<PAGE>
                                                                    EXHIBIT 10.5

                             100 PINE STREET CENTER

                                  OFFICE LEASE

                                    BETWEEN

                        PINE STREET INVESTORS I, L.L.C.
                     a Delaware limited liability company,

                                    LANDLORD

                                      AND

                              ART TECHNOLOGY GROUP
                            a Delaware corporation,

                                     TENANT

                          DATED ______________________
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
<S>                                                                         <C>
ARTICLE 1
         Premises ........................................................     1

ARTICLE 2
         Term ............................................................     1

ARTICLE 3
         Base Rent .......................................................     3

ARTICLE 4
         Additional Rent .................................................     3

ARTICLE 5
         Personal Property Taxes, Rent Taxes and Other Taxes .............     6

ARTICLE 6
         Condition of Premises ...........................................     6

ARTICLE 7
         Use and Rules ...................................................     6

ARTICLE 8
         Services and Utilities ..........................................     7

ARTICLE 9
         Maintenance and Repairs .........................................     9

ARTICLE 10
         Alterations and Liens ...........................................     9

ARTICLE 11
         Insurance, Subrogation and Waiver of Claims .....................    11

ARTICLE 12
         Indemnity .......................................................    12

ARTICLE 13
         Destruction or Damage ...........................................    13

ARTICLE 14
         Condemnation ....................................................    14

ARTICLE 15
         Subordination, Attornment and Mortgagee Protection ..............    15
</TABLE>


                                       i
<PAGE>
<TABLE>
<S>                                                                           <C>
ARTICLE 16
         Estoppel Certificate ............................................    15

ARTICLE 17
         Assignment and Subletting .......................................    16

ARTICLE 18
         Compliance with Legal Requirements ..............................    20

ARTICLE 19
         Rights Reserved by Landlord .....................................    20

ARTICLE 20
         Landlord's Remedies .............................................    22

ARTICLE 21
         Landlord's Right to Cure ........................................    24

ARTICLE 22
         Return of Possession ............................................    25

ARTICLE 23
         Holding Over ....................................................    25

ARTICLE 24
         No Waiver .......................................................    26

ARTICLE 25
         Attorneys' Fees and Jury Trial ..................................    26

ARTICLE 26
         Captions, Definitions and Severability ..........................    26

ARTICLE 27
         Conveyance by Landlord and Liability ............................    31

ARTICLE 28
         Safety and Security Devices, Services and Programs ..............    31

ARTICLE 29
         Communication and Computer Lines ................................    32

ARTICLE 30
         Hazardous Materials .............................................    33

ARTICLE 31
         Miscellaneous ...................................................    35
</TABLE>


                                       ii
<PAGE>


<TABLE>
<S>                                                                           <C>
ARTICLE 32
         Offer ...........................................................    36

ARTICLE 33
         Notices .........................................................    36

ARTICLE 34
         Signage .........................................................    36

ARTICLE 35
         Real Estate Brokers .............................................    37

ARTICLE 36
         Security Deposit ................................................    37

ARTICLE 37
         Entire Agreement ................................................    38

Exhibit A

Rider One

Rider Two

Rider Three
</TABLE>


                                      iii
<PAGE>
                                  OFFICE LEASE

      THIS LEASE made as of the ____ day of ___________, 1999, between PINE
STREET INVESTORS I, L.L.C., a Delaware limited liability company ("Landlord")
and ART TECHNOLOGY GROUP, a Delaware corporation ("Tenant"), whose address is 25
First Street, Cambridge, MA 02141.

                                   WITNESSETH:

      Landlord hereby leases to Tenant and Tenant hires from Landlord the
premises described herein for the term and subject to the terms, covenants,
agreements and conditions hereinafter set forth, to each and all of which Tenant
and Landlord hereby mutually agree.

                                   ARTICLE 1.
                                    PREMISES

      Landlord hereby leases to Tenant and Tenant hereby hires from Landlord
those certain premises (Suite 2100), as shown on the floor plan attached hereto
as Exhibit "A" and made a part hereof ("Premises"), on the 21st floor of the
building known as Pine Street Center ("Building") located at 100 Pine Street,
San Francisco, California ("Property" as further described in Article 26).
Tenant acknowledges and agrees that it has had an opportunity to review
Landlord's calculation of rentable area, and Landlord and Tenant hereby agree
that for purposes of this Lease the rentable area of the Premises is 12,931
square feet and the rentable area of the Property is 402,534 square feet.

                                   ARTICLE 2.
                                      TERM

      (A) Term. The term of this Lease ("Term") shall commence on January 1,
2000 ("Commencement Date") and, unless sooner terminated as hereinafter
provided, shall expire sixty (60) months thereafter ("Expiration Date")."). The
Commencement Date shall be subject to adjustment as provided in Paragraph (B) of
this Article.

      (B) Delays. The Commencement Date set forth in Paragraph (A) of this
Article shall be delayed and Base Rent shall be abated to the extent that
Landlord fails to substantially complete any initial improvements to the
Premises required to be performed by Landlord under that certain Work Agreement
to be executed by the parties concurrently herewith, but only to the extent such
failure is caused by: (i) a Landlord Delay (as defined in the Work Agreement) or
(ii) Landlord's inability to deliver possession of the Premises by reason of
holding over by prior occupants. If Landlord so fails to deliver the Premises
for a ninety (90) day initial grace period, or such additional time as may be
necessary due to fire or other casualty, strikes, lock-outs, or other labor
troubles, shortages of equipment or materials, governmental requirements, power
shortages or outages, acts or omissions of Tenant or other Persons, or other
causes beyond

May 7, 1999


                                       1
<PAGE>
Landlord's reasonable control, Tenant shall have the right to terminate this
Lease by written notice to Landlord any time thereafter up until Landlord
substantially completes any such improvements and delivers the Premises to
Tenant. In addition, if Landlord is unable, for any reason, except to the extent
caused by Tenant, its contractors, agents or employees (including a Tenant Delay
as defined in the Work Agreement defined below in Paragraph (c) of this
Article), to deliver possession of the Premises to Tenant within one hundred
eighty (180) days from the Commencement Date set forth in Paragraph (A) of this
Article, Tenant shall have the right to terminate this Lease by written notice
to Landlord any time thereafter up until Landlord delivers the Premises to
Tenant. Any such delay shall not subject Landlord to liability for loss or
damage resulting therefrom and Tenant's sole recourse with respect thereto shall
be the right to rent abatement as set forth herein or to terminate this Lease
described above. Upon any such termination, Landlord and Tenant shall be
entirely relieved of their obligations hereunder, any Security Deposit and Rent
payments shall be returned to Tenant.

      (C) EARLY OCCUPANCY. Landlord acknowledges and agrees that Tenant will be
permitted to occupy the Premises commencing upon the substantial completion of
the initial repairs, alterations and improvements to the Premises to be
completed in accordance with that certain Work Agreement to be executed by the
parties concurrently herewith (the "Work Agreement"), which occupancy may be
prior to the Commencement Date. During such early occupancy period until the
Commencement Date, Tenant shall comply with all terms and provisions of this
Lease except those provisions requiring the payment of Base Rent and payment of
Tenant's Prorata Share of Taxes and Operating Expenses. In addition, during any
period during which shall be permitted to enter the Premises prior to the
Commencement Date to perform alterations or improvements, Tenant shall comply
with all terms and provisions of this Lease, except those provisions requiring
the payment of Base Rent and Tenant's Prorata Share of Taxes and Operating
Expenses.

      (D) TEMPORARY PREMISES. If this Lease is fully executed by September 24,
1999, all Plans (as defined in the Work Agreement) are complete by September 30,
1999 and the initial repairs, alterations and improvements to the Premises are
not substantially complete as a result of Landlord Delays (as defined in the
Work Agreement), Landlord agrees, to the extent such space is available in the
Building, to attempt to provide Tenant with interim premises of approximately
6,000 rentable square feet (the "Temporary Premises"). If applicable, the
following terms and conditions shall apply to the Temporary Premises: (i) the
same terms and conditions set forth in this Lease shall apply except as
specifically set forth herein, (ii) the lease term for the Temporary Premises
shall commence on December 1, 1999 and continue until the earlier of: (1) the
substantial completion of the alterations, improvements and repairs to be made
to the Premises under the Work Agreement or (2) fourteen (14) days following the
date upon which Base Rent (as hereinafter defined) commences as provided herein,
as may be accelerated as set forth in the Work Agreement, (iii) Tenant shall pay
rent equal to $43.00 per rentable square foot per year, for the Temporary
Premises, payable monthly in advance on or before the first day of each month
during the term for such space, and (iv) the Temporary Premises will be leased
in its "as is" condition and Landlord shall not be responsible for making any
repairs or improvements thereto or for providing Tenant with any allowance for
the repair, improvement or refurbishment thereof.

      (D) OPTION TO EXTEND TERM. Tenant shall have an option to extend the Term
upon the term and conditions set forth in Rider Two, attached hereto and made a
part hereof.

May 7, 1999


                                       2
<PAGE>
                                    ARTICLE 3.
                                    BASE RENT

      Tenant shall pay Landlord as Base Rent the sum of $49.OO per rentable
square foot of the Premises per year, which shall be equal to an annual Base
Rent of $633,619.OO and a monthly Base Rent of $52,801.58. Monthly Base Rent
shall be paid to Landlord in advance on or before the first day of each calendar
month during the Term, commencing as of the Commencement Date, except that Base
Rent for the first full calendar month for which Base Rent shall be due, shall
be paid when Tenant executes this Lease. Except as expressly set forth herein,
Rent shall be paid without any prior demand or notice therefor and without any
deduction, set-off or counterclaim unless otherwise explicitly set forth herein,
or relief from any valuation or appraisement laws. If the Term commences on a
day other than the first day of a calendar month, or ends on a day other than
the last day of a calendar month, then the Base Rent for such month shall be
prorated on the basis of 1/30th of the monthly Base Rent for each day of such
month.

                                    ARTICLE 4.
                                 ADDITIONAL RENT

      (A) TAXES. Tenant shall pay Landlord as additional rent an amount equal to
Tenant's Prorata Share of Taxes in excess of the amount of Taxes paid by
Landlord during the calendar year 1999 ("Base Tax Year"). Tenant shall not be
required to pay additional rent for such amount for the calendar year 2000. The
terms "Taxes" and "Tenant's Prorata Share" shall have the meanings specified
therefor in Article 26.

      (B) OPERATING EXPENSES. Tenant shall pay Landlord as additional rent an
amount equal to Tenant's Prorata Share of Operating Expenses in excess of the
amount of Operating Expenses paid by Landlord during the calendar year 1999
("Base Expense Year"). Tenant shall not be required to pay additional rent for
such amount during the calendar year 2000. The term "Operating Expenses" shall
have the meaning specified therefor in Article 26.

      (C) MANNER OF PAYMENT. Taxes and Operating Expenses shall be paid in the
following manner:

            a) Landlord may reasonably estimate in advance the amounts Tenant
            shall owe for Taxes and Operating Expenses for any full or partial
            calendar year of the Term. In such event, Tenant shall pay such
            estimated amounts, on a monthly basis, on or before the first day of
            each calendar month, together with Tenant's payment of Base Rent.
            Such estimate may be reasonably adjusted from time to time by
            Landlord.

            b) Within 120 days after the end of each calendar year, or as soon
            thereafter as practicable, Landlord shall provide a statement
            ("Statement") to Tenant showing: (a) the amount actual Taxes and
            Operating Expenses for such calendar year, with a listing of amounts
            for major categories of Operating Expenses, and such amounts for the
            Base Years, (b) any amount paid by Tenant towards Taxes and
            Operating Expenses during such calendar year on an estimated basis,
            and (c)

May 7, 1999


                                       3
<PAGE>
            any revised estimate of Tenant's obligations for Taxes and Operating
            Expenses for the current calendar year.

            c) If the Statement shows that Tenant's estimated payments were less
            than Tenant's actual obligations for Taxes and Operating Expenses
            for such year, Tenant shall pay the difference. If Landlord
            increases Tenant's estimated payments for the current calendar year,
            Tenant shall pay the difference between the new and former
            estimates, for the period from January 1 of the current calendar
            year through the month in which a statement is sent. Tenant shall
            make such payments within thirty (30) days after Landlord sends the
            applicable statement.

            d) If the Statement shows that Tenant's estimated payments exceeded
            Tenant's actual obligations for Taxes and Operating Expenses, Tenant
            shall receive a credit for the difference against payments of Base
            Rent next due. If the Term shall have expired and no further Base
            Rent shall be due, Tenant shall receive a refund of such difference,
            within thirty (30) days after Landlord sends the Statement.

            e) So long as Tenant's obligations hereunder are not materially
            adversely affected thereby, Landlord reserves the right to
            reasonably change, from time to time, the manner or timing of the
            foregoing payments. In lieu of providing one Statement covering
            Taxes and Operating Expenses, Landlord may provide separate
            statements, at the same or different times. No delay by Landlord in
            providing the Statement (or separate statements) shall be deemed a
            default by Landlord or a waiver of Landlord's right to require
            payment of Tenant's obligations for actual or estimated Taxes or
            Operating Expenses. In no event shall a decrease in Taxes or
            Operating Expenses below the Base Year amounts, ever decrease the
            monthly Base Rent, or give rise to a credit or refund in favor of
            Tenant.

      (D) PRORATION. If the Term commences other than on January 1, or ends
other than on December 31, Tenant's obligations to pay estimated and actual
amounts towards Taxes and Operating Expenses for such first or final calendar
years shall be prorated to reflect the portion of such years included in the
Term. Such proration shall be made by multiplying the total estimated or actual
(as the case may be) Taxes and Operating Expenses, for such calendar years, as
well as the Base Year amounts, by a fraction, the numerator of which shall be
the number of days of the Term during such calendar year, and the denominator of
which shall be 365.

      (E) ADJUSTMENTS. For purposes of making its calculation of Operating
Expenses and Taxes payable by Tenant hereunder, Landlord will make adjustments
to reflect a 95% occupancy rate in the Building. If Landlord eliminates from any
subsequent year's Operating Expenses any category of expenses (either recurring
or non-recurring) previously included in the Base Expense Year, Landlord may
subtract such category from the Base Expense Year commencing with such
subsequent year. If Landlord adds to any subsequent years Operating Expenses any
category of expenses (either recurring or nonrecurring) previously not included
in the Base Expense Year, Landlord will add a reasonable estimate for such
category to the Base Expense Year commencing with such subsequent year. Any such
elimination or addition will be made in accordance with generally accepted
accounting principles.

May 7, 1999


                                       4
<PAGE>
      (F) LANDLORD'S RECORDS. Landlord shall maintain records respecting Taxes
and Operating Expenses and determine the same in accordance with sound
accounting and management practices, consistently applied. Although this Lease
contemplates the computation of Taxes and Operating Expenses on a cash basis,
Landlord shall make reasonable and appropriate accrual adjustments to ensure
that each calendar year, including the Base Years, includes substantially the
same recurring items. Landlord reserves the right to change to a full accrual
system of accounting so long as the same is consistently applied and Tenant's
obligations are not materially adversely affected.

