STANDARD OFFICE LEASE


1.    Basic Lease Provisions ("Basic Lease Provisions")

     1.1 Parties:  This Lease, dated, for reference purposes only, July 1 , 1997
, is made by and between  STEVENS  CREEK OFFICE  CENTER OF SANTA CLARA , (herein
called   "Landlord")  and  EXCALIBUR   TECHNOLOGIES   CORPORATION,   a  Delaware
corporation, , (herein called the "Tenant"). 

     1.2  Building:  Commonly  described as being  located at 4675 Stevens Creek
Boulevard  , in the  City of  Santa  Clara,  County  of  Santa  Clara,  State of
California, as more particularly described in Exhibit "A" hereto, and as defined
in paragraph 2.

     1.3 Premises:  Suite  Number(s)  #230 , on the second floor,  consisting of
approximately 1,339 rentable square feet , more or less, as defined in paragraph
2 and subject to Attached Addendum to Lease , and as shown on Exhibit(s) "B@ and
"B-1" , hereto (the Premises").

     1.4 Use: General office and administrative, including software engineering,
as well as other landlord approved uses, subject to paragraph 6.

     1.5 Term:  Thirty-six (36) months,  commencing July 1, 1997  ("Commencement
Date") and ending June 30, 2000, ("Termination Date") as defined in paragraph 3.

     1.6 Base Rent: : See: Attached Addendum to Lease, per month, payable on the
first (1st) day of each month, per paragraph 4.1

     1.7 Base Rent Increase:  See:  Attached  Addendum to Lease the monthly Base
Rent  payable  under  paragraph  1.6 above  shall be adjusted as provided in the
Addendum to Lease.

     1.8 Rent Paid Upon Execution: Four Thousand Nine Hundred Ninety-Six Dollars
and Eighty-Five  Cents  ($4,996.85) : for the month of July 1997 for Suite #230,
September 1997 for Suite #220 and November 1997 for Suite #224 .

     1.9 Security  Deposit:  Two  Thousand  Dollars and No Cents  ($2,000.),  is
currently  being  held  by  Landlord  for  the  benefit  of  Interpix   Software
Corporation,   said  Tenant  having  been  acquired  by  Excalibur  Technologies
Corporation.  Said sum is being  transferred  from that certain Lease  Agreement
dated June 5, 1996,  between Stevens Creek Office Center (Landlord) and Interpix
Software  Corporation  (Tenant) upon expiration of said Lease for the benefit of
Excalibur Technologies. Tenant hereby agrees to increase said deposit by the sum
of Three Thousand Dollars and No Cents ($3,000.) increasing the security deposit
to a total sum of Five Thousand Dollars and No Cents ($5,000.) upon execution of
this lease agreement.

     1.10 Tenant's Share of Operating  Expense  Increase:  4.050 % as defined in
paragraph 4.2.

2. Premises, Parking and Common Areas.

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     2.1 Premises: The Premises are a portion of a building,  herein referred to
as the  "Building"  in paragraph 1.2 of the Basic Lease  Provisions.  "Building"
shall include  adjacent  parking  structures used in connection  therewith.  The
Premises,  the  Building,  the  Common  Areas,  the land upon which the same are
located,  along with all other buildings and improvements thereon or thereunder,
are herein collectively  referred to as the "Office Building Project".  Landlord
hereby  leases to Tenant and Tenant  leases from  Landlord for the term,  at the
rental,  and upon all of the  conditions  set forth  herein,  the real  property
referred to in the Basic Lease  Provisions,  paragraph  1.3, as the  "Premises",
including rights to the Common Areas as hereinafter specified.

     2.2 Vehicle  Parking:  So long as Tenant is not in default,  and subject to
the rules and regulations  attached hereto,  and as established by Landlord from
time to time,  Tenant  shall  be  entitled  to rent  and use Six (6)  unassigned
parking  spaces in the Office  Building  Project at the monthly rate  applicable
from time to time for monthly parking as set by Landlord and/or its licensee.

     2.2.1 If Tenant commits, permits or allows any of the prohibited activities
described in the Lease or the rules then in effect, then Landlord shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove or tow away, in connection  with parking,  the vehicle  involved
and charge the cost to the Tenant,  which cost shall be immediately payable upon
demand by Landlord.

     2.2.2 The monthly parking rate per parking space will be $ (0) per month at
the  commencement of the term of this Lease,  and is subject to change upon five
(5) days prior written notice to Tenant.  Monthly  parking fees shall be payable
one month in advance prior to the first day of each calendar month.

     2.3 Common Areas -  Definition.  The term "Common  Areas" is defined as all
areas and facilities  outside the Premises and within the exterior boundary line
of the Office Building  Project that are provided and designated by the Landlord
from time to time for the general  non-exclusive use of Landlord,  Tenant and of
other Tenants of the Office  Building  Project and their  respective  employees,
suppliers, shippers, customers and invitees, including but not limited to common
entrances,  lobbies,  corridors,  stairways and  stairwells,  public  restrooms,
elevators,  escalators,  parking areas to the extent not otherwise prohibited by
this Lease,  loading and  unloading  areas,  trash areas,  roadways,  sidewalks,
walkways, parkways, ramps, driveways, landscaped areas and decorative walls.

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     2.4 Common  Areas - Rules and  Regulations.  Tenant  agrees to abide by and
conform to the rules and  regulations  attached hereto as Exhibit C with respect
to the Office  Building  Project and Common Areas,  and to cause its  employees,
suppliers,  shippers,  customers, and invitees to so abide and conform. Landlord
or such other person(s) as Landlord may appoint shall have the exclusive control
and management of the Common Areas and shall have the right,  from time to time,
to modify,  amend and enforce  said  non-discriminatory  rules and  regulations.
Except  that  Landlord  shall  do  all  it  can do to  enforce  such  rules  and
regulations  and to the best of its  ability  to  mitigate  any  non-compliance,
Landlord  shall not be  responsible  to Tenant for the  noncompliance  with said
rules and regulations by other Tenants, their agents,  employees and invitees of
the Office Building Project.

     2.5 Common Areas - Changes.  Landlord  shall have the right,  in Landlord's
sole discretion, from time to time:

          (a) To make changes to the  Building  interior and exterior and Common
     Areas, including, without limitation, changes in the location, size, shape,
     number, and appearance  thereof,  including but not limited to the lobbies,
     windows,   stairways,  air  shafts,   elevators,   escalators,   restrooms,
     driveways,  entrances, parking spaces, parking areas, loading and unloading
     areas, ingress, egress, direction of traffic,  decorative walls, landscaped
     areas and  walkways;  provided,  however,  that any such changes  shall not
     materially  deprive  Tenant of the Premises  leased  hereunder  and as more
     particularly  set forth in Section 1.3, above.  Landlord shall at all times
     provide the parking facilities required by applicable law;

          (b) To close  temporarily  any of the  Common  Areas  for  maintenance
     purposes so long as reasonable access to the Premises remains available;

          (c) To designate other land and improvements outside the boundaries of
     the Office Building Project to be a part of the Common Areas, provided that
     such other land and improvements have a reasonable functional  relationship
     to the Office Building Project.

          (d) To add additional buildings and improvements to Common Areas;

          (e) To use  the  Common  Areas  while  engaged  in  making  additional
     improvements, repairs or alterations to the Office Building Project, or any
     portion thereof;

          (f) To do and perform such other acts and make such other  changes in,
     to or with  respect to the  Common  Areas and  Office  Building  Project as
     Landlord  may,  in the  exercise  of  sound  business  judgment  deem to be
     reasonably appropriate.


                                                 Landlord Initials:____________
                         FULL SERVICE - GROSS
                                                   Tenant Initials:____________

                         
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3. Term.

     3.1  Term.  The  term  and  Commencement  Date of this  Lease  shall  be as
specified in paragraph 1.5 of the Basic Lease Provisions.

     3.2 Delay in  Possession.  Except in the event of willful acts of Landlord,
its  agents or  employees,  or for  causes  within  the  reasonable  control  of
Landlord,  notwithstanding  said  Commencement  Date, if for any reason Landlord
cannot deliver  possession of the Premises to Tenant on said date and subject to
paragraph 3.2.2,  Landlord shall not be subject to any liability  therefor,  nor
shall such  failure  affect the  validity  of this Lease or the  obligations  of
Tenant hereunder or extend the term hereof;  but, in such case, Tenant shall not
be  obligated  to pay rent or perform any other  obligation  of Tenant under the
terms of this Lease,  except as may be otherwise  provided in this Lease,  until
possession  of the  Premises  is  tendered to Tenant,  as  hereinafter  defined;
provided,  however,  that if Landlord shall not have delivered possession of the
Premises within ninety (90) days following said  Commencement  Date, as the same
may be  extended  under the terms of a Work  Letter  executed  by  Landlord  and
Tenant,  Tenant may, at Tenant's option, by notice in writing to Landlord within
ten (10) days thereafter  cancel this Lease, in which event the parties shall be
discharged  from all  obligations  hereunder:  provided,  however,  that,  as to
Tenant's  obligations,  Tenant first reimburses  Landlord for all costs incurred
for Non-Standard  improvements and as to Landlord's obligations,  Landlord shall
return any money  previously  deposited by Tenant (less any offsets due Landlord
for  Non-Standard  Improvements):  and  provided  further,  that if such written
notice by Tenant is not  received by  Landlord  within said ten (10) day period,
Tenant's  right to cancel  this Lease  hereunder  shall  terminate  and be of no
further force or effect.

     3.2.1 Possession Tendered-Defined.  Possession  of the  Premises  shall  be
deemed tendered to Tenant ("Tender of Possession")  when (1) the improvements to
be provided by Landlord under this Lease are  substantially  completed,  (2) the
Building utilities are ready for use In the Premises.  (3) Tenant has reasonable
access to the  Premises  and,  (4) ten (10) days  shall have  expired  following
advance  written notice to Tenant of the occurrence of the matters  described in
(1),(2) and (3). above of this paragraph 3.2.1.

     3.2.2 Delays Caused by Tenant. There shall be no abatement of rent, and the
sixty (60) day period  following  the  Commencement  Date before which  Tenant's
right to cancel this Lease accrues under paragraph 3.2. shall be deemed extended
to the  extent of any delays  caused by acts or  omissions  of Tenant,  Tenant's
agents, employees and contractors.

   3.3  Early  Possession.  If  Tenant  occupies  the  Premises  prior  to  said
Commencement  Date,  such  occupancy  shall be subject to all provisions of this
Lease, such occupancy shall not change the termination date and Tenant shall pay
rent for such occupancy.

   3.4 Uncertain  Commencement.  In the event  commencement of the Lease term is
defined as the completion of the improvements, Tenant and Landlord shall execute
an amendment to this Lease  establishing  the date of Tender of  Possession  (as
defined  In  paragraph  3.2.1) or the  actual  taking of  possession  by Tenant,
whichever first occurs, as the Commencement Date.


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4.  Rent

     4.1 Base Rent.  Subject to adjustment as hereinafter  provided In paragraph
4.3 and except as may be  otherwise  expressly  provided in this  Lease,  Tenant
shall pay to Landlord the Base Rent for the Premises set forth in paragraph  1.6
of the Basic Lease  Provisions,  without  offset or deduction.  Tenant shall pay
Landlord upon execution  hereto the advance Base Rent described in paragraph 1.8
of the Basic Lease  Provision.  Rent for any period during the term hereof which
Is for less than one month  shall be  prorated  based upon the actual  number of
days of the calendar  month  involved.  Rent shall be payable in lawful money of
the United  States to  Landlord at the  address  stated  herein or to such other
persons or at such other places as Landlord may designate In writing.

     4.2 Operating  Expense  Increase.  Tenant shall pay to Landlord  during the
term  hereof,  in  addition to the Base Rent,  Tenant's  Share,  as  hereinafter
defined, of the amount by which all Operating Expenses,  as hereinafter defined,
for each  Comparison  Year exceeds the amount of all Operating  Expenses for the
Base Year, such excess being hereinafter  referred to as the "Operating  Expense
increase" in accordance with the following provisions:

          (a) "Tenant's  Share" Is defined,  for purposes of this Lease,  as the
     percentage set forth in paragraph 1.10 of the Basic Lease Provisions, which
     percentage has been determined by dividing the  approximate  square footage
     of the  Premises by the total  approximate  square  footage of the rentable
     space contained in the Office Building Project. it is understood and agreed
     that the square footage figures set forth in the Basic Lease Provisions are
     approximations which Landlord and Tenant agree are reasonable and shall not
     be subject to revision  except in  connection  with an actual change In the
     size of the  Premises or a change in the space  available  for lease In the
     Office Building Project.

          (b) "Base Year" is defined as 1996 .

          (c) "Comparison Year" is defined as each calendar year during the term
     of this Lease subsequent to the Base Year:  Tenant's Share of the Operating
     Expense  Increase for the first and last Comparison Years of the Lease Term
     shall be prorated  according to that portion of such  Comparison Year as to
     which Tenant Is responsible for a share of such increase.

          (d) "Operating  Expenses " is defined,  for purposes of this Lease, to
     include all costs,  if any,  incurred  by  Landlord in the  exercise of Its
     reasonable discretion, for:

               (i) The operation, repair, maintenance, and replacement, in neat,
          clean, safe, good order and condition, of the Office Building Project,
          including but not limited to, the following:

                    (aa) The Common Areas, including their surfaces,  coverings,
               decorative  items,  carpets,  drapes  and window  coverings,  and
               including  parking  areas,  loading and  unloading  areas,  trash
               areas,  roadways,  sidewalks,   walkways,  stairways,   parkways,
               driveways,   landscaped  areas,  striping,   bumpers,  irrigation
               systems, Common Area lighting facilities,  building exteriors and
               roofs, fences and gates:

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                    (bb) All heating,  air  conditioning,  plumbing,  electrical
               systems,  life  safely  equipment,  telecommunication  and  other
               equipment  used in common by, or for the benefit  of,  Tenants or
               occupants of the Office Building Project, including elevators and
               escalators,  Tenant directories, fire detection systems Including
               sprinkler system maintenance and repair,

               (ii) Trash disposal, janitorial and security services:

               (iii)  Any other  service  to be  provided  by  Landlord  that is
          elsewhere in this Lease stated to be an "Operating Expense":

               (iv) The cost of the  premiums  for the  liability  and  property
          Insurance  policies to be  maintained  by Landlord  under  paragraph 8
          hereof:

               (v) The amount of the real property  taxes to be paid by Landlord
          under paragraph 10.1 hereof:

               (vi)  The  cost of  water,  sewer,  gas,  electricity  and  other
          publicly mandated services to the Office Building Project:

               (vii) Labor,  salaries and applicable  fringe benefits and costs,
          materials, supplies and tools, used in maintaining and/or cleaning the
          Office   Building   Project  and   accounting  and  a  management  fee
          attributable to the operation of the Office Building Project:

               (viii)  Replacing  and/or  adding  improvements  mandated  by any
          governmental agency and any repairs or removals  necessitated  thereby
          amortized  over its  useful  life  according  to  federal  income  tax
          regulations or guidelines for depreciation thereof (Including interest
          on the  unamortized  balance as is then  reasonable in the judgment of
          Landlord's accountants):

               (ix) Replacements of equipment or improvements that have a useful
          life  for  depreciation  purposes  according  to  Federal  income  tax
          guidelines of five (5) years or less, as amortized over such life.


