Exhibit 10.18

                       SUMMARY OF BASIC LEASE INFORMATION

         The undersigned hereby agree to the following terms of this Summary of
Basic Lease Information (the "Summary"). This Summary is hereby incorporated
into and made a part of the attached Lease (this Summary and the Lease to be
known collectively as the "Lease") which pertains to the building (the
"Building") which is located at 601 Brannan Street, San Francisco, California
(the "Site"). Each reference in the Lease to any term of this Summary shall have
the meaning as set forth in this Summary for such term. In the event of a
conflict between the terms of this Summary and the Lease, the terms of the Lease
shall prevail. Any capitalized terms used herein and not otherwise defined
herein shall have the meaning as set forth in the Lease.

<TABLE>
<CAPTION>
         TERMS OF LEASE                     DESCRIPTION

<S>      <C>                                <C>
(a.)     Date:                              July 17, 2000

(b.)     Landlord:                          Thomas A. Price and Gwendolyn L. Price, as trustees of
                                            the Price Trust UTD October 5, 1984

(c.)     Address of Landlord (Paragraph 8): 55 Peninsula Road, Belvedere, California 94920

(d.)     Tenant:                            Digital Think, Inc., a Delaware corporation

(e.)     Address of Tenant (Paragraph 8):   1098 Harrison Street, San Francisco, California.
                                            Attention: Chief Financial Officer

(f.)     Premises (Paragraph 1):            601 Brannan Street, San Francisco, California. Total square
                                            footage of Premises:  approximately 74,200 (subject to
                                            adjustment pursuant to Paragraph 1.3.)

(g.)     Term (Paragraph 2):                Approximately ten (10) years.

         (i) Lease Commencement Date:       Two hundred seventy (270) days (as measured pursuant to
                                            Paragraph 2.2) after the City and County of San Francisco
                                            has issued the Final Use Approval (as defined in Paragraph
                                            3.1) (as such date may be extended pursuant to Paragraph 5.2
                                            of the Work Letter), or the date on which Tenant is able to
                                            occupy substantially all of the Premises and conduct
                                            business thereon, whichever first occurs.

         (ii) Lease Expiration Date:        The last day of the month in which the tenth (10th)
                                            anniversary of the Lease Commencement Date occurs (unless
                                            the Lease Commencement Date falls on the first day of a
                                            calendar month, in which case the Lease Expiration Date
                                            shall be the last day of the month preceding the tenth
                                            (10th) anniversary of the Lease Commencement Date).

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<PAGE>

         (iii) Early Occupancy:             Tenant shall take possession of approximately 13,520 square
                                            feet of the Building on the date the current tenant vacates
                                            the Premises, which tenant shall vacate no later than sixty
                                            (60) days following the date of execution of this Lease
                                            (Paragraph 3.2).

(h.) Monthly Basic Rent:                    See Paragraph 4.

(i.) Adjustment to Monthly
     Basic Rent (Paragraph 4.1):            Annual Consumer Price Index increases; 3% minimum, 5% maximum.

(j.) Prepaid Rent:                          $355,541.67 upon execution of Lease.

(k.) Operating Expenses (Paragraph 5):      Tenant is responsible for payment of all operating expenses
                                            related to the Premises, the Building and the Site.

(l.) Security Deposit (Paragraph 6):        $1,000,000.00 in cash; $2,133,250.00 in a letter of credit
                                            (subject to adjustment pursuant to Paragraph 6).

(m.) Broker (Paragraph 9):                  Tenant's Broker:    HC&M Commercial Properties, Inc.
                                            Landlord's Broker:  Cappiello & Associates, Inc.

(n.) Work Letter (Exhibit D):               See attached.
</TABLE>

The foregoing terms of this Summary are agreed to by Landlord and Tenant.

<TABLE>
<CAPTION>
LANDLORD:                                                     TENANT:

<S>                                                           <C>
Thomas A. Price and Gwendolyn L. Price, as trustees           Digital Think, Inc., a Delaware corporation
of the Price Trust UTD October 5, 1984

                                                              By:  ____________________________
By:____________________________                               Name:  _________________________
     Thomas A. Price, Trustee                                 Its:  ____________________________

By:____________________________                               By:____________________________
     Gwendolyn Price, Trustee                                 Name:_________________________
                                                              Its:____________________________
</TABLE>

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<PAGE>

                                      LEASE

         THIS LEASE, dated July 17, 2000, for purposes of reference only, is
made and entered into by and between Thomas A. Price and Gwendolyn L. Price, as
trustees of the Price Trust UTD October 5, 1984 ("Landlord") and Digital Think,
Inc., a Delaware corporation ("Tenant").

1. Premises Leased.

1.1 Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord,
the Premises designated in the Summary and outlined on the Diagram attached
hereto as Exhibit A consisting of the Building at the address designated in the
Summary and the parcel of real property designated as the Site in the Summary,
including all parking areas located on the Site, subject to such reasonable
rules and regulations as Landlord may deliver to Tenant from time to time.
Tenant acknowledges that Landlord has made no representation or warranty
regarding the condition of the Premises, Building, or Site except as
specifically stated in this Lease. The parties hereto agree that said letting
and hiring is upon and subject to the terms, covenants and conditions herein set
forth and Tenant covenants as a material part of the consideration for this
Lease to keep and perform each and all of said terms, covenants and conditions
by it to be kept and performed and that this Lease is made upon the condition of
such performance.

1.2 The rights and obligations of the parties regarding the construction of the
Premises are described in the tenant work letter ("Work Letter") attached to
this Lease as Exhibit D. Any inconsistency between the provisions of the Work
Letter and the provisions of the balance of the Lease, shall be governed by the
provisions of the Work Letter.

1.3 Tenant acknowledges that a portion of the Base Building Work (as defined in
the Work Letter) includes construction of additional second floor space in a
portion of the Building, and that upon completion of such construction, the
square footage of the Building is estimated to be approximately 74,200 square
feet. Upon substantial completion of the Base Building Work, Base Building
Architect and Tenant's Architect shall calculate the actual square footage of
the Building pursuant to modified BOMA (gross taken to outside surface of
exterior walls, without deduction for stairwells or telephony/equipment rooms,
with deduction for shafts and transformer rooms) for purposes of determining the
final, actual square footage of the Building.

2. Term.

2.1 Subject to Paragraphs 2.2 and 3, the term of this Lease (the "Term") shall
commence on the Lease Commencement Date, and terminate on the Lease Expiration
Date, as such terms are defined in the Summary, unless the Term is earlier
commenced or terminated as hereinafter provided. At all times that Tenant has
access to the Premises prior to the Lease Commencement Date, whether to perform
construction of Base Building Work or Tenant's Improvements, to fixturize the
Premises or for any other purpose, the terms and conditions of this


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Lease shall be in full force and effect, with the exception of the payment of
Monthly Basic Rent which, subject to Paragraph 3.2, shall not commence until the
Lease Commencement Date.

2.2 Landlord and Tenant shall each exercise commercially reasonable efforts to
substantially complete the Base Building Work and the Tenant's Improvements, as
contemplated by the Work Letter, in the shortest time possible, taking into
account the necessary governmental permissions and approvals, demand on
construction industry resources, inclement weather and other events and
circumstances outside the parties' control. The Lease Commencement Date shall be
(i) that date which is two hundred ten (210) days following the date on which
the City and County of San Francisco (the "City") issues Final Use Approval (as
defined in Paragraph 3.1); provided however, that such date shall be extended by
the length of time it takes Base Building Architect (as defined in the Work
Letter) to complete the Base Building Drawings (as defined in the Work Letter)
and for the Contractor (as defined in the Work Letter), with Tenant's and
Landlord's reasonable cooperation, to obtain a building permit for construction
of the Base Building Work, which extension shall not exceed sixty (60) days
unless extended by a Permitted Delay (as defined in the Work Letter), or (ii)
the date on which Tenant is able to occupy substantially all of the Premises and
operate its business thereon, whichever first occurs. The Lease Expiration Date
shall be the last day of the month in which the tenth (10th) anniversary of the
Lease Commencement Date occurs (unless the Lease Commencement Date falls on the
first day of a calendar month, in which case the Lease Expiration Date shall be
the last day of the month preceding the tenth (10th) anniversary of the Lease
Commencement Date). The actual Lease Commencement Date and the actual Lease
Expiration Date shall be specified in Landlord's Notice of Lease Term Dates
("Notice"), in the form attached hereto as Exhibit B, and shall be served upon
Tenant as provided in Paragraph 8 promptly after the Term shall have commenced.

3. Possession.

3.1 Landlord and Tenant each acknowledge and agree that this Lease, and the
parties' respective rights and obligations hereunder, is subject to the City
giving its final approval for a conversion of the Premises from the existing
service/light industrial use to a multimedia use (the "Final Use Approval").
Landlord shall use its commercially reasonable efforts to obtain Final Use
Approval on or before January 31, 2001, and thereafter if Final Use Approval has
not been obtained within said period. Tenant shall fully cooperate with Landlord
as necessary to facilitate obtaining Final Use Approval as expeditiously as
possible. In the event Final Use Approval is not received on or before January
31, 2001, Landlord and Tenant shall each have the right to terminate this Lease
by giving written notice of termination to the other party at any time prior to
the City issuing Final Use Approval. In the event the City informs Landlord that
Final Use Approval is not forthcoming prior to January 31, 2001, Landlord shall
promptly inform Tenant, and Landlord and Tenant shall then each have the right
to terminate this Lease by giving written notice to the other party so stating.
In the event of such notice, Tenant shall return possession of the Early
Occupancy Premises (as defined below) to Landlord in good condition within
thirty (30) days. Upon receipt of possession of the Early Occupancy Premises,
Landlord shall return all deposits and all prepaid Rent (less any earned Rent
for the Early Occupancy Period (as defined below)) to Tenant, and shall repay
Tenant for all advances made by Tenant related to Base Building Work. Except as
provided in the immediately preceding sentence, each party shall otherwise bear
their own costs and fees incurred through the date of termination (including
without limitation attorney's fees, architectural and engineering fees, design
fees or other construction planning and related costs), and neither party


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<PAGE>

shall have any further obligation to the other. In the event this Lease is
terminated pursuant to this Paragraph, Landlord's obligation to repay all
advances made by Tenant related to Base Building Work shall be contingent only
upon the return of the Early Occupancy Premises to Landlord in good condition,
and otherwise shall constitute an independent covenant. Landlord shall cooperate
with and keep Tenant fully informed in connection with seeking Final Use
Approval and shall reasonably consult with Tenant prior to submitting any
information to the City in connection with obtaining Final Use Approval.
Landlord shall keep Tenant informed of all communications and shall provide
Tenant with copies of all written communications received from the City related
to obtaining Final Use Approval, and shall further notify Tenant in writing of
any meetings at which the application for Final Use Approval will be addressed
to allow Tenant to send representatives to such meetings. Tenant shall have no
direct contact with the City concerning the Final Use Approval without
Landlord's prior written consent, which shall not be unreasonably withheld.

3.2 Notwithstanding the provisions of this Lease concerning the calculation of
the Lease Commencement Date or the length of the Term, beginning on the date
that the current tenant vacates the Premises (not to exceed sixty (60) days from
the date hereof) and continuing until the Lease Commencement Date (the "Early
Occupancy Period"), Tenant shall take possession of approximately 13,520 square
feet of the Premises consisting of (i) approximately 8,140 square feet of space
on the existing second floor of the Premises, and (ii) approximately 5,380
square feet on the ground floor level, all as more particularly set forth in
Exhibit A (the "Early Occupancy Premises"). Tenant accepts such space in its "AS
IS" condition; provided, however, that Landlord shall, prior to commencement of
the Early Occupancy Period, construct a temporary, insulated wall along the
column line separating the above-referenced 5,380 square foot ground level space
from the balance of the ground floor to allow Tenant to more effectively use
such space during the Early Occupancy Period and while construction is ongoing
with respect to the remainder of the Premises. All of the terms and conditions
of this Lease shall be applicable during the Early Occupancy Period as though
the Term had commenced; provided, however, that during the Early Occupancy
Period, and until the Lease Commencement Date, (i) Tenant shall pay in lieu of
Monthly Basic Rent the sum of $51,893.75 per month, (ii) Landlord shall be
responsible for payment of earthquake insurance premiums associated with
coverage during the Early Occupancy Period, and (iii) Tenant shall only be
responsible for payment of 18.22% of the Real Property Taxes (as defined below)
which accrue during the Early Occupancy Period. During the Early Occupancy
Period, the Early Occupancy Rent shall be paid in accordance with Paragraph 4.4.

         If, during the Early Occupancy Period, the City (or any other
governmental agency with jurisdiction) notifies Landlord or Tenant that Tenant's
occupancy of any portion of the Early Occupancy Premises is not permitted, and
Landlord is not able within a reasonable time to obtain the City's consent to
such occupancy, Tenant's right of possession of the applicable portion of the
Early Occupancy Premises shall terminate and Tenant shall promptly vacate such
portion and return possession to Landlord. In such event, the reduced Monthly
Basic Rent set forth above shall be further reduced to an amount equal to the
sum of (i) $57.50 multiplied by the square footage of the second floor portion
of the Early Occupancy Premises Tenant continues to occupy, and (ii) $28.75
multiplied by the square footage of the first floor portion of the Early
Occupancy Premises Tenant continues to occupy. Except as amended by this
Subparagraph, all of the terms and conditions applicable to the Early Occupancy
Period shall remain in full force and effect.

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<PAGE>

4. Monthly Basic Rent/Rent Adjustments.

4.1 Tenant agrees to pay to Landlord monthly rent for the Premises (the "Monthly
Basic Rent") in the following amounts, which amounts are subject to adjustment
as provided in Paragraphs 4.2, 4.3, 4.4 and 4.5:

         Months 1 through 12:                                 $244,430.56
         Months 13 through 18:                                $255,096.81
         Months 19 through end of Term:                       $366,207.92

4.2 The parties acknowledge that the Monthly Basic Rent amounts set forth above
have been determined assuming the square footage of the Building is 74,200
square feet. In the event an adjustment to the square footage of the Building is
made pursuant to Paragraph 1.3, the Monthly Basic Rent amounts set forth above
shall be recalculated by multiplying the stated Monthly Basic Rent by a
fraction, the numerator of which shall be the actual square footage of the
Building as determined pursuant to Paragraph 1.3, and the denominator of which
shall be 74,200.

4.3 Commencing with the Monthly Basic Rent due on the first day of the
twenty-fifth (25th) month of the Term ("Initial Adjustment Date"), the Monthly
Basic Rent shall be adjusted in accordance with the provisions of this
Paragraph, and shall thereafter be adjusted on each subsequent annual
anniversary of the Initial Adjustment Date (each date an "Adjustment Date")
during the balance of the Term. Such adjustment to Monthly Basic Rent shall
reflect any increase in the Consumer Price Index (All Items) for Urban Consumers
for the San Francisco-Oakland-San Jose Area (Base Period 1982-84=100), published
by the United States Department of Labor, Bureau of Labor Statistics ("Index"),
and shall be calculated as follows:

         The Index published and in effect immediately prior to the Initial
Adjustment Date (the "First Adjustment Index") and the Index published and in
effect exactly one year prior to the First Adjustment Index (the "Beginning
Index") shall be used to determine the amount of the first increase in Monthly
Basic Rent. The Monthly Basic Rent on the Initial Adjustment Date shall be
increased by the same percentage amount as the increase in the First Adjustment
Index over the Beginning Index. Thereafter, on each subsequent Adjustment Date,
the Monthly Basic Rent for the ensuing year shall be increased over the Monthly
Basic Rent in effect immediately prior to the subject Adjustment Date by the
same percentage amount as the increase in the Index published and in effect
immediately prior to such Adjustment Date over the Index published and in effect
exactly one year earlier; provided, however, that the increase in Monthly Basic
Rent for any adjustment period shall never be less than three percent (3%) nor
more than five percent (5%).

         If the Index is changed so that the Base Period differs from that
described above, the Index shall be converted in accordance with the conversion
factor published by the United States Department of Labor, Bureau of Labor
Statistics. If the Index is discontinued or revised during the Term, such other
government index or computation with which it is replaced shall be used in order
to obtain substantially the same result as would be obtained if the Index had
not been discontinued or revised. On adjustment of the Monthly Basic Rent as
provided in this Paragraph (due to an adjustment in square footage or an annual
adjustment based on a change in the Index), Landlord shall promptly deliver to
Tenant written notice setting forth the new Monthly Basic Rent.


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<PAGE>

Landlord's failure to promptly deliver such notice shall not constitute a waiver
of Landlord's right to increase the Monthly Basic Rent as provided herein.

4.4 All payments of Monthly Basic Rent shall be due and payable in advance on
the first day of each and every calendar month during the Term, except that the
amount specified in Paragraph (j) of the Summary as Prepaid Rent shall be paid
upon the execution hereof and shall be applied as a credit against the first
installments of Monthly Basic Rent due hereunder until exhausted. Tenant's
obligation to pay Monthly Basic Rent hereunder shall be prorated during any
partial month of the Term based on the number of days in such month. In addition
to said Monthly Basic Rent, Tenant agrees to pay the amount of the rental
adjustments as and when provided in this Lease. Monthly Basic Rent and all
additional rent shall be paid to Landlord without any prior demand therefor and
without any deduction or offset (unless otherwise provided in this Lease) in
lawful money of the United States of America, which shall be legal tender at the
time of payment, at the address of Landlord designated in Paragraph (b) of the
Summary, or to such other person or at such other place as Landlord may from
time to time designate in writing. Further, all charges to be paid by Tenant
hereunder, including, without limitation, payments for Real Property Taxes (as
defined below) and other costs and expenses shall be considered additional rent
for the purposes of this Lease, and the word "Rent" in this Lease shall include
such additional rent as well as Monthly Basic Rent unless the context
specifically or clearly implies that only the Monthly Basic Rent is referenced.
All payments received by Landlord from Tenant shall be applied to the oldest
payment obligation owed by Tenant to Landlord. No designation by Tenant, either
in a separate writing or on a check or money order, shall modify this clause or
have any force or effect.

