FIFTH AMENDMENT TO LEASE


     THIS FIFTH AMENDMENT TO LEASE (the "Amendment") is made and entered into as
of the 28th  day of  March,  1997 by and  between  C. J.  SEGERSTROM  & SONS,  a
California  general  partnership  ("Landlord"),   and  FILENET  CORPORATION,   a
California corporation ("Tenant"), with respect to the following:

                                    RECITALS

     A. Landlord is the landlord and Tenant is the tenant  pursuant to a certain
High  Technology/Research  and  Development  Lease  dated  July  23,  1986  (the
"Original  Lease").  The Original Lease has been modified or supplemented by the
following instruments:

          (1)  Letter dated July 23, 1986 (the "First Letter");

          (2)  Option agreement dated July 23, 1986 (the "Option Agreement");

          (3)  Letter agreement dated June 23, 1987 (the. "Second Letter");

          (4)  Letter agreement dated July 2, 1987 (the "Third Letter");

          (5)  Letter agreement dated March 15, 1988 (the "Fourth Letter");

          (6)  Letter agreement dated May 23, 1988 (the "Fifth Letter");

          (7)  Third  amendment  to lease  dated  October  1, 1992  (the  "Third
               Amendment"); and

          (8)  Fourth  Amendment  to lease dated  December 1, 1992 (the  "Fourth
               Amendment").

The Original  Lease,  First through Fifth  Letters,  Third  Amendment and Fourth
Amendment are herein, collectively, referred to as the "Lease."

     B. Pursuant to the Lease, Tenant holds and occupies four complete buildings
located at Harbor  Gateway  Business  Center,  in Costa  Mesa,  California  (the
"Center"), which four buildings (each a "Building" herein) are more particularly
described as follows:

          (1) "Building 1" - 3565 Harbor Boulevard,  consisting of approximately
     60,000 square feet of Rentable Area;

          (2) "Building 2" - 1540 Scenic  Avenue,  consisting  of  approximately
     60,000 square feet of Rentable Area;

          (3) "Building 3" - 1550 Scenic  Avenue,  consisting  of  approximately
     50,000 square feet of Rentable Area; and

<PAGE>

          (4) "Building 14" - 1535 Scenic  Avenue,  consisting of  approximately
     60,000 square feet of Rentable Area.

     C. The term of the Lease as to  Building 1 and  Building  2 expires  during
1998. Tenant has options to extend the Lease as to each such Building.  Landlord
and Tenant  desire to enter into this  Amendment to reflect the exercise of such
options as to  Building  1 and  Building 2 and to modify and set forth the terms
and provisions  upon which Tenant shall  continue to hold and occupy  Building 1
and Building 2.

                                    AGREEMENT

     IN  CONSIDERATION  OF the foregoing  recitals and the mutual  covenants set
forth herein, Landlord and Tenant agree as follows:

          1.   Extension of Term.

     (a) The  current  term of the Lease as to  Building  1 expires on April 30,
1998.  Tenant has exercised its option to extend as to such  Building,  and such
term shall be extended  for the period from May 1, 1998  through  April 30, 2003
(the "Building 1 Extended Term").

     (b) The term of the Lease as to  Building 2 expires on  January  31,  1998.
Tenant has  exercised  its option to extend as to such  Building,  and such term
shall be extended for the period from  February 1, 1998  through  April 30, 2003
(the "Building 2 Extended Term").

     (c) The term of the Lease as to Building 3 and Building 14.  expires on May
31, 2000 and shall not be affected by this Amendment.

     (d) Tenant has the option to extend the term of the Lease for an additional
five (5) years with respect to each of the Buildings 3 and 14. Such option shall
remain as currently written in the Lease with respect to Building 3 and Building
14 (i.e.,  five (5) years from and after June 1, 2000). With respect to Building
1 and Building 2, the option terms  resulting  from Tenant's  exercise as of its
options shall be as set forth in this Amendment.

          2    Rent.

     (a) During the current  term of the Lease as to  Buildings  1, 2, 3 and 14,
Tenant  shall  continue to pay Basic  Annual Rent at the rates  provided  for or
determined  pursuant  to the  Lease as to each such  Building  and shall pay all
additional rent provided for in the Lease with respect to each such Building.

