EXHIBIT 10.1

                             OFFICE LEASE AGREEMENT


                          FLATIRON BOULDER OFFICE, INC.

                                TABLE OF CONTENTS


ARTICLE 1.  SUMMARY AND DEFINITION OF CERTAIN LEASE PROVISIONS AND
            EXHIBITS...........................................................1

ARTICLE 2.  PREMISES/RIGHT TO USE COMMON AREAS.................................2

ARTICLE 3.  TERM...............................................................3

ARTICLE 4.  MINIMUM MONTHLY RENT...............................................3

ARTICLE 5.  ADDITIONAL RENT....................................................3

ARTICLE 6.  PARKING............................................................4

ARTICLE 7.  RENT TAX AND PERSONAL PROPERTY TAXES...............................4

ARTICLE 8.  PAYMENT OF RENT/LATE CHARGES/INTEREST ON PAST-DUE OBLIGATIONS......4

ARTICLE 9.  SECURITY DEPOSIT...................................................4

ARTICLE 10.  CONSTRUCTION OF THE PREMISES......................................4

ARTICLE 11.  ALTERATIONS.......................................................4

ARTICLE 12.  PERSONAL PROPERTY/SURRENDER OF PREMISES...........................5

ARTICLE 13.  LIENS.............................................................5

ARTICLE 14.  USE OF PREMISES/RULES AND REGULATIONS.............................5

ARTICLE 15.  RIGHTS RESERVED BY LANDLORD.......................................5

ARTICLE 16.  QUIET ENJOYMENT...................................................6

ARTICLE 17.  MAINTENANCE AND REPAIR............................................6

ARTICLE 18.  UTILITIES AND JANITORIAL SERVICES.................................6

ARTICLE 19.  ENTRY AND INSPECTION..............................................7

ARTICLE 20.  ACCEPTANCE OF THE PREMISES/LIABILITY INSURANCE....................7

ARTICLE 21.  CASUALTY INSURANCE................................................7

ARTICLE 22.  DAMAGE AND DESTRUCTION OF PREMISES................................7

ARTICLE 23.  EMINENT DOMAIN....................................................8

ARTICLE 24.  ASSIGNMENT AND SUBLETTING.........................................8

ARTICLE 25.  SALE OF PREMISES BY LANDLORD......................................9

ARTICLE 26.  SUBORDINATION/ATTORNMENT/MODIFICATION/ASSIGNMENT..................9

ARTICLE 27.  LANDLORD'S DEFAULT AND RIGHT TO CURE.............................10

ARTICLE 28.  ESTOPPEL CERTIFICATES............................................10

ARTICLE 29.  TENANT'S DEFAULT AND LANDLORD'S REMEDIES.........................10

ARTICLE 30.  TENANT'S RECOURSE................................................12

ARTICLE 31.  HOLDING OVER.....................................................12

ARTICLE 32.  GENERAL PROVISIONS...............................................12

ARTICLE 33.  NOTICES..........................................................13

ARTICLE 34.  BROKER'S COMMISSIONS.............................................13

ARTICLE 35.  INDEMNIFICATION/WAIVER OF SUBROGATION............................13

ARTICLE 36.  WAIVER OF TRIAL BY JURY..........................................14

ARTICLE 37.  USA PATRIOT ACT AND ANTI-TERRORISM LAWS..........................14

EXHIBITS:
(A)......PREMISES
(B)......RULES AND REGULATIONS
(C)......PARKING RULES AND REGULATIONS
(D)......TENANT IMPROVEMENTS
(E)......CONFIRMATION OF COMMENCEMENT DATE
(F)......RENEWAL OPTION
(G)......RIGHT OF FIRST OFFER


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                             OFFICE LEASE AGREEMENT

THIS OFFICE LEASE  AGREEMENT,  dated August 31, 2005 is made and entered into by
FLATIRON BOULDER OFFICE,  INC., a Texas  corporation (the "LANDLORD") and PATRON
SYSTEMS,  INCORPORATED,  a Delaware corporation (the "TENANT"). In consideration
of the mutual promises and representations set forth in this Lease, Landlord and
Tenant agree as follows:

ARTICLE 1.  SUMMARY AND DEFINITION OF CERTAIN LEASE PROVISIONS AND EXHIBITS

1.1      The following  terms and provisions of this Lease, as modified by other
         terms and  provisions  hereof,  are  included  in this  SECTION 1.1 for
         summary and  definitional  purposes  only.  If there is any conflict or
         inconsistency between any term or provision in this SECTION 1.1 and any
         other term or provision  of this Lease,  the other term or provision of
         this Lease shall control:

         (a)      LANDLORD:

                  Flatiron Boulder Office, Inc., a Texas corporation

         (b)      ADDRESS OF LANDLORD FOR NOTICES:

                  Trammell Crow Company
                  8390 East Crescent Parkway, Suite 300
                  Greenwood Village, Colorado 80111
                  Attn:  Property Manager

                  With a copy to:

                  Invesco Real Estate
                  500 Three Galleria Tower
                  13155 Noel Road
                  Dallas, Texas 75240
                  Attn.:  Asset Manager

         (c)      TENANT:

                  Patron Systems, Incorporated, a Delaware corporation
                  __________________________________
                  __________________________________

         (d)      ADDRESS OF TENANT FOR NOTICES: (Include Main/Hdq. Address)

                  AT THE PREMISES___________________
                  __________________________________
                  __________________________________
                  Attn: ____________________________

         (e)      LEASE TERM OR TERM: Fifty-Four (54) months, plus the remainder
                  of  any  partial  calendar  month  in  which  the  Lease  Term
                  commences,   commencing   on  the   earliest   of  (such  date
                  hereinafter  referred to as the "Commencement  Date"): (a) the
                  date on which Tenant  occupies any portion of the Premises and
                  begins conducting business therein;  (b) the date on which the
                  Work (as  defined  in  EXHIBIT D hereto)  in the  Premises  is
                  Substantially  Completed (as defined in EXHIBIT D hereto);  or
                  (c) the date on which the Work in the Premises would have been
                  Substantially  Completed but for the  occurrence of any Tenant
                  Delay Days (as defined in EXHIBIT D hereto).

         (f)      BUILDING:   The  office  building  located  at  5775  Flatiron
                  Parkway, Boulder, Colorado 80301 (the "BUILDING").

         (g)      PREMISES: Suite 230 on the Second (2nd) floor of the Building,
                  as shown on  EXHIBIT  A,  consisting  of  approximately  4,876
                  Rentable Square Feet.

         (h)      MINIMUM MONTHLY RENT:

                  LEASE MONTH      RENTABLE SQUARE FOOT     MINIMUM MONTHLY RENT

                  1 - 6                   $ 0.00                 $    0.00
                  7 - 54                  $10.00                 $4,063.33

                  plus  applicable  Rent Tax.  As used  herein,  the term "LEASE
                  MONTH"  shall  mean  each  calendar  month  during  the  Term.
                  Notwithstanding  anything  to  the  contrary  herein,  if  the
                  Commencement  Date does not occur on the first  (1st) day of a
                  calendar month, the period from the  Commencement


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                  Date to the day that is six (6) months  from the  Commencement
                  Date shall  constitute  Tenant's free Rent period and the next
                  calendar day  (irrespective  of whether or not such day is the
                  first  (1st) day of a calendar  month)  shall  constitute  the
                  beginning  of the  seventh  (7th)  Lease  Month  and  Tenant's
                  obligation to pay all Rent (including Minimum Monthly Rent) as
                  provided above shall begin and the  termination of the Seventh
                  (7th) Lease month shall end as of the end of the last calendar
                  date of such seventh (7th) Lease Month.

         (i)      SECURITY DEPOSIT: A Security Deposit of $19,995.00 is required
                  and shall be deposited  with Landlord at the time the Lease is
                  signed by Tenant.

         (j)      PARKING:  Twenty (20)  surface  unreserved  spaces at no extra
                  charge during the initial Term (plus applicable Rental Taxes).

         (k)      BUILDING  HOURS:  7:00 a.m. to 6:00 p.m. on Business  Days and
                  8:00 am. to 1:00 p.m. on  Saturdays,  exclusive  of  Holidays.
                  Closed  Sundays and all legal  holidays.  "BUSINESS DAY" shall
                  mean  Monday  through  Friday  of  each  week,   exclusive  of
                  holidays.

1.2      The following exhibits (the "EXHIBITS") and addenda are attached hereto
         and incorporated herein by this reference:

         EXHIBIT A         Premises
         ---------
         EXHIBIT B         Rules and Regulations
         ---------
         EXHIBIT C         Parking Rules and Regulations
         ---------
         EXHIBIT D         Tenant Improvements
         ---------
         EXHIBIT E         Confirmation of Commencement Date
         ---------
         EXHIBIT F         Renewal Option
         ---------
         EXHIBIT G         Right of First Offer
         ---------
         EXHIBIT H         Landlord's Waiver
         ---------

         The Office Lease Agreement and the Exhibits are  collectively  referred
         to herein as the "LEASE."

ARTICLE 2.  PREMISES/RIGHT TO USE COMMON AREAS

2.1      Landlord leases to Tenant and Tenant leases from Landlord the Premises,
         for and  subject to the terms and  provisions  set forth in this Lease.
         This Lease is subject to all liens,  encumbrances,  parking  and access
         easements,  restrictions,  covenants,  and all other matters of record,
         the Rules and Regulations described in ARTICLE 14 and the Parking Rules
         and  Regulations  described in ARTICLE 6. Tenant and  Tenant's  agents,
         contractors,  customers,  directors, employees, invitees, officers, and
         patrons (collectively,  the "TENANT'S PERMITTEES") have a non-exclusive
         privilege and license, during the Lease Term, to use the non-restricted
         Common Areas in common with all other authorized users thereof.

2.2      For purposes of this Lease,  the following  terms have the  definitions
         set forth below:

         (a)      "AUTOMOBILE  PARKING  AREAS"  means all areas  designated  for
                  automobile  parking upon the land in the  Project.  Automobile
                  Parking Areas are Common Areas,  but certain parking areas are
                  restricted. (See Parking Rules & Regulations).

         (b)      "COMMON  AREAS" means those areas within the Building and Land
                  not leased to any tenant and which are intended by Landlord to
                  be  available  for the  use,  benefit,  and  enjoyment  of all
                  occupants of the Building.

         (c)      "INTERIOR  COMMON   FACILITIES"   means  lobbies,   corridors,
                  hallways,  elevator foyers,  restrooms, mail rooms, mechanical
                  and  electrical  rooms,  janitor  closets,  and other  similar
                  facilities  used by tenants or for the benefit of tenants on a
                  non-exclusive   basis.   Access  to  certain  Interior  Common
                  Facilities is restricted.

         (d)      "PROJECT"  means  the  Building  and  the  parcel(s)  of  land
                  containing said Building.

         (e)      "RENTABLE  SQUARE  FOOTAGE"  means  (1)  with  respect  to the
                  Building,  the  sum of the  total  area of all  floors  in the
                  Building  (including  Interior Common Facilities but excluding
                  stairs,  elevator shafts,  vertical shafts,  parking areas and
                  exterior  balconies),  computed by  measuring  to the exterior
                  surface of permanent  outside  walls;  and (2) with respect to
                  the  Premises,  the  area  of the  Premises  (or  other  space
                  occupiable  by  tenants  as  the  case  may  be)  computed  by
                  measuring to the exterior surface of permanent  outside walls,
                  to the  midpoint of  corridor  and  demising  walls and to the
                  Tenant side of permanent  interior  walls and Interior  Common
                  Facilities walls (other than corridor walls).

         (f)      "TENANT'S PROPORTIONATE SHARE" 5.093%, which is the percentage
                  obtained by dividing (a) the number of Rentable Square Feet in
                  the Premises as stated  above by (b) the Rentable  Square Feet
                  in the Building at the time a respective  charge was incurred,
                  which  at the  time of  execution  of  this  Lease  is  95,744
                  Rentable Square Feet.  Landlord and Tenant  stipulate that the
                  number of  Rentable


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                  Square  Feet in the  Premises  and in the  Building  set forth
                  above is conclusive  as to the square  footage in existence on
                  the date of this Lease and shall be binding upon them.

ARTICLE 3.  TERM

The term of this  Lease  and the  Commencement  Date  shall be as  specified  in
SECTION 1.1.  Landlord  shall  provide the Premises per the attached  space plan
(EXHIBIT "A") on or before the Commencement Date.  Landlord and Tenant presently
anticipate  that  possession  of the Premises  will be tendered to Tenant in the
condition  required  by this  Lease on or about  July 27,  2005 (the  "ESTIMATED
DELIVERY DATE"). If there are delays, which delays are not caused by Tenant, and
the Premises are not  substantially  complete  enough that Tenant can reasonably
take  occupancy  of the  Premises  on or before  the  Estimated  Delivery  Date,
Landlord  shall not be deemed in  default  of the  Lease,  Tenant  shall  accept
possession of the Premises when Landlord tenders  possession  thereof to Tenant,
and the  parties  agree  to amend  the  Commencement  Date and Rent (as  defined
herein) schedule,  accordingly.  Subject to force majeure and Tenant Delay Days,
if the Premises are not substantially complete enough that Tenant can reasonably
take  occupancy of them within 90 days after the  scheduled  Commencement  Date,
Tenant's  sole  remedies  shall be to either  enter into a  mutually  acceptable
revision of the appropriate  terms of the Lease with Landlord,  or to cancel the
Lease  with ten (10)  days  written  notice  to  Landlord.  Notwithstanding  the
foregoing,  if said delays are caused by Tenant,  then the Lease, and all of the
obligations  therein,  shall commence on the Commencement Date. By occupying the
Premises,  Tenant  shall  be  deemed  to have  accepted  the  Premises  in their
condition  as of the  date of such  occupancy,  subject  to the  performance  of
punch-list  items that remain to be  performed  by  Landlord,  if any.  Prior to
occupying  the  Premises,  Tenant shall execute and deliver to Landlord a letter
substantially in the form of EXHIBIT E hereto  confirming:  (1) the Commencement
Date (as defined in the Basic Lease  Information) and the expiration date of the
initial  Term (as defined in the Basic Lease  Information);  (2) that Tenant has
accepted  the  Premises;  and  (3)  that  Landlord  has  performed  all  of  its
obligations  with respect to the Premises (except for punch-list items specified
in such  letter);  however,  the failure of the  parties to execute  such letter
shall  not defer the  Commencement  Date or  otherwise  invalidate  this  Lease.
Tenant's  failure  to  execute  such  document  within  ten (10) days of receipt
thereof from Landlord shall be a default by Tenant under this Lease and shall be
deemed  Tenant's  agreement to the contents of such  document.  Occupancy of the
Premises by Tenant prior to the Commencement  Date ("EARLY  OCCUPANCY") shall be
subject to all of the provisions of this Lease, including the payment of Minimum
Monthly Rent prorated on a per diem basis for each day of Early Occupancy.