4.5 Paragraph 1.3 of the Work Letter sets forth Landlord's and Tenant's
obligations with respect to the payment for Base Building Costs (as defined in
the Work Letter). Notwithstanding anything to the contrary contained herein, in
the event the sum of (i) the Base Building Costs, plus (ii) one-half of the
Extractions (as defined below) paid by Tenant exceeds in the aggregate
$2,000,000.00 (such excess is hereafter referred to as the "Excess Building
Costs"), then one-eighteenth (1/18th) of the Excess Building Costs shall be
credited against the Monthly Basic Rent due for each of the first full eighteen
(18) months of the Term; provided, however, that if the Excess Building Costs
exceed the total amount of the Monthly Basic Rent due for the first eighteen
(18) months of the Term, then any such excess amount shall be applied as a
credit against the full amount of the Monthly Basic Rent due for the nineteenth
(19th) month of the Term and, if necessary, any succeeding months of the Term
until such excess amount is exhausted.

         By way of example only, assume that the final, actual square footage of
the Building (as determined pursuant to Paragraph 1.3) is 73,000 square feet,
the Base Building Costs paid by Tenant are $3,000,000.00, and the Extractions
paid by Tenant are $1,000,000, then the Monthly Basic Rental for Months 1-18 of
the Term would be adjusted to equal the following amounts: $157,144.18 for
Months 1-12 {[$244,430.56 x 73,000/74,200] - [(($3,000,000.00 - $2,000,000.00) +
(1/2 of $1,000,000.00))/18]} and $167,637.93 for Months 13-18 {[$255,096.81 x
73,000/74,200] - [(($3,000,000.00 - $2,000,000.00) + (1/2 of
$1,000,000.00))/18]}.

4.6 In the event this Lease is terminated during the Early Occupancy Period or
the first eighteen (18) months of the Term, and such termination is not the
result, in whole or part, of Tenant's breach or default of this Lease or the
attached Work Letter, Landlord shall return to Tenant (i) any unearned, prepaid
Monthly Basic Rent, (ii) any unused portion of the Security


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Deposit, and (iii) any amount paid by Tenant toward Base Building Work. Landlord
shall deliver all such amounts to Tenant within ninety (90) days following the
date of such termination. In the event such termination is the result of a
casualty or other event which results in insurance proceeds being paid to
Landlord, Tenant shall have the right to receive, and Landlord shall be
obligated to pay, any sums due to Tenant under this Paragraph from such
insurance proceeds.

5. Payment of Taxes, Utilities and Extractions.

5.1 Tenant shall pay prior to delinquency all taxes assessed against and levied
upon Tenant-owned leasehold improvements, trade fixtures, furnishings, equipment
and all personal property of Tenant contained in the Premises or elsewhere. When
possible, Tenant shall cause its leasehold improvements, trade fixtures,
furnishings, equipment and all other personal property to be assessed and billed
separately from the real property of Landlord.

5.2 Tenant shall pay prior to delinquency all Real Property Taxes (as defined
below) which accrue in connection with the Premises during the Term of this
Lease. Promptly upon receipt of invoices for Real Property Taxes attributable to
the Premises, Landlord shall deliver such invoices to Tenant. Upon written
request from Tenant, Landlord shall provide Tenant with copies of all other
correspondence or documentation related to any Real Property Taxes Tenant is
obligated to pay hereunder. Upon request, Tenant shall furnish Landlord with
satisfactory evidence that all Real Property Taxes are paid and current. If any
Real Property Taxes paid by Tenant cover any period of time prior to the
Commencement Date or after expiration of the Term, Tenant's share of the Real
Property Taxes shall be equitably prorated to cover only the period of time this
Lease is in effect, and Landlord shall reimburse Tenant for any overpayment by
reason of such proration. If Tenant shall fail to pay any Real Property Taxes
required by this Lease to be paid by Tenant, Landlord shall have the right to
pay the same upon ten (10) days written notice to Tenant, and Tenant shall
reimburse Landlord therefor, including any interest and penalties upon demand.

         As used herein, the term "Real Property Taxes" shall include any form
of real estate tax, any general, special, ordinary or extraordinary assessment,
any improvement bond, levy or similar tax (or any other fee, charge, or excise
which may be imposed as a substitute for any of the foregoing) imposed upon the
Premises by any authority having the direct or indirect power to tax, including
any city, county, state or federal government, or any school, agricultural,
sanitary, fire, street, drainage or other improvement district, levied against
any legal or equitable interest of Landlord in the Premises. Tenant shall not be
responsible for the payment of any tax levied against Landlord's leasing of the
Premises, or for the payment of any estate, inheritance, transfer, gift or
franchise taxes, or any penalties or interest accrued in connection with the
Real Property Taxes (unless the result of Tenant's failure to comply with its
obligations under this Lease). In the event of an increase in Real Property
Taxes due directly to the sale or transfer of the Site by Landlord, Tenant's
obligation to pay Real Property Taxes accruing during the Term shall only
include fifty percent (50%) of any such increase.

         Tenant shall obtain Landlord's consent (which consent shall not be
unreasonably withheld) prior to contesting any Real Property Taxes Tenant is
obligated to pay hereunder, and in the event of such tax contest by Tenant,
Tenant shall (i) fully indemnify Landlord pursuant to the provisions of
Paragraph 18, and (ii) bear the full cost of any such contest including without
limitation the cost


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of any interest and penalties which may be assessed. If a change in Real
Property Taxes is obtained for any year of the Term, then Real Property Taxes
for that year shall be retroactively adjusted to reflect any actual reduction
realized by Landlord and Landlord shall provide Tenant with a credit, if any,
based on the actual adjustment. Landlord shall notify Tenant in writing of any
material change in any tax assessment or reassessment of the Building and the
Site within sufficient time to allow Tenant to review such assessment or
reassessment. Landlord shall cooperate at no more than a nominal cost to
Landlord and in good faith with Tenant in connection with any protest or contest
of taxes or assessments made by Tenant.

5.3 Tenant shall pay prior to delinquency all charges for water, gas, heat,
light, power, telephone, sewage, air conditioning and ventilating, scavenger,
janitorial, landscaping, and all other materials and utilities supplied to the
Premises, and all other expenses related to the operation of the Premises not
the responsibility of Landlord hereunder. Landlord shall not be liable, and,
except as otherwise provided in Paragraph 17, Tenant shall not be entitled to
any abatement of Rent (including without limitation Monthly Basic Rent) for the
reduction, interruption or suspension of any utility service to the Premises
unless caused by the negligent act or omission of Landlord or its agents;
provided, however, that Landlord shall reasonably cooperate with Tenant at
Tenant's request to reestablish any such interrupted services. No such
interruption, reduction or suspension of utilities shall constitute an eviction
of Tenant from the Premises. Landlord shall not charge Tenant a management fee
related to this Lease, Tenant's occupancy of the Premises or the performance of
Landlord's obligations hereunder.

5.4 Landlord and Tenant acknowledge that, in connection with changing the use
of, and constructing additional square footage at, the Building, the City will
assess certain charges and extractions (the "Extractions") against the Building
in furtherance of the City's policy to allocate a portion of school, traffic and
other City infrastructure costs to commercial property development in the City.
Tenant shall pay all such Extractions as and when due.

6. Security Deposit. Tenant shall pay to Landlord as follows a security deposit
in the amounts specified in Paragraph (l) of the Summary to be held by Landlord
as security for the faithful performance by Tenant of all of the terms,
covenants and conditions of this Lease by Tenant to be kept and performed during
the Term hereof: (i) upon execution of this Lease by the parties, Tenant shall
post the cash portion of the Security Deposit; (ii) within ten (10) business
days after the execution of this Lease by the parties, Tenant shall deliver a
letter of credit in the amount of $1,066,625.00; and (iii) within ten (10)
business days after receipt of Final Use Approval, Tenant shall increase the
amount of the letter of credit to that amount set forth in Paragraph (l) of the
Summary. The letter of credit portion of the deposit shall be in a form, and
with a financial institution, reasonably acceptable to Landlord. If at any time
during the Term of this Lease any item constituting Rent as provided herein
shall be overdue and unpaid then Landlord may, after expiration of any
applicable cure period and at the sole option of Landlord, but without any
requirement to do so, appropriate and apply the deposit provided pursuant to
this Paragraph 6 to payment of such overdue Rent. In doing so, Landlord shall
first apply the cash portion of the deposit prior to making any draw against the
letter of credit. Further, in the event of the failure of Tenant to keep and
perform any term, covenant or condition of this Lease to be kept or performed by
Tenant, then, after expiration of the applicable cure period and at the sole
option of Landlord, Landlord may appropriate and apply the deposit to the extent
necessary to compensate Landlord for any loss or damage sustained by Landlord
due to such breach on the part of Tenant, and/or to cure


                                       9
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such breach. In the event that all or any portion of the deposit is appropriated
and applied by Landlord pursuant to this Paragraph, then Tenant shall, upon
written demand of Landlord, promptly remit to Landlord a sufficient amount of
cash or replacement letter of credit to restore each component of the deposit to
the amount of deposit then required under this Paragraph. Any failure on the
part of Tenant to restore the deposit within ten (10) days following the date on
which demand for restoration is deemed given hereunder shall constitute a
default pursuant to Paragraph 24.1(c) without any further notice. Upon
expiration of the Term, or earlier termination of this Lease, and within the
time prescribed by law, Landlord shall deliver to Tenant any cash or letter of
credit portion of the deposit which has not been appropriated or applied by
Landlord in accordance with the provisions of this Paragraph. Tenant
acknowledges that the deposit is not prepaid rent and, except as expressly
provided below, shall not be applied by Tenant to the payment of any Rent due
Landlord. No interest shall be paid to Tenant on the deposit, and Landlord shall
not be obligated to maintain the cash portion of the deposit separate or apart
from any other funds of Landlord. In the event Landlord transfers the deposit to
any successor in interest of Landlord to title of the Site and Building who has
agreed in writing to assume the obligations of Landlord under this Lease, then,
in such event, Landlord shall be discharged from any further obligation or
liability with respect to the deposit. Tenant waives the provisions of
California Civil Code Section 1950.7 and all other provisions of law now or
hereafter in force which provide that Landlord may claim from a security deposit
only those sums reasonably necessary to remedy defaults in the payment of Rent,
to repair damages caused by Tenant, or to clean the Premises. Landlord and
Tenant agree that Landlord may, in addition, claim those sums reasonably
necessary to compensate Landlord for any other foreseeable or unforeseeable loss
or damage caused by the act or omission by Tenant or Tenant's officers, agents,
employees, independent contractors or invitees. Tenant may not assign or
encumber the deposit without the consent by Landlord. Any attempt to do so shall
be void and shall not be binding on Landlord.

         On each anniversary of the Lease Commencement Date, and provided Tenant
has not been in default of this Lease beyond any applicable cure period at any
time during the immediately preceding three hundred sixty-five (365) day period,
Tenant may replace the letter of credit portion of the deposit with another
letter of credit in an amount reduced by one-sixth (1/6th) of the original
letter of credit amount; provided, however, that at such time as the letter of
credit has been so reduced three (3) times down to $1,066,625.00, the fourth and
final reduction in the letter of credit shall be for $66,625.00, and the
replacement letter of credit for $1,000,000.00 shall thereafter remain in place
until the expiration or earlier termination of the Term. Provided Tenant has not
been in default of this Lease beyond any applicable cure period at any time
during the immediately preceding three hundred sixty-five (365) day period, and
provided Tenant is not in default on the date the applicable Monthly Basic Rent
payment is due, beginning with the Monthly Basic Rent due for the thirty-seventh
(37th) month of the Term, Landlord shall apply one-twelfth (1/12th) of the cash
portion of the deposit as a credit against Monthly Basic Rent for each month of
the Term thereafter until the cash portion of the deposit has been fully
credited against Monthly Basic Rent.

7. Use.

7.1 Tenant shall use the Premises for multimedia and/or business services, and
all purposes incident thereto, and shall not use or permit the Premises to be
used for any other purpose without the prior written consent of Landlord, which
consent may be granted or withheld in Landlord's sole discretion. Tenant shall
not use or occupy the Premises in violation of any currently


                                       10
<PAGE>

recorded covenants, conditions and restrictions affecting the Site or of any
law, nor shall Tenant use or occupy, or permit the Premises to be used or
occupied, in any way which would jeopardize Landlord's right to use the Site in
accordance with the Final Use Approval. Tenant shall, upon five (5) days written
notice from Landlord, discontinue any use of the Premises proscribed in the
immediately preceding sentence. Tenant shall not interfere with radio or
television broadcasting or reception from or in the Building or elsewhere.
Tenant shall comply with any direction of any governmental authority having
jurisdiction which shall, by reason of the nature of Tenant's specific use or
alteration of the Premises, impose any duty upon Tenant or Landlord with respect
to the Premises or with respect to the use or occupation thereof. Tenant shall
not do or permit to be done anything which will invalidate or increase the cost
of any fire, extended coverage or any other insurance policy covering the
Building and/or property located therein and shall comply with all rules,
orders, regulations and requirements of the Pacific Fire Rating Bureau or any
other organization performing a similar function. Tenant shall promptly upon
demand reimburse Landlord as additional Rent for any additional premium charged
for such policy by reason of Tenant's failure to comply with the provisions of
this Paragraph 7. Tenant shall not use or allow the Premises to be used for any
unlawful purpose, nor shall Tenant cause, maintain or permit any nuisance in, on
or about the Premises, or allow any noxious odors to exist at or emanate from
the Premises. Tenant shall not commit or suffer to be committed any waste in or
upon the Premises and shall keep the Premises in good repair and appearance.
Tenant shall not place a load upon the Premises exceeding the average pounds of
live load per square foot of floor area specified for the Building by Landlord's
architect, with the partitions to be considered a part of the live load.
Landlord reserves the right to prescribe the weight and position of all safes,
files and heavy equipment which Tenant desires to place in the Premises so as to
distribute properly the weight thereof. Tenant's business machines and
mechanical equipment which cause vibration or noise that may be transmitted to
the Building structure or to any other space in the Building shall be so
installed, maintained and used by Tenant as to eliminate such vibration or
noise. Tenant shall be responsible for all structural engineering required to
determine structural load. Tenant shall fasten all files, bookcases and like
furnishings to walls in a manner to prevent tipping over in the event of earth
movements. Landlord shall not be responsible for any damage or liability for
such events.

7.2 Except for the normal and proper use and storage of typical cleaning fluids
and solutions, and office equipment supplies (such as copier toner), in amounts
commensurate with Tenant's use and occupancy of the Premises, Tenant shall not
use, introduce to the Premises, generate, manufacture, produce, store, release,
discharge or dispose of, on, under or about the Premises or transport to or from
the Premises any Hazardous Material (as defined below) or allow its employees,
agents, contractors, invitees or any other person or entity to do so. Tenant
warrants that it shall not make any use of the Premises which may cause
contamination of the soil, the subsoil or ground water. Tenant shall keep and
maintain the Premises in compliance with, and shall not cause or permit the
Premises to be in violation of any and all federal, state or local laws,
ordinances, rules or regulations pertaining to health, industrial hygiene or the
environmental conditions on, under or about the Premises. Tenant shall give
immediate written notice to Landlord of (i) any action, proceeding or inquiry by
any governmental authority or any third party with respect to the presence of
any Hazardous Material on the Premises or the migration thereof from or to other
property or (ii) any spill, release or discharge of Hazardous Materials that
occurs with respect to the Premises or Tenant's operations.

                                       11
<PAGE>

7.2.1 Tenant shall indemnify and hold harmless Landlord, its directors,
officers, employees, agents, successors and assigns (collectively "Landlord")
from and against any and all claims arising from Tenant's use of the Premises in
violation of this Paragraph. The indemnity shall include all costs, fines,
penalties, judgments, losses, attorney's fees, expenses and liabilities incurred
by Landlord for any such claim or any action or proceeding brought thereon
including, without limitation, (a) all foreseeable consequential damages
including without limitation loss of rental income and diminution in property
value; and (b) the costs of any cleanup, detoxification or other ameliorative
work of any kind or nature required by any governmental agency having
jurisdiction thereof, including without limitation all costs of monitoring and
all fees and expenses of consultants and experts retained by Landlord. This
indemnity shall survive the expiration or termination of this Lease. In any
action or proceeding brought against Landlord by reason of any such claim, upon
notice from Landlord if Landlord does not elect to retain separate counsel,
Tenant shall defend the same at Tenant's expense by counsel reasonably
satisfactory to Landlord. Tenant's indemnity obligations pursuant to this
Subparagraph shall not include the presence of Hazardous Materials on or beneath
the Site which are the result of migration from properties adjacent to the Site.

7.2.2 To the best of Landlord's actual knowledge, no Hazardous Materials exist
on, at or under the Premises, the Building or the Site as of the date of
execution of this Lease. Landlord has received a "No Further Action" letter for
the Site from the applicable governmental agency, a copy of which, along with
any other Hazardous Materials reports or materials related to the Site in
Landlord's possession, Landlord shall provide to Tenant upon execution of this
Lease. Landlord shall be responsible at its sole cost and expense for removing
or otherwise remediating as required by applicable law any Hazardous Materials
which existed on, at or under the Premises, the Building or the Site as of the
date of execution of this Lease and Landlord shall, in similar scope as Tenant's
indemnification obligations set forth in Subparagraph 7.2.1, indemnify, defend
and hold Tenant harmless from any costs and expenses related to any such
preexisting Hazardous Materials. If either party desires, a Phase I
Environmental Assessment shall be performed on the Site prior to the Lease
Commencement Date, in which event the parties shall share equally all costs of
obtaining such environmental assessment.