                                       2

<PAGE>

     (b) During the Building 1 Extended  Term and the Building 2 Extended  Term,
Basic Annual Rent for each Building shall be as follows:

          (i) For the period from the  commencement  date of each  Extended Term
     through the end of the thirtieth  (30th) month of each Extended Term, Basic
     Annual Rent shall be at the rate of $1.10 per square foot of Rentable  Area
     of each Building.

          (ii) Effective at the commencement of the thirty-first (31st) month of
     the  Building  1 Extended  Term and the  commencement  of the  thirty-first
     (31st)  month of the  Building 2 Extended  Term,  Basic Annual Rent for the
     relevant  Building  (i.e.,  Building 1 or Building 2) shall be increased in
     the manner provided in Section 3.4 of the Original  Lease.  For the purpose
     of the  increases  provided for in this clause (ii),  the  following  shall
     pertain:

               (A) The "Index" for  purposes  of such  adjustments  shall be the
          "Consumer  Price  Index of Urban Wage  Earners  and  Clerical  Workers
          (Revised    Series),     Los     Angeles-Anaheim-Riverside     Average
          (1982-1984=100), subgroup all items."

               (B) The Index  published  as of the  calendar  month  immediately
          preceding the commencement date of the relevant Extended Term shall be
          considered the "Base."

               (C) In no event shall the Basic  Annual Rent for either  Building
          after such  adjustment  exceed one hundred  ten percent  (110%) of the
          Basic  Annual Rent  immediately  prior to such  adjustment,  and in no
          event shall there be any  decrease in the Basic Annual Rent for either
          Building.

          In addition,  during the  Building 1 Extended  Term and the Building 2
          Extended Term,  Tenant shall pay all  additional  rent provided for in
          the Lease with respect to each of Building 1 and Building 2.

     (c) Subject to the  provisions  of paragraph 4 below,  Tenant shall receive
monthly  abatements  or credits with respect to Basic Annual Rent for the months
of June and November, 1997 and June and November, 1998. Each such monthly credit
or abatement shall be in the amount of $93,750. Such credits shall be applied by
simply  reducing  the  aggregate  Basic  Annual Rent  payable by Tenant for such
months with respect to all four Buildings pursuant to the Lease.

     3  Parking.  Currently,  Tenant  has the  right,  under the  Lease,  to the
non-exclusive  use of the following  numbers of Allocated  Parking Spaces at the
Center  with  respect to each  Building:

                 Building  1      212 spaces
                 Building  2      172 spaces
                 Building  3      200 spaces
                 Building 14      240 spaces

                                       3
<PAGE>

     Such Allocated  Parking Spaces are on a non-exclusive  basis in the Parking
Areas of the Center

     Effective  upon  the  effective  date of this  Amendment,  as  provided  in
paragraph 9 below, Tenant shall have the right to use, on a non-exclusive basis,
an additional 76 Allocated Parking Spaces (the "New Allocated Spaces").  The New
Allocated  Spaces shall be located in that  portion of the Parking  Areas of the
Center indicated by hatching on Exhibit "A" attached hereto. For the purposes of
this paragraph, it is understood and agreed that:

          (a) The New Allocated  Spaces shall be allocated 18 spaces to Building
     1 (for a total of 230 Allocated Parking Spaces) and 58 spaces to Building 2
     (for a total of 230 Allocated Parking Spaces).

          (b) The New  Allocated  Spaces are,  like the balance of the Allocated
     Parking  Spaces with  respect to the  Buildings,  only the right to use, in
     common  with other  tenants of the Center,  a  specified  number of parking
     spaces and do not give to Tenant the exclusive  right to use any particular
     parking spaces in the Center.

          (c) The provisions of this paragraph shall  supplement  paragraph 44.1
     of the Original  Lease,  as  previously  amended,  and shall  supersede and
     replace all inconsistent prior iterations thereof.

     4. Permanent  Improvements by Tenant. In consideration for the Basic Annual
Rent abatement provided for in paragraph 2(c) above,  Tenant covenants to spend,
prior to the  expiration of the Extended  Terms as to Building 1 and Building 2,
not less than  $375,000 on permanent  improvements  to Building 1 and Building 2
(Tenant's  Improvement  Work").  In connection with Tenant's  Improvement  Work,
Landlord and Tenant agree that:

          (a)  "Permanent  improvements"  shall mean work  which is  permanently
     attached  to the  structure,  shell or  interior  components  of Building 1
     and/or Building 2, and includes permanent  decorative  improvements such as
     paint,  wall  coverings,  floor tile and ceilings.  Permanent  improvements
     shall  not  include  furniture,  furnishings  and  removable  fixtures  and
     equipment.

