Exhibit 10.15

First Amendment to 892 Ross Drive lease dated March 15, 2004.

               THIS FIRST AMENDMENT TO 892 ROSS DRIVE LEASE (this “Amendment”)is
dated effective as of March 15, 2004 (the “Effective Date”), and is made by and
between ROSS DRIVE INVESTORS, a California general partnership (“Landlord”), and
VERITY, INC., a Delaware corporation (“Verity” or “Tenant”).  This Amendment is
made part of and modifies the Lease dated January 22, 1996, together with the
Summary of Basic Lease Terms, the First Addendum to Lease, the Second Addendum
to Lease, and the Acceptance Agreement applicable to the premises located at 892
Ross Drive, Sunnyvale, California (the “892 Ross Drive Lease”)  It relates to
that certain other Lease between Landlord and Tenant dated January 22, 1996,
together with the Summary of Basic Lease Terms, the First Addendum to Lease, the
Second Addendum to Lease, the Acceptance Agreement, the First Amendment to Lease
dated June 20, 1996, the Second Amendment to Lease dated November 5, 1996 and
the Third Amendment to Lease dated January 17, 1997, applicable to the premises
located at 894 Ross Drive, Sunnnyvale, California (the “894 Ross Drive Lease”). 
The 892 Ross Drive Lease and the 894 Ross Drive Lease shall be collectively
referred to herein as the “Leases” and individually as a “Lease”.  This
Amendment is made with reference to the following facts:

               A.          The Premises currently leased by Tenant pursuant to
the 892 Ross Drive Lease consist of 51,217 rentable square feet commonly known
as 892 Ross Drive, City of Sunnyvale and the Premises leased pursuant to the 894
Ross Drive Lease consist of 43,925 rentable square feet commonly known as 894
Ross Drive, City of Sunnyvale, California.

               B.          The Lease Term for each of said Premises currently
expires on February 28, 2005.

               C.          Tenant and Landlord wish to amend the 892 Ross Drive
Lease on the terms and conditions set forth in this Amendment.  All capitalized
terms used in this Amendment shall have the meaning ascribed to them in the
Lease unless expressly defined herein.

               NOW, THEREFORE, Landlord and Tenant hereby agree that the Lease
terms are amended as follows:

                             1.          Lease Term:  The Lease Term for the 892
Ross Drive Lease is extended to and including March 31, 2011, and the said Lease
is amended to provide that the Lease Term shall end March 31, 2011.

                             2.          Base Monthly Rent:  Commencing March
15, 2004, the total Base Monthly Rent shall be as provided in the following
table, and the Lease is so amended:

 

March 15, 2004 through and including March 31, 2005:

 

$

33,291.05 per month

 

April 1, 2005 through and including March 31, 2006:

 

$

38,412.75 per month

 

April 1, 2006 through and including March 31, 2007:

 

$

43,534.45 per month

 

April 1, 2007 through and including March 31, 2008:

 

$

43,534.45 per month

 

April 1, 2008 through and including March 31, 2009:

 

$

51,217.00 per month

 

April 1, 2009 through and including March 31, 2010:

 

$

51,217.00 per month

 

April 1, 2010 through and including March 31, 2011:

 

$

56,338.70 per month

                             3.          Option to Extend Lease Term:  Landlord
hereby grants to Tenant one option to extend the Lease Term of the 892 Ross
Drive Lease for a five (5) year term commencing when the prior term expires,
under the following terms and conditions:

                                          A.          Exercise Dates:  Tenant
must give Landlord notice in writing of its exercise of the option in question
no earlier than three hundred sixty (360) days before the date the Lease Term
would end but for said exercise (the “Earliest Exercise Date”) and no later than
one hundred eighty (180) days before the date the Lease Term would end but for
said exercise (the “Last Exercise Date”).  Valid exercise by Tenant shall be
conditioned on Tenant validly exercising its option as to the 894 Ross Drive
Avenue Premises as well as the 892 Ross Drive Premises, and Tenant is not
entitled to exercise an option for one of the Leases and not the other.

