Sample Business Contracts


California-San Francisco-101 Montgomery Street Lease - 101 Montgomery Street Co. and Charles Schwab & Co. Inc.

Lease Forms

  • Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
  • When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
  • Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
  • Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
  • When renting an office space, tenants should understand the amount of the rent and duration of the lease. Other important terms include whether the space can be subleased, which parties are responsible for maintenance, and whether any furniture and furnishings will be provided.

                         LEASE OF 101 MONTGOMERY STREET
                           SAN FRANCISCO, CALIFORNIA

                                    between

                     101 MONTGOMERY STREET CO. ("Landlord")

                                      and

                     CHARLES SCHWAB & CO., INC. ("Tenant")

                                 OCTOBER 8, 1996
                      

                     
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                                TABLE OF CONTENTS


RECITALS ..............................................................    1

1.       Lease Covenant: Premises Defined..............................    2

2.       Term..........................................................    3
         (a)      Term.................................................    3
         (b)      Option To Terminate As To Portion Of The Premises....    3
         (c)      Options To Extend Term...............................    6

3.       Rent..........................................................    9
         (a)      Monthly Base Rent....................................    9
         (b)      Payment Of Base Rent.................................    9
         (c)      Initial Base Rent Abatement..........................    9
         (d)      Refurbishment Abatement..............................   10
         (e)      Treatment Of Initial Abatement And Refurbishment
                  Abatement Upon Termination Of This Lease.....           10
         (f)      Proration............................................   12
         (g)      "Additional Rent" And "Rent" Defined.................   12
         (h)      Interest On Late Payments: Time Is Of The Essence....   12

4.       Permitted Uses, Occupancy And Restrictions Concerning Use.....   13
         (a)      Basic Use Restriction................................   13
         (b)      No Uses Other Than Those Expressly Allowed...........   14
         (c)      Specific Covenants With Respect To Parking...........   15
         (d)      Alterations and Improvements.........................   18

5.       Assignment, Subletting And/Or Mortgaging Of Premises..........   20
         (a)      General Covenant.....................................   20
         (b)      No Waiver............................................   22
         (c)      Conditions Of Approval...............................   22

6.       Alterations...................................................   25
         (a)      General Restriction..................................   25
         (b)      Procedure............................................   25
         (c)      Conditions That Apply To Improvement Work............   26
         (d)      Protection Against Lien Claims.......................   27
         (e)      Ownership And Removal................................   28
         (f)      Tax Aspects Of Alterations And Improvements..........   30
         (g)      Tenant's Right to Increase Floor Load................   30
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                               TABLE OF CONTENTS

         (h)      Certain Alterations Not Requiring Landlord's Consent...  30

                                       ii
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                                TABLE OF CONTENTS
                                  (continued)




7.       Repairs.......................................................   31
         (a)      Tenant's Obligation..................................   31
         (b)      Landlord's Obligation................................   32
         (c)      Landlord to Minimize Interference....................   33
         (d)      Current ADA And Related Requirements.................   33

8.       Compliance With Laws, Insurance Standards And Security........   34
         (a)      Compliance With Laws.................................   34
         (b)      Compliance With Laws by Landlord.....................   35
         (c)      Insurance Standards And Requirements.................   36
                                                                         
9.       Subordination, Attornment And Non-Disturbance.................   37
         (a)      Subordination........................................   37
         (b)      Foreclosure..........................................   39
                                                                         
10.      Building Security.............................................   39

11.      Rules And Regulations.........................................   40

12.      Insurance; Subrogation Waivers; Non-Liability For Certain     
          Events.......................................................   40
         (a)      Non-Liability........................................   40
         (b)      Indemnity............................................   41
         (c)      Tenant's Liability Insurance.........................   42
         (d)      Tenant's Property Insurance..........................   43
         (e)      Tenant's Self-Insurance: Deductibles.................   43
         (f)      Landlord's Building And Property Insurance...........   43
         (h)      Subrogation Waiver...................................   45
         (i)      Termination Of Subrogation Waiver....................   46

13.      Damage And Destruction........................................   47
         (a)      Minor Casualty.......................................   47
         (b)      Extended Restoration Period: Minor Casualty..........   47
         (c)      Major Casualty: Termination of Lease.................   48
         (d)      Effect Of Termination................................   49
         (e)      Contractor Selected For Damage Analysis And Reports..   50
         (f)      Failure To Complete Work Within Estimated
                  Restoration Period...................................   50
         (g)      Use Of Expedited Construction Practices..............   51
         (h)      Rent Abatement During Repair Period..................   51
         (i)      Disruption of Tenant.................................   52

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                               TABLE OF CONTENTS
                                  (continued)


         (j)      Substantially Completed; Substantial Completion......   52

14.      Eminent Domain................................................   52
         (a)      Definitions..........................................   52
         (b)      Condemnation Of Total Premises.......................   53
         (c)      Condemnation Of Portion Of Premises..................   53
         (d)      Allocation Of Award..................................   53
         (e)      Condemnation Of Temporary Interests..................   54
         (f)      Disruption of Tenant.................................   54

15.      Basic Services................................................   55
         (a)      Defined Terms........................................   55
         (b)      Passenger Elevator Service...........................   55
         (c)      Freight Elevator Service; Loading Facilities.........   56
         (d)      Heating, Ventilation And Air Conditioning............   56
         (e)      Electricity..........................................   57
         (f)      Water................................................   58
         (g)      Tenant's Supplemental Air Conditioning System........   58
         (h)      Janitorial Service...................................   58
         (i)      Tenant's Emergency Generator.........................   61
         (j)      Service To Tenant's Equipment........................   61
         (k)      Lighting And Building Systems Maintenance............   61
         (l)      Service Interruption.................................   62
         (m)      Rent Abatement for Failure of Services...............   63

16.      Access To Premises............................................   64
         (a)      Tenant's Access......................................   64
         (b)      Landlord's Access....................................   65

17.      Vaults And Vault Space........................................   66

18.      Sprinkler System..............................................   66
         (a)      Condition: Notice: Duty To Repair....................   66
         (b)      Alterations..........................................   66

19.      Bankruptcy Or Insolvency......................................   67
         (a)      Right Of Termination.................................   67
         (b)      Rights On Termination................................   68

20.      Default.......................................................   68
         (a)      Events Of Default....................................   68
         (b)      Remedies.............................................   69

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                               TABLE OF CONTENTS
                                  (continued)

         (c)      Late Charge..........................................   70
         (d)      Remedies Allowed By Law..............................   70
         (e)      Tenant's Remedies: Payment Under Protest.............   71

21.      Self Help And Enforcement Costs...............................   71
         (a)      Landlord's Rights....................................   71
         (b)      Tenant's Rights......................................   72

22.      Surrender; End Of Term........................................   72

23.      Quiet Enjoyment; Limitation Of Liability......................   73
         (a)      Quiet Enjoyment......................................   73
         (b)      Landlord's Obligations Run With Land.................   73
         (c)      Estoppel Certificates................................   74

24.      Amendments And Waivers........................................   76
         (a)      No Amendment Except In Writing.......................   76
         (b)      No Waiver By Inaction................................   76

25.      Force Majeure.................................................   77
                                                                         
26.      Notices.......................................................   77

27.      Occupancy Costs: Tenant's Obligation To
         Pay Increases After The Year 2000.............................   79
         (a)      Occupancy Cost Excess. ..............................   79
         (b)      Occupancy Costs Defined..............................   79
         (c)      Occupancy Cost Exclusions............................   82
         (d)      Building Occupancy Adjustment........................   85
         (e)      Payment Of Estimated Occupancy Cost Excess...........   86
         (f)      Computation Of Actual Operating Cost Excess:
                  Adjustment For Variation Between Estimated And
                  Actual Occupancy Costs...............................   86
         (g)      Capital Improvements.................................   87
         (h)      Tenant's Audit Rights................................   88
         (i)      Failure to Deliver Statements........................   90
         (j)      Single Recovery......................................   90

28.      Tenant's Payment Of Increases In "Tax Costs.".................   90
         (a)      Payment Obligation...................................   90
         (b)      "Tax Costs" Defined..................................   91
         (c)      Payment..............................................   92

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                               TABLE OF CONTENTS
                                  (continued)


         (d)      Tax Reduction Proceedings............................   93
         (e)      Proposition 13.......................................   96
         (f)      Failure to Deliver Statements........................   97

29.      Nuisance: Odor And Noise......................................   97
                                                                         
30.      Definition And Determination Of "Fair Market Rent."...........   97
         (a)      Definition...........................................   98
         (b)      Matters to be Arbitrated.............................   98

31.      Captions......................................................  101

32.      Brokerage.....................................................  101

33.      Successors And Assigns........................................  102

34.      Miscellaneous.................................................  102
         (a)      Competing Uses.......................................  102
         (b)      Building Name........................................  103
         (c)      Litigation Indemnity.................................  103
         (d)      Construction.........................................  103
         (e)      Severability.........................................  103
         (f)      Name Change..........................................  104
         (g)      Time Of Essence......................................  104
         (h)      No Partnership.......................................  104
         (i)      Governing Law........................................  104
         (j)      Calculation Of Abatement.............................  104
         (k)      Certificate Of Occupancy.............................  105

35.      Exclusion Of Public Space From Premises.......................  105

36.      Interpretation: Effect On Modified Initial Lease..............  105



Exhibit A - Property Description (Page 1)*

Exhibit B - Leased Premises (Page 2)

Exhibit C - Square Footage of all Leased Space (Page 2)

Exhibit D - Termination Payment (Page 5)

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                               TABLE OF CONTENTS
                                  (continued)



Exhibit E - Original Elevator Software Identified (Page 4)

Exhibit F - Not used

Exhibit G - Planning Resolution (Page 14)

Exhibit H - Not used

Exhibit I - Floor Loadings (Page 30)

Exhibit J - National Holidays (Page 55)

Exhibit K - Janitorial Specification (Page 59)

Exhibit L - Chart of Accounts (Page 86)

Exhibit M - Certificate of Occupancy (Page 105)

         *Page number where first reference to Exhibit occurs.

                                      vii
<PAGE>   9
                         LEASE OF 101 MONTGOMERY STREET


                  THIS LEASE OF 101 MONTGOMERY STREET (this "Lease") is entered
into as of this eighth day of October, 1996, by and between 101 MONTGOMERY
STREET CO., a limited partnership ("Landlord") (in which Cahill Montgomery
Corp., a California corporation, is the general partner; and California Jones
Company, a California general partnership, is the limited partner) and CHARLES
SCHWAB & CO., INC., a California corporation ("Tenant").

RECITALS:

                  This Lease Of 101 Montgomery Street is entered into upon the
basis of the following facts, understandings and intentions of the parties:

                  A. Landlord's predecessor in interest, California Jones
Company ("Cal Jones") as Landlord, and Tenant entered into a certain AGREEMENT
OF LEASE (the "Initial Lease") dated as of the 18th day of May, 1983, providing
for the lease by Tenant of substantially all of the rentable space in a
high-rise office building located in the City and County of San Francisco, State
of California, known as 101 Montgomery Street (the "Building"), located on the
land more particularly described in Exhibit A, attached hereto and incorporated
herein by reference thereto (the "Land"). The Term of the Initial Lease expires
at 11:59 pm on April 7, 2000, subject to Tenant's right to extend such term
pursuant to certain options contained in the Initial Lease.

                  B. Cal Jones and Tenant amended the Initial Lease by executing
and delivering (i) an Amendment of Lease for 101 Montgomery Street, dated August
10, 1983 (the "First Amendment"), (ii) a Second Amendment of Lease for 101
Montgomery Street dated October 4, 1983 (the "Second Amendment"), and (iii) a
Letter Modification Agreement dated November 3, 1983 (the "Modification
Agreement"). Cal Jones assigned the Initial Lease, as amended by the First
Amendment, the Second Amendment and the Modification Agreement, to Landlord,
(and Landlord assumed the same), by Assignment dated as of September 1, 1989.
Landlord and Tenant then further amended the Initial Lease by executing and
delivering a Third Amendment of Lease (the "Third Amendment") dated as of
February 9, 1990, a Fourth Amendment Of Lease (the "Fourth Amendment") dated as
of October 1, 1993; and a Fifth Amendment Of Lease (the "Fifth Amendment") dated
as of November


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30, 1993. The Initial Lease as modified by the First Amendment, Second
Amendment, Third Amendment, Fourth Amendment, Fifth Amendment and the
Modification Agreement are referred to herein as the "Modified Initial Lease."

                  C. Landlord is now the Landlord under the Modified Initial
Lease and is also the holder of fee title to the Land and the Building
(collectively the "Property").

                  D. Although the Modified Initial Lease does not expire until
11:59 pm on April 7, 2000, Landlord and Tenant desire to enter into a lease for
a term commencing when the Modified Initial Lease term expires and continuing
until March 31, 2010. This Lease is intended to accomplish that purpose, to
supersede the options to extend contained in the Modified Initial Lease and to
provide all of the terms and conditions that apply to the leasing of the
Premises from and after the expiration of the term of the Modified Initial
Lease.

                  NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and
promises of the parties, the parties hereto agree as follows:

                  1. Lease Covenant: Premises Defined. Landlord shall lease to
Tenant and Tenant shall hire from Landlord the space in the Building more
particularly described in Exhibit B, attached hereto and incorporated herein by
reference thereto. The space so leased (as described in Exhibit B), together
with the appurtenant rights provided for in this Lease are referred to as the
"Premises." Tenant acknowledges that as of the date of this Lease, the Premises
are identical to the demised premises that are the subject of the Modified
Initial Lease; that it has accepted and is in beneficial occupancy of the entire
Premises; and Landlord has performed all of the obligations on its part to be
performed under the Modified Initial Lease with respect to completion of the
improvements to be made the Premises in order to make the same ready for initial
occupancy by Tenant. The rentable square feet contained on each floor and the
rentable square feet contained in the entire Building are stated on Exhibit C,
attached hereto and incorporated herein by reference thereto. Exhibit C
represents a final determination of the information shown thereon for all
purposes of this Lease as well as a final determination of the rentable square
feet on each floor and in the Building as a whole under the Modified Initial
Lease. Notwithstanding the foregoing, however, this Lease shall be null and void
if the Modified Initial Lease is terminated in


                                       2
<PAGE>   11
its entirety for any reason prior to 11:59 pm on April 7, 2000.

                  2. Term.

                  (a) Term. The term of this Lease (the "Term") shall commence
(the "Commencement Date") immediately upon expiration of the term of the
Modified Initial Lease at 11:59 pm on April 7, 2000 and shall expire at 11:59 pm
on March 31, 2010, subject to earlier termination or extension by operation of
various provisions hereof.

                  (b) Option To Terminate As To Portion Of The Premises. Tenant
shall have a right to terminate this Lease as it applies to up to fourteen (14)
full floors of the Premises. Such right may be exercised in one or more
elections upon the following terms and conditions:


                  (1) Notice of each such election (the "Election Notice") must
         be given by Tenant to Landlord at least eighteen (18) months prior to
         the effective date of termination, which effective date shall be on the
         last day of any calendar month stated in the Election Notice, but in no
         event shall any such effective date occur before March 31, 2005 or
         after March 31, 2007.

                  (2) The portion of the Premises to which each termination
         shall apply shall consist only of a full floor or floors. If this Lease
         is being terminated solely with respect to a single floor, that floor
         shall be the 25th floor; and where this Lease is being terminated with
         respect to more than one full floor, all floors as to which this Lease
         shall be terminated shall be contiguous floors, commencing with the
         25th floor of the Building and each contiguous floor below it. The
         Election Notice (or Notices) shall specify the space to which the
         termination election applies within the limits of the foregoing
         requirements.

                  (3) Effective at 11:59 pm on the termination date specified in
         the Election Notice (or Notices), (i)



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<PAGE>   12
      all of Landlord's and Tenant's obligations with respect to the space as
      to which this Lease has been terminated shall cease, except with respect
      to obligations accruing prior to the effective date of termination and
      obligations that are required to be performed under this Lease after
      termination, (ii) Tenant shall have no right to extend the Term by
      exercise of any of the options provided for in Paragraph 2.(c) with
      respect to the portion of the Premises as to which this Lease has been
      terminated, (iii) if this Lease shall have been terminated with respect
      to five (5) or more floors, Landlord shall have the right to reduce
      Tenant's rights to storage and parking (on the 29th floor and in the
      basement) in direct proportion to the reduction of space in the Premises
      upon sixty (60) days prior written notice to Tenant (but in so reducing
      the 29th floor space, Landlord shall not recover the area occupied by
      Tenant's UPS system and related equipment as shown on Exhibit B), (iv)
      upon one hundred eighty (180) days prior written notice to Tenant,
      Landlord shall have the right to require Tenant to eliminate ground floor
      lobby-lanes and to remove the lobby mission statement, and Landlord may
      also eliminate the cross-over elevator stops on the 9th and 15th floors,
      elevator security and express features, and restore the computer software
      that controls the timing of the elevators to the condition described in
      Exhibit E, attached hereto and incorporated herein by reference thereto,
      and Tenant shall reimburse Landlord for the reasonable and actual costs
      incurred by Landlord to perform the work described in this subclause (iv)
      within thirty (30) days after receipt of an invoice therefor accompanied
      by supporting documentation, (v) if this Lease shall have been terminated
      with respect to ten (10) or more floors, Landlord shall have the right to
      change the name of the Building to any name desired by Landlord in its
      sole discretion upon sixty (60) days prior written notice to Tenant, (vi)
      the Base Rent for the floor or floors as to which this Lease has been
      terminated (including, if applicable the 29th floor and the basement)
      shall be reduced in accordance with Exhibit C, (vii) Tenant's obligations
      under Paragraph 10 of this Lease with respect to Building


                                       4
<PAGE>   13
security shall be modified as specified therein, (viii) Tenant's Proportionate
Share (as hereinafter defined) shall be reduced to reflect the reduction in the
Premises leased by Tenant, and (ix) all references to the Premises herein shall
refer to the portion of the original Premises as to which this Lease remains in
full force and effect and all provisions hereof that are based upon the
proportion that the Premises represents of the total space in the Building
shall be appropriately recalculated. Notwithstanding anything to the contrary
contained in this Paragraph 2.(b)(3), this Lease shall remain in full force and
effect with respect to the portions of the floors as to which a termination
option has been exercised that are occupied by shafts, rooms, conduits and
Tenant's equipment areas ("Shafts") required to connect Tenant's emergency and
other equipment on the 29th floor with the remaining Premises. Any rentable
area occupied by Shafts on floors as to which this Lease is terminated shall be
determined by physical measurement when such election to terminate is made. The
parties shall execute such amendment hereof as may be required to (aa) annex
the Shafts to the Premises, (bb) establish Base Rent for Shafts based upon the
area occupied at the rate stated in Exhibit C, and (cc) adjust Tenant's
Proportionate Share to include the rentable area of the Shafts in the
calculation.

                   (4) Exercise of the right of termination shall be conditioned
upon Tenant paying to Landlord, upon the date the termination becomes effective,
a termination payment consisting of (i) six (6) months Base Rent for each floor
for which Tenant shall have exercised a right of termination, determined on the
basis of Exhibit C; and (ii) the amount shown on Exhibit D with respect to each
floor for which Tenant shall have exercised its right to terminate, as
determined for the particular month in which this Lease shall terminate with
respect to such floor; provided, however, that if Tenant shall not have received
the Initial Abatement pursuant to Paragraph 3.(c) with respect to the portion
of the Premises as to which this Lease is terminated, then the termination
payment shall be

                                       5
<PAGE>   14
reduced by the portion of the Initial Abatement not received by Tenant that
comprises part of the termination payment specified on Exhibit D, taking into
account the eight percent (8%) interest factor and the ten (10) year term used
to compute the termination payment.

                  (5) Nothing contained in this Paragraph 2 shall be deemed to
permit Landlord to remove any of Tenant's signs at the southeast corner of the
Building, all of which signage rights shall be retained by Tenant so long as
this Lease remains in full force and effect.

                  (6) For purposes of any determination of rentable square
footage required to be made pursuant to this Paragraph 2, rentable square feet
on each floor is stated on Exhibit C along with the total rentable square feet
in the Building. Any recalculation of Tenant's Proportionate Share after
exercise of a termination right shall be based upon the information contained in
Exhibit C.

         (c) Options To Extend Term.

                  (1) Provided that as of the date Tenant exercises its option
to extend the Term, the Premises shall include at least fourteen (14) floors in
the Building (the parties agreeing that the portion of the ground floor occupied
as of this date by Tenant shall count as one floor for purposes of the foregoing
proviso), Tenant shall have the option to extend the Term for three (3)
successive periods of sixty (60) months each (each of which is referred to
herein as an "Extended Term"). The first Extended Term (the "First Extended
Term"), if any, shall commence immediately upon expiration of the initial Term
of this Lease and shall continue for a period of sixty (60) months thereafter.
The second Extended Term (the "Second Extended Term"), if any, shall commence
immediately upon expiration of the First Extended Term and shall continue for a
period of sixty (60) months thereafter. The third Extended Term (the "Third
Extended Term"), if any, shall commence immediately upon expiration of


                                       6
<PAGE>   15
the Second Extended Term and shall continue for a period of sixty (60) months
thereafter. Tenant's right to exercise the options to extend the Term of this
Lease shall be subject to the conditions that (i) at the time the notice of
exercise is given, no Event of Default exists hereunder, and (ii) on the
commencement date of the Extended Term to which the notice applies, there shall
not be an outstanding Event of Default for failure on the part of Tenant to pay
when due any installment of Base Rent or any installment of Estimated Operating
Cost Excess (as defined in Paragraph 27.(e)) or Tenant Proportionate Share of
Excess Tax Costs (as defined in Paragraph 28.(a)). For purposes of interpreting
this Lease, references to the "Term" shall be deemed to include any then
current Extended Term if Tenant exercises an option to extend as provided
herein.

                  (2) Each option to extend the Term may be exercised only with
respect to (i) all of the space in the Premises under this Lease at the time of
the exercise, or (ii) all of the rentable area in the two lower elevator banks
(floors 1 through 16, inclusive), plus all or the portion of the 29th floor,
then being leased hereunder by Tenant. The notice of exercise shall specify the
space as to which the option is being exercised within the foregoing
limitations; provided, however, that failure to so specify shall be construed as
an exercise of the option with respect to all of the space then being leased by
Tenant.

                  (3) If Tenant elects to exercise any of Tenant's options to
extend the Term, Tenant shall give Landlord written notice of its election at
least eighteen (18) months prior to expiration of the then current Term. Within
sixty (60) days of receipt of Tenant's election to extend or twenty-eight (28)
months prior to expiration of the then current Term, whichever is the later,
Landlord shall notify Tenant in writing of the Base Rent for the Extended Term
based upon Landlord's determination of Fair Market Rent, with Base Rent for the
First Extended Term and the Second Extended Term fixed at ninety-five percent
(95%) of


                                       7
<PAGE>   16
Fair Market Rent; and Base Rent for the Third Extended Term fixed at one hundred
percent (100%) of Fair Market Rent; provided, however, that in any case where
Tenant exercises an option for only that portion of the Premises in the two
lower elevator banks, the Base Rent for each Extended Term thereafter shall be
fixed at one hundred percent (100%) of Fair Market Rent. Within sixty (60) days
after receipt of such written notice from Landlord, Tenant shall have the right
to: (i) elect to accept Landlord's statement of the Base Rent as the Base Rent
for the Extended Term; or (ii) elect to have Fair Market Rent determined by
arbitration pursuant to Paragraph 30 hereof. Fair Market Rent with respect to an
Extended Term shall be determined as of the date that the Extended Term in
question commences and not as of the date when the option to extend is
exercised.

                  (4) With its notice of Base Rent based on its determination of
Fair Market Rent, Landlord shall inform Tenant of any recent transactions
(including a reasonable summary of the economic terms of such transactions) that
Landlord considers to be reasonably comparable for purposes of establishing the
Fair Market Rent and the Base Rent; provided, however, that Tenant shall keep
such information confidential and use it solely for purposes of this Lease.

                  (5) Failure on the part of Tenant to elect in writing in a
timely manner to require arbitration of Fair Market Rent shall constitute an
election by Tenant to accept Landlord's determination of the Base Rent for the
Extended Term. If Tenant fails to exercise an option to extend the Term, all
further options for later Extended Terms shall be extinguished.

                  (6) From and after commencement of an Extended Term, all of
the other terms, covenants and conditions of this Lease shall apply, and
references to the Term shall be deemed to include the Extended Term then in
effect; provided, however, that Base Rent shall be revised as herein provided,
and Tenant shall have no option or right to further extend the Term beyond the


                                       8
<PAGE>   17
         third Extended Term provided for herein. Base Rent for each Extended
         Term is referred to herein as "Extended Term Base Rent." With respect
         to each of the Extended Terms, the Base Operating Year and the Base Tax
         Year (as such terms are defined in Paragraphs 27 and 28 respectively)
         shall be adjusted to be the calendar year in which the applicable
         Extended Term commences and Tenant's Proportionate Share shall be
         recalculated appropriately if Tenant exercises its option to extend for
         less than all of the space the constituting the Premises

         3. Rent.

                  (a) Monthly Base Rent. Commencing upon the commencement of the
Term, the base rent (the "Base Rent") for the Premises that Tenant covenants to
pay during the Term, shall be Six Million Eight Hundred Sixty Thousand Three
Hundred Eighty Eight Dollars ($6,860,388) per annum, payable in equal monthly
installments of Five Hundred Seventy-One Thousand Six Hundred Ninety-Nine
Dollars ($571,699) per month (subject to reduction upon exercise of a partial
termination option as provided in Paragraph 2.(b)). The Base Rent is based
upon the space included within the Premises, with the schedule of Base Rent
per square foot for various portions of the Premises being stated in Exhibit C.

                  (b) Payment Of Base Rent. Base Rent shall be paid on or before
the first day of each calendar month during the Term, in lawful money of the
United States, without deduction or offset (except as otherwise provided
herein), at Landlord's office or such other place as Landlord may direct in
writing. If the first day of any month during the Term falls on a Saturday,
Sunday, or legal holiday, Rent shall be due on the first Business Day (as
hereafter defined) thereafter.

                  (c) Initial Base Rent Abatement. Provided that as of the
Commencement Date, there shall not then be outstanding an event of default by
Tenant with respect to the payment of Base Rent or Occupancy Costs under the
Modified Initial Lease which default has not been cured by Tenant within thirty
(30) days after Landlord has given


                                       9
<PAGE>   18
notice to Tenant of such default, Landlord grants to Tenant an abatement of Base
Rent, effective as of the Commencement Date ("Effective Abatement Date"), in the
amount of Nine Million Twenty-Five Thousand Nine Hundred Ninety-Nine Dollars
($9,025,999) (the "Initial Abatement"). The Initial Abatement shall be applied
by Tenant against the installments of Base Rent next falling due under this
Lease on and after the Effective Abatement Date and continuing until the entire
amount of the Initial Abatement shall have been applied.