          (b) Tenant's  Improvement  Work shall be allocated  between Building 1
     and Building 2 (or  performed  all in one  Building) as selected by Tenant,
     and  there is no  minimum  amount  which  Tenant is  required  to spend for
     permanent improvements as to either such Building.

          (c) Tenant's Improvement Work shall be in accordance with Article 9 of
     the Original Lease,  including the requirement to obtain  Landlord's  prior
     written  consent with respect  thereto as and when required by such Article
     9.

          (d) Promptly  upon  completion  of Tenant's  Improvement  Work, or any
     portion  thereof with a cost of $l0,000 or more,  Tenant  shall  furnish to
     Landlord  copies of paid  invoices,  paid  statements or other  documentary
     evidence reasonably satisfactory to Landlord evidencing the amount spent by
     Tenant and that such amount reflects the cost of permanent  improvements to

                                       4
<PAGE>

     Building 1 and/or Building 2. In addition,  upon completion of any Tenant's
     Improvement  Work which  changes the  physical  layout of Building 1 and/or
     Building 2, Tenant shall deliver to Landlord a copy of "as built" plans and
     specifications with respect to such Tenant's Improvement Work.

          (e) If Tenant fails to spend the amount required by this paragraph for
     permanent  improvements and/or to furnish  documentary  evidence thereof to
     Landlord  pursuant  to  subparagraph  (d)  above by the  expiration  of the
     Building 1 Extended Term, Tenant shall pay to Landlord,  as additional rent
     pursuant  to the  Lease,  an  amount  equal  to (a)  $375,000  less (b) the
     aggregate cost of Tenant's  Improvement  Work actually  performed by Tenant
     with  respect  to  Building  1 and/or  Building  2 as to which  Tenant  has
     furnished to Landlord the documentary evidence required by subparagraph (d)
     above. Such payment ("Tenant's  Reimbursement") shall be due and payable in
     full within ten (10) days after the  expiration  of the Building 1 Extended
     Term,  and failure of Tenant to pay Tenant's  Reimbursement  in full within
     such period shall entitle Landlord to exercise all remedies  available to a
     landlord  against a tenant  pursuant to a written lease for  non-payment of
     rent,  including  but not  limited  to those set forth in Article 20 of the
     Original Lease.

     5. Other Terms and Conditions.  During the Building 1 Extended Term and the
Building 2 Extended Term, Tenant shall hold and occupy Building 1 and Building 2
upon all of the terms and conditions of the Lease, except that:

          (a) Basic Lease  Provisions 5, 6 and 13,  Sections 2.1, 2.2, 2.3, 2.4,
     3.5,  Articles  32 and 41 and  Sections  47.9,  48.1 and Exhibit "D" to the
     Original  Lease  shall have no  application  to  Building 1 and  Building 2
     during the Building 1 Extended Term and the Building 2 Extended Term.

          (b)  Those  provisions  of  the  Lease  which  are  superseded  by  or
     inconsistent  with the  provisions  of this  Amendment  shall  not apply to
     Building  1 or  Building 2 during  the  Building  1  Extended  Term and the
     Building 2 Extended  Term.  In the event of any  inconsistency  between the
     provisions  of  the  Lease  and  the  provisions  of  this  Amendment,  the
     provisions of this  Amendment  shall control with respect to Building 1 and
     Building 2 during the Building 1 Extended  Term and the Building 2 Extended
     Term.

     6. First Offer Rights. During the term of the Lease, including the Building
1 Extended Term and the Building 2 Extended  Term,  Tenant shall have a right of
first offer with respect to each of the following buildings at the Center:

          (A) Hr-B:  70,000 square feet of Rentable Area and currently  occupied
     by Q-Logic ("HT-B");

          (B) Hr-A:  54,910 square feet of Rentable Area and currently  occupied
     by Emulex ("HT-A")

          (C) HT-15:  82,106 square feet of Rentable Area and currently occupied
     by PacifiCare ("HT-15").

