<PAGE>
                                                                    EXHIBIT 10.1


                                  OFFICE LEASE

                                  KILROY REALTY

                              KILROY CENTRE DEL MAR

                              KILROY REALTY, L.P.,

                         a Delaware limited partnership,

                                  as Landlord,

                                       and

                     FAIR, ISAAC AND COMPANY, INCORPORATED,

                             a Delaware corporation

                                   as Tenant.

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                         Page
                                                                                         ----
<S>                                                                                      <C>
ARTICLE 1 PREMISES, BUILDING, PROJECT, AND COMMON AREAS...........................         6

ARTICLE 2 INITIAL LEASE TERM; OPTION TERM(S); EARLY TERMINATION...................        13

ARTICLE 3 BASE RENT; ABATEMENT OF RENT............................................        17

ARTICLE 4 ADDITIONAL RENT.........................................................        19

ARTICLE 5 USE OF PREMISES.........................................................        31

ARTICLE 6 SERVICES AND UTILITIES..................................................        32

ARTICLE 7 REPAIRS ................................................................        35

ARTICLE 8 ADDITIONS AND ALTERATIONS...............................................        36

ARTICLE 9 COVENANT AGAINST LIENS..................................................        39

ARTICLE 10 INSURANCE .............................................................        40

ARTICLE 11 DAMAGE AND DESTRUCTION.................................................        44

ARTICLE 12 NONWAIVER .............................................................        47

ARTICLE 13 CONDEMNATION ..........................................................        48

ARTICLE 14 ASSIGNMENT AND SUBLETTING..............................................        48

ARTICLE 15 SURRENDER OF PREMISES; OWNERSHIP AND  REMOVAL OF TRADE FIXTURES........        54

ARTICLE 16 HOLDING OVER ..........................................................        55

ARTICLE 17 ESTOPPEL CERTIFICATES..................................................        56

ARTICLE 18 SUBORDINATION..........................................................        56

ARTICLE 19 DEFAULTS; REMEDIES.....................................................        57

ARTICLE 20 COVENANT OF QUIET ENJOYMENT............................................        60

ARTICLE 21 SECURITY DEPOSIT.......................................................        60

ARTICLE 22 TELECOMMUNICATIONS EQUIPMENT...........................................        61

ARTICLE 23 SIGNS .................................................................        62
</TABLE>

                                      (ii)

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<TABLE>
<S>                                                                                      <C>
ARTICLE 24 COMPLIANCE WITH LAW....................................................        65

ARTICLE 25 LATE CHARGES ..........................................................        65

ARTICLE 26 LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT...................        66

ARTICLE 27 ENTRY BY LANDLORD......................................................        66

ARTICLE 28 TENANT PARKING.........................................................        67

ARTICLE 29 MISCELLANEOUS PROVISIONS...............................................        68
</TABLE>

                                      (iii)

<PAGE>

                                     INDEX

<TABLE>
<CAPTION>
                                                                                        PAGE(S)
                                                                                        -------
<S>                                                                                     <C>
Abatement Event...................................................................        18
Additional FF&E...................................................................        77
Additional Notice.................................................................        18
Additional Rent...................................................................        19
Advocate Arbitrators..............................................................        16
Alterations.......................................................................        36
Applicable Laws...................................................................        65
Applicable Reassessment...........................................................        30
Award.............................................................................        16
Bank Prime Loan...................................................................        65
Base Building.....................................................................        37
Base Rent.........................................................................        17
Base Year.........................................................................        19
bona-fide third-party offer.......................................................        .9
Brokers...........................................................................        73
BS/BS Exception...................................................................        35
Building 5 First Refusal Space....................................................        13
Building Common Areas,............................................................         7
Building Common Areas.............................................................         7
Building Hours....................................................................        32
Building Structure................................................................        35
Building Systems..................................................................        35
Building Tombstone  Sign..........................................................        63
CC&Rs.............................................................................        32
Claims............................................................................        40
Comparable Area...................................................................        15
Comparable Buildings..............................................................        15
Comparable Deals..................................................................        14
Comparable Term...................................................................        14
Control,..........................................................................        53
Cosmetic Alterations..............................................................        36
Damage Termination Date...........................................................        46
Damage Termination Notice.........................................................        46
Direct Expenses...................................................................        19
Eligibility Period................................................................        18
Environmental Laws................................................................        75
Estimate..........................................................................        28
Estimate Statement................................................................        28
Estimated Excess..................................................................        28
Excess............................................................................        27
Exercise Notice...................................................................        15
Existing FF&E.....................................................................        77
Expansion Notice..................................................................         8
Expansion Space...................................................................         7
</TABLE>

                                      (iv)

<PAGE>

<TABLE>
<CAPTION>
                                                                                        PAGE(S)
                                                                                        -------
<S>                                                                                     <C>
Expense Year......................................................................        19
FF&E..............................................................................        78
First Refusal Notice..............................................................         9
First Refusal Space...............................................................         9
First Refusal Space Amendment.....................................................        10
First Refusal Space Lease.........................................................        10
Force Majeure.....................................................................        71
Hazardous Material(s).............................................................        75
Holdover Notice...................................................................        55
Holidays..........................................................................        32
HVAC..............................................................................        32
Interest Rate.....................................................................        65
Landlord..........................................................................        .1
Landlord Parties..................................................................        40
Landlord Repair Notice............................................................        45
Landlord Response Notice..........................................................        15
Landlord's Option Rent Calculation................................................        15
Lease.............................................................................        .1
Lease Commencement Date...........................................................        13
Lease Expiration Date.............................................................        13
Lease Term........................................................................        13
Lease Year........................................................................        13
Lines.............................................................................        74
Mail..............................................................................        71
Market Rent.......................................................................        14
Neutral Arbitrator................................................................        16
New Services......................................................................        24
Nondisturbance Agreement..........................................................        56
Notices...........................................................................        71
Objectionable Name................................................................        63
Operating Expenses................................................................        19
Option Rent.......................................................................        14
Option Term.......................................................................        13
Option Term TI Allowance..........................................................        15
Original Improvements.............................................................        43
Original Tenant...................................................................        .7
Other Improvements................................................................        76
Outside Agreement Date............................................................        15
Permitted Holdover Term...........................................................        55
Permitted Transferee..............................................................        53
Premises..........................................................................         6
Project Common Areas..............................................................         7
Project Common Areas,.............................................................         7
Proposition 13....................................................................        25
Proposition 13 Protection Amount..................................................        30
</TABLE>

                                     (v)
<PAGE>

<TABLE>
<CAPTION>
                                                                                        PAGE(S)
                                                                                        -------
<S>                                                                                     <C>
Proposition 13 Purchase Price.....................................................        30
Provider..........................................................................        77
Reassessment......................................................................        29
Reassessment,.....................................................................        26
Renovations.......................................................................        74
Rent Concessions..................................................................        14
Rent..............................................................................        19
Review Period.....................................................................        30
Security Deposit..................................................................        60
Sign Specifications...............................................................        63
Statement.........................................................................        27
Subject Space.....................................................................        49
Summary...........................................................................         1
Tax Expenses......................................................................        25
Tax Increase......................................................................        29
Telecom FF&E......................................................................        78
Telecommunications Equipment......................................................        61
Tenant............................................................................         1
Tenant Work Letter................................................................         6
Tenant's Option Rent Calculation..................................................        15
Tenant's Share....................................................................        26
Tenant's Signage..................................................................        62
Test Fit Plan.....................................................................        77
Third Party Lease.................................................................        10
Transfer..........................................................................        52
Transfer Notice...................................................................        49
Transfer Premium..................................................................        51
Transferee........................................................................        49
Transfers.........................................................................        49
Unusable Area.....................................................................        18
</TABLE>

                                      (vi)

<PAGE>


                              KILROY CENTRE DEL MAR

                                  OFFICE LEASE

         This Office Lease (the "LEASE"), dated as of the date set forth in
Section 1 of the Summary of Basic Lease Information (the "SUMMARY"), below, is
made by and between KILROY REALTY, L.P., a Delaware limited partnership
("LANDLORD"), and FAIR, ISAAC AND COMPANY, INCORPORATED, a Delaware corporation
("TENANT").

                       SUMMARY OF BASIC LEASE INFORMATION

<TABLE>
<CAPTION>
         TERMS OF LEASE                                                    DESCRIPTION
         --------------                                                    -----------
<S>                                                   <C>
1.       Date:                                        February 14, 2003.

2.       Premises:

         2.1      Building:                           That certain five (5)-story  building (the "BUILDING" or
                                                      "BUILDING 3")  located at 3661 Valley Centre Drive,  San
                                                      Diego,   California   92130,   which  Building  contains
                                                      129,752 rentable  (123,445 usable) square feet of space,
                                                      and  which   Building   is   commonly   referred  to  as
                                                      "BUILDING 3" within the "Project."

         2.2      Premises:                           All of the Building, as more particularly  identified in
                                                      EXHIBIT A to this Lease.

         2.3      Project:                            The  Building  is part of an  office  project  known  as
                                                      "KILROY  CENTRE  DEL  MAR,"  as  further  set  forth  in
                                                      Section 1.1.2 of this Lease.

3.       Lease Term
         (Article 2):

         3.1      Length of Term:                     Seven (7) years.

         3.2      Lease Commencement Date:            August 1, 2003, subject to "Landlord Caused Delays," as
                                                      that term is set forth in Section 5.1  of the  "Tenant
                                                      Work Letter," attached hereto as EXHIBIT B.
</TABLE>

<PAGE>

<TABLE>
<S>                                                   <C>
         3.3      Lease Expiration Date:              The date immediately preceding the seventh (7th)
                                                      anniversary of the Lease Commencement Date.

         3.4      Option Term(s):                     Two (2) five (5)-year options to renew, as more
                                                      particularly set forth in Section 2.2 of this Lease.
</TABLE>

4.       Base Rent (Article 3):*

<TABLE>
                                                                                                   Monthly
                                                                     Monthly                     Rental Rate
       Period During                    Annual                      Installment                  per Rentable
        Lease Term                    Base Rent**                  of Base Rent**                Square Foot
    ------------------               -------------                 --------------                ------------
<S>                                  <C>                           <C>                           <C>
     Month 1 through
        Month 60                     $3,799,140.00                  $316,595.00                     $2.44

     Month 61 through
        Month 72                     $4,453,089.00                  $371,090.75                     $2.86

     Month 73 through
        Month 84                     $4,593,222.00                  $382,768.50                     $2.95
</TABLE>

*        To the extent Tenant elects to increase the amount of the Tenant
         Improvement Allowance pursuant to Section 2.3 of the Tenant Work
         Letter, such "TIA Increase," as that term is defined in Section 2.3 of
         the Tenant Work Letter, shall be amortized over the initial Lease Term
         using an amortization rate of ten percent (10%) per annum. Accordingly,
         for each dollar of TIA Increase utilized by Tenant, the Base Rent
         payable by Tenant during the initial Lease Term shall be increased by
         an amount equal to $0.0166 per month.

**       Annual Base Rent (and Monthly Installment of Base Rent) was calculated
         by multiplying the Monthly Rental Rate per Rentable Square Foot by the
         number of rentable square feet of space in the Premises; provided,
         however, that in each instance, the resulting Monthly Installment of
         Base Rent was rounded up or down, as applicable, to the nearest
         twenty-five cents ($0.25), and the Annual Base Rent is, therefore, an
         amount equal to twelve (12) times such rounded Monthly Installment of
         Base Rent amount.
<TABLE>
<S>                                                    <C>
5.       Base Year                                     2004; provided, however, Landlord and Tenant
         (Article 4):                                  acknowledge and agree that electrical utilities
                                                       exclusively serving the Premises shall be paid directly by
                                                       Tenant, the same having been excluded from "Operating
                                                       Expenses," as that term is set forth in Section 4.2.4 of
                                                       the Lease.
</TABLE>

                                      -2-
<PAGE>

<TABLE>
<S>                                                    <C>
6.       Tenant's Share
         (Article 4):

         6.1      Tenant's Project Share:              24.09%.

         6.2      Tenant's Building Share :            100%.

7.       Permitted Use                                 Provided  any such use is  legally  permissible,  Tenant
         (Article 5):                                  shall use the  Premises  solely for  general  office use
                                                       and uses incidental thereto to the extent the same comply with
                                                       applicable laws and zoning and are consistent with the
                                                       character of the Project as a first-class office building Project,
                                                       specifically including, but not limited to, incidental uses
                                                       related to Tenant's planned operation of a data center,
                                                       employee cafeteria and work-out facility.

8.       Security Deposit                              $382,768.50;  provided,  however, the same is subject to
         (Article 21):                                 the  forgiveness  provisions  and delivery  requirements
                                                       set forth in Article 21 of this Lease.

9.       Parking Pass Ratio                            Landlord    shall    provide    Tenant   with   (i) Five
         (Article 28):                                 (5) unreserved  parking  passes for every  1,000  usable
                                                       square feet of the Premises (rounded to the nearest 200
                                                       usable square feet), of which thirty (30) passes shall be for the
                                                       use of covered reserved parking spaces, and (ii) a
                                                       total of forty (40) reserved parking spaces located
                                                       adjacent to the Building's entrance designated "Fair,
                                                       Isaac and Company Visitor/Vendor," as depicted on EXHIBIT A.

10.      Address of Tenant                             Fair, Isaac and Company, Inc.
         (Section 29.18):                              5935 Cornerstone Court West
                                                       San Diego, California 92121
                                                       Attention:  Vice President, Operations
                                                       (Prior to Lease Commencement Date)
</TABLE>

                                      -3-

<PAGE>
<TABLE>
<S>                                                    <C>
         and                                           Fair, Isaac and Company, Inc.
                                                       3661 Valley Centre Drive,
                                                       San Diego, California  92130
                                                       Attention:  Vice President, Operations

                                                       with a copy to:

                                                       Fair, Isaac and Company, Inc.
                                                       4295 Lexington Avenue North,
                                                       Saint Paul, Minnesota 55126
                                                       Attention:  General Counsel
                                                       (After Lease Commencement Date)

11.      Address of Landlord
         (Section 29.18):                              See Section 29.18 of the Lease.

12.      Broker(s)                                     The Staubach Company-West, Inc.
         (Section 29.24):                              11988 El Camino Real
                                                       Suite 150
                                                       San Diego, California 92130
                                                       Attention:    Mr. William E. Fleck, and
                                                                     M. E. Norman III.

                                                       and

                                                       CB Richard Ellis, Inc.
                                                       4365 Executive Drive
                                                       Suite 900
                                                       San Diego, CA 92121-2127
                                                       Attention:    Mr. Douglas Lozier, and
                                                                     Mr. Bret E. Gossett

13.      Tenant Improvement Allowance                  $2,500,000.00,  which amount may be increased to include
         (Section 2 of EXHIBIT B):                     the  "TIA   Increase,"   pursuant   to  the   terms  and
                                                       conditions of the Tenant Work Letter.
</TABLE>

                                      -4-

<PAGE>


<TABLE>
<S>                                                    <C>
14.      FF&E Allowance                                In  addition  to  the  Tenant   Improvement   Allowance,
         (Section 2 of EXHIBIT B):                     Landlord shall  (i) cause,  at Landlord's  sole cost and
                                                       expense, the "Existing FF&E," and the "Additional
                                                       FF&E," as those terms are set forth in Section 29.36 of
                                                       this Lease, to be purchased, installed and/or
                                                       otherwise located in the Premises for the benefit of
                                                       Tenant, and (ii) provide Tenant with the "Telecommunications
                                                       Allowance," as that term is set forth in Section 29.36 of
                                                       this Lease, in an amount equal to $150,000.00, all as
                                                       more particularly set forth in such Section 29.36.
</TABLE>

                                      -5-

<PAGE>

                                   ARTICLE 1

                  PREMISES, BUILDING, PROJECT, AND COMMON AREAS

         1.1      PREMISES, BUILDING, PROJECT AND COMMON AREAS.

                  1.1.1    THE PREMISES. Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord the premises set forth in Section 2.2 of the
Summary (the "PREMISES"). The outline of the Premises is set forth in EXHIBIT A
attached hereto and each floor or floors of the Premises has/shall have
approximately the number of rentable square feet as set forth in Section 2.2 of
the Summary. The parties hereto agree that the lease of the Premises is upon and
subject to the terms, covenants and conditions (the "TCCS") herein set forth,
and Tenant covenants as a material part of the consideration for this Lease to
keep and perform each and all of such TCCs by it to be kept and performed and
that this Lease is made upon the condition of such performance. The parties
hereto hereby acknowledge that the purpose of EXHIBIT A is to show the
approximate location of the Premises in the "BUILDING," as that term is defined
in Section 1.1.2, below, only, and such Exhibit is not meant to constitute an
agreement, representation or warranty as to the construction of the Premises,
the precise area thereof or the specific location of the "Common Areas," as that
term is defined in Section 1.1.3, below, or the elements thereof or of the
accessways to the Premises or the "PROJECT," as that term is defined in Section
1.1.2, below. Except as specifically set forth in this Lease and in the Tenant
Work Letter attached hereto as EXHIBIT B (the "TENANT WORK LETTER"), Landlord
shall not be obligated to provide or pay for any improvement work or services
related to the improvement of the Premises. Tenant also acknowledges that
neither Landlord nor any agent of Landlord has made any representation or
warranty regarding the condition of the Premises, the Building or the Project or
with respect to the suitability of any of the foregoing for the conduct of
Tenant's business, except as specifically set forth in this Lease and the Tenant
Work Letter. Subject to the completion of "Landlord's Work," as that term is set
forth in Section 1.2 of the Tenant Work Letter, pursuant to the TCCs of such
Tenant Work Letter (including the correction of any deficiencies thereof), the
taking of possession of the Premises by Tenant shall conclusively establish that
the Premises and the Building were at such time in good and sanitary order,
condition and repair.

                  1.1.2    THE BUILDING AND THE PROJECT. The Premises are a part
of the building set forth in Section 2.1 of the Summary (the "BUILDING"). The
Building is part of an office project known as "KILROY CENTRE DEL MAR." The term
"PROJECT," as used in this Lease, shall mean (i) the Building and the Common
Areas, (ii) the land (which is improved with landscaping, parking facilities and
other improvements) upon which the Building and the Common Areas are located,
and (iii) the other office buildings located adjacent to the Building and the
land upon which such adjacent office buildings are located.

                  1.1.3    COMMON AREAS. Tenant shall have the non-exclusive
right to use in common with other tenants in the Project, and subject to the
rules and regulations referred to in Article 5 of this Lease, those portions of
the Project which are provided, from time to time, for use in common by
Landlord, Tenant and any other tenants of the Project (such areas, together with
such other portions of the Project designated by Landlord, in its discretion,
including certain areas designated for the exclusive use of certain tenants, or
to be shared by Landlord and certain

                                      -6-

<PAGE>

tenants, are collectively referred to herein as the "COMMON AREAS"). The Common
Areas shall consist of the "PROJECT COMMON AREAS" and the "BUILDING COMMON
AREAS." The term "PROJECT COMMON AREAS," as used in this Lease, shall mean the
portion of the Project designated as such by Landlord; provided, however,
Project Common Areas shall not include any portion of the Project which is
included in the rentable square footage of any building in the Project. The term
"BUILDING COMMON AREAS," as used in this Lease, shall mean the portions of the
Common Areas located within the Building designated as such by Landlord;
provided, however, Landlord and Tenant hereby acknowledge and agree that (i) as
the initial Premises configuration consist of the entire Building, initially
there are no Building Common Areas, and (ii) unless Landlord recaptures space
within the Building pursuant to Section 14.4 of this Lease, Landlord shall not,
during the Lease Term, designate space within the Building as Building Common
Areas. Landlord shall operate and maintain the Common Areas in a manner that is
consistent with the "Comparable Buildings," as that term is set forth in Section
2.2.2, below, and the use thereof shall be subject to such rules, regulations
and restrictions as Landlord may make from time to time, provided that such
rules, regulations and restrictions do not (a) unreasonably interfere with the
rights granted to Tenant under this Lease and the permitted use granted under
Section 5.1, below, or (b) materially increase the cost of Tenant's occupancy of
the Premises. Landlord reserves the right to close temporarily, make alterations
or additions to, or change the location of elements of the Project and the
Common Areas; provided that no such changes shall be permitted which materially
and adversely diminish Tenant's rights to quiet enjoyment and use of the
Premises (except that such restriction shall not apply to alterations and
additions required by "Applicable Laws," as that term is set forth in Article
24, below). Except when and where Tenant's right of access is specifically
excluded in this Lease, Tenant shall have the right of access to the Premises,
the Building, and the Project parking facility twenty-four (24) hours per day,
seven (7) days per week during the "Lease Term," as that term is defined in
Section 2.1, below.

                  1.2      STIPULATION OF RENTABLE SQUARE FEET OF PREMISES AND
BUILDING. For purposes of this Lease, "rentable square feet" and "usable square
feet" of the Premises shall be deemed as set forth in Section 2.2 of the Summary
and the rentable square feet of the Building shall be deemed as set forth in
Section 2.1 of the Summary.

                  1.3      EXPANSION OPTION.

                  1.3.1    EXPANSION RIGHT. Landlord hereby grants to the Tenant
originally named in this Lease (the "ORIGINAL TENANT"), and its "Permitted
Transferees," as that term is set forth in Section 14.8 of this Lease (but only
to the extent such Permitted Transferee has, in Landlord's reasonable
determination, financial strength equal to or greater than Original Tenant), the
right to expand the Premises to include all or one-half (1/2) of the first floor
of "Building 2," as that term is set forth in Section 1.3.2, below (such entire
first floor to be known as the "EXPANSION SPACE"), pursuant to the terms and
conditions of this Section 1.3.

                  1.3.2    AVAILABILITY OF BUILDING 2. Peregrine Systems, Inc.,
("PEREGRINE") currently occupies all of that certain five (5)-story office
building commonly referred to as "Building 2" within the Project, which has a
street address of 3611 Valley Centre Drive, San Diego, California 92130
("BUILDING 2"), pursuant to that certain lease between KR-Carmel Partners, LLC,
predecessor-in-interest to Landlord, and Peregrine, dated as of June 9, 1999
(the

                                      -7-

<PAGE>

"PEREGRINE BUILDING 2 LEASE"). On September 22, 2002 (the "PETITION DATE"),
Peregrine filed a voluntary petition for relief under chapter 11 of the
Bankruptcy Code in the United States Bankruptcy Court for the District of
Delaware, commencing bankruptcy Case Number 02-12740-JKF (the "BANKRUPTCY
CASE"). Landlord has been informed that, as part of the Bankruptcy Case,
Peregrine intends to reject the Peregrine Building 2 Lease. To the extent that
the Peregrine Building 2 Lease is terminated as to all or a portion of the
Expansion Space prior to January 1, 2004, whether as a result of such
anticipated rejection by Peregrine or otherwise, then Landlord shall promptly
provide Tenant with a written notice (the "AVAILABILITY NOTICE") of such
termination, which Availability Notice shall set forth the date Landlord
anticipates possession of such Expansion Space to be deliverable.

                  1.3.3    PROCEDURE FOR ELECTION. The rights contained in this
Section 1.3 shall be exercised by Tenant, if at all, only in the manner set
forth in this Section 1.3.3. Within thirty (30) days following the date Tenant
receives the Availability Notice, Tenant shall deliver written notice (the
"EXPANSION NOTICE") to Landlord stating that Tenant is exercising its right to
expand the Premises to include that portion of the Expansion Space identified by
Tenant in such Expansion Notice. The failure of Tenant to deliver such Expansion
Notice to Landlord pursuant to the terms of this Section 1.3.3 shall be deemed
to be a waiver by Tenant of all rights granted to Tenant in this Section 1.3 and
such rights shall immediately be null and void and of no further force or
effect.

                  1.3.4    EXPANSION RENT. The Base Rent applicable to the
Expansion Space shall be based on the then-current Monthly Rental Rate per
Rentable Square Foot applicable to the Premises, as set forth in Section 4 of
the Summary, and shall thereafter be subject to the same scheduled Base Rent
increases, such that the Monthly Rental Rate per Rentable Square Foot for the
Expansion Premises and the Monthly Rental Rate per Rentable Square Foot for the
Premises shall be identical throughout the remainder of the Lease Term.

                  1.3.5    CONSTRUCTION OF EXPANSION SPACE. Tenant shall accept
the Expansion Space in its then existing "as is" condition, subject to the TCCs
of Section 1.1 of the Tenant Work Letter. The construction of improvements in
the Expansion Space shall follow the same general procedures set forth in the
Tenant Work Letter with regard to improvements in the initial Premises;
provided, however, the "Tenant Improvement Allowance" provided by Landlord to
Tenant in connection with the Expansion Space shall be equal, on a per rentable
square foot basis, to the product of (i) the Tenant Improvement Allowance per
rentable square foot provided to Tenant in connection with the initial Premises,
and (ii) a fraction, the numerator of which shall be the number of full calendar
months then remaining during the initial Lease Term, and the denominator of
which shall be eighty-four (84).

                  1.3.6    NEW LEASE. If Tenant timely and properly exercises
Tenant's right to lease Expansion Space as set forth herein, Landlord and Tenant
shall each use commercially reasonable efforts to execute a new Lease (the "FAIR
ISAAC BUILDING 2 LEASE") for such Expansion Space within thirty (30) days
following Landlord's receipt of the Expansion Notice. The Fair Isaac Building 2
Lease shall be based upon the same terms and conditions as this Lease; provided,
however, commercially reasonable changes shall be implemented therein to account
for the fact that Building 2 shall be a multi-tenant building as well as
equitable changes in amounts and/or percentages which are based or dependent
upon the square footage of the

                                      -8-

<PAGE>

premises or building. The Fair Isaac Building 2 Lease shall include a provision
whereby an economic default by Tenant of this Lease (beyond any applicable
notice and cure periods) shall constitute a default thereunder. The lease term
of Fair Isaac Building 2 Lease shall (i) commence upon the date immediately
following the expiration of a tenant improvement construction period mutually
and reasonably agreed upon by Landlord and Tenant, and (ii) shall expire
coterminously with this Lease on the Expiration Date.

         1.4      BUILDING TWO RIGHT OF FIRST REFUSAL. To the extent that (i)
the Peregrine Building 2 Lease is terminated in its entirety, and (ii) Tenant
has not previously exercised its expansion rights set forth in Section 1.3,
above, then, subject to the TCCs of Section 1.4.3, below, Landlord hereby grants
to the Original Tenant and its Permitted Transferees (but only to the extent
such Permitted Transferee has, in Landlord's reasonable determination, financial
strength equal to or greater than Original Tenant), an ongoing right of first
refusal with respect to all or any portion of the bottom two floors (i.e., the
ground floor and the second floor) in Building 2 (the "FIRST REFUSAL SPACE").

                  1.4.1    PROCEDURE FOR LEASE.

                           1.4.1.1  PROCEDURE FOR OFFER. Landlord shall notify
Tenant (the "FIRST REFUSAL NOTICE") from time-to-time when and if Landlord
receives a "bona-fide third-party offer" for all or a portion of the First
Refusal Space. Pursuant to such First Refusal Notice, Landlord shall offer to
lease to Tenant the applicable First Refusal Space. The First Refusal Notice
shall describe the First Refusal Space, and the lease term, rent and other
fundamental economic terms and conditions, including the method of measurement
of rentable and usable square feet, upon which Landlord proposes to lease such
First Refusal Space pursuant to the bona-fide third-party offer. For purposes of
this Section 1.4, a "BONA-FIDE THIRD-PARTY OFFER" shall mean a counter-offer
received by Landlord to lease First Refusal Space from a qualified third party
which Landlord would otherwise be willing to accept. For purposes of example
only, the following would each constitute a bone-fide third-party offer:

                                    (i)     Landlord receives a request for
                                            proposal from a qualified third
                                            party. Landlord responds to the
                                            request for proposal with a lease
                                            proposal and subsequently receives a
                                            written bona-fide counter proposal
                                            from the qualified third party.

                                    (ii)    Landlord receives a written offer to
                                            lease from a qualified third party.
                                            Landlord responds to the offer with
                                            a written counter offer and
                                            subsequently receives a bona-fide
                                            counter to Landlord's counter offer
                                            from the qualified third party.

                           1.4.1.2  PROCEDURE FOR ACCEPTANCE. If Tenant wishes
to exercise Tenant's right of first refusal with respect to the First Refusal
Space described in the First Refusal Notice, then within five (5) business days
of delivery of the First Refusal Notice to Tenant, Tenant shall deliver notice
to Landlord of Tenant's exercise of its right of first refusal with respect to
all of the First Refusal Space described in the First Refusal Notice at the
rent, for the term and upon the other fundamental economic terms and conditions
pursuant to Section 1.4.2, below. If Tenant does not so notify Landlord within
such five (5) day period of Tenant's exercise of its first refusal

                                      -9-

<PAGE>
 right, then Landlord shall be free to negotiate and enter into a lease for the
First Refusal Space to anyone whom it desires on the net-effective economic
terms and the fundamental non-economic terms which are no more than five percent
(5.0%) more beneficial to such party than those set forth in the First Refusal
Notice; provided, however, (i) the "net-effective economic" terms shall be
determined by calculating the gross rent payable under the terms of the lease,
as determined per rentable square foot on an average annual basis, and adjusting
such amount by the value (on a rentable square foot basis) of the monetary
concessions (spreading such monetary concessions equally throughout the lease
term with interest at the "Interest Rate," as that term is set forth in Article
25 of this Lease), and (ii) to the extent Landlord intends to enter into a lease
with a "Direct Competitor," as that term is defined below, then, prior to
entering into such lease, Landlord shall so notify Tenant and Tenant shall again
have a right of first refusal for the such first Refusal Space pursuant to the
provisions of this Section 1.4. For purposes of this Section 1.4, a "DIRECT
COMPETITORS" shall be any entity that (a) is not the third-party entity (or any
other qualified third-party) initially disclosed in the First Refusal Notice
with regard to the bone-fide third-party offer, and (b) is an entity set forth
on EXHIBIT C, attached hereto. To the extent that an entity would reasonably be
considered to directly compete with Tenant, then Tenant shall have the right to
add such direct competitor(s) to the list set forth on EXHIBIT C by written
notice to Landlord; provided, however, to the extent that Tenant's notice to add
new direct competitor(s) onto such list occurs following the date upon which
Landlord delivers any particular First Refusal Notice, then such additional
direct competitor(s) shall not be considered a Direct Competitor for purposes of
such First Refusal Notice. If Landlord does not execute a lease with a third
party for all or any portion of the First Refusal Space within one hundred
eighty-five (185) days following the delivery to Tenant of the First Offer
Notice, then Tenant shall again have a right of first refusal for the such First
Refusal Space pursuant to the provisions of this Section 1.4, which provisions
shall again become applicable in their entirety. To the extent Landlord enters
into any lease of First Refusal Space with any such third party in accordance
with the foregoing ("THIRD PARTY LEASE"), Tenant's rights under this Section 1.4
shall be subordinate to the rights of the tenant under the Third Party Lease
with respect to the space leased and encumbered pursuant to the provisions of
the Third Party Lease, all extensions and renewals thereof (but only to the
extent such extensions and/or renewals are reasonably identified in such First
Refusal Notice), all pure expansion options contained therein which are stated
as Landlord delivery obligations within a certain time frame for a certain
amount of space, and all right of first offer expansions contained therein (but
to the extent either expansion options apply to any portion of the First Offer
Space, only to the extent the same are reasonably identified in such First
Refusal Notice).