                  (d) Refurbishment Abatement. Provided that as of October 1,
                  2007, there shall not be an outstanding Event of Default for
                  failure on the part of Tenant to pay when due any installment
                  of Base Rent or any installment of Estimated Operating Cost
                  Excess (as defined in Paragraph 27.(e)) or Tenant'
                  Proportionate Share of Excess Tax Costs (as defined in
                  Paragraph 28.(a)), and provided further that Tenant has
                  exercised the option provided for in Paragraph 2.(c)(1) to
                  extend the Term for the First Extended Term, Landlord grants
                  to Tenant an abatement of Base Rent in the amount of Two
                  Million Six Hundred Forty-Eight Thousand Eighty-Six Dollars
                  ($2,648,086), said amount to be reduced, if (i) Tenant
                  exercises options to terminate pursuant to Paragraph 2.(b), or
                  (ii) if Tenant exercises the option to extend this Lease for
                  the First Extended Term pursuant to Paragraph 2.(c)(2) for
                  less than all of the Premises then being leased, said
                  reduction under clause (i) or clause (ii) to be equal to the
                  percentage that the rentable square feet of space as to which
                  this Lease has been so terminated (or the option to extend
                  for the First Extended Term has not been exercised)
                  represents of the total rentable square feet of office and
                  retail space in the Premises initially leased hereunder. The
                  abatement so determined is referred to herein as the
                  "Refurbishment Abatement". The Refurbishment Abatement shall
                  be applied by Tenant against the installments of Base Rent
                  falling due under this Lease commencing on October 1, 2007,
                  and continuing until the entire amount of the Refurbishment
                  Abatement shall have  been applied.

                  (e) Treatment Of Initial Abatement And Refurbishment Abatement
Upon Termination Of This Lease.


                                       10
<PAGE>   19
                  (1) If this Lease is terminated prior to expiration of the
Term for any reason other than Landlord's default, Tenant shall not be entitled
to any portion of the Initial Abatement or the Refurbishment Abatement that it
has not realized as of the date of termination.

                  (2) If this Lease is terminated prior to expiration of the
initial Term due to default on the part of Tenant, then Landlord shall be
entitled to recover that portion of the Initial Abatement applied by Tenant
against Rent that would be allocated to the portion of the initial Term
remaining after the date of Lease termination, assuming that the entire Initial
Abatement is amortized on a straight line basis over the entire initial Term.
Landlord's rights hereunder shall be in addition to all of its other rights
arising by reason of Tenant's default.

                  (3) If this Lease is terminated prior to expiration of the
initial Term and the First Extended Term, but after October 1, 2007, due to
default on the part of Tenant, then Landlord shall be entitled to recover that
portion of the Refurbishment Abatement applied by Tenant against Rent that would
be allocated to the portion of the initial Term and First Extended Term
remaining after the date of Lease termination, assuming that the entire
Refurbishment Abatement is amortized on a straight line basis over the last two
and one-half (2 1/2) years of the initial Term and the First Extended Term.
Landlord's rights hereunder shall be in addition to all of its other rights
arising by reason of Tenant's default.

                  (4) If Tenant commits an Event of Default hereunder and as a
result, Tenant loses the right to possession of the Premises but the Lease is
not terminated, no Initial Abatement or Refurbishment Abatement remaining
unapplied shall be available as a reduction of Base Rent falling due hereunder.
Further, Landlord shall be entitled to recover from Tenant as additional damages
(A) that portion of the Initial Abatement applied by Tenant against Rent that
would be


                                       11
<PAGE>   20
         allocated to the portion of the initial Term remaining after the date
         of Lease termination assuming that the entire Initial Abatement is
         amortized on a straight-line basis over the entire initial Term, and
         (B) that portion of the Refurbishment Abatement applied by Tenant
         against Rent that would be allocated to the portion of the initial Term
         and First Extended Term remaining after the date of Lease termination,
         assuming that the entire Refurbishment Abatement is amortized on a
         straight-line basis over the last two and one-half (2 1/2) years of the
         initial Term and the full First Extended Term.

                  (5) If this Lease is terminated due to Landlord's default (and
         not due to casualty, condemnation or other cause that does not
         constitute a default on Landlord's part) Tenant shall be entitled to
         recover from Landlord any unrealized portion of the Initial Abatement
         and the Refurbishment Abatement in addition to all of Tenant's other
         rights arising by reason of Landlord's default.

         (f) Proration. If this Lease shall commence or be terminated as to all
or any portion of the Premises at any time other than the first or the last day
of a calendar month during the Term, Base Rent shall be appropriately prorated
based on the actual number of days in each month so that Tenant shall be charged
Base Rent solely for that period when this Lease is in effect as to the Premises
or that portion thereof as to which this Lease remains in effect.

         (g) "Additional Rent" And "Rent" Defined. All monetary obligations of
Tenant hereunder shall be considered obligations for payment of rent. All such
monetary obligations other than Base Rent and Extended Term Base Rent are
referred to herein as "Additional Rent." Base Rent and Additional Rent are
referred to collectively herein as "Rent."

         (h) Interest On Late Payments: Time Is Of The Essence. The time for
payment of Base Rent and Additional Rent hereunder is of the essence of this
Lease. In addition


                                       12
<PAGE>   21
         to all other remedies available to Landlord hereunder, all Base Rent
         and Additional Rent not paid when due hereunder shall bear interest at
         the rate of one-half percent (1/2%) over the prime rate of Wells Fargo
         Bank, N.A., or the highest rate allowed by law, whichever is less (the
         "Interest Rate"). Interest shall accrue from the date when Landlord
         gives the notice provided for in Paragraph 20.(a).

                  4. Permitted Uses, Occupancy And Restrictions Concerning Use.

              (a) Basic Use Restriction. Tenant shall use and occupy the
    Premises for the following purposes (collectively, the "Permitted Use"):

                           (1) The portion of the Premises on the 2nd through
                  28th floors shall be used for executive, administrative,
                  general or computer service offices with a trading floor or
                  floors, classrooms and auditoriums (but no place of public
                  group assembly requiring a permit, unless Tenant obtains such
                  a permit without cost or expense to Landlord but with Landlord
                  to cooperate with Tenant in the effort to procure such
                  permit). Subject to and in compliance with the provisions of
                  Paragraphs 6 and 29, Tenant may install and operate a lunch
                  room, cafeteria and recreational facilities on any of such
                  floors;

                           (2) In addition to the uses permitted under Paragraph
                  4.(a)(1), the portion of the Premises on the 2nd floor may be
                  used for any retail, wholesale, lunch room or cafeteria use;

                           (3) The portion of the Premises on the 1st floor
                  shall be used as follows: (i) the portion of the Premises
                  located at the south side of the Building lobby shall be used
                  for a customer lobby and financial services display area; (ii)
                  the portion of the Premises located to the north of the
                  Building lobby shall be used for a retail service delivery
                  center for Tenant's products, customer service and
                  information, (iii) for stock and securities brokerage
                  operations or as one of Tenant's retail branch offices, and/or
                  (iv) any retail


                                       13
<PAGE>   22
         use that is consistent with uses on the ground floor of comparable
         buildings in the downtown financial district of San Francisco (the
         "Downtown Financial District") and is a use that does not compete with
         other retail uses on the first floor of the Building; provided,
         however, that any uses allowed under clauses (i), (ii), (iii) and (iv)
         above shall comply with the requirements, restrictions and limitations
         contained in Resolution No. 8942 of the San Francisco City Planning
         Commission, a copy of which is attached hereto, marked Exhibit G. If
         Tenant desires to move the uses described in clauses (i) and/or (ii)
         above and substitute another use in such space or spaces that is a
         permitted use in other portions of the 1st floor, Landlord shall
         cooperate with Tenant in its efforts to seek such permits for such
         change as may be required at Tenant's sole cost and expense;

                  (4) The portion of the Premises on the 29th and 30th floors
         shall be used for storage and for equipment to service the portions of
         the Premises on other floors of the Building; and

                  (5) The portion of the Premises consisting of the garage space
         shall be used for parking, storage and a maintenance shop and uses
         incidental thereto.

              (b) No Uses Other Than Those Expressly Allowed. Tenant shall not
use or occupy the Premises, or any part thereof, for any other purpose without
the prior written consent of Landlord, which said consent Landlord shall not
unreasonably withhold. The use restrictions contained in the Lease are
materially significant to the preservation of Landlord's interest in the
Building; provided, however, that the foregoing use restrictions are subject to
the following:

                  (1) At its expense, Tenant may install, maintain and replace
         electronic financial service facilities within the Premises; subject to
         the restrictions contained in Paragraph 6.

                  (2) At its expense, Tenant may furnish and install extra
         equipment that it determines to be


                                       14
<PAGE>   23
         necessary, such as additional cooling towers, one or more microwave
         antennae or dishes, laser transmission equipment, supplemental heating,
         ventilating and air conditioning equipment, diesel fuel risers, tanks
         and emergency generators, ancillary chilling unit(s), UPS system,
         battery racks and EPS system on the 30th floor of the Building as shown
         on page 5 of Exhibit B, subject to Paragraph 6 and the balance of this
         subparagraph. Any such equipment shall not project higher than the
         existing outside Building walls on the 30th floor. The installation and
         location of such equipment shall be subject to the reasonable approval
         of Landlord; and it shall be reasonable for Landlord to withhold such
         approval if, in the reasonable opinion of Landlord's engineer(s), such
         proposed installation or equipment would (i) materially interfere with
         the proper operation of the Building, or (ii) overload its mechanical,
         electrical or structural systems, or (iii) materially and adversely
         affect other equipment or the rights of other tenants (if any) in the
         Building (other than Tenant's Affiliates, as hereinafter defined);
         provided, however, that in such event Landlord shall forthwith suggest
         to, and discuss with, Tenant alternative proposed installations or
         equipment that Landlord would approve and that Landlord believes might
         be reasonably acceptable to Tenant. Subject to the terms and conditions
         of this Lease, Landlord shall cooperate with Tenant throughout the Term
         to facilitate the reasonable expansion or modification of its computer
         facilities and attendant support systems, so long as such expansions
         and/or modifications do not increase Landlord's operating costs,
         capital costs or otherwise impose additional material burdens upon the
         Building structure, the Building systems or Landlord.

              (c) Specific Covenants With Respect To Parking.

                  (1) Throughout the Term, Tenant shall cooperate with Landlord
         (without cost to Tenant) with regard to Landlord's fulfillment of its
         obligation to provide the following in or about the portion of the
         Premises designated for parking if, and to the extent, such obligation
         is required by the City and County of


                                       15
<PAGE>   24
         San Francisco (the "City"): (i) not less than ten (10) safe and secure
         bicycle and/or moped parking spaces; (ii) two (2) loading service
         vehicle spaces below grade, and (iii) two (2) additional spaces for
         small service vans. In addition, Landlord shall maintain the basement
         portion of the Premises, at no cost to Tenant, so as to assure priority
         for vanpool and carpool vehicles and vehicles driven by the physically
         challenged ("Priority Parking"), if and to the extent, actually
         required by the City.

                  (2) If Tenant is prevented from using for executive parking
         any of the parking spaces in the basement of the Premises due to the
         obligation to provide Priority Parking or for any other reason (except
         Tenant's election to use the basement space for storage or other
         purposes), Base Rent shall be abated in proportion to the number of
         spaces lost that would otherwise have been available as a percentage of
         the total spaces (based upon the Base Rent for the parking area in
         accordance with Exhibit C) during the period that such parking is not
         available.

                  (3) If (aa) Tenant is prevented from using for executive
         parking more than fifty percent (50%) of the parking spaces in the
         basement of the Premises due to Landlord's obligation to provide
         Priority Parking, or (bb) if Landlord is required to provide access
         to the basement portion of the Premises to members of the general
         public in order to satisfy its obligation to provide Priority Parking
         and as a result, the security of the basement for Tenant's purposes is
         materially impaired, (i) Rent shall be abated in the manner provided
         in the Paragraph 4.(c)(2), and (ii) Tenant shall have the option to
         terminate this Lease with respect to the basement portion of the
         Premises only, upon sixty (60) days' prior written notice to Landlord.
         If this Lease is terminated as to the basement portion of the
         Premises, Landlord shall provide loading and delivery spaces in the
         basement as part of the Building common area for the entire portion
         of the Term when the basement is not part of the Premises; and all of
         Landlord's and Tenant's obligations hereunder with


                                       16
<PAGE>   25
         respect to the basement shall terminate except with respect to
         obligations that accrue prior to the date of such termination and
         obligations that are required to be performed under this Lease after
         termination.

                  (4) If either party learns of a City action or request that
         could result in Rent abatement or a lease termination with respect to
         the basement portion of the Premises pursuant to this Paragraph, such
         party shall immediately notify the other party. Landlord shall
         thereupon have a period of sixty (60) days prior to any such Rent
         abatement or Lease termination to consult with Tenant and with the City
         to attempt to arrange an alternative solution(s) to the City action or
         request that would eliminate Rent abatement or Lease termination
         hereunder. If Landlord is unable to achieve an alternative solution
         that is reasonably satisfactory to Tenant, the Rent abatement and Lease
         termination rights with respect to the portion of the Premises in the
         basement shall take effect as Tenant may elect, but in no event earlier
         than the date when Tenant actually loses the use of the affected space
         or spaces.

                  (5) If this Lease is so terminated with respect to the
         basement portion of the Premises pursuant to this Paragraph 4.(c) and
         the condition resulting in such termination is subsequently removed,
         Landlord shall so notify Tenant in writing. Tenant shall have the
         right to reinstate this Lease with respect to that portion of the
         basement portion of the Premises that is available by written notice
         given to Landlord not later than sixty (60) days after receipt of
         Landlord's notice by Tenant. The Rent for the space as to which the
         Lease is reinstated and Tenant's other obligations with respect
         thereto shall be reinstated at the same level as they would have been
         had the Lease never been terminated with respect thereto.

                  (6) If Tenant does so terminate this Lease as to the basement
         portion of the Premises pursuant to this Paragraph 4.(c), then provided
         this Lease is in full force and effect and no uncured Event Of Default
         exists


                                       17
<PAGE>   26
         hereunder, Tenant shall have a continuing right of first refusal to
         rent parking spaces in the Building garage in proportion that the space
         in the Premises represents of the total space in the Building;
         provided, however, that the continuing right of first refusal shall
         terminate upon exercise by Tenant of the partial termination option
         provided for in Paragraph 2.(b). Landlord shall give Tenant written
         notice of the availability of each such space and the monthly charge
         therefor as each space becomes available from time to time during the
         Term and Tenant may exercise its right to rent the specified space by
         giving to Landlord written notice of its desire to do so within five
         (5) working days of Tenant's receipt of Landlord's notice. If Tenant
         fails to so respond, Landlord may enter into a parking contract with
         another party on the same terms and conditions as offered to Tenant
         and subject to Tenant's further right of first refusal upon the
         subsequent availability of the space.

                  (7) If this Lease shall have been terminated with respect to
         the basement portion of the Premises, Landlord may adjust storage
         charges for spaces made available to Tenant pursuant to Paragraph
         4.(c)(6) once each calendar year to the then going market rate that
         shall be competitive with other parking garages in the immediate
         neighborhood of the Building. The obligation to pay for the use of
         parking spaces shall be in addition to and not in lieu of Tenant's
         other obligations hereunder.

                  (8) For the purpose of this Paragraph, the term "parking
         space" or "space" shall mean the right to park one automobile in a
         space in the basement of the Premises, but shall not mean that such
         parking shall be in any particularly designated location in the
         basement. The total number of spaces shall be based upon the number
         that the basement of the Building can accommodate without regard to
         Tenant's use of substantial parts of the garage area, originally
         intended for parking space, as storage area.

              (d) Alterations and Improvements. On the


                                       18
<PAGE>   27
Commencement Date of the Term, Landlord shall deliver, and Tenant shall accept
the Premises in their "as is" condition as of the date hereof, subject to
reasonable wear and tear. All alterations and improvements to the Premises and
Building made by Tenant as of the date hereof and to which Landlord has
expressly consented may continue and remain in the Premises and Building without
any obligation on the part of Tenant to remove the same upon expiration of the
Term or earlier termination hereof. If Landlord discovers alterations and
improvements to the Premises made prior to the execution hereof to which
Landlord did not consent, Landlord shall not unreasonably require removal and
restoration. It shall be reasonable for Landlord to require removal of the
improvements if (i) they are not consistent with ordinary office use, (ii) they
materially interfere with or disrupt mechanical, electrical, elevator or life
safety systems as originally designed, or (iii) violate any "Requirements," as
defined in Paragraph 8.(a).

         (e) Use Of Basement: Alexander Building Access. Ingress to and egress
from the basement for parking purposes is obtained by means of an access ramp
(the "Ramp") through the basement of an adjacent building located at 155
Montgomery Street and known as the Alexander Building (the "Alexander
Building"). Tenant has the right to utilize the Ramp and related portions of the
Alexander Building pursuant to the terms of a certain lease (the "Current
Alexander Building Lease"). Tenant and Landlord have entered into a new lease
for the space in the Alexander Building (the "New Alexander Building Lease"),
bearing even date herewith, to run concurrently with the Term. The premises
under the Current Alexander Building Lease are also used for the installation,
maintenance and operation of fuel tanks and pumps (referred to in the Current
Alexander Building Lease and the New Alexander Building Lease as the "System")
that are owned by Tenant and are part of Tenant's emergency power generation
system in the Building. The New Alexander Building Lease provides for
continuation of such use. In addition to the other provisions hereof that
pertain:

                  (1) If Tenant is prevented from using the parking in the
         basement of the Building due to an event or condition that physically
         or legally prevents use of


                                       19
<PAGE>   28
         the Ramp for ingress thereto or egress therefrom, Base Rent for parking
         shall be subject to abatement in the same manner as provided in
         Paragraph 4.(c) above and Landlord shall provide Tenant with another
         means of loading and delivery to the Building.

                  (2) If Tenant is prevented from using the portion of the
         Alexander Building leased to Tenant for installation, maintenance and
         operation of the System, Tenant shall have the right to use the
         basement of the Building for the System by installing the same or
         similar components therein, including the right to install a fuel line
         fill pipe outside of the Building, in a location reasonably approved by
         Landlord, The installation of the System shall otherwise be subject to
         the provisions of Paragraph 6.(b) through Paragraph 6.(h), with Tenant
         to pay all costs thereof and to comply with all Requirements pertaining
         thereto. If the System is relocated to a location in the basement as to
         which this Lease has been terminated, Tenant shall pay Base Rent for
         those portions of the basement occupied by the System in the amount
         determined in accordance with Exhibit C.

         5. Assignment, Subletting And/Or Mortgaging Of Premises.

           (a) General Covenant.

                  (1) Tenant shall not (i) assign, mortgage or encumber this
         Lease, or any interest therein, or (ii) sublet all or any portion of
         the Premises (or allow the same to be used or occupied by others
         outside the ordinary course of Tenant's business, except as otherwise
         provided in this Paragraph 5), without the prior written consent of
         Landlord in each instance, which consent shall not be unreasonably
         withheld or conditioned and shall be given or refused within twenty
         (20) days after Tenant's request for consent (and all information
         necessary for action thereon has been provided to Landlord by Tenant).
         Landlord's failure to respond within said twenty (20) day period shall
         be deemed consent to Tenant's request. Any such purported


                                       20
<PAGE>   29
         assignment, mortgage, encumbrance, sublease or use by others for which
         Landlord's consent is required without such consent shall be void and
         shall constitute a default hereunder, if Landlord so elects. A transfer
         of a controlling interest in Tenant shall constitute an assignment and
         shall be subject to all of the provisions of this Paragraph 5;
         provided, however, that the transfer of the outstanding capital stock
         of any corporate tenant or subtenant shall be deemed not to include the
         sale of such stock through the "over-the-counter" market or through any
         recognized stock exchange or the sale of stock in any public offering;
         and provided further, that restrictions on transfer of a controlling
         stock interest shall not apply to the initial Tenant named in this
         Lease.

                  (2) The provisions contained in Paragraph 5.(a)(1) shall not
         apply to transactions with a corporation into or with which Tenant is
         merged or consolidated or with an entity to which all or substantially
         all of the assets of Tenant are transferred, nor shall the provisions
         of Paragraph 5.(a)(1) apply to transactions with any Affiliate of
         Tenant, so long as in the case of a merger, consolidation or transfer
         of assets, the net worth of the successor, survivor or merged entity
         in any such merger, consolidation or transfer of assets is at least
         as great as the net worth of Tenant immediately prior thereto. An
         "Affiliate" of any person shall mean an entity that controls such
         person or is controlled by such person or is under common control with
         such person. Notwithstanding and provisions contained in this
         Paragraph 5.(a), Tenant shall have the right to assign this Lease or
         to sublease the whole or any portion of the Premises to any of its
         Affiliates without Landlord's consent and to permit any affiliate or
         any of Tenant's partners in business projects to use all or any
         portion of the Premises without Landlord's consent. The term "control"
         as used in this Lease (i) in the case of a corporation shall mean
         ownership of more than fifty (50%) percent of the outstanding capital
         stock of that corporation, (ii) in the case of a general or limited
         liability partnership, shall mean more than fifty (50%) of the general
         partnership or membership interests of the partnership, (iii) in the
         case of a limited partnership, shall mean more than fifty percent
         (50%) of the general


                                       21
<PAGE>   30
         partnership interests of such limited partnership, and (iv) in the case
         of a limited liability company, shall mean more than fifty percent
         (50%) of the membership interests of such limited liability company.

         (b) No Waiver. If this Lease or any interest herein is assigned, or if
the Premises or any part thereof are sublet or occupied by any party other than
Tenant, Landlord may, after the occurrence of an Event of Default by Tenant,
collect Rent from the assignee, subtenant or occupant, and apply the net amount
collected to the Rent herein reserved, but no such assignment, subletting,
occupancy or collection shall be deemed a waiver of the covenant stated in
Paragraph 5.(a), or the acceptance of the assignee, subtenant or occupant as a
successor to Tenant, or a release of Tenant from further performance of its
obligations contained in this Lease, nor shall it limit Landlord's right to seek
recourse first against the assignor or sublessor for any monetary default or
obligation. Any consent by Landlord to an assignment or subletting shall not be
construed to relieve Tenant, the assignee or the subtenant from the obligation
to obtain Landlord's written consent to any further assignment or subletting,
which shall be given or withheld in accordance with the provisions of Paragraph
5.(a); nor shall it be construed to release Tenant from any liability whether
past, present or future under this Lease. Landlord's consent to any such
subletting shall not relieve Tenant of liability for payment of invoices
rendered by Landlord for the charges incurred by the subtenant for services
and materials supplied to the Premises; but Tenant shall not be liable to
Landlord for extra services and materials supplied to an assignee after the
date of an assignment in any case where Landlord has no obligation hereunder
to provide such service or material.

         (c) Conditions Of Approval. Landlord's exercise of its right to approve
any proposed assignment or sublease shall be conditioned upon the following:

            (1) Without limiting the generality of the


                                       22
<PAGE>   31
foregoing, it shall be reasonable for Landlord to withhold consent if:

                  (i) the use to be made of the Premises (or the portion
         affected by the proposed assignment or sublease) by the proposed
         assignee or sublessee is (aa) not generally consistent with uses in
         comparable buildings in the Downtown Financial District, or (bb) a use
         that conflicts with any restrictive covenant then in force in favor of,
         or for any use that is the same as that stated in any lease to, another
         tenant in the Building or the Alexander Building, providing for payment
         of rent based in material part on the tenant's receipts (provided,
         however, that in the case of such percentage lease, the use to be made
         by the proposed assignee or sublessee is the same use with respect to
         which the percentage rent is to be paid to Landlord), or (cc) a use
         that would be prohibited by any provision hereof; or

                  (ii) the proposed assignee shall not be reputable or shall
         have a financial net worth at the time of the consent of less than One
         Hundred Million Dollars ($100,000,000) during the initial Term of this
         Lease and Two Hundred Million Dollars ($200,000,000) after the
         commencement of any Extended Term; or in the case of a sublease of less
         than all of the Premises, the sublessee shall not be reputable or shall
         not have a financial strength and reputation that is reasonably
         satisfactory to Landlord given the size of the financial commitment
         represented by the proposed sublease and considering the fact that
         Tenant remains liable under this Lease.

         (2) Any proposed assignee shall execute an agreement to perform
faithfully and be bound by all of the terms, covenants and conditions of this
Lease with respect to the interest assigned, without reservation or new
conditions. Any proposed sublessee shall execute an agreement with respect to
the space subleased requiring that it attorn to Landlord (at


                                       23
<PAGE>   32
Landlord's option) upon termination of this Lease due to Tenant's default,
without reservation or new conditions; and

         (3) Tenant shall pay to Landlord monthly on or before the last day of
each month during the Term in the case of an assignment or during the term of
the sublease in the case of a sublease, fifty percent (50%) of the Receipts (as
hereinafter defined) received by Tenant during such month from any such
assignment or subletting permitted hereunder (other than any assignment referred
to in Paragraph 5.(a)(2)); provided, however, that Tenant shall have no
obligation to pay any portion of Receipts to Landlord derived from transactions
with Affiliates. "Receipts" shall mean the excess, if any, of any and all rent
and other consideration (but not proceeds of sale or lease of Tenant's personal
property) actually collected by Tenant for such month under or in connection
with any sublease of the Premises (or any part thereof) or assignment of this
Lease over the sum of (i) the Base Rent for such space based upon the Base Rent
amounts per rentable square foot listed in Exhibit C, plus (ii) any Additional
Rent payable for such space under this Lease (all sums prorated to reflect
obligations allocable to that portion of the Premises subject to the sublease in
the case of a sublease of a portion of the Premises), and (iii) Tenant's
reasonable costs incurred in subleasing or assigning (including, without
limitation, architectural and engineering fees, brokerage commissions,
concessions, construction costs, advertising costs, attorneys' fees and
disbursements incurred in connection with such subletting or assignment),
amortized with interest at a fixed rate equal to the then current U.S. Treasury
rate for bills or notes in the open market with comparable maturities over (aa)
the term of the sublease in the case of a subletting, or (bb) the Term, in the
case of an assignment. Tenant shall compute the appropriate amortization and
interest rate and provide Landlord with written notice thereof (together with
supporting detail) not later than sixty (60) days after the total cost to be so
amortized has been incurred. Tenant



                                       24
<PAGE>   33
         shall provide Landlord with reasonable evidence of payment for all such
         items within a reasonable time after request.