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                                          B.          Conditions to Exercise of
Option:  Tenant’s right to extend is conditioned upon and subject to each of the
following:

                                                        (1)          In order to
exercise its option to extend, Tenant must give written notice of such election
to Landlord and Landlord must receive same by the Last Exercise Date, but not
prior to the Earliest Exercise Date.  If proper notification of the exercise of
an option is not given and/or received, such option shall automatically expire. 
Failure to exercise an option terminates that option and all subsequent
options.  Tenant acknowledges that because of the importance of Landlord of
knowing no later than the Last Exercise Date whether or not Tenant will exercise
the option, the failure of Tenant to notify Landlord by the Last Exercise Date
will conclusively be presumed an election by Tenant not to exercise the option.

                                                        (2)          Tenant
shall have no right to exercise an option (i) if Tenant is in Default beyond any
cure period provided in the Lease (if applicable) either on the date of exercise
of the option or on the date on which the Lease would terminate absent exercise
of the option or (ii) in the event that Landlord has given to Tenant three (3)
or more notices of separate Defaults during the 12 month period immediately
preceding the exercise of the option, whether or not the Defaults are cured. 
The period of time within which an option may be exercised shall not be extended
or enlarged by reason of Tenant’s inability to exercise an option because of the
provisions of this Paragraph.

                                          C.          Creation of Extended
Term:  Upon the timely exercise of the option to extend and the commencement of
the extended Term, all references in the Lease to the Term shall be considered
to mean the Term as extended by the exercise of the option, which shall be
referred to herein as the “Extended Term”.

                                          D.          Options Personal:  The
option is personal to the Tenant, and cannot be assigned to or exercised by
anyone other than the Tenant.  The option can only be exercised at a time when
the Tenant is in possession of not less than fifty percent (50%) of the Premises
and does not have any intent of thereafter assigning or subletting. 
Notwithstanding the above, Tenant may assign the options together with Tenant’s
interest under this Lease to a transferee in a Permitted Transfer.

                                          E.          The Base Monthly Rent for
the Option Period shall be one hundred percent (100%) of the then fair market
monthly rent determined as of the commencement of the option period in question
based upon like buildings with like improvements in the area.  The Option Period
shall contain no free rent and the Premises shall be taken “as-is”. If the
parties are unable to agree upon the fair market monthly rent for the Premises
for the option period in question at least seventy-five (75) days prior to the
commencement of the option period in question, then the fair market monthly rent
shall be determined by appraisal conducted pursuant to subparagraph F.

                                          F.          In the event it becomes
necessary to determine by appraisal the fair market rent of the Premises for the
purpose of establishing the Base Monthly Rent during the Option Period, then
such fair market monthly rent shall be determined by three (3) real estate
appraisers, all of whom shall be members of the American Institute of Real
Estate Appraisers with not less than five (5) years experience appraising real
property (other than residential or agricultural property) located in Santa
Clara County, California, in accordance with the following procedures:

                                                        (1)          The party
demanding an appraisal (the “Notifying Party”) shall notify the other party (the
“Non-Notifying Party”) thereof by delivering a written demand for appraisal,
which demand, to be effective, must give the name, address, and qualifications
of an appraiser selected by the Notifying Party.  Within ten (10) days of
receipt of said demand, the Non-Notifying Party shall select its appraiser and
notify the Notifying Party, in writing, of the name,  address, and
qualifications of an appraiser selected by it.  Failure by the Non-Notifying
Party to select a qualified appraiser within said ten (10) day period shall be
deemed a waiver of its right to select a second appraiser on its own behalf and
the Notifying Party shall select a second appraiser on behalf of the
Non-Notifying Party within five (5) days after the expiration of said ten (10)
day period.  Within ten (10) days from the date the second appraiser shall have
been appointed, the two (2) appraisers so selected shall appoint a third
appraiser.  If the two appraisers fail to select a third qualified appraiser,
the third appraiser shall be selected by the American Arbitration Association or
if it shall refuse to perform this function, then at the request of either
Landlord or Tenant, such third appraiser shall be promptly appointed by the then
Presiding Judge of the Superior Court of the State of California for the County
of  Santa Clara.