ARTICLE 4.  MINIMUM MONTHLY RENT

Tenant  shall pay to Landlord,  without  deduction,  setoff,  prior  notice,  or
demand,  the Minimum  Monthly Rent,  payable in advance on the first day of each
calendar month during the Lease Term.  The  obligations of Tenant to pay Minimum
Monthly Rent and other sums to Landlord and the  obligations  of Landlord  under
this Lease are independent obligations. The Seventh (7th) monthly installment of
Minimum  Monthly Rent shall be payable  contemporaneously  with the execution of
this Lease; thereafter, Minimum Monthly Rent shall be payable on the first (1st)
day of each month  beginning  on the first  (1st) day of the  eighth  (8th) full
calendar month of the Term. If the Lease Term commences on a date other than the
first day of a calendar month,  the Minimum Monthly Rent for that month shall be
prorated  on a per  diem  basis  and  be  paid  to  Landlord  on or  before  the
Commencement Date.

ARTICLE 5.  ADDITIONAL RENT

Tenant shall pay to Landlord as additional rent each year Tenant's Proportionate
Share  of  Operating  Costs  during  each  Operating  Year  of  the  Lease  Term
("OPERATING  COST  RENT").  Landlord  may  make a  good  faith  estimate  of the
Operating  Cost Rent to be due by Tenant for any Operating  year or part thereof
during the Lease Term.  During each Operating Year or partial  Operating Year of
the Lease Term, Tenant shall pay to Landlord,  in advance concurrently with each
monthly  installment  of Minimum  Monthly Rent, an amount equal to the estimated
Operating  Cost Rent for such  Operating  Year or part  thereof  divided  by the
number  of  months  therein.  From  time to  time,  Landlord  may  estimate  and
re-estimate  the  Operating  Cost Rent to be due by Tenant and deliver a copy of
the estimate or re-estimate to Tenant.  Thereafter,  the monthly installments of
Operating  Cost  Rent  payable  by Tenant  shall be  appropriately  adjusted  in
accordance  with the  estimations  so that, by the end of the Operating  Year in
question,  Tenant shall have paid all of the Operating Cost Rent as estimated by
Landlord.  Any  amounts  paid  based on such an  estimate  shall be  subject  to
adjustment as herein provided when actual Operating Costs are available for each
Operating  Year.  In the event the  Building  is not fully  occupied  during any
Operating  Year,  an  adjustment  shall be made by Landlord in  calculating  the
Operating  Costs for such  Operating  Year so that the Operating  Costs shall be
adjusted  to the amount  that would have been  incurred  had the  Building  been
occupied  to the  extent of 95% during  such  Operating  Year.  By May 1 of each
Operating Year, or as soon thereafter as practicable,  Landlord shall furnish to
Tenant a  statement  of  Operating  Costs for the  previous  year,  adjusted  as
provided  above (the  "Operating  Costs  Statement").  If  Tenant's  payments of
estimated  Operating  Cost  Rent for the year  covered  by the  Operating  Costs
Statement exceed Tenant's  Proportionate Share of such items as indicated in the
Operating  Costs  Statement,  then Landlord shall  promptly  credit or reimburse
Tenant for such excess;  likewise,  if Tenant's  estimated payments of Operating
Costs for such year are less than  Tenant's  share of such items as indicated in
the  Operating  Costs  Statement,  then Tenant shall  promptly pay Landlord such
deficiency, notwithstanding that the Term has expired and Tenant has vacated the
Premises.  For purposes of this Lease (a)  "OPERATING  COSTS" means and includes
all costs of management,  maintenance,  and operation of the Project,  including
but not limited to the costs of cleaning,  repairs, utilities, air conditioning,
heating, plumbing, elevator, parking, landscaping, insurance, property taxes and
special  assessments,  and all other  costs  which can  properly  be  considered
operating  expenses but excluding costs of property  additions,  alterations for
tenants, leasing commissions, advertising,  depreciation, interest, income taxes
and   administrative   costs  not  specifically   incurred  in  the  management,
maintenance and operation of the Project;  and (b) "OPERATING YEAR" means a year
beginning  January 1 and ending  December 31.  Tenants  with leases  expiring or


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terminating  prior to the end of the  Operating  Year shall be  responsible  for
their  portion of  Operating  Costs based on  Landlord's  estimate of  Operating
Costs.

ARTICLE 6.  PARKING

Nothing  contained  herein shall be deemed to create liability upon Landlord for
any damage to motor  vehicles of Tenant's  Permittees,  or from loss of property
from within such motor vehicles  while parked in the  Automobile  Parking Areas.
Landlord  has the right to  establish  and to enforce  against  all users of the
Automobile  Parking Areas,  reasonable rules and regulations (the "PARKING RULES
AND  REGULATIONS").  Landlord shall assign and identify Reserved Parking Spaces.
Landlord will not police nor be  responsible  for any vehicle parked in Tenant's
reserved parking space.

ARTICLE 7.  RENT TAX AND PERSONAL PROPERTY TAXES

Tenant shall pay to Landlord, in addition to, and simultaneously with, any other
amounts  payable to Landlord  under this Lease,  a sum equal to the aggregate of
any municipal,  county,  state,  or federal excise,  sales,  use, or transaction
privilege  taxes now or  hereafter  legally  levied or  imposed  against,  or on
account  of, any  amounts  payable  under  this  Lease by Tenant or the  receipt
thereof by Landlord  (collectively,  "RENT  TAX").  Tenant  shall pay,  prior to
delinquency,  all  taxes  levied  upon  fixtures,  furnishings,  equipment,  and
personal property placed on the Premises by Tenant.

ARTICLE 8.  PAYMENT OF RENT/LATE CHARGES/INTEREST ON PAST-DUE OBLIGATIONS

Tenant  shall  pay the rent and all other  charges  specified  in this  Lease to
Landlord at the  address  set forth on SECTION 1.1 of this Lease,  or to another
person  and at another  address  as  Landlord  from time to time  designates  in
writing.  All monetary  obligations of Tenant,  including  Minimum Monthly Rent,
additional  rent, or other charges payable by Tenant to Landlord under the terms
of this Lease shall be deemed "RENT",  and any Rent not received within ten (10)
days after the due date (the  "DELINQUENCY  DATE")  thereof shall  automatically
(and without  notice) incur a late charge of five percent (5%) of the delinquent
amount.  Except as otherwise  provided herein, any Rent due to Landlord not paid
when due shall  bear  interest,  from the date  due,  at the  maximum  rate then
allowable by law or judgments.  Payment of such interest  shall in no way excuse
or cure any default by Tenant under this Lease; provided, however, that interest
shall not be payable on late charges incurred by Tenant.

ARTICLE 9.  SECURITY DEPOSIT

Tenant shall,  upon execution of this Lease,  deposit with Landlord the Security
Deposit,  as security for the  performance of terms and provisions of this Lease
by Tenant,  which shall be returned to Tenant within the time period required by
law if it has  discharged its  obligations to Landlord in full.  Notwithstanding
the foregoing, provided no Event of Default has occurred within the prior twelve
(12) calendar  months of the Term,  Landlord  agrees to return  $6,665.00 of the
Security  Deposit  to  Tenant:  (a)  on  the  first  (1st)  anniversary  of  the
Commencement  Date; and (b) on the second (2nd)  anniversary of the Commencement
Date.  The  Security  Deposit  shall not be used to pay the last  month's  lease
payment.  Unless required  otherwise by applicable law, the Security Deposit may
be commingled with other funds, and no interest shall be paid thereon.

ARTICLE 10.  CONSTRUCTION OF THE PREMISES

Except as otherwise set forth on EXHIBIT D, if any,  attached  hereto,  Landlord
shall  construct  Tenant's  leasehold  improvements in accordance with plans and
specifications prepared by Landlord's architect. Prior to the Commencement Date,
any work performed by Tenant or any fixtures or personal property moved onto the
Premises  shall be at Tenant's own risk,  Tenant's entry onto the Premises shall
be subject to all  provisions  of the Lease  (other  than the payment of Minimum
Monthly Rent and additional rent) and neither Landlord nor Landlord's  agents or
contractors shall be responsible to Tenant for damage or destruction of Tenant's
property.

ARTICLE 11.  ALTERATIONS

After completion of Landlord's construction obligations under ARTICLE 10, Tenant
shall  not  make  or  cause  to be  made  any  further  additions,  alterations,
improvements, Utility Installations or repairs in, on or about the Premises, the
Building or the Project without the prior written  consent of Landlord.  As used
in this Article,  the term "UTILITY  INSTALLATION" shall mean carpeting,  window
and wall coverings,  power panels,  electrical  distribution  systems,  lighting
fixtures, air conditioning, plumbing, and telephone and telecommunication wiring
and equipment.  At the expiration of the term,  Landlord may require the removal
of  any  and  all  of  said  additions,  alterations,  improvements  or  Utility
Installations,  and the  restoration  of the  Premises,  Building and Project to
their prior  condition,  at Tenant's  expense.  Should Landlord permit Tenant to
make its own  additions,  alterations,  improvements  or Utility  Installations,
Tenant may only use such contractor as has been expressly  approved by Landlord,
and Landlord may require Tenant to provide  Landlord,  at Tenant's sole cost and
expense, a lien and completion bond in an amount equal to one and one-half times
the  estimated  cost  of such  improvements,  to  insure  Landlord  against  any
liability for mechanic's and materialmen's liens and to insure completion of the
work.  Should Tenant make any additions,  alterations,  improvements  or Utility
Installations  without the prior  approval of Landlord,  or use a contractor not
expressly approved by Landlord, Landlord may, at any time during the Lease Term,
require  that  Tenant  remove  any  part  or  all of the  same.  All  additions,
alterations, improvements and Utility Installations (whether or not such Utility
Installations  constitute  trade  fixtures of Tenant),  which may be made to the
Premises by Tenant,  including but not limited to, floor  coverings,  panelings,
doors,  drapes,  built-ins,   moldings,  sound  attenuation,  and  lighting  and
telephone or communication systems,  conduit,  wiring and outlets, shall be made
and done in a good and


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workmanlike manner and of good and sufficient quality and materials and shall be
the property of Landlord and remain upon and be surrendered with the Premises at
the  expiration of the Lease Term,  unless  Landlord  requires  their removal as
described  above.  Provided  Tenant  is  not  in  default,  notwithstanding  the
provisions of this Article, Tenant's personal property and equipment, other than
that  which is  affixed to the  Premises  so that it cannot be  removed  without
material  damage to the Premises or Building or Project,  and other than Utility
Installations,  shall remain the property of Tenant and may be removed by Tenant
as provided  herein.  Tenant shall  provide  Landlord  with  as-built  plans and
specifications   for  any  additions,   alterations,   improvements  or  Utility
Installations.

ARTICLE 12.  PERSONAL PROPERTY/SURRENDER OF PREMISES

All  personal  property  located in the  Premises  shall  remain the property of
Tenant and may be removed  by Tenant not later than the  Expiration  Date or the
earlier  termination of the Lease Term. Tenant shall promptly repair, at its own
expense,  any  damage  resulting  from such  removal.  All  cabinetry,  built-in
appliances,  wall  coverings,  floor  coverings,  window  coverings,  electrical
fixtures, plumbing fixtures, conduits, lighting, and other special fixtures that
may be placed upon,  installed  in, or attached to the Premises by Tenant shall,
at the  termination  of this Lease be the property of Landlord  unless  Landlord
requires its removal as set forth in ARTICLE 11. At the Expiration  Date or upon
the earlier  termination of the Lease Term,  Tenant shall surrender the Premises
in good condition, reasonable wear and tear excepted, and shall deliver all keys
to Landlord.

ARTICLE 13.  LIENS

Tenant shall keep the  Premises,  Building,  and the Project free from any liens
arising out of work performed,  material furnished,  or obligations incurred due
to the  actions of Tenant or  Tenant's  Permittees  or the  failure of Tenant to
comply  with any law.  In the  event  any such  lien  does  attach  against  the
Premises,  Building,  or Project, and Tenant does not discharge the lien or post
bond (which under law would  prevent  foreclosure  or execution  under the lien)
within ten (10) days after demand by Landlord,  such event shall be a default by
Tenant  under  this  Lease and,  in  addition  to  Landlord's  other  rights and
remedies,  Landlord  may take any  action  necessary  to  discharge  the lien at
Tenant's expense.

ARTICLE 14.  USE OF PREMISES/RULES AND REGULATIONS

14.1     Without  the  prior  approval  of  Landlord,  Tenant  shall not use the
         Premises for any use other than for general  business  office  purposes
         (the  "PERMITTED  USE") and Tenant agrees that it will use the Premises
         in such  manner as to not  interfere  with or infringe on the rights of
         other tenants in the Building or Project.  Tenant agrees to comply with
         all applicable laws,  ordinances and regulations in connection with its
         use of the  Premises,  agrees  to keep  the  Premises  in a  clean  and
         sanitary  condition,  and agrees not to perform any act in the Building
         which would increase any insurance  premiums related to the Building or
         Project  or would  cause the  cancellation  of any  insurance  policies
         related to the  Building or Project.  Tenant  shall not use,  generate,
         manufacture,  store,  or dispose of, in, under,  or about the Premises,
         the Building,  the or the Project or transport to or from the Premises,
         the Building, the or the Project, any Hazardous Materials. For purposes
         of this Lease,  "HAZARDOUS MATERIALS" includes,  but is not limited to:
         (i) flammable,  explosive, or radioactive materials,  hazardous wastes,
         toxic substances,  or related materials; (ii) all substances defined as
         "hazardous  substances,"  "hazardous materials," "toxic substances," or
         "hazardous  chemical  substances  or  mixtures"  in  the  Comprehensive
         Environmental  Response  Compensation  and  Liability  Act of 1980,  as
         amended,  42  U.S.C.  ss.  9601,  et  seq.,  as  amended  by  Superfund
         Amendments and  Re-authorization  Act of 1986; the Hazardous  Materials
         Transportation   Act,  49  U.S.C.  ss.  1901,  et  seq.;  the  Resource
         Conservation  and Recovery Act, 42 U.S.C.  ss. 6901, et seq.; the Toxic
         Substances  Control  Act,  15 U.S.C.  ss.  2601,  et seq.;  (iii) those
         substances  listed in the United States  Department  of  Transportation
         Table (49 CFR 172.10 and  amendments  thereto) or by the  Environmental
         Protection Agency (or any successor agent) as hazardous  substances (40
         CFR Part 302 and  amendments  thereto);  (iv) any material,  waste,  or
         substance  which is (A) petroleum,  (B) asbestos,  (C)  polychlorinated
         biphenyl's,  (D) designated as a "hazardous  substance" pursuant to ss.
         311 of the Clean Water Act,  33 U.S.C.  S 1251 et seq.  (33 U.S.C.  ss.
         1321) or listed  pursuant to the Clean Water Act (33 U.S.C.  ss. 1317);
         (E) flammable  explosives;  or (F) radioactive  materials;  and (v) all
         substances  defined as "hazardous  wastes" in the statutes of the state
         in which the Premises are located.