         6.    Alterations.

         (a) General Restriction. Tenant shall make no alterations in or
improvements to the Premises without the prior written consent of Landlord,
which consent shall not be unreasonably withheld or delayed. It shall be
reasonable for Landlord to withhold consent to any alteration or improvement
that is reasonably likely to (i) adversely affect the Building (aa) exterior,
(bb) structure, (cc) mechanical, electrical, elevator or life safety systems,
(ii) adversely affect the exterior appearance of the Premises, or any part
thereof, as seen from Building common areas (if this Lease is terminated as to a
portion of the Premises) or the exterior of the Building, (iii) increase the
floor loadings above the designed loadings of the Building, subject to Tenant's
rights under Paragraph 6.(g), (iv) result in the violation of any law,
ordinance, rule or regulation, (v) cause Landlord to incur expense in order to
upgrade or improve any part of the Building as required pursuant any law,
ordinance, rule or regulation promulgated or enacted after the date hereof
(unless Tenant agrees to bear the cost of any such upgrading or improvement).

         (b)      Procedure.

                  (1) Tenant shall give to Landlord prior written notice of its
         intent to make an alteration in or improvement to the Premises, such
         notice to include plans or drawings that fully disclose and describe
         the same. Tenant may submit any such plans and specifications to
         Landlord on a "fast-track" basis, i.e., plans may be submitted for
         separate categories of work, and if such plans for separate categories
         of work shall have been approved by Landlord, Tenant may commence work
         on the categories of work described in the plans so approved. Landlord
         shall have ten (10) days after receipt of Tenant's notice within which
         to approve or disapprove the same or to request additional information,
         if the request does not provide Landlord


                                       25
<PAGE>   34
         with sufficient information for the exercise of Landlord's reasonable
         judgment. If Landlord grants its approval, it shall do so in writing
         specifying the conditions and terms thereof pursuant to Paragraph
         6.(c). Landlord's failure to respond to Tenant's request within such
         ten (10) day period shall be deemed approval. If Landlord denies the
         request for approval, it shall specify in writing, in reasonable
         detail the grounds therefor and advise Tenant of the types of
         revisions in the request that would make it acceptable where such
         revisions reasonably appear to be available. If Landlord determines
         that it cannot grant the request for lack of sufficient information,
         it shall specify with particularity the reasons why the information
         provided by Tenant is insufficient. Landlord shall cooperate with
         Tenant in a good faith effort to reach agreement on alterations and
         improvements that will achieve some or all of Tenant's objectives
         consistent with the terms and conditions of this Lease.

                  (2) Tenant shall not be required to use Building standard or
         Building stock materials in any work of alteration or improvement;
         provided, however, that Tenant shall reimburse Landlord for any
         additional maintenance, utility, service or operating costs that
         Landlord may incur as a result of Tenant's use of such non-standard or
         non-stock materials; and such additional cost shall not constitute an
         Occupancy Cost pursuant to Paragraph 27.(b). Subject to the foregoing,
         Tenant may re-use without charge improvements currently located in the
         Premises in any such work of alteration or improvement.

              (c) Conditions That Apply To Improvement Work. After the
Commencement Date, any alteration or improvement work permitted hereunder shall
be performed by contractors or mechanics approved by Landlord, which approval
shall not be unreasonably withheld or delayed, and only upon such reasonable
conditions as Landlord may impose, including, but without limitation, the time
of day when the work may be performed, restrictions upon deliveries and use of
Building systems; provided, however, that restrictions with respect



                                       26
<PAGE>   35
to timing and deliveries shall not be imposed if Tenant is the sole occupant of
the Building (other than the 29th floor) above the ground floor. Tenant shall
submit the approved plans and specifications for performance of any work of
alteration or improvement to Cahill Contractors, Inc., or Cahill Construction
Services, Inc., (individually and collectively "Cahill"), among not less than
two (2) other responsible contractors for bids. Tenant shall select Cahill for
performance of the work, if it submits the lowest responsible bid. All such work
shall be done at such times and in such manner as Landlord may from time to time
reasonably designate; but Tenant shall not be required to do any work during
Overtime Periods (as hereinafter defined) or at overtime or premium pay rates
unless such work adversely affects the use of their space or Building common
areas by any other tenants of the Building. All work done by Tenant shall be
performed in compliance with all laws, rules, orders, ordinances, directions,
regulations and requirements of all governmental agencies, offices, departments,
bureaus and boards having jurisdiction, and in compliance with the rules,
orders, directions, regulations and requirements of the Insurance Services
Office or of any similar body. From time to time after the Commencement Date,
Landlord shall furnish to Tenant lists of contractors, subcontractors and
suppliers that Landlord considers acceptable for performance of the work. Tenant
shall reimburse Landlord for Landlord's actual and reasonable out-of-pocket
costs for plan review, permit application fees, monitoring, inspection and other
reasonable costs incurred in connection with Tenant's alteration and improvement
plans ("Review Expense"), consistent with the magnitude and nature of the work.
Landlord shall not charge Tenant a fee for any construction supervision or
administration over and above Review Expense; and Landlord shall not charge for
monitoring and inspection if Cahill is the contractor selected.

              (d) Protection Against Lien Claims. Before commencing any work,
Tenant shall give Landlord at least five (5) days' prior written notice of the
proposed commencement of such work in order to afford Landlord an opportunity to
post appropriate notices of non-responsibility. At the option of Landlord in the
case of work being performed by a subtenant, or work that has a cost



                                       27
<PAGE>   36
exceeding One Million Dollars ($1,000,000) in the case of the Tenant named in
this Lease or Five Hundred Thousand Dollars ($500,000) in the case of an
assignee, the party performing the work shall secure, without cost or expense to
Landlord, a completion and lien indemnity bond, reasonably satisfactory to
Landlord, for said work. Landlord shall waive the foregoing bond requirement in
the case of work being performed by a subtenant within the financial limits
stated above in any case where Tenant co-signs the construction contract and
becomes directly liable for the payment obligations thereunder. Tenant shall
cause any mechanic's lien filed against the Premises, or against the Building or
Property for work claimed to have been done for, or materials claimed to have
been furnished to Tenant or a sublessee of Tenant, to be discharged, by bond or
otherwise, within thirty (30) days after Tenant receives notice thereof, without
cost or expense to Landlord. If any such lien is filed and is not released of
record within thirty (30) days after Tenant receives notice thereof, Landlord
may, without waiving its rights and remedies based on such failure by Tenant and
without releasing Tenant from any obligations hereunder, cause such liens to be
released by any means it shall deem proper, including payment of the claim
giving rise to such lien in which event all amounts paid by Landlord shall
immediately be due and payable by Tenant upon Landlord's demand, supported by
invoice and documentary evidence of the amount paid.

              (e) Ownership And Removal. Other than Tenant's computers, trade
fixtures, equipment, personal property, movable panels, movable partitions and
furniture systems, all alterations, additions or improvements in the Premises,
made by either party, including, without limiting the generality of the
foregoing, all permanently affixed panelling, permanently affixed partitions,
railings, mezzanine floors, galleries and the like, shall become the property of
Landlord, and shall remain upon, and be surrendered with the Premises at the end
of the Term, except as otherwise provided in Paragraph 4.(d). Notwithstanding
the foregoing, Landlord may elect to have Tenant remove those alterations or
improvements made by Tenant after the Commencement Date that are not consistent
with ordinary office use; provided, however, that Landlord shall have


                                       28
<PAGE>   37
given written notice to Tenant at the time of Landlord's approval (or deemed
approval) of the plans and specifications for such alterations or improvements
that Landlord is reserving its right to require that such alterations or
improvements be removed on expiration or termination of the Term, with all
damage to the Building and Building systems caused by such removal repaired.
Notwithstanding the foregoing, if Tenant has exercised a termination option
pursuant to Paragraph 2.(b), Landlord may require Tenant to pay a portion of the
reasonable and actual cost of removing (i) its computer-related water towers,
condenser water piping and shafts, pumps and electrical installations related
thereto, (ii) the UPS system and battery racks, (iii) diesel fuel risers, tanks
and emergency generators and related electrical wiring, (iv) escalator and
internal stairs, and (v) cafeteria improvements, at the end of the Term or
earlier termination of this Lease, within thirty (30) days after Landlord's
invoice therefor is submitted to Tenant. The portion of the cost of removing the
foregoing improvements that Tenant shall pay shall be equal to the proportion
that the rentable square feet of the office space as to which Tenant has
exercised a termination option represents of the total rentable square feet of
the office and retail space in the original Premises under this Lease, said
amount to be paid within thirty (30) days after receipt from Landlord of an
invoice therefor based on Landlord's actual and reasonable cost of such removal,
including repair of all damage caused by such removal. Landlord agrees to obtain
competitive bids for such removal and restoration from three (3) subcontractors
and to use the lowest bid which is in compliance with the specifications for
such work and to deliver a copy of such bids to Tenant prior to commencing such
work. If Landlord or Landlord's contractor undertakes or supervises such work, a
reasonable fee of not to exceed ten percent (10%) of subcontractor charges shall
be included as a part of the reasonable and actual cost of removing the
foregoing improvements. With respect to any alterations or improvements that
Landlord has the right to require Tenant to remove, Landlord shall notify Tenant
(i) not less than one hundred eighty (180) days prior to the date when the Term
expires of the alterations or improvements to be removed, or (ii) within thirty
(30) after the earlier termination of this Lease. Tenant may, however,



                                       29
<PAGE>   38
remove its computers, trade fixtures, equipment, personal property, movable
panels, movable partitions and furniture systems from the Premises in the
ordinary course of Tenant's business or in the ordinary course of any
reconstruction, renovation or alteration upon condition that Tenant shall repair
any damage caused by any removal of such property.

              (f) Tax Aspects Of Alterations And Improvements. All accounting
for tax purposes shall allocate the benefits and burdens (i) to the party paying
for the particular improvement, (ii) in the case of improvements for which the
parties share the costs, in proportion to the amount paid by each, or (iii) as
otherwise agreed by the parties in writing.

              (g) Tenant's Right to Increase Floor Load. If Tenant shall desire
to increase the floor loads of any floor in the Building above the load
capacities shown on Exhibit I, attached hereto and incorporated herein by
reference thereto, Landlord shall strengthen and reinforce the same so as to
give Tenant the load desired, provided that (i) the work necessary to increase
such floor load does not materially and adversely affect the structure of the
Building, (ii) such work will not materially interfere with the amount or
availability of any space adjoining, alongside, above or below the Premises,
(iii) Tenant shall submit to Landlord the plans showing the locations of and the
desired floor load for the areas in question; and (iv) Tenant shall agree to
reimburse Landlord, within thirty (30) days after demand, for the actual
out-of-pocket costs incurred by Landlord to provide such strengthening and
reinforcement. Landlord shall inform Tenant of the cost of such work prior to
commencing it. Notwithstanding the foregoing, if Tenant shall have terminated
this Lease with respect to any floor, then if Tenant needs access to such floor
(the "Access Floor") to strengthen the floor load of the floor above it,
Landlord may refuse to permit Tenant to increase the load of the floor above the
Access Floor if the floor or area shall then be occupied by another tenant.

              (h) Certain Alterations Not Requiring Landlord's Consent.
Notwithstanding the restrictions contained in Paragraph 6.(a), (but subject to
the notice requirements


                                       30
<PAGE>   39
contained in Paragraph 6.(d)), Tenant may make non-structural alterations to the
Premises without Landlord's prior consent, provided that (i) no permit is
required from any applicable authority for performance of such work, (ii) in the
case of work on the ground or second floors of the Building, the appearance of
the Building from the exterior shall not be affected by such alteration, (iii)
the proper functioning of each of the mechanical, electrical, sanitary,
plumbing, telecommunications, fire sprinkler and all other systems serving any
portion of the Building shall not be adversely affected by such alteration, (iv)
the work shall consist primarily of decorative work or changes to interior
layout such as changes in wall coverings, wall painting, floor coverings and
rearrangement of movable non-structural partitions and panels, (v) the
alterations shall not affect the exterior appearance of the Premises from any
Building common area if this Lease has been terminated as to any portion of the
Premises, (vi) the work shall comply with and be performed in accordance with
all applicable laws, ordinances rules and regulations, and (vii) Tenant shall
provide to Landlord a reproducible record print showing the proposed work with
such notice.

      7. Repairs.

         (a) Tenant's Obligation. Tenant shall take good care of the Premises
and fixtures therein, using reasonable diligence to prevent damage and
deterioration thereof beyond normal wear and tear, obsolescence and damage by
casualty or condemnation. In addition, Tenant shall be responsible for and
diligently repair and maintain during the Term (i) Tenant's condenser water
riser and cooling tower, related equipment, shafts, risers and cable racks; (ii)
Tenant's communication risers; (iii) Tenant's emergency and uninterruptible
power system and related conduit, panels and batteries; (iv) Tenant's cafeteria
equipment, fans and plumbing; and (v) Tenant's pneumatic tube system. Tenant
shall not be required to make any structural repairs or repairs to any Building
systems; provided, however, that Tenant shall be required to reimburse Landlord
for the cost of all such repairs made necessary due to the negligence or willful
misconduct of Tenant, its agents, servants, employees, contractors, invitees or
licensees. Promptly



                                       31
<PAGE>   40
after Tenant becomes aware of the need for such repairs, Tenant shall inform
Landlord of the need for repairs to the Building structure or Building systems.
Tenant shall be fully responsible for the repair and maintenance of all trade
fixtures and personal property that remain the property of Tenant hereunder,
unless the repairs are necessary due to the negligence or willful misconduct of
Landlord or its agents, servants, employees, contractors, invitees or licensees,
in which event, Landlord shall repair the same; and the cost of repairs in such
an instance shall not be included as an Occupancy Cost. Tenant shall cause all
work for which it is responsible to be performed in a manner that does not cause
damage or injury to the Premises.

         (b) Landlord's Obligation. Except as expressly otherwise provided in
Paragraph 7.(a) above, Landlord shall repair all damage or injury to the
Premises, or to the Building or to its fixtures, appurtenances or equipment,
promptly after receipt from Tenant of notice of the need for such repairs.
Unless other specific levels of service are specified herein, Landlord shall
operate and maintain the Building, Building structure and Building systems in
a manner consistent with comparable buildings in the Downtown Financial
District. All such work (including, but without limitation, structural repairs
and repairs to Building systems) shall be performed at the expense of Tenant,
in the case of negligence or willful misconduct of Tenant or Tenant's agents,
servants, employees, contractors, invitees or licensees, or as an Occupancy
Cost (as defined in Paragraph 27.(b)) to the extent permitted in the case of
normal wear and tear. Such repairs shall be made without cost or expense to
Tenant (and not charged as an Occupancy Cost) to the extent made necessary by
the negligence or willful misconduct of Landlord, its agents, servants,
employees, contractors, invitees or licensees. The Building's roofs, exterior
walls and windows shall be maintained at Landlord's expense and not as an
Occupancy Cost (except that the cost to replace window glass shall be an
Occupancy Cost if the glass is cracked or broken in its installed location as
a result of any cause other than (i) a defect in materials or installation,
(ii) an act of Landlord or its agents, servants, employees, contractors,
invitees or licensees, or (iii) an act of God that is covered by Landlord's
insurance;

                                       32
<PAGE>   41
provided, however, that any portion of the loss not covered by Landlord's
insurance shall be included as an Occupancy Cost).

              (c) Landlord to Minimize Interference. Landlord shall use
reasonable diligence to minimize interference with Tenant's use and occupancy of
the Premises in making any repairs; provided, however, that Landlord shall have
no obligation to employ contractors or labor at so-called overtime or other
premium pay rates or to incur any other overtime costs in connection with such
repairs. Notwithstanding the foregoing, if Tenant shall so request, Landlord
shall employ contractors or labor at so-called overtime or other premium pay
rates or incur other overtime costs in making such repairs, and Tenant shall pay
to Landlord, within thirty (30) days after demand therefor, an amount equal to
the excess costs incurred by Landlord to comply with Tenant's request.

              (d) Current ADA And Related Requirements. Without cost to Tenant
and without inclusion of the cost of such work as an Occupancy Cost, Landlord
shall perform the work required to bring the portions of the Building described
in this Paragraph 7.(d) into compliance with the requirements of the Americans
With Disabilities Act ("ADA") and Title 24 of the California Code of
Regulations as said requirements exist on the date of performance of such work.
The work to be performed by Landlord shall bring into compliance the following:
(i) Ground floor entry to the Building lobby; (ii) Ground floor Building lobby
(excluding Tenant's security turnstile); (iii) Elevator cabs and call buttons
in each cab and on each floor (provided, however, that the foregoing shall not
require enlargement of elevator cabs); (iv) Building restrooms on Floors 2
through 28 (provided, however, that the foregoing shall not include the
private restroom on the 28th floor; and provided further, that the foregoing
shall exclude work that has already been performed). The work to be performed
by Landlord shall be limited to requirements that generally apply to "path of
travel" obligations and shall not include any work required to accommodate
Tenant's requirements in excess of such obligations normally incidental to
office building use. All such work shall be performed by Landlord prior to the


                                       33
<PAGE>   42
Commencement Date. Landlord will either precede or match Tenant's remodeling
schedule on any floor, even if Tenant's work occurs from the date of execution
of this Lease to the Commencement Date. Landlord shall design the modifications
and obtain the alteration permit for restroom work. Landlord shall perform the
work so that at any one time, not more than six (6) pairs of restrooms in the
Building are out of service on non-contiguous floors. Except as expressly
provided in this Paragraph 7.(d), Landlord shall have no other responsibilities
or obligations to Tenant to comply with the current requirements of the ADA or
Title 24 of the California Code Of Regulations (including, but without
limitation, provision of fire rated corridors or visual warning systems).


             8.   Compliance With Laws, Insurance Standards And Security.

                  (a) Compliance With Laws By Tenant. Tenant shall comply with
all laws, ordinances, rules, regulations and orders ("Requirements") of federal,
state, county and municipal authorities having jurisdiction (each a "Government
Authority") pertaining to Tenant's use of the Premises, and with any direction
of any public officer or officers, pursuant to law, that shall impose any duty
upon Tenant with respect to the Premises, or the use or occupation thereof;
provided, however, that Tenant shall not be obligated to make any alterations or
improvements to the Premises necessary to comply with any Requirements, unless
compliance shall be required by reason of (i) Tenant's particular manner of use
or occupancy of the Premises (as opposed to mere use as executive, general and
administrative offices, retail space, parking or any other use permitted under
this Lease), or (ii) breach of any of Tenant's covenants or agreements under
this Lease, or (iii) any cause or conditions arising out of any alterations made
by Tenant in the Premises or Building during the Term hereof or during the Term
of the Modified Initial Lease. Specifically, but without limiting the generality
of the foregoing, Tenant shall comply with any order issued by any Government
Authority requiring removal and replacement of the Halon fire protection system
installed for protection of data



                                       34
<PAGE>   43
processing equipment. Tenant shall not do or permit to be done, any act or thing
upon the Premises that subjects or might subject Landlord to any liability or
responsibility for injury to any person or persons or to any property by reason
of any business or operation being carried on in the Premises, and Tenant shall
indemnify Landlord and hold Landlord harmless from and against any such
liability and reasonable attorneys' fees. All business machines, computers and
mechanical equipment owned by Tenant and used in the Premises shall be placed
and maintained by Tenant at Tenant's expense in settings reasonably sufficient
to absorb and prevent excessive vibration, noise and annoyance affecting
portions of the Building occupied by other tenants, in Landlord's reasonable
judgement. At its sole cost and expense and after notice to Landlord, Tenant may
contest by appropriate proceedings the legality or applicability of any
Requirements affecting the Premises or the Building, provided that the
Certificate of Occupancy of the Building shall not be suspended by reason of
non-compliance or by reason of such contest. Tenant shall keep Landlord
regularly advised of the status of such proceedings.

         (b) Compliance With Laws by Landlord. Except as otherwise expressly
provided in Paragraph 7.(d), Landlord shall comply with all Requirements that
impose a duty on Landlord or Tenant with respect to the Premises or the
Property with which Tenant is not required to comply. Further, Landlord
represents to Tenant that to the best of Landlord's knowledge, the Premises
and the Property are free of asbestos-containing materials and other Hazardous
Materials (as hereinafter defined). The term "Hazardous Materials" shall mean
any toxic or hazardous wastes, pollutants or substances, including, without
limitation, asbestos, PCBs, petroleum products and by-products, substances
defined or listed as "hazardous substances" or "toxic substances" or similarly
identified in or pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., and as
hazardous wastes under the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6010, et seq., any chemical substance or mixture regulated under the
Toxic Substance Control Act of 1976, as amended, 15 U.S.C. Section 2601, et
seq., any "toxic pollutant" under the


                                       35
<PAGE>   44
Clean Water Act, 33 U.S.C. Section 466 et seq., as amended, any hazardous air
pollutant under the Clean Air Act, 42 U.S.C. Section 7401 et seq., hazardous
materials identified in or pursuant to the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1802, et seq., and any hazardous or toxic substances or
pollutant regulated under any other Requirements. If, after the date of this
Lease, asbestos-containing materials or other Hazardous Materials are found in
the Premises or on the Property, and the presence of such asbestos-containing
materials or other Hazardous Materials did not result from or in connection with
the act or omission of Tenant, its agents, employees, contractors, licensees,
invitees or sublessees, then Landlord, at its sole cost and expense, shall cause
such asbestos-containing materials or other Hazardous Materials to be removed,
encapsulated or handled in accordance with a hazardous materials operations and
maintenance plan, all in compliance with applicable Requirements, and shall
repair any damage caused by such removal.

         (c) Insurance Standards And Requirements. Tenant shall not do or permit
to be done, any act or thing upon the Premises, that will invalidate or conflict
with fire or extended coverage insurance policies ("Fire Insurance") covering
the Building or its fixtures, appurtenances or equipment or the property located
therein or that constitutes a violation of any rules, orders and requirements of
the Insurance Services Office, (or any similar body that establishes controlling
insurance standards), and shall not conduct any activity or keep any substance
in the Premises, that will increase the rates of Fire Insurance on the Building
or its fixtures, appurtenances, equipment or property located therein. The use
or occupancy by Tenant of the Premises for the purposes permitted under this
Lease shall not be deemed to violate the provisions of this Paragraph. If Tenant
fails to comply with this Paragraph 8.(c) and as a result, the Fire Insurance
rate shall at any time be higher than it otherwise would have been if Tenant
had so complied, then Tenant shall reimburse Landlord, as Additional Rent, for
that part of all Fire Insurance premiums thereafter paid by Landlord due to such
violation by Tenant within thirty (30) days after Tenant shall have received an
invoice therefor from


                                       36
<PAGE>   45
Landlord. In any action or proceeding wherein Landlord and Tenant are parties, a
schedule or "make up" of rates for the Building or the Premises issued by the
Insurance Services Office, or other body making Fire Insurance rates for the
Building or the Premises, shall be conclusive evidence of the facts therein
stated and of the several items and charges in the Fire Insurance rate that then
apply to the Premises.

         9. Subordination, Attornment And Non-Disturbance.

            (a)   Subordination.

                  (1) This Lease is subject and subordinate to all ground or
         underlying leases, mortgages and deeds of trust that now affect or
         encumber the Property (including, without limitation, mortgages or
         deeds of trust encumbering the leasehold estate in any ground leases)
         and to all renewals, modifications, consolidations, replacements and
         extensions thereof. Landlord represents that as of the date of this
         Lease, there are no liens or encumbrances (other than liens or
         encumbrances for real estate taxes, water and sewer charges) to which
         this Lease is subject or subordinate, and that by their foreclosure
         could result in termination of this Lease, other than the Deed of
         Trust, Security Agreement and Fixture Filing with Assignment Of Rents
         and Agreements, made for the benefit of The Prudential Insurance
         Company Of America ("Prudential"), dated August 31, 1989, by 101
         Montgomery Street Co., said Deed of Trust having been duly recorded on
         August 31, 1989, in the Office of the Recorder of the City and County
         of San Francisco at Reel E947, Image 2051-2100 (the "Deed of Trust").

                  (2) Within ninety (90) days after execution and delivery of
         this Lease, Landlord shall deliver to Tenant an agreement in recordable
         form from each and every such current lessor, mortgagee and beneficiary
         to the effect that Tenant shall not be disturbed in its possession of
         the Premises, nor shall Tenant's rights be reduced or its obligations
         increased beyond those stated in this Lease by reason of such
         subordination

                                       37
<PAGE>   46
(unless such party shall have the right to do so by reason of an Event of
Default under this Lease). The agreement shall also provide that Tenant shall
not be named as a defendant in any judicial foreclosure action, request for
appointment of a receiver or any other form of judicial relief. Landlord and
Tenant shall share equally in the legal fees charged to Landlord by Prudential
as a condition to obtaining such an agreement from Prudential with respect to
the Deed of Trust. If despite diligent effort, Landlord is unable to secure such
an agreement from Prudential, and such failure continues for a period of an
additional ninety (90) days beyond the ninety (90) day period stated above, then
Tenant shall have the right to terminate this Lease by written notice given to
Landlord within thirty (30) days after expiration of such second ninety (90) day
period.

         (3) At the option of Landlord, this Lease shall be subordinate to any
ground or underlying leases, mortgages or deeds of trust that may hereafter
affect or encumber the Property, but only upon condition that the lessor,
mortgagee or beneficiary named in any such lease, mortgage or deed of trust
enters into an agreement in recordable form with Tenant pursuant to which such
lessor, mortgagee or beneficiary agrees that Tenant shall not be disturbed in
its possession of the Premises, nor shall Tenant's rights be reduced or its
obligations increased beyond those stated in this Lease by reason of such
subordination (unless such party shall have the right to do so by reason of an
Event of Default under this Lease); and further agrees that Tenant shall not be
named as a defendant in any judicial foreclosure action, request for appointment
of a receiver or any other form of judicial relief. Tenant and such mortgagee,
lessor or beneficiary, as the case may be, shall promptly execute and deliver
such further agreements as may reasonably be required to carry out and
consummate such subordination and non-disturbance covenants, including, without
limitation, an agreement to attorn to the lessee, mortgagee or beneficiary upon
its demand after default beyond all notice and grace periods by Landlord

                                       38
<PAGE>   47
             as tenant or mortgagor under such documents.

                  (b) Foreclosure. Upon foreclosure or exercise of power of sale
         under any mortgage or deed of trust now or hereafter affecting the
         Property, Tenant shall not be disturbed in its possession of the
         Premises (unless an Event of Default shall have occurred hereunder),
         nor shall Tenant's obligations hereunder be increased or its rights
         hereunder reduced as a result of or in connection with such
         foreclosure; nor shall Tenant be named as a defendant in any judicial
         foreclosure action, request for appointment of a receiver or any other
         form of judicial relief. Upon reasonable request by the holder of any
         such mortgage or deed of trust, Tenant shall execute and deliver the
         instruments desired by such holder to establish the relative priority
         of this Lease to any such mortgage or deed of trust so long as the full
         substance of the covenant of non-disturbance of Tenant (as set forth in
         Paragraph 9.(a) above) is preserved in any such documentation.