                                                        (2)          The three
(3) appraisers so selected shall meet in San Jose, California, not later than
twenty (20) days following the selection of the third appraiser.  At said
meeting the appraisers so selected shall attempt to determine the fair market
monthly rent of the  Premises for the option period in question (including the
timing and amount of periodic increases, if such increases are then prevailing
in the market).

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                                                        (3)          If the
appraisers so selected are unable to complete their determinations in one
meeting, they may continue to consult at such times as they deem necessary for a
fifteen (15) day period from the date of the first meeting, in an attempt to
have at least two (2) of them agree.  If, at the initial meeting or at any time
during said fifteen (15) day period, two (2) or more of the appraisers so
selected agree on the fair market rent of the Leased Premises, such agreement
shall be determinative and binding on the parties hereto, and the agreeing
appraisers shall, in simple letter form executed by the agreeing appraisers,
forthwith notify both Landlord and Tenant of the amount set by such agreement.

                                                        (4)          If two (2)
or more appraisers do not so agree within said fifteen (15) day period, then
each appraiser shall, within five (5) days after the expiration of said fifteen
(15) day period, submit his independent appraisal in simple letter form to
Landlord and Tenant stating his determination of the fair market rent of the
Premises for the option period in question.  The parties shall then determine
the fair market rent for the Premises by determining the average of the fair
market rent set by each of the appraisers.  However, if the lowest appraisal is
less than eighty-five percent (85%) of the middle appraisal then such lowest
appraisal shall be disregarded and/or if the highest appraisal is greater than
one hundred fifteen percent (115%) of the middle appraisal then such highest
appraisal shall be disregarded.  If the fair market rent set by any appraisal is
so disregarded, then the average shall be determined by computing the average
set by the other appraisals that have not been disregarded.

                                                        (5)          Nothing
contained herein shall prevent Landlord and Tenant from jointly selecting a
single appraiser to determine the fair market rent of the Premises, in which
event the determination of such appraisal shall be conclusively deemed the fair
market rent of the Premises.

                                                        (6)          Each party
shall bear the fees and expenses of the appraiser selected by or for it, and the
fees and expenses of the third appraiser (or the joint appraiser if one joint
appraiser is used) shall be borne fifty percent (50%) by Landlord and fifty
percent (50%) by Tenant.

                                          G.          The option granted in this
paragraph is the sole option possessed by Tenant following the execution hereof,
and all other options set forth in the leases shall be of no force or effect.

                             4.          Tenant Improvement Allowance:  Landlord
will provide a Tenant Improvement Allowance of Five Hundred Thousand 00/100ths
Dollars ($500,000.00) toward improvements in 892 and 894 Ross Drive.  Tenant may
allocate this Tenant Improvement Allowance at Tenant’s discretion between the
two Premises and the two Leases.  However, the total amount to be provided by
Landlord for both Leases and both Premises shall be $500,000.00 and no more. 
The Allowance will be provided as a reimbursement of money actually expended by
Tenant toward new Tenant Improvements (which must be approved by Landlord under
the provisions of the Lease relating to construction) prior to December 31,
2005.  Subject to the provisions below, reimbursement by Landlord will be made
within sixty (60) days of presentation of reasonably adequate documentation
evidencing the expenses incurred and confirming that (1) all Tenant Improvements
for which reimbursement is sought have been completed; (2) all contractors,
materialmen, suppliers, and others entitled to a lien have provided evidence
satisfactory to Landlord releasing or waiving any such liens (or a proper Notice
of Completion has been filed and the statutory period for filing of liens
following recordation of a Notice of Completion has expired in the reasonable
opinion of counsel for Landlord); and (3) said funds have actually been expended
by December 31, 2005 for the Tenant Improvements approved by Landlord. Upon
application for funds in conformity with the above period, Landlord may audit
Tenant’s records upon request made within thirty (30) days after the request is
made in regard to each such request for reimbursement.  Notwithstanding the
above provisions, Landlord shall not be obligated to pay any reimbursement to
Tenant in accordance with the above prior to March 31, 2005.  Tenant may apply
for reimbursement of such matters at any time to and including  March 31, 2006. 
Landlord will have no duty to reimburse based on any application which is
received by Landlord after such date. Tenant may not apply for reimbursement
under this Paragraph 4 more often than three (3) times in any calendar year.  In
the event of any non-payment of reimbursement which was due to Tenant, after
said reimbursement was due under the above provision, the Tenant shall be
entitled to set the amount which it should have been reimbursed off against Rent
due to Landlord under either Lease.