                                       5

<PAGE>

HT-B, HT-A and HT-15 are each herein referred to as a "First Offer Building" and
are collectively referred to as the "First Offer Buildings." Such right of first
offer shall be on the following terms and conditions:

          (a) If a First Offer Building becomes  available for lease, as defined
     below,  Landlord shall in writing notify Tenant of such availability and of
     the terms upon  which  Landlord  is  prepared  to lease  such  First  Offer
     Building to Tenant or a third party.  Such written notice shall contain the
     information set forth in subparagraph  (b) below. As used herein,  the term
     "available  for lease"  means that the  current  lease for such First Offer
     Building expires without an agreed extension or renewal or is terminated by
     court order or mutual agreement. A First Offer Building shall not be deemed
     to be "available for lease" upon expiration of the existing lease term with
     respect  thereto  if the tenant of such  building  continues  in  occupancy
     pursuant  to an option  set forth in such lease or an agreed  extension  or
     renewal of the existing lease term.

          (b) The  notice to be  provided  by  Landlord  to Tenant as to a First
     Offer  Building  which  becomes  available for lease during the term of the
     Lease shall:

               (i) Identify the First Offer Building;

               (ii)  Specify  the  approximate  date upon which such First Offer
          Building became or will become available for lease;

               (iii) Set forth the rent and term for which or on which  Landlord
          proposes to offer such First Offer  Building for lease,  the Allocated
          Parking  Spaces  with  respect to such First  Offer  Building  with an
          identification of any such Allocated Parking Spaces, if any, which are
          for the  exclusive  use of the Tenant of the First Offer  Building and
          whether  such First  Offer  Building  is  offered  "AS IS" or with any
          renovation work or tenant allowance by Landlord; and

               (iv) Set forth any other  business  terms  which are  specific to
          Landlord's proposed leasing of such First Offer Building.

          (c) Tenant may accept  Landlord's  offer to lease a  particular  First
     Offer Building only by unequivocal  written notice of acceptance  delivered
     to  Landlord  within  ten (10)  business  days  after  Tenant's  receipt of
     Landlord's  written  notice of  availability  and leasing  terms as to such
     First Offer Building. To be effective, such notice must be delivered within
     such ten (10) business day period and shall not after,  amend or supplement
     any of the terms set forth in Landlord's offer notice.

          (d) If Tenant  timely and properly  accepts  Landlord's  offer as to a
     First Offer  Building in the manner  provided  in  subparagraph  (c) above,
     Landlord shall  promptly  prepare and Landlord and Tenant shall execute and
     deliver an amendment  to the Lease adding such First Offer  Building to the
     Premises  pursuant  to the Lease.  Tenant  shall hold and occupy such First
     Offer Building upon the terms set forth in Landlord's offer notice and upon
     those provisions of the Lease which are not inconsistent with the terms set
     forth in Landlord's offer notice.

                                       6

<PAGE>

          (e) If Tenant fails to timely and properly accept  Landlord's offer as
     to a particular  First Offer Building,  Tenant shall have no further rights
     with respect to such First Offer  Building,  and Landlord  shall be free to
     offer such First Offer  Building to third parties on the terms set forth in
     Landlord's  offer  notice and to enter into a lease of such  building  upon
     such terms as are agreed by Landlord and any third party.  Neither  failure
     of Tenant to timely and properly accept Landlord's offer as to a particular
     First  Offer  Building  nor  acceptance  of such  offer and  addition  of a
     particular First Offer Building to the Premises pursuant to the Lease shall
     affect Tenant's rights pursuant to this paragraph with respect to any other
     First Offer Building which thereafter becomes available for lease.

          (f)  Notwithstanding  anything  to  the  contrary  contained  in  this
     paragraph,  in no event  shall  Landlord  be  required to offer to Tenant a
     First Offer  Building  during any period  during which Tenant is in default
     pursuant to the Lease.  Moreover,  nothing herein shall require Landlord to
     hold such First Offer  Building off the market for leasing to third parties
     pending a cure by Tenant of a default  pursuant to the Lease.  In the event
     that Landlord  receives a third party offer to lease a First Offer Building
     during any period of Tenant default  pursuant to the Lease,  Landlord shall
     be free to accept such offer and enter into a lease of such building with a
     third party upon such terms and  conditions  as are  acceptable to Landlord
     and such third party.