                                               Landlord Initials:____________
                          FULL SERVICE - GROSS
                                                Tenant Initials:____________

   
<PAGE>

          (e) Operating  Expenses shall not include the costs of replacements of
     equipment or  improvements  that have a useful life for Federal  income tax
     purposes in excess of five (5) years unless it is of the type  described in
     paragraph 4.2(d)(viii), in which case their cost shall be included as above
     provided;

          (f)  Operating  Expenses  shall not Include any  expenses  paid by any
     Tenant  directly to third  parties,  or as to which  Landlord Is  otherwise
     reimbursed by any third party, other Tenant, or by insurance proceeds.

          (g) Tenant's Share of Operating  Expense  Increase shall be payable by
     Tenant within ten (10) days after a reasonably detailed statement of actual
     expenses is presented to Tenant by Landlord. At Landlord's option, however,
     an amount  may be  estimated  by  Landlord  from time to time In advance of
     Tenant's Share of the Operating  Expense  Increase for any Comparison Year,
     and the same  shall be payable  monthly or  quarterly,  as  Landlord  shall
     designate,  during each  Comparison Year of the Lease term, on the same day
     as the Base Rent Is due hereunder. In the event that Tenant pays Landlord's
     estimate of Tenant's  Share of  Operating  Expense  Increase as  aforesaid,
     Landlord  shall  deliver  to  Tenant  within  ninety  (90)  days  after the
     expiration of each Comparison Year a reasonably  detailed statement showing
     Tenant's Share of Operating  Expense Increase next falling due. If Tenant's
     payments under this paragraph  during said  Comparison  Year were less than
     Tenant's Share as indicated on said statement, Tenant shall pay to Landlord
     the deficiency within ten (10) days after delivery by Landlord to Tenant of
     said detailed  statement  showing  Tenant's  Share of the actual  Operating
     Expense Increase  incurred during the year, If Tenant's payments under this
     paragraph  4.2(g)  during said  Comparison  Year exceed  Tenant's  Share as
     indicated  on said  statement,  Tenant shall be entitled to a credit in the
     amount  of  such  overpayment  against  future  payments  of  Base  Rent to
     Landlord.  Landlord and Tenant shall forthwith  adjust between them by cash
     payment any balance determined to exist with respect to that portion of the
     last  Comparison  Year for which  Tenant  Is  responsible  as to  Operating
     Expense increases,  notwithstanding that the Lease term may have terminated
     before the end of such Comparison Year.

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4.3 Rent Increase. (This section marked out and deleted)


5. Security  Deposit.  Tenant shall deposit with Landlord upon execution  hereof
the security deposit set forth in paragraph 1.9 of the Basic Lease Provisions as
security for Tenant's faithful performance of Tenant's obligations  hereunder If
Tenant fails to pay rent or other charges due hereunder.  or otherwise  defaults
with respect to any provision of this Lease,  Landlord may use,  apply or retain
all or any portion of said  deposit for the payment of any rent or other  charge
in  default  for the  payment  of any other  sum to which  Landlord  may  become
obligated by reason of Tenant's default,  or to compensate Landlord for any loss
or damage which  Landlord may suffer  thereby if Landlord so uses or applies all
or any portion of said deposit,  Tenant shall within ten (10) days after written
demand  therefor  deposit cash with Landlord in an amount  sufficient to restore
said deposit to the full amount then required of Tenant.  Landlord  shall not be
required to keep said security  deposit separate from its general  accounts.  If
Tenant performs all of Tenant's obligations hereunder,  said deposit, or so much
thereof as has not  heretofore  been  applied  by  Landlord  shall be  returned,
without  payment of interest or other  increment  for its use, to Tenant (or, at
Landlord's option, to the last assignee, if any, of Tenant's interest hereunder)
at the expiration of the term hereof, and after Tenant has vacated the Premises.
No trust relationship is created herein between Landlord and Tenant with respect
to said Security Deposit.
    

6. Use.

   6.1 Use.  The Premises  shall be used and  occupied  only for the purpose set
forth in paragraph  1.4 of the Basic Lease  Provisions or any other use which is
reasonably comparable to that use and for no other purpose.

<PAGE>

   6.2  Compliance with Law.

      (a) Landlord  warrants to Tenant that the Premises,  in the state existing
on the date that the lease term commences,  but without regard to alterations or
improvements  made by  Tenant  or the use  for  which  Tenant  will  occupy  the
Premises,  does not violate any  covenants  or  restrictions  of record,  or any
applicable  building code,  regulation or ordinance in effect on such Lease term
Commencement  Date.  In the event it is  determined  that this warranty has been
violated, then it shall be the obligation of the Landlord,  after written notice
from Tenant, to promptly, at Landlord's sole cost and expense,  rectify any such
violation.

      (b) Except as provided  in  paragraph  6.2(a)  Tenant  shall,  at Tenant's
expense,  promptly  comply  with all  applicable  statutes,  ordinances,  rules,
regulations,  orders,  covenants and restrictions of record, and requirements of
any fire insurance  underwriters or rating  bureaus,  now in effect or which may
hereafter come into effect,  whether or not they reflect a change in policy from
that now existing,  during the term or any part of the term hereof,  relating in
any manner to the Premises and the occupation and use by Tenant of the Premises.
Tenant shall conduct its business in a lawful manner and shall not use or permit
the use of the  Premises  or the Common  Areas in any  manner  that will tend to
create  waste or a  nuisance  or shall tend to disturb  other  occupants  of the
Office Building Project.

   6.3  Condition of Premises.

      (a) Landlord shall deliver the Premises to Tenant in a clean  condition on
the Lease  Commencement  Date  (unless  Tenant is  already  in  possession)  and
Landlord warrants to Tenant that the plumbing,  lighting, air conditioning,  and
heating  system in the Premises  shall be in good  operating  condition.  In the
event that it Is determined that this warranty has been violated,  then it shall
be the  obligation  of  Landlord,  after  receipt of written  notice from Tenant
setting forth with  specificity  the nature of the  violation,  to promptly,  at
Landlord's sole cost, rectify such violation.

      (b) Except as otherwise provided in this Lease,  Tenant hereby accepts the
Premises and the Office Building  Project in their condition  existing as of the
Lease  Commencement  Date  or the  date  that  Tenant  takes  possession  of the
Premises,  whichever is earlier,  subject to all applicable  zoning,  municipal,
county and state laws,  ordinances and regulations  governing and regulating the
use of the Premises, and any easements, covenants or restrictions or record, and
accepts this Lease subject thereto and to all matters  disclosed  thereby and by
any exhibits attached hereto.  Tenant  acknowledges that it has satisfied itself
by its own  independent  investigation  that the  Premises  are suitable for its
intended use, and that neither  Landlord nor Landlord's agent or agents has made
any  representation  or warranty as to the present or future  suitability of the
Premises,  Common Areas, or Office Building  Project for the conduct of Tenant's
business.

                                               Landlord Initials:____________
                        FULL SERVICE - GROSS
                                                Tenant Initials:____________


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7. Maintenance, Repairs, Alterations and Common Area Services.

   7.1 Landlord's Obligations.  Landlord shall keep the Office Building Project,
including the Premises, interior and exterior walls, roof, and Common Areas, and
the equipment  whether used exclusively for the Premises or in common with other
premises, in good condition and repair; provided, however, Landlord shall not be
obligated to paint,  repair or replace wall  coverings,  or to repair or replace
any  improvements  that are not  ordinarily  a part of the Building or are above
then Building standards.  Except as provided in paragraph 9 5. there shall be no
abatement  of  rent  or  liability  of  Tenant  on  account  of  any  injury  or
interference   with  Tenant's   business  with  respect  to  any   improvements,
alterations  or repairs made by Landlord to the Office  Building  Project or any
part  thereof.  Tenant  expressly  waives the  benefits  of any  statute  now or
hereafter  in effect  which  would  otherwise  afford  Tenant  the right to make
repairs at Landlord's  expense or to terminate  this Lease because of Landlord's
failure to keep the Premises in good order, condition and repair.

   7.2   Tenant's Obligations.

      (a)  Notwithstanding  Landlord's  obligation  to keep the Premises in good
condition  and  repair,  Tenant  shall be  responsible  for  payment of the cost
thereof  to  Landlord  as  additional  rent for that  portion of the cost of any
maintenance and repair of the Premises, or any equipment (wherever located) that
serves only Tenant or the Premises,  to the extent such cost is  attributable to
causes beyond normal wear and tear.  Tenant shall be responsible for the cost of
painting,  repairing or replacing  wall  coverings  and to repair or replace any
Premises improvements that are not ordinarily a part of the Building or that are
above then  Building  standards.  Landlord may, at its option,  upon  reasonable
notice,  elect to have Tenant perform any particular such maintenance or repairs
the cost of which is otherwise Tenant's responsibility hereunder.

      (b) On the last  day of the term  hereof,  or on any  sooner  termination,
Tenant  shall  surrender  the  Premises  to Landlord  in the same  condition  as
received,  ordinary wear and tear excepted, clean and free of debris. Any damage
or  deterioration  of the Premises shall not be deemed ordinary wear and tear if
the same could have been  prevented  by good  maintenance  practices  by Tenant.
Tenant shall repair any damage to the Premises occasioned by the installation or
removal of Tenant's  trade  fixtures,  alterations.  furnishings  and equipment.
Except as  otherwise  stated in this  Lease.  Tenant  shall leave the air lines,
power  panels,   electrical   distribution  systems,   lighting  fixtures,   air
conditioning, window coverings, wall coverings, carpets, wall paneling, ceilings
and plumbing on the Premises and in good operating condition.

   7.3  Alterations and Additions.

      (a) Tenant shall not,  without  Landlord's  prior written consent make any
alterations, improvements, additions, Utility Installations or repairs in, on or
about the Premises,  or the Office Building  Project.  As used in this paragraph
7.3 the term  "Utility  Installation"  shall  mean  carpeting,  window  and wall
coverings, power panels, electrical distribution systems, lighting fixtures, air
conditioning,   plumbing,   and  telephone  and  telecommunication   wiring  and
equipment.  At the  expiration of the term,  Landlord may require the removal of
any  or  all  of  said   alterations,   improvements,   additions   or   Utility
Installations,  and the  restoration  of the  Premises  and the Office  Building
Project to their prior condition,  at Tenant's  expense.  Should Landlord permit
Tenant  to  make  its  own  alterations,   improvements,  additions  or  Utility
Installations,  Tenant  shall use only  such  contractor  as has been  expressly

<PAGE>

approved by Landlord,  and Landlord may require Tenant to provide  Landlord,  at
Tenant's sole cost and expense, a lien and completion bond in an amount equal to
one and  one-half  times  the  estimated  cost of such  improvements,  to insure
Landlord  against any liability for  mechanic's and  materialmen's  liens and to
insure completion of the work. Should Tenant make any alterations. improvements,
additions or Utility  Installations  without the prior approval of Landlord,  or
use a contractor not expressly  approved by Landlord,  Landlord may, at any lime
during the term of this Lease, require that Tenant remove any part or all of the
same.

      (b) Any alterations,  improvements,  additions or Utility Installations in
or about the Premises or the Office Building Project that Tenant shall desire to
make shall be  presented to Landlord in written  form,  with  proposed  detailed
plans.  If Landlord shall give its consent to Tenant's  making such  alteration,
improvement.  addition  or Utility  Installation,  the  consent  shall be deemed
conditioned  upon  Tenant  acquiring  a  permit  to do so  from  the  applicable
governmental  agencies,  furnishing  a copy  thereof  to  Landlord  prior to the
commencement  of the work,  and compliance by Tenant with all conditions of said
permit in a prompt and expeditious manner.

      (c)  Tenant  shall  pay,  when due,  all  claims  for  labor or  materials
furnished  or alleged to have been  furnished  to or for Tenant at or for use in
the  Premises,  which  claims  are or  may  be  secured  by  any  mechanic's  or
materialmen's  lien against the  Premises,  the Building or the Office  Building
Project, or any interest therein.

      (d) Tenant  shall give  Landlord not less than ten (10) days' notice prior
to the  commencement  of any work in the Premises by Tenant,  and Landlord shall
have the right to post  notices of  non-responsibility  in or on the Premises or
the  Building as provided by law. If Tenant  shall,  in good faith,  contest the
validity  of any such lien,  claim or demand,  then  Tenant  shall,  at its sole
expense  defend  itself and Landlord  against the same and shall pay and satisfy
any such adverse  judgment that may be rendered  thereon before the  enforcement
thereof  against  the  Landlord  or the  Premises,  the  Building  or the Office
Building  Project,  upon the condition that if Landlord  shall  require,  Tenant
shall  furnish to Landlord a surely bond  satisfactory  to Landlord in an amount
equal to such  contested  lien  claim or demand  indemnifying  Landlord  against
liability  for the same and holding the  Premises,  the  Building and the Office
Building  Project  free from the  effect of such  lien or  claim.  In  addition,
Landlord may require Tenant to pay  Landlord's  reasonable  attorneys'  fees and
costs  in  participating  in such  action  if  Landlord  shall  decide  it is to
Landlord's best interest so to do.

      (e) All  alterations,  improvements,  additions and Utility  Installations
(whether or not such Utility Installations constitute trade fixtures of Tenant),
which may be made to the Premises by Tenant, including but not limited to, floor
coverings,  paneling, doors, drapes, built-ins, moldings, sound attenuation, and
lighting and telephone or communication  systems,  conduit,  wiring and outlets,
shall  be made  and  done  in a good  and  workmanlike  manner  and of good  and
sufficient  quality and  materials  and shall be the  property  of Landlord  and
remain upon and be surrendered  with the Premises at the expiration of the Lease
term,  unless  Landlord  requires  their removal  pursuant to paragraph  7.3(a).
Provided  Tenant  is not In  default,  notwithstanding  the  provisions  of this
paragraph  7.3(e),  Tenant's  personal  property and equipment,  other than that
which Is affixed to the Premises so that it cannot be removed  without  material
damage to the Premises or the  Building,  and other than Utility  Installations,
shall remain the property of Tenant and may be removed by Tenant  subject to the
provisions of paragraph 7.2.
<PAGE>

      (f) Tenant shall provide  Landlord with as-built plans and  specifications
for any alterations, improvements, additions or Utility Installations.

   7.4  Utility  Additions,  Landlord  reserves  the  right  to  install  new or
additional  utility  facilities  throughout the Office Building  Project for the
benefit of  Landlord  or  Tenant,  or any other  Tenant of the  Office  Building
Project,  including,  but not by way of limitation,  such utilities as plumbing,
electrical  systems,  communication  systems,  and fire protection and defection
systems,  so long as  such  installations  do not  unreasonably  interfere  with
Tenant's use of the Premises.

