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                                                                    EXHIBIT 10.9
                                 LEASE AGREEMENT

        THIS LEASE, made this 26th day of October, 1999 between WESTPORT JOINT
VENTURE, a California joint venture, hereinafter called Landlord, and IPASS,
INC., a California corporation, hereinafter called Tenant.

                                   WITNESSETH:

        Landlord hereby leases to Tenant and Tenant hereby hires and takes from
Landlord those certain premises the "Premises" outlined in red on Exhibit "A",
attached hereto and incorporated herein by this reference thereto more
particularly described as follows:

        All of that certain 48,384+ square foot, two-story building located at
3800 Bridge Parkway, Redwood City, California 94065. Said Premises is more
particularly shown within the area outlined in Red on EXHIBIT A attached hereto.
The entire parcel, of which the Premises is a part, is shown within the area
outlined in Green on EXHIBIT A attached. The Premises shall be improved by
Landlord as shown on EXHIBIT B to be attached hereto, and is leased on an
"as-is" basis, in its present condition, and in the configuration as shown in
Red on EXHIBIT B to be attached hereto.

        As used herein the Complex shall mean and include all of the land
outlined in Green and described in Exhibit "A", attached hereto, common area
private roads within the Complex, and all of the buildings, improvements,
fixtures and equipment now or hereafter situated on said land.

        Said letting and hiring is upon and subject to the terms, covenants and
conditions hereinafter set forth and Tenant covenants as a material part of the
consideration for this Lease to perform and observe each and all of said terms,
covenants and conditions. This Lease is made upon the conditions of such
performance and observance.

1.      USE.

Tenant shall use the Premises only in conformance with applicable governmental
laws, regulations, rules and ordinances for the purpose of general office, light
manufacturing, research and development, and storage and other uses necessary
for Tenant to conduct Tenant's business, provided that such uses shall be in
accordance with all applicable governmental laws and ordinances and for no other
purpose. Tenant shall not do or permit to be done in or about the Premises or
the Complex nor bring or keep or permit to be brought or kept in or about the
Premises or the Complex anything which is prohibited by or will in any way
increase the existing rate of (or otherwise affect) fire or any insurance
covering the Complex or any part thereof, or any of its contents, or will cause
a cancellation of any insurance covering the Complex or any part thereof, or any
of its contents. Tenant shall not do or permit to be done anything in, on or
about the Premises or the Complex which will in any way obstruct or interfere
with the rights of other tenants or occupants of the Complex or injure or annoy
them, or use or allow the Premises to be used for any improper, immoral,
unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit
any nuisance in, on or about the Premises or the Complex. No sale by suction
shall be permitted on the Premises. Tenant shall not place any loads upon the
floors, walls, or ceiling, which endanger the structure, or place any harmful
fluids or other materials in the




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drainage system of the building, or overload existing electrical or
other mechanical systems. No waste materials or refuse shall be dumped upon or
permitted to remain upon any part of the Premises or outside of the building in
which the Premises are a part, except in trash containers placed inside exterior
enclosures designated by Landlord for that purpose or inside of the building
proper where designated by Landlord. No materials, supplies, equipment, finished
products or semi-finished products, raw materials or article of any nature shall
be stored upon or permitted to remain outside the Premises or on any portion of
common area of the Complex. No loudspeaker or other device, system or apparatus
which can be heard outside the Premises shall be used in or at the Premises
without the prior written consent of Landlord. Tenant shall not commit or suffer
to be committed any waste in or upon the Premises. Tenant shall indemnify,
defend and hold Landlord harmless against any loss, expense, damage, attorneys'
fees, or liability arising out of failure of Tenant to comply with any
applicable law. Tenant shall comply with any covenant, condition, or restriction
("CC&R's") affecting the Premises. The provisions of this paragraph are for the
benefit of Landlord only and shall not be construed to be for the benefit of any
tenant or occupant of the Complex.

2.      TERM.*

        A. The term of this Lease shall be for a period of ten (10) years, one
(1) month, seventeen (17) days (unless sooner terminated as hereinafter
provided) and, subject to Paragraphs 2(B) and 3, shall commence on the 15th day
of January, 2000 and end on the 28th day February of 2010.

        B. Possession of the Premises shall be deemed tendered and the term of
this Lease shall commence when the first of the following occurs:

           (a) One day after a Certificate of Occupancy is granted by the proper
governmental agency, or, if the governmental agency having jurisdiction over the
area in which the Premises are situated does not issue certificates of
occupancy, then the same number of days after certification by Landlord's
architect or contractor that Landlord's construction work has been completed,
and Landlord has delivered possession of the Premises to Tenant; or

           (b) Upon the occupancy of the Premises by any of Tenant's operating
personnel; or

           (c) When the Tenant Improvements have been substantially completed
for Tenant's use and occupancy, in accordance and compliance with Exhibit B of
this Lease Agreement and Landlord has delivered the Premises to Tenant; or

           (d) As otherwise agreed in writing.

3.      POSSESSION.

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* It is agreed in the event said Lease commences on a date other than the first
day of the month the term of the Lease will be extended to account for the
number of days in the partial month. The Basic Rent during the resulting partial
month will be pro-rated (for the number of days in the partial month) at the
Basic Rent scheduled for the projected commencement date as shown in Paragraph
43.


                                       2.
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        If Landlord, for any reason whatsoever, cannot deliver possession of
said premises to Tenant at the commencement of the said term, as hereinbefore
specified, this Lease shall not be void or voidable; no obligation of Tenant
shall be affected thereby; nor shall Landlord or Landlord's agents be liable to
Tenant for any loss or damage resulting therefrom; but in that event the
commencement and termination dates of the Lease, and all other dates affected
thereby shall be revised to conform to the date of Landlord's delivery of
possession, as specified in Paragraph 2(b) above. The above is, however, subject
to the provision that the period of delay of delivery of the premises shall not
exceed 60 days from the commencement date herein (except those delays caused by
Acts of God strikes, war, utilities, governmental bodies, weather, unavailable
materials, and delays beyond Landlord's control shall be excluded in calculating
such period) in which instance Tenant, at its option, may, by written notice to
Landlord, terminate this Lease.

4.      RENT

        A. BASIC RENT. Tenant agrees to pay to Landlord at such place as
Landlord may designate without deduction, offset, prior notice or demand, and
Landlord agrees to accept as Basic Rent for the leased Premises the total sum of
Twenty Five Million Nine Hundred Seventy Two Thousand Eight Hundred Forty three
and 35/100 ($25,972,843.35) Dollars in lawful money of the United States of
America, payable as follows:

        See Paragraph 43 for Basic Rent Schedule

        B. TIME FOR PAYMENT. In the event that the term of this Lease commences
on a date other than the first day of a calendar month, on the date of
commencement of the term hereof Tenant shall pay to Landlord as rent for the
period from such date of commencement to the first day of the next succeeding
calendar month that proportion of the monthly rent hereunder which the number of
days between such date of commencement and the first day of the next succeeding
calendar month bears to thirty (30). In the event that the term of this Lease
for any reason ends on a date other than the last day of a calendar month, on
the first day of the last calendar month of the term hereof Tenant shall pay to
Landlord as rent for the period from said first day of said last calendar month
to and including the last day of the term hereof that proportion of the monthly
rent hereunder which the number of days between said first day of said last
calendar month and the last day of the term hereof bears to thirty (30).

        C. LATE CHARGE. Notwithstanding any other provision of this Lease. If
Tenant is in default in the payment of rental as set forth in this Paragraph 4
when due, or any part thereof, Tenant agrees to pay Landlord. In addition to the
delinquent rental due, a late charge for each rental payment in default ten (10)
days. Said late charge shall equal ten (10%) percent of each rental payment so
in default.

        D. ADDITIONAL RENT. Beginning with the commencement date of the term of
this Lease. Tenant shall pay to Landlord in addition to the Basic Rent and as
Additional Rent the following:

           (a) Tenant's proportionate share of all Taxes relating to the
Complex as set forth in Paragraph 12, and



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           (b) Tenant's proportionate share of all insurance premiums and
deductibles relating to the Complex, as set forth in Paragraph 15, and

           (c) Tenant's proportionate share of expenses for the operation,
management, maintenance and repair of the Building (including common area of the
Building) and Common Areas of the Complex in which the Premises are located as
set forth in Paragraph 7, and

           (d) All charges, costs and expenses, which Tenant is required to pay
hereunder, together with all interest and penalties, costs and expenses
including attorneys' fees and legal expenses, that may accrue thereto in the
event of Tenant's failure to pay such amounts, and all damages, reasonable costs
and expenses which Landlord may incur by reason of default of Tenant or failure
on Tenant's part to comply with the terms of this Lease. In the event of
nonpayment by Tenant of Additional Rent, Landlord shall have all the rights and
remedies with respect thereto as Landlord has for nonpayment of rent.

        The Additional Rent due hereunder shall be paid to Landlord or
Landlord's agent (i) within five (5) days for taxes and insurance and within
thirty (30) days for all other Additional Rent items after presentation of
invoice from Landlord or Landlord's agent setting forth such additional Rent
and/or (ii) at the option of Landlord. Tenant shall pay to Landlord monthly, in
advance, Tenant's prorate share of an amount estimated by Landlord to be
Landlord's approximate average monthly expenditure for such Additional Rent
Items, which estimated amount shall be reconciled within 120 days of the end of
each calendar year or more frequently if Landlord so elects to do so at
Landlord's sole and absolute discretion, as compared to Landlord's actual
expenditure for said Additional Rent items, with Tenant paying to Landlord, upon
demand, any amount of actual expenses expended by Landlord in excess of said
estimated amount, or Landlord crediting to Tenant (providing Tenant is not in
default in the performance of any for the terms, covenants and conditions of
this Lease) any amount of estimated payments made by Tenant in excess of
Landlord's actual expenditures for said Additional Rent items. Within thirty
(30) days after receipt of Landlord's reconciliation, Tenant shall have the
right, at Tenant's sole expense, to audit, at a mutually convenient time at
Landlord's office, Landlord's records relating to the foregoing expenses. Such
audit must be conducted by Tenant or an independent nationally recognized
accounting firm that is not being compensated by Tenant or other third party on
a contingency fee basis. Landlord shall be provided a complete copy of said
audit at no expense to Landlord. If such audit reveals that Landlord has
overcharged Tenant and the audit is not challenged by Landlord, the amount
overcharged shall be credited to Tenant's account within thirty (30) days after
the audit is concluded.

        The respective obligations of Landlord and Tenant under this paragraph
shall survive the expiration or other termination of the term of this lease, and
if the term hereof shall expire or shall otherwise terminate on a day other than
the last day of a calendar year, the actual Additional Rent incurred for the
calendar year in which the term hereof expires or otherwise terminates shall be
determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number
of days in such calendar year pricing such expiration or termination bears to
365.

        E. FIXED MANAGEMENT FEE.  Beginning with the Commencement Date of the
term of this Lease, Tenant shall pay, in addition to the Basic Rent and
Additional Rent, a fixed monthly



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management fee ("Management Fee") equal to two percent (2%) of the Basic Rent
due for each month during the Lease term. Said Management Fee shall be paid by
Tenant to A&P Property Management Company at 2560 Mission College Blvd., Suite
101, Santa Clara, CA 95054.

        F. PLACE OF PAYMENT OF RENT AND ADDITIONAL RENT. All Basic Rent
hereunder and all payments hereunder for Additional Rent shall be paid to
Landlord at the office of Landlord at Westport Joint Venture, 2560 Mission
College Blvd., Suite 101, Santa Clara, CA 95054 or to such other person or to
such other place as Landlord may from time to time designated in writing.

        G. SECURITY DEPOSIT. Concurrently with Tenant's execution of this Lease,
Tenant shall deposit with Landlord the sum of Four Hundred Ninety Three Thousand
Five Hundred Sixteen and 80/100 ($493,516.80) Dollars. Said sum shall be held by
Landlord as a Security Deposit for the faithful performance by Tenant of all of
the terms, covenants, and conditions of this Lease to be kept and performed by
Tenant during the term hereof. If Tenant defaults with respect to any provision
of this Lease, including, but not limited to, the provisions relating to the
payment of rent and any of the monetary sums due herewith, Landlord may (but
shall not be required to) use, apply or retain all or any part of this Security
Deposit for the payment of any other amount which Landlord may spend by reason
of Tenant's default or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant's default. If any portion of said
Deposit is so used or applied. Tenant shall, within ten (10) days after written
demand therefor, deposit cash with Landlord in the amount sufficient to restore
the Security Deposit to its original amount. Tenant's failure to do so shall be
a material breach of this Lease. Landlord shall not be required to keep this
Security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on such Deposit. If Tenant fully and faithfully performs
every provision of this Lease to be performed by it, the Security Deposit or any
balance thereof shall be returned to Tenant (or at Landlord's option, to the
last assignees of Tenant's interest hereunder) at the expiration of the Lease
term and after Tenant has vacated the Premises. In the event of termination of
Landlord's interest in this Lease, Landlord shall transfer said Deposit to
Landlord's successor in interest whereupon Tenant agrees to release Landlord
from liability for the return of such Deposit or the accounting therefor. See
Paragraph 57.

