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                                                                   EXHIBIT 10.01



                                  OFFICE LEASE

THIS LEASE is made on the 28 day of March, 2000 by and between DLC Redwood City,
a California limited partnership (hereinafter called "Landlord"), NIKU, Inc. a
Delaware corporation (hereinafter called "Tenant").

        IN CONSIDERATION OF THE MUTUAL PROMISES CONTAINED HEREIN, THE PARTIES
        AGREE AS FOLLOWS:

1.      Premises. Landlord leases to Tenant and Tenant leases from Landlord,
        upon the terms and conditions herein set forth, those certain premises
        (the "Premises") situated at 350 Convention Way which includes a 3 story
        Class "A" mid-rise office building of approximately 75,945 rentable
        square feet ("Building") and a 4 level parking garage (the Building and
        parking garage together "Complex") in the City of Redwood City, County
        of San Mateo, California, as outlined in Exhibit A, attached hereto and
        incorporated herein by this reference, and described as follows:

        Approximately seventy five thousand nine hundred forty-five (75,945)
        rentable square feet on the first, second and third floors of the
        complex (i.e.: 100% of the Building).

2.      Term. The term of this Lease shall commence on the date ("Commencement
        Date") which is the date that the Improvements are Substantially
        Completed, as these terms are hereinafter defined in Paragraph 6 and
        Exhibit C of this Lease which is attached hereto and made part hereof.

        Landlord shall send to Tenant a notification, in the form attached
        hereto as Exhibit B and incorporated herein by this reference, stating
        the Commencement Date, when it is ascertained.

        The term of the Lease shall end fifteen (15) years from the Commencement
        Date (the "Term"), unless sooner terminated pursuant to any provision
        hereof. Should the Lease not commence on the first (1st) day of the
        month, the Lease shall nonetheless terminate on the last day of the
        month, which is fifteen (15) years after the Commencement Date of the
        Term as provided herein.

3.      Rent. All sums payable to Landlord under this Lease, including but not
        limited to the sums set forth in this Paragraph 3, are deemed "Rent" for
        the Premises. All Rent shall be paid without deduction or offset, prior
        notice, abatement or demand, except as herein provided, to Landlord, c/o
        Dewey Land Company, 999 Baker Way, Suite 300 San Mateo, CA 94404
        Attention: Accounting, or at such other place as may be designated from
        time to time by Landlord.

        A.      Basic Rent. Tenant shall pay to Landlord, as basic rent ("Basic
                Rent") for the Premises the amount ("Basic Rent") for the
                initial year of the Lease Term of Four Hundred Thirty Two
                Thousand Eight Hundred Eighty-Six and 50/100ths Dollars
                ($432,886.50) ($5.70 per rentable square foot) per month in
                lawful money of the United States of America, subject to
                adjustment as provided in subparagraph 3.B, below.

                Basic Rent for the first month of the Term of this Lease shall
                be paid, in advance, on the execution hereof. Basic Rent shall,
                beginning with second month of the Term of this Lease, be due
                and payable in advance on the first day of such month and on the
                first (1st) day of each succeeding calendar month until the end
                of the term. Rent for any period during the Term hereof which is
                for less than one (1) full month shall be a pro rata portion of
                the monthly Rent payment.

                Tenant acknowledges that late payment by Tenant to Landlord of
                Basic Rent or any other payment due Landlord will cause Landlord
                to incur costs not contemplated by this Lease, the exact amount
                of such costs being extremely difficult and impracticable to
                fix. Such costs include, without limitation, processing and
                accounting charges, and late charges that may be imposed on
                Landlord by the terms of any encumbrance and note secured by any
                encumbrance covering the Premises. Therefore, if any installment
                of Rent or other payment due from Tenant is not received by
                Landlord within three (3) days following the date it is due and
                payable, Tenant shall pay to Landlord, in addition to the Rent
                due, and in addition to interest thereon as provided in
                Paragraph 14, an additional sum of ten percent (10%) of the
                overdue amount as a late charge. The parties agree that this
                late charge and interest represents a fair and reasonable
                estimate of the costs that Landlord will incur by reason of late
                payment by Tenant. Acceptance of any late charge shall not
                constitute a waiver of Tenant's default with respect to the
                overdue amount, nor prevent Landlord from exercising any of the
                other rights and remedies available to Landlord.



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        B.      Basic Rent Increase. The Basic Rent shall be subject to
                adjustment as of the first day of the thirteenth month of the
                Term if the Term commenced on the first day of a calendar month,
                or the month in which the first anniversary of the Commencement
                Date occurs otherwise and annually thereafter each year
                ("Adjustment Date") as follows:

                The base for computing the adjustment is the Consumer Price
                Index, All Urban Consumers, San Francisco-Oakland-San Jose
                Metropolitan Area average (1982-1984=100), published by the
                United States Department of Labor, Bureau of Labor Statistics
                ("Index"), which is published most immediately preceding a date
                one (1) year prior to the Adjustment Date ("Beginning Index").
                The Index published most immediately preceding the Adjustment
                Date in question ("Extension Index") is to be used in
                determining the amount of the adjustment. If the Extension Index
                has increased over the Beginning Index, the Basic Rent for the
                following year (until the next Basic Rent adjustment) shall be
                set by multiplying the monthly Basic Rent applicable for the
                period immediately preceding the Adjustment Date by a fraction,
                the numerator of which is the Extension Index and the
                denominator of which is the Beginning Index. In no event shall
                the increase in Basic Rent on any Adjustment Date be less than
                three percent (3%) per year nor greater than six percent (6%)
                per year. In no event shall any delay by Landlord in notifying
                Tenant of the adjustment of Base Rent relieve Tenant of paying
                the adjusted Base Rent for any period prior to the date of
                notice from Landlord.

                If the Index is changed so that the base year differs from that
                in effect when the Term commences, the Index shall be converted
                in accordance with the conversion factor published by the United
                States Department of Labor, Bureau of Labor Statistics. If the
                Index is discontinued or revised during the Term, such other
                government index or computation with which it is replaced shall
                be used to obtain substantially the same result as would be
                obtained if the Index had not been discontinued or revised.

        C.      Additional Rent; Operating Expenses and Taxes. The parties
                acknowledge and agree that it is their intent to enter into an
                "absolute net" lease whereby the Basic Rent is net to Landlord
                of all expenses. Therefore, all expenses of maintenance, capital
                repair/replacement and operation of the Premises and Complex are
                to be paid and/or reimbursed by Tenant as Additional Rent as
                described in this Lease. For purposes of implementing this
                intention, the parties agree to the following:

                (1)     In addition to the Basic Rent, Tenant shall pay to
                        Landlord, as Additional Rent, Tenant's pro-rata share of
                        the Operating Expenses and Taxes as defined herein
                        (hereinafter "OPT"). Concurrently with each installment
                        of Basic Rent, Tenant shall pay one-twelfth (1/12) of
                        the Landlord's current estimate of OPT for the current
                        year. For the calendar year 2001 the monthly installment
                        of OPT is estimated to be $0.75 per rentable square
                        foot, per month, for a monthly sum Fifty Six Thousand
                        Nine Hundred Fifty Eight and 75/100ths Dollars
                        ($56,958.75) payable by Tenant hereunder. Landlord does
                        not guarantee this estimate.

                (2)     Tenant's proportionate share of Operating Expenses and
                        Taxes is agreed to be one hundred percent (100%).
                        Notwithstanding anything in this Lease to the contrary,
                        Landlord shall calculate Tenant's proportionate share of
                        the OPT (for purposes of both estimated and actual
                        calculations) as if the Building and Complex were fully
                        occupied regardless of the actual occupancy rate. If any
                        modifications are made to the Complex or the Building
                        which change Tenant's percentage of the rentable area of
                        the Building or the Complex, then Tenant's proportionate
                        share shall be adjusted.

                (3)     For purposes of this Lease, "Operating Expenses" shall
                        mean all direct costs of operating, maintaining and
                        managing the Building, Complex and the Premises
                        (including parking areas and parking garage) including,
                        but not limited to, all reasonable charges paid or
                        expenses incurred by Landlord for: repairs; maintenance;
                        utilities; water; capital improvements required to meet
                        the mandates of government regulations; exterior
                        cleaning and janitorial services; security services;
                        modifications or additional capital improvements or
                        replacement of existing building systems and equipment
                        to reduce the Operating Expenses; replacement of Complex
                        systems or components or Building sewer equipment
                        existing as of the Commencement Date when required
                        because of normal wear and tear regardless of whether
                        such items are capitalized or expensed; maintenance,
                        repair and replacement of landscaping, parking lot,
                        glazing, plumbing systems, electrical systems, security
                        systems, heating and air conditioning systems, energy
                        management systems, automatic fire extinguishing
                        systems, sculpture operating system, roofs, down spouts,
                        elevator equipment and controls, Building exterior and
                        interiors, ceilings, and Building exterior doors and


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                        common area doors regardless of whether such items are
                        capitalized or expensed; rubbish removal or recycling;
                        property and liability insurance (including
                        deductibles); licenses, permits and inspections
                        including but not limited to business license or similar
                        taxes on rentals received; costs of supplies, tools and
                        equipment used in the repair or maintenance of the
                        Building, Complex and Premises; reasonable
                        administrative and property management fees equal to
                        four percent (4%) of Rent, and legal and accounting
                        expenses; amortization (together with interest at the
                        Interest Rate as defined in Paragraph 14 per annum on
                        the unamortized balance) on machinery and equipment used
                        to maintain the Complex, the Building, the parking areas
                        or the Premises; amortization (together with interest at
                        the Interest Rate per annum on the unamortized balance)
                        on other personal property used by Landlord in the
                        Building; and the reasonable cost of reasonably
                        contesting the validity or applicability of any
                        government enactments that may affect Operating
                        Expenses.

                (4)     "Taxes" shall mean all Real Property Taxes as hereafter
                        defined in Paragraph 7, but excluding all other taxes
                        which are paid by Landlord and which are to be
                        reimbursed by Tenant under this Lease.

Notwithstanding to the contrary of this Lease, OPT does not include the
following: (i) repairs, restoration or other work occasioned by condemnation, or
by fire, wind the elements or other casualty to the extent of any net insurance
proceeds received by Landlord under any insurance policy maintained by Landlord
covering the Building or Complex or any portion thereof (subject to landlord's
obligation to diligently and reasonably attempt to recover all proceeds and
awards available to cover such costs); (ii) any ground lease payments or any
interest or principal payments on any mortgage or other indebtedness of
Landlord, and points, commissions and legal fees associated with financing
covering the Building or the Complex; (iii) compensation paid to any employee of
Landlord other than maintenance and property management personnel below the
level of project manager, directly associated with the operation and maintenance
of the Building or Complex (it being agreed that the salaries of such management
personnel are covered by the management fee); (iv) any depreciation allowance or
expense; (v) repairs, alterations, additions, improvements or replacements made
to rectify or correct any non-compliance with any requirements of any
governmental authority as of the date of delivery of the Premises to Tenant;
(vi) damage and repairs necessitated by the gross negligence or willful
misconduct of Landlord or any of Landlord's Agents; (vii) Landlord's general
overhead expenses in excess of the property management fee; (viii) legal fees,
accountants' fees and other expenses incurred in connection with the defense of
Landlord's title to or Landlord's or Tenant's interest in the Complex or any
part thereof; (ix) charitable or political contributions of Landlord; (x) any
cost or expense related to the testing for, removal, transportation or storage
of Hazardous Materials (as defined below) from the Premises or Complex unless
such cost or expense arises due to the existence of Hazardous Materials arising
from the actions or inactions of Tenant or its Agents; (xi) interest, penalties
or other costs arising out of Landlord's failure to make timely payments of its
obligations, to the extent not caused by Tenant's default; (xii) any
environmental assessments, charges or liens arising in connection with the
remediation of Hazardous Materials from the building or Complex unless such cost
or expense arises due to the existence of Hazardous Materials arising from the
actions or inactions of Tenant or its Agents; and (xiii) cost to rebuild the
Complex due to an uninsured casualty.

Tenant shall pay its pro rata share of OPT as Additional Rent throughout the
Term of this Lease. From the Commencement Date, Tenant shall pay the amount
estimated by Landlord and set forth above in clause (1). Thereafter, prior to
the commencement of each calendar year during the Term of the Lease or within a
reasonable period thereafter, Landlord shall estimate Tenant's pro rata share of
such OPT for the following calendar year and Landlord shall notify Tenant of
such estimate in writing. Commencing on the first day of the next month for
which Landlord has notified Tenant of the revised estimated OPT, and on the
first day of every month thereafter, Tenant shall pay to Landlord, as Additional
Rent, one-twelfth (1/12th) of Tenant's estimated pro rata share of the yearly
OPT. If Landlord fails to furnish an estimate prior to the beginning of any
calendar year, the prior year's estimate of OPT shall remain in effect until a
revised estimate is made by Landlord. Within ninety (90) days after the end of
each calendar year for which Tenant has made estimated payments (the
"Reconciliation Date"), Landlord shall furnish Tenant a statement with respect
to such year, showing actual OPT charges for the past calendar year and the
total payments made by Tenant on the basis of Landlord's estimate. If Tenant's
actual pro rata share of the OPT exceeds the payments made by Tenant based on
Landlord's estimate, Tenant shall pay the deficiency to Landlord within ten (10)
days of Tenant's receipt of Landlord's statement. If the total payments by
Tenant based on Landlord's estimate exceed Tenant's actual pro rata share of the
OPT, Tenant's excess payment shall be credited toward future payments by Tenant
of Basic Rent and/or Additional Rent or refunded to Tenant within ten (10) days
of Landlord's statement to Tenant if no future Basic Rent or Additional Rent is
to become due. Landlord's failure to provide its estimate of OPT prior to the
commencement of any year or its failure to



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        provide a reconciliation by the Reconciliation Date shall not be deemed
        a waiver of Landlord's right to issue an increased estimate of OPT or to
        collect an underpayment of OPT.

        Upon request by Tenant to Landlord, Landlord shall allow Tenant or
        Tenants representative to review, audit, and copy Landlord's records of
        OPT, at Landlord's office in place where the records are kept, at all
        reasonable times during normal business hours. Tenant shall reimburse
        Landlord within ten (10) days of Landlord's statement of expenses
        incurred by Landlord for such review to Tenant.

        All Lease provisions with respect to late charges and interest on unpaid
        Rent shall be applicable to Additional Rent, as well as to Basic Rent
        and all other monetary amounts due from Tenant under this Lease.

        D.      Monetary Obligations as Rent. All monetary amounts payable by
                Tenant to Landlord under this Lease including but not limited to
                Basic and Additional Rent, and amounts paid by Landlord to cure
                Tenant's default(s) shall be deemed "Rent" hereunder.