              10. Building Security. Tenant shall provide a lobby guard service
24 hours per day, seven days per week, at Tenant's sole cost and expense;
provided, however, that if the ground floor lobby-lanes shall have been
eliminated pursuant to Paragraph 2(b)(3) of this Lease, Tenant shall not have
the obligation to provide a lobby guard service. In such event, Landlord shall
provide all security services as shall be consistent with the standard of
operation for comparable buildings in the Downtown Financial District with the
cost thereof to be charged as an Occupancy Cost hereunder. Unless Tenant shall
have exercised its right pursuant to Paragraph 2(b) to terminate this Lease with
respect to any portion of the Premises, any other security in the Building or
the Premises shall also be provided by Tenant at its sole cost and expense. All
security arrangements provided for by Tenant shall be subject to Landlord's
prior written consent which shall not be unreasonably withheld or delayed;
provided, however, that Landlord shall have no right of approval over security
guards who are employees of Tenant. All security arrangements made by Tenant
shall be established on terms and conditions that do not unreasonably interfere
with or restrict Landlord's rights hereunder or its ability to perform work
required to be performed in the fulfillment of Landlord's obligations under this
Lease or


                                       39
<PAGE>   48
its ability to market available space in the Building or to operate the
Building. Without affecting or reducing Tenant's obligations to provide
security, Tenant may eliminate the ground floor lobby lanes in the Building on
not less than thirty (30) days prior written notice to Landlord without
exercising an option to terminate this Lease pursuant to Paragraph 2.(b). Within
thirty (30) days after receipt of an invoice submitted together with supporting
information, Tenant shall reimburse Landlord for the cost of repairing all
damage caused by such removal and restoration of the lobby (including, but
without limitation, replacement of floor tiles, the Building directory and metal
trim) as close as is reasonably possible to the original architectural design
and quality of finishes.

                  11. Rules And Regulations. Tenant and Tenant's agents,
servants, employees, contractors, visitors and licensees shall comply with such
rules and regulations as Landlord may adopt from time to time during the Term
(such rules and regulations to be consistent with what is customary and
reasonable in comparable buildings in the Downtown Financial District);
provided, however, that no rule or regulation shall require Tenant to pay
Additional Rent or bear additional economic obligations beyond those provided
for in this Lease. Landlord shall notify Tenant of any rules and regulations
(and amendments thereto) by providing a copy to Tenant in the manner provided
for giving of notices under Paragraph 26 of this Lease. Landlord shall not be
liable to Tenant for violation of any of rules and regulations, or the breach of
any lease, by any other tenant or other party in the Building. Landlord shall
use reasonable diligence, consistent with normal building management practice,
to enforce such compliance on a uniform basis.

                  12. Insurance; Subrogation Waivers; Non-Liability For Certain
Events.

                       (a) Non-Liability. Neither Landlord nor Landlord's
         agents, contractors or employees shall be liable for any damage to
         property entrusted to them, their employees or to the Building
         personnel, or for the loss of any property by theft, breach of Building
         security or otherwise. If at any time during the Term, any Building
         windows become obstructed or darkened temporarily for any reason
         whatsoever, including, but not limited to Landlord's

                                       40
<PAGE>   49
         own acts, or permanently due to the application of any Requirements,
         Landlord shall not be liable for any damage that Tenant may sustain
         thereby and Tenant shall not be entitled to any compensation or
         abatement of rent or release from any of the obligations of Tenant
         hereunder caused directly or indirectly by such obstruction, shadowing
         or darkening. Landlord shall diligently seek to eliminate the condition
         causing the obstruction or darkening. If, despite Landlord's diligent
         effort, it reasonably appears that such obstruction or darkening is
         "permanent," (i.e., of indefinite and long-term duration) Tenant shall
         have the right to terminate this Lease as to the ground floor of the
         Premises if such permanent obstruction or darkening affects not less
         than thirty percent (30%) of the area of the ground floor exterior
         windows, such termination to take effect sixty (60) days after written
         notice by Tenant to Landlord of its election to so terminate based upon
         such obstruction or darkening. Upon such termination, the Premises
         shall be reduced, Base Rent for the ground floor shall be abated in the
         manner provided herein with respect to partial termination for casualty
         and the parties' rights and obligations with respect to the space as to
         which the Lease is so terminated shall cease except with respect to
         rights and obligations that have accrued prior to the date of
         termination and obligations that are required to be performed under
         this Lease after termination. Such right of partial Lease termination
         shall constitute Tenant's sole remedy for any such obstruction.

                       (b) Indemnity. Tenant shall hold Landlord harmless from
         any and all loss, cost, damage, expense claims and liability (including
         reasonable attorney's fees) incurred in connection with or arising from
         the Premises or Tenant's operations, other than that which may arise as
         a result of, and to the extent of, the negligence or willful misconduct
         of Landlord, to the extent that such liability is not covered by
         Landlord's insurance. Landlord shall hold Tenant harmless from any and
         all loss, cost, damage, expense claims and liability (including
         reasonable attorney's fees) incurred in connection with or arising from
         Landlord's acts or omissions in or with respect to the Building and/or
         Property, other than that which may arise as a result of, and to the
         extent of, the negligence or willful misconduct


                                       41
<PAGE>   50
of Tenant, to the extent that such liability is not covered by Tenant's
insurance. The provisions of this Paragraph 12.(b) shall survive the
expiration or sooner termination of this Lease with respect to any claims or
liability occurring prior to such expiration or termination.

         (c) Tenant's Liability Insurance. Tenant shall purchase and maintain in
force throughout the Term (without cost or expense to Landlord), commercial
general liability insurance (including public liability and property damage
insurance) in the amount of Ten Million and No/100 Dollars ($10,000,000) per
occurrence for legal liability arising out of personal injuries to or deaths of
persons occurring in or about the Premises. Such amounts may be satisfied with a
primary commercial general liability policy and an excess or "Umbrella"
liability policy affording coverage, at least as broad as that afforded by the
primary policy. Such insurance shall: (i) name Landlord, its managing agent, any
mortgagee of the Property and any lessor under any ground lease that Landlord
specifies by notice given in accordance with Paragraph 26 hereof, as additional
insureds; (ii) cover Tenant's contractual liability under Tenant's leases; (iii)
be issued by an insurance company that has a Best's Insurance Guide Rating of
A-XI or better; (iv) be primary and non-contributing with any insurance that may
be carried by Landlord; and (v) provide that it shall not be cancelled or
coverage changed without thirty (30) days' prior written notice to Landlord and
any mortgagee of Landlord's that has requested such notice in writing by notice
to Tenant in accordance with Paragraph 26 hereof. Tenant may obtain such
insurance under a blanket insurance policy covering other properties as well as
the Premises. At least one (1) Business Day prior to the Commencement Date,
Tenant shall deliver a certificate of such insurance to Landlord and shall
provide certificates of renewals thereof at least one (1) Business Day before
the expiration dates of the coverage then in effect. If Tenant shall fail to
procure such insurance before such date, or to deliver such certificates,
Landlord may, at its option, on notice to Tenant, procure such policies for the
account of Tenant, and the reasonable cost thereof shall be paid to Landlord as
Additional Rent within thirty (30) days after delivery to Tenant of an invoice
therefor.


                                       42
<PAGE>   51
         (d) Tenant's Property Insurance. Tenant shall obtain and maintain
throughout the Term "all risk" insurance on and for the full cost of replacement
of all of Tenant's property in the Premises, including, without limitation, all
furniture, equipment, and personal property and all items of Building fixtures,
alterations and improvements in which Tenant retains an ownership interest; and
Tenant shall provide Landlord with copies of current certificates for such
policy or policies that shall be kept current and in full force and effect at
all times during the Term.

         (e) Tenant's Self-Insurance: Deductibles. Notwithstanding the
requirements of this Paragraph 12, the Tenant named in this Lease (but not any
successor or assignee of said Tenant, without Landlord's prior written consent
that Landlord shall have the right to withhold in its sole discretion) may
self-insure against any or all of the risks referred to in Paragraphs 12.(c)
and 12.(d) above, up to a total of One Million Dollars ($1,000,000); provided,
however, that at all times during the period Tenant shall have elected to
self-insure, Tenant shall have a net worth of not less than Two Hundred
Million Dollars ($200,000,000); and provided, further, that at all times that
Tenant shall have elected to self-insure with respect to the insurance required
to be carried pursuant to Paragraph 12.(c), a third party insurance company
shall perform the claims management and loss adjustment of all claims within
the scope of such coverage but for self-insurance.

         (f) Landlord's Building And Property Insurance. Landlord shall maintain
and keep in full force and effect or cause to be maintained and kept in full
force and effect, with an insurance company that has a Best's Insurance Guide
rating of A-XI or better, at least the following insurance: (A) if there is a
boiler or other similar refrigeration equipment or pressure object or other
similar equipment in the Building, steam boiler, air-conditioning and machinery
insurance written on broad form basis with a limit of not less than $500,000;
(B) "all-risk" insurance, to the extent of one hundred percent (100%) of the
insurable replacement cost of the Building and all alterations and improvements
therein in which Landlord retains an ownership interest with


                                       43
<PAGE>   52
rental abatement coverage for a period of not less than one (1) year due to
rental loss from an insured cause; and (C) worker's compensation, disability and
such other similar insurance in at least the statutory amounts covering all
persons employed in connection with any work performed by Landlord with respect
to the Property and with respect to whom death or bodily injury claims could be
asserted against Landlord, Tenant, the Premises or the Property. In addition,
Landlord shall have the right, but not the obligation, to maintain earthquake
insurance insuring the Building and personal property located therein against
loss due to earthquake in an amount reasonably determined by Landlord to provide
adequate protection against loss with commercially acceptable deductible
percentage as Landlord shall reasonably determine. All of the insurance policies
described in this Paragraph 12 shall be in form reasonably satisfactory to
Tenant, have deductibles of not less than Twenty Five Thousand Dollars ($25,000)
nor more than One Hundred Thousand Dollars ($100,000) (except as specifically
otherwise provided in the preceding sentence with respect to earthquake) and
provide in each case that it shall not be subject to cancellation, termination
or change except after at least thirty (30) days' prior written notice to
Tenant. Certificates shall be deposited by Landlord with Tenant on or before the
Commencement Date and certificates of renewal shall be deposited by Landlord
with Tenant at least one (1) Business Day before the expiration of the coverage
then in effect.


                                       44
<PAGE>   53
         (g) Landlord's Comprehensive General Liability Insurance. Landlord
shall have the right to purchase and maintain in force throughout the Term (or
from time to time during the Term) commercial general liability insurance
(including public liability and property damage insurance) in the amount of Ten
Million and No/100 Dollars ($10,000,000) for legal liability arising out of
personal injuries to or deaths of persons occurring in or about the Premises.
Such amounts may be satisfied with a primary commercial general liability policy
and an excess or "Umbrella" liability policy affording coverage, at least as
broad as that afforded by the primary policy. Such insurance shall: (i) cover
Landlord's contractual liability under Landlord's leases; (ii) be issued by an
insurance company that has a Best's Insurance Guide Rating of A-XI or better;
and (iii) provide that it shall not be cancelled or coverage changed without
thirty (30) days' prior written notice to Tenant. Landlord may obtain such
insurance under a blanket insurance policy covering other properties as well as
the Property.

         (h) Subrogation Waiver. Landlord waives any and all rights of recovery
against Tenant for or arising out of injury to person or damage to or
destruction of the Building or any other property of Landlord or the Premises,
from causes then included under Fire Insurance policies or endorsements and
public liability and property damage insurance policies or endorsements (and
actually covered by the insurance policies then in force with proceeds payable
to Landlord), whether or not such injury, damage or destruction shall have been
caused by the negligence of Tenant, its agents, servants, employees,
contractors, visitors or licensees; provided, however, that the foregoing waiver
shall only apply to the extent that Landlord's insurance policies then in force
permit such waiver. Tenant waives any and all rights of recovery against
Landlord for or arising out of injury to person or damage to or destruction of
the Building or any other property of Tenant or the Premises, from causes then
included under Fire Insurance policies or endorsements and public liability and
property damage insurance policies or endorsements (and actually covered by the
insurance policies then in force with proceeds payable to Tenant), whether or
not such


                                       45
<PAGE>   54
injury, damage or destruction shall have been caused by the negligence of
Landlord, its agents, servants, employees, contractors, visitors or licensees;
provided, however, that the foregoing waiver shall only apply to the extent that
Tenant's insurance policies then in force permit such waiver. Landlord and
Tenant represent that their present insurance policies now in force permit such
waivers.

        (i) Termination Of Subrogation Waiver. If at any time during the Term,
any insurance carrier then providing insurance required to be provided
hereunder shall refuse to grant the waiver described in Paragraph 12.(h), or
such carrier shall   revoke a consent previously given or shall cancel or
threaten to cancel any policy previously issued in order to revoke such waiver,
then, in any of such events, the party (either Landlord or Tenant) who receives
notice of such action or proposed action by the carrier shall notify the other
party in writing. Five (5) days after the date of such notice, the waivers by
both Landlord and Tenant as provided in Paragraph 12.(h) shall terminate as to
the loss,   damage or destruction covered by such policy; provided, however,
that if at any time thereafter such consent shall be obtained without an
additional premium from any existing or substitute insurance carrier, the
waiver shall be reinstated. If such carrier shall consent to such waiver only
upon payment of an additional reasonable premium, the insured party shall pay
the additional reasonable premium and maintain such policy in effect.


                                       46
<PAGE>   55
              13.      Damage And Destruction.

                         (a) Minor Casualty. If all or any part of the Premises
         on any particular floor or floors in the Building are rendered
         untenantable or inaccessible by damage from fire or other casualty
         (other than a Major Casualty, as hereinafter defined) such that a
         contractor selected by Landlord (subject to Paragraph 13.(e) below),
         states in a written report that such damage can be substantially
         repaired in compliance with Requirements within one (1) year from the
         date of such casualty (employing normal construction methods without
         overtime or other premium except as otherwise provided in Paragraph
         13.(g)), Landlord shall promptly deliver a copy of such report to
         Tenant and notify Tenant of the date by which Landlord estimates that
         the repairs will be substantially complete, which date shall not be
         later than the date stated in the contractor's report. Landlord shall
         diligently repair such damage at its own expense; provided, however,
         that damage to improvements, furniture, chattels or trade fixtures
         that are the property of Tenant or that Tenant may be required to
         remove upon termination of this Lease shall be repaired at Tenant's
         expense. Failure to complete the work of repair or restoration within
         the time specified for completion in the contractor's  report shall
         have the consequences specified in Paragraph 13.(f) below.

                  (b) Extended Restoration Period: Minor Casualty. If all or any
         part of the Premises on any particular floor or floors in the Building
         are rendered untenantable or inaccessible by damage from fire or other
         casualty (other than a "Major Casualty" as specified in Paragraph
         13.(c)) such that a contractor selected by Landlord (as provided in
         Paragraph 13.(e) below), states in a written report that such damage
         cannot be substantially repaired in compliance with Requirements
         within one (1) year from the date of such casualty (employing normal
         construction methods without overtime or other premium except as
         otherwise provided in Paragraph 13.(g)), Landlord shall promptly
         deliver a copy of such report to Tenant and notify Tenant of the date
         by which Landlord estimates that the repairs can be substantially
         complete, which date shall not be later than the date stated in the
         contractor's report. Either Landlord or Tenant may     



                                       47
<PAGE>   56
         elect to terminate this Lease with respect to the particular floor or
         floors that have suffered the damage that cannot be repaired within the
         one (1) year period referred to above, such termination to be effective
         as of the date of such casualty, by written notice delivered to the
         other not more than twenty (20) days after receipt of the contractor's
         written opinion as to the date when the damage can be repaired. If
         neither party elects to so terminate the Lease as to the damaged
         floors, then Landlord shall promptly repair such damage at its own
         expense; provided, however, that damage to improvements, furniture,
         chattels or trade fixtures that do not belong to Landlord or that were
         specially installed to accommodate Tenant's occupancy ((aa) Tenant's
         computer-related water towers, condenser water piping and shafts, pumps
         and electrical installations related thereto, (bb) UPS system and
         battery racks, (cc) diesel fuel risers, tanks and emergency generators
         and related electrical installations, (dd) escalator and internal
         stairs, and (ee) Schwab University and cafeteria) shall be repaired at
         Tenant's expense; provided, however, that Tenant may elect not to
         repair or restore any of such items. Failure to complete the work of
         repair or restoration within the time specified in the contractor's
         report for completion shall have the consequences specified in
         Paragraph 13.(f) below.

                  (c) Major Casualty: Termination of Lease. If thirty seven and
         one-half percent (37.5%) or more of the rentable square footage of the
         Premises then leased by Tenant from Landlord in the Building are
         rendered untenantable or inaccessible by damage from fire or other
         casualty such that a contractor selected by Landlord (as provided in
         Paragraph 13.(e) below), states in a written report that (i) such
         damage cannot be substantially repaired in compliance with Requirements
         within one (1) year from the date of such casualty (employing normal
         construction methods without overtime or other premium except as other
         wise provided in Paragraph 13.(g)), and (ii) at least sixty two and
         one-half percent (62.5%) of the total rentable square footage of the
         Premises can be tenantable and accessible within one (1) year from the
         date of such casualty (employing normal construction methods without
         overtime or other  premium), then Landlord shall promptly deliver a
         copy
       

                                       48
<PAGE>   57
         of such report to Tenant and notify Tenant of the date by which
         Landlord estimates that such repairs can be substantially completed,
         which shall not be later than the time period stated in the
         contractor's report. Either Landlord or Tenant may elect to terminate
         this Lease with respect to the portion of the Premises that has
         suffered the damage that cannot be repaired within the one (1) year
         period referred to above, such termination to be effective as of the
         date of such casualty, by written notice delivered to the other not
         more than thirty (30) days after receipt of the contractor's report as
         to the date when the damage can be repaired; or Tenant may elect to
         terminate this Lease in its entirety by written notice delivered to
         Landlord not more than thirty (30) days after Tenant's receipt of the
         estimate for completion of the work, based upon the contractor's
         report. If neither party elects to so terminate the Lease in whole or
         in part, then Landlord shall promptly repair damage with respect to
         all or the portion of the Premises as to which this Lease remains in
         full force and effect at its own expense; provided, however, that
         damage to improvements, furniture, chattels or trade fixtures that do
         not belong to Landlord or that were specially installed to accommodate
         Tenant's occupancy ((aa) Tenant's computer-related water towers,
         condenser water piping and shafts, pumps and electrical installations
         related thereto, (bb) UPS system and battery racks, (cc) diesel fuel
         risers, tanks and emergency generators and related electrical
         installations, (dd) escalator and internal stairs, and (ee) Schwab
         University and cafeteria) shall be repaired at Tenant's expense;
         provided, however, that Tenant may elect not to repair or restore any
         of such items. Failure to complete the work of repair or restoration
         within the time specified in the contractor's report for completion
         shall have the consequences specified in Paragraph 13.(f) below. If
         the provisions of Paragraph 13.(b) and 13.(c) both apply to any
         situation that arises hereunder, Paragraph 13.(c) shall control.

                  (d) Effect Of Termination. If Tenant or Landlord elects to
         terminate this Lease, under this Paragraph 13 with respect to any
         particular floor, floors or portion of the Premises, then the Base Rent
         shall be reduced by the amount that Tenant was paying for such portion
         of the Premises and


                                       49
<PAGE>   58
         Tenant's Proportionate Share and other obligations hereunder shall be
         commensurately reduced so as to apply solely to the Premises that
         remain subject to the Lease, based on the square footage of the portion
         of the Premises as to which the Lease is terminated as determined
         pursuant to Exhibit C. If this Lease shall have been terminated under
         this Paragraph 13 with respect to the entire Premises, then this Lease
         shall expire as of the date of termination stated in such notice with
         the same effect as if that were the date on which the Term expires; and
         all Rent payable under this Lease shall be apportioned as of such date.
         If Tenant shall have paid any Base Rent or any Additional Rent pursuant
         to Paragraphs 27 or 28 for any period after expiration of this Lease,
         Landlord shall promptly refund such amount to Tenant.

                  (e) Contractor Selected For Damage Analysis And Reports. The
         contractor referred to in this Paragraph shall be a reputable,
         independent contractor or construction manager and not an Affiliate of
         either Landlord or Tenant and shall be selected by Landlord within
         twenty (20) days after the date of the casualty. Landlord's choice
         shall be subject to the prior written approval of Tenant, which
         approval shall not be unreasonably withheld or delayed.

                  (f) Failure To Complete Work Within Estimated Restoration
         Period. During the course of Landlord's restoration work, Landlord
         shall diligently seek to notify Tenant in writing as soon as it
         reasonably appears to Landlord that work of repair and restoration may
         not be completed within the time period estimated by Landlord as
         provided this Paragraph 13. Landlord and Tenant shall promptly meet and
         confer in an effort to reach agreement as to the best method of
         completing the work so that the Premises will again be tenantable and
         accessible and the outside date when such work shall be completed. If
         (i) Landlord and Tenant are unable to reach such an agreement, and (ii)
         Landlord has been unable to complete the work so that the damaged
         portions of the Premises have been made tenantable and accessible
         within sixty (60) days after the date originally estimated in the
         contractor's report, then this Lease may be terminated by written
         notice given by Tenant within twenty (20) after the end of said sixty
         (60) day period with respect to the particular floor or floors


                                       50
<PAGE>   59
         that are damaged in the case of a Minor Casualty and as to the entire
         Premises in the case of a Major Casualty.

                  (g) Use Of Expedited Construction Practices. Notwithstanding
         anything to the contrary in this Paragraph, Landlord may elect at its
         sole option to have the one (1) year period for completion of repairs
         (referred to in Paragraphs 13.(a), 13.(b) and 13.(c) above),
         calculated by assuming use of expedited construction methods and/or
         with overtime or other premium. Landlord shall notify Tenant and the
         contractor to be selected pursuant to Paragraph 13.(e) of the type and
         extent of expedited construction methods that Landlord is willing to
         employ. The contractor shall then base its estimate of the number of
         days to complete the work on the basis of such expedited methods.
         Landlord shall then use the expedited methods so identified in
         performance of the work, if it undertakes or is required to undertake
         repair and restoration as provided herein.

                  (h) Rent Abatement During Repair Period. If this Lease remains
         in full force and effect with respect to any portion of the Premises
         that has been damaged and rendered untenantable or inaccessible, Base
         Rent and Additional Rent payable under Paragraphs 27 and 28 shall be
         reduced in proportion to the ratio that the rentable square footage
         so rendered untenantable or inaccessible to Tenant on such floor bears
         to the total rentable square footage of such floor, such reduction to
         commence on the date of such fire or other casualty and to continue
         until the earlier of (i) thirty (30) days after substantial completion
         by Landlord of the repairs to the part of the Premises rendered
         untenantable or inaccessible, or (ii) Tenant's occupancy of the space
         for the conduct of its business. Landlord shall organize the
         restoration work to the best of Landlord's ability in a manner that
         will allow Tenant to begin its work before Landlord has completed its
         restoration so that Tenant can recommence the conduct of its business
         in the restored space as expeditiously as possible. If damage to the
         Premises occurs during a period when Tenant is entitled to rental
         abatement pursuant to Paragraph 3.(c) or 3.(d), the abatement provided
         for in this Paragraph shall be added to the abatement period then in
         effect under Paragraph 3.(c) or Paragraph 3.(d) so that Tenant will
         not lose the   benefit of any


                                       51
<PAGE>   60
         abatement provided for in this Lease due to overlapping abatement
         periods.

                  (i) Disruption of Tenant. Landlord shall use reasonable
         diligence to minimize any inconvenience or annoyance to Tenant or
         injury to the business of Tenant resulting in any way from damage from
         fire or other casualty or the repair thereof.

                  (j) Substantially Completed; Substantial Completion. Whenever
         used in this Paragraph 13 with respect to any work to be performed by
         Landlord, "Substantially Completed" or "Substantial Completion" shall
         mean that stage of the progress of such work as shall enable Tenant to
         have (i) all of the services to be provided to Tenant pursuant to
         Paragraph 15 hereof, and (ii) access to the Premises to commence
         Tenant's use of the Premises for the purpose of installing Tenant's
         improvements and alterations without interference (except to an
         immaterial degree) by reason of the completion of unfinished details of
         Landlord's work. Landlord shall complete such unfinished details of
         Landlord's work within a reasonable time and with minimal disturbance
         of Tenant. The time limits for completion of work provided for in this
         Paragraph 13 shall not be extended by reason of force majeure.

            14.   Eminent Domain.

                       (a)  Definitions. The terms used in this Paragraph
         shall have the following meanings:

                           (1) "Condemnation" means (i) the exercise by a
                  governmental or quasi-governmental agency or authority of the
                  lawful power to acquire or "take" interests in property for a
                  public purpose, whether by legal action or otherwise, or (ii)
                  a voluntary sale or transfer by Landlord to any governmental
                  or quasi-governmental agency, under threat of condemnation or
                  while proceedings for condemnation are pending.

                           (2) "Date of Taking" means the date that the
                  condemnor becomes lawfully entitled to the interest that it
                  seeks to acquire.


                                       52
<PAGE>   61
                           (3) "Award" means all consideration paid for the
                  property being acquired through condemnation.

         (b) Condemnation Of Total Premises. If the whole of the Premises are
taken by Condemnation, this Lease and the Term shall terminate on the Date of
Taking.

         (c) Condemnation Of Portion Of Premises. If any portion of the Premises
is taken by Condemnation, this Lease shall remain in effect, except that Tenant
may elect to terminate this Lease as of the Date of Taking if thirty percent
(30%) or more of the total amount of rentable square footage of the Premises is
taken. If Tenant elects to terminate this Lease, Tenant must exercise its right
to terminate pursuant to this Paragraph 14 by giving notice of such election to
Landlord within ninety (90) days after the nature and extent of the taking have
been finally determined. Tenant shall have sixty (60) days thereafter within
which to vacate the Premises. Any Base Rent or Additional Rent paid by Tenant
for periods after the effective date of termination shall be refunded promptly
by Landlord. If any portion of the Premises is taken by Condemnation and this
Lease remains in full force and effect as to the remainder of the Premises, then
on the Date of Taking, the Base Rent shall be reduced by a sum equal to the Base
Rent per square foot of the area taken as determined pursuant to Exhibit C on
the floor(s) from which space is taken, multiplied by the number of square feet
taken from such floor(s); and Tenant's Proportionate Share and other obligations
under this Lease shall be commensurately reduced so as not to include
obligations relating to that portion of the Premises as to which the Lease has
been terminated. Landlord shall diligently restore the part of the Premises not
taken (including, but without limitation, the alterations and improvements made
by Tenant) to a self-contained rental unit without cost or expense to Tenant (no
such costs to be charged as part of Occupancy Cost).