8. Insurance; Indemnity.

   8.1 Liability Insurance-Tenant. Tenant shall, at Tenant's expense, obtain and
keep in force  during the term of this Lease a policy of  Comprehensive  General
Liability  insurance  utilizing an Insurance  Services Office standard form with
Broad Form General Liability Endorsement  (GLO404), or equivalent.  in an amount
of not less than  $1,000,000 per occurrence of bodily Injury and property damage
combined or In a greater  amount as reasonably  determined by Landlord and shall
insure Tenant with Landlord as an additional  insured against  liability arising
out of the use,  occupancy or maintenance of the Premise's.  Compliance with the
above requirement shall not, however, limit the liability of Tenant hereunder.

   8.2  LiabilIty  Insurance-Landlord.  Landlord  shall obtain and keep in force
during the term of this Lease a policy of Combined  Single Limit  Bodily  Injury
and Broad Form Property Damage Insurance, plus coverage against such other risks
Landlord deems advisable from time to time,  insuring Landlord,  but not Tenant,
against liability arising out of the ownership, use, occupancy or maintenance of
the  Office  Building  Protect  in an  amount  not less than  $5,000,000.00  per
occurrence.

   8.3 Property Insurance-Tenant.  Tenant shall, at Tenant's expense, obtain and
keep in  force  during  the  term of this  Lease  for  the  benefit  of  Tenant,
replacement  cost fire and  extended  coverage  insurance,  with  vandalism  and
malicious   mischief,   sprinkler  leakage  and  earthquake   sprinkler  leakage
endorsements,  in an amount  sufficient  to cover not less than 100% of the full
replacement  cost,  as the same may exist from time to time,  of all of Tenant's
personal property, fixtures, equipment and Tenant improvements.

8.4 Property Insurance-Landlord.  Landlord shall obtain and keep in force during
the term of this Lease a policy or policies of insurance covering loss or damage
to the Office Building Project improvements, but not Tenant's personal property,
fixtures, equipment or Tenant improvements, in the amount of the

                                               Landlord Initials:____________
                        FULL SERVICE - GROSS
                                                Tenant Initials:____________

<PAGE>


full  replacement  cost  thereof,  as the  same  may  exist  from  time to time,
utilizing  Insurance  Services  Office  standard form, or equivalent,  providing
protection  against  all  perils  included  within the  classification  of fire,
extended coverage,  vandalism,  malicious mischief,  plate glass, and such other
perils as Landlord deems  advisable or may be required by a lender having a lien
on the Office Building Project.  In addition,  Landlord shall obtain and keep in
force,  during  the term of this  Lease,  a policy  of  rental  value  insurance
covering a period of one year,  with toss payable to Landlord,  which  insurance
shall also cover all  Operating  Expenses  for said  period.  Tenant will not be
named in any such  policies  carried by Landlord  and shall have no right to any
proceeds therefrom.  The policies required by these paragraphs 8.2 and 8.4 shall
contain such deductibles as Landlord or the aforesaid  lender may determine.  In
the event that the Premises shall suffer an insured loss as defined In paragraph
9.1(f) hereof,  the deductible  amounts under the applicable  insurance policies
shall be deemed an Operating  Expense.  Tenant shall not do or permit to be done
anything  which shall  invalidate  the insurance  policies  carried by Landlord.
Tenant shall pay the entirety of any increase in the property  insurance premium
for the  Office  Building  Project  over  what it was  immediately  prior to the
commencement  of the  term  of  this  Lease  if the  increase  Is  specified  by
Landlord's  Insurance  carrier as being solely  caused by the nature of Tenant's
occupancy or any act or omission of Tenant.

   8.5 Insurance Policies,  Tenant shall deliver to Landlord copies of liability
insurance  policies required under paragraph 8.1 or certificates  evidencing the
existence  and  amounts  of such  insurance  within  seven  (7) days  after  the
Commencement  Date of this Lease.  No such policy shall be cancelable or subject
to  reduction  of coverage or other  modification  except after thirty (30) days
prior written notice to Landlord.  Tenant shall, at least thirty (30) days prior
to the expiration of such policies, furnish Landlord with renewals thereof.

   8.6 Waiver of  Subrogation,  Tenant and  Landlord  each  hereby  release  and
relieve the other,  and waive their entire right of recovery  against the other,
for direct or  consequential  loss or damage  arising  out of or incident to the
perils covered by property  insurance carried by such party.  whether due to the
negligence of Landlord or Tenant or their agents, employees,  contractors and/or
invitees. If necessary all property insurance policies required under this Lease
shall be endorsed to so provide.

   8.7  Indemnity.  Tenant shall  indemnify and hold  harmless  Landlord and its
agents,  Landlord's  master or ground Landlord,  partners and lenders,  from and
against any and all claims for damage to the person or properly of anyone or any
entity  arising from Tenant's use of the Office  Building  Project,  or from the
conduct  of  Tenant's  business  or from  any  activity,  work or  things  done,
permitted or suffered by Tenant in or about the Premises or elsewhere  and shall
further  indemnify  and hold  harmless  Landlord  from and  against  any and all
claims, costs and expenses arising from any breach or default in the performance
of any  obligation  on  Tenant's  part to be  performed  under the terms of this
Lease, or arising from any act or omission of Tenant, or any of Tenant's agents,
contractors,  employees,  or invitees and from and against all costs, attorney's
fees,  expenses and  liabilities  incurred by Landlord as the result of any such
use,  conduct,  activity,  work,  things done,  permitted  or suffered,  breach,
default or negligence,  and in dealing reasonably  therewith,  including but not
limited to the  defense  or  pursuit  of any claim or any  action or  proceeding
involved  therein,  and in case any  action or  proceeding  be  brought  against
Landlord by reason of any such matter.  Tenant upon notice from  Landlord  shall
defend  the same at  Tenant's  expense  by counsel  reasonably  satisfactory  to

<PAGE>

Landlord and Landlord shall cooperate with Tenant in such defense. Landlord need
not have first paid any such claim in order to be so indemnified.  Tenant,  as a
material  part of the  consideration  to  Landlord,  hereby  assumes all risk of
damage to property of Tenant or injury to persons,  in, upon or about the Office
Building  Project  arising from any cause and Tenant hereby waives all claims in
respect thereof against Landlord.

   8.8 Exemption of Landlord from Liability.  Tenant hereby agrees that Landlord
shall  not be  liable  for  injury to  Tenant's  business  or any loss of income
therefrom or for loss of or damage to the goods,  wares or  merchandise or other
property of Tenant, Tenant's employees, Invitees, customers, or any other person
in or about the Premises or the Office Building  Project,  nor shall Landlord be
liable  for  injury  to the  person of  Tenant,  Tenant's  employees,  agents or
contractors,  whether  such damage or injury is caused by or results from theft,
fire,  steam,  electricity,  gas, water or rain, or from the breakage,  leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances,  plumbing,
air  conditioning or lighting  fixtures,  or from any other cause,  whether said
damage or injury results from conditions arising upon the Premises or upon other
portions of the Office  Building  Project,  or from other sources or places,  or
from new  construction  or the repair;  alteration or Improvement of any part of
the Office  Building  Project,  or of the equipment,  fixtures or  appurtenances
applicable thereto, and regardless of whether the cause of such damage or injury
or the means of repairing the same is inaccessible. Landlord shall not be liable
for any damages arising from any act or neglect of any other Tenant, occupant or
user of the Office Building Project, nor from the failure of Landlord to enforce
the  provisions  of any other lease of any other  Tenant of the Office  Building
Project.

   8.9 No Representation of Adequate Coverage.  Landlord makes no representation
that the limits or forms of coverage of insurance  specified in this paragraph 8
are adequate to cover Tenant's property or obligations under this Lease.

9. Damage or Destruction.

   9.1   Definitions.
      (a) "Premises Damage" shall mean if the Premises are damaged or destroyed
to any extent.

      (b) "Premises Building Partial Damage" shall mean if the Building of which
the  Premises  are a part is damaged or destroyed to the extent that the cost to
repair Is less than  fifty  percent  (50%) of the then  Replacement  Cost of the
building.

      (c) "Premises  Building Total  Destruction"  shall mean If the Building of
which the  Premises  are a part is damaged or  destroyed  to the extent that the
cost to repair is fifty  percent (50%) or more of the then  Replacement  Cost of
the Building.

      (d) "Office Building Project Buildings" shall mean all of the buildings on
the Office Building Project site.

      (e) "Office Building Project  Buildings Total  Destruction"  shall mean If
the Office  Building  Project  Buildings  are damaged or destroyed to the extent
that the cost of repair is fifty percent  (50%) or more of the then  Replacement
Cost of the Office Building Project Buildings.

<PAGE>

      (f) "Insured Loss" shall mean damage or destruction which was caused by an
event required to be covered by the insurance described in paragraph 8. The fact
that an  Insured  Loss  has a  deductible  amount  shall  not  make  the loss an
uninsured loss.

      (g)  "Replacement  Cost"  shall mean the amount of money  necessary  to be
spent in order to repair or  rebuild  the  damaged  area to the  condition  that
existed  immediately prior to the damage  occurring,  excluding all improvements
made by Tenants, other than those installed by Landlord at Tenant's expense.

   9.2     Premises Damage: Premises Building Partial Damage.

      (a) Insured Loss:  Subject to the provisions of paragraphs 9.4 and 9.5, if
at any time  during the term of this Lease  there is damage  which is an Insured
Loss and  which  falls  into the  classification  of either  Premises  Damage or
Premises  Building  Partial  Damage,  then Landlord shall, as soon as reasonably
possible  and to the  extent  the  required  materials  and  labor  are  readily
available through usual commercial channels, at Landlord's expense,  repair such
damage (but not Tenant's fixtures,  equipment or Tenant improvements  originally
paid for by Tenant) to its  condition  existing at the time of the  damage,  and
this Lease shall continue in full force and effect.

      (b) Uninsured  Loss:  Subject to the provisions of paragraphs 9.4 and 9.5,
if at any time  during  the term of this Lease  there is damage  which is not an
Insured Loss and which falls  within the  classification  of Premises  Damage or
Premises Building Partial Damage, unless caused by a negligent or willful act of
Tenant (in which event Tenant shall make the repairs at Tenant's expense), which
damage prevents Tenant from making any substantial use of the Premises, Landlord
may at  Landlord's  option  either (i) repair such damage as soon as  reasonably
possible at Landlord's expense, in which event this Lease shall continue in full
force and effect,  or (ii) give written notice to Tenant within thirty (30) days
after the date of the  occurrence  of such  damage of  Landlord's  intention  to
cancel and terminate this Lease as of the date of the occurrence of such damage,
in which event this Lease shall  terminate as of the date of the  occurrence  of
such damage.

   9.3 Premises  Building  Total  Destruction;  Office  Building  Project  Total
Destruction. Subject to the provisions of paragraphs 9.4 and 9.5, if at any time
during the term of this Lease  there is damage,  whether or not it is an Insured
Loss, which falls into the classifications of either (i) Premises Building Total
Destruction,  or (ii) Office Building Project Total  Destruction,  then Landlord
may at Landlord's option either (i) repair such damage or destruction as soon as
reasonably  possible at Landlord's expense (to the extent the required materials
are readily  available  through  usual  commercial  channels)  to its  condition
existing at the time of the damage,  but not  Tenant's  fixtures,  equipment  or
Tenant improvements,  and this Lease shall continue in full force and effect, or
(ii) give  written  notice to Tenant  within  thirty (30) days after the date of
occurrence of such damage of Landlord's  intention to cancel and terminate  this
Lease, in which case this Lease shall terminate as of the date of the occurrence
of such damage.
                                               Landlord Initials:____________
                        FULL SERVICE - GROSS
                                                Tenant Initials:____________

<PAGE>

  9.4  Damage Near End of Term.

      (a)  Subject to  paragraph  9.4(b),  if at any time during the last twelve
(12)  months  of the term of this  Lease  there  is  substantial  damage  to the
Premises,  Landlord may at Landlord's  option cancel and terminate this Lease as
of the date of occurrence of such damage by giving  written  notice to Tenant of
Landlord's election to do so within 30 days after the dale of occurrence of such
damage.

      (b)  Notwithstanding  paragraph  9.4(a),  in the event that  Tenant has an
option to extend or renew this Lease,  and the time within which said option may
be exercised has not yet expired, Tenant shall exercise such option, if it is to
be exercised at all, no later than twenty (20) days after the  occurrence  of an
Insured Loss falling  within the  classification  of Premises  Damage during the
last twelve (12) months of the term of this Lease. If Tenant duly exercises such
option  during  said  twenty  (20) day period,  Landlord  shall,  at  Landlord's
expense,  repair such  damage,  but not Tenant's  fixtures,  equipment or Tenant
Improvements,  as soon as reasonably  possible and this Lease shall  continue in
full force and  effect.  If Tenant  fails to exercise  such  option  during said
twenty (20) day period,  then  Landlord may at Landlord's  option  terminate and
cancel this Lease as of the  expiration of said twenty (20) day period by giving
written  notice to Tenant of  Landlord's  election to do so within ten (10) days
after the expiration of said twenty (20) day period, notwithstanding any term or
provision in the grant of option to the contrary.

   9.5     Abatement of Rent; Tenant's Remedies.

      (a) In the event  Landlord  repairs or restores  the  Building or Premises
pursuant to the provisions of this paragraph 9, and any part of the Premises are
not usable (including loss of use due to loss of access or essential  services),
the rent  payable  hereunder  (including  Tenant's  Share of  Operating  Expense
Increase)  for the  period  during  which  such  damage,  repair or  restoration
continues  shall be  abated,  provided  (1) the damage was not the result of the
negligence  of Tenant,  and (2) such  abatement  shall only be to the extent the
operation and  profitability of Tenant's  business as operated from the Premises
is adversely  affected.  Except for said abatement of rent, if any, Tenant shall
have no claim  against  Landlord  for any damage  suffered by reason of any such
damage, destruction, repair or restoration.

      (b) If Landlord  shall be  obligated  to repair or restore the Premises or
the Building  under the  provisions  of this  Paragraph 9 and shall not commence
such repair or restoration within ninety (90) days after such occurrence,  or if
Landlord  shall not complete the  restoration  and repair  within six (6) months
after such  occurrence,  Tenant may at Tenant's option cancel and terminate this
Lease,  by giving Landlord  written notice of Tenant's  election to do so at any
time prior to the  commencement or completion,  respectively,  of such repair or
restoration.  In such event this Lease  shall  terminate  as of the date of such
notice.

      (c) Tenant agrees to cooperate  with Landlord in connection  with any such
restoration  and  repair,  including  but not  limited  to the  approval  and/or
execution of plans and specifications required.

   9.6Termination-Advance  Payments.  Upon termination of this Lease pursuant to
this paragraph 9, an equitable  adjustment shall be made concerning advance rent
and any  advance  payments  made by  Tenant  to  Landlord.  Landlord  shall,  in
addition,  return to  Tenant so much of  Tenant's  security  deposit  as has not
theretofore been applied by Landlord.
<PAGE>

   9.7 Waiver.  Landlord and Tenant waive the  provisions  of any statute  which
relate to termination of leases when leased property is destroyed and agree that
such event shall be governed by the terms of this Lease.

