Document:

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                                                                   EXHIBIT 10.6

                              SETTLEMENT AGREEMENT

     THIS SETTLEMENT AGREEMENT (Settlement Agreement) is entered into by and
among Cana Capital Corporation, a Florida corporation, (CCC) Big Bike of
Daytona, Inc., a Florida corporation, d/b/a Biker's Dream of Jacksonville, (BBD)
Big Bike of Jacksonville, Inc., a Florida corporation, d/b/a Biker's Dream of
Jacksonville, (BBJ) and Scott & Johns Enterprises, Inc., a Florida corporation,
d/b/a/ Big Biker of Tampa Bay, Inc., (BBTB), individually, their parents,
subsidiaries, affiliates, officers, directors, shareholders, insurers, sureties,
employees, agents, attorneys, general partners, limited partners, predecessors,
successors and assigns, and Bruce A. Scott, individually, his heirs, personal
representatives, administrators, executors, family, agents, insurers, sureties,
employees, attorneys, successors and assigns, (collectively Cana) and Biker's
Dream, Inc., a California corporation, (BD) and Ultra Acquisition Corporation, a
Nevada corporation d/b/a/ Ultra Kustom Cycles, (Ultra) their parents,
subsidiaries, affiliates, officers, directors, shareholders, insurers, sureties,
employees, agents, attorneys, general partners, limited partners, predecessors,
successors and assigns, (collectively Biker's Dream).

     WHEREAS, CCC has an action pending against BD in the Circuit Court, Fourth
Judicial Circuit Court in and for Duval County, Florida; styled Cana Capital
Corporation, a Florida corporation v. Biker's Dream, Inc., a California
corporation, Case No. 99-1438-CA, Division CV-G; and

     WHEREAS, BBD has an action pending against Ultra in the Circuit Court,
Seventh Judicial Circuit Court in and for Volusia County, Florida; styled Big
Bike of Daytona, Inc., a Florida corporation, d/b/a Biker's Dream of
Jacksonville v. Ultra

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<PAGE>   2

Acquisition Corporation, a Nevada corporation, d/b/a Ultra Kustom Cycles, Case
No. 2000-31183 CICI, Division 32; and

     WHEREAS, BBJ has an action pending against Ultra in the County Court,
Fourth Judicial Circuit Court in and for Duval County, Florida; styled Big Bike
of Jacksonville, Inc., a Florida corporation, d/b/a biker's Dream of
Jacksonville v. Ultra Acquisition Corporation, a Nevada corporation, d/b/a/
Ultra Kustom Cycles, Case No. 99-6607-CC, Division G; and

     WHEREAS, BBTB has an action pending against Ultra in the Circuit Court,
Thirteenth Judicial Circuit Court in and for Hillsborough County, Florida;
styled Scott & Johns Enterprises, Inc., a Florida corporation, d/b/a Big Bike of
Tampa Bay, v. Ultra Acquisition Corporation, a Nevada corporation d/b/a/ Ultra
Kustom Cycles, Case No. 99-7614-CC, Division G; and

     WHEREAS, Cana and Biker's Dream desire to resolve and settle any and all
issues, claims, disputes, and causes of action among them.

     Accordingly, IT IS EHREBY AGREED AS FOLLOWS:

1. In exchange for the consideration given by Biker's Dream as set forth below,
in paragraph A through J, the sufficiency of which Cana acknowledges, Biker's
Dream agrees as follows:

          A. Biker's Dream will ship 8 Fat Pounders Model 2000; 3 Ground
Pounders S/T Model 2000; and 3 Ground Pounders Model 2000 (the motorcycles) to
Cana described on Exhibit A attached on or before July 31, 2000. The delivery
shall be made at Cana's offices located at 9543 Sunbeam Center Drive,
Jacksonville, Florida 32257.

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          B. The motorcycles' paint schemes will be selected by Robert Dick from
those in inventory at his sole discretion on or before July 21, 2000.

          C. Biker's Dream will deliver a Manufacturer's Certificate of Origin
(MSO) contemporaneously with each motorcycle.

          D. Cana will pay the freight charges for the delivery of the
motorcycles, at the time of delivery.

          E. All the motorcycles will be honored by Ultra's Warranty program.
None may be sold in Daytona or Clearwater.

          F. Biker's Dream will transfer ownership and provide Cana with a Bill
of Sale for the 1998 Ultra Wide Series (18ZWS21A8WR000710) (1998 Ultra) located
in Daytona Beach, Florida. Biker's Dream will execute all documents necessary to
transfer the 1998 Ultra title to Cana.

          G. Biker's Dream will transfer ownership and provide Cana with a Bill
of Sale or invoices marked "paid" for all parts consigned by Biker's Dream to
BBD which are currently located in Daytona Beach in BBD's possession.

          H. Biker's Dream will provide Cana with a Termination and Release
Agreement for each and every Dealer and/or Warranty Agreement between Cana and
Biker's Dream.

          I. Biker's Dream will provide Cana with a General Release of Dick
Lindholm, MN Beach Properties, Inc.

          J. Biker's Dream will provide Cana with a General Release of all
parties to this Settlement Agreement.

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     2. In exchange for the consideration given by Biker's Dream as set forth in
paragraphs A through D below, the sufficiency of which Cana acknowledges, Cana
agrees as follows:

          A. Upon complete performance of all the conditions and agreements of
this Settlement Agreement, Cana shall dismiss the actions described in this
Settlement Agreement with prejudice.