                             5          Signage:  Verity will have exclusive
monument signage for the monument currently in front of the building at 890-892
Ross Drive plus any building signage that governing authorities will approve for
the Project subject to maintaining reasonably adequate signage for other
tenants.  Additionally, Landlord will assist Verity in the design and approval
process for obtaining a “pylon” sign for visibility to Highway 101 (provided,
however, that Landlord cannot guarantee action by the authorities having
jurisdiction over such a sign).  Tenant may use the Tenant Improvement Allowance
to pay the costs of permitted signage.  Tenant may display banners outside the
Building for up to two (2) weeks with the prior consent of Landlord, which shall
not be unreasonably withheld.

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                             6.          Right of First Negotiation:

                                          A.          Grant and Right of First
Negotiation:  Landlord hereby grants to Tenant a Right of First Negotiation
regarding the leasing of the “First Negotiation Space”, which consists of the
portion of the Building (Project) which is identified and described on Exhibit
“A” as the First Negotiation Space, being approximately 44,340 square feet of
rentable space commonly known as 890 Ross Drive, Sunnyvale on the terms
contained in this Paragraph.

                                          B.          Negotiation Notice:  If
Landlord proposes to lease all or part of the First Negotiation Space at any
time after the Effective Date of this Lease and before the expiration or earlier
termination of this Right of First Negotiation, Landlord shall notify Tenant in
writing (the “Negotiation Notice”) of the following basic business terms upon
which Landlord would be willing to lease the First Negotiation Space; (i) the
portion of the First Negotiation Space which Landlord propose to lease (the
“Offered Space”), (ii) the term of the proposed lease; (iii) the tenant
improvements Landlord is willing to construct or that it will require be
constructed and the contribution Landlord is willing to make to pay for such
tenant improvements; (iv) the rent for the terms of the lease or formula to be
used to determine such rent, and (v) any other material business terms Landlord
elects to specify.

                                          C.          Negotiation Period: 
Tenant shall have ten (10) days (the “Negotiation Period”) from the Negotiation
Notice within which to conduct negotiations with Landlord regarding Tenant’s
leasing of the Offered Space, whether on the terms set forth in Landlord’s
notice or otherwise.

                                          D.          Duties During Negotiation
Period:  During the Negotiation Period, Landlord and Tenant will negotiate in
good faith in an attempt to agree on a lease of the Offered Space.  Neither
Landlord nor Tenant shall be bound to agree to or accept any terms and
conditions for such lease except those which each party, in its sole discretion,
wishes to agree to.  “Good Faith” in such negotiations does not require either
party to make concessions to the other party’s position, but only requires that
each party give the other party a reasonable opportunity, within the Negotiation
Period, to present and discuss the party’s proposals.  Landlord is not bound to
agree to any or all of the terms set forth in the Negotiation Notice if it
determines during negotiations that one or more of said terms is not in
landlord’s best interest.

                                          E.          Landlord’s Right To Lease
Absent Agreement:  If Landlord and Tenant do not reach agreement in writing for
Tenant to lease the Offered Space within the Negotiation Period, Landlord
thereafter shall have the right to offer the Offered Space to any third party,
on such terms and conditions as Landlord may elect, and Landlord shall not
thereafter, have any duty to further offer the Offered Space to Tenant.

                                          F.          Termination:  The right
granted to Tenant in this Paragraph is personal to Tenant, and may not be
assigned by Tenant to any third party, either alone or in conjunction with an
assignment of this Lease or a sublease of all or any part of the Premises.  The
rights granted to Tenant under this paragraph shall terminate upon the earliest
of the following to occur:  (i) the expiration or earlier termination of the
Lease; (ii) any assignment by Tenant of its interest in this Lease; (iii) any
subletting by Tenant of substantially all of the Premises for substantially all
of the remainder of the Lease Term, (iv) the termination of this right by
default as set forth in Subparagraph G below, or (v) as to any Offered Space,
when the Negotiation Period ends without Tenant and Landlord reaching a written
agreement for Tenant to lease the Offered Space.