7.2.3 As used herein, the term "Hazardous Material" shall mean any substance or
material which has been determined by any state, federal or local governmental
authority to be capable of posing a risk of injury to health, safety or
property, including all of those materials and substances designated as
hazardous or toxic by the city in which the Premises are located, the U.S.
Environmental Protection Agency, the Consumer Product Safety Commission, the
Food and Drug Administration, the California Water Resources Control Board, the
Regional Water Quality Control Board, San Francisco Bay Region the California
Air Resources Board, CAL/OSHA Standards Board, Division of Occupational Safety
and Health, the California Department of Food and Agriculture, the California
Department of Health Services, and any federal agencies that have overlapping
jurisdiction with such California agencies, or any other governmental agency now
or hereafter authorized to regulate materials and substances in the environment.
Without limiting the generality of the foregoing, the term "Hazardous Material"
shall included all of those materials and substances defined as "hazardous
materials" or "hazardous waste" in Sections 66680 through 66685 of Title 22 of
the California Administrative Code, Division 4, Chapter 30, as the same shall be
amended from time to time, petroleum, petroleum-related substances and the
by-products, fractions, constituents and sub-constituents of petroleum or
petroleum-related substances, asbestos, and any

                                       12
<PAGE>

other materials requiring remediation now or in the future under federal, state
or local statutes, ordinances, regulations or policies.

8. Payments and Notices. All Rents and other sums payable by Tenant to Landlord
hereunder shall be paid to Landlord by check, cashier's check, or cash, at
Landlord's option, at the address designated by Landlord in the Summary or at
such other places as Landlord may hereafter designate in writing. Any notice
required or permitted to be given hereunder must be in writing and may be given
by personal delivery, mail, or by recognized overnight courier. If notice is
given by personal delivery, such notice shall be deemed to be given upon
delivery at the addresses designated in the Summary, if notice is given by
registered or certified mail such notice shall be deemed given three (3)
business days following deposit in the U.S. mail, postage prepaid, addressed to
Tenant or Landlord (as the case may be) at the addresses designated in the
Summary and if given by overnight courier shall be deemed given the next
business day following delivery to the courier, charges prepaid, address as
stated above. Either party may by written notice to the other specify a
different address for notice purposes. If more than one person or entity
constitutes the "Tenant" under this Lease, service of any notice upon any one of
said persons or entities shall be deemed as service upon all of said persons or
entities.

9. Brokers. The parties recognize that the brokers who negotiated this Lease are
the brokers whose names are stated in Paragraph (m) of the Summary, and agree
that Landlord shall be solely responsible for the payment of brokerage
commissions to said brokers, and that Tenant shall have no responsibility
therefor. As part of the consideration for the granting of this Lease, Tenant
represents and warrants to Landlord that to Tenant's knowledge no other broker,
agent or finder negotiated or was instrumental in negotiating or consummating
this Lease and that Tenant knows of no other real estate broker, agent or finder
who is, or might be, entitled to a commission or compensation in connection with
this Lease. Any broker, agent or finder of Tenant whom Tenant has failed to
disclose herein shall be paid by Tenant. Tenant shall hold Landlord harmless
from all damages and indemnify Landlord for all said damages paid or incurred by
Landlord resulting from any claims that may be asserted against Landlord by any
broker, agent or finder who has, or has claimed to have, rendered services to
Tenant undisclosed by Tenant herein. Landlord shall hold Tenant harmless from
all damages and indemnify Tenant for all said damages paid or incurred by Tenant
resulting from any claims that may be asserted against Tenant by any broker,
agent or finder who has, or has claimed to have, rendered services to Landlord
undisclosed by Landlord herein.

10. Holding Over. If Tenant remains in possession of the Premises after
expiration or earlier termination of this Lease with Landlord's express consent,
Tenant's occupancy shall be a month to month tenancy at a rent agreed upon by
Landlord and Tenant but, in no event less than the Monthly Basic Rent payable
under this Lease during the last full month before the date of expiration or
earlier termination. The month to month tenancy shall be on the terms and
conditions of this Lease except as provided in the preceding sentence and the
Lease clauses concerning extension rights. If Tenant holds over after the
expiration or earlier termination of the Term hereof without the express written
consent of Landlord, Tenant shall become a tenant at sufferance only, at a
rental rate equal to one hundred fifty percent (150%) of the Monthly Basic Rent
which would be applicable to the Premises upon the date of such expiration
(subject to adjustment as provided herein and prorated on a daily basis) for the
first sixty (60) days of such holdover, and two hundred percent (200%) of the
Monthly Basic Rent thereafter during the pendency of such holdover, and
otherwise subject to the terms, covenants and conditions of this Lease,
including without limitation the payment of Real


                                       13
<PAGE>

Property Taxes, insurance premiums, utility charges and all other amounts
(either directly to third parties or to Landlord) required hereunder. Acceptance
by Landlord of Rent after such expiration or earlier termination shall not
constitute a consent to a holdover hereunder or result in a renewal. The
foregoing provisions of this Paragraph 10 are in addition to and do not affect
Landlord's right of re-entry or any rights of Landlord hereunder or as otherwise
provided by law. If Tenant fails to surrender the Premises upon the expiration
of this Lease despite demand to do so by Landlord, Tenant shall indemnify and
hold Landlord harmless from all loss or liability arising out of such failure,
including without limitation, any claim made by any succeeding tenant founded on
or resulting from such failure to surrender. No provision of this paragraph 10
shall be construed as implied consent by Landlord to any holding over by Tenant.
Landlord expressly reserves the right to require Tenant to surrender possession
of the Premises to Landlord as provided in this Lease upon expiration or other
termination of this Lease. The provisions of this paragraph 10 shall not be
considered to limit or constitute a waiver of any other rights or remedies of
Landlord provided in this Lease or at law.

11. [Intentionally Left Blank].

12. Condition of Premises. Except as otherwise expressly provided herein, Tenant
acknowledges that neither Landlord nor any agent of Landlord has made any
representation or warranty of any kind whatsoever with respect to the Premises
or the Building or with respect to the suitability of either for the conduct of
Tenant's business. Tenant acknowledges and agrees that Tenant is relying solely
upon Tenant's own inspection of the Premises, and Tenant is not relying on any
representation or warranty from the Landlord regarding the Premises or the
Building, except as specifically set forth in this Lease or the Work Letter,
including, without limitation, any representation or warranty as to the physical
condition, design or layout of the Premises.

13. Alterations.

13.1 Tenant may, at any time and from time to time during the Term of this
Lease, at its sole cost and expense, make alterations, additions, installations,
substitutions, improvements and decorations (hereinafter collectively called
"Changes" and individually, a "Change") in and to the Premises, excluding
structural changes, on the following conditions, and providing such Changes will
not result in a violation of any law applicable to the Premises, or affect
adversely Landlord's right to use the Site in accordance with the Final Use
Approval:

(a.) The outside appearance, character or use of the Building shall not be
affected adversely, and no Changes shall weaken or impair the structural
strength or, in the reasonable opinion of Landlord, lessen the value of the
Building or create the potential for unusual expenses to be incurred upon the
removal of Changes and the restoration of the Premises upon the termination of
this Lease.

(b.) No part of the Building outside of the Premises shall be physically
affected.

(c.) The proper functioning of any of the mechanical, electrical, sanitary and
other service systems or installations of the Building ("Service Facilities")
shall not be adversely affected and there shall be no construction which might
interfere with Landlord's free access to the Service


                                       14
<PAGE>

Facilities or interfere with the moving of Landlord's equipment to or from the
enclosures containing the Service Facilities.

(d.) In performing the work involved in making such Changes, Tenant shall be
bound by and observe all of the conditions and covenants contained in this
Paragraph.

(e.) All work shall be done at such times and in such manner as Landlord from
time to time may reasonably designate.

(f.) At the date upon which the Term of this Lease shall end, or the date of any
earlier termination of this Lease, Tenant shall on Landlord's written request
restore the Premises to their condition prior to the making of any Changes
permitted by this Paragraph, reasonable wear and tear excepted; provided,
however, that Tenant shall have the right at the time Tenant seeks Landlord's
consent to a Change to require Landlord to then state in writing whether or not
Landlord will require the Change to be removed, and the Premises restored, at
the expiration of the Term or earlier termination of this Lease. In no event
shall Tenant be responsible for removing the Base Building Work or Tenant's
Improvements constructed at the Premises pursuant to the Work Letter. If Tenant
fails to complete the restoration before the latter of (i) expiration of the
Term; or (ii) thirty (30) days following the written notice from Landlord
requesting the restoration, Landlord may complete the restoration and charge the
cost of the restoration to Tenant. In no event shall Tenant be required to
remove any of the Work contemplated by the Work Letter.

13.2 Before proceeding with any Change (exclusive only of changes to items
constituting Tenant's personal property), Tenant shall submit to Landlord plans
and specifications for the work to be done, which shall in all cases require
Landlord's prior written approval, which approval shall not be withheld
unreasonably. Landlord may confer with consultants in connection with the review
of such plans and specifications. If Landlord or such consultant(s) shall
disapprove of any of Tenant's plans, Tenant shall be advised of the reasons of
such disapproval. In any event, Tenant agrees to pay to Landlord, as additional
Rent, the reasonable cost of such consultation and review (but not in excess of
$3,500.00) immediately upon receipt of invoices either from Landlord or such
consultant(s). Any Change for which approval has been received shall be
performed strictly in accordance with the approved plans and specifications, and
no material amendments or additions to such plans and specifications shall be
made without the prior written consent of Landlord. Notwithstanding the
foregoing, Tenant shall be entitled to make non-structural, interior Changes to
the Premises which do not exceed One Hundred Thousand Dollars ($100,000) in
cost, in the aggregate over the duration of the Term, without Landlord's prior
written consent provided that such Changes (i) shall be subject to the other
provisions of this Paragraph, including without limitation the removal
provisions of Paragraph 13.1(f), and (ii) Landlord shall be given prior written
notice of such Changes.

13.3 If the proposed Change requires approval by or notice to the lessor of a
superior lease or the holder of a mortgage, no Change shall be commenced until
such approval has been received, or such notice has been given, as the case may
be, and all applicable conditions and provisions of said superior lease or
mortgage with respect to the proposed Change or alteration have been met or
complied with at Tenant's expense; and Landlord, if it approves the Change, will
request such approval or give such notice, as the case may be.

                                       15
<PAGE>

13.4 Tenant shall submit to Landlord the name and address of each contractor
intended to be used by Tenant in connection with construction of Changes. No
contractor which is reasonably unacceptable to Landlord shall be engaged by
Tenant. All costs and expenses incurred in Changes shall be paid timely by
Tenant. If Landlord approves the construction of specific interior improvements
in the Premises by contractors or mechanics selected by Tenant and approved by
Landlord, then Tenant's contractors shall obtain on behalf of Tenant and at
Tenant's sole cost and expense, (i) all necessary governmental permits and
certificates for the commencement and prosecution of Tenant's Changes and for
final approval thereof upon completion, and (ii) at Landlord's request, a
completion and lien indemnity bond, or other surety, satisfactory to Landlord,
for Changes which require Landlord's prior approval. In the event Tenant shall
request any changes in the work to be performed after the submission of the
plans referred to in this Paragraph 13, such additional changes shall be subject
to the same approvals and notices as the changes initially submitted by Tenant.

13.5 All Changes and the performance thereof shall at all times comply with (i)
all laws, rules, orders, ordinances, directions, regulations and requirements of
all governmental authorities, agencies, offices, departments, bureaus and boards
having jurisdiction thereof, (ii) all rules, orders, directions, regulations and
requirements of the Pacific Fire Rating Bureau, or of any similar insurance body
or bodies, and (iii) all rules and regulations of Landlord, and Tenant shall
cause Changes to be performed in compliance therewith and in good and first
class workmanlike manner, using materials and equipment at least equal in
quality and class to the installations of the Building. Changes shall be
performed in such manner as not to impose any additional expense upon Landlord
in construction, maintenance or operation of the Building, and shall be
performed by Contractors or mechanics reasonably approved by Landlord and
submitted to Tenant pursuant to this Paragraph, who shall coordinate their work
in cooperation with any other work being performed with respect to the Building.
Throughout the performance of Changes, Tenant, at its expense, shall carry, or
cause to be carried, workmen's compensation insurance in statutory limits, and
general liability insurance for any occurrence in or about the Building, of
which Landlord and its managing agent shall be named as parties insured, in such
limits as Landlord may reasonably prescribe, with insurers reasonably
satisfactory to Landlord all in compliance with Subparagraph 20.2.
Notwithstanding any provision of this Lease to the contrary, in no event shall
Landlord be required to undertake any alteration or any improvements of any kind
whatsoever in connection with the Premises or the Building as a result of or in
connection with any Changes being made by Tenant and specifically, but without
limitation, Landlord shall not be required to make any improvements or
alteration of any kind whatsoever in order to comply with any applicable laws,
orders, ordinances, regulations or building codes which may be required in
connection with Changes being made by Tenant.

13.6 Tenant further covenants and agrees that any mechanic's lien filed against
the Premises or against the Building for work claimed to have been done for, or
materials claimed to have been furnished to Tenant, will be discharged by
Tenant, by bond or otherwise, within ten (10) days after the filing thereof, at
the cost and expense of Tenant. All alterations, decorations, additions or
improvements upon the Premises, made by either party, including (without
limiting the generality of the foregoing) all wall covering, built-in cabinet
work, paneling and the like, shall, unless Landlord elects otherwise, become the
property of Landlord, and shall remain upon, and be surrendered with the
Premises, as a part thereof, at the end of the Term hereof, except that Landlord
may by written notice to Tenant, given at least thirty (30) days prior to the
end of the Term, require Tenant to remove all partitions, counters, railings and
the like installed by Tenant, and Tenant shall repair any


                                       16
<PAGE>

damage to the Premises arising from such removal or, at Landlord's option, shall
pay to the Landlord all of Landlord's costs of such removal and repair.
Notwithstanding the sentence immediately above, Tenant shall not be required to
remove or restore any Changes which Landlord agreed in accordance with the
provisions of Subparagraph 13.1(f) need not be removed or restored.

13.7 All articles of personal property and all business and trade fixtures,
machinery and equipment, furniture and movable partitions owned by Tenant or
installed by Tenant at its expense in the Premises shall be and remain the
property of Tenant and may be removed by Tenant at any time during the Term
provided Tenant is not in default hereunder, and provided further that Tenant
shall repair any damage caused by such removal. If Tenant shall fail to remove
all of its effects from said Premises upon termination of this Lease for any
cause whatsoever, Landlord may, at its option, remove the same in any manner
that Landlord shall choose, and store said effects without liability to Tenant
for loss thereof, and Tenant agrees to pay Landlord upon demand any and all
expenses incurred in such removal, including court costs and attorneys' fees and
storage charges on such effects for any length of time that the same shall be in
Landlord's possession or Landlord may, at its option, without notice, sell said
effects, or any of the same, at private sale and without legal process, for such
price as Landlord may obtain and apply the proceeds of such sale upon any
amounts due under this Lease from Tenant to Landlord and upon the expense
incident to the removal and sale of said effects.

13.8 Subject to Landlord's agreement to minimize any disturbance of Tenant's use
of the Premises, Landlord reserves the right at any time and from time to time
without the same constituting an actual or constructive eviction and without
incurring any liability to Tenant therefor or otherwise affecting Tenant's
obligations under this Lease, to make such changes, alterations, additions,
improvements, repairs or replacements in or to the Site or the Building
(including the Premises if required so to do by any law or regulation) and the
fixtures and equipment thereof, as well as in or to the street entrances, halls,
passages and stairways thereof, and/or to change the name by which the Building
is commonly known, as Landlord may deem necessary or desirable. Nothing
contained in this Paragraph 13, shall be deemed to relieve Tenant of any duty,
obligation or liability of Tenant with respect to making any repair, replacement
or improvement or complying with any law, order or requirement of any government
or other authority and nothing contained in this Paragraph 13, shall be deemed
or construed to impose upon Landlord any obligation, responsibility or liability
whatsoever, for the care, supervision of repair of the Building or any part
thereof other than as otherwise provided in this Lease.

13.9 The construction of the improvements to the Premises to be constructed
pursuant to the provisions of the Work Letter attached to this Lease as Exhibit
D (if any) shall be governed by the terms of such Work Letter to the extent
inconsistent with the provisions of this Paragraph 13.

13.10 Upon completion of any Changes, Tenant shall provide Landlord with a set
of final "as-built" plans as soon as practical.

14. Repairs and Maintenance.

14.1 Except as otherwise provided in Paragraphs 7, 14.3, 21 and/or 22, Tenant
shall, at Tenant's sole cost and expense, maintain and preserve in good
condition, and repair and replace as


                                       17
<PAGE>

necessary, each and every part, system and facility serving or comprising the
Premises, including by way of example and without limitation all restroom and
kitchen facilities, heating and air conditioning systems, plumbing and
electrical systems, parking lot surfaces, glass and windows, wall, ceiling and
floor surfaces and each and every other component of the Premises. In the event
that Tenant is obligated to replace the air conditioning and/or heating system
serving the Premises or any major components thereof during the last two (2)
years of the Term, and the useful life of the system or components to be
replaced will exceed the remaining Term, Tenant may require that Landlord make
the needed replacements, in which event the cost thereof shall be amortized over
the useful life of the replaced system or components and Tenant shall thereafter
pay to Landlord, along with monthly installments of Rent, the monthly amortized
portion of the cost of said replaced items together with interest on the
unamortized portion at the prevailing rate available to Landlord from commercial
banks.

14.2 All maintenance and repairs shall be performed by contractors reasonably
acceptable to Landlord. All costs and expenses incurred in such maintenance and
repair shall be paid timely by Tenant. Landlord shall reasonably cooperate with
Tenant (including assignment thereof) to allow Tenant to avail itself of any
contractor warranties which may exist with respect to the construction of Base
Building Work contemplated by the Work Letter. Tenant shall upon the expiration
or sooner termination of the Term surrender the Premises to Landlord in good
condition, reasonable wear and tear excepted. Landlord shall have no obligation
to alter, remodel, improve, repair, decorate or paint the Premises or any part
thereof (except as provided in the Work Letter), and the parties hereto affirm
that Landlord has made no representations to Tenant respecting the condition of
the Premises or the Building except as specifically herein set forth.
Notwithstanding anything set forth above in this Paragraph to the contrary,
Tenant shall have no obligation to install, maintain or repair any of the
structural elements or systems of the Building (including the roof), unless such
work is required due to Tenant's specific use or misuse of the Premises (subject
to the waiver of subrogation provisions of Paragraph 20.6).