14.2     Tenant  shall  comply with the rules and  regulations  of the  Building
         which are  attached  hereto as Exhibit B.  Landlord  may,  from time to
         time,  change  such rules and  regulations  for the  safety,  care,  or
         cleanliness of the Building and related facilities,  provided that such
         changes  are  applicable  to all  tenants  of the  Building,  will  not
         unreasonably  interfere  with  Tenant's  use of the  Premises  and  are
         enforced by Landlord in a  non-discriminatory  manner.  Tenant shall be
         responsible  for the compliance  with such rules and regulations by any
         assignees  claiming  by,  through,  or  under  Tenant;  any  subtenants
         claiming by,  through,  or under  Tenant;  and any of their  respective
         agents, contractors, employees, and invitees.

ARTICLE 15.  RIGHTS RESERVED BY LANDLORD

In addition to all other rights, Landlord has the following rights,  exercisable
without  notice to Tenant and without  effecting  an eviction,  constructive  or
actual,  and without giving right to any claim for set off or abatement of rent:
(a) to  decorate  and to  make  repairs,  alterations,  additions,  changes,  or
improvements  in and about the Building during Building Hours (b) to approve the
weight,  size,  and location of heavy  objects in and about the Premises and the
Building, and to require all such items to be moved into and out of the Building
and Premises in such manner as Landlord shall direct in writing; (c) to prohibit
the  placing of vending  machines  in or about the  Premises  without  the prior
written consent of Landlord;  (d) to take all such  reasonable  measures for the
security of the Building and its occupants (provided that Landlord shall have no
obligation to provide any such security unless required by law);


                                       5
<PAGE>


(e) to relocate the  Premises to another  location of  substantially  equivalent
size and location in the Building provided such relocation does not increase the
Minimum  Monthly  Rent or other costs  payable by Tenant  under this  Lease.  If
Landlord elects to move Tenant,  the suite into which Tenant is re-located shall
have  substantially  similar  leasehold  improvements  as were  in the  original
Premises and Landlord  will pay Tenant's  reasonable  costs of moving to the new
location,  including  incidental  costs  such as  reprinting  existing  stock of
stationery and new Signage,  but Landlord will have no other liability to Tenant
with respect to relocation and (f) to  temporarily  block off parking spaces for
maintenance or construction purposes.

ARTICLE 16.  QUIET ENJOYMENT

Landlord  agrees that,  provided a default by Tenant has not occurred,  Landlord
will do nothing that will prevent Tenant from quietly enjoying and occupying the
Premises  during the Lease Term.  Tenant agrees this Lease is subordinate to the
Rules and  Regulations  described  in  ARTICLE  14,  and the  Parking  Rules and
Regulations described in ARTICLE 6.

ARTICLE 17.  MAINTENANCE AND REPAIR

17.1     Landlord shall,  subject to reimbursement for Operating Costs, keep and
         maintain in good repair and working order,  subject to reasonable  wear
         and  tear:  (1)  structural  elements  of the  Building;  (2)  standard
         mechanical (including HVAC), electrical,  plumbing and fire/life safety
         systems  serving  the  Building  generally,  together  with air filters
         provided by Landlord  for the HVAC  serving  the  Premises,  if any and
         standard light fixtures  provided by Landlord to the Premises,  if any;
         (3) Common Areas; (4) the roof of the Building; (5) exterior windows of
         the Building;  and (6) elevators serving the Building,  reasonable wear
         and tear  excepted.  Tenant  waives all  rights to make  repairs at the
         expense of  Landlord.  If  Landlord  would be  required  to perform any
         maintenance or make any repairs  because of: (a)  modifications  to the
         roof, walls, foundation,  and floor of the Building from that set forth
         in Landlord's plans and  specifications  which are required by Tenant's
         design for improvements, alterations and additions; (b) installation of
         Tenant's  improvements,  fixtures,  or  equipment;  (c) a negligent  or
         wrongful act of Tenant or Tenant's Permittees; or, (d) Tenant's failure
         to perform any of Tenant's  obligations under this Lease,  Landlord may
         perform the  maintenance  or repairs and Tenant  shall pay Landlord the
         cost thereof.

17.2     Tenant agrees to: (a) pay Landlord's  cost of  maintenance  and repair,
         including  additional  janitorial  costs of any  non-building  standard
         improvements  and  non-building  standard  materials  and  finishes  as
         additional rent  hereunder;  (b) repair or replace all ceiling and wall
         finishes  (including  painting)  and  floor or window  coverings  which
         require repair or  replacement  during the Lease Term, at Tenant's sole
         cost;  and (c) at  Tenant's  sole cost,  maintain  and repair  interior
         partitions;  doors;  electronic,  phone and data  cabling  and  related
         equipment that is installed by or for the benefit of Tenant and located
         in  the  Premises  or  other  portions  of  the  Building  or  Project;
         supplemental  air  conditioning  units,  private  showers and kitchens,
         including hot water heaters,  plumbing,  dishwashers,  ice machines and
         similar  facilities  serving  Tenant  exclusively;   phone  rooms  used
         exclusively by Tenant; alterations performed by contractors retained by
         or on  behalf  of  Tenant;  and  all  of  Tenant's  furnishings,  trade
         fixtures, equipment and inventory. It is generally understood that mold
         spores are  present  essentially  everywhere  and that mold can grow in
         most any moist  location.  Emphasis is properly placed on prevention of
         moisture and on good  housekeeping  and ventilation  practices.  Tenant
         acknowledges the necessity of housekeeping,  ventilation,  and moisture
         control (especially in kitchens,  janitor's closets,  bathrooms,  break
         rooms and around  outside walls) for mold  prevention.  In signing this
         Lease,  Tenant has first  inspected the Premises and certifies  that it
         has not observed mold,  mildew or moisture within the Premises.  Tenant
         agrees to immediately notify Landlord if it observes mold/mildew and/or
         moisture  conditions  (from any  source,  including  leaks),  and allow
         Landlord to evaluate and make  recommendations  and/or take appropriate
         corrective action.  Tenant relieves Landlord from any liability for any
         bodily  injury or  damages to  property  caused by or  associated  with
         moisture  or the  growth  of or  occurrence  of mold or  mildew  on the
         Premises.   In   addition,   execution   of  this   Lease   constitutes
         acknowledgement  by Tenant that control of moisture and mold prevention
         are integral to its Lease obligations.

17.3     Notwithstanding  anything in this Lease to the contrary,  to the extent
         the  terms  and   provisions  of  ARTICLE  22  conflict  with,  or  are
         inconsistent  with,  the terms and  provisions  of this ARTICLE 17, the
         terms and provisions of ARTICLE 22 shall control. Tenant shall take all
         reasonable precautions to insure that the Premises are not subjected to
         excessive  wear and tear,  i.e. chair pads should be utilized by Tenant
         to protect carpeting. Tenant shall be responsible for touch-up painting
         in the Premises throughout the Lease Term.

ARTICLE 18.  UTILITIES AND JANITORIAL SERVICES

Landlord  agrees to furnish to the  Premises  during  normal  Building  Hours as
defined in SECTION  1.1, and subject to the Rules and  Regulations,  electricity
suitable  for  general  office use of the  Premises,  heat and air  conditioning
required in Landlord's  judgment for normal use and  occupation of the Premises,
and during such hours as  determined  by Landlord,  janitorial  services for the
Premises and Common Areas. Landlord further agrees to furnish hot and cold water
to those areas provided for general use of all tenants in the Building. Landlord
will use  diligent  efforts  to  provide  continuous  elevator  service  for the
Building. If Tenant shall require electric current, water, heating,  cooling, or
air outside of normal Building Hours which will result in excess  consumption of
such  utilities  or services,  Tenant shall first obtain the written  consent of
Landlord to the use thereof.  If, in Landlord's  reasonable  discretion,  Tenant
consumes any utilities or services in excess of the normal  consumption  of such
utilities and services for general office use, Tenant agrees to pay Landlord for
the cost of such excess consumption of utilities or services as additional rent,
upon  receipt of a statement  of such costs from  Landlord,  at the same time as
payment of


                                       6
<PAGE>


the  Minimum  Monthly  Rent is made.  Landlord  shall  have the right to install
separate electrical meters, at Landlord's expense, to measure excess consumption
or establish  another basis for determining the amount of excess  consumption of
electrical current. Further, Landlord shall have the right to install electronic
HVAC over-time hour meters for Tenant's convenience. These meters shall be used,
in part, by Landlord to determine  Tenant's excess HVAC consumption for purposes
of billing  Tenant for such excess  charges.  If Tenant  desires  HVAC at a time
other than Building  Hours:  (i) Tenant shall give Landlord such prior notice as
Landlord shall from time to time  establish as  appropriate of Tenant's  desired
use; (ii) Landlord shall supply such  after-hours  HVAC to Tenant at such hourly
costs to Tenant as Landlord shall from time to time establish;  and (iii) Tenant
shall pay such cost as  additional  rent  within  ten (10) days  after  billing.
Landlord  shall not be liable for damages nor shall rent or other  charges abate
in the event of any failure or interruption  of any utility or service  supplied
to the Premises, Building or Project by a regulated utility or municipality,  or
any failure of a Building  system  supplying  any such  service to the  Premises
(provided  Landlord uses diligent  efforts to repair or restore the same) and no
such failure or  interruption  shall  entitle  Tenant to abate rent or terminate
this Lease.

ARTICLE 19.  ENTRY AND INSPECTION

Landlord shall have the right to enter into the Premises at reasonable times for
the purpose of inspecting  the Premises and reserves the right,  during the last
three months of the term of the Lease, to show the Premises at reasonable  times
to  prospective  tenants.  Landlord  shall be permitted to take any action under
this Article  without  causing any  abatement of rent or liability to Tenant for
any loss of occupation or quiet enjoyment of the Premises, nor shall such action
by Landlord be deemed an actual or constructive eviction.

ARTICLE 20.  ACCEPTANCE OF THE PREMISES/LIABILITY INSURANCE

20.1     All personal property and fixtures  belonging to Tenant shall be placed
         and  remain  on  the  Premises  at  Tenant's  sole  risk.  Upon  taking
         possession of the Premises and  thereafter  during the Lease Term,  the
         Tenant  shall,  at Tenant's sole cost and expense,  maintain  insurance
         coverage  with  limits  not  less  than  the  following:  (a)  Worker's
         Compensation  Insurance,  minimum limit as defined by applicable  laws;
         (b)  Employer's  Liability  Insurance,  minimum limit  $1,000,000;  (c)
         Commercial General Liability Insurance, Bodily Injury/Property,  Damage
         Insurance (including the following coverages:

         Premises/Operations, Independent Contractors, Broad Form Contractual in
         support of the indemnification  obligations of Tenant under this Lease,
         and Bodily and Personal  Injury  Liability),  minimum  combined  single
         limit $1,000,000; and (d) Automobile Liability Insurance, minimum limit
         $1,000,000.  All such policies shall include a waiver of subrogation in
         favor of  Landlord  and shall name  Landlord  and such  other  party or
         parties as  Landlord  may  require  as  additional  insureds.  Tenant's
         insurance shall be primary,  with any insurance  maintained by Landlord
         to be considered excess. Tenant's insurance shall be maintained with an
         insurance  company  qualified  to do business in the state in which the
         Premises are located and having a current A.M. Best manual rating of at
         least  A-X or  better.  Before  entry  into  the  Premises  and  before
         expiration of any policy,  evidence of these  coverages  represented by
         Certificates  of  Insurance  issued by the  insurance  carrier  must be
         furnished to Landlord.  Certificates  of Insurance  should  specify the
         additional  insured status,  the waiver of  subrogation,  and that such
         insurance  is primary,  and any  insurance  by Landlord is excess.  The
         Certificate of Insurance  shall state that Landlord will be notified in
         writing  thirty  (30) days before  cancellation,  material  change,  or
         non-renewal of insurance.

20.2     During  the entire  Lease  Term,  Landlord  agrees to  maintain  public
         liability  insurance  in such  forms  and  amounts  as  Landlord  shall
         determine.  The cost of the insurance  obtained under this SECTION 20.2
         shall be an Operating Cost under ARTICLE 5 of this Lease.

ARTICLE 21.  CASUALTY INSURANCE

21.1     Tenant  shall  maintain  fire and  extended  coverage  insurance  (full
         replacement  value)  with a  business  interruption  and extra  expense
         endorsements,  on personal property and trade fixtures owned or used by
         Tenant.

21.2     Landlord   shall  maintain   property   insurance  for  the  Building's
         replacement  value,  less  a  commercially   reasonable  deductible  if
         Landlord so chooses  including  endorsements  as determined by Landlord
         throughout  the Lease Term on the Building  (excluding  Tenant's  trade
         fixtures and personal  property).  At Landlord's  option, the policy of
         insurance may include a business interruption insurance endorsement for
         loss of rents.  The cost of the insurance  obtained  under this SECTION
         21.2 shall be an Operating Cost under ARTICLE 5 of this Lease.