                  1.4.2    AMENDMENT TO LEASE. If Tenant timely exercises
Tenant's right of first refusal to lease First Refusal Space as set forth
herein, Landlord and Tenant shall within thirty (30) days thereafter execute
either (i) to the extent Landlord and Tenant previously enter into the Fair
Isaac Building 2 Lease, then an amendment to Fair Isaac Building 2 Lease (the
"FIRST REFUSAL SPACE AMENDMENT") for such First Refusal Space pursuant to
Section 1.4.2.1 or 1.4.2.2, below, as applicable, or (ii) a separate lease (the
"FIRST REFUSAL SPACE LEASE") for such First Refusal Space pursuant to Section
1.4.2.1 or 1.4.2.2, below, as applicable; provided, however, such First Refusal
Space Lease shall have similar modifications as those identified in Section
1.3.6, above, with regard to the multi-tenant nature of such Building 2 and the
different square footages therein.

                                      -10-
<PAGE>

                           1.4.2.1  If the applicable First Refusal Notice is
delivered to Tenant prior to the second (2nd) anniversary of the Lease
Commencement Date, then notwithstanding the economic and fundamental
non-economic terms set forth in the First Refusal Notice, Tenant's lease of such
First Refusal Space shall be pursuant to the same TCCs as the initial Premises
(on a pro-rata basis, if applicable), including, without limitation, the Monthly
Rental Rate per Rentable Square Foot, Base Year, and Expiration Date; provided,
however, (i) Landlord shall provide Tenant with an improvement allowance
applicable to such First Refusal Space equal to a pro-rata portion (based on the
initial Lease Term as compared to the then-remaining Lease Term) of the Tenant
Improvement Allowance set forth in this Lease, (ii) Tenant shall not be entitled
to any TIA Increase, (iii) Landlord shall not be required to provide Tenant with
any existing furniture, fixtures or equipment, or other FF&E, whether pursuant
to Section 29.28 of this Lease or otherwise (iv) Tenant shall not be entitled to
the Building-top signage rights set forth in this Lease in connection with such
First Refusal Space unless (or until) the cumulative First Refusal Space leased
by Tenant comprises at least fifty percent (50%) of Building 2, (v) Tenant shall
not have the roof rights set forth in Article 22 of this Lease unless (or until)
the cumulative First Refusal Space leased by Tenant comprises at least fifty
percent (50%) of Building 2; provided, however Tenant shall be granted roof
rights reasonably consistent with the roof rights granted by Landlord to other
tenants leasing space in a multi-tenanted building within the Project (i.e., up
to two (2) eighteen inch (18") to twenty-four inch (24") satellite dishes,
subject to Landlord's reasonable requirements), (vi) the First Refusal Space
Amendment shall commence upon the date immediately following the expiration of a
tenant improvement construction period mutually and reasonably agreed upon by
Landlord and Tenant,, and (vii) the reserved parking spaces set forth in Section
9 of the Summary shall not be applicable to the First Refusal space (but the
ratio of unreserved parking passes set forth therein, rounded to the nearest
1,000 usable square feet, shall be applicable to such First Refusal Space).

                           1.4.2.2  If the applicable First Refusal Notice is
delivered to Tenant on or following the second (2nd) anniversary of the Lease
Commencement Date, then Tenant's lease of such First Refusal Space shall be upon
the express terms set forth in the First Refusal Notice, but otherwise upon the
TCCs set forth in this Lease and this Section 1.4; provided, however, Landlord
shall make a reasonable determination, as set forth in this Section 1.4.2.2,
below, as to whether, and if so to what extent, Tenant must provide Landlord
with financial security, such as a letter of credit or guaranty, for Tenant's
rent obligations incurred in connection with Tenant's lease of such First
Refusal Space. The determination as to whether, and if so to what extent, Tenant
must provide Landlord with financial security in connection with Tenant's lease
of such First Refusal Space, shall be made by reviewing the extent of financial
security then generally being imposed in Comparable Deals upon tenants of
comparable financial condition and credit history to the then existing financial
condition and credit history of Tenant (with appropriate adjustments to account
for differences in the then-existing financial condition of Tenant and such
other tenants). Landlord and Tenant shall use commercially reasonable efforts to
execute the First Refusal Lease within thirty (30) days following Tenant's
exercise of its right to lease the First Refusal Space.

                  1.4.3    TERMINATION OF FIRST REFUSAL RIGHT. The rights
contained in this Section 1.4 shall be personal to the Original Tenant and its
Permitted Transferee (and not any other assignee, sublessee or other transferee
of the Original Tenant's interest in this Lease) if the Original Tenant and/or
its Permitted Assignee occupies at least sixty percent (60%) of the usable

                                      -11-

<PAGE>

square footage of Building 3. The right to lease First Refusal Space as provided
in this Section 1.4 may not be exercised if, as of the date of the attempted
exercise of the expansion option by Tenant, or as of the scheduled date of
delivery of such First Refusal Space to Tenant, Tenant is in default under this
Lease (beyond any applicable notice and cure periods) or Tenant has previously
been in economic default under this Lease (beyond any applicable notice and cure
periods) more than twice during the previous twelve (12) month period.

                  1.4.4    MAJORITY BUILDING 2 TENANT. Notwithstanding anything
in this Section 1.4 to the contrary, if Landlord receives a "bone-fide
third-party offer" for more than the top three (3) floors of Building 2 (i.e.,
an offer which includes all of floors 3, 4 and 5 of Building 2 and additional
space located on floors 1 and/or 2 of Building 2) (the "MAJORITY BUILDING 2
SPACE"), then either (i) Tenant shall exercise its right of first refusal with
respect to the entire Majority Building 2 Space pursuant to the terms and
conditions of this Section 1.4, or (ii) Tenant shall waive its right of first
refusal with respect to the entire Majority Building 2 Space (including the
portion which would otherwise constitute First Refusal space); provided,
however, notwithstanding Landlord's entering into a Third Party Lease for such
Majority Building 2 Space, Tenant's right of first refusal with respect to any
space located on the ground floor and/or second (2nd) floor of Building 2 which
is not included in the Majority Building 2 Space shall nevertheless remain
superior to any expansion right(s) contained in such Third Party Lease.

         1.5      ADDITIONAL OFFICE SPACE IN BUILDING ONE. To the extent that
Tenant's right of first refusal regarding the First Refusal Space is waived
pursuant to the terms of Section 1.4.4, above, then throughout the remainder of
the Lease Term, Landlord shall inform Tenant whenever Landlord enters into
material negotiations for office space in that certain three (3)-story building
located at 3579 Valley Centre Drive, San Diego, California, commonly known
within the Project as "BUILDING 1," (a "BUILDING 1 NEGOTIATION NOTICE") (but
only to the extent such office space is not subject to any other tenant's
rights). Following Tenant's receipt of a Building 1 Negotiation Notice, Tenant
shall promptly inform Landlord (the "TENANT INTEREST NOTICE") whether or not
Tenant desires to lease any office space identified in such Building 1
Negotiation Notice (the "BUILDING 1 SPACE"). If Landlord and Tenant fail to
reach material agreement with regard to fundamental terms for a lease of such
Building 1 Space within five (5) business days following Landlord's receipt of
the Tenant Interest Notice, then Landlord and Tenant hereby expressly agree that
(i) Landlord shall not have any duty to lease such Building 1 Space to Tenant,
and (ii) Tenant shall not have any duty to lease such Building 1 Space from
Landlord. Landlord and Tenant hereby expressly acknowledge and agree that any
such agreement with regard to such Building 1 Space may be withheld or granted
in the sole and absolute discretion of either party, without any obligation or
other duty with regard to good faith and/or fair dealing.

         1.6      BUILDING FIVE RIGHT OF FIRST REFUSAL. To the extent that (i)
Tenant's right of first refusal regarding the First Refusal Space is waived
pursuant to the terms of Section 1.4.4, above, and (ii) Landlord does not then
have office space available for lease in Building 1, then Landlord shall grant
to Original Tenant and its Permitted Transferees an ongoing right of first
refusal with respect to bottom floor (i.e., the ground floor) of that certain
five (5)-story office building located at 3721 Valley Centre Drive, San Diego,
California, which is commonly known within the Project as "BUILDING 5" (the
"BUILDING 5 FIRST REFUSAL SPACE") pursuant to the same terms and

                                      -12-

<PAGE>

conditions otherwise applicable to the First Refusal Space pursuant to the terms
and conditions of Section 1.4, above; provided, however, (i) the terms and
conditions of Section 1.4.4 above shall not be applicable to the Building 5
First Refusal Space, and (ii) Tenant's rights granted in this Section 1.6 shall
be subordinate to the rights granted to the tenant under that certain lease by
and between Landlord and MEMEC, LLC, a Delaware limited liability company, dated
September 23, 2002.

                                   ARTICLE 2

              INITIAL LEASE TERM; OPTION TERM(S); EARLY TERMINATION

         2.1      INITIAL LEASE TERM. The TCCs and provisions of this Lease
shall be effective as of the date of this Lease. The term of this Lease (the
"LEASE TERM") shall be as set forth in Section 3.1 of the Summary, shall
commence on the date set forth in Section 3.2 of the Summary (the "LEASE
COMMENCEMENT DATE"), and shall terminate on the date set forth in Section 3.3 of
the Summary (the "LEASE EXPIRATION DATE") unless this Lease is sooner terminated
as hereinafter provided. For purposes of this Lease, the term "LEASE YEAR" shall
mean each consecutive twelve (12) month period during the Lease Term; provided,
however, that if the Lease Commencement Date occurs on a date other than the
first (1st) day of a calendar month, then the first Lease Year shall commence on
the Lease Commencement Date and end on the last day of the eleventh month
thereafter and the second and each succeeding Lease Year shall commence on the
first day of the next calendar month; and further provided that the last Lease
Year shall end on the Lease Expiration Date. At any time during the Lease Term,
Landlord may deliver to Tenant a notice in the form as set forth in EXHIBIT D,
attached hereto, as a confirmation only of the information set forth therein,
which Tenant shall, after confirming the accuracy thereof, execute and return to
Landlord within five (5) business days of receipt thereof.

         2.2      OPTION TERM(S).

                  2.2.1    OPTION RIGHT. Landlord hereby grants the Original
Tenant and its Permitted Transferees (provided such Permitted Transferee has, in
Landlord's reasonable determination, financial strength equal to or greater than
Original Tenant), two (2) options to extend the Lease Term for the "Extension
Premises," as that term is set forth below, each by a period of five (5) years
(each, an "OPTION TERM"). Such option shall be exercisable only by Notice
delivered by Tenant to Landlord as provided in Section 2.2.3, below, provided
that, as of the date of delivery of such Notice, Tenant is not in material or
economic default under this Lease (beyond any applicable notice and cure
periods). Upon the proper exercise of such option to extend, and provided that,
as of the end of the then applicable Lease term, Tenant is not in material or
economic default under this Lease (beyond any applicable notice and cure
periods), the Lease Term, as it applies to the Extension Premises, shall be
extended for a period of five (5) years. For purposes of this Section 2.2,
"EXTENSION PREMISES" shall consist of (i) one hundred percent (100%) of Building
3, and, (ii) to the extent the Premises has expanded to include any Expansion
Premises, First Refusal Space or any other space in the Project, any
floor-by-floor portion(s) of such additional space as Tenant shall specify in
the "Exercise Notice," as that term is set forth in Section 2.2.3, below, such
that all expanded space contained on an indicated floor shall be included in
such Expansion Premises; provided, however, in no event shall the Extension
Premises include any space which is not included within the then-existing
Premises.

                                      -13-

<PAGE>

The rights contained in this Section 2.2 shall only be exercised by the Original
Tenant or its Permitted Transferee (and not any other assignee, sublessee or
other transferee of the Original Tenant's interest in this Lease).

                  2.2.2    OPTION RENT. The Rent payable by Tenant during the
Option Term (the "OPTION RENT") shall be equal to ninety-five percent (95%) of
the Market Rent as set forth below. For purposes of this Lease, the term "MARKET
RENT" shall mean rent (including additional rent and considering any "base year"
or "expense stop" applicable thereto), including all escalations, at which
tenants, as of the commencement of the applicable term are, pursuant to
transactions completed within the twenty-four (24) months prior to the first day
of the applicable Option Term, leasing non-sublease, non-encumbered,
non-synthetic, non-equity, non-renewal space (unless such space was leased
pursuant to a definition of "fair market" comparable to the definition of Market
Rent) comparable in size, location and quality to the Extension Premises for a
"Comparable Term," as that term is defined in this Section 2.2.2 (the
"COMPARABLE DEALS"), which comparable space is located in the "Comparable
Buildings," as that term is defined in this Section 2.2.2, giving appropriate
consideration to the annual rental rates per rentable square foot (adjusting the
base rent component of such rate to reflect a net value after accounting for
whether or not utility expenses are (i) directly paid by the tenant, or (ii)
directly reimbursed to Landlord by the tenant (as opposed to being included in
operating expenses)), the standard of measurement by which the rentable square
footage is measured, the ratio of rentable square feet to usable square feet,
and taking into consideration only, and granting only, the following concessions
(provided that the rent payable in Comparable Deals in which the terms of such
Comparable Deals are determined by use of a discounted fair market rate formula
shall be equitably adjusted in order that such Comparable Deals will not reflect
a discounted rate) (collectively, the "RENT CONCESSIONS"): (a) rental abatement
concessions or build-out periods, if any, being granted such tenants in
connection with such comparable spaces; (b) tenant improvements or allowances
provided or to be provided for such comparable space, taking into account the
value of the existing improvements in the Extension Premises, such value to be
based upon the age, quality and layout of the improvements and the extent to
which the same could be utilized by general office users as contrasted with this
specific Tenant, (c) Proposition 13 protection, and (d) all other reasonable
monetary concessions, if any, being granted such tenants in connection with such
comparable space; provided, however, that notwithstanding anything to the
contrary herein, no consideration shall be given to the fact that Landlord is or
is not required to pay a real estate brokerage commission in connection with the
applicable term or the fact that the Comparable Deals do or do not involve the
payment of real estate brokerage commissions. The term "COMPARABLE TERM" shall
refer to the length of the lease term, without consideration of options to
extend such term, for the space in question. In addition, the determination of
the Market Rent shall include a determination as to whether, and if so to what
extent, Tenant must provide Landlord with financial security, such as a letter
of credit or guaranty, for Tenant's rent obligations during any Option Term, and
the value of such credit enhancement, or lack thereof, to Landlord in comparison
to the credit enhancements granted in Comparable Deals. Such determination shall
be made by reviewing the extent of financial security then generally being
imposed in Comparable Deals upon tenants of comparable financial condition and
credit history to the then existing financial condition and credit history of
Tenant (with appropriate adjustments to account for differences in the
then-existing financial condition of Tenant and such other tenants). If in
determining the Market Rent, Tenant is entitled to a tenant improvement or
comparable allowance for the improvement of the Extension Premises (the "OPTION
TERM TI

                                      -14-

<PAGE>

ALLOWANCE"), Landlord may, at Landlord's sole option, elect any or a portion of
the following: (A) to grant some or all of the Option Term TI Allowance to
Tenant in the form as described above (i.e., as an improvement allowance),
and/or (B) to reduce the rental rate component of the Market Rent to be an
effective rental rate which takes into consideration (including the application
of the appropriate interest rate to any such unfunded Option Term TI Allowance)
that Tenant will not receive the total dollar value of such excess Option Term
TI Allowance (in which case the Option Term TI Allowance evidenced in the
effective rental rate shall not be granted to Tenant). The term "COMPARABLE
Buildings" shall mean the Building and other first-class office buildings which
are comparable to the Building in terms of age (based upon the date of
completion of construction or major renovation as to the building containing the
portion of the Extension Premises in question), quality of construction, level
of services and amenities, size and appearance, and are located in the
University Towne Center (i.e., the area from two (2) blocks to the North of La
Jolla Village Drive to two (2) blocks to the South of La Jolla Village Drive
between the I-5 and I-805 freeways) and Del Mar geographical areas (the
"COMPARABLE AREA").

                  2.2.3    EXERCISE OF OPTION. The option contained in this
Section 2.2 shall be exercised by Tenant, if at all, only in the manner set
forth in this Section 2.2.3. Tenant shall deliver notice (the "EXERCISE NOTICE")
to Landlord not more than eighteen (18) months nor less than twelve (12) months
prior to the expiration of the then Lease Term, stating that Tenant is
exercising its option. Landlord shall deliver notice (the "LANDLORD RESPONSE
NOTICE") to Tenant on or before the date which is thirty (30) days after
Landlord's receipt of the Exercise Notice, which Landlord Response Notice shall
set forth Landlord's calculation of the Option Rent (the "LANDLORD'S OPTION RENT
CALCULATION"). Within thirty (30) business days of its receipt of the Landlord
Response Notice, Tenant shall deliver written notice to Landlord stating that
Tenant is (A) accepting the Option Rent contained in the Landlord's Option Rent
Calculation, or (B) rejecting the Option Rent contained in the Landlord's Option
Rent Calculation and setting forth Tenant's calculation of the Option Rent (the
"TENANT'S OPTION RENT CALCULATION"). If Tenant does not affirmatively accept or
Tenant rejects the Market Rent specified in the Landlord's Option Rent
Calculation, the parties shall follow the procedure, and the Market Rent shall
be determined as set forth in Section 2.2.4.

                  2.2.4    DETERMINATION OF MARKET RENT. In the event Tenant
objects or is deemed to have objected to Landlord's Option Rent Calculation,
Landlord and Tenant shall attempt to agree upon the Option Rent using reasonable
good-faith efforts. If Landlord and Tenant fail to reach agreement within sixty
(60) days following Tenant's objection or deemed objection to the Landlord's
Option Rent Calculation (the "OUTSIDE AGREEMENT DATE"), then (i) in connection
with the Option Rent, Landlord's Option Rent Calculation and Tenant's Option
Rent Calculation, each as previously delivered to the other party, shall be
submitted to the arbitrators pursuant to the TCCs of this Section 2.2.4, and
(ii) in connection with any other contested calculation of Market Rent, the
parties shall each make a separate determination of the Market Rent and shall
submit the same to the arbitrators pursuant to the TCCs of this Section 2.2.4.
The submittals shall be made concurrently with the selection of the arbitrators
pursuant to this Section 2.2.4 and shall be submitted to arbitration in
accordance with Section 2.2.4.1 through 2.2.4.7.

                           2.2.4.1  Landlord and Tenant shall each appoint one
arbitrator who shall by profession be a licensed real estate broker, MAI
appraiser or attorney who shall have been active

                                      -15-

<PAGE>

over the five (5) year period ending on the date of such appointment in the
leasing (or appraisal, as the case may be) of first-class office properties in
the Comparable Area. The determination of the arbitrators shall be limited
solely to the issue of whether Landlord's or Tenant's submitted Option Rent, is
the closest to ninety-five percent (95%) of the actual Market Rent as determined
by the arbitrators, taking into account the requirements of Section 2.2.2 of
this Lease. Each such arbitrator shall be appointed within fifteen (15) days
after the applicable Outside Agreement Date. Landlord and Tenant may consult
with their selected arbitrators prior to appointment and may select an
arbitrator who is favorable to their respective positions. The arbitrators so
selected by Landlord and Tenant shall be deemed (the "ADVOCATE ARBITRATORS").

                           2.2.4.2  The two Advocate Arbitrators so appointed
shall be specifically required pursuant to an engagement letter within ten (10)
days of the date of the appointment of the last appointed Advocate Arbitrator
agree upon and appoint a third arbitrator ("NEUTRAL ARBITRATOR") who shall be
qualified under the same criteria set forth hereinabove for qualification of the
two Advocate Arbitrators except that neither the Landlord or Tenant or either
party's Advocate Arbitrator may, directly or indirectly, consult with the
Neutral Arbitrator prior to subsequent to his or her appearance. The Neutral
Arbitrator shall be retained via an engagement letter jointly prepared by
Landlord's counsel and Tenant's counsel.

                           2.2.4.3  The three arbitrators shall within thirty
(30) days of the appointment of the Neutral Arbitrator reach a decision as to
Market Rent and determine whether the Landlord's or Tenant's determination of
Option Rent as submitted pursuant to Section 2.2.4.1 and Section 2.2.3 of this
Lease is closest to ninety-five percent (95%) of the Market Rent as determined
by the arbitrators and simultaneously publish a ruling ("AWARD") indicating
whether Landlord's or Tenant's submitted Option Rent is closest to the Option
Rent as determined by the arbitrators. Following notification of the Award, the
Landlord's or Tenant's submitted Option Rent determination, whichever is
selected by the arbitrators as being closest to Option Rent shall become the
then applicable Market Rent.

                           2.2.4.4  The Award issued by the majority of the
three arbitrators shall be binding upon Landlord and Tenant.

                           2.2.4.5  If either Landlord or Tenant fail to appoint
an Advocate Arbitrator within fifteen (15) days after the applicable Outside
Agreement Date, either party may petition the presiding judge of the Superior
Court of San Diego County to appoint such Advocate Arbitrator subject to the
criteria in Section 2.2.4.1 of this Lease, or if he or she refuses to act,
either party may petition any judge having jurisdiction over the parties to
appoint such Advocate Arbitrator.

                           2.2.4.6  If the two Advocate Arbitrators fail to
agree upon and appoint the Neutral Arbitrator, then either party may petition
the presiding judge of the Superior Court of San Diego County to appoint the
Neutral Arbitrator, subject to criteria in Section 2.2.4.1 of this Lease, or if
he or she refuses to act, either party may petition any judge having
jurisdiction over the parties to appoint such arbitrator.

                           2.2.4.7  The cost of arbitration shall be paid by the
party whose Option Rent was not selected by the majority of the arbitrators as
being the closest to ninety-five percent

                                      -16-

<PAGE>

(95%) of the actual Market Rent. Any costs or expenses (including, without
limitation, attorneys fees and costs) incurred by Landlord pursuant to this
Section 2.2.4 shall not be included in Operating Expenses.

         2.3      EARLY TERMINATION. On or about September 23, 2002, Peregrine
filed a Motion for Order Under Section 365(a) of the Bankruptcy Code Authorizing
the Debtors to Reject Certain Executory Contracts and Unexpired Leases of
Nonresidential Real Property (the "REJECTION MOTION"). The Rejection Motion
seeks Court approval of Tenant's rejection of that certain lease between
KR-Carmel Partners, LLC, predecessor-in-interest to Landlord, and Peregrine
dated as of June 9, 1999 (as amended, the "PEREGRINE BUILDING 3 LEASE"). The
terms and conditions of this Lease, and the obligations of the parties
hereunder, are subject to and conditioned upon the issuance of an order by the
bankruptcy court under the Bankruptcy Case approving Peregrine's rejection of
the Peregrine Building 3 Lease ("COURT APPROVAL"). In the event that Court
Approval has not been obtained on or before April 15, 2003 (the "OUTSIDE
APPROVAL DATE"), Tenant shall have a one-time right to deliver a notice to
Landlord (a "TERMINATION NOTICE") electing to terminate this Lease effective
upon the date occurring five (5) business days following receipt by Landlord of
the Termination Notice (the "EFFECTIVE DATE"). The Termination Notice must be
delivered by Tenant to Landlord, if at all, not earlier than the Outside Date
nor later than fifteen (15) business days after the Outside Date. Upon any
termination pursuant to this Section 2.3, Landlord and Tenant shall be relieved
from any and all liability to each other resulting hereunder except (i) Landlord
shall return to Tenant any portion of the "Over-Allowance Amount", as that term
is defined in Section 4.2 of the Tenant Work Letter, which has not been expended
by Landlord in connection with the construction of the Tenant Improvements, and
(ii) Landlord shall reimburse Tenant, within thirty (30) days of Landlord's
receipt of an invoice therefor (with reasonable supporting documentation), the
third-party legal fees reasonably incurred by Tenant in connection with the
negotiation of this Lease, and the actual, out-of-pocket costs and expense
reasonably incurred by Tenant in connection with the preparation of construction
plans and drawings for the Premises; provided, however, in no event shall
Landlord be required to reimburse Tenant pursuant to this subsection (ii) in an
aggregate amount that exceeds Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00). Tenant's rights to terminate this Lease, as set forth in this
Section 2.3, shall be Tenant's sole and exclusive remedy at law or in equity for
the failure of the bankruptcy court to approve Peregrine's rejection of the
Peregrine Building 3 Lease.

                                   ARTICLE 3

                          BASE RENT; ABATEMENT OF RENT

         3.1      BASE RENT. Tenant shall pay, without prior notice or demand,
to Landlord or Landlord's agent at the management office of the Project, or, at
Landlord's option, at such other place as Landlord may from time to time
designate in writing, by a check for currency which, at the time of payment, is
legal tender for private or public debts in the United States of America, base
rent ("BASE RENT") as set forth in Section 4 of the Summary, payable in equal
monthly installments as set forth in Section 4 of the Summary in advance on or
before the first day of each and every calendar month during the Lease Term,
without any setoff or deduction whatsoever. The Base Rent for the first full
month of the Lease Term which occurs after the expiration of any free rent
period shall be paid at the time of Tenant's execution of this Lease. If

                                      -17-

<PAGE>

any Rent payment date (including the Lease Commencement Date) falls on a day of
the month other than the first day of such month or if any payment of Rent is
for a period which is shorter than one month, the Rent for any fractional month
shall accrue on a daily basis for the period from the date such payment is due
to the end of such calendar month or to the end of the Lease Term at a rate per
day which is equal to 1/365 of the applicable annual Rent. All other payments or
adjustments required to be made under the TCCs of this Lease that require
proration on a time basis shall be prorated on the same basis.

         3.2      ABATEMENT OF RENT; REPLACEMENT SERVICES. In the event that
Tenant is prevented from using, and does not use, the Premises or any portion
thereof, as a result of (i) any repair, maintenance or alteration performed by
Landlord, or which Landlord failed to perform, after the Lease Commencement Date
and required by this Lease, which substantially interferes with Tenant's use of
or ingress to or egress from the Building, Project (including the Project Common
Areas and the Project parking areas (to the extent reasonable replacement spaces
are not provided)), or Premises; or (ii) any failure by Landlord to provide
necessary services, utilities or ingress to and egress from the Building,
Project (including the Project Common Areas and the Project parking areas (to
the extent reasonable replacement spaces are not provided)), or Premises as
required pursuant to the TCCs of this Lease; or (iii) the presence of Hazardous
Materials not brought on the Premises by "Tenant Parties," as that term is set
forth in Section 10.1 of this Lease to the extent such presence substantially
interferes with Tenant's use of or ingress to or egress from the Building,
Project (including the Project Common Areas), or Premises (including the Project
parking areas to the extent reasonable replacement spaces are not provided) (any
such set of circumstances as set forth in items (i) through (iii), above, to be
known as an "ABATEMENT EVENT"), then Tenant shall give Landlord Notice of such
Abatement Event, and if such Abatement Event continues for five (5) consecutive
business days after Landlord's receipt of any such Notice (the "ELIGIBILITY
PERIOD"), then, Tenant may deliver an additional notice to Landlord (the
"ADDITIONAL NOTICE"), specifying such Abatement Event and Tenant's intention to
abate the payment of Rent under this Lease. If Landlord does not cure such
Abatement Event within three (3) business days of receipt of the Additional
Notice, then as Tenant's sole remedy vis-a-vis such Abatement Event, Tenant may
elect to either (a) obtain replacement services, utilities or parking spaces
(and related reasonable accommodations associated therewith) (collectively, the
"REPLACEMENT SERVICE") to the extent reasonably required to continue Tenant's
business operations in the Premises, or (b) abate or reduce, as the case may be,
the Base Rent and Tenant's Share of Direct Expenses after expiration of the
Eligibility Period for such time that Tenant continues to be so prevented from
using, and does not use, the Premises, or a portion thereof, in the proportion
that the rentable area of the portion of the Premises that Tenant is prevented
from using, and does not use ("UNUSABLE AREA"), bears to the total rentable area
of the Premises. If Tenant elects to obtain Replacement Services pursuant to
clause (a) of the preceding sentence, then Landlord shall reimburse Tenant,
within thirty (30) days following Landlord's receipt of Tenant's reasonably
detailed itemized invoice, for the out-of-pocket costs reasonably and actually
incurred by Tenant in obtaining such Replacement Services; provided, however, in
no event shall Landlord be required to reimburse Tenant in an aggregate amount
which exceeds the sum of (X) an amount equal to the aggregate abatement or
reduction of Base Rent and Tenant's Share of Direct Expenses that Tenant would
have received if Tenant had so elected pursuant to clause (b) of the preceding
sentence, and (Y) the reasonable deductible amount (but in no event greater than
$50,000.00) under Tenant's business interruption insurance policy. Landlord and
Tenant hereby acknowledge that, in

                                      -18-

<PAGE>

addition to the abatement rights set forth in this Section 3.2, Tenant's
abatement rights following an event of damage and destruction or condemnation is
provided pursuant to the TCCs of Articles 11 and 13 of this Lease.

                                   ARTICLE 4

                                 ADDITIONAL RENT

         4.1      GENERAL TERMS. In addition to paying the Base Rent specified
in Article 3 of this Lease, Tenant shall pay "TENANT'S SHARE" of the annual
"DIRECT EXPENSES," as those terms are defined in Sections 4.2.6 and 4.2.2,
respectively, of this Lease, which are in excess of the amount of Direct
Expenses applicable to the "Base Year," as that term is defined in Section
4.2.1, below; provided, however, that in no event shall any decrease in Direct
Expenses for any Expense Year below Direct Expenses for the Base Year entitle
Tenant to any decrease in Base Rent or any credit against sums due under this
Lease. Such payments by Tenant, together with any and all other amounts payable
by Tenant to Landlord pursuant to the TCCs of this Lease, are hereinafter
collectively referred to as the "ADDITIONAL RENT," and the Base Rent and the
Additional Rent are herein collectively referred to as "RENT." All amounts due
under this Article 4 as Additional Rent shall be payable for the same periods
and in the same manner as the Base Rent. Without limitation on other obligations
of Tenant which survive the expiration of the Lease Term, the obligations of
Tenant to pay the Additional Rent provided for in this Article 4 shall survive
the expiration of the Lease Term, provided that Landlord bills Tenant for such
Additional Rent within one (1) year following the calendar year in which the
Lease Term expires, except where the failure to timely furnish such bill as to
any particular item includable as Additional Rent is beyond Landlord's
reasonable control (e.g., tax assessments that are late in arriving from the
assessor), in which case such one (1) year limit shall not be applicable.

         4.2      DEFINITIONS OF KEY TERMS RELATING TO ADDITIONAL RENT. As used
in this Article 4, the following termsshall have the meanings hereinafter set
forth:

                  4.2.1    "BASE YEAR" shall mean the period set forth in
Section 5 of the Summary.