14.3 Landlord shall, at Landlord's sole cost and expense, repair and maintain
the structural components of the Building (including without limitation the
exterior and other load bearing walls, footings, columns, structural floors and
foundations), and shall be responsible for all major repairs to and replacement
of the roof surface, unless such maintenance and repairs are caused in part or
in whole by the act, neglect, fault of or omission of any duty of Tenant, its
agents, servants, employees or invitees, in which case Tenant shall pay to
Landlord as additional Rent, the reasonable cost of such maintenance and repairs
(unless the same are covered by insurance required to be maintained by Landlord
or Tenant pursuant to Paragraph 20). Tenant shall solely be responsible for any
roofing membrane maintenance or repairs necessitated by Tenant's penetration of
the roof for the purpose of installing any equipment, antennae or other devices.
Landlord shall not be liable for any failure to make any repairs, or to perform
any maintenance, required of Landlord unless such failure shall persist for an
unreasonable time after written notice of the need of such repairs or
maintenance is given to Landlord by Tenant. In the event of an emergency, Tenant
shall have the right to make necessary repairs which would otherwise be
Landlord's responsibility and obtain reimbursement from Landlord for the
reasonable costs of such repairs; provided, however, that Tenant shall first use
commercially reasonable efforts to notify Landlord and allow Landlord the
opportunity to effect such repairs. Except as provided in Paragraphs 21 and 22,
there shall be no abatement of Rent and no liability of Landlord by reason of
any injury to or interference with Tenant's business arising from the making of
any repairs, alterations or improvements in or to


                                       18
<PAGE>

any portion of the Building or the Premises or in or to fixtures, appurtenances
and equipment therein. Tenant hereby waives the provisions of California Civil
Code Sections 1932(1), 1941 and 1942 and of any similar law, statute or
ordinance now or hereafter in effect.

15. Liens. Tenant shall not permit any mechanic's, material men's or other liens
to be filed against the real property of which the Premises form a part nor
against the Tenant's leasehold interest in the Premises. Landlord shall have the
right at all reasonable times to post and keep posted on the Premises any
notices which it deems necessary for protection from such liens. If any such
liens are filed, Landlord may, following not less than ten (10) days prior
written notice to Tenant and without waiving its rights and remedies based on
such breach of Tenant and without releasing Tenant from any of its obligations,
cause such liens to be released by any means it shall deem proper, including
payment in satisfaction of the claim giving rise to such lien. Tenant shall pay
to Landlord at once, upon notice by Landlord, any sum paid by Landlord to remove
such liens, together with interest at the maximum rate per annum permitted by
law from the date of such payment by Landlord.

16. Entry by Landlord. Subject to Landlord's agreement to use reasonable efforts
to minimize any disturbance of Tenant's use of the Premises by exercise of the
following rights, Landlord reserves and shall at any and all reasonable times
(except in the case of emergency) have the right to enter the Premises to
inspect the same, to supply any service to be provided by Landlord to Tenant
hereunder, to submit said Premises to prospective purchasers or
mortgagors/lenders or, during the last twelve (12) months of the Term of this
Lease, to prospective tenants, to post notices of nonresponsibility, to alter,
improve or repair the Premises or any other portion of the Building, all without
being deemed guilty of any eviction of Tenant and without abatement of Rent, and
may, in order to carry out such purposes, erect scaffolding and other necessary
structures where reasonably required by the character of the work to be
performed, provided that the business of Tenant shall be interfered with as
little as is reasonably practicable. Tenant hereby waives any claim for damages
for any injury or inconvenience to or interference with Tenant's business, any
loss of occupancy or quiet enjoyment of the Premises, and any other loss
occasioned thereby. For each of the aforesaid purposes, Landlord shall at all
times have and retain a key with which to unlock all of the doors in, upon and
about the Premises excluding Tenant's vaults and safes, and Landlord shall have
the means which Landlord may deem proper to open said doors in an emergency in
order to obtain entry to the Premises, and any entry to the Premises obtained by
Landlord by any of said means, or otherwise, shall not under any circumstances
be construed or deemed to be a forcible or unlawful entry into, or a detainer
of, the Premises, or an eviction of Tenant from the Premises or any portion
thereof, and any damages caused on account thereof shall be paid by Tenant. It
is understood and agreed that no provision of this Lease shall be construed as
obligating Landlord to perform any repairs, alterations or decorations except as
otherwise expressly agreed herein to be performed by Landlord. Landlord shall
(i) attempt in the exercise of its rights under this Paragraph 16 to minimize
any disturbance of Tenant's use and possession of the Premises and to provide as
much notice to Tenant as may be reasonably possible prior to any such exercise
of Landlord's rights under this Paragraph 16, and (ii) comply with Tenant's
reasonable security requirements including the right of Tenant to accompany
Landlord while upon the Premises except in the case of emergency.

17. Utilities and Services. Tenant acknowledges that, pursuant to Paragraph 5.3,
Tenant is to contract directly for and obtain (and Landlord is to have no
responsibility for) certain utilities and services necessary for the operation
of the Premises. Landlord shall not be liable for, and Tenant


                                       19
<PAGE>

shall not be entitled to any abatement or reduction of Rent by reason of the
discontinuation of utilities to the Building where such failure is caused by
accident, breakage, repairs, strikes, lockouts or other labor disturbances or
labor disputes of any character, or for other causes beyond Landlord's
reasonable control; provided, however, that to the extent there is an
interruption in utility service resulting from a particular cause which, if the
Rent were to abate, such rental abatement would be covered by insurance required
to be maintained by Landlord pursuant to Paragraph 20.2(a), then in such event,
and to the extent Landlord actually receives payment under such policy, Monthly
Basic Rent due hereunder, and all other monetary payments and additional Rent
owed by Tenant to Landlord hereunder (but only to the extent Tenant's use
thereof has been diminished), shall abate. Additionally, in the event of an
interruption of utility services, Landlord shall cooperate with and assist
Tenant as reasonably requested by Tenant (and at no more than nominal cost to
Landlord) to reestablish such services as soon as is possible. Tenant hereby
waives the provisions of California Civil Code Section 1932(1) or any other
applicable existing or future law, ordinance or governmental regulation
permitting the termination of this Lease due to the interruption or failure of
or inability to provide any services required to be provided by Landlord
hereunder.

18. Indemnification.

18.1 To the fullest extent permitted by law, and except as caused by Landlord's,
or Landlord's agent's, negligence or willful misconduct, Tenant hereby agrees to
defend, indemnify, protect and hold Landlord harmless against and from any and
all loss, cost, damage or liability arising in whole or in part from Tenant's
use of the Premises or the conduct of its business or from any activity, work,
or thing done, permitted or suffered by Tenant, its agents, contractors,
employees or invitees in or about the Premises or elsewhere, and hereby agrees
to further indemnify and hold harmless Landlord against and from any and all
loss, cost, damage or liability arising in whole or in part from any breach or
default in the performance of any obligation on Tenant's part to be performed
under the terms of this Lease or arising from any act, neglect, fault or
omission of Tenant, or of its agents, employees or invitees, and from and
against all costs, attorneys' fees, expenses and liabilities incurred for such
claim or any action or proceeding brought thereon. In case any action or
proceeding is brought against Landlord by reason of any such claim, Tenant upon
notice from Landlord hereby agrees to defend the same at Tenant's expense by
counsel approved in writing by Landlord. Tenant, as a material part of the
consideration to Landlord, hereby waives all claims against Landlord (but not
against Landlord's agents or any third parties) for damage to property or injury
to persons in, upon or about the Premises from any cause whatsoever except that
which is caused by Landlord's (or its agent's) gross negligence or intentional
misconduct.

18.2 Landlord shall defend and indemnify Tenant and hold it harmless from any
loss by reason of injury to person or property to the extent such injury is
caused by the gross negligence or intentional misconduct of Landlord, including
without limitation any liability or injury to the person or property of
Landlord, its officers, directors, partners, employees, agents, invitees or
guests. Nothing herein shall relieve Tenant of liability for its own willful
acts or negligence.

19. Damage to Tenant's Property. Landlord shall not be liable to Tenant for any
damage to property, nor for loss of or damage to any property by theft or
otherwise, nor for any injury or damage to persons or property resulting from
fire, explosion, falling plaster, steam, gas, electricity, water or rain which
may leak from any part of the Building or from the pipes, appliances or plumbing
works therein or from the roof, street or sub-surface or from any other place or
resulting


                                       20
<PAGE>

from dampness or any other patent or latent cause whatsoever, unless such damage
is caused by the gross negligence or willful misconduct of Landlord or its
agents. Landlord or its agents shall not be liable for interference with the
light, air, view or intangible characteristics or qualities of the Premises.
Tenant shall give prompt notice to Landlord in case of fire or accidents in the
Premises or in the Building or of defects known to Tenant therein or in the
fixtures or equipment located therein. Further, neither Landlord nor any
partner, director, officer, agent, servant or employee of Landlord shall be
liable: (i) for any such damage caused by any persons in, upon or about the
Building, or caused by operations in the construction of any private, public or
quasi-public work (the limitations of liability set forth in this clause (i)
shall not apply to any damage or liability caused by the gross negligence or
intentional misconduct of Landlord or its agents); or (ii) for consequential
damages, including lost profits, of Tenant or any person claiming through or
under Tenant.

20. Insurance.

20.1 During the Term hereof, Tenant, at its sole expense, shall obtain and keep
in force the following insurance:

(a.) Commercial general liability insurance designating Landlord as a named
insured against any and all claims for bodily injury and property damage
occurring in, or about the Premises (including without limitation damage or
injury to vehicles or persons in the parking lot located on the Site) arising
out of Tenant's use and occupancy of the Premises. Such insurance shall have a
combined single limit of not less than Three Million Dollars ($3,000,000) per
occurrence with a Ten Million Dollar ($10,000,000) aggregate limit. Such
liability insurance shall be primary and not contributing to any insurance
available to Landlord and any insurance maintained by Landlord shall be excess
thereto. In no event shall the limits of such insurance be considered as
limiting the liability of Tenant under this Lease.

(b.) Fire and casualty insurance in the name of Landlord and Tenant, with loss
payable to Landlord and to any Mortgagee, insuring against loss or damage to the
Premises. The amount of such insurance shall be equal to the full replacement
cost of the Premises, exclusive of foundations, as the same shall exist from
time to time, or the amount required by any lender(s), but in no event more than
the commercially reasonable and available insurable value thereof if, by reason
of the unique nature or age of the improvements involved, such latter amount is
less than full replacement cost. The insurance required by this Paragraph shall,
in addition, include coverage for any additional costs resulting from debris
removal and reasonable amounts of coverage for the enforcement of any ordinance
or law regulating the reconstruction or replacement of any undamaged sections of
the Premises required to be demolished, and shall also contain an agreed
valuation provision in lieu of any coinsurance clause, waiver of subrogation and
inflation guard protection causing an increase in the annual property insurance
coverage amount by a factor of not less than the adjusted U.S. Department of
Labor Consumer Price Index for All Urban Consumers for the city nearest to where
the Premises are located. If such insurance coverage has a deductible clause,
then Tenant shall be liable for the full deductible amount.

(c.) Personal property insurance insuring all equipment, trade fixtures,
inventory, fixtures and personal property located on or in the Premises for
perils covered by the causes of loss - special form (all risk) and in addition,
coverage for flood, and boiler and machinery (if applicable).


                                       21
<PAGE>

Such insurance shall be written on a replacement cost basis in an amount equal
to the full replacement value of the aggregate of the foregoing less any
applicable deductible.

(d.) Workers' compensation insurance in accordance with statutory law.

(e.) Loss of income and extra expense insurance in such amounts as will
reimburse Tenant for direct or indirect loss of earnings attributable to all
perils commonly insured against by prudent tenants or attributable to prevention
of access to the Premises or to the Building as result of such perils.

(f.) Any other form or forms of insurance as Tenant, Landlord, or Landlord's
mortgagees may reasonably require from time to time in form, in amounts, and for
insurance risks against which a prudent tenant of a comparable size and in a
comparable business would protect itself.

20.2 During the Term hereof (including the Early Occupancy Period), Landlord
shall obtain and keep in force the following insurance:

(a.) Policies of insurance in the name of Landlord insuring the Building
(excluding any property which Tenant is obligated to insure under Subparagraph
20.l(c) hereof and any Changes, but including the Base Building Work and
Tenant's Improvements) against damage caused by earthquake or flood, if the
Premises is within a designated flood zone. Landlord may, but shall not be
obligated to, obtain and carry any other form or forms of insurance as it or
Landlord's mortgagees may determine advisable. Notwithstanding any contribution
by Tenant to the cost of insurance premiums, as provided herein, Tenant
acknowledges that it has no right to receive any proceeds from any insurance
policies carried by Landlord. Except for such costs related to the Early
Occupancy Period, Tenant shall reimburse Landlord for the cost of all such
insurance within twenty (20) days of receipt of an invoice therefor. Tenant
shall be responsible for the payment of any deductible amount in connection with
any such policies carried by Landlord; provided, however, that Tenant's
obligation to pay the deductible in connection with an earthquake policy shall
decrease by 10% upon expiration of each lease year of the Term (Tenant shall pay
100% of the deductible if a casualty occurs in the first lease year, 90% if the
casualty occurs in the second lease year, 80% in the third lease year, etc.),
and Landlord shall be responsible for the payment of the balance of any
deductible.

(b.) Policies of insurance in the name of Landlord, with loss payable to
Landlord and any Mortgagee, insuring the loss of the full rental or other
charges payable by Tenant to Landlord pursuant to this Lease for a period of not
less than one year. Such insurance shall provide that in the event that the
Lease is terminated by reason of an insured loss, the period of indemnity for
such coverage shall be extended beyond the date of the completion of repairs or
replacement of the Premises, to provide for one full year's loss of Rent from
the date of any such loss. Said insurance shall contain an agreed evaluation
provision in lieu of any coinsurance clause, and the amount of coverage shall be
adjusted annually to reflect the projected Rent payable by Tenant for the next
twelve (12) month period. Tenant shall reimburse Landlord for the cost of all
such insurance within twenty (20) days of receipt of an invoice therefor. Tenant
shall be liable for any deductible amount in the event of a loss.

                                       22
<PAGE>

20.3 The policies required to be maintained by Tenant and Landlord hereunder
shall be with companies rated AVIII or better in the most current issue of
Best's Insurance Reports. Insurers shall be licensed to do business in the state
in which the Premises are located and domiciled in the USA. Any deductible
amounts under any insurance policies required hereunder shall not exceed
$10,000.00; provided, however, that the deductible with respect to the insurance
required pursuant to Paragraph 20.2(b) shall be substantially equal to that
amount which is 10% of the full replacement cost of the Building (including Base
Building Work and Tenant's Improvements). Certificates of insurance shall be
delivered to Landlord prior to the commencement date and annually thereafter at
least thirty (30) days prior to the expiration date of the old policy. Tenant
shall have the right to provide insurance coverage which it is obligated to
carry pursuant to the terms hereof in a blanket policy, provided such blanket
policy expressly affords coverage to the Premises and to Landlord as required by
this Lease. Each policy of insurance shall provide that Landlord (and any
mortgagee) are additional insureds and shall provide notification to Landlord at
least thirty (30) days prior to any cancellation or modification to reduce the
insurance coverage. Landlord shall have the right to review the limits of
coverage maintained by Tenant periodically during the Term, and may request that
such limits be increased to commercially reasonable levels consistent with other
similar buildings in the area of the Building if a discrepancy is discovered.

20.4 Tenant will not knowingly keep, use, sell, or offer for sale in, or upon,
the Premises any article which may be prohibited by any insurance policy
periodically in force covering the Building. If Tenant's occupancy or business
in, or on, the Premises, whether or not Landlord has consented to the same,
results in any increase in premiums for the insurance required or actually
carried by Tenant and/or Landlord with respect to the Building, Tenant shall pay
any such increase in premiums as additional Rent. In determining whether
increased premiums are a result of Tenant's use of the Premises, a schedule
issued by the organization computing the insurance rate on the Building or the
Premises showing the various components of such rate, shall be conclusive
evidence of the several items and charges which make up such rate. Tenant shall
promptly comply with all reasonable requirements of the insurance authority or
any present or future insurer relating to the Premises.

20.5 If any insurance policy required to be maintained by Tenant shall be
canceled or cancellation shall be threatened or the coverage thereunder reduced
or threatened to be reduced in any way because of the specific use of the
Premises or any part thereof by Tenant or any assignee or sub-tenant of Tenant
or by anyone Tenant permits on the Premises and, if Tenant fails to remedy the
condition giving rise to such cancellation, threatened cancellation, reduction
of coverage, threatened reduction of coverage, increase in premiums, or
threatened increase in premiums, within 48 hours after written notice thereof,
Landlord may, at its option, enter upon the Premises and attempt to remedy such
condition, and Tenant shall promptly pay all costs thereof to Landlord as
additional Rent. Landlord shall not be liable for any damage or injury caused to
any property of Tenant or of others located on the Premises resulting from such
entry. If Landlord is unable, or elects not, to remedy such condition, then
Landlord shall have all of the remedies provided for in this Lease in the event
of a default by Tenant.

20.6 Notwithstanding anything herein to the contrary, Landlord and Tenant hereby
mutually waive their respective rights of recovery against each other for any
loss of, or damage to, either parties' property, to the extent that such loss or
damage is insured by an insurance policy required to be in effect at the time of
such loss or damage. Each party shall obtain any special


                                       23
<PAGE>

endorsements, if required by its insurer whereby the insurer waives its rights
of subrogation against the other party.

20.7 In the event Tenant does not purchase the insurance required by this Lease
or keep the same in full force and effect, Landlord may, but shall not be
obligated to purchase the necessary insurance and pay the premium. The Tenant
shall repay to Landlord, as additional Rent, the amount so paid promptly upon
demand. In addition, Landlord may recover from Tenant and Tenant agrees to pay,
as additional Rent, any and all reasonable expense (including attorneys' fees)
and damages which Landlord may sustain by reason of the failure to Tenant to
obtain and maintain such insurance.

20.8 Prior to commencement of the Early Occupancy Period, Landlord shall be
responsible for maintaining the insurance coverages set forth in Paragraphs
20.1(b) and 20.2(a), and shall be responsible for the payment of all premiums
for such policies which accrue prior to the Early Occupancy Period.