          (g) Landlord and Tenant acknowledge and agree that the rights afforded
     to Tenant  pursuant to this  paragraph  are  unusual and are not  generally
     afforded  by  Landlord  to  tenants  of  the  Center.  Landlord  shall  use
     reasonable  efforts to honor the rights granted to Tenant  pursuant to this
     paragraph. However, if Landlord inadvertently neglects to provide to Tenant
     an offer  notice  with  respect to a First  Offer  Building  which  becomes
     available  for  lease,  such  failure  shall not  constitute  a default  by
     Landlord  pursuant to the Lease or entitle  Tenant to any  damages,  rental
     abatement  or other remedy on account of such failure and Tenant shall have
     no right to terminate the Lease on account of such failure.

     7. No Brokers. The first sentence of Article 38 of the Original Lease shall
have no  application  with respect to this Amendment  (i.e.,  there is no broker
entitled to a commission with respect to this  Amendment).  The  representations
and covenants  contained in the second and third sentences of such Article shall
apply with respect to this Amendment. For the purpose of such covenants, payment
shall  not be a  condition  precedent  to  recovery  upon  such  indemnification
provisions.  Each such indemnification provision shall include a covenant by the
indemnifying party to defend the indemnified party against all claims from which
indemnification  is  available  pursuant to such  provision  with legal  counsel
selected  by the  insurance  carrier  for the  indemnifying  party or  otherwise
reasonably acceptable to the indemnified party.

     8. Lender  Approval.  Landlord  and Tenant  acknowledge  and agree that the
continued  effectiveness  of this  Amendment  is subject to the approval of this
Amendment by Teachers Insurance and Annuity Association,  Landlord's lender with
respect to the Center ("Lender").  Promptly upon the last execution and delivery
of this  Amendment by Tenant and Landlord,  Landlord shall submit this Amendment
to Lender with a request for approval  hereof by Lender in writing.  Thereafter,
Landlord shall use  reasonable  efforts to obtain the approval of Lender to this

                                       7
<PAGE>

Amendment as promptly as  practicable.  Promptly  upon receipt of such  approval
from Lender,  Landlord  shall so notify  Tenant and shall  furnish a copy of any
written  approval to Tenant.  In the event that Landlord is unable to obtain the
approval  of Lender to this  Amendment  within  fifty (50) days  after  Tenant's
execution and delivery of this  Amendment,  either party shall have the right to
terminate  this  Amendment.  Such right shall be  exercised  by either  party by
written notice to the other given at any time after the expiration of such fifty
(50) day period and prior to Landlord's notice to Tenant as to such approval. If
the parties are entitled to terminate this Amendment and either party  exercises
such right,  then (a) this Amendment shall terminate upon the date of receipt of
such notice of termination by the recipient party, (b) each party shall bear its
own  costs  and  fees  incurred  in the  preparation  and  negotiation  of  this
Amendment,  (c)  neither  party  shall have any  further  rights or  obligations
pursuant  to this  Amendment  and (d) the Lease  shall  remain in full force and
effect without regard to this Amendment.

     9. Effective  Date.  Subject to the  provisions of paragraph 8 above,  this
Amendment  shall be effective as of March 28,  1997,  notwithstanding  any later
execution and delivery of this Amendment by Landlord and/or Tenant.

     10.  Counterparts.  This  Amendment  may be  executed  in two  (2) or  more
counterparts,  each of  which  shall  be  deemed  an  original  but all of which
together  shall  constitute a single  instrument. It shall not be necessary  for
Landlord and Tenant to execute the same  counterpart(s)  of this  Amendment  for
this Amendment to become effective.

     11.  Defined Terms.  All terms used in this Amendment with initial  capital
letters and not defined  herein shall have the  meanings  given to such terms in
the Lease.

     12.  Lease in Effect.  Landlord and Tenant  acknowledge  and agree that the
Lease,  as hereby  amended  and  extended,  remains  in full force and effect in
accordance with its terms.

                                       8

<PAGE>


     IN WITNESS WHEREOF,  Landlord and Tenant have executed this Fifth Amendment
to Lease to be effective as provided in paragraph 9 above.


FILENET CORPORATION, a California           C.J. SEGERSTROM & SONS, a California
corporation                                 general partnership


By       __________________________   By     ________________________________
                                                             Managing Partner
Title:   __________________________   By     ________________________________
                                                             Managing Partner
Dated:   __________________________
                                      Dated: ________________________________


               "Tenant"                                   "Landlord"


         Attachment:
                 Exhibit "A" - Location of New Allocated Spaces


                                       9