wallboard both sides, level 5 finish
with two coats of latex paint.

B.   Doors and Hardware.
     ------------------

     One (1) ten (10) foot high, solid core, plain sliced maple door with a
clear anodized aluminum frame and polished chrome lever handle latch set
hardware per three hundred (300) square feet of Net Rentable Area less Common
Areas.

C.   Ceiling.
     -------

     Suspended metal "T-Bar" ceiling system with 24 x 24 x thick tegular-style
mineral fiber acoustical ceiling throughout the Leased Premises.

D.   Lighting.
     --------

     One (1) 2 x 4 recessed fluorescent lighting fixture with anodized aluminum
parabolic shaped louvers, including initial lamping, per seventy-five (75)
square feet of Net Rentable Area less Common Areas. Common Areas on all office
floors shall have lighting selected by Landlord.

E.   Electrical Outlets.
     ------------------

     One (1) duplex wall-mounted convenience outlet mounted at standard
locations with white plastic cover plate for each one hundred twenty (120)
square feet of Net Rentable Area less Common Areas.

F.   Telephone Outlets.
     -----------------

     One (1) telephone wall outlet mounted at standard locations for each two
hundred ten (210) square feet of Net Rentable Area less Common Areas with pull
wire through the partition.

G.   Floor Covering.
     --------------

     Direct glue down Broadloom carpet or a credit of $15.00 per square yard of
carpeted area.

                                     C-1-
<PAGE>

H.   Switch.
     ------

     One (1) dual light switch, rocker type, mounted at standard locations with
white plastic cover plate for each three hundred (300) square feet of Net
Rentable Area less Common Areas.

I.   Window Covering.
     ---------------

     Horizontal aluminum one-inch-slat blinds for exterior windows.

J.   Life Safety Systems.
     -------------------

     Rapid Response fire sprinkler heads to conform with typical Tenant
partition layout, utilizing the Building Standard partition and lighting, for
light hazard occupancy design criteria. Manual fire alarm pull stations, exit
lights, and audible fire alarm speakers shall be provided at the Building stair
doors and elevator lobbies.

K.   HVAC.
     ----

     The HVAC system for the Leased Premises to suit normal general office space
utilizing the Building Standard lighting fixtures.

                                     C-1-
<PAGE>

                                   EXHIBIT D

                        BUILDING RULES AND REGULATIONS

     1.   Sidewalks, doorways, halls, stairways, vestibules and other similar
areas shall not be obstructed by any Tenant or used by them for purpose other
than ingress to and egress from their respective Leased Premises, and for going
from one part of the Building to another part.

     2.   Plumbing fixtures shall be used only for their designated purpose, and
no foreign substances of any kind shall be deposited therein. Damage to any such
fixture resulting from misuse by Tenant or any employee or invitee of Tenant
shall be repaired at the expense of Tenant.

     3.   Nails, screws and other attachments to the Building require prior
written consent from Landlord; provided, however, that Tenant shall have the
right without the consent of Landlord to hang artwork, pictures and other
decorative objects on partition walls in the Leased Premises.

     4.   All contractors and technicians rendering any installation service to
Tenant shall be subject to Landlord's approval and supervision prior to
performing services. This applies to all work performed in the Building,
including, but not limited to, installation of telephone, telegraph equipment,
and electrical devices, as well as all installation affecting floors, walls,
woodwork, windows, ceilings, and any other physical portion of the Building.

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

     6.   Corridor doors, when not in use, shall be kept closed.

     7.   Tenant shall cooperate with Landlord in maintaining the Leased
Premises. Tenant shall not employ any person for the purpose of cleaning the
Leased Premises other than the Building's cleaning and maintenance personnel.

     8.   Deliveries of water, soft drinks, newspapers, or other such items to
any Leased Premises shall be restricted to hours established by Landlord and
made by use of the freight elevators if Landlord so directs.

     9.   Nothing shall be swept or thrown into the corridors, halls, elevator
shafts, or stairways. No birds, fish, or animals of any kind shall be brought
into or kept in, on or about the Leased Premises.

                                      D-1
<PAGE>

     10.  No cooking shall be done in the Leased Premises except in connection
with convenience lunch room or beverage service for employees and guests (on a
non-commercial basis) in a manner which complies with all of the provisions of
the Lease and which does not produce fumes or odors.

     11.  Food, soft drink or other vending machines shall not be placed within
the Leased Premises without Landlord's prior written consent.