5.      RULES AND REGULATIONS AND COMMON AREA.

Subject to the term of conditions of this Lease and such reasonable Rules and
Regulations as Landlord may from time to time prescribe, Tenant and Tenant's
employees, invitees and customers shall, in common with other occupants of the
Complex in which the Premises are located, and their respective employees,
invoices and customers, and others entitled to the use thereof, have the
non-exclusive right to use the access roads, parking areas, and facilities
provided and designated by Landlord for the general use and convenience of the
occupants of the Complex in which the Premises are located, which areas and
facilities are referred to herein as "Common Area". This right shall terminate
upon the termination of this Lease, Landlord reserves the right from time to
time to make changes in the shape, size, location, amount and extent of Common
Area. Landlord further reserves the right to promulgate such reasonable rules
and regulations relating to the use of the Common Area, and any party or parts
thereof, as Landlord may deem appropriate for the best interests of the
occupants of the Complex. The Rules and Regulations shall be binding upon Tenant
upon delivery of a copy of them to Tenant,


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and Tenant shall abide by them and cooperate in the observance. Such Rules and
Regulations may be reasonably amended by Landlord from time to time, with or
without advance notice, and all amendments shall be effective upon delivery of a
copy to Tenant, Landlord shall not be responsible to Tenant for the
non-performance by any other tenant or occupant of the Complex of any of said
Rules and Regulations.

        Landlord shall operate, manage and maintain the Common Area. The manner
in which the Common Area shall be maintained and the expenditure for such
maintenance shall be at the discretion of Landlord. Landlord's rights pursuant
to this Paragraph 5 shall be subject to the condition that exercise of any such
rights shall not unreasonably interfere with Tenant's use of the Premises.

6.      PARKING.

        Tenant shall have the right to use with other tenants or occupants of
the Complex 161 parking spaces in the common parking areas of the Complex.
Tenant agrees, that Tenant, Tenant's employees, agents, representatives and/or
invitees shall not use parking spaces in excess of said 161 spaces allocated to
Tenant hereunder. Landlord shall have the right, at Landlord's sole discretion,
to specifically designate the location of Tenant's parking spaces within the
common parking areas of the Complex in the event of a dispute among the tenants
occupying the building and/or Complex referred to herein, in which event Tenant
agrees that Tenant, Tenant's employees, agents, representatives and/or invitees
shall not use any parking spaces other than those parking spaces specifically
designated by Landlord for Tenant's use. Said parking spaces, if specifically
designated by Landlord to Tenant, may be relocated by Landlord at any time, and
from time to time, Landlord reserves the right, at Landlord's sole discretion,
to rescind any specific designation of parking spaces. Tenant shall not, at any
time, park or permit to be parked, any trucks or vehicles adjacent to the
loading area as to interfere in any way with the use of such areas, nor shall
Tenant at any time park, or permit the parking of Tenant's 'trucks or other
vehicles or the trucks and vehicles of Tenant's suppliers or others, in any
portion of the common parking area or other common areas of the Complex. Tenant
agrees to assume responsibility for compliance by its employees with the parking
provision contained herein. If Tenant or its employees park in other than such
designated parking areas, the Landlord may charge Tenant, as an additional
charge, and Tenant agrees to pay, ten ($10.00) Dollars per day for each day or
partial day each such vehicle is parked in any area other than that designated.
Tenant hereby authorizes Landlord at Tenant's sole expense to tow away from the
Complex any vehicle belong to Tenant or Tenant's employees parked in violation
of these provisions, or to attach violation stickers or notices to such
vehicles. Tenant shall use the parking area for vehicle parking only, and shall
not use the parking area for storage.

7.     EXPENSES OF OPERATION, MANAGEMENT, AND MAINTENANCE OF THE COMMON AREAS
OF THE COMPLEX.

      As Additional Rent and in accordance with Paragraph 4D of this Lease,
Tenant shall pay to Landlord Tenant's proportionate share (calculated on a
square footage or other equitable basis as calculated by Landlord) of all
expense of operations, management, maintenance and repair of the Common Areas of
the Complex including, but not limited to, license, permit, and inspection fees;
security; utility charges associated with exterior landscaping and lighting
(including water


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and sewer charges); all charges incurred in the maintenance and replacement of
landscaped areas, private roads within the Complex and roads with reciprocal
easement areas; lakes, parking lots and paved areas (including repairs,
replacement, resealing and restriping), sidewalks, driveways; maintenance,
repair and replacement of all fixtures and electrical, mechanical, and plumbing
systems; structural elements and exterior surfaces of the buildings; salaries
and employee benefits of personnel and payroll taxes applicable thereto;
suppliers, materials, equipment and tools; the cost of capital expenditures
which have the effect of reducing opening expenses, provided, however, that in
the event Landlord makes such capital improvements, Landlord may amortize its
investment in said improvements (together with interest at the rate of fifteen
(15%) percent per annum on the unamortized balance) as an operating expense in
accordance with standard accounting practices, provided, that such amortization
is not at a rate greater than the anticipated savings in the operating expenses.

        "Additional Rent" as used herein shall not include Landlord's debt
repayments; interest on changes; expenses directly or indirectly incurred by
Landlord for the benefit of any other tenant; cost for the installation of
partitioning or any other tenant improvements; cost of attracting tenants;
depreciation; interest, or executive salaries.

8.      ACCEPTANCE AND SURRENDER OF PREMISES.

By entry hereunder, Tenant accepts the Premises as being in good and sanitary
order, condition and repair and accepts the building and improvements included
in the Premises in the present condition and without representation or warranty
by Landlord as to the condition of such building or as to the use or occupancy
which may be made thereof. Any expectations to the foregoing must be by written
agreement executed by Landlord and Tenant. Tenant agrees on the last day of the
Lease term, or on the sooner termination of this Lease, to surrender the
Premises promptly and peaceably to Landlord in good condition and repair (damage
by Acts of God, fire, normal wear and tear excepted), with all interior walls
painted, or cleaned so that they appear freshly painted, and repaired and
replaced, if damaged; all floors cleaned and waxed; all carpets cleaned and
shampooed; the air conditioning and hearing equipment serviced by a reputable
and licensed service firm and in good operating condition (provided the
maintenance of such equipment has been Tenant's responsibility during the term
of this Lease) together with all alterations, additions, and improvements which
may have been made in, to, or on the Premises (except movable trade fixtures
installed at the expense of Tenant) except that Tenant shall ascertain from
Landlord within thirty (30) days before the end of the term of this Lease
whether Landlord desires to have the Premises or any part or parts thereof
restored to their condition and configuration as when the Premises were
delivered to Tenant and if Landlord shall so desire, the Tenant shall restore
said Premises or such part or parts thereof before the end of the Lease at
Tenant's sole cost and expense. Tenant, on or before the end to the term or
sooner termination of this Lease, shall remove all of Tenant's personal property
and trade fixtures from the Premises, and all property not so removed on or
before the end of the term or sooner termination of this Lease, shall remove all
of Tenant's personal property and trade fixtures from the Premises, and all
property not so remove on or before the end of the term or sooner termination of
this Lease shall be deemed abandoned by Tenant and title to same shall thereupon
pass to Landlord without compensation to Tenant. Landlord may, upon termination
of this Lease, remove all moveable furniture and equipment so abandoned by
Tenant, at Tenant's sole cost, and repair any damage caused by such removal at
Tenant's sole cost. If the Premises be not surrendered at the end of


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the term or sooner termination of this Lease, Tenant shall indemnify Landlord
against loss or liability resulting from the delay by Tenant in so surrendering
the Premises including, without limitation, any claims made by any succeeding
tenant founded on such delay. Nothing contained herein shall be construed as an
extension of the term hereof or as a consent of Landlord to any holding over by
Tenant. The voluntary or other surrender of this Lease or the Premises by Tenant
or a mutual cancellation of this Lease shall not work as a merger and, at the
option of Landlord, shall either terminate all or any existing sublease or
subtenancies or operate as an assignment to Landlord of all or any such
subleases or subtenancies.

9.      ALTERATIONS AND ADDITIONS.

        Tenant shall not make, or suffer to be made, any alteration or addition
to the Premises, or any part thereof, without the written consent (which written
consent will specify whether Landlord shall require removal of said alterations
and/or additions, provided Tenant requests such determination from Landlord), of
Landlord first had and obtained by Tenant (which approval shall not be
unreasonably withheld) but at the cost of Tenant, and any addition to, or
alteration of, the Premises, except moveable furniture and trade fixtures, shall
at once become a part to the Premises and belong to Landlord. Landlord reserves
the right to approve all contractors and mechanics proposed by Tenant to make
such alterations and additions. Tenant shall retain title to all moveable
furniture and trade fixtures placed in the Premises. All heating, lighting,
electrical air conditioning, floor to ceiling partitioning, drapery, carpeting,
and floor installation made by Tenant, together with all property that has
become an integral part of the Premises, shall not be deemed trade fixtures.
Tenant agrees that it will not proceed to make such alteration or additions,
without having obtained consent from Landlord to do so, and until five (5) days
from the receipt of such consent, in order that Landlord may post appropriate
notices to avoid any liability to contractors or material suppliers for payment
for Tenant's improvements. Tenant will at all times permit such notices to be
posted and to remain posted until the completion of work. Tenant shall, if
required by Landlord, secure at Tenant's own cost and expense, a completion and
lien indemnity bond, satisfactory to Landlord, for such work. Tenant further
covenants and agrees that any mechanic's lien filed against the Premises or
against the Complex 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. Any exceptions to the foregoing must be made in writing and
executed by both Landlord and Tenant. Notwithstanding anything to the contrary
herein, under no circumstances shall Tenant be authorized to penetrate the soil
to a depth that exceeds three and one-half feet from the uppermost surface of
the soil.

10.     TENANT MAINTENANCE.

Tenant shall, at its sole cost and expense, keep and maintain the Premises
(including appurtenances) and every part thereof in a high standard of
maintenance and repair, and in good and sanitary condition. Tenant's maintenance
and repair responsibilities herein referred to include, but are not limited to,
all windows, window frames, plate glass, glazing, truck doors, plumbing systems
(such as water and drain lines, sinks, toilets, faucets, drains, showers and
water fountains), electrical system (such as panels, conduits, outlets, lighting
fixtures, lamps, bulbs, tubes, ballasts), heating and air-conditioning systems
(such as compressors, fans, air handlers, ducts, mixing boxes, thermostats, time
clocks, boilers, heaters, supply and return



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grills), store fronts, roofs, downspouts, all interior improvements within the
premises including but not limited to wall coverings, window coverings, carpet,
floor coverings, partitioning, ceilings, doors (both interior and exterior,
including closing mechanisms, latches, locks, skylights (if any), automatic fire
extinguishing systems, and elevators and all other interior improvements of any
nature whatsoever. Tenant agrees to provide carpet shields under all rolling
chairs or to otherwise be responsible for wear and tear of the carpet caused by
such rolling chairs is such wear and tear exceed that caused by normal foot
traffic in surrounding areas. Areas of excessive wear shall be replaced at
Tenant's sole expense upon Lease termination. Tenant hereby waives all rights
under, and benefits of, subsection 1 of Section 1932 and Section 1941 and 1942
of the California Civil Code and under any similar law, statue or ordinance now
or thereafter in effect.

11.     UTILITIES.

        Tenant shall pay promptly as the same become due, all charges for water,
gas, electricity, telephone, telex and other electronic communications service,
sewer service, waste pick-up and any other utilities, materials or services
furnished directly to or used by Tenant on or about the Premises during the term
of this Lease, including, without limitation, any temporary or permanent utility
surcharge or other exactions whether or not hereinafter imposed.

        Landlord shall not be liable for an Tenant shall not be entitled to any
abatement or reduction of rent by reason of any interruption or failure of
utility services to the Premises when such interruption or failure is caused by
accident, breakage, repair, strikes, lockouts, or other labor disturbances or
labor disputes of any nature, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord.