ARTICLE 22.  DAMAGE AND DESTRUCTION OF PREMISES

22.1     If the Premises or the  Building are damaged by fire or other  casualty
         (a  "CASUALTY"),  Landlord  shall use good faith  efforts to deliver to
         Tenant within sixty (60) days after such Casualty a good faith estimate
         (the "DAMAGE NOTICE") of the time needed to repair the damage caused by
         such Casualty.

22.2     If a material  portion of the Premises is damaged by Casualty such that
         Tenant is prevented  from  conducting its business in the Premises in a
         manner reasonably  comparable to that conducted immediately before such
         Casualty and Landlord  estimates  that the damage caused thereby cannot
         be repaired within one hundred eighty (180) days after the commencement
         of repairs (the "REPAIR PERIOD"), then Tenant may terminate this


                                       7
<PAGE>


         Lease by  delivering  written  notice to  Landlord  of its  election to
         terminate  within  thirty  (30) days after the  Damage  Notice has been
         delivered to Tenant.

22.3     If a  Casualty  damages  the  Premises  or a  material  portion  of the
         Building  and: (1) Landlord  estimates  that the damage to the Premises
         cannot be  repaired  within  the Repair  Period;  (2) the damage to the
         Premises  exceeds fifty percent (50%) of the  replacement  cost thereof
         (excluding  foundations  and footings),  as estimated by Landlord,  and
         such  damage  occurs  during  the last two (2) years of the  Term;  (3)
         regardless  of the extent of damage to the Premises,  Landlord  makes a
         good  faith   determination   that  restoring  the  Building  would  be
         uneconomical; or (4) Landlord is required to pay any insurance proceeds
         arising out of the Casualty to a Landlord's  Mortgagee,  then  Landlord
         may terminate  this Lease by giving  written  notice of its election to
         terminate  within  thirty  (30) days after the  Damage  Notice has been
         delivered to Tenant.

22.4     If neither party elects to terminate  this Lease  following a Casualty,
         then  Landlord  shall,  within a reasonable  time after such  Casualty,
         begin  to  repair  the  Premises  and  shall  proceed  with  reasonable
         diligence to restore the Premises to  substantially  the same condition
         as they existed immediately before such Casualty;  however,  other than
         building standard leasehold improvements Landlord shall not be required
         to repair or replace any Alterations or betterments within the Premises
         (which shall be promptly and with due  diligence  repaired and restored
         by  Tenant  at  Tenant's  sole  cost  and  expense)  or any  furniture,
         equipment,  trade fixtures or personal  property of Tenant or others in
         the Premises or the Building,  and  Landlord's  obligation to repair or
         restore the  Premises  shall be limited to the extent of the  insurance
         proceeds actually received by Landlord for the Casualty in question. If
         this Lease is  terminated  under the  provisions  of this  ARTICLE  22,
         Landlord  shall be  entitled  to the  full  proceeds  of the  insurance
         policies  providing  coverage  for all  alterations,  improvements  and
         betterments  in the  Premises  (and,  if Tenant has failed to  maintain
         insurance  on such items as required by this  Lease,  Tenant  shall pay
         Landlord an amount equal to the proceeds  Landlord  would have received
         had  Tenant  maintained  insurance  on such items as  required  by this
         Lease).

22.5     If the Premises  are damaged by  Casualty,  Rent for the portion of the
         Premises  rendered  untenantable  by the  damage  shall be  abated on a
         reasonable  basis  from the date of  damage  until  the  completion  of
         Landlord's  repairs (or until the date of  termination of this Lease by
         Landlord  or  Tenant as  provided  above,  as the case may be),  unless
         Tenant or a Tenant Permitee caused such damage,  in which case,  Tenant
         shall  continue to pay Minimum  Monthly Rent and all other rent without
         abatement  and  Tenant  shall be  liable to  Landlord  for the cost and
         expense of the repair and  restoration  of the Premises or the Building
         caused  thereby to the extent  that costs and expense is not covered by
         insurance proceeds.

ARTICLE 23.  EMINENT DOMAIN

23.1     If the entire Building or Premises are taken by right of eminent domain
         or conveyed in lieu thereof (a "TAKING"), this Lease shall terminate as
         of the date of the Taking.

23.2     If any part of the Building becomes subject to a Taking and such Taking
         will prevent  Tenant from  conducting its business in the Premises in a
         manner reasonably  comparable to that conducted immediately before such
         Taking for a period of more than one hundred  eighty  (180) days,  then
         Tenant may terminate this Lease as of the date of such Taking by giving
         written  notice to Landlord  within  thirty (30) days after the Taking,
         and Rent shall be apportioned as of the date of such Taking.  If Tenant
         does  not  terminate  this  Lease,  then  Rent  shall  be  abated  on a
         reasonable   basis  as  to  that  portion  of  the  Premises   rendered
         untenantable by the Taking.

23.3     If any material  portion,  but less than all, of the  Building  becomes
         subject  to a Taking,  or if  Landlord  is  required  to pay any of the
         proceeds arising from a Taking to a Landlord's Mortgagee, then Landlord
         may terminate this Lease by delivering written notice thereof to Tenant
         within  thirty  (30)  days  after  such  Taking,   and  Rent  shall  be
         apportioned  as of the date of such  Taking.  If  Landlord  does not so
         terminate this Lease, then this Lease will continue, but if any portion
         of the Premises has been taken, Rent shall abate as provided in SECTION
         22.5.

23.4     If any Taking  occurs,  then Landlord shall receive the entire award or
         other  compensation for the Land, the Building,  and other improvements
         taken; however,  Tenant may separately pursue a claim (to the extent it
         will not reduce  Landlord's  award) against the condemnor for the value
         of Tenant's  personal property which Tenant is entitled to remove under
         this Lease,  moving  costs,  loss of business,  and other claims it may
         have.

ARTICLE 24.  ASSIGNMENT AND SUBLETTING

Tenant  agrees not to assign,  mortgage,  or pledge  this  Lease,  and shall not
sublet the Premises without Landlord's prior written consent, which shall not be
unreasonably  withheld if  Landlord  does not elect to  terminate  this Lease as
provided herein. Without limitation,  it is agreed that Landlord's consent shall
not be  considered  unreasonably  withheld  if:  (1) the  proposed  transferee's
financial  condition does not meet the criteria Landlord uses to select Building
tenants having similar leasehold obligations;  (2) the proposed transferee's use
is not suitable for the Building  considering  the business of the other tenants
and the Building's prestige,  or would result in a violation of another tenant's
rights; (3) the proposed  transferee is a governmental agency or occupant of the
Project;  (4) Tenant is in default  after the  expiration of the notice and cure
periods in this  Lease;  or (5) any portion of the  Premises  or Building  would
likely become  subject to additional or different  laws as a consequence  of the
proposed  assignment or subletting.  Tenant shall not be entitled to receive any
monetary  damages  based upon a claim that  Landlord  unreasonably  withheld its
consent to a proposed  sublease or assignment  and Tenant's sole remedy shall be
an action to enforce any provision  through specific  performance or declaratory
judgment. Any attempted sublease or


                                       8
<PAGE>


assignment in violation of this Article shall,  at Landlord's  option,  be void.
Consent by Landlord to one or more subleases or assignments shall not operate as
a  waiver  of  Landlord's   rights  to  approve  any  subsequent   subleases  or
assignments.  Any  assignment  or  subletting  hereunder  shall not  release  or
discharge  Tenant of or from any  liability  under this Lease,  and Tenant shall
continue to be fully liable  thereunder.  As part of its request for  Landlord's
consent  to a  sublease  or  assignment,  Tenant  shall  provide  Landlord  with
financial  statements  for  the  proposed  transferee,  a  complete  copy of the
proposed  sublease,  assignment and other  contractual  documents and such other
information  as Landlord may  reasonably  request.  Landlord  shall,  by written
notice  to  Tenant  within  thirty  (30)  days of its  receipt  of the  required
information and documentation, either: (1) consent to the sublease or assignment
by the  execution of a consent  agreement  in a form  reasonably  designated  by
Landlord  or  reasonably  refuse to consent to the  sublease  or  assignment  in
writing;  or (2) exercise its right to terminate  this Lease with respect to the
portion of the Premises that Tenant is proposing to sublease or assign. Any such
termination  shall be effective on the proposed  effective  date the sublease or
assignment for which Tenant requested consent.  If Tenant shall assign or sublet
the Lease or request the consent of Landlord to any  assignment or subletting or
if Tenant shall  request the consent of Landlord for any act Tenant  proposes to
do, then Tenant shall pay Landlord's  reasonable costs and expenses  incurred in
connection  therewith,  including attorneys',  architects',  engineers' or other
consultants' fees, which fee shall be no less than $500.00.  Consent by Landlord
to one assignment, subletting, occupation, or use by another person shall not be
deemed to be consent to any subsequent assignment,  subletting,  occupation,  or
use by another  person.  Tenant  shall pay fifty  percent  (50%) of all rent and
other  consideration  which  Tenant  receives  as  a  result  of a  sublease  or
assignment  that is in excess of the Rent payable to Landlord for the portion of
the Premises and Lease Term covered by the sublease or assignment.  Tenant shall
pay Landlord for  Landlord's  share of any excess  within thirty (30) days after
Tenant's receipt of such excess consideration. Tenant may deduct from the excess
all reasonable and customary  expenses directly incurred by Tenant  attributable
to the  sublease or  assignment  (other  than  Landlord's  costs and  expenses),
including  brokerage  fees,  legal fees and  construction  costs. If Tenant is a
corporation, an unincorporated association or a partnership,  unless listed on a
national stock exchange, the transfer,  assignment or hypothecation of any stock
or interest in such corporation,  association or partnership in the aggregate in
excess of fifty  percent  (50%)  shall be deemed an  assignment  of this  Lease.
Tenant  agrees to  immediately  notify  Landlord in writing of any change in its
ownership.  Notwithstanding anything in this Article 24 to the contrary,  Tenant
may assign or sublease  all or part of its interest in this Lease or all or part
of the Premises (a "Permitted  Transfer") to the following  types of entities (a
"Permitted  Transferee") without the written consent of Landlord: (a) any person
or entity which,  directly or  indirectly,  through one or more  intermediaries,
controls,  is  controlled  by,  or is  under  common  control  with  Tenant  (an
"AFFILIATE");  (b)  any  corporation,  limited  partnership,  limited  liability
partnership, limited liability company or other business entity in which or with
which Tenant, or its corporate successors or assigns, is merged or consolidated,
in  accordance  with  applicable   statutory  provisions  governing  merger  and
consolidation  of  business  entities,  so  long  as  (i)  Tenant's  obligations
hereunder  are  assumed by the entity  surviving  such merger or created by such
consolidation;  and (ii) the  Tangible  Net Worth of the  surviving  or  created
entity  is not less  than the  Tangible  Net  Worth of  Tenant as of the date of
execution of this Lease; or (c) any corporation,  limited  partnership,  limited
liability  partnership,  limited  liability  company  or other  business  entity
acquiring all or substantially  all of Tenant's assets if such entity's Tangible
Net Worth  after such  acquisition  is not less than the  Tangible  Net Worth of
Tenant as of the date of execution of this Lease.  Tenant shall promptly  notify
Landlord of any such  Permitted  Transfer.  Tenant shall  remain  liable for the
performance  of all of the  obligations  of  Tenant  hereunder,  or if Tenant no
longer exists because of a merger, consolidation,  or acquisition, the surviving
or acquiring  entity shall expressly assume in writing the obligations of Tenant
hereunder.  Additionally,  the Permitted Transferee shall comply with all of the
terms and conditions of this Lease,  including the Permitted Use, and the use of
the Premises by the Permitted  Transferee  may not violate any other  agreements
affecting the Premises,  the Building or the Complex,  Landlord or other tenants
of the Complex. No later than five (5) business days after the effective date of
any Permitted Transfer, Tenant agrees to furnish Landlord with (A) copies of the
instrument effecting any of the foregoing Permitted Transfers, (B) documentation
establishing   Tenant's   satisfaction  of  the  requirements  set  forth  above
applicable  to any such  Permitted  Transfer,  and (C)  evidence of insurance as
required  under  this  Lease  with  respect  to the  Permitted  Transferee.  The
occurrence of a Permitted  Transfer shall not waive Landlord's  rights as to any
subsequent  assignments  or subleases.  "Tangible Net Worth" means the excess of
total assets over total  liabilities,  in each case as  determined in accordance
with generally accepted  accounting  principles  consistently  applied ("GAAP"),
excluding,  however,  from the  determination  of total  assets all assets which
would  be  classified  as  intangible  assets  under  GAAP  including  goodwill,
licenses,  patents,  trademarks,  trade names, copyrights,  and franchises.  Any
subsequent  assignments or subleases by a Permitted  Transferee shall be subject
to the terms of this Article 24.

ARTICLE 25.  SALE OF PREMISES BY LANDLORD

In the event of any sale of the Building or the property upon which the Building
is located  or any  assignment  of this Lease by  Landlord  (or a  successor  in
title), the assignee or purchaser shall be deemed, without any further agreement
between the parties,  to have assumed and agreed to carry out any and all of the
covenants and obligations of Landlord under this Lease, and shall be substituted
as Landlord for all purposes from and after the sale or assignment: and Landlord
(or such successor)  shall  automatically  be entirely freed and relieved of all
liability under any and all of Landlord's covenants and obligations contained in
this Lease or arising out of any act,  occurrence,  or omission  occurring after
such sale or assignment.

ARTICLE 26.  SUBORDINATION/ATTORNMENT/MODIFICATION/ASSIGNMENT

Tenant's  interest under this Lease is subordinate to all terms of and all liens
and interests  arising under any ground lease, deed of trust, or mortgage now or
hereafter placed on the Landlord's  interest in the Premises,  the Building,  or
the Project.  Tenant  consents to an assignment  of Landlord's  interest in this
Lease to Landlord's lender as required under such financing.  If the Premises or
the Building is sold as a result of a default under the mortgage, or pursuant to
a transfer in lieu of foreclosure, Tenant shall, at the mortgagee's, purchaser's
or ground lessor's sole election,


                                       9
<PAGE>


attorn to the mortgagee or purchaser.  This Article is self-operative.  However,
Tenant  agrees to execute and deliver,  if Landlord,  any deed of trust  holder,
mortgagee, or purchaser should so request, such further instruments necessary to
subordinate  this  Lease  to a  lien  of any  mortgage  or  deed  of  trust,  to
acknowledge  the consent to assignment and to affirm the  attornment  provisions
set forth herein.