     12.  Tenant shall not use or keep on its Leased Premises any kerosene,
gasoline, or inflammable or combustible fluid or material other than limited
quantities reasonably necessary for the operation and maintenance of office
equipment.

     13.  Tenant shall not tamper with or attempt to adjust temperature control
thermostats in the Leased Premises. Landlord shall make adjustments in
thermostats on call from Tenant.

     14.  Tenant shall comply with all requirements necessary for the security
of the Leased Premises, including the use of service passes issued by Landlord
for after hours movement of office equipment/packages, and signing security
register in Building lobby after hours.

     15.  Landlord will furnish Tenant with a reasonable number of initial keys
for entrance doors into the Leased Premises and may charge Tenant for additional
keys, thereafter. All such keys shall remain the property of Landlord. No
additional locks are allowed on any door of the Leased Premises without
Landlord's prior written consent and Tenant shall not make any duplicate keys,
except those provided by Landlord. Upon termination of this Lease, Tenant shall
surrender to Landlord all keys to the Leased Premises, and give to Landlord the
combination of all locks for safes and vault doors, if any, in the Leased
Premises.

     16.  Landlord retains the right, without notice or liability to any tenant,
to change the name and street address of the Building.

     17.  Canvassing, peddling, soliciting, and distribution of handbills in the
Building are prohibited and each tenant will cooperate to prevent these
activities.

     18.  The Building hours of operation are (excluding holidays):

                 7:00 a.m. to 6:00 p.m. Monday through Friday

     19.  Landlord reserves the right to rescind any of these rules and
regulations and to make future rules and regulations required for the safety,
protection, and maintenance of the Building, the operation and preservation of
good order thereof, and the protection and comfort of the tenants and their
employees and visitors. Such rules and regulations, when made and written notice
given the Tenant, shall be binding as if originally included herein.

                                      D-2
<PAGE>

                                   Exhibit E

                                Sample Form Of
                        Lease Commencement Certificate

                                Office Building

Re:  The Gateway
     801 Gateway Boulevard
     South San Francisco, California 94080

     This is to certify that AllAdvantage.com has opened/closed on [Date]

     BILLING ADDRESS                   Rentable Area: _______________________

     NAME: _______________________     Lease Commencement Date: _____________

     ADDRESS:                          Lease Expiration Date: _______________
     _____________________________

     CITY, STATE, ZIP:                 Rental Payment Commencement Date:
     _____________________________     ______________________________________

     ATTN: _______________________     Final Tenant Construction Overage:
                                       ______________________________________

     ATTN: _______________________     Payment due from Tenant

                                       Insurance Certificate submitted (Y/N):
                                       ______________________________________

                                       Letter of Credit received: ___________

     By:__________________________     By:___________________________________
        [TENANT or TENANT'S AGENT]         Agent for HMS GATEWAY OFFICE, L.P.

                                      E-1
<PAGE>

                                   Exhibit F

               Tenant Improvements Loan Amortization Memorandum

              Landlord:   HMS Gateway Office, L.P.

                Tenant:   AllAdvantage.com

            Lease Date:   January 21, 2000

              Premises:   Located at 801 Gateway Boulevard, South San Francisco,
                          California

     Tenant hereby acknowledges that Landlord has provided a Tenant Improvements
Loan to Tenant in the amount of _______________ Dollars ($__________) pursuant
to Paragraph 9(b) of Exhibit C to the Lease. Subject to the terms of the Lease
and said Exhibit C, the Tenant Improvements Loan shall be repayable by Tenant,
together with interest on the principal balance outstanding from time to time at
the rate of eleven percent (11%) per annum, in monthly installments of
_______________ Dollars ($__________) each. Said installments shall be payable
on the first day of each month during the initial Term of the Lease concurrently
with the payment of Base Rent.

                      Tenant:  AllAdvantage.com,
                               a California corporation

                               By:___________________________
                               Name:_________________________
                               Title:________________________

                                      F-1
<PAGE>

Approved and Agreed:

Landlord:

HMS Gateway Office, L.P.,
a Delaware limited partnership

By:  Hines Gateway Office, L.P.,
     General Partner

     By: Hines Interests Limited Partnership,
         General Partner

         By: Hines Holdings, Inc.,
             General Partner

             By:____________________________
             Name:__________________________
             Title:_________________________

                                      F-2

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