         (d) Allocation Of Award. The Award shall belong first to any mortgagee
of the Property pursuant to the terms of its mortgage. The remaining Award, if
any, shall belong to and be paid to Landlord, provided, however, that Tenant


                                       53
<PAGE>   62
shall receive from the Award the following:

                  (i) A sum attributable to the value at Date of Taking of
         Tenant's improvements or Alterations made to the Premises by Tenant at
         Tenant's sole cost and expense, as shown on Tenant's Federal income tax
         or information returns;

                  (ii) A sum attributable to the value at Date of Taking of
         Tenant's trade fixtures, equipment and other personal property included
         in the Condemnation; and

                  (iii) Any sum attributable to Tenant's loss of goodwill or
         relocation expenses, but only to the extent that compensation for such
         loss is included in the Award as a separate item of damage.

              (e) Condemnation Of Temporary Interests. If all or any portion of
the Premises is taken by exercise of the power of eminent domain for a period
that is less than the then remaining Term, then this Lease shall remain in full
force and effect. If, by reason of such acquisition or condemnation, changes or
alterations are required to be made to the Premises or to restore the Premises,
Landlord shall perform such changes or alterations at Landlord's sole cost and
expense (which cost shall not be charged as an Occupancy Cost). Tenant shall
continue to pay all Rent due hereunder, but shall be entitled to receive the
entire Award made in connection with any such temporary taking (less a portion
thereof necessary to cover the reasonable expenses of the restoration described
in the preceding sentence, which shall be retained by Landlord and applied
toward such restoration). A temporary taking extending beyond the then-remaining
Term shall be treated as a permanent taking for purposes of this Lease.

              (f) Disruption of Tenant. Landlord shall use reasonable diligence
to minimize any inconvenience or annoyance to Tenant or injury to the business
of Tenant resulting in any way from any repairs in connection with any
Condemnation.


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<PAGE>   63
                  15. Basic Services. Landlord shall provide services to the
         Premises as follows:

                      (a) Defined Terms. As used in this Paragraph 15, the
              following terms are defined as follows:

                          (i) "Basic Services" means the services that Landlord
                      is required to provide to Tenant under this Lease without
                      extra charge beyond payment of Base Rent, except as
                      otherwise provided in Paragraph 27. Landlord shall
                      generally operate the Building in a manner customary in
                      buildings comparable to the Building in the Downtown
                      Financial District unless other specific levels of service
                      are specified herein. The cost of services in excess of
                      Basic Services that are separately billed to Tenant
                      pursuant to the terms of this Lease shall not be
                      considered an Occupancy Cost pursuant to Paragraph 27 of
                      this Lease.

                          (ii) "Normal Business Hours" means from 8:00 a.m. to
                      6:00 p.m. on weekdays (other than National Holidays) and
                      8:00 a.m. to 2:00 p.m. on Saturdays.

                          (iii) "Overtime Periods" means all times other than
                      Normal Hours.                  

                          (iv) "National Holidays" means the days identified on
                      Exhibit J, attached hereto and incorporated herein by
                      reference thereto and any other day designated after the
                      date of this Lease as a holiday by the federal government.

                          (v) "HVAC System" means the Building heating,
                      ventilation and air conditioning system.

                          (vi) "Business Days" means all days, excluding
                      Saturdays, Sundays and National Holidays.              

                      (b) Passenger Elevator Service. Landlord shall cause the
              elevators in all elevator banks to be fully accessible and usable
              by Tenant during Normal Business Hours for passenger service to
              the Premises (subject to necessary

                                      55
<PAGE>   64
         shutdown for repairs). At least two passenger elevators shall be
         functioning to provide access to each floor within the Premises at all
         other times.

                  (c) Freight Elevator Service; Loading Facilities. Landlord
         shall provide one freight elevator serving the Premises on call on a
         "first come, first served" basis during Normal Business Hours and on a
         reservation, "first come, first served" basis during Overtime Periods.
         Use of the freight elevator serving the Premises shall be available to
         Tenant during Overtime Periods at the reasonable actual cost to
         Landlord of providing such service to Tenant, which Tenant shall pay,
         within thirty (30) days after receipt of Landlord's invoice accompanied
         by reasonably detailed and satisfactory supporting documentation. In
         addition, if this Lease shall be terminated as to the basement portion
         of the Premises, Landlord shall provide loading and delivery spaces in
         the basement, as provided in Paragraph 4.(c) at no cost to Tenant.

                  (d) Heating, Ventilation And Air Conditioning. During Normal
         Business Hours, Landlord shall ventilate the Premises and furnish
         heating or air conditioning when in the reasonable judgment of Landlord
         it may be required for the comfortable occupancy of the Premises or
         when required by law. Heating, air conditioning and ventilation shall
         be available to Tenant at all times outside of Normal Business Hours
         upon reasonable prior notice from Tenant to Landlord specifying the
         service needed and the floors of the Premises (if less than all) to be
         so serviced. Tenant shall pay the reasonable and actual cost of
         providing heating, ventilation or air conditioning from the Building's
         central system outside of Normal Business Hours. Tenant shall be
         responsible for keeping all exterior doors to the Premises and all
         exterior windows in the Premises closed. Tenant shall cooperate with
         Landlord and comply with such reasonable rules as Landlord may
         establish from time to time to preserve the efficiency and integrity of
         the HVAC System. Tenant shall not install or use in the Premises any
         equipment that generates heat so as to adversely affect the HVAC System
         without Landlord's prior written consent which shall not be
         unreasonably withheld or delayed; provided, however, that it shall be
         reasonable for Landlord to refuse

                                       56
<PAGE>   65
         consent unless Tenant's proposal can be modified to mitigate any
         adverse impact on the HVAC System. Throughout the Term, Landlord shall
         have free access to any and all mechanical installations of Landlord
         or Tenant, including, but not limited to air conditioning, fan,
         ventilating and machine rooms, telephone rooms and electrical closets,
         subject to the limitations contained in Paragraph 16.(b). Tenant shall
         not construct partitions or other obstructions that might unreasonably
         interfere with Landlord's free access to such installations, or
         unreasonably interfere with the moving of Landlord's equipment to or
         from the enclosures containing said installations. Tenant shall not
         tamper with, adjust, modify, touch or otherwise in any manner
         adversely affect the HVAC System.

                  (e) Electricity. Landlord shall provide electricity to the
         Premises for normal and usual lighting and office business machines
         (including, without limitation, computers, printers, facsimile
         machines, photocopying machines, electronic data processing and
         ancillary equipment) only. Tenant's use of electric current shall never
         exceed the capacity of the feeders to the Building or the risers or
         wiring installation. Tenant shall not install or use or permit the
         installation or use in the Premises, of any computer or electronic data
         processing or ancillary equipment or any other electrical apparatus
         designed to operate on electrical current in excess of 120 volts,
         without the prior written consent of Landlord which shall not be
         unreasonably withheld or delayed. Total electrical usage by Tenant in
         the Building (including, but without limitation, power for the HVAC
         System, elevators and other Building systems) shall not exceed four
         hundred twenty-seven thousand six hundred eighty-five (427,685)
         kilowatt hours per month. If Tenant exceeds the foregoing usage, it
         shall reimburse Landlord for the cost of the excess within thirty (30)
         days after receipt of an invoice therefor, submitted together with the
         power bill from the utility company that demonstrates the overage.
         Electricity provided to all retail space within the Building shall be
         separately metered, the cost of such electricity shall be charged to
         the tenants of such space and no portion thereof shall be included in
         Occupancy Costs or charged to Tenant; nor shall the electricity charged
         to tenants of the retail space be


                                       57
<PAGE>   66
      counted against or included in the monthly kilowatt hour limit stated
      above.

                  (f) Water. Landlord shall furnish hot and cold water for
      drinking, cleaning, kitchen and lavatory purposes in a manner customary in
      buildings comparable to the Building in the Downtown Financial District.
      Landlord shall also furnish water to Tenant's cooling towers and to
      Tenant's cafeteria and for all other needs of Tenant. Tenant shall pay the
      cost of all water delivered to Tenant's cooling towers and Tenant's
      cafeteria, as separately metered to Tenant within thirty (30) days after
      receipt of an invoice therefor from Landlord. All other water consumption
      charges are included in Occupancy Costs pursuant to Paragraph 27 of this
      Lease. Tenant shall keep the meters and installation equipment in good
      working order and repair at Tenant's sole cost and expense, in default of
      which Landlord may cause such meter and equipment to be replaced or
      repaired and collect the cost thereof from Tenant within thirty (30) days
      after invoice therefor.

                  (g) Tenant's Supplemental Air Conditioning System. Tenant has
      installed in a portion of the Premises a supplemental air conditioning
      system, including water towers, condenser water pipes and shafts, pumps
      and related electrical installations to provide supplemental air
      conditioning to a portion of the Premises. Tenant shall have access to all
      such equipment and facilities for the purpose of inspecting, repairing,
      replacing, operating, testing and maintaining the same during the Term,
      notwithstanding that Tenant may have terminated this Lease with respect to
      a portion of the Premises. If Tenant shall need access to an area leased
      to another tenant for any such purposes, Landlord shall use reasonable
      diligence to gain access to such area for Tenant to perform such work in
      such leased area. Tenant shall pay directly all costs of operating and
      maintaining such supplemental air conditioning system and the cost thereof
      shall be in addition to and not a part of Occupancy Costs.

                  (h)   Janitorial Service.

                        (1) Landlord shall cause all portions of the


                                       58
<PAGE>   67
            Premises (including the cafeteria) other than the storage areas,
            parking areas and kitchen for the cafeteria to be kept clean,
            provided the same are used for uses permitted hereunder, and are
            kept reasonably in order by Tenant, in accordance with the cleaning
            specifications attached hereto, marked Exhibit K, attached hereto
            and incorporated herein by reference thereto. Janitorial service
            provided by Landlord shall be provided after 5:30 p.m. on Business
            Days. Basic Service shall not include (i) janitorial service for
            additional weekday or weekend shifts, (ii) cleaning of kitchen and
            kitchen facilities for the cafeteria or the executive restroom,
            (iii) cleaning of rooms used solely for Tenant's mechanical
            equipment and fixtures, and (iv) polishing of Tenant's metalwork or
            millwork. Landlord's obligation to provide such service shall be
            suspended during any period when the Premises are untenantable or
            inaccessible and Tenant is receiving an abatement of Base Rent
            hereunder by reason of such condition.

                        (2) Any part of the Premises not required to be cleaned
            by Landlord shall be kept clean and in order by Tenant at Tenant's
            expense, by contractor's approved by Landlord (such approval not to
            be unreasonably withheld or delayed) or by Tenant's employees.
            Landlord shall remove all of Tenant's refuse and rubbish. Tenant
            shall pay to Landlord the cost of removal of any of Tenant's refuse
            and rubbish, to the extent that the same exceeds the refuse and
            rubbish customarily and normally generated by commercial office
            space use of space comparable to the Premises, fixed by the parties
            as two (2) loads per week of a fifteen (15) cubic yard container of
            compacted refuse averaging four thousand one hundred (4,100) pounds
            per load.

                        (3) Landlord shall furnish window washing service for
            the exterior side of the exterior windows at least once every three
            (3) months and for the interior side of the exterior windows at
            least once each year, the cost thereof to be an item of Occupancy
            Costs.

                        (4) Provided that Tenant has not exercised


                                       59
<PAGE>   68
         any option pursuant to Paragraph 2.(b), Tenant may elect to provide
         its own janitorial service at any time and from time to time during
         the Term; provided, however, that if Tenant elects to provide its own
         janitorial service, it shall assume such responsibility for the entire
         Building (except for retail uses in the Building that are not those
         Tenant or Tenant's sublessees) and Tenant shall not have the right to
         require Landlord again to provide such service for a period of one (1)
         year thereafter. To exercise such an election, Tenant shall notify
         Landlord in writing with a full and complete list of all of the
         persons who will be performing the work for Tenant. All such persons
         who are not employees of Tenant shall be subject to the prior written
         approval of Landlord, which said approval shall not be unreasonably
         withheld or delayed; provided, however, that it shall be reasonable
         for Landlord to condition approval upon (i) the agreement of all such
         persons to comply with reasonable rules and regulations from time to
         time established by Landlord for performance of such work, including,
         but without limitation, use of freight elevators, cleaning equipment,
         trash receptacles and the like; and (ii) compliance by such persons
         with labor contracts (if any) to which Landlord may be subject in the
         Building. Whenever and for any period when Tenant has assumed
         responsibility for performance of the janitorial service, Tenant shall
         cause its service provider to deliver trash to the Building loading
         dock, separated in the manner required to comply with all applicable
         recycling and solid waste management requirements. The refuse and
         rubbish shall then be removed in the manner provided in Paragraph
         15.(h)(2). Once Tenant has assumed responsibility for performance of
         janitorial services, it shall not have the right to relinquish
         performance of the service to have the same again assumed by Landlord
         on less than ninety (90) days prior written notice to Landlord. If
         Tenant shall be providing janitorial services for the Building,
         Landlord shall provide to Tenant a credit against monthly installments
         of Base Rent in an aggregate amount equal to the then reduction in
         Landlord's actual costs as a result of Landlord not being required to
         provide the janitorial


                                       60
<PAGE>   69
            services to the Building set forth in Exhibit K. If Tenant shall
            have made the election provided in this Lease during any part of the
            Term during which Tenant is entitled to an abatement in Base Rent,
            then instead of a rent credit, Landlord shall pay to Tenant on the
            first day of each month during such abatement period an amount equal
            to the then reduction in Landlord's actual costs as a result of
            Landlord not being required to provide the janitorial services to
            the Building set forth in Exhibit K.

                  (i) Tenant's Emergency Generator. Tenant has installed in a
      portion of the Premises an emergency generator, including related fuel
      tanks and lines and related electrical installations to provide emergency
      power to a portion of the Premises and to certain Building systems. Tenant
      shall have access to all such equipment and facilities for the purpose of
      inspecting, repairing, replacing, operating, testing and maintaining the
      same during the Term, notwithstanding that Tenant may have terminated this
      Lease with respect to a portion of the Premises. If Tenant shall need
      access to an area leased to another tenant for any of such purposes,
      Landlord shall use reasonable diligence to gain access to such area for
      Tenant to perform such work in such leased area. Tenant shall pay
      directly, and not as an item of Occupancy Cost, all costs of operating and
      maintaining such emergency generator system.

                  (j)   Service To Tenant's Equipment. Tenant shall provide
      and be responsible for servicing its own equipment and other
      improvements at Tenant's direct cost and not as an item of Occupancy
      Cost.

                  (k) Lighting And Building Systems Maintenance. Landlord shall
      maintain Building standard light fixtures, including tube and ballast
      replacement, throughout the Building (including, but without limitation,
      the Premises). Landlord shall maintain the Building systems in good
      working order sufficient to serve the Premises in a manner customary in
      buildings comparable to the Building in the Downtown Financial District.
      Should any portion of the Premises be used in excess of Normal Business
      Hours on a regular basis, Tenant shall reimburse Landlord for any


                                       61
<PAGE>   70
      additional light and Building systems maintenance costs incurred as a
      consequence of such use.

                  (l) Service Interruption. Landlord shall not be liable for
      failure to furnish utilities or services to the Premises when the failure
      results from accident, breakage, strikes, lock-outs, shortages or other
      causes beyond Landlord's reasonable control or the need to make repairs
      due to emergency or otherwise; but in case of such failure Landlord shall
      take all reasonable steps promptly to restore the interrupted utilities
      and services and to minimize the inconvenience to and disruption of
      Tenant's use or enjoyment of the Premises. Such service or utility
      interruption shall not constitute a constructive eviction of Tenant nor
      shall Tenant be entitled to abatement of Rent except as expressly
      otherwise provided in Paragraph 15.(m). Landlord shall use reasonable
      diligence to provide Tenant with prior notice of any proposed curtailment
      or cessation of a utility or service and the length of time of such
      disruption, except in the event of an emergency, in which case Landlord
      shall notify Tenant of such curtailment or cessation of utility or service
      and the length of disruption promptly after Landlord has become aware of
      same. Landlord shall not be required to perform any such repairs or
      maintenance on an overtime or premium pay basis, except that Landlord
      shall employ contractors or laborers at so-called overtime or other
      premium pay rates if necessary to make any repair required to be made by
      it hereunder to remedy any condition that (i) results in a denial of
      access to all or a material portion of the Premises, (ii) is dangerous to
      persons in the Premises, or (iii) that renders thirty thousand (30,000)
      rentable square feet or more of the Premises untenantable for more than
      one Business Day; provided, however, that nothing in this Paragraph 15.(l)
      shall operate to enlarge Landlord's obligations in any case where
      Paragraph 13 applies. In all other cases, at Tenant's request, Landlord
      shall employ contractors or laborers at so-called overtime or other
      premium pay rates and incur any other costs or expenses in making any
      repairs, maintenance, alterations, additions or improvements, and Tenant
      shall pay to Landlord, within thirty (30) days after written demand, an
      amount equal to the difference between the overtime or other premium pay
      rates and the regular pay rates for such labor


                                       62
<PAGE>   71
      and any other overtime costs or expenses incurred by Landlord.

                  (m)   Rent Abatement for Failure of Services.

                        (1) Notwithstanding any provision contained in this
            Lease to the contrary, should any cessation or curtailment of any
            utility or Building service, caused by a "Landlord Failure" (as
            hereinafter defined) materially impair Tenant's ability to conduct
            its normal business in the Premises (an "Interruption") for at least
            four (4) consecutive Business Days, then Base Rent and the
            Additional Rent payable pursuant to Paragraphs 27 and 28, for that
            portion of the Premises so affected shall be abated from the first
            Business Day following such cessation or curtailment until the
            utilities or services are fully restored. If an Interruption shall
            result from any cause emanating from outside the Property and not
            the result of a Landlord Failure, and such Interruption shall
            continue for ten (10) consecutive days, then Base Rent and the
            Additional Rent payable pursuant to Paragraphs 27 and 28 for that
            portion of the Premises so affected shall be abated from the first
            Business Day following such cessation or curtailment until the
            utilities or services are fully restored. Tenant shall not be
            entitled to abatement of Rent with respect to space within the
            Premises that remains unimpaired and/or can be used by Tenant for
            the conduct of its business by operation of Tenant's emergency
            generators and other emergency equipment, subject to Landlord's
            obligation to reimburse Tenant for the use of such generators and
            equipment as provided in Paragraph 15.(m)(4).

                        (2) A "Landlord Failure" shall mean any Interruption
            caused by Landlord's work of repair, alteration, installation,
            addition or improvement or by reason of Landlord's failure to make
            any repairs, alterations, installations, additions or improvements
            that Landlord is required to make pursuant to this Lease.

                        (3) Landlord shall be entitled to the


                                       63
<PAGE>   72
            proceeds of any rental abatement insurance payable with respect to
            any period for which Tenant may abate payments of Rent pursuant to
            this Paragraph 15.(m).

                        (4) Tenant shall use its emergency generators and other
            emergency equipment to minimize the service interruption and its
            effect on Tenant's operation. Landlord shall reimburse Tenant for
            the cost of operating such emergency generators and equipment within
            thirty (30) days after receipt of an invoice therefor from Tenant
            that itemizes the costs so incurred.

                        (5) During any period when payments of Base Rent and
            Additional Rent payable under Paragraphs 27 and 28 are abated
            hereunder in  whole or in part, Tenant shall nonetheless remain
            liable to Landlord, and shall pay when due as provided herein, any
            reimbursable items for which Tenant is liable hereunder. Nothing
            contained in this Paragraph 15.(m) shall be deemed to confer upon
            Tenant the right to withhold any payment of Base Rent or
            installment of Additional Rent payable under Paragraphs 27 and 28
            or to offset any Rent abated pursuant to this Paragraph
            15.(m) against payments of Base Rent and/or Additional Rent next
            falling due hereunder. Tenant shall recover any Rent abated under
            this Paragraph 15.(m) by invoice submitted to Landlord that shall
            be due thirty (30)  days thereafter.

                        (6) If right to abatement hereunder occurs during a
            period when Tenant is entitled to rental abatement pursuant to
            Paragraph 3.(c) or 3.(d), the abatement provided for in this
            Paragraph shall be  added to the abatement period then in effect
            under Paragraph 3.(c) or Paragraph 3.(d) so that Tenant will not
            lose the benefit of any abatement provided for in this Lease due to
            overlapping abatement periods.

            16.   Access To Premises.

                  (a) Tenant's Access. Tenant and Tenant's agents, servants,
      employees, contractors, invitees and licensees shall be entitled to access
      to the Premises 24 hours per


                                       64
<PAGE>   73
      day, 7 days per week, subject to such reasonable security measures as
      Landlord and/or Tenant may establish to protect against entry by
      unauthorized persons.

                  (b) Landlord's Access. With the prior written consent of
      Tenant in each instance, which consent shall not be unreasonably withheld
      or delayed, Landlord may erect, use, and maintain pipes, conduits and
      other elements of the Building mechanical, electrical and life safety
      systems in, through and adjacent to walls, partitions and columns of the
      Premises, provided that the work shall be concealed behind, beneath or
      within partitioning, columns, ceilings or floors or, where the same cannot
      be so concealed, completely furred at points immediately adjacent to
      partitioning, columns or ceilings and that Landlord shall repaint and
      repair all damage caused thereby, and further provided that the same do
      not interfere with Tenant's use of the Premises or decrease the usable
      area of any floor of the Premises to greater than a de minimis extent.
      Tenant shall permit Landlord, and its authorized representatives, upon
      reasonable prior notice to Tenant and with Tenant to have the right to
      have a representative accompanying Landlord and Landlord's
      representatives, to enter the Premises at all reasonable times during
      Normal Business Hours for the purpose of (i) inspecting the same, (ii)
      posting notices of non-responsibility in connection with work to be
      performed by Tenant, (iii) making any repairs to the Premises required to
      be made under this Lease, (iv) performing work that may be necessary to
      comply with any laws, ordinances or governmental rules or regulations, or
      that may be necessary to prevent waste or deterioration, and (v) showing
      the Premises to prospective mortgagees, purchasers; and during the last
      sixteen (16) months of the Term, to prospective tenants. All rights of
      Landlord hereunder shall be exercised in a reasonable manner, upon
      reasonable notice and so as not to cause unreasonable interference with
      Tenant's business, except in an emergency (in which event, Landlord shall
      use reasonable diligence to minimize the amount of time Landlord or its
      representatives remain in the Premises and to minimize interference with
      Tenant's business). So long as Landlord acts reasonably under the
      circumstances, Landlord shall not be liable to Tenant for diminution of
      rental value, inconvenience, annoyance or injury to Tenant's


                                       65
<PAGE>   74
      business arising from such entry by Landlord, nor shall Tenant be entitled
      to an abatement of Rent by reason thereof. If, during the last month of
      the Term, Tenant shall have removed all or substantially all of Tenant's
      property from the Premises, Landlord may immediately enter and alter,
      renovate and redecorate the Premises, without reduction or abatement of
      Rent, or other compensation, and such acts shall have no effect upon this
      Lease. If (i) Tenant has exercised an election to terminate this Lease as
      to ten (10) or more Floors, or (ii) Landlord is required by law to make
      such change, Landlord shall have the right to change the arrangement and
      location of public entrances and passageways, doors and doorways, and
      corridors, elevators, stairs, toilets, and other public parts of the
      Building after reasonable notice, provided that no such change impairs
      Tenant's access to the Premises or Tenant's use of the Premises for any
      Permitted Use. Landlord shall use reasonable diligence to make any such
      changes in the public portions of the Building in a manner that minimizes
      the inconvenience to and disruption of Tenant's use and enjoyment of the
      Premises.

            17. Vaults And Vault Space. No vaults, vault space or space not
within the boundary of the Property is leased hereunder, anything contained in
or indicated on any sketch, blueprint or plan, or anything contained elsewhere
in this Lease to the contrary notwithstanding. Landlord makes no representation
as to the location of the boundary of the Property. All vaults and vault space
and all space not within the boundary of the Property, that Tenant may be
permitted to use or occupy, is to be used or occupied under a revocable license,
and if any such license be revoked, or if the amount of such space be curtailed
by any federal, state or municipal authority, or public utility, Landlord shall
not be liable to Tenant, nor shall Tenant be entitled to any compensation or
diminution or abatement of Rent, nor shall such revocation or curtailment be
deemed a constructive or actual, total or partial eviction. Any fee or license
charge of municipal authorities for any such vault used or occupied by Tenant
shall be paid by Tenant.

            18.   Sprinkler System.

                  (a)   Condition: Notice: Duty To Repair.  The


                                       66
<PAGE>   75
      Building sprinkler system performs an essential life-safety function in
      the Building. Tenant shall promptly inform Landlord of any damage or
      injury to the sprinkler system, or whenever Tenant believes that all or
      any part of the sprinkler system might not be in good working order, and
      Tenant shall pay the cost of any repairs thereto made necessary by any act
      or omission of Tenant, Tenant's agents, servants, employees, contractors,
      invitees or licensees.

                  (b) Alterations. If the Insurance Services Office (or similar
      body) or any bureau, department or official of the state, county or city
      government, or any governmental authority having jurisdiction, require or
      recommend that changes, modifications, alterations, or additions be made
      in or to the sprinkler system by reason of Tenant's business, or the
      location of partitions, trade fixtures, or other contents of the Premises,
      or if any such changes, modifications, alterations, additional sprinkler
      heads or other equipment, become necessary to prevent the imposition of a
      penalty or charge against the full allowance for a sprinkler system in the
      fire insurance rate as fixed by said Office, or by any fire insurance
      company providing coverage for the Building, Tenant shall promptly make
      and supply such changes, modifications, alterations, additional sprinkler
      heads or other equipment without cost or expense to Landlord.