21. Damage or Destruction.

21.1 In the event that the Premises is damaged by fire or other casualty which
is covered under insurance pursuant to the provisions of the foregoing section,
Landlord shall restore such damage provided that: (i) the insurance proceeds,
plus the amount of any deductible (the payment of which shall be Tenant's
responsibility, except to the extent Landlord is responsible for payment of the
deductible pursuant to Paragraph 20.2(a)), are sufficient to pay one hundred
percent (100%) of the cost of restoration; and (ii) in the reasonable judgment
of Landlord, the restoration can be completed within two hundred and seventy
(270) days after the date of the damage or casualty under the laws and
regulations of the state, federal, county and municipal authorities having
jurisdiction. Landlord shall notify Tenant whether or not the Premises will be
restored under this section within forty-five (45) days of the occurrence of the
casualty. If such conditions apply so as to require Landlord to restore such
damage pursuant to this section, this Lease shall continue in full force and
effect, unless otherwise agreed to in writing by Landlord and Tenant. Tenant
shall be entitled to a proportionate reduction of Rent (to the extent such
amounts are covered by rental interruption insurance which Landlord was
obligated to maintain pursuant to Paragraph 20.2(b)) at all times during which
Tenant's use of the Premises is interrupted, such proportionate reduction to be
based on the extent to which the damage and restoration efforts actually
interfere with Tenant's business in the Premises. Except as otherwise provided
in Paragraph 21.4, 21.6 and subject to Paragraph 24.6, Tenant's right to a
reduction of Rent hereunder shall be Tenant's sole and exclusive remedy in
connection with any such damage. Notwithstanding the foregoing, if Landlord
elects to terminate this Lease pursuant to this Subparagraph 21.1, if within
thirty (30) days after receipt of Landlord's notice Tenant elects to provide the
funds necessary to make up the shortage (or absence) of insurance proceeds and
provides Landlord with reasonable assurance thereof, Landlord shall restore the
Premises as provided in this Subparagraph provided that the Premises are
reasonably subject to restoration within two hundred seventy (270) days
following the date on which the casualty occurs.

21.2 In the event that the Premises is damaged by a casualty against which
Tenant is not required to maintain insurance pursuant to Paragraph 20, and
Landlord is not required to restore such damage in accordance with the
provisions of the immediately preceding section, Landlord shall have the option
to either (i) repair or restore such damage, with the Lease continuing in full

                                       24
<PAGE>

force and effect, but Rent to be proportionately abated as provided above; or
(ii) give notice to Tenant at any time within forty-five (45) days after the
occurrence of such damage terminating this Lease as of a date to be specified in
such notice which date shall not be less than thirty (30) nor more than sixty
(60) days after the date on which such notice of termination is given. In the
event of the giving of such notice of termination, this Lease shall expire and
all interest of Tenant in the Premises shall terminate on the date so specified
in such notice and the Rent, reduced by any proportionate reduction in Rent as
provided for above, shall be paid to the date of such termination.
Notwithstanding the foregoing, if Landlord elects to terminate this Lease
pursuant to this Subparagraph 21.2, if within thirty (30) days after receipt of
Landlord's notice Tenant elects to provide the funds necessary to make up the
shortage (or absence) of insurance proceeds and provides Landlord with
reasonable assurance thereof, Landlord shall restore the Premises as provided in
this Subparagraph provided that the Premises are reasonably subject to
restoration within two hundred seventy (270) days following the date on which
the casualty occurs. Tenant in connection with such election, shall have the
right to exercise any remaining option(s) to extend the Term provided herein (if
any), provided that Tenant otherwise meets all requirements necessary for such
exercise.

21.3 Notwithstanding the foregoing, either Landlord or Tenant may terminate this
Lease if the Premises is damaged by fire or other casualty (and Landlord's
reasonably estimated cost of restoration of the Premises exceeds ten percent
(10%) of the then replacement value of the Premises) and such damage or casualty
occurs during the last twelve (12) months of the Term of this Lease (or the Term
of any renewal option, if applicable) by giving the other notice thereof at any
time within thirty (30) days following the occurrence of such damage or
casualty. Such notice shall specify the date of such termination, which date
shall not be less than thirty (30) nor more than sixty (60) days following the
date on which such notice of termination is given. In the event of the giving of
such notice of termination, this Lease shall expire and all interest of Tenant
in the Premises shall terminate on the date so specified in such notice and the
Rent shall be paid to the date of such termination. Notwithstanding the
foregoing to the contrary, Landlord shall not have the right to terminate this
Lease if damage or casualty occurs during the last twelve (12) months of the
Term if Tenant timely exercises its option to extend the Term of this Lease (if
any) within twenty (20) days after the date of such damage or casualty.

21.4 In the event that the destruction to the Premises cannot be restored as
required herein under applicable laws and regulations within two hundred seventy
(270) days of the damage or casualty, notwithstanding the availability of
insurance proceeds, either party shall have the right to terminate this Lease by
giving the other notice thereof within thirty (30) days of date of the
occurrence of such casualty specifying the date of termination which shall not
be less than thirty (30) days nor more than sixty (60) days following the date
on which such notice of termination is given. In the event of the giving of such
notice of termination, this Lease shall expire and all interest of Tenant in the
Premises shall terminate on the date so specified in such notice and the Rent,
reduced by any proportionate reduction in Rent as provided for above, shall be
paid to the date of such termination.

21.5 Upon any termination of this Lease under any of the provisions of this
Paragraph 21, the parties shall be released thereby without further obligation
to the other from the date possession of the Premises is surrendered to
Landlord, except for (i) items which have already accrued and are then unpaid by
Tenant under the Lease, (ii) any prepaid (and unearned) Monthly Basic Rent or

                                       25
<PAGE>

unused security deposit amounts, and (iii) any portion of the costs of the Base
Building Work not yet offset against Monthly Basic Rent.

21.6 Tenant shall not be released from any of its obligations under this Lease
except to the extent and upon the conditions expressly stated in this Paragraph
21. Notwithstanding anything to the contrary contained in this Paragraph 21,
should Landlord be delayed or prevented from repairing or restoring the damaged
Premises within one (1) year after the occurrence of such damage or destruction
by reason of acts of God, war, governmental restrictions, inability to procure
the necessary labor or materials, or other cause or force majeure beyond the
control of Landlord, such one (1) year period shall be extended by one day for
each day completion of the work to restore the Premises is delayed thereby. Upon
expiration of the one (1) year period for reconstruction (as the same may be
extend by force majeure), and provided such reconstruction is not then
substantially complete, Tenant may give Landlord written notice terminating this
Lease, and in the event Landlord does not substantially complete the
reconstruction of the Premises within sixty (60) days of receipt of such notice,
this Lease shall terminate.

21.7 If Landlord is obligated to or elects to repair or restore as herein
provided, Landlord shall be obligated to make repairs or restoration only of
those portions of the Building and the Premises which constituted the Work (as
defined in the Work Letter), or which were insured by either party and the
proceeds of such insurance have been received by Landlord. The repair and
restoration of items not provided at Landlord's expense shall be the obligation
of Tenant.

21.8 Tenant hereby waives California Civil Code Sections 1932(2) and 1933(4),
providing for termination of hiring upon destruction of the thing hired and
Sections 1941 and 1942, providing for repairs to and of premises.

22. Eminent Domain.

22.1 In case the whole of the Site (including the Building and all parking areas
located on the Site), or such part thereof as shall substantially interfere with
Tenant's use and occupancy thereof, shall be taken for any public or
quasi-public purpose by any lawful power or authority by exercise of the right
of appropriation, condemnation or eminent domain, or sold to prevent such
taking, either party shall have the right to terminate this Lease effective as
of the date possession is required to be surrendered to said authority. Tenant
shall not assert any claim against Landlord or the taking authority for any
compensation because of such taking (provided that Tenant may present a separate
claim for Tenant's relocation costs, lost personal property and the unamortized
portion of any leasehold improvements performed by Tenant other than the Work
(as defined in the Work Letter), so long as such claim does not diminish any
award otherwise available to Landlord), and Landlord shall be entitled to
receive the entire amount of any award without deduction for any estate or
interest of Tenant. In the event the amount of property or the type of estate
taken shall not substantially interfere with the conduct of Tenant's business,
Landlord shall be entitled to the entire amount of the award without deduction
for any estate or interest of Tenant. If this Lease is not so terminated,
Landlord shall promptly proceed to restore the Premises to substantially their
same condition prior to such partial taking, and a proportionate allowance shall
be made to Tenant for the Rent corresponding to the time during which, and to
the part of the Premises of which, Tenant shall be so deprived on account of
such taking and restoration. Nothing contained in this Paragraph shall be deemed
to give Landlord any interest in any award separately made to Tenant for the
taking of


                                       26
<PAGE>

personal property and trade fixtures belonging to Tenant, for the loss of
Tenant's goodwill or for moving costs incurred by Tenant in relocating Tenant's
business.

22.2 In the event of taking of the Premises or any part thereof for temporary
use, (i) this Lease shall be and remain unaffected thereby and Rent shall not
abate, and (ii) Tenant shall be entitled to receive for itself such portion or
portions of any award made for such use with respect to the period of the taking
which is within the Term, provided that if such taking shall remain in force at
the expiration or earlier termination of this Lease, Tenant shall then pay to
Landlord a sum equal to the reasonable cost of performing Tenant's obligations
under Paragraph 14 with respect to surrender of the Premises and upon such
payment shall be excused from such obligations. For purpose of this Subparagraph
22.2, a temporary taking shall be defined as a taking for a period of 270 days
or less.

22.3 Landlord and Tenant each hereby waive the provisions of California Code of
Civil Procedure Section 1265.130 and any other applicable existing or future
law, ordinance or governmental regulation providing for, or allowing either
party to petition the courts of the state of California for, a termination of
this lease upon a partial taking of the Premises and/or the Building.

23. Bankruptcy. If Tenant shall file a petition in bankruptcy under any Chapter
of federal bankruptcy law as then in effect, or if Tenant be adjudicated a
bankrupt in involuntary bankruptcy proceedings and such adjudication shall not
have been vacated within sixty (60) days from the date thereof, or if a receiver
or trustee be appointed of Tenant's property and the order appointing such
receiver or trustee not be set aside or vacated within sixty (60) days after the
entry thereof, or if Tenant shall assign Tenant's estate or effects for the
benefit of creditors, or if this Lease shall otherwise by operation of law pass
to any person or persons other than Tenant, then and in any such event Landlord
may, if Landlord so elects, with or without notice of such election and with or
without entry or action by Landlord, forthwith terminate this Lease to the
extent allowed by applicable law. Notwithstanding any other provisions of this
Lease, Landlord, in addition to any and all rights and remedies allowed by law
or equity, shall upon such termination be entitled to recover damages in the
amount provided in Subparagraph 24.2 below and neither Tenant nor any person
claiming through or under Tenant or by virtue of any statute or order of any
court shall be entitled to possession of the Premises but shall forthwith quit
and surrender the Premises to Landlord. Nothing herein contained shall limit or
prejudice the right of Landlord to prove and obtain as damages by reason of any
such termination an amount equal to the maximum allowed by any statute or rule
of law in effect at the time when, and governing the proceedings in which, such
damages are to be proved, whether or not such amount be greater, equal to, or
less than the amount of damages recoverable under the provisions of this
Paragraph 23.

24. Defaults and Remedies.

24.1 The occurrence of any one or more of the following events shall constitute
a default hereunder by Tenant:

(a.) The abandonment of the Premises by Tenant. Abandonment is herein defined to
include, but is not limited, to, any absence by Tenant from the Premises for
fourteen (14) consecutive days or more without paying Rent and providing
reasonably adequate security for the Premises.

                                       27
<PAGE>

(b.) The failure by Tenant to make any payment of Monthly Basic Rent, additional
Rent or any other payment required to be made by Tenant hereunder as and when
due, where such failure continues for a period of five (5) days after written
notice thereof from Landlord to Tenant; provided, however, that any such notice
shall be in lieu of, and not in addition to, any notice required under
California Code of Civil Procedure 1161 (provided such notice is prepared and
delivered to Tenant in compliance with Section 1161).

(c.) The failure by Tenant to observe or perform any of the express or implied
covenants or provisions of this Lease to be observed or performed by Tenant,
other than as specified in Subparagraph 24.1(a) or 24.1(b) above, where such
failure shall continue for a period of ten (10) days after written notice
thereof from Landlord to Tenant; provided, however, that any such notice shall
be in lieu of, and not in addition to, any notice required under California Code
of Civil Procedure 1161 (provided such notice is prepared and delivered to
Tenant in compliance with Section 1161); provided, further, that if the nature
of Tenant's default is such that more than ten (10) days are reasonably required
for its cure, then Tenant shall not be deemed to be in default if Tenant shall
commence such cure within said ten-day period and thereafter diligently and
without interruption prosecute such cure to completion.

(d.) (1) The making by Tenant of any general assignment for the benefit of
creditors; (2) the filing by or against Tenant of a petition to have Tenant
adjudged a bankrupt or a petition for reorganization or arrangement under any
law relating to bankruptcy (unless, in the case of a petition filed against
Tenant, the same is dismissed within sixty (60) days); (3) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, where possession
is not restored to Tenant within sixty (60) days; or (4) the attachment,
execution or other judicial seizure of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease where such seizure
is not discharged within sixty (60) days.

24.2 In the event of any such default by Tenant, in addition to any other
remedies available to Landlord at law or in equity, Landlord shall have the
immediate option to terminate this Lease and all rights of Tenant hereunder.
Upon such termination of Tenant's right to possession of the Premises, this
Lease shall terminate and Landlord shall be entitled to recover damages from
Tenant as provided in California Civil Code Section 1951.2 or any other
applicable existing or future law, ordinance or regulation providing for
recovery of damages for such breach, including but not limited to the following:

(a.) the worth at the time of award of any unpaid Rent which had been earned at
the time of such termination; plus

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

(c.) the worth at the time of award of the amount by which the unpaid Rent for
the balance of the Term after the time of award exceeds the amount of such
rental loss that Tenant proves could be reasonably avoided; plus

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<PAGE>

(d.) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform his obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom.

         As used in Subparagraphs 24.2(a) and 24.2(b) above, the "worth at the
time of award" is computed by allowing interest at the maximum rate permitted by
law per annum. As used in Subparagraph 24.2(c) above, the Worth at the time of
awards is computed by discounting to present value at the time of the award such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1%).

24.3 If a default exists under this Lease, Landlord shall also have the remedy
described in California Civil Code Section 1951.4 (Landlord may continue this
Lease in effect after Tenant has breached this Lease and abandoned the Premises
and recover Rent as it becomes due; provided, however that Tenant has the right
to sublet or assign this Lease, subject only to reasonable limitations). Acts of
maintenance or preservation or efforts to relet the Premises or the appointment
of a receiver upon initiative of Landlord to protect Landlord's interest under
this Lease shall not constitute a termination of Tenant's right to possession.

24.4 During the continuance of a default, and subject to all applicable due
process requirements, Landlord may enter the Premises without terminating this
Lease and remove all Tenant's personal property, any Changes and trade fixtures
from the Premises and store them at Tenant's risk and expense. If Landlord
removes such property from the Premises and stores it at Tenant's risk and
expense, and if Tenant fails to pay the cost of such removal and storage after
written demand therefor and/or to pay any Rent then due, then after the property
has been stored for a period of thirty (30) days or more Landlord may sell such
property at public or private sale, in the manner and at such times and places
as Landlord deems commercially reasonable following reasonable notice to Tenant
of the time and place of such sale. The proceeds of any such sale shall be
applied first to the payment of the expenses for removal and storage of the
property, the preparation for and the conducting of such sale, and for
attorneys' fees and other legal expenses incurred by Landlord in connection
therewith; and the balance shall be applied to any past due amount owing
hereunder.

         Tenant hereby waives all claims for damages that may be caused by
Landlord's reentering and taking possession of the Premises or removing and
storing Tenant's personal property pursuant to this Paragraph 24, and Tenant
shall hold Landlord harmless from and against any loss, cost or damage resulting
from any such act. No reentry by Landlord shall constitute or be construed as a
forcible entry by Landlord.

24.5 All rights, options' and remedies of Landlord contained in this Lease shall
be construed and held to be cumulative, and no one of them shall be exclusive of
the other, and Landlord shall have the right to pursue any one or all of such
remedies or any other remedy or relief which may be provided by law, whether or
not stated in this Lease. No waiver of any default of Tenant hereunder shall be
implied from any acceptance by Landlord of any Rent or other payments due
hereunder or any omission by Landlord to take any action on account of such
default if such default persists or is repeated, and no express waiver shall
affect defaults other than as specified in said waiver. The consent or approval
or Landlord to or of any act by Tenant requiring Landlord's


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<PAGE>

consent or approval shall not be deemed to waive or render unnecessary
Landlord's consent or approval to or of any subsequent similar acts by Tenant.

24.6 The failure by Landlord to observe or perform any of the covenants,
conditions or provisions of this Lease shall constitute an event of default
under the Lease, but only if such failure continues for a period of thirty (30)
days after written notice thereof from Tenant to Landlord; provided, however,
that if additional time is necessary to cure such default, no event of default
shall be deemed to have occurred if Landlord commences to cure the default
within thirty (30) days of notice from Tenant and thereafter diligently
prosecutes such cure to completion. For purposes of this Paragraph, a cure of
the default shall include a reasonable period of time for Landlord to (i)
evaluate the alleged event of default, (ii) obtain bids from three or more
qualified contractors to perform the work necessary to cure the default (if
applicable), (iii) award a contract to a contractor to perform any necessary
work to cure the default, and (iv) complete the work to cure the default. In the
event of any uncured event of default, then Tenant, at Tenant's option, may
thereafter pursue one of the following remedies: (a) perform Landlord's
obligation and invoice Landlord for reimbursement for reasonable expenses
actually incurred by Tenant, with supporting documentation in form and substance
satisfactory to Landlord; provided, however, that Tenant shall have no right to
offset the cost thereof against Monthly Basic Rent or other sums payable by
Tenant to Landlord hereunder, or (b) institute an action for specific
performance and/or other equitable remedies against Landlord in the San
Francisco Superior Court. Notwithstanding the foregoing, and without
constituting a default on Landlord's part, Tenant shall have the right to
perform repairs to the Premises otherwise the responsibility of Landlord if (i)
the circumstances can fairly be described as an emergency and the contemplated
repairs are necessary to avoid continuing damage to the Building or Tenant's
property, and (ii) Tenant gives Landlord advanced notice and a reasonable
opportunity to effect the necessary repairs. In such event, Tenant may offset
the reasonable costs of such repairs against subsequent Monthly Basic Rent
payments. Tenant shall have the further right to offset against subsequent
Monthly Basic Rent payments any portion of the cost of the Base Building Work in
excess of $4,000,000.00 for which Landlord is required to reimburse Tenant
pursuant to Paragraph 1.3.1 of the Work Letter, if such reimbursement is not
received by Tenant within the time provided in Paragraph 1.3.1 of the Work
Letter.