          B. Cana will provide Biker's Dream the MSO's on all bikes financed
under Cana's Floor Plan.

          C. Cana will provide Biker's Dream with a General Release of BD from
Dick Lindholm, MN Beach Properties, Inc.

          D. Cana will provide Biker's Dream with a General Release of all
parties to this Settlement Agreement.

     3. For purposes of this Agreement, an "affiliate" of any person or entity
means any person, entity or group (currently existing or hereafter created)
controlling, controlled by or under common control with, the specified person or
entity, and "control" of a person or entity (including with correlative meaning,
the terms "control by" and "under common control with") means the power to
direct or cause the direction of the management, policies or affairs of the
controlled persons, whether through ownership of securities or partnership or
other ownership interests, by contract or otherwise.

     4. THE PARTIES SPECIFICALLY, KNOWINGLY AND INTENTIONALLY WAIVE THEIR RIGHT
TO A JURY TRIAL IN ANY ACTION RELATING TO THIS SETTLEMENT AGREEMENT.

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     5. The parties to this Settlement Agreement agree to cooperate fully and
execute any and all supplementary documents and to take all additional actions
which may be necessary or appropriate to give full force and effect to the terms
and intent of this Settlement Agreement.

     6. The parties to the Settlement Agreement acknowledge that they have had
the advice of counsel with regard to the meaning and purpose of this Settlement
Agreement. Each party represents that it, she or he has read this Settlement
Agreement, understands its terms and enters into this Settlement Agreement
freely and without reservation.

     7. The parties to this Settlement Agreement further represent and warrant
that each signatory to this Settlement Agreement is duly authorized to sign for
the purpose and in the capacity in which she, or he purports to sign.

     8. This Settlement Agreement shall be construed as a whole according to its
fair meaning and not strictly for or against any of the parties.

     9. The terms of this Settlement Agreement are contractual in nature and are
not merely recitals and may not be changed except in a writing signed by all
parties.

     10. If any provision of this Settlement Agreement or the application
thereof to any circumstance shall, in any event, be invalid or unenforceable,
the remainder hereof, the application of such provision to circumstances other
than those to which it is held invalid or unenforceable, shall not be affected
thereby, and each provision hereof shall be valid and enforced to the fullest
extent permitted by governing law.

     11. This Stipulation of Settlement may be executed in counterparts and
signatures transmitted by facsimile and shall be binding on the parties.

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     12. If a court of competent jurisdiction finds that either party has
breached any of the covenants, warranties, or agreements contained in this
Stipulation of Settlement, that party shall pay the attorneys' fees and expenses
of the prevailing party for litigation or resolving that breach.

     13. Each party shall bear its own costs and attorneys' fees in connection
with all matters arising out of or concerning the litigation described in this
Settlement Agreement.

     Dated this         day of July, 2000.
               ---------

CANA CAPITAL CORPORATION                    BIG BIKE OF DAYTONA, INC.

By:      /s/ Bruce A. Scott                 By:      /s/ Bruce A. Scott
         --------------------------                 ----------------------------
         Bruce A. Scott, President          Bruce A. Scott, President

BIG BIKE OF JACKSONVILLE, INC.              SCOTT & JOHNS ENTERPRISES,
                                            INC.

By:      /s/ Bruce A. Scott                 By:      /s/ Bruce A. Scott
         --------------------------                  ---------------------------
         Bruce A. Scott, President          Bruce A. Scott, President

/s/ Bruce A. Scott
-----------------------------------
Bruce A. Scott, Individually

BIKER'S DREAM, INC.                         ULTRA ACQUISITION
                                            CORPORATION

By:      /s/ Harold L. Collins              By:      /s/ Harold L. Collins
         --------------------------                  ---------------------------
Its:     CEO                                Its:     CEO
         --------------------------                  ---------------------------

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                        SETTLEMENT AGREEMENT (CONTINUED)

/s/ Myra Loughran                           /s/ Daniel C. Shaughnessy
------------------------------------        ------------------------------------
Myra Loughran                               Daniel C. Shaughnessy
333 First St. N., Suite 305                          4640 Blanding Blvd.
Jacksonville Beach, FL 32250                Jacksonville, FL 32201
Telephone:  (904) 249-8500                  Telephone:  (904) 777-8383
Facsimile:  (904) 249-0841                  Facsimile:  (904) 777-1330
Florida Bar No. 866849                      Florida Bar No. 323586
Attorney for Cana Capital Corporation       Attorney for Biker's Dream, Inc.,
Big Bike of Daytona, Inc., Big Bike of      and Ultra Acquisition Corporation
Jacksonville, Inc. and Scott & Johns
Enterprises, Inc.

/s/ Albert M. Guemmer
------------------------------------
Albert M. Guemmer
3002 W. Kennedy Blvd.
Tampa, FL 33609
Telephone:  (813) 875-1973
Florida Bar No. 99549
Attorney for Ultra Acquisition
Corporation

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                                 GENERAL RELEASE

     Cana Capital Corporation, Big Bike of Daytona, Inc., Big Bike of
Jacksonville, Inc., Scott & Johns Acquisitions, Inc. and Bruce A. Scott,
individually, (the "first party"), for valuable and sufficient consideration and
the settlement and compromise of certain claims and other valuable
consideration, received from or on behalf of Biker's Dream, Inc. and Ultra
Acquisition Corporation (the "second party"), the receipt and sufficiency
whereof are hereby acknowledged.

     (Wherever used herein the term "first party" and "second party" shall
include singular and plural heirs, legal representatives, the assigns of
individuals, subsidiaries and the successors and assigns of corporations,
wherever the contexts so admits or requires.)