            19.   Bankruptcy Or Insolvency.

                  (a) Right Of Termination. If (i) at any time during the Term,
      Tenant shall file (or be named as the defendant in) a bankruptcy or
      insolvency petition under any federal or state statute, or a petition
      seeking the appointment of a receiver, trustee or conservator of all or a
      portion of Tenant's property, or if Tenant makes an assignment for the
      benefit of creditors, and (ii) any of the foregoing either (x) results in
      any such entry of an order for relief, adjudication of bankruptcy or
      insolvency or such an appointment or the issuance or entry of any other
      order having a similar effect, or (y) is not dismissed, discharged or
      dissolved within sixty (60) days after commencement thereof (or if the
      same reasonably cannot be accomplished within said sixty (60) days, if
      Tenant shall not have


                                       67
<PAGE>   76
      commenced to cure the same within such period and continued to diligently
      prosecute the cure thereof to completion within a reasonable time), then
      this Lease may be cancelled and terminated at the option of Landlord,
      exercised within a reasonable time after notice of the happening of any
      one or more of such events. Upon such cancellation, neither Tenant nor
      any person claiming through or under Tenant shall be entitled to
      possession or to remain in possession of the Premises but shall forthwith
      quit and surrender the Premises. In addition to the other rights and
      remedies granted by Paragraph 19.(b) hereof, or by virtue of any other
      provision in this Lease or any statute or rule of law, Landlord may
      retain as damages any Rent, security, deposit or moneys received by it
      from Tenant or others on behalf of Tenant. If the exercise of any right
      granted to Landlord in this Paragraph 19.(a) is limited by any provision
      of law, this Paragraph 19.(a) shall be given the maximum effect
      consistent with such overriding or conflicting law.

                  (b) Rights On Termination. If this Lease is terminated
      pursuant to Paragraph 19.(a), Landlord shall be entitled to the rights and
      remedies stated in Paragraphs 20.(b), 20.(c), 20.(d) and 21 of this Lease.

            20.   Default.

                  (a)   Events Of Default.  The occurrence of any of the
      following shall constitute a default by Tenant and shall be referred to
      herein as an "Event Of Default":

                        (1) Failure by Tenant to pay Rent required to be paid
            hereunder when due where such failure continues (i) for two (2)
            Business Days after written notice from Landlord of such default in
            the case of failure to pay Base Rent, and (ii) for five (5) Business
            Days after written notice from Landlord of such default in the case
            of all other failures to pay Rent.

                        (2) Tenant's abandonment of all or any portion of the
            Premises if such abandonment continues for twenty (20) consecutive
            days after written notice from Landlord to Tenant.


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<PAGE>   77
                        (3) Failure by Tenant to comply with any other provision
            of this Lease that constitutes an obligation of Tenant, where such
            failure continues for thirty (30) days after written notice thereof
            from Landlord; provided, however, that if such default cannot
            reasonably be cured within said thirty (30) day period, then the
            default shall not be deemed to be uncured if Tenant commences to
            cure the same within thirty (30) days after Landlord's notice and
            continues to prosecute diligently such cure to completion within a
            reasonable time thereafter.

                        (4) The occurrence of any of the events specified in
            Paragraph 19 hereof concerning bankruptcy and insolvency that
            results in cancellation and termination of this Lease.

                  (b)   Remedies.  If an Event Of Default shall occur, then
            Landlord shall have the following rights:

                        (1) The right to terminate this Lease and recover from
            Tenant as provided by California Civil Code Section 1951.2: (i) the
            worth at the time of award of the unpaid Rent and other amounts that
            had been earned at the time of termination; (ii) the worth at the
            time of award of the amount by which the unpaid Rent that 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 for the balance of the Term after
            the time of award exceeds the amount of such Rent loss that Tenant
            proves Landlord could reasonably avoid; 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 that would be likely to result therefrom in the ordinary
            course of things. The "worth at the time of award" of the amount
            referred to in clause (iii) above shall be computed by discounting
            such amount at the discount rate of the Federal Reserve Bank of San
            Francisco at the time of award plus one


                                       69
<PAGE>   78
            percent (1%). For purposes of computing unpaid Rent that would have
            accrued and become payable under the Lease pursuant to the
            provisions of this subparagraph (1), unpaid Rent shall consist of
            the sum of the unpaid Rent and all other amounts payable hereunder
            as reasonably estimated by Landlord for the balance of the Term; or

                        (2) The right to continue this Lease in effect and
            enforce all of its rights and remedies under this Lease, as provided
            by California Civil Code Section 1951.4, including the right to
            recover Rent for so long as Landlord does not terminate Tenant's
            right to possession. Acts of maintenance or preservation, efforts to
            relet the Premises, or the appointment of a receiver upon Landlord's
            initiative to protect its interest under this Lease, shall not
            constitute a termination of Tenant's right to possession, and no
            such termination shall be deemed to have taken place unless and
            until Landlord provides to Tenant written notice that it has elected
            to terminate the Lease by reason of an Event Of Default in
            accordance with this Lease.

                  (c) Late Charge. Late payment by Tenant to Landlord of the
      Rent will cause Landlord to incur costs not contemplated by this Lease,
      including, but not limited to, processing and accounting charges and
      late charges.  Accordingly, if any installment of Base Rent or Additional
      Rent payable under Paragraphs 27 and 28 is not received by Landlord or
      Landlord's designee within three (3) Business Days after the same becomes
      due, Tenant shall pay a late payment charge of one percent (1%) of such
      unpaid amounts. Acceptance of such late charge by Landlord shall not
      constitute a waiver of Tenant's default with respect to such overdue
      amount, nor prevent Landlord from exercising any of the other rights and
      remedies granted hereunder.

                  (d) Remedies Allowed By Law. Nothing contained in this
      Paragraph 20 shall limit Landlord's right to obtain as damages in any
      action against Tenant or in any bankruptcy, insolvency, receivership,
      reorganization, or dissolution proceeding, an amount equal to the maximum


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<PAGE>   79
      allowed by any statute or rules of law governing such a proceeding and in
      effect at the time when such damages are to be proved, whether or not such
      amount be greater, equal to, or less than the amounts recoverable, either
      as damages or Rent, referred to in any of the preceding provisions of this
      Paragraph.

                  (e) Tenant's Remedies: Payment Under Protest. Nothing
      contained in this Paragraph 20 shall limit the right of Tenant to make any
      payment, perform any act, or observe any provision of this Lease under
      protest; and Tenant shall be entitled to bring a legal action for damages
      and/or an equitable action for specific performance and/or declaratory
      relief if it contends that Landlord is in default hereunder or that any
      payment, performance or observation by Tenant is not required under the
      terms of this Lease; provided, however, that Tenant's damages in any such
      action shall be limited to (i) Tenant's out-of-pocket expenses in
      restoring itself to its condition immediately prior to such payment,
      performance or observation under protest; and (ii) interest on such
      expenses at the rate specified in Paragraph 3.(h) of this Lease. If Tenant
      prevails in any such action, Landlord shall pay such sums to Tenant within
      thirty (30) days after Tenant's demand therefor. Tenant shall not be
      entitled to recover from Landlord any consequential damages for business
      interruption or loss of business, however arising, and Tenant hereby
      waives and relinquishes any and all such claims.

                  21.   Self Help And Enforcement Costs.

                       (a) Landlord's Rights. Subject to Tenant's rights under
      Paragraph 20.(e), if Tenant defaults in the performance of any obligation
      on Tenant's part to be performed under this Lease, and Landlord shall
      give Tenant written notice thereof pursuant to Paragraph 20, and if
      Tenant shall fail to cure or to begin and thereafter pursue with due
      diligence the curing of such default within the applicable time as
      specified in Paragraph 20, then Landlord may perform the same for the
      account of Tenant. If Landlord pays any sum of money, or performs any act
      that requires the payment of money in connection with such performance
      for the account of Tenan or, if Landlord, after such notice, incurs


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<PAGE>   80
      any expense (excluding attorneys' fees in instituting, prosecuting or
      defending any action or proceeding, whether or not such action or
      proceeding proceeds to judgment) by reason of the occurrence of an Event
      Of Default hereunder, the sum or sums so paid by Landlord with costs and
      damages, shall constitute Additional Rent and shall be due from Tenant to
      Landlord thirty (30) days after receipt by Tenant of an invoice therefor
      presented by Landlord.

                  (b) Tenant's Rights. If within ten (10) days after written
      notice from Tenant to Landlord, Landlord shall fail to perform or observe
      any covenant or condition herein contained (or to commence within ten (10)
      days and diligently pursue performance or observance of matters reasonably
      requiring more than ten (10) days to complete), Tenant may perform the
      same for Landlord's account, and any sums paid by Tenant for such purpose
      shall be immediately paid by Landlord to Tenant with interest thereon at
      the Interest Rate within thirty (30) days after Tenant makes written
      demand for such payment until the date when Landlord pays said sum. In
      case of emergency, Tenant may proceed to perform Landlord's obligation
      immediately as necessary; provided, however, that Tenant shall diligently
      notify Landlord thereof as promptly as possible thereafter.


           22. Surrender; End Of Term. Upon the expiration or other termination
of the Term, Tenant shall quit and surrender the Premises to Landlord, broom
clean and in as good order, condition and repair as they shall exist on the
Commencement Date, ordinary wear and tear and damage by casualty and
condemnation excepted. Tenant shall remove such property of Tenant as shall be
required to be removed under the terms of this Lease and reimburse Landlord for
costs associated with such removal as required pursuant to Paragraph 6.(e). Any
such property of Tenant left in the Premises for more than ten (10) days after
the expiration or other termination of this Lease, or after recovery by
Landlord of possession of the Premises after an Event of Default shall be
deemed abandoned and disposed of by Landlord at the expense and risk of Tenant.
Tenant releases Landlord of and from any and all claims and liability for
damage to or loss of property left by Tenant upon the Premises at the
expiration or other termination of this Lease. If Tenant holds over after the


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<PAGE>   81
Term with the written consent of Landlord, such tenancy shall be from month to
month only and shall not be a renewal hereof, and Tenant shall pay the Rent and
all other charges at the same rate as herein provided, and also comply with all
of the terms, covenants, conditions, provisions and agreements of this Lease for
the time during which Tenant holds over. If Tenant holds over after the Term
without the written consent of Landlord and shall fail to vacate the Premises
after the expiration or sooner termination of this Lease, Tenant shall be liable
to Landlord for Rent at one hundred fifty percent (150%) of the monthly
installment of Base Rent as provided in this Lease for the last month of the
Term hereunder plus any Additional Rent. In addition, Tenant shall be
responsible to Landlord for all damage (including, but without limitation,
consequential damage) that Landlord shall suffer by reason thereof, and Tenant
indemnifies Landlord against all claims made by any succeeding tenant against
Landlord, resulting from delay by Landlord in delivering possession of the
Premises to such succeeding tenant where such delay is caused by Tenant's
failure timely to vacate the Premises upon expiration of the Term. If the last
day of the Term falls on a day other than a Business Day, this Lease shall
expire on the Business Day immediately preceding. Tenant's obligations under
this Paragraph shall survive the expiration or other termination of this Lease.

            23.   Quiet Enjoyment; Limitation Of Liability.

                  (a) Quiet Enjoyment. Landlord covenants that upon payment and
      performance of the obligations on Tenant's part to be paid and performed
      hereunder, Tenant shall have peaceable and quiet possession of the
      Premises for the Term, subject, however, to the terms of this Lease and of
      the ground leases, underlying leases, mortgages and deeds of trust
      identified in this Lease as having priority over this Lease. The parties
      shall execute, acknowledge, deliver and record a Short Form of Lease in
      the City and County of San Francisco immediately upon execution hereof,
      that is sufficient to give constructive notice hereof; and execute,
      acknowledge, deliver and record any amendments thereto.

                  (b) Landlord's Obligations Run With Land. The foregoing
      covenant of quiet enjoyment and all of Landlord's obligations under this
      Lease shall bind and be enforceable


                                       73
<PAGE>   82
      against Landlord and each successor to Landlord's interest, subject to the
      terms hereof, only so long as Landlord or any such successor has fee
      simple title to the Property, but not thereafter in any case where the
      successor to fee simple title has assumed and agreed to perform Landlord's
      obligations under this Lease. Each conveyance by Landlord (or any of its
      successors) of Landlord's interest in the Property prior to the expiration
      or other termination of the Term shall be subject to this Lease and shall
      relieve the grantor of any further obligations or liability as Landlord as
      of the date the grantor relinquishes fee simple title to the Property and
      ceases to collect Rent from Tenant hereunder, except that the grantor
      shall remain liable for all obligations and liability of Landlord under
      this Lease that accrue prior to the date of such conveyance, and provided
      that any such successor shall assume and agree to perform Landlord's
      obligations under this Lease. Tenant shall attorn to Landlord's successors
      in interest where such interest is acquired by sale or transfer.

                  (c)   Estoppel Certificates.

                        (1) Within ten (10) days following any written request
            that Landlord may make from time to time (but no more often than
            twice in any calendar year), Tenant shall execute and deliver to
            Landlord, and, at Landlord's request, to any prospective purchaser
            and any ground or underlying lessor or mortgagee of the Building or
            Property, a statement certifying: (i) that Tenant has accepted the
            Premises (or, if Tenant has not done so, specifying the reasons
            therefor); (ii) the expiration date of this Lease; (iii) the fact
            that this Lease is unmodified and in full force and effect (or, if
            there have been modifications, that this Lease is in full force and
            effect, as modified, and stating the dates and nature of such
            modifications); (iv) the date to which the Rent and other charges
            payable under this Lease have been paid; (v) the fact that, to the
            best of the Tenant's knowledge, there are no current defaults by
            Landlord and no defenses against the enforcement of any of Tenant's
            obligations under this Lease except as specified in Tenant's
            statement; and (vi) such other


                                       74
<PAGE>   83
            matters with respect to this Lease as may be reasonably requested by
            Landlord. Landlord and Tenant intend that any statement delivered
            pursuant to this Paragraph may be relied upon by any mortgagee,
            beneficiary, ground or underlying lessor, purchaser or prospective
            purchaser of the Building or any interest therein. If Tenant fails
            to deliver such certificate within the time specified herein, and if
            Landlord's request makes statements concerning Landlord's position
            as to the items specified in clauses (i) through (vi) above, the
            truth and accuracy of Landlord's statements shall be conclusive upon
            Tenant.

                        (2) Within ten (10) days following any written request
            that Tenant may make from time to time (but no more often than twice
            in any calendar year), Landlord shall execute and deliver to Tenant,
            and, at Tenant's request, to any prospective assignee or sublessee
            of Tenant's certifying: (i) the expiration date of this Lease; (ii)
            the fact that this Lease is unmodified and in full force and effect
            (or, if there have been modifications, that this Lease is in full
            force and effect, as modified, and stating the dates and nature of
            such modifications); (iii) the date to which the Rent and other
            charges payable under this Lease have been paid; (iv) the fact that,
            to Landlord's knowledge, there are no current defaults by Tenant and
            no defenses against the enforcement of any of Landlord's obligations
            under this Lease except as specified in Landlord's statement; and
            (v) such other matters with respect to this Lease as may be
            reasonably requested by Tenant. Landlord and Tenant intend that any
            statement delivered pursuant to this Paragraph may be relied upon by
            any assignee or sublessee of Tenant.

                        (3) A party shall not be liable to the requesting party
            or third person or entity requesting or receiving a certificate
            hereunder on account of any information therein contained,
            notwithstanding the omission for any reason to disclose correct
            and/or relevant information, but the party providing information
            shall be estopped with respect to the requesting party or such third
            person or entity from


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<PAGE>   84
            asserting any right or obligation or utilizing any defense that
            contravenes or is contrary to such information.

            24.   Amendments And Waivers.

                  (a) No Amendment Except In Writing. No amendment or purported
      amendment hereof shall have any force or effect unless it is written and
      signed by the party against which enforcement is sought. No act or thing
      done by Landlord or Landlord's agents during the Term shall be deemed an
      acceptance of surrender of the Premises, and no agreement to accept such
      surrender shall be valid unless in writing signed by Landlord. No employee
      of Landlord or of Landlord's agents shall have any power to accept the
      keys of the Premises prior to the expiration or termination of this Lease.
      The delivery of keys to any employee of Landlord or of Landlord's agents
      shall not operate as a termination of this Lease or a surrender of the
      Premises. If Tenant desires to have Landlord sublet the Premises for
      Tenant's account, Landlord or Landlord's agents are authorized to receive
      said keys for such purposes without releasing Tenant from any of the
      obligations under this Lease.

                  (b) No Waiver By Inaction. The failure of either party to seek
      redress for violation of, or to insist upon the strict performance of, any
      term, covenant, condition, provision or agreement of this Lease shall not
      constitute a waiver of the default or any subsequent default of the same
      or different nature and shall not prevent a subsequent act, that would
      have originally constituted a violation, from having all of the force and
      effect of an original violation. The receipt by Landlord of Rent with
      knowledge of a breach of any term, covenant, condition, provision or
      agreement of this Lease, shall not be deemed a waiver of such breach. The
      failure of Landlord to enforce any of the Rules and Regulations attached
      to this Lease, or hereafter adopted, against Tenant or any other tenant in
      the Building shall not be deemed a waiver of any such Rule or Regulation.
      No provision of this Lease shall be deemed to have been waived by either
      party, unless such waiver is in writing signed by the waiving party. No
      payment by Tenant or receipt by Landlord of a lesser amount than the Rent
      then due shall be


                                       76
<PAGE>   85
      deemed to be other than on account of the earliest item(s) of Rent, nor
      shall any endorsement or statement on any check or any letter accompanying
      any check or payment as Rent be deemed an accord and satisfaction, and
      Landlord may accept such check or payment without prejudice to Landlord's
      right to recover the balance of the Rent or pursue any other remedy
      available to it.

            25. Force Majeure. Each party shall be excused from performing an
obligation or undertaking provided for in this Lease (other than the obligations
of Tenant to pay Rent) so long as such performance is prevented or delayed,
retarded or hindered by acts of God, fire, earthquake, flood, explosion, action
of the elements, war, invasion, insurrection, riot, mob violence, sabotage,
inability to procure or a general shortage of labor, equipment, facilities,
materials, or supplies in the open market, failure of transportation, strike,
lockout, action of labor unions, a taking by eminent domain as herein defined,
requisition, laws, orders or government, or civil or military or naval
authorities, or any other cause whether similar or dissimilar to the foregoing,
not within the reasonable control of the party prevented, retarded, or hindered
thereby. In each such instance of inability to perform, the party prevented,
retarded, or hindered shall exercise due diligence to eliminate the cause of
such inability to perform. The inability of Landlord or Tenant to pay for goods
or services or to pay its debts shall not excuse Landlord or Tenant, as the case
may be, from performing its obligations under this Lease.

            26. Notices. Any bill, statement, notice, request, consent, demand,
approval or other communication that may or shall be given under the terms of
this Lease shall be in writing and either shall be delivered (i) by hand with
receipt acknowledged, or (ii) sent by United States registered or certified
mail, first class postage prepaid, return receipt requested, or (iii) sent by a
nationally recognized overnight courier service, as follows:


                                       77
<PAGE>   86
            To Tenant:              Charles Schwab & Co., Inc.
                                    101 Montgomery Street
                                    San Francisco, California  94104
                                    Attn:  Senior Vice President
                                           Corporate Services

            With a copy of
            notices of default
            only by
            certified mail to:      Charles Schwab & Co., Inc.,
                                    P.O. Box 881566
                                    San Francisco, California 94188-1566
                                    ATTN:  Corporate Real Estate Lease
                                           Administration


                                                and

            With a copy of
            notices of default
            to:                     Corbin Silverman & Sanseverino
                                    805 Third Avenue
                                    11th Floor
                                    New York, New York 10022
                                    ATTN: Raymond A. Sanseverino, Esq.

            To Landlord:            Gerald K. Cahill
                                    Calfox, Inc.
                                    425 California Street, Ste 2300
                                    San Francisco, CA 94104

            with a copy of
            notices of default
            only to:                William R. Cahill
                                    Cahill Montgomery Corp.
                                    425 California Street, Ste 2300
                                    San Francisco, CA 94104

Notice shall be deemed given upon delivery, if delivered by hand; or upon
receipt if by mail (or in the case of failure to deliver by reason of changed
address of which no notice was given or a refusal to accept delivery, as of the
date of such failure as indicated on the return receipt or by notice of the
postal


                                       78
<PAGE>   87
service), or one Business Day following delivery to a nationally
recognized overnight courier service marked for next day delivery. Any and all
notices to be given to either party shall be given to that party only by
delivery or mailing to the specific individuals above designated, until further
designation, and either party may, at any time change the designation or the
address for notice or add one additional person to receive a copy by delivering
or mailing, as aforesaid, a notice stating the changes.

            27.   Occupancy Costs: Tenant's Obligation To Pay Increases After
The Year 2000.

                  (a) Occupancy Cost Excess. Commencing on January 1, 2001 and
      for the remainder of the Term, Tenant shall pay, in equal monthly
      installments, Tenant's Proportionate Share of the amount by which
      Occupancy Costs for each Operating Year that falls (in whole or in part)
      during the Term (prorated for any partial calendar year at the beginning
      and at the end of the Term) exceed Occupancy Costs for the Base Operating
      Year (the "Occupancy Cost Excess"). The term "Base Operating Year" shall
      mean calendar year 2000. The term "Operating Year" shall mean each
      calendar year after the Base Operating Year.

                  (b) Occupancy Costs Defined. Occupancy Costs shall mean all
      reasonable and actual expenses and costs (but not costs that are
      separately billed to and paid by specific tenants), net of refunds and
      reimbursements received, of every kind and nature that Landlord shall pay
      or incur (including, without limitation, such reasonable and actual costs
      incurred by managers and agents that are reimbursed by Landlord) because
      of or with respect to the management, maintenance, preservation and
      operation of the Building and Property (as allocated in accordance with
      generally accepted accounting principles, consistently applied)("GAAP")
      except as otherwise provided in Paragraph 27.(g)(3)), including, but
      not limited to the following:

                        (1) Wages, salaries and reimbursable expenses and
            benefits of all on-site and off-site personnel (not above the grade
            of Building manager) engaged in the operation, maintenance and
            security of


                                       79
<PAGE>   88
            the Property, and the direct costs of training such employees;
            provided, however, that the amounts included in Occupancy Costs
            shall only be such amounts directly and fairly allocable to services
            rendered by the employees and personnel for the benefit of the
            Property (with respect to employees who perform work on other
            projects as well as the Property).

                        (2) All supplies, materials and rental equipment used in
            the operation and maintenance of the Building and Property,
            including, without limitation, temporary lobby displays and events,
            the cost of erecting, maintaining and dismantling art work and
            similar decorative displays customary in buildings comparable to the
            Building in the Downtown Financial District.

                        (3) Utilities, including, without limitation, water,
            power, gas, sewer, waste disposal, communication and cable T.V.
            facilities, heating, cooling, lighting and ventilation of the
            Building and Property.

                        (4) All payments under maintenance, janitorial and
            service agreements for the Building and Property 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.

                        (5) A management fee equal to two and one quarter
            percent (2.25%) of all Rent and other rental income (excluding such
            management fee) derived from the Property; provided, however, that
            the management fee shall be increased to three percent (3%) from and
            after the effective date of partial termination of this Lease
            resulting from exercise by Tenant of any option pursuant to
            Paragraph 2.(b), hereof.

                        (6) Legal fees and costs, and fees for accounting
            services for the management and operation of the Building and
            Property, including, but not limited to, the costs of audits by
            certified public accountants


                                       80
<PAGE>   89
            of Occupancy Cost records.

                        (7) All insurance premiums and related costs incurred to
            obtain the insurance Landlord is required or allowed to carry under
            this Lease, including but not limited to the premiums and cost of
            fire, boiler and machinery, casualty, liability, rental abatement
            and earthquake insurance applicable to the Building and Property and
            Landlord's personal property used in connection therewith (and all
            "deductible" amounts paid due to loss, up to the amount permitted
            under Paragraph 12.(f) to be carried as a deductible and except as
            otherwise provided below with respect to earthquake insurance).
            Should Landlord incur any loss or cost of repair caused by
            earthquake damage that is not covered by earthquake insurance or is
            part of the deductible amount of earthquake insurance, such loss or
            cost of repair shall not be included in Occupancy Cost. In the case
            where the cost of insurance coverage that is permitted to be
            included under this Paragraph 27 is carried by Landlord in an
            Operating Year, but not during the Base Year, the cost of such
            insurance coverage shall be added to the Occupancy Costs for the
            Base Year for the purpose of calculating Occupancy Cost Excess for
            that Operating Year. In the case where the cost of insurance
            coverage that is permitted to be included under this Paragraph 27 is
            carried by Landlord in the Base Year, but not during an Operating
            Year, the cost of such insurance coverage shall be deducted from the
            Occupancy Costs for the Base Year for the purpose of calculating
            Occupancy Cost Excess for that Operating Year. In the case where the
            insurance coverage in any Operating Year that is permitted to be
            included under this Paragraph 27 is not reasonably consistent (as to
            the risks covered or the amount of coverage) with the insurance
            coverage carried by Landlord in the Base Year, the cost of such
            insurance for the Base Year shall be adjusted to reflect the cost
            which Landlord would have incurred had such coverage been reasonably
            consistent.

                        (8) Repairs, replacements, general maintenance and
            security costs (to the extent of


                                       81
<PAGE>   90
            security service provided by Landlord) incurred by Landlord in
            providing Basic Services.

                        (9) The cost incurred by Landlord to maintain and
            operate the loading and delivery area.

                        (10) Amortization (together with reasonable financing
            charges) of capital improvements made to the Property after the
            Commencement Date to the extent permitted by Paragraph 27.(g).
            Notwithstanding the foregoing, however, Landlord may treat as
            expenses (chargeable in the year incurred) and not as capital costs
            items that would otherwise be categorized as capital costs but that
            are, in the aggregate, less than two percent (2%) of Estimated
            Occupancy Costs for the year in question, subject to the limitations
            contained in Paragraph 27.(g)(3).