10.    Real Property Taxes.

   10.1 Payment of Taxes.  Landlord  shall pay the real property tax, as defined
in  paragraph  10.3,  applicable  to the  Office  Building  Project  subject  to
reimbursement  by Tenant of Tenant's Share of such taxes in accordance  with the
provisions of paragraph 4.2, except as otherwise provided in paragraph 10.2.

   10.2 Additional Improvements.  Tenant shall not be responsible for paying any
increase in real properly lax specified In the tax  assessor's  records and work
sheets  as being  caused  by  additional  improvements  placed  upon the  Office
Building Project by other Tenants or by Landlord for the exclusive  enjoyment of
any other  Tenant.  Tenant  shall,  however,  pay to  Landlord  at the lime that
Operating  Expenses  are  payable  under  paragraph  4.2(c) the  entirety of any
increase  in real  property  tax if  assessed  solely by  reason  of  additional
improvements placed upon the Premises by Tenant or at Tenant's request.

   10.3  Definition  of "Real  Property  Tax":  As used  herein,  the term "real
properly tax" shall include any form of real estate tax or assessment,  general,
special, ordinary or extraordinary,  and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance,  personal income
or estate taxes) imposed on the Office  Building  Project or any portion thereof
by any authority having the direct or Indirect power to tax, including any city,
county,  state or federal  government,  or any school,  agricultural,  sanitary,
fire,  street,  drainage or other improvement  district thereof,  as against any
legal or equitable interest of Landlord in the Office Building Project or in any
portion thereof,  as against Landlord's right to rent or other income therefrom,
and as against Landlord's  business of leasing the Office Building Project.  The
term "real  property tax" shall also include any tax,  fee,  levy  assessment or
charge (i) in  substitution  of,  partially  or  totally,  any tax,  fee,  levy,
assessment  or  charge  hereinabove  included  within  the  definition  of "real
property tax:' or (ii) the nature of which was hereinbefore  included within the
definition  of "real  property  tax:' or (iii) which is imposed as a result of a
change in ownership,  as defined by applicable  local  statutes for property tax
purposes,  of the Office  Building  Project or which is added to a tax or charge
hereinbefore  included  within the  definition of real property tax by reason of
such  change  of  ownership,  or  (iv)  which  is  imposed  by  reason  of  this
transaction, any modifications or changes hereto, or any transfers hereof.

   10.4 Joint Assessment.  If the improvements or property,  the taxes for which
are to be paid  separately  by  Tenant  under  paragraph  10.2  or 10.5  are not
separately assessed,  Tenant's portion of that tax shall be equitably determined
by Landlord  from the  respective  valuations  assigned in the  assessor's  work
sheets or such other information (which may include the cost of construction) as
may be reasonably  available.  Landlord's reasonable  determination  thereof, in
good faith, shall be conclusive.

   10.5    Personal Property Taxes.

      (a) Tenant shall pay prior to delinquency  all taxes assessed  against and
levied  upon  trade  fixtures,  furnishings,  equipment  and all other  personal
property of Tenant contained in the Premises or elsewhere.

<PAGE>

      (b) If any of Tenant's  said  personal  properly  shall be  assessed  with
Landlord's real property, Tenant shall pay to Landlord the taxes attributable to
Tenant within ten (10) days after receipt of a written  statement  setting forth
the taxes applicable to Tenant's property.

11.   Utilities.

   11.1  Services   Provided  by  Landlord.   Landlord  shall  provide  heating,
ventilation,  air conditioning,  and janitorial service as reasonably  required,
reasonable amounts of electricity for normal lighting and office machines, water
for reasonable and normal drinking and lavatory use, and replacement light bulbs
and/or fluorescent tubes and ballasts for standard overhead fixtures.

   11.2 Services Exclusive to Tenant. Tenant shall pay for all water, gas, heat,
light,   power,   telephone  and  other  utilities  and  services  specially  or
exclusively  supplied  and/or metered  exclusively to the Premises or to Tenant,
together with any taxes thereon. If any such services are not separately metered
to the Premises, Tenant shall pay at Landlord's option, either Tenant's Share or
a reasonable  proportion to be reasonably  determined by Landlord of all charges
jointly metered with other premises in the Building.

   11.3 Hours of Service.  Said services and utilities  shall be provided during
generally  accepted  business  days and hours or such other days or hours as may
hereafter be set forth,  Utilities and services required at other times shall be
subject to advance request and  reimbursement  by Tenant to Landlord of the cost
thereof.

   11.4  Excess  Usage  by  Tenant.  Tenant  shall  not make  connection  to the
utilities  except by or through  existing  outlets  and shall not install or use
machinery or equipment in or about the Premises that uses excess water, lighting
or power,  or  suffer  or  permit  any act that  causes  extra  burden  upon the
utilities  or services,  including  but not limited to security  services,  over
standard  office usage for the Office Building  Project.  Landlord shall require
Tenant to reimburse Landlord for any excess expenses or costs that may arise out
of a  breach  of  this  subparagraph  by  Tenant.  Landlord  may,  in  its  sole
discretion,  install at Tenant's expense supplemental  equipment and/or separate
metering applicable to Tenant's excess usage or loading.

   11.5  Interruptions.  There shall be no abatement of rent and Landlord  shall
not  be  liable  in  any  respect   whatsoever  for  the  inadequacy   stoppage.
interruption or  discontinuance  of any utility or service due to riot.  strike,
labor  dispute,  breakdown,  accident,  repair or other cause beyond  Landlord's
reasonable control or in cooperation with governmental request or directions.

                                               Landlord Initials:____________
                          FULL SERVICE - GROSS
                                                 Tenant Initials:____________


<PAGE>


   12.1  Landlord's  Consent  Required.  Tenant  shall  not  voluntarily  or  by
operation of law assign,  transfer,  mortgage,  sublet, or otherwise transfer or
encumber all or any part of Tenant's  interest in the Lease or in the  Premises,
without Landlord's prior written consent,  which Landlord shall not unreasonably
withhold.  Landlord shall respond to Tenant's request for consent hereunder in a
timely manner and any attempted assignment,  transfer, mortgage,  encumbrance or
subletting  without such consent shall be void, and shall  constitute a material
default  and breach of this Lease  without  the need for notice to Tenant  under
paragraph 13.1. "Transfer" within the meaning of this paragraph 12 shall include
the transfer or transfers aggregating, (a) If Tenant is a corporation, more than
forty-five  percent  (45%) of the voting  stock of such  corporation,  or (b) if
Tenant is a partnership,  more than twenty-five  percent (25%) of the profit and
loss participation in such partnership.

   12.2 Tenant  Affiliate.  Notwithstanding  the  provisions  of paragraph  12.1
hereof,  Tenant may  assign or sublet  the  Premises,  or any  portion  thereof,
without Landlord's consent, to any corporation which controls,  is controlled by
or is under common control with Tenant, or to any corporation resulting from the
merger or consolidation  with Tenant,  or to any person or entity which acquires
all the  assets of  Tenant  as a going  concern  of the  business  that is being
conducted on the Premises,  all of which are referred to as "Tenant  Affiliate";
provided that before such assignment shall be effective, (a) said assignee shall
assume,  in full,  the  obligations  of Tenant under this Lease and (b) Landlord
shall be given  written  notice  of such  assignment  and  assumption.  Any such
assignment  shall not, in any way, affect or limit the liability of Tenant under
the terms of this Lease even if after such assignment or subletting the terms of
this Lease are materially  changed or altered without the consent of Tenant, the
consent of whom shall not be necessary.

   12.3 Terms and Conditions Applicable to Assignment and Subletting.

      (a) Regardless of Landlord's  consent,  no assignment or subletting  shall
release Tenant of Tenant's obligations  hereunder or after the primary liability
of  Tenant  to pay the rent and  other  sums due  Landlord  hereunder  Including
Tenant's  Share  of  Operating  Expense  Increase,  and  to  perform  all  other
obligations to be performed by Tenant hereunder.

      (b)  Landlord  may accept rent from any person  other than Tenant  pending
approval or disapproval of such assignment.

      (c) Neither a delay in the approval or disapproval  of such  assignment or
subletting, nor the acceptance of rent, shall constitute a waiver or estoppel of
Landlord's  right to exercise its remedies for the breach of any of the terms or
conditions of this paragraph 12 or this Lease.

      (d) If Tenant's obligations under this Lease have been guaranteed by third
parties, then an assignment or sublease,  and Landlord's consent thereto,  shall
not be  effective  unless said  guarantors  give their  written  consent to such
sublease and the terms thereof.

      (e) The consent by  Landlord to any  assignment  or  subletting  shall not
constitute a consent to any subsequent  assignment or subletting by Tenant or to
any  subsequent  or  successive  assignment  or  subletting  by the  sub-tenant.
However,  Landlord may consent to subsequent subletting's and assignments of the
sublease or any amendments or modifications  thereto without notifying Tenant or
anyone else liable on the Lease or sublease and without  obtaining their consent

<PAGE>
and such action shall not relieve such persons from  liability  under this Lease
or said sublease:  however,  such persons shall not be responsible to the extent
any such amendment or modification  enlarges or increases the obligations of the
Tenant or sub-tenant under this Lease or such sublease.

      (f) In the event of any  default  under this Lease,  Landlord  may proceed
directly  against  Tenant,  any guarantors or any one else  responsible  for the
performance of this Lease,  including the sub-tenant,  without first  exhausting
Landlord's  remedies against any other person or entity responsible  therefor to
Landlord, or any security held by Landlord or Tenant.

      (g)  Landlord's  written  consent to any  assignment  or subletting of the
Premises by Tenant shall not constitute an  acknowledgment  that no default then
exists under this Lease of the  obligations  to be performed by Tenant nor shall
such consent be deemed a waiver of any then existing  default,  except as may be
otherwise stated by Landlord at the time.

      (h) The discovery of the fact that any financial  statement relied upon by
Landlord in giving its consent to an  assignment or  subletting  was  materially
false shall,  at Landlord's  election,  render  Landlord's said consent null and
void.

   12.4 Additional Terms and Conditions Applicable to Subletting.  Regardless of
Landlord's  consent,  the  following  terms and  conditions  shall  apply to any
subletting  by  Tenant  of all or any part of the  Premises  and shall be deemed
included in all subleases under this Lease whether or not expressly incorporated
therein:

      (a) Tenant  hereby  assigns  and  transfers  to  Landlord  all of Tenant's
interest in all rentals  and income  arising  from any  sublease  heretofore  or
hereafter  made by Tenant,  and  Landlord  may collect  such rent and income and
shall  apply  same  toward  Tenant's  obligations  under this  Lease:  provided,
however;  that  until a  default  shall  occur in the  performance  of  Tenant's
obligations  under this Lease,  Tenant may receive,  collect and enjoy the rents
accruing under such sublease. Landlord shall not, by reason of this or any other
assignment of such  sublease to Landlord nor by reason of the  collection of the
rents from a sub-tenant,  be deemed liable to the  sub-tenant for any failure of
Tenant to perform and comply with any of Tenant's obligations to such sub-tenant
under such sublease.  Tenant hereby irrevocably  authorizes and directs any such
sub-tenant,  upon  receipt of a written  notice  from  Landlord  stating  that a
default exists in the performance of Tenant's  obligations  under this Lease, to
pay to  Landlord  the  rents due and to become  due under the  sublease.  Tenant
agrees that such sub-tenant shall have the right to rely upon any such statement
and request  from  Landlord;  and that such  sub-tenant  shall pay such rents to
Landlord  without any  obligation or right to inquire as to whether such default
exists and notwithstanding any notice from or claim from Tenant to the contrary.
Tenant shall have no right or claim against said  sub-tenant or Landlord for any
such rents so paid by said sub-tenant to Landlord.

      (b) No sublease entered into by Tenant shall be effective unless and until
it has been  approved in writing by  Landlord.  In entering  Into any  sublease,
Tenant shall use only such form of  sub-tenant as is  satisfactory  to Landlord;
and once approved by Landlord,  such  sublease  shall not be changed or modified
without  Landlord's  prior written  consent.  Any sublease  shall,  by reason of
entering  into a  sublease  under this  Lease,  be  deemed,  for the  benefit of
Landlord;  to have  assumed and agreed to conform and comply with each and every
obligation  herein to be performed by Tenant other than such  obligations as are
contrary to or  inconsistent  with  provisions  contained in a sublease to which
Landlord has expressly consented in writing.
<PAGE>

      (c)  In  the  event  Tenant  shall  default  in  the  performance  of  its
obligations under this Lease,  Landlord at Its option and without any obligation
to do so, may  require  any  sub-tenant  to attorn to  Landlord,  in which event
Landlord shall  undertake the obligations of Tenant under such sublease from the
time of the  exercise  of  said  option  to the  termination  of such  sublease:
provided,  however;  Landlord  shall  not be  liable  for any  prepaid  rents or
security  deposit  paid by such  sub-tenant  to Tenant  or for any  other  prior
defaults of Tenant under such sublease.

      (d) No sub-tenant  shall  further  assign or sublet all or any part of the
Premises without Landlord's prior written consent.

      (a) With  respect  to any  subletting  to which  Landlord  has  consented,
Landlord  agrees to  deliver a copy of any  notice of  default  by Tenant to the
sub-tenant.  Such  sub-tenant  shall  have the right to cure a default of Tenant
within  three  (3) days  after  service  of said  notice  of  default  upon such
sub-Tenant,  and the sub-tenant shall have a right of  reimbursement  and offset
from and against Tenant for any such defaults cured by the sub-tenant.

   12.5  Landlord's  Expenses.  In the event  Tenant  shall assign or sublet the
Premises or request the consent of Landlord to any  assignment  or subletting or
If Tenant shall  request the consent of Landlord for any act Tenant  proposes to
do then Tenant shall pay Landlord's  reasonable  costs and expenses  incurred in
connection  therewith,  including  attorneys,  architects,  engineers'  or other
consultants' fees.

   12.6  Conditions  to Consent.  Landlord  reserves the right to condition  any
approval to assign or sublet upon Landlord's determination that (a) the proposed
assignee or  sub-tenant  shall  conduct a business on the  Premises of a quality
substantially  equal to that of Tenant and consistent with the general character
of the other  occupants of the Office  Building  Project and not In violation of
any  exclusives  or rights  then  held by other  Tenants,  and (b) the  proposed
assignee or  sub-tenant  be at least as  financially  responsible  as Tenant was
expected to be at the time of the execution of this Lease or of such  assignment
or subletting, whichever Is greater.

                                               Landlord Initials:____________

                             FULL SERVICE - GROSS
                                                Tenant Initials:____________

<PAGE>

13.   Default; Remedies.

   13.1Default.  The  occurrence of any one or more of the  following  events
shall constitute a material default of this Lease by Tenant:

      (a) The vacation or abandonment of the Premises by Tenant. Vacation of the
Premises  shall  Include the  failure to occupy the  Premises  for a  continuous
period of sixty (60) days or more, whether or not the rent Is paid, except where
damage to the Premises prevents such occupancy.