     HEREBY remises, releases, acquits, satisfies, and forever discharges the
second party, of and from any and all manner of obligation, sequela, action and
actions, cause and causes of action, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
executions, claims and demands whatsoever, in law or in equity, which the first
party ever had, now has or which the first party and any personal
representative, successor, heir or assign of the first party hereinafter can,
shall or may have, whether known or unknown, against the second party, for, upon
or by reason of any matter, cause or thing whatsoever, from the beginning of the
world to the date of this General Release, including but not limited to any and
all claims which were or which could have been set forth in those certain suits
filed in the Circuit Court of the Fourth Judicial Circuit, Duval County,
Florida, Cana Capital Corporation v. Bikers' Dream, Inc., Case No. 99-1438-CA;
the Circuit Court, Seventh Judicial Circuit in and of Volusia County, Florida,
Case No. 2000-31183 CICI, Big Bike of Daytona, Inc. v. Ultra Acquisition
Corporation; in the County Court, Fourth Judicial Circuit in and for Duval
County, Florida, Case No. 99-6607-CC, Big Bike of Jacksonville, Inc. v. Ultra
Acquisition Corporation; and in the Circuit Court, Thirteenth Judicial Circuit
in and for Hillsborough County, Florida, Scott & Johns Enterprises, Inc., v.
Ultra Acquisition Corporation.

Signed sealed and delivered Cana Capital Corporation in the presence of:

                                    By:     /s/ Bruce A. Scott
----------------------------                ------------------------------------
                                            Bruce A. Scott, President

                                    Big Bike of Daytona, Inc.

/s/ Bruce A. Scott                  By:      /s/ Bruce A. Scott
-----------------------------                -----------------------------------
Bruce A. Scott, Individually                 Bruce A. Scott, President

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                                    Big Bike of Jacksonville, Inc.

                                    By:      /s/ Bruce A. Scott
                                             -----------------------------------
                                             Bruce A. Scott, President

                                             Scott & Johns Acquisitions, Inc.

                                    By:      /s/ Bruce A. Scott
                                             -----------------------------------
                                             Bruce A. Scott, President

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                                 GENERAL RELEASE

     Dick Lindholm and MN Beach Properties, Inc. (the "first party"), for
valuable and sufficient consideration and the settlement and compromise of
certain claims and other valuable consideration, received from or on behalf of
Biker's Dream, Inc. and Ultra Acquisition Corporation (the "second party"), the
receipt and sufficiency whereof are hereby acknowledged.

     (Wherever used herein the term "first party" and "second party" shall
include singular and plural heirs, legal representatives, the assign of
individuals, subsidiaries and the successors and assigns of corporations,
wherever the contexts so admits or requires.)

     HEREBY remises, releases, acquits, satisfies, and forever discharges the
second party, of and from any and all manner of obligation, sequela, action and
actions, cause and causes of action, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
executions, claims and demands whatsoever, in law or in equity, which the first
party ever had, now has or which the first party and any personal
representative, successor, heir or assign of the first party hereinafter can,
shall or may have, known or unknown, against the second party, for, upon or be
reason of any matter, cause or thing whatsoever, from the beginning of the world
to the date of this General Release.

Signed sealed and delivered         MN Beach Properties, Inc.
in the presence of:

                                    By:     /s/ Dick Lindholm
---------------------------                 ------------------------------------
                                            Dick Lindholm
                                    Its:    President
                                            ------------------------------------

                                    --------------------------------------------
                                    Dick Lindholm, President

STATE OF FLORIDA
COUNTY OF

     The foregoing instrument was acknowledged before me this 21 day of July
2000 by Dick Lindholm, individually and on behalf of MN Beach Properties, Inc.
He is personally known to me or has provided Drivers License as identification.

                                     -------------------------------------------
                                     Notary Public, State of Florida

                                       10<PAGE>   1
                                                                   EXHIBIT 10.29

                              EMPLOYMENT AGREEMENT

            THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") is made
and entered into as of May 27, 1999, by and between ARDEN REALTY LIMITED
PARTNERSHIP, a Maryland limited partnership (the "Company") and ROBERT PEDDICORD
("Executive").

1.       EMPLOYMENT

         The Company hereby employs Executive and Executive hereby accepts
employment upon the terms and conditions set forth below.

2.       TERM AND RENEWAL

         2.1 Term. The term of this Agreement shall commence on May 27, 1999
(the "Effective Date"), and shall continue to December 31, 2000 (the "Original
Employment Term"), on the terms and conditions set forth below, unless sooner
terminated as provided in Section 5.

         2.2 Extension. Following the expiration of the Original Employment Term
and provided that this Agreement has not been terminated pursuant to Section 5,
and every year thereafter, the Agreement shall be automatically renewed for an
additional 12-month period, effective on January 1, 2001 and each anniversary
thereof; provided, that if a Change in Control (as defined in Section 5.6),
occurs during the original or extended term of this Agreement, this Agreement
shall continue in effect for a period not less than twelve (12) months beyond
the month in which such Change in Control occurred.

3.   COMPENSATION

         3.1 Base Compensation. For the services to be rendered by Executive
under this Agreement, Executive shall be entitled to receive, commencing as of
the Effective Date, an annual base compensation ("Base Compensation") of
$196,000 payable in substantially equal semi-monthly installments. The Base
Compensation shall be reviewed and adjusted annually as determined by the
Compensation Committee (the "Compensation Committee") of the Board of Directors
(the "Board") of the Company.

         3.2 Bonus Compensation. The Compensation Committee shall review
Executive's performance at least annually during each year of the Original
Employment Term and cause the Company to award Executive a cash bonus which the
Compensation Committee determines in its sole and absolute discretion.

<PAGE>   2

         3.3 "Gross-Up" of Compensation.

                  (a) 280G "Gross-Up".