12.     TAXES.

A. As Additional Rent and in accordance with Paragraph 4 D of this Lease, Tenant
shall pay to Landlord Tenant's proportionate share of all Real Property taxes,
which prorata share shall be allocated to the leased Premises by square footage
or other equitable basis, as calculated by Landlord. The term "Real Property
Taxes", as used herein, shall mean (i) all taxes, assessments, levies and other
charges of any kind or nature whatsoever, general and special, foreseen and
unforeseen (including all installments of principal and interest required to pay
any general or special assessments for public improvements and any increases
resulting from reassessments caused by any change in ownership of the Complex)
now or hereafter imposed by any governmental or quasi-governmental authority or
special district having the direct or indirect power to tax or levy assessments,
which are levied or assessed against, or with respect to the value, occupancy or
use of, all or any portion of the Complex (as now constructed or as may at any
time hereafter be constructed, altered, or otherwise changed) or Landlord's
interest therein; any improvements located within the Complex (regardless of
ownership); the fixtures, equipment and other property of Landlord, real or
personal, that are an integral part of and located in the Complex; or parking
areas, public utilities, or energy within the Complex; (ii) all charges, levies
or fees imposed by reason of environmental regulation or other governmental
control of the Complex; and (iii) all costs and fees (including attorneys' fees)
incurred by Landlord in contesting any Real Property Tax and in negotiating with
public authorities as to any Real Property Tax. If at any time during the term
of this Lease the taxation or assessment of the



                                       9.
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Complex prevailing as of the commencement date of this Lease shall be altered to
that in lieu of or in addition to any Real Property Tax described above there
shall be levied, assessed or imposed (whether by reason of a change in the
method of taxation or assessment, creation of a new tax or charge, or any other
cause) an alternate or additional tax or charge (i) on the value of the
occupancy of the Complex or Landlord's interest therein or (ii) on a measured by
the gross receipts, income or rentals from the Complex, or Landlord's business
of leasing the Complex, or computed in any manner with respect to the operation
of the Complex, then any such tax or charge, however designated, shall be
included within the meaning of the term "Real Property Taxes" for purposes of
this Lease. If any Real Property Tax is based upon property or rents unrelated
to the Complex, then only that part of such real Property tax that is fairly
allocable to the Complex shall be included within the meaning of the term "Real
Property Taxes". Notwithstanding the foregoing, the term "Real Property Taxes"
shall not include estate, inheritance, gift or franchise taxes of Landlord or
the federal or state net income tax imposed on Landlord's income from all
sources. The term "Real Estate Taxes" shall also include supplemental taxes
related to the period of Tenant's Lease Term whenever levied, including any such
taxes that may be levied after the Lease Term has expired.

        B. TAXES ON TENANT'S PROPERTY

           (a) Tenant shall be liable for and shall pay ten (10) days before
delinquency, taxes levied against any personal property or trade fixtures placed
by Tenant in or about in the Premises. If any such taxes on Tenant's personal
property or trade fixtures are levied against Landlord or Landlord's property or
if the assessed value of the Premises is increased by the inclusion therein of a
value placed upon such personal property or trade fixtures of Tenant and if
Landlord, after written notice to Tenant, pays the taxes based on such increased
assessments, which Landlord shall have the right to do regardless of the
validity thereof, but only under proper protest if requested by Tenant. Tenant
shall upon demand, as the case may be, repay to Landlord the taxes so levied
against Landlord, or the proportion of such taxes resulting from such increase
in the assessment; provided that in any such event Tenant shall have the right,
in the name of Landlord and with Landlord's full cooperation, to bring suit in
any court of competent jurisdiction to recover the amount of any such taxes so
paid under protest, and any amount so recovered shall belong to Tenant.

           (b) if the Tenant improvements in the Premises, whether installed,
and/or paid for by Landlord or Tenant and whether or not affixed to the real
property so as to become a part thereto, are assessed for real property tax
purposes at a valuation higher than the valuation to which standard office
improvements in other space in the Complex are assessed, then the real property
taxes and assessments levied against Landlord or the Complex by reason of such
excess assessed valuation shall be deemed to be taxes levied against personal
property of Tenant and shall be governed by the provisions of 12B(a) above. If
the records of the County Assessor are available and sufficiently detailed to
serve as a basis for determining whether said Tenant improvements are assessed
at a higher valuation than standard office improvements in other space in the
Complex, such records shall be binding on both the Landlord and the Tenant. If
the records of the County Assessor are not available or sufficiently detailed to
serve as a basis for making said determination, the actual cost of construction
shall be used.

13.     LIABILITY INSURANCE.





                                      10.
<PAGE>   11

        Tenant, at Tenant's expenses, agrees to keep in force during the term of
this Lease a policy of commercial general liability insurance with a combined
single limit coverage of not less than Two Million Dollars ($2,000,000) per
occurrence for injuries to or death of persons occurring in, on or about the
Premises or the Complex, and property damage insurance with limits of $500,000.
The policy or policies affecting such insurance, certificates of insurance of
which shall be furnished to Landlord, shall name Landlord as additional
insureds, and shall insure any liability of Landlord, contingent or otherwise,
as respects acts or omissions of Tenant, its agents, employees or invitees or
otherwise by any conduct or transaction of any of said persons in or about or
concerning the Premises, including any failure of Tenant to observe or perform
any of its obligations hereunder, shall be issued by an insurance admitted to
transact business in the State of California and shall provide that the
insurance effected thereby shall not be canceled, expect upon thirty (30) days'
prior written notice to Landlord. If, during the term of this Lease, in the
considered opinion of Landlord's Lender, insurance advisor, or counsel, the
amount of insurance described in this paragraph 13 is not adequate, Tenant
agrees to increase said coverage to such reasonable amount as Landlord's Lender,
insurance advisor, or counsel shall deem adequate.

14. TENANT'S PERSONAL PROPERTY INSURANCE AND WORKMAN'S COMPENSATION INSURANCE.

        Tenant shall maintain a policy or policies of fire and property damage
insurance in "all risk" form with a sprinkler leakage endorsements insuring the
personal property, inventory, trade fixtures, and leasehold improvements within
the leased Premises for the full replacement value thereof. The proceeds from
any of such pollicies shall be used for the repair or replacement of such items
so insured.

        Tenants shall also maintain a policy or policies of workman's
compensation insurance and any other employee benefit insurance sufficient to
comply with all laws.

15.     PROPERTY INSURANCE.

        Landlord shall purchase and keep in force and as Additional Rent and in
accordance with Paragraph 4D of this Lease, Tenant shall pay to Landlord (or
Landlord's agent if so direct by Landlord) Tenant's proportionate share
(calculated on a square footage or other equitable basis as calculated by
Landlord) of the deductibles on insurance claims and the cost of policy or
policies of insurance covering loss or damage to the Premises and Complex in the
amount of the full replacement value thereof, providing protection against those
perils included within the classification of "all risks" insurance and flood
and/or earthquake insurance, if available, plus a policy of rental income
insurance in the amount of one hundred (100%) percent of twelve (12) months
Basic Rent, plus sums paid as Additional Rent and any deductibles related
thereto. If such insurance costs is increased due to Tenant's use of the
Premises or the Complex. Tenant agrees to pay to Landlord the full cost of such
increase. Tenant shall have no interest in nor any right to the proceeds of any
insurance procured by Landlord for the Complex.

Landlord and Tenant do each hereby respectively release the other, to the extent
of insurance coverage of the releasing party, from any liability for loss or
damage caused by fire or any of the extended coverage casualties included in the
releasing party's insurance policies,


                                      11.
<PAGE>   12

irrespective of the cause of such fire or casualty; provided, however, that if
the insurance policy or either releasing party prohibits such waiver, then this
waiver shall not take effect until consent to such waiver is obtained. If such
waiver is so prohibited, the insured party affected shall promptly notify the
other party thereof.

16.     INDEMNIFICATION.

        Landlord shall not be liable to Tenant and Tenant hereby waives all
claims against Landlord for any injury to or death of any person or damage to or
destruction of property in or about the Premises or the Complex by or from any
cause whatsoever, including, without limitation, gas, fire, oil, electricity or
leakage of any character from the roof, walls, basement or other portion of the
Premises or the Complex but excluding, however; the willful misconduct or
negligence of Landlord, its agents, servants, employees, invitees, or
contractors of which negligence Landlord has knowledge and reasonable time to
correct. Except as to injury to persons or damage to property to the extent
arising from the willful misconduct or the negligence of Landlord, its agents,
servants, employees, invitees, or contractors, Tenant shall hold Landlord
harmless from and defend Landlord against any and all expenses, including
reasonable attorneys' fees, in connection therewith, arising out of any injury
to or death of any person or damage to or destruction of property occurring in,
on or about the Premises, or any part thereof, from any cause whatsoever.

17.     COMPLIANCE.

        Tenant, at its sole cost and expense, shall promptly comply with all
laws, statues, ordinances and governmental rules, regulations or requirements
now or hereafter in effect; with the requirements of any board of fire
underwriters or other similar body now or hereafter constituted; and with any
direction or occupancy certificate issued pursuant to law by any public officer;
provided, however, that no such failure shall be deemed a breach of the
provisions if Tenant, immediately upon notification, commences to remedy or
rectify said failure. The judgment of any court of competent jurisdictions or
the admission of Tenant in any action against Tenant, whether Landlord be a
party thereto or not, that Tenant has violated any such law, statute, ordinance
or governmental rule, regulation, requirement, direction or provision, shall be
conclusive of that fact as between Landlord and Tenant. This paragraph shall not
be interpreted as requiring Tenant to make structural changes or improvements,
except to the extent such changes or improvements are required as a result of
Tenant's use of the Premises. Tenant shall, at its sole costs and expense,
comply with any and all requirements pertaining to said Premises, of any
insurance organization or company, necessary for the maintenance of reasonable
fire and public liability insurance covering the Premises.

18.     LIENS.

Tenant shall keep the Premises and the Complex free from any liens arising out
of any work performed, materials furnished or obligation incurred by Tenant. In
the event that Tenant shall not, within ten (10) days following the imposition
of such lien, cause the same to be released of record. Landlord shall have, in
addition to all other remedies provided herein and by law, the right, but no
obligation, to cause the same to be released by such means as it shall deem
proper, including payment of the claim giving rise to such lien. All sums paid
by Landlord for


                                      12.
<PAGE>   13

such purpose, and all expenses incurred by it in connection therewith, shall be
payable to Landlord by Tenant on demand with interest at the prime rate of
interest as quoted by the Bank of America.

19.     ASSIGNMENT AND SUBLETTING.

Tenant shall not assign, transfer, or hypothecate the leasehold estate under
this Lease, or any interest therein, and shall not sublet the Premises, or any
part thereof, or any right or privilege appurtenant thereto, or suffer any other
person or entity to occupy or use the Premises, or any portion thereof, without,
in each case, the prior written consent of Landlord which consent will not be
unreasonably withheld. As a condition for granting this consent to any
assignment, transfer, or subletting, Landlord shall require Tenant to pay to
Landlord as Additional Rent, seventy-five (75%) percent of all rents and/or
additional consideration due Tenant from its assignees, transferees or
subtenants in excess of the Rent payable by Tenant to Landlord hereunder for the
assigned, transferred and/or subleased space ("Excess Rent"); provided, however,
that before sharing such Excess Rent, Tenant shall first be entitled to recover
from such Excess Rent the amount of any reasonable leasing commissions related
to said transaction paid by Tenant to third party brokers not affiliated with
Tenant. Tenant shall by thirty (30) days written notice, advise Landlord of its
intent to assign or transfer Tenant's interest in the Lease or sublet the
Premises or any portion thereof for any part of the term hereto. Within
thirty(30) days after receipt of said written notice, Landlord may, in its sole
discretion, elect to terminate this Lease as to the portion of the Premises
described in Tenant's notice on the date specified in Tenant's notice by giving
written notice of such election to termination. If no such notice to terminate
is given to Tenant within said thirty (30) day period, Tenant may proceed to
locate an acceptable sublessee, assignee, or other transferee for presentment to
Landlord for Landlord's approval, all in accordance with the terms, covenants,
and conditions of this paragraph 19. If Tenant intends to sublet the entire
Premises and Landlord elects to terminate this Lease, this Lease shall be
terminated on the date specified in Tenant's notice. If, however, this Lease
shall terminate pursuant to the foregoing with respect to less than all the
Premises, the rest, as defined and reserved hereinabove shall be adjusted on a
pro rata basis to the number of square feet retained by Tenant, and this Lease
as so amended shall continue in full force and effect. In the event Tenant is
allowed to assign, transfer or sublet the whole or any part of the Premises,
with the prior written consent of Landlord, no assignee, transferee or subtenant
shall assign or transfer this Lease, either in whole or in part, or sublet the
whole or any part of the Premises, without also having obtained the prior
written consent of Landlord. A consent of Landlord to one assignment, transfer,
hypothecation, subletting, occupation or use by any other person shall not
release Tenant from any of Tenant's obligations hereunder or be deemed to be a
consent to any subsequent similar or dissimilar assignment, transfer,
hypothecation, subletting, occupation or use by any other person. Any such
assignment, transfer, hypothecation, subletting, occupation or use without such
consent shall be void and shall constitute a breach of the Lease by Tenant and
shall, at the option of Landlord exercised by written notice to Tenant,
terminate this Lease. The leasehold estate under this Lease shall not, nor shall
any interest therein, be assignable for any purpose by operation of law without
the written consent of Landlord. As a condition to its consent, Landlord shall
require Tenant to pay all expenses in connection with the assignment, and
Landlord shall require Tenant's assignee or transferee (or other assignees or
transferees) to assume in writing all of the obligations under this Lease and
for Tenant to remain liable to


                                      13.
<PAGE>   14

Landlord under the Lease. Notwithstanding the above, in no event will Landlord
consent to a sub-sublease.