        E.      First Month's Rent. Landlord hereby acknowledges that upon
                Tenant's execution of the Lease, Tenant shall have deposited
                Four Hundred Eighty Nine Thousand Eight Hundred Forty-Five and
                25/100ths Dollars ($489,845.25) which represents a portion of
                First Month's Basic Rent of, and the estimated OPT for, the
                first month of which represents and shall be applied to the
                First Month's Basic Rent of, Four Hundred Thirty Two Thousand
                Eight Hundred Eighty Six and 50/100ths Dollars ($432,886.50) and
                the estimated OPT of Fifty Six Thousand Nine Hundred Fifty-Eight
                and 75/100ths Dollars ($56,958.75).

4.      Security Deposit. Landlord acknowledges that, upon Tenant's execution of
        this Lease, Tenant shall have deposited with Landlord a security deposit
        in the sum of Two Million Nine Hundred Forty Thousand and No/100ths
        Dollars ($2,940,000.00) in cash (the "Cash Deposit") and concurrently
        herewith Tenant shall deliver to Landlord a security deposit in the form
        of an irrevocable standby letter of credit payable to Landlord in the
        initial amount of Five Million Eight Hundred Seventy Eight Thousand One
        Hundred Forty Three and No/100ths Dollars ($5,878,143.00) (the "Letter
        of Credit") (together with the Cash Deposit, the "Security Deposit") to
        secure Tenant's full and faithful performance of each term, covenant,
        and condition of this Lease to be performed by Tenant. The Letter of
        Credit and any substitute Letter of Credit shall be issued in a form and
        by a bank approved by Landlord (the "Bank") in the amount required by
        this Section 4. Landlord shall hold the Letter of Credit as security for
        the performance by Tenant of all obligations on the part of Tenant to be
        kept and performed. Landlord shall have the right, from time to time
        without prejudice to any other remedy Landlord may have on account
        thereof, to draw upon the Letter of Credit and apply such funds to
        Landlord's damages arising from any Event of Default as herein defined
        on the part of Tenant, in which event Tenant shall restore the balance
        of the Letter of Credit to the amount required hereunder. Tenant shall
        maintain the Letter of Credit, or a substitute Letter of Credit from the
        Bank approved by Landlord, in accordance with the terms hereof, in full
        force and effect at all times during the entire Lease Term and for a
        period of thirty (30) days thereafter (the last day of such 30 day
        period shall be referred to herein as the "Return Date"). If the Letter
        of Credit shall expire before the Return Date, Tenant shall replace the
        Letter of Credit deposited with Landlord by providing Landlord with a
        substitute Letter of Credit at least thirty (30) days prior to the
        expiration date of the then effective Letter of Credit being held by
        Landlord, in the applicable amount required hereunder and the failure to
        do so shall constitute a default entitling Landlord to draw the full
        amount of the Letter of Credit and hold the proceeds thereof as a cash
        security deposit hereunder. No later than the Return Date, Landlord
        shall return the Security Deposit (as the same may have been reduced
        pursuant to this Section), or so much thereof as shall not have
        theretofore been applied in accordance with the terms of this Section or
        drawn upon by Landlord and applied by Landlord to cure any default of
        Tenant existing at the expiration or earlier termination of this Lease,
        or shall notify Tenant of any facts which constitute a default by Tenant
        under this Lease which entitles Landlord to retain some or all of the
        Security Deposit and further notify Tenant of the date by which Landlord
        shall have completed its determination of the amount of the Security
        Deposit to be retained which shall be no more than thirty (30) days
        thereafter. Notwithstanding the foregoing provisions of this Lease, if,
        as of the fourth (4th) anniversary date of the Commencement Date as well
        as, the ninth (9th) anniversary date of the Commencement Date
        thereafter: (1) there has been no breach of any undertaking by Tenant
        under this Lease beyond any applicable grace period; (2) Tenant is a
        publicly held company with a net worth of One Billion and no/100ths
        Dollars $1,000,000,000.00 or greater in accordance with GAAP (or such
        other accounting standard that has replaced GAAP); (3) Tenant has a
        pre-tax profit margin from normal operations excluding one-time events
        for the prior twelve (12) months of fifteen (15%) percent or greater;
        (4) All rent and other sums due under the Lease have been paid when due;
        and (5) Tenant is not, nor has ever been in default under the terms and
        conditions of this Lease, then the face amount of the Letter of Credit
        shall be reduced by One Million Nine Hundred Fifty Nine Thousand Three
        Hundred Eighty-One and No/100ths Dollars ($1,959,381.00). If Tenant
        fails to pay any Basic Rent, Additional Rent or any other monetary



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       amount due from Tenant hereunder, or fails to keep or perform any term,
       covenant or condition on its part to be made or performed or kept under
       this Lease beyond any applicable grace period, then Landlord may, but
       shall not be obligated to, and without waiving or releasing Tenant from
       any obligation under this Lease, use, apply or retain the whole or any
       part of said security deposit (i) to the extent of any sum due to
       Landlord; or (ii) to make any required payment provided for hereunder on
       Tenant's behalf; or (iii) to compensate Landlord for any loss, damage,
       reasonable attorneys' fees or expense sustained by Landlord due to
       Tenant's default. Landlord shall be entitled to draw on the Letter of
       Credit before utilizing any cash Security Deposit. If the Security
       Deposit is so applied, Tenant shall, within ten (10) days of written
       demand by Landlord, remit to Landlord sufficient funds to restore the
       security deposit to its original sum, Tenant's failure to do so shall be
       a material breach of this Lease. No interest shall accrue on the security
       deposit held by Landlord, or shall Landlord be required to keep such
       security deposit separate from its general funds.

5.      Use of the Premises. The Premises shall be used exclusively for general
        office which may include software engineering and sales and any office
        use related thereto. Tenant shall not use, or permit the Premises or any
        part thereof to be used, for any purpose other than the purpose for
        which the Premises are hereby leased; and no use shall be made or
        permitted to be made of the Premises, nor acts done in, on or about the
        Premises, which will increase the existing rate of insurance upon the
        Complex, or cause a cancellation of any insurance policy covering the
        Complex, or any part thereof, nor shall Tenant sell or permit to be
        kept, used or sold, in or about the Premises, any article which may be
        prohibited by the standard form of fire insurance policies. Tenant shall
        not commit, or suffer to be committed, any waste upon the Premises, or
        any public or private nuisance, or other act or thing which may injure,
        annoy or disturb the quiet enjoyment of any occupant of neighboring
        properties or other tenant in the Complex nor, without limiting the
        generality of the foregoing, shall Tenant allow the Premises to be used
        for any improper, immoral, unlawful or objectionable purpose. Tenant
        shall not place any harmful liquids in the drainage system of the
        Premises or of the Complex. Tenant shall not place any loads upon the
        floors, walls, ceilings or roof which might endanger the structure, nor
        overload any electrical, mechanical or other systems.

        No waste materials or refuse shall be dumped upon or permitted to remain
        upon any part of the Premises outside the Building except in trash
        containers placed inside exterior enclosures approved for that purpose
        by Landlord, or inside the Building proper where designated by Landlord.
        No materials or articles of any nature shall be stored upon or permitted
        to remain outside of the Building. Subject to the provisions of
        Paragraph 34 of this Lease, 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 (including the
        common areas 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 which consent
        may be granted at Landlord's absolute discretion.

        Tenant covenants and agrees that no diminution of light, air or view by
        any structure which may be. hereafter erected, whether or not by
        Landlord, or use of the Complex by any other occupants or use of
        neighboring buildings or areas by others, shall in any way affect this
        Lease, entitle Tenant to any reduction of Rent hereunder, or result in
        any liability of Landlord to Tenant.

        Tenant shall comply with all the covenants, conditions and/or
        restrictions ("CC&R's") affecting the Premises and the Complex, and all
        rules and regulations affecting the Premises, which rules and
        regulations shall be enforced by Landlord in a non-discriminatory and
        non-arbitrary manner.

        The term "Hazardous Material" means any hazardous or toxic substance,
        material or waste, the storage, use or disposition of which is or
        becomes regulated by any governmental authority, including, but not
        limited to, municipal, county, the State of California or the United
        States government. The term "Hazardous Material" includes, without
        limitation, any material or substance which is (i) defined as a
        "hazardous waste", "extremely hazardous waste" or "restricted hazardous
        waste" under Sections 25115, 25117 or 25122.7, or listed pursuant to
        Section 25140, of the California Health and Safety Code, Division 20,
        Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a "hazardous
        substance" under Section 25136 of the California Health and Safety Code,
        Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance
        Account Act), (iii) defined as a "hazardous material", "hazardous
        substance" or "hazardous waste" under Section 25501 of the California
        Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials
        Release Response Plans and Inventory), (iv) defined as a "hazardous
        substance" under Section 25281 of the California Health and Safety Code,
        Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances),
        (v) petroleum, (vi) asbestos, (vii) listed under Article 9 or defined as
        hazardous or extremely hazardous pursuant to Article 11 of Title 22 of
        the California Administrative Code, Division 4, Chapter 20, (viii)
        designated as a "hazardous substance" pursuant to Section 311 of the
        Federal Water Pollution Control Act (33 U.S.C. Section 1317), (ix)
        defined as a "hazardous waste" pursuant to Section 1004 of the Federal
        Resource Conservation



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        and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section
        6903), (x) defined as a "hazardous substance" pursuant to Section 101 of
        the Comprehensive Environmental Response Compensation and Liability Act,
        42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601) or (xi) listed
        or defined as "hazardous waste", "hazardous substance" or other similar
        designation by any regulatory scheme of the State of California or the
        United States government.

        Tenant, at its sole cost, shall comply with all laws and regulations
        relating to the storage, use and disposal of Hazardous Materials at the
        Complex. If Tenant does store, use or dispose of any Hazardous Materials
        at the Complex, Tenant shall notify Landlord, in writing, at least five
        (5) days prior to their first appearance at the Complex; provided,
        however, that Tenant shall have the right to store reasonable amounts of
        chemicals and/or solvents used for ordinary office equipment without
        notifying Landlord. Tenant shall be solely responsible for and shall
        defend, with counsel reasonably acceptable to Landlord indemnify and
        hold Landlord, and Landlord's partners, officers, employees, successors,
        assigns and agents, harmless from and against all claims, demands,
        damages, costs and liabilities, including reasonable attorneys' fees and
        costs, arising out of or in connection with the storage, use or disposal
        of Hazardous Materials by Tenant, its agents, employees, contractors or
        sublessees.

        If the presence of Hazardous Materials at the Complex caused or
        permitted by Tenant, its agents, employees, contractors, or sublessees
        results in or is likely to result in contamination or deterioration of
        water or soil resulting in a level of contamination greater than the
        safe levels established by any governmental agency having jurisdiction
        over such contamination, or if any investigation of conditions, or any
        clean-up, remedial removal or restoration work is required by any
        federal, state or local governmental agency or political subdivision
        ("Governmental Agency") because of the level of Hazardous Material in
        the soil or ground water or at the Complex caused or permitted by
        Tenant, its agents, employees, contractors or sublessees, then Tenant
        shall promptly, and at its sole cost, take any and all action necessary
        to investigate and clean up such contamination. Tenant shall further be
        solely responsible for, and shall defend, with counsel acceptable to
        Landlord, indemnify and hold Landlord and Landlord's, members, partners,
        officers, employees, successors, assigns and agents harmless from and
        against, all claims, demands, damages, costs and liabilities judgments
        or obligations, including attorneys' fees and costs, arising out of or
        in connection with any removal, clean-up and restoration work and
        materials required hereunder to return the Premises, the Complex or the
        surrounding properties to the condition existing prior to the appearance
        of the Hazardous Materials caused or permitted by Tenant, its agents,
        employees, contractors or sublessees.

        If the presence of Hazardous Materials at the Complex caused or
        knowingly permitted by Landlord, its agents, employees, contractors, or
        sublessees results in contamination of deterioration of water or soil
        resulting in a level of contamination greater than the safe levels
        established by any governmental agency having jurisdiction over such
        contamination, or if any investigation of conditions, or any clean-up,
        remedial removal or restoration work is required by any Governmental
        Agency because of the level of Hazardous Material in the soil or ground
        water or at the Complex, then Landlord shall promptly, and at its sole
        cost, take any and all action necessary to investigate and clean up such
        contamination. Landlord shall further be solely responsible for, and
        shall defend, with counsel reasonably acceptable to Tenant, indemnify
        and hold Tenant and Tenant's members, partners, officers, employees,
        successors, assigns and agents harmless from and against all claims,
        demands, damages, costs and liabilities, judgments or obligations,
        including reasonable attorneys' fees and costs, arising out of or in
        connection with any removal, clean-up and restoration work and materials
        required hereunder to return the Premises, the Complex or the
        surrounding properties to a condition as approved by the County of San
        Mateo or any other such agency having jurisdiction over these types of
        matters.

        If Landlord has good cause to believe that the Premises or the Complex
        have or may become contaminated by Hazardous Materials, Landlord may
        cause tests to be performed, including wells to be installed at the
        Complex, and may cause the soil or ground water to be tested to detect
        the presence of Hazardous Materials by the use of such tests as are then
        customarily used for such purposes. The cost of such tests of the
        installation, maintenance, repair and replacement of such wells shall be
        paid by Tenant provided that Tenant, its agents, employees, or
        contractors are a responsible party for such contamination by Hazardous
        Materials.

        The termination of the Lease shall not terminate the parties' respective
        rights and obligations under this Paragraph 5, and the parties hereto
        expressly agree that the provisions contained herein shall survive the
        termination of Tenant's leasehold estate.

        Tenant shall abide by all laws, ordinances and statutes, as they now
        exist or may hereafter be enacted by legislative bodies having
        jurisdiction thereof, relating to its use and occupancy of the Premises.



                                       6
<PAGE>   7

        The provisions of this Paragraph 5 are for the benefit of the Landlord
        only and shall not be construed to be for the benefit of any other
        person or occupant of the Complex.

6.      Improvements. Landlord will, at its sole expense and using contractors
        of its choice, make improvements ("Improvements") to the Premises as
        specified in Exhibit C attached hereto and incorporated herein by this
        reference. On or before June 1. 2000, Tenant shall deliver to Landlord,
        for Landlord's approval, its final construction drawings and
        specifications plans with detailed listing of finish materials, all of
        which have been approved by Tenant and all of which shall have been
        prepared by Landlord's Architect (Architopia). Tenant agrees to provide
        its written comments to Landlord within five (5) days from receipt of
        said draft construction documents and three (3) days following the
        receipt of any revision to the construction documents. Notwithstanding
        anything in this Lease to the contrary, if Tenant fails to provide
        Landlord with such final construction documents and specifications plans
        and finish materials approved by Tenant on or before June 1. 2000, or if
        Tenant changes any of the construction documents and specifications or
        finish materials subsequent to such date or if Tenant fails to provide
        Landlord within the time periods specified above, with its approval of
        the construction documents or if Tenant makes changes to the
        construction documents after such timeframes specified above, or if
        Tenant should delay Landlord's contractor from timely completing the
        construction of the Improvements, then the Commencement Date shall be
        the Anticipated Completion Date as hereinafter set forth, or the date of
        Landlord's notification to Tenant of Substantial Completion (as
        hereinafter defined) of the Improvements, or the date on which Tenant
        takes possession of the Premises, whichever shall first occur.