      (G) TENANT'S REVIEW. Tenant, within thirty (30) days after receiving
Landlord's Statement, shall have the right to provide Landlord with written
notice ("Review Notice") of its intent to review Landlord's books and records
relating to Taxes and Operating Expenses for such calendar year. Within a
reasonable time after receipt of a timely Review Notice, Landlord shall make
such books and records available to Tenant or Tenant's agent for its review at
the Building office; provided, that if Tenant retains an agent to review
Landlord's books and records for any calendar year, such agent must be a CPA
firm licensed to do business in California, Tenant shall be solely responsible

for any and all costs, expenses and fees incurred by Tenant or its agent in
connection with such review. Upon such review of Landlord's books and records,
Tenant shall have the right, within thirty (30) days after such books and
records are made available, to give Landlord written notice stating in
reasonable detail any objection to Landlord's Statement for the applicable
calendar year. If Tenant fails to give Landlord written notice of objection
within such thirty (30) day period or fails to provide Landlord with a timely
Review Notice, Tenant shall be deemed to have approved Landlord's Statement in
all respects and shall thereafter be barred from raising any claims with respect
thereto. Upon Landlord's receipt of a timely objection notice from Tenant,
Landlord and Tenant shall work together in good faith to resolve the discrepancy
between Landlord's Statement and Tenant's review. If Landlord and Tenant
determine that Taxes and Operating Expenses for the applicable calendar year are
less than reported, Landlord shall provide Tenant with a credit against future
additional rent in the amount of any overpayment by Tenant. Likewise, if
Landlord and Tenant determine that Taxes and Operating Expenses for the
applicable calendar year are greater than reported, Tenant shall forthwith pay
to Landlord the amount of underpayment by Tenant. Any information obtained by
Tenant pursuant to the provisions of this section shall be treated as
confidential. Notwithstanding anything to the contrary herein, Tenant shall not
be permitted to examine Landlords books and records or to dispute any Statement
unless Tenant has paid to Landlord the amount due as shown on such Statement. If
it is determined that Tenant's Prorata Share of Taxes or Operating Expenses are
overstated by more than five percent (5%) for any applicable year, Landlord
agrees to pay the reasonable and direct costs of Tenant's review of Taxes and
Operating Expenses for such year.

      (H) RENT AND OTHER CHARGES. Base Rent, Taxes, Operating Expenses, and any
other amounts which Tenant is or becomes obligated to pay Landlord under this
Lease or other agreement entered into in connection herewith, are sometimes
herein referred to collectively as "Rent," and all remedies applicable to the
non-payment of Rent shall be applicable thereto. Rent shall be paid at any
office maintained by Landlord or its agent at the Property, or at such other
place as Landlord may designate.

May 7, 1999


                                       5
<PAGE>
                                   ARTICLE 5.
               PERSONAL PROPERTY TAXES, RENT TAXES AND OTHER TAXES

      Tenant shall pay prior to delinquency all taxes, charges or other
governmental impositions assessed against or levied upon Tenant's fixtures,
furnishing, equipment and personal property located in the Premises, and any
Work to the Premises performed under Article 10. Whenever possible, Tenant shall
cause all such items to be assessed and billed separately from the property of
Landlord. In the event any such items shall be assessed and billed with the
property of Landlord, Tenant shall pay Landlord its share of such taxes, charges
or other governmental impositions within thirty (30) days after Landlord
delivers a statement and a copy of the assessment or other documentation showing
the amount of such impositions applicable to Tenant's property. Further, Tenant
shall pay any rent tax or sales tax, service tax, transfer tax or value added
tax, or any other applicable tax on the Rent or services herein or otherwise
respecting this Lease (exclusive of Landlord's federal or state income taxes).

                                   ARTICLE 6.
                              CONDITION OF PREMISES

      Tenant has inspected the Premises, Building, Property, Systems and
Equipment (as defined in Article 26), or has had an opportunity to do so, and
agrees to accept the same "as is" without any agreements, representations,
understandings or obligations on the part of Landlord to perform any
alterations, repairs or improvements other than (i) as expressly set forth in
the Work Agreement and (ii) Landlord's obligation to be responsible for
compliance with American With Disabilities Act requirements, to the extent
applicable as of the Commencement Date, in the 21st floor restrooms.

                                   ARTICLE 7.
                                  USE AND RULES

      Tenant shall use the Premises exclusively for business offices and no
other purpose whatsoever, in compliance with all applicable Laws, and without
disturbing or interfering with any other tenant or occupant of the Property.
Tenant shall not use the Premises in any manner so as to cause a cancellation of
Landlord's insurance policies, or an increase in the premiums thereunder and
Tenant shall not commit, or suffer to be committed, any waste upon the Premises,
or any nuisance or other act or thing that may disturb the quiet enjoyment of
any other Tenant in the Building in which the Premises may be located. Tenant
shall comply with all rules set forth in Rider One attached hereto (the
"Rules"). Landlord shall have the right to reasonably amend such Rules and
supplement the same with other reasonable Rules (not expressly and materially
inconsistent with this Lease) relating to the Property, or the promotion of
safety, care, cleanliness or good order therein, and all such amendments or new
Rules shall be binding upon Tenant after five (5) days' notice thereof to
Tenant. All Rules shall be applied on a non-discriminatory basis, but nothing
herein shall be construed to give Tenant or any other Person (as defined in
Article 26) any claim, demand or cause of action against Landlord arising out of
the violation of such Rules by any other tenant, occupant, or visitor of the
Property, or out of the enforcement, failure to enforce or waiver of the Rules
by Landlord in any particular instance or instances.

May 7, 1999


                                       6
<PAGE>
                                   ARTICLE 8.
                             SERVICES AND UTILITIES

      (A) Provided Tenant shall not be in default under this Lease and subject
to the other provisions of this Lease and the Rules, Landlord shall provide the
following services and utilities (the cost of which shall be included in
Operating Expenses unless otherwise expressly stated herein):

            1. Electricity for standard office lighting fixtures, and equipment
            and accessories customary for offices where: (1) the connected
            electrical load of all of the same does not exceed an average of 4
            watts per square foot of the Premises (or such lesser amount as may
            be available, based on the safe and lawful capacity of the existing
            electrical circuit(s) and facilities serving the Premises), (2) the
            electricity will be at nominal 120 volts, single phase (or 110
            volts, depending on available service in the Building), and (3) the
            safe and lawful capacity of the existing electrical circuit(s)
            serving the Premises is not exceeded. Landlord shall replace lamps
            and ballasts for Building standard lighting fixtures within the
            Premises as needed on Tenant's request. The cost of such replacement
            shall be included as Operating Expenses. Tenant shall replace lamps
            and ballasts for non-Building standard lighting fixtures within the
            Premises at Tenant's expense.

            2. Heat and air-conditioning to provide a temperature required, in
            Landlord's reasonable opinion and in accordance with applicable Law,
            for occupancy of the Premises under normal business operations, from
            8:00 a.m. until 6:00 p.m. Monday through Friday and from 9:00 a.m.
            until 1:00 p.m. Saturday, except on Holidays (as defined in Article
            26). Landlord shall not be responsible for inadequate
            air-conditioning or ventilation to the extent that same occurs
            because Tenant uses any item or items of equipment consuming more
            than 500 watts at rated capacity without providing adequate
            air-conditioning and ventilation therefor.

            3. Water for drinking, lavatory and toilet purposes at those points
            of supply provided for nonexclusive general use of other tenants at
            the Property.

            4. Customary office cleaning and trash removal service Monday
            through Friday or Sunday through Thursday in and about the Premises.

            5. Operatorless passenger elevator service (if the Property has such
            equipment serving the Premises) and freight elevator service (if the
            Property has such equipment serving the Premises, and subject to
            scheduling by Landlord) in common with Landlord and other tenants
            and their contractors, agents and visitors.

      (B) Tenant shall cooperate fully with Landlord to conserve energy use in
the Building and Tenant shall use its commercially reasonable efforts to
reasonably minimize its use of gas, electricity, water and other utilities and
public services throughout the term hereof. Tenant agrees to cooperate with
Landlord and to abide by all regulations and requirements which Landlord may
prescribe for the proper functioning and protection of heating, ventilating,
air-conditioning and other systems within the Building.

May 7, 1999


                                       7
<PAGE>
      (C) So long as Tenant is not in Default under this Lease, Landlord shall
seek to provide such extra utilities or services as Tenant may from time to time
request, if the same are reasonable and feasible for Landlord to provide and do
not involve modifications or additions to the Property or existing Systems and
Equipment (as defined in Article 26), and if Landlord shall receive Tenant's
request within a reasonable period (but in any event no less than forty-eight
hours) prior to the time such extra utilities or services are required;
notwithstanding the minimum notice required herein, if Tenant provides Landlord
at least twelve (12) hours prior notice of Tenant's need for after hours heating
and air-conditioning, Landlord will attempt to accommodate such need. Landlord
may comply with written or oral requests by any officer or employee of Tenant,
unless Tenant shall notify Landlord of, or Landlord shall request, the names of
authorized individuals (up to 3 for each floor on which the Premises are
located) and procedures for written requests. Tenant shall, for such extra
utilities or services, pay such charges as Landlord shall from time to time
reasonably establish on a cost recovery basis. All charges for such extra
utilities or services shall be due at the same time as the installment of Base
Rent with which the same are billed, or if billed separately, shall be due
within twenty (20) days after such billing.

      (D) The parties acknowledge and agree that up to 280 hours per month shall
be considered typical office use for which excess rates will not be charged.
Landlord may install, at its cost and expense, and operate meters or any other
reasonable system for monitoring or estimating any services or utilities used by
Tenant in excess of those required to be provided by Landlord under this Article
(including a system for Landlord's engineer to reasonably estimate any such
excess usage). If such system indicates such excess services or utilities,
Tenant shall pay Landlord's reasonable charges for installing and operating such
system and any supplementary air-conditioning, ventilation, heat, electrical or
other systems or equipment (or adjustments or modifications to the existing
Systems and Equipment), and Landlord's reasonable charges for such amount of
excess services or utilities used by Tenant.

      (E) Landlord does not warrant that any services or utilities will be free
from shortages, failures, variations, interruptions caused by repairs,
maintenance, replacements, improvements, alterations, changes of service,
strikes, lockouts, labor controversies, accidents, inability to obtain services,
utilities, fuel, steam, water or supplies, governmental requirements or
requests, or other causes beyond Landlord's reasonable control. Landlord shall
not be in default hereunder or be liable for any damages (including loss of
profits, business interruption or other consequential damages) directly or
indirectly resulting from, nor shall it constitute a constructive eviction of
Tenant, nor shall the Rent reserved herein be abated or Tenant relieved from the
performance of its other obligations under this Lease by reason of: (i) the
installation, use, or interruption of use of any equipment in connection with
furnishing the services to be provided by Landlord hereunder, (ii) failure to
furnish or delay in furnishing any such services when such failure is caused by
accident or any condition beyond the reasonable control of Landlord or by the
making of necessary Improvements or repairs to the Premises, Systems and
Equipment, Building or the Property, (iii) the limitation, curtailment,
rationing or restriction on use of water, electricity, gas or any other form of
energy, utility or other public service serving the Premises or the Building,
(iv) any prevention, delay or stoppage due to strikes, labor or materials or
reasonable substitutes therefor, governmental restrictions, governmental
regulations, governmental controls, enemy or hostile governmental action, civil
commotion, fire or other casualty. Without limiting the generality of the
foregoing and except as set forth in Article 13, if (i) there is a disruption of
essential services to be provided by Landlord to the Premises as expressly set
forth in this Lease,

May 7, 1999


                                       8
<PAGE>
(ii) such disruption is not caused by Tenant's acts or omissions, (iii) such
disruption materially interferes with Tenants use of the Premises, and (iv) (1)
the restoration of such essential services is within Landlord's reasonable
control, Tenant will be entitled to an abatement of Base Rent if such essential
services are not restored within ten (10) consecutive business days from the
date such disruption began, retroactive to the date such disruption began, or
(2) the restoration of such essential services is not within Landlord's
reasonable control, Tenant will be entitled to an abatement of Base Rent if such
essential services are not restored within forty-five (45) days from the date
such disruption began; for purposes hereof a restoration of essential services
shall mean and refer to a restoration to substantially the same capacity that
was in place immediately prior, to the disruption.

                                   ARTICLE 9.
                             MAINTENANCE AND REPAIRS

      Except for customary cleaning and trash removal provided by Landlord under
Article 8, and damage covered under Article 13, Tenant shall keep the Premises
in good and sanitary condition, working order and repair (including without
limitation, carpet, wall-covering, doors, plumbing and other fixtures,
equipment, alterations and improvements whether installed by Landlord or
Tenant). In the event that any repairs, maintenance or replacements are
required, Tenant shall promptly arrange for the same, in a first class,
workmanlike manner approved by Landlord in advance in writing, either through
Landlord for such reasonable charges as Landlord may from time to time
establish, or such contractors as Landlord generally uses at the Property, or
such other contractors as Landlord shall first approve in writing. If Tenant
does not promptly make such arrangements, Landlord may, but need not, make such
repairs, maintenance and/or replacements, and the costs paid or incurred by
Landlord therefor shall be reimbursed by Tenant promptly after request by
Landlord. Tenant shall indemnify Landlord and pay for any repairs, maintenance
and replacements to areas of the Property outside the Premises, caused in whole
or in part, as a result of moving any furniture, fixtures, or other property to
or from the Premises, or by Tenant or its employees, agents, contractors, or
visitors (notwithstanding anything to the contrary contained in this Lease).
Except as provided in this Article, or for damage covered under Article 13,
Landlord shall keep the common areas of the Property in good and sanitary
condition, working order and repair (the cost of which shall be included in
Operating Expenses).

                                   ARTICLE 1O.
                              ALTERATIONS AND LIENS

      (A) Except as expressly set forth in this Paragraph, Tenant shall make no
additions, changes, alterations or improvements ("Work") to the Premises or the
Systems and Equipment (as defined in Article 26) pertaining to the Premises
without the prior written consent of Landlord, which shall not be unreasonably
withheld or delayed. Landlord's approval of any Work shall not be required if
(i) the total cost of the Work (including materials) is less than $3,000.00 and
any Work not requiring Landlord's consent performed by Tenant does not exceed
$5,OOO.OO in any twelve (12) month period during the Term, (ii) the Work does
not affect Building Systems and Equipment or structural components of the
Property, whether required by heavy loads or otherwise, or alter the
configuration of the Premises, (iii) the Work consists of only standard office
alterations conforming to Building standard finishes and materials being used by
Landlord at the Property, and (iv) Tenant gives Landlord notice that the Work
will be performed at least

May 7, 1999


                                       9
<PAGE>
ten (10) business days prior to the commencement thereof and provides Landlord
with such information related to the Work as Landlord may reasonably request.
Landlord may impose reasonable requirements as a condition of providing its
consent including without limitation the submission of plans and specifications
for Landlord's prior written approval, obtaining necessary permits, posting
bonds, obtaining insurance, prior approval of contractors, subcontractors and
suppliers, prior receipt of copies of all contracts and subcontracts, contractor
and subcontractor lien waivers, affidavits listing all contractors,
subcontractors and supplies, use of union labor (if Landlord uses union labor),
affidavits from engineers acceptable to Landlord stating that the Work will not
adversely affect the Systems and Equipment or the structure or operation of the
Property, and requirements as to the manner and times in which such Work shall
be done. All Work shall be performed in a good and workmanlike manner and all
materials used shall be of a quality comparable to or better than those in the
Premises and Property and shall be in accordance with plans and specifications
approved by Landlord, and Landlord may require that all such Work be performed
under Landlord's supervision. If Landlord consents or supervises, the same shall
not be deemed a warranty as to the adequacy of the design, workmanship or
quality of materials, and Landlord hereby expressly disclaims any responsibility
or liability for the same. Landlord shall under no circumstances have any
obligation to repair, maintain or replace any portion of the Work. Landlord and
Tenant acknowledge and agree that Landlord may withhold its consent to the Work
if such Work necessitates compliance with any Laws for which Landlord might be
responsible.