25. Assignment and Subletting. Tenant shall not voluntarily assign or encumber
its interest in this Lease or in the Premises, or sublease all or any part of
the Premises, or allow any other person or entity to occupy or use all or any
part of the Premises, without first obtaining Landlord's prior written consent,
which consent shall not be unreasonably withheld. Any assignment, encumbrance or
sublease without Landlord's prior written consent shall be voidable, at
Landlord's election, and shall constitute a default. For purposes hereof, in the
event Tenant is a partnership, a withdrawal or change of partners, or change of
ownership of partners, owning more than a fifty percent (50%) interest in the
partnership, or if Tenant is a private (as opposed to a public) corporation, any
transfer of fifty percent (50%) of its stock, or of voting control of such
corporation, shall constitute a voluntary assignment and shall be subject to
these provisions. Notwithstanding the provisions of this Paragraph 25 to the
contrary, Tenant shall be entitled to assign or sublet all or a portion of its
interest in this Lease to an affiliate of Tenant without the prior consent of
Landlord provided that (i) Tenant shall continue to be liable following the
assignment for the obligations pursuant to this Lease, and (ii) Tenant shall
give thirty (30) days prior written notice, along with complete financial
information for the affiliate, to Landlord of any such proposed assignment to an
affiliate. For purposes hereof, the term "affiliate" shall refer to any entity
which (i) directly or indirectly, through


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<PAGE>

one or more intermediaries, controls, is controlled by, or is under common
control with Tenant, or (ii) any entity with which or into which Tenant merges
or consolidates. No consent to any assignment, encumbrance, or sublease shall
constitute a further waiver of the provisions of this Paragraph. No later than
thirty (30) days prior to the effective date of the proposed assignment or
sublease, Tenant shall notify Landlord in writing of Tenant's intent to assign,
encumber, or sublease, the name of the proposed assignee or sublessee,
information concerning the financial responsibility of the proposed assignee or
sublessee and the terms of the proposed assignment or subletting, and Landlord
shall, within twenty (20) days of receipt of such written notice as well as any
additional information requested by Landlord concerning the proposed assignee's
or sublessee's financial responsibility, either approve or reject the proposed
assignment, encumbrance or sublease.

         Without limiting the instances in which it may be reasonable for
Landlord to withhold its consent to an assignment or subletting, Landlord and
Tenant acknowledge that it shall be reasonable for Landlord to withhold its
consent in the following instances: (i) if at the time consent is requested or
at any time prior to the granting of consent, Tenant is in default under this
Lease or would be in default under this Lease but for the pendency of any grace
or cure period under Paragraph 24 above; (ii) if the proposed assignee or
sublessee is a governmental agency; (iii) if, in Landlord's judgment, the use of
the Premises by the proposed assignee or sublessee (1) would be inconsistent
with Paragraph 7 of this Lease, or (2) would result in more than a reasonable
number of occupants per floor; or (iv) if the proposed assignee's or sublessee's
credit, character and business or professional standing does not meet the
reasonable standards of Landlord.

         In the event that Landlord shall consent to any assignment or sublease
under the provisions of this Paragraph 25, Tenant shall pay Landlord's
reasonable processing costs and attorneys' fees incurred in giving such consent.
Landlord's consent to any assignment or sublease shall not release or relieve
Tenant from its obligations for the full and timely performance of each and
every term and condition to be performed by Tenant hereunder. If for any
proposed assignment or sublease Tenant receives Rent or other consideration,
either initially or over the term of the assignment or sublease, in excess of
the Rent and monthly amortization of Transfer Costs (defined below) called for
hereunder, or, in case of the sublease of a portion of the Premises, in excess
of the monthly amortization of all Transfer Costs and such Rent fairly allocable
to such portion, after appropriate adjustments to assure that all other payments
called for hereunder are taken into account, Tenant shall, except where such
assignee or subtenant is an affiliate of Tenant, pay to Landlord as additional
Rent hereunder 50% of the excess of each such payment of Rent or other
consideration received by Tenant promptly after its receipt. As used herein,
"Transfer Costs" shall mean commercially reasonable brokerage commissions and
attorneys' fees incurred by Tenant in negotiating and documenting such
assignment or sublease, and such expenses as Landlord shall approve in advance
(in Landlord's sole discretion) incurred by Tenant in performing Changes to the
Premises reasonably required by the proposed assignee or sublessee, such
Transfer Costs to be amortized (without interest) for the purposes of Tenant's
recovery of same from excess consideration, on a straight-line basis over the
remaining initial Term of this Lease as of the effective date of such assignment
or subletting. Landlord's waiver or consent to any assignment or subletting
shall not relieve Tenant from any obligation under this Lease..

26. Quiet Enjoyment. Landlord covenants and agrees with Tenant that upon Tenant
paying the Rent required under this Lease and paying all other charges and
performing all of the covenants and provisions aforesaid on Tenant's part to be
observed and performed under this Lease and subject to


                                       31
<PAGE>

the terms and conditions of this Lease, Tenant shall and may peaceably and
quietly have, hold and enjoy the Premises in accordance with this Lease.

27. Subordination. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any first mortgagee with a lien on the Building or any
ground lessor with respect to the Building, this lease shall be subject and
subordinate at all times to: (a) all ground leases or underlying leases which
may now exist or hereafter be executed affecting the Building or the land upon
which the Building is situated or both, and (b) the lien of any mortgage or deed
of trust which may now exist or hereafter be executed in any amount for which
the Building, land, ground leases or underlying leases, or Landlord's interest
or estate in any of said items is specified as security. Notwithstanding the
foregoing, Landlord shall have the right to subordinate or cause to be
subordinated any such ground leases or underlying leases or any such liens to
this lease. In the event that any ground lease or underlying lease terminates
for any reason or any mortgage or deed of trust is foreclosed or a conveyance in
lieu of foreclosure is made for any reason, Tenant shall, if requested by the
ground lessor, mortgagee or beneficiary, as applicable, attorn to and become the
Tenant of the successor in interest to Landlord and in such event Tenant's right
to possession of the Premises shall not be disturbed if Tenant is not in default
and so long as Tenant shall pay the Rent and all other amounts required to be
paid to Landlord pursuant to the terms hereof and observe and perform all of the
provisions of this Lease, unless the Lease is otherwise terminated pursuant to
its terms. Tenant covenants and agrees to execute and deliver, upon demand by
Landlord and in the form reasonably requested by Landlord, any additional
documents evidencing the priority or subordination of this Lease with respect to
any such ground leases or underlying leases or the lien of any such mortgage or
deed of trust, provided that such documents shall contain commercially
reasonable non-disturbance provisions such that as long as Tenant observes and
performs its obligations as provided hereunder, its possession of the Premises
and its rights hereunder will not be disturbed and that, in the event of any
foreclosure by such mortgagee or ground lessor, Tenant's leasehold interest
hereunder shall not be terminated. Should Tenant fail to sign and return any
such documents within ten (10) business days of receipt, Tenant shall be in
default, and Landlord may, at Landlord's option, terminate this Lease provided
written notice of such termination is received by Tenant prior to Landlord's
receipt of such documents. Within ninety (90) days of execution of this Lease,
Landlord shall obtain from all existing mortgagees and ground lessors a
commercially reasonable Subordination, Nondisturbance and Attornment Agreement.
Landlord shall also obtain (and Tenant shall also execute) such documentation
with respect to any future mortgagees or ground lessors of the Site. Within
ninety (90) days of execution of this Lease, Landlord shall obtain a
commercially reasonable Subordination, Nondisturbance and Attornment Agreement
from all other parties with "of record" lien or leasehold rights in the Site, or
shall cause the recordation of such documentation as may be reasonably
acceptable to Fidelity National Title Company to remove such matters from the
title to the Site.

28. Estoppel Certificate.

28.1 Within ten (10) business days following any written request which Landlord
may make from time to time, Tenant shall execute and deliver to Landlord a
statement, in a form substantially similar to the form of Exhibit C attached
hereto, certifying; (i) the Commencement Date of this Lease; (ii) the fact that
this Lease is unmodified and in full force and effect (or, if there have been
modifications hereto, that this Lease is in full force and effect, as modified,
and stating the date and nature of such modifications); (iii) the date to which
the rental and other sums payable


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<PAGE>

under this Lease have been paid; (iv) the fact that there are no current
defaults under this Lease by either Landlord or Tenant except as specified in
such statement; and (v) such other matters reasonably requested by the
requesting party. Landlord and Tenant intend that any statement delivered
pursuant to this Paragraph 28 may be relied upon by any mortgagee, beneficiary,
purchaser or prospective purchaser of the Building or any interest therein.

28.2 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 the requesting party's performance, and (iii) that not more
than one (1) month's Rent has been paid in advance. If Tenant fails to deliver
said statement to Landlord within ten (10) business days of receipt of a written
request therefor, such failure shall, without the requirement of any future
notice or any further grace period, constitute a default under this Lease
pursuant to Paragraph 24.1(c).

29. Conflict of Laws. This Lease shall be governed by and construed pursuant to
the laws of the State of California.

30. Successors and Assigns. Except as otherwise provided in this Lease, all of
the covenants, conditions and provisions of this Lease shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
personal representative, successors and assigns.

31. Surrender of Premises. The voluntary or other surrender of this Lease by
Tenant, or a mutual cancellation thereof, shall not work a merger, and shall, at
the option of Landlord, operate as an assignment to it of any or all subleases
or subtenancies. Upon the expiration or termination of this Lease, Tenant shall
peaceably surrender the Premises and all alterations and additions (except as
otherwise provided in Paragraph 13) thereto broom-clean, in good order, repair
and condition, reasonable wear and tear excepted. The delivery of keys to any
employee of Landlord or to Landlord's agent or any employee thereof shall not be
sufficient to constitute a termination of this Lease or a surrender of the
Premises.

32. Professional Fees.

32.1 In the event that Landlord or Tenant should bring suit for the possession
of the Premises, for the recovery of any sum due under this Lease, or because of
the breach of any provisions of this Lease, or for any other relief against
Tenant or Landlord hereunder, or should either party bring suit against the
other with respect to matters arising from or growing out of this Lease, then
all costs and expenses, including without limitation, its reasonable
professional fees such as appraisers', accountants' and attorneys' fees,
incurred by the prevailing party therein shall be paid by the other party, which
obligation on the part of the other party shall be deemed to have accrued on the
date of the commencement of such action and shall be enforceable whether or not
the action is prosecuted to judgment.

32.2 Should Landlord be named as a defendant in any suit brought against Tenant
in connection with or arising out of Tenant's occupancy hereunder, and such suit
is not based on any negligent or wrongful conduct of Landlord or its agents,
Tenant shall pay to Landlord its costs and expenses incurred in such suit as and
when incurred, including without limitation, its actual professional fees such
as appraiser's, accountants' and attorneys' fees.

                                       33
<PAGE>

33. Performance by Tenant. All covenants and agreements to be performed by
Tenant under any of the terms of this Lease shall be performed by Tenant at
Tenant's sole cost and expense and without any abatement of Rent, except as
otherwise provided herein. Tenant acknowledges that the late payment by Tenant
to Landlord of any sums due under this Lease will cause Landlord to incur costs
not contemplated by this Lease, the exact amount of such cost being extremely
difficult and impractical to fix. Such costs include, without limitation,
processing and accounting charges, and late charges that may be imposed on
Landlord by the terms of any encumbrance and note secured by any encumbrance
covering the Premises or the Building of which the Premises are a part.
Therefore if any amount due Landlord from Tenant hereunder has not been received
on or before the fifth (5th) day after Tenant receives written notice that such
amount is past due, Tenant shall pay to Landlord, without notice or demand, as
additional Rent, five percent (5 %) of the overdue amount as a late charge. Such
overdue amount shall also bear interest, as additional Rent, at the maximum rate
permissible by law calculated, as appropriate, from the date of receipt of said
notice until the date of payment to Landlord. Landlord's acceptance of any late
charge or interest shall not constitute a waiver of Tenant's default with
respect to the overdue amount or prevent Landlord from exercising any of the
other rights and remedies available to Landlord under this Lease or any law now
or hereafter in effect. Further, in the event such late charge is imposed by
Landlord for two (2) consecutive months for whatever reason, Landlord shall have
the option to require that, beginning with the first payment of Rent due
following the imposition of the second consecutive late charge, Rent shall no
longer be paid in monthly installments but shall be payable three (3) months in
advance.

34. Mortgagee and Senior Lessor Protection. No act or failure to act on the part
of Landlord which would entitle Tenant under the terms of this Lease, or by law,
to be relieved of Tenant's obligations hereunder or to terminate this Lease,
shall result in a release of such obligations or a termination of this Lease
unless (a) Tenant has given notice by registered or certified mail to Landlord
and to any beneficiary of a deed of trust or mortgage covering the Building and
to the lessor under any master or ground lease covering the Building, the Site
or any interest therein whose identity and address shall have been furnished to
Tenant, and (b) Tenant offers such beneficiary, mortgagee or lessor a reasonable
opportunity (but in no event less than thirty (30) days) to cure the default,
including time to obtain possession of the Premises by power of sale or of
judicial foreclosure, if such should prove necessary to effect a cure. Landlord
shall, from time to time, give Tenant written notice of the identity and address
of the beneficiary of any deed of trust or mortgage covering the Building and/or
the lessor under any master or ground lease.

35. Definition of Landlord. The term "Landlord" as used in this Lease, so far as
covenants or obligations on the part of Landlord are concerned, shall be limited
to mean, and include only, the owner or owners, at the time in question, of the
fee title to, or a lessee's interest in a ground lease of the Site or master
lease of the Building. In the event of any transfer, assignment or other
conveyance or transfer of any such title or interest, Landlord herein named (and
in case of any subsequent transfers or conveyances, the then grantor) shall be
automatically freed and relieved from and after the date of such transfer,
assignment or conveyance of all liability with respect to the performance of any
covenants or obligations on the part of Landlord contained in this Lease
thereafter to be performed and, without further agreement, the transferee of
such title or interest shall be deemed to have agreed to observe and perform any
and all obligations of Landlord hereunder, during its ownership of the Premises.
Landlord may transfer its interest in the Premises without the consent


                                       34
<PAGE>

of Tenant and such transfer or subsequent transfer shall not be deemed a
violation on Landlord's part of any of the terms and conditions of this Lease.

36. Waiver. The failure of either Landlord or Tenant to seek redress for
violation of, or to insist upon strict performance of, any term, covenant or
condition of this Lease shall not be deemed a waiver of such violation, nor
shall any custom or practice which may become established between the parties in
the administration of the terms hereof be deemed a waiver of, or in any way
affect, the right of either party to insist upon the performance by the other
party in strict accordance with said terms. The subsequent acceptance or payment
of Rent hereunder by Landlord shall not be deemed to be a waiver of any
preceding breach by Tenant of any term, covenant or condition of this Lease,
other than the failure of Tenant to pay the particular Rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such Rent.

37. Terms and Headings. The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular. Words used in any gender include
other genders. If there be more than one Tenant, i.e., if two or more persons or
entities are jointly referred to in this Lease as "Tenant," the obligations
hereunder imposed upon Tenant shall be joint and several. The Paragraph headings
of this Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part hereof. Where ever in the Lease
Tenant's obligation to return the Premises to Landlord, or to repair or maintain
the Premises, excepts or is made subject to "normal wear or tear", or similar
qualifying language, any of such Tenant obligations shall also be subject to
"damage due to casualty or condemnation", except where the subject damage is
materially caused by Tenant's, or Tenant's employees', agents' or invitees'
negligence or willful misconduct and is not covered by (i) insurance proceeds
actually received by Landlord from policies to be maintained by Tenant during
the Term, or (ii) insurance policies to be maintained by Landlord during the
Term.

38. Examination of Lease. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or option for Lease,
and it is not effective as a Lease or otherwise until execution by and delivery
to both Landlord and Tenant.

39. Time. Time is of the essence with respect to the performance of every
provision of this Lease in which time or performance is a factor.

40. Prior Agreement; Amendments. This Lease contains all of the agreements of
the parties hereto with respect to any matter covered or mentioned in this
Lease, and no prior agreement or understanding, oral or written, express or
implied, pertaining to any such matter shall be effective for any purpose. No
provision of this Lease may be amended or added to except by an agreement in
writing signed by the parties hereto or their respective successors in interest.
The parties acknowledge that all prior agreements, representations and
negotiations are deemed superseded by the execution of this Lease to the extent
they are not incorporated herein.

41. Severability. Any provision of this Lease which shall prove to be invalid,
void or illegal in no way affects, impairs or invalidates any other provision
hereof, and such other provisions shall remain in full force and effect.

42. Recording. Neither Landlord nor Tenant shall record this Lease nor a short
memorandum thereof without the consent of the other and if such recording
occurs, it shall be at the sole cost and


                                       35
<PAGE>

expense of the party requesting the recording, including any documentary
transfer taxes or other expenses related to such recordation.

43. Limitation on Liability. The obligations of Landlord under this Lease do not
constitute personal obligations of the individual partners, directors, officers
or shareholders of Landlord, and Tenant shall not seek recourse against the
individual partners, directors, officers or shareholders of Landlord or any of
their personal assets for satisfaction of any liability in respect to this
Lease. In consideration of the benefits accruing hereunder, Tenant and all
successors and assigns covenant and agree that in the event of any actual or
alleged failure, breach or default hereunder by Landlord, the sole and exclusive
remedy shall be against Landlord's interest in the Building.