ARTICLE 27.  LANDLORD'S DEFAULT AND RIGHT TO CURE

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

ARTICLE 28.  ESTOPPEL CERTIFICATES

Tenant  agrees at any time and from time to time upon  request by  Landlord,  to
execute,  acknowledge,  and deliver to Landlord,  within ten (10)  calendar days
after demand by Landlord,  a statement in writing certifying (a) that this Lease
is unmodified and in full force and effect (or if there have been modifications,
that  the  same is in full  force  and  effect  as  modified  and  stating  such
modifications),  (b) the dates to which the Minimum  Monthly Rent and other rent
and charges  have been paid in advance,  if any,  (c)  Tenant's  acceptance  and
possession of the Premises, (d) the commencement of the Lease Term, (e) the rent
provided  under the Lease,  (f) that Landlord is not in default under this Lease
(or if Tenant claims such default,  the nature thereof),  (g) that Tenant claims
no offsets against the rent, and (h) such other  information as may be requested
with  respect to the  provisions  of this Lease or the  tenancy  created by this
Lease.  Tenant's  failure to deliver  such  statement  within such time shall be
conclusive upon Tenant (i) that this Lease is in full force and effect,  without
modification  except as may be represented  by Landlord,  (ii) that there are no
uncured  defaults in  Landlord's  performance,  and (iii) that not more than one
month's rent has been paid in advance.

ARTICLE 29.  TENANT'S DEFAULT AND LANDLORD'S REMEDIES

29.1     Tenant  will be in  default  under  the  Lease if any of the  following
         occurs, and same shall be deemed an "EVENT OF DEFAULT":

         (a)      If Tenant  fails to pay the Minimum  Monthly  Rent or make any
                  other  payment  required by the Lease within three (3) working
                  days after  Landlord  sends Tenant a written  notice or demand
                  for  payment,  provided  that  such  notice or demand is dated
                  subsequent to the date such payment is due.

         (b)      If Tenant  assigns the Lease or mortgages  its interest in the
                  Lease  or  sublets  any  part of the  Premises  without  first
                  obtaining  Landlord's written consent,  as required by ARTICLE
                  24.

         (c)      If Tenant  abandons  the  Premises,  or ceases to operate  its
                  business on the Premises, or becomes bankrupt or insolvent, or
                  makes any general  assignment of all or a substantial  part of
                  its property for the benefit of creditors, or if a receiver is
                  appointed to operate  Tenant's  business or to take possession
                  of all or a substantial part of Tenant's property.

         (d)      If a lien attaches to the Lease or to Tenant's interest in the
                  Premises, and Tenant fails to post a bond or other security or
                  to  have  the  lien  released  within  ten  (10)  days  of its
                  notification thereof, or if a mortgagee institutes proceedings
                  to foreclose its mortgage against Tenant's  leasehold interest
                  or other  property  and Tenant  fails to have the  foreclosure
                  proceedings  dismissed within ten (10) calendar days after the
                  entry of any  judgment or order  declaring  the mortgage to be
                  valid and Tenant to be in default  on the  obligation  secured
                  thereby, or directing enforcement of the mortgage.

         (e)      If Tenant fails to maintain  any of the  insurance as required
                  by the Lease.

         (f)      If Tenant  breaches any other provision of the Lease and fails
                  to cure the breach  within  fifteen  (15) days after  Landlord
                  sends it written notice of the breach, or if the breach cannot
                  be cured  within  fifteen  (15) days,  then if Tenant does not
                  proceed with  reasonable  diligence to cure the breach  within
                  such additional time as may be reasonably  necessary under the
                  circumstances, not to exceed sixty (60) days.

29.2     If Tenant is in default,  then Landlord may take any one or more of the
         following actions:

         (a)      Landlord may re-enter and take  possession  of all or any part
                  of the  Premises  and remove  Tenant  and any person  claiming
                  under Tenant from the Premises,  using  reasonable  force,  if
                  necessary,  and  without  committing  a trespass  or  becoming
                  liable for any loss or damage that may be occasioned  thereby.
                  Landlord  may also  change the locks to the  Premises  without
                  notice at Tenant's  expense.  Re-entry and  possession  of the
                  Premises will not by themselves terminate the Lease.


                                       10
<PAGE>


         (b)      Landlord may remove any property, including fixtures, from the
                  Premises and store the same at Tenant's expense in a warehouse
                  or any other location, or Landlord may lease the Premises with
                  the  property  on  the  Premises   pending  removal  or  other
                  disposition.  If Landlord  leaves the property on the Premises
                  or  stores  it at  another  location  owned or  controlled  by
                  Landlord, then Landlord may charge Tenant a reasonable fee for
                  storing and handling the property  comparable to what Landlord
                  would  have had to pay to a third  party  for  such  services.
                  Landlord will not be liable under any  circumstance  to Tenant
                  or to anyone  else for any  damage to the  property.  Provided
                  that Tenant does not remove  Tenant's  property  within twenty
                  (20) days after  Landlord has taken  possession  of all or any
                  part of the  Premises,  Landlord may proceed to sell  Tenant's
                  property,  which shall be sold in accordance  with the laws of
                  the state in which the Premises are located.

         (c)      Landlord may collect any rents or other  payments  that become
                  due from any subtenant, concessionaire or licensee, and may in
                  its own name or in Tenant's  name bring suit for such amounts,
                  and settle any claims therefor, without approving the terms of
                  the sublease or Tenant's  agreement with the concessionaire or
                  licensee  and  without   prejudice  to  Landlord's   right  to
                  terminate  the sublease or agreement  without cause and remove
                  the subtenant, concessionaire or licensee from the Premises.

         (d)      [Intentionally Deleted]

         (e)      Landlord  may  relet  the  Premises  at  whatever  rent and on
                  whatever terms and conditions it deems advisable.  The term of
                  any new lease may be shorter or longer than the remaining term
                  of this Lease.  In reletting the  Premises,  Landlord may make
                  any  alterations or repairs to the Premises it feels necessary
                  or  desirable;  may  subdivide the Premises into more than one
                  unit and lease  each  portion  separately;  may sell  Tenant's
                  improvements,  fixtures  and  other  property  located  on the
                  Premises  to the new  tenant,  or include  such  improvements,
                  fixtures  and  property  as  part  of  the  Premises   without
                  additional cost; may advertise the Premises for sale or lease;
                  may hire brokers or other agents; and, may do anything else it
                  deems  necessary or helpful in reletting the Premises.  Tenant
                  will be liable to Landlord  for all costs and  expenses of the
                  reletting  including but not limited to rental  concessions to
                  the new tenant,  broker's commissions and tenant improvements,
                  and will remain  liable for the Minimum  Monthly  Rent and all
                  other  charges  arising  under  the  Lease,  less  any  income
                  received  from the new tenant,  unless the Lease is terminated
                  as set forth  below.  In the event an  existing  tenant of the
                  project is moved into the Premises,  Tenant will be liable for
                  the damages suffered by Landlord (as calculated herein) as the
                  result of the vacancy of the premises occupied by the existing
                  tenant.

         (f)      Landlord  may  terminate  the Lease at any time  after  Tenant
                  defaults  by  sending  a written  notice  to Tenant  expressly
                  stating that the Lease is being  terminated.  Termination will
                  be  effective  on the date of the  notice or on any other date
                  set forth in the notice.  Until  Landlord  sends Tenant such a
                  notice,  the Lease will remain in full force and  effect,  and
                  Tenant will remain liable for paying the Minimum  Monthly Rent
                  and  other  charges  that  come due  under  the  Lease and for
                  performing  all other terms and  conditions  of the Lease.  No
                  other  action  by  Landlord,  including  repossession  of  the
                  Premises,  removing  or selling  Tenant's  separate  property,
                  reletting the Premises,  or filing suit for  possession or for
                  damages,  will  terminate the Lease or release Tenant from its
                  continuing   liability  for  complying   with  the  terms  and
                  conditions.

         (g)      Landlord  may  recover  from  Tenant  all costs  and  expenses
                  Landlord  incurs  as  a  direct  or  indirect  consequence  of
                  Tenant's  breach,  including  the cost of storing  and selling
                  Tenant's property,  reletting the Premises,  and bringing suit
                  against Tenant for possession or damages.  If Landlord made or
                  paid for any  improvements to the Premises,  or granted Tenant
                  any  improvement  allowance  or  credit  against  the  Minimum
                  Monthly  Rent or other  charges  due  hereunder  for  Tenant's
                  improvements,  then Landlord shall also be entitled to recover
                  the  unamortized  portion of the cost of such  improvements or
                  the  amount  of  such  allowance  or  credit,   determined  by
                  multiplying  the total  amount of such  cost or  allowance  or
                  credit by a fraction,  the  denominator  of which is the total
                  number of months of the initial  Lease Term and the  numerator
                  of which is the number of months of the Lease  Term  remaining
                  at the time of Tenant's  default.  Also, if the Lease provides
                  for any months for which no Minimum  Monthly Rent or a reduced
                  Minimum  Monthly  Rent  is  payable,  or for  any  other  rent
                  concession to Tenant, then, upon default,  Tenant shall become
                  liable for the full  amount of the  Minimum  Monthly  Rent (or
                  other  rent  concession),  plus  applicable  taxes,  for  such
                  months,   and  Landlord   shall  be  entitled  to  recover  as
                  additional  rent the amount  that  would have been  payable by
                  Tenant for such months if the Minimum  Monthly  Rent  provided
                  for herein had been  payable by Tenant  throughout  the entire
                  Lease Term. Unless Landlord  terminates the Lease, Tenant will
                  also  remain  liable for any  difference  between  the Minimum
                  Monthly Rent and other charges called for by the Lease and the
                  rent and other  charges  collected  by  Landlord  from any new
                  tenant.  For any month in which Landlord  collects less from a
                  successor  tenant than is payable  under this Lease,  Landlord
                  may demand that Tenant immediately make up the difference, and
                  Landlord may bring suit  against  Tenant if Tenant fails to do
                  so. If Landlord does terminate the Lease,  then Tenant will no
                  longer be liable on a continuing monthly basis for the Minimum
                  Monthly  Rent and other  charges  that would  have  become due
                  under the Lease thereafter,  but Tenant will remain liable for
                  all sums accrued  under the Lease to the date of  termination,
                  as well as for all costs and  expenses  incurred by  Landlord,
                  and any other damages sustained by Landlord,  as a consequence
                  of Tenant's breach. Also Landlord may recover from


                                       11
<PAGE>


                  Tenant the difference between the present value at the date of
                  termination to the end of the Lease Term and the present value
                  of the Minimum  Monthly Rent and other charges  Landlord could
                  have obtained if Landlord had rented the Premises for the same
                  period at its fair rental value at the end of termination. The
                  present  value of the  amounts  referred  to in the  preceding
                  sentence  shall be computed using a discount rate equal to the
                  prime rate charged by Wells Fargo Bank (or its  successor)  at
                  the date of termination.

         (h)      Landlord may sue Tenant for  possession of the  Premises,  for
                  damages  for  breach of the Lease,  and for other  appropriate
                  relief,  either in the same or in separate  actions.  Landlord
                  may recover all costs and expenses it incurs in any such suit,
                  including reasonable attorneys' fees.

         (i)      Landlord may  exercise any other right or remedy  available at
                  law or in equity  for  breach of  contract,  damages  or other
                  appropriate  relief.  The rights and remedies described herein
                  are cumulative,  and Landlord's exercise of any one right will
                  not preclude the  simultaneous  exercise of any other right or
                  remedy.



29.3     [Intentionally Deleted]

ARTICLE 30.  TENANT'S RECOURSE

Anything in this Lease to the contrary  notwithstanding,  Tenant  agrees to look
solely to the estate and  property of Landlord in the  Building and the Project,
subject to prior rights of any ground lessor, mortgagee, or deed of trust of the
Building and the Project or any part thereof, for the collection of any judgment
requiring  the  payment  of money by  Landlord  in the event of any  default  by
Landlord  under this Lease.  Tenant agrees that it is prohibited  from using any
other procedures for the satisfaction of Tenants' remedies. Neither Landlord nor
any of its respective officers,  directors,  employees,  heirs,  successors,  or
assigns,  shall have any personal  liability of any kind or nature,  directly or
indirectly, under or in connection with this Lease.

ARTICLE 31.  HOLDING OVER

Subject to prior  written  consent by  Landlord,  if Tenant holds over after the
Expiration  Date,  or  any  extension  thereof,  Tenant  shall  be a  tenant  at
sufferance,  the Minimum  Monthly  Rent shall be  increased  to 150% of the then
current  lease rate at the Building or the  Tenant's  lease rate at the time the
Lease expired,  whichever is higher, plus any amounts due under ARTICLE 5, which
shall be payable in advance on the first day of such holdover  period and on the
first  day of  each  month  thereafter.  Tenant  will be  considered  to be on a
month-to-month basis during any holdover period.

ARTICLE 32.  GENERAL PROVISIONS

32.1     This Lease is  construed  in  accordance  with the laws of the state in
         which the Premises are located.

32.2     If  Tenant is  composed  of more than one  person or  entity,  then the
         obligations of such entities or parties are joint and several.

32.3     If any term, condition, covenant, or provision of this Lease is held by
         a  court  of   competent   jurisdiction   to  be  invalid,   void,   or
         unenforceable,  the remainder of the terms, conditions,  covenants, and
         provisions hereof shall remain in full force and effect and shall in no
         way be affected, impaired, or invalidated.

32.4     The  various  headings  and  numbers  herein  and the  grouping  of the
         provisions  of this Lease into  separate  articles and sections are for
         the  purpose  of  convenience  only  and are not be  considered  a part
         hereof.

32.5     Time is of the essence of this Lease.

32.6     Other  than for  Tenant's  obligations  under  this  Lease  that can be
         performed  by  the  payment  of  money  (e.g.,   payment  of  Rent  and
         maintenance  of  insurance),  whenever  a  period  of  time  is  herein
         prescribed  for action to be taken by either party  hereto,  such party
         shall not be liable or  responsible  for,  and there  shall be excluded
         from the  computation  of any such  period of time,  any  delays due to
         strikes,  riots,  acts of God,  shortages  of labor or  materials,  war
         (declared  or  undeclared),  acts  of  terrorism,   governmental  laws,
         regulations,  or  restrictions,   or  any  other  causes  of  any  kind
         whatsoever which are beyond the control of such party.