                  4.2.2    "DIRECT EXPENSES" shall mean "Operating Expenses" and
"Tax Expenses."

                  4.2.3    "EXPENSE YEAR" shall mean each calendar year in which
any portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires, provided that Landlord, upon notice to Tenant, may
change the Expense Year from time to time to any other twelve (12) consecutive
month period, and, in the event of any such change, Tenant's Share of Direct
Expenses shall be equitably adjusted for any Expense Year involved in any such
change.

                  4.2.4    "OPERATING EXPENSES" shall be calculated in
accordance with sound real estate accounting principles (consistently applied
from year to year) and shall mean all expenses, costs and amounts of every kind
and nature which, in accordance with sound real estate management principles
(consistently applied), Landlord pays or accrues during any Expense Year because
of or in connection with the ownership, management, maintenance, security,
repair, replacement, restoration or operation of the Project, or any portion
thereof; provided,

                                      -19-

<PAGE>

however, the foregoing shall be subject to the TCCs of Section 4.3, below, with
regard to allocations. Without limiting the generality of the foregoing,
Operating Expenses shall specifically include any and all of the following: (i)
the cost of supplying all utilities, the cost of operating, repairing,
maintaining, and renovating the utility, telephone, mechanical, sanitary, storm
drainage, and elevator systems, and the cost of maintenance and service
contracts in connection therewith; (ii) the cost of licenses, certificates,
permits and inspections and the cost of contesting any governmental enactments
which may affect Operating Expenses, and the costs incurred in connection with a
governmentally mandated transportation system management program or similar
program; (iii) the cost of all insurance carried by Landlord in connection with
the Project; provided, however, that if Landlord does not carry earthquake/flood
insurance for the Project and/or the Building during any part of the Base Year
but subsequently obtains earthquake/flood insurance for the Project and/or the
Building during the Lease Term, then from and after the date upon which Landlord
obtains such earthquake/flood insurance and continuing throughout the period
during which Landlord maintains such insurance, Operating Expenses for the Base
Year shall be deemed to be increased by the amount of the premium Landlord
reasonably estimates it would have incurred had Landlord maintained such
insurance for the same period of time during the Base Year as such insurance was
maintained by Landlord during such subsequent Expense Year; provided further,
however, any such earthquake/flood insurance shall be subject to Tenant's
reasonable approval (Tenant acknowledging and agreeing, however, that it shall
be deemed unreasonable for Tenant to withhold such consent to the extent (A)
such earthquake/flood insurance is mandated by applicable governmental entities
or Landlord's lender, or (B) landlords of Comparable Buildings are requiring
such earthquake/flood insurance policies be maintained and Landlord's
earthquake/flood insurance policy is commercially reasonably vis-a-vis such
third party policies); (iv) the cost of landscaping, relamping, and all
supplies, tools, equipment and materials used in the operation, repair and
maintenance of the Building and/or Common Areas, or any portion thereof; (v)
costs incurred in connection with the parking areas servicing the Project; (vi)
fees and other costs, including management fees, consulting fees, legal fees and
accounting fees, of all contractors and consultants in connection with the
management, operation, maintenance and repair of the Project (which fees shall
be commercially reasonable vis-a-vis the competitive fees being charged for
similar services at Comparable Buildings in the Comparable Area); (vii) payments
under any equipment rental agreements and the fair rental value of any
management office space; (viii) wages, salaries and other compensation and
benefits, including taxes levied thereon, of all persons (other than persons
generally considered to be higher in rank than the position of Project manager)
engaged in the operation, maintenance and security of the Project; (ix) costs
under any instrument pertaining to the sharing of costs by the Project; (x)
operation, maintenance, and (to the extent necessitated by normal wear and tear
or Tenant's failure to perform Tenant's obligations under the "BS/BS Exception,"
as that term is set forth in Article 7, below) repair and replacement of all
Building Systems and components thereof (provided that any capital costs
associated therewith shall be amortized in accordance with clause (xiii) below);
(xi) the cost of janitorial, alarm, security and other services, replacement of
wall and floor coverings, ceiling tiles and fixtures in the Common Areas,
maintenance and replacement of curbs and walkways, repair to the Building's roof
and re-roofing of the Building (provided that any re-roofing costs shall be
amortized over the useful life of the replacement roof in accordance with clause
(xiii) below); (xii) amortization (including interest on the unamortized cost)
of the cost of acquiring or the rental expense of personal property used in the
maintenance, operation and repair of the Project, or any portion thereof, to the
extent of cost

                                      -20-

<PAGE>

savings reasonably anticipated by Landlord at the time of such expenditure to be
incurred in connection therewith; (xiii) the cost of capital improvements or
other costs incurred in connection with the Project (A) which are reasonably
intended to effect economies in the operation or maintenance of the Project, or
any portion thereof, (B) that are required to comply with present (or which are
reasonably anticipated to be effective for a material portion of the Lease Term)
conservation programs, (C) which are replacements or modifications of
nonstructural items located in the Common Areas required to keep the Common
Areas in good order or condition (but only to the extent necessitated by normal
wear and tear during the Lease Term), (D) that relate to Building Systems, or
(E) that relate to Building Structure and are required under any governmental
law or regulation by a federal, state or local governmental agency, except for
capital repairs, replacements or other improvements to remedy a condition
existing prior to the Lease Commencement Date which an applicable governmental
authority, if it had knowledge of such condition prior to the Lease Commencement
Date, would have then required to be remedied pursuant to then-current
governmental laws or regulations in their form existing as of the Lease
Commencement Date and pursuant to the then-current interpretation of such
governmental laws or regulations by the applicable governmental authority as of
the Lease Commencement Date; provided, however, that any capital expenditure
shall be amortized with interest over its useful life in accordance with sound
real estate management and accounting principles and Operating Expenses shall
include only the amortized portion of such capital expenditure which accrues
between the completion of the work associated therewith and the expiration or
earlier termination of this Lease; (xiv) costs, fees, charges or assessments
imposed by, or resulting from any mandate imposed on Landlord by, any federal,
state or local government for fire and police protection, trash removal,
community services, or other services which do not constitute "Tax Expenses" as
that term is defined in Section 4.2.5, below; and (xv) payments under any
easement, license, operating agreement, declaration, restrictive covenant, or
instrument pertaining to the sharing of costs by the Building. Notwithstanding
the foregoing, for purposes of this Lease, Operating Expenses shall not,
however, include:

                  (a)      costs, including marketing costs, legal fees, space
planners' fees, advertising and promotional expenses, and brokerage fees
incurred in connection with the original construction or development, or
original or future leasing of the Project, and costs, including permit, license,
construction and inspection costs, incurred with respect to the installation of
tenant improvements made for tenants or occupants occupying space in the Project
or incurred in renovating or otherwise improving, decorating, painting or
redecorating space for tenants or other occupants of the Project (excluding,
however, such costs relating to any Common Areas of the Project or parking
facilities);

                  (b)      except as set forth in items (xii), (xiii), and (xiv)
above, depreciation, interest and principal payments on mortgages and other debt
costs, if any, penalties and interest, costs of capital repairs and alterations,
and costs of capital improvements, replacements and equipment;

                  (c)      costs for which the Landlord is entitled to
reimbursement by any tenant or occupant of the Project or by insurance by its
carrier or any tenant's carrier or by anyone else, and electric power or other
utility costs for which any tenant (including Tenant) directly contracts with
the local public service company, and the cost of correcting any defects in

                                      -21-

<PAGE>

the construction of any portion of the Project to the extent actually covered by
any warranty rights of Landlord;

                  (d)      any bad debt loss, rent loss, or reserves for bad
debts or rent loss;

                  (e)      costs associated with the operation of the business
of the partnership or entity which constitutes the Landlord, as the same are
distinguished from the costs of operation of the Project (which shall
specifically include, but not be limited to, accounting costs associated with
the operation of the Project). Costs associated with the operation of the
business of the partnership or entity which constitutes the Landlord include
costs of partnership accounting and legal matters, costs of defending any
lawsuits with any mortgagee or ground lessor (except as the actions of the
Tenant may be in issue), costs and fees incurred in the selling, syndicating,
financing, mortgaging or hypothecating any of the Landlord's interest in the
Project, and costs and fees incurred in connection with any disputes between
Landlord and its employees, between Landlord and Project management, or between
Landlord and other tenants, occupants or brokers, and Landlord's general
corporate overhead and general and administrative expenses;

                  (f)      the wages and benefits of any employee who does not
devote substantially all of his or her employed time to the Project unless such
wages and benefits are prorated to reflect time spent on operating and managing
the Project vis-a-vis time spent on matters unrelated to operating and managing
the Project; provided, that in no event shall Operating Expenses for purposes of
this Lease include wages and/or benefits attributable to personnel above the
level of Project manager;

                  (g)      amount paid as ground rental for the Project (or any
portion thereof) by the Landlord, and attorneys' fees', transfer taxes and any
other transactional costs or expenses associated with any ground lease of the
Project (or any portion thereof);

                  (h)      overhead and profit increment paid to the Landlord or
to subsidiaries or affiliates of the Landlord for services in the Project to the
extent the same exceeds the costs of such services rendered by qualified,
first-class unaffiliated third parties providing similar services in the
Comparable Area on a competitive basis;

                  (i)      any compensation paid to clerks, attendants or other
persons in commercial concessions operated by the Landlord;

                  (j)      rentals and other related expenses incurred in
leasing air conditioning systems, elevators or other equipment which if
purchased the cost of which would be excluded from Operating Expenses as a
capital cost, except equipment not affixed to the Project which is used in
providing janitorial or similar services and, further excepting from this
exclusion such equipment rented or leased to remedy or ameliorate an emergency
condition in the Project (to the extent such emergency condition was not caused
by the gross negligence or willful misconduct of Landlord or its agents,
employees, vendors or contractors);

                  (k)      all items and services for which Tenant or any other
tenant in the Project reimburses Landlord or which Landlord provides selectively
to one or more tenants (other than Tenant), or to one or more buildings (other
than the Building) without reimbursement;

                                      -22-

<PAGE>

                  (l)      costs, other than those incurred in ordinary
maintenance and repair, for sculpture, paintings, fountains or other objects of
art;

                  (m)      any costs expressly excluded from Operating Expenses
elsewhere in this Lease;

                  (n)      rent for any office space occupied by Project
management personnel to the extent the size or rental rate of such office space
exceeds the size or fair market rental value of office space occupied by
management personnel of the Comparable Buildings in the Comparable Area, with
adjustment where appropriate for the size of the applicable project;

                  (o)      costs associated with Landlord's Work, costs
associated with the acquisition and development of any "Other Improvements," as
that term is set forth in Section 29.34, below, and payments made to any
"Provider," as that term is set forth in Section 29.35, below, for services
provided to the Building unless Tenant elects, in its sole and absolute
discretion, to use such Provider's services;

                  (p)      costs arising from Landlord's charitable or political
contributions;

                  (q)      costs arising from the gross negligence or willful
misconduct of Landlord or its agents, employees, vendors, contractors, or
providers of materials or services, and any interest and tax penalties incurred
as a result of Landlord's negligence, inability or unwillingness to make
payments or file returns when due;

                  (r)      costs to the extent attributable to Landlord's
failure to promptly remediate any natural hazard condition (including, but not
limited to, microbial induced corrosion and mold) in the Building or Common
Areas after Landlord becomes aware of such condition, but only to the extent not
caused by Tenant or its agents, employees, vendors, contractors, or providers of
materials or services or attributable to Tenant's Alterations;

                  (s)      operating reserves or contingency amounts in excess
of the amount allocated thereto in the Base Year; and

                  (t)      costs incurred to comply with laws relating to the
removal of hazardous material (as defined under applicable law) which was in
existence in the Building or on the Project prior to the Lease Commencement
Date, and was of such a nature that a federal, State or municipal governmental
authority, if it had then had knowledge of the presence of such hazardous
material, in the state, and under the conditions that it then existed in the
Building or on the Project, would have then required the removal of such
hazardous material or other remedial or containment action with respect thereto;
and costs incurred to remove, remedy, contain, or treat hazardous material,
which hazardous material is brought into the Building or onto the Project after
the date hereof by Landlord or any of its agents, employees, vendors,
contractors or providers or materials or services, or by any other tenant of the
Project, and is of such a nature, at that time, that a federal, State or
municipal governmental authority, if it had then had knowledge of the presence
of such hazardous material, in the state, and under the conditions, that it then
exists in the Building or on the Project, would have then required the removal
of such hazardous material or other remedial or containment action with respect
thereto.

                                      -23-

<PAGE>

         If Landlord is not furnishing any particular work or service (the cost
of which, if performed by Landlord, would be included in Operating Expenses) to
a tenant who has undertaken to perform such work or service in lieu of the
performance thereof by Landlord, Operating Expenses shall be deemed to be
increased by an amount equal to the additional Operating Expenses which would
reasonably have been incurred during such period by Landlord if it had at its
own expense furnished such work or service to such tenant. If the Project is not
at least one hundred percent (100%) occupied during all or a portion of the Base
Year or any Expense Year, Landlord shall elect to make an appropriate adjustment
to the components of Operating Expenses for such year to determine the amount of
Operating Expenses that would have been incurred had the Project been one
hundred percent (100%) occupied; and the amount so determined shall be deemed to
have been the amount of Operating Expenses for such year. Operating Expenses for
the Base Year shall not include (i) market-wide cost increases due to
extraordinary circumstances, including, but not limited to, Force Majeure,
boycotts, strikes, conservation surcharges, embargoes or shortages, or amortized
costs relating to capital improvements, and (ii) utility rate increases due to
extraordinary circumstances including, but not limited to, conservation
surcharges, boycotts, embargoes or other shortages, or amortized costs relating
to capital improvements; provided, however, that Landlord shall, within 120 days
after the last calendar day of the Base Year, submit to Tenant a written
itemized accounting of Operating Expenses attributable to the Base Year, and
shall indicate, and set forth Landlord's basis for so determining, those
Operating Expenses for the Base Year which Landlord reasonably believes to be
inflated during the Base Year pursuant to clauses (i) and (ii) of this sentence.
Landlord shall not (i) make a profit by charging items to Operating Expenses
that are otherwise also charged separately to others and (ii) subject to
Landlord's right to adjust the components of Operating Expenses described above
in this paragraph, collect Operating Expenses from Tenant and all other tenants
in the Building in an amount in excess of what Landlord incurs for the items
included in Operating Expenses. If Landlord, in any Expense Year following the
Base Year, begins providing any new category of services (the "NEW SERVICES"),
then for such period of time in which such New Services apply, Operating
Expenses for the Base Year shall be increased by the amount that Landlord
reasonably determines it would have incurred had Landlord provided such New
Services during the same period of time during the Base Year as such New
Services were provided during such subsequent Expense Year. Notwithstanding the
foregoing, no adjustment to the Operating Expenses for the Base Year shall occur
to the extent such New Services (1) are attributable to Tenant's use of the
Premises (as opposed to office use generally), in which case Landlord may elect
(Y) to include the cost of such New Services in Operating Expenses, or (Z) to
invoice Tenant directly for such costs, depending upon the nature of the New
Services and the extent to which the need for such New Services is directly
attributable to Tenant's use, as determined in Landlord's reasonable discretion,
(2) is being offered by landlords in the majority of Comparable Buildings, or
(3) is required by "Applicable Laws," as that Term is set forth in Article 24.
If Landlord, in any Expense Year after the Base Year, discontinues any type or
category of service then for such period of time in which such services are
discontinued, Operating Expenses for the Base Year shall be decreased by the
amount that Landlord reasonably determines it incurred for such type or category
of service throughout the Base Year.

         4.2.5    TAXES.

                  4.2.5.1  "TAX EXPENSES" shall mean all federal, state, county,
or local governmental or municipal taxes, fees, charges or other impositions of
every kind and nature,

                                      -24-

<PAGE>

whether general, special, ordinary or extraordinary, (including, without
limitation, real estate taxes, general and special assessments, transit taxes,
leasehold taxes or taxes based upon the receipt of rent, including gross
receipts or sales taxes applicable to the receipt of rent, unless required to be
paid by Tenant, personal property taxes imposed upon the fixtures, machinery,
equipment, apparatus, systems and equipment, appurtenances, furniture and other
personal property used in connection with the Project, or any portion thereof),
excluding fines, default interest and penalties (unless due to Tenant's failure
to pay Additional Rent when due), which shall be paid or accrued during any
Expense Year (without regard to any different fiscal year used by such
governmental or municipal authority) because of or in connection with the
ownership, leasing and operation of the Project, or any portion thereof. All
assessments shall be paid by Landlord in the maximum number of installments
permitted by law and shall not be included as Tax Expenses except in the year in
which the assessment installment is actually paid.

                  4.2.5.2  Tax Expenses shall include, without limitation: (i)
Any tax on the rent; (ii) Any assessment, tax, fee, levy or charge in addition
to, or in substitution, partially or totally, of any assessment, tax, fee, levy
or charge previously included within the definition of real property tax, it
being acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election ("PROPOSITION 13")
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants, and, in further
recognition of the decrease in the level and quality of governmental services
and amenities as a result of Proposition 13, Tax Expenses shall also include any
governmental or private assessments or the Project's contribution towards a
governmental or private cost-sharing agreement for the purpose of augmenting or
improving the quality of services and amenities normally provided by
governmental agencies; (iii) Any assessment, tax, fee, levy, or charge allocable
to or measured by the area of the Premises or the Rent payable hereunder; and
(iv) Any assessment, tax, fee, levy or charge, upon this transaction or any
document to which Tenant is a party, creating or transferring an interest or an
estate in the Premises (provided that Tax Expenses shall not include any
documentary transfer taxes associated with the conveyance of Landlord's interest
in any portion of the Project).

                  4.2.5.3  Any costs and expenses (including, without
limitation, reasonable attorneys' fees) incurred in attempting to protest,
reduce or minimize Tax Expenses shall be included in Tax Expenses in the Expense
Year such expenses are paid. Except as set forth in Section 4.2.5.4, below,
refunds of Tax Expenses shall be credited against Tax Expenses and refunded to
Tenant regardless of when received, based on the Expense Year to which the
refund is applicable, provided that in no event shall the amount to be refunded
to Tenant for any such Expense Year exceed the total amount paid by Tenant as
Additional Rent under this Article 4 for such Expense Year. If Tax Expenses for
any period during the Lease Term or any extension thereof are increased after
payment thereof for any reason, including, without limitation, error or
reassessment by applicable governmental or municipal authorities, Tenant shall
pay Landlord upon demand Tenant's Share of any such increased Tax Expenses
included by Landlord as Building Tax Expenses pursuant to the TCCs of this
Lease. Notwithstanding anything to the contrary contained in this Section 4.2.8
(except as set forth in Section 4.2.8.1, above), there shall be excluded from
Tax Expenses (i) all excess profits taxes, franchise taxes, gift taxes, capital
stock taxes, inheritance and succession taxes, estate taxes, federal and state
income taxes, and

                                      -25-

<PAGE>

other taxes to the extent applicable to Landlord's general or net income (as
opposed to rents, receipts or income attributable to operations at the Project),
(ii) any items included as Operating Expenses, and (iii) any items paid by
Tenant under Section 4.5 of this Lease.

                           4.2.5.4 Notwithstanding anything to the contrary set
forth in this Lease, the amount of Tax Expenses for the Base Year and any
Expense Year shall be calculated without taking into account any decreases in
real estate taxes obtained in connection with Proposition 8, and, therefore, the
Tax Expenses in the Base Year and/or an Expense Year may be greater than those
actually incurred by Landlord, but shall, nonetheless, be the Tax Expenses due
under this Lease; provided that (i) any costs and expenses incurred by Landlord
in securing any Proposition 8 reduction shall not be included in Direct Expenses
for purposes of this Lease, and (ii) tax refunds under Proposition 8 shall not
be deducted from Tax Expenses, but rather shall be the sole property of
Landlord. Landlord and Tenant acknowledge that this Section 4.2.5.4 is not
intended to in any way affect (A) the inclusion in Tax Expenses of the statutory
two percent (2.0%) annual increase in Tax Expenses (as such statutory increase
may be modified by subsequent legislation), or (B) the inclusion or exclusion of
Tax Expenses pursuant to the terms of Proposition 13, which shall be governed
pursuant to the terms of Sections 4.2.5.1 through 4.2.5.3, above and Section
4.6, below. Notwithstanding the foregoing, upon a "REASSESSMENT," as that term
is defined in Section 4.6 below, occurring after the Base Year, the component of
Tax Expenses for the Base Year which is attributable to the assessed value of
the Project under Proposition 13 prior to the Reassessment (without taking into
account any Proposition 8 reductions) shall be reduced, if at all, for the
purposes of comparison to all subsequent Expense Years (commencing with the
Expense Year in which the Reassessment takes place and continuing for as long as
such Reassessment remains effective) to an amount equal to the real estate taxes
based upon such Reassessment.

                           4.2.5.5 Landlord shall not voluntarily issue any
assessments or bonds for the Project which would increase Tenant's payment of
Tax Expenses without Tenant's prior written consent, which shall not be
unreasonably withheld, conditioned or delayed.

                           4.2.6 "TENANT'S SHARE" shall mean the percentages set
forth in Section 6 of the Summary. To the extent the rentable square footage of
the Premises is increased or decreased, or the aggregate rentable square footage
of all the buildings in the Project is increased or decreased, then Tenant's
Share of the Building shall be calculated by dividing the rentable square
footage of the then-existing Premises by the rentable square footage of the
Building, and Tenant's Share of the Project shall be calculated by dividing the
rentable square footage of the then-existing Premises by the rentable square
footage of all office buildings in the Project.

         4.3      ALLOCATION OF DIRECT EXPENSES.

                  4.3.1 METHOD OF ALLOCATION. The parties acknowledge that the
Building is a part of a multi-building project and that the costs and expenses
incurred in connection with the Project (i.e. the Direct Expenses) should be
shared, in an equitable manner, between the tenants of the Building and the
tenants of the other buildings in the Project. Accordingly, a portion of the
Direct Expenses shall be allocated to Tenant (as opposed to any other tenants of
any building in the Project). Such portion of Direct Expenses allocated to
Tenant shall include (i) Tenant's Building Share of all Direct Expenses
attributable solely to the Building, and (ii) Tenant's Project

                                      -26-

<PAGE>

Share of all Direct Expenses attributable to the Project Common Areas (as
opposed to Direct Expenses which are solely and directly attributable to any
other building in the Project).

         4.4      CALCULATION AND PAYMENT OF ADDITIONAL RENT. Landlord shall
separately establish (i) the amount of Direct Expenses attributable to the
Building during the Base Year, and (ii) the amount of Direct Expenses
attributable to the Project Common Areas during the Base Year. If for any
Expense Year ending or commencing within the Lease Term, Tenant's Share of
Direct Expenses for the Building and Project Common Areas, as applicable, for
such Expense Year exceeds Tenant's Share of Direct Expenses applicable to the
Base Year for the Building and the Project Common Areas, respectively, then
Tenant shall pay to Landlord, in the manner set forth in Section 4.4.1, below,
and as Additional Rent, an amount equal to the respective excess (each, an
"EXCESS"); provided, however, Landlord hereby agrees that, for any Lease Year
following the Base Year, the components of Operating Expenses that are within
Landlord's reasonable control (i.e., all Operating Expenses other than those
incurred with regard to insurance, Common Area utilities, and labor costs
attributable to janitorial and/or security services) (the "CONTROLLABLE
EXPENSES") shall never be increased to an amount in excess of the amount that
such Controllable Expenses would currently be had they increased, from the
initial amount for such Controllable Expenses set forth in the Base Year, at a
cumulative rate of five percent (5%) per Expense Year.

                  4.4.1    STATEMENT OF ACTUAL BUILDING DIRECT EXPENSES AND
PAYMENT BY TENANT. Landlord shall give to Tenant following the end of each
Expense Year, a statement (the "STATEMENT") which shall state in general major
categories the Direct Expenses incurred or accrued for such preceding Expense
Year, and which shall indicate the amount of the Excess. Landlord shall use
commercially reasonable efforts to deliver such Statement to Tenant on or before
May 1 following the end of the Expense Year to which such Statement relates.
Upon receipt of the Statement for each Expense Year commencing or ending during
the Lease Term, if an Excess is present, Tenant shall pay, with its next monthly
installment of Base Rent, the full amount of the Excess for such Expense Year,
less the amounts, if any, paid during such Expense Year as "Estimated Excess,"
as that term is defined in Section 4.4.2, below, and if Tenant paid more as
Estimated Excess than the actual Excess, Tenant shall receive a credit in the
amount of Tenant's overpayment against Rent next due under this Lease. The
failure of Landlord to timely furnish the Statement for any Expense Year shall
not prejudice Landlord or Tenant from enforcing its rights under this Article 4
for a period of one (1) year after the expiration of the Expense Year for which
the Statement applies, except where the failure to timely furnish the Statement
as to any particular item includable in the Statement is beyond Landlord's
reasonable control (e.g. tax assessments that are late in arriving from the
assessor), in which case such one (1) year limit shall not be applicable.
Notwithstanding anything contained in this Section 4.4.1, except for estimated
payments by Tenant pursuant to Section 4.4.2 below, Tenant shall not be
obligated to pay the Excess unless and until Tenant is furnished with the
Statement. Even though the Lease Term has expired and Tenant has vacated the
Premises, when the final determination is made of Tenant's Share of Direct
Expenses for the Expense Year in which this Lease terminates, if an Excess is
present, Tenant shall, within thirty (30) days after receipt of the Statement,
pay to Landlord such amount, and if Tenant paid more as Estimated Excess than
the actual Excess, Landlord shall, within thirty (30) days, deliver a check
payable to Tenant in the amount of the overpayment. The provisions of this
Section 4.4.1 shall survive the expiration or earlier termination of the Lease
Term.

                                      -27-
<PAGE>

                  4.4.2    STATEMENT OF ESTIMATED BUILDING DIRECT EXPENSES. In
addition, Landlord shall give Tenant a yearly expense estimate statement (the
"ESTIMATE STATEMENT") which shall set forth in general major categories
Landlord's reasonable estimate (the "ESTIMATE") of what the total amount of
Direct Expenses for the then-current Expense Year shall be and the estimated
Excess (the "ESTIMATED EXCESS") as calculated by comparing the Direct Expenses
for such Expense Year, which shall be based upon the Estimate, to the amount of
Direct Expenses for the Base Year. Landlord shall use commercially reasonable
efforts to deliver such Estimate Statement to Tenant on or before January 31
following the end of the Expense Year to which such Estimate Statement relates.
The failure of Landlord to timely furnish the Estimate Statement for any Expense
Year shall not preclude Landlord from enforcing its rights to collect any
Additional Rent under this Article 4, nor shall Landlord be prohibited from
revising any Estimate Statement or Estimated Excess theretofore delivered to the
extent necessary. Thereafter, Tenant shall pay, within thirty (30) days after
receipt of the Estimate Statement, a fraction of the Estimated Excess for the
then-current Expense Year (reduced by any amounts paid pursuant to the second to
last sentence of this Section 4.4.2). Such fraction shall have as its numerator
the number of months which have elapsed in such current Expense Year, including
the month of such payment, and twelve (12) as its denominator. Until a new
Estimate Statement is furnished (which Landlord shall have the right to deliver
to Tenant at any time), Tenant shall pay monthly, with the monthly Base Rent
installments, an amount equal to one-twelfth (1/12) of the total Estimated
Excess set forth in the previous Estimate Statement delivered by Landlord to
Tenant. Throughout the Lease Term Landlord shall maintain books and records with
respect to Direct Expenses in accordance with generally accepted real estate
accounting and management practices, consistently applied.

         4.5      TAXES AND OTHER CHARGES FOR WHICH TENANT IS DIRECTLY
RESPONSIBLE.

                  4.5.1    Tenant shall be liable for and shall pay ten (10)
days before delinquency, taxes levied against Tenant's equipment, furniture,
fixtures and any other personal property located in or about the Premises. If
any such taxes on Tenant's equipment, furniture, fixtures and any other personal
property are levied against Landlord or Landlord's property or if the assessed
value of Landlord's property is increased by the inclusion therein of a value
placed upon such equipment, furniture, fixtures or any other personal property
and if Landlord pays the taxes based upon such increased assessment, which
Landlord shall have the right to do regardless of the validity thereof but only
under proper protest if requested by Tenant, Tenant shall upon demand repay to
Landlord the taxes so levied against Landlord or the proportion of such taxes
resulting from such increase in the assessment, as the case may be.

                  4.5.2    If the tenant improvements in the Premises, whether
installed and/or paid for by Landlord or Tenant and whether or not affixed to
the real property so as to become a part thereof, are assessed for real property
tax purposes at a valuation higher than the valuation at which tenant
improvements conforming to Landlord's "building standard" in other space in the
Building are assessed, then the Tax Expenses levied against Landlord or the
property by reason of such excess assessed valuation shall be deemed to be taxes
levied against personal property of Tenant and shall be governed by the
provisions of Section 4.5.1, above; provided, however, Landlord's "building
standard" shall be reasonably established vis-a-vis the customary level of
tenant improvements for Comparable Buildings in the Comparable Area.

                                      -28-

<PAGE>

                  4.5.3    Notwithstanding any contrary provision herein, Tenant
shall pay prior to delinquency any (i) rent tax or sales tax, service tax,
transfer tax or value added tax, or any other applicable tax on the rent or
services herein or otherwise respecting this Lease, (ii) taxes assessed upon or
with respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises or any portion of
the Project, including the Project parking facility; or (iii) taxes assessed
upon this transaction or any document to which Tenant is a party creating or
transferring an interest or an estate in the Premises.

              4.6      TENANT'S PAYMENT OF CERTAIN TAX EXPENSES. Notwithstanding
anything to the contrary contained in this Lease, in the event that, at any time
during the initial Lease Term only (as opposed to any Option Term), any sale,
refinancing, or change in ownership of the Building or Project is consummated
(specifically excluding, however, a change in ownership to a lender resulting
from a foreclosure or a deed-in-lieu of foreclosure), and as a result thereof,
and to the extent that in connection therewith, the Building or Project is
reassessed (the "REASSESSMENT") for real estate tax purposes by the appropriate
governmental authority pursuant to the terms of Proposition 13, then the TCCs of
this Section 4.6 shall apply to such Reassessment of the Building or Project.

                  4.6.1    THE TAX INCREASE. For purposes of this Article 4, the
term "TAX INCREASE" shall mean that portion of the Tax Expenses, as calculated
immediately following the Reassessment, which is attributable solely to the
Reassessment. Accordingly, the term Tax Increase shall not include any portion
of the Tax Expenses, as calculated immediately following the Reassessment, which
(i) is attributable to the initial assessment of the value of the Project, the
base, shell and core of the Building or the tenant improvements located in the
Building; (ii) is attributable to assessments which were pending immediately
prior to the Reassessment which assessments were conducted during, and included
in, such Reassessment, or which assessments were otherwise rendered unnecessary
following the Reassessment; or (iii) is attributable to the annual inflationary
increase of real estate taxes, but not in excess of two percent (2.0%) per
annum.

                  4.6.2    PROTECTION.

                           4.6.2.1  During the first two (2) years of the
initial Lease Term, Tenant shall not be obligated to pay any portion of the Tax
Increase relating to any Reassessment of the Building or Project.