44. Signs. Tenant shall not place any sign upon the Premises or the Building
without Landlord's prior written consent, which consent shall not be
unreasonably withheld or delayed. All signs shall be constructed, erected and
affixed to the Premises at Tenant's sole cost and expense, and Tenant shall be
responsible for the removal of such signage, and the repair of any damage to the
Building caused thereby, at the end of the Term. All signs shall be in full
compliance with all applicable ordinances, statutes and regulations imposed by
all applicable governmental authorities.

45. Modification for Lender. If in connection with obtaining construction,
interim or permanent financing for the Building, the lender shall request
reasonable modifications in this Lease as a condition to such financing, Tenant
will not unreasonably withhold, delay or defer its consent thereto, provided
that such modifications do not increase the obligations of Tenant hereunder or
adversely affect the leasehold interest hereby created or Tenant's rights
hereunder.

46. Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a
lesser amount than the Rent payment herein stipulated shall be deemed to be
other than on account of the Rent, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as Rent be deemed an
accord and satisfaction and Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance of such Rent or pursue any
other remedy provided in this Lease. Tenant agrees that each of the foregoing
covenants and agreements shall be applicable to any covenant or agreement either
expressly contained in this lease or imposed by any statute or at common law.

47. Tenant as Corporation. If Tenant executes this Lease as a corporation, then
Tenant and the persons executing this Lease on behalf of Tenant represent and
warrant that the individuals executing this Lease on Tenant's behalf are duly
authorized to execute and deliver this Lease on its behalf in accordance with a
duly adopted resolution of the board of directors of Tenant, a copy of which
shall be delivered to Landlord within ten (10) days of Landlord's request
therefor, and in accordance with the By-Laws of Tenant and that this Lease is
binding upon Tenant in accordance with its terms.

48. No Partnership or Joint Venture. Nothing in this Lease shall be deemed to
constitute Landlord and Tenant as partners or joint venturers. It is the express
intent of the parties hereto that their relationship with regard to this Lease
be and remain that of landlord and tenant.

                                       36
<PAGE>

49. Landlord Authority. Landlord holds good title to the Premises and the
signatories to this Lease on Landlord's behalf are fully empowered to enter into
this Lease, and to perform and honor its terms and conditions on behalf of
Landlord.

                  [Remainder of Page Intentionally Left Blank]


                                       37
<PAGE>

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

<TABLE>
<CAPTION>
LANDLORD:                                                     TENANT:

<S>                                                           <C>
Thomas A. Price and Gwendolyn L. Price, as trustees           Digital Think, Inc., a Delaware corporation
of the Price Trust UTD October 5, 1984

                                                              By:_____________________________
                                                              Name:___________________________
By:___________________________                                Its:______________________________
    Thomas A. Price, Trustee

                                                              By:_____________________________
By:____________________________                               Name:___________________________
    Gwendolyn Price, Trustee                                  Its:______________________________
</TABLE>


                                       38
<PAGE>

                                    EXHIBIT A

                                   FLOOR PLAN

                                [To be attached]


                                       39
<PAGE>

                                    EXHIBIT B

                                 SAMPLE FORM OF
                           NOTICE OF LEASE TERM DATES

     To: ________________________________ Date:
     Re: Lease dated __________________ between ______________________, Tenant,
and ____________________________, Landlord, concerning the Premises located at
_________________________________.

Gentlemen:

         In accordance with the subject Lease, we wish to advise and/or confirm
as follows:

1. That the Premises have been accepted herewith by the Tenant.

2. That the Tenant has possession of the subject Premises and acknowledges that
under the provisions of the subject Lease, the Term of said Lease shall commence
as of ___________ and shall expire on ___________________. Based on the
above-referenced actual Lease Commencement Date and Lease Expiration Date, the
Monthly Basic Rent due during the Term shall be as follows:

3. That in accordance with the subject Lease, rental commences to accrue on
_______________________, which is the Commencement Date.

4. Rent is due and payable in advance on the first day of each and every month
during the Term of said Lease. Your rent checks should be made payable
to____________________ at_______________________.

                               AGREED AND ACCEPTED

TENANT:                                     LANDLORD:
-------                                     ---------

_____________________________               __________________________________,
a ___________________________               a ________________________________

By:__________________________               By:_______________________________
Name:________________________               Name:_____________________________
Its:_________________________               Its:______________________________


                                       40
<PAGE>

                                    EXHIBIT C

                                 SAMPLE FORM OF
                           TENANT ESTOPPEL CERTIFICATE

The undersigned, ______________________________ ("Landlord"), with a mailing,
address c/o _____________________________ and _____________________________
("Tenant"), hereby certify to _____________________, a ________________________
as follows:

1. Attached hereto is a true, correct and complete copy of that certain lease
dated ___________________ between Landlord and Tenant (the "Lease"), which
premises are located on the__________ (_____) floor of the Building located at
___________________.

         The Lease is now in full force and effect and has not been amended,
modified or supplemented, except as set forth in Paragraph 4 below.

2. The term of the Lease commenced on _______________________.

3. The term of the Lease shall expire on _______________________.

4. The Lease has: (Initial one)

     ( ) not been amended, modified, supplemented, extended, renewed or
     assigned.

     ( ) been amended, modified, supplemented, extended, renewed or assigned by
     the following described agreements, copies of which are attached hereto:

     ---------------------------------------------------------------------------
     ---------------------------------------------------------------------------

5. Tenant has accepted, is now in possession of and is now conducting business
in said Premises.

6. Tenant and Landlord acknowledge that the Lease will be assigned to __________
and that no modification, adjustment, revision or cancellation of the Lease or
amendments thereto shall be effective unless written consent of is obtained, and
that until further notice, payments under the Lease may continue as heretofore.

7. The amount of Monthly Basic Rent is $____________
Monthly Basic Rent shall be increased based upon Operating Expense increases and
as follows:_____________________________________.

8. The amount of security deposit (if any) is $ ____________. No other security
deposits have been made.

                                       41
<PAGE>

9. Tenant is paying the full lease rental, which has been paid in full as of the
date hereof. No Rent under the Lease has been paid for more than thirty (30)
days in advance of its due date.

10. All Work required to be performed by Landlord under the Lease has been
completed and all required contributions by Landlord to Tenant on account of
Tenant Improvements have been received.

11. There are no defaults on the part of the Landlord or Tenant under the Lease.

12. Tenant has no defense as to its obligations under the Lease and claims no
set-off or counterclaim against Landlord.

13. Tenant has no right to any concessions (rental or otherwise) or similar
compensation in connection with renting the space it occupies, except as
provided in the Lease.

14. The Lease, amended as noted in Item 4 above, represents the entire agreement
between Landlord and Tenant as to this leasing.

                  All provisions of the Lease and the amendments thereto (if
any) referred to above are hereby ratified.

DATED: _______________________ , 19__

TENANT:                                     LANDLORD:
-------                                     ---------

_____________________________,              __________________________________,
a ___________________________               a ________________________________

By:__________________________               By:_______________________________
Name:________________________               Name:_____________________________
Its:_________________________               Its:______________________________

                                       42
<PAGE>

                                    EXHIBIT D

                  601 BRANNAN STREET, SAN FRANCISCO, CALIFORNIA
                               TENANT WORK LETTER

         This Tenant Work Letter ("Work Letter") is entered into effective July
17, 2000 and shall set forth the terms and conditions controlling the
construction of certain initial improvements to the Premises known as 601
Brannan Street, San Francisco, California. Unless otherwise defined herein, all
capitalized terms shall have the meanings ascribed to them in that certain lease
between Digital Think, Inc., a Delaware corporation ("Tenant") and Thomas A.
Price and Gwendolyn L. Price, as trustees of the Price Trust UTD October 5, 1984
("Landlord") dated July 17, 2000 (the "Lease").

                                    SECTION 1
                               BASE BUILDING WORK

1.1 Scope of Base Building Work. The following work and improvements ("Base
Building Work") shall be specified in drawings ("Base Building Drawings")
prepared by a licensed, qualified architect and other qualified consultants
selected by Landlord (collectively, "Base Building Architect") and shall be
constructed by the Contractor (as defined below), subject to the provisions of
Paragraph 1.3:

1.1.1 Installation of new roof surface on the rear, brick portion of the
Building, as depicted in The Base Building Drawings, and construction of
structural roof support system sufficient to support any roof mounted HVAC
equipment, as specified in The Base Building Drawings.

1.1.2 Install a ninety (90) ton main HVAC system with supply and return ducting
stubbed to each floor of the Building.

1.1.3 Install 3500 amp electrical service into the Building, stubbed to each
floor of the Building.

1.1.4 Installation of life-safety systems as required by applicable building
codes on an unoccupied basis, including all sprinkler systems, emergency exit
systems (including required exit signs, lighting and strobes), fire alarm pull
stations, and other required fire safety systems.

1.1.5 Installation of sewer and water line connections to all occupied levels of
the Building in the same area as the present ground level restrooms of
sufficient capacity for construction of required capacity restrooms.

1.1.6 Performance of all work necessary for the Site and the Building to comply
with all applicable seismic regulations, the Americans with Disabilities Act of
1980 (except with respect to those compliances associated exclusively with
Tenant's Improvements), all applicable path of travel regulations, all
covenants, conditions, restrictions and encumbrances ("CC&R's") affecting the
Building (if any), all insurance underwriter's requirements (if any), and all
rules, regulations, ordinances, laws and building codes (collectively, "Laws"),
in effect and requiring compliance with respect to Landlord's Work on the Lease
Commencement Date.

                                       43
<PAGE>

1.1.7 Installation of all insulation and other improvements necessary to meet
Title 24 requirements for existing ceilings and sidewalls.

1.1.8 Installation of the additional floor area as described in Paragraph 1.3 of
the Lease, including required concrete floors and an additional two hour fire
demising wall where required and in accordance with all applicable building
codes.

1.1.9 Demolition of existing ramps to the Building from the parking lot and the
leveling and re-paving of that area, the re-striping of the parking lot to
accommodate the maximum permissible number of parking stalls.

1.1.10 Level all interior drive-in ramps, and fill in all unneeded roll-up door
openings with appropriate materials.

1.2 Construction of the Base Building Work. Tenant, with the reasonable
cooperation of Landlord, shall cause the Base Building Work to be constructed by
a contractor (the "Contractor") and subcontractors selected in accordance with
Paragraph 1.3.1, in accordance with The Base Building Drawings, all applicable
CC&R's and Laws, in a good and workmanlike manner, using new materials and
equipment of good quality. Tenant shall enter into a commercially reasonable
written contract with the Contractor for construction of the Base Building Work,
which contract shall be subject to Landlord's reasonable approval. Tenant's
representative (designated below) shall serve as the construction manager for
the Work; provided, however, that Landlord shall have the right to appoint a
separate construction supervisor to assist in the coordination and prosecution
of the Base Building Work. Construction of the Base Building Work shall be
conducted in accordance with the provisions of Section 4.

1.3 Payment for Base Building Work; Selection of Contractor/Subcontractors.

1.3.1 Except as provided herein, Tenant shall be responsible for the timely
payment to Contractor of all costs associated with the Base Building Work,
including without limitation designer, architect and engineer fees, all
building, use and occupancy permit(s)/certificate(s), construction inspection
charges, labor and material costs, contractor profit, project management costs,
and all other construction costs (collectively, "Base Building Costs"). The
first $2,000,000.00 in Base Building Costs shall be Tenant's sole financial
responsibility. Any Base Building Costs in excess of $2,000,000.00 but less than
$4,000,000.00 shall be borne by Tenant and thereafter shall be offset against
Monthly Basic Rent in accordance with the provisions of Paragraph 4.5 of the
Lease. Any Base Building Costs in excess of $4,000,000.00 shall be Landlord's
sole financial responsibility ("Landlord's Contribution"), and Landlord shall
reimburse Tenant for all such excess Base Building Costs within ten (10) days of
receipt of an invoice therefor. Prior to reimbursing Tenant for any portion of
Base Building Costs in excess of $4,000,000.00, Landlord shall have the right to
request and receive reasonable documentation to verify the Base Building Costs
previously incurred, and the Base Building Costs for which Tenant has invoiced
Landlord. Landlord and Tenant shall have an affirmative obligation to control
and minimize in a commercially reasonable manner the construction costs of the
Base Building Work. In this regard, the parties shall solicit the bids of not
less than three (3) qualified general contractors in selecting the Contractor,
one of which contractors shall be Delcon Construction, Inc. The bidding process
shall


                                       44
<PAGE>

be "open book", not sealed, and each component of the bids shall be subject to
review and evaluation by the parties in connection with the Contractor selection
process. Each material component of the Base Building Work (in excess of
$100,000.00) to be performed by subcontractor shall also be bid by not less than
three (3) qualified specialty subcontractors. Landlord shall have the right to
approve the bids of all bidding contractors and subcontractors, which approval
shall not be unreasonably withheld; provided, however, that it shall be
reasonable for Landlord to withhold its consent to a particular subcontractor or
contractor if the subcontractor or contractor bid exceeds by ten percent (10%)
or more the cost for the same component of the Base Building Work as bid by the
low, responsive bidding contractor or subcontractor. Tenant shall have the right
to accept the bid of a contractor or subcontractor whose bid exceeds the bid of
the lowest bidder in the applicable bid category by 10%, provided the contractor
or subcontractor is otherwise reasonably acceptable to Landlord, and provided
further that Tenant shall sole be responsible for all costs in excess of the
lowest bid plus 10%.

1.3.2 Prior to Landlord's payment of any portion of Landlord's Contribution,
Contractor shall furnish Landlord with mechanic's and materialmen's lien
waivers, and contractors' and architects' affidavits and statements, applicable
to the Base Building Work for which Landlord's Contribution is sought, in such
forms as Landlord may reasonably require. Upon substantial completion of the
Work, Tenant shall submit to Landlord a detailed breakdown of Tenant's total
construction costs regarding the Base Building Work, together with such evidence
of payment, including full and final lien waivers from the Contractor and all
subcontractors, reasonably satisfactory to Landlord. For purposes of the Lease
and this Work Letter, the date of "substantial completion" of the Base Building
Work shall mean the date on which (i) Tenant has substantially completed the
Base Building Work in accordance with The Base Building Drawings and this Work
Letter as certified by Tenant's architect, subject only to completion of
finishing details, mechanical adjustments and other normal punch list items, and
(ii) all necessary governmental inspections of the Base Building Work have been
obtained and approved. Tenant shall give written notice to Landlord of the
occurrence of substantial completion of the Base Building Work. Within two (2)
business days after the date on which the notice of substantial completion is
given by Tenant to Landlord, Tenant, Tenant's Architect (as defined below) and
Landlord and Base Building Architect shall conduct a walk through of the
Premises setting forth a description of any and all of the Base Building Work
remaining to be completed or defective, and requiring repair or replacement as
reasonably determined by Tenant's Architect and Base Building Architect. Tenant
shall, following the preparation of the punch list, diligently pursue completion
and/or repair of the punch list items.

1.4 Remediation of Hazardous Materials. In the event any Hazardous Materials (as
defined in Paragraph 7 of the Lease) are discovered at the Site during
construction of the Work, Landlord shall solely be responsible, at Landlord's
sole cost, for performing all required investigation, monitoring and/or
remediation which any applicable governmental agency with jurisdiction may
require.

                                    SECTION 2
                              TENANT'S IMPROVEMENTS

         2.1 Scope of Tenant's Improvements. The improvements to the Premises
and Building as described in the Construction Drawings, which are to be
constructed by the Contractor at Tenant's cost, shall be referred to as
"Tenant's Improvements". The Base Building Work and


                                       45
<PAGE>

Tenant's Improvements are sometimes collectively referred to as the "Work".
Tenant shall be responsible for all costs relating to the construction of
Tenant's Improvements including space planning, architectural and engineering
costs, all costs incurred in connection with permits required for the Tenant's
Improvements, all costs incurred in connection with constructing Tenant's
Improvements (including without limitation labor, materials and insurance) and
any and all other construction costs incurred in connection with construction of
Tenant's Improvements.

         2.2 Payment for Tenant's Improvements. Landlord shall have the right to
request that Tenant provide Landlord with assurances reasonably acceptable to
Landlord that Tenant has identified and earmarked sufficient funds for the
construction of Tenant's Improvements. Tenant shall cause Tenant's Improvements
to be constructed at the Premises in a lien free manner. Landlord shall have the
right periodically to require that Tenant deliver copies of lien releases and
all other reasonable evidence of Tenant's payment of all costs and expenses
associated with the Work.

                                    SECTION 3
                   CONSTRUCTION DRAWINGS; SUPERVISION OF WORK

         3.1 Selection of Architect/Construction Drawings. Tenant shall select
one or more architects ("Tenant's Architect") to prepare the Construction
Drawings (as defined below), subject to Landlord's approval, which approval
shall not be unreasonably withheld or delayed. Tenant shall enter into a written
contract with Tenant's Architect in a form reasonably acceptable to Landlord and
shall be responsible for direct payment of all of Tenant's Architect's fees,
expenses and liabilities. To the extent required or appropriate, Tenant also
shall select engineering consultants reasonably acceptable to Landlord (the
"Engineers") to prepare and/or review plans and drawings relating to Tenant's
Improvements and shall be responsible for direct payment of all Engineer's fees,
expenses and liabilities. The plans and drawings to be prepared by Tenant's
Architect and the Engineers hereunder shall be known collectively as the
"Construction Drawings". All Construction Drawings, and all subsequent change
orders reflecting additions or changes to the scope of Tenant's Improvements
(except minor, in-the-field changes), shall be subject to Landlord's written
approval, which shall not be unreasonably withheld. Tenant and Tenant's
Architect shall verify in the field the actual dimensions and conditions of the
Building and the Site, and Tenant and Tenant's Architect shall be solely
responsible therefor and shall rely exclusively thereon. Landlord shall
cooperate with Tenant and Tenant's Architect and provide them with all relevant
plans, drawings and other information concerning the Building in Landlord's
possession or control, but Landlord shall have no responsibility whatsoever for
determination of the dimensions and conditions of the Building, and makes no
representations in connection therewith. Landlord's review of the Construction
Drawings as set forth in this Paragraph shall be for its sole purpose and shall
not imply Landlord's review of the same, or obligate Landlord to review the
same, for quality, design, code compliance or other like matters. Accordingly,
notwithstanding that any Construction Drawings are reviewed by Landlord or its
architect, engineers and consultants (if any), and notwithstanding any advice or
assistance which may be rendered to Tenant by Landlord or Base Building
Architect, engineers, and consultants (if any), Landlord shall have no liability
whatsoever in connection therewith and shall not be responsible for any
omissions or errors contained in the Construction Drawings. Tenant's indemnity
obligations set forth in the Lease shall specifically apply to the Construction
Drawings. No changes, modifications or alterations in the Construction Drawings
may be made without the prior written consent of Landlord, which shall not be
unreasonably withheld.