20.     SUBORDINATION AND MORTGAGES.

        In the event Landlord's title or leasehold interests is now or hereafter
encumbered by a deed of trust, upon the interest of Landlord in the land and
buildings in which the demised Premises are located, to secure a loan from a
lender (hereinafter referred to as "Lender") to Landlord, Tenant shall, at the
request of Landlord or Lender, execute in writing an agreement subordinating its
rights under this Lease to the lien of such deed of trust, or, if so requested,
agreeing that the lien of Lender's deed of trust shall be or remain subject and
subordinate to the rights to Tenant under this Lease. Notwithstanding any such
subordination, Tenant's possession under this Lease shall not be disturbed if
Tenant is not in default and so long as Tenant shall pay all rent and observe
and perform all of the provisions set forth in this Lease.

21.     ENTRY BY LANDLORD.

        Landlord reserves, and shall at all reasonable times after at least 24
hours notice (except in emergencies) have, the right to enter the Premises to
inspect them; to perform any services to be provided by Landlord hereunder, to
submit the Premises to prospective purchasers, mortgagers or tenants; to post
notices of nonresponsibility; and to alter, improve or repair the Premise and
any portion of the Complex, all without abatement of rent; and may erect
scaffolding and other necessary structures in or through the Premises where
reasonably required by the character of the work to be performed; provided,
however, that the business of Tenant shall be interfered with to the least
extent that is reasonably practical. For each of the foregoing purposes,
Landlord shall at all times have and retain a key with which to unlock all of
the 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, actual or
constructive, of Tenant from the Premises or any portion thereof. Landlord shall
also have the right at any time to change the arrangement or location of
entrances or passageways, doors and doorways, and corridors, elevators, stairs,
toilets or other public parts of the Complex and to change the name, number or
designation by which the Complex is commonly known, and none of the foregoing
shall be deemed an actual or constructive eviction of Tenant, or shall entitle
Tenant to any reduction of rent hereunder.

22.     BANKRUPTCY AND DEFAULT.

        The commencement of a bankruptcy action or liquidation action or
reorganization action or insolvency action or an assignment of or by Tenant for
the benefit of creditors, of any similar action undertaken by Tenant, or the
insolvency of Tenant, shall at Landlord's option, constitute a breach of this
Lease by Tenant. If the trustee or receive appointed to serve during a
bankruptcy, liquidation, reorganization, insolvency or similar action elects to
reject Tenant's unexpired Lease, the trustee or receiver shall notify Landlord
in writing of its election within thirty (30) days after an order for relief in
a liquidation action or within thirty (30) days after the commencement of any
action.




                                      14.
<PAGE>   15

        Within thirty (30) days after court approval of the assumption of this
Lease, the trustee or receiver shall cure (or provide adequate assurance to the
reasonable satisfaction of Landlord that the trustee or receiver shall cure) any
and all previous defaults under the unexpired Lease and shall compensate
Landlord for all actual pecuniary loss and shall provide adequate assurance of
future performance under said Lease to the reasonable satisfaction of Landlord.
Adequate assurance of future performance, as used herein, include, but shall not
be limited to: (i) assurance of source and payment of rent and other
consideration due under this Lease; (ii) assurance that the assumption or
assignment of this Lease will not breach substantially any provisions, such as
radius, location, use, or exclusivity provision, in any agreement relating to
the above described Premises.

        Nothing contained in this section shall affect the existing right of
Landlord to refuse to accept an assignment upon commencement of or in connection
with a bankruptcy, liquidation, reorganization or insolvency action or an
assignment of Tenant for the benefit of creditors or other similar act. Nothing
contained in this Lease shall be construed as giving or granting or creating an
equity in the demised Premises to Tenant. In no event shall the leasehold estate
under this Lease, or any interest therein, be assigned by voluntary or
involuntary bankruptcy proceeding without the prior written consent of Landlord.
In no event shall this Lease or any right or privileges hereunder be an asset of
Tenant under any bankruptcy, insolvency or reorganization proceedings.

        The failure to perform or honor any covenant, condition or
representation made under this Lease shall constitute a default hereunder by
Tenant upon expiration of the appropriate grace period hereinafter provided.
Tenant shall have a period of five (5) days from the date of written notice from
Landlord within which to cure any default in the payment of rental or adjustment
thereto. Tenant shall have a period of thirty (30) days from the date of written
notice from Landlord within which to cure any other default under this Lease,
provided, however, that if the nature of Tenant's failure is such that more than
thirty (30) days is reasonably required to cure the same, Tenant shall not be in
default so long as Tenant commences performance within such thirty (30) day
period and thereafter prosecutes the same to completion. Upon an uncured default
of this Lease by Tenant, Landlord shall have the following rights and remedies
in addition to any other rights or remedies available to Landlord at law or in
equity:

           (a) The rights and remedies provided for by California Civil Code
Section 1951.2, including but not limited to, recovery of 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 rental loss for the same period
that Tenant proves could be reasonably avoided as computed pursuant to
subsection(b) of said Section 1951.2. Any proof by Tenant under subparagraph (2)
and (3) of Section 1951.2 of the California Civil Code of the amount of rental
loss that could be reasonably avoided shall be made in the following manner.
Landlord and Tenant shall each select a licensed real estate broker in the
business of renting property of the same type and use as the Premises and in the
same geographic vicinity. Such two real estate brokers shall select a third
licensed real estate broker, and the three licensed real estate brokers so
selected shall determine the amount of the rental loss that could be reasonably
avoided from the balance of the term of this Lease after the time of award. The
decision of the majority of said licensed real estate brokers shall be final and
binding upon the parties hereto.




                                      15.
<PAGE>   16

           (b) The right and remedies provided by California Civil Code Section
which allows Landlord to continue the Lease in effect and to enforce all of its
rights and remedies under this Lease, including the right to recover rent as it
becomes due, for so long as Landlord does not terminate Tenant's right to
possession; acts of maintenance or preservation, efforts to relet the Premises,
or the appointment of a receiver upon Landlord's initiative to protect its
interests under this Lease shall not constitute a termination of Tenant's right
to possession.

           (c) The right to terminate this Lease by giving notice to Tenant in
accordance with applicable law.

           (d) To the extent permitted by law the right of power, to enter the
Premises and remove therefrom all persons and property, to store such property
in a public warehouse or elsewhere at the cost of and for the account of Tenant,
and to sell such property and apply such proceeds therefrom pursuant to
applicable California law. Landlord, may from time to time sublet the Premises
or any part thereof for such term or terms (which may extend beyond the term of
the Lease) and at such rent and such other terms as Landlord in its sole
discretion may deem advisable, with the right to make alterations and repairs to
the Premises. Upon each subletting, (i) Tenant shall be immediately liable to
pay Landlord, in addition to indebtedness other than rent due hereunder, the
cost of such subletting, including, but not limited to, reasonable attorney's
fees and any real estate commissions actually paid, and the cost of such
alteration and repairs incurred by Landlord and the amount, if any, by which the
rent hereunder for the period of such subletting (to the extent such period does
not exceed the term hereof) exceeds the amount to be paid as rent for the
Premises for such period or (ii) at the option of Landlord, rents received from
such subletting shall be applied first to payment of indebtedness other than
rent due hereunder from Tenant to Landlord; second, to the payment of any costs
of such subletting and of such alterations and repairs; third to payment of rent
due and unpaid hereunder, and the residue, if any, shall be held by Landlord and
applied to payment of future rent as the same becomes due hereunder. If Tenant
has been credited with any rent to be received by such subletting under option
(i) and such rent shall not be promptly paid to Landlord by the subtenant(s), or
if such rentals received from such subletting under option (ii) during any month
by less than that to be paid during the month by Tenant hereunder. Tenant shall
pay any such deficiency to Landlord. Such deficiency shall be calculated and
paid monthly. No taking possession of the Premises by Landlord, shall be
construed as an election on its part to terminate this Lease unless a written
notice of such intention be given to Tenant. Notwithstanding any such subletting
without termination, Landlord may at any time hereafter elect to terminate this
Lease for such previous breach.

           (e) The right to have a receiver appointed for Tenant upon
application by Landlord, to take possession of the Premises and to apply any
rental collected from the Premises and to exercise all other rights and remedies
granted to Landlord pursuant to subparagraph (d) above.

23.     ABANDONMENT.

Tenant shall not vacate or abandon the Premises at any time during the term of
this Lease and if Tenant shall abandon, vacate or surrender the Premises, or be
dispossessed by the process of law, or otherwise, any personal property
belonging to Tenant and left on the Premises shall be



                                      16.
<PAGE>   17

deemed to be abandoned, at the option of Landlord, except such property as may
be mortgage to Landlord.

24.     DESTRUCTION.

        In the event the Premises are destroyed in whole or in part form any
cause, except for routine maintenance and repairs and incidental damage and
destruction caused form vandalism and accidents for which Tenant is responsible
for under Paragraph 10, Landlord may, at its option:

           (a) Rebuild or restore the Premises to the condition prior to the
damage or destruction; or

           (b) Terminate this Lease, (providing that the Premises is damaged to
the extent of 33 1/3% of the replacement cost). If Landlord does not give Tenant
notice in writing within thirty (30) days from the destruction of the Premises
of its election to either rebuild and restore them, or to terminate this Lease,
Landlord shall be deemed to have elected to rebuild or restore them, in which
event Landlord agrees, at its expense, promptly to rebuild or restore the
Premises to their condition prior to the damage or destruction. Tenant shall be
entitled to a reduction in rent while such repair is being made in the
proportion that the area of the Premises rendered untenantable by such damage
bears to the total area of the Premises. If Landlord initially estimates that
the rebuilding or restoration will exceed one hundred eighty (180) days or if
Landlord does not complete the rebuilding or restoration within one hundred
eighty (180) days following the date of destruction (such period of time to be
extended for delays caused by the fault or neglect of Tenant or because of acts
of God, acts of public agencies, labor disputes, strikes, fires, freight
embargoes, rainy or stormy weather, inability to obtain materials, supplies or
fuels, acts of contractors or subcontractors, or delay of the contractors or
subcontractors due to such causes or other contingencies beyond the control of
Landlord), then Tenant shall have the right to terminate this Lease by giving
fifteen (15) days prior written notice to Landlord. Notwithstanding anything
herein to the contrary. Landlord's obligation to rebuild or restore shall be
limited to the building and interior improvements constructed by Landlord as
they existed as of the commencement date of the Lease and shall not include
restoration of Tenant's trade fixtures, equipment, merchandise, or any
improvements, alterations or additions made by Tenant to the Premises, which
Tenant shall forthwith replace or fully repair at Tenant's sole cost and expense
provided this Lease is not cancelled according to the provisions above.

        Unless this Lease is terminated pursuant to the foregoing provisions,
this Lease shall remain in full force and effect. Tenant hereby expressly waives
the provisions of Section 1932, Subdivision 2, in Section 1933, Subdivision 4 of
the California Civil Code.

        In the event that the building in which the Premises are situated is
damaged or destroyed to the extent of not less than 33 1/8 % of the replacement
cost thereof, Landlord may elect to terminate this Lease, whether the Premises
be injured or not. Notwithstanding anything to the contrary herein, Landlord may
terminate this Lease in the event of an uninsured event or if insurance proceeds
are insufficient to cover one hundred percent of the rebuilding costs net of the
deductible.