        Upon Landlord's approval (which shall not be unreasonably withheld or
        delayed) of such final construction documents and specifications
        including finish materials approved by Tenant, Landlord shall cause
        Landlord's contractor to diligently undertake to construct the
        Improvements in accordance with such final plans, specifications and
        finish materials as approved by Landlord and Tenant (collectively
        referred to as "Final Plans"). All such construction shall be performed
        with due diligence and in substantial accordance with the Final Plans.
        Landlord agrees to use all commercially reasonable efforts to
        substantially complete the Improvements by March 1, 2001 ("Anticipated
        Completion Date"), but without any warranty as to when such Improvements
        shall be substantially completed.

        Landlord's obligation to construct the Improvements is specifically
        subject to any changes or other requirements of or imposed by all
        applicable governmental body(ies), agency(ies) and/or utility(ies);
        Landlord shall notify Tenant of any such changes and/or requirements
        promptly after Landlord becomes aware of the same. Any improvements to
        the Premises not expressly shown or stated in the Final Plans shall be
        made by Landlord on behalf of Tenant at Tenant's sole cost and expense
        in accordance with Paragraph 11 of this Lease; provided, however, that
        notwithstanding anything in this Lease to the contrary, any delay in
        Landlord's construction of the Improvements caused in whole or in part
        by Tenant including, but not limited to, delays caused by additional
        improvements made or any changes requested by Tenant, shall not delay
        the Commencement Date of this Lease, and Substantial Completion, as
        hereinafter defined, for purposes of determining the Commencement Date
        of this Lease, shall be at such time as the Improvements would have been
        Substantially Complete absent such additional improvements made or
        changes requested by Tenant. The Landlord's Architect shall determine
        this date of Substantial Completion by giving written notice thereof to
        Landlord and Tenant, which notice shall be deemed a part of this Lease,
        Landlord and Tenant agree to accept such date as determined by
        Landlord's Architect.

        Landlord will allow Tenant to have access to the Premises beginning
        seven (7) days in advance of the estimated date for Substantial
        Completion in order for Tenant to perform Tenant's fit-up work, provided
        that neither Tenant nor its vendors shall interfere with or delay the
        performance of work by Landlord's contractors, vendors, inspectors and
        the like.

        It is understood that the Final Plans and the exact location of doors,
        walks, lighting, plumbing and all other facilities and improvements are
        subject to such minor changes (for example: Schlage lock set can be
        replaced with like kind alternate) as Landlord, or Landlord's architect
        or general contractor in charge of the construction of the Improvements,
        determine to be necessary desirable in the course of construction of or
        to the Premises, and no such changes shall affect this Lease or
        constitute a breach by Landlord hereunder. Landlord agrees to not
        materially deviate from the Final Plans without Tenant's consent, which
        consent shall not be unreasonably withheld or delayed.

        "Substantial Completion" shall mean the earlier of (i) the date upon
        which the City of Redwood City issues a temporary certificate of
        occupancy for the Premises, and Landlord's Architect certifies that all
        of the Improvements are substantially complete, or (ii) the date upon
        which all of the Improvements would have been substantially complete,
        but for delays caused by Tenant as provided in this Section 6 and
        Exhibit C of this Lease, but subject to usual punch list items of



                                       7
<PAGE>   8

        Improvements and except for Tenant's responsibility to obtain licenses
        and other approvals, for which Tenant agrees to be solely responsible
        (Landlord shall be responsible for customary certificate of occupancy
        from the City of Redwood City provided Tenant takes no action to prevent
        or hinder the issuance of such Certificate of Occupancy). If such
        Improvements do not conform exactly to the Final Plans, but the general
        appearance, structural integrity and Tenant's use and occupancy of the
        Premises, the Complex and such Improvements are not materially or
        unreasonably affected by such deviation(s), it is agreed that the
        Improvements shall be deemed to be "Substantially Completed" for
        purposes of this Lease, and Tenant's obligation to pay Rent hereunder
        shall not be affected by such deviation(s). Upon Substantial Completion,
        Tenant agrees to accept the Premises and such Improvements as so
        constructed by Landlord. However, notwithstanding the above, Tenant
        shall have thirty (30) days from the date of Substantial Completion to
        provide Landlord with a list of items requiring repair or replacement.
        Upon Landlord's receipt of such list, Landlord shall proceed to correct
        such "punch list" items with due diligence.

7.      Taxes and Assessments.

        A. Tenant shall pay before delinquency any and all taxes, assessments,
license fees and public charges levied, assessed or imposed upon or against
Tenant's fixtures, equipment, furnishings, furniture, appliances and personal
property installed or located on or within the Premises. Tenant shall cause said
fixtures, equipment, furnishings, furniture, appliances and personal property to
be assessed and billed separately from the real property of Landlord. If any of
Tenant's said personal property shall be assessed with Landlord's real property,
Tenant shall pay to Landlord the taxes attributable to Tenant within thirty (30)
days after receipt of a written statement from Landlord setting forth the taxes
applicable to Tenant's property.

        B. All Real Property Taxes shall be paid by Landlord and be reimbursed
by Tenant to Landlord as provided in Section 3 of this Lease. However, if a
supplemental assessment is levied in any calendar year subsequent to the
Landlord's estimate of the OPT for that calendar year (as provided in Section 3
of this Lease), and payment is due for said supplemented assessment during this
same calendar year, Landlord reserves the right to adjust its estimate of the
OPT for that calendar year so as to collect such reimbursement from Tenant to
timely pay (before delinquency) said supplemented assessment.

        The term "Real Property Taxes," as used herein, shall mean and include:
(i) all taxes, assessments, levies and other charges of any kind or nature
whatsoever, general and special, foreseen and unforeseen (including without
limitation, 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 Premises,
the Building or the Complex, or otherwise) 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, the Building or the Premises (as now constructed or as
may at any time hereafter be constructed, altered, or otherwise changed) or
Landlord's interest therein; any improvements of Landlord located within the
Complex, the Building or the Premises (regardless of ownership); the fixtures,
equipment and other property of Landlord, real or personal, that are an integral
part of and located in, on or about the Complex, the Building or the Premises;
and landscaping areas, walkways and parking areas; and (ii) all costs and fees
(including reasonable attorneys' fees) incurred by Landlord in reasonably
contesting any Real Property Tax and in negotiating with public authorities as
to any Real Property Tax. "Real Property Taxes" shall not include any franchise,
rental, income, inheritance or profit tax, capital levy or excise tax payable by
Landlord.

        Tenant shall have the right to contest by appropriate legal proceedings
the amount or validity of any taxes, including any assessments, taxes, fees,
levies and charges that may be imposed by governmental agencies for such
purposes as fire protection, street, sidewalk, road, utility construction and
maintenance, refuse removal and for other governmental services which may
formerly have been provided without charge to property owners or occupants,
provided Tenant shall pay all taxes when due so as not to cause any delinquency
or penalty to be incurred. In addition, Tenant acknowledges that the foregoing
does not waive Tenant's obligation to pay the taxes, fees, levies and charges as
a part of OPT in Sections 3 and 7 of this Lease.

        If at any time during the Term of this Lease the taxation or assessment
of the Complex, the Building or the Premises prevailing as of the Commencement
Date of this Lease shall be altered so 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, use or occupancy of the Complex, the Building or the
Premises or Landlord's interest therein, or (ii) on or measured by the gross
receipts, income or rentals from the Complex, the Building or the Premises, on
Landlord's business of leasing the Complex, the Building or the Premises, or
Landlord's interest therein, or based on parking, employment, production or the
like in, on or about the Complex, the Building or the Premises, or computed in
any manner with respect to the operation of the Complex, the Building or the
Premises, 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



                                       8
<PAGE>   9

Real Property Tax is based in part upon property or rents unrelated to the
Complex, the Building or the Premises, then only that part of such Real Property
Tax that is fairly allocable to the Complex, the Building or the Premises shall
be included within the meaning of the term "Real Property Taxes".

        If, at any time during the Term of this Lease, any assessments which
would be deemed to be Real Property Taxes are levied against the Premises, the
Building or the Complex, Landlord may elect either to pay the assessment in full
or to allow the assessment to go to bond and to pay it in installments. In
either case, however, Tenant shall only be obligated to pay to Landlord, with
regard to any such assessment, each time payment of Real Property Taxes is made,
a sum equal to that which would have been payable by Tenant as its pro rata
percentage of the installments of principal and interest which would have become
due during the Term of this Lease had Landlord allowed the assessment to go to
bond.

8.      Insurance.

        A.      Indemnity. Tenant agrees to indemnify and defend (with counsel
                reasonably acceptable to Landlord) Landlord against and hold
                Landlord and Landlord's, members, partners, officers, employees,
                and successors, assigns and agents harmless from any and all
                demands, claims, damages, costs and liabilities, causes of
                action, judgments or obligations, and all reasonable expenses
                incurred in investigating or resisting the same (including
                reasonable attorneys' fees), on account of, or arising out of,
                the Tenant's, its employees, invitees', licensees', sublessees',
                agents' and contractors' use or occupancy of the Premises except
                to the extent caused solely by Landlord's gross negligence or
                willful misconduct. This Lease is made on the express condition
                that Landlord shall not except to the extent caused solely by
                Landlord's gross negligence or willful misconduct be liable for,
                or suffer loss by reason of, injury to person or property, from
                whatever cause, in any way connected with the use or occupancy
                of the Premises specifically including, without limitation, any
                liability for injury to the person or property of Tenant, its
                agents, officers, employees, licensees and invitees.

        B.      Liability and Worker's Compensation Insurance. Tenant shall, at
                Tenant's expense, obtain and keep in force during the Term of
                this Lease a policy of worker's compensation insurance and a
                policy of comprehensive public liability insurance insuring
                Landlord and Tenant, with cross-liability endorsements, against
                any liability arising out of the Tenant's, its employees, agents
                and contractors use or occupancy of the Premises and all areas
                appurtenant thereto, including parking areas. Such public
                liability insurance shall be in an amount satisfactory to
                Landlord of not less than $10,000,000 combined single limit for
                bodily injury or death as a result of any one occurrence, and
                $10,000,000 for damage to property as a result of any one
                occurrence. The insurance shall be with companies admitted to do
                business in the State of California and companies of Best's
                Rating Guide of A+9 or better. Such policies shall be written as
                a primary policy, not contributing with and not in excess of
                coverage which Landlord may carry. During the Term of this
                Lease, liability limits shall be increased from time to time, as
                reasonably determined by Landlord. Tenant shall deliver to
                Landlord, prior to taking possession of the Premises, a
                certificate of insurance evidencing the existence of the policy
                required hereunder, and such certificate shall certify that the
                policy (i) names Landlord as an additional insured; (ii) shall
                not be canceled or altered without thirty (30) days prior
                written notice to Landlord; and (iii) the coverage is primary
                and any coverage carried or obtained by Landlord is in excess
                thereto. Tenant shall furnish renewal certificates at least
                thirty (30) days prior to the expiration date of any such
                policy.

                Landlord may at its election, maintain in effect its own policy
                of public liability and property damage insurance insuring
                against any liability (including bodily injury or property
                damage) arising on or about the Complex with policy limits
                determined by Landlord in its sole discretion. Such insurance
                costs and deductibles shall be included in Operating Expenses
                described in Paragraph 3 above.

        C.      Insurance of Personal Property, Fixtures and Equipment. Tenant
                shall at all times during the term hereof, and at its sole cost
                and expense, maintain in effect policies of insurance covering:
                (i) its personal property, inventory, alterations, fixtures and
                equipment located on the Premises, in an amount not less than
                one hundred percent (100%) of their actual replacement value,
                providing protection against any peril included within the
                classification "Fire and Extended Coverage," together with
                insurance against sprinkler damage, vandalism and malicious
                mischief; and (ii) all plate glass on the Premises. The proceeds
                of such insurance, so long as this Lease remains in effect,
                shall be used to repair or replace the personal property,
                inventory, alterations, fixtures, equipment and plate glass so
                insured.

        D.      Property Insurance. Landlord shall obtain and keep in force
                during the Term of this Lease a policy or policies of insurance
                coverage including special broad form coverage (and, at



                                       9
<PAGE>   10

                Landlord's sole and absolute discretion, earthquake and flood),
                for loss or damage to the Premises and to the Complex, in the
                amount of the full replacement value thereof. Such insurance
                costs and deductibles shall be included in Operating Expenses
                described in Paragraph 3 above.

        E.      Mutual Waiver of Subrogation. The parties hereto release each
                other and their respective authorized representatives partners,
                members, officers, agents, employees and servants, from any and
                all claims, demands, loss, expense or injury to any person, or
                to the Premises or Complex, or to the furnishings, fixtures or
                equipment located therein, caused by or resulting from perils,
                events or happenings which are the subject of insurance in force
                at the time of such loss. Each party shall cause each insurance
                policy obtained by it to provide that the insurer waives all
                right of recovery by way of subrogation against either party in
                connection with any damage covered by any policy. Neither party
                shall be liable to the other for any damage caused by fire or
                any of the risks insured against under any insurance policy in
                effect as required by this Lease.

        9.      Operation, Management, Services and Utilities. All operation and
                management of the Premises and the complex including, but not
                limited to, the furnishing of water, gas, light, heat, power,
                electricity, trash pick-up, property management services,
                landscaping, janitorial services, sewer charges, pest control,
                security charges, and all other services supplied to or consumed
                on the Premises or the Complex shall be controlled by Landlord
                and shall be included in Operating Expenses described in
                Paragraph 3 above, except to the extent such charges are
                directly billed to Tenant. Landlord agrees to manage the
                Property in a first class manner similar to other comparable
                projects in the Redwood City, San Mateo, Palo Alto marketplace.
                Landlord shall not be liable for and Tenant shall not be
                entitled to any abatement or reduction of Rent by reason of any
                interruption or failure of utility or other services to the
                Premises during the Lease term. Utilities and services shall be
                provided in accordance with the Standards for Utilities and
                Services set forth in Exhibit D attached hereto and incorporated
                herein. The parties agree to the terms and provisions set forth
                in the Standards and to any modifications or additions thereto.