                           4.6.2.2 During the third (3rd) and fourth (4th) years
of the initial Lease Term, Tenant shall only be obligated to pay twenty percent
(20%) of the Tax Increase relating to any Reassessment of the Building or
Project.

                           4.6.2.3  During the fifth (5th) year of the initial
Lease Term, Tenant shall only be obligated to pay forty percent (40%) of the Tax
Increase relating to any Reassessment of the Building or Project.

                           4.6.2.4  During the sixth (6th) year of the initial
Lease Term, Tenant shall only be obligated to pay sixty percent (60%) of the Tax
Increase relating to any Reassessment of the Building or Project.

                                      -29-

<PAGE>

                           4.6.2.5  During the seventh (7th) year of the initial
Lease Term, Tenant shall only be obligated to pay eighty percent (80%) of the
Tax Increase relating to any Reassessment of the Building or Project.

                  4.6.3    LANDLORD'S RIGHT TO PURCHASE THE PROPOSITION 13
PROTECTION AMOUNT ATTRIBUTABLE TO A PARTICULAR REASSESSMENT. The amount of Tax
Expenses which Tenant is not obligated to pay or will not be obligated to pay
during the Lease Term in connection with a particular Reassessment pursuant to
the TCCs of Section 4.6, shall be sometimes referred to hereafter as a
"PROPOSITION 13 PROTECTION AMOUNT." If the occurrence of a Reassessment is
reasonably foreseeable by Landlord and the Proposition 13 Protection Amount
attributable to such Reassessment can be reasonably quantified or estimated for
each Lease Year commencing with the Lease Year in which the Reassessment will
occur, the TCCs of this Section 4.6.3 shall apply to each such Reassessment.
Upon Notice to Tenant, Landlord shall have the right to purchase the Proposition
13 Protection Amount relating to the applicable Reassessment (the "APPLICABLE
REASSESSMENT"), at any time during the Lease Term, by paying to Tenant an amount
equal to the "Proposition 13 Purchase Price," as that term is defined in this
Section 4.6.3. As used herein, "PROPOSITION 13 PURCHASE PRICE" shall mean the
present value of the Proposition 13 Protection Amount remaining during the Lease
Term, as of the date of payment of the Proposition 13 Purchase Price by
Landlord. Such present value shall be calculated (i) by using the portion of the
Proposition 13 Protection Amount attributable to each remaining Lease Year (as
though the portion of such Proposition 13 Protection Amount benefited Tenant at
the end of each Lease Year), as the amounts to be discounted, and (ii) by using
discount rates for each amount to be discounted equal to (A) the average rates
of yield for United States Treasury Obligations with maturity dates as close as
reasonably possible to the end of each Lease Year during which the portions of
the Proposition 13 Protection Amount would have benefited Tenant, which rates
shall be those in effect as of Landlord's exercise of its right to purchase, as
set forth in this Section 4.6.3, plus (B) two percent (2%) per annum. Upon such
payment of the Proposition 13 Purchase Price, the provisions of Section 4.6.2 of
this Lease shall not apply to any Tax Increase attributable to the Applicable
Reassessment. Since Landlord is estimating the Proposition 13 Purchase Price
because a Reassessment has not yet occurred, then when such Reassessment occurs,
if Landlord has underestimated the Proposition 13 Purchase Price, then upon
Notice by Landlord to Tenant, Landlord shall promptly pay to Tenant the amount
of such underestimation, and if Landlord overestimates the Proposition 13
Purchase Price, then upon Notice by Landlord to Tenant, Tenant shall promptly
refund to Landlord the amount of such overestimation within thirty (30) days of
a statement therefore.

         4.7      LANDLORD'S BOOKS AND RECORDS. Within ninety (90) days after
receipt of a Statement by Tenant (the "REVIEW PERIOD"), if Tenant disputes the
amount set forth in the Statement, Tenant's employees or an independent
certified public accountant (which accountant is a member of a regionally
recognized accounting firm), designated by Tenant, may, after reasonable notice
to Landlord and at reasonable times, inspect Landlord's records at Landlord's
offices, provided that Tenant is not then in default after expiration of all
applicable cure periods of any obligation under this Lease (including, but not
limited to, the payment of the amount in dispute) and provided further that
Tenant and such accountant or representative shall, and each of them shall use
their commercially reasonable efforts to cause their respective agents and
employees to, maintain all information contained in Landlord's records in strict
confidence. Notwithstanding the foregoing, Tenant shall only have the right to
review Landlord's records

                                      -30-

<PAGE>

one (1) time during any twelve (12) month period. Tenant's failure to dispute
the amounts set forth in any Statement within the Review Period shall be deemed
to be Tenant's approval of such Statement and Tenant, thereafter, waives the
right or ability to dispute the amounts set forth in such Statement. If after
such inspection, but within thirty (30) days after the Review Period, Tenant
notifies Landlord in writing that Tenant still disputes such amounts, a
certification as to the proper amount shall be made, at Tenant's expense, by an
independent certified public accountant selected by Landlord and who is a member
of a nationally or regionally recognized accounting firm, which certification
shall be binding upon Landlord and Tenant. Landlord shall cooperate in good
faith with Tenant and the accountant to show Tenant and the accountant the
information upon which the certification is to be based. However, if such
certification by the accountant proves that the Direct Expenses set forth in the
Statement were (i) overstated by more than five percent (5%), then the cost of
the accountant and the cost of such certification shall be paid for by Landlord,
or (ii) overstated by more than three percent (3%) but less than five percent
(5%), then the cost of the accountant and the cost of such certification shall
be shared equally (i.e., each party shall pay for one-half of such costs) by
Landlord and Tenant. Promptly following the parties receipt of such
certification, the parties shall make such appropriate payments or
reimbursements, as the case may be, to each other, as are determined to be owing
pursuant to such certification, together with interest at the Interest Rate (as
defined in Article 25 below). Tenant agrees that this section shall be the sole
method to be used by Tenant to dispute the amount of any Direct Expenses payable
by Tenant pursuant to the terms of this Lease, and Tenant hereby waives any
other rights at law or in equity relating thereto.

                                   ARTICLE 5

                                 USE OF PREMISES

         5.1      PERMITTED USE. Tenant shall use the Premises solely for the
Permitted Use set forth in Section 7 of the Summary and Tenant shall not use or
permit the Premises or the Project to be used for any other purpose or purposes
whatsoever without the prior written consent of Landlord, which may be withheld
in Landlord's sole discretion.

         5.2      PROHIBITED USES. The uses prohibited under this Lease shall
include, without limitation, use of the Premises or a portion thereof for (i)
offices of any agency or bureau of the United States or any state or political
subdivision thereof; (ii) offices or agencies of any foreign governmental or
political subdivision thereof; (iii) offices of any health care professionals or
service organization; (iv) schools or other training facilities which are not
ancillary to corporate, executive or professional office use; (v) retail or
restaurant uses; or (vi) communications firms such as radio and/or television
stations. Tenant further covenants and agrees that Tenant shall not use, or
suffer or permit any person or persons to use, the Premises or any part thereof
for any use or purpose contrary to the provisions of the Rules and Regulations
set forth in EXHIBIT E, attached hereto, or in violation of the laws of the
United States of America, the State of California, or the ordinances,
regulations or requirements of the local municipal or county governing body or
other lawful authorities having jurisdiction over the Project) including,
without limitation, any such laws, ordinances, regulations or requirements
relating to hazardous materials or substances, as those terms are defined by
applicable laws now or hereafter in effect; provided, however, Landlord shall
not enforce, change or modify the Rules and Regulations in a discriminatory
manner and Landlord agrees that the Rules and Regulations shall not be

                                      -31-

<PAGE>

unreasonably modified or enforced in a manner which will unreasonably interfere
with the normal and customary conduct of Tenant's business. Tenant shall not do
or permit anything to be done in or about the Premises which will in any way
damage the reputation of the Project or obstruct or interfere with the rights of
other tenants or occupants of the Building, or injure or unreasonably annoy them
or use or allow the Premises to be used for any unlawful or reasonably
objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance
in, on or about the Premises.

         5.3      CC&Rs. Tenant shall comply with all recorded covenants,
conditions, and restrictions currently affecting the Project. Additionally,
Tenant acknowledges that the Project may be subject to any future covenants,
conditions, and restrictions (the "CC&Rs") which Landlord, in Landlord's
discretion, deems reasonably necessary or desirable, and Tenant agrees that this
Lease shall be subject and subordinate to such CC&Rs; provided, however, such
future CC&R's shall not materially adversely affect Tenant's use or occupancy of
the Premises nor any of its rights hereunder. Landlord shall have the right to
require Tenant to execute and acknowledge, within fifteen (15) business days of
a request by Landlord, a "Recognition of Covenants, Conditions, and
Restriction," in a form substantially similar to that attached hereto as EXHIBIT
H, agreeing to and acknowledging the CC&Rs. Landlord represents and warrants
that use of the Premises for general office use conforms with currently recorded
CC&R's.

                                   ARTICLE 6

                             SERVICES AND UTILITIES

         6.1      STANDARD TENANT SERVICES. Landlord shall provide the following
services on all days (unless otherwise stated below) during the Lease Term.

                  6.1.1    Subject to limitations imposed by all governmental
rules, regulations and guidelines applicable thereto, Landlord shall provide
heating and air conditioning ("HVAC") when necessary for normal comfort for
normal office use in the Premises from 7:00 A.M. to 6:00 P.M. Monday through
Friday, and on Saturdays from 9:00 A.M. to 1:00 P.M. (collectively, the
"BUILDING HOURS"), except for the date of observation of New Year's Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day and,
at Landlord's discretion, other locally or nationally recognized holidays
(collectively, the "HOLIDAYS"); provided, however, in no event shall Martin
Luther King Day, Columbus Day, or Veterans Day be included as Holidays.

                  6.1.2    Landlord shall provide adequate electrical wiring and
facilities for connection to Tenant's lighting fixtures and incidental use
equipment, provided that (i) the connected electrical load of the incidental use
equipment does not exceed an average of five (5) watts per usable square foot of
the Premises during each of the Building Hours on a monthly basis (i.e., the
total number of watts per usable square foot allocable to such incidental use
equipment during a given month divided by the number of Building Hours that
occur during such given month shall not exceed five (5) watts per usable square
foot), and the electricity so furnished for incidental use equipment will be at
a nominal one hundred twenty (120) volts and no electrical circuit for the
supply of such incidental use equipment will require a current capacity
exceeding twenty (20) amperes, and (ii) the connected electrical load of
Tenant's

                                      -32-

<PAGE>

lighting fixtures does not exceed an average of one and one-half (1 1/2) watts
per usable square foot of the Premises during the Building Hours on a monthly
basis, and the electricity so furnished for Tenant's lighting will be at a
nominal two hundred seventy-seven (277) volts, which electrical usage shall be
subject to applicable laws and regulations, including Title 24. Tenant will
design Tenant's electrical system serving any equipment producing nonlinear
electrical loads to accommodate such nonlinear electrical loads, including, but
not limited to, oversizing neutral conductors, derating transformers and/or
providing power-line filters. Engineering plans shall include a calculation of
Tenant's fully connected electrical design load with and without demand factors
and shall indicate the number of watts of unmetered and submetered loads. Tenant
shall bear the cost of replacement of lamps, starters and ballasts for lighting
fixtures within the Premises to the extent such lighting fixtures constitute
"Above Standard Tenant Improvements," as that term is defined in Section 2.5 of
the Tenant Work Letter.

                  6.1.3    Landlord shall provide city water for the
fire/sprinkler system, and from the regular Building outlets for drinking,
lavatory and toilet purposes in the Building Common Areas.

                  6.1.4    Landlord shall provide janitorial services to the
Premises five days per week (Monday through Friday), except the date of
observation of the Holidays, in and about the Premises and window washing
services in a manner consistent with the Comparable Buildings.

                  6.1.5    Landlord shall provide twenty-four (24) hour per day,
nonexclusive, non-attended, automatic passenger elevator service.

                  6.1.6    Landlord shall provide on-site and/or remote
monitoring of the Project Common Areas; provided, however, Tenant hereby
acknowledges and agrees that neither Landlord nor the "Landlord Parties," as
that term is defined in Section 10.1 of this Lease, shall be liable for, and
Landlord and the Landlord Parties are hereby released from any responsibility
for, any damage either to persons or property sustained by Tenant incurred in
connection with or arising from any acts or omissions of such monitoring of the
Project Common Areas.

         Tenant shall cooperate fully with Landlord at all times and abide by
all regulations and requirements that Landlord may reasonably prescribe for the
proper functioning and protection of the HVAC, electrical, mechanical and
plumbing systems.

         6.2      ABOVE STANDARD TENANT SERVICES. Notwithstanding anything to
the contrary set forth in Section 4.2.4 or this Article 6, Tenant shall directly
pay to Landlord one hundred percent (100%) of the cost of all services required
by Tenant to be provided by Landlord which are in excess of the services set
forth in Section 6.1, above, including, but not limited to, (i) twenty-four (24)
hour security services, to the extent provided separately and exclusively to
Tenant , and (ii) twenty-four (24) hour porter service, to the extent provided
separately and exclusively to Tenant.

         6.3      DIRECT PAYMENT OF PREMISES ELECTRICITY COSTS. Notwithstanding
anything to the contrary set forth in Section 4.2.4 or this Article 6, Tenant
shall pay one hundred percent (100%) of the cost of all electricity attributable
to its use of the entire Premises. All such electrical

                                      -33-

<PAGE>

payments shall be excluded from Operating Expenses and shall be paid directly by
Tenant prior to the date on which the same are due to the applicable utility
provider. Landlord and Tenant hereby acknowledge and agree that the Premises has
been separately metered.

         6.4      OVERSTANDARD TENANT USE.

                  6.4.1    GENERALLY. Tenant shall not, without Landlord's prior
written consent, use heat-generating machines, machines other than normal
fractional horsepower office machines, or equipment or lighting other than
Building standard lights in the Premises, which may materially affect the
temperature otherwise maintained by the air conditioning system furnished for
the Premises by Landlord pursuant to the terms of Section 6.1 of this Lease;
provided, however, Landlord shall not withhold its consent to the extent Tenant
installs (either as part of the "Tenant Improvements," as that term is set forth
in Section 2.1 of the Tenant Work Letter, or as an "Alteration," as that term is
set forth in Section 8.1, below) adequate supplementary air conditioning units
to support such additional heat load. If such consent is given, despite Tenant
not itself installing adequate supplementary air conditioning units to support
such additional heat load, Landlord shall have the right to install
supplementary air conditioning units or other facilities in the Premises,
including supplementary or additional metering devices, and the cost thereof,
including the cost of installation, operation and maintenance, increased wear
and tear on existing equipment and other similar charges, shall be paid by
Tenant to Landlord upon billing by Landlord. If Tenant uses water, electricity,
heat or air conditioning in excess of that supplied by Landlord pursuant to
Section 6.1 of this Lease, Tenant shall pay to Landlord, upon billing, the cost
of the installation, operation, and maintenance of equipment which is installed
in order to supply such excess consumption. Tenant's use of electricity shall
never exceed the capacity of the feeders to the Project or the risers or wiring
installation, as the same may be upgraded from time-to-time in accordance with
the TCCs of Article 8, below.

                  6.4.2    HVAC. Tenant shall be provided access to the HVAC
controls for each floor of the Building within the Premises. If Tenant uses HVAC
in excess or two hundred fifty-five (255) cumulative hours (per floor of the
Building) during any calendar month of the Lease Term, such excess-hours of HVAC
shall be provided to Tenant subject to Tenant's payment to Landlord of an amount
reasonably determined by Landlord to be directly attributable to increased wear
and tear on existing Building Systems caused by such excess use; provided,
however, promptly following Tenant's request therefore, Landlord shall provide
reasonable backup documentation in support of Landlord's determination of such
excess-hours charge; provided further, however, Tenant's use of HVAC on any
floor of the Building (for hours other than the normal and customary business
hours maintained by Tenant) shall be for a minimum of two (2) consecutive hours
per such use. As of the execution of this Lease, the excess-hours charge is
anticipated to total approximately $7.35 per floor per hour. Amounts payable by
Tenant to Landlord for such excess-hours use shall be deemed Additional Rent and
shall be paid within thirty (30) days after Tenant's receipt of an invoice
therefor.

         6.5      INTERRUPTION OF USE. Except as otherwise provided in Section
3.2 of this Lease, above, Tenant agrees that Landlord shall not be liable for
damages, by abatement of Rent or otherwise, for failure to furnish or delay in
furnishing any service (including telephone and telecommunication services), or
for any diminution in the quality or quantity thereof, when such failure or
delay or diminution is occasioned, in whole or in part, by breakage, repairs,

                                      -34-

<PAGE>

replacements, or improvements, by any strike, lockout or other labor trouble, by
inability to secure electricity, gas, water, or other fuel at the Building or
Project after reasonable effort to do so, by any riot or other dangerous
condition, emergency, accident or casualty whatsoever, by act or default of
Tenant or other parties, or by any other cause beyond Landlord's reasonable
control; and such failures or delays or diminution shall never be deemed to
constitute an eviction or disturbance of Tenant's use and possession of the
Premises or relieve Tenant from paying Rent or performing any of its obligations
under this Lease, except as otherwise provided in this Lease. Furthermore,
Landlord shall not be liable under any circumstances for a loss of, or injury
to, property or for injury to, or interference with, Tenant's business,
including, without limitation, loss of profits, however occurring, through or in
connection with or incidental to a failure to furnish any of the services or
utilities as set forth in this Article 6.

                                   ARTICLE 7

                                     REPAIRS

         Landlord shall maintain in first-class condition and operating order
and keep in good repair and condition the structural portions of the Building,
including the foundation, floor/ceiling slabs, roof structure (as opposed to
roof membrane), curtain walls, exterior glass and mullions, columns, beams,
shafts (including elevator shafts), fire stairs, parking areas, landscaping,
exterior Project signage, stairwells, elevator cab, men's and women's washrooms,
Building mechanical, electrical and telephone closets, and all common and public
areas (collectively, "BUILDING STRUCTURE") and the Base Building mechanical,
electrical, life safety, plumbing, sprinkler systems and HVAC systems which were
not constructed by Tenant Parties (collectively, the "BUILDING SYSTEMS") and the
Project Common Areas. Notwithstanding anything in this Lease to the contrary,
Tenant shall be required to repair the Building Structure and/or the Building
Systems to the extent caused due to Tenant's use of the Premises for other than
normal and customary business office operations, unless and to the extent such
damage is covered by insurance carries or required to be carried by Landlord
pursuant to Article 10 and to which the waiver of subrogation is applicable
(such obligation to the extent applicable to Tenant as qualified and conditioned
will hereinafter be defined as the "BS/BS EXCEPTION"). Tenant shall, at Tenant's
own expense, keep the Premises, including all improvements, fixtures and
furnishings therein, and the floor or floors of the Building on which the
Premises are located, in good order, repair and condition at all times during
the Lease Term, but such obligation shall not extend to the Building Structure
and the Building Systems except pursuant to the BS/BS Exception. In addition,
Tenant shall, at Tenant's own expense, but under the supervision and subject to
the prior approval of Landlord, and within any reasonable period of time
specified by Landlord, promptly and adequately repair all damage to the Premises
and replace or repair all damaged, broken, or worn fixtures and appurtenances,
but such obligation shall not extend to the Building Structure and the Building
Systems except pursuant to the BS/BS Exception, except for damage caused by
ordinary wear and tear or beyond the reasonable control of Tenant; provided
however, that, at Landlord's option, or if Tenant fails to make such repairs,
Landlord may, after written notice to Tenant and Tenant's failure to repair
within five (5) days thereafter, but need not, make such repairs and
replacements, and Tenant shall pay Landlord the cost thereof, including a
percentage of the cost thereof (to be uniformly established for the Building
and/or the Project and which shall be consistent with the percentages paid for
such services in Comparable Buildings) sufficient to reimburse Landlord (without
profit) for all overhead, general conditions,

                                      -35-

<PAGE>

fees and other costs or expenses paid to third-parties arising from Landlord's
involvement with such repairs and replacements forthwith upon being billed for
same. Notwithstanding the foregoing, Landlord shall be responsible for repairs
to the exterior walls, foundation and roof of the Building, the structural
portions of the floors of the Building, and the systems and equipment of the
Building, except to the extent that such repairs are required due to the
negligence or willful misconduct of Tenant; provided, however, that if such
repairs are due to the negligence or willful misconduct of Tenant, Landlord
shall nevertheless make such repairs at Tenant's expense, or, if covered by
Landlord's insurance, Tenant shall only be obligated to pay any deductible in
connection therewith. Landlord may, but shall not be required to, enter the
Premises at all reasonable times to make such repairs, alterations, improvements
or additions to the Premises or to the Project or to any equipment located in
the Project as Landlord shall desire or deem necessary or as Landlord may be
required to do by governmental or quasi-governmental authority or court order or
decree; provided, however, except for (i) emergencies, (ii) repairs,
alterations, improvements or additions required by governmental or
quasi-governmental authorities or court order or decree, or (iii) repairs which
are the obligation of Tenant hereunder, any such entry into the Premises by
Landlord shall be performed in a manner so as not to materially interfere with
Tenant's use of, or access to, the Premises; provided that, with respect to
items (ii) and (iii) above, Landlord shall use commercially reasonable efforts
to not materially interfere with Tenant's use of, or access to, the Premises.
Tenant hereby waives any and all rights under and benefits of subsection 1 of
Section 1932 and Sections 1941 and 1942 of the California Civil Code or under
any similar law, statute, or ordinance now or hereafter in effect.

                                   ARTICLE 8

                            ADDITIONS AND ALTERATIONS

         8.1      LANDLORD'S CONSENT TO ALTERATIONS. Tenant may not make any
improvements, alterations, additions or changes to the Premises or any
mechanical, plumbing or HVAC facilities or systems pertaining to the Premises
(collectively, the "ALTERATIONS") without first procuring the prior written
consent of Landlord to such Alterations, which consent shall be requested by
Tenant not less than ten (10) business days prior to the commencement thereof,
and which consent shall not be unreasonably withheld by Landlord, provided it
shall be deemed reasonable for Landlord to withhold its consent to any
Alteration which adversely affects the structural portions or the systems or
equipment of the Building or is visible from the exterior of the Building.
Notwithstanding the foregoing, Tenant shall be permitted to make Alterations
following ten (10) business days notice to Landlord, but without Landlord's
prior consent, to the extent that such Alterations (i) do not, in the aggregate,
exceed a cost of $50,000.00 per Alteration, and (ii) do not adversely affect the
Building systems, Building Structure or the exterior appearance of the Building
(the "COSMETIC ALTERATIONS"). For purposes of determining the cost of an
Alteration, work done in phases or stages shall be considered part of the same
Alteration, and any Alteration shall be deemed to include all trades and
materials involved in accomplishing a particular result. The construction of the
initial improvements to the Premises shall be governed by the terms of the
Tenant Work Letter and not the terms of this Article 8. Notwithstanding anything
to the contrary in this Article 8, Landlord's consent shall not be required (but
Tenant shall provide Landlord with at least ten (10) days prior notice for any
such installation costing, in the aggregate, more than $25,000.00) for the
installation or modification of trade fixtures, furniture and trade equipment
which (A) do not require a permit, and (B) may

                                      -36-

<PAGE>

be removed from the Premises without injury thereto (including, without
limitation, demountable partitions, refrigerators and other kitchen appliances,
computer racking and similar demountable fixtures) (collectively, "TRADE
FIXTURES").

         8.2      MANNER OF CONSTRUCTION. Landlord may impose, as a condition of
its consent to any and all Alterations or repairs of the Premises or about the
Premises, such requirements as Landlord in its reasonable discretion may deem
desirable, including, but not limited to, the requirement that Tenant utilize
for such purposes only contractors reasonably approved by Landlord, and the
requirement that upon Landlord's timely request (which request must be made, if
at all, at the time of Landlord's consent to such Alteration), Tenant shall, at
Tenant's expense, remove such Alterations upon the expiration or any early
termination of the Lease Term and return the affected portion of the Premises to
a building standard tenant improved condition as determined by Landlord. Tenant
shall construct such Alterations and perform such repairs in a good and
workmanlike manner, in conformance with any and all applicable federal, state,
county or municipal laws, rules and regulations and pursuant to a valid building
permit, issued by the City of San Diego, California, all in conformance with
Landlord's construction rules and regulations; provided, however, that prior to
commencing to construct any Alteration (except with regard to Cosmetic
Alterations), Tenant shall meet with Landlord to discuss Landlord's design
parameters and code compliance issues. In the event Tenant performs any
Alterations in the Premises which require or give rise to governmentally
required changes to the "Base Building," as that term is defined below, then
Landlord shall, at Tenant's expense, make such changes to the Base Building. The
"BASE BUILDING" shall include the Building Structure, and the public restrooms,
elevators, fire stairwells and the systems and equipment (including the
electrical, life safety, plumbing, sprinkler systems and HVAC systems) located
in the internal core of the Building on the floor or floors on which the
Premises are located. In performing the work of any such Alterations, Tenant
shall have the work performed in such manner so as not to obstruct access to the
Project or any portion thereof, by any other tenant of the Project, and so as
not to obstruct the business of Landlord or other tenants in the Project. Tenant
shall not use (and upon notice from Landlord shall cease using) contractors,
services, workmen, labor, materials or equipment that, in Landlord's reasonable
judgment, would disturb labor harmony with the workforce or trades engaged in
performing other work, labor or services in or about the Building or the Common
Areas. In addition to Tenant's obligations under Article 9 of this Lease, upon
completion of any Alterations, Tenant agrees to cause a Notice of Completion to
be recorded in the office of the Recorder of the County of San Diego,
California, in accordance with Section 3093 of the Civil Code of the State of
California or any successor statute, and Tenant shall deliver to the Project
construction manager a reproducible copy of the "as built" drawings of the
Alterations as well as all permits, approvals and other documents issued by any
governmental agency in connection with the Alterations, if such Alterations are
of a type for which as-built plans are reasonably available.

         8.3      PAYMENT FOR IMPROVEMENTS. If payment is made directly to
contractors, Tenant shall (i) comply with Landlord's requirements for final lien
releases and waivers in connection with Tenant's payment for work to
contractors, and (ii) sign Landlord's standard contractor's rules and
regulations. If Tenant orders any work directly from Landlord, Tenant shall pay
to Landlord an amount equal to three percent (3%) of the cost of such work to
compensate Landlord for all overhead, general conditions, fees and other costs
and expenses arising from Landlord's involvement with such work. If Tenant does
not order any work directly from

                                      -37-

<PAGE>

Landlord, Tenant shall reimburse Landlord for Landlord's reasonable, actual,
out-of-pocket costs and expenses actually incurred in connection with Landlord's
review of such work.

         8.4      CONSTRUCTION INSURANCE. In addition to the requirements of
Article 10 of this Lease, in the event that Tenant makes any Alterations, prior
to the commencement of such Alterations, Tenant shall provide Landlord with
evidence that Tenant or Tenant's contractor carries "Builder's All Risk"
insurance in an amount reasonably approved by Landlord covering the construction
of such Alterations, and such other insurance as Landlord may reasonably
require, it being understood and agreed that all of such Alterations shall be
insured by Tenant pursuant to Article 10 of this Lease immediately upon
completion thereof; provided, however, to the extent such insurance is not
available on a commercially reasonable basis, then Tenant shall not be required
to carry such insurance. In addition, if the cost of any Alteration exceeds One
Hundred Thousand Dollars ($100,000.00), Landlord may, in its reasonable
discretion, require Tenant to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount sufficient to
ensure the lien-free completion of such Alterations and naming Landlord as a
co-obligee.

         8.5      LANDLORD'S PROPERTY. All Alterations, improvements, fixtures,
equipment and/or appurtenances which may be installed or placed in or about the
Premises, from time to time, shall be at the sole cost of Tenant and shall be
and become the property of Landlord, except that Tenant may remove any
Alterations, improvements, fixtures and/or equipment which Tenant can
substantiate to Landlord have not been paid for with any Tenant improvement
allowance funds provided to Tenant by Landlord, provided Tenant repairs any
damage to the Premises and Building caused by such removal and returns the
affected portion of the Premises to a building standard tenant improved
condition as determined by Landlord. Furthermore, Landlord may, by written
notice to Tenant (x) given pursuant to the terms of Section 8.2, above, or (y)
in the case of Cosmetic Alterations and Trade Fixtures, given at least sixty
(60) days prior to the end of the Lease Term (or given promptly following any
earlier termination of this Lease), or, (z) in the case of an Above Standard
Tenant Improvements, given pursuant to the terms of Section 2.5 of the Tenant
Work Letter, require Tenant, at Tenant's expense, to (i) remove any Alterations
or improvements in the Premises, and/or (ii) remove any Above Building Standard
Tenant Improvements, located within the Premises and replace the same with then
existing "Building Standard Tenant Improvements," as that term is defined in
Section 2.4 of the Tenant Work Letter, and to repair any damage to the Premises
and Building caused by such removal and return the affected portion of the
Premises to a building standard tenant improved condition as reasonably
determined by Landlord; provided, however, if, in connection with its notice to
Landlord with respect to Cosmetic Alterations or Trade Fixtures, (1) Tenant
requests Landlord's decision with regard to the removal of such Cosmetic
Alterations and/or Trade Fixtures, and (2) Landlord thereafter agrees in writing
to waive the removal requirement with regard to such Cosmetic Alterations and/or
Trade Fixtures, then Tenant shall not be required to so remove such Cosmetic
Alterations or Trade Fixtures; provided further, however, that if Tenant
requests such a determination from Landlord and Landlord, within 5 business days
following Landlord's receipt of such request from Tenant with respect to
Cosmetic Alterations and/or Trade Fixtures, fails to address the removal
requirement with regard to such Cosmetic Alterations and/or Trade Fixtures,
Landlord shall be deemed to have agreed to waive the removal requirement with
regard to such Cosmetic Alterations and/or Trade Fixtures. If Tenant fails to
complete any required removal and/or to repair any damage caused by the required
removal of any Alterations or improvements

                                      -38-

<PAGE>

in the Premises, and returns the affected portion of the Premises to a building
standard tenant improved condition as reasonably determined by Landlord, then at
Landlord's option, either (A) Tenant shall be deemed to be holding over in the
Premises and Rent shall continue to accrue in accordance with the terms of
Article 16, below, until such work shall be completed, or (B) Landlord may do so
and may charge the cost thereof to Tenant. Tenant hereby protects, defends,
indemnifies and holds Landlord harmless from any liability, cost, obligation,
expense or claim of lien in any manner relating to the installation, placement,
removal or financing of any such Alterations, improvements, fixtures and/or
equipment in, on or about the Premises, which obligations of Tenant shall
survive the expiration or earlier termination of this Lease; provided, however,
if (aa) Landlord requires the surrender of any such Alterations or Above
Standard Tenant Improvements in accordance with the TCCs of this Lease, and (bb)
Tenant maintained such Alterations or Above Standard Tenant Improvements
throughout the Lease Term in accordance with the TCCs of this Lease and
applicable manufacturers' maintenance specifications, then Landlord agrees to
accept such Alterations or Above Standard Tenant Improvements in their then
existing "as is" condition, with all flaws, and Tenant shall be released from
all liability therefor effective as of the date of such surrender.