                           (i) Anything in this Agreement to the contrary
notwithstanding, if it shall be determined that any payment or distribution to
Executive or for his benefit (whether paid or payable or distributed or
distributable) pursuant to the terms of this Agreement or otherwise (the
"Payment") would be subject to the excise tax imposed by section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") (the "Excise Tax"), then
Executive shall be entitled to receive from the Company an additional payment
(the "Gross-Up Payment") in an amount such that the net amount of the Payment
and the Gross-Up Payment retained by Executive after the calculation and
deduction of all Excise Taxes (including any interest or penalties imposed with
respect to such taxes) on the Payment and all federal, state and local income
tax, employment tax and Excise Tax (including any interest or penalties imposed
with respect to such taxes) on the Gross-Up Payment provided for in this Section
3.3(a) and taking into account any lost or reduced tax deductions on account of
the Gross-Up Payment, shall be equal to the Payment;

                           (ii) All determinations required to be made under
this Section 3.3(a), including whether and when the Gross-Up Payment is required
and the amount of such Gross-Up Payment, and the assumptions to be used in
arriving at such determinations shall be made by the Accountants (as defined
below) which shall provide Executive and the Company with detailed supporting
calculations with respect to such Gross-Up Payment within fifteen (15) business
days of the receipt of notice from Executive or the Company that Executive has
received or will receive a Payment. For the purposes of this Section 3.3(a), the
"Accountants" shall mean the Company's independent certified public accountants
serving immediately prior to the Change in Control (as defined in Section 5.6).
In the event that the Accountants are also serving as accountant or auditor for
the individual, entity or group effecting the Change in Control, Executive shall
appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accountants hereunder). All fees and expenses of the Accountants shall
be borne solely by the Company. For the purposes of determining whether any of
the Payments will be subject to the Excise Tax and the amount of such Excise
Tax, such Payments will be treated as "parachute payments" within the meaning of
section 280G of the Code, and all "parachute payments" in excess of the "base
amount" (as defined under section 280G(b)(3) of the Code) shall be treated as
subject to the Excise Tax, unless and except to the extent that in the opinion
of the Accountants such Payments (in whole or in part) either do not constitute
"parachute payments" or represent reasonable compensation for services actually
rendered (within the meaning of section 280G(b)(4) of the Code) in excess of the
"base amount," or such "parachute payments" are otherwise not subject to such
Excise Tax. For purposes of determining the amount of the Gross-Up Payment,

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Executive shall be deemed to pay Federal income taxes at the highest applicable
marginal rate of federal income taxation for the calendar year in which the
Gross-Up Payment is to be made and to pay any applicable state and local income
taxes at the highest applicable marginal rate of taxation for the calendar year
in which the Gross-Up Payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from the deduction of such state or
local taxes if paid in such year (determined without regard to limitations on
deductions based upon the amount of Executive's adjusted gross income), and to
have otherwise allowable deductions for federal, state and local income tax
purposes at least equal to those disallowed because of the inclusion of the
Gross-Up Payment in Executive's adjusted gross income. To the extent
practicable, any Gross-Up Payment with respect to any Payment shall be paid by
the Company at the time Executive is entitled to receive the Payment and in no
event will any Gross-Up Payment be paid later than five days after the receipt
by Executive of the Accountant's determination. Any determination by the
Accountants shall be binding upon the Company and Executive. As a result of
uncertainty in the application of section 4999 of the Code at the time of the
initial determination by the Accountants hereunder, it is possible that the
Gross-Up Payment made will have been an amount less than the Company should have
paid pursuant to this Section 3.3(a) (the "Underpayment"). In the event that the
Company exhausts its remedies pursuant to Section 3.3(a)(ii) and Executive is
required to make a payment of any Excise Tax, the Underpayment shall be promptly
paid by the Company to or for Executive's benefit; and

                           (iii) Executive shall notify the Company in writing
of any claim by the Internal Revenue Service that, if successful, would require
the payment by the Company of the Gross-Up Payment. Such notification shall be
given as soon as practicable after Executive is informed in writing of such
claim and shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on which
Executive gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes, interest and/or penalties with respect to such
claim is due). If the Company notifies Executive in writing prior to the
expiration of such period that it desires to contest such claim, Executive
shall:

                           (A) give the Company any information reasonably
                  requested by the Company relating to such claim;

                           (B) take such action in connection with contesting
                  such claim as the Company shall reasonably request in writing
                  from time to time, including, without limitation, accepting
                  legal representation with respect to such claim by an attorney
                  reasonably selected by the Company;

                           (C) cooperate with the Company in good faith in order
                  to effectively contest such claim; and

                           (D) permit the Company to participate in any
                  proceedings relating to such claims;

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                  provided, however, that the Company shall bear and pay
                  directly all costs and expenses (including additional interest
                  and penalties) incurred in connection with such contest and
                  shall indemnify Executive for and hold Executive harmless
                  from, on an after-tax basis, any Excise Tax or income tax
                  (including interest and penalties with respect thereto)
                  imposed as a result of such representation and payment of all
                  related costs and expenses. Without limiting the foregoing
                  provisions of this Section 3.3(a), the Company shall control
                  all proceedings taken in connection with such contest and, at
                  its sole option, may pursue or forgo any and all
                  administrative appeals, proceedings, hearings and conferences
                  with the taxing authority in respect of such claim and may, at
                  its sole option, either direct Executive to pay the tax
                  claimed and sue for a refund or contest the claim in any
                  permissible manner, and Executive agrees to prosecute such
                  contest to a determination before any administrative tribunal,
                  in a court of initial jurisdiction and in one or more
                  appellate courts, as the Company shall determine; provided,
                  however, that if the Company directs Executive to pay such
                  claim and sue for a refund, the Company shall advance the
                  amount of such payment to Executive, on an interest-free
                  basis, and shall indemnify Executive for and hold Executive
                  harmless from, on an after-tax basis, any Excise Tax or income
                  tax (including interest or penalties with respect thereto)
                  imposed with respect to such advance or with respect to any
                  imputed income with respect to such advance (including as a
                  result of any forgiveness by the Company of such advance);
                  provided, further, that any extension of the statute of
                  limitations relating to the payment of taxes for the taxable
                  year of Executive with respect to which such contested amount
                  is claimed to be due is limited solely to such contested
                  amount. Furthermore, the Company's control of the contest
                  shall be limited to issues with respect to which a Gross-Up
                  Payment would be payable hereunder and Executive shall be
                  entitled to settle or contest, as the case may be, any other
                  issue raised by the Internal Revenue Service or any other
                  taxing authority.