10.     Repair and Maintenance.

        A.      Subject to provisions of Paragraphs 10B and 15 of this Lease,
                below, Landlord shall keep and maintain the roof, paving,
                structural elements, landscaping, irrigation systems and
                exterior walls of the Complex in good order and repair. Landlord
                shall also keep and maintain in good order and repair the
                windows, window frames, doors, hardware, interior walls, and the
                electrical, plumbing, elevators, lighting, energy management
                systems, security systems, fire sprinklers, heating and air
                conditioning systems. Landlord agrees to make such repairs as
                necessary as promptly as possible. Such expenses shall be
                included in Operating Expenses for purposes of Paragraph 3
                above. If, however, any repairs or maintenance are required
                because of an act or omission of Tenant, or its agents,
                employees or invitees, then Tenant shall pay to Landlord upon
                demand one hundred percent (100%) of the costs of such repair or
                maintenance. Notwithstanding anything in this Lease to the
                contrary, after the initial construction of the Improvements in
                the Premises by Landlord pursuant to the provisions of Paragraph
                6 of this Lease, Landlord shall have no obligation to alter,
                remodel, improve, decorate, or paint the Premises or any part
                thereof.

                Should Landlord fail to maintain the electrical, plumbing,
                elevators, lighting, energy management systems, security
                systems, fire sprinklers, and heating and air conditioning
                systems (the "Building Systems") in good order and repair, then
                Tenant may make or do the same at Tenant's expense provided,
                however, Tenant shall give Landlord three (3) days advance
                written notice and Tenant shall use such contractors to do such
                work so as to not void or in any way alter the existing
                warranties of the Building System(s) so being repaired.

        B.      Except as expressly provided in subparagraph 10.A above, Tenant
                shall, at its sole cost, keep and maintain the interior of the
                Premises in good and sanitary order, first class condition and
                repair.

                Should Tenant fail to maintain the Premises as required
                hereunder forthwith upon notice from Landlord, then Landlord, in
                addition to all other remedies available hereunder or by law,
                and without waiving any alternative remedies, may make or do the
                same, and in that event, Tenant shall reimburse Landlord for the
                cost of such maintenance or repairs as Additional Rent, at
                Landlord's election on demand or on the next date upon which
                Basic Rent becomes due.



                                       10
<PAGE>   11

                Tenant hereby expressly waives the provisions of Subsection 1 of
                Section 1932, and Sections 1941 and 1942 of the Civil Code of
                California and all rights to make repairs at the expense of
                Landlord, as provided in Section 1942 of said Civil Code.

        C.      Subject to the provisions of Paragraphs 15 and 16 of this Lease,
                neither Landlord nor Tenant shall be deemed in default of their
                respective obligations under this Paragraph 10 if performance
                thereof is delayed or becomes impossible because the fault or
                neglect of the other party, or because of acts of God, war
                (whether declared or undeclared), earthquake, fire, labor
                dispute, strike, acts of public agencies, embargoes, rainy,
                stormy or other adverse weather, riot, civil commotion,
                insurrection, blockade, inability to obtain materials, supplies
                or fuels, acts and delays of subcontractors or contractors, and
                such other contingencies beyond the control of the performing
                party. Upon such an event, the time for performance shall be
                reasonably extended, but in no event shall such extension be
                longer than sixty (60) days beyond the original date for
                performance.

        D.      Landlord shall on behalf of Tenant, take commercially reasonable
                steps to enforce all of its rights under any warranties received
                by Landlord in connection with the construction of the
                Improvements and Landlord shall reasonably cooperate with
                Tenant, at no cost to Landlord, in enforcing all such
                warranties.

11.     Alterations and Additions. Tenant shall not make, or suffer to be made,
        any alterations, improvements or additions in, on or about, or to the
        Premises or any part thereof, without the prior written consent of
        Landlord, which consent shall not be unreasonably withheld, and without
        a valid Building permit issued by the appropriate governmental
        authority. Such alterations, improvements and additions shall then be
        performed by Landlord's contractors.

        As a condition to giving such consent, Landlord may require that Tenant
        agree to remove any such alterations, improvements or additions at the
        termination of this Lease, and to restore the Premises to their prior
        condition. Any alteration, addition or improvements to the Premises,
        except movable furniture and trade fixtures not affixed to the Premises,
        shall become the property of Landlord upon installation, and shall
        (subject to the provisions of the immediately preceding sentence) remain
        upon and be surrendered with the Premises at the termination of this
        Lease. Landlord can elect, however, by so notifying Tenant in writing at
        the time the improvement is made or installed to require Tenant to
        remove any alterations, additions or improvements that Tenant has made
        to the Premises. If Landlord so elects, Tenant shall restore the
        Premises to the condition designated by Landlord in its election, before
        the last day of the Term or if earlier terminated before the last day of
        the term pursuant to an early termination.

        Alterations, additions and improvements which are not to be deemed trade
        fixtures include heating, lighting and electrical systems, air
        conditioning, partitioning, cabinetry, window coverings, carpeting, or
        any other installation which has become an integral part of the
        Premises.

        If Landlord consents to Tenant's making any alterations, improvements or
        additions in the Premises, Tenant shall be responsible for the timely
        posting of notices of non-responsibility on Landlord's behalf, which
        shall remain posted until completion of the alterations, additions or
        improvements, and Tenant shall provide Landlord with a copy of such
        notice of non-responsibility prior to commencement of any such
        construction. Tenant shall indemnify and defend (with counsel acceptable
        to Landlord) Landlord against and hold Landlord and Landlord's members,
        partners, officers, employees, successors and assigns and agents
        harmless from any and all claims, demands, losses, damages, costs and
        liabilities, causes of action, judgments or obligations resulting from
        any work performed at the Premises by or for the Tenant, including
        reasonable attorney's fees.

        If, during the term hereof, any alteration, addition or change of any
        sort through all or any portion of the Premises is required, due to
        Tenant's particular use of the Premises, by law, regulation, ordinance
        or order of any public agency, Tenant, at its sole cost and expense,
        shall promptly make the same.

12.     Acceptance of the Premises and Covenant to Surrender. By entry and
        taking possession of the Premises pursuant to this Lease, upon
        substantial completion of the Improvements, Tenant, subject to
        Landlord's obligation to correct so-called "punch list" items, as
        provided in Paragraph 6, above, accepts the premises as being in good
        and sanitary order, condition and repair, and accepts the Complex and
        the Improvements included in the Premises in their condition existing as
        of the date of such entry and without representation or warranty by
        Landlord as to the condition of the Complex or the Premises, or as to
        the use or occupancy which may be made thereof. Tenant further accepts
        any Improvements to be constructed by Landlord as being completed in
        accordance with the Final Plans for such Improvements, except for items
        specified in writing as punch list items pursuant to Paragraph 6.



                                       11
<PAGE>   12
        Tenant agrees, on the last day of the Term hereof, or on any sooner
        termination of this Lease, to surrender the Premises, together with all
        alterations, additions and improvements which may have been made in, to
        or on the Premises by Landlord or Tenant, to Landlord, broom clean, in
        good and sanitary order, condition and repair, except for such wear and
        tear as would be normal for the period of Tenant's occupancy. Tenant
        further agrees that at the end of the Term of this Lease or upon any
        sooner termination of this Lease, Tenant, at its sole expense, shall
        have any damaged walls and damaged columns patched and repainted as
        necessary, any damaged ceiling tile replaced, damaged light lenses and
        ballasts restored to good order and repair, any blinds repaired or
        replaced (as the case may be), any damaged doors and damaged cabinetry
        replaced or repaired (as the case may be), and any torn or stained
        carpet repaired or replaced (as the case may be) and any chipped or
        scratch floor tile/stone replaced.

        Tenant, on or before the end of the Term of this Lease or on any sooner
        termination of this Lease, shall remove all its personal property and
        trade fixtures from the Premises, and all property not so removed shall
        be deemed to be abandoned by Tenant and title to the same shall
        thereupon pass to Landlord without compensation to Tenant. Landlord may,
        upon termination of this Lease, remove, store and/or sell all moveable
        personal property and trade fixtures 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 are not so surrendered at the end of the Term or sooner
        termination of this Lease, then Tenant shall be liable to Landlord for
        any 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.

        No act or conduct of Landlord, whether consisting of the acceptance of
        the keys to the Premises or otherwise, shall be deemed to be or to
        constitute an acceptance of the surrender of the Premises by Tenant
        prior to the expiration of the Term hereof, and such acceptance of any
        surrender by Tenant shall only be evidenced by a written acknowledgment
        of acceptance of surrender signed by Landlord. The voluntary or other
        surrender of 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 existing subleases or operate as an assignment to
        Landlord of all such subleases.

        After 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 Property.

13.     Events of Default. The occurrence of any of one or more of the following
        events shall constitute a default hereunder by Tenant (each, an "Event
        of Default"):

        A.      The abandonment of the Premises by Tenant. Abandonment is herein
                defined to include, but is not limited to, any absence by Tenant
                from the Premises for five (5) days or longer.

        B.      Three (3) days following written notice by Landlord to Tenant of
                Tenant's failure to make any payment of Rent, or other payment
                required to be made by Tenant hereunder, when due provided,
                however, that any such notice shall be in lieu of, and not in
                addition to, any notice required under California Code of Civil
                Procedure Section 1161.

        C.      The failure by Tenant to observe or perform any of the express
                or implied covenants or provisions of this Lease to be observed
                or performed by Tenant, other than monetary or as specified in
                subparagraphs 13.A or 13.B, above, where such failure continues
                for a period of twenty (20) days after written notice thereof
                from Landlord to Tenant; provided, however, that any such notice
                shall be in lieu of, and not in addition to, any notice required
                under California Code of Civil Procedure Section 1161; provided
                further, that if the nature of Tenant's default is such that
                more than twenty (20) days are reasonably required for its cure,
                then Tenant shall not be deemed to be in default if Tenant shall
                commence such cure within said twenty (20) day period and
                thereafter diligently prosecute such cure to completion (and
                such completion occurs within sixty (60) days thereafter).

        D.      Any assignment or subletting of this Lease without the consent
                of Landlord, including, without limitation, an involuntary
                assignment as defined in Paragraph 21, below.

        E.      Chronic delinquency by Tenant in the payment of Rent or any
                other periodic payments required to be paid by Tenant under this
                Lease. "Chronic delinquency" shall mean failure by Tenant to pay
                Rent, or any other payments required to be paid by Tenant under
                this Lease, within three (3) days after written notice thereof
                for any three (3) months



                                       12
<PAGE>   13

                (consecutive or nonconsecutive) during any twelve (12) month
                period. In the event of a chronic delinquency, at Landlord's
                option, Landlord shall have the right, in addition to all other
                remedies under this Lease and at law, to require that Rent be
                paid by Tenant quarterly, in advance. This provision shall not
                limit in any way nor be construed as a waiver of the rights and
                remedies of Landlord provided herein or by law in the event of
                even one instance of delinquency.

14.     Remedies for Default.

        A.      In the event of any breach of this Lease by Tenant, Landlord has
                the option of (i) removing all persons and property from the
                Premises and repossessing the Premises, in which case any of
                Tenant's property which Landlord removes from the Premises may
                be stored in a public warehouse or elsewhere at the cost of, and
                for the account of, Tenant, or (ii) allowing Tenant to remain in
                full possession and control of the Premises. If Landlord chooses
                to repossess the Premises, then this Lease will automatically
                terminate in accordance with the provisions of California Civil
                Code Section 1951.2. In the event of such termination of this
                Lease, Landlord may recover from Tenant: (a) the worth at the
                time of award of the unpaid Rent which had been earned at the
                time of termination, including interest at the prime rate as
                published in the "Wall Street Journal" or such other equivalent
                periodical that tracks such interest rates, plus these three
                hundred (300) basis points (hereinafter "Interest Rate"); (b)
                the worth at the time of award of the amount by which the unpaid
                Rent which would have been earned after termination until the
                time of award exceeds the amount of such rental loss that Tenant
                proves could have been reasonably avoided, including interest at
                the Interest Rate; (c) the worth at the time of award of the
                amount by which the unpaid Rent for the balance of the Term
                after the time of award exceeds the amount of such rental loss
                that Tenant proves could be reasonably avoided; and (d) any
                other amount necessary to compensate Landlord for all the
                detriment proximately caused by Tenant's failure to perform its
                obligations under this Lease or which, in the ordinary course of
                things, would be likely to result therefrom. "The worth at the
                time of the award", as used in (a) and (b) of this paragraph, is
                to be computed by allowing interest at the Interest Rate. "The
                worth at the time of the award", as referred to in (c) of this
                paragraph, is to be computed by discounting the amount at the
                discount rate of the Federal Reserve Bank of San Francisco at
                the time of the award, plus one percent (1%).

        B.      If Landlord chooses not to repossess the Premises, but allows
                Tenant to remain in full possession and control of the Premises,
                in accordance with provisions of California Civil Code Section
                1951.4, then Landlord may treat this Lease as being in full
                force and effect, and may collect from Tenant all Rents as they
                become due through the termination date of this Lease, as
                specified in this Lease. For the purpose of this Paragraph 14,
                the following shall not constitute a termination of Tenant's
                right to possession:

                (1)     Acts of maintenance or preservation, or efforts to relet
                        the Premises;

                (2)     The appointment of a receiver on the initiative of
                        Landlord to protect its interest under this Lease.

        C.      Tenant shall be liable immediately to Landlord for all
                reasonable costs Landlord incurs in reletting the Premises,
                including, without limitation, brokers' commissions, expenses of
                remodeling the Premises required by the reletting, and like
                costs. Reletting can be for a period shorter or longer than the
                remaining Term of this Lease. Tenant shall pay to Landlord the
                Rent due under this Lease, on the dates the Rent is due, less
                the Rent Landlord receives from the new Lease, unless Landlord
                notifies Tenant that Landlord elects to terminate this Lease.
                Tenant shall pay to Landlord, in addition to the remaining Rent
                due, all costs which Landlord incurred in reletting, including
                without limitation maintenance, that remain after applying the
                Rent received from the reletting, as provided in this Paragraph
                14. After the occurrence of an Event of Default and for as long
                as Landlord does not terminate Tenant's right to possession of
                the Premises, if Tenant obtains Landlord's consent, Tenant shall
                have the right to assign its interest in this Lease, or sublet
                all or a portion of the Premises, but Tenant shall not be
                released from liability and obligations under this Lease.
                Landlord's consent to a proposed assignment or subletting shall
                be as required in Paragraph 21.