                                   ARTICLE 9

                             COVENANT AGAINST LIENS

         Tenant shall keep the Project and Premises free from any liens or
encumbrances arising out of the work performed, materials furnished or
obligations incurred by or on behalf of Tenant, and shall protect, defend,
indemnify and hold Landlord harmless from and against any claims, liabilities,
judgments or costs (including, without limitation, reasonable attorneys' fees
and costs) arising out of same or in connection therewith. Tenant shall give
Landlord notice at least twenty (20) days prior to the commencement of any such
work on the Premises (or such additional time as may be necessary under
applicable laws) to afford Landlord the opportunity of posting and recording
appropriate notices of non-responsibility. Tenant shall remove any such lien or
encumbrance by bond or otherwise within ten (10) business days after notice by
Landlord, and if Tenant shall fail to do so, Landlord may pay the amount
necessary to remove such lien or encumbrance, without being responsible for
investigating the validity thereof. The amount so paid shall be deemed
Additional Rent under this Lease payable upon demand, without limitation as to
other remedies available to Landlord under this Lease. Nothing contained in this
Lease shall authorize Tenant to do any act which shall subject Landlord's title
to the Building or Premises to any liens or encumbrances whether claimed by
operation of law or express or implied contract. Any claim to a lien or
encumbrance upon the Building or Premises arising in connection with any such
work or respecting the Premises not performed by or at the request of Landlord
shall be null and void, or at Landlord's option shall attach only against
Tenant's interest in the Premises and shall in all respects be subordinate to
Landlord's title to the Project, Building and Premises. Landlord hereby
acknowledges and agrees that any and all of Tenant's movable furniture,
furnishings, trade fixtures and equipment at the Premises ("TENANT'S PROPERTY")
may be financed by a third-party lender or lessor (an "EQUIPMENT LIENOR"), and
to the extent so financed Landlord hereby (a) agrees to waive any rights to
Tenant's Property, and (b) agrees to recognize the rights of any such Equipment
Lienor, subject to and in accordance with a commercially reasonable waiver
agreement to be entered into by and between Landlord and the Equipment Lienor
following request by Tenant.

                                      -39-

<PAGE>

                                   ARTICLE 10

                                    INSURANCE

         10.1     INDEMNIFICATION AND WAIVER. To the extent not prohibited by
law and except as otherwise expressly provided herein, Tenant hereby assumes all
risk of damage to property or injury to persons in, upon or about the Premises
from any cause whatsoever and agrees that Landlord, its partners, subpartners
and their respective officers, agents, servants, employees, and independent
contractors (collectively, "LANDLORD PARTIES") shall not be liable for, and are
hereby released from any responsibility for, any damage either to person or
property or resulting from the loss of use thereof, which damage is sustained by
Tenant or by other persons claiming through Tenant. Tenant shall indemnify,
defend, protect, and hold harmless the Landlord Parties from any and all loss,
cost, damage, expense and liability (including without limitation court costs
and reasonable attorneys' fees) incurred in connection with or arising from any
cause in, on or about the Premises, any acts, omissions or negligence of Tenant
or of any person claiming by, through or under Tenant, or of the contractors,
agents, servants, employees, invitees, guests or licensees of Tenant or any such
person, in, on or about the Project or any breach of the TCCs of this Lease,
either prior to, during, or after the expiration of the Lease Term. However,
notwithstanding the foregoing, Tenant shall not be required to indemnify and/or
hold Landlord harmless from any loss, cost, liability, damage or expense,
including, but not limited to, penalties, fines, attorneys' fees or costs
(collectively, "CLAIMS"), to any person, property or entity to the extent
resulting from the negligence or willful misconduct of Landlord or its agents,
contractors, or employees (except for damage to the Tenant Improvements and
Tenant's personal property, fixtures, furniture and equipment in the Premises in
which case Tenant shall be responsible to the extent Tenant is required to
obtain the requisite insurance coverage pursuant to this Lease); provided,
however, Tenant hereby indemnifies and holds Landlord harmless from any Claims
to the extent such Claim is covered by Tenant's insurance, even if such Claim is
resulting from the negligent acts, omissions, or willful misconduct of Landlord
or those of its agents, contractors, or employees. Subject to Section 10.5
below, Landlord hereby indemnifies Tenant and holds Tenant harmless from any
Claims to the extent resulting from the negligence or willful misconduct of
Landlord or its agents, contractors or employees and not covered by insurance
required to be carried under this Lease by Tenant or actually carried by Tenant;
provided, however, that (i) Landlord hereby indemnifies and holds Tenant
harmless from any Claims to any property outside of the Premises to the extent
such Claim is covered by such insurance, even if resulting from the negligent
acts, omissions, or willful misconduct of Tenant or those of its agents,
contractors, or employees, and (ii) because Tenant must carry insurance pursuant
to Section 10.3.2 to cover its personal property within the Premises and the
Improvements, Tenant hereby indemnifies and holds Landlord harmless from any
Claim to any property within the Premises, to the extent such Claim is covered
by such insurance, even if resulting from the negligent acts, omissions or
willful misconduct of Landlord or those of its agents, contractors, or
employees. The provisions of this Section 10.1 shall survive the expiration or
sooner termination of this Lease with respect to any claims or liability arising
in connection with any event occurring prior to such expiration or termination.
Notwithstanding anything to the contrary contained in this Lease, nothing in
this Lease shall impose any obligations on Tenant or Landlord to be responsible
or liable for, and each hereby releases the other from all liability for,
consequential damages other than those consequential damages incurred by
Landlord in connection with a holdover of the Premises by Tenant after the

                                      -40-

<PAGE>

expiration or earlier termination of this Lease or incurred by Landlord in
connection with any repair, physical construction or improvement work performed
by or on behalf of Tenant in the Project, but Tenant shall not be responsible
for any direct or consequential damages resulting from Landlord's or
contractor's acts in connection with the completion by Landlord of the tenant
improvements in the Premises pursuant to the Tenant Work Letter, or Landlord's
ownership or removal of any Alterations that are not required to be removed by
Tenant pursuant to the TCCs of Article 8, above.

         10.2     LANDLORD'S FIRE, CASUALTY AND LIABILITY INSURANCE. Landlord
shall carry Commercial General Liability Insurance with respect to the Building
during the Lease Term covering claims for bodily injury, personal injury and
property damage in the Project Common Areas, and with respect to Landlord's
activities in the Premises, and shall further insure the Building during the
Lease Term with a policy of Physical Damage Insurance including building
ordinance coverage, written on a standard Causes of Loss--Special Form basis
against loss or damage due to fire and other casualties covered within the
classification of fire and extended coverage, vandalism coverage and malicious
mischief, sprinkler leakage, water damage and special extended coverage,
covering the full replacement cost of the Premises, without deduction for
depreciation. Such coverage shall contain commercially - reasonable deductible
amounts, from such companies, and on such other terms and conditions, as
Landlord may from time to time reasonably determine. Additionally, at the option
of Landlord, such insurance coverage may include the risks of earthquakes and/or
flood damage and additional hazards, a rental loss endorsement and one or more
loss payee endorsements in favor of the holders of any mortgages or deeds of
trust encumbering the interest of Landlord in the Building or the ground or
underlying lessors of the Building, or any portion thereof. Notwithstanding the
foregoing provisions of this Section 10.2, the coverage and amounts of insurance
carried by Landlord in connection with the Building shall, at a minimum, be
comparable to the coverage and amounts of insurance which are carried by
reasonably prudent landlords of Comparable Buildings, and Worker's Compensation
and Employer's Liability coverage as required by applicable law. Tenant shall,
at Tenant's expense, comply with all insurance company requirements pertaining
to the use of the Premises. If Tenant's conduct or use of the Premises causes
any increase in the premium for such insurance policies then Tenant shall
reimburse Landlord for any such increase. Tenant, at Tenant's expense, shall
comply with all rules, orders, regulations or requirements of the American
Insurance Association (formerly the National Board of Fire Underwriters) and
with any similar body.

         10.3     TENANT'S INSURANCE. Tenant shall maintain the following
coverages in the following amounts.

                  10.3.1   Commercial General Liability Insurance covering the
insured against claims of bodily injury, personal injury and property damage
(including loss of use thereof) arising out of Tenant's operations, and
contractual liabilities (covering the performance by Tenant of its indemnity
agreements) including a Broad Form endorsement covering the insuring provisions
of this Lease and the performance by Tenant of the indemnity agreements set
forth in Section 10.1 of this Lease, for limits of liability not less than:

<TABLE>
<S>                                                <C>
Bodily Injury and                                  $5,000,000 each occurrence
Property Damage Liability                          $5,000,000 annual aggregate
</TABLE>

                                      -41-

<PAGE>

<TABLE>
<S>                                                <C>
Personal Injury Liability                          $5,000,000 each occurrence
                                                   $5,000,000 annual aggregate
                                                   0% Insured's participation
</TABLE>

These limits may be satisfied by a general liability and an umbrella policy so
long as all other requirements under this Section 10.3 are met. Notwithstanding
the insurance provisions of this Lease to the contrary, Original Tenant and its
Permitted Transferee (and not any other assignee, sublessee, or other transferee
of Original Tenant's interest in this Lease) shall have the right to self-insure
with respect to any of the insurance required to be carried by Tenant under this
Section 10.3.1, provided that (i) Original Tenant or Permitted Transferee
maintains a minimum net worth of at least One Hundred Fifty Million Dollars
($150,000,000.00) according to its most recent audited financial statements;
(ii) Original Tenant or Permitted Transferee governs and manages (either
internally or through a third-party administrator) its self-insurance program,
and maintains sufficient reserves on its balance sheet committed to its
self-insurance program liabilities, in a manner consistent with comparable
programs managed by prudent businesses whose stock is publicly traded on
nationally recognized exchanges; and (iii) applicable law(s) do not prohibit or
render unenforceable Tenant's indemnification obligations under this Lease. Upon
request, Tenant shall supply to Landlord from time to time with evidence
reasonably satisfactory to Landlord of Tenant's net worth and the satisfaction
of the conditions set forth above. If Original Tenant or Permitted Transferee
elects to self-insure (and without limiting Tenant's responsibility or
liability), Tenant shall itself be responsible for losses or liabilities which
would have been assumed by insurance companies which would have issued the
insurance required by Tenant under this Lease in conformance with Landlord's
insurance requirements set forth in this Section 10.3.1 and Tenant shall accept
Landlord's tender of defense for any claims within the scope of Tenant's
indemnity obligations as if Landlord, Landlord's lender and any other party
reasonably identified by Landlord (to the extent such third party has a vested
economic interest in the Project), if any, were named as additional insureds on
any liability policy maintained by Tenant meeting such requirements. Original
Tenant or Permitted Transferee will notify Landlord in advance of any period for
which Tenant intends to self-insure and shall provide Landlord with satisfactory
evidence that it complies with the requirements set forth herein in order to
give Landlord an opportunity to confirm the satisfaction of the conditions set
forth herein. For so long as Original Tenant or Permitted Transferee
self-insures, Tenant, for applicable periods, shall indemnify, defend and hold
harmless Landlord, its partners, agents, employees and representatives from and
against all costs, damages, or expenses (including reasonable attorneys' fees)
incurred or paid by Landlord as a result of any claim which would have been
covered by the insurance which would otherwise be required to be carried by
Tenant pursuant to this Section 10.3.1 above. Notwithstanding the foregoing, if
any of Landlord's lenders objects to Original Tenant's or Permitted Transferee's
self-insurance rights under this Section 10.3.1, then during such portion of the
Lease Term that such lender's loan is secured by the Premises and Tenant meets
all of the conditions for maintaining a program of self-insurance provided
above, then in lieu of the policy of Commercial General Liability Insurance
required to be maintained by Tenant under this Section 10.3.1, Tenant shall be
required to obtain and maintain a policy of Premises Liability Insurance with
similar limits for the Building (excluding Products-Completed Operations
Coverage), and any liabilities which are not covered by such insurance, and
which would otherwise be covered by the Commercial General Liability Insurance
required to be maintained by Tenant under Section 10.3.1 of this Lease shall be

                                      -42-

<PAGE>

considered to be self-insured by Tenant in accordance with this Section 10.3.1.
Furthermore, throughout the period that Original Tenant or Permitted Transferee
self-insures any of the insurance required to be carried by Tenant under this
Section 10.3.1, Landlord shall have the right, at Landlord's sole cost and
expense, to obtain forced-place insurance of all or any portion of such coverage
and Tenant agrees to cooperate with Landlord's efforts to obtain any such
coverage, at Landlord's sole cost and expense.

                  10.3.2   Physical Damage Insurance covering (i) all office
furniture, business and trade fixtures, office equipment, free-standing cabinet
work, movable partitions, merchandise and all other items of Tenant's property
on the Premises installed by, for, or at the expense of Tenant, (ii) the "Tenant
Improvements," as that term is defined in Section 2.1 of the Tenant Work Letter,
and any other improvements which exist in the Premises as of the Lease
Commencement Date (excluding the Base Building) (collectively, the "ORIGINAL
IMPROVEMENTS"), and (iii) all other improvements, alterations and additions to
the Premises, including, without limitation, the FF&E. Such insurance shall be
written on an "all risks" of physical loss or damage basis, for the full
replacement cost value (subject to reasonable deductible amounts) new without
deduction for depreciation of the covered items and in amounts that meet any
co-insurance clauses of the policies of insurance and shall include coverage for
damage or other loss caused by fire or other peril including, but not limited
to, vandalism and malicious mischief, theft, water damage of any type, including
sprinkler leakage, bursting or stoppage of pipes, and explosion, and providing
business interruption coverage for a period of one year. Notwithstanding
anything to the contrary contained herein, the Original Tenant (and not any
Permitted Transferee, assignee, subtenant or other transferee) may, subject to
the provisions of this Section 10.3.2, fulfill its insurance obligations under
Section 10.3.2(i) above by self-insurance. Any self-insurance so maintained by
Original Tenant shall be deemed to contain all of the terms and conditions
applicable to such insurance as required in this Article 10, including, without
limitation, a deemed waiver of subrogation; consequently, Landlord shall be
treated, for all purposes, as if Tenant had actually purchased such insurance
from a third party. If Original Tenant elects to so self-insure, then with
respect to any claims which may result from incidents occurring during the Lease
Term, such self-insurance obligation shall survive the expiration or earlier
termination of this Lease to the same extent as the insurance required hereunder
would survive.

                  10.3.3   Worker's Compensation or other similar insurance
pursuant to all applicable state and local statutes and regulations, and
Employer's Liability or other similar insurance pursuant to all applicable state
and local statutes and regulations, with limits not less than One Millions and
No/100 Dollars ($1,000,000.00).

                  10.3.4  Comprehensive Automobile Liability Insurance covering
all owned, hired, or non-owned vehicles with the following limits of liability:
One Million Dollars ($1,000,000.00) combined single limit for bodily injury and
property damage.

                  10.4   FORM OF POLICIES. The minimum limits of policies of
insurance required of Tenant under this Lease shall in no event limit the
liability of Tenant under this Lease. Such insurance shall (i) name Landlord,
Landlord's lender and any other party reasonably identified by Landlord (to the
extent such third party has a vested economic interest in the Project), as an
additional insured; (ii) specifically cover the liability assumed by Tenant
under this Lease,

                                      -43-

<PAGE>

including, but not limited to, Tenant's obligations under Section 10.1 of this
Lease; (iii) be issued by an insurance company having a rating of not less than
A-X in Best's Insurance Guide or which is otherwise acceptable to Landlord and
licensed to do business in the State of California; (iv) be primary insurance as
to all claims thereunder and provide that any insurance carried by Landlord is
excess and is non-contributing with any insurance requirement of Tenant; (v) be
in form and content reasonably acceptable to Landlord; and (vi) provide that
said insurance shall not be canceled or coverage changed unless thirty (30)
days' prior written notice shall have been given to Landlord and any mortgagee
of Landlord, the identity of whom has been provided to Tenant in writing. Tenant
shall deliver said policy or policies or certificates thereof to Landlord on or
before the Lease Commencement Date and at least thirty (30) days before the
expiration dates thereof. In the event Tenant shall fail to procure such
insurance, or to deliver such policies or certificate, Landlord may, at its
option, after written notice to Tenant and Tenant's failure to obtain such
insurance within fifteen (15) days thereafter, procure such policies for the
account of Tenant, and the cost thereof shall be paid to Landlord within thirty
(30) days after delivery to Tenant of bills therefor.

         10.5     SUBROGATION. Landlord and Tenant intend that their respective
property loss risks shall be borne by reasonable insurance carriers to the
extent above provided, and Landlord and Tenant hereby agree to look solely to,
and seek recovery only from, their respective insurance carriers in the event of
a property loss to the extent that such coverage is agreed to be provided
hereunder. The parties each hereby waive all rights and claims against each
other for such losses, and waive all rights of subrogation of their respective
insurers, provided such waiver of subrogation shall not affect the right to the
insured to recover thereunder. The parties agree that their respective insurance
policies are now, or shall be, endorsed such that the waiver of subrogation
shall not affect the right of the insured to recover thereunder, so long as no
material additional premium is charged therefor.

         10.6     ADDITIONAL INSURANCE OBLIGATIONS. Tenant shall carry and
maintain during the entire Lease Term, at Tenant's sole cost and expense,
increased amounts of the insurance required to be carried by Tenant pursuant to
this Article 10 and such other reasonable types of insurance coverage and in
such reasonable amounts covering the Premises and Tenant's operations therein,
as may be reasonably requested by Landlord, but in no event in excess of the
amounts and types of insurance then being required by landlords of other
Comparable Buildings.

                                   ARTICLE 11

                             DAMAGE AND DESTRUCTION

         11.1     REPAIR OF DAMAGE TO PREMISES BY LANDLORD. Tenant shall
promptly notify Landlord of any damage to the Premises resulting from fire or
any other casualty. If the Premises or any Common Areas serving or providing
access to the Premises shall be damaged by fire or other casualty, Landlord
shall promptly and diligently, subject to reasonable delays for insurance
adjustment or other matters beyond Landlord's reasonable control, and subject to
all other terms of this Article 11, restore the Base Building and such Common
Areas. Such restoration shall be to substantially the same condition of the Base
Building and the Common Areas prior to the casualty, except for modifications
required by zoning and building codes and other laws or by the holder of a
mortgage on the Building or Project or any other modifications

                                      -44-

<PAGE>

to the Common Areas deemed desirable by Landlord, which are consistent with the
character of the Project, provided that access to the Premises and any common
restrooms serving the Premises shall not be materially impaired. Upon the
occurrence of any damage to the Premises, upon notice (the "LANDLORD REPAIR
NOTICE") to Tenant from Landlord, Tenant shall assign to Landlord (or to any
party designated by Landlord) all insurance proceeds payable to Tenant under
Tenant's insurance required under Section 10.3.2(ii) and (iii) of this Lease,
and Landlord shall repair any injury or damage to the Original Improvements
installed in the Premises and shall return such Original Improvements to their
original condition; provided that if the cost of such repair by Landlord exceeds
the amount of insurance proceeds received by Landlord from Tenant's insurance
carrier, as assigned by Tenant, the cost of such repairs shall be paid by Tenant
to Landlord prior to Landlord's commencement of repair of the damage. In the
event that Landlord does not deliver the Landlord Repair Notice within sixty
(60) days following the date the casualty becomes known to Landlord, Tenant
shall, at its sole cost and expense, repair any injury or damage to the Original
Improvements installed in the Premises and shall return such Original
Improvements to their original condition. Whether or not Landlord delivers a
Landlord Repair Notice, prior to the commencement of construction, Tenant shall
submit to Landlord, for Landlord's review and approval, all plans,
specifications and working drawings relating thereto, and Landlord shall select
the contractors to perform such improvement work. Landlord shall not be liable
for any inconvenience or annoyance to Tenant or its visitors, or injury to
Tenant's business resulting in any way from such damage or the repair thereof;
provided however, that Landlord shall use commercially reasonable effort to
minimize any such inconvenience or annoyance; provided further, however, that if
such fire or other casualty shall have damaged the Premises or Common Areas
necessary to Tenant's occupancy, and the Premises are not occupied by Tenant as
a result thereof, then during the time and to the extent the Premises are unfit
for occupancy, the Rent shall be abated in proportion to the ratio that the
amount of rentable square feet of the Premises which is unfit for occupancy for
the purposes permitted under this Lease bears to the total rentable square feet
of the Premises. In the event that Landlord shall not deliver the Landlord
Repair Notice, Tenant's right to rent abatement pursuant to the preceding
sentence shall terminate as of the date which is reasonably determined by
Landlord to be the date Tenant should have completed repairs to the Premises
assuming Tenant used reasonable due diligence in connection therewith.

         11.2     LANDLORD'S OPTION TO REPAIR. Notwithstanding the terms of
Section 11.1 of this Lease, Landlord may elect not to rebuild and/or restore the
Premises, Building and/or Project, and instead terminate this Lease, by
notifying Tenant in writing of such termination within sixty (60) days after the
date of discovery of the damage, such notice to include a termination date
giving Tenant ninety (90) days to vacate the Premises, but Landlord may so elect
only if the Building or Project shall be damaged by fire or other casualty or
cause, whether or not the Premises are affected, and one or more of the
following conditions is present: (i) in Landlord's reasonable judgment, repairs
cannot reasonably be completed within two hundred seventy (270) days after the
date of discovery of the damage (when such repairs are made without the payment
of overtime or other premiums); (ii) the holder of any mortgage on the Building
or Project or ground lessor with respect to the Building or Project shall
require that the insurance proceeds or any portion thereof be used to retire the
mortgage debt, or shall terminate the ground lease, as the case may be; (iii)
the damage is not fully covered by Landlord's insurance policies (unless Tenant
agrees to itself pay such excess repair cost (i.e., the portion of such repair
costs that exceeds the amount covered by Landlord's insurance policies) in which
event such excess repair

                                      -45-

<PAGE>

costs shall be amortized over the then-remaining Lease Term (following the
completion of such repairs) using an amortization rate equal to the Interest
Rate, and the Base Rent payable by Tenant throughout the remaining Lease Term
shall be increased accordingly); (iv) Landlord decides to rebuild the Building
or Common Areas so that they will be substantially different structurally or
architecturally; or (v) the damage occurs during the last twelve (12) months of
the Lease Term. Notwithstanding the foregoing, Tenant may negate Landlord's
termination right (elected vis-a-vis condition (i) above) by paying any overtime
costs or other premiums required in order to cause the repairs to be completed
within the two hundred seventy (270) day period set forth above. If Landlord
does not elect to terminate this Lease pursuant to Landlord's termination right
as provided above, and (1) the required repairs cannot, in the reasonable
opinion of Landlord, be completed within two hundred seventy (270) days after
being commenced, or (2) the damage occurs during the last twelve (12) months of
the Lease Term and the required repairs cannot, in the reasonable opinion of
Landlord, be completed within sixty (60) days after being commenced, then Tenant
may elect, not later than thirty (30) days after Tenant's receipt of Landlord's
reasonable estimate, in writing, of the time required to effectuate such
repairs, to terminate this Lease by written notice to Landlord effective as of
the date specified in the notice, which date shall not be less than thirty (30)
days nor more than sixty (60) days after the date such notice is given by
Tenant. Furthermore, if neither Landlord nor Tenant has terminated this Lease,
and the repairs are not actually completed within such 270-day period (or, if
applicable, such 60-day period), then Tenant shall have the right to terminate
this Lease during the first five (5) business days of each calendar month
following the end of such period until such time as the repairs are complete, by
notice to Landlord (the "DAMAGE TERMINATION NOTICE"), effective as of a date set
forth in the Damage Termination Notice (the "DAMAGE TERMINATION DATE"), which
Damage Termination Date shall not be less than ten (10) business days following
the end of each such month. Notwithstanding the foregoing, if Tenant delivers a
Damage Termination Notice to Landlord, then Landlord shall have the right to
suspend the occurrence of the Damage Termination Date for a period ending thirty
(30) days after the Damage Termination Date set forth in the Damage Termination
Notice by delivering to Tenant, within five (5) business days of Landlord's
receipt of the Damage Termination Notice, a certificate of Landlord's contractor
responsible for the repair of the damage certifying that it is such contractor's
good faith judgment that the repairs shall be substantially completed within
thirty (30) days after the Damage Termination Date. If repairs shall be
substantially completed prior to the expiration of such thirty-day period, then
the Damage Termination Notice shall be of no force or effect, but if the repairs
shall not be substantially completed within such thirty-day period, then this
Lease shall terminate upon the expiration of such thirty-day period. At any
time, from time to time, after the date occurring sixty (60) days after the date
of the damage, Tenant may request that Landlord inform Tenant of Landlord's
reasonable opinion of the date of completion of the repairs and Landlord shall
respond to such request within five (5) business days. Notwithstanding the
provisions of this Section 11.2, Tenant shall have the right to terminate this
Lease under this Section 11.2 only if each of the following conditions is
satisfied: (a) the damage to the Project by fire or other casualty was not
caused by the gross negligence or intentional act of Tenant or its partners or
subpartners and their respective officers, agents, servants, employees, and
independent contractors; (b) Tenant is not then in default under this Lease; (c)
as a result of the damage, Tenant cannot reasonably conduct business from the
Premises; and, (d) as a result of the damage to the Project, Tenant does not
occupy or use the Premises at all. In the event this Lease is terminated in
accordance with the terms of this

                                      -46-

<PAGE>

Section 11.2, Tenant shall assign to Landlord (or to any party designated by
Landlord) all insurance proceeds payable to Tenant under Tenant's insurance
required under Section 10.3.2 of this Lease; provided, however, Tenant shall be
entitled to retain all insurance proceeds payable to Tenant under Tenant's
insurance required under Section 10.3.2 of this Lease that are in excess of the
then-current unamortized (with such amortization based on interest at the
Interest Rate over the initial Lease Term) amount of the "Tenant Improvement
Allowance," as that term is set forth in Section 2.1 of the Tenant Work Letter
(including, if applicable, the amount of any "TIA Increase").

         11.3     WAIVER OF STATUTORY PROVISIONS. The provisions of this Lease,
including this Article 11, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building or the Project, and any statute or regulation of
the State of California, including, without limitation, Sections 1932(2) and
1933(4) of the California Civil Code, with respect to any rights or obligations
concerning damage or destruction in the absence of an express agreement between
the parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all or
any part of the Premises, the Building or the Project.

                                   ARTICLE 12

                                    NONWAIVER

         No provision of this Lease shall be deemed waived by either party
hereto unless expressly waived in a writing signed thereby. The waiver by either
party hereto of any breach of any term, covenant or condition herein contained
shall not be deemed to be a waiver of any subsequent breach of same or any other
term, covenant or condition herein contained. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, 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. No acceptance of a lesser amount than the Rent herein stipulated shall be
deemed a waiver of Landlord's right to receive the full amount due, nor shall
any endorsement or statement on any check or payment or any letter accompanying
such check or payment be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord's right to recover
the full amount due. No receipt of monies by Landlord from Tenant after the
termination of this Lease shall in any way alter the length of the Lease Term or
of Tenant's right of possession hereunder, or after the giving of any notice
shall reinstate, continue or extend the Lease Term or affect any notice given
Tenant prior to the receipt of such monies, it being agreed that after the
service of notice or the commencement of a suit, or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due, and
the payment of said Rent shall not waive or affect said notice, suit or
judgment.

                                      -47-

<PAGE>

                                   ARTICLE 13

                                  CONDEMNATION

         If the whole or any part of the Premises, Building or Project shall be
taken by power of eminent domain or condemned by any competent authority for any
public or quasi-public use or purpose, or if any adjacent property or street
shall be so taken or condemned, or reconfigured or vacated by such authority in
such manner as to require the use, reconstruction or remodeling of any part of
the Premises, Building or Project, or if Landlord shall grant a deed or other
instrument in lieu of such taking by eminent domain or condemnation, Landlord
shall have the option to terminate this Lease effective as of the date
possession is required to be surrendered to the authority. If more than twenty
percent (20%) of the rentable square feet of the Premises is taken or more than
twenty percent (20%) of Tenant's parking spaces are taken (and Landlord does not
provide Tenant with substitute parking spaces within thirty (30) days after such
taking sufficient to cause the total number of parking spaces available to
Tenant to be at least eighty percent (80%) of Tenant's total allocated parking
spaces), or if access to the Premises is substantially impaired, in each case
for a period in excess of one hundred eighty (180) days, Tenant shall have the
option to terminate this Lease effective as of the date possession is required
to be surrendered to the authority. Tenant shall not because of such taking
assert any claim against Landlord or the authority for any compensation because
of such taking and Landlord shall be entitled to the entire award or payment in
connection therewith, except that Tenant shall have the right to file any
separate claim available to Tenant for any taking of Tenant's personal property
and fixtures belonging to Tenant and removable by Tenant upon expiration of the
Lease Term pursuant to the terms of this Lease, and for moving expenses, so long
as such claims do not diminish the award available to Landlord, its ground
lessor with respect to the Building or Project or its mortgagee, and such claim
is payable separately to Tenant. All Rent shall be apportioned as of the date of
such termination. If any part of the Premises shall be taken, and this Lease
shall not be so terminated, the Rent shall be proportionately abated. Tenant
hereby waives any and all rights it might otherwise have pursuant to Section
1265.130 of The California Code of Civil Procedure. Notwithstanding anything to
the contrary contained in this Article 13, in the event of a temporary taking of
all or any portion of the Premises for a period of one hundred and eighty (180)
days or less, then this Lease shall not terminate but the Base Rent and the
Additional Rent shall be abated for the period of such taking in proportion to
the ratio that the amount of rentable square feet of the Premises taken bears to
the total rentable square feet of the Premises. Landlord shall be entitled to
receive the entire award made in connection with any such temporary taking.