                  (c) Occupancy Cost Exclusions. Notwithstanding anything to the
      contrary contained in Paragraph 27.(b), Occupancy Costs shall not include
      (or have deducted from them, as the case may be), expenses for: (i)
      depreciation and amortization of the Building; (ii) the cost of the
      design, construction, renovation, redecorating or other preparation of
      tenant improvements for Tenant or other tenants or prospective tenants of
      the Building (including design fees for space planning and all third party
      fees and charges, permit, license and inspection fees) and allowances
      therefor; (iii) real estate brokerage and leasing commissions and fees;
      (iv) advertising and promotional expenses; (v) expenditures that would be
      required to be treated as capital improvements and replacements under
      GAAP except to the extent otherwise specifically provided in Paragraph
      27.(g); (vi) wages, salaries, reimbursable expenses, benefits and other
      compensation of (1) any personnel above the grade of Building manager,
      and (2) Landlord's general overhead expenses not related to the Building
      and any management fees in excess of the amounts expressly permitted
      hereunder; (vii) legal, accounting or other professional fees incurred in
      connection with negotiating, preparing or enforcing leases or lease
      terms, amendments of leases, terminations of leases or extensions of
      leases, proceedings against any tenant (including Tenant) relating
      to the


                                       82
<PAGE>   91
      collection of rent or other sums due to Landlord from such tenant or any
      other disputes with any tenant (including Tenant), legal costs incurred in
      connection with the development, construction, alteration or improvement
      of the Building or the Property, or legal, auditing, accounting or other
      professional fees not allocated to the operation or management of the
      Property; (viii) any rental under any ground or underlying lease; (ix)
      interest, including interest on debt, debt service or amortization
      payments on any mortgage encumbering the Building or the Property and any
      financing and refinancing costs with respect thereto; (x) repairs or
      improvements paid for from the proceeds of insurance, or paid for directly
      by Tenant, any other tenants of the Building or any third party, or
      repairs or improvements made for the benefit solely of tenants of the
      Building other than Tenant; (xi) the cost of any utilities (including,
      without limitation, water, electricity, power, gas, sewer, waste disposal,
      communication and cable T.V. facilities, heating, cooling, lighting and
      ventilation) for which Landlord is entitled to be reimbursed by Tenant
      pursuant to Paragraph 15 of this Lease or by any other tenant; (xii) any
      expense for which Landlord is entitled to be reimbursed by any tenant
      (including Tenant) as an additional charge in excess of Base Rent and such
      tenant's pro rata share of Occupancy Costs, or by any third party; (xiii)
      any fee payable to any operator of the garage facilities located in the
      Building; (xiv) any loss and the costs of repairs or replacements incurred
      by reason of fire or other casualty or cause covered or required by this
      Lease to be covered by casualty or other insurance (with the exception of
      deductible payments that shall be so included in Occupancy Costs to the
      extent permitted to be so included in this Lease) or by the exercise of
      the right of eminent domain; (xv) overhead and profit increment paid to
      Affiliates of Landlord for services on or to the Building or the Property
      or for supplies or other materials, to the extent that the costs of the
      services, supplies, or materials exceed the competitive costs of the
      services, supplies, or materials were they not provided by an Affiliate of
      Landlord, unless the cost of the supplies, materials or services were
      approved by Tenant in a particular instance; (xvi) costs incurred to test,
      survey, clean up, contain, encapsulate, abate, remove, dispose of,


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      or otherwise remedy hazardous wastes or asbestos-containing materials on,
      in, at, under or from the Building or the Property; (xvii) amounts
      received by Landlord through proceeds of insurance to the extent they are
      compensation for sums previously included in Occupancy Costs; (xviii) Tax
      Costs; (xix) Landlord's income taxes and franchise, gains or estate taxes
      imposed upon the income of Landlord; (xx) real estate association dues,
      unless specifically approved by Tenant in a particular instance; (xxi)
      costs with respect to the creation of a mortgage or a superior lease or in
      connection with a sale of the Building or the Property including, without
      limitation, survey, legal fees and disbursements, transfer stamps and
      appraisals, engineering and inspection reports associated with the
      contemplated sale; (xxii) costs incurred with respect to any specialty use
      in the Building that is operated by Landlord and is not available for use
      by Tenant or its employees; (xxiii) payment of damages, attorneys' fees
      and any other amounts to any person seeking recovery for negligence or
      other torts (including any tort claims relating to asbestos); (xxiv) the
      cost of any repairs, alterations, additions, improvements or replacements
      made to rectify, remedy or correct any structural or other defect in the
      original design, construction materials, installations or workmanship of
      the Property as of the time of such construction or installation; (xxv)
      damages and repairs necessitated by the negligence or willful misconduct
      of Landlord or Landlord's employees, contractors or agents; (xxvi) costs
      incurred due to violations by Landlord, or by any tenant (including
      Tenant) in the Building, of the terms and conditions of any lease, and
      penalties or interest for late payment of any obligation of Landlord
      (unless such penalties or interest result from Tenant's late payment of
      Rent); (xxvii) Landlord's general corporate overhead, including without
      limitation, the cost of Landlord's general corporate accounting and the
      cost of preparation of Landlord's income tax or information returns;
      (xxviii) any tenant improvement allowance given to any tenant (including
      Tenant) whether given by contribution or credit against Rent or otherwise,
      and any abatements or credits to Base Rent or Additional Rent, including
      the Initial Abatement and the Refurbishment Abatement; (xxix) the costs
      incurred in performing work or furnishing services for any tenant
      (including Tenant) in the


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      Building, whether at such tenant's or Landlord's expense, to the extent
      that such work or service is in excess of any work or service that
      Landlord is obligated to furnish to Tenant; (xxx) any rental concessions
      to, or lease buy-outs of, Tenant or any other tenant in the Building;
      (xxxi) any costs expressly to be excluded as Occupancy Costs under any
      other provision of this Lease; (xxxii) that portion of any insurance
      premiums for insurance with respect to which Landlord does not maintain at
      least the minimum deductible required to be maintained under this Lease;
      (xxxiii) if Tenant is the sole tenant in the Building, the cost of any
      temporary works of art and any other lobby or common area decoration;
      (xxxiv) the costs of any commercial concessions operated by Landlord;
      (xxxv) the costs of providing 4705 KWH per month representing unsubmetered
      electrical power provided as a Basic Service to the 29th floor, basement
      and roof premises (said cost to be adjusted from time to time to reflect
      actual power consumption in such space); (xxxvi) the cost of permanent
      works of art; and (xxxvii) any loss due to uninsured casualty except for
      losses that fall within the deductible provisions of such insurance to the
      extent permitted in this Lease.

                        Occupancy Costs shall be net only and for that purpose
      shall be deemed reduced by the amount of all reimbursements, recoupments,
      payments, discounts, credits, reductions, allowances or the like actually
      received by Landlord in connection with Occupancy Costs; provided,
      however, that Landlord may include in Occupancy Costs the reasonable and
      actual costs and expenses, if any, incurred by Landlord in obtaining such
      reimbursements, recoupments, payments, discounts, credits, reductions,
      allowances or the like.

                  (d) Building Occupancy Adjustment. Notwithstanding any other
      provision herein to the contrary, if the Building is less than ninety-five
      percent (95%) occupied on a time-weighted average during any calendar year
      of the Term (including the Base Operating Year), an adjustment shall be
      made in computing Occupancy Costs for such calendar year (including the
      Base Operating Year) so that Occupancy Costs shall be adjusted to the
      amount that would normally be expected to be incurred had the Building


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<PAGE>   94
      been ninety-five percent (95%) occupied on a time-weighted average
      throughout such calendar year, without adjustment for any vacancy or
      reduction caused by or attributable to alteration work being performed by
      Tenant.

                  (e) Payment Of Estimated Occupancy Cost Excess. Prior to
      December 1 of each calendar year during the Term commencing on December
      1, 2000, Landlord shall deliver to Tenant a reasonable written estimate
      of the amount (if any) by which the Occupancy Costs for the following
      year will  exceed the Occupancy Costs for the year Base Operating Year,
      (the "Estimated Occupancy Cost Excess") as adjusted pursuant to Paragraph
      27.(d). Such computation shall be broken down into reasonable detail as
      shown on the chart of accounts attached hereto as Exhibit L and shall
      state the assumptions and facts upon which the computation was based.
      Landlord's failure to provide such notice shall not constitute a waiver
      of the right to require Tenant to pay any Estimated Occupancy Cost Excess
      as provided herein. As Additional Rent payable hereunder, Tenant shall
      pay with each monthly installment of Base Rent one-twelfth (1/12th) of
      Tenant's Proportionate Share of the Estimated Occupancy Cost Excess for
      that year (prorated for any partial calendar year at the beginning and at
      the end of the Term). "Tenant's Proportionate Share" shall mean the ratio
      of the square footage of rentable area contained in the Premises at the
      time of the calculation (excluding all Non-Occupancy Space) to the total
      square footage of rentable area in the Building (excluding all
      Non-Occupancy Space). As of the date of this Lease, Tenant's
      Proportionate Share is ninety-nine and fifty-nine one hundredths percent
      (99.59%). If the rentable area contained in the Premises changes,
      Tenant's Proportionate Share shall be proportionately adjusted, provided,
      however, that as to the calendar year in which such change occurs,
      Tenant's Proportionate Share shall be determined on the basis of the
      number of days during such calendar year during which each
      percentage is in  effect.

                  (f) Computation Of Actual Operating Cost Excess: Adjustment
      For Variation Between Estimated And Actual Occupancy Costs. Within one
      hundred eighty (180) days after the end of each calendar year (or portion
      thereof) for which Tenant is required to pay the Estimated Occupancy Cost
      Excess, Landlord shall compute the actual Occupancy Cost


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<PAGE>   95
      Excess for the prior calendar year and shall give notice thereof (the
      "Occupancy Cost Statement") to Tenant. Landlord's failure to give the
      Occupancy Cost Statement within one hundred eighty (180) days after the
      end of any calendar year shall not release either party from the
      obligation to make the adjustment provided for in this Paragraph 27.(f),
      except as otherwise provided in Paragraph 27.(i). Landlord shall prepare
      its Occupancy Cost Statement in accordance with GAAP, broken down into
      the categories shown on Exhibit L. Each Occupancy Cost Statement shall
      contain the following statement and be executed by the person in charge
      of Landlord's real estate accounting function and an executive officer or
      partner of Landlord and acknowledged: "This Occupancy Cost Statement is
      correct and fairly states the Occupancy Costs for the years shown and was
      prepared in accordance with the terms of the Lease between Landlord and
      Tenant." Within thirty (30) days after receipt of such notice, Tenant
      shall pay any deficiency in Tenant's Proportionate Share of the actual
      Occupancy Cost Excess from the Estimated Occupancy Cost Excess for the
      prior calendar year (prorated for any partial calendar year at the
      beginning and at the end of the Term). If Tenant has made an overpayment,
      Landlord shall refund the amount of the overpayment to Tenant within
      thirty (30) days thereafter. Any adjustment required of Landlord or
      Tenant that exceeds two percent (2%) of the Estimated Occupancy Costs for
      the year in question shall bear interest at the Interest Rate from the
      date of the Occupancy Cost Statement until the date of payment.

                  (g)   Capital Improvements.

                        (1) If, after the Commencement Date of this Lease,
            Landlord makes any capital expenditure or purchases any item of
            capital equipment that is installed in the Building (i) to comply
            with Requirements enacted and effective after the Commencement Date,
            or (ii) for the purpose of reducing or minimizing the increases in
            expenses that would otherwise be included in Occupancy Costs, then
            the costs of such capital equipment or capital expenditure shall be
            included in Occupancy Costs for the Operating


                                       87
<PAGE>   96
            Year in which the costs are incurred and every subsequent Operating
            Year, amortized on a straight-line basis over the useful life (as
            determined in accordance with GAAP), with interest at the rate of
            eight percent (8%) per annum, (except that Landlord may charge as
            current Occupancy Costs capital costs within the limits specified
            in the second sentence of Paragraph 27.(b)(10)). If Landlord leases
            any item of capital equipment to bring about savings or reductions
            in expenses that would otherwise be included in Occupancy Costs,
            then the rentals and other costs paid with respect to such leasing
            shall be included in Occupancy Costs for the Operating Years in
            which such rentals and costs are incurred.

                        (2) The maximum amount that may be included in Occupancy
            Costs in any Operating Year for any capital equipment or capital
            expenditure incurred to bring about savings in Occupancy Costs shall
            be the amount of savings in Occupancy Costs realized by the
            installation of such capital equipment or capital expenditure,
            either in direct reductions or by minimizing cost increases.

                        (3) Notwithstanding any other provision of this Lease
            (but subject to the aggregate limitation contained in Paragraph 27)
            items of repair and/or replacement that do not exceed Forty Thousand
            Dollars ($40,000) in cost per item during the initial Term and Sixty
            Thousand Dollars ($60,000) in cost per item after commencement of
            any Extended Term shall be treated as an expense, with the cost
            thereof included in Occupancy Cost in the year when the cost is
            incurred, whether or not GAAP or other accounting reference might
            otherwise require that some or all of such costs be considered
            "capital" in nature.

                  (h) Tenant's Audit Rights. Tenant and its representatives
      shall have the right, upon reasonable notice to Landlord, given within two
      (2) years after Tenant's receipt of an Occupancy Cost Statement, to
      examine Landlord's books and records pertaining to the Occupancy Costs
      reflected in such Statement (and to make copies


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      thereof as required) at the Landlord's management office in San Francisco,
      California. In addition, Tenant shall have the right to examine in the
      same manner Landlord's books and records with respect to the Base Year by
      written notice given within two (2) years after Tenant's receipt of the
      Occupancy Cost Statement for the first Operating Year after the Base Year.
      Any such examination shall be conducted during Normal Business Hours and
      at Tenant's sole cost and expense, except as otherwise provided herein. In
      making such examination, Tenant shall (and shall cause its representatives
      and employees conducting the examination to agree in writing to) keep
      confidential any and all information contained in such books and records,
      save and except that Tenant may disclose such information (i) to a trier
      of fact if any dispute between Landlord and Tenant pertaining to the
      Statement in question cannot be resolved by agreement between the parties;
      provided, however, that Tenant shall not oppose such protective or other
      orders in the proceeding as may be reasonably required to preserve the
      confidentiality of such information, (ii) as may be required by law, and
      (iii) to Tenant's executives, agents and representatives. Landlord shall
      maintain all of its books and records pertaining to Occupancy Costs
      reasonably necessary for Tenant to substantiate Landlord's Occupancy Costs
      Statements and all Additional Rent paid by Tenant pursuant to this Lease,
      for each calendar year of the Term or portion thereof, for a period of
      three (3) years following the end of each such year. Landlord shall
      maintain such records on a current basis, in a manner consistent with the
      provisions of this Lease. Any investigation of Occupancy Costs conducted
      by Tenant shall be conducted for it by its employees or by any reputable
      accounting firm or a person having a certificate in facilities management
      under a compensation arrangement that does not provide for contingent
      payments based upon the amount of savings that the audit procures. If
      Tenant does not give notice of intent to examine or dispute Occupancy
      Costs within such two (2) year period, then the Statement as furnished by
      Landlord shall be conclusive and binding upon Tenant. Tenant shall provide
      to Landlord a true and correct copy of the audit report prepared by
      Tenant's accountant with respect to each such examination of an Occupancy
      Cost Statement. If Tenant's examination establishes that either


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<PAGE>   98
      party owes an adjustment based upon an overstatement or understatement of
      Occupancy Costs, such adjustment shall be made by payment within thirty
      (30) days after completion of the audit report. If it is established that
      an Occupancy Cost Statement overstated Occupancy Costs by three percent
      (3%) or more, then Landlord shall reimburse Tenant for the reasonable cost
      of such audit.

                  (i) Failure to Deliver Statements. Notwithstanding anything to
      the contrary contained herein, if Landlord shall have failed to render an
      Occupancy Cost Statement with respect to any Operating Year within one
      year after the end of such calendar year, Tenant shall not be obligated to
      make any payment shown to be due with respect to such calendar year on any
      Occupancy Cost Statement thereafter delivered.

                  (j) Single Recovery. Landlord shall not collect as Occupancy
      Costs an amount that would reimburse Landlord for a sum in excess of 100%
      of Occupancy Costs in any calendar year and Landlord shall not recover any
      Occupancy Costs more than once.

                  (k)  Tenant's Janitorial Service.  If Tenant elects to
      provide its own janitorial service, the provisions of Paragraph 15.(h)(4)
      shall apply with respect to that service.

            28.   Tenant's Payment Of Increases In "Tax Costs."

                  (a) Payment Obligation. Commencing on January 1, 2001, and for
      the remainder of the Term, Tenant shall pay to Landlord Tenant's
      Proportionate Share of the amount (the "Excess Tax Costs") by which the
      "Tax Costs" (as hereinafter defined) for each Tax Year that falls (in
      whole or in part) during the Term (prorated for any partial calendar year
      at the beginning and at the end of the Term) exceed Tax Costs for the Base
      Tax Year (the "Base Tax Costs"). "Base Tax Year" shall mean the calendar
      year 2000. The term "Tax Year" shall mean each calendar year after the
      Base Tax Year. Tax Costs for the Base Tax Year shall be determined as
      follows:


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<PAGE>   99
                        (1) Items Of Tax Costs Based Upon Assessment Roll. All
            items of Tax Costs that are determined by multiplying a tax rate
            times the assessed valuation of the Building, Property, any part
            thereof or interest therein shall be determined by multiplying the
            tax rate for the year 2000 times an assessed valuation equal to the
            assessed valuation of the Building, Property or part or interest in
            question for the assessment date of March 1, 1995, escalated at the
            rate of two percent (2%) per year until the year 2000; and

                        (2) Items Of Tax Costs Not Based Upon Assessment Roll.
            All other items of Tax Costs for the Base Tax Year shall be the
            actual amounts that become due (and must be paid to avoid penalty)
            during said year as appropriately prorated.

                  (b) "Tax Costs" Defined. "Tax Costs" shall mean 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,
      gross receipts taxes, assessments, charges, fees and levies, annual or
      periodic license or use fees, including, but not limited to, all of the
      following: (i) all real estate taxes and assessments, and all other taxes
      relating to, or levied, assessed or imposed on, the Building or Property,
      or any portion thereof, or interest therein; (ii) 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 and used in connection
      with the Building or Property, or levied upon, measured by or attributable
      to the cost or value of any of the foregoing, or attributable to
      Landlord's equipment and fixtures located in, on and used in connection
      with the Property or levied upon, measured by or reasonably attributable
      to the cost or value of any of the foregoing; (iii) all other taxes,
      assessments, charges, levies, fees, or penalties, general and special,
      ordinary and extraordinary, unforeseen as well as foreseen, of any kind
      and nature imposed, levied, assessed, charged or collected


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<PAGE>   100
      by any governmental authority or other entity either directly or
      indirectly (A) for public improvements, user, maintenance or development
      fees, transit, housing, employment, police, fire, open space, streets,
      sidewalks, utilities, job training, child care or other governmental
      services or benefits, (B) upon or with respect to the development,
      possession, leasing, operation, management, maintenance, alteration,
      repair, use or occupancy of, or business operations in, the Building or
      Property, (C) upon, against or measured by the area of the Building or
      Property, 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 (D) for environmental matters 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 Building or Property, or any portion thereof or interest therein,
      as a source of pollution or storm water runoff; and (iv) any tax or
      excise, however described, imposed in substitution partially or totally
      for any or all of the foregoing taxes, assessments, charges or fees. If by
      law any item constituting Tax Costs may be paid in installments at the
      option of the taxpayer, then Landlord shall include within Tax Costs only
      those installments (including interest, if any) that would become due by
      exercise of such option. Tax Costs shall not include (i) franchise,
      transfer, capital stock, inheritance or estate taxes imposed upon or
      assessed against the Property, or any part thereof or interest therein, or
      (ii) taxes computed upon the basis of the net income derived from the
      Building or Property by Landlord or the owner of any interest therein,
      (iii) any tax on Tenant's personal property or similar taxes paid by other
      tenants on their personal property or other such taxes (under similar
      provisions in their leases or otherwise), (iv) any penalties, fines,
      interest or charges attributable to the late payment of any Tax Costs by
      Landlord (unless caused by Tenant's failure to make any payment required
      hereunder), and (v) real estate taxes attributable to any improvements the
      cost of which is not includible in Occupancy Costs under this Lease in
      whole or in part.

                  (c) Payment. Tenant shall pay any Excess Tax Costs for any Tax
      Year of the Term after January 1, 2001


                                       92
<PAGE>   101
      within thirty (30) days after receipt of an invoice therefor from Landlord
      submitted together with tax bills supporting Landlord's computation of the
      amount due. Tenant's obligation for such payment shall be in addition to
      its obligation for payment of Occupancy Costs as provided in Paragraph 27.

                  (d)   Tax Reduction Proceedings.

                        (1) Prior to the date that is thirty (30) days prior to
            the last day of each year when the assessed valuation of the
            Property or any other item of Tax Costs may be contested by the
            appropriate administrative or legal proceedings, Landlord shall
            notify Tenant whether Landlord will contest the assessed valuation
            of the Property or any other item of Tax Costs. If Landlord shall
            have notified Tenant that Landlord will contest the same, Landlord
            shall do so. If Landlord shall have notified Tenant that Landlord
            will not contest the assessed valuation or other items of Tax Costs,
            or if Landlord shall have failed to notify Tenant of Landlord's
            intentions with respect to any such contest, then upon written
            notice to Landlord, and provided that Tenant then leases not less
            than sixty percent (60%) of the rentable square feet in the
            Building, Tenant shall have the right to require that Landlord
            contest the amount or validity of the assessed valuation and/or
            items of Tax Costs designated in Tenant's notice. Landlord shall
            diligently prosecute any such contest as requested by Tenant. Any
            such proceeding shall be undertaken by counsel or other professional
            consultant selected by Landlord and reasonably approved by Tenant;
            and Tenant shall cooperate with Landlord in connection with such
            proceedings. Landlord agrees that it will promptly upon receipt (but
            in no event later than ten (10) days after receipt) furnish Tenant
            with copies of all tax bills and other relevant notices and
            supporting documentation so that Tenant can determine whether it
            desires to have Landlord undertake a contest that Landlord has not
            otherwise determined to undertake.

                        (2) If Landlord shall have contested the


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<PAGE>   102
            amount or validity of any Tax Costs and shall not have obtained a
            determination in Landlord's favor or shall have obtained one not
            reasonably satisfactory to Tenant, Landlord shall appeal from such
            determination (if same shall be appealable) or give Tenant the right
            to appeal from such determination, at no cost to Landlord, unless
            Landlord shall, at the commencement of such contest or proceeding
            and continuously during such contest or proceeding, have given
            Tenant the opportunity to participate in decisions regarding the
            contest or proceeding and Tenant shall have rejected such
            opportunity. Landlord shall cooperate with Tenant (at no cost to
            Landlord) in prosecuting any appeal and shall furnish to Tenant
            copies of tax bills and other documentation, all as provided in the
            immediately preceding subparagraph. Landlord and Tenant shall notify
            the other of the determination of any administrative or legal
            proceeding instituted by Landlord or Tenant, as the case may be,
            contesting the amount or validity of Tax Costs within five (5)
            Business Days after such determination and whether it will appeal.

                        (3) Neither Landlord nor Tenant shall, without the prior
            approval of the other, which approval shall not be unreasonably
            withheld or delayed, enter into, or agree to any settlement,
            compromise or disposition of any contest, or discontinue or withdraw
            from any contest, or accept any refund, adjustment or credit with
            respect to any Tax Costs that either Landlord or Tenant shall have
            contested; provided, however, that for Tenant to have the benefit of
            this provision, Tenant must have a representative present at all
            assessment and appeal hearings to participate in settlement or
            compromise discussions as appropriate, reasonable notice of which
            shall have been given by Landlord to Tenant.


                                       94
<PAGE>   103
                        (4) If the Tax Costs for a Tax Year for which Tenant
            shall have paid Tenant's Proportionate Share of Excess Tax Costs
            pursuant to this Paragraph shall be reduced, whether as the result
            of protest of any tentative assessment, or by means of agreement, or
            as the result of legal proceedings or otherwise, Tenant's
            Proportionate Share of Excess Tax Costs becoming due in said Tax
            Year pursuant to this Paragraph shall be determined on the basis of
            said reduced Tax Costs. If Tenant shall have paid Tenant's
            Proportionate Share of Excess Tax Costs for such year prior to any
            said reduction, Landlord shall refund to Tenant any excess amount
            thus paid as reflected by said reduced Tax Costs, less Tenant's
            Proportionate Share of any cost, expense or fees (including experts'
            and attorneys' fees) incurred by Landlord in obtaining said
            reduction in Tax Costs, provided that the same shall be customarily
            acceptable costs, expenses and fees for buildings comparable to the
            Building in the Downtown Financial District. If said reduction in
            Tax Costs shall occur prior to Tenant's payment of Tenant's
            Proportionate Share of Excess Tax Costs for such Tax Year, Tenant
            shall pay Tenant's Proportionate Share of any cost, expenses or fees
            (including experts' and attorneys' fees) incurred by Landlord in
            obtaining said Tax reduction, provided that the same shall be
            customarily acceptable costs, expenses and fees for buildings
            comparable to the Building in the Downtown Financial District.

                        (5) If Tax Costs shall be reduced by reason of
            appropriate administrative or legal proceedings instituted by Tenant
            after payment by Tenant of Tenant's Proportionate Share of Excess
            Tax Costs that included Tax Costs for the applicable Tax Year, all
            costs, expenses and fees (including experts' and attorneys' fees)
            incurred by Tenant in obtaining said adjustment in Tax Costs,
            (provided, however, that the same shall be customarily acceptable
            costs, expenses and fees for buildings comparable to the Building in
            the Downtown Financial District) shall first be deducted from the
            amount of any refund and paid to


                                       95
<PAGE>   104
            Tenant as reimbursement for such costs and Tenant shall receive
            Tenant's Proportionate Share of such refund and the balance shall be
            paid to Landlord. If Tax Costs or the assessed valuation of the
            Property shall be reduced as a result of appropriate administrative
            or legal proceedings instituted by Tenant prior to the payment of
            Tenant's Proportionate Share of Excess Tax Costs that include Taxes
            for the applicable year, Landlord shall pay to Tenant all costs,
            expenses and fees (including experts' and attorneys' fees) incurred
            by Tenant in obtaining said reduction in Tax Costs (provided,
            however, that the same shall be customarily acceptable costs,
            expenses and fees for buildings comparable to the Building in the
            Downtown Financial District) less Tenant's Proportionate Share of
            such costs.

                  (e) Proposition 13. Notwithstanding any provision contained in
      this Lease to the contrary, if the assessed valuation of the Property (or
      any portion thereof) is increased for real estate tax purposes (under
      Proposition 13 or otherwise) by reason of a conveyance or other "change in
      ownership" (as defined in California Revenue and Taxation Code) of the
      Property (or any portion thereof), then only the following percentages of
      the increase in such assessed valuation of the Property (or any portion
      thereof) attributable to such conveyance or change in ownership shall be
      included in the computation of Tax Costs:

                        (1) No portion of the increase in Tax Costs attributable
                  to such conveyance or change in ownership shall be included in
                  Tax Costs during the period commencing on the Commencement
                  Date and ending on August 4, 2003.

                        (2) Only 33.33% of the increase in Tax Costs
                  attributable to such conveyance or change in ownership shall
                  be included in Tax Costs during the period commencing on
                  August 5, 2003 and ending on December 5, 2006.


                                       96
<PAGE>   105
                        (3) Only 66.67% of the increase in Tax Costs
                  attributable to such conveyance or change in ownership shall
                  be included in Tax Costs during the period commencing on
                  December 6, 2006 and ending on March 31, 2010.