        D.      If Landlord elects to relet the Premises as provided in this
                Paragraph 14, then any Rent that Landlord receives from
                reletting shall be applied to the payment of:

                (1)     First, any indebtedness from Tenant to Landlord other
                        than Rent due from Tenant;


                                       13
<PAGE>   14

                (2)     Second, all costs, including for maintenance, incurred
                        by Landlord in reletting; and

                (3)     Third, Rent due and unpaid under this Lease.

        E.      After deducting the payments referred to in this Paragraph 14,
                any sum remaining from any Rent which Landlord receives from
                reletting shall be held by Landlord and applied in payment of
                future Rent as Rent becomes due under this Lease. In no event
                shall Tenant be entitled to any excess Rent received by
                Landlord.

        F.      Landlord, at any time after an Event of Default, can cure the
                default at Tenant's cost. If Landlord at any time, by reason of
                an Event of Default, pays any sum or does any act that requires
                the payment of any sum, then the sum paid by Landlord shall be
                due immediately from Tenant to Landlord at the time the sum is
                paid and, if paid at a later date, shall bear interest at the
                Interest Rate from the date the sum is paid by Landlord until
                Landlord is reimbursed by Tenant. The sum, together with
                interest on it, shall be Additional Rent.

        G.      Any Rent not paid when due shall bear interest at the Interest
                Rate from the date due until paid and shall be subject to the
                late charge set forth in subparagraph 3.A above.

15.     Destruction.

        A. In the event the Premises or the Complex are damaged by any casualty
        which is covered under insurance carried by Tenant or Landlord, then
        Landlord or Tenant, whichever receives such insurance proceeds, shall
        restore such damage to the extent that the insurance proceeds are
        available provided such restoration can be completed within one hundred
        eighty (180) days after the commencement of the work. In such event,
        this Lease shall continue in full force and effect except that Tenant
        shall be entitled to proportionate reduction of Rent while such
        restoration takes place, such proportionate reduction to be based upon
        the extent to which the restoration efforts interfere with the Tenant's
        business in the Premises. If such repair and restoration is not
        completed by the end of said one hundred eighty (180) day period, then
        Tenant shall have the right to terminate this Lease by written notice to
        Landlord given within fifteen (15) days after the end of such one
        hundred eighty (180) day period. If Tenant fails to give notice of
        termination within the time provided, then this Lease shall continue in
        full force and effect. Landlord shall, at all times during the Term of
        this Lease, procure and continue in force insurance coverage to cover an
        amount equal to at least one hundred percent (100%) replacement value of
        the building. Notwithstanding the foregoing, if any such damage or
        destruction occurs during the last twelve (12) months of the Term of
        this Lease, and Tenant has not exercised its option to renew as provided
        in Section 39 hereof, Landlord shall not be obligated to repair such
        damage.

        B. If the Premises, the Building, Complex or common areas are damaged by
        risks not covered by such insurance or the insurance proceeds available
        to Landlord are less than ninety percent (90%) of the cost of
        restoration, or if the restoration cannot be completed within six (6)
        months after the commencement of work in the opinion of the architect or
        engineer appointed by Landlord, then Landlord shall have the option to
        (i) repair or restore such damage, this Lease continuing in full force
        and effect, or (ii) give notice to Tenant at any time within ninety (90)
        days after the date of such damage terminating this Lease as of the date
        to be specified in such notice, which date shall not be less than thirty
        (30) and no more than sixty (60) days after giving of such notice.
        Notwithstanding the foregoing, if any such uninsured damage or
        destruction occurs during the last twelve (12) months of the Term of
        this Lease, and Tenant has not previously exercised its option to renew
        as provided in Section 39 hereof, Landlord shall not be obligated to
        repair such damage.

        C. Notwithstanding the foregoing, if the Premises are destroyed
        ("Destroyed" shall mean more than fifty percent (50%) of the Premises),
        in whole or in part, from any cause, Landlord shall, at its option,
        either:

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

                (2)     Terminate this Lease.

        If Landlord does not give Tenant notice in writing within sixty (60)
        days from the destruction of the Premises of its election either to keep
        this Lease in full force and rebuild and restore the Premises, or to
        terminate this Lease, and provided that insurance proceeds actually
        available to Landlord for the purpose of restoring the Complex or the
        Premises are sufficient to rebuild or restore the Premises, then
        Landlord shall be deemed to have elected to rebuild or restore the



                                       14
<PAGE>   15
         Premises, in which event Landlord agrees, at its expense, promptly to
         rebuild or restore the Premises to the condition existing as of the
         date of Substantial Completion.

         If Landlord does not materially complete the re-building or restoration
         cannot be completed within six (6) months after the commencement of
         work in the opinion of the architect or engineer appointed by Landlord
         (such period of time to be extended for delays as provided in Paragraph
         36), then Tenant shall have the right to terminate this Lease by giving
         written notice to Landlord within fifteen (15) days of the expiration
         of such period. If Tenant fails to give notice of termination within
         the time provided, then this Lease shall continue in full force and
         effect.

         Landlord's obligation to rebuild or restore the Premises shall not
         include restoration of Tenant's trade fixtures, equipment or
         merchandise, or any improvements, alterations or additions made by
         Tenant to the Premises. 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, and Section 1933, Subdivision 4, of the California Civil
         Code.

16.      Condemnation. If any part of the Premises shall be taken for any public
         or quasi-public use, under any statute or by right of eminent domain,
         or private purchase in lieu thereof, and a part thereof remains which
         is susceptible of occupancy hereunder, then this Lease shall, as to the
         part so taken, terminate as of the date title vests in the condemnor or
         purchaser, and the Rent payable hereunder shall be adjusted so that
         Tenant shall be required to pay for the remainder of the term only such
         portion of the Rent as the value of the part remaining after such
         taking bears to the value of the entire Premises prior to such taking.
         Landlord shall have the right to terminate this Lease in the event that
         such taking causes a reduction in Rent payable hereunder by twenty-five
         percent (25%) or more. If all of the Premises or such part thereof is
         taken so that there does not remain a portion susceptible for occupancy
         hereunder, as reasonably necessary for Tenant's conduct of its business
         as contemplated in this Lease, then this Lease shall thereupon
         terminate. If a part or all of the Premises is taken, then all
         compensation awarded upon such taking shall go to Landlord and Tenant
         shall have no claim thereto, and Tenant hereby irrevocably assigns and
         transfers to Landlord any right to compensation or damages to which
         Tenant may become entitled during the Term hereof by reason of the
         purchase or condemnation of all or a part of the Premises. Tenant shall
         have the right to separately petition and to claim and recover from the
         condemning authority, but not from Landlord, such compensation as may
         be separately awarded or recoverable by Tenant in Tenant's own right on
         account of any and all damage to Tenant's business, including without
         limitation the loss of goodwill by reason of any appropriation, and for
         or on account of any cost or loss to which Tenant might be put in
         removing and relocating Tenant's merchandise, furniture, moveable trade
         fixtures and equipment. In no event, however, shall the loss of
         goodwill include any diminution in the value of the leasehold or the
         bonus value of this Lease and in no event shall Tenant be entitled to
         any award which diminishes the award to Landlord on account of the
         condemnation. Each party waives the provisions of Code of Civil
         Procedure, Section 1265.130, allowing either party to petition the
         Superior Court to terminate this Lease in the event of a partial taking
         of the Premises.

17.      Free from Liens. Tenant shall (i) pay for all labor and services
         performed or materials used by or furnished to Tenant or any contractor
         employed by Tenant with respect to the Premises, and (ii) indemnify,
         protect and defend (with counsel reasonably acceptable to Landlord)
         Landlord against and hold Landlord and Landlord's members, partners,
         officers, employees, lenders, successors, assigns and agents harmless
         from any and all claims, demands, losses, damages, costs and
         liabilities, causes of action, judgments or obligations resulting
         therefrom, including reasonable attorney's fees with respect to the
         Premises.

18.      Compliance with Laws. Tenant shall, at its own cost, comply with and
         observe all requirements of all municipal, county, state and federal
         authority now in force, or which may hereafter be in force, pertaining
         to the use and occupancy of the Premises and/or Complex.

19.      Subordination. Tenant agrees that this Lease shall, at the option of
         Landlord, be subject and subordinate to any mortgage, deed of trust or
         other instrument of security which has been or shall be placed on the
         Premises and the Complex, and this subordination is hereby made
         effective without any further act of Tenant or Landlord. Tenant shall,
         at any time hereinafter, on demand, execute any instruments, releases
         or other documents that may be required by a mortgagee, mortgagor,
         trustor or beneficiary under any deed of trust, for the purpose of
         subjecting or subordinating this Lease to the lien of any such
         mortgage, deed of trust or other instrument of security. If Tenant
         fails to execute and deliver any such documents or instruments, such
         failure shall, at Landlord's option, constitute a default by Tenant
         under this Lease.

         If the Premises is currently subject to a superior lease or mortgage,
         Landlord shall obtain a subordination, non-disturbance and attornment
         agreement from the holder thereof in recordable form, in the form
         customarily used by such holder, whereby the holder of such superior
         lease or mortgage agrees that, so long as Tenant is not in default
         under this Lease, Tenant shall lawfully

                                       15

<PAGE>   16



         and quietly hold, occupy and enjoy the Premises during the Term of this
         Lease, without hindrance or interference from anyone claiming by or
         through said superior lessor or mortgagee.

         If this Lease is or becomes subordinate to any encumbrance now of
         record or any encumbrance recorded after this date affecting the
         Premises, then Tenant agrees to attorn to any purchaser at any
         foreclosure sale, or to any grantee or transferee designated in any
         deed given in lieu of foreclosure. In such event, Tenant shall execute,
         at Landlord's or the lender's request, such recognition and attornment
         agreement as the lender, at its option, may require. Landlord and
         Tenant acknowledge that it is the intention that a subordination,
         non-disturbance and attornment agreement (in reasonably industry
         standard form) be executed by Landlord, Tenant and the lender to the
         Complex. Landlord agrees to be diligent and negotiate in good faith
         with any lender to obtain quiet enjoyment/non-disturbance agreement
         regarding the Premises provided that Tenant is in conformance with the
         terms and conditions of the Lease, and provided that obtaining such an
         agreement shall not be a condition to subordination of this Lease
         (Landlord shall not be required to pay any consideration to the lender
         for the same).

20.      Abandonment. Tenant shall not vacate nor abandon the Premises at any
         time during the Term of this Lease; and if Tenant shall abandon, vacate
         or surrender said Premises, or be dispossessed by process of law, or
         otherwise, then any personal property belonging to Tenant and left on
         the Premises shall be deemed to be abandoned, at the option of
         Landlord, except such property as may be mortgaged to Landlord.

21.      Assignment and Subletting.

         A.       Landlord's Consent Required. Tenant shall not, either
                  voluntarily or by operation of law, sell, encumber, pledge or
                  otherwise transfer all or any part of Tenant's leasehold
                  estate hereunder or permit the Premises to be occupied by
                  anyone other than Tenant or Tenant's employees, or sublet the
                  Premises or any portion thereof, without Landlord's prior
                  written consent in each instance, which consent may not
                  unreasonably be withheld by Landlord. In exercising its
                  reasonable discretion, Landlord may consider all commercially
                  relevant factors involved in the leasing, subleasing or
                  assignment of the space, including, but not limited to, the
                  following: (i) the creditworthiness and financial stability
                  of the prospective assignee or sublessee; (ii) the references
                  from prior landlords of such prospective sublessee or
                  assignee; (iii) the past history of such sublessee or assignee
                  with respect to involvement in litigation and bankruptcy
                  proceedings; (iv) whether the proposed use of the Premises by
                  the prospective sublessee or assignee falls within the use
                  permitted under Paragraph 5; (v) the impact of said sublessee
                  or assignee and the proposed use of the Premises on pedestrian
                  and vehicular traffic and parking facilities; (vi) the
                  anticipated use, storage, generation, treatment and disposal
                  of Hazardous Materials by such prospective sublessee or
                  assignee; or (vii) the fact that the subletting will cause a
                  vacancy in any property owned by Landlord's affiliates. Tenant
                  shall provide Landlord with prior notice of any proposed
                  assignment or sublease as provided in subparagraph 21.B,
                  below. Consent by Landlord to one or more assignments of this
                  Lease or to one or more subletting of the Premises shall not
                  operate to exhaust Landlord's rights under this Paragraph 21.
                  If Tenant is a corporation, unincorporated association, or
                  partnership, the transfer, assignment, or hypothecation of any
                  stock or ownership interest in such corporation,
                  unincorporated association or partnership in excess of
                  forty-nine percent (49%) shall be deemed an assignment within
                  the meaning and provision of this Paragraph 21; but excluding
                  ordinary secondary market transactions in the stock of Tenant
                  which may aggregate 49% thereof, if they take place on a
                  market or exchange such as NASDAQ or NYSE, but including
                  transfers in connection with a "tender offer" merger,
                  stock-for stock exchange or "going private". If in excess of
                  forty-nine percent (49%) of the ownership of Tenant's stock is
                  transferred, or all or substantially all of its assets are
                  transferred or Tenant merges with another corporation, then
                  such transferee of the stock or new party directly or
                  indirectly controlling greater than 49% of the stock of Tenant
                  shall promptly execute a guarantee ("Guarantee") of the Lease
                  as attached hereto in Exhibit "F" and in the case of a
                  transfer of assets or a merger, such transferee or merged
                  corporation shall assume this Lease without modification.

                  As a condition of Landlord's consent to an assumption of the
                  Lease by the transferee after such a stock transfer, asset
                  sale or merger, which condition Tenant agrees is reasonable,
                  the proposed transferee of stock, purchaser of assets, or
                  surviving entity in a merger shall have a minimum net worth
                  (as determined by GAAP) equal to Five Hundred Million and
                  No/100ths U.S. Dollars ($500,000,000.00) at the time of the
                  completion of the transaction. The voluntary or other
                  surrender of this Lease by Tenant or a mutual cancellation
                  hereof shall not work a merger, and shall, at the option of
                  Landlord, terminate all or any existing subleases or
                  subtenancies. All Rent received by Tenant from its subtenants
                  in excess of the Rent payable by Tenant to Landlord under this
                  Lease shall be paid to Landlord, and any sums to be paid by an
                  assignee to Tenant in consideration of the assignment of this

                                       16

<PAGE>   17



                  Lease shall be paid to Landlord. In addition, all
                  considerations in excess of the fair market value for the item
                  being leased or conveyed shall be paid to Landlord. However,
                  from the sublease rent in excess of the Basic and Additional
                  Rent hereunder, Tenant may recover its direct documented
                  third-party expenses of subleasing of reasonable legal fees,
                  reasonable brokerage commissions, and reasonable tenant
                  improvement costs. Any sublease or assignment permitted
                  herein, shall, at Landlord's election, automatically terminate
                  Tenant's option(s), if any, to extend the Term of this Lease
                  and, in such event, any such options shall not be available to
                  any sublessee, assignee or other transferee. Furthermore,
                  Landlord reserves the right to terminate this Lease upon
                  thirty (30) days written notice after Landlord receives
                  Tenant's written request to approve a proposed sublease and/or
                  assignment. Such election shall be made within said thirty
                  (30) days after Landlord receives Tenant's request for
                  approval of a sublease or assignment. Landlord's election to
                  terminate shall be in Landlord's sole and absolute discretion.