                                      17.
<PAGE>   18

25.     EMINENT DOMAIN.

        If all or any part of the Premises shall be taken by any public or
quasi-public authority under the power of eminent domain or conveyance in lieu
thereof, this Lease shall terminate as to any portion of the Premises so taken
or conveyed on the date when title vests in the condemnor, and Landlord shall be
entitled to any and all payment, income, rent, award, or any interest therein
whatsoever which may be paid or made in connection with such taking or
conveyance, and Tenant shall have no claim against Landlord or otherwise for the
value of any unexpired term of this Lease. Notwithstanding the foregoing
paragraph, any compensation specifically awarded Tenant for loss of business,
Tenant's personal property, moving cost or loss of goodwill, shall be and remain
the property of Tenant.

        If (i) any action or proceeding is commenced for such taking of the
Premises or any part thereof, or if Landlord is advised in writing by any entity
or body having the right or power of condemnation of its intention to condemn
the premises or any portion thereof, or (ii) any of the foregoing events occur
with respect to the taking of any space in the Complex not leased hereby, or if
any spaces so taken or conveyed in lieu of such taking and Landlord shall decide
to discontinue the use and operation of the Complex, or decide to demolish,
alter or rebuild the Complex, then, in any of such events Landlord shall have
the right to terminate this Lease by giving Tenant written notice thereof within
sixty (60) days of the date of receipt of said written advice, or commencement
of said action or proceeding, or taking conveyance, which termination shall take
place as of the first to occur of the last day of the calendar month next
following the month in which such notice is given or the date on which title to
the Premises shall vest in the condemnor.

        In the event of such a partial taking or conveyance of the Premises, if
the portion of the Premises taken or conveyed is so substantial that the Tenant
can no longer reasonably conduct its business, Tenant shall have the privilege
of terminating this Lease within sixty (60) days from the date of such taking or
conveyance, upon written notice to Landlord of its intention so to do, and upon
giving of such notice this Lease shall terminate on the last day of the calendar
month next following in which such notice is given, upon payment by Tenant of
the rent form the date of such taking or conveyance to the date of termination.

        If a portion of the Premises be taken by condemnation or conveyance in
lieu thereof and neither Landlord nor Tenant shall terminate this Lease as
provided herein, this Lease shall continue in full force and effect as to the
part of the Premises not so taken or conveyed, and the rent herein shall be
apportioned as of the date of such taking or conveyance so that thereafter the
rent to be paid by Tenant shall be in the ratio that the area of the portion of
the Premises not so taken or conveyed bears to the total area of the Premises
prior to such taking.

26.     SALE OR CONVEYANCE BY LANDLORD.

In the event of a sale or conveyance of the Complex or any interest therein, by
any owner of the reversion then constituting Landlord, the transferor shall
thereby be released form any further liability upon any of the terms, covenants
or conditions (express or implied) herein contained in favor of Tenant, and in
such event, insofar as such transfer is concerned. Tenant agrees to look solely
to the responsibility of the successor in interest of such transferor in and to


                                      18.
<PAGE>   19

the Complex and this Lease for all obligations thereafter arising. This Lease
shall not be affected by any such sale or conveyance, and Tenant agrees, upon
recognition, to attorn to the successor in interest of such transferor.

27.     ATTORNMENT TO LENDER OR THIRD PARTY.

        In the event the interest of Landlord in the land and buildings in which
the leased Premises are located (whether such interest of Landlord is a fee
title interest or a leasehold interest) is encumbered by deed of trust, and such
interest is acquired by the lender or any third party through judicial
foreclosure or by exercise of a power of sale at private trustee's foreclosure
sale. Tenant hereby agrees, upon recognition, to attorn to the purchaser at any
such foreclosure sale and to recognize such purchaser as the Landlord under this
Lease. In the event lien of the deed of trust securing the loan from a Lender to
Landlord is prior and paramount to the Lease, this Lease shall nonetheless
continue in full force and effect for the remainder of the unexpired term
hereof, at the same rental herein reserved and upon all the other terms,
conditions and covenants herein contained.

28.     HOLDING OVER.

        Any holding over by Tenant after expiration or other termination of the
term of this Lease with the written consent of Landlord delivered to Tenant
shall not constitute a renewal or extension of the Lease or give Tenant any
rights in or to the leased Premises except as expressly provided in this Lease.
Any holding over after the expiration or other termination f the term of this
Lease, with the consent of Landlord, shall be construed to be a tenancy from
month to month, on the same terms and conditions herein specified insofar as
applicable except that the monthly Basic Rent shall be increased to an amount
equal to one hundred fifty (150%) percent of the monthly Basic Rent required
during the last month of the Lease term.

29.     CERTIFICATE OF ESTOPPEL.

        Tenant shall at any time upon not less than ten (10) days' prior written
notice to Landlord execute, acknowledge and deliver to Landlord a statement in
writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect) and the date to
which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to Tenant's knowledge, any uncured defaults on
the part of Landlord hereunder, or specifying such defaults, if any, are
claimed. Any such statmeent may be conclusively relied upon by any prospective
purchaser or encumbrancer of the Premises. Tenant's failure to deliver such
statement with in such time shall be conclusive upon Tenant that this Lease is
in full force and effect, without modification except as may be represented by
Landlord; that there are no uncured defaults in Landlord's performance, and that
not more than one month's rent has been paid in advance.

30.     CONSTRUCTION CHANGES.

It is understood that the description of the Premises and the location of
ductwork, plumbing and other facilities therein are subject to such minor
changes as Landlord or Landlord's architect determines to be desirable in the
course of construction of the Premises, and



                                      19.
<PAGE>   20

no such changes, or any changes in plans for any other portions of the Complex
shall affect this Lease or entitle Tenant to any reduction of rent hereunder or
result in any liability of Landlord to Tenant. Landlord does not guarantee the
accuracy of any drawings supplied to Tenant and verification for the accuracy of
such drawings rests with Tenant.

31.     RIGHT OF LANDLORD TO PERFORM.

        All terms, covenants and conditions of this Lease to be performed or
observed by Tenant shall be performed or observed by Tenant at Tenant's sole
cost and expense and without any reduction of rent. If Tenant shall fail to pay
any sum of money, or other rent, required to be paid by it hereunder and such
failure shall continue for five (5) days after written notice thereof by
Landlord, or shall fail to perform any other term or covenant hereunder on its
part to be performed, and such failure shall continue for thirty (30) days after
written notice thereof by Landlord, Landlord, without waiving or releasing
Tenant from any obligation of Tenant hereunder, may, but shall not be obligated
to, make any such payment or perform any such other term or covenant on Tenant's
part to be performed. All sums so paid by Landlord and all necessary costs of
such performance by Landlord together with interest thereon at the rate of the
prime rate of interest per annum as quoted by the Bank of America from the date
of such payment or performance by Landlord, shall be paid (and Tenant covenants
to make such payment) to Landlord on demand by Landlord, and Landlord shall have
(in addition to any other right or remedy of Landlord) the same rights and
remedies in the event of nonpayment by Tenant as in the case of failure by
Tenant in the payment of rent hereunder. See Paragraph 51.

32.     ATTORNEYS' FEES.

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

        B. Should Landlord be named as a defendant in any suit brought against
Tenant in connection with or arising out of Tenant's occupancy hereunder, Tenant
shall pay to Landlord its costs and expenses incurred in such suit, including a
reasonable attorney's fee.

33.     WAIVER.

        The waiver by either party of the other party's failure to perform or
observe any term, covenant or condition herein contained to be performed or
observed by such waiving party shall not be deemed to be a waiver of such term,
covenant or condition or of any subsequent failure of the party failing to
perform or observe the same or any other such term, covenant or condition
therein contained, and no custom or practice which may develop between the
parties hereto during the term hereof shall be deemed a waiver of, or in any way
affect, the right of either party to insist upon performance and observance by
the other party in strict accordance with the terms hereof.



                                      20.
<PAGE>   21

34.     NOTICES.

        All notices, demands, requests, advices or designations which may be or
are required to be given by either party to the other hereunder shall be in
writing. All notices, demands, requests, advices or designations by Landlord to
Tenant shall be sufficiently given, made or delivered if personally served on
Tenant by leaving the same at the Premises or if sent by United States certified
or registered mail, postage prepaid, addressed to Tenant at the Premises. All
notices demands, requests, advices or designations by Tenant to Landlord shall
be sent by United States certified or registered mail, postage prepaid,
addressed to Landlord at its offices at Westport Joint Venture, 2560 Mission
College Blvd., #101, Santa Clara, CA 95054. Each notice, request, demand, advice
or designatin referred to in this paragraph shall be deemed received on the date
of the personal service or mailing thereof in the manner herein provided, as the
case may be.

35.     EXAMINATION OF LEASE.

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

36.     DEFAULT BY LANDLORD.

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

37.     CORPORATE AUTHORITY.

        If Tenant is a corporation, (or a partnership) each individual executing
this Lease on behalf of said corporation (or partnership) represents and
warrants that he is duly authorized to execute and deliver this Lease on behalf
of said corporation (or partnership) in accordance with the by-laws of said
corporation (or partnership in accordance with the partnership agreement) and
that this Lease is binding upon said corporation (or partnership) in accordance
with its terms. If Tenant is a corporation, Tenant shall, within thirty (30)
days after execution of this Lease, deliver to Landlord a certified copy of the
resolution of the Board of Directors of said corporation authorizing or
ratifying the execution of this Lease.

38.     LIMITATION OF LIABILITY.

        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:


                                      21.
<PAGE>   22

      A.    The sole and exclusive remedy shall be against Landlord's interest
in the Premises leased herein;

      B.    No partner of Landlord shall be sued or named as a party in any suit
or action (except as may be necessary to secure jurisdiction of the partnership)

      C.    No service of process shall be made against any partner of Landlord
(except as may be necessary to secure jurisdiction of the partnership)

      A.    No partner of Landlord shall be required to answer or otherwise
plead to any service of process;

      B.    No judgment will be taken against any partner of Landlord;

      C.    Any judgment taken against any partner of Landlord may be vacated
and set aside at any time without hearing;

      D.    No writ of execution will ever be levied against the assets of any
partner of Landlord;

      E.    These covenants and agreements are enforceable both by Landlord and
also by any partner of Landlord.

      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 statute or at common law.

39.   MISCELLANEOUS AND GENERAL PROVISIONS.

      A.    Tenant shall not, without the written consent of Landlord, use the
name of the building for any purpose other than as the address of the business
conducted by Tenant in the Premises.

      B.    This Lease shall in all respects be governed by and construed in
accordance with the laws of the State of California. If any provision of this
Lease shall be invalid, unenforceable or ineffective for any reason whatsoever,
all other provisions hereof shall be and remain in full force and effect.

      C.    The term "Premises" includes the space leased hereby and any
improvements now or hereafter installed therein or attached thereto. The term
"Landlord" or any pronoun used in place thereof includes the plural as well as
the singular and the successors and assigns of Landlord. The term "Tenant" or
any pronoun used in place thereof includes the plural as well as the singular
and individuals, firms, associations, partnerships and corporations, and their
and each of their respective heirs, executors, administrators, successors and
permitted assigns, according to the context hereof, and the provisions of this
Lease shall inure to the benefit of and bind such heirs, executors,
administrators, successors and permitted assigns.

      The term "person" includes the plural as well as the singular and
individuals, firms, associations, partnerships and corporations. Words used in
any gender include other genders. If



                                      22.
<PAGE>   23

there be more than one Tenant the obligations of Tenant hereunder are joint and
several. The paragraph headings of this Lease are for convenience of reference
only and shall have no effect upon the construction or interpretation of any
provision here.

      D.    Time is of the essence of this Lease and of each and all of its
provisions.

      E.    At the expiration or earlier termination of this Lease, Tenant shall
execute, acknowledge and deliver to Landlord, within ten (10) days after written
demand from Landlord to Tenant, any quitclaim deed or other document required by
any reputable title company, licensed to operate in the State of California, to
remove the cloud or encumbrance created by this Lease from the real property of
which Tenant's Premises are a part.

      F.    This instrument along with any exhibits and attachments hereto
constitutes the entire agreement between Landlord and Tenant relative to the
Premises and this agreement and the exhibits and attachments may be altered,
amended or revoked only by an instrument in writing signed by both Landlord and
Tenant, Landlord and Tenant agree hereby that all prior or contemporaneous oral
agreements between and among themselves and their agents or representatives
relative to the leasing of the Premises are merged in or revoked by this
agreement.

      G.    Neither Landlord nor Tenant shall record this Lease or a short form
memorandum hereof without the consent of the other.

      H.    Tenant further agrees to execute any amendments required by a lender
to enable Landlord to obtain financing, so long as Tenant's rights hereunder are
not substantially affected.