            Landlord shall make a reasonable determination of the portion of any
            increase in the assessed valuation of the Property (or any portion
            thereof) that is attributable to such conveyance or change in
            ownership. Tenant may dispute such determination within one hundred
            eighty (180) days after Landlord shall notify Tenant of such
            determination.

                  (f) Failure to Deliver Statements. Notwithstanding anything to
      the contrary contained in this Paragraph 28, if Landlord shall have failed
      to render an invoice (together with a tax bill supporting Landlord's
      computation of the amount due where the computation is based upon a tax
      bill or bills rendered to Landlord) with respect to any Tax Year within
      one (1) year after the end of such Tax Year, Tenant shall not be obligated
      to make any payment shown to be due with respect to such Tax Year on any
      invoice thereafter delivered.

            29. Nuisance: Odor And Noise. Tenant may place anywhere in the
Premises such coffee and vending machines and other food and beverage dispensing
equipment as normally are used in offices. Subject to the provisions of
Paragraph 6, Tenant may install a lunch room or cafeteria and recreational
facilities on any floor of the Premises other than the ground floor. Tenant
shall conduct its operation of all food and beverage equipment and facilities
and all recreational facilities on the Premises in such manner as not
unreasonably to interfere with the conduct of the business of any other tenants
of the Building and shall not permit any noxious odors or vapors or any
disturbing noises to be emitted from the Premises.

            30.   Definition And Determination Of "Fair Market Rent."


                                       97
<PAGE>   106
                  (a) Definition. "Fair Market Rent" shall mean the rental rate
      being charged for comparable space in buildings comparable to the Building
      in the Downtown Financial District between a knowledgeable landlord and
      tenant, dealing at arms' length, with neither being under compulsion to
      consummate a lease, taking into consideration: location in the Building,
      tenant improvements, allowances or lease concessions provided 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, the ownership of the comparable space
      and of the Building, the size, quality and financial strength of Tenant
      and the tenant in the comparable space, the time the particular rate under
      consideration became or is to become effective considering the market
      condition and any other relevant terms or conditions; provided, however,
      that payment or non-payment of real estate brokerage commissions shall not
      be taken into account. The other provisions of this Lease to the contrary
      notwithstanding, in no event shall Fair Market Rent be less than the total
      of Base Rent and Occupancy Cost Excess payable during the last year of the
      Term in the case of the First Extended Term, or the last year of the
      preceding Extended Term in the case of the Second and Third Extended
      Terms.

                  (b) Matters to be Arbitrated. Any dispute between the parties
      concerning Fair Market Rent shall be determined by arbitration in
      accordance with the procedures specified in this Paragraph 30.(b), if
      Tenant elects to determine Fair Market Rent by arbitration in accordance
      with Paragraph 2.(c)(3). Any such arbitration shall be final and binding
      between the parties as to the matters at issue, and the order of the
      arbitrator may be enforced in the manner provided for enforcement of a
      judgment of a court of law pursuant to the applicable provisions of the
      California Code of Civil Procedure.

                        (1) Claim and Demand. If Tenant elects to have an
            arbitrator determine Fair Market Rent pursuant to the provisions of
            Paragraph 2.(c)(3), Landlord's statement


                                       98
<PAGE>   107
            of its proposed Base Rent shall constitute its claim (the "Claim").

                        (2) Obligation to Meet and Confer. Landlord and Tenant
            shall meet and confer in an attempt to resolve their differences. If
            they are unable to reach a resolution within sixty (60) days after
            the date of the Claim, then within ten (10) days thereafter,
            Landlord shall either (i) restate its Claim, (ii) amend the Claim,
            or (iii) withdraw the Claim, in each case presented together with
            the evidence upon which Landlord relies. Failure on the part of
            Landlord to withdraw or amend the Claim in writing shall constitute
            a restatement thereof.

                        (3) Response to Claim. If the Claim is not withdrawn
            within the ten (10) day period provided for in Paragraph 30.(b)(2)
            above, Tenant shall, within fifteen (15) days after expiration of
            the ten (10) day period provided for in Paragraph 30.(b)(2) above,
            prepare a response to the Claim (the "Response") stating
            specifically Tenant's determination of Fair Market Rent, together
            with the evidence upon which Tenant relies for its determination.

                        (4) Submission to Arbitrator. The arbitrator shall be
            appointed by mutual agreement of the parties involved in the
            dispute. The arbitrator shall be a person who holds the senior
            professional designation awarded by one of the following
            professional groups: the American Institute of Real Estate
            Appraisers, the Society of Real Estate Appraisers, the American
            Society of Real Estate Counselors, the Institute of Real Estate
            Management, or the then pre-eminent real estate appraisal,
            counseling, or management professional organization. In addition,
            the appraiser-arbitrator shall have at least five (5) years of
            current experience in the appraisal of office buildings and office
            building space in the Downtown Financial District, negotiating
            leases in office buildings, the appraisal of market rental value in


                                       99
<PAGE>   108
            office buildings, or the performance of office building market
            rental surveys. If the parties are unable to agree upon such a
            person within thirty (30) days after Landlord's receipt of Tenant's
            Response, then either party shall have the right to apply to the
            Presiding Judge of the Superior Court of the City and County of San
            Francisco, acting in his or her private, non-judicial capacity, to
            make the appointment. The appointment made by such Judge shall be
            final and binding upon the parties. The matter in dispute shall be
            submitted to the arbitrator on the basis of the issues as framed by
            the Claim (as the same may have been amended pursuant to Paragraph
            30.(b)(2) above) and the Response. The arbitration proceeding shall
            be conducted in accordance with standard commercial arbitration
            rules or any other procedures to which the parties may agree with
            the arbitrator (except that the arbitrator shall be bound by the
            rules of law, and the attorney/client and work product privileges
            shall apply) and shall take place in San Francisco, California.

                        (5) Decision of Arbitrator. As soon as convenient after
            appointment, the arbitrator shall meet with Landlord and Tenant to
            hear evidence and argument on the Claim and Response. The arbitrator
            shall not be bound by the rules of evidence in the conduct of such
            proceeding, although the arbitrator shall take account of said rules
            in considering the weight of the evidence. In making a decision, the
            sole function of the arbitrator shall be to determine whether (i)
            the Claim, or (ii) the Response most closely approximates the
            arbitrator's opinion of Fair Market Rent as herein defined. Unless
            the arbitrator's opinion as to Fair Market Rent is closer to the
            statement of Fair Market Rent contained in the Response, then Fair
            Market Rent for purposes hereof shall be that stated in the Claim.
            If the arbitrator's opinion as to Fair Market Rent is closer to the
            statement of Fair Market Rent contained in the Response, then Fair
            Market Rent for purposes hereof shall be that stated in the
            Response. The


                                      100
<PAGE>   109
            arbitrator shall have no right to (i) fashion an independent
            determination of Fair Market Rent, split the difference between the
            parties, nor (iii) amend the terms of this Lease.

                        (6) Costs. Each party shall pay one-half (1/2) of the
            fees and costs of the arbitrator and all of its own costs and
            attorneys' fees in connection with the arbitration; provided,
            however, that at the end of the arbitration proceeding, the
            arbitrator shall award costs properly incurred to the prevailing
            party but not the costs and attorneys' fees of the other party.

                        (7) Determination After Commencement Of Extended Term.
            If a final determination of Fair Market Rent is not arrived at until
            after the applicable Extended Term shall have commenced, Tenant
            shall pay the Base Rent plus Additional Rent per rentable square
            foot of the Premises applicable at the end of the preceding Term
            monthly until such final determination is made. Within thirty (30)
            days after such final determination is made, Tenant shall pay to
            Landlord, retroactively for the period from the commencement of the
            applicable lease period until the date of such determination, the
            excess Rent payable pursuant to such determination over the Rent
            actually paid by Tenant to Landlord in said period together with
            interest at the Interest Rate.

            31.   Captions.    Captions and marginal notes are inserted only
as a matter of convenience and for reference and in no way define, limit or
describe the scope or intent of this Lease nor do they in any way affect this
Lease.

            32. Brokerage. Tenant represents that it has not had dealings with
any real estate broker, finder, or other person, with respect to this Lease
other than Colliers Damner Pike of San Francisco, California, ("Broker"); and
Tenant shall indemnify and hold Landlord harmless of and from any damages and
costs Landlord may suffer by reason of the claims of persons other than Broker
who purport to have dealt with Tenant. Landlord represents that


                                      101
<PAGE>   110
it has dealt with no person, firm or entity other than Broker as Tenant's
representative in the procurement and negotiation of this Lease and has not
entered into any listing agreement with any real estate broker, finder or other
person with respect to this Lease other than Broker. Landlord shall pay any
commissions or fees that are payable to Broker with respect to this Lease in
accordance with the provisions of a separate commission agreement. Landlord
shall indemnify, defend and hold Tenant harmless from all claims, actions,
suits, liability, damages, and demands of any kind resulting from any entity's
purported dealings as a broker or finder in connection with this Lease with or
on behalf of Landlord; provided, however, that Landlord's indemnity shall not
extend to claims based upon purported contacts between the claimant and Tenant
that are not consistent with Tenant's representation in the first sentence of
this Paragraph 32.

            33.   Successors And Assigns. The terms, covenants and conditions
contained in this Lease shall bind and inure to the benefit of Landlord and
Tenant their successors and assigns, subject to the limitations contained in
this Lease.

            34.   Miscellaneous.

                  (a)   Competing Uses.  Other tenants in the Building shall
      not include stock or securities brokerages, banks, or other direct
      competitors of Tenant.

                  (b) Building Name. Provided that Tenant has not exercised its
      option to terminate this Lease as to a portion of the Premises pursuant to
      Paragraph 2.(b) comprising more than ten (10) floors hereof, the name of
      the Building shall be "The Charles Schwab Building," and letters spelling
      said name currently existing over the main entrance doors of the Building
      , both at the curbside face and immediately above the doors, shall be
      maintained by Tenant at Tenant's expense. Any change in the type, style,
      size, shape, location and color of said letters and the marquee referred
      to in the next sentence shall be subject to the reasonable approval of
      Landlord. At Tenant's cost, Landlord has placed and constructed a stock
      quotation marquee at the southeast


                                      102
<PAGE>   111
      corner of the ground floor of the Premises. The marquee displays the
      Charles Schwab & Co. name. Any change in the type, style and color of said
      marquee shall be subject to the prior approval of Tenant which shall not
      be unreasonably withheld or delayed. Said letters and marquee shall be
      maintained in good order and repair by Tenant at its expense. Landlord has
      also provided stock quotation readout devices in those elevators servicing
      the Premises. Tenant shall pay for any change in or addition to such
      signs. Subject to Landlord's prior written approval (which shall not be
      unreasonably withheld or delayed), Tenant may install a sign of reasonable
      size and in an appropriate location designating its parcel pick-up and
      delivery station. At its expense, Tenant shall have the right from time to
      time to replace said signs if it so elects, in conformity with applicable
      laws and ordinances, and subject to the prior written approval of
      Landlord, which shall not be unreasonably withheld or delayed.

                  (c) Litigation Indemnity. If either party becomes a party to
      any litigation concerning this Lease or the Premises by reason of any act
      or omission of the other party or its authorized representatives, and not
      by any act or omission of the party that becomes a party to that
      litigation or any act or omission of its authorized representatives, the
      party that causes the other party to become involved in the litigation
      shall be liable to that party for reasonable attorney's fees and court
      costs incurred by it in the litigation; provided, however, that in any
      litigation between the parties to this Lease, each shall bear its own
      costs and attorneys' fees.

                  (d)   Construction.     The language in this Lease shall be
      construed according to its normal and usual meaning, not strictly for
      or against either Landlord or Tenant.

                  (e) Severability. If any term, covenant, condition, provision
      or agreement herein contained is held to be invalid or void by any court
      of competent jurisdiction, the invalidity of any such term, covenant,


                                      103
<PAGE>   112
      condition, provision or agreement shall in no way affect any other term,
      covenant, condition, provision or agreement herein contained.

                  (f) Name Change. If the name of either party or any successor
      or assign shall be changed during the Term, such party shall promptly
      provide the other with written notice thereof, accompanied by a certified
      copy of the document effecting such change of name.

                  (g)   Time Of Essence.  Time is of the essence of each and
      every provision of this Lease.

                  (h) No Partnership. Nothing herein contained shall be deemed
      to make Landlord and Tenant partners or joint venturers or to create a
      relation of principal and agent between them, nor shall either Landlord or
      Tenant hold itself out as joint venturer, partner, or agent of the other
      contrary to the terms of this Lease by advertising or otherwise. Neither
      party shall be bound by any representation, act, or omissions whatsoever
      of the other made contrary to the provisions of this Lease.

                  (i) Governing Law. This Lease shall be construed and enforced
      in accordance with the law of the State of California. The venue for any
      action to enforce this Lease or to secure relief for breach shall be in
      the City and County of San Francisco.

                  (j) Calculation Of Abatement. Whenever, Rent is abated
      hereunder or the Lease is terminated with respect to a portion of the
      Premises, such abatement or reduction of Rent, (1) if occurring during the
      Term, shall be at the appropriate rent(s) per square foot (for the
      floor(s) as to which Rent is abated or the Lease is terminated) stated in
      Exhibit C, or (2) if occurring during one of the three five (5) year
      Extended Terms, at a Rent equal to the current rent per rentable square
      foot then payable by Tenant to Landlord for such particular floor(s) with
      respect to which Rent is to be abated or this Lease terminated.


                                      104
<PAGE>   113
                  (k) Certificate Of Occupancy. Landlord represents that the
      Certificate of Occupancy for the Building has been duly issued and remains
      in full force and effect. A true and correct copy of the Certificate of
      Occupancy is attached hereto, marked Exhibit M and incorporated herein by
      reference thereto.

            35. Exclusion Of Public Space From Premises. As a condition to its
building permit for the Building, Landlord may be required to construct and
maintain two spaces in the Building located above the 19th floor, each having an
area of approximately 750 square feet for the purpose of a restaurant, lunch
room or other facility open to the public during normal working hours. Upon
determination that such space(s) are required and the exact locations thereof,
Landlord shall so notify Tenant, with appropriate written documentation.
Landlord shall bear all cost of improvements to the public area, of separating
the public area from the Premises and of securing the Premises from entry by
members of the public who visit or purport to be visiting the public area. Such
space(s) shall not be within Tenant's Premises unless unavoidably required by
the City and County of San Francisco, in which case the Lease shall be amended
to exclude such space(s), Base Rent and Tenant's Proportionate Share and other
obligations under this Lease, shall be reduced proportionately, and Landlord
shall bear all reasonable and actual costs of relocating Tenant or otherwise
vacating Tenant from the public area. Landlord shall also pay the reasonable and
actual costs for such adjustments in security as may be required to preserve the
integrity of Tenant's security system while accommodating such public space
uses.

            36.   Interpretation: Effect On Modified Initial Lease.  This
Lease constitutes the full and complete agreement of the parties with respect
to the subject matter hereof.  The options to extend the term contained in
the Modified Initial Lease and the rights of the parties to terminate the
Modified Initial Lease under Paragraph 10.(H) are deleted therefrom.






                                      105
<PAGE>   114



      IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this
Lease as of the day and year first above written.


                                    LANDLORD:

                                    101 MONTGOMERY STREET CO., a
                                    California limited partnership

                                    By:  Cahill Montgomery Corp.,
                                         a California corporation
                                    Its:  General Partner


                                    By:   /S/ Gerald K. Cahill
                                          -----------------------------
                                          Gerald K. Cahill
                                    Its:  Vice President


                                    TENANT:

                                    CHARLES SCHWAB & CO., INC., a California
                                    corporation

                                    By:   /s/ Steven L. Scheid
                                          -----------------------------
                                          Steven L. Scheid
                                    Its:  Chief Financial Officer

                                    By:   /s/ Luis E. Valencia
                                          -----------------------------
                                          Luis E. Valencia
                                    Its:  Executive Vice President and
                                          Chief Administrative Officer


                                      106
<PAGE>   115
                                    EXHIBIT A

                              Property Description
<PAGE>   116
                            EXHIBIT B (PAGE 1 OF 5)

                                    PREMISES

                             101 MONTGOMERY STREET

Landlord hereby leases to Tenant and Tenant hereby hires from Landlord the
following space ("Premises") in the 101 Montgomery Street Building:

I.   The entire floor area of each floor beginning with the 2nd Floor through
     and including the entire 28th Floor.

II.  Basement (garage) area as set forth on the Plan, Exhibit B - Page 2 of 5,
     attached hereto.

III. Ground Floor (First Floor) areas as shown on the Plan, Exhibit B - Page 3
     of 5, attached hereto.

IV.  29th Floor area as shown on the Plan, Exhibit B - Page 4 of 5, attached
     hereto.

V.   Roof (30th Floor) areas as shown on the Plan, Exhibit B - Page 5 of 5,
     attached hereto.

Areas leased by Tenant are shown in diagonal crosshatching on the attached
plans.

Premises does not include building fire stairs, building systems, shafts and
risers, elevator shafts, and machine rooms and building system equipment area.
Premises does include internal tenant stairs between 9 and 10 in the cafeteria
area, between 28th and 27th elevator lobbies, between the second floor north
and Montgomery Street exit and the escalator between the first and second floor.

Tenant has installed a shaft for its computer-related condenser water, as well
as power, and telecommunications risers which are included in the Premises.

                       (Floor Plans - Pages 2 through 5)
<PAGE>   117
                                    EXHIBIT C

                             101 MONTGOMERY STREET



                              Net Rentable
 RETAIL AND                      Area of               Base Monthly Rent             Base
OFFICE FLOOR                Premises in Sq. Ft.           Per Sq. Ft.            Monthly Rent
- ------------                -------------------           -----------            ------------
                                                                                          
  1                               5,784                     $2.00                  $11,568.00
  2                              11,026                     $2.00                  $22,052.00
  3                              11,533                     $2.00                  $23,066.00
  4                              11,533                     $2.00                  $23,066.00
  5                              11,533                     $2.00                  $23,066.00
  6                              11,533                     $2.00                  $23,066.00
  7                              11,533                     $2.00                  $23,066.00
  8                              11,533                     $2.00                  $23,066.00
  9                               9,492                     $2.00                  $18,984.00
 10                               9,492                     $2.00                  $18,984.00
 11                               9,169                     $2.00                  $18,338.00
 12                               9,468                     $2.00                  $18,936.00
 13                               9,468                     $2.00                  $18,936.00
 14                               9,468                     $2.00                  $18,936.00
 15                               9,528                     $2.00                  $19,056.00
 16                               9,550                     $2.00                  $19,100.00
 17                               9,550                     $2.00                  $19,100.00
 18                               9,756                     $2.00                  $19,512.00
 19                               9,756                     $2.00                  $19,512.00
 20                               9,756                     $2.00                  $19,512.00
 21                               9,756                     $2.00                  $19,512.00
 22                               9,756                     $2.00                  $19,512.00
 23                               9,756                     $2.00                  $19,512.00
 24                               9,756                     $2.00                  $19,512.00
 25                               9,086                     $2.00                  $18,172.00
 26                               9,391                     $2.00                  $18,782.00
 27                               9,391                     $2.00                  $18,782.00
 28                               9,391                     $2.00                  $18,782.00
                                  -----                     -----                  ----------

Subtotal - retail/office area   276,744                                           $553,488.00
                                -------                                           -----------

Non-Finished Areas
 29 - Storage                     5,036                     $1.00                   $5,036.00
 Roof                             1,880                     $1.00                   $1,880.00
 Basement                        11,295                     $1.00                  $11,295.00
                                 ------                     -----                  ----------

Subtotal                         18,211                                            $18,211.00
                                 ------                                            ----------

TOTAL LEASED PREMISES           294,955                                           $571,699.00
                                =======                                           ===========

NON-LEASED RETAIL SPACE           1,151
                                -------

TOTAL BLDG RENTABLE AREA        296,106
                                =======    

<PAGE>   118
                                    EXHIBIT D

                             101 MONTGOMERY STREET

                                  page 1 of 2



DATE OF TERMINATION
 last day of
 month of:                          MARCH        APRIL        MAY          JUNE         JULY         AUGUST  
                                    2005         2005         2005         2005         2005         2005
                                    -----        -----        ----         ----         ----         ------
                                                                                  
     FLOOR NO.
            25                      $192,447     $189,828     $187,191     $184,537     $181,865     $179,175
            24                      $206,634     $203,821     $200,990     $198,140     $195,272     $192,384
            23                      $206,634     $203,821     $200,990     $198,140     $195,272     $192,384
            22                      $206,634     $203,821     $200,990     $198,140     $195,272     $192,384
            21                      $206,634     $203,821     $200,990     $198,140     $195,272     $192,384
            20                      $206,634     $203,821     $200,990     $198,140     $195,272     $192,384
            19                      $206,634     $203,821     $200,990     $198,140     $195,272     $192,384
            18                      $206,634     $203,821     $200,990     $198,140     $195,272     $192,384
            17                      $202,272     $199,519     $196,748     $193,958     $191,150     $188,323
            16                      $202,272     $199,519     $196,748     $193,958     $191,150     $188,323
            15                      $201,807     $199,060     $199,296     $193,512     $190,710     $187,890    
            14                      $200,533     $197,804     $195,058     $192,291     $189,506     $186,704
            13                      $200,533     $197,804     $195,058     $192,291     $189,506     $186,704
            12                      $200,533     $197,804     $195,058     $192,291     $189,506     $186,704




DATE OF TERMINATION
 last day of
 month of:                          SEPT         OCT          NOV          DEC          JAN          FEB
                                    2005         2005         2005         2005         2006         2006
                                    -----        -----        ----         ----         ----         ------
                                                                                  
     FLOOR NO.
            25                      $176,468     $173,742     $170,998     $168,236     $165,455     $162,656
            24                      $189,476     $186,550     $183,604     $180,638     $177,652     $174,647
            23                      $189,476     $186,550     $183,604     $180,638     $177,652     $174,647
            22                      $189,476     $186,550     $183,604     $180,638     $177,652     $174,647
            21                      $189,476     $186,550     $183,604     $180,638     $177,652     $174,647
            20                      $189,476     $186,550     $183,604     $180,638     $177,652     $174,647
            19                      $189,476     $186,550     $183,604     $180,638     $177,652     $174,647
            18                      $189,476     $186,550     $183,604     $180,638     $177,652     $174,647
            17                      $185,477     $182,612     $179,728     $176,825     $173,902     $170,961
            16                      $185,477     $182,612     $179,728     $176,825     $173,902     $170,961
            15                      $185,051     $182,192     $179,315     $176,419     $173,503     $170,568    
            14                      $183,882     $181,042     $178,183     $175,305     $172,407     $169,491
            13                      $183,882     $181,042     $178,183     $175,305     $172,407     $169,491
            12                      $183,882     $181,042     $178,183     $175,305     $172,407     $169,491

<PAGE>   119
                                   EXHIBIT D

                             101 MONTGOMERY STREET

                                  page 2 of 2



DATE OF TERMINATION
 last day of
 month of:                          MARCH        APRIL        MAY          JUNE         JULY         AUGUST  
                                    2006         2006         2006         2006         2006         2006
                                    -----        -----        ----         ----         ----         ------
                                                                                  
     FLOOR NO.
            25                      $159,838     $157,002     $154,146     $151,272     $148,378     $145,465
            24                      $171,622     $168,576     $165,510     $162,424     $159,317     $156,189
            23                      $171,622     $168,576     $165,510     $162,424     $159,317     $156,189
            22                      $171,622     $168,576     $165,510     $162,424     $159,317     $156,189
            21                      $171,622     $168,576     $165,510     $162,424     $159,317     $156,189
            20                      $171,622     $168,576     $165,510     $162,424     $159,317     $156,189
            19                      $171,622     $168,576     $165,510     $162,424     $159,317     $156,189
            18                      $171,622     $168,576     $165,510     $162,424     $159,317     $156,189
            17                      $167,999     $165,018     $162,016     $158,995     $155,954     $152,892
            16                      $167,999     $165,018     $162,016     $158,995     $155,954     $152,892
            15                      $167,613     $164,638     $161,644     $158,630     $155,595     $152,541
            14                      $166,555     $163,599     $160,623     $157,628     $154,613     $151,578
            13                      $166,555     $163,599     $160,623     $157,628     $154,613     $151,578
            12                      $166,555     $163,599     $160,623     $157,628     $154,613     $151,578




DATE OF TERMINATION
 last day of
 month of:                          SEPT         OCT          NOV          DEC          JAN          FEB          MAR
                                    2006         2006         2006         2006         2007         2007         2007
                                    -----        -----        ----         ----         ----         ------       ----
                                                                                            
     FLOOR NO.
            25                      $142,533     $139,581     $136,610     $133,618     $130,607     $127,575     $124,524
            24                      $153,040     $149,871     $146,680     $143,468     $140,235     $136,980     $133,704
            23                      $153,040     $149,871     $146,680     $143,468     $140,235     $136,980     $133,704
            22                      $153,040     $149,871     $146,680     $143,468     $140,235     $136,980     $133,704
            21                      $153,040     $149,871     $146,680     $143,468     $140,235     $136,980     $133,704
            20                      $153,040     $149,871     $146,680     $143,468     $140,235     $136,980     $133,704
            19                      $153,040     $149,871     $146,680     $143,468     $140,235     $136,980     $133,704
            18                      $153,040     $149,871     $146,680     $143,468     $140,235     $136,980     $133,704
            17                      $149,810     $146,707     $143,584     $140,440     $137,275     $134,089     $130,881
            16                      $149,810     $146,707     $143,584     $140,440     $137,275     $134,089     $130,881
            15                      $149,466     $146,370     $143,254     $140,117     $136,959     $133,781     $130,581
            14                      $148,522     $145,446     $142,350     $139,233     $136,095     $132,936     $129,756
            13                      $148,522     $145,446     $142,350     $139,233     $136,095     $132,936     $129,756
            12                      $148,522     $145,446     $142,350     $139,233     $136,095     $132,936     $129,756

<PAGE>   120
                                    EXHIBIT E

                      Original Elevator Software Identified
<PAGE>   121
                                    EXHIBIT F

                                   (Not Used)
<PAGE>   122
                                    EXHIBIT G

                               Planning Resolution
<PAGE>   123
                                    EXHIBIT H

                                   (Not Used)
<PAGE>   124
                                    EXHIBIT I

                                 Floor Loadings
<PAGE>   125
                                    EXHIBIT J

                                National Holidays
<PAGE>   126
                                    EXHIBIT K

                            Janitorial Specification
<PAGE>   127
                                    EXHIBIT L

                                Chart of Accounts
<PAGE>   128
                                    EXHIBIT M

                            Certificate of Occupancy




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