                                   ARTICLE 14

                            ASSIGNMENT AND SUBLETTING

         14.1     TRANSFERS. Tenant shall not, without the prior written consent
of Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien
to attach to, or otherwise transfer, this Lease or any interest hereunder,
permit any assignment, or other transfer of this Lease or any interest hereunder
by operation of law, sublet the Premises or any part thereof, or enter into any
license or concession agreements or otherwise permit the occupancy or use of the
Premises or any part thereof by any persons other than Tenant and its employees
and contractors

                                      -48-

<PAGE>

(all of the foregoing are hereinafter sometimes referred to collectively as
"TRANSFERS" and any person to whom any Transfer is made or sought to be made is
hereinafter sometimes referred to as a "TRANSFEREE"). If Tenant desires
Landlord's consent to any Transfer, Tenant shall notify Landlord in writing,
which notice (the "TRANSFER NOTICE") shall include (i) the proposed effective
date of the Transfer, which shall not be less than fifteen (15) days nor more
than one hundred eighty (180) days after the date of delivery of the Transfer
Notice, (ii) a description of the portion of the Premises to be transferred (the
"SUBJECT SPACE"), (iii) all of the terms of the proposed Transfer and the
consideration therefor, including calculation of the "TRANSFER PREMIUM", as that
term is defined in Section 14.3 below, in connection with such Transfer, the
name and address of the proposed Transferee, and a copy of all existing executed
and/or proposed documentation pertaining to the proposed Transfer, including all
existing operative documents to be executed to evidence such Transfer or the
agreements incidental or related to such Transfer, provided that Landlord shall
have the right to require Tenant to utilize Landlord's standard Transfer
documents in connection with the documentation of such Transfer, (iv) current
financial statements of the proposed Transferee certified by an officer, partner
or owner thereof, business credit and personal references and history of the
proposed Transferee and any other information reasonably required by Landlord
which will enable Landlord to determine the financial responsibility, character,
and reputation of the proposed Transferee, nature of such Transferee's business
and proposed use of the Subject Space and (v) an executed estoppel certificate
from Tenant in the form attached hereto as EXHIBIT F. Any Transfer made without
Landlord's prior written consent shall, at Landlord's option, be null, void and
of no effect, and shall, at Landlord's option, constitute a default by Tenant
under this Lease. Whether or not Landlord consents to any proposed Transfer,
Tenant shall pay Landlord's reasonable review and processing fees, as well as
any reasonable professional fees (including, without limitation, attorneys',
accountants', architects', engineers' and consultants' fees) incurred by
Landlord, not to exceed One Thousand Dollars ($1,000.00) per proposed Transfer,
within thirty (30) days after written request by Landlord.

         14.2     LANDLORD'S CONSENT. Landlord shall not unreasonably withhold
its consent to any proposed Transfer of the Subject Space to the Transferee on
the terms specified in the Transfer Notice. Without limitation as to other
reasonable grounds for withholding consent, the parties hereby agree that it
shall be reasonable under this Lease and under any applicable law for Landlord
to withhold consent to any proposed Transfer where one or more of the following
apply:

                  14.2.1   The Transferee is of a character or reputation or
engaged in a business which is not consistent with the quality of the Building
or the Project, or would be a significantly less prestigious occupant of the
Building than Tenant;

                  14.2.2   The Transferee intends to use the Subject Space for
purposes which are not permitted under this Lease;

                  14.2.3   The Transferee is either a governmental agency or
instrumentality thereof which is inconsistent with the character of the Project
as a first-class office project;

                                      -49-

<PAGE>

                  14.2.4   The proposed Transfer is for more than 12,000
rentable square feet and the Transferee is not a party of reasonable financial
worth and/or financial stability in light of the responsibilities to be
undertaken in connection with the Transfer on the date consent is requested;

                  14.2.5   The proposed Transfer would cause a violation of
another lease for space in the Project, or would give an occupant of the Project
a right to cancel its lease;

                  14.2.6   The terms of the proposed Transfer will allow the
Transferee to exercise a right of renewal, right of expansion, right of first
offer, or other similar right held by Tenant (or will allow the Transferee to
occupy space leased by Tenant pursuant to any such right); or

                  14.2.7   Either the proposed Transferee, or any person or
entity which directly or indirectly, controls, is controlled by, or is under
common control with, the proposed Transferee, (i) occupies space in the Project
at the time of the request for consent, or (ii) is negotiating with Landlord to
lease space in the Project at such time, or (iii) has negotiated with Landlord
during the six (6)-month period immediately preceding the Transfer Notice, but
with regard to each of conditions (i), (ii) and (iii) above, only to the extent
Landlord has comparable space in the Project for such proposed Transferee;
provided, however, if Landlord withholds its consent to a transfer pursuant to
this Section 14.2.7, then Landlord shall be required to recapture the Subject
Space pursuant to the terms and conditions of Section 14.4, below, or

                  14.2.8   The Transferee does not intend to occupy at least
sixty percent (60%) of the usable Subject Space and conduct its business
therefrom for a substantial portion of the term of the Transfer.

         If Landlord consents to any Transfer pursuant to the terms of this
Section 14.2 (and does not exercise any recapture rights Landlord may have under
Section 14.4 of this Lease), Tenant may within six (6) months after Landlord's
consent, but not later than the expiration of said six-month period, enter into
such Transfer of the Premises or portion thereof, upon substantially the same
terms and conditions as are set forth in the Transfer Notice furnished by Tenant
to Landlord pursuant to Section 14.1 of this Lease, provided that if there are
any changes in the terms and conditions from those specified in the Transfer
Notice (i) such that Landlord would initially have been entitled to refuse its
consent to such Transfer under this Section 14.2, or (ii) which would cause the
proposed Transfer to be more favorable to the Transferee than the terms set
forth in Tenant's original Transfer Notice, Tenant shall again submit the
Transfer to Landlord for its approval and other action under this Article 14
(including Landlord's right of recapture, if any, under Section 14.4 of this
Lease). Notwithstanding anything to the contrary in this Lease, if Tenant or any
proposed Transferee claims that Landlord has unreasonably withheld or delayed
its consent under Section 14.2 or otherwise has breached or acted unreasonably
under this Article 14, their sole remedies shall be a suit for contract damages
(other than damages for injury to, or interference with, Tenant's business
including, without limitation, loss of profits, however occurring) or a
declaratory judgment and an injunction for the relief sought, and Tenant hereby
waives the provisions of Section 1995.310 of the California Civil Code, or any
successor statute, and all other remedies, including, without limitation, any
right at law or equity to terminate this Lease, on its own behalf and, to the
extent permitted under all applicable laws, on behalf of the proposed
Transferee. Tenant shall indemnify, defend and hold harmless Landlord from any
and all liability, losses, claims, damages, costs, expenses, causes of action
and proceedings involving

                                      -50-

<PAGE>

any third party or parties (including without limitation Tenant's proposed
subtenant or assignee) who claim they were damaged by Landlord's wrongful
withholding or conditioning of Landlord's consent.

         14.3     TRANSFER PREMIUM. If Landlord consents to a Transfer, as a
condition thereto which the parties hereby agree is reasonable, Tenant shall pay
to Landlord fifty percent (50%) of any "Transfer Premium," as that term is
defined in this Section 14.3, received by Tenant from such Transferee. "TRANSFER
PREMIUM" shall mean all rent, additional rent or other consideration payable by
such Transferee in connection with the Transfer in excess of the Rent and
Additional Rent payable by Tenant under this Lease during the term of the
Transfer on a per rentable square foot basis if less than all of the Premises is
transferred, after first deducting the reasonable expenses incurred by Tenant
for (i) any changes, alterations and improvements to the Premises in connection
with the Transfer, (ii) any free base rent and other economic concessions
reasonably provided to the Transferee, and (iii) any brokerage commissions and
reasonable legal fees and costs in connection with the Transfer (collectively,
the "TRANSFER CONCESSIONS"). "Transfer Premium" shall also include, but not be
limited to, key money, bonus money or other cash consideration paid by
Transferee to Tenant in connection with such Transfer, and any payment in excess
of fair market value for services rendered by Tenant to Transferee or for
assets, fixtures, inventory, equipment, or furniture transferred by Tenant to
Transferee in connection with such Transfer. In the calculations of the rent (as
it relates to the Transfer Premium calculated under this Section 14.3), the rent
paid during each annual period for the Subject Space shall be computed after
adjusting such rent to the net effective rent to be paid, after first deducting
any and all Transfer Concessions. For purposes of calculating any such effective
rent all such concessions shall be amortized on a straight-line basis over the
relevant term.

         14.4     LANDLORD'S OPTION AS TO SUBJECT SPACE. In the event that a
proposed Transfer, if consented to, would cause sixty percent (60%) or more of
the Premises to be subleased or licensed to a party (or parties) other than
Original Tenant and/or its Permitted Transferee, then notwithstanding anything
to the contrary contained in this Article 14, Landlord shall have the option, by
giving written notice to Tenant (the "RECAPTURE NOTICE") within ten (10)
business days after receipt of any Transfer Notice, to recapture the Subject
Space. Such Recapture Notice shall cancel and terminate this Lease with respect
to the Subject Space as of the date stated in the Transfer Notice as the
effective date of the proposed Transfer until the last day of the term of the
Transfer as set forth in the Transfer Notice (or at Landlord's option, shall
cause the Transfer to be made to Landlord or its agent, in which case the
parties shall execute the Transfer documentation promptly thereafter). However,
if Landlord delivers a Recapture Notice to Tenant, Tenant may, within ten (10)
days after Tenant's receipt of the Recapture Notice, deliver written notice to
Landlord indicating that Tenant is rescinding its request for consent to the
proposed Transfer, in which case such Transfer shall not be consummated and this
Lease shall remain in full force and effect as to the portion of the Premises
that was the subject of the Transfer. Tenant's failure to so notify Landlord in
writing within said ten (10) day period shall be deemed to constitute Tenant's
election to allow the Recapture Notice to be effective. In the event of a
recapture by Landlord, if this Lease shall be canceled with respect to less than
the entire Premises, the Rent reserved herein shall be prorated on the basis of
the number of rentable square feet retained by Tenant in proportion to the
number of rentable square feet contained in the Premises, and this Lease as so
amended shall continue thereafter in full force and effect, and upon request of
either party, the parties shall execute written confirmation of the same. If
Landlord declines, or fails to elect

                                      -51-

<PAGE>

within ten (10) business days to recapture the Subject Space under this Section
14.4, then, provided Landlord has consented to the proposed Transfer, Tenant
shall be entitled to proceed to transfer the Subject Space to the proposed
Transferee, subject to provisions of this Article 14.

         14.5     EFFECT OF TRANSFER. If Landlord consents to a Transfer, (i)
the TCCs of this Lease shall in no way be deemed to have been waived or
modified, (ii) such consent shall not be deemed consent to any further Transfer
by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,
promptly after execution, an original executed copy of all documentation
pertaining to the Transfer in form reasonably acceptable to Landlord, (iv)
Tenant shall furnish upon Landlord's request a complete statement, certified by
an independent certified public accountant, or Tenant's chief financial officer,
setting forth in detail the computation of any Transfer Premium Tenant has
derived and shall derive from such Transfer, and (v) no Transfer relating to
this Lease or agreement entered into with respect thereto, whether with or
without Landlord's consent, shall relieve Tenant or any guarantor of the Lease
from any liability under this Lease, including, without limitation, in
connection with the Subject Space. Landlord or its authorized representatives
shall have the right at all reasonable times to audit the books, records and
papers of Tenant relating to any Transfer, and shall have the right to make
copies thereof. If the Transfer Premium respecting any Transfer shall be found
understated, Tenant shall, within thirty (30) days after demand, pay the
deficiency, and if understated by more than five percent (5%), Tenant shall pay
Landlord's costs of such audit.

         14.6     ADDITIONAL TRANSFERS. For purposes of this Lease, the term
"TRANSFER" shall also include (i) if Tenant is a partnership, the withdrawal or
change, voluntary, involuntary or by operation of law, of fifty percent (50%) or
more of the partners, or transfer of fifty percent (50%) or more of partnership
interests, within a twelve (12)-month period, or the dissolution of the
partnership without immediate reconstitution thereof, and (ii) if Tenant is a
closely held corporation (i.e., whose stock is not publicly held and not traded
through an exchange or over the counter), (A) the dissolution, merger,
consolidation or other reorganization of Tenant or (B) the sale or other
transfer of an aggregate of fifty percent (50%) or more of the voting shares of
Tenant (other than to immediate family members by reason of gift or death),
within a twelve (12)-month period, or (C) the sale, mortgage, hypothecation or
pledge of an aggregate of fifty percent (50%) or more of the value of the
unencumbered assets of Tenant within a twelve (12)-month period.

         14.7     OCCURRENCE OF DEFAULT. Any Transfer hereunder shall be
subordinate and subject to the provisions of this Lease, and if this Lease shall
be terminated during the term of any Transfer, Landlord shall have the right to:
(i) treat such Transfer as canceled and repossess the Subject Space by any
lawful means, or (ii) require that such Transferee attorn to and recognize
Landlord as its landlord under any such Transfer. If Tenant shall be in default
under this Lease, Landlord is hereby irrevocably authorized, as Tenant's agent
and attorney-in-fact, to direct any Transferee to make all payments under or in
connection with the Transfer directly to Landlord (which Landlord shall apply
towards Tenant's obligations under this Lease) until such default is cured. Such
Transferee shall rely on any representation by Landlord that Tenant is in
default hereunder, without any need for confirmation thereof by Tenant. Upon any
assignment, the assignee shall assume in writing all obligations and covenants
of Tenant thereafter to be performed or observed under this Lease. No collection
or acceptance of rent by Landlord from any Transferee shall be deemed a waiver
of any provision of this Article 14 or the approval of

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<PAGE>

any Transferee or a release of Tenant from any obligation under this Lease,
whether theretofore or thereafter accruing. In no event shall Landlord's
enforcement of any provision of this Lease against any Transferee be deemed a
waiver of Landlord's right to enforce any term of this Lease against Tenant or
any other person. If Tenant's obligations hereunder have been guaranteed,
Landlord's consent to any Transfer shall not be effective unless the guarantor
also consents to such Transfer.

         14.8     NON-TRANSFERS. Notwithstanding anything to the contrary
contained in this Article 14, (i) an assignment or subletting of all or a
portion of the Premises to an affiliate of Tenant (an entity which is controlled
by, controls, or is under common control with, Tenant), (ii) an assignment of
the Premises to an entity which acquires all or substantially all of the assets
or interests (partnership, stock or other) of Tenant, or (iii) an assignment of
the Premises to an entity which is the surviving/resulting entity of a merger or
consolidation of Tenant, shall not be deemed a Transfer under this Article 14,
provided that (A) Tenant notifies Landlord of any such assignment or sublease
and promptly supplies Landlord with any documents or information requested by
Landlord regarding such assignment or sublease or such affiliate, (B) such
transferee has, in Landlord's reasonable determination, financial strength equal
to or greater than Original Tenant, and (c) such assignment or sublease is not a
subterfuge by Tenant to avoid its obligations under this Lease. The transferee
under a transfer specified in items (i), (ii) or (iii) above shall be referred
to in this Lease as a "PERMITTED TRANSFEREE." "CONTROL," as used in this Section
14.8, shall mean the ownership, directly or indirectly, of more than fifty
percent (50%) of the voting securities of, or the power to direct or cause the
direction of its affairs, whether through ownership or voting securities, or by
contract or otherwise, any person or entity.

         14.9     ADDITIONAL OCCUPANTS. Notwithstanding any contrary provision
of this Lease, Tenant may, upon written notice to Landlord, permit (a) the space
located within the Building designed as the cafeteria, and (b) up to a total of
twenty percent (20%) of the remaining Premises, to be occupied by (i) licensees
and vendors providing "out-sourced" services to Tenant's business operation in
the Premises, and (ii) persons performing services pursuant to a joint venture
or other business alliance with Tenant (each, a "PERMITTED OCCUPANT" and
collectively, the "PERMITTED OCCUPANTS"); provided, however, (A) such Permitted
Occupant shall not occupy a separately demised portion of the Premises; (B) all
Permitted Occupants shall be of a character and reputation consistent with the
first-class quality of the Building and the Project; and (C) such occupancy
shall not be a subterfuge by Tenant to avoid its obligations under this Lease,
or the restrictions on Transfers pursuant to Article 14 of this Lease. Tenant
shall promptly supply Landlord with any documents or information reasonably
requested by Landlord regarding any such Permitted Occupant. Any Permitted
Occupant permitted under this Section 14 shall not be deemed a Transfer under
Article 14 of this Lease. Notwithstanding the foregoing, no such occupancy by a
Permitted Occupant shall relieve Tenant from any liability under this Lease, and
Tenant hereby agrees to indemnify, defend, protect and hold harmless the
Landlord Parties from any and all loss, cost, damage, expense and liability
(including without limitation court costs and reasonable attorneys' fees)
incurred in connection with any Permitted Occupant.

         14.10    CO-LOCATION OF EQUIPMENT. To the extent that such installation
(i) constitutes a Trade Fixture and/or a Cosmetic Alteration pursuant to the
terms of Section 8.1, above, (ii) relates to Tenant's business operations in the
Premises, and (iii) is not a subterfuge by Tenant

                                      -53-

<PAGE>

to avoid its obligations under this Lease (or the restrictions on Transfers
pursuant to the terms of Article 14 of this Lease), then Tenant shall not be
required to obtain Landlord's consent (but Tenant shall provide Landlord with
ten (10) days prior written notice thereof) for the installation of equipment
(the "CO-LOCATION EQUIPMENT") in the Premises by any of Tenant's customers
pursuant to a written co-location agreement between Tenant and such customer;
provided, however, the installation and operation of any such Co-Location
Equipment shall be subject to the terms and conditions of Section 6.1 of this
Lease, above; provided further, however, the removal of such Co-Location
Equipment shall be subject to the TCCs of Section 8.5 and Articles 15 and 16.
Notwithstanding anything to the contrary in this Lease, and subject to
Landlord's reasonable release and indemnity requirements relating to such entry,
for a period of fifteen (15) days following any early termination of the Lease
(i.e., a termination which occurs prior to the Lease Expiration Date), Landlord
shall provide the representative of any applicable customer of Tenant the
ability to enter upon the Premises during normal business hours and to remove
from the Premises that equipment which is clearly marked as the property of such
customer. Tenant hereby agrees to indemnify, defend, protect and hold harmless
the Landlord Parties from any and all loss, cost, damage, expense and liability
(including without limitation court costs and reasonable attorneys' fees)
incurred by Landlord in connection with, or arising from, any Co-Location
Equipment.

                                   ARTICLE 15

                      SURRENDER OF PREMISES; OWNERSHIP AND
                            REMOVAL OF TRADE FIXTURES

         15.1     SURRENDER OF PREMISES. No act or thing done by Landlord or any
agent or employee of Landlord during the Lease Term shall be deemed to
constitute an acceptance by Landlord of a surrender of the Premises unless such
intent is specifically acknowledged in writing by Landlord. The delivery of keys
to the Premises to Landlord or any agent or employee of Landlord shall not
constitute a surrender of the Premises or effect a termination of this Lease,
whether or not the keys are thereafter retained by Landlord, and notwithstanding
such delivery Tenant shall be entitled to the return of such keys at any
reasonable time upon request until this Lease shall have been properly
terminated. The voluntary or other surrender of this Lease by Tenant, whether
accepted by Landlord or not, or a mutual termination hereof, shall not work a
merger, and at the option of Landlord shall operate as an assignment to Landlord
of all subleases or subtenancies affecting the Premises or terminate any or all
such sublessees or subtenancies.

         15.2     REMOVAL OF TENANT PROPERTY BY TENANT. Upon the expiration of
the Lease Term, or upon any earlier termination of this Lease, Tenant shall,
subject to the provisions of this Article 15, quit and surrender possession of
the Premises to Landlord in as good order and condition as when Tenant took
possession and as thereafter improved by Landlord and/or Tenant, reasonable wear
and tear and repairs which are specifically made the responsibility of Landlord
hereunder excepted. Upon such expiration or termination, Tenant shall, without
expense to Landlord, remove or cause to be removed from the Premises all debris
and rubbish, and such items of furniture, equipment, business and trade
fixtures, free-standing cabinet work, movable partitions and other articles of
personal property owned by Tenant or installed or placed by Tenant at its
expense in the Premises, and such similar articles of any other persons claiming

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under Tenant, as Landlord may, in its sole discretion, require to be removed,
and Tenant shall repair at its own expense all damage to the Premises and
Building resulting from such removal.

                                   ARTICLE 16

                                  HOLDING OVER

         If Tenant holds over after the expiration of the Lease Term or earlier
termination thereof, with or without the express or implied consent of Landlord,
such tenancy shall be from month-to-month only, and shall not constitute a
renewal hereof or an extension for any further term, and in such case Base Rent
shall be payable at a monthly rate (the "HOLD OVER BASE RENT") equal to one
hundred fifty percent (150%) of the Base Rent applicable during the last rental
period of the Lease Term under this Lease; provided, however, for the first
thirty (30) days only following the expiration or earlier termination of the
Lease Term, Tenant shall not be required to pay Hold Over Base Rent applicable
to any full floor of the Building completely vacated and surrendered to Landlord
pursuant to the terms and conditions of Article 15, above; provided, further,
however, following the expiration of such 30-day period, if Tenant continues its
hold over in any portion of the Premises, then Tenant shall be required to pay
Hold Over Base Rent applicable to the entire Premises. Such month-to-month
tenancy shall be subject to every other applicable term, covenant and agreement
contained herein. Notwithstanding the foregoing, Original Tenant and any
Permitted Transferee (but only to the extent such Permitted Transferee has, in
Landlord's reasonable determination, financial strength equal to or greater than
Original Tenant) shall have the one-time right, upon notice (the "HOLDOVER
NOTICE") to Landlord not less than twelve (12) months prior to the expiration of
the then Lease Term, to extend the Lease Term for a period of up to six (6)
months (the "PERMITTED HOLDOVER TERM"), in which case the Rent payable by Tenant
during such Permitted Holdover Term shall equal the product of (A) the Rent
applicable during the last monthly rental period of the Lease Term under this
Lease, and (B) a percentage equal to one hundred percent (100%) during the first
three (3) months immediately following the expiration or earlier termination of
the Lease Term, and one hundred fifty percent (150%) thereafter. The right of
Tenant to extend the Lease Term as provided in this Article 16 may not be
exercised if, as of the date Tenant delivers the Holdover Notice to Landlord, or
as of the commencement of such Permitted Holdover Term, Tenant is in material or
economic default under this Lease (beyond any applicable notice and cure
periods) or if Tenant has previously been in material or economic default under
this Lease (beyond any applicable notice and cure periods) more than twice
during the previous twelve (12) month period. Except with respect to the
Permitted Holdover Term, nothing contained in this Article 16 shall be construed
as consent by Landlord to any holding over by Tenant, and Landlord expressly
reserves the right to require Tenant to surrender possession of the Premises to
Landlord as provided in this Lease upon the expiration or other termination of
this Lease. The provisions of this Article 16 shall not be deemed to limit or
constitute a waiver of any other rights or remedies of Landlord provided herein
or at law. Except as otherwise specifically provided for in this Article 16 with
regard to a Permitted Holdover Term, if Tenant fails to surrender the Premises
upon the termination or expiration of this Lease (or upon the expiration of the
Permitted Holdover Term, if any), in addition to any other liabilities to
Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold
Landlord harmless from all loss, costs (including reasonable attorneys' fees)
and liability resulting from such failure, including, without limiting the
generality of the

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<PAGE>

foregoing, any claims made by any succeeding tenant founded upon such failure to
surrender and any lost profits to Landlord resulting therefrom.

                                   ARTICLE 17

                              ESTOPPEL CERTIFICATES

         Within ten (10) business days following a request in writing by
Landlord, Tenant shall execute, acknowledge and deliver to Landlord an estoppel
certificate, which, as submitted by Landlord, shall be substantially in the form
of EXHIBIT F, attached hereto (or such other form as may be required by any
prospective mortgagee or purchaser of the Project, or any portion thereof),
indicating therein any exceptions thereto that may exist at that time, and shall
also contain any other factual information reasonably requested by Landlord or
Landlord's mortgagee or prospective mortgagee. Any such certificate may be
relied upon by any prospective mortgagee or purchaser of all or any portion of
the Project. At any time during the Lease Term, Landlord may require Tenant to
provide Landlord with a current financial statement and financial statements of
the two (2) years prior to the current financial statement year. Such statements
shall be prepared in accordance with generally accepted accounting principles
and, if such is the normal practice of Tenant, shall be audited by an
independent certified public accountant. Failure of Tenant to timely execute,
acknowledge and deliver such estoppel certificate or other instruments shall
constitute an acceptance of the Premises and an acknowledgment by Tenant that
statements included in the estoppel certificate are true and correct, without
exception.

                                   ARTICLE 18

                                  SUBORDINATION

         This Lease shall be subject and subordinate to all present and future
ground or underlying leases of the Building or Project and to the lien of any
mortgage, trust deed or other encumbrances now or hereafter in force against the
Building or Project or any part thereof, if any, and to all renewals,
extensions, modifications, consolidations and replacements thereof, and to all
advances made or hereafter to be made upon the security of such mortgages or
trust deeds, unless the holders of such mortgages, trust deeds or other
encumbrances, or the lessors under such ground lease or underlying leases,
require in writing that this Lease be superior thereto. Landlord's delivery to
Tenant of commercially reasonable non-disturbance agreement(s) (the
"NONDISTURBANCE AGREEMENT") in favor of Tenant from any ground lessor, mortgage
holders or lien holders of Landlord who later come into existence at any time
prior to the expiration of the Lease Term shall be in consideration of, and a
condition precedent to, Tenant's agreement to be bound by the TCCs of this
Article 18. Subject to Tenant's receipt of such a Nondisturbance Agreement,
Tenant covenants and agrees in the event any proceedings are brought for the
foreclosure of any such mortgage or deed in lieu thereof (or if any ground lease
is terminated), to attorn, without any deductions or set-offs whatsoever, to the
lienholder or purchaser or any successors thereto upon any such foreclosure sale
or deed in lieu thereof (or to the ground lessor), if so requested to do so by
such purchaser or lienholder or ground lessor, and to recognize such purchaser
or lienholder or ground lessor as the lessor under this Lease, provided such
lienholder or purchaser or ground lessor shall agree to accept this Lease and
not disturb

                                      -56-

<PAGE>

Tenant's occupancy, so long as Tenant timely pays the rent and observes and
performs the TCCs of this Lease to be observed and performed by Tenant.
Landlord's interest herein may be assigned as security at any time to any
lienholder. Tenant shall, within five (5) business days of request by Landlord,
execute such further instruments or assurances as Landlord may reasonably deem
necessary (consistent with customary requirements of commercial lenders in
California) to evidence or confirm the subordination or superiority of this
Lease to any such mortgages, trust deeds, ground leases or underlying leases.
Tenant waives the provisions of any current or future statute, rule or law which
may give or purport to give Tenant any right or election to terminate or
otherwise adversely affect this Lease and the obligations of the Tenant
hereunder in the event of any foreclosure proceeding or sale.

                                   ARTICLE 19

                               DEFAULTS; REMEDIES

         19.1     EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute a default of this Lease by Tenant:

                  19.1.1   Any failure by Tenant to pay any Rent or any other
charge required to be paid under this Lease, or any part thereof, when due
unless such failure is cured within five (5) business days after notice; or

                  19.1.2   Except where a specific time period is otherwise set
forth for Tenant's performance in this Lease, in which event the failure to
perform by Tenant within such time period shall be a default by Tenant under
this Section 19.1.2, any failure by Tenant to observe or perform any other
provision, covenant or condition of this Lease to be observed or performed by
Tenant where such failure continues for thirty (30) days after written notice
thereof from Landlord to Tenant; provided that if the nature of such default is
such that the same cannot reasonably be cured within a thirty (30) day period,
Tenant shall not be deemed to be in default if it diligently commences such cure
within such period and thereafter diligently proceeds to rectify and cure such
default, but in no event exceeding a period of time in excess of ninety (90)
days after written notice thereof from Landlord to Tenant; or

                  19.1.3   To the extent permitted by law, a general assignment
by Tenant or any guarantor of this Lease for the benefit of creditors, or the
taking of any corporate action in furtherance of bankruptcy or dissolution
whether or not there exists any proceeding under an insolvency or bankruptcy
law, or the filing by or against Tenant or any guarantor of any proceeding under
an insolvency or bankruptcy law, unless in the case of a proceeding filed
against Tenant or any guarantor the same is dismissed within sixty (60) days, or
the appointment of a trustee or receiver to take possession of all or
substantially all of the assets of Tenant or any guarantor, unless possession is
restored to Tenant or such guarantor within thirty (30) days, or any execution
or other judicially authorized seizure of all or substantially all of Tenant's
assets located upon the Premises or of Tenant's interest in this Lease, unless
such seizure is discharged within thirty (30) days; or

                                      -57-

<PAGE>

                  19.1.4   The failure by Tenant to observe or perform according
to the provisions of Articles 5, 14, 17 or 18 of this Lease where such failure
continues for more than five (5) business days after notice from Landlord; or

                  19.1.5   Any economic default by Tenant (beyond any applicable
notice and cure period set forth therein) under the Fair Isaac Building 2 Lease,
if any.

         The notice periods provided herein are in lieu of, and not in addition
to, any notice periods provided by law.

         19.2     REMEDIES UPON DEFAULT. Upon the occurrence of any event of
default by Tenant, Landlord shall have, in addition to any other remedies
available to Landlord at law or in equity (all of which remedies shall be
distinct, separate and cumulative), the option to pursue any one or more of the
following remedies, each and all of which shall be cumulative and nonexclusive,
without any notice or demand whatsoever.

                  19.2.1   Terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord, and if Tenant fails to do so,
Landlord may, without prejudice to any other remedy which it may have for
possession or arrearages in rent, enter upon and take possession of the Premises
and expel or remove Tenant and any other person who may be occupying the
Premises or any part thereof, without being liable for prosecution or any claim
or damages therefor; and Landlord may recover from Tenant the following:

                           (a)      The worth at the time of award of any unpaid
rent which has been earned at the time of such termination; plus

                           (b)      The worth at the time of award of the amount
by which the unpaid rent which would have been earned after termination until
the time of award exceeds the amount of such rental loss that Tenant proves
could have been reasonably avoided; plus

                           (c)      The worth at the time of award of the amount
by which the unpaid rent for the balance of the Lease Term after the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus

                           (d)      Any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to perform
its obligations under this Lease or which in the ordinary course of things would
be likely to result therefrom, specifically including but not limited to,
brokerage commissions and advertising expenses incurred, expenses of remodeling
the Premises or any portion thereof for a new tenant, whether for the same or a
different use, and any special concessions made to obtain a new tenant; and

                           (e)      At Landlord's election, such other amounts
in addition to or in lieu of the foregoing as may be permitted from time to time
by applicable law.

         The term "RENT" as used in this Section 19.2 shall be deemed to be and
to mean all sums of every nature required to be paid by Tenant pursuant to the
terms of this Lease, whether to Landlord or to others. As used in Sections
19.2.1(a) and (b), above, the "worth at the time of award" shall be computed by
allowing interest at the rate set forth in Article 25 of this Lease, but

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in no case greater than the maximum amount of such interest permitted by law. As
used in Section 19.2.1(c), above, the "worth at the time of award" shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).

                  19.2.2   Landlord shall have the remedy described in
California Civil Code Section 1951.4 (lessor may continue lease in effect after
lessee's breach and abandonment and recover rent as it becomes due, if lessee
has the right to sublet or assign, subject only to reasonable limitations).
Accordingly, if Landlord does not elect to terminate this Lease on account of
any default by Tenant, Landlord may, from time to time, without terminating this
Lease, enforce all of its rights and remedies under this Lease, including the
right to recover all rent as it becomes due.

                  19.2.3   Landlord shall at all times have the rights and
remedies (which shall be cumulative with each other and cumulative and in
addition to those rights and remedies available under Sections 19.2.1 and
19.2.2, above, or any law or other provision of this Lease), without prior
demand or notice except as required by applicable law, to seek any declaratory,
injunctive or other equitable relief, and specifically enforce this Lease, or
restrain or enjoin a violation or breach of any provision hereof.