         3.4 Benefits.

                  (a) Medical Insurance. The Company shall provide to Executive,
Executive's spouse and children, at its sole cost, such health, dental and
optical insurance as the Company may from time to time make available to its
other executive employees.

                  (b) Life and Disability Insurance. The Company shall provide
Executive such disability and/or life insurance as the Company in its sole
discretion may from time to time make available to its other executive
employees.

                  (c) Pension Plans, Etc. The Executive shall be entitled to
participate in all pension, 401(k) and other employee plans and benefits
established by the Company on at least the same terms as the Company's other
executive employees.

         3.5 Method of Payment. The monetary compensation payable and any
benefits due to Executive hereunder may be paid or provided in whole or in part,
from time to time, by the

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Company and/or its respective subsidiaries and affiliates, but shall at all
times remain the responsibility of the Company.

4.       POSITION AND DUTIES

         4.1 Position. Executive shall serve as Senior Vice President - Leasing
or such other position or positions to which the Company, in its sole and
absolute discretion, assigns Executive.

         4.2 Devotion of Time and Effort. Executive shall use Executive's good
faith best efforts and judgment in performing Executive's duties as required
hereunder and to act in the best interests of the Company. Executive shall
devote such time, attention and energies to the business of the Company as are
reasonably necessary to satisfy Executive's required responsibilities and duties
hereunder.

         4.3 Other Activities. Executive may engage in other activities for
Executive's own account while employed hereunder, including without limitation
charitable, community and other business activities, provided that such other
activities do not materially interfere with the performance of Executive's
duties hereunder.

         4.4 Vacation. It is understood and agreed that Executive shall be
entitled to three (3) weeks vacation per year. During such vacation periods,
Executive shall not be relieved of Executive's duties under this Agreement and
there will be no abatement or reduction of Executive's compensation hereunder.

         4.5 Business Expenses. The Company shall promptly, but in no event
later than thirty days after submission of a claim of expenditure, reimburse
Executive for all reasonable business expenses including, without limitation,
business seminar fees, professional association dues, bar dues and other
reasonable entertainment expenses which have been given approval in advance and
are incurred by Executive in connection with the business of the Company and/or
its respective subsidiaries and affiliates, upon presentation to the Company of
written receipts for such expenses. Such reimbursement shall also include, but
not be limited to, reimbursement for all reasonable travel expenses, including
all airfare, hotel and rental car expenses, incurred by Executive in traveling
in connection with the business of the Company.

         4.6 Company's Obligations. The Company shall provide Executive with any
and all necessary or appropriate current financial information and access to
current information and records regarding all material transactions involving
the Company and/or its representative subsidiaries and affiliates, including but
not limited to acquisition of assets, personnel contracts, dispositions of
assets, service agreements and registration statements or other state or federal
filings or disclosures, reasonably necessary for Executive to carry out
Executive's duties and responsibilities hereunder. In addition, the Company
agrees to provide Executive, as a condition to Executive's services hereunder,
such staff, equipment and office space as is reasonably necessary for Executive
to perform Executive's duties hereunder.

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5.       TERMINATION

         5.1 By the Company Without Cause. The Company may terminate this
Agreement without "cause" (as hereinafter defined) at any time following the
Effective Date, provided that the Company first delivers to Executive the
Company's written election to terminate this Agreement at least 90 days prior to
the effective date of termination.

         5.2 Severance Payment.

                  (a) Amount. In the event the Company terminates Executive's
services hereunder pursuant to Section 5.1, or Executive terminates his
employment hereunder pursuant to Section 5.4 or 5.6, Executive shall continue to
render services to the Company pursuant to this Agreement until the date of
termination and shall continue to receive compensation, as provided hereunder,
through the termination date. In addition to other compensation payable to
Executive for services rendered through the termination date, the Company shall
pay Executive no later than the date of such termination, as a single severance
payment, an amount equal to the sum of: (i) three times Executive's average
annual Base Compensation, paid hereunder for the preceding twenty-four month
period (or, if Executive has been employed less than twenty-four months, the
average annual Base Compensation for the period employed) plus (ii) an amount
equal to three times Executive's most recent annual bonus from the Company
(collectively, the "Severance Amount"). In addition to payment of the Severance
Amount, any unvested stock options or restricted stock held by Executive shall
become fully vested as of the date of termination.

                  (b) Benefits. In the event Executive's employment hereunder is
terminated by the Company without cause pursuant to Section 5.1 or by Executive
pursuant to Section 5.4 or 5.6, then in addition to paying Executive the
Severance Amount and providing for the full vesting of unvested stock options or
restricted stock held by Executive, the Company shall pay the COBRA premium for
health care coverage for Executive and Executive's spouse and children, as
applicable and to the extent eligible, for the lesser of 18 months commencing on
the date of such termination (the "Severance Benefits") or the date on which
Executive becomes eligible for health care coverage under the plan of any other
employer.

                  (c) To be eligible to receive any payments under this Section
5.2, Executive must execute and deliver (and not revoke, if revocation period is
required by law) a release of claims in a form acceptable to the Company.