      I.    Paragraphs 43 through 59 are added hereto and are included as a part
of this lease.

      J.    Clauses, plats and riders, if any, signed by Landlord and tenant and
endorsed on or affixed to this Lease are a part hereof.

      K.    Tenant covenants and agrees that no diminution or shutting off of
light, air or view by any structure which may be hereafter erected (whether or
not by Landlord) shall in any way affect his Lease, entitle Tenant to any
reduction of rent hereunder or result in any liability of Landlord to Tenant.

40.   BROKERS.

      Tenant warrants that it had dealings with only the following real estate
brokers or agents in connection with the negotiation of this Lease: none and
that it knows of no other real estate broker or agent who is entitled to a
commission in connection with this Lease.

41.   SIGNS.

      No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside of
the Premises or any exterior windows of the Premises without the written consent
of Landlord first had and obtained and Landlord shall have the right to remove
any such sign, placard, picture, advertisement, name or notice without notice



                                      23.
<PAGE>   24

to and at the expense of Tenant. If Tenant is allowed to print or affix or in
any way place a sign in, on, or about the Premises, upon expiration or other
sooner termination of this Lease, Tenant at Tenant's sole cost and expense shall
both remove such sign and repair all damage in such a manner as to restore all
aspects of the appearance of the Premises to the condition prior to the
placement of said sign.

      All approved signs or lettering on outside doors shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person approved of
by Landlord. Tenant shall not place anything or allow anything to be placed near
the glass of any window, door partition or wall which may appear unsightly from
outside the Premises.

      IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
Lease as of the day and year last written below.


<TABLE>

<S>                                                             <C>
LANDLORD:                                                       TENANT:

WESTPORT JOINT VENTURE                                          IPASS, INC.,
a California joint venture                                       a California corporation

JOHN ARRILLAGA SURVIVOR'S TRUST

By /s/ John Arrillaga                                           By   /s/ Michael Mansouri
  ----------------------------------------------------            ------------------------------------
    John Arrillaga, Trustee

Date  11/24/99                                                  Title Chairman & CEO
    -------------------------------------------------                ----------------------------------
PEERY PRIVATE INVESTMENT COMPANY WP, L.P.,
a California limited partnership                                Print or Type Name  Michael Mansouri
                                                                                  ---------------------
By /s/ Richard Perry                                            Date 11/21/99
  --------------------------------------------------                -----------------------------------
   Richard T. Peery, Trustee of the Richard T. Peery
   Separate Property Trust dated 7/20/77, as its
   General Partner

Date 11/24/99
    ------------------------------------------------
PEERY PUBLIC INVESTMENT COMPANY - WP, L.P.,
a California limited partnership

By: /s/ Richard Perry
   -------------------------------------------------
Richard T. Peery, Trustee of the Richard T. Peery
Separate Property Trust dated 7/20/77, as its
General Partner

Date  11/24/99
    ------------------------------------------------
</TABLE>


                                      24.
<PAGE>   25

Paragraphs 43 through 59 to Lease Agreement dated October 26, 1999, by and
between Westport Joint Venture, a California joint venture, as Landlord, and
iPass, Inc., a California corporation, as Tenant for 48,384+/- Square Feet of
Space Located at 3800 Bridge Parkway, Redwood City, California.

42.   BASIC RENT.

      In accordance with Paragraph 4A herein, the total aggregate sum of
TWENTY-FIVE MILLION NINE HUNDRED SEVENTY NINE THOUSAND SEVEN HUNDRED FIVE AND
38/100 DOLLARS ($25,979,705.38), shall be payable as follows:

      On January 15, 2000, the sum of ONE HUNDRED SIX THOUSAND THREE HUNDRED
SIXTY ONE AND 38/100 DOLLARS ($106,361.30) shall be due, representing the
prorated Basic Rent for the period of January 15, 200 through January 31, 2000.

      On February 1, 2000, the sum of ONE HUNDRED EIGHTY-ONE THOUSAND FOUR
HUNDRED FORTY AND NO/100 DOLLARS ($181,440.00) shall be due, and a like sum due
on the first day of each month thereafter, through and including February 1,
2001.

      On March 1, 2001, the sum of ONE HUNDRED EIGHTY-EIGHT THOUSAND SIX HUNDRED
NINETY-SEVEN AND 60/100 DOLLARS ($188,697.60) shall be due, and a like sum due
on the first day of each month thereafter, through and including February 1,
2002.

      On March 1, 2002, the sum of ONE HUNDRED NINETY-FIVE THOUSAND NINE HUNDRED
FIFTY-FIVE AND 20/100 DOLLARS ($195,955.20) shall be due, and a like sum due on
the first day of each month thereafter, through and including February 1, 2003.

      On March 1, 2003, the sum of TWO HUNDRED THREE THOUSAND TWO HUNDRED TWELVE
AND 80/100 DOLLARS ($203,212.80) shall be due, and a like sum due on the first
day of each month thereafter, through and including February 1, 2004.

      On March 1, 2004, the sum of TWO HUNDRED TEN THOUSAND FOUR HUNDRED SEVENTY
AND 40/100 DOLLARS ($210,470.40) shall be due, and a like sum due on the first
day of each month thereafter, through and including February 1, 2005.

      On March 1, 2005, the sum of TWO HUNDRED SEVENTEEN THOUSAND SEVEN HUNDRED
TWENTY-EIGHT AND NO/100 DOLLARS ($217,728.00) shall be due, and a like sum due
on the first day of each month thereafter, through and including February 1,
2006.

      On March 1, 2006, the sum of TWO HUNDRED TWENTY-FOUR THOUSAND NINE HUNDRED
EIGHTY-FIVE AND 60/100 DOLLARS ($224,985.60) shall be due, and a like sum due on
the first day of each month thereafter, through and including February 1, 2007.

      On March 1, 2007, the sum of TWO HUNDRED THIRTY-TWO THOUSAND TWO HUNDRED
FORTY-THREE AND 20/100 DOLLARS ($232,243.20) shall be due, and a like sum due on
the first day of each month thereafter, through and including February 1, 2008.


                                      25.
<PAGE>   26

      On March 1, 2008, the sum of TWO HUNDRED THIRTY-NINE THOUSAND FIVE HUNDRED
AND 80/100 DOLLARS ($239,500.80) shall be due, and a like sum due on the first
day of each month thereafter, through and including February 1, 2009.

      On March 1, 2009, the sum of TWO HUNDRED FORTY-SIX THOUSAND SEVEN HUNDRED
FIFTY-EIGHT AND 40/100 DOLLARS ($246,258.40) shall be due, and a like sum due on
the first day of each month thereafter, through and including February 1, 2010;
or until the entire aggregate sum of TWENTY-FIVE MILLION NINE HUNDRED
SEVENTY-NINE THOUSAND SEVEN HUNDRED FIVE AND 38/100 DOLLARS ($25,979,705.38) has
been paid.

43.   "AS-IS BASIS.

      Subject only to Paragraph 45 and to Landlord making the improvements shown
on EXHIBIT B to be attached hereto, it is hereby agreed that the Premises leased
hereunder is leased strictly on an "as-is" basis and in its present condition,
and in the configuration as shown on EXHIBIT B to be attached hereto, and by
reference made a part hereof. Except as noted herein, it is specifically agreed
between the parties that after Landlord makes the interior improvements as shown
on EXHIBIT B, Landlord shall not be required to make, nor be responsible for any
cost, in connection with any repair, restoration, and/or improvement to the
Premises in order for this Lease to commence, or thereafter, throughout the Term
of this Lease. Notwithstanding anything to the contrary within this Lease,
Landlord makes no warranty or representation of any kind or nature whatsoever as
to the condition or repair of the Premises, nor as to the use or occupancy which
may be made thereof.

44.   TENANT INTERIOR IMPROVEMENTS.

      Landlord shall, at its sole cost and expense, construct certain interior
improvements (the "Tenant Improvements") in the Premises, as shown on EXHIBIT B
to be attached to the Lease and Landlord agrees to deliver the Premises leased
hereunder to Tenant, at Landlord's expense, in the configuration shown in Red on
EXHIBIT B to be attached hereto. Notwithstanding anything to the contrary above,
it is specifically understood and agreed that Landlord shall be required to
furnish only a standard air conditioning/heating system, normal electrical
outlets, standard fire sprinkler systems, standard bathroom, standard lobby, 2'
x 4' suspended acoustical tile drop ceiling throughout the entire space leased,
carpeting and/or vinyl-coated floor tile, and standard office partitions and
doors, as shown on EXHIBIT B to be attached hereto; provided, however, that any
special HVAC and/or plumbing and/or electrical requirements over and above that
normally supplied by Landlord shall be 100 percent the responsibility of and be
paid for 100 percent by Tenant.

      It is further agreed that Tenant shall furnish Landlord with Tenant's
required specifications and a preliminary space plan showing the layout of the
improvements to be constructed in the Premises by November 15, 1999. At that
time, Landlord shall have the final interior plans drawn by Landlord's
architect. All of the plans and specifications shall be EXHIBIT B to this Lease.
If said preliminary plans and specifications for any items affecting the
interior improvements to be constructed in the building are not received by
Landlord for Landlord's approval (which approval shall not be unreasonably
withheld) by November 15, 1999, then it is


                                      26.
<PAGE>   27

agreed that, notwithstanding anything to the contrary in this Lease, this Lease
and Tenant's obligation to perform all terms, covenants and conditions of this
Lease shall commence February 15, 2000, regardless of whether or not the
building and interior improvements are completed on February 15, 2000, and
Landlord shall complete construction of the interior improvements as soon as
reasonably possible thereafter.

      Notwithstanding anything to the contrary, it is agreed that in the event
Tenant makes changes, additions or modifications to the plans and specifications
to be constructed by Landlord as set forth herein, or improvements are installed
for Tenant in excess of those to be provided Tenant by Landlord as set forth on
EXHIBIT B, any increased cost(s) resulting from said changes, additions and/or
modifications and/or improvements in excess of those to be provided Tenant shall
be contracted for with Landlord and paid for one hundred percent (100%) by
Tenant.

      The interior shall be constructed in accordance with EXHIBIT B of the
Lease, it being agreed, however, that if the interior improvements constructed
by Landlord relating thereto, do not conform exactly to the plans and
specifications as set forth in the Lease, and the general appearance, structural
integrity, and Tenant's uses and occupancy of the Premises and interior
improvements relating thereto are not materially or unreasonably affected by
such deviation, it is agreed that the commencement date of the Lease, and
Tenant's obligation to pay rental, shall not be affected, and Tenant hereby
agrees, in such event, to accept the Premises and interior improvements as
constructed by Landlord.

      Tenant shall have thirty (30) days after the Commencement Date to provide
Landlord with a "punch list" pertaining to Landlord's work with respect to
Tenant's interior improvements. As soon as reasonably possible thereafter,
Landlord, or one of Landlord's representatives (if so approved by Landlord), and
Tenant shall conduct a joint walk-through of the Premises (if Landlord so
requires), and inspect such Tenant Improvements, using their best efforts to
agree on the incomplete or defective construction related to the Tenant
Improvements installed by Landlord. After such inspection has been completed,
Landlord shall prepare, and both parties shall sign, a list of all "punch list"
items which the parties reasonably agree are to be corrected by landlord (but
which shall exclude any damage or defects caused by Tenant, its employees,
agents or parties Tenant has contracted with to work on the Premises). landlord
shall have thirty (30) days thereafter (or longer if necessary, provided
Landlord is diligently pursuing the completion of the same) to complete, at
Landlord's expense, the repairs on the "punch list" without the Commencement
Date of the Lease and Tenant's obligation to pay Rental thereunder being
affected. This Paragraph shall be of no force and effect if Tenant shall fail to
give any such notice to Landlord within thirty (30) days after the Commencement
Date of this Lease.

45.   CONSENT.

      Whenever the consent of one party to the other is required hereunder, such
consent shall not be unreasonably withheld.

46.   CHOICE OF LAW; SEVERABILITY.

      This Lease shall in all respects be governed by and construed in
accordance with the laws of the State of California. If any provisions of this
Lease shall be invalid, unenforceable or



                                      27.
<PAGE>   28

ineffective for any reason whatsoever, all other provisions hereof shall be and
remain in full force and effect.

47.   AUTHORITY TO EXECUTE.

      The parties executing this Lease Agreement hereby warrant and represent
that they are properly authorized to execute this Lease Agreement and bind the
parties on behalf of whom they execute this Lease Agreement and to all of the
terms, covenants and conditions of this Lease Agreement as they relate to the
respective parties hereto.