         19.3     SUBLEASES OF TENANT. Whether or not Landlord elects to
terminate this Lease on account of any default by Tenant, as set forth in this
Article 19, Landlord shall have the right to terminate any and all subleases,
licenses, concessions or other consensual arrangements for possession entered
into by Tenant and affecting the Premises or may, in Landlord's sole discretion,
succeed to Tenant's interest in such subleases, licenses, concessions or
arrangements. In the event of Landlord's election to succeed to Tenant's
interest in any such subleases, licenses, concessions or arrangements, Tenant
shall, as of the date of notice by Landlord of such election, have no further
right to or interest in the rent or other consideration receivable thereunder.

         19.4     FORM OF PAYMENT AFTER DEFAULT. Following the occurrence of
three (3) monetary defaults by Tenant within any eighteen (18) consecutive month
time period, Landlord shall have the right to require that any or all subsequent
amounts paid by Tenant to Landlord hereunder, whether to cure the default in
question or otherwise, be paid in the form of cash, money order, cashier's or
certified check drawn on an institution acceptable to Landlord, or by other
means approved by Landlord, notwithstanding any prior practice of accepting
payments in any different form.

         19.5     EFFORTS TO RELET. No re-entry or repossession, repairs,
maintenance, changes, alterations and additions, reletting, appointment of a
receiver to protect Landlord's interests hereunder, or any other action or
omission by Landlord shall be construed as an election by Landlord to terminate
this Lease or Tenant's right to possession, or to accept a surrender of the
Premises, nor shall same operate to release Tenant in whole or in part from any
of Tenant's obligations hereunder, unless express written notice of such
intention is sent by Landlord to Tenant. Tenant hereby irrevocably waives any
right otherwise available under any law to redeem or reinstate this Lease.

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<PAGE>

         19.6     LANDLORD DEFAULT. Notwithstanding anything to the contrary set
forth in this Lease, Landlord shall be in default in the performance of any
obligation required to be performed by Landlord pursuant to this Lease if
Landlord fails to perform such obligation within thirty (30) days after the
receipt of notice from Tenant specifying in detail Landlord's failure to
perform; provided, however, if the nature of Landlord's obligation is such that
more than thirty (30) days are required for its performance, then Landlord shall
not be in default under this Lease if it shall commence such performance within
such thirty (30) day period and thereafter diligently pursues the same to
completion. Upon any such default by Landlord under this Lease, Tenant may,
except as otherwise specifically provided in this Lease to the contrary,
exercise any of its rights provided at law or in equity. Any award from a court
or arbitrator in favor of Tenant requiring payment by Landlord which is not paid
by Landlord within the time period directed by such award, may be offset by
Tenant from Rent next due and payable under this Lease; provided, however,
Tenant may not deduct the amount of the award against more than fifty percent
(50%) of Base Rent next due and owing (until such time as the entire amount of
such judgment is deducted) to the extent following a foreclosure or a
deed-in-lieu of foreclosure; provided further, however, any amount which cannot
be fully deducted by Tenant from Base Rent in the initial one (1)-month period
following such award shall bear interest at the Interest Rate.

                                   ARTICLE 20

                           COVENANT OF QUIET ENJOYMENT

         Landlord covenants that Tenant, so long as Tenant is not in default of
this Lease (beyond any applicable notice and cure period), shall, during the
Lease Term, peaceably and quietly have, hold and enjoy the Premises subject to
the TCCs, provisions and agreements hereof without interference by any persons
lawfully claiming by or through Landlord. The foregoing covenant is in lieu of
any other covenant express or implied.

                                   ARTICLE 21

                                SECURITY DEPOSIT

         Concurrent with Tenant's execution of this Lease, Tenant shall deposit
with Landlord a security deposit (the "SECURITY DEPOSIT") in the amount set
forth in Section 8 of the Summary, as security for the faithful performance by
Tenant of all of its obligations under this Lease; provided, however, Tenant
shall not be required to deliver such Security Deposit so long as Tenant is not
in default (beyond any applicable notice and cure period) of any of Tenant's
financial covenants under Tenant's then-current master credit facility, if any,
to the extent the same has a term of at least twenty-four (24) months, is for an
amount of at least Seventy-Five Million Dollars ($75,000,000.00), and as the
same may be amended or replaced by a materially equivalent credit facility (the
"MASTER CREDIT FACILITY"); provided further, however, in the event the
issuer/grantor of such Master Credit Facility waives any such financial
covenant, then such financial covenant shall be deemed waived for purposes of
this Article 21. To the extent Tenant is required to provide Landlord with the
Security Deposit pursuant to the foregoing sentence, Tenant shall deliver such
Security Deposit to Landlord within five (5) business days following demand
therefor. If Tenant defaults with respect to any provisions of this Lease,
including, but not limited to, the provisions relating to the payment of Rent,
the removal of property and the

                                      -60-

<PAGE>

repair of resultant damage, Landlord may, without notice to Tenant, but shall
not be required to apply all or any part of the Security Deposit for the payment
of any Rent or any other sum in default and Tenant shall, upon demand therefor,
restore the Security Deposit to its original amount. Any unapplied portion of
the Security Deposit shall be returned to Tenant, or, at Landlord's option, to
the last assignee of Tenant's entire interest hereunder, within sixty (60) days
following the expiration of the Lease Term. Tenant shall not be entitled to any
interest on the Security Deposit; provided, however, to the extent any unapplied
portion of the Security Deposit is not returned to Tenant (or its applicable
assignee) within sixty (60) days following the expiration of the Lease Term
pursuant to the immediately preceding sentence, then Tenant shall be entitled to
interest, at the Interest Rate, allocable to such unapplied portion of the
Security Deposit commencing on the day immediately following such sixty (60) day
period and ending upon the day such unapplied portion of the Security Deposit is
returned to Tenant (or its applicable assignee). Tenant hereby waives the
provisions of Section 1950.7 of the California Civil Code, or any successor
statute.

                                   ARTICLE 22

                          TELECOMMUNICATIONS EQUIPMENT

         At any time during the Lease Term, subject to the TCCs of this Article
22 and Article 8 of this Lease, Tenant shall have the exclusive right to
install, at Tenant's sole cost and expense, but without the payment of any Rent
or a license or similar fee or charge, satellite dish(s), antenna(s), microwave
antenna(s), and/or other equipment servicing the business conducted by Tenant
from within the Premises (all such equipment, including non-telecommunication
equipment is, for the sake of convenience, defined collectively as the
"TELECOMMUNICATIONS EQUIPMENT") upon up to eighty percent (80%) of the usable
space on the roof of the Building ("TENANT'S ROOFTOP SPACE") in a configuration
to be mutually and reasonably determined by Landlord and Tenant. The physical
appearance and the size of the Telecommunications Equipment shall be subject to
Landlord's reasonable approval, the particular location of any such installation
of the Telecommunications Equipment shall be designated by Tenant subject to
Landlord's reasonable approval and Landlord may require Tenant to install
screening around such Telecommunications Equipment, at Tenant's sole cost and
expense, as reasonably designated by Landlord. Tenant shall maintain such
Telecommunications Equipment, at Tenant's sole cost and expense. In the event
Tenant elects to exercise its right to install the Telecommunication Equipment,
then Tenant shall give Landlord prior notice thereof. Tenant shall reimburse to
Landlord the actual costs reasonably incurred by Landlord in approving such
Telecommunications Equipment, provided, however, such reimbursement shall not
exceed Five Hundred and No/100 Dollars ($500.00) per approval. Tenant shall
remove such Telecommunications Equipment upon the expiration or earlier
termination of this Lease and shall return the affected portion of the rooftop
and the Building to the condition the rooftop and the Building would have been
in had no such Telecommunications Equipment been installed (reasonable wear and
tear accepted). Such Telecommunications Equipment shall be installed pursuant to
plans and specifications approved by Landlord, which approval will not be
unreasonably withheld, conditioned, or delayed. Such Telecommunications
Equipment shall, in all instances, comply with applicable governmental laws,
codes, rules and regulations, and CC&Rs. Tenant shall not be entitled to license
its Communication Equipment to any unrelated third party (other than a Permitted
Transferee in connection with a Transfer), nor shall Tenant be

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permitted to receive any revenues, fees or any other consideration (except
pursuant to charges for Tenant's business services which are provided via such
Telecommunications Equipment) for the use of such Telecommunication Equipment by
an unrelated third party. Tenant's right to install such Telecommunication
Equipment shall be exclusive with regard to Tenant's Rooftop Space; provided,
however, Tenant hereby expressly acknowledges Landlord's continued right to
itself utilize the remaining rooftop space; provided, however, such Landlord use
shall not materially interfere with (or preclude the installation of) Tenant's
Telecommunications Equipment.

                                   ARTICLE 23

                                      SIGNS

         23.1     FULL FLOORS. Subject to Landlord's prior written approval, in
its reasonable discretion, and provided all signs are in keeping with the
quality, design and style of the Building and Project, Tenant, if the Premises
comprise an entire floor of the Building, at its sole cost and expense, may
install identification signage anywhere in the Premises including in the
elevator lobby of the Premises, provided that such signs must not be visible
from the exterior of the Building.

         23.2     MULTI-TENANT FLOORS. If other tenants occupy space on the
floor on which all or a portion of the Premises is located, Tenant's identifying
signage for such multi-tenant floor shall be provided by Landlord, at Tenant's
cost, and such signage shall be comparable to that used by Landlord for other
similar floors in the Building and shall comply with Landlord's Building
standard signage program.

         23.3     PROHIBITED SIGNAGE AND OTHER ITEMS. Any signs, notices, logos,
pictures, names or advertisements which are installed and that have not been
separately approved by Landlord may be removed without notice by Landlord at the
sole expense of Tenant. Except as expressly set forth in Section 23.4, below,
Tenant may not install any signs on the exterior or roof of the Project or the
Common Areas. Any signs, window coverings, or blinds (even if the same are
located behind the Landlord-approved window coverings for the Building), or
other items visible from the exterior of the Premises or Building, shall be
subject to the prior approval of Landlord, in its sole discretion.

         23.4     TENANT'S SIGNAGE. Tenant shall be entitled to install the
following signage in connection with Tenant's lease of the Premises
(collectively, the "TENANT'S SIGNAGE"):

                           (i)      Exclusive Building-top signage consisting of
                                    either (A) one (1) building-top sign not to
                                    exceed 150 square feet, or (B) two (2)
                                    building-top signs, neither of which shall
                                    exceed 100 square feet, which building-top
                                    sign(s) shall identify Tenant's name or logo
                                    and be located at the top of the Building,
                                    together with two (2) eyebrow signs, each of
                                    which shall be located over the primary
                                    entrances into the Building, all as more
                                    particularly identified on EXHIBIT A-1
                                    attached hereto; and

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                           (ii)     One (1) exclusive monument sign adjacent to
                                    the Building at a particular location to be
                                    mutually and reasonably agreed to between
                                    the parties (the "BUILDING TOMBSTONE SIGN"),
                                    as more particularly identified on EXHIBIT
                                    A-1 attached hereto; provided, however,
                                    Landlord and Tenant hereby acknowledge and
                                    agree that the upper portion of such
                                    Building Tombstone Sign shall have
                                    Project-standard Project identification
                                    signage (i.e. "Kilroy Centre Del Mar);
                                    provided further, however, Landlord shall be
                                    able to locate its standard identification
                                    signage on the Building Tombstone Sign
                                    (below, and with a relative size equal to no
                                    greater than twenty-five percent (25%) of,
                                    Tenant's signage thereon); and

                           (iii)    Exclusive corporate flags consisting of up
                                    to three (3) flag poles at a location to be
                                    mutually and reasonably agreed to between
                                    the parties.

                  23.4.1   SPECIFICATIONS AND PERMITS. Tenant's Signage shall
set forth Tenant's name and logo as determined by Tenant in its sole discretion;
provided, however, in no event shall Tenant's Signage include an "Objectionable
Name," as that term is defined in Section 23.4.2, of this Lease. The graphics,
materials, color, design, lettering, lighting, size, illumination,
specifications and exact location of Tenant's Signage (collectively, the "SIGN
SPECIFICATIONS") shall be subject to the prior written approval of Landlord,
which approval shall not be unreasonably withheld, conditioned or delayed, and
shall be consistent and compatible with the quality and nature of the Project
and the "Building Standard Signage Specifications," attached hereto as EXHIBIT
G. For purposes of this Section 23.4.1, the reference to "name" shall mean name
and/or logo. In addition, Tenant's Signage shall be subject to Tenant's receipt
of all required governmental permits and approvals and shall be subject to all
Applicable Law and to any CC&Rs. Landlord shall use commercially reasonable
efforts to assist Tenant in obtaining all necessary governmental permits and
approvals for Tenant's Signage. Tenant hereby acknowledges that, notwithstanding
Landlord's approval of Tenant's Signage, Landlord has made no representation or
warranty to Tenant with respect to the probability of obtaining all necessary
governmental approvals and permits for Tenant's Signage. In the event Tenant
does not receive the necessary governmental approvals and permits for Tenant's
Signage, Tenant's and Landlord's rights and obligations under the remaining TCCs
of this Lease shall be unaffected.

                  23.4.2   OBJECTIONABLE NAME. To the extent Original Tenant or
its Permitted Transferees desires to change the name and/or logo set forth on
Tenant's Signage, such name and/or logo shall not have a name which relates to
an entity which is of a character or reputation, or is associated with a
political faction or orientation, which is inconsistent with the quality of the
Project, or which would otherwise reasonably offend a landlord of the Comparable
Buildings (an "OBJECTIONABLE NAME"). The parties hereby agree that the name
"Fair, Isaac and Company, Incorporated" or any reasonable derivation thereof,
shall not be deemed an Objectionable Name.

                  23.4.3   TERMINATION OF RIGHT TO TENANT'S SIGNAGE. The rights
contained in this Section 23.4 shall be personal to the Original Tenant and any
Permitted Transferee, and may only be exercised by the Original Tenant and/or
its Permitted Transferee (and not any other

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assignee, sublessee or other transferee of the Original Tenant's interest in
this Lease) if the then existing Premises equals at least sixty percent (60%) of
the Building.

                  23.4.4   COST AND MAINTENANCE. The costs of the actual signs
comprising Tenant's Signage and the installation, design, construction, and any
and all other costs associated with Tenant's Signage, including, without
limitation, utility charges and hook-up fees, permits, required Building
structural upgrades, and maintenance and repairs, shall be the sole
responsibility of Tenant; provided that the costs and fees associated with the
initial installation, design, and construction of such Tenant's Signage may, at
Tenant's option, be deemed a "Tenant Improvement Allowance Item," as that term
is set forth in Section 2.2 of the Tenant Work Letter. Should Tenant's Signage
require repairs and/or maintenance, as determined in Landlord's reasonable
judgment, Landlord shall have the right to provide notice thereof to Tenant and
Tenant (except as set forth above) shall cause such repairs and/or maintenance
to be performed within thirty (30) days after receipt of such notice from
Landlord, at Tenant's sole cost and expense; provided, however, if such repairs
and/or maintenance are reasonably expected to require longer than thirty (30)
days to perform, Tenant shall commence such repairs and/or maintenance within
such thirty (30) day period and shall diligently prosecute such repairs and
maintenance to completion. Should Tenant fail to perform such repairs and/or
maintenance within the periods described in the immediately preceding sentence,
Landlord shall, upon the delivery of an additional five (5) business days' prior
written notice, have the right to cause such work to be performed and to charge
Tenant as Additional Rent for the cost of such work. Upon the expiration or
earlier termination of this Lease, Tenant shall, at Tenant's sole cost and
expense, cause Tenant's Signage to be removed and shall cause the areas in which
such Tenant's Signage was located to be restored to the condition existing
immediately prior to the placement of such Tenant's Signage (excepting normal
wear and tear caused by the sun, rain and other elements to which such Tenant's
Signage is exposed). If Tenant fails to timely remove such Tenant's Signage or
to restore the areas in which such Tenant's Signage was located, as provided in
the immediately preceding sentence, then Landlord may perform such work, and all
costs incurred by Landlord in so performing shall be reimbursed by Tenant to
Landlord within thirty (30) days after Tenant's receipt of an invoice therefor.
The TCCs of this Section 23.4.4 shall survive the expiration or earlier
termination of this Lease.

                  23.4.5   ASSIGNMENT OF SIGNAGE RIGHTS. Notwithstanding any
provision in this Lease to the contrary, Tenant may assign (i) the right to one
of the Building-top signs identified in Section 23.4(i), above, to any
Transferee approved by Landlord pursuant to the terms and conditions of Article
14 of this Lease, provided such Transferee subleases at least one full floor of
the Building, and such Transferee or its corporate affiliate (to the extent such
corporate affiliate guarantees Transferee's obligations under the applicable
Transfer (collectively, the "IDENTIFIED ENTITY") has (A) a minimum net worth of
at least twenty-five percent (25%) of Tenant's then-current net worth, according
to each of Tenant's and such Identified Entity's most recent audited financial
statements, (B) net income for the immediately preceding 12 months of at least
twenty-five percent (25%) of Tenant's net income for the preceding 12 months,
and (C) not filed (or been filed against) any proceeding under an insolvency or
bankruptcy law during the prior thirty-six (36) month period, and (ii) the right
to a pro-rata portion of the signage (based on rentable square feet) on the
Building Tombstone Sign to any Transferee approved by Landlord pursuant to the
terms and conditions of Article 14 of this Lease, provided such Transferee
occupies at least one full floor of the Building.

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<PAGE>

                                   ARTICLE 24

                               COMPLIANCE WITH LAW

         Tenant shall not do anything or suffer anything to be done in or about
the Premises or the Project which will in any way conflict with any law,
statute, ordinance or other governmental rule, regulation or requirement now in
force or which may hereafter be enacted or promulgated (collectively,
"APPLICABLE LAWS"). At its sole cost and expense, Tenant shall promptly comply
with all such Applicable Laws which relate to (i) Tenant's use of the Premises
for non-general office use, (ii) the Alterations or Tenant Improvements in the
Premises, or (iii) the Base Building, but, as to the Base Building, only to the
extent such obligations are triggered by Tenant's Alterations, the Tenant
Improvements, or use of the Premises for non-general office use. Should any
standard or regulation now or hereafter be imposed on Landlord or Tenant by a
state, federal or local governmental body charged with the establishment,
regulation and enforcement of occupational, health or safety standards for
employers, employees, landlords or tenants, then Tenant agrees, at its sole cost
and expense, to comply promptly with such standards or regulations. The judgment
of any court of competent jurisdiction or the admission of Tenant in any
judicial action, regardless of whether Landlord is a party thereto, that Tenant
has violated any of said governmental measures, shall be conclusive of that fact
as between Landlord and Tenant. Landlord shall comply with all Applicable Laws
relating to the Base Building and the Project Common Areas, provided that
compliance with such Applicable Laws is not the responsibility of Tenant under
this Lease, and provided further that Landlord's failure to comply therewith
would prohibit Tenant from obtaining or maintaining a certificate of occupancy
for the Premises, or would unreasonably and materially affect the safety of
Tenant's employees, subtenants or invitees, or create a significant health
hazard for Tenant's employees. Landlord shall be permitted to include in
Operating Expenses any costs or expenses incurred by Landlord under this Article
24 to the extent consistent with the terms of Section 4.2.4, above.

                                   ARTICLE 25

                                  LATE CHARGES

         If any installment of Rent or any other sum due from Tenant shall not
be received by Landlord or Landlord's designee within five (5) business days
after Tenant's receipt of notice that said amount was not paid when due, then
Tenant shall pay to Landlord a late charge equal to two and one-half percent (2
1/2%) of the overdue amount plus reasonable attorneys' fees incurred by Landlord
by reason of Tenant's failure to pay Rent and/or other charges when due
hereunder. The late charge shall be deemed Additional Rent and the right to
require it shall be in addition to all of Landlord's other rights and remedies
hereunder or at law and shall not be construed as liquidated damages or as
limiting Landlord's remedies in any manner. In addition to the late charge
described above, any Rent or other amounts owing hereunder which are not paid
within ten (10) days after the date they are due shall bear interest from the
date when due until paid at a rate per annum (the "INTEREST RATE") equal to the
lesser of (i) the annual "BANK PRIME LOAN" rate cited in the Federal Reserve
Statistical Release Publication G.13(415), published on the first Tuesday of
each calendar month (or such other comparable index as Landlord and Tenant shall
reasonably agree upon if such rate ceases to be published) plus four (4)
percentage points, and (ii) the highest rate permitted by applicable law.

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                                   ARTICLE 26

              LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT

         26.1     LANDLORD'S CURE. All covenants and agreements to be kept or
performed by Tenant under this Lease shall be performed by Tenant at Tenant's
sole cost and expense and without any reduction of Rent, except to the extent,
if any, otherwise expressly provided herein. If Tenant shall fail to perform any
obligation under this Lease, and such failure shall continue in excess of the
time allowed under Section 19.1.2, above, unless a specific time period is
otherwise stated in this Lease, Landlord may, but shall not be obligated to,
make any such payment or perform any such act on Tenant's part without waiving
its rights based upon any default of Tenant and without releasing Tenant from
any obligations hereunder.

         26.2     TENANT'S REIMBURSEMENT. Except as may be specifically provided
to the contrary in this Lease, Tenant shall pay to Landlord, upon delivery by
Landlord to Tenant of statements therefor: (i) sums equal to expenditures
reasonably made and obligations incurred by Landlord in connection with the
remedying by Landlord of Tenant's defaults pursuant to the provisions of Section
26.1; (ii) sums equal to all losses, costs, liabilities, damages and expenses
referred to in Article 10 of this Lease; and (iii) sums equal to all
expenditures made and obligations incurred by Landlord in collecting or
attempting to collect the Rent or in enforcing or attempting to enforce any
rights of Landlord under this Lease or pursuant to law, including, without
limitation, all legal fees and other amounts so expended. Tenant's obligations
under this Section 26.2 shall survive the expiration or sooner termination of
the Lease Term.

                                   ARTICLE 27

                                ENTRY BY LANDLORD

         Landlord reserves the right at all reasonable times, subject to
Tenant's reasonable security requirements (and during Building Hours with
respect to items (i) and (ii) below), and upon at least twenty-four (24) hours
prior notice to Tenant (except in the case of an emergency) to enter the
Premises to (i) inspect them; (ii) show the Premises to prospective purchasers,
or to current or prospective mortgagees, ground or underlying lessors or
insurers, or during the last twelve (12) months of the Lease Term, to
prospective tenants; (iii) post notices of nonresponsibility; or (iv) alter,
improve or repair the Premises or the Building, or for structural alterations,
repairs or improvements to the Building or the Building's systems and equipment.
Notwithstanding anything to the contrary contained in this Article 27, Landlord
may enter the Premises at any time upon reasonable prior written notice to
Tenant (except that no notice shall be required in an emergency or to perform
regularly scheduled service, such as janitorial service) to (A) perform services
required of Landlord, including janitorial service; (B) take possession due to
any breach of this Lease in the manner provided herein; and (C) perform any
covenants of Tenant which Tenant fails to perform. Landlord may make any such
entries without the abatement of Rent, except as otherwise provided in this
Lease, and may take such reasonable steps as required to accomplish the stated
purposes; provided, however, except for (i) emergencies, (ii) repairs,
alterations, improvements or additions required by governmental or
quasi-governmental authorities or court order or decree, or (iii) repairs which
are the obligation of Tenant hereunder, any such entry shall be performed in a
manner so as not to unreasonably interfere with Tenant's

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<PAGE>

use of the Premises and shall be performed after normal business hours if
reasonably practical, unless such after-hours entry is not compatible with
Tenant's security requirements. With respect to items (ii) and (iii) above,
Landlord shall use commercially reasonable efforts to not materially interfere
with Tenant's use of, or access to, the Premises. Except as otherwise set forth
in Section 3.2, Tenant hereby waives any claims for damages or for any injuries
or inconvenience to or interference with Tenant's business, lost profits, any
loss of occupancy or quiet enjoyment of the Premises, and any other loss
occasioned thereby. For each of the above purposes, unless Tenant is maintaining
24-hour on-site staffed security for access to the Premises (in which case no
keys must be provided to Landlord), Landlord shall at all times have a key with
which to unlock all the doors in the Premises, excluding Tenant's vaults, safes
and special security areas designated in advance by Tenant. In an emergency,
Landlord shall have the right to use any means that Landlord may reasonably deem
proper, under the circumstances (including whether or not access is available
through Tenant's security services), to obtain access to the Premises. Any entry
into the Premises by Landlord in the manner hereinbefore described shall not be
deemed to be a forcible or unlawful entry into, or a detainer of, the Premises,
or an actual or constructive eviction of Tenant from any portion of the
Premises. No provision of this Lease shall be construed as obligating Landlord
to perform any repairs, alterations or decorations except as otherwise expressly
agreed to be performed by Landlord herein.

                                   ARTICLE 28

                                 TENANT PARKING

         Landlord shall provide to Tenant, throughout the Lease Term and at no
additional cost to Tenant, the number of unreserved parking passes set forth in
Section 9 of the Summary, on a monthly basis throughout the Lease Term, which
parking passes shall pertain to the Project parking facilities; provided,
however, that the total number of Project parking passes outstanding at any time
shall not exceed 110% of the aggregate number of actual parking spaces in the
Project parking facilities (the number of parking passes above the number of
parking spaces shall be the "PARKING FLOAT"); provided further, however, to the
extent Landlord makes such Parking Float available for lease to other tenants of
the Project, then Landlord shall make a pro-rata portion of such Parking Float
available for lease by Tenant on substantially similar terms. In lieu of an
equal number of parking passes, Tenant shall have the right to designate thirty
(30) covered spaces as reserved for Tenant's executives, in particular locations
to be mutually and reasonably agreed upon by Landlord and Tenant, which reserved
spaces shall include that certain motorcycle parking area reserved for use by
Tenant's employees in the location identified on EXHIBIT A. In addition to the
foregoing, and upon Tenant's request therefor, Landlord shall provide an
additional forty (40) reserved spaces directly in front of the Building,
specifically designated for use by Tenant's visitors and vendors, in a location
more particularly identified on EXHIBIT A. Tenant shall be responsible for the
full amount of any taxes imposed by any governmental authority in connection
with the renting of such parking passes (including any designated parking
spaces) by Tenant or the use of the parking facility by Tenant. Tenant's
continued right to use the parking passes (including any designated parking
spaces) is conditioned upon Tenant abiding by all rules and regulations which
are prescribed from time to time for the orderly operation and use of the
parking facility where the parking passes/designated parking spaces are located,
including any sticker or other identification system established by Landlord,
Tenant's cooperation in seeing that Tenant's employees and visitors also comply
with

                                      -67-

<PAGE>

such rules and regulations and Tenant not being in default under this Lease. To
the extent reasonably necessary to ensure Tenant's parking rights hereunder are
readily available to Tenant and its employees, Landlord shall establish a
sticker or other identification system for the Project; provided, however, the
enforcement of the Project parking facilities for only such stickered or
otherwise identified employees/visitors/guests of the Project tenants shall be
reasonably conducted by Landlord; provided further, however, to the extent the
foregoing measures prove insufficient (as reasonably and mutually determined by
Landlord and Tenant), Landlord shall additionally implement reasonable access
control with regard to such Project parking facilities. Landlord specifically
reserves the right to (i) change the size, configuration, design, layout and all
other aspects of the Project parking facility at any time as long as the changes
do not materially and adversely affect Tenant (provided that such restriction
shall not apply to changes required by Laws) and/or (ii) perform repairs to the
parking facilities, and Tenant acknowledges and agrees that Landlord may,
without incurring any liability to Tenant and without any abatement of Rent
under this Lease, from time to time, close-off or restrict access to the Project
parking facility (for a period not to exceed thirty (30) days, as such thirty
(30) day period may be extended by a Force Majeure), or relocate Tenant's
parking spaces to other parking structures and/or surface parking areas within a
reasonable distance of the Premises, for purposes of permitting or facilitating
any such construction, alteration, improvements or repairs with respect to the
parking facilities or to accommodate or facilitate renovation, alteration,
construction or other modification of other improvements or structures located
on the land underlying the Project, provided that Landlord shall use reasonable
efforts to minimize any inconvenience to Tenant. Landlord may delegate its
responsibilities hereunder to a parking operator in which case such parking
operator shall have all the rights of control attributed hereby to the Landlord.
The parking passes (including any designated parking spaces) granted to Tenant
pursuant to this Article 28 are provided to Tenant solely for use by Tenant's
own personnel, customers and visitors, and Permitted Occupants, and such passes
(including any designated parking spaces) may not be transferred, assigned,
subleased or otherwise alienated by Tenant separate from Tenant's interest in
the Premises without Landlord's prior approval. Tenant may validate visitor
parking by such method or methods as the Landlord may establish, at the
validation rate from time to time generally applicable to visitor parking.

                                   ARTICLE 29

                            MISCELLANEOUS PROVISIONS

         29.1     TERMS; CAPTIONS. The words "Landlord" and "Tenant" as used
herein shall include the plural as well as the singular. The necessary
grammatical changes required to make the provisions hereof apply either to
corporations or partnerships or individuals, men or women, as the case may
require, shall in all cases be assumed as though in each case fully expressed.
The captions of Articles and Sections are for convenience only and shall not be
deemed to limit, construe, affect or alter the meaning of such Articles and
Sections.

         29.2     BINDING EFFECT. Subject to all other provisions of this Lease,
each of the covenants, conditions and provisions of this Lease shall extend to
and shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective heirs, personal
representatives, successors or assigns, provided this clause shall not permit
any assignment by Tenant contrary to the provisions of Article 14 of this Lease.

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         29.3     NO AIR RIGHTS. No rights to any view or to light or air over
any property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease. If at any time any windows of the Premises are temporarily
darkened or the light or view therefrom is obstructed by reason of any repairs,
improvements, maintenance or cleaning in or about the Project, the same shall be
without liability to Landlord and without any reduction or diminution of
Tenant's obligations under this Lease.

         29.4     MODIFICATION OF LEASE. Should any current or prospective
mortgagee or ground lessor for the Building or Project require a modification of
this Lease, which modification will not cause an increased cost or expense to
Tenant or in any other way materially and adversely change the rights and
obligations of Tenant hereunder, then and in such event, Tenant agrees that this
Lease may be so modified and agrees to execute whatever documents are reasonably
required therefor and to deliver the same to Landlord within ten (10) days
following a request therefor. At the request of Landlord or any mortgagee or
ground lessor, Tenant agrees to execute a short form of Lease and deliver the
same to Landlord within ten (10) days following the request therefor.

         29.5     TRANSFER OF LANDLORD'S INTEREST. Tenant acknowledges that
Landlord has the right to transfer all or any portion of its interest in the
Project or Building and in this Lease, and Tenant agrees that in the event of
any such transfer, Landlord shall automatically be released from all liability
under this Lease which accrues from and after the date of such transfer provided
such transferee assumes such liability in writing (and further provided that
such release shall include any liability which accrues prior to the transfer in
the event the transferee assumes such liability in writing) and Tenant agrees to
look solely to such transferee for the performance of Landlord's obligations
hereunder after the date of transfer. Tenant further acknowledges that Landlord
may assign its interest in this Lease to a mortgage lender as additional
security and agrees that such an assignment shall not release Landlord from its
obligations hereunder and that Tenant shall continue to look to Landlord for the
performance of its obligations hereunder.