      (b) The breach by Tenant of any of the covenants, conditions or provisions
of paragraphs 7.3(a), (b) or (d) (alterations), 12.1 (assignment or subletting),
13.1(a)  (vacation  or  abandonment),   13.1(e)  (Insolvency),   13.1(f)  (false
statement), 16(a) (estoppel certificate), 30(b) (subordination),  33 (auctions),
or 41.1 (easements), all of which are hereby deemed to be material,  non-curable
defaults without the necessity of any notice by Landlord to Tenant thereof.

      (c) The failure by Tenant to make any payment of rent or any other payment
required to be made by Tenant  hereunder,  as and when due,  where such  failure
shall  continue for a period of three (3) days after written notice thereof from
Landlord to Tenant.  In the event that  Landlord  serves Tenant with a Notice to
Pay Rent or Quit pursuant to applicable  Unlawful  Detainer statutes such Notice
to Pay  Rent  or  Quit  shall  also  constitute  the  notice  required  by  this
subparagraph.

       (d)The  failure by Tenant to observe  or  perform  any of the  covenants,
conditions  or  provisions  of this Lease to be observed or  performed by Tenant
other than those  referenced in  subparagraphs  (b) and (c),  above,  where such
failure  shall  continue for a period of thirty (30) days after  written  notice
thereof  from  Landlord  to  Tenant,  provided,  however,  that if the nature of
Tenant's  noncompliance  is such that more than thirty (30) days are  reasonably
required  for its cure,  then  Tenant  shall not be deemed to be in  default  if
Tenant  commenced  such cure within  said thirty (30) day period and  thereafter
diligently pursues such cure to completion. To the extent permitted by law, such
thirty (30) day notice shall  constitute the sole and exclusive  notice required
to be given to Tenant under applicable Unlawful Defamer statutes.

      (e) (i) The  making  by  Tenant  of any  general  arrangement  or  general
assignment  for the benefit of  creditors;  (ii)  Tenant  becoming a "debtor" as
defined in 11 U.S.C.  ss.101 or any successor  statute thereto  (unless,  in the
case of a petition filed against Tenant, the same is dismissed within sixty (60)
days.  (iii) the  appointment  of a trustee or  receiver to take  possession  of
substantially  all of  Tenant's  assets  located at the  Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within thirty
(30)  days,  or (iv) the  attachment,  execution  or other  judicial  seizure of
substantially  all of  Tenant's  assets  located at the  Premises or of Tenant's
interest in this Lease,  where such seizure is not discharged within thirty (30)
days. In the event that any provision of this  paragraph  13.1(e) is contrary to
any applicable law, such provision shall be of no force or effect.

      (f) The  discovery  by  Landlord  that any  financial  statement  given to
Landlord by Tenant, or its successor in interest or by any guarantor of Tenant's
obligation hereunder, was materially false.

   13.2 Remedies.  In the event of any material  default or breach of this Lease
by  Tenant,  Landlord  may at any time  thereafter;  with  notice or demand  and
without limiting  Landlord in the exercise of any right or remedy which Landlord
may have by reason of such default:
<PAGE>

      (a) Terminate  Tenant's  right to possession of the Premises by any lawful
means,  in which case this Lease and the term hereof shall  terminate and Tenant
shall  immediately  surrender  possession  of the Premises to Landlord.  In such
event Landlord shall be entitled to recover from Tenant all damages  incurred by
Landlord by reason of Tenant's default  including,  but not limited to, the cost
of  recovering  possession of the Premises;  expenses of  re-letting,  including
necessary renovation and alteration of the Premises, reasonable attorneys' fees,
and any real estate commission  actually paid; the worth at the time of award by
the court having jurisdiction thereof of the amount by which the unpaid rent for
the balance of the term after the time of such award  exceeds the amount of such
Tenant loss for the same period that Tenant proves could be reasonably  avoided;
that portion of the leasing commission paid by Landlord pursuant to paragraph 15
applicable to the unexpired term of this Lease.

      (b) Maintain  Tenant's  right to possession in which case this Lease shall
continue in effect  whether or not Tenant shall have  vacated or  abandoned  the
Premises.  In such event Landlord shall be entitled to enforce all of Landlord's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.

      (c) Pursue any other remedy now or hereafter  available to Landlord  under
the laws or judicial  decisions  of the state  wherein the Premises are located.
Unpaid  installments  of rent and other unpaid  monetary  obligations  of Tenant
under the  terms of this  Lease  shall  bear  interest  from the date due at the
maximum rate the allowable by law.

   13.3 Default by Landlord.  Landlord shall not be in default  unless  Landlord
fails to perform obligations  required of Landlord within a reasonable time, but
in no event  later  than  thirty  (30) days  after  written  notice by Tenant to
Landlord and to the holder of any first  mortgage or deed of trust  covering the
Premises whose name and address shall have  theretofore been furnished to Tenant
In writing,  specifying  wherein Landlord has failed to perform such obligation;
provided,  however, that If the nature of Landlords obligation is such that more
than thirty (30) days are required for performance then Landlord shall not be in
default  if  Landlord  commences  performance  within  such  30-day  period  and
thereafter diligently pursues the same to completion.

   13.4 Late Charges.  Tenant hereby acknowledges that late payment by Tenant to
Landlord of Base Rent,  Tenant's  Share of Operating  Expense  Increase or other
sums due hereunder will cause Landlord to incur costs not  contemplated  by this
Lease, the exact amount of which will be extremely difficult to ascertain.  Such
costs include,  but are not limited to, processing and accounting  charges,  and
late  charges  which may be imposed on Landlord by the terms of any  mortgage or
trust deed covering the Office Building Project.  Accordingly If any installment
of Base Rent, Operating Expense Increase, or any other sum due from Tenant shall
not be received by Landlord  or  Landlords  designee  within ten (10) days after
such amount shall be due, then,  without any  requirement  for notice to Tenant,
Tenant shall pay to Landlord a late charge  equal to 6% of such overdue  amount.
The parties hereby agree that such late charge  represents a fair and reasonable
estimate of the costs  Landlord  will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall in no event 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.

14. Condemnation.  If the Premises or any portion thereof or the Office Building
Project are taken under the power of eminent domain, or sold under the threat of
the exercise of said power (all of which are herein called "condemnation"), this
Lease  shall  terminate  as to the part so  taken as of the date the  condemning
<PAGE>

authority takes title or possession, whichever first occurs; provided that if so
much  of the  Premises  or  the  Office  Building  Project  are  taken  by  such
condemnation  as would  substantially  and  adversely  affect the  operation and
profitability  of Tenant's  business  conducted from the Premises,  Tenant shall
have the option,  to be exercised  only in writing within thirty (30) days after
Landlord  shall  have  given  Tenant  written  notice of such  taking (or in the
absence of such notice,  within thirty (30) days after the condemning  authority
shall  have  taken  possession),  to  terminate  this  Lease  as of the date the
condemning  authority takes such  possession.  If Tenant does not terminate this
Lease In accordance  with the  foregoing,  this Lease shall remain in full force
and effect as to the portion of the Premises remaining, except that the rent and
Tenant's Share of Operating  Expense Increase shall be reduced in the proportion
that the floor area of the  Premises  taken bears to the total floor area of the
Premises.  Common Areas taken shall be excluded  from the Common Areas usable by
Tenant and no reduction  of rent shall occur with  respect  thereto or by reason
thereof. Landlord shall have the option In its sole discretion to terminate this
Lease  as of the  taking  of  possession  of  the  Premises  by  the  condemning
authority,  by giving  written  notice to Tenant of such election  within thirty
(30) days after receipt of notice of a taking by condemnation of any part of the
Premises or the Office Building Project.  Any award for the taking of all or any
part of the Premises or the Office  Building  Project under the power of eminent
domain or any payment  made under  threat of the exercise of such power shall be
the property of Landlord.  whether such award shall be made as compensation  for
diminution  in value  of the  leasehold  or for the  taking  of the  fee,  or as
severance  damages;  provided,  however;  that  Tenant  shall be entitled to any
separate  award for loss of or  damage to  Tenant's  business,  trade  fixtures,
removable personal property and unamortized  Tenant  improvements that have been
paid for by Tenant.  For that  purpose  the cost of such  improvements  shall be
amortized  over the original term of this Lease  excluding  any options.  In the
event that this Lease Is not terminated by reason of such condemnation, Landlord
shall to the extent of severance damages received by Landlord In connection with
such condemnation, repair any damage to the Premises caused by such condemnation
except to the extent that Tenant has been reimbursed  therefor by the condemning
authority.  Tenant  shall pay any  amount in  excess of such  severance  damages
required to complete such repair.

                                               Landlord Initials:____________

                             FULL SERVICE - GROSS
                                                Tenant Initials:____________


<PAGE>

15.   Broker's Fee.

   (a)  The brokers involved in this transaction are --(none)--
as "listing broker" and --(none)--as "cooperating broker:'
licensed real estate broker(s).  A "cooperating broker" is defined as any broker
other than the  listing  broker  entitled to a share of any  commission  arising
under this Lease.  Upon execution of this Lease by both parties,  Landlord shall
pay to said brokers  jointly,  or In such  separate  shares as they may mutually
designate  in  writing,  a fee as set  forth  in a  separate  agreement  between
Landlord  and said  broker(s),  or In the event there Is no  separate  agreement
between Landlord and said broker(s),  the sum of $ (N/A) for brokerage  services
rendered by said broker(s) to Landlord in this transaction.

   (b)  Landlord  further  agrees that (I) if Tenant  exercises  any Option,  as
defined In paragraph  39.1 of this Lease,  which Is granted to Tenant under this
Lease, or any subsequently  granted option which Is  substantially  similar loan
Option granted to Tenant under this Lease, or (II) If Tenant acquires any rights
to  the  Premises  or  other   premises   described  In  this  Lease  which  are
substantially  similar to what Tenant would have  acquired had an Option  herein
granted to Tenant been  exercised,  or (iii) if Tenant  remains In possession of
the Premises  after the expiration of the term of this Lease after having failed
to exercise an Option,  or (iv) if said broker(s) are the procuring cause of any
other lease or sale entered into between the parties  pertaining to the Premises
and/or any adjacent  property In which  Landlord has an Interest,  or (v) If the
Base Rent is  Increased,  whether by agreement  or  operation  of an  escalation
clause contained herein,  then as to any of said transactions or rent increases,
Landlord shall pay said broker(s) a fee in accordance  with the schedule of said
broker(s) In effect at the time of  execution  of this Lease.  Said fee shall be
paid at the time such increased rental is determined.

   (c)  Landlord  agrees to pay said fee not only on behalf of Landlord but also
on behalf of any person,  corporation,  association,  or other entity  having an
ownership  Interest in said real property or any part thereof,  when such fee Is
due hereunder. Any transferee of Landlord's Interest In this Lease, whether such
transfer is by  agreement or by operation of law shall be deemed to have assumed
Landlord's  obligation  under this  paragraph  15. Each listing and  cooperating
broker shall be a third party beneficiary of the provisions of this paragraph 15
to the extent of their Interest in any  commission  arising under this Lease and
may enforce that right directly against Landlord;  provided,  however,  that all
brokers having a right to any part of such total  commission  shall be necessary
party to any suit with respect thereto.

   (d) Tenant and Landlord each  represent and warrant to the other that neither
has had any dealings  with any person,  firm,  broker or finder  (other than the
person(s),  if any,  whose  names are set forth In  paragraph  15(a),  above) in
connection  with the  negotiation of this Lease and/or the  consummation  of the
transaction  contemplated  hereby, and no other broker or other person,  firm or
entity is entitled to any  commission  or finder's fee In  connection  with said
transaction and Tenant and Landlord do each hereby  indemnify and hold the other
harmless from and against any costs, expenses,  attorneys' fees or liability for
compensation or charges which may be claimed by any such unnamed broker;  finder
or other similar party by reason of any dealings or actions of the  indemnifying
party.

<PAGE>

16.   Estoppel Certificate.

   (a) Each party (as  "responding  party") shall at any time upon not less than
fifteen  (15) days'  prior  written  notice  from the other  party  ("requesting
party") execute,  acknowledge and deliver to the requesting party a statement in
writing  (i)  certifying  that this  Lease Is  unmodified  and in full force and
effect (or, If modified;  stating the nature of such modification and certifying
that this Lease,  as so  modified,  Is In full force and effect) and the date to
which  the  rent  and  other  charges  are  paid in  advance,  if any,  and (ii)
acknowledging  that there are not,  to the  responding  party's  knowledge,  any
uncured  defaults  on the  part of the  requesting  party,  or  specifying  such
defaults if any are claimed.  Any such statement may be conclusively relied upon
by any prospective  purchaser or encumbrancer of the Office Building  Project or
of the business of Tenant.

   (b) At the requesting  party's option,  the failure to deliver such statement
within  such time shall be a material  default of this Lease by the party who is
to respond,  without any further notice to such party, or it shall be conclusive
upon  such  party  that (i) this  Lease is in full  force  and  effect,  without
modification  except as may be represented by the requesting  party,  (ii) there
are no uncured  defaults in the  requesting  party's  performance,  and (iii) if
Landlord is the requesting  party,  not more than one month's rent has been paid
in advance.

   (c) If Landlord  desires to finance,  refinance,  or sell the Office Building
Project,  or any pad thereof,  Tenant  hereby agrees to deliver to any lender or
purchaser  designated by Landlord such  financial  statements of Tenant as maybe
reasonably  required by such lender or purchaser Such  statements  shall include
the past three (3) years'  financial  statements of Tenant.  All such  financial
statements  shall be  received  by  Landlord  and such  lender or  purchaser  in
confidence and shall be used only for the purposes herein set forth.

17. Landlord's Liability. The term "Landlord" as used herein shall mean only the
owner  or  owners,  at the time in  question,  of the fee  title  or a  Tenant's
interest  in a ground  lease of the  Office  Building  Project,  and  except  as
expressly  provided in paragraph  15, in the event of any transfer of such title
or interest, Landlord herein named (and in case of any subsequent transfers then
the grantor)  shall be relieved  from and after the date of such transfer of all
liability  as  respects  Landlord's  obligations  thereafter  to  be  performed,
provided that any funds In the hands of Landlord or the then grantor at the time
of such transfer; in which Tenant see has an interest, shall be delivered to the
grantee,  The  obligations  contained  in this Lease to be performed by Landlord
shall subject as aforesaid,  be binding on  Landlord's  successors  and assigns,
only during their respective periods of ownership.

18.     Severability.  The  invalidity  of any  provision  of this  Lease  as
determined  by a court of competent  jurisdiction  shall In no way affect the
validity of any other provision hereof,

19. Interest on Past-due Obligations.  Except as expressly herein provided,  any
amount due to Landlord not paid when due shall bear interest at the maximum rate
then allowable by law or judgments  from the date due,  Payment of such interest
shall not excuse or cure any  default  by Tenant  under  this  Lease;  provided,
however,  that interest shall not be payable on late charges  incurred by Tenant
nor on any amounts upon which late charges are paid by Tenant.