32.7     In the event either party  initiates  legal  proceedings  or retains an
         attorney  to  enforce  any right or  obligation  under this Lease or to
         obtain  relief  for  the  breach  of any  covenant  hereof,  the  party
         ultimately  prevailing in such proceedings or the non-defaulting  party
         shall be entitled to recover all costs and reasonable attorneys' fees.

32.8     This Lease, and any Exhibit or Addendum attached hereto, sets forth all
         the terms, conditions, covenants, provisions, promises, agreements, and
         undertakings,  either oral or written, between the Landlord and Tenant.
         No subsequent alteration,  amendment, change, or addition to this Lease
         is binding upon Landlord or Tenant unless reduced to writing and signed
         by both parties.


                                       12
<PAGE>


32.9     Subject to ARTICLE 24, the covenants  herein  contained  shall apply to
         and bind the heirs, successors,  executors,  personal  representatives,
         legal representatives,  administrators,  and assigns of all the parties
         hereto.

32.10    No term,  condition,  covenant,  or  provision  of this Lease  shall be
         waived except by written  waiver of Landlord,  and the  forbearance  or
         indulgence by Landlord in any regard  whatsoever shall not constitute a
         waiver of the term,  condition,  covenant, or provision to be performed
         by Tenant to which the same shall apply, and until complete performance
         by Tenant of such term,  condition,  covenant,  or provision,  Landlord
         shall be entitled to invoke any remedy available under this Lease or by
         law despite such  forbearance or indulgence.  The waiver by Landlord of
         any breach or term,  condition,  covenant,  or  provision  hereof shall
         apply to and be limited to the specific instance involved and shall not
         be deemed to apply to any other instance or to any subsequent breach of
         the same or any other term,  condition,  covenant, or provision hereof.
         Acceptance  of rent by Landlord  during a period in which  Tenant is in
         default in any respect other than payment of rent shall not be deemed a
         waiver of the other  default.  Any  payment  made in  arrears  shall be
         credited to the oldest amount  outstanding and no contrary  application
         will waive this right.

32.11    The use of a singular  term in this Lease shall  include the plural and
         the use of the masculine, feminine, or neuter genders shall include all
         others.

32.12    Landlord's  submission  of a copy of  this  Lease  form to any  person,
         including  Tenant,  shall  not be deemed to be an offer to lease or the
         creation of a lease  unless and until this Lease has been fully  signed
         and delivered by Landlord.

32.13    Every term,  condition,  covenant,  and provision of this Lease, having
         been negotiated in detail and at arm's length by both parties, shall be
         construed  simply according to its fair meaning and not strictly for or
         against Landlord or Tenant.

32.14    If the time for the  performance  of any  obligation  under  this Lease
         expires  on  a  Saturday,  Sunday,  or  legal  holiday,  the  time  for
         performance shall be extended to the next succeeding day which is not a
         Saturday, Sunday, or legal holiday.

32.15    If requested by Landlord,  Tenant shall execute  written  documentation
         with signatures  acknowledged by a notary public,  to evidence when and
         if Landlord or Tenant has met certain obligations under this Lease.

ARTICLE 33.  NOTICES

Wherever  in this Lease it is  required  or  permitted  that notice or demand be
given or served by either party to or on the other,  such notice or demand shall
be in writing  and shall be given or served and shall not be deemed to have been
duly given or served unless (a) in writing; (b) either (1) delivered personally,
(2) deposited with the United States Postal Service,  as registered or certified
mail,  return  receipt  requested,  bearing  adequate  postage,  or (3)  sent by
overnight express courier (including,  without limitation,  Federal Express, DHL
Worldwide Express,  Airborne Express, United States Postal Service Express Mail)
with a request that the addressee sign a receipt  evidencing  delivery;  and (c)
addressed  to the party at its address in SECTION  1.1.  Either party may change
such  address  by written  notice to the other.  Service of any notice or demand
shall be deemed  completed  forty-eight  (48) hours after  deposit  thereof,  if
deposited with the United States Postal Service, or upon receipt if delivered by
overnight courier or in person.

ARTICLE 34.  BROKER'S COMMISSIONS

Tenant   represents  and  warrants  that  there  are  no  claims  for  brokerage
commissions or finder's fees in connection with this Lease other than Rare Space
Inc. ("Rare Space"),  acting as Tenant's agent who shall be paid a commission by
Landlord pursuant to a separate agreement. Landlord represents and warrants that
there are no claims for  brokerage  commissions  or finder's  fees in connection
with this Lease other than  Trammell  Crow  Services,  Inc.  ("Trammell  Crow"),
acting as Landlord's  agent.  Tenant shall  indemnify,  defend and hold Landlord
harmless for, from and against all costs,  expenses,  attorneys' fees, liens and
other liabilities for commissions or other compensation claimed by any broker or
agent claiming the same by, through or under Tenant,  other than Rare Space. The
foregoing  indemnity shall survive the expiration or earlier  termination of the
Lease.

ARTICLE 35.  INDEMNIFICATION/WAIVER OF SUBROGATION

35.1     Tenant shall  indemnify,  defend,  and hold  Landlord and any lender of
         Landlord  harmless  against  all  Claims (as  defined  below) and costs
         incurred by Landlord arising from: (a) any act or omission of Tenant or
         Tenant's  Permittees which results in personal injury, loss of life, or
         property damage sustained in and about the Premises,  the Building,  or
         the Project;  (b)  attachment or discharge of a lien upon the Premises,
         the  Building,  or the Project;  (c) Tenant's and Tenant's  Permittees'
         use,  generation,  storage,  release,  threatened  release,  discharge,
         disposal,  or presence of Hazardous  Materials on, under,  or about the
         Premises, the Building, or the Project; (d) any default of Tenant under
         this Lease;  and (e) any claims for brokerage  commissions  or finder's
         fees in  connection  with this  Lease  (excepting  commissions  or fees
         authorized  in writing by  Landlord).  As used in this Lease,  "CLAIMS"
         means  any  claim,   suit,   proceeding,   action,   cause  of  action,
         responsibility, demand, judgment and execution, and attorneys' fees and
         costs related thereto or arising therefrom.


                                       13
<PAGE>


35.2     Tenant hereby  releases,  discharges,  and waives any right of recovery
         from  Landlord  and  Landlord's  agents,   directors,   officers,   and
         employees,  and Landlord hereby  releases,  discharges,  and waives any
         right of recovery from Tenant and Tenant's Permittees, from all Claims,
         liabilities,  losses,  damages,  expenses, or attorneys' fees and costs
         incurred  arising from or caused by any peril required to be covered by
         insurance  obtained by Landlord or Tenant under this Lease,  or covered
         by  insurance in  connection  with (a)  property on the  Premises,  the
         Building, or the Project; (b) activities conducted on the Premises, the
         Building,  or the Project;  and (c) obligations to indemnify under this
         Lease,  regardless  of the cause of the  damage or loss.  Landlord  and
         Tenant shall give their respective  insurance  carriers notice of these
         waivers and shall secure an endorsement from each carrier to the effect
         that the waivers given in this ARTICLE 35 shall not adversely affect or
         impair the policies of  insurance  or prejudice  the right of the named
         insured on the policy to recover  thereunder.  These waivers apply only
         to the extent such Claims,  liabilities,  losses, damages, expenses, or
         attorneys'  fees are  covered by  insurance  required  pursuant to this
         Lease.

35.3     Notwithstanding anything in this Lease to the contrary,  Landlord shall
         not be  responsible  or  liable to Tenant  for any  Claims  for loss or
         damage  caused by the acts or  omissions of any persons  occupying  any
         space elsewhere in the Building.

ARTICLE 36.  WAIVER OF TRIAL BY JURY

LANDLORD  AND  TENANT  WAIVE  ANY  RIGHT  TO A TRIAL  BY JURY IN ANY  ACTION  OR
PROCEEDING  BASED UPON,  OR RELATED TO, THE SUBJECT  MATTER OF THIS LEASE OR THE
USE AND OCCUPANCY OF THE PREMISES.  THIS WAIVER IS KNOWINGLY,  INTENTIONALLY AND
VOLUNTARILY MADE BY TENANT, AND TENANT ACKNOWLEDGES THAT NEITHER LANDLORD OR ANY
PERSON  ACTING ON BEHALF OF  LANDLORD  HAS MADE ANY  REPRESENTATIONS  OF FACT TO
INDUCE  THIS  WAIVER  OF TRIAL BY JURY OR IN ANY WAY TO MODIFY  OR  NULLIFY  ITS
EFFECT. TENANT FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED (OR HAS HAD THE
OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS LEASE AND IN THE MAKING OF
THIS WAIVER BY  INDEPENDENT  LEGAL  COUNSEL,  SELECTED OF ITS OWN FREE WILL, AND
THAT TENANT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.  TENANT
FURTHER   ACKNOWLEDGES  THAT  IT  HAS  READ  AND  UNDERSTANDS  THE  MEANING  AND
RAMIFICATIONS OF THIS WAIVER PROVISION, AS EVIDENCED BY ITS SIGNATURE BELOW.

ARTICLE 37.  USA PATRIOT ACT AND ANTI-TERRORISM LAWS

37.1     Tenant  represents and warrants to, and covenants  with,  Landlord that
         neither  Tenant  nor  any  of  its  respective  constituent  owners  or
         affiliates  currently  are,  or shall be at any  time  during  the Term
         hereof,  in  violation  of any  laws  relating  to  terrorism  or money
         laundering (collectively, the "Anti-Terrorism Laws"), including without
         limitation Executive Order No. 13224 on Terrorist Financing,  effective
         September  24, 2001 and relating to Blocking  Property and  Prohibiting
         Transactions  With Persons Who Commit,  Threaten to Commit,  or Support
         Terrorism (the "Executive  Order") and/or the Uniting and Strengthening
         America by  Providing  Appropriate  Tools  Required  to  Intercept  and
         Obstruct  Terrorism  Act of 2001  (Public Law 107-56) (the "USA Patriot
         Act").

37.2     Tenant  covenants  with  Landlord  that  neither  Tenant nor any of its
         respective  constituent  owners or affiliates is or shall be during the
         Term hereof a "Prohibited  Person," which is defined as follows:  (i) a
         person  or entity  that is  listed  in the  Annex  to, or is  otherwise
         subject to, the  provisions  of the Executive  Order;  (ii) a person or
         entity  owned or  controlled  by, or acting  for or on behalf  of,  any
         person  or entity  that is  listed  in the  Annex  to, or is  otherwise
         subject to the  provisions of, the Executive  Order;  (iii) a person or
         entity with whom Landlord is prohibited  from dealing with or otherwise
         engaging  in any  transaction  by  any  Anti-Terrorism  Law,  including
         without  limitation the Executive Order and the USA Patriot Act; (iv) a
         person or entity  who  commits,  threatens  or  conspires  to commit or
         support  "terrorism" as defined in Section 3(d) of the Executive Order;
         (v) a  person  or  entity  that is  named  as a  "specially  designated
         national and blocked person" on the then-most current list published by
         the U.S.  Treasury  Department  Office of Foreign Assets Control at its
         official     website,     http://www.treas.gov/offices/eotffc/ofac/sdn/
         t11sdn.pdf, or at any replacement website or other replacement official
         publication of such list; and (vi) a person or entity who is affiliated
         with a person or entity listed in items (i) through (v), above.

37.3     At any time and from time-to-time during the Term, Tenant shall deliver
         to Landlord,  within ten (10) days after  receipt of a written  request
         therefor,  a written  certification  or such other evidence  reasonably
         acceptable to Landlord  evidencing and confirming  Tenant's  compliance
         with this Section 37.

LANDLORD AND TENANT  EXPRESSLY  DISCLAIM ANY IMPLIED  WARRANTY THAT THE PREMISES
ARE SUITABLE FOR TENANT'S INTENDED COMMERCIAL  PURPOSE,  AND TENANT'S OBLIGATION
TO PAY RENT HEREUNDER IS NOT DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE
PERFORMANCE BY LANDLORD OF ITS OBLIGATIONS  HEREUNDER,  AND, EXCEPT AS OTHERWISE
EXPRESSLY  PROVIDED  HEREIN,  TENANT  SHALL  CONTINUE  TO PAY THE RENT,  WITHOUT
ABATEMENT,  DEMAND, SETOFF OR DEDUCTION,  NOTWITHSTANDING ANY BREACH BY LANDLORD
OF ITS DUTIES OR OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED.

                            [Signature page follows]


                                       14
<PAGE>


IN WITNESS WHEREOF,  the parties have duly executed this Lease as of the day and
year first above written.

LANDLORD                                   TENANT

FLATIRON BOULDER OFFICE, INC.,             PATRON SYSTEMS, INCORPORATED,
a Texas corporation                        a Delaware corporation

By:   /s/ Terrell Boiko                    By:   /s/ Heidi Newton
   ---------------------------------          ----------------------------

Its:  Vice President                       Its:  V.P. Finance
    --------------------------------           ---------------------------

Date: 8/31/05                              Date: 8/24/05
     -------------------------------            --------------------------

                                           ATTEST:

                                           By:   /s/ Kathie Robinson
                                              ----------------------------
                                           Its:  Assistant Controller
                                               ---------------------------
                                           Date: 8/24/05
                                                --------------------------


                                       15
<PAGE>


                                   EXHIBIT "A"

                                    PREMISES


                                      A-1
<PAGE>


                                   EXHIBIT "B"

                              RULES AND REGULATIONS

         The following  rules and regulations  shall apply to the Premises,  the
Building,  the  parking  garage  associated  therewith,  and  the  appurtenances
thereto:

         1. Sidewalks, doorways, vestibules, halls, stairways, and other similar
areas  shall not be  obstructed  by tenants  or used by any tenant for  purposes
other than ingress and egress to and from their  respective  leased premises and
for  going  from one to  another  part of the  Building.  Bicycles  shall not be
permitted in the offices, halls, corridors stairways, corridors and elevators of
the Building.  An exterior bicycle rack shall be provided by Landlord for tenant
and guest use.