         B.       Notice to Landlord. If Tenant desires at any time to assign
                  this Lease or to sublet the Premises (including any
                  transaction treated as an assignment under the terms of this
                  Lease) or any portion thereof, it shall first notify Landlord
                  of its desire to do so and shall submit in writing to Landlord
                  (i) the name of the proposed sublessee or assignee; (ii) the
                  nature of the proposed sublessee's or assignee's business to
                  be carried on in the Premises; (iii) the material business
                  terms of the proposed sublease or assignment; and (iv) such
                  reasonable financial information concerning the proposed
                  sublessee or assignee as Landlord may need to make a prudent
                  and considered decision. Tenant shall also provide to Landlord
                  a copy of the sublease or assignment after such document has
                  been fully executed by both Tenant and the proposed subtenant
                  or assignee, as the case may be, for Landlord's review and
                  approval.

         C.       Tenant Not Released. No subletting or assignment, even with
                  the written consent of Landlord, shall relieve Tenant of its
                  obligation to pay the Rent and perform all of the other
                  obligations to be performed by Tenant hereunder. Tenant shall
                  indemnify and defend (with counsel reasonably acceptable to
                  Landlord) Landlord against and hold Landlord and Landlord's
                  members, partners, officers, employees, successors and assigns
                  and agents harmless from any and all claims, demands, losses,
                  damages, costs and liabilities, causes of action, judgments or
                  obligations resulting therefrom, including reasonable
                  attorney's fees, arising out of any claims by brokers or
                  others for commissions or finder's fees with respect to any
                  subletting or assignment by Tenant. The acceptance of Rent by
                  Landlord from any other person shall not be deemed to be a
                  waiver by Landlord of any provision of this Lease or to be a
                  consent to any assignment or subletting. Tenant immediately
                  and irrevocably assigns to Landlord, as security for Tenant's
                  obligations under this Lease, all Rent from any subletting,
                  and Landlord, as assignee and attorney in fact for Tenant, or
                  any receiver for Tenant appointed on Landlord's application,
                  may collect such Rent and apply it toward Tenant's obligations
                  under this Lease, except that, until the occurrence of any
                  Event of Default by Tenant, Tenant shall have the right to
                  collect such Rent.

         D.       Involuntary Assignment. No interest of Tenant in this Lease
                  shall be assignable by operation of law. Without limiting the
                  foregoing, each of the following acts shall be considered an
                  involuntary assignment:

                  (i)      If Tenant is or becomes bankrupt or insolvent, makes
                           an assignment for the benefit of creditors, or
                           institutes a proceeding under the Bankruptcy Act in
                           which Tenant is the bankrupt; or, if Tenant is a
                           partnership or consists of more than one person or
                           entity, if any general partner of the partnership or
                           other person or entity is or becomes bankrupt or
                           insolvent, or makes an assignment for the benefit of
                           creditors;

                  (ii)     The appointment of a trustee or receiver to take
                           possession of substantially all of Tenant's assets
                           located at the Premises or of Tenant's interests in
                           this Lease, where possession is not restored to
                           Tenant within thirty (30) days; or

                  (iii)    The attachment, execution or other judicial seizure
                           of substantially all of Tenant's assets located at
                           the Premises or of Tenant's interest in this Lease,
                           where seizure is not discharged within thirty (30)
                           days.


                  An involuntary assignment shall constitute an Event of Default
                  under this Lease, and in such event Landlord shall have the
                  right to elect to terminate this Lease, in which case this
                  Lease shall not be treated as an asset of Tenant.

         E.       Tenant to Reimburse Landlord for Expenses. Tenant agrees to
                  reimburse Landlord, as Additional Rent, upon demand, for
                  Landlord's reasonable costs and attorney's fees,


                                       17
<PAGE>   18



                  incurred in conjunction with the processing, investigation and
                  documentation of any requested assignment, subletting,
                  transfer, change of ownership or hypothecation of this Lease
                  or Tenant's interest in and to the Premises, regardless of
                  whether any request actually results in a permitted
                  assignment, sublease or other transfer.

22.      Parking. Any parking charges, surcharges or any other cost hereafter
         levied or assessed by local, state or federal governmental agencies in
         connection with the use of the parking facilities serving the Premises,
         including, without limitation, any parking surcharge imposed by or
         under the authority of the Federal Environmental Protection Agency,
         shall be included in Operating Expenses as defined in Paragraph 3,
         above. Should Landlord require that Tenant issue parking permits to its
         individual employees or develop any form of traffic parking management
         plan, Tenant agrees to fully and promptly cooperate with Landlord.
         Tenant further acknowledges that the parking garage is designed for a
         specific number of cars i.e.: 229 and Tenant agrees that it shall not
         park more than that number of cars in the parking garage at any one
         given time.

23.      Landlord Loan or Sale. Tenant agrees, promptly following request by
         Landlord, to execute and deliver to Landlord any documents, including
         estoppel certificates presented to Tenant by Landlord, (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; (ii)
         acknowledging that there are not, to Tenant's knowledge, any uncured
         defaults on the part of Landlord hereunder (or, if there are any such
         uncured defaults, stating the nature of any such default[s]); and (iii)
         evidencing the status of the Lease as may be required either by a
         lender making a loan to Landlord, to be secured by deed of trust or
         mortgage covering the Premises, or a purchaser of the Complex or the
         Premises from Landlord. Tenant's failure to deliver an estoppel
         certificate within ten (10) business days following such request shall
         constitute a default under this Lease and shall be conclusive upon
         Tenant that this Lease is in full force and effect and has not been
         modified except as may be represented by Landlord, and that there are
         no uncured defaults in Landlord's performance. In addition, if
         requested by Landlord, Tenant shall deliver to any prospective lender
         or purchaser of the Property and/or the Complex, audited financial
         statements of Tenant covering the two (2) fiscal years immediately
         preceding the request, certified by an independent certified public
         accountant (or, if such statements are not normally prepared, audited
         and certified by an independent public accountant, then certified by
         the chief financial officer or a principal of Tenant).

24.      Surrender of Lease. The voluntary or other surrender of this Lease by
         Tenant, or a mutual cancellation thereof, shall not work a merger nor
         relieve Tenant of any of Tenant's obligations under this Lease, and
         shall, at the option of Landlord, either terminate all or any existing
         subleases or subtenancies, or operate as an assignment to Landlord of
         any or all such subleases or subtenancies.

25.      Attorneys' Fees. If, for any reason, any action or other proceeding is
         initiated between Landlord and Tenant, the prevailing party shall be
         entitled to legal costs, expert witnesses expenses, reasonable
         attorneys' fees and costs as fixed by the court.

26.      Notices. All notices to be given to either party shall be given in
         writing, personally or by depositing the same in the United States
         mail, postage prepaid, or by commercial overnight courier, and
         addressed to Tenant at the said Premises, whether or not Tenant has
         departed from, abandoned or vacated the Premises, as well as to the
         address set forth below, or to such other address as Tenant may specify
         by notice given in accordance with the provisions of this Paragraph 26.
         Any notice to be given to Landlord shall be addressed to Landlord at
         the address set forth below, or at such other address as it may have
         theretofore specified by notice delivered in accordance herewith:

       Landlord:     DLC REDWOOD CITY
                     c/o Dewey Land Company, Inc.
                     999 Baker Way, Suite 300
                     San Mateo, CA 94404
                     (650) 571-1010 Fax (650) 571-1019

                     Before Commencement:                  After Commencement:

       Tenant:       NIKU, Inc.                            At the Premises
                     305 Main Street
                     Redwood City, CA 94063
                     (650)298-4600 Fax (650)298-4601
                     Attn: General Counsel and Chief Financial
                           Officer


                                       18
<PAGE>   19
27.      Waiver. The waiver by Landlord or Tenant of any breach of any term,
         covenant or condition herein contained shall not be deemed to be a
         waiver of such term, covenant or condition. The subsequent acceptance
         of Rent hereunder by Landlord shall not be deemed to be a waiver of any
         preceding breach by Tenant of any term, covenant or condition of this
         Lease, other than the failure of Tenant to pay the particular Rent so
         accepted, regardless of Landlord's knowledge of such preceding breach
         at the time of acceptance of such Rent.

28.      Holding Over. Any holding over by Tenant after the expiration of the
         Term of this Lease or any extension hereof, with the consent of
         Landlord, shall be construed to be a tenancy from month-to-month, at a
         Basic Rent of two hundred percent (200%) of the monthly Basic Rent in
         effect during the last month of the Lease term, or any extension
         thereof, and shall otherwise be on the terms and conditions herein
         specified, so far as applicable.

29.      Covenants, Conditions and Restrictions. The parties by this reference
         incorporate herein as if set out in full, all Covenants, Conditions and
         Restrictions ("CC&R's") pertaining to the Complex which may exist in
         the future. As a condition to this Lease, Tenant agrees to abide by all
         of said CC&R's. Moreover, such reasonable rules and regulations as may
         be hereafter adopted by Landlord for the safety, care and cleanliness
         of the Complex and/or Premises and the preservation of good order
         thereon, are hereby expressly made a part hereof, and Tenant agrees to
         obey all such rules and regulations.

30.      Limitation on Landlord's Liability. If Landlord is in default of this
         Lease, and as a consequence Tenant recovers a money judgment against
         Landlord, any such judgment shall be satisfied only out of the proceeds
         of sale received on execution of the judgment and levy against the
         right, title and interest of Landlord in the Premises, or in the
         Complex, and out of Rent or other income from such real property
         receivable by Landlord, or out of the consideration received by
         Landlord from the sale or other disposition of all or any part of
         Landlord's right, title and interest in the Premises in the Complex.
         Neither Landlord nor any of the members or partners comprising the
         company or partnership or officers of the company designated as
         Landlord (or its general partner) shall be personally liable for any
         deficiency.

31.      Sale or Transfer of Premises. If Landlord sells or transfers all or any
         portion of the Premises, or the Complex, then Landlord, on consummation
         of the sale or transfer, shall be released from any liability
         thereafter accruing under this Lease. If any security deposit or
         prepaid Rent has been paid by Tenant, Landlord agrees to transfer the
         security deposit or prepaid Rent to Landlord's successor, other than
         any portion of the security deposit applied or retained to compensate
         Landlord for any loss or damage which Landlord may have suffered as a
         result of an Event of Default, and thereupon Landlord shall be
         discharged from any further liability in reference thereto.

32.      Landlord's Right 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 fails to pay any sum of money required to
         be paid by it hereunder or fails to perform or observe any other term
         hereunder on its part to be performed or observed, then Landlord may,
         at its option, without waiving or releasing Tenant from any obligation
         of Tenant hereunder, make any such payment, or perform or observe any
         such other term or act on Tenant's part to be performed or observed.
         All sums so paid by Landlord and all reasonably necessary costs of such
         performance or observation by Landlord together with interest thereon
         from the date incurred at the Interest Rate, shall be paid by Tenant to
         Landlord as Additional Rent, on demand, in which event and as to the
         same Landlord shall have the same rights and remedies against Tenant as
         in the case of nonpayment of Rent hereunder.

33.      Landlord's Right of Entry. With reasonable telephone notice (except in
         the case of emergency), Landlord (and/or its representatives) shall
         have the right, at all reasonable times, to enter the Premises in order
         to post notices; to improve, or alter the Complex; to inspect or repair
         the Premises or the Complex; and to erect scaffolding and other
         necessary structures in or near the Premises (provided the same do not
         unreasonably impair access to the Premises), or the Complex; and to
         post "For Sale" signs with respect to the Complex. During the last nine
         (9) months of the then current Term of this Lease, Landlord (and/or its
         representatives) shall have the right, at all reasonable times, to
         enter the Premises to place "For Lease" signs on the Premises. Landlord
         and any purchaser, lessee or encumbrancer may enter the Premises, at
         all reasonable times, with respect to any existing or prospective sale,
         lease or encumbrance. Landlord shall also have the right to enter the
         Premises at any time, without prior notice, in those emergency
         situations which could involve potential injury to persons or loss of
         property. All of the above shall be without abatement of Rent and any
         such entry shall not be construed as a forcible or unlawful entry, or a
         detainer, or an actual or constructive eviction of Tenant from the
         Premises.

34.      Signs. No sign, placard, picture, advertisement, name or notice shall
         be inscribed, displayed, printed or affixed on or to any part of the
         outside of the Premises, or any exterior windows of the Premises, or
         any interior windows visible from common areas of the Complex, without
         the prior

                                       19
<PAGE>   20



         written consent of Landlord (which consent may be granted in Landlord's
         absolute discretion) and Landlord shall have the right to remove the
         same without notice to and at the expense of Tenant. NIKU, Inc. may
         install its name on the exterior of the Building, in one location,
         facing Highway 101 Size, color and exact location of said sign shall be
         mutually agreed upon by Landlord and Tenant, and be subject to City of
         Redwood City approval. Tenant shall be permitted to install its name on
         the main building directory and its suite. Tenant may allocate the
         Basic Allowance toward this cost for signage. At Landlord's option,
         upon expiration or other sooner termination of this Lease, Tenant
         shall, at Tenant's sole cost, remove all Tenant signage, repair all
         damage caused thereby and restore the appearance of the Premises and
         the Building to its condition prior to the placement of said signs. All
         approved signs (or lettering on outside doors) shall be done at the
         expense of Tenant by a person selected by Landlord.

35.      Exercise Facility. By its execution of this Lease, Tenant acknowledges
         that it is aware that the Complex may contain an exercise facility in
         Landlord's sole election. Tenant and its employees over the age of
         eighteen (18) years may reasonably use the exercise facility and its
         equipment in accordance with the rules therefor established by
         Landlord; provided, however, that no person shall use the exercise
         facility or its equipment unless he/she has signed a waiver and release
         in the form attached hereto as Exhibit E and made a part hereof, and
         the original of such executed waiver and release has been delivered to
         Landlord. In consideration for the right to use the exercise facility,
         Tenant agrees to faithfully enforce the provision of this Paragraph 35,
         and to indemnify, defend and hold Landlord harmless from any claims or
         damages, including reasonable attorneys' fees, incurred as a result of
         the use of the exercise facility and its equipment including but not
         limited to any personal injury, pursuant to this Paragraph 35. Use of
         the exercise facility in violation of the provisions of this Paragraph
         35 or any other unauthorized use of the exercise facility shall
         constitute a material breach of this Lease. The cost of operation of
         the exercise facility (including rent at the same per square foot
         rental rate as being paid by Tenant on area of the exercise facility)
         shall be included in the Operating Expenses described in Paragraph 3
         above.