         29.6     PROHIBITION AGAINST RECORDING. A "Memorandum of Lease,"
substantially in the form attached hereto as EXHIBIT K, shall be executed and
acknowledged by Landlord and Tenant concurrently with the execution of this
Lease and either Landlord or Tenant may, at such party's sole cost and expense,
record such Memorandum of Lease.

         29.7     LANDLORD'S TITLE. Landlord's title is and always shall be
paramount to the title of Tenant. Nothing herein contained shall empower Tenant
to do any act which can, shall or may encumber the title of Landlord.

         29.8     RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall
be deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.

         29.9     APPLICATION OF PAYMENTS. Landlord shall have the right to
apply payments received from Tenant pursuant to this Lease, regardless of
Tenant's designation of such payments, to satisfy any obligations of Tenant
hereunder, in such order and amounts as Landlord, in its sole discretion, may
elect.

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         29.10    TIME OF ESSENCE. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor.

         29.11    PARTIAL INVALIDITY. If any term, provision or condition
contained in this Lease shall, to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of such term, provision or condition
to persons or circumstances other than those with respect to which it is invalid
or unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.

         29.12    NO WARRANTY. In executing and delivering this Lease, Tenant
has not relied on any representations, including, but not limited to, any
representation as to the amount of any item comprising Additional Rent or the
amount of the Additional Rent in the aggregate or that Landlord is furnishing
the same services to other tenants, at all, on the same level or on the same
basis, or any warranty or any statement of Landlord which is not set forth
herein or in one or more of the exhibits attached hereto.

         29.13    LANDLORD EXCULPATION. The liability of Landlord or the
Landlord Parties to Tenant for any default by Landlord under this Lease or
arising in connection herewith or with Landlord's operation, management,
leasing, repair, renovation, alteration or any other matter relating to the
Project or the Premises shall be limited solely and exclusively to an amount
which is equal to the net interest of Landlord (following payment of any
outstanding liens and/or mortgages, whether attributable to sales or insurance
proceeds or otherwise) in the Building (including any insurance proceeds which
Landlord receives). Neither Landlord, nor any of the Landlord Parties shall have
any personal liability therefor, and Tenant hereby expressly waives and releases
such personal liability on behalf of itself and all persons claiming by, through
or under Tenant. The limitations of liability contained in this Section 29.13
shall inure to the benefit of Landlord's and the Landlord Parties' present and
future partners, beneficiaries, officers, directors, trustees, shareholders,
agents and employees, and their respective partners, heirs, successors and
assigns. Under no circumstances shall any present or future partner of Landlord
(if Landlord is a partnership), or trustee or beneficiary (if Landlord or any
partner of Landlord is a trust), have any liability for the performance of
Landlord's obligations under this Lease. Notwithstanding any contrary provision
herein, neither Landlord nor the Landlord Parties shall be liable under any
circumstances for injury or damage to, or interference with, Tenant's business,
including but not limited to, loss of profits, loss of rents or other revenues,
loss of business opportunity, loss of goodwill or loss of use, in each case,
however occurring.

         29.14    ENTIRE AGREEMENT. It is understood and acknowledged that there
are no oral agreements between the parties hereto affecting this Lease and this
Lease constitutes the parties' entire agreement with respect to the leasing of
the Premises and supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between the
parties hereto or displayed by Landlord to Tenant with respect to the subject
matter thereof, and none thereof shall be used to interpret or construe this
Lease. None of the terms, covenants, conditions or provisions of this Lease can
be modified, deleted or added to except in writing signed by the parties hereto.

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         29.15    RIGHT TO LEASE. Landlord reserves the absolute right to effect
such other tenancies in the Project as Landlord in the exercise of its sole
business judgment shall determine to best promote the interests of the Building
or Project. Tenant does not rely on the fact, nor does Landlord represent, that
any specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.

         29.16    FORCE MAJEURE. Any prevention, delay or stoppage due to
strikes, lockouts, labor disputes, acts of God, acts of war, terrorist acts,
inability to obtain services, labor, or materials or reasonable substitutes
therefor, governmental actions, civil commotions, fire or other casualty, and
other causes beyond the reasonable control of the party obligated to perform,
except with respect to the obligations imposed with regard to Rent and other
charges to be paid by Tenant pursuant to this Lease and except as to Tenant's
obligations under Articles 5 and 24 of this Lease (collectively, a "FORCE
MAJEURE"), notwithstanding anything to the contrary contained in this Lease,
shall excuse the performance of such party for a period equal to any such
prevention, delay or stoppage and, therefore, if this Lease specifies a time
period for performance of an obligation of either party, that time period shall
be extended by the period of any delay in such party's performance caused by a
Force Majeure.

         29.17    WAIVER OF REDEMPTION BY TENANT. Tenant hereby waives, for
Tenant and for all those claiming under Tenant, any and all rights now or
hereafter existing to redeem by order or judgment of any court or by any legal
process or writ, Tenant's right of occupancy of the Premises after any
termination of this Lease.

         29.18    NOTICES. All notices, demands, statements, designations,
approvals or other communications (collectively, "NOTICES") given or required to
be given by either party to the other hereunder or by law shall be in writing,
shall be (A) sent by United States certified or registered mail, postage
prepaid, return receipt requested ("MAIL"), (B) transmitted by telecopy, if such
telecopy is promptly followed by a Notice sent by Mail, (C) delivered by a
nationally recognized overnight courier, or (D) delivered personally. Any Notice
shall be sent, transmitted, or delivered, as the case may be, to Tenant at the
appropriate address set forth in Section 10 of the Summary, or to such other
place as Tenant may from time to time designate in a Notice to Landlord, or to
Landlord at the addresses set forth below, or to such other places as Landlord
may from time to time designate in a Notice to Tenant. Any Notice will be deemed
given (i) three (3) days after the date it is posted if sent by Mail, (ii) the
date the telecopy is transmitted, (iii) the date the overnight courier delivery
is made, or (iv) the date personal delivery is made or attempted to be made. If
Tenant is notified of the identity and address of Landlord's mortgagee or ground
or underlying lessor, Tenant shall give to such mortgagee or ground or
underlying lessor written notice of any default by Landlord under the terms of
this Lease by registered or certified mail, and such mortgagee or ground or
underlying lessor shall be given a reasonable opportunity to cure such default
prior to Tenant's exercising any remedy available to Tenant. As of the date of
this Lease, any Notices to Landlord must be sent, transmitted, or delivered, as
the case may be, to the following addresses:

                                    Kilroy Realty Corporation
                                    12200 West Olympic Boulevard
                                    Suite 200

                                      -71-

<PAGE>

                                    Los Angeles, California  90064
                                    Attention: Legal Department

                                    with copies to:

                                    Kilroy Realty Corporation
                                    3811 Valley Centre Drive, Suite 300
                                    San Diego, California  92130
                                    Attention: Mr. Roger Simsiman

                                    and

                                    Allen Matkins Leck Gamble & Mallory LLP
                                    1901 Avenue of the Stars, Suite 1800
                                    Los Angeles, California 90067
                                    Attention: Anton N. Natsis, Esq.

         29.19    JOINT AND SEVERAL. If there is more than one Tenant, the
obligations imposed upon Tenant under this Lease shall be joint and several.

         29.20    AUTHORITY. If Tenant is a corporation, trust or partnership,
each individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in California and that Tenant has full right and authority to execute
and deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so. In such event, Tenant shall, within ten (10) days after
execution of this Lease, deliver to Landlord satisfactory evidence of such
authority and, if a corporation, upon demand by Landlord, also deliver to
Landlord satisfactory evidence of (i) good standing in Tenant's state of
incorporation and (ii) qualification to do business in California.

         29.21    ATTORNEYS' FEES. In the event that either Landlord or Tenant
should bring suit for the possession of the Premises, for the recovery of any
sum due under this Lease, or because of the breach of any provision of this
Lease or for any other relief against the other, then all costs and expenses,
including reasonable attorneys' fees, incurred by the prevailing party therein
shall be paid by the other party, which obligation on the part of the other
party shall be deemed to have accrued on the date of the commencement of such
action and shall be enforceable whether or not the action is prosecuted to
judgment.

         29.22    GOVERNING LAW; WAIVER OF TRIAL BY JURY. This Lease shall be
construed and enforced in accordance with the laws of the State of California.
IN ANY ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT
TO (I) THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF CALIFORNIA,
(II) SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) IN
THE INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE
OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S
USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR

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<PAGE>

DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY. IN THE EVENT LANDLORD COMMENCES
ANY SUMMARY PROCEEDINGS OR ACTION FOR NONPAYMENT OF BASE RENT OR ADDITIONAL
RENT, TENANT SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION
(UNLESS SUCH COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION,
BUT SHALL BE RELEGATED TO AN INDEPENDENT ACTION AT LAW.

         29.23    SUBMISSION OF LEASE. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of, option
for or option to lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.

         29.24    BROKERS. Landlord and Tenant hereby warrant to each other that
they have had no dealings with any real estate broker or agent in connection
with the negotiation of this Lease, excepting only the real estate brokers or
agents specified in Section 12 of the Summary (the "BROKERS"), and that they
know of no other real estate broker or agent who is entitled to a commission in
connection with this Lease. Each party agrees to indemnify and defend the other
party against and hold the other party harmless from any and all claims,
demands, losses, liabilities, lawsuits, judgments, costs and expenses (including
without limitation reasonable attorneys' fees) with respect to any leasing
commission or equivalent compensation alleged to be owing on account of any
dealings with any real estate broker or agent, other than the Brokers, occurring
by, through, or under the indemnifying party.

         29.25    INDEPENDENT COVENANTS. This Lease shall be construed as though
the covenants herein between Landlord and Tenant are independent and not
dependent and Tenant hereby expressly waives the benefit of any statute to the
contrary and agrees that if Landlord fails to perform its obligations set forth
herein, Tenant shall not be entitled to make any repairs or perform any acts
hereunder at Landlord's expense or to any setoff of the Rent or other amounts
owing hereunder against Landlord.

         29.26    PROJECT OR BUILDING NAME AND SIGNAGE. Landlord shall have the
right at any time to change the name of the Project or Building and, subject to
Tenant's signage rights set forth in Article 23 of this Lease, to install, affix
and maintain any and all signs on the exterior and on the interior of the
Project or Building as Landlord may, in Landlord's sole discretion, desire;
provided, however, Landlord shall provide Tenant with prior written notice of
any such change. Tenant shall not use the name of the Project or Building or use
pictures or illustrations of the Project or Building in advertising or other
publicity or for any purpose other than as the address of the business to be
conducted by Tenant in the Premises, without the prior written consent of
Landlord. Notwithstanding the foregoing, Tenant may use a picture of the
Building showing its name thereon in its advertising and promotional materials.

         29.27    COUNTERPARTS. This Lease may be executed in counterparts with
the same effect as if both parties hereto had executed the same document. Both
counterparts shall be construed together and shall constitute a single lease.

         29.28    CONFIDENTIALITY. Tenant acknowledges that the content of this
Lease and any related documents are confidential information. Tenant shall keep
such confidential information

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<PAGE>

strictly confidential and shall not disclose such confidential information to
any person or entity other than Tenant's financial, legal, and space planning
consultants.

         29.29    TRANSPORTATION MANAGEMENT. Tenant shall fully comply with all
present or future governmentally required programs intended to manage parking,
transportation or traffic in and around the Building, and in connection
therewith, Tenant shall take responsible action for the transportation planning
and management of all employees located at the Premises by working directly with
Landlord, any governmental transportation management organization or any other
transportation-related committees or entities.

         29.30    BUILDING RENOVATIONS. It is specifically understood and agreed
that Landlord has made no representation or warranty to Tenant and has no
obligation and has made no promises to alter, remodel, improve, renovate, repair
or decorate the Premises, Building, or any part thereof and that no
representations respecting the condition of the Premises or the Building have
been made by Landlord to Tenant except as specifically set forth herein or in
the Tenant Work Letter. However, Tenant hereby acknowledges that Landlord is
currently renovating or may during the Lease Term renovate, improve, alter, or
modify (collectively, the "RENOVATIONS") the Project, the Building and/or the
Premises including without limitation the parking structure, common areas,
systems and equipment, roof, and structural portions of the same, which
Renovations may include, without limitation, (i) installing sprinklers in the
Building common areas and tenant spaces, (ii) modifying the common areas and
tenant spaces to comply with applicable laws and regulations, including
regulations relating to the physically disabled, seismic conditions, and
building safety and security, and (iii) installing new floor covering, lighting,
and wall coverings in the Building common areas, and in connection with any
Renovations, Landlord may, among other things, erect scaffolding or other
necessary structures in the Building, limit or eliminate access to portions of
the Project, including portions of the common areas, or perform work in the
Building, which work may create noise, dust or leave debris in the Building.
Tenant hereby agrees that such Renovations and Landlord's actions in connection
with such Renovations shall in no way constitute a constructive eviction of
Tenant nor entitle Tenant to any abatement of Rent. Landlord shall have no
responsibility or for any reason be liable to Tenant for any direct or indirect
injury to or interference with Tenant's business arising from the Renovations,
nor shall Tenant be entitled to any compensation or damages from Landlord for
loss of the use of the whole or any part of the Premises or of Tenant's personal
property or improvements resulting from the Renovations or Landlord's actions in
connection with such Renovations, or for any inconvenience or annoyance
occasioned by such Renovations or Landlord's actions.

         29.31    NO VIOLATION. Tenant hereby warrants and represents that
neither its execution of nor performance under this Lease shall cause Tenant to
be in violation of any agreement, instrument, contract, law, rule or regulation
by which Tenant is bound, and Tenant shall protect, defend, indemnify and hold
Landlord harmless against any claims, demands, losses, damages, liabilities,
costs and expenses, including, without limitation, reasonable attorneys' fees
and costs, arising from Tenant's breach of this warranty and representation.

         29.32    COMMUNICATIONS AND COMPUTER LINES. Tenant may install,
maintain, replace, remove or use any communications or computer wires and cables
(collectively, the "LINES") at the Project in or serving the Premises, provided
that (i) Tenant shall use an experienced and qualified contractor and shall
comply with all of the other provisions of Articles 7 and 8 of this

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<PAGE>

Lease, (ii) an acceptable number of spare Lines and space for additional Lines
shall be maintained for existing and future occupants of the Project, as
determined in Landlord's reasonable opinion, (iii) the Lines therefor (including
riser cables) shall be appropriately insulated to prevent excessive
electromagnetic fields or radiation, and shall be surrounded by a protective
conduit reasonably acceptable to Landlord, (iv) any new or existing Lines
servicing the Premises shall comply with all applicable governmental laws and
regulations, (v) as a condition to permitting the installation of new Lines,
Landlord may require that Tenant remove any Lines previously installed by Tenant
(or any Permitted Transferee) which are no longer serving the Premises and
repair any damage in connection with such removal, and (vi) Tenant shall pay all
costs in connection therewith. Landlord reserves the right to require that
Tenant remove any Lines located in or serving the Premises which are installed
in violation of these provisions, or which are at any time in violation of any
laws or represent a dangerous or potentially dangerous condition.

         29.33    HAZARDOUS SUBSTANCES.

                  29.33.1  DEFINITIONS. For purposes of this Lease, the
following definitions shall apply: "HAZARDOUS MATERIAL(S)" shall mean any solid,
liquid or gaseous substance or material that is described or characterized as a
toxic or hazardous substance, waste, material, pollutant, contaminant or
infectious waste, or any matter that in certain specified quantities would be
injurious to the public health or welfare, or words of similar import, in any of
the "Environmental Laws," as that term is defined below, or any other words
which are intended to define, list or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity or reproductive toxicity and includes, without
limitation, asbestos, petroleum (including crude oil or any fraction thereof,
natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable
for fuel, or any mixture thereof), petroleum products, polychlorinated
biphenyls, urea formaldehyde, radon gas, nuclear or radioactive matter, medical
waste, soot, vapors, fumes, acids, alkalis, chemicals, microbial matters (such
as molds, fungi or other bacterial matters), biological agents and chemicals
which may cause adverse health effects, including but not limited to, cancers
and /or toxicity. "ENVIRONMENTAL LAWS" shall mean any and all federal, state,
local or quasi-governmental laws (whether under common law, statute or
otherwise), ordinances, decrees, codes, rulings, awards, rules, regulations or
guidance or policy documents now or hereafter enacted or promulgated and as
amended from time to time, in any way relating to a) the protection of the
environment, the health and safety of persons (including employees), property or
the public welfare from actual or potential release, discharge, escape or
emission (whether past or present) of any Hazardous Materials or b) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of any Hazardous Materials.

                  29.33.2  COMPLIANCE WITH ENVIRONMENTAL LAWS. Landlord
covenants that during the Lease Term, Landlord shall comply with all
Environmental Laws in accordance with, and as required by, the TCCs of Article
24 of this Lease. Tenant represents and warrants that, except as herein set
forth, it will not use, store or dispose of any Hazardous Materials in or on the
Premises. However, notwithstanding the preceding sentence, Landlord agrees that
Tenant may use, store and properly dispose of commonly available household items
(such as saccharine), and household cleaners and chemicals to maintain the
Premises and Tenant's routine office operations (such as printer toner and
copier toner) (hereinafter the "Permitted Chemicals").

                                      -75-

<PAGE>

Landlord and Tenant acknowledge that any or all of the Permitted Chemicals
described in this paragraph may constitute Hazardous Materials. However, Tenant
may use, store and dispose of same, provided that in doing so, Tenant fully
complies with all Environmental Laws.

                  29.33.3  LANDLORD'S RIGHT OF ENVIRONMENTAL AUDIT. Landlord
may, upon reasonable notice to Tenant, be granted access to and enter the
Premises no more than once annually to perform or cause to have performed an
environmental inspection, site assessment or audit. Such environmental inspector
or auditor may be chosen by Landlord, in its sole discretion, and be performed
at Landlord's sole expense. To the extent that the report prepared upon such
inspection, assessment or audit, indicates the presence of Hazardous Materials
in violation of Environmental Laws, or provides recommendations or suggestions
to prohibit the release, discharge, escape or emission of any Hazardous
Materials at, upon, under or within the Premises, or to comply with any
Environmental Laws, Tenant shall promptly, at Tenant's sole expense, comply with
such recommendations or suggestions, including, but not limited to performing
such additional investigative or subsurface investigations or remediation(s) as
recommended by such inspector or auditor. Notwithstanding the above, if at any
time, Landlord has actual notice or reasonable cause to believe that Tenant has
violated, or permitted any violations of any Environmental Law, then Landlord
will be entitled to perform its environmental inspection, assessment or audit at
any time, notwithstanding the above mentioned annual limitation, and Tenant must
reimburse Landlord for the reasonable cost or fees incurred for such as
Additional Rent.

                  29.33.4  INDEMNIFICATIONS. Landlord agrees to indemnify,
defend, protect and hold harmless the Tenant Parties from and against any
liability, obligation, damage or costs, including without limitation, attorneys'
fees and costs, resulting directly or indirectly from any use, presence, removal
or disposal of any Hazardous Materials to the extent such liability, obligation,
damage or costs was a result of actions caused or permitted by Landlord or a
Landlord Party, or which occurred prior to the date of this Lease. Tenant agrees
to indemnify, defend, protect and hold harmless the Landlord Parties from and
against any liability, obligation, damage or costs, including without
limitation, attorneys' fees and costs, resulting directly or indirectly from any
use, presence, removal or disposal of any Hazardous Materials or breach of any
provision of this section, to the extent such liability, obligation, damage or
costs was a result of actions caused or permitted by Tenant or a Tenant Party.

         29.34    DEVELOPMENT OF THE PROJECT.

                  29.34.1  SUBDIVISION. Landlord reserves the right to further
subdivide all or a portion of the Project. Tenant agrees to execute and deliver,
upon demand by Landlord and in the form requested by Landlord, any additional
documents needed to conform this Lease to the circumstances resulting from such
subdivision.

                  29.34.2  THE OTHER IMPROVEMENTS. If portions of the Project or
property adjacent to the Project (collectively, the "OTHER IMPROVEMENTS") are
owned by an entity other than Landlord, Landlord, at its option, may enter into
an agreement with the owner or owners of any or all of the Other Improvements to
provide (i) for reciprocal rights of access and/or use of the Project and the
Other Improvements, (ii) for the common management, operation, maintenance,
improvement and/or repair of all or any portion of the Project and the Other

                                      -76-

<PAGE>

Improvements, (iii) for the allocation of a portion of the Direct Expenses to
the Other Improvements and the operating expenses and taxes for the Other
Improvements to the Project, and (iv) for the use or improvement of the Other
Improvements and/or the Project in connection with the improvement,
construction, and/or excavation of the Other Improvements and/or the Project.
Nothing contained herein shall be deemed or construed to limit or otherwise
affect Landlord's right to convey all or any portion of the Project or any other
of Landlord's rights described in this Lease.

                  29.34.3  CONSTRUCTION OF PROJECT AND OTHER IMPROVEMENTS.
Tenant acknowledges that portions of the Project and/or the Other Improvements
may be under construction following Tenant's occupancy of the Premises, and that
such construction may result in levels of noise, dust, obstruction of access,
etc. which are in excess of that present in a fully constructed project. Tenant
hereby waives any and all rent offsets or claims of constructive eviction which
may arise in connection with such construction.

         29.35    OFFICE AND COMMUNICATIONS SERVICES.

                  29.35.1  THE PROVIDER. Landlord has advised Tenant that
certain office and communications services may be offered to Tenant (and, if
applicable, any other tenants of the Building) by a concessionaire under
contract to Landlord ("PROVIDER"), including, without limitation, phone service
and cable TV/fiber optic services. Tenant shall be permitted to contract with
Provider for the provision of any or all of such services on such terms and
conditions as Tenant and Provider may agree. Landlord hereby covenants that its
contract with Provider does not unreasonable exclude any qualified carrier from
providing similar services to the Premises.

                  29.35.2  OTHER TERMS. Tenant acknowledges and agrees that: (i)
Landlord has made no warranty or representation to Tenant with respect to the
availability of any such services, or the quality, reliability or suitability
thereof; (ii) the Provider is not acting as the agent or representative of
Landlord in the provision of such services, and Landlord shall have no liability
or responsibility for any failure or inadequacy of such services, or any
equipment or facilities used in the furnishing thereof, or any act or omission
of Provider, or its agents, employees, representatives, officers or contractors;
(iii) Landlord shall have no responsibility or liability for the installation,
alteration, repair, maintenance, furnishing, operation, adjustment or removal of
any such services, equipment or facilities; and (iv) any contract or other
agreement between Tenant and Provider shall be independent of this Lease, the
obligations of Tenant hereunder, and the rights of Landlord hereunder, and,
without limiting the foregoing, no default or failure of Provider with respect
to any such services, equipment or facilities, or under any contract or
agreement relating thereto, shall have any effect on this Lease or give to
Tenant any offset or defense to the full and timely performance of its
obligations hereunder, or entitle Tenant to any abatement of rent or additional
rent or any other payment required to be made by Tenant hereunder, or constitute
any accrual or constructive eviction of Tenant, or otherwise give rise to any
other claim of any nature against Landlord.

         29.36    FURNITURE, FIXTURES AND EQUIPMENT. Landlord shall, at no
additional cost to Tenant, as part of "Landlord's Work," as that term is set
forth in Section 1.2 of the Tenant Work Letter, and pursuant to that certain
"Test Fit" plan (the "TEST FIT PLAN") attached hereto as EXHIBIT I, cause (i)
that certain furniture, fixtures, and equipment currently existing in the

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Premises (collectively, the "EXISTING FF&E" which is set forth and identified on
the Test Fit Plan, as such Test Fit Plan may be revised to reflect permitted
modifications pursuant the TCCs of this Section 29.36), and (ii) the additional
furniture, fixtures, and equipment (collectively, the "ADDITIONAL FF&E" which is
set forth and identified on EXHIBIT I) to be purchased, installed and/or
otherwise located in the Premises; provided, however, Tenant may, upon
reasonable prior written notice to Landlord, and to the extent such
modifications do not cause Landlord to incur any increased cost or expense
(above the cost of the Additional FF&E originally identified on that certain
"Test Fit" plan dated November 6, 2002), modify the Test Fit Plan. In addition,
Landlord shall provide Tenant, within thirty (30) days of Tenant's written
request, with an allowance an in amount equal to One Hundred Fifty Thousand and
No/100 Dollars ($150,000.00) (the "TELECOMMUNICATIONS ALLOWANCE") for the
telecommunications equipment (collectively, the "TELECOM FF&E"). The Existing
FF&E, Additional FF&E and Telecom FF&E shall be referred to collectively, as the
"FF&E") Tenant hereby acknowledges that the Existing FF&E is currently installed
in the Premises and that, notwithstanding any provision of this Lease or the
Tenant Work Letter to the contrary, Landlord makes no representations or
warranties regarding the condition of such Existing FF&E, and Tenant hereby
acknowledges and agrees that it shall accept, upon delivery of the same, such
Existing FF&E in its then currently existing, "as-is" condition (but in the
locations installed by Landlord in accordance with EXHIBIT I); provided,
however, that Landlord hereby covenants to Tenant that Landlord has good and
marketable title to the Existing FF&E and shall have good and marketable title
to the Additional FF&E, and Landlord shall indemnify, defend and hold Tenant
harmless against any and all liens, claims and encumbrances, and any and all
proceedings relating thereto, of any third party or parties claiming any prior
right, title or interest in the Existing FF&E or the Additional FF&E. Except to
the extent the same is damaged in conjunction with Landlord's Work, Landlord
shall have no obligation to maintain or repair any FF&E. Tenant hereby agrees
that Tenant shall maintain and repair all such FF&E in as good a condition as
received by Tenant (subject to normal wear and tear) throughout the term of the
Lease, at Tenant's sole cost and expense. Landlord shall have the right, at any
time during the Lease Term, upon reasonable prior notice to Tenant, to inspect
the FF&E to ensure Tenant's compliance with the TCCs of this Section 29.36. In
the event Tenant fails to maintain and repair the FF&E in accordance with this
Section 29.36, Landlord shall have the right to repair such FF&E, at Tenant's
sole cost and expense, and Tenant shall reimburse Landlord for the cost of such
maintenance and repair within ten (10) days following Landlord's request
therefor. In the event of irreparable damage (excluding normal wear and tear) to
any item of the FF&E, then Tenant shall replace such damaged item, at Tenant's
sole cost and expense, prior to the expiration or earlier termination of the
Lease Term. With respect to the insurance which Tenant is obligated to maintain
on its personal property during the term of the Lease pursuant to the TCCs of
Section 10.3.2, Tenant shall cause such insurance to also cover the FF&E. Tenant
shall not (i) remove any of the FF&E from the Premises, (ii) assign the FF&E as
collateral or otherwise, (iii) sell any of the FF&E, or (iv) give any third
party a security interest or any other interest in such FF&E. To the extent
Tenant is not then in economic default under the terms of this Lease (beyond any
applicable notice and cure periods), upon the expiration of the initial Lease
Term, Tenant may purchase such FF&E from Landlord in its then existing "as-is"
condition for One Dollar ($1.00) and Landlord shall convey its interest therein
to Tenant (free and clear of all liens or claims of any third parties against
such interest) pursuant to a Bill of Sale substantially in the form of EXHIBIT
J, attached hereto. Following the expiration or earlier termination of the Lease
Term, Tenant shall either

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(A) remove such FF&E to the extent Tenant purchased the same from Landlord
pursuant to the immediately preceding sentence, or (B) promptly surrender such
FF&E to Landlord in good condition and repair (ordinary wear and tear excepted)
in conjunction with Tenant's vacation of the Premises pursuant to Section 8.5
and Article 16 of this Lease.

         29.37    EMERGENCY GENERATOR. Subject to Landlord's approval, which
shall not be unreasonably withheld or delayed, and subject to the TCCs of this
Section 29.37 and Article 8 of this Lease, Tenant may install, for Tenant's own
use and at Tenant's sole cost and expense, but without the payment of any Rent
or a license or similar fee or charge, an emergency generator and related
equipment, cabling and conduits (all such equipment defined collectively as the
"EMERGENCY GENERATOR") in the location identified on EXHIBIT A, with conduits
and cabling to be located between the Emergency Generator pad and the Premises'
electrical room. The particular location, physical appearance (including such
conduits and cabling) and the size of the Emergency Generator (and components
thereof) shall be subject to Landlord's reasonable approval, and Landlord may
require Tenant to install screening around such Emergency Generator, at Tenant's
sole cost and expense, as reasonably designated by Landlord. Tenant shall
maintain such Emergency Generator, at Tenant's sole cost and expense. In the
event Tenant elects to exercise its right to install the Emergency Generator,
then Tenant shall give Landlord no less than thirty (30) days prior written
notice thereof. Tenant shall reimburse to Landlord the reasonable costs actually
incurred by Landlord in approving such Emergency Generator. Tenant shall, if
instructed by Landlord at the time of Landlord's approval of such Emergency
Generator, remove such Emergency Generator within thirty (30) days of the
expiration or earlier termination of this Lease and shall repair any damage to
the Building caused by such removal and return the affected portion of the
Project's parking, landscaping and driveway areas to their pre-Emergency
Generator condition. Such Emergency Generator shall be installed pursuant to
plans and specifications approved by Landlord, which approval will not be
unreasonably withheld. Such Emergency Generator shall remain Tenant's personal
property throughout the Lease Term and, in all instances, comply with applicable
governmental laws, codes, rules and regulations, and CC&Rs.

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                                      -79-

<PAGE>

         29.38    NO DISCRIMINATION. Tenant covenants by and for itself, its
heirs, executors, administrators and assigns, and all persons claiming under or
through Tenant, and this Lease is made and accepted upon and subject to the
following conditions: that there shall be no discrimination against or
segregation of any person or group of persons, on account of race, color, creed,
sex, religion, marital status, ancestry or national origin in the leasing,
subleasing, transferring, use, or enjoyment of the Premises, nor shall Tenant
itself, or any person claiming under or through Tenant, establish or permit such
practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy, of tenants, lessees, sublessees,
subtenants or vendees in the Premises.

         IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.

                             "LANDLORD":

                             KILROY REALTY, L.P.,
                             a Delaware limited partnership

                             By: Kilroy Realty Corporation,
                                 a Maryland corporation,
                                 General Partner

                             By: /s/ Steve Scott
                                 ----------------------------------
                                 Its: Senior Vice President

                             By: Jeffrey C. Hawken
                                 ----------------------------------
                                 Its: Executive Vice President, Chief
                                 Operating Officer

                             "TENANT":

                             FAIR, ISAAC AND COMPANY,
                             INCORPORATED,
                             a Delaware corporation

                             By: /s/  Thomas G. Grudnowski
                                 ----------------------------------
                                 Its: Chief Executive Officer

                             By: /s/  Kenneth J. Saunders
                                 ----------------------------------
                                 Its: Chief Financial Officer

                                      -80-