         2.  Plumbing,  fixtures  and  appliances  shall  be used  only  for the
purposes for which designed, and no sweepings, rubbish, rags or other unsuitable
material  shall be thrown or  deposited  therein.  Damage  resulting to any such
fixtures  or  appliances  from misuse by a tenant or its  agents,  employees  or
invitees, shall be paid by such tenant.

         3. No sign, picture,  advertisement,  name notice or other object shall
be  displayed  or  affixed  off or to any part of the  outside  or inside of the
Building  (including  all common  areas mid  facilities  in the  Building or the
leased  Premises  (including  the window sills) which is visible from outside of
the Premises  without the prior written  consent of Landlord and Landlord  shall
have the right to remove  any  object  without  notice to and at the  expense of
Tenant.  The  directory of the  Building  will be provided  exclusively  for the
display of the name and location of Tenant only and Landlord  reserves the right
to include or exclude any others therefrom.

         4.  Landlord  may retain a passkey to the  Premises.  Tenant  shall not
alter any lock or  install a new lock or  deadbolt  on any door of the  Premises
without the prior written  consent of Landlord.  Tenant shall not duplicate keys
provided by Landlord. Additional keys shall be provided to Tenant by Landlord at
Tenant sole  expense.  Loss and  replacement  of a card access key for Tenant or
Tenant's  employees shall be provided by Landlord at a charge of $10.00 each. If
the card is found,  no refund  will be issued by  Landlord,  tenant  shall  upon
termination  of the Lease or of Tenant's  possession,  surrender all card access
keys to the  Premises to Landlord.  Tenant may be assessed  $10.00 for each card
access key not  surrendered  to Landlord.  Tenant shall notify  Landlord of each
employee no longer in their employ in order to reprogram access to the Building.

         5. If the Building is multi-tenant,  movement in or out of the Building
of furniture or office equipment, or dispatch or receipt by tenants of any bulky
material,  merchandise or materials which require use of elevators or stairways,
or movement  through the Building  entrances  or lobby shall be conducted  under
Landlord's  supervision  at such  times  and in such a manner  as  Landlord  may
reasonably require. Each tenant assumes all risks of and shall be liable for all
damage to articles  moved and injury to persons or public engaged or not engaged
in such  movement,  including  equipment,  property and personnel of Landlord if
damaged or  injured as a result of acts in  connection  with  carrying  out this
service for such tenant.

         6. If any Tenant  desires to place in the Building any unusually  heavy
equipment including large files, safes and electronic data processing  equipment
shall first obtain written  approval of Landlord for such  placement  within the
Building including the location and the use of the Building elevators.  Landlord
may prescribe weight limitations and determine the locations for safes and other
heavy equipment or items,  which shall in all cases be placed in the Building so
as to distribute weight in a manner acceptable to Landlord which may include the
use of such  supporting  devices as  Landlord  may  require.  All damages to the
Building caused by the  installation or removal of any property of a tenant,  or
done by a tenant's  property  while in the  Building,  shall be  repaired at the
expense of such tenant.

         7. Corridor doors, when not in use, shall be kept closed. Nothing shall
be swept or thrown into the corridors,  halls, elevator shafts or stairways.  No
pets,  birds or animals (other than seeing eye or hearing dogs) shall be brought
into or kept in, on or about any  tenant's  leased  premises.  No portion of any
tenant's  leased  premises  shall at any time be used or occupied as sleeping or
lodging quarters.

         8. No noise,  including  the playing of musical  instruments,  radio or
television,  vibration,  or  unpleasant  odors  which,  in the  judgment  of the
Landlord,  might disturb other tenants or persons  having  business with them in
the Building, shall be made or permitted by any Tenants, and no cooking shall be
done in the Premises or the Building  except as expressly  approved by Landlord.
All electrical  equipment used by Tenants shall be U.L. approved.  Nothing shall
be done or permitted in Tenant's Premises,  and nothing shall be brought into or
kept in the Premises  which would  impair or interfere  with any of the Building
set-vices  or the  proper  and  economic  heating  cooling,  cleaning  or  other
servicing  of the  Building or the Premises or the use or enjoyment by any other
Tenant within the Building. Tenant may have a microwave oven in its suite.

         9. No machinery of any kind (other than normal office  equipment) shall
be operated by any tenant on its leased area without  Landlord's  prior  written
consent,  nor shall any  tenant use or keep in the  Building  any  flammable  or
explosive  fluid  or  substance  (other  than  typical  office  supplies  [e.g.,
photocopier toner] used in compliance with all Laws).

         10. In the event  janitorial  services  become  necessary under Section
8(b)(ii),  Tenant shall permit the janitor,  who shall be bonded and approved by
Landlord, to clean their Premises. Landlord shall not be responsible for lost or
stolen personal property, equipment money or any article taken from the Premises
or  Building,  regardless  of how or when  loss  occurs  when the area is locked
against entry or not. In the event Tenant must dispose of boxes,


                                       B-1
<PAGE>


etc.  which will not fit into office  wastepaper  baskets,  Tenant shall clearly
mark them "TRASH"  Tenant shall not leave any refuse in the public  corridors or
other areas of the Building for disposal.

         11. No vending or dispensing  machines of any kind may be maintained in
any leased premises without the prior written permission of Landlord, other than
those used for Tenant's employees.

         12.  Tenant  shall not conduct any activity on or about the Premises or
Building which will draw pickets, demonstrators, or the like.

         13. No tenant may enter into phone rooms,  electrical rooms, mechanical
rooms, or other service areas of the Building unless  accompanied by Landlord or
the Building manager.

         14. Tenant shall not permit its employees,  invitees or guests to smoke
in the Premises or the lobbies, passages,  corridors,  elevators, vending rooms,
rest rooms,  stairways or any other area shared in common with other  tenants in
the Building. Nor shall the tenant permit its employees,  invitees, or guests to
loiter at the Building entrances for the purposes of smoking.  Landlord may, but
shall not be required to, designate an area for smoking outside the Building.

         15. Canvassing,  soliciting or peddling in or about the Premises or the
Property is prohibited  and Tenant shall  cooperate to prevent same,  and Tenant
shall not do any act  tending to injure the  reputation  of the  Building or the
Premises.

         16.  Landlord  reserves the right to exclude or expel from the Building
any person who, in the judgment of the  Landlord,  is  intoxicated  or under the
influence of liquor or drugs, or who shall in any manner do any act in violation
of any of the rules and  regulations  of the  Building,  or causes or  creates a
public nuisance.

         17. Tenant shall not use the name of the Building in connection with or
in promoting or advertising  the business of tenant except as Tenant's  business
address without the prior written consent of Landlord.

         18. Tenant shall not have access to the roof of the Building,  nor make
any  installations  upon or through the roof,  walls or plenums of the  Building
without  prior  written  consent of the  Landlord.  If any tenant  desires radio
signal,  communication antenna satellite dish, alarm or other utility or service
connection  installed  or  changed,  such work  shall be done at the  expense of
Tenant,  with prior written lien consent it by Landlord.  Landlord  reserves the
right to disconnect  any such  installation  when, in Landlord's  opinion,  such
installation  apparatus  interferes with the proper operation of the Building or
systems within the Building.

         19. All large supplies, goods, materials, packages, equipment furniture
and all such items of every kind are to be delivered through the dock and to the
Tenant's space through the freight elevator only. All such items moved in or out
of the  Building  shall be done at such time and in such  manner as  designed by
Landlord. All hand trucks shall be equipped with rubber tires only.

         20. Tenant shall not permit any  contractor or other person to make any
alterations,  additions, repairs or installations within the Premises nor to use
life  hallways,  lobbies or corridors as storage or work areas without the prior
approval of Landlord Tenant shall use Building approved  contractors through the
services of the Landlord unless otherwise agreed to in writing.

         21. Tenant agrees to use chair pads to be furnished by Tenant under all
rolling and ordinary desk chairs in the carpeted areas throughout the Premises.

         22.  Tenant shall give  Landlord  prompt  notice of all accidents to or
problems  with  air  conditioning,   heating  venting,  plumbing  or  electrical
equipment  in their  Premises  or common  areas of the  Building.  All  plumbing
fixtures,  including,  but not limited to water closets,  waste lines, sinks and
dishwashers  installed within the Tenant Premises shall be the responsibility of
the Tenant after any and all warranty periods; however, Landlord shall repair at
Tenant's sole expense.

         23. Landlord reserves the right by written notice to Tenant to rescind,
modify or waive any rule or regulation at any time  prescribed  for the Building
when, in Landlord's reasonable judgment it is necessary, desirable or proper for
the best interest or the Building and its tenants.


                                      B-2
<PAGE>


                                    EXHIBIT C

                                PARKING AGREEMENT

         During the initial Term,  Tenant and its employees shall have the right
to use up to Twenty (20) total surface,  unreserved parking spaces, at no charge
for the Term of the Lease, subject to the terms and conditions of this Lease and
to reasonable  Rules and  Regulations  prescribed from time to time by Landlord,
including the  designation of specified areas in which  automobiles  operated by
Tenant and its employees shall be parked. Upon request of Landlord, Tenant shall
furnish to Landlord a complete  list of the license  numbers of all  automobiles
operated by Tenant and its employees.

         Landlord  reserves  the  right  to  enter  into  an  agreement  for the
management  of the parking  structure.  In the event  Landlord  enters into such
parking  structure  management  agreement,  Tenant  shall  enter  into a parking
agreement  directly with the company which manages the parking garage associated
with the Building and Landlord agrees to use commercially  reasonable efforts to
preserve any  pre-existing  parking  privileges  of Tenant as contained  herein.
Tenant  acknowledges that a default by Tenant under the Lease shall be a default
under such parking  agreement,  and a default under such parking agreement shall
be a default under the Lease.

                                  RESTRICTIONS

o        Damage caused by vehicles is the responsibility of vehicle owner.
o        Landlord is not responsible for theft or damage to any vehicle.
o        Landlord is not  responsible  for water damage from leaks in the garage
         or any surface parking area.
o        Landlord is not  responsible  for damage due to height  limitations  of
         garage.
o        Vehicles not to exceed 2 miles per hour speed limit in the garage.
o        Vehicles that leak excessive fluids will be required to protect parking
         surface.
o        Mechanical repairs to vehicles are not permitted on property.
o        Large or oversize  vehicles such as motor homes,  boats or trailers are
         not permitted.
o        No  parking  in fire  lanes,  loading  zones  or any  other  areas  not
         designated as a parking space.
o        Landlord, at Landlord's sole discretion,  may add or modify the parking
         rules.
o        Landlord reserves the right to relocate the location of reserved spaces
         from time to time.
o        Rental for  reserved  spaces  shall be paid to Landlord by Tenant along
         with, and on the same due date as, the Minimum Monthly Rent.


Violations of rules & regulations may result in towing from the Project.  Towing
from the Project can only be ordered by Landlord or Landlord's property manager.
Charges for towing are to be paid by vehicle owner.


                                      C-1
<PAGE>


                                   EXHIBIT "D"

                   TENANT IMPROVEMENTS: LIMITED SCOPE OF WORK

                          (LANDLORD PERFORMS THE WORK)

         1. ACCEPTANCE OF PREMISES.  Except as set forth in this Exhibit, Tenant
accepts the Premises in their  "AS-IS"  condition on the date that this Lease is
entered into.

         2. SCOPE OF WORK. Landlord, at its expense, shall perform the following
work in the Premises (the "WORK") in substantial  accordance  with that specific
space plan dated August 3, 2005 by McDermott (including  repainting the existing
painted walls in the Premises with Building-standard paint in Tenant's choice of
color in Building-standard  quantities and installing  Building-standard  carpet
and base in the  Premises  in Tenant's  choice of color)  attached as SCHEDULE 1
hereto (the "SPACE PLANS"). Other than as set forth on the Space Plans, Landlord
shall have no  obligations  for the  completion  or  remodeling of the Premises.
Landlord's approval of the Space Plans shall not be a representation or warranty
of Landlord that such drawings are adequate for any use or comply with any Laws,
but shall merely be the consent of Landlord  thereto.  Within three (3) Business
Days after the date of this Lease,  Tenant  shall  select all  Building-standard
materials  to be  incorporated  into the Work and give  written  notice  of such
selection to Landlord.

         3. WORKING DRAWINGS.  If the scope of the Work so requires,  Landlord's
architects and engineers will prepare  architectural,  mechanical and electrical
working  drawings for the Premises that are consistent with the Space Plans (the
"WORKING DRAWINGS").  Landlord's approval of the Working Drawings shall not be a
representation  or warranty of Landlord  that such drawings are adequate for any
use or comply with any Law, but shall merely be the consent of Landlord thereto.
Tenant shall, at Landlord's  request,  sign the Working Drawings to evidence its
review and approval  thereof.  After the Working  Drawings  have been  approved,
Landlord shall cause the Work to be performed in substantial accordance with the
Working Drawings, using contractors and subcontractors selected by Landlord.

         4. CHANGE ORDERS.  Tenant may initiate  changes in the Work.  Each such
change must receive the prior written approval of Landlord, such approval not to
be unreasonably withheld or delayed; however, (a) if such requested change would
adversely  affect (in the reasonable  discretion of Landlord) (1) the Building's
exterior  walls,  roof,  elevator  shafts  (if  any),   footings,   foundations,
structural portions of load-bearing walls, structural floors and subfloors,  and
structural columns and beams or the Premises' and Building's HVAC,  life-safety,
plumbing, electrical, and mechanical systems (including the Building's restrooms
or mechanical  rooms), (2) the exterior  appearance of the Building,  or (3) the
appearance of the  Building's  Common Areas or elevator lobby areas (if any), or
(b) if any such requested change might delay the Commencement Date, Landlord may
withhold its consent in its sole and absolute  discretion.  Tenant  shall,  upon
completion  of  the  Work,  furnish  Landlord  with  an  accurate  architectural
"as-built"  plan of the Work as  constructed,  which plan shall be  incorporated
into this EXHIBIT D by this reference for all purposes.