36.      Force Majeure. Subject to the provisions of Paragraphs 15 and 16 of
         this Lease, neither Landlord nor Tenant shall be deemed in default of
         their respective obligations under this Lease if performance thereof is
         delayed or becomes impossible because the fault or neglect of the other
         party, or because of acts of God, war (whether declared or undeclared),
         earthquake, fire, acts of public agencies, embargoes, rainy, stormy or
         other adverse weather, riot, civil commotion, insurrection, blockade,
         inability to obtain materials, supplies or fuels, acts and delays of
         subcontractors or contractors, and such other contingencies beyond the
         control of the performing party. Upon such an event, the time for
         performance shall be reasonably extended, but in no event shall such
         extension be longer than sixty (60) days beyond the original date for
         performance, in which case the party to whom the obligation is owed may
         terminate this Lease without penalty by giving notice to the other
         party. This Paragraph 36 shall not be applicable to the payment of Rent
         or other monetary sums under this Lease.

37.      Quiet Enjoyment. Landlord covenants that if, and so long as, Tenant
         keeps and performs each and every covenant, agreement, term, provision
         and condition herein contained on the part and on behalf of Tenant to
         be kept and performed, Tenant shall quietly enjoy the Premises from and
         against the claims of all persons.

38.      Miscellaneous.

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

         B.       The term "Complex" shall mean the Complex in which the
                  Premises are situated.

         C.       The term "assign" shall include the term "transfer".

         D.       The invalidity or unenforceability of any provision of this
                  Lease shall not affect the validity or enforceability of the
                  remainder of this Lease.

         E.       The headings and titles to the paragraphs of this Lease are
                  not a part of this Lease and shall have no effect upon the
                  construction or interpretation of any part thereof.

         F.       Landlord has made no representation(s) whatsoever to Tenant
                  (express or implied) except as may be expressly stated in
                  writing in this Lease.

         G.       This instrument contains all of the agreements and conditions
                  between the parties hereto with respect to the Premises, and
                  may not be modified orally or in any other manner than by
                  agreement in writing, signed by all of the parties hereto or
                  their respective successors in interest.

                                       20

<PAGE>   21



         H.       It is understood and agreed that the remedies herein given to
                  Landlord shall be cumulative, and the exercise of any one
                  remedy by Landlord shall not be to the exclusion of any other
                  remedy.

         I.       The covenants and conditions herein contained shall, subject
                  to the provisions of Paragraph 21, apply to and bind the
                  heirs, successors, executors, administrators and assigns of
                  all the parties hereto.

         J.       This Lease has been negotiated jointly by the parties hereto,
                  and the language hereof shall not be construed for or against
                  either party.

         K.       All exhibits to which reference is made in this Lease are
                  deemed incorporated into this Lease, whether or not actually
                  attached.

         L.       All provisions of this Lease, whether covenants or conditions,
                  applicable to Tenant shall be deemed to be both covenants and
                  conditions.

         M.       This Lease shall in all respects be governed by, and construed
                  and enforced in accordance with the laws of the State of
                  California.

         N.       As used in this Lease, the term "Effective Date" shall mean
                  the latest date set forth below.

         O.       Tenant and Landlord hereby warrant to the other that each
                  individual executing this Lease has been duly authorized to
                  execute and deliver the Lease by all necessary entity action
                  and that this Lease is the valid and binding obligation of
                  Tenant and Landlord. Tenant and Landlord warrant to the other
                  that it is qualified to do business in and to be in good
                  standing in the State of California.

         IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the
date first above written.

        LANDLORD                                     TENANT

        DLC REDWOOD CITY                             NIKU Inc
        a California limited partnership             a Delaware corporation

        By 350 Associates LLC                        By: /s/ MARK NELSON
        a California limited liability company          ------------------------
        its General Partner                          Its: CFO
                                                         -----------------------

                                                     Date: 3/29/00
                                                          ----------------------
        By: /s/ RICHARD R. DEWEY, JR.
           ---------------------------
        Richard R. Dewey, Jr.
        Manager
        Date  3/29/0200
            --------------------------

                                       21

<PAGE>   22

                                    ADDENDUM


TO THAT CERTAIN LEASE DATED March 28, 2000, BY AND BETWEEN DLC REDWOOD CITY, A
CALIFORNIA LIMITED PARTNERSHIP ("LANDLORD") AND NIKU, INC, A DELAWARE
CORPORATION ("TENANT").


39.      Option to Extend. Tenant shall have the option to renew the Term of
         this Lease for one (1) additional ten (10) year term (the "Extended
         Term"). The Basic Rent for the Extended Term shall be Fair Market Rent
         including annual increases provided in Section 3B of this Lease as
         reflected in the determination of Fair Market Rent as provided herein.
         Fair Market Rent shall be defined to be rent for first class well
         maintained mid-rise office projects located proximate to the Palo Alto,
         Menlo Park, Redwood City, Redwood Shores, San Mateo, Foster City
         marketplace and that have on-building freeway visible signage,
         including the most recent comparable leases Landlord has consummated
         with other tenants at the Complex. Should Landlord and Tenant be unable
         to agree upon the Fair Market Rent within twenty-one (21) days of
         Landlord's timely receipt of Tenant's written notice as required
         herein, then Tenant may elect to either (i) revoke its written notice
         and have the lease expire at the end of the Term as provided in this
         Lease or (ii) notify Landlord within five (5) days that it elects to
         set the Fair Market Rent by appraisal. Tenant's failure to so timely
         notify Landlord as provided above shall be deemed to be Tenant's
         election to have the Lease expire at the end of the Term.

         Following such election to set the Fair Market Rent by appraisal, each
         party, within fifteen (15) days at its cost and by giving notice to the
         other party, shall appoint a licensed real estate appraiser (MAI) with
         at least five (5) years' full-time commercial appraisal experience in
         the area in which the Premises are located to determine the Fair Market
         Rental as specified above. If a party does not appoint an appraiser
         within fifteen (15) days, the single appraiser appointed shall be the
         sole appraiser and shall set the Fair Market Rent for the extended
         Term. If the two appraisers are appointed by the parties as stated in
         this paragraph, they shall meet promptly and attempt to set the Fair
         Market Rent for the extended term. If they are unable to agree within
         twenty (20) days after the second appraiser has been appointed, they
         shall select a third appraiser meeting the qualifications stated in
         this paragraph within ten (10) days after the last day the two
         appraisers are given to set the Fair Market Rent. The cost of said
         third appraiser shall be borne equally by Landlord and Tenant.

         Within ten (10) days after the selection of the third appraiser, a
         majority of the appraisers shall set the Fair Market Rent for the
         Extended Term. If a majority of the appraisers are unable to set the
         Fair Market Rent within the stipulated period of time, then the two
         (2) closest appraisals shall be added together and their total divided
         by two (2); and shall be the initial Basic Rent for the Premises for
         the first twelve (12) months of the Extended Term subject to CPI
         adjustments as set forth in the Lease. In no event shall Fair Market
         Rent be less than the Basic Rent paid in the last month of the primary
         Term of the Lease as increased by the CPI. Said Basic Rent as set by
         the appraisers shall be binding upon the parties hereto and the Lease
         shall remain in effect through the Extended Term. Tenant shall have no
         other right to extend the Lease beyond the Extended Term herein
         granted.

         Tenant shall thereafter notify Landlord of its desire to exercise such
         option within a minimum of nine (9) months and a maximum of twelve (12)
         months prior to the expiration date of the primary lease Term. This
         option shall be void, at Landlord's option, if Tenant has been
         chronically delinquent as defined in Section 13# of this Lease, or is
         in default at the time of exercise or at any time subsequent to Tenant
         giving timely notice up to commencement of the Extended Term. This
         option is personal to Tenant and may not be assigned or transferred
         without Landlord's expressed

                                       22

<PAGE>   23

ADDENDUM
NIKU, INC.
PAGE 2



written consent which may be withheld in Landlord's sole and absolute
discretion. TIME IS OF THE ESSENCE.

Except for adjustments to the Basic Rent, the Extended Term shall be on the same
terms and conditions as the primary Term of the Lease. OPT shall continue to be
chargeable to Tenant during the Extended Term.

<TABLE>
<CAPTION>

     <S>                                                    <C>
     AGREED AND ACCEPTED:                                   AGREED AND ACCEPTED:


     LANDLORD                                               TENANT


     DLC REDWOOD CITY                                       NIKU, INC.
     a California limited partnership                       a Delaware corporation

     By 350 Associates LLC
     a limited liability company
     its General Partner

     By: /s/ RICHARD R. DEWEY, JR. Date: 3/29/2000          By: /s/ MARK NELSON Date: 3/29/00
        ------------------------------------------             -------------------------------
             Richard R. Dewey, Jr.                                  Mark Nelson

     Its: Manager                                           Its:    CFO
         -----------------------------                          ------------------------
</TABLE>

                                       23

<PAGE>   24

                                    EXHIBIT A



Description of Premises, including description of Real Property on which the
Premises are located:

PARCEL ONE:

Parcel 3, as shown on Parcel Map 78-7, being a resubdivision f Parcel "A" shown
on the Parcel Map 69-recorded in Book 7 of Parcel Maps, Page 28, City of Redwood
City, San Mateo County, California, and recorded on October 4, 1978 in Book 44
of Parcel Maps, Page 5.

PARCEL TWO:

Parcel 4, as shown on Parcel Map No. 78-7, being a resubdivision of Parcel "A"
shown on Parcel Map 69-1 recorded in Book 7 of Parcel Maps, Page 28, City of
Redwood City, San Mateo County, California, and recorded on October 4, 1978 in
Book 44 of Parcel Maps, Page 5, Series No. 23141-AN.

 APN:   052-383-320
        052-383-330

                                       24

<PAGE>   25


                       DESCRIPTION OF 350 CONVENTION WAY




<PAGE>   26


                       DESCRIPTION OF 350 CONVENTION WAY

<PAGE>   27



                       DESCRIPTION OF 350 CONVENTION WAY

<PAGE>   28

                                    EXHIBIT B


                                     (DATE)





NIKU, INC.
350 Convention Way
Redwood City, CA 94063


Re: Commencement Date under Lease dated March 28, 2000 Between DLC Redwood City
a California limited partnership, ("Landlord") NIKU, Inc., a Delaware
corporation (hereinafter called "Tenant").


Dear                         :
    -------------------------

         Pursuant to Paragraph 2 of the above-mentioned Lease, you are hereby
         informed of the following:

         Commencement Date of the Term of the Lease:

         Expiration Date of the Term of the Lease:

                               Very truly yours,

                               DLC Redwood City
                               a California limited partnership

                               By 350 Associates LLC
                               a California limited liability Company
                               its General Partner.



                               Richard R. Dewey, Jr.
                               Manager

                               RRD/ms


                                       25


<PAGE>   29

                                    EXHIBIT C


Improvements

Landlord shall provide a Tenant Improvement allowance of Thirty and No/100ths
Dollars ($30.00) per usable square foot (usable square footage shall be the
rentable building areas less the first floor lobby and elevator core, restrooms,
utility/janitor rooms, shafts/stairwells as determined by Landlord's Architect)
("Base Allowance") for construction of tenant improvements in accordance with
the Final Plans prepared under Paragraph 6 of the Lease. Said Improvements shall
include the Building standards including, but limited to, full height solid core
doors in finish selected by Landlord; upgraded light fixtures; "2nd look" t-bar
ceiling grid/tile; semi-recessed fire sprinklers at t-bar ceiling and fully
recessed sprinklers at sheetrock ceiling; side lights next to interior doors,
smooth (Level 5) walls and ceilings; white electrical outlets/switches; Kitchen
appliances (refrigerator, dishwasher, garbage disposal etc.) and sinks on all
floors; and the like. It is understood that Landlord's general contractor will
complete all Improvements done at the Premises. Landlord shall provide Tenant
with its written estimate of the cost of the Improvements (construction costs,
city fees, design fees, architectural/structural fees, etc.) plus a contingency
of five percent (5%). Should the estimated cost of the Improvements exceed the
Base Allowance, then, within ten (10) days from receipt of Landlord's written
estimate, Tenant shall deposit such estimated amount in excess of the Base
Allowance with Landlord. Tenant's failure to so timely forward said excess
amount shall be deemed a default under the Lease as well as a delay in
Substantial Completion caused by Tenant. During construction, any additional
costs in excess of the Base Allowance and funds deposited with Landlord, shall
be paid by Tenant to Landlord within ten (10) days of Tenant's receipt of
Landlord's invoice. Tenant's failure to timely pay as required herein shall be a
default under the Lease as well as a delay as caused by Tenant. At the end of
the construction of the Improvements, Landlord shall provide Tenant with a
summary of the actual costs of the Improvements. Should the actual cost of the
Improvements be less than the amount so paid by Tenant in excess of the Base
Allowance, Landlord shall refund the difference to Tenant within ten (10) days.
Should the actual cost of the Improvements be in excess of the Base Allowance
plus the cost so paid by Tenant, Tenant shall pay this difference (i.e. actual
cost of the Improvements less Base Allowance, less amount paid by Tenant) to
Landlord within ten (10) days of receipt of written invoice.

The Base Allowance provided to Tenant is in addition to work provided in the
base Complex shell at Landlord's cost, included in the base Complex shell
provided at Landlord's sole cost are:

On-site improvements; Parking Garage; Building structure; elevators (finished),
main building (finished) restroom core on each floor (finished); elevator lobby
is fully finished on first floor; main HVAC unit set on roof with main vertical
duct shaft (horizontal distribution, zoning, energy management systems and all
controls are part of the Tenant Improvements); main electrical service to main,
electrical room (Distribution on the respective floor is part of the Tenant
Improvements); and fire sprinkler main vertical riser (horizontal branches,
distribution and drops are part of the Tenant Improvements); all power and
telephone service will be described in detail on or before June 1, 2000 by
Tenant.

Landlord agrees to do the following (or cause the following to be done by the
general contractor): (i) Place order for steel by June 30, 2000; (ii) Place
order to GFRC/Curtain Wall by June 30, 2000; (iii) Commence Indicator piles by
May 31, 2000. (iv) Commence installation of piles by July 31, 2000. Should
Landlord not so timely commence or order, as the case may be, on or before
thirty (30) days, following the above respected date, Tenant may notify Landlord
in writing of this delay. Landlord then shall have thirty (30) days to commence
the work or place the order, as the case may be. Should Landlord fail to do so,
Tenant, by giving Landlord fifteen (15) days written notice, may terminate the
Lease.