20. Time of Essence.  Time is of the essence with respect to the  obligations to
be performed under this Lease,
<PAGE>

21.  Additional  Rent. All monetary  obligations of Tenant to Landlord under the
terms of this Lease,  Including  but not limited to Tenant's  Share of Operating
Expense  Increase and any other expenses  payable by Tenant  hereunder  shall be
deemed to be rent.

22.  Incorporation  of Prior  Agreements;  Amendments.  This Lease  contains all
agreements of the parties with respect to any matter mentioned  herein. No prior
or  contemporaneous  agreement or  understanding  pertaining  to any such matter
shall be effective.  This Lease may be modified In writing  only,  signed by the
parties in interest at the time of the modification.  Except as otherwise stated
in this Lease,  Tenant hereby  acknowledges  that neither the real estate broker
listed in paragraph 15 hereof nor any cooperating broker on this transaction nor
the  Landlord or any employee or agents of any of said persons has made any oral
or written  warranties or representations to Tenant relative to the condition or
use by  Tenant  of the  Premises  or the  Office  Building  Project  and  Tenant
acknowledges that Tenant assumes all  responsibility  regarding the Occupational
Safety  Health  Act,  the legal use and  adaptability  of the  Premises  and the
compliance thereof with all applicable laws and regulations in effect during the
term of this Lease.

23. Notices.  Any notice required or permitted to be given hereunder shall be in
writing and may be given by personal delivery or by certified or registered mail
or by overnight  delivery  service,  and shall be deemed  sufficiently  given if
delivered or  addressed  to Tenant or to Landlord at the address  noted below or
adjacent to the signature of the respective  parties, as the case may be. Mailed
notices shall be deemed given upon actual  receipt at the address  required,  or
forty-eight  hours following  deposit in the mail,  postage  prepaid,  whichever
first  occurs.  Either  party may by notice  to the  other  specify a  different
address for notice purposes  except that upon Tenant's taking  possession of the
Premises,  the Premises shall constitute Tenant's address for notice purposes. A
copy of all notices  required or permitted to be given Landlord  hereunder shall
be  concurrently  transmitted  to such  party or parties  at such  addresses  as
Landlord may from time to time hereafter designate by notice to Tenant.

                                               Landlord Initials:____________

                             FULL SERVICE - GROSS
                                                Tenant Initials:____________


<PAGE>

24. Waivers. No waiver by either party of any provision hereof shall be deemed a
waiver of any other  provision  hereof or of any subsequent  breach by Tenant of
the same or any other  provision.  A party's consent to, or approval of, any act
shall not be deemed to render  unnecessary the obtaining of that party's consent
to or approval of any subsequent act by Tenant. The acceptance of rent hereunder
by  Landlord  shall  not be a waiver  of any  preceding  breach by Tenant of any
provision hereof, other than the failure of Tenant to pay the particular rent so
accepted,  regardless of Landlord's  knowledge of such preceding  breach, at the
time of acceptance of such rent.

25.  Recording.  Either  Landlord or Tenant  shall,  upon  request of the other;
execute,  acknowledge and deliver to the other a "short form" memorandum of this
Lease for recording purposes.

26. Holding Over. If Tenant,  without Landlord's consent,  remains in possession
of the Premises or any part  thereof  after the  expiration  of the term hereof,
such occupancy shall be a tenancy from month to month upon all the provisions of
this Lease pertaining to the obligations of Tenant, except that the rent payable
shall be two hundred  percent (200%) of the rent payable  immediately  preceding
the termination date of this Lease,  and all Options,  if any, granted under the
terms of this  Lease  shall be deemed  terminated  and be of no  further  effect
during said month to month tenancy.

27.     Cumulative  Remedies.  No  remedy  or  election  hereunder  shall  be
deemed exclusive but shall,  wherever possible,  be cumulative with all other
remedies at law or in equity.

28. Covenants and Conditions. Each provision of this Lease performable by Tenant
shall be deemed both a covenant and a condition.

29. Binding Effect;  Choice of Law. Subject to any provisions hereof restricting
assignment or  subletting  by Tenant and subject to the  provisions of paragraph
17,  this  Lease  shall  bind  the  parties,  their  personal   representatives,
successors  and  assigns.  This Lease shall be governed by the laws of the State
where the Office Building Project is located and any litigation  concerning this
Lease  between the parties  hereto shall be initiated in the county in which the
Office Building Project is located.

30.   Subordination.

   (a) This Lease,  and any Option or right of first refusal granted hereby,  at
Landlord's option, shall be subordinate to any ground lease,  mortgage,  deed of
trust, or any other  hypothecation  or security now or hereafter placed upon the
Office Building Project and to any and all advances made on the security thereof
and to all renewals, modifications,  consolidations, replacements and extensions
thereof, notwithstanding such subordination,  Tenant's right to quiet possession
of the  Premises  shall not be disturbed if Tenant is not in default and so tong
as Tenant  shall pay the rent and observe and perform all of the  provisions  of
this Lease, unless this Lease is otherwise  terminated pursuant to Its terms, if
any mortgagee, trustee or ground Landlord shall elect to have this Lease and any
Options  granted  hereby  prior  to the lien of its  mortgage,  deed of trust or
ground lease,  and shall give written notice  thereof to Tenant,  this Lease and
such  Options  shall be deemed prior to such  mortgage,  deed of trust or ground
lease,  whether this Lease or such Options are dated prior or  subsequent to the
date of said  mortgage,  deed of trust or, ground lease or the date of recording
thereof.

<PAGE>

   (b)  Tenant  agrees to  execute  any  documents  required  to  effectuate  an
attornment, a subordination,  or to make this Lease or any Option granted herein
prior to the lien of any mortgage,  deed of trust or ground  lease,  as the case
may be,  Tenant's  failure to execute such  documents  within  fifteen (15) days
after written  demand shall  constitute a material  default by Tenant  hereunder
without  further  notice to Tenant  or; at  Landlord's  option,  Landlord  shall
execute such documents on behalf of Tenant as Tenant's attorney-in-fact,  Tenant
does  hereby  make,  constitute  and  irrevocably  appoint  Landlord as Tenant's
attorney-In-fact  and In  Tenant's  name,  place  and  stead,  to  execute  such
documents in accordance with this paragraph 30(b).

31.   Attorneys' Fees.

   31.1 If either party or the broker(s) named herein bring an action to enforce
the terms hereof or declare rights  hereunder;  the prevailing party in any such
action, trial or appeal thereon,  shall be entitled to his reasonable attorneys'
fees to be paid by the  losing  party  as  fixed  by the  court in the same or a
separate  suit,  and  whether  or not such  action is  pursued  to  decision  or
judgment.  The  provisions of this  paragraph  shall inure to the benefit of the
broker named herein who seeks to enforce a right hereunder,

   31.2 The  attorneys'  fee award shall not be computed in accordance  with any
court fee schedule,  but shall be such as to fully reimburse all attorneys' fees
reasonably Incurred in good faith,

   31.3 Landlord shall be entitled to reasonable  attorneys'  fees and all other
costs and expenses  incurred In the preparation and service of notice of default
and consultations in connection therewith, whether or not a legal transaction is
subsequently commenced in connection with such default.

32.     Landlord's Access.

   32.1  Landlord  and  Landlord's  agents  shall  have the  right to enter  the
Premises at reasonable times for the purpose of inspecting the same,  performing
any services required of Landlord,  showing the same to prospective  purchasers,
lenders, or Tenants,  taking such safety measures,  erecting such scaffolding or
other necessary structures,  making such alterations,  repairs,  improvements or
additions  to the  Premises or to the Office  Building  Project as Landlord  may
reasonably  deem necessary or desirable and the erecting,  using and maintaining
of utilities,  services,  pipes and conduits  through the Premises  and/or other
premises as long as there is no material  adverse  effect to Tenant's use of the
Premises.  Landlord  may at any  time  place  on or about  the  Premises  or the
Building any  ordinary  "For Sale" signs and Landlord may at any time during the
last 120 days of the term hereof  place on or about the  Premises  any  ordinary
"For Lease" signs,

   32.2 All activities of Landlord  pursuant to this paragraph  shall be without
abatement of rent, nor shall Landlord have any liability to Tenant for the same.

   32.3  Landlord  shall have the right to retain  keys to the  Premises  and to
unlock all doors in or upon the Premises other than to files,  vaults and safes,
and in the case of emergency to enter the Premises by any reasonably appropriate
means,  and any such entry shall not be deemed a forceable or unlawful  entry or
detainer of the Premises or an eviction.  Tenant  waives any charges for damages
or  injuries or  interference  with  Tenant's  property  business in  connection
therewith.

<PAGE>

33.  Auctions.  Tenant shall not  conduct,  nor permit to be  conducted,  either
voluntarily or involuntarily,  any auction upon the Premises or the Common Areas
without first having obtained Landlord's prior written consent.  Notwithstanding
anything to the  contrary  in this Lease,  Landlord  shall not be  obligated  to
exercise any standard of  reasonableness  in  determining  whether to grant such
consent. The holding of any auction on the Premises or Common Areas in violation
of this paragraph shall constitute a material default of this Lease.

34.  Signs.  Tenant  shall not place any sign upon the  Premises  or the  Office
Building   Project  without   Landlord's   prior  written   consent.   Under  no
circumstances  shall  Tenant  place a sign on any roof or  windows of the Office
Building Project.

35.  Merger.  The  voluntary or other  surrender  of this Lease by Tenant,  or a
mutual  cancellation  thereof,  or a termination  by Landlord;  shall not work a
merger;  and shall,  at the option of  Landlord;  terminate  all or any existing
sub-tenancies  or may, at the Option of Landlord;  operate as an  assignment  to
Landlord of any or all of such sub-tenancies.

36.  Consents.  Except for  paragraphs  33  (auctions)  and 34  (signs)  hereof,
wherever  in this Lease the  consent of one party is  required  to an act of the
other party such consent shall not be unreasonably withheld or delayed.

37.  Guarantor.  In the event  that there is a  guarantor  of this  Lease,  said
guarantor shall have the same obligations as Tenant under this Lease.


                                               Landlord Initials:____________

                             FULL SERVICE - GROSS
                                                Tenant Initials:____________


<PAGE>

38. Quiet Possession. Upon Tenant paying the rent for the Premises and observing
and performing all of the covenants,  conditions and provisions on Tenant's part
to be observed and performed  hereunder;  Tenant shall have quiet  possession of
the Premises for the entire term hereof subject to all of the provisions of this
Lease. The individuals  executing this Lease on behalf of Landlord represent and
warrant  to  Tenant  that they are  fully  authorized  and  legally  capable  of
executing  this Lease on behalf of Landlord  and that such  execution is binding
upon all parties holding an ownership interest in the Office Building Project.

39. Options.

   39.1Definition. As used in this paragraph the word "Option" has the following
meaning:  (a) the right or option to extend  the term of this Lease or to extend
or renew any lease that Tenant has on other property of Landlord: (b) the option
of right of first  refusal to lease the  Premises or the right of first offer to
lease the Premises or the right of first refusal to lease other space within the
Office  Building  Project or other  property  of  Landlord or the right of first
offer to lease other space within the Office Building  Project or other property
of  Landlord:  (c) the right or option to  purchase  the  Premises or the Office
Building Project,  or the right of first refusal to purchase the Premises or the
Office Building  Project or the right of first offer to purchase the Premises or
the Office Building  Project,  or the right or option to purchase other property
of  Landlord,  or the right of first  refusal  to  purchase  other  property  of
Landlord or the right of first offer to purchase other property of Landlord.

   39.2  Options  Personal.  Each  Option  granted  to Tenant  in this  Lease is
personal to the original Tenant and may be exercised only by the original Tenant
while  occupying  the  Premises  who does so without  the  intent of  thereafter
assigning this Lease or subletting the Premises or any portion thereof,  and may
not be exercised  or be assigned,  voluntarily  or  involuntarily,  by or to any
person or entity other than  Tenant:  provided,  however;  that an Option may be
exercised by or assigned to any Tenant Affiliate as defined in paragraph 12.2 of
this Lease.  The Options,  if any,  herein  granted to Tenant are not assignable
separate and apart from this Lease,  nor may any Option be  separated  from this
Lease in any manner; either by reservation or otherwise.

   39.3 Multiple  Options.  In the event that Tenant has any multiple options to
extend or renew this Lease a later option  cannot be exercised  unless the prior
option to extend or renew this Lease has been so exercised.

  39.4     Effect of Default on Options.

      (a) Tenant shall have no right to exercise an Option,  notwithstanding any
provision in the grant of Option to the contrary, (i) during the time commencing
from the date Landlord gives to Tenant a notice of default pursuant to paragraph
13.1(c) or 13.1(d) and continuing until the noncompliance alleged in said notice
of default is cured,  or (ii)  during the period of time  commencing  on the day
after a monetary  obligation to Landlord is due from Tenant and unpaid  (without
any necessity for notice thereof to Tenant) and continuing  until the obligation
is paid,  or (iii) In the event that  Landlord has given to Tenant three or more
notices of default under paragraph 13.1(c), or paragraph 13.1(d), whether or not
the defaults are cured,  during the 12 month period of time immediately prior to
the time that Tenant attempts to exercise the subject Option, (iv) If Tenant has
committed any non-curable  breach,  including without limitation those described
in paragraph 13.1(b). or is otherwise In default of any of the terms.  covenants
or conditions of this Lease.

<PAGE>

      (b) The period of time with 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 paragraph 39.4(a).

      (c) All rights of Tenant under the provisions of an Option shall terminate
and be of no further  force or effect,  notwithstanding  Tenant's due and timely
exercise  of the Option,  if,  after such  exercise  and during the term of this
Lease. (i) Tenant fails to pay to Landlord a monetary obligation of Tenant for a
period of thirty  (30) days after  such  obligation  becomes  due  (without  any
necessity of Landlord to give notice thereof to Tenant), or (ii) Tenant fails to
commence to cure a default  specified in paragraph  13.1(d)  within  thirty (30)
days after the date that Landlord  gives notice to Tenant of such default and/or
Tenant fails  thereafter to diligently  prosecute  said cure to  completion,  or
(iii) Landlord gives to Tenant three or more notices of default under  paragraph
13.1(c), or paragraph 13.1(d), whether or not the defaults are cured, or (iv) if
Tenant has committed any non-curable breach,  including without limitation those
described in paragraph 13.1(b),  or is otherwise in default of any of the terms,
covenants and conditions of this Lease.

40.   Security Measures-Landlord's Reservations.

   40.1  Tenant  hereby  acknowledges  that  Landlord  shall have no  obligation
whatsoever to provide guard service or other  security  measures for the benefit
of  the  Premises  or  the  Office   Building   Project.   Tenant   assumes  all
responsibility  for the protection of Tenant,  its agents,  and invitees and the
property  of Tenant  and of  Tenant's  agents  and  invitees  from acts of third
parties.  Nothing herein  contained shall prevent  Landlord,  at Landlord's sole
option,  from providing  security  protection for the Office Building Project or
any part thereof,  in which event the cost thereof shall be included  within the
definition of Operating Expenses, as set forth in paragraph 4.2(b).