         5.3 By The Company For Cause. The Company may terminate Executive for
cause at any time, upon written notice to Executive. For purposes of this
Agreement, "cause" shall mean:

                  (a) Executive's conviction for commission of a felony or a
crime involving moral turpitude;

                  (b) Executive's willful commission of any act of theft,
embezzlement or misappropriation against the Company which, in any such case, is
materially and demonstrably injurious to the Company;

                                       6
<PAGE>   7
                  (c) Executive's willful and continued failure to substantially
perform Executive's duties hereunder (other than such failure resulting from
Executive's incapacity due to physical or mental illness), which failure is not
remedied within a reasonable time after written demand for substantial
performance is delivered by the Company which specifically identifies the manner
in which the Company believes that Executive has not substantially performed
Executive's duties; or

                  (d) Executive's death or Disability (as hereinafter defined).

         For purposes of this Section 5.3, no act, or failure to act, on
Executive's part shall be deemed "willful" unless done, or omitted to be done,
by Executive not in good faith.

         In the event Executive is terminated for cause pursuant to this Section
5.3, Executive shall have the right to receive Executive's compensation as
otherwise provided under this Agreement through the effective date of
termination. Executive shall have no further right to receive compensation or
other consideration from the Company, or have any other remedy whatsoever
against the Company, as a result of this Agreement or the termination of
Executive pursuant to this Section 5.3, except as set forth below with respect
to a termination due to Executive's Disability.

         In the event Executive is terminated by reason of Executive's death or
Disability, the Company shall immediately pay Executive (or his estate) the
Severance Amount and shall pay the COBRA premium for health care coverage for
Executive's spouse and children, as applicable and to the extent eligible, for a
period of 18 months commencing on the date of such termination. Said payments
shall be in addition to any disability insurance payments to which Executive is
otherwise entitled and any other compensation earned by Executive hereunder. In
addition, any unvested stock options or restricted stock held by Executive shall
become fully vested as of the date of termination. For purposes of this
Agreement, the term "Disability" shall mean a physical or mental incapacity as a
result of which Executive becomes unable to continue the proper performance of
Executive's duties hereunder for six consecutive calendar months or for shorter
periods aggregating 180 business days in any 12 month period, but only to the
extent that such definition does not violate the Americans with Disabilities
Act.

         5.4 By Executive For Good Reason. Executive may terminate this
Agreement for good reason upon at least 10 days prior written notice to the
Company. For purposes of this Agreement, "good reason" shall mean:

                  (a) the Company's material breach of any of its respective
obligations hereunder and either such breach is incurable or, if curable, has
not been cured within fifteen (15) days following receipt of written notice by
Executive to the Company of such breach by the Company;

         In the event that Executive terminates this Agreement for good reason
pursuant to this Section 5.4, Executive shall have the right to receive
Executive's compensation as provided hereunder through the effective date of
termination and shall also have the same rights and remedies against the Company
as Executive would have had if the Company had terminated

                                       7
<PAGE>   8
Executive's employment without cause pursuant to Section 5.1 (including the
right to receive the Severance Amount payable and the Severance Benefits to be
provided under Section 5.2).

         5.5 Executive's Voluntary Termination. Executive may, at any time,
terminate this Agreement without good reason upon written notice delivered to
the Company at least ninety (90) days prior to the effective date of
termination. In the event of such voluntary termination of this Agreement by
Executive: (i) Executive shall have the right to receive Executive's
compensation as provided hereunder through the effective date of termination,
and (ii) the Company, on the one hand, and Executive, on the other hand, shall
not have any further right or remedy against one another except as provided in
Sections 6 and 7 hereof which shall remain in full force and effect.

         5.6 Change in Control. Executive may terminate this Agreement, upon at
least ten (10) days' prior written notice to the Company, at any time within
twelve (12) months after a "change in control" (as hereinafter defined) of the
Company. In the event Executive terminates this Agreement within twelve (12)
months after a change in control pursuant to this Section 5.6, (i) Executive
shall continue to render services pursuant hereto and shall continue to receive
compensation, as provided hereunder, through the termination date, (ii) the
Company shall pay Executive no later than the date of such termination, as a
single severance payment, an amount equal to the Severance Amount, and (iii)
following such termination, the Company shall provide the Severance Benefits as
required by Section 5.2. For purposes of this Agreement, a "change in control"
shall mean the occurrence of any of the following events:

                  (a) the individuals constituting the Board as of the Effective
Date (the "Incumbent Board") cease for any reason to constitute at least
two-thirds (2/3rds) of the Board; provided, however, that if the election, or
nomination for election by the Company's stockholders, of any new director was
approved by a vote of at least two-thirds (2/3rds) of the Incumbent Board, such
new director shall be considered a member of the Incumbent Board;

                  (b) an acquisition of any voting securities of the Company
(the "Voting Securities") by any "person" (as the term "person" is used for
purposes of Section 13(d) or Section 14(d) of the Securities Exchange Act of
1934, as amended (the "1934 Act")) immediately after which such person has
"beneficial ownership" (within the meaning of Rule 13d-3 promulgated under the
1934 Act) ("Beneficial Ownership") of 20% or more of the combined voting power
of the Company's then outstanding Voting Securities; or

                  (c) approval by the stockholders of the Company of:

                           (i) a merger, consolidation, share exchange or
reorganization involving the Company, unless

         (A) the stockholders of the Company, immediately before such merger,
consolidation, share exchange or reorganization, own, directly or indirectly
immediately following such merger, consolidation, share exchange or
reorganization, at least 80% of the combined voting power of the outstanding
voting securities of the corporation that is the successor in such merger,
consolidation, share exchange or reorganization (the "Surviving Company") in
substantially the

                                       8
<PAGE>   9
same proportion as their ownership of the Voting Securities immediately before
such merger, consolidation, share exchange or reorganization; and

         (B) the individuals who were members of the Incumbent Board immediately
prior to the execution of the agreement providing for such merger,
consolidation, share exchange or reorganization constitute at least two-thirds
(2/3rds) of the members of the board of directors of the Surviving Company;

                           (ii) a complete liquidation or dissolution of the
Company; or

                           (iii) an agreement for the sale or other disposition
of all or substantially all of the assets of the Company.