                                          G.          Termination By Default:
 The rights of Tenant under this Paragraph shall not be effective at any time
when Tenant is in default under this Lease beyond any applicable cure period
provided in this Lease.  If Tenant, with the agreement of Landlord, shall
nevertheless cure such default, then the rights provided hereunder shall be
reinstated, but any transaction to lease any or all of the First Negotiation
Space entered into by Landlord during such period of default shall be valid and
Tenant shall have no further Right of First Negotiation as to any such space
leased by Landlord while Tenant is in default under this Subparagraph.

                                          H.          No Right To Negotiation
For Renewal Or Extension Space:  The right granted to Tenant by this Paragraph
shall not arise on account of or in connection with the renewal or extension of
the term of any then existing lease affecting all or any portion of the First
Negotiation.

                                          I.           Concordance with Other
Lease:   A single right of first negotiation is granted to Tenant pursuant to
both Leases.  The existence of this language in both Leases does not create more
than one such right in Tenant, and such right may not, under any circumstances,
be exercised by any other party but Tenant.

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                             7.          Assignment and Subleasing:  Verity
shall have the right to sublease all or part of the Premises subject to
Landlord’s reasonable approval.  Verity may sublease to any entity wholly owned
by or merged with Verity without Landlord’s consent, but with advance written
notice to Landlord (documenting the facts of the ownership.  Landlord will
attend promptly to and expedite consent to any Subleases, and shall use
reasonable efforts to respond to a request for consent to a sublease within five
(5) business days of the later of receipt of such request or the receipt of all
information reasonably required or requested by Landlord in connection
therewith.  Sublease or assignment profits (other than for subleases to any
Tenant wholly owned or merged with Verity) shall be shared Fifty Percent (50%)
to Landlord and Fifty Percent (50%) to Verity, net of reasonable costs for
brokers, reasonable attorneys’ fees, and reasonable subtenant improvements and
triple net expenses paid by Verity attributable to the subleased space which are
not paid or reimbursed by the subtenant.  Notwithstanding the above, Verity
shall be entitled to defer payment of any sublease or assignment profits to
Landlord until March 31, 2005, on which date Verity shall pay all  of Landlord’s
share of sublease or assignment profits received to that date.  The provisions
of this Paragraph 7 are intended to supplement, and not limit or modify, the
provisions regarding a Permitted Transfer in the Lease.

                             8.          Non-Disturbance:  Landlord will work to
obtain a commercially reasonable non-disturbance agreement acceptable to Verity
from Landlord’s current and future lenders, at no cost to Landlord.  However,
Landlord’s inability to obtain such a non-disturbance agreement is not a breach
of this Lease nor a failure of condition.

                             9.          Alterations Limit:  Tenant shall have
the right to complete any interior alteration for the project subject to
Landlord’s consent, which shall not be unreasonably withheld, conditioned or
delayed.  Tenant shall have no restoration requirements for the current existing
tenant improvements.  Landlord’s consent to new improvements shall contain
Landlord’s restoration requirements at the time consent is granted.

                             10.         Retained Real Estate Brokers: Tenant is
represented by Colliers International and no other brokers or finders in the
execution of this Amendment.

                             11.         HVAC and Roof Repairs; Capital
Improvements: 

                                           A.          The roof of 892 Ross
Drive was resurfaced in 1999 and the roof of 894 Ross Drive was resurfaced in
2002.  These roofs are inspected and any needed maintenance performed annually
in addition to twice per year cleaning.  This work is part of Common Area
Expenses.

                                           B.          Verity has been
maintaining the HVAC system for the Premises with Verity’s contractor.  Should
any of the HVAC equipment for the Premises need replacing, Verity may allocate
some of the Tenant Improvement Allowance (Item #5) to these costs.