                                       26

<PAGE>   30

                                   EXHIBIT "D"

                      STANDARDS FOR UTILITIES AND SERVICES



The following Standards for Utilities and Services shall apply to the Complex.
Landlord reserves the right to adopt nondiscriminatory modifications and
additions hereto at any time as Landlord, in its sole discretion, deems
advisable.

A.       On the Commencement Date through the date the Lease terminates, during
         usual business hours (and at other times for a reasonable additional
         charge to be fixed by Landlord), Landlord shall ventilate the Premises
         and furnish air-conditioning or heating on such days and hours, when in
         the judgment of Landlord it may be required for the comfortable
         occupancy of the Premises. The air-conditioning system achieves maximum
         cooling when the window coverings are closed, Landlord shall not be
         responsible for room temperatures if Tenant does not keep all window
         coverings in the Premises closed whenever the system is in operation.
         Tenant agrees to cooperate fully at all times with Landlord, and to
         abide by all regulations and requirements which Landlord may prescribe
         for the proper functioning and protection of said air-conditioning
         system. Tenant agrees not to connect any apparatus, device, conduit or
         pipe to the Complex air-conditioning supply lines. Tenant further
         agrees that neither Tenant nor its servants, employees, agents,
         visitors, licensees or contractors shall at any time enter mechanical
         installations or facilities of the Complex or adjust, tamper with,
         touch or otherwise in any manner affect said installations or
         facilities.

B.       The Landlord shall furnish to the Premises during the usual business
         hours, electric current as required by the Complex's standard office
         lighting and fractional horsepower office lighting and fractional
         horsepower office business machines in the amount of approximately four
         (4) watts per square foot. The Tenant agrees, should its electrical
         installation or electrical consumption be in excess of the aforesaid
         quantity or extend beyond usual business hours, to reimburse Landlord
         monthly on the date Basic Rent is due for the measured consumption at
         the terms, classifications and rates charged similar consumers by said
         public utility serving the neighborhood in which the Complex is
         located. If a separate meter is not installed at Tenant's cost, such
         excess cost will be established by an estimate agreed upon by Landlord
         and Tenant, and if the parties fail to agree, as established by an
         independent licensed engineer, selected by Landlord and approved by
         Tenant. Tenant agrees not to use any apparatus or device in, or upon,
         or about the Premises which may in any way increase the amount of such
         services usually furnished or supplied to said Premises, and Tenant
         further agrees not to connect any apparatus or device with wires,
         conduits or pipes, or other means by which such services are supplied,
         for the purpose of using additional or unusual amounts of such services
         without the prior written consent of Landlord. Should Tenant use the
         same to excess, Tenant shall pay to Landlord, upon demand, the amount
         established by Landlord for such excess usage. At all times Tenant's
         use of electric current shall never exceed the capacity of the feeders
         to the Complex or the risers or wiring installation and Tenant shall
         not install or use or permit the installation or use of any computer or
         electronic data processing equipment in the Premises without the prior
         written consent of Landlord.

C.       Water will be available in public areas for drinking and lavatory
         purposes only, but if, in Landlord's sole determination, Tenant
         requires, uses or consumes water for any purpose in addition to
         ordinary drinking and lavatory purposes, Landlord may install a water
         meter at Tenant's expense and thereby measure Tenant's water
         consumption for all purposes. Tenant shall pay Landlord, upon demand,
         for the cost of the meter and the cost of the installation thereof and
         throughout the duration of Tenant's occupancy Tenant shall keep said
         meter and installation equipment in good working order and repair at
         Tenant's own cost and expense. If Tenant is in default of its
         obligations to keep the meter and equipment in good repair, then
         Landlord, in addition to all other remedies for breach in this Lease
         and at law, may cause such meter and equipment to be replaced or
         repaired and collect the cost thereof from Tenant. Tenant agrees to pay
         for water consumed, as shown on said meter, as and when bills are
         rendered, and on default in making such payment, Landlord may, in
         addition to all other remedies for breach in this Lease and at law, pay
         such charges and collect the same from Tenant.

D.       The Landlord shall provide janitorial services on the Premises,
         provided the same are used exclusively as offices and are kept
         reasonably in order by Tenant. Tenant shall pay to Landlord, upon
         demand, the cost of removal of Tenant's refuse and rubbish, to the
         extent that the same exceeds the refuse and rubbish usually attendant
         upon the use of the Premises as offices, as well as any costs of excess
         rubbish removal due to move-in, new equipment etc.


                                       27


<PAGE>   31



Exhibit "D"
Page 2




E.       "Holidays" for purposes of this Lease, shall be defined as holidays
         observed by the United States Post Office. "Usual business hours" for
         purposes of this Lease, are from 8:00 a.m. until 6:00 p.m.; Monday
         through Friday, except holidays.

F.       Tenant may operate its business at hours other than usual business
         hours provided that Tenant acknowledges that it shall pay the cost of
         operation of HVAC and electricity for power and lighting on a monthly
         basis as invoiced by Landlord and payable by Tenant to Landlord within
         fifteen (15) days of invoice for Landlord to Tenant.

Landlord reserves the right to stop service of the elevator, plumbing,
ventilation, air-conditioning and electric systems, when necessary, by reason of
accident or emergency or for repairs, alterations or improvements, in the
judgment of Landlord desirable or necessary to be made, until said repairs,
alterations or improvements shall have been completed. Landlord's obligations to
provide utilities and services hereunder shall also be subject to and limited by
the Force Majeure provisions of the Lease. Any failure to supply utilities or
services, whether caused by a Force Majeure described in the Lease or by reason
of accident, emergency, repair, alteration or improvement, shall not be
construed as an eviction of Tenant, whether actual or constructive, and shall
not cause an abatement of Rent, either in whole or in part.

Landlord shall have no obligation whatsoever to supply utilities and services to
the Premises if Tenant is in default of any term, covenant, or condition of this
Lease.

Any costs or expenses incurred by Landlord with respect to Tenant's default
hereunder as well as all payments to be made by Tenant to Landlord pursuant to
the above provisions, as stated herein or as may be later modified, shall be
deemed to be Additional Rent under the Lease and Landlord shall have all its
rights and remedies under the Lease and at law with respect to the same
including but not limited to the right to late fees and interest upon default.

The cost for operating the HVAC at times other than usual business hours is
forty and No/100ths Dollars ($40.00) per hour. This cost shall be adjusted to
reflect increases in the Index as provided in Paragraph 3B of the Lease. The
cost for operating the lighting systems at times other than usable business
hours is twelve and No/100ths Dollars ($12.00) per hour. This cost shall be
adjusted to reflect increases in the Index as provided in Paragraph 3B of the
Lease. The foregoing charges and limitations on use shall not be applicable to
Tenant so long as Tenant is leasing 100% of the Building and is therefore
responsible for 100% of the utility and repair/replacement costs and expenses.


                                       28
<PAGE>   32



                                   EXHIBIT "E"

                               WAIVER AND RELEASE


         In consideration for being authorized to use the Exercise Facility, I,
the undersigned, for myself, my heirs, executors, administrators and assigns
waive and release all rights and claims for damages for death, personal injury
or loss of property which I may have as a result of my utilization of the
Exercise Facility arid its equipment located at_________________.

         I, the undersigned, for myself, my heirs, executors, administrators and
assigns release and forever discharge the Complex owners, lessees of the
Complex, and management of the Complex and their respective agents, members,
directors, partners, officers, employees and representative from any and all
liability, losses, claims, and damages arising out of or connected in any way
with my use of the Exercise Facility. I understand that exercise entails risk of
personal injury and my participation is voluntary and done entirely at my own
risk. I attest that I have no medical condition which would increase the usual
risks of physical exercise.

         I have read and fully understand everything written above.

Dated:
      ---------------------

Signature:
          -----------------

Printed Name:
             --------------

                                       29
<PAGE>   33



                                   EXHIBIT "F"
                                 LEASE GUARANTEE

WHEREAS, NIKU, INC., A DELAWARE CORPORATION, (the "Tenant"), has entered into a
lease agreement dated March 28, 2000 as Tenant, with DLC Redwood City, a
California limited partnership ("Landlord'), concerning real property commonly
known as 350 Convention Way, Redwood City, California (the "Lease"); and

         WHEREAS, the undersigned Guarantor is willing to execute and deliver
this Lease Guarantee for the express and intended purpose of inducing Landlord
to enter into the Lease.

         NOW, THEREFORE, the Guarantor, in order to induce Landlord to enter
into the Lease with Tenant, does hereby absolutely and unconditionally guarantee
to Landlord the full and prompt payment of all amounts which Tenant, or any
sublessee or assignee of the Lease (collectively, "Obligors"), may at any time
owe under the Lease, any extensions, renewals or modifications thereof, and
further guarantees to Landlord and shall be liable to Landlord for the full,
prompt and faithful performance of the Obligors of each and all of the
covenants, terms, and conditions of the Lease, or any extensions, modifications
or renewals thereof, to be hereafter performed and kept by the lessee of the
Lease, or any Obligor.

         The Guarantor's obligations hereunder are independent of the
obligations of the Obligors, and a separate action or actions may be brought and
prosecuted against the Guarantor whether or not action is brought against the
Obligors or whether or not the Obligors be joined in any such action or actions.
Landlord's rights hereunder shall not be exhausted by its exercise of any of its
rights or remedies or by any such action or by any number of successive actions
until and unless all indebtedness and obligations, the payment and performance
of which are hereby guaranteed, have been paid and fully performed.

         The Guarantor authorizes Landlord, without notice or demand and without
affecting the liability of Guarantor hereunder, from time to time to (a) consent
to any extensions, accelerations or other changes in the time for any payment
provided for in the Lease, or consent to any other alteration of any covenant,
term or condition of the Lease in any respect so long as Tenant consents
thereto, and to consent to any assignment, subletting or reassignment of the
Lease; (b) take and hold security for any payment provided for in the Lease or
for the performance of any covenant, term or condition of the Lease, or
exchange, waive or release any such security; (c) apply such security and direct
the order or manner of sale thereof as Landlord in its discretion may determine.
Landlord may, without notice, assign this Guarantee to any party who assumes the
obligations of lessor under the Lease. Notwithstanding any termination, renewal,
extension or holding over of the Lease, this Guarantee shall continue until all
of the covenants, terms and conditions on the part of the Obligors to be
performed have been fully and completely performed by the Obligors, and the
Guarantor shall not be released of any obligation or liability hereunder so long
as there is any claim against the Obligors arising out of the Lease that has not
been settled or discharged in full.

Guarantor hereby waives and relinquishes all rights and remedies accorded by
applicable law to guarantors and agrees not to assert or take advantage of any
such rights or remedies including but not limited to: (a) any right to require
Landlord to proceed against any Obligor or any other person or to proceed
against or exhaust any security held by Landlord at any time or to pursue any
other remedy in Landlord's power before proceeding against Guarantor; (b) the
defense of the statute of limitations in any action hereunder or in any action
for the collection of any obligation or indebtedness or the performance of any
obligation hereby guaranteed; (c) any defense that may arise by reason of the
incapacity, lack of authority, death or disability of any other person or
persons or the failure of Landlord to file or enforce a claim against the estate
(in administration, bankruptcy or any other proceeding) of any other person or
persons; (d) demand, protest and notice of any kind, including but not limited
to notice of the existence, creation or incurring of any new or additional
obligation or of any action or non-action on the part of Landlord, any Obligor
or on the part of any other person whomsoever under this or any other instrument
in connection with any obligation hereby guaranteed; (e) any defense based upon
an election of remedies by Landlord, which destroys or otherwise impairs the
subrogation rights of Guarantor or the right of Guarantor to proceed against
Tenant and/or the Obligors for reimbursement or both; (f) any defense based upon
any statute or rule of law which provides that the obligation of a surety must
be neither larger in amount nor in other respects more 'burdensome than that of
the principal; (g) any duty on the part of Landlord to disclose to Guarantor any
facts Landlord may now or hereafter know about

                                       30

<PAGE>   34


Tenant, regardless of whether Landlord has reason to believe that any such facts
materially increase the risk beyond that which Guarantor intends to assume or
has reason to believe that such facts are unknown to Guarantor or has a
reasonable opportunity to communicate such facts to Guarantor, it being
understood and agreed that the Guarantor is fully responsible for being and
keeping informed of the financial condition of Tenant and of all circumstances
bearing on the risk of non-performance of any obligation of the lessee under the
Lease; (h) any defense arising because of Landlord's election, in any proceeding
instituted under the federal Bankruptcy Code, of the application of Section 1111
(b)(2) of the federal Bankruptcy Code; (i) any defense based on any borrowing
or grant of a security interest under Section 364 of the federal Bankruptcy
Code, and (j) any defense based on the assumption or rejection of the Lease by
any Obligor or any bankruptcy trustee under Section 365(a) of the federal
Bankruptcy Code. Without limiting the generality of the foregoing or any other
provision hereof, Guarantor hereby expressly waives any and all benefits which
might otherwise be available to Guarantor under California Civil Code Sections
2809 through 2856, 2899 and 3433.

         The Guarantor shall have no right of subrogation and waiver, any right
to proceed against any Obligor for reimbursement, as well as any right to
enforce any remedy which Landlord now has or may hereafter have against any
Obligor, and waives any benefit of, and any right to participate in any security
now or hereafter held by Landlord.

         The Guarantor waives all demands upon and notices to Guarantor or to
any Obligor, including demands for performance, notices of non-performance,
notices of non-payment and notice of acceptance of this Guarantee.

         Guarantor agrees to pay reasonable attorneys' fees and all other costs
and expenses which may be incurred by Landlord in the enforcement of this
Guarantee.

         No right or power of Landlord shall be deemed to have been waived by
any act or conduct on the part of Landlord, or by any neglect to exercise such
right or power, or by any delay in so doing; and every right and power of
Landlord shall continue in full force and effect until such right or power is
specifically waived by an instrument in writing executed by Landlord.

         This Guarantee shall bind the Guarantor, its successors and assigns,
and shall inure to the benefit of Landlord and its successors and assigns.

         This Guarantee and each and every term and provision thereof shall be
construed in accordance with the laws of the State of California.

         In the event any dispute arises regarding the enforcement or
construction of the terms or provisions of this Guarantee, the prevailing party
in such dispute shall be entitled to recover, in addition to any damages
suffered, reasonable attorneys' fees incurred as a result thereof.

         If any provision or portion thereof of this Guarantee is declared
unenforceable by a court of competent jurisdiction, the remaining provisions
shall continue in full force and effect.

         IN WITNESS WHEREOF, Guarantor has executed this instrument on this
day___ of _________.


                                   "GUARANTOR"

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

                                       31