   40.2 Landlord shall have the following rights:

      (a) To change the name, address or title of the Office Building Project or
building  In which the  Premises  are  located  upon not less than 90 days prior
written notice:

      (b) To,  at  Tenant's  expense,  provide  and  install  Building  standard
graphics on the door of the  Premises  and such  portions of the Common Areas as
Landlord shall reasonably deem appropriate:

      (c) To permit any Tenant the  exclusive  right to conduct any  business as
long as such exclusive does not conflict with any rights expressly given herein:

      (d) To place such signs,  notices or displays as Landlord reasonably deems
necessary or advisable  upon the roof,  exterior of the  buildings or the Office
Building Project or on pole signs In the Common Areas:

   40.3  Tenant shall not:

      (a) Use a  representation  (photographic  or otherwise) of the Building or
the  Office  Building  Project  or their  name(s) in  connection  with  Tenant's
business:
      (b) Suffer or permit anyone,  except in emergency,  to go upon the roof of
the Building.

<PAGE>

41.    Easements.

   41.1 Landlord  reserves to Itself the right, from time to time, to grant such
easements,  rights and  dedications  that Landlord deems necessary or desirable,
and to cause the  recordation of Parcel Maps and  restrictions,  so long as such
easements,  rights,  dedications,  Maps  end  restrictions  do not  unreasonably
interfere  with the use of the Premises by Tenant.  Tenant shall sign any of the
aforementioned  documents  upon  request of Landlord  and failure to do so shall
constitute  a  material  default of this  Lease by Tenant  without  the need for
further notice to Tenant.

   41.2 The obstruction of Tenant's view air; or light by any structure  erected
in the vicinity of the Building,  whether by Landlord or third parties, shall in
no way affect this Lease or impose any liability upon Landlord.

42.  Performance Under Protest..  If at any time a dispute shall arise as to any
amount or sum of money to be paid by one party to the other under the provisions
hereof, the party against whom the obligation to pay the money is asserted shall
have the right to make payment  "under  protest"  and such payment  shall not be
regarded as a voluntary  payment,  and there shall survive the right on the part
of said  party  to  institute  suit for  recovery  of such  sum.  if it shall be
adjudged  that  there was no legal  obligation  on the part of said party to pay
such sum or any part  thereof,  said party shall be entitled to recover such sum
or so much thereof as It was not legally required to pay under the provisions of
this Lease.




                                               Landlord Initials:____________

                             FULL SERVICE - GROSS
                                                Tenant Initials:____________


<PAGE>


43.  Authority.  If  Tenant is a  corporation,  trust,  or  general  or  limited
partnership,  Tenant, and each individual executing this Lease on behalf of such
entity  represent and warrant that such individual is duly authorized to execute
and deliver  this Lease on behalf of said  entity.  If Tenant is a  corporation,
trust or partnership,  Tenant shall,  within thirty (30) days after execution of
this Lease,  deliver to  Landlord  evidence of such  authority  satisfactory  to
Landlord, if requested in writing by Landlord.

44. Conflict.  Any conflict between the printed provisions,  Exhibits or Addenda
of this Lease and the  typewritten or handwritten  provisions,  if any, shall be
controlled by the typewritten or handwritten provisions.

45. No Offer.  Preparation  of this Lease by  Landlord or  Landlord's  agent and
submission  of same to  Tenant  shall not be deemed an offer to Tenant to lease.
This Lease  shall  become  binding  upon  Landlord  and  Tenant  only when fully
executed by both parties.

46. Lender Modification.  Tenant agrees to make such reasonable modifications to
this  Lease  as  may  be  reasonably  required  by an  institutional  lender  in
connection  with the obtaining of normal  financing or refinancing of the Office
Building Project.

47.  Multiple  Parties.  If more  than one  person  or entity is named as either
Landlord or Tenant herein,  except as otherwise  expressly  provided herein, the
obligations  of the  Landlord  or Tenant  herein  shall be the joint and several
responsibility  of all  persons or  entities  named  herein as such  Landlord or
Tenant, respectively.

48. Work Letter.  This Lease is supplemented by that certain Work Letter of even
date  executed  by  Landlord  and  Tenant,  attached  hereto as  Exhibit  D, and
incorporated herein by this reference.

49.  Attachments.  Attached  hereto,  including the Addendum,  are the following
documents constitute a part of this Lease:

  Exhibit "A"                Property Description

  Exhibit "B"                Floor Plans

  Exhibit "B-1"              Demised Premises

  Exhibit "C"                Rules & Regulations

  Exhibit "D"                Work Letter Agreement

  Exhibit "D-1"              Space Plan






<PAGE>

LANDLORD AND TENANT HAVE  CAREFULLY  READ AND REVIEWED  THIS LEASE AND EACH TERM
AND  PROVISION  CONTAINED  HEREIN AND , BY EXECUTION  OF THIS LEASE,  SHOW THEIR
INFORMED AND VOLUNTARY  CONSENT  THERETO.  THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE
PREMISES.

           IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR  SUBMISSION
           TO  YOUR   ATTORNEY   FOR  HIS   APPROVAL.   NO   REPRESENTATION   OR
           RECOMMENDATION  IS  MADE  BY  THE  AMERICAN  INDUSTRIAL  REAL  ESTATE
           ASSOCIATION  OR BY THE REAL ESTATE  BROKER OR ITS AGENTS OR EMPLOYEES
           AS TO THE LEGAL  SUFFICIENCY,  LEGAL EFFECT,  OR TAX  CONSEQUENCES OF
           THIS LEASE OR THE  TRANSACTION  RELATING  THERETO;  THE PARTIES SHALL
           RELY  SOLELY  UPON THE  ADVICE OF THEIR OWN LEGAL  COUNSEL  AS TO THE
           LEGAL AND TAX CONSEQUENCES OF THIS LEASE.








LANDLORD:                                 TENANT:
STEVENS CREEK OFFICE CENTER               EXCALIBUR TECHNOLOGIES CORPORATION
 OF SANTA CLARA                           a Delaware corporation


By /s/Louie P. Tersini                    By  /s/James H. Buchanan
   --------------------                       --------------------
   Louie P. Tersini                           James H. Buchanan
   Owner
                                          Its Chief Financial Officer


                                          Federal Tax I.D.  #85-0278207


<PAGE>


                                 Exhibit "A"


                            Property Description


All that certain property  situated in the City of Santa Clara,  County of Santa
Clara, State of California, described as follows:

Parcel One:

Parcel 1, as shown on that certain map entitled, "Parcel Map of a portion of the
Quito Rancho for Red Barn  Systems,  Inc.,  Santa Clara  California,"  filed for
record June 16, 1969, in Book 255 of Maps, at Page 16, Santa Clara Records.

Parcel Two:

Easement  and  right  of way for the  purpose  of  accessibility  in the case of
service or emergency over a strip of land 20 feet in width lying westerly of and
contiguous to the Westerly boundary of Board of the Southern Baptist Convention,
a Texas corporation,  to Paul H. Magnuson,  recorded July 16, 1982 in Book G905,
Page 327 of Official Records.

APN#: 296-21-008



<PAGE>



                                 Exhibit "B"

                                 FLOOR PLAN


THIS EXHIBIT is made this 1st day of July ,1997,  by and between  STEVENS  CREEK
OFFICE  CENTER  OF  SANTA  CLARA,  ("Landlord"),   and,  EXCALIBUR  TECHNOLOGIES
CORPORATION, a Delaware corporation, ("Tenant").




<PAGE>



                                  Exhibit "B-1"

                                DEMISED PREMISES


THIS EXHIBIT is made this 1st day of July ,1997,  by and between  STEVENS  CREEK
OFFICE  CENTER  OF  SANTA  CLARA,  ("Landlord"),   and,  EXCALIBUR  TECHNOLOGIES
CORPORATION, a Delaware corporation, ("Tenant").


<PAGE>
                                 Exhibit "C"

                            RULES and REGULATIONS

THIS EXHIBIT is made this 1st day of July ,1997,  by and between  STEVENS  CREEK
OFFICE  CENTER  OF  SANTA  CLARA,  ("Landlord"),   and,  EXCALIBUR  TECHNOLOGIES
CORPORATION, a Delaware corporation, ("Tenant").

Landlord and Tenant agree that the following Rules and Regulations  shall be and
hereby are made a part of this Lease, and Tenant agrees that Tenant's  employees
and agents,  or any others  permitted by Tenant to occupy or enter the Premises,
will at all times abide by said Rules and Regulations:


                                GENERAL RULES

1. The sidewalks, entries, passages,  corridors,  stairways and elevators of the
Building shall not be obstructed by Tenant, or Tenant's agents or employees,  or
used for any purpose other than ingress to and egress from the Premises.

2. Furniture, equipment or supplies will be moved in or out of the Building only
upon the elevator  designated by Landlord and then only during such hours and in
such manner as may be prescribed by Landlord and upon no less than  forty-eighty
(48) hours prior notice to Landlord. Landlord shall have the right to approve or
disapprove the movers or moving company  employed by Tenant.  Tenant shall cause
its ,movers to use only the  ;loading  facilities  and  elevator  designated  by
Landlord.  In the event  Tenant's  movers damage the elevator or any part of the
Building,  Tenant shall  forthwith pay to Landlord the amount required to repair
said damage.  Tenant shall insure that  deliveries  of materials and supplies to
the Premises are made through such  entrances,  elevators  and  corridors and at
such  times  as may from  time to time be  designated  by  Landlord,  and  shall
promptly pay or cause to be paid to Landlord  the costs of repairing  any damage
in or to the  Building  or  Building  Complex  caused by any person  making such
deliveries.

3. All  removals,  or the carrying in or out of any safes,  freight,  furniture,
construction  material,  bulky matter or heavy equipment of any description must
take place during the hours which  Landlord or its agent may determine from time
to time. Landlord reserves the fight to prescribe the weight and position of all
safes,  which must be placed upon two-inch  thick plank strips to distribute the
weight. The moving of safes, freight, furniture, fixtures, bulky matter or heavy
equipment of any kind must be made upon previous notice to the Building  Manager
and in a manner and at times  prescribed  by same,  and the  persons  employed y
Tenant for such work are subject to Landlord's prior approval. Landlord reserves
the right to inspect all safes, freight or other bulky articles to be brought in
the Building, and to exclude from the Building all safes, freight or other bulky
articles which violate any of these Rules and  Regulations or the Lease of which
these Rules and Regulations a part.

4. During the entire  term of this  Lease,  Tenant  shall,  at Tenant's  expense
install  and  maintain  under each and every  caster  chair a vinyl chair pad to
protect the carpeting.

5. No sign, advertisement, notice, lettering, decoration or other thing shall be
exhibited, inscribed, painted or affixed by Tenant on any part of the outside or
inside of the Premises or of the Building,  without the prior written consent of
Landlord. In the event of the violation of the foregoing by Tenant, Landlord may
remove same without any liability,  and may charge the expense  incurred by such
removal to Tenant.
<PAGE>

6. Tenant shall not do or permit  anything to be done in the Premises,  or bring
or keep  anything  therein  which  would  in any way  increase  the rate of fire
insurance on the Building or on property kept therein,  constitute a nuisance or
waste, or obstruct or interfere with the rights of other Tenants,  or in any way
injure or annoy them,  or conflict  with any of the rules or  ordinances  of the
Fire  Department or of the Department of Health of the City and County where the
Building is located.

7. The water and wash closets and other plumbing  fixtures shall not be used for
any purposes other than those for which they were constructed, and no sweepings,
rubbish,  rages or  other  substances  shall  be  thrown  therein.  All  damages
resulting from any misuse of the fixtures shall be borne by Tenant to the extent
that Tenant or Tenant's agents, servants,  employees,  contractors,  visitors or
licensees shall have caused the same.

8. No animal or bird of any kind shall be  brought  into or kept in or about the
Premises or the Building, except seeing-eye dogs or other seeing-eye animals.

9. No vehicles,  including bicycles,  shall be permitted in the offices,  halls,
corridors,  and elevators in the Building nor shall any vehicles by permitted to
obstruct the sidewalks or entrances of the Building.

10.  Tenant  shall not make,  or permit to be made any  unseemly  or  disturbing
noises or disturb or interfere with  occupants of the building,  or those having
business with them. Tenant shall not throw anything out of the doors, windows or
skylights or down the passageways.

11. Neither Tenant nor any of Tenant's agents, servants, employees, contractors,
visitors  or  licensees  shall at any time bring or keep upon the  Premises  any
flammable, combustible or explosive fluid, chemical or substance.

12. No  additional  locks,  bolts or mail slots of any kind shall be placed upon
any of the doors or windows by Tenant,  nor shall any change be made in existing
locks  or the  mechanism  thereof.  Tenant  must,  upon the  termination  of the
tenancy,  restore to Landlord all keys of stores, offices, toilet rooms and mail
box, either furnished to, or otherwise  procured by Tenant,  and in the event of
the  loss of any  keys so  furnished,  Tenant  shall  pay to  Landlord  the cost
thereof.

13. No window shades, blinds, screens,  draperies or other window coverings will
be attached or detached by Tenant  without  Landlord's  prior  written  consent.
Tenant agrees to abide by Landlord's  rules with respect to maintaining  uniform
curtains, draperies and/or linings at all windows and hallways.

14. No awnings shall be placed over any window.

15. If  Tenant  desires  telegraphic,  telephonic,  telecommunications  or other
similar connections, Landlord or Landlord's agent will designate the location of
such  installations.  Any  such  installation  and  connection  shall be made at
Tenant's expense.

16. Any painting or decorating as may be agreed to be done by and at the expense
of Landlord hall be done during regular  weekday  working  hours.  Should Tenant
desire such work on Saturdays,  Sundays,  holidays or outside or regular working
hours,  Tenant  shall pay for the extra cost  thereof.  Tenant  shall  carry out
Tenant's repair, maintenance,  alterations and improvements in the Premises only
during  times  agreed to in advance by Landlord  and in a manner  which will not
interfere with the rights of other Tenants in the Building.
<PAGE>

17.  Except as  permitted  by Landlord or except for normal  office  decorating,
Tenant shall not mark upon,  paint signs upon,  cut, drill into,  drive nails or
screws into, or in any way deface the walls,  ceilings,  partitions or floors of
the Premises or of the Building, and any defacement,  damage or injury caused by
Tenant, Tenant's agents or employees, shall be paid for by Tenant.

18. No water cooler, air conditioning unit or system or other apparatus shall be
installed or used by Tenant without the written consent of Landlord.

19.  Canvassing,  soliciting  and peddling in the Building  are  prohibited  and
Tenant shall cooperate to prevent the same.