48.   ASSESSMENT CREDITS.

      The demised property herein may be subject to a special assessment levied
by the City of Redwood City as part of an Improvement District. As a part of
said special assessment proceedings (if any), additional bonds were or may be
sold and assessments were or may be levied to provide for construction
contingencies and reserve funds. Interest shall be earned on such funds created
for contingencies and on reserve funds which will be credited for the benefit of
said assessment district. To the extent surpluses are created in said district
through unused contingency funds, interest earnings or reserve funds, such
surpluses shall be deemed the property of Landlord. Notwithstanding that such
surpluses may be credited on assessments otherwise due against the Leased
Premises, Tenant shall pay to Landlord, as additional rent if, and at the time
of any such credit of surpluses, an amount equal to all such surpluses so
credited. For example: if (i) the property is subject to an annual assessment of
$1,000.00, and (ii) a surplus of $200.00 is credited towards the current year's
assessment which reduces the assessment amount shown on the property tax bill
from $1,000.00 to $800.00, Tenant shall, upon receipt of notice from Landlord,
pay to Landlord said $200.00 credit as Additional Rent.

49.   ASSIGNMENT AND SUBLETTING (CONTINUED).

      A.    In addition to and notwithstanding anything to the contrary in
Paragraph 19 of this Lease and provided Tenant is not in default of this Lease,
Landlord hereby agrees to consent to: (1) Tenant's assigning or subletting said
Lease to: (i) any parent or subsidiary corporation, or corporation with which
Tenant merges or consolidates provided that the net worth of said parent or
subsidiary corporation, or said corporation has a net worth equal to or greater
than the net worth of Tenant (a) at the time of Lease execution or (b) at the
time of such assignment, merger, or consolidation (whichever is greater); or
(ii) any third party or entity to whom Tenant sells all or substantially all of
its assets; provided, that the net worth of the resulting or acquiring
corporation has a net worth after the merger, consolidation or acquisition equal
to or greater than the net worth of Tenant (a) at the time of Lease execution or
(b) at the time of such merger, consolidation or acquisition, whichever is
greater (collectively "Permitted Transfers"); (2) waive its right to terminate
the Lease due to a Permitted Transfer; and (3) waive any rights to Excess Rent
related to a Permitted Transfer. No such assignment or subletting will release
the Tenant from its liability and responsibility under this Lease to the extend
Tenant continues in existence following such transaction. Notwithstanding the
above, Tenant shall be required to (a) give Landlord written notice prior to
such assignment or subletting to any party as described in (i) and (ii) above,
(b) execute Landlord's consent document prepared by Landlord reflecting the



                                      28.
<PAGE>   29

assignment or subletting and (c) pay Landlord's costs for processing said
Consent prior to the effective date of said assignment or sublease.

      B.    Notwithstanding the foregoing, Landlord and Tenant agree that it
shall not be unreasonable for Landlord to refuse to consent to a proposed
assignment, sublease or other transfer ("Proposed Transfer") if the Premises or
any other portion of the Property would become subject to additional or
different Government Requirements as a direct or indirect consequence of the
Proposed Transfer and/or the Proposed Transferee's use and occupancy of the
Premises and the Property. However, Landlord may, in its sole discretion,
consent to such a proposed Transfer where Landlord is indemnified by Tenant and
(i) Subtenant or (ii) Assignee, in form and substance satisfactory to Landlord's
counsel, by Tenant and/or the Proposed Transferee from and against any and all
costs, expenses, obligations and liability arising out of the Proposed Transfer
and/or the Proposed Transferee's use and occupancy of the premises and the
Property.

      C.    Any and all sublease agreement(s) between Tenant and any and all
subtenant(s) (which agreements must be consent to by Landlord, pursuant to the
requirements of this Lease) shall contain the following language:

            "If Landlord and Tenant jointly and voluntarily elect, for any
      reason whatsoever, to terminate the Master Lease prior to the scheduled
      Master Lease termination date, then this Sublease (if then still in
      effect) shall terminate concurrently with the termination of the Master
      Lease. Subtenant expressly acknowledges and agrees that (1) the voluntary
      termination of the Master Lease by Landlord and Tenant and the resulting
      termination of this Sublease shall not give Subtenant any right or power
      to make any legal or equitable claim against Landlord, including without
      limitation any claim for interference with contract or interference with
      prospective economic advantage, and (2) Subtenant hereby waives any and
      all rights it may have under law or at equity against Landlord to
      challenge such an early termination of the Sublease, and unconditionally
      releases and relieves Landlord, and its officers, directors, employees and
      agents, from any and all claims, demands, and/or causes of action
      whatsoever (collectively, "Claims"), whether such matters are known or
      unknown, latent or apparent, suspected or unsuspected, foreseeable or
      unforeseeable, which Subtenant may have arising out of or in connection
      with any such early termination of this Sublease. Subtenant knowingly and
      intentionally waives any and all protection which is or may be given by
      Section 1542 of the California Civil Code which provides as follows: "A
      general release does not extend to claims which the creditor does not know
      or suspect to exist in his favor at the time of executing the release,
      which if known by him must have materially affected his settlement with
      debtor.

            The term of this Sublease is therefore subject to early termination.
      Subtenant's initials here below evidence (a) Subtenant's consideration of
      and agreement to this early termination provision, (b) Subtenant's
      acknowledgment that, in determining the net benefits to be derived by
      Subtenant under the terms of this Sublease, Subtenant has anticipated the
      potential for early termination, and (c) Subtenant's agreement to the
      general waiver and release of Claims above.


                                      29.
<PAGE>   30

              Initials:                           Initials:                    "
                       ----------------------              --------------------
                             Subtenant                           Tenant

50.   BANKRUPTCY AND DEFAULT.

      Paragraph 22 is modified to provide that with respect to non-monetary
defaults not involving Tenant's failure to pay Basic Rent or Additional Rent,
Tenant shall not be in default of any non-monetary obligation if (i) more than
thirty (30) days is required to cure such non-monetary default, and (ii) Tenant
commences cure of such default as soon as reasonably practicable after receiving
written notice of such default from Landlord and thereafter continuously and
with due diligence prosecutes such cure to completion.

51.   ABANDONMENT.

      Paragraph 23 is modified to provide that Tenant shall not be in default
under the Lease if it leaves all or any part of Premises vacant so long as (i)
tenant is performing all of its other obligations under the Lease including the
obligation to pay Basic Rent and Additional Rent (ii) Tenant provides on-site
security during normal business hours for those parts of the Premises left
vacant, (iii) such vacancy does not materially and adversely affect the validity
or coverage of any policy of insurance carried by Landlord with respect to the
Premises, and (iv) the utilities and heating and ventilation system are operated
and maintained to the extent necessary to prevent damage to the Premises or its
systems.

52.   HAZARDOUS MATERIALS.

      Landlord and Tenant agree as follows with respect to the existence or use
of "Hazardous Materials" (as defined herein) on, in, under or about the Premises
and real property located beneath said Premises and the common areas of the
Complex (hereinafter collectively referred to as the "Property"):

      A.    As used herein, the term "Hazardous Materials," shall mean any
material, waste, chemical, mixture or byproduct which is or hereafter is
defined, listed or designated under Environmental Laws (defined below) as a
pollutant, or as a contaminant, or as a toxic or hazardous substance, waste or
material, or any other unwholesome, hazardous, toxic, biohazardous or
radioactive material, waste, chemical, mixture or byproduct or which is listed,
regulated or restricted by any Environmental Law (including, without limitation,
petroleum hydrocarbons or any distillates or derivatives or fractions thereof,
polychlorinated biphenyls or asbestos). As used herein, the term "Environmental
Laws" shall mean any applicable Federal, State of California or local government
law (including common law), statute, regulation, rule, ordinance, permit,
license, order, requirement, agreement or approval, or any determination,
judgment, directive or order of any executive or judicial authority at any level
of Federal, State of California or local government (whether now existing or
subsequently or promulgated) relating to pollution or the protection of the
environment, ecology, natural resources or public health and safety.

      B.    Tenant shall obtain Landlord's written consent, which may be
withheld in Landlord's discretion, prior to the occurrence of any Tenant's
Hazardous Materials Activities (defined below); provided, however, that
Landlord's consent shall not be required for normal use in


                                      30.
<PAGE>   31

compliance with applicable Environmental Laws of customary household and office
supplies (Tenant shall first provide Landlord with a list of said materials
use), such as mild cleaners, lubricants and copier toner. As used herein, the
term "Tenant's Hazardous Materials Activities" shall mean any and all use,
handling, generation, storage, disposal, treatment, transportation, release,
discharge or emission of any Hazardous Materials on, in, beneath, to, from, at
or about the Property, in connection with Tenant's use of the Property, or by
Tenant or by any of Tenant's agents, employees, contractors, vendors, invitees,
visitors or its future subtenants or assignees. Tenant agrees that any and all
Tenant's Hazardous Materials Activities shall be conducted in strict, full
compliance with applicable Environmental Laws at Tenant's expense, and shall not
result in any contamination of the Property or the environment. Tenant agrees to
provide Landlord with prompt written notice of any spill or release of Hazardous
Materials at the Property during the term of the Lease of which Tenant becomes
aware, and further agrees to provide Landlord with prompt written notice of any
violation of Environmental Laws in connection with Tenant's Hazardous Materials
Activities of which Tenant becomes aware. If Tenant's Hazardous Materials
Activities involve Hazardous Materials other than normal use of customary
household and office supplies, Tenant also agrees at Tenant's expense: (i) to
install such Hazardous Materials monitoring, storage and containment devices as
Landlord reasonably deems necessary (Landlord shall have no obligation to
evaluate the need for any such installation or to require any such
installation); (ii) provide Landlord with a written inventory of such Hazardous
Materials, including an update of same each year upon the anniversary date of
the Commencement Date of the Lease ("Anniversary Date"); and (iii) on each
Anniversary Date, to retain a qualified environmental consultant, acceptable to
Landlord, to evaluate whether Tenant is in compliance with all applicable
Environmental Laws with respect to Tenant's Hazardous Materials Activities.
Tenant, at its expense, shall submit to Landlord a report from such
environmental consultant which discusses the environmental consultant's findings
within two (2) months of each Anniversary Date. Tenant, at its expense, shall
promptly undertake and complete any and all steps necessary, and in full
compliance with applicable Environmental Laws, to fully correct any and all
problems or deficiencies in connection with Tenant's Hazardous Materials
Activities identified by the environmental consultant, and promptly provide
Landlord with documentation of all such corrections.

      C.    Prior to termination or expiration of the Lease, Tenant, at its
expense, shall (i) properly remove from the Property all Hazardous Materials
which come to be located at the Property in connection with Tenant's Hazardous
Materials Activities, and (ii) fully comply with and complete all facility
closure requirements of applicable Environmental Laws regarding Tenant's
Hazardous Materials Activities, including but not limited to (x) properly
restoring and repairing the Property to the extent damaged by such closure
activities, and (y) obtaining from the local Fire Department or other
appropriate governmental authority with jurisdiction a written concurrence that
closure has been completed in compliance with applicable Environmental Laws.
Tenant shall promptly provide Landlord with copies of any claims, notices, work
plans, data and reports prepared, received or submitted in connection with any
such closure activities.

      D.    If Landlord, in its sole discretion, believes that the Property has
become contaminated as a result of Tenant's Hazardous Materials Activities,
Landlord in addition to any other rights it may have under this Lease or under
Environmental Laws or other laws, may enter upon the Property and conduct
inspection, sampling and analysis, including but not limited to, obtaining and
analyzing samples of soil and groundwater, for the purpose of determining the
nature and


                                      31.
<PAGE>   32

extent of such contamination. Tenant shall promptly reimburse Landlord for the
costs of such an investigation, including but not limited to, reasonable
attorneys' fees Landlord incurs with respect to such investigation, that
discloses Hazardous Materials contamination for which Tenant is liable under
this Lease. Except as may be required of Tenant by applicable Environmental
Laws, Tenant shall not perform any sampling, testing or drilling to identify the
presence of any Hazardous Materials at the Property, without Landlord's prior
written consent which may be withheld in Landlord's discretion. Tenant shall
promptly provide Landlord with copies of any claims, notices, work plans, data
and reports prepared, received or submitted in connection with any sampling,
testing or drilling performed pursuant to the preceding sentence.