                  (d) any Person is or becomes the Beneficial Owner of
securities of the Company representing ten percent (10%) or more of the combined
voting power of the Company's then outstanding securities and (A) the identity
of the Chief Executive Officer of the Company is changed during the period
beginning sixty (60) days before the attainment of the ten percent (10%)
beneficial ownership and ending two (2) years thereafter, or (B) individuals
constituting at least one-third (1/3) of the members of the Board at the
beginning of such period shall leave the Board during the period beginning sixty
(60) days before the attainment of the ten percent (10%) beneficial ownership
and ending two (2) years thereafter.

6.       CONFIDENTIALITY

         During the term of Executive's employment under this Agreement,
Executive will have access to and become acquainted with various information
relating to the Company's business operations, marketing data, business plans,
strategies, employees, contracts, financial records and accounts, projections
and budgets, and similar information. Executive agrees that to the extent such
information is not generally available to the public and gives the Company an
advantage over competitors who do not know of or use such information, such
information and documents constitute "trade secrets" of the Company. Executive
further agrees that all such information and documents relating to the business
of the Company, whether they are prepared by Executive or come into Executive's
possession in any other way, are owned by the Company and shall remain the
exclusive property of the Company. Executive shall not misuse, misappropriate or
disclose any trade secrets of the Company, directly or indirectly, or use them
for Executive's own benefit, either during the term of this Agreement or at any
time thereafter, except as may be necessary or appropriate in the course of
Executive's employment with the Company, unless such action is either previously
agreed to in writing by the Company or required by law.

7.       NON-SOLICITATION

         For a period of one (1) year following the date Executive's employment
hereunder is terminated, Executive shall not solicit or induce any of the
Company's employees, agents or independent contractors to end their relationship
with the Company, or recruit, hire or otherwise induce any such person to
perform services for Executive, or any other person, firm or company.

                                       9
<PAGE>   10
8.       ARBITRATION AGREEMENT

         8.1. In the event of any issue or dispute arising between Executive and
the Company, its officers, directors, managers, supervisors and/or employees
(except for claims for workers' compensation, unemployment insurance, and any
matter within the jurisdiction of the California Labor Commissioner), the matter
shall be submitted to and resolved by final and binding arbitration as provided
for by the California Arbitration Act, California Code of Civil Procedure,
Section 1280, et. seq. Mandatory arbitration will not preclude Executive from
filing an administrative charge or complaint of discrimination or harassment
with either the Equal Employment Opportunity Commission or the California
Department of Fair Employment and Housing. Except as provided in this section,
ARBITRATION SHALL BE THE EXCLUSIVE METHOD FOR RESOLVING ANY EMPLOYMENT RELATED
DISPUTE, AND BOTH THE COMPANY, AND THE EXECUTIVE ARE GIVING UP ANY RIGHT THAT
THEY MIGHT OTHERWISE HAVE TO HAVE A JUDGE OR JURY DECIDE ANY SUCH EMPLOYMENT
RELATED DISPUTE; provided, however, that either the Executive or the Company,
may request equitable relief, including but not limited to injunctive relief,
from a court of competent jurisdiction.

         8.2. The claims which are to be arbitrated under this Agreement
include, but are not limited to, tort claims, bad faith claims, contract claims,
wage claims, benefit claims, demands, liabilities, debts, accounts, obligations,
damages, compensatory damages, punitive damages, liquidated damages, costs,
expenses, actions and causes of action arising out of or in connection with the
employment relationship with the Company, the termination of that relationship,
and/or post-employment retaliation and defamation (including but not limited to
any claims for wrongful discharge or breach of the covenant of good faith and
fair dealing), any and all federal and state civil rights laws, ordinances,
regulations or orders, based on charges of discrimination or harassment on
account of race, color, religion, sex, sexual orientation, age, citizenship,
national origin, mental or physical disability, medical condition, marital
status, pregnancy or any other discrimination prohibited by such laws,
ordinances, regulations or orders (including but not limited to Title VII of the
Civil Rights Act of 1964, as amended, 42 USC Section 2000, et seq.; Americans
with Disabilities Act; Civil Rights Act of 1866, and Civil Rights Act of 1991;
42 USC Section 1981, et seq.; Age Discrimination in Employment Act, as amended,
29 USC Section 621, et seq.; Equal Pay Act, as amended, 29 USC Section 206(d);
regulations of the Office of Federal Contract Compliance, 41 CFR Section 60, et
seq.; and the California Fair Employment and Housing Act, California Government
Code Section 12940, et seq.).

         8.3. If the Executive or the Company does not make a written request
for arbitration within the limitations period applicable to a claim under
applicable federal or state law, that party will have waived its right to raise
that claim, in any forum, arising out of that issue or dispute.

         8.4. The Executive and the Company will select an arbitrator by mutual
agreement. If the Executive and the Company are unable to agree on a neutral
arbitrator, either party may elect to obtain a list of arbitrators from the
Alternative Dispute Resolution Service. The Executive and the Company will
alternately strike names from the list, with the Executive striking the first
name, until only one name remains. The remaining person shall be the arbitrator.

                                       10
<PAGE>   11
         8.5. Arbitration proceedings will be held in California at a location
mutually convenient to the Executive and the Company.

         8.6. The parties retain the rights to conduct all discovery as provided
for in the California Code of Civil Procedure, and the arbitrator shall have the
power to decide any discovery disputes between the parties.