20. Landlord shall at all times have the right, by Landlord's representatives or
agents,  to enter the  Premises  and show the same to  persons  wishing to lease
them, and may, at any time within sixty (60) days  preceding the  termination of
Tenant's  Lease term,  place upon the doors and  windows of the  Premises a "For
Rent" sign, which notice shall not be removed by Tenant.

21.  Tenant shall not obstruct or interfere  with the rights of other Tenants of
the  Building,  or of persons  having  business in the  Building,  or in any way
injure or annoy such Tenants or persons.

22. Tenant shall not commit any act or permit  anything in or about the Building
which shall or might  subject  Landlord to any liability or  responsibility  for
injury to any person or property by reason of any  business or  operation  being
carried on in or bout the Building or for any other reason.

23. Tenant shall not use the Building for lodging, sleeping, cooking, or for any
immoral or illegal purpose or for any purpose that will damage the Building,  or
the reputation  thereof,  or for any purposes other than those  specified in the
Lease.

24. Tenant shall not bring any Hazardous  Materials onto the Premises except for
those  which  are in  general  commercial  use and are  incidental  to  Tenant's
business office operations and only in quantities suitable for immediate use.

25.  Smoking  is  prohibited  in all  enclosed  Common  Areas  of the  Building,
including,  without  limitation,  the main  lobby,  atrium,  all  hallways,  all
elevators, all elevator lobbies, all restrooms and the parking structure.

26.  Landlord  reserves the right to close and lock the  Building on  Saturdays,
Sundays and legal holidays, and on any other days between the hours of 6:30 p.m.
and of 6:30 a.m. of the following  day. If Tenant uses the Premises  during such
periods,  Tenant shall be responsible for securely locking any doors it may have
opened for entry.

                                PARKING RULES

1.  Parking  areas shall be used only for  parking  vehicles no longer than full
size,  passenger  automobiles herein called "Permitted Size Vehicles".  Vehicles
other  that  Permitted  Size  Vehicles  are  herein  referred  to as  "Oversized
Vehicles".

2.  Tenant  shall  not  permit  or allow  any  vehicles  that  belong  to or are
controlled  by  Tenant  or  Tenant's  employees,  agents,  suppliers,  shippers,
customers  or  invitees  to be loaded,  unloaded,  or parked in areas other than
those designated by Landlord for such activities.

<PAGE>

3. Landlord  reserves the right to relocate all or a part of parking spaces from
floor to  floor,  within  one  floor,  and/or  to  reasonably  adjacent  offsite
location(s),  and to reasonably  allocate them between compact and standard size
spaces,  as long as the same  complies  with  applicable  laws,  ordinances  and
regulations.

4. Users of the  parking  area will obey all  posted  signs and park only in the
areas designated for vehicle parking.

5.  Landlord  will not be  responsible  for any  damage to  vehicles,  injury to
persons or loss of  property,  all of which risks are assumed by the party using
the parking area.

6. The  maintenance,  washing,  waxing or  cleaning  of  vehicles in the parking
structure or Common Areas is strictly prohibited.

7. Tenant shall be responsible for seeing that all of its employees,  agents and
invitees  comply  with  the  applicable  parking  rules,  regulations,  laws and
agreements.

8.  Landlord  reserves  the right to modify  these rules and/or adopt such other
reasonable and on discriminatory  rules and regulations as it may deem necessary
for the proper operation of the parking area.

9. Such parking use as is herein  provided is intended  merely as a license only
and no bailment is intended or shall be created hereby.

                                                Landlord Initials:___________
                                                  Tenant Initials:___________




<PAGE>
                                 Exhibit "D"

                            WORK LETTER AGREEMENT


THIS EXHIBIT is made this 1st day of July ,1997,  by and between  STEVENS  CREEK
OFFICE  CENTER  OF  SANTA  CLARA,  ("Landlord"),   and,  EXCALIBUR  TECHNOLOGIES
CORPORATION, a Delaware corporation, ("Tenant").


1. Landlord  shall,  at Landlord's  expense,  complete the  construction  of the
improvements  to the Premises as  described  and  delineated  in the space plans
attached hereto as Exhibit "D-1" and in accordance with the building  standards.
Landlord shall cause to be prepared  final drawings for the Tenant  Improvements
that are consistent with the space plans and the building standards.  As soon as
such  Construction  Drawings are  completed,  Landlord shall deliver the same to
Tenant.  Such  Constriction  Drawings  shall be reviewed  and approved by Tenant
within three (3) business days after delivery by Landlord and four (4) copies of
such Construction Drawings shall be initialed and dated by Landlord and Tenant.

2. Tenant shall be solely responsible for the suitability for the Tenant's needs
and business of the design and function of the Tenant Improvements. Tenant shall
also be  responsible  for  procuring  or  installing  in the  Premises any trade
fixtures,  equipment,  furniture,  furnishings,  telephone  equipment  or  other
personal  property to be used in the  Premises  by Tenant,  and the cost of such
personal property shall be paid by Tenant.  Tenant shall conform to the Building
wiring  standards in installing any telephone  equipment and shall be subject to
any and all rules of the site construction.

3. If Tenant shall request any change,  addition or alteration in the plans, the
building  standards  or  the  approved  Construction  Drawings,  Landlord  shall
promptly  give  Tenant a written  estimate  of (a) the cost of  engineering  and
design  services to prepare a change order ("Change  Order") in accordance  with
such request,  (b) the cost of the work to be performed  pursuant to such Change
Order,  and (c) the time delay expected  because of such requested Change Order>
Within three (3)  business  days  following  Tenant's  receipt of the  foregoing
written  estimate,  Tenant shall notify  Landlord in writing whether it approves
such written estimate.  If Tenant approves such written  estimate,  Tenant shall
accompany such approval with a good check made payable to Landlord in the amount
of the  estimated  cost of preparing  the Change Order and  performing  the work
thereof, and the foregoing shall constitute Landlord's authorization to proceed.
If such written authorization and check are not received by Landlord within such
three (3) business days period,  Landlord  shall not be obligated to prepare the
Change Order or perform any work in connection therewith. Upon completion of the
work of the Change Order and submission of the final cost thereof by Landlord to
Tenant, Tenant shall promptly pay any such additional amounts due Landlord;  any
savings shall,  at Landlord's  option,  either by refunded to Tenant or credited
against any other Change Order sums which are due Landlord by Tenant.

4. If the completion of the Tenant  Improvements  in the Premises is delayed (i)
at the request of Tenant,  (ii) by Tenant's failure to comply with the foregoing
provisions,  (iii) by  changes  in the work  requested  (whether  or not  Tenant
authorizes  Landlord to proceed therewith) or ordered by Tenant or by extra work
ordered by Tenant,  or (iv)  because  Tenant  chooses  to have  additional  work
performed by Landlord, then Tenant shall be responsible for all limitation,  any
costs and expenses  attributable  to increases in labor or materials,  and there
shall be no delay in the commencement of Tenant's  obligation to pay Rent if the
completion of the Tenant Improvements is delayed as a result of the foregoing.

<PAGE>

5. Landlord and Tenant agree that the Tenant  Improvements  shall be completd in
three (3) phases,  subject to the expansion space commencement  dates. Suite 230
will be completed  within  forty-five days (45) following  Tenants  occupancy of
Suites 220 and 224, pursuant to Section 3.2 of the Lease.






IN WITNESS  WHEREOF,  the parties have executed this Work Letter  Agreement this
9th day of July, 1997.




LANDLORD:                                 TENANT:
STEVENS CREEK OFFICE CENTER               EXCALIBUR TECHNOLOGIES CORPORATION.
OF SANTA CLARA                            a  Delaware  corporation
                                          

By:/s/Louie P. Tersini                    By:  /s/James H. Buchanan
   ----------------------                      -------------------------
   Louie P. Tersini                       Its: Chief Financial Officer
   Owner



<PAGE>




                               Exhibit "D - 1"

                                 SPACE PLAN


THIS EXHIBIT is made this 1st day of July ,1997,  by and between  STEVENS  CREEK
OFFICE  CENTER  OF  SANTA  CLARA,  ("Landlord"),   and,  EXCALIBUR  TECHNOLOGIES
CORPORATION, a Delaware corporation, ("Tenant").



<PAGE>
                                  ADDENDUM


THIS  ADDENDUM  TO LEASE  is made  this 1st day of July  ,1997,  by and  between
STEVENS  CREEK  OFFICE  CENTER  OF SANTA  CLARA,  ("Landlord"),  and,  EXCALIBUR
TECHNOLOGIES CORPORATION, a Delaware corporation, ("Tenant").


50. Base Rent: Tenant shall pay to Landlord "Base Rent" for the Premises, 
    Suite #230, as follows:

    Months 1 - 12        $2,276.30 per month, $27,315.60 per annum
    Months 13 - 24       $2,343.25 per month, $28,119.00 per annum
    Months 25 - 36       $2,410.20 per month, $28,922.40 per annum

   Total rent obligation is $84,357.00,  pursuant to the terms and conditions of
paragraph 4.3, hereinabove.

51.Expansion  Space:  Landlord and Tenant have mutually agreed that Tenant shall
   lease Premises known as Suite #220 and #224,  following the expiration of the
   current Tenant's,  in possession,  lease agreements,  i.e., July 31, 1997 and
   October 31, 1997,  respectively.  The Expansion Space commencement date shall
   be the earlier of (i) the date Tenant  occupies the Expansion  space, or (ii)
   the date on which Substantial  Completion of the expansion space improvements
   has been  achieved.  For  purposes  of the  Addendum,  the term  "Substantial
   Completion" shall mean the date upon which Landlord's  General Contractor has
   issued a notice of substantial completion with respect to the Expansion Space
   Improvements

   a. Expansion of Suite #220;  Effective as of the Expansion Space Commencement
   Date,  Landlord  hereby  leases to  Tenant  and  Tenant  hereby  leases  from
   Landlord,  that certain space,  consisting of 865 Rentable square feet and as
   shown on Exhibit  "B-1".  Effective as of the  Expansion  Space  Commencement
   Date.  Whenever  the term  "Premises"  is used in the Lease,  such term shall
   include the original  Premises and the Expansion  Space as if it were part of
   the  original  Premises.  The lease by Tenant of the  Expansion  Space  shall
   continue until the expiration of the original term pursuant to Section 1.5 of
   the Lease.

      (i)  Adjustments:  Commencing  from and after the  Expansion  Commencement
   Date,  the  Expansion  Space shall be deemed to be a part of the Premises and
   shall be subject to all the terms,  covenants  and  conditions  of the Lease,
   except  that the  following  terms  shall be deemed  amended  to  provide  as
   follows:

        (a) Premises:  The Premises shall be adjusted from 1,339 rentable square
   feet to 2,204 rentable square feet.

   
        (b)  Expansion  Space  Commencement  Date:  August  1,  1997 
   pursuant to Section 1.5 of the Lease.
    

        (c) Base Rent::  The Base Rent then being paid shall be increased by the
   sum of One Thousand Six Hundred  Dollars and Twenty-Five  Cents  ($1,600.25),
   per month (which sum shall be prorated if the  expansion  space  commencement
   date  occurs on a date other  that the first day of a  calendar  month on the
   basis of a thirty (30) day month. The Base Rent pursuant to Section 50, shall
   be increased on the respective anniversary dates hereinabove, as follows:

<PAGE>

        Months 13 - 24  $1,643.50 per month, $19,722.00 per annum
        Months 25 - 36  $1,686.75 per month, $20,241.00 per annum

        (d) Operating Expense Increase:  Tenant's share of the Operating Expense
   Increase  shall be increased  from 4.05% to 6.666% as define in Sections 1.10
   and 4.2 of the Lease.

        (e) Parking Spaces:  The number of parking spaces shall be increase from
   Six (6) to Nine (9) .

        (f) Delay in  Possession:  Possession  shall be  deliverd by Landlord to
   Tenant pursuant to Section 3.2 of the Lease.

        (g)       Tenant Improvements:  Landlord shall construct the
   expansion space improvements, as defined in           Exhibit(s) "D"
   and "D-1", attached hereto.


   b. Expansion of Suite #224;  Effective as of the Expansion Space Commencement
   Date,  Landlord  hereby  leases to  Tenant  and  Tenant  hereby  leases  from
   Landlord,  that certain space,  consisting of 659 Rentable square feet and as
   shown on Exhibit  "B-1".  Effective as of the  Expansion  Space  Commencement
   Date.  Whenever  the term  "Premises"  is used in the Lease,  such term shall
   include the original  Premises and the Expansion  Space as if it were part of
   the  original  Premises.  The lease by Tenant of the  Expansion  Space  shall
   continue until the expiration of the original term pursuant to Section 1.5 of
   the Lease.

      (i)  Adjustments:  Commencing  from and after the  Expansion  Commencement
   Date,  the  Expansion  Space shall be deemed to be a part of the Premises and
   shall be subject to all the terms,  covenants  and  conditions  of the Lease,
   except  that the  following  terms  shall be deemed  amended  to  provide  as
   follows:

        (a) Premises:  The Premises shall be adjusted from 2,204 rentable square
   feet to 2,863 rentable square feet.

        (b)  Expansion  Space  Commencement  Date:  November  1, 1997 and ending
   pursuant to Section 1.5 of the Lease.

        (c) Base Rent:  The Base Rent then being paid shall be  increased by the
   sum of One Thousand One Hundred Twenty Dollars and Thirty Cents  ($1,120.30),
   per month (which sum shall be prorated if the  expansion  space  commencement
   date  occurs on a date other  that the first day of a  calendar  month on the
   basis of a thirty  (30) day month.  The Base Rent  pursuant to Section 50 and
   Section  51a(b)  herein,  shall be  increased on the  respective  anniversary
   dateshereinabove, as follows:

        Months 13 - 24  $1,153.25 per month, $13,839.00 per annum
        Months 25 - 36  $1,186.20 per month, $14,234.40 per annum

<PAGE>

        (d) Operating Expense Increase:  Tenant's share of the Operating Expense
   Increase  shall be increased from 6.666% to 8.659% as define in Sections 1.10
   and 4.2 of the Lease.

        (e) Parking Spaces:  The number of parking spaces shall be increase from
   Nine (9) to Twelve (12) .

        (e) Delay in  Possession:  Possession  shall be  deliverd by Landlord to
   Tenant pursuant to Section 3.2 of the Lease.

        (f)       Tenant Improvements:  Landlord shall construct the
   expansion space improvements, as defined in  Exhibit(s) "D" and "D-1",
   attached hereto.

52.  Option to Renew:  Provided  that  Tenant is not in default of the terms and
conditions of this Lease, Tenant shall have one (1) option to extend the Term of
this  Lease for an  additional  period of three (3) years on the same  terms and
conditions  provided  herein,  except that the Base Rent for the  extended  term
shall be adjusted by  Ninety-Five  (95%) of the then  Prevailing  Market  Rental
Value.  However,  in no event  shall the Base  Annual  Rent be less than  amount
payable under the terms of the Lease  immediately  prior to the  commencement of
the  applicable  Option Term. The Option shall be exercised by written notice to
Landlord one hundred twenty (120) days prior to the expiration of the Lease.