      E.    Tenant shall indemnify, defend (with legal counsel acceptable to
Landlord, whose consent shall not unreasonably be withheld) and hold harmless
Landlord, its employees, assigns, successors, successors-in-interest, agents and
representatives from and against any and all claims (including but not limited
to third party claims from a private party or a government authority),
liabilities, obligations, losses, causes of action, demands, governmental
proceedings or directives, fines, penalties, expenses, costs (including but not
limited to reasonable attorneys', consultants' and other experts' fees and
costs), and damages, which arise from or relate to: (i) Tenant's Hazardous
Materials Activities; (ii) any Hazardous Materials contamination caused by
Tenant prior to the Commencement Date of the Lease; or (iii) the breach of any
obligation of Tenant under this Paragraph 53 (collectively, "Tenant's
Environmental Indemnification"). Tenant's Environmental Indemnification shall
include but is not limited to the obligation to promptly and fully reimburse
Landlord for losses in or reductions to rental income, and diminution in fair
market value of the Property. Tenant's Environmental Indemnification shall
further include but is not limited to the obligation to diligently and properly
implement to completion, at Tenant's expense, any and all environmental
investigation, removal, remediation, monitoring, reporting, closure activities
or other environmental response action (collectively, "Response Actions").
Tenant shall promptly provide Landlord with copies of any claims, notices, work
plans, data and reports prepared, received or submitted in connection with any
Response Actions.

      F.    Landlord hereby informs Tenant, and Tenant hereby acknowledges, that
the Premises and adjacent properties overlie a former solid waste landfill site
commonly known as the Westport Landfill ("Former Landfill"). Landlord further
informs Tenant, and Tenant hereby acknowledges, that (i) prior testing has
detected the presence of low levels of certain volatile and semi-volatile
organic compounds and other contaminants in the groundwater, in the leachate
from the landfilled sold waste, and/or in certain surface waters of the
Property, as more fully described in Section 2.3.2 of the report entitled
"Revised Discharge Monitoring Plan, Westport Landfill Site, Redwood City,
California," prepared by Geomatrix Consultants, dated May 1996 ("Discharge
Plan"), (ii) methane gas is or may be generated by the landfilled solid waste
(item "i" immediately preceding and this item "ii" are hereafter collectively
referred to as the "Landfill Contamination"), and (iii) the Premises and the
Former Landfill are subject to the California Regional Water Quality Control
Board's ("Regional Board") Waste Discharge Requirements Order No. 94-181 (the
"Order"). The Order is attached hereto as EXHIBIT C. As evidenced by their
initials set forth immediately below, Tenant acknowledges that Landlord has
provided Tenant with copies of the environmental reports listed on EXHIBIT D,
and Tenant acknowledges that Tenant and Tenant's experts (if any) have had ample
opportunity to review such reports and


                                      32.
<PAGE>   33

that Tenant has satisfied itself as to the environmental conditions of the
Property and the suitability of such conditions for Tenant's intended use of the
Property.

        Initials: /s/ MM                           Initials:  /s/ JA
                 ----------------------------               --------------------
                      Tenant                                     Landlord

      G.    Landlord shall indemnify, defend and hold harmless Tenant against
any and all claims asserted by third parties (excluding any agents, employees,
contractors, vendors, invitees, visitors, future subtenants and assignees of
Tenant, and excluding any other parties related to Tenant), including all
liabilities, judgments, damages, suits, orders, government directives, costs and
expenses in connection with such claims, which arise from (i) the Landfill
Contamination, or (ii) the Order, as may be amended ("Landlord's Environmental
Indemnity"); provided, however, that Landlord's Environmental Indemnity shall be
subject to the following limitations and conditions:

            (a)   Landlord's Environmental Indemnity shall not apply to any
economic or consequential damages suffered by Tenant, including but not limited
to loss of business or profits.

            (b)   Landlord's Environmental Indemnity shall not apply, without
limitation, to any releases caused by Tenant's Hazardous Materials Activities.

            (c)   Tenant acknowledges that Landlord must comply with the Order,
as may be amended, and with directives of government authorities including the
Regional Board, with respect to the Contamination and the Former Landfill.
Tenant further acknowledges that groundwater monitoring wells, methane recovery
wells and equipment, and other environmental control devices are located on and
about the Premises and may be modified or added to during the term of the Lease
(collectively, "Environmental Equipment"), and that environmental investigation,
monitoring, closure and post-closure activities (collectively, "Environmental
Activities") will be performed on the Premises during the term of the Lease.
Tenant shall allow Landlord, and any other party named as a discharger under the
Order, as may be amended, and their respective agents, consultants and
contractors, and agents of governmental environmental authorities with
jurisdiction ("Government Representatives") to enter the Premises to access the
Environmental Equipment and to perform Environmental Activities during the term
of the Lease, provided that Tenant's use and occupancy of the Premises shall not
unreasonably be disturbed.

            (d)   Tenant and Landlord shall reasonably cooperate with each other
regarding any Environmental Activities to be performed, and regarding any
Environmental Equipment to be installed, maintained, or removed on the Premises
during the term of the Lease.

            (e)   Tenant shall be responsible at its expense for repairing any
Environmental Equipment damages due to the negligence of Tenant or Tenant's
agents, employees, contractors, vendors, invitees, visitors, future subtenants
or assignees (such terms "invitees" and "visitors" as used in this Paragraph 53
shall not include Landlord or any other party named as a discharger under the
Order as may be amended, or any of their respective agents, consultants or
contractors, or any Government Representatives).


                                      33.
<PAGE>   34

      It is agreed that the Tenant's responsibilities related to Hazardous
Materials will survive the expiration or termination of this Lease and that
Landlord may obtain specific performance of Tenant's responsibilities under this
Paragraph 53.

53.   LEASE TERMS CO-TERMINOUS.

      It is acknowledged that (i) concurrently with the execution of this Lease,
Landlord and Tenant are also executing a second Lease Agreement dated October
26, 1999 (hereinafter referred to as the "Building 19 Lease") affecting adjacent
property located at 3600 Bridge Parkway, Redwood City and (ii) it is the
intention of the parties that the term of this Lease be co-terminous with the
term of the Building 19 Lease such that the terms of both leases expire on the
same date; provided, however, the termination of this Lease resulting from the
terms and conditions stated under Paragraph 19 "Bankruptcy and Default" (subject
to Landlord's option as stated in the respective leases' "Cross Default"
Paragraph) or Paragraph 21 "Destruction" or Paragraph 22 "Eminent Domain" shall
not result in a termination of the Building 19 Lease, unless Landlord elects, at
its sole and absolute discretion, to terminate both of the leases.

54.   CROSS DEFAULT.

      As a material part of the consideration for the execution of this Lease by
Landlord, it is agreed between Landlord and Tenant that a default under this
Lease, or a default under said Building 19 Lease may, at the option of Landlord,
be considered a default under both leases, in which event Landlord shall be
entitled (but in no event required) to apply all rights and remedies of Landlord
under the terms of one lease to both leases including, but not limited to, the
right to terminate one or both of said leases by reason of a default under said
Building 19 Lease or hereunder.

55.   ADDITIONAL RENT CONTINUED.

      The following items shall be excluded from "Additional Rent":

      A.    Leasing commissions, attorney's fees, costs, disbursements, and
other expenses incurred in connection with negotiations with other tenants, or
disputes between Landlord and other third party not related to Tenant
(hereinafter referred to as "Third Party"), or in connection with marketing,
leasing, renovating, or improving space for other current or prospective tenants
or other current or prospective occupants of the Complex; notwithstanding
anything to the contrary herein, any costs and expenses Landlord is entitled to
be reimbursed for as stated under Paragraph 22 ("Bankruptcy and Default") ARE
NOT excluded Additional Rent items as reflected in this Paragraph 56.

      B.    The cost of any service sold to any other Third Party or other
occupant whose leased premises are not part of the Premises leased herein and
for which Landlord is entitled to be reimbursed as an additional charge or
rental over and above the basic rent and additional rent payable under the lease
agreement with said other tenant.

      C.    Any costs, fines, or penalties incurred due to violations by
Landlord of any governmental rule or authority, provided Tenant is not
responsible under the Lease for such


                                      34.
<PAGE>   35

costs, fines and/or penalties, and/or provided Tenant's actions or inactions did
not cause, in whole or in part, such costs, fines and/or penalties.

      D.    Wages, salaries, or other compensation paid to executive employees
above the grade of Property Manager.

      E.    Repairs or other work occasioned by fire, windstorm, or other
insured peril, to the extent that Landlord shall receive proceeds of such
insurance or would have received such proceeds had Landlord maintained the
insurance coverage required under this Lease providing said insurance coverage
was available and Tenant paid its share of the premium as required under the
Lease and any insurance deductible(s) which Tenant is responsible for paying and
provided Tenant is not responsible for the damage to the Premises.

      F.    Except as otherwise noted in this Lease, any mortgage debt, or
ground rents or any other amounts payable under any ground lease for the
Property.

      G.    Subject to the terms of Paragraph 53G above, Landlord's costs
related to Lease Paragraphs 53F and 53G.

56.   SECURITY DEPOSIT IN THE FORM OF AN IRREVOCABLE STANDBY LETTER OF CREDIT.

      The cash Security Deposit provided for in Paragraph 4G of the Lease shall
be deposited by Tenant with Landlord upon execution of this Lease; however,
Tenant shall have the right, at Tenant's sole election, to replace one-half
($246,758.40) of the cash Security Deposit held by Landlord with an irrevocable
letter of credit, drawn upon an institutional lender reasonably acceptable and
accessible to Landlord in form and content reasonably satisfactory to Landlord
and for a term equal to the Term of this Lease plus a period of sixty (60) days,
and said irrevocable letter of credit shall not be subject to annual renewal.
Said financial institution must agree that the presentment for demand may be
made in San Jose, Santa Clara or Palo Alto, California. One half of the cash
Security Deposit ($246,758.40) held by Landlord shall be refunded to Tenant upon
Landlord's receipt of an acceptable irrevocable letter of credit. If Tenant
defaults with respect to any provisions of this Lease, including but not limited
to provisions relating to the payment of Rent, Landlord may (but shall not be
required to) draw down on the irrevocable letter of credit for payment of any
sum which Landlord may spend or become obligated to spend by reason of Tenant's
default, or to compensate Landlord for any loss or damage which Landlord may
suffer by reason of Tenant's default. Landlord and Tenant acknowledge that such
irrevocable letter of credit will be treated as if it were a cash Security
Deposit, and such irrevocable letter of credit may be drawn down upon by
Landlord upon demand and presentation of evidence of the identity of Landlord to
the issuing bank, in the event that Tenant defaults with respect to any
provision of this Lease and such default is not cured within any applicable cure
period. Landlord acknowledges that it is not entitled to draw down such
irrevocable letter of credit unless Landlord would have been entitled to draw
upon a cash Security Deposit pursuant to the terms of Paragraph 4G of the Lease.
Concurrently with the delivery of the required information to the issuing bank,
Landlord shall deliver to Tenant written evidence of the default upon which the
draw down was based, together with evidence that Landlord has provided to Tenant
the written notice of such default which was required under the applicable
provision of the Lease, and evidence of the failure of Tenant to cure such
default


                                      35.
<PAGE>   36

within the applicable grace period following receipt of such notice of default.
If any portion of the irrevocable letter of credit is used or applied pursuant
hereto, Tenant shall, within ten (10) days after receipt of a written demand
therefor from Landlord, restore and replace the value of such security by either
(i) depositing cash with Landlord in the amount equal to the sum drawn down
under the irrevocable letter of credit, or (ii) increasing the irrevocable
letter of credit to its value immediately prior to such application. Tenant's
failure to replace the value of the security as provided in the preceding
sentence shall be a material breach of its obligation under this Lease.

57.   ASSIGNMENT OF WARRANTIES.

      During the Term of the Lease, Landlord hereby assigns to Tenant all of
Landlord's Contractor's warranties and shall cooperate with Tenant in enforcing
any of such warranties except that Landlord shall not be required to pay any
legal fees or incur any expenses in this regard.

58.   BROKERS.

      Landlord and Tenant each represent to the other that they have dealt with
no real estate brokers, agents, or finders in connection with this transaction,
except as follows: Cornish & Carey Oncor International ("C&C"), whose commission
shall be paid by Landlord in accordance with Landlord's standard commission
schedule which commission for this Lease is a total of $100,000.00. Each party
agrees to defend, protect, indemnify and hold the other party harmless from and
against all claims for brokerage commissions, finder's fees, and other
compensation made by any broker, agent, or finder as consequence of the
indemnifying party's actions or dealing with such broker, agent or finder. The
parties hereto acknowledge that Landlord will not pay an additional brokerage
fee to C&C or any broker in the event the term of this Lease is extended for any
reason whatsoever.




                                      36.
<PAGE>   37

                              WESTPORT OFFICE PARK

                            REDWOOD CITY, CALIFORNIA


                                     [MAP]