                                           C.          Any single item of
maintenance, repair or replacement performed by either party under the Lease
with a cost of Twenty Thousand Dollars ($20,000) or more relating to the roof,
the pump and associated fire suppression equipment, including interior fire
sprinklers which were installed by Landlord (and specifically excluding any fire
suppression systems or components of the master fire suppression system which
have been installed or are installed by Tenant or were installed in improvements
constructed by Tenant), or the HVAC system shall be a “Capital Improvement”
under this Paragraph 11. C, which in the case of items performed by Landlord
shall be amortized and treated as set forth in Section 5.4 of the Lease. If the
Tenant is obligated under the Lease to perform any such Capital Improvement,
Tenant shall pay at the time of performing such Capital Improvement only the
first annual installment of the amortized cost of such item, determined as set
forth above, and Landlord shall pay the balance of the cost of such Capital
Improvement, subject to Tenant’s subsequent annual reimbursement to Landlord of
the amortized cost of such item which comes due during the Term and any Extended
Term of the Lease. For example, if a Capital Improvement has a cost of $50,000
and a useful life of ten (10) years, Tenant’s obligation for principal would be
$5,000 annually (plus amortization costs per Paragraph 5.4), subject to
termination at the expiration of the Term or any Extended Term of the Lease.

                             12.          Miscellaneous Provisions: 

                                           A.          Verity shall have the
right to select and use a reputable licensed contractor on a competitive bid
process to construct improvements and alterations to the Premises subject to
Landlord’s reasonable approval process.  Landlord’s associated licensed
contractor shall be invited to submit a bid on improvements and alterations.

                                           B.          Verity shall designate a
reputable licensed HVAC contractor to conduct maintenance on the Premises during
the Lease Term.  Landlord’s associated licensed contractor shall be invited to
submit a bid on any equipment replacements.

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                             13.          Condition of Premises:  Tenant is
fully familiar with the Premises by way of its occupancy and accepts the
Premises for the extended term created hereby in their as-is condition, with all
latent and patent faults, without warranty or obligation on the part of Landlord
to provide or pay for any interior improvements or tenant improvement
allowances, except as expressly set forth herein.  Upon timely exercise of the
option to extend, Tenant shall take the Premises for the Extended Term on the
same basis. 

                             14.          Continuing Obligation:  Except as
expressly modified by the terms of this Amendment, all terms and conditions of
the Lease remain in full force and effect, and all terms and conditions of the
Lease are incorporated herein as though set forth at length.

                             15.          Effect of Amendment:  This Amendment
modifies the Lease.  In the event of any conflict or discrepancy between the
Lease and/or any other previous documents between the parties and the provisions
of this Amendment, then the provisions of this Amendment shall control.  Except
as modified herein, the Lease shall remain in full force and effect.

                             16.          Authority:  Each individual executing
this Amendment on behalf of Tenant represents and warrants that he or she is
duly authorized to and does execute and deliver this Amendment pursuant to
express authority from Tenant pursuant to and in accordance with the By-Laws and
the other organic documents of the Tenant corporation.

                             17.          Entire Agreement:  The Lease, as
modified by this Amendment, constitutes and contains the entire agreement
between the parties, and there are no binding agreements or representations
between the parties except as expressed herein.  Tenant acknowledges that
neither Landlord nor Landlord’s Agents have made any legally binding
representations or warranties as to any matter except as expressly set forth
herein, including any representations or warranties relating to the condition of
the Premises or the improvements thereto or the suitability of the Premises or
the Project for Tenant’s business.

               IN WITNESS WHEREOF, Landlord and Tenant have executed this
Amendment as of the Effective Date.

LANDLORD:

 

TENANT:

 

 

 

ROSS DRIVE INVESTORS
a California general partnership

 

VERITY, INC.
a Delaware corporation

By:  /s/ David J. Brown

 

By: /s/ Steven R. Springsteel

 

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David J. Brown

 

Steven R. Springsteel

 

Manager

 

Senior Vice President of Finance and

 

 

Administration and Chief Financial Officer

 

 

 

Date:     March 15, 2004

 

Date:     March 15, 2004

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