         8.7. The arbitrator shall entertain motions by either party for summary
disposition as provided for by applicable state law.

         8.8. The arbitrator shall conduct a hearing in a manner to be mutually
agreed upon by the Executive and the Company, or by the arbitrator if the
parties cannot agree, provided, however, that the parties shall have the
opportunity to call witnesses under oath, and to examine and cross examine all
witnesses who appear at the hearing.

         8.9. Within thirty (30) days following the hearing and the submission
of the matter to the arbitrator, the arbitrator shall issue a written opinion
and award which shall be signed and dated. The arbitrator's award shall decide
all issues submitted by the parties, and the arbitrator may not decide any issue
not submitted. The arbitrator shall be permitted to award only those remedies in
law or equity which are requested by the parties and allowed by law.

         8.10 The cost of the arbitrator and other incidental costs of
arbitration, including the cost of a court reporter, shall be equally shared
between the Executive and the Company, unless the arbitrator determines that
this would cause an undue hardship to the Executive, in which case the entire
cost shall be borne by the Company. The Executive and the Company shall each
bear their own costs for legal representation in any arbitration proceeding,
provided however, that the arbitrator shall have the authority to require either
party to pay the fee for the other party's representation during the
arbitration, as is otherwise permitted under federal or state law, as a part of
any remedy that may be ordered.

9.       INDEMNIFICATION

         To the fullest extent permitted under applicable law, the Company shall
indemnify, defend and hold Executive harmless from and against any and all
causes of action, claims, demands, liabilities, damages, costs and expenses of
any nature whatsoever (collectively, "Damages") directly or indirectly arising
out of or relating to Executive discharging Executive's duties hereunder on
behalf of the Company and/or its respective subsidiaries and affiliates, so long
as Executive acted in good faith within the course and scope of Executive's
duties with respect to the matter giving rise to the claim or Damages for which
Executive seeks indemnification.

10.      GENERAL PROVISIONS

         10.1. Assignment; Binding Effect. Neither the Company or Executive may
assign, delegate or otherwise transfer this Agreement or any of their respective
rights or obligations hereunder without the prior written consent of the other
party. Any attempted prohibited

                                       11
<PAGE>   12
assignment or delegation shall be void. This Agreement shall be binding upon and
inure to the benefit of any permitted successors or assigns of the parties and
the heirs, executors, administrators and/or personal representatives of
Executive.

         10.2. Notices. All notices, requests, demands and other communications
that are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when received if personally delivered;
when transmitted if transmitted by telecopy, electronic or digital transmission
method with electronic confirmation of receipt; the day after it is sent, if
sent for next-day delivery to a domestic address by recognized overnight
delivery service (e.g., FedEx); and upon receipt, if sent by certified or
registered mail, return receipt requested. In each case notice shall be sent to:

         If to the Company:             Arden Realty Limited Partnership
                                        c/o Arden Realty, Inc.
                                        11601 Wilshire Boulevard
                                        Fourth Floor
                                        Los Angeles, CA 90025-1740
                                        Attention:  President
                                        Facsimile:(310) 966-2699

         If to Executive:               Robert Peddicord
                                        c/o Arden Realty, Inc.
                                        11601 Wilshire Boulevard
                                        Fourth Floor
                                        Los Angeles, CA 90025-1740
                                        Facsimile:(310) 966-2699

                                       12
<PAGE>   13
         Any party may change its address for the purpose of this Section 10.2
by giving the other party written notice of its new address in the manner set
forth above.

         10.3. Entire Agreement. This Agreement constitutes the entire agreement
of the parties, and supersedes all prior agreements including without
limitation, the Agreement between the Company and Executive dated as of January
1, 1999 which provided for a one year term of employment.

         10.4. Amendments; Waivers. This Agreement may be amended or modified,
and any of the terms and covenants may be waived, only by a written instrument
executed by the parties hereto, or, in the case of a waiver, by the party
waiving compliance. Any waiver by any party in any one or more instances of any
term or covenant contained in this Agreement shall neither be deemed to be nor
construed as a further or continuing waiver of any such term or covenant of this
Agreement.

         10.5. Provisions Severable. In case any one or more provisions of this
Agreement shall be invalid, illegal or unenforceable, in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not, in any way, be affected or impaired thereby. If any provision
hereof is determined by any court of competent jurisdiction to be invalid or
unenforceable by reason of such provision extending the covenants and agreements
contained herein for too great a period of time or over too great a geographical
area, or being too extensive in any other respect, such provision shall be
interpreted to extend only over the maximum period of time and geographical
area, and to the maximum extent in all other respects, as to which it is valid
and enforceable, all as determined by such court in such action.

         10.6. Attorney's Fees. If any legal action, arbitration or other
proceeding, is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach or default in connection with any of the provisions of
this Agreement, each of the parties hereto shall be responsible for payment of
any attorneys' fees and other costs incurred by them in that action or
proceeding, without regard to whomever is the prevailing party in such action or
proceeding.

         10.7. Governing Law. This Agreement shall be construed, performed and
enforced in accordance with, and governed by the laws of the State of California
without giving effect to the principles of conflict of laws thereof.

         10.8. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute the same instrument.

                                       13
<PAGE>   14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the date first written above.

THE COMPANY:

ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland Limited Partnership

By:  ARDEN REALTY, INC.,
        a Maryland corporation
        Its:  Sole General Partner

By:   /s/ Victor J. Coleman                                        5/27/99
      ----------------------------                                 -------
      Victor J. Coleman                                            Date
      Its:  President and COO

EXECUTIVE:

/s/ Robert Peddicord                                               5/27/99
----------------------------------                                 -------
Robert Peddicord                                                   Date

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