         5.  DEFINITIONS.  As used herein,  a "TENANT DELAY DAY" shall mean each
day of delay in the  performance of the Work that occurs (a) because of Tenant's
failure to timely  deliver or approve  any  required  documentation  such as any
design or space plans, (b) because of any change by Tenant to any design,  Space
Plans or  Working  Drawings,  (c)  because  of any  specification  by  Tenant of
materials  or  installations  in addition to or other than  Landlord's  standard
finish-out materials, or (d) because Tenant; any assignees claiming by, through,
or under Tenant; any subtenants  claiming by, through,  or under Tenant; and any
of their  respective  agents,  contractors,  employees,  and invitees  otherwise
delays  completion  of  the  Work.  As  used  herein  "SUBSTANTIAL  COMPLETION,"
"SUBSTANTIALLY  COMPLETED,"  and any  derivations  thereof  mean the Work in the
Premises has been performed in substantial  accordance with the Scope of Work in
Section 2 above, as reasonably determined by Landlord (other than any details of
construction,  mechanical  adjustment or other similar matter, the noncompletion
of which does not  materially  interfere  with  Tenant's use or occupancy of the
Premises).

         6.  WALK-THROUGH;  PUNCHLIST.  When Landlord  considers the Work in the
Premises to be Substantially  Completed,  Landlord will notify Tenant and within
three (3)  Business  Days  thereafter,  Landlord's  representative  and Tenant's
representative  shall  conduct a  walk-through  of the Premises and identify any
necessary  touch-up work,  repairs and minor completion items that are necessary
for final completion of the Work. Neither Landlord's representative nor Tenant's
representative  shall  unreasonably  withhold his or her  agreement on punchlist
items.  Landlord shall use reasonable efforts to cause the contractor performing
the Work to complete all punchlist items within thirty (30) days after agreement
thereon;  however,  Landlord shall not be obligated to engage  overtime labor in
order to complete such items.

         7. COSTS.  Landlord  shall bear the entire cost of performing  the Work
depicted on the Space Plans  initially  submitted  to and  approved by Landlord.
Tenant shall bear the entire additional costs incurred by Landlord in performing
the Work because of any event  specified in clause 4, 5.(a),  5.(b),  5.(c),  or
5.(d) of this  Exhibit.  Tenant  shall pay  Landlord  an  amount  equal to fifty
percent (50%) of the estimated additional costs of any change to the Space Plans
or the Working Drawings at the time of such change; Tenant shall pay to Landlord
the  remaining  portion of  additional  costs  incurred in  performing  the Work
because of an event  specified in clauses 4, 5.(a),  5.(b),  5.(c),  or 5.(d) of
this Exhibit upon  Substantial  Completion  of the Work.  In  consideration  for
Landlord's  management and supervision for services performed in connection with
clauses  4,  5.(a),  5.(b),  5.(c),  or 5.(d),  Tenant  shall pay to  Landlord a
construction  management fee equal to three percent (3%) of the additional costs
specified in this SECTION 7.


                                       D-1
<PAGE>


         8.    CONSTRUCTION    REPRESENTATIVES.    Landlord's    and    Tenant's
representatives  for  coordination of construction and approval of change orders
will be as follows,  provided  that either  party may change its  representative
upon written notice to the other:


Landlord's Representative:          Trammell Crow Company
                                    c/o John Osborne
                                    8390 E Crescent Pkwy, Suite 300
                                    Greenwood Village, CO 80111
                                    Telephone: (303) 842-1977
                                    Telecopy: (303) 889-5880

Tenant's Representative:            _____________________________________
                                    c/o _________________________________
                                    _____________________________________
                                    Telephone: __________________________
                                    Telecopy: ___________________________

         9.  MISCELLANEOUS.  To the extent not  inconsistent  with this Exhibit,
SECTIONS 11 and 12 of this Lease shall  govern the  performance  of the Work and
Landlord's  and  Tenant's  respective  rights  and  obligations   regarding  the
improvements installed pursuant thereto.


                                      D-2
<PAGE>


                             SCHEDULE 1 TO EXHIBIT D


                                  (SPACE PLANS)


                                      D-3
<PAGE>


                                    EXHIBIT E

                        CONFIRMATION OF COMMENCEMENT DATE


                              ______________, 200_

___________________________
___________________________
___________________________
___________________________

Re:      Lease  Agreement  (the "Lease")  dated  _____________,  200__,  between
         Flatiron Boulder Office,  Inc., a Texas corporation  ("Landlord"),  and
         Patron  Systems,   Incorporated,  a  Delaware  corporation  ("Tenant").
         Capitalized  terms  used  herein  but not  defined  shall be given  the
         meanings assigned to them in the Lease.

Ladies and Gentlemen:

         Landlord and Tenant agree as follows:

         1.  CONDITION  OF  PREMISES.  Tenant  has  accepted  possession  of the
Premises  pursuant to the Lease. Any  improvements  required by the terms of the
Lease to be made by  Landlord  have  been  completed  to the  full and  complete
satisfaction  of Tenant in all respects except for the punchlist items described
on EXHIBIT E-1 hereto (the  "PUNCHLIST  ITEMS"),  and except for such  Punchlist
Items,  Landlord has fulfilled all of its duties under the Lease with respect to
such initial tenant  improvements.  Furthermore,  Tenant  acknowledges  that the
Premises are suitable for the Permitted Use.

         2. COMMENCEMENT DATE. The Commencement Date of the Lease is __________,
200__.

         3. EXPIRATION  DATE. The Term is scheduled to expire on the last day of
the ___ full calendar month of the Term, which date is ______________, 200__.

         4. CONTACT PERSON. Tenant's contact person in the Premises is:
                           ____________________________________________
                           ____________________________________________
                           ____________________________________________
                           Attention: _________________________________
                           Telephone:__________________________________
                           Telecopy:___________________________________

         5.  RATIFICATION.  Tenant hereby  ratifies and confirms its obligations
under the Lease, and represents and warrants to Landlord that it has no defenses
thereto. Additionally, Tenant further confirms and ratifies that, as of the date
hereof,  (a) the Lease is and  remains  in good  standing  and in full force and
effect,  and (b) Tenant  has no  claims,  counterclaims,  set-offs  or  defenses
against  Landlord  arising  out of the Lease or in any way  relating  thereto or
arising out of any other transaction between Landlord and Tenant.

         6. BINDING EFFECT;  GOVERNING LAW. Except as modified hereby, the Lease
shall remain in full effect and this letter  shall be binding upon  Landlord and
Tenant and their respective  successors and assigns. If any inconsistency exists
or arises between the terms of this letter and the terms of the Lease, the terms
of this letter shall  prevail.  This letter shall be governed by the laws of the
state in which the Premises are located.

         Please  indicate  your  agreement to the above  matters by signing this
letter in the space indicated below and returning an executed original to us.

                                             Sincerely,


                           FLATIRON BOULDER OFFICE, INC., a Texas corporation

                           By:
                              --------------------------------------------------
                           Name:
                                ------------------------------------------------
                           Title:
                                 -----------------------------------------------
Agreed and accepted:

PATRON SYSTEMS, INCORPORATED,
a Delaware corporation

By:__________________________________________________
Name:________________________________________________
Title:_______________________________________________


                                       E-1
<PAGE>


                                   EXHIBIT E-1

                                 PUNCHLIST ITEMS


Please insert any punchlist items that remain to be performed by Landlord. If no
items are listed below by Tenant, none shall be deemed to exist.


                                      E-2
<PAGE>


                                    EXHIBIT F

                                 RENEWAL OPTION

         If Tenant has not committed  more than two (2) Events of Default at any
time  during the Term and there is no  existing  Event of Default at the time it
exercises its renewal  option or at the  commencement  of the extended Term, and
Tenant is occupying the entire Premises at the time of such election, Tenant may
renew this Lease for one (1) additional period of Three (3) years, by delivering
written notice of the exercise  thereof to Landlord not earlier than twelve (12)
months nor later than nine (9) months  before the  expiration  of the Term.  The
Base  Rent  payable  for each  month  during  such  extended  Term  shall be the
prevailing  rental rate (the "Prevailing  Rental Rate"),  at the commencement of
such  extended  Term,  for  renewals of space in the  Building  or  Complex,  if
applicable,  of equivalent quality, size, utility and location,  with the length
of the extended Term and the credit standing of Tenant to be taken into account.
Within  thirty  (30) days after  receipt of Tenant's  notice to renew,  Landlord
shall deliver to Tenant written  notice of the Prevailing  Rental Rate and shall
advise  Tenant of the required  adjustment  to Base Rent,  if any, and the other
terms and conditions  offered.  Tenant shall, within ten (10) days after receipt
of Landlord's  notice,  notify  Landlord in writing  whether  Tenant  accepts or
rejects Landlord's determination of the Prevailing Rental Rate. If Tenant timely
notifies Landlord that Tenant accepts Landlord's determination of the Prevailing
Rental Rate,  then,  on or before the  commencement  date of the extended  Term,
Landlord and Tenant shall execute an amendment to this Lease  extending the Term
on the same terms provided in this Lease, except as follows:

         (a) Base Rent shall be adjusted to the Prevailing Rental Rate;

         (b) Tenant  shall  have no  further  renewal  option  unless  expressly
granted by Landlord in writing;

         (c) Landlord  shall lease to Tenant the Premises in their  then-current
condition, and Landlord shall not provide to Tenant any allowances (e.g., moving
allowance,  construction  allowance,  and the like) or other tenant inducements;
and

         (d) Tenant shall pay for the parking spaces which it is entitled to use
at the rates from time to time charged to patrons of the parking area and/or any
other parking area  associated  with the Building during the extended Term (plus
all applicable taxes).

         If Tenant rejects  Landlord's  determination  of the Prevailing  Rental
Rate,  or fails to timely  notify  Landlord in writing  that  Tenant  accepts or
rejects  Landlord's  determination of the Prevailing  Rental Rate, time being of
the essence  with respect  thereto,  Tenant's  rights  under this Exhibit  shall
terminate and Tenant shall have no right to renew this Lease.

         Tenant's rights under this Exhibit shall terminate if (1) this Lease or
Tenant's right to possession of the Premises is  terminated,  (2) Tenant assigns
any of its interest in this Lease or sublets any portion of the Premises  unless
in connection with a Permitted Transfer, (3) Tenant fails to timely exercise its
option  under this  Exhibit,  time being of the essence with respect to Tenant's
exercise  thereof,  or (4)  Landlord  determines,  in its  sole  but  reasonable
discretion, that Tenant's financial condition or creditworthiness has materially
deteriorated since the date of this Lease.


                                      F-1
<PAGE>

                                    EXHIBIT G

                              RIGHT OF FIRST OFFER

         Subject to then-existing  renewal or expansion options of other tenants
for the Offer Space (or,  even if not a right  under such  tenant's  lease,  the
renewal of a lease of any tenant by Landlord  for the Offer  Space  (hereinafter
defined))  ("PRIOR  RIGHTS"),  and  provided  no Event of Default  then  exists,
Landlord grants Tenant continuous right of first offer (the "RIGHT OF OFFER") to
lease those  approximately  2,921  rentable  square feet of space located on the
second (2nd) floor of the Building contiguous to the Premises and known as Suite
207  (the  "OFFER  SPACE")  as it  becomes  available  to lease  throughout  the
Extension Term hereof, on the following basis:

         (a)  Once the Offer Space becomes  available  (subject to the rights of
tenants with Prior Rights),  Landlord  shall,  prior to offering or accepting an
offer for the same to any party (other than tenants  with Prior  Rights),  first
offer to lease to Tenant  the Offer  Space in an "AS-IS"  condition;  such offer
shall be in writing and specify the lease terms for the Offer  Space,  including
the rent to be paid for the Offer  Space  and the date on which the Offer  Space
shall be included in the  Premises  (the "OFFER  NOTICE").  However,  such offer
shall be on terms no less favorable to Tenant than would be offered to any third
party prospective tenant in the market.  Tenant shall notify Landlord in writing
whether  Tenant elects to lease the entire Offer Space on the terms set forth in
the Offer  Notice,  within ten (10) days after  Landlord  delivers to Tenant the
Offer Notice.  If Tenant  timely elects to lease the Offer Space,  then Landlord
and Tenant shall execute an amendment to the Lease, effective as of the date the
Offer  Space is to be included  in the  Premises,  on the terms set forth in the
Offer Notice and, to the extent not  inconsistent  with the Offer Notice  terms,
the terms of this  Lease;  however,  Tenant  shall  accept the Offer Space in an
"AS-IS" condition and Landlord shall not provide to Tenant any allowances (e.g.,
moving  allowance,  construction  allowance,  and  the  like)  or  other  tenant
inducements  except as specifically  provided in the Offer Notice.  Landlord and
Tenant hereby  acknowledge  and agree that in addition to the Prior Rights,  the
Offer  Space  shall  not be  deemed to  become  available  if the space is:  (1)
assigned or subleased by the current tenant of the space; (2) the current tenant
by renewal,  extension,  or renegotiation has extended and continued its current
lease by rights existing as of the Commencement Date or the current tenant is in
a  holdover  status;  or (3) vacant and not leased to a tenant as of the date of
this Lease.

         (b)  If  Tenant  fails  or is  unable  to  timely  exercise  its  right
hereunder,  then such right shall lapse,  time being of the essence with respect
to the  exercise  thereof,  and Landlord may lease all or a portion of the Offer
Space to third  parties on such  terms as  Landlord  may  elect.  Tenant may not
exercise its rights  under this Exhibit if an Event of Default  exists or Tenant
is not then  occupying the entire  Premises.  For purposes  hereof,  if an Offer
Notice  is  delivered  for less  than all of the  Offer  Space  but such  notice
provides for an expansion,  right of first refusal,  or other preferential right
to lease some of the remaining  portion of the Offer Space,  then such remaining
portion of the Offer Space shall  thereafter be excluded from the  provisions of
this Exhibit.  In no event shall Landlord be obligated to pay a commission  with
respect to any space  leased by Tenant  under  this  Exhibit,  and Tenant  shall
indemnify,  defend,  and hold  Landlord  harmless  from and  against  all costs,
expenses,  attorneys'  fees,  and  other  liability  for  commissions  or  other
compensation  claimed by any broker or agent claiming the same by,  through,  or
under Tenant.

         (c)  Tenant's  rights  under this Exhibit  shall  terminate if (a) this
Lease or Tenant's right to possession of the Premises is terminated,  (b) Tenant
assigns  any of its  interest  in this  Lease  or  sublets  any  portion  of the
Premises, (c) Tenant's current financial condition fails to meet and satisfy the
financial  criteria  that  Landlord  generally  uses to lease  space to  tenants
reasonably  acceptable to Landlord, or (d) less than two (2) full calendar years
remain in the initial Term of this Lease.


                                      G-1