                                       46
<PAGE>

         3.2 Permits. Prior to the commencement of construction of Tenant's
Improvements, Tenant and Contractor, with the assistance and cooperation of
Tenant's Architect, shall submit the Construction Drawings as approved by
Landlord to the appropriate municipal authorities for all applicable building
permits necessary to allow the Contractor to commence and fully complete the
construction of Tenant's Improvements (the "Permits"). Landlord shall cooperate
with Tenant and Contractor in executing permit applications and performing other
ministerial acts reasonably necessary to enable Tenant and Contractor to obtain
any such permits or approvals.

         3.3 Supervision and Management. Landlord shall hire such construction
management professionals as Landlord deems appropriate, subject to the
reasonable approval of Tenant, to assist in supervising and coordinating the
Base Building Work, and to otherwise represent Landlord's interests in
connection with the construction of the Base Building Work. The costs associated
with the construction manager shall be borne by Landlord to the extent
applicable to Base Building Work (subject to Paragraph 1.3.1). Landlord, at
Landlord's sole cost and expense, shall also have the right to hire a
construction management professional to protect Landlord's interests in
connection with the construction of Tenant's Improvements. Tenant shall
cooperate reasonably with Landlord and Landlord's construction manager to allow
the construction manager to protect Landlord's interests.

                                    SECTION 4
                      CONSTRUCTION OF TENANT'S IMPROVEMENTS

         4.1 Contractor. Tenant shall be entitled to select the contractor to
perform Tenant's Improvements, subject to Landlord's prior approval which shall
not be unreasonably withheld or delayed, and subject to the provisions of
Paragraph 1.3.1. Tenant shall be solely responsible to the Contractor for
performance of Tenant's Improvements, it being expressly understood that
Landlord is not in contractual privity with the Contractor with respect to
Tenant's Improvements, and that all costs of constructing Tenant's Improvements
are Tenant's responsibility. Tenant shall not be obligated to use the same
contractor to perform Tenant's Improvements as the Contractor selected to
perform the Base Building Work; provided, however, that any delay in
substantially completing the Work caused by the use of two contractors shall not
be a Permitted Delay.

         4.3 Construction of Tenant Improvements.

                  4.3.1 Construction.

                           4.3.1.1 Landlord's General Conditions. Tenant's
construction of the Work shall comply with the following: (i) the Work shall be
constructed in accordance with The Base Building Drawings and the approved
Construction Drawings, and in strict accordance with all applicable CC&R's and
Laws, in a good and workmanlike manner, using new materials and equipment of
good quality; and (ii) Tenant shall abide by all rules made by Landlord with
respect to the storage of materials, and any other matter in connection with
this Work Letter, including, without limitation, the construction of Tenant's
Improvements.

                           4.3.1.2 Indemnity. Tenant's indemnity obligations to
Landlord as set forth in the Lease shall also apply with respect to any and all
costs, losses, damages, injuries and liabilities related in any way to any act
or omission of Tenant or the Contractor, or anyone directly or indirectly
employed by any of them, or in connection with Tenant's nonpayment of any amount

                                       47
<PAGE>

arising out of the Work and/or Tenant's disapproval of all or any portion of any
request for payment.

                           4.3.1.3 Requirements of Tenant's Contractor. The
Contractor shall warrant to Tenant and for the benefit of Landlord that the
portion of the Work for which it is responsible shall be free from any defects
in workmanship and materials for a period of not less than one (1) year from the
date of completion thereof. The Contractor shall be responsible for the
replacement or repair, without additional charge, of all work done or furnished
in accordance with its contract that shall become defective within one (1) year
after the substantial completion of the work performed by such Contractor or its
subcontractors. The correction of such work shall include, without additional
charge, all additional expenses and damages incurred in connection with such
removal or replacement of all or any part of the Work, and/or the Building
and/or common areas that may be damaged or disturbed thereby. All such
warranties as to materials or workmanship of or with respect to the Work shall
be contained in the contract with the Contractor and shall be written such that
such warranties shall inure to the benefit of both Landlord and Tenant, as their
respective interests may appear, and can be directly enforced by either. To the
extent such warranties are related to components of the Work for which Landlord
is responsible for maintenance and/or repair, such warranties shall be
assignable to Landlord, and Tenant shall cooperate with Landlord in availing
itself of the benefit of all such warranties.

                  4.3.2 Insurance Requirements.

                           4.3.2.1 General Coverages. The Contractor shall carry
worker's compensation insurance covering all of its respective employees, and
shall also carry public liability insurance, including property damage, all with
limits, in form and with companies as are required to be carried by Tenant as
set forth in the Lease.

                           4.3.2.2 Special Coverages. Tenant shall carry, or
cause Contractor to carry, "Builder's All Risk" insurance in an amount covering
the full cost of construction of the Work, and such other insurance as Landlord
reasonably may require. Such insurance shall be in amounts and shall include
such extended coverage endorsements as may reasonably be required by Landlord.

                           4.3.2.3 General Terms. Certificates for all insurance
carried pursuant to this section shall be delivered to Landlord before the
commencement of construction of the Work and before the Contractor's equipment
is moved onto the site. All such policies of insurance must contain a provision
that the company writing said policy will give Landlord thirty (30) days' prior
written notice of any cancellation or lapse of the effective date or any
reduction in the amounts of such insurance. In the event the Work is damaged by
any cause during the course of construction, the provisions of Paragraph 21 of
the Lease shall apply; provided, however, that all policies of insurance
required to be maintained by this Work Letter shall also be considered, and so
long as the Lease is not terminated by Landlord or Tenant pursuant to Paragraph
21, Tenant shall cause the same to be repaired promptly at Tenant's sole cost
and expense. Contractor shall maintain all of the foregoing insurance coverage
in force until the Work are fully completed and accepted by Landlord. All
policies carried pursuant to this section shall insure Landlord and Tenant, as
their interests may appear, as well as Contractor. All insurance, except
Workers' Compensation and public liability insurance, maintained by Contractor
shall preclude subrogation claims by the insurer against anyone


                                       48
<PAGE>

insured thereunder. Such insurance shall provide that it is primary insurance
with respect to Landlord and that any other insurance maintained by Landlord is
excess and noncontributing with the insurance required hereunder. The
requirements for the foregoing insurance shall not in any way effect or
eliminate Tenant's indemnification obligations to Landlord as provided in the
Lease and in this Work Letter.

                  4.3.3 Governmental Compliance. The Work shall comply in all
respects with the following: (i) all applicable building codes and other state,
federal, city or quasi-governmental laws, codes, ordinances and regulations, as
each may apply according to the rulings of the controlling public official,
agent or other person; (ii) applicable standards of the American Insurance
Association (formerly, the National Board of Fire Underwriters) and the National
Electrical Code; and (iii) building material manufacturer's specifications.

                  4.3.4 Inspection by Landlord. Landlord shall have the right to
inspect the Work at all times, provided however, that Landlord's failure to
inspect the Work shall in no event constitute a waiver of any of Landlord's
rights hereunder nor shall Landlord's inspection of the Work constitute
Landlord's approval of the same. Should Landlord disapprove any portion of the
Work, Landlord shall notify Tenant in writing of such disapproval and shall
specify the items disapproved. Any defects or deviations in, and/or disapproval
by Landlord of, the Work shall be rectified by Tenant at no expense to Landlord;
provided, however, that in the event Landlord determines that a defect or
deviation exists or disapproves of any matter in connection with any portion of
the Work and such defect, deviation or matter might adversely affect the
mechanical, electrical, plumbing, heating, ventilating and air-conditioning or
life-safety systems of the Building, the structure or exterior appearance of the
Building, Landlord may, after delivering written notice to Tenant and Tenant
failing within seven (7) days thereafter to commence a cure and prosecute such
cure diligently to completion, take such action as Landlord deems necessary, at
Tenant's expense and without incurring any liability on Landlord's part, to
correct any such defect, deviation and/or matter, including, without limitation,
causing the cessation of performance of the construction of the Work until such
time as the defect, deviation and/or matter is corrected to Landlord's
satisfaction.

                  4.3.5 Meetings. Commencing upon the execution of the Lease,
Tenant shall hold weekly meetings at a reasonable time, with the Architect and
the Contractor regarding the progress of the preparation of Construction
Drawings and the construction of the Work, which meetings shall be held at a
location acceptable to Landlord, and Landlord and/or its agents shall receive
prior notice of, and shall have the right to attend, all such meetings. In
addition, minutes shall be taken at all such meetings, a copy of which minutes
shall be promptly delivered to Landlord. One such meeting each month shall
include the review of Contractor's current request for payment. Landlord's
attendance at such meetings shall in no way create any greater obligation or
liability on Landlord's part in excess of Landlord's express obligations set
forth herein. Landlord's nonattendance at such meetings shall in no way
constitute a waiver of any rights in Landlord set forth herein or in the Lease,
including without limitation Landlord's right to indemnification by Tenant.

         4.4 Notice of Completion; Copy of Record Set of Plans. Within ten (10)
days after completion of construction of the Work, Tenant shall cause a Notice
of Completion to be recorded in the office of the Recorder of the City and
County of San Francisco in accordance with Paragraph 3093 of the Civil Code of
the State of California or any successor statute, and shall furnish a copy



                                       49
<PAGE>

thereof to Landlord upon such recordation. If Tenant fails to do so, Landlord
may execute and file the same on behalf of Tenant as Tenant's agent for such
purpose, at Tenant's sole cost and expense. At the conclusion of construction,
(i) Tenant and Landlord shall cause the Architects and Contractor(s) (A) to
update the approved Construction Drawings as necessary to reflect all changes
made to the approved Construction Drawings during the course of construction,
(B) to certify to their knowledge that the "record-set" of mylar as-built
drawings are true and correct, which certification shall survive the expiration
or termination of the Lease, and (C) to deliver to Landlord two (2) sets of
copies of such record-set of drawings within ninety (90) days following
completion of the Work (as evidenced by the recordation of a Notice of
Completion) for the Premises, and (ii) Tenant shall deliver to Landlord a copy
of all warranties, guaranties, and operating manuals and information relating to
the improvements, equipment, and systems in the Premises.

                                    SECTION 5
                   TENANT'S COVENANTS; LEASE COMMENCEMENT DATE

6.1 Tenant Indemnity. In addition to Tenant's indemnification obligations set
forth in the Lease, and unless substantially the result of Landlord's, Base
Building Architect's or Landlord's agents' negligence or willful misconduct,
Tenant hereby indemnifies Landlord from any loss, claims, damages or delays
arising from the actions of Tenant's agents, employees or contractors in the
Premises or the Building. In the event Tenant shall conduct additional work to
the Premises separate and apart from the Work prior to Substantial Completion of
the Work, such as fixture installation or workstation set up, Tenant shall do so
in strict compliance with any and all rules and regulations related thereto that
Landlord's Building manager, Contractor or Landlord shall reasonably impose.
Tenant waives any and all claims against Landlord for damages incurred during
construction of the Work except if such damages are caused by Landlord's gross
negligence or willful misconduct.

6.2 Lease Commencement Date. The Lease Commencement Date shall be such date as
determined pursuant to Paragraph (g)(i) of the Summary; provided, however, that
if the Lease Commencement Date is determined by calculating two hundred ten
(210) days from the date of Final Use Approval, and the Work is not
substantially complete due to a Permitted Delay (defined below), the Lease
Commencement Date shall instead be that date which is 210 days after Final Use
Approval is received, plus the number of days of delay caused by a Permitted
Delay. A Permitted Delay shall be defined as (i) a delay caused by extreme
inclement weather, riot, war, casualty, general strike, act of god or such other
event customarily considered a force majeure event beyond Tenant's reasonable
control, (ii) a delay caused by Landlord's failure to approve the original plans
and drawings for the Work within seven (7) business days of receipt, or any
change order or other Tenant submittal requiring approval within three (3)
business days of receipt, (iii) any delay caused by the discovery, investigation
and/or remediation of any Hazardous Materials discovered at the Site during
prosecution of the Work, (iv) any delay caused by Base Building Architect's
failure to complete all required The Base Building Drawings in a form sufficient
for submission to the City for the purpose of obtaining a building permit for
construction of the Base Building Work within the sixty (60) day period
described in Paragraph 2.2 of the Lease (such Permitted Delays caused by Base
Building Architect shall include, by way of example, incomplete drawings, lack
of necessary detail (as determined by the building department of the City),
material field inspector changes and errors in the drawings, but shall not
include changes to The Base Building Drawings made at the request of


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<PAGE>

Tenant, or necessitated by changes in the Construction Drawings), (v) any delay
caused by the lack of electrical power or other utility available at the Site
sufficient to construct the Base Building Work, or (vi) any delay caused by the
failure of any governmental authority to perform any required act, or give any
required approval, within a reasonable time after Tenant's submission or
request. The parties shall agree in good faith on the calculation of any
Permitted Delay. If they are unable to do so within a reasonable time, Tenant's
Architect and Base Building Architect shall attempt to agree on the appropriate
number of days of Permitted Delay. If the Architects are unable to agree, the
provisions of Paragraph 6.5 shall apply.

                                    SECTION 7
                                  MISCELLANEOUS

7.1 Tenant's Representative. Tenant has designated David Yokell as its sole
representative with respect to the matters set forth in this Work Letter, who,
unless and until Tenant notifies Landlord in writing of a change in
representative, shall have full authority and responsibility to act on behalf of
the Tenant as required in this Work Letter.

7.2 Landlord's Representative. Landlord has designated Matt Cappiello as its
sole representative with respect to the matters set forth in this Work Letter,
who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Work Letter.

7.3 Time of the Essence. Unless otherwise indicated, all references herein to a
"number of days" shall mean and refer to calendar days. If any item requiring
approval is timely disapproved by Landlord, the procedure for preparation of the
document and approval thereof shall be repeated until the document is approved
by Landlord. Unless otherwise provided in this Work Letter, Landlord's approval
of any submittals required to be made by Tenant (with the exception of the
Construction Drawings, which shall be approved or rejected within seven (7)
business days) shall be given or withheld within three (3) business days after
receipt by Landlord of Tenant's submittal. If Landlord disapproves of any
submittals, the reasons for disapproval shall be specified in writing. If
Landlord has not approved or disapproved the submittal within the three (3)
business day period, the submittal shall be deemed approved and Tenant shall be
entitled to proceed as if Landlord had approved the submittal in writing;
provided, however, that Landlord may, within the applicable period request more
time for review and approval, in which event the additional days requested shall
constitute a Permitted Delay for purposes of calculating the Lease Commencement
Date. Any resubmittal by Tenant shall be approved or disapproved within the
applicable period, and this procedure shall continue until Landlord's approval
of any submittal or resubmittal has been approved or is deemed approved by
Landlord.

7.4 Incorporated into the Lease. For all purposes, this Work Letter shall be and
is hereby deemed a part of the Lease, and to the extent necessary, they shall
together be construed as one and the same document; provided, however, that in
the event of a conflict between any provision of the Lease and this Work Letter
concerning the Work, this Work Letter shall control.

7.5 Arbitration. Any dispute concerning Permitted Delays which is not resolved
pursuant to such Paragraph shall be finally settled by binding arbitration in
accordance with and under the rules of practice and procedure for arbitration
hearings of Judicial Arbitration and


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<PAGE>

Mediation Services, Inc. ("JAMS"), or its successor in San Francisco,
California. The parties may agree upon a retired judge from the JAMS panel. If
they are unable to agree, JAMS shall provide a list of available judges
containing one more judge than there are parties to the arbitration and each
party may strike one. The remaining judge shall serve as the arbitrator. The
arbitrator shall have the authority to grant injunctive and/or other equitable
relief. The arbitrator shall not have the power to commit errors of law or legal
reasoning and the appropriate court shall have the authority to review the award
for errors of fact, law or legal reasoning. The award may also be vacated or
corrected pursuant to the California Code of Civil Procedure for any such error.
If and when a demand for arbitration is made by either party, the parties agree
to execute a submission agreement, provided by JAMS, setting forth the rights of
the parties and the rules and procedures to be followed at the arbitration
hearing; provided, however, that (i) the arbitration shall take place in San
Francisco California; (ii) the arbitrator shall apply the rules of evidence and
substantive law of the State of California; (iii) the arbitrator shall render
written findings of fact and conclusions of law; (iv) the parties shall be
entitled to conduct such pre-hearing discovery as would otherwise be permitted
under California law; (v) the arbitrator shall have the authority to entertain
and decide motions before the arbitration hearing as otherwise would be
permitted in a court of law, including, by way of example, motions to compel
discovery and motions for summary judgment; and (vi) remedies which the
arbitrator shall have the authority to grant shall be limited to the same
remedies which could otherwise be imposed by a court of law. Such arbitration
shall be the sole remedy available to the parties.

                  [Remainder of Page Intentionally Left Blank]


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<PAGE>

         IN WITNESS WHEREOF, the parties have executed and delivered this Work
Letter on the day and year first above written.

<TABLE>
<CAPTION>
LANDLORD:                                                     TENANT:

<S>                                                           <C>
Thomas A. Price and Gwendolyn L. Price, as trustees           Digital Think, Inc., a Delaware corporation
of the Price Trust UTD October 5, 1984

                                                              By:  ____________________________
By:____________________________                               Name:  _________________________
     Thomas A. Price, Trustee                                 Its:  ____________________________

By:____________________________                               By:____________________________
     Gwendolyn Price, Trustee                                 Name:_________________________
                                                              Its:____________________________
</TABLE>

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