      (B) Tenant shall keep the Property, the Building and Premises free from
any mechanic's, materialman's or similar liens or other such encumbrances in
connection with any Work on or respecting the Premises not performed by or at
the request of Landlord, and shall indemnify and hold Landlord harmless from and
against any claims, liabilities, judgments, or costs (Including attorneys' fees)
arising out of the same or in connection therewith. Tenant shall give Landlord

notice at least twenty (20) days prior to the commencement of any Work on the
Premises, or such additional times as may be necessary under applicable Laws
(defined in Article 26), to afford Landlord the opportunity of posting and
recording appropriate notices of non-responsibility; provided, however, in the
event Tenant must make emergency repairs to the Premises, Tenant shall notify
Landlord as soon as possible but in any event prior to the commencement any such
repairs. Tenant shall remove any such liens or encumbrance by bond or otherwise
within ten (10) days after written notice by Landlord, and if Tenant shall fail
to do so, Landlord may pay the amount necessary to remove such lien or
encumbrances, without being responsible for investigating the validity thereof.
The amount so paid shall be deemed additional Rent under this Lease payable upon
demand, without limitation as to other remedies available to Landlord under this
Lease. Nothing contained in this Lease shall authorize Tenant to do any act
which shall subject Landlord's title to the Property, Building or Premises to
any liens or encumbrances whether claimed by operation of law or express or
implied contract. Any claim to a lien or encumbrance upon the Property, Building
or Premises arising in connection with any Work on or respecting the Premises
not performed by or at the request of Landlord shall be null and void, or at
Landlord's option shall attach only against Tenant's interest in the Premises
and shall in all respects be subordinate to Landlord's title to the Property and
Premises.

May 7, 1999


                                       10
<PAGE>
                                   ARTICLE 11.
                   INSURANCE, SUBROGATION AND WAIVER OF CLAIMS

      (A) At all times during the Lease Term and during any pre-commencement
occupancy and holdover period, Tenant, at its sole expense, shall procure and
maintain the following types of insurance:

      1. A policy of commercial general liability insurance with Broad Form
      Liability, and cross-liability endorsements, insuring Landlord and Tenant
      against any claims for bodily injury, property damage or other liability
      arising out of the use, occupancy, maintenance or ownership of the
      Premises and all areas appurtenant thereto, including parking areas, with
      an "Additional Insured-Managers or Lessors of Premises" Endorsement and
      contain the "Amendment of the Pollution Exclusion" for damage caused by
      heat, smoke or fumes from a hostile fire. Such insurance shall be in an
      amount satisfactory to Landlord but in no event less than $2,000,000 per
      occurrence, $2,000,000 annually in the aggregate for all claims.

      2. Insurance for Tenant's 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
      All Risk coverage including, without limitation, water damage of any type,
      including sprinkler leakage, bursting or stoppage of pipes, explosion,
      theft, vandalism and malicious mischief. 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 and
      equipment so insured. In addition, Tenant shall obtain and keep in force,
      at any times during the Term of this lease, a policy of business
      interruption insurance coverage, Insuring that one hundred percent (100%)
      of the monthly Base Rent, and all additional Rent due hereunder, will be
      paid to Landlord for a period of not less than one (1) year if the
      Premises are damaged or destroyed or rendered unfit for occupancy by a
      risk insured under the foregoing All Risk coverage.

      3. A policy of worker's compensation insurance as required by applicable
      law.

      (B) The insurance to be acquired and maintained by Tenant shall be with
companies admitted to do business in the State of California with Best's Rating
Guide of A+10 or better. The insurance policies required hereunder shall (to the
extent applicable): (i) name Landlord, and such other parties as Landlord shall
designate from time to time, as additional insured, (ii) not be canceled or
altered without thirty (30) days' prior written notice to Landlord, (iii) insure
performance of the indemnity set forth in Article 12, and (iv) provide that such
coverage is primary to and not contributory with any similar insurance carried
by Landlord, whose insurance shall be considered excess insurance only.

      (C) The limits of said insurance required by this Lease or as carried by
Tenant shall not, however, limit the liability of Tenant nor relieve Tenant of
any obligation hereunder. Landlord may periodically, but not more often than
every five years, require that Tenant reasonably increase the aforementioned
coverage.

May 7, 1999


                                       11
<PAGE>
      (D) An original certificate for each policy of insurance required to be
carried by Tenant under this Article evidencing the existence of such coverage,
together with copies of all endorsements to such policies, shall be delivered to
Landlord for retention by it prior to Tenant's taking possession of the
Premises, and Tenant shall provide renewal certificates to Landlord at least
twenty (20) days prior to expiration of such policies. In the event that Tenant
shall fail to insure or shall fail to furnish Landlord the evidence of such
insurance as herein required, Landlord may, but shall not be obligated to, from
time to time acquire such insurance for the benefit of Tenant or Landlord, or
both of them, for a period not exceeding one (1) year, and any premium paid by
Landlord shall be recoverable from Tenant as additional Rent on demand.

      (E) Tenant and Landlord shall obtain from their insurers under all
policies of insurance maintained by the parties pursuant to this Article (other
than worker's compensation insurance) a waiver of all rights of subrogation
which the insurer might have against the other party, and the parties agree to
indemnify each other against any loss or expense, including reasonable
attorney's fees, resulting from the failure to obtain or effect such waiver. In
addition, Tenant and Landlord hereby waive, on behalf of themselves and their
insurers, to the extent it would not have the effect of invalidating any
insurance coverage of Tenant, all rights of subrogation as to each other.
Further, Tenant and Landlord hereby release and relieve each other and waive
their respective rights to recover damages (whether in contract or in tort)
against each other for loss of or damage to their property arising our of or
incident to perils required to be insured pursuant to this Lease. The effect of
such release and waiver of the right to recover damages shall not be limited by
the amount of insurance carried or required, or by any deductibles applicable
thereto.

      (G) Landlord shall maintain a standard form of "Special Form" insurance
policy on the Building and the Building standard tenant improvements within the
Premises in an amount reasonably determined by Landlord to be the Building's
replacement value.

                                    ARTICLE 12.
                                    INDEMNITY

      (A) Tenant agrees to defend and indemnify Landlord against and save
Landlord harmless from any and all loss, cost, liability, damage and expense,
including without limitation penalties, fines and reasonable attorney's fees and
costs, incurred in connection with or arising from any cause whatsoever in, on
or about the Premises, including without limiting the generality of the
foregoing: (i) any failure by Tenant to observe or perform of any of the terms,
covenants or conditions of this Lease on Tenant's part to be observed or
performed, or (ii) the use or occupancy or manner fuse or occupancy of the
Premises by Tenant or any person or entity claiming through or under Tenant, or
(iii) the condition of the Premises or any occurrence or happening on the
Premises from any cause whatsoever, or (iv) any acts, omissions or negligence of
Tenant or any person or entity claiming through or under Tenant, or of the
agents, contractors, employees, subtenants, licensees, invitees or visitors of
Tenant or any such person or entity, in, on or about the Premises or the
Building, either prior to the commencement of, during, or after the expiration
of the term, including without limitation any acts, omissions or negligence in
the making or performing of any alterations. Tenant further agrees to defend,
indemnify and save harmless Landlord, Landlord's agents and the lessors under
any ground or underlying leases, from and against any and all loss, cost,
liability, damage and expense, including without 1imitation reasonable
attorneys' fees and costs, incurred in connection with or arising from any
claims by any

May 7, 1999


                                       12
<PAGE>
persons by reason of injury to persons or damage to property occasioned by any
use, occupancy, condition, occurrence, happening, act, omission or negligence
referred to in the preceding sentence. In the event any action or proceeding is
brought against Landlord for any claim with respect to which Tenant is obligated
to indemnify Landlord hereunder, Tenant upon notice from Landlord shall defend
such action or proceeding at Tenant's sole expense by counsel approved by
Landlord, which approval shall not be unreasonably withheld. The provisions of
this Paragraph shall survive the expiration or earlier termination of this
Lease.

      (B) Subject to Paragraph (C) of this Article and except as provided in
Article 12(A), Landlord shall immediately Tenant for and hold Tenant harmless
and defend Tenant against liability for any injury to person or damage to
property or direct losses, damages, claims and reasonable attorney's fees caused
by: (i) Landlord's gross negligence or willful misconduct, or (ii) failure by
Landlord to observe or perform any of the terms, covenants or conditions of this
Lease on Landlord's part to be observed or performed.

      (C) Notwithstanding anything to the contrary herein, Landlord shall not be
responsible for or liable to Tenant for any loss or damage that may be
occasioned by or through the acts or omissions of persons occupying adjoining
premises or any part of the premises adjacent to or connected with the Premises
or any part of the Building or Property or for any loss or damage resulting to
Tenant or its property from burst, stopped or leaking water, gas, sewer or steam
pipes or falling plaster, or electrical wiring or for any damage or loss of
property within the Premises from any causes whatsoever, including theft,
excepting only losses or damages resulting from the gross negligence or willful
misconduct of Landlord, and in no event shall Landlord be liable to Tenant for
any consequential damages.

                                   ARTICLE 13.
                              DESTRUCTION OR DAMAGE

      If the Premises or any common areas of the Property providing access
thereto shall be damaged by fire or other casualty, Landlord shall use available
insurance proceeds to restore the same. Such restoration shall be to
substantially the condition prior to the casualty, except for modifications
required by zoning and building codes and other Laws or by any Holder (as
defined in Article 26), any other modifications to the common areas deemed
desirable by Landlord (provided access to the Premises is not materially
impaired), and except that Landlord shall not be required to repair or replace
any of Tenant's furniture, furnishings, fixtures or equipment, or any
alterations or improvements in excess of any work performed or paid for by
Landlord under any separate agreement signed by the parties in connection
herewith. Landlord shall not be liable for any inconvenience or annoyance to
Tenant or its visitors, or injury to Tenant's business resulting in any way from
any such damage or the repair thereof. However, Landlord shall allow Tenant a
proportionate abatement of Base Rent and Tenant's Prorata Share of Operating
Expenses and Taxes during the time and to the extent the Premises are unfit for
occupancy for the purposes permitted under this Lease and not occupied by Tenant
as a result thereof; provided, however, if Tenant or its employees or agents
caused the damage such rent abatements if applicable, shall not commence until
sixty (60) days following the date of the damage or casualty. Notwithstanding
the foregoing to the contrary, Landlord may elect to terminate this Lease by
notifying Tenant in writing of such termination within sixty (60) days after the
date of damage (such termination notice to include a termination date providing
at least ninety (90) days for Tenant to vacate the

May 7, 1999


                                       13
<PAGE>
Premises) if the Property shall be damaged by fire or other casualty or cause
such that: (a) repairs to the Premises and access thereto cannot reasonably be
completed within 120 days after the casualty without the payment of overtime or
other premiums, (b) more than 25% of the Premises is affected by the damage, and
fewer than 24 months remain in the Term, or any material damage occurs to the
Premises during the last 12 months of the Term; provided, however, Landlord
shall not have the right to terminate this Lease pursuant to this subsection
during the initial Term if Tenant has exercised its right to extend the Term in
accordance with the terms of this Lease or Tenant exercises such right to extend
the Term (to the extent applicable as set forth herein) within ten (10) business
days after Landlord notifies Tenant in writing of its election to terminate this
Lease, (c) any Holder shall require that the insurance proceeds or any portion
thereof be used to retire the Mortgage debt (or shall terminate the ground
lease, as the case may be), or the damage is not fully covered by Landlord's
insurance policies, or (d) the cost of the repairs, alterations, restoration or
improvement work would exceed 25% of the replacement value of the Building, or
the nature of such work would make termination of this Lease necessary or
convenient. Tenant agrees that Landlord's obligation to restore, and the
abatement of Rent provided herein, shall be Tenant's sole recourse in the event
of such damage, and waives any other rights Tenant may have under any applicable
Law to terminate the Lease by reason of damage to the Premises or Property;
provided, however, if in Landlord's reasonable opinion the Premises cannot be
restored within six (6) months after the casualty and if such damage materially
and adversely affects Tenant's use of the Premises or if any material damage
occurs to the Premises (such that repairs to the Premises and access thereto
cannot reasonably be completed within 120 days after the casualty) during the
last 12 months of the Term, Tenant may (unless Tenant or its employees,
contractors or agents caused the damage) elect to terminate this Lease by
delivering written notice thereof to Landlord within sixty (60) days after the
date of such damage, in which event this Lease shall terminate as of the
termination date specified in such notice and any obligation of Landlord to
restore the Premises shall cease. Tenant acknowledges that this Article
represents the entire agreement between the parties respecting damage to the
Premises or Property, and Tenant waives the provisions of California Civil Code
Section 1932(2) and 1933(4) and any similar statute now or hereafter in force.

                                   ARTICLE 14.
                                  CONDEMNATION

      If the whole or any material part of the Premises or Property shall be
taken by power of eminent domain or condemned by any competent authority for any
public or quasi-public use or purpose, or If any adjacent property or street
shall be so taken or condemned, or reconfigured or vacated by such authority in
such manner as to require the use, reconstruction or remodeling of any part of
the Premises, Building or Property, or if Landlord shall grant a deed or other
instrument in lieu of such taking by eminent domain or condemnation, Landlord
shall have the option to terminate this Lease upon ninety (90) days' notice,
provided such notice is given no later than one hundred eighty (180) days after
the date of such taking, condemnation, reconfiguration, vacation, deed or other
instrument. Tenant shall have reciprocal termination rights if the whole or any
material part of the Premises is permanently taken, or if access to the Premises
is permanently materially impaired. Landlord shall be entitled to receive the
entire award or payment in connection therewith, except that Tenant shall have
the right to file any separate claim available to Tenant for any taking of
Tenant's personal property and fixtures belonging to Tenant and removable by
Tenant upon expiration of the Term, and for moving expenses (so long as such

May 7, 1999


                                       14
<PAGE>
claim does not diminish the award available to Landlord or any Holder, and such
claim is payable separately to Tenant). All Rent shall be apportioned as of the
date of such termination, or the date of such taking, whichever shall first
occur. If any part of the Premises shall be taken, and this Lease shall not be
so terminated, the Rent shall be proportionately abated. The parties waive the
provisions of California Code of Civil Procedure section 1265.130 or any similar
law allowing either party to petition the Superior Court to terminate this Lease
in the event of a partial taking of the Premises.

                                   ARTICLE 15.
               SUBORDINATION, ATTORNMENT AND MORTGAGEE PROTECTION

      This Lease is subject and subordinate to all Mortgages (as defined in
Article 26) now placed upon the Property, and all other encumbrances and matters
of public record applicable to the Property. Provided Tenant receives a
commercially reasonable non-disturbance, subordination and attornment agreement
from any new Holder, which Tenant hereby agrees to execute, this Lease shall be
subject and subordinate any Mortgages hereafter placed on the Property. If any
foreclosure proceedings are initiated by any Holder (as defined in Article 26)
or a deed in lieu is granted (or if any ground lease is terminated), Tenant
agrees, upon written request of any such Holder or any purchaser at foreclosure
sale, to attorn and pay Rent to such party and to execute and deliver any
instruments necessary or appropriate to evidence or effectuate such attornment.
However, in the event of attornment, no Holder shall be: (i) liable for any
action or omission of Landlord, or subject to any offsets or defenses which
Tenant might have against Landlord (prior to such Holder becoming Landlord under
such attornment), (ii) liable for any security deposit or bound by any prepaid
Rent not actually received by such Holder or (iii) bound by any future
modification of this Lease not consented to by such Holder. Any Holder may elect
to make this Lease prior to the lien of its Mortgage, by written notice to
Tenant, and if the Holder of any prior Mortgage shall require, this Lease shall
be prior to any subordinate Mortgage. Tenant agrees to give any Holder by
certified mail, return receipt requested, a copy of any notice of default served
by Tenant upon Landlord, provided that prior to such notice Tenant has been
notified in writing (by way of service on Tenant of a copy of an assignment of
leases, or otherwise) of the address of such Holder. Tenant further agrees that
if Landlord shall have failed to cure such default within the times permitted by
Landlord for cure under this Lease, any such Holder whose address has been
provided to Tenant shall have an additional period of thirty (30) days in which
to cure (or such additional time, not to exceed 180 days, as may be required due
to causes beyond such Holder's control, including time to obtain possession of
the Property by power of sale or judicial action). Tenant shall execute such
documentation as Landlord may reasonably request from time to time in recordable
form, in order to confirm the matters set forth in this Article.

                                   ARTICLE 16.
                              ESTOPPEL CERTIFICATE

      Either party shall from time to time, within twenty (20) days after
written request from the other, execute, acknowledge and deliver a statement (i)
certifying that this Lease is unmodified and in the 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 (or if this Lease is claimed
not to be in full force and effect, specifying the grounds therefor) and any
dates to which the Rent has been paid in

May 7, 1999


                                       15
<PAGE>
advance, and the amount of any Security Deposit, (ii) acknowledging that there
are not, to such party's knowledge, any uncured defaults on the part of the
other party hereunder, or specifying such defaults if any are claimed, and (iii)
certifying such other matters as may be reasonably requested, or as may be
requested by Landlord's current or prospective Holders, insurance carriers,
auditors, and prospective purchasers. Notwithstanding the foregoing, Tenant may
request such a statement only if it has a reasonable business purpose therefor;
in addition, Tenant may not request such statement from Landlord more than twice
in any twelve (12) month period during the Term, Any such statement may be
relied upon by any such parties. If Tenant shall fail to execute and return any
such statement within the time required herein, Tenant shall be deemed to have
agreed with the matters set forth therein.

                                   ARTICLE 17.
                            ASSIGNMENT AND SUBLETTING

      (A) TRANSFERS. Except for transfers to Related Entities (as defined in
Article 17(G)), Tenant shall not, without the prior written consent of Landlord:
(i) assign, mortgage, pledge, hypothecate, encumber, or permit any lien to
attach to, or otherwise transfer, this Lease or any interest hereunder, by
operation of law or otherwise, (ii) sublet the Premises or any part thereof or
(iii) permit the use of the Premises by any Persons (as defined in Article 26)
other than Tenant and its employees (all of the foregoing are hereinafter
sometimes referred to collectively as "Transfers" and any Person to whom any
Transfer is made or sought to be made is hereinafter sometimes referred to as a
"Transferee"). Prior to making any Transfer, Tenant shall notify Landlord in
writing, which notice shall provide a detailed description of the proposed
Transfer, including, without limitation: (a) the proposed effective date (which
shall not be less than 30 nor more than 180 days after Tenant's notice), (b) the
portion of the Premises to be Transferred (herein called the "Subject Space"),
(c) the terms of the proposed Transfer and the consideration therefor, the name
and address of the proposed Transferee, and a copy of any documentation
pertaining to the proposed Transferee, and (d) current financial statements of
the proposed Transferee, certified by an other, partner or owner thereof, and
any other information reasonably required to enable Landlord to determine the
financial responsibility, character, and reputation of the proposed Transferee,
nature of such Transferee's business and proposed use of the Subject Space, and
such other information as Landlord may reasonably require. If Landlord
reasonably requests additional information, Tenant's notice shall not be deemed
to have been received until Landlord receives such additional information. Any
Transfer made without complying with this Article shall, at Landlord's option,
be null, void and of no effect, or shall constitute a Default under this Lease.
Whether or not Landlord shall grant consent, Tenant shall pay $3OO.OO towards
Landlord's review and processing expenses, as well as any reasonable legal fees
incurred by Landlord, within thirty (30) days after written request therefor by
Landlord.

      (B) APPROVAL. Subject to the terms set forth in this Article, Landlord
will not unreasonably withhold or delay its consent to any proposed Transfer of
the Subject Space to the Transferee on the terms specified in Tenant's notice.
The parties hereby agree that it shall be reasonable under this Lease and under
any applicable Law for Landlord to withhold consent to any proposed Transfer
where one or more of the following applies (without limitation as to other
reasonable grounds for withholding consent): (i) the Transferee is of a
character or reputation or engaged in a business which is not consistent with
the quality of the Property), (ii) the Transferee intends to use the Subject
Space for purposes which are not permitted under this Lease, (iii) the

May 7, 1999


                                       16
<PAGE>
Subject Space is not regular in shape with appropriate means of ingress and
egress suitable for normal renting purposes, (iv) the Transferee is either a
government (or agency or instrumentality thereof) or an occupant of the Property
unless such occupant desires to expand its premises and no other comparable
space is available in the Building, (v) the proposed Transferee does not have a
reasonable financial condition in relation to the obligations to be assumed in
connection with the Transfer, (vi) the proposed Transfer would result in more
than two (2) subleases of portions of the Premises being in effect at any one
time during the Term, or (vii) Tenant has committed and failed to cure a default
at the time Tenant requests consent to the proposed Transfer.

      (C) RECAPTURE. Notwithstanding anything to the contrary in this Article,
Landlord shall have the option, by giving notice to Tenant within thirty (30)
days after receipt of Tenant's notice of any proposed Transfer (and any
additional information required or requested by Landlord in connection
therewith) to: (a) in the case of any Transfer, terminate this Lease as to the
Subject Space as of the effective date of the proposed Transfer, in which event
Tenant shall be relieved of all further obligations hereunder as to the Subject
Space as of such date; or (b) in the case of a sublease, to sublease the Subject
Space from Tenant upon the terms and conditions set forth in Tenant's notice,
except that the rent shall be the lower of the per square foot monthly Base Rent
and additional Rent described in Articles 3 and 4 payable under this Lease for
the Subject Space, or that part of the rent and other consideration set forth in
Tenant's notice which is applicable to the Space. If Landlord exercises its
option to sublet the Subject Space, Tenant shall sublet the Subject Space to
Landlord upon the terms and conditions contained in Tenant's notice; provided,
however, that: (i) Landlord shall at all times under such sublease have the
right and option further to sublet the Subject Space without obtaining Tenant's
consent or sharing any of the economic consideration received by Landlord; (ii)
the provisions of Article 6 shall not be applicable thereto; (iii) Landlord and
its subtenants shall have the right to use in common with Tenant all lavatories,
corridors and lobbies which are within the Premises and the use of which is
reasonably required for the use of the Subject Space; (iv) Tenant shall have no
right of set-off or abatement or any other right to assert a default hereunder
by reason of any default by Landlord under such sublease; and (v) Landlord's
liability under such sublease shall not be deemed assumed or taken subject to by
any successor to Landlord's interest under this Lease. No failure of Landlord to
exercise either option with respect to the Subject Lease shall be deemed to be
Landlord's consent to the Transfer. If this Lease shall be terminated with
respect to less than the entire Premises, the Rent reserved herein shall be
prorated on the basis of the number of square feet of rentable area retained by
Tenant in proportion to the number of rentable square feet contained in the
Premises, this Lease as so amended shall continue thereafter in full force and
effect, and upon request of either party, the parties shall execute written
confirmation of the same. Notwithstanding the foregoing rights of Landlord,
Landlord's right to recapture or sublease the Subject Space as set forth in this
Paragraph shall not apply to a proposed assignment or sublease of the Premises
where: (1) the aggregate space sublet and/or proposed to be sublet by Tenant
(including the Subject Space and any common area square footage allocated or
proposed to be allocated to any Transferees) is equal to less than 3,000
rentable square feet or (ii) the sublease or assignment does not require
Landlord's consent as expressly set forth in Article 17(G).

      (D) TERMS OF CONSENT. If Landlord consents to a Transfer, as some of the
conditions to the effectiveness thereof: (a) the terms and conditions of this
Lease, including among other things, Tenant's liability for the Subject Space,
shall in no way be deemed to have been waived or

May 7, 1999


                                       17
<PAGE>
modified, (b) such consent shall not be deemed consent to any further Transfer
by either Tenant or a Transferee, (c) no Transferee shall succeed to any rights
provided in this Lease or any amendment hereto to extend the Term of this Lease,
expand the Premises, or lease additional space, any such rights being deemed
personal to Tenant, and (d) Tenant shall deliver to Landlord promptly after
execution, an original executed copy of all documentation pertaining to the
Transfer in form reasonably acceptable to Landlord. Any sublease hereunder shall
be subordinate and subject to the provisions of this Lease, and if this Lease
shall be terminated during the term of any sublease for any reason, Landlord
shall have the right, in its sole discretion, to: (i) treat such sublease as
canceled and repossess the Subject Space by any lawful means, or (ii) require
that such subtenant attorn to and recognize Landlord as its landlord under any
such sublease. If Tenant shall be in Default hereunder, as described in
Paragraph (A) of Article 20, Landlord is hereby irrevocably authorized, as
Tenant's agent and attorney-in-fact, to, and may (but shall not be obligated
to), direct any Transferee to make all payments under or in connection with the
Transfer directly to Landlord (which Landlord shall apply towards Tenant's
obligations under this Lease) until such Default is cured. Regardless of
Landlord's consent, no Transfer shall release Tenant of Tenant's obligation or
alter the primary liability of Tenant to pay the Rent and to perform all other
obligations to be performed by Tenant hereunder. The acceptance of Rent by
Landlord from any other person shall not be deemed to be a waiver by Landlord of
any provision hereof. Consent to one Transfer shall not be deemed consent to any
subsequent Transfer. In the event of default by any assignee or successor of
Tenant in the performance of any of the terms hereof Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
said assignee or successor. Landlord may consent to subsequent Transfers of the
Lease or amendments or modifications to this Lease with assignees of Tenant,
without noticing Tenant, or any successor of Tenant, and without obtaining its
or their consent thereto and such action shall not relieve Tenant or any
successor of Tenant of liability under this Lease.

      (E) TRANSFER PREMIUM. If Landlord consents to a Transfer, and as a
condition thereto which the parties hereby agree is reasonable, Tenant shall pay
Landlord seventy-five percent (75%) of any Transfer Premium derived by Tenant
from such Transfer. "Transfer Premium" shall mean all rent, additional rent or
other consideration paid by such Transferee in excess of the Rent payable by
Tenant under this Lease (on a monthly basis during the Term, and on a per
rentable square foot basis, if less than all of the Premises is transferred),
after deducting the reasonable expenses incurred by Tenant for any changes,
alterations and improvements to the Premises, any other customary economic
concessions provided to the Transferee, and any customary brokerage commissions
paid in connection with the Transfer. If part of the consideration for such
Transfer shall be payable other than in cash, Landlord's share of such non-cash
consideration shall be in such form as is reasonably satisfactory to Landlord.
The percentage of the Transfer Premium due Landlord hereunder shall be paid
within ten (10) days after Tenant receives any Transfer Premium from the
Transferee.

      (F) CERTIFICATE; ANNUAL STATEMENT. Tenant shall finish upon Landlord's
request a complete statement, certified by an independent certified public
accountant, or Tenant's chief financial officer, setting forth in detail the
computation of any Transfer Premium Tenant has derived and shall derive from
such Transfer. In addition, Tenant shall deliver to Landlord a statement within
thirty (30) days after the end of each calendar year in which any part of the
Term occurs, and the end of the Term, specifying as to such calendar year each
sublease or assignment in effect during the period covered by such statement and
(i) the date of its execution and

May 7, 1999


                                       18
<PAGE>
delivery, (ii) the number of square feet of rentable area covered thereby, (iii)
the term thereof (iv) the rent charged thereunder, and (v) the amount (if any)
Transfer Premium paid and payable by Tenant to Landlord. Landlord or its
authorized representatives shall have the right at all reasonable times to audit
the books, records and papers of Tenant relating to any Transfer, and shall have
the right to make copies thereof. If the Transfer Premium respecting any
Transfer shall be found understated, Tenant shall within thirty (30) days after
demand pay the deficiency, and if understated by more than 2%, Tenant shall pay
Landlord's costs of such audit.

      (G) CERTAIN TRANSFERS. For purposes of this Lease, the term "Transfer"
shall also include (a) if Tenant is a partnership, or limited liability company,
the withdrawal or change (whether voluntary, involuntary or by operation of law)
of a majority of the partners or members, or any transfer of a majority of
partnership or membership interests or assets (as a consequence of a single
transaction or any number of separate transactions), or the dissolution of the
partnership or United liability company, (b) if Tenant is a corporation whose
stock is not publicly held and not traded through an exchange or over the
counter, the dissolution, merger, consolidation or other reorganization of
Tenant, or (as a consequence of a single transaction or any number of separate
transactions): (i) the sale or other transfer of more than an aggregate of 50%
of the voting shares of Tenant, or (ii) the sale, mortgage, hypothecation or
pledge of more than an aggregate of 50% of Tenant's net assets, (c) If tenant is
more than one Person, any Transfer by any one of the Persons comprising Tenant,
and (d) any Transfer by a Transferee. Notwithstanding the foregoing or anything
to the contrary in this Article, as long as ART TECHNOLOGY GROUP is the Tenant
in possession of the Premises and no Default then exists, Tenant shall have the
right, subject to the terms and conditions hereinafter set forth, without the
consent of Landlord, to (a) assign its interest in this Lease (i) to any
corporation which is a successor to Tenant either by merger or consolidation, or
(ii) to a purchaser of all or substantially all of Tenant's assets (provided
such purchaser shall have also assumed in writing substantially all of Tenant's
liabilities), or (iii) to a corporation or other entity which shall control, be
under the control of, or be under the common control with, ART TECHNOLOGY GROUP
(the term "control" as used herein shall be deemed to mean ownership of more
than fifty percent (50%) of the outstanding voting stock of a corporation, or
other majority equity and controlling interest if Tenant is not a corporation)
(any such entity being a "Related Entity"), or (b) sublease all or any portion
of the Premises to a Related Entity; upon the condition that (1) the principal
purpose of such assignment or sublease is not the acquisition of Tenant's
interest in this Lease (except if such assignment or sublease is made to a
Related Entity and is made for a valid intra-corporate business purpose and is
not made to circumvent the provisions of this Article 17)), and (2) any such
assignee shall have a net worth and annual income and cash flow, determined in
accordance with generally accepted accounting principals, consistently applied,
after giving effect to such assignment, in amounts necessary to perform its
duties, obligations and liabilities hereunder, as reasonably determined by
Landlord, Tenant shall, within ten (10) business days after execution of such
assignment or sublease, deliver to Landlord (A) a duplicate original instrument
of assignment or sublease, as the case may be, in form and substance reasonably
satisfactory to Landlord, duly executed by Tenant, (B) evidence reasonably
satisfactory to Landlord establishing compliance by the assignee with the net
worth, income and cash flow requirements of clause (b)(2) above, (C) an
instrument in form and substance reasonably satisfactory to Landlord, duly
executed by the assignee or sublessee, as the case may be, in which such
assignee or sublessee shall assume observance and performance of, and agree to
be personally bound by, all of the terms, covenants and conditions of this Lease
on Tenant's part to be observed and performed and (D) such other documentation
as Landlord shall

May 7, 1999


                                       19
<PAGE>
reasonably request to satisfy itself that the assignment or sublease conforms to
the specific exclusions to the definition of a "Transfer" as set forth in this
Paragraph.

                                   ARTICLE 18.
                       COMPLIANCE WITH LEGAL REQUIREMENTS

      (A) At Tenant's sole cost, Tenant shall promptly comply with all Laws
(defined in Article 26) now in force or that may later be in force, including,
but not limited to, all provisions of the American With Disabilities Act, the
requirements of any board of fire underwriters or other similar body now or in
the future constituted, and any direction or occupancy certificate issued by
public officers (collectively "Legal Requirements"), insofar as they relate to
the condition, use, or occupancy of the Premises; except for (i) structural
changes or changes to the electrical, mechanical, or plumbing systems of the
Building, to the extent such changes are not necessitated by Tenant's acts or by
improvements made for Tenant, (ii) alterations or improvements to the Building
as a whole or the common areas of the Building, and (iii) compliance with the
Americans With Disabilities Act in the 21st floor restrooms required as of the
Commencement Date.

      (B) In the event that Landlord shall be required to comply with any Legal
Requirement as a result of any structural changes, changes to the electrical,
mechanical or plumbing systems of the Building or the Premises or any
alterations or improvements to the Building as a whole or the common areas of
the Building done solely for the benefit of Tenant, any and all costs of such
changes, alterations and improvements together with any and all costs associated
with Landlord's compliance with Legal Requirements in connection therewith shall
be for the account of Tenant and Tenant shall within ten (10) days of receipt
pay all invoices therefor as additional rent.

                                   ARTICLE 19.
                           RIGHTS RESERVED BY LANDLORD

      Landlord reserves full rights to control the Property (which rights may be
exercised without subjecting Landlord to claims for constructive eviction,
abatement of Rent, damages or other claims of any kind), including more
particularly, but without limitation, the following rights:

      (A) To change the name or street address of the Property; install and
maintain signs on the exterior and interior of the Property; retain at all
times, and use in appropriate instances, keys to all doors within and into the
Premises; grant to any Person the right to conduct any business or render any
service at the Property, whether or not it is the same or similar to the use
permitted Tenant by this Lease; and have access for Landlord and other tenants
of the Property to any mail chutes located on the Premises according to the
rules of the United States Postal Service.

      (B) To enter the Premises at reasonable hours upon reasonable notice
(except in the case of emergencies) for reasonable purposes, including
inspection and supplying cleaning service or other services to be provided
Tenant hereunder, to show the Premises to current and prospective mortgage
lenders, ground lessors, insurers and prospective purchasers, tenants and
brokers, and if Tenant shall abandon the Premises at any time, or shall vacate
the same during the last three months of the Term, to decorate, remodel, repair
or alter the Premises.

May 7, 1999


                                       20
<PAGE>
      (C) To use any and all means which Landlord deems proper to enter the
Premises at any time in an emergency.

      (D) To limit or prevent access to the Property, shut down elevator
service, activate elevator emergency controls, or otherwise take such action or
preventative measures deemed necessary by Landlord for the safety of tenants or
other occupants of the Property or the protection of the Property and other
property located thereon or therein, in case of fire, invasion, insurrection,
riot, civil disorder, public excitement or other dangerous condition, or threat
thereof.

      (E) To decorate and to make alterations, additions and improvements,
structural or otherwise, in or to the Property or any part thereof and any
adjacent building, structure, parking facility, land, street or alley (including
without limitation changes and reductions in corridors, lobbies, parking
facilities and other public areas and the installation of kiosks, planters,
sculptures, displays, escalators, mezzanines, and other structures, facilities,
amenities and features therein, and changes for the purpose of connection with
or entrance into or use of the Property in conjunction with any adjoining or
adjacent building or buildings, now existing or hereafter constructed). In
connection with such matters, or with any other repairs, maintenance,
improvements or alterations, in or about the Property, Landlord may erect
scaffolding and other structures reasonably required, and during such operations
may enter upon the Premises and take into and upon or through the Premises, all
materials required to make such repairs, maintenance, alterations or
improvements, and may close public entry ways, other public areas, restrooms,
stairways or corridors.

      (F) To substitute for the Premises other premises (herein referred to as
the "new premises") at the Property provided: (i) the new premises shall be
similar to the Premises in area and on a floor no lower than the 11th floor of
the Building, (ii) Landlord shall give Tenant at least thirty (30) days' written
notice before making such change; and (iii) if Tenant shall already have taken
possession of the Premises: (a) Landlord shall pay the direct, out-of-pocket,
reasonable expenses of Tenant in moving from the Premises to the new premises
(such as removing and reinstalling Tenant's furniture, fixtures, equipment and
any Lines installed in accordance with Article 29 and the cost of a thirty day
supply of letterhead and a reasonable number of business cards) and improving
the new premises so that they are substantially similar to the Premises in
quality, and (b) such move shall be made during evenings, weekends, or otherwise
so as to incur the least convenience to Tenant. In such case, the parties shall
execute an amendment to the Lease confirming the change within thirty (30) days
after Landlord shall request the same.

      (G) To terminate this Lease upon written notice thereof if Tenant vacates
all or a substantial portion of the Premises for more than sixty (60)
consecutive days, or the failure to take possession of the Premises within sixty
(60) days after the Commencement Date;

      In connection with entering the Premises to exercise any of the rights set
forth in Paragraphs (A) through (F) of this Article, Landlord shall: (a) provide
reasonable advance written or oral notice to Tenant's on-site manager or other
appropriate person (except in emergencies, or for routine cleaning or other
routine matters), and (b) take reasonable steps to minimize any interference
with Tenant's business.

May 7, 1999


                                       21
<PAGE>
                                   ARTICLE 20.
                               LANDLORD'S REMEDIES

      (A) DEFAULT. The occurrence of any one or more of the following events
shall constitute a "Default" by Tenant, which shall give rise to Landlord's
remedies set forth in Paragraph (B) of this Article: (i) failure by Tenant to
make when due any payment of Rent; provided, that on the first two (2) occasions
during the Term of Tenant's failure to pay Rent when due, no Default shall be
deemed to have occurred unless Tenant fails to pay Rent within three (3) days
following Landlord's written notice thereof (ii) failure by Tenant to observe or
perform any of the terms or conditions of this Lease to be observed or performed
by Tenant other than the payment of Rent, or as provided below, unless such
failure is cured within thirty (30) days after written notice, or such shorter
period expressly provided elsewhere in this Lease, or such longer period as may
be reasonably necessary if the failure by its nature cannot be cured within
thirty (30) days) provided that within such thirty (30) day period Tenant
commences and thereafter diligently proceeds to cure such failure; (iii) failure
by Tenant to comply with the Rules, unless such failure is cured within five (5)
days after notice; (iv) (a) making by Tenant of any general assignment for the
benefit of creditors, (b) filing by or against Tenant of a petition to have
Tenant adjudged a bankrupt or a petition for reorganization or arrangement under
any Law (defined in Article 26) relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days),
(c) appointment of a trustee or receiver to take possession of substantially all
of Tenant's assets or of Tenant's interest in this Lease, where possession is
not restored to Tenant within thirty (30) days, (d) attachment, execution or
other judicial seizure of substantially all of Tenant's assets or of Tenant's
interest in this Lease, (e) Tenant's convening of a meeting of its creditors or
any class thereof for the purpose of effecting a moratorium upon or composition
of its debts, or (f) Tenant's insolvency or admission of an inability to pay its
debts as they mature; (v) any material misrepresentation herein, or material
misrepresentation or omission in any financial statements or other materials
provided by Tenant in connection with negotiating or entering this Lease or in
connection with any Transfer under Article 17; or (vi) making of any Transfer in
violation of Article 17. Without limiting the foregoing, failure by Tenant to
comply with the same term or condition of this Lease on three occasions during
any twelve (12) month period shall cause any failure to comply with such term or
condition during the succeeding twelve month period, at Landlord's option, to
constitute an incurable Default if Landlord has given Tenant notice of each such
failure after each such failure occurs. The parties acknowledge and agree that
time is of the essence of this Lease and, to the extent allowable by Law, the
notice and cure periods provided herein are in lieu of, and not in addition to,
any notice and cure periods provided by Law.

      (B) REMEDIES. If Tenant commits a Default, in addition to any other right
or remedy allowed under any Law or other provision of this Lease (all of which
remedies shall be distinct, separate and cumulative), Landlord may terminate
this Lease, repossess the Premises by unlawful detainer suit, summary
proceedings, or any other lawful means, and recover as damages a sum of money
equal to: (a) the worth at the time of award of the unpaid Rent which had been
earned at the time of termination; (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 the award exceeds the amount of such Rent loss that Tenant
proves could have been reasonably avoided; (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 Rent loss that Tenant proves can reasonably
be

May 7, 1999


                                       22
<PAGE>
avoided; and (d) any other amounts necessary to compensate Landlord for all
detriment or damages proximately caused by Tenant's failure to perform its
obligations under this Lease or that in the ordinary course would be likely to
result therefrom, including without limitation, all Costs of Reletting (as
defined in Paragraph (F) of this Article. For purposes of computing the amount
of Rent herein that would have accrued after the time of award, Tenant's Prorata
Share of Taxes and Operating Expenses shall be projected, based upon the average
rate of increase, if any, in such items from the Commencement Date through the
time of award. The "worth at the time of award" of the amounts referred to in
clauses (a) and (b) shall be computed by allowing interest at the Default Rate
(as defined in Article 26). The "worth at the time of award" of the amount
referred to in clause (c) shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%).

      (C) MITIGATION OF DAMAGES. If Landlord terminates this Lease or Tenant's
right to possession, Landlord shall use reasonable efforts to mitigate
Landlord's damages, and Tenant shall be entitled to submit proof of such failure
to mitigate as a defense to Landlord's claims hereunder, if mitigation of
damages by Landlord is required by applicable Law. If Landlord has not
terminated this Lease or Tenant's right to possession, Landlord shall have no
obligation to mitigate, and may permit the Premises to remain vacant or
abandoned, and shall have the remedies under California Civil Code, Section
1951.4, as the same may be modified or replaced hereafter; in such case, Tenant
may seek to mitigate damages by attempting to sublease the Premises or assign
this Lease subject to the provisions of Article 17.

      (D) SPECIFIC PERFORMANCE AND COLLECTION OF RENT. Landlord shall at all
times have the rights and remedies (which shall be cumulative with each other
and cumulative and in addition to those rights and remedies available under
Paragraph (B) of this Article above or any law or other provision of this
Lease), without prior demand or notice except as required by applicable Law: (1)
to seek any declaratory, injunctive or other equitable relief and specifically
enforce this Lease, or restrain or enjoin a violation or breach of any provision
hereof, and (ii) to sue for and collect any unpaid Rent which has accrued.

      (E) LATE CHARGES AND INTEREST. Tenant shall pay, as additional Rent, a
service charge of Two Hundred Dollars ($200.00) for bookkeeping and
administrative expenses, if Rent is not received within five (5) days after its
due date. In addition, any Rent paid more than five (5) days after due shall
accrue interest from the due date at the Default Rate (as defined in Article
26), until payment is received by Landlord. Such service charge and interest
payments shall not be deemed consent by Landlord to late payments, nor a waiver
of Landlord's right to insist upon timely payments at any time, nor a waiver of
any remedies to which Landlord is entitled as a result of the late payment of
Rent.

      (F) CERTAIN DEFINITIONS. "Net Re-Letting Proceeds" shall mean the total
amount of rent and other consideration actually paid by any Replacement Tenants,
less all Costs of Re-Letting, during a given period of time. "Costs of
Re-Letting" shall include, without limitation, all reasonable costs and expenses
incurred by Landlord for any repairs, maintenance, changes, alterations and
improvements to the Premises, brokerage commissions, advertising costs,
attorneys' fees, any customary free rent periods or credits, tenant improvement
allowances, take-over lease obligations and other customary, necessary or
appropriate economic incentives reasonably required to enter into leases with
Replacement Tenants, and costs of collecting rent

May 7, 1999


                                       23
<PAGE>
from Replacement Tenants. "Replacement Tenants" shall mean any Person (as
defined in Article 26) to whom Landlord relets the Premises or any portion
thereof pursuant to this Article.

      (G) OTHER MATTERS. No re-entry or repossession, repairs, changes,
alterations and additions, reletting, acceptance of keys from Tenants, or any
other action or omission by Landlord shall be construed as an election by
Landlord to terminate this Lease or Tenant's right to possession, or accept a
surrender of the Premises, nor shall the same operate to release the Tenant in
whole or in part from any of Tenant's obligations hereunder, unless express
written notice of such intention is sent by Landlord to Tenant. To the fullest
extent permitted by Law, all rent and other consideration paid by any
Replacement Tenants shall be applied: first, to the Costs of Re-Letting, second,
to the payment of any Rent theretofore accrued, and the residue, if any, shall
be held by Landlord and applied to the payment of other obligations of Tenant to
Landlord as the same become due (with any remaining residue to be retained by
Landlord). Landlord may apply payments received from Tenant to any obligations
of Tenant then accrued, without regard to such obligations as may be designated
by Tenant. Landlord shall be under no obligation to observe or perform any
provision of this Lease on its part to be observed or performed which accrues
after the date of any Default by Tenant. Tenant hereby irrevocably waives any
right otherwise available under any Law to redeem or reinstate this Lease.

                                   ARTICLE 21
                            LANDLORD'S RIGHT TO CURE

      (A) If Landlord shall fail to perform any term or provision under this
Lease required to be performed by Landlord, Landlord shall not be deemed to be
in default hereunder nor subject to any claims for damages of any kind, unless
such failure shall have continued for a period of thirty (30) days after written
notice thereof by Tenant; provided, if the nature of Landlord's failure is such
that more than thirty (30) days are reasonably required in order to cure,
Landlord shall not be in default if Landlord commences to cure such failure
within such thirty (30) day period, and thereafter reasonably seeks to cure such
failure to completion. The aforementioned periods of time permitted for Landlord
to cure shall be extended for any period of time during which Landlord is
delayed in, or prevented from, curing due to fire or other casualty, strikes,
lock-outs or other labor troubles or shortages, shortages of equipment or
materials, governmental requirements, power shortages or outages, acts or
omissions by Tenant or other Persons, and other causes beyond Landlord's
reasonable control. If Landlord shall fail to cure within the times permitted
for cure herein, Landlord shall be subject to such remedies as may be available
to Tenant (subject to the other provisions of this Lease); provided, in
recognition that Landlord must receive timely payments of Rent and operate the
Property, Tenant shall have no right of self-help to perform repairs or any
other obligation of Landlord, and shall have no right to withhold, set-off or
abate Rent except as expressly set forth herein.

      (B) All agreements and provisions to be performed by Tenant under any of
the terms of this Lease shall be at its sole cost and expense and without any
abatement of Rent. If Tenant shall fail to pay any sum of money, other than
Rent, required to be paid by it hereunder, or shall fail to perform any other
act on its part to be performed hereunder and such failure shall continue for
ten (10) days after notice thereof by Landlord, or a shorter period if
additional damage may result, Landlord may, to protect its interests, but shall
not be obligated to do so, and without waiving or releasing Tenant from any of
its obligations, make any such payment or perform any

May 7, 1999


                                       24
<PAGE>
such other act on Tenant's part to be made or performed as provided herein. All
sums so paid by Landlord and all necessary incidental costs shall be deemed
additional Rent hereunder and shall be payable with interest from the date
Landlord makes such payments until paid by Tenant, at the Default Rate, and
Landlord shall have (in addition to any other right or remedy of Landlord) the
same rights and remedies in the event of the nonpayment thereof by Tenant as in
the case of default by Tenant in the payment of Rent.

                                   ARTICLE 22.
                              RETURN OF POSSESSION

      At the expiration of earlier termination of this Lease or Tenant's right
of possession, Tenant shall surrender possession of the Premises in the
condition required under Article 9, ordinary wear and tear excepted, and shall
surrender all keys, key cards, and any parking stickers, to Landlord, and advise
Landlord as to the combination of any locks or vaults then remaining in the
Premises, and shall remove all trade fixtures and personal property. All
improvements, fixtures and other items in or upon the Premises (except trade
fixtures and personal property belonging to Tenant), whether installed by Tenant
or Landlord, shall be Landlord's property and shall remain upon the Premises,
all without compensation, allowance or credit to Tenant. However, if Landlord so
directs upon granting its consent to any alterations or improvements to the
Premises made by Tenant, Tenant shall promptly remove such of the foregoing
items as are designated in such notice and restore the Premises to the condition
prior to the installation of such items and as of the execution hereof. if
Tenant shall fail to perform any repairs or restoration, or fail to remove any
items from the Premises required hereunder, Landlord may do so, and Tenant shall
pay Landlord the reasonable cost thereof upon demand. All property removed from
the Premises by Landlord pursuant to any provisions of this Lease or any Law may
be handled or stored by Landlord at Tenant's expense, and Landlord shall in no
event be responsible for the value, preservation or safekeeping thereof. All
property not removed from the Premises or retaken from storage by Tenant within
thirty (30) days after expiration or earlier termination of this Lease or
Tenant's right to possession, shall at Landlord's option be conclusively deemed
to have been conveyed by Tenant to Landlord as if by bill of sale without
payment by Landlord. Unless prohibited by applicable Law, Landlord shall have a
lien against such property for the costs incurred in removing and storing the
same.

                                   ARTICLE 23.
                                  HOLDING OVER

      Unless Landlord expressly agrees otherwise in writing, Tenant shall pay
Landlord 150% of the amount of Rent then applicable for the first ninety (90)
days after expiration or earlier termination of this Lease and thereafter 175%
of the amount of rent applicable at the expiration or earlier termination of
this Lease (or the highest amount permitted by law, whichever shall be less),
prorated on per diem basis for each day Tenant shall retain possession of the
Premises or any part thereof after the expiration or earlier termination of this
Lease, together with all damages sustained by Landlord on account thereof. The
foregoing provisions shall not serve as permission for Tenant to hold-over, nor
serve to extend the Term (although Tenant shall remain bound to comply with all
provisions of this Lease until Tenant vacates the Premises, and shall be subject
to the provisions of Article 22). Notwithstanding the foregoing to the contrary,
at any time before or after expiration or earlier termination of the Lease,
Landlord may serve notice advising Tenant

May 7, 1999


                                       25
<PAGE>
of the amount of Rent and other terms required, should Tenant desire to enter a
month-to-month tenancy (and if Tenant shall hold over more than one fill
calendar month after such notice, Tenant shall thereafter be deemed a
month-to-month tenant, on the terms and provisions of this Lease then in effect,
as modified by Landlord's notice, and except that Tenant shall not be entitled
to any renewal or expansion rights contained in this Lease or any amendments
hereto).

                                    ARTICLE 24.
                                    NO WAIVER
      No provision of this Lease will be deemed waived by either party unless
expressly waived in writing signed by the waiving party. No waiver shall be
implied by delay, forbearance, failure to act or any other act or omission of
either party. No waiver by either party of any provision of this Lease shall be
deemed a waiver of such provision with respect to any subsequent matter relating
to such provision, and Landlord's consent or approval respecting any action by
Tenant shall not constitute a waiver of the requirement for obtaining Landlord's
consent or approval respecting any subsequent action. Acceptance of Rent by
Landlord shall not constitute a waiver of any breach by Tenant of any term or
provision of this Lease. No acceptance of a lesser amount than the Rent herein
stipulated shall be deemed a waiver of Landlord's right to receive the full
amount due, nor shall any endorsement or statement on any check or payment or
any letter accompanying such check or payment be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the full amount due. The acceptance of Rent or of
the performance of any other term or provision from any Person other than
Tenant, including any Transferee, shall not constitute a waiver of Landlord's
right to approve or disapprove any Transfer.

                                   ARTICLE 25.
                         ATTORNEYS' FEES AND JURY TRIAL

      In the event of any litigation between the parties, the prevailing party
shall be entitled to obtain, as part of the judgment, all reasonable attorneys'
fees, costs and expenses incurred in connection with such litigation, except as
may be limited by applicable Law. In the interest of obtaining a speedier and
less costly hearing of any dispute, the parties hereby each irrevocably waive
the right to trial by jury.

                                   ARTICLE 26.
                     CAPTIONS, DEFINITIONS AND SEVERABILITY

      The captions of the Articles and Paragraphs of this Lease are for
convenience of reference only and shall not be considered or referred to in
resolving questions of interpretation. If any term or provision of this Lease
shall be found invalid, void, illegal, or unenforceable with respect to any
particular Person by a court of competent jurisdiction, it shall not affect,
impair or invalidate any other terms or provisions hereof, or its enforceability
with respect to any other Person, the parties hereto agreeing that they would
have entered into the remaining portion of this Lease notwithstanding the
omission of the portion or portions adjudged invalid, void, illegal, or
unenforceable with respect to such Person.

May 7, 1999


                                       26
<PAGE>
      (A) "Building" shall mean the structure identified in Article 1 of this
Lease.

      (B) "Default Rate" shall mean five percent (5%) in excess of the Prime
Rate (as defined in Paragraph (J) of this Article) per annum, or the highest
rate permitted by applicable Law, whichever shall be less.

      (C) "Holder" shall mean the holder of any Mortgage at the time in
question, and where such Mortgage is a ground lease, such term shall refer to
the ground lessor.

      (D) "Holidays" shall mean all federally observed holidays, including New
Year's Day, President's Day, Memorial Day, Independence Day, Labor Day,
Veterans' Day, Thanksgiving Day, Christmas Day, and to the extent of utilities
or services provided by union members engaged at the Property, such other
holidays observed by such unions.

      (E) "Landlord" and "Tenant" shall be applicable to one or more Persons as
the case may be, and the singular shall include the plural, and the neuter shall
include the masculine and feminine; and if there be more than one, the
obligations thereof shall be joint and several. For purposes of any provisions
indemnifying or limiting the liability of Landlord, the term "Landlord" shall
include Landlord's present and future partners, members, beneficiaries,
trustees, officers, directors, employees, shareholders, principals, agents,
affiliates, successors and assigns.

      (F) "Law" shall mean all federal, state, county and local governmental and
municipal laws, statutes, ordinances, rules, regulations, codes, decrees,
orders, and other such requirements, applicable equitable remedies and decisions
by courts in cases where such decisions are considered binding precedents in the
state in which the Property is located, and decisions of federal courts applying
the Laws of such State.

      (G) "Mortgage" shall mean all mortgages, deeds of trust, ground leases and
other such encumbrances now or hereafter placed upon the Property or Building,
or any part thereof, and all renewals, modifications, consolidations,
replacements or extensions thereof and all indebtedness now or hereafter secured
thereby and all interest thereon.

      (H) "Operating Expenses" shall mean all expenses, costs and amounts (other
than Taxes) of every kind and nature which Landlord shall incur or pay during
any calendar year any portion of which occurs during the Term, because of or in
connection with the ownership, management, repair, maintenance, restoration and
operation of the Property, including, without limitation, any amounts paid for:
(a) utilities for the Property, Including but not limited to, electricity,
power, gas, steam, oil or other fuel, water, sewer, lighting, heating, air
conditioning and ventilating, (b) permits, licenses and certificates necessary
to operate, manage and lease the Property, (c) insurance applicable to the
Property, not limited to the amount of coverage Landlord is required to provide
under this Lease, (d) supplies, tools, equipment and materials used in the
operation, repair and maintenance of the Property, (e) accounting, legal,
inspection, consulting, concierge and other services, (f) any equipment rental
(or installment equipment purchase or equipment financing agreements), or
management agreements (including the cost of any management fee actually paid
thereunder and the fair rental value of any office space provided thereunder, up
to customary and reasonable amounts), (g) wages, salaries and other compensation
and benefits (including the fair value of any parking privileges provided) for
all persons engaged in

May 7, 1999


                                       27
<PAGE>
the operation, maintenance or security of the Property (as distinguished from
executive compensation), and employer's Social Security taxes, unemployment
taxes or insurance, and any other taxes which may be levied on such wages,
salaries, compensation and benefits, (h) payments under any easement, operating
agreement, declaration, restrictive covenant or instrument pertaining to the
sharing of costs in any planned development, and (i) operation, repair and
maintenance of all Systems and Equipment and components thereof (including
replacement of components), janitorial service, alarm and security service,
window cleaning, trash removal, elevator maintenance, cleaning of walks, parking
facilities and building walls, removal of ice and snow, replacement of wall and
floor coverings, ceiling tiles and fixtures in lobbies, corridors, restrooms and
other common or public areas or facilities, maintenance and replacement of
shrubs, trees, grass, sod and other landscaped items, irrigation systems,
drainage facilities fences, curbs and walkways, re-paving and re-striping
parking facilities, and roof repairs. If the Property is not fully occupied
during all or a portion of any calendar year, Landlord may, in accordance with
sound accounting and management practices, determine the amount of variable
Operating Expenses (i.e., those items which vary according to occupancy levels)
that would have been paid had the Property been 95% occupied, and the amount so
determined shall be deemed to have been the amount of variable Operating
Expenses for such year. If Landlord makes such an adjustment, Landlord shall
make a comparable adjustment for the Base Expense year. Notwithstanding the
foregoing, Operating Expenses shall not, however, include:

      (i) depreciation, interest (except as set forth below with respect to
      amortization of capital improvements) and amortization on Mortgages, and
      other debt costs or ground lease payments, if any; legal fees in
      connection with leasing, tenant disputes or enforcement of leases; real
      estate brokers' leasing commissions; improvements or alterations to tenant
      spaces; the cost of providing any service directly to and paid directly
      by, any tenant; any costs expressly excluded from Operating Expenses
      elsewhere in this Lease; costs of any items to the extent Landlord
      receives reimbursement from insurance proceeds or from a third party (such
      proceeds to be deducted from Operating Expenses in the year in which
      received); and

      (ii) capital expenditures, except for: (a) the costs of any capital
      improvements, equipment or devices installed or paid for by Landlord (1)
      required for the health and safety of tenants and occupants, (2) to
      conform with any change in Laws, rules, regulations or requirements of any
      governmental or quasi governmental authority having jurisdiction not
      applicable to the Building as of the date hereof or of the board of fire
      underwriters or similar insurance body, or (3) to effect a labor saving,
      energy saving or other economy, amortized over the lesser of (A) the "pay
      back period," or (B) the useful life of such capital improvement,
      equipment or device (as determined in accordance with generally accepted
      accounting principles), or such longer period as Landlord shall reasonably
      determine, as well as interest on the unamortized balance at the Prime
      Rate, as defined in Paragraph (J) below, on the date the costs are
      incurred or such higher rate as may have been paid by Landlord on borrowed
      funds; and (b) the costs of (1) exterior window draperies and coverings
      provided by Landlord, (2) carpeting and wall coverings in the common
      areas, and (3) other furnishings in common areas which, as a result of
      normal use, require periodic replacement, amortized over the useful life
      of such improvements (as determined by generally accepted accounting

      principles), or such longer period as may be determined by Landlord in its
      reasonable discretion, as well as interest, on the unamortized

May 7, 1999


                                       28
<PAGE>
      balance at the Prime Rate on the date the costs are incurred or such
      higher rate as may have been paid by Landlord on borrowed funds, if more
      than thirty-five percent (35%) of the draperies, window coverings,
      carpeting or furnishings are replaced during any calendar year. If
      thirty-five percent (35%) or less of the draperies, window coverings,
      carpeting or furnishings are replaced during any calendar year, then the
      entire cost of replacing such draperies, window coverings, carpeting or
      furnishings shall be included in Operating Expenses in the calendar year
      the cost is incurred; (c) depreciation or amortization of the costs of
      materials, tools, supplies and equipment purchased by Landlord to enable
      Landlord to supply services which Landlord might otherwise contract for
      with a third party where such depreciation and amortization would
      otherwise have been included in the charge for such third party's
      services; and (d) costs of minor capital improvements or expenditures
      where such improvement or expenditure costs less than Ten Thousand Dollars
      ($10,000.00) in the aggregate in any calendar year.

      (1) "Person" shall mean an individual, trust, partnership, joint venture,
association, limited liability company, corporation and any other entity.

      (3) "Prime Rate" shall mean the prime rate (or base rate) reported in the
Money Rates column or section of The Wall Street Journal as being the base rate
on corporate loans at large U.S. money center commercial banks (whether or not
such rate has actually been charged by any such bank) on the first day on which
The Wall Street Journal is published in the month preceding the month in which
the subject costs are incurred.

      (K) "Property" shall mean the Building, and any common or public areas or
facilities, easements, corridors, lobbies, sidewalks, loading areas, driveways,
landscaped areas, skywalks, parking garages and lots, and any and all other
structures or facilities operated or maintained in connection with or for the
benefit of the Building, and all parcels or tracts of land on which all or any
portion of the Building or any of the other foregoing items are located, and any
fixtures, machinery, equipment, apparatus, Systems and Equipment, furniture and
other personal property located thereon or therein and used in connection
therewith, whether title is held by Landlord or its affiliates. Possession of
areas necessary for utilities, services, safety and operation of the Property,
including the Systems and Equipment (as defined in this Article), fire
stairways, perimeter walls, space between the finished ceiling of the Premises
and the slab of the floor or roof of the Property there above, and the use
thereof together with the right to install, maintain, operate, repair and
replace the Systems and Equipment including any of the same in, through, under
or above the Premises in locations that will not materially interfere with
Tenant's use of the Premises, are hereby excepted and reserved by Landlord, and
not demised to Tenant.

      (L) "Rent" shall have the meaning specified therefor in Paragraph (H) of
Article 4.

      (M) "Systems and Equipment" shall mean any plant, machinery, transformers,
duct work, cable, wires and other equipment, facilities, and systems designed to
supply heat, ventilation, air conditioning and humidity or any other services or
utilities, or comprising or serving as any component or portion of the
electrical, gas, steam, plumbing, sprinkler, communications, alarm, security, or
fire/life/safety systems or equipment, or any other mechanical, electrical,
electronic, computer or other systems or equipment for the Property.

May 7, 1999


                                       29
<PAGE>
      (N) "Taxes" shall mean all federal, state, county or local governmental or
municipal taxes, fees, charge or other impositions of every kind and nature,
whether general, special, ordinary or extraordinary (including, without
limitation, real estate taxes, general and special assessments, transit taxes,
water and sewer rents, taxes based upon the receipt of rent including gross
receipts or sales taxes applicable to the receipt of rent or service or value
added taxes (except to the extent paid by Tenant under Article 5), personal
property taxes imposed upon the fixtures, machinery, equipment, apparatus,
Systems and Equipment, appurtenances, furniture and other personal property used
in connection with the Property which Landlord shall pay during any calendar
year, any portion of which occurs during the Term (without regard to any
different fiscal year used by such government or municipal authority) because of
or in connection with the ownership, leasing and operation of the Property.
Notwithstanding the foregoing, there shall be excluded from Taxes all excess
profits taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and
succession taxes, estate taxes, federal and state income taxes, and other taxes
to the extent applicable to Landlord's general or net income (as opposed to
rents, receipts or income attributable to operations at the Property). If the
method of taxation of real estate prevailing at the time of execution hereof
shall be, or has been altered, so as to cause the whole or any part of the taxes
now, hereafter or heretofore levied, assessed or imposed on real estate to be
levied, assessed or imposed on Landlord, wholly or partially, as a capital levy
or otherwise, or on or measured by the rents received therefrom, then such new
or altered taxes attributable to the Property shall be included within the term
"Taxes," except that the same shall not include any enhancement of said tax
attributable to other Income of Landlord. Any expenses incurred by Landlord in
attempting to protest, reduce or minimize Taxes shall be included in Taxes in
the calendar year such expenses are paid. Tax refunds shall be deducted from
Taxes in the year they are received by Landlord, but if such refund shall relate
to taxes paid in a prior year of the Term, and the Lease shall have expired,
Landlord shall mail Tenant's Prorata Share of such net refund (after deducting
expenses and attorneys' fees), up to the amount Tenant paid towards Taxes during
such year, to Tenant's last known address. If Taxes for the Base Tax year are
reduced as the result of protest, or by means of agreement, or as the result of
legal proceedings or otherwise, Landlord may adjust Tenant's obligations for
Taxes in all years following the Tax Base Year, and Tenant shall pay Landlord
within 30 days after notice any additional amount required by such adjustment
for any such years or portions thereof that have therefore occurred. If Taxes
for any period during the Term or any extension thereof shall be Increased after
payment thereof by Landlord, for any reason, including without limitation, error
or reassessment by applicable governmental or municipal authorities, Tenant
shall pay Landlord upon demand Tenant's Prorata Share of such increased Taxes.
Tenant shall pay increased Taxes whether Taxes are increased as a result of
increases in the assessments or valuation of the Property (whether based on a
sale, change in ownership or refinancing of the Property or otherwise),
increases in the tax rates, reduction or elimination of any rollbacks or other
deductions available under current law, scheduled reductions of any tax
abatement, as a result of the elimination, invalidity or withdrawal of any tax
abatement, or for any other cause whatsoever. Notwithstanding the foregoing, if
any Taxes shall be paid based on assessments or bills by a governmental or
municipal authority using a fiscal year other than a calendar year, Landlord may
elect to average the assessments or bills for the subject calendar year, based
on the number of months of such calendar year included in each such assessment
or bill.

      (O) "Tenant's Prorata Share" of Taxes and Operating Expenses shall be
3.212%. Tenant acknowledges that the "rentable area of the Premises" under this
Lease includes the usable

May 7, 1999


                                       30
<PAGE>
area, without deduction for columns or projections, multiplied by a load or
conversion factor, to reflect a share of certain areas, which may include
lobbies, corridors, mechanical, utility, janitorial, boiler and service rooms
and closets, restrooms and other public, common and service areas. Except as
provided expressly to the contrary herein, the "rentable area of the Property"
shall include all rentable area of all space leased or available for lease at
the Property, which Landlord may reasonably re-determine from time to time, to
reflect re-configurations, additions or modifications to the Property.

                                   ARTICLE 27.
                      CONVEYANCE BY LANDLORD AND LIABILITY

      In case Landlord or any successor owner of the Property or the Building
shall convey or otherwise dispose of arty portion thereof in which the Premises
are located, to another Person (and nothing herein shall be construed to
restrict or prevent such conveyance or disposition), such other Person shall
thereupon be and become landlord hereunder and shall be deemed to have fully
assumed and be liable for all obligations of this Lease to be performed by
Landlord which must arise after the date of conveyance, and Tenant shall attorn
to such other Person, and Landlord or such successor owner shall, from and after
the date of conveyance, be free of all liabilities and obligations hereunder not
then incurred. The liability of Landlord to Tenant for any default by Landlord
under this Lease or arising in connection herewith or with Landlord's operation,
management, leasing, repair, renovation, alteration or any other matter relating
to the Property or the Premises, shall be limited to the interest of Landlord in
the Property (and the rental proceeds thereof), and Tenant agrees to look solely
to Landlord's interest in the Property (and the rental proceeds thereof). Tenant
agrees to look solely to Landlords interest in the Property (and the rental
proceeds thereof) for the recovery of any judgment against Landlord, and
Landlord shall not be personally liable for any such judgment or deficiency
after execution thereon. The limitations of liability contained In this Article
shall apply equally and inure to the benefit of Landlord's present and future
partners, beneficiaries, officers, directors, trustees, members, shareholders,
agents and employees, and their respective partners, heirs, successors and
assigns. Under no circumstances shall any present or future partner, member,
shareholder, or trustee or beneficiary (if Landlord or any partner, member or
shareholder of Landlord is a trust) have any liability for the performance of
Landlord's obligations under this Lease. Notwithstanding the foregoing to the
contrary, Landlord shall have personal liability for insured claims, beyond
Landlord's interest in the Property (and rental proceeds thereof), to the extent
of Landlord's liability insurance coverage available for such claims.

                                   ARTICLE 28.
               SAFETY AND SECURITY DEVICES, SERVICES AND PROGRAMS

      The parties acknowledge that safety and security devices, services and
programs provided by Landlord, if any, while intended to deter crime and ensure
safety, may not in given instances prevent theft or other criminal acts, or
ensure safety of persons or property. The risk that any safety or security
device, service or program may not be effective, or may malfunction, or be
circumvented by a criminal, is assumed by Tenant with respect to Tenant's
property and interests, and Tenant shall obtain insurance coverage to the extent
Tenant desires protection against such criminal acts and other losses in
addition to insurance required to be carried by Tenant hereunder.

May 7, 1999


                                       31
<PAGE>
Tenant agrees to cooperate in a any reasonable safety or security program
developed by Landlord or any program required by law.

                                   ARTICLE 29.
                        COMMUNICATIONS AND COMPUTER LINES

      (A) Tenant may install, maintain, replace, remove or use any
communications or computer wires, cables and related devices (collectively the
"Lines") at the Property in or serving the Premises, provided: (a) Tenant shall
obtain Landlord's prior written consent, use an experienced and qualified
contractor approved in writing by Landlord, and comply with all of the other
provisions of Article 10, (b) any such installation, maintenance, replacement,
removal or use shall comply with all Laws applicable thereto and good work
practices, and shall not interfere with the use of any then existing Lines at
the Property, (c) an acceptable number of spare Lines and space for additional
Lines shall be maintained for existing and future occupants of the Property, as
determined in Landlord's reasonable opinion, (d) if Tenant at any time uses any
equipment that may create an electromagnetic field exceeding the normal
insulation ratings of ordinary twisted pair riser cable or cause radiation
higher than normal background radiation, the Lines therefor (including riser
cables) shall be appropriately insulated to prevent such excessive
electromagnetic fields or radiation, (e) as a condition to permitting the
installation of new Lines, Landlord may require that Tenant remove existing
Lines located in or serving the Premises, (f) Tenant's rights shall be subject
to the rights of any regulated telephone company, and (g) Tenant shall pay all
costs in connection therewith. Landlord reserves the right to require that
Tenant remove any Lines located in or serving the Premises which are installed
in violation of these provisions, or which are or become at any time in
violation of any Laws or represent a dangerous or potentially dangerous
condition (whether such Lines were installed by Tenant or any other party),
within three (3) days after written notice.

      (B) Landlord may (but shall not have the obligation to): (i) install new
Lines at the Property, (ii) create additional space for Lines at the Property,
and (iii) reasonably direct, monitor and/or supervise the installation.
maintenance, replacement and removal of, the allocation and periodic
re-allocation of available space (if any) for, and the allocation of excess
capacity (if any) on, any Lines now or hereafter installed at the Property by
Landlord, Tenant or any other party (but Landlord shall have no right to monitor
or control the information transmitted through such Lines). Such rights shall
not be in limitation of other rights that may be available to Landlord by Law or
otherwise. If Landlord exercises any such rights, Landlord may charge Tenant for
the costs attributable to Tenant, or may include those costs and all other costs
in Operating Expenses under Article 26 (including, without limitation, costs for
acquiring and installing Lines and risers to accommodate new Lines and spare
Lines, any associated computerized system and software for maintaining records
of Line connections, and the fees of any consulting engineers and other
experts); provided, any capital expenditures included in Operating Expenses
hereunder shall be amortized (together with reasonable finance charges) over the
period of time prescribed by Paragraph (H)(ii) of Article 26.

      (C) Notwithstanding anything to the contrary contained in Article 22,
Landlord reserves the right to require that Tenant remove any or all Lines
installed by or for Tenant within or serving the Premises upon termination of
this Lease, provided Landlord notifies Tenant thereof at the time Landlord
approves the installation. Any Lines not required to be removed pursuant to

May 7, 1999


                                       32
<PAGE>
this Article shall, at Landlord's option, become the property of Landlord
without payment by Landlord. If Tenant fails to remove such lines as required by
Landlord, or violates any other provision of this Article, Landlord may, after
twenty (20) days' written notice to Tenant, remove such Lines or remedy such
other violation, at Tenant's expense (without limiting Landlord's other remedies
available under this Lease or applicable Law). Tenant shall not, without the
prior written consent of Landlord in each instance, grant to any third party, a
security interest or lien in or on the Lines, and any such security interest or
lien granted without Landlord's written consent shall be null and void. Except
to the extent arising from the intentional or grossly negligent acts of Landlord
or Landlord's agents or employees, Landlord shall have no liability for damages
arising from, and Landlord does not warrant that the Tenant's use of any Lines
will be free from the following (collectively called "Line Problems"): (x) any
eavesdropping or wire-tapping by unauthorized parties, (y) any failure of any
Lines to satisfy Tenant's requirements, or (z) any shortages, failures,
variations, interruptions, disconnections, loss or damage caused by the
installation, maintenance, replacement, use or removal of Lines by or for other
tenants or occupants of the Property, by any failure of the environmental
conditions or the power supply for the Property to conform to any requirements
for the Lines or any associated equipment, or any other problems associated with
any Lines by any other cause. Under no circumstances shall any Line Problems be
deemed an actual or constructive eviction of Tenant, render Landlord liable to
Tenant for abatement of Rent, or relieve Tenant from performance of Tenant's
obligations under this Lease. Landlord in no event shall be liable for damages
by reason of loss of profits, business interruption or other consequential
damage arising from any Line Problems.

                                   ARTICLE 3O.
                               HAZARDOUS MATERIALS

      (A) Tenant shall not transport, use, store, maintain, generate,
manufacture, handle, dispose, release or discharge any "Hazardous Material" (as
defined below) upon or about the Property, or permit Tenant's employees, agents,
contractors and other occupants of the Premises to engage in such activities
upon or about the Property. However, the foregoing provisions shall not prohibit
the transportation to and from, and use, storage, maintenance and handling
within, the Premises of substances customarily used in offices (or such other
business or activity expressly permitted to be undertaken in the Premises under
Article 7), provided: (a) such substances shall be used and maintained only in
such quantities as are reasonably necessary for such permitted use of the
Premises, strictly in accordance with applicable Law and the manufacturers'
instructions therefor, (b) such substances shall not be disposed of, released
or discharge on the Property, and shall be transported to and from the Premises
in compliance with all applicable laws, and as Landlord shall reasonably
require, (c) if any applicable Law or Landlord's trash removal contractor
requires that any such substances be disposed of separately from ordinary trash,
Tenant shall make arrangements at Tenant's expense for such disposal directly
with a qualified and licensed disposal company at a lawful disposal site
(subject to scheduling and approval by Landlord), and shall ensure that disposal
occurs frequently enough to prevent unnecessary storage of such substances in
the Premises, and (d) any remaining such substances shall be completely,
properly and lawfully removed from the Property upon expiration or earlier
termination of this Lease.

      Tenant shall promptly notify Landlord of: (i) any enforcement, cleanup or
other regulatory action taken or threatened by any governmental or regulatory
authority with respect to the

May 7, 1999


                                       33
<PAGE>
presence of any Hazardous Material on the Premises or the migration thereof from
or to other property, (ii) any demands or claims made or threatened by any party
against Tenant or the Premises relating to any loss or injury resulting from any
Hazardous Materials, (iii) any release, discharge or nonroutine, improper or
unlawful disposal or transportation of any Hazardous Material on or from the
Premises, and (iv) any matters where Tenant is required by Law to give a notice
to any governmental or regulatory authority respecting any Hazardous Material on
the Premises. Landlord shall have the right (but not the obligation) to join and
participate as a party in any legal proceedings or actions affecting the
Premises initiated in connection with any environmental, health or safety Law.
At such times as Landlord may reasonably request, Tenant shall provide Landlord
with a written list identifying any Hazardous Material then used, stored, or
maintained upon the Premises, the use and approximate quantity of each such
material, a copy of any material safety data sheet ("MSDS") issued by the
manufacturer therefor, written information concerning the removal,
transportation and disposal of the same, and such other information as Landlord
may reasonably require or as may be required by Law. The term "Hazardous
Material" for purposes hereof shall mean any chemical substance, material or
waste or component thereof which is now or hereafter listed, defined or
regulated as a hazardous or toxic chemical, substance, material or waste or
component thereof by any federal, state or local governing or regulatory body
having jurisdiction, or which would trigger any employee or community
"right-to-know" requirements adopted by any such body, or for which any such
body has adopted any requirements for the preparation or distribution of an
MSDS.

      If any Hazardous Material is released, discharged or disposed of by Tenant
or any other occupant of the Premises, or their employees, agents or
contractors, on or about the Property In violation of the foregoing provisions,
Tenant shall immediately, properly and in compliance with applicable Laws clean
up and remove the Hazardous Material from the Property and any other affected
property and clean or replace any affected personal property (whether or not
owned by Landlord), at Tenant's expense. Such cleanup and removal work shall be
subject to Landlord's prior written approval (except in emergencies), and shall
include, without limitation, any testing, investigation, and the preparation and
implementation of any remedial action plan required by any governmental body
having jurisdiction or reasonably required by Landlord. If Tenant shall fail to
comply with the provisions of this Article within five (5) days after written
notice by Landlord, or such shorter time as may be required by Law or in order
to minimize any hazard to Persons or property, Landlord may (but shall not be
obligated to) arrange for such compliance directly or as Tenant's agent through
contractors or other parties selected by Landlord, at Tenant's expense (without
limiting Landlord's other remedies under this Lease or applicable Law). If any
Hazardous Material is released, discharged or disposed of on or about the
Property and such release, discharge or disposal is not caused by Tenant or
other occupants of the Premises, or their employees, agents or contractors, such
release, discharge or disposal shall be deemed casualty damage under Article 13
to the extent that the Premises or common areas serving the Premises are
affected thereby; in such case, Landlord and Tenant shall have the obligations
and rights respecting such casualty damage provided under Article 13.

      (B) The parties acknowledge that the material used in certain of the
fire-proofing materials applied to certain structural members in the Building
and Property (which structural members are primarily located above the ceiling
in the Premises) contains asbestos. In order to preserve the air quality of the
Building and Property, Landlord has established, and from time to time may
modify, rules and regulations governing the manner in which alterations and

May 7, 1999


                                       34
<PAGE>
improvements are to be undertaken in the areas where the subject fire-proofing
is located. Tenant shall comply with all such rules and regulations established
by Landlord. If any governmental entity promulgates or revises a statute,
ordinance, code or regulation, or imposes mandatory or voluntary controls or
guidelines with respect to the subject asbestos fire-proofing, or if Landlord is
required or elects to make alterations or to remove the subject asbestos
fire-proofing, Landlord may, in its sole discretion, comply with such mandatory
or voluntary controls or guidelines, or make such alterations or remove such
asbestos fire-proofing; Landlord agrees to use reasonable efforts to minimize
disruption to Tenant's business resulting from such alterations. Neither such
compliance nor the making of alterations, nor the removal of all or a portion of
such asbestos fire-proofing shall in any event entitle Tenant to any damages,
relieve Tenant of the obligation to pay any sums due hereunder, or constitute or
be construed as a constructive or other eviction of Tenant. In accordance with
Proposition 65 and the regulations promulgated thereunder which require that
person subject to "environmental exposure" to certain designated chemicals, such
as asbestos, receive warnings, you are advised that:

            WARNING: THE BUILDING CONTAINS ASBESTOS, A CHEMICAL KNOWN TO THE
            STATE OF CALIFORNIA TO CAUSE CANCER.

                                   ARTICLE 31.
                                  MISCELLANEOUS

      (A) Each of the terms and provisions of this Lease shall be binding upon
and inure to the benefit of the parties hereto, their respective heirs,
executors, administrators, guardians, custodians, permitted successors and
assigns, subject to the provisions of Article 17 respecting Transfers.

      (B) Neither this Lease nor any short form lease shall be recorded by
Tenant. However, Tenant may record a memorandum of lease upon Landlord's prior
written consent and approval of the form thereof, which shall not be
unreasonably withheld or delayed.

      (C) This Lease shall be construed in accordance with the Laws of the state
of California.

      (D) All obligations or rights of either party arising during or
attributable to the period ending upon expiration or earlier termination of this
Lease shall survive such expiration or earlier termination.

      (E) Landlord agrees that, if Tenant timely pays the Rent and performs the
terms and provisions hereunder, and subject to all other terms and provisions of
this Lease, Tenant shall hold and enjoy the Premises during the Term, free of
lawful claims by any Person acting by or through Landlord.

      (F) This Lease does not grant any legal rights to "light and air" outside
the Premises nor any particular view or cityscape visible from the Premises.

May 7, 1999


                                       35
<PAGE>
      (G) If the Commencement Date is delayed in accordance with Article 2 for
more than one year, Landlord may declare this Lease null and void, and if the
Commencement Date is so delayed for more than seven years, this Lease shall
thereupon become null and void without further action by either party.

      (H) All remedies hereinbefore and hereafter conferred upon the parties
hereto shall be deemed cumulative and no one shall be exclusive of the other, or
shall in any way limit the availability to either party of any other remedy
conferred by law, whether or not specifically conferred by the provisions of
this Lease.

                                   ARTICLE 32.
                                      OFFER

      The submission and negotiation of this Lease shall not be deemed an offer
to enter into the same by Landlord, but the solicitation of such an offer by
Tenant. Tenant agrees that its execution of this Lease constitutes a firm offer
to enter into the same which may not be withdrawn for a period of ten (10)
business days after delivery to Landlord (or such other period as may be
expressly provided in any other agreement signed by the parties). During such
period and in reliance on the foregoing, Landlord may, at Landlords option (and
shall, if required by applicable Law), deposit any security deposit and Rent,
and proceed with any plans, specifications, alterations or improvements, and
permit Tenant to enter the Premises, but such acts shall not be deemed an
acceptance of Tenant's offer to enter this Lease, and such acceptance shall be
evidenced only by Landlord signing and delivering this Lease to Tenant.

                                   ARTICLE 33.
                                     NOTICES

      Except as expressly provided to the contrary in this Lease, every notice
or other communication to be given by either party to the other with respect
hereto or to the Premises or Property, shall be in writing and shall not be
effective for any purpose unless the same shall be served personally or by
national air courier service, or United States certified mail, return receipt
requested, postage prepaid, addressed, if to Tenant, at the address first set
forth in the Lease, and if to Landlord, at the address at which the last payment
of Rent was required to be made and to Pine Street Investors I, L.L.C., c/o
Danielson Whitehead, Inc., at 100 Pine Street, San Francisco, California 94111,
Attn: Robert Whitehead, or such other address or addresses as Tenant or Landlord
may from time to time designate by notice given as above provided. Every notice
or other communication hereunder shall be deemed to have been given as of the
third business day following the date of such mailing (or as of any earlier date
evidenced by a receipt from such national air courier service or the United
States Postage Service) or immediately if personally delivered. Notices not sent
in accordance with the foregoing shall be of no force or effect until received
by the foregoing parties at such addresses required herein.

                                   ARTICLE 34.
                                     SIGNAGE

      Landlord agrees to provide Tenant with standard building signage for
Tenant's business name on the Building's main lobby directory, at the 21st
floor elevator lobby and on the Premises

May 7, 1999


                                       36
<PAGE>
entrance door. No other sign, placard, picture, advertisement, name or notice
(collectively, "Signs") shall be inscribed, displayed, printed or affixed on or
to any part of the outside or inside of the Building without the written consent
of Landlord first had and obtained. Tenant acknowledges and agrees that Landlord
may withhold its consent to the placing of Signs on the exterior of the Building
in its sole and absolute discretion.

                                   ARTICLE 35.
                               REAL ESTATE BROKERS

      Tenant represents that it has dealt only with CRESA/Belvedere Associates,
Inc. and McPherson Corporation (whose commission, if any, shall be paid by
Landlord pursuant to separate agreement) as broker, agent or finder in
connection with this Lease and agrees to indemnify and hold Landlord harmless
from all damages, judgments, liabilities and expenses (including reasonable
attorneys' fees) arising from any claims or demands of any other broker, agent
or finder with whom Tenant has dealt or is claimed to have dealt for any
commission or fee alleged to be due in connection with its participation in the
procurement of Tenant or the negotiation with Tenant or execution of this Lease.
Landlord shall indemnify and hold harmless Tenant from all damages, judgments,
liabilities and expenses (including reasonable attorneys' fees) arising from any
claims or demands of any broker, agent or finder with whom Landlord has dealt or
is claimed to have dealt for any commission or fee alleged to be due in
connection with its participation in the procurement of Tenant or the
negotiation with Tenant or execution of this Lease.

                                   ARTICLE 36.
                                SECURITY DEPOSIT

      Tenant shall deposit with Landlord the sum of $158,404.75 ("Security
Deposit"), upon Tenant's execution and submission of this Lease. The Security
Deposit shall serve as security for the prompt, full and faithful performance
by Tenant of the terms and provisions of this lease. In the event that Tenant is
in Default hereunder, or in the event that Tenant owes any amounts to Landlord
upon the expiration of this Lease, Landlord may use or apply the whole or any
part of the Security Deposit for the payment of Tenant's obligations hereunder.
The use or application of the Security Deposit or any portion thereof shall not
prevent Landlord from exercising any other right or remedy provided hereunder or
under any Law and shall not be construed as liquidated damages. In the event the
Security Deposit is reduced by such use or application, Tenant shall deposit
with Landlord within ten (10) days after written notice, an amount sufficient to
restore the full amount of the Security Deposit. Landlord shall not be required
to keep the Security Deposit separate from Landlord's general funds or pay
interest on the Security Deposit. Any remaining portion of the Security Deposit
shall be returned to Tenant within sixty (60) days after Tenant has vacated the
Premises in accordance with Article 22. If the Premises shall be expanded at any
time, or if the Term shall be extended at an increased rate of Rent, the
Security Deposit shall thereupon be proportionately increased.

May 7, 1999


                                       37
<PAGE>
                                   ARTICLE 37.
                                ENTIRE AGREEMENT

      This Lease, together with Riders One through Three, Exhibit A, and the
document captioned Work Agreement (WHICH COLLECTIVELY ARE HEREBY INCORPORATED
WHERE REFERRED TO HEREIN AND MADE A PART HEREWITH AS THOUGH FULLY SET FORTH),
contains all the terms and provisions between Landlord and Tenant relating to
the matters set forth herein, and no prior or contemporaneous agreement or
understanding pertaining to the same shall be of any force or effect, except any
such contemporaneous agreement specifically referring to and modifying this
Lease, signed by both parties. Without limitation as to the generality of the
foregoing, Tenant hereby acknowledges and agrees that Landlord's leasing agents
and field personnel are only authorized to show the Premises and negotiate terms
and conditions for leases subject to Landlord's final approval, and are not
authorized to make any agreements, representations, understandings or
obligations, binding upon Landlord, respecting the condition of the Premises or
Property, suitability of the same for Tenant's business, or any other matter,
and no such agreements, representations, understandings or obligations not
expressly contained herein or in such contemporaneous written agreement shall be
of any force or effect. Neither this Lease, nor any Riders or Exhibits referred
to above, may be modified, except in writing signed by both parties.



                        LANDLORD:

                        PINE STREET INVESTORS I, L.L.C.
                        a Delaware limited liability company

                                By: Walton Street Real Estate Fund I, L.P.,
                                    a Delaware limited partnership,
                                    Managing Partner

                                        By: Walton Street Managers I, L.P.,
                                            a Delaware limited partnership,
                                            General Partner

                                                By: WSC Managers I, Inc.,
                                                    a Delaware corporation,
                                                    General Partner

                                                        By:_____________________
                                                          Name:_________________
                                                          Title:________________

May 7, 1999


                                       38
<PAGE>
                                        TENANT:

                                        ART TECHNOLOGY GROUP,
                                        a Delaware corporation

                                        By:     /s/ Paul Shorthose
                                           -------------------------------------
                                                Name: Paul Shorthose
                                                     ---------------------------
                                                Its: Chief Operating Officer
                                                    ----------------------------

                                        By:     /s/ Mahendrajeot Singh
                                           -------------------------------------
                                                Name: Mahendrajeot Singh
                                                     ---------------------------
                                                Its: President
                                                    ----------------------------


                                       39
<PAGE>
                                    RIDER TWO

                                OPTION TO EXTEND

      Tenant is hereby granted an option to extend the Term for a single
additional period of five (5) consecutive Lease Years ("Extension Period"), on
the same terms and conditions in effect under the Lease immediately prior to the
Extension Period (and shall include any expansion premises actually leased by
Tenant under the Lease), except that monthly Base Rent shall be increased to the
Prevailing Rental Rate (as defined herein), and Tenant shall have no further
option to extend. The option to extend may be exercised only by giving Landlord
irrevocable and unconditional written notice thereof no earlier than one year
and no later than nine months prior to the commencement of the Extension Period.
Said exercise shall, at Landlord's election, be null and void if Tenant is in
Default under the Lease at the date of said notice or at any time thereafter and
prior to commencement of the Extension Period. The term "Lease Year" herein
means each twelve month annual period, commencing with the first day of the
Extension Period, without regard to calendar years.

      "Prevailing Rental Rate" means the average per square foot rental rate per
month for all renewal leases for renewal periods approximately as long as the
Extension Period, executed by tenants for similar uses and lengths of time for
comparable space in the Building and comparable buildings in the vicinity of the
Building during the six (6) months immediately prior to the date upon which such
Prevailing Rental Rate is to become effective, where such renewal rates were not
fixed in advance by the terms of such leases, subject to reasonable adjustments
for comparable space on more or less desirable floors or areas of the Property.
In all cases, such rates shall be based on the average net effective rate then
being charged for similar spaces and for similar terms by landlords (after
taking into account any "free rent" or periods of reduced rent, then generally
being provided by landlords for similar deals). Notwithstanding anything to the
contrary herein, for purposes of determining the Prevailing Rental Rate, Tenant
shall not be entitled to any credit on account of any tenant improvement
allowance recoupment component of prevailing rents paid generally by other
tenants.

      Landlord agrees to make (or provide an allowance for) certain cosmetic
improvements to the Premises such as painting, recarpeting, patching of walls,
repair of doors, and replacement of ceiling tile, where same is necessary to
generally make the Premises appear in "like new condition." Under no
circumstances will Landlord be required to in any way reconfigure the Premises
or do any other work other than the cosmetic work described above.

      If the parties are unable to agree on the Prevailing Rental Rate within
sixty (60) days after the commencement of the Extension Period (the "Outside
Agreement Date"), the Prevailing Rental Rate shall be determined by arbitration
in accordance with Paragraphs (i) to (vii) below.

      (i)   No later than fifteen (15) days following the Outside Agreement
            Date, Landlord and Tenant shall each appoint one arbitrator who
            shall by profession be a real estate broker who shall have been
            active over the five (5) year period ending on the date of such
            appointment in the


                                       1
<PAGE>
            appraisal of office properties in the San Francisco, California
            area. The determination of the arbitrators shall be limited solely
            to the issue of whether Landlord's or Tenant's submitted Prevailing
            Rental Rate is the most accurate as determined by the arbitrators.

      (i)   The two (2) arbitrators so appointed shall within fifteen (15) days
            of the date of the appointment of the last appointed arbitrator
            agree upon and appoint a third arbitrator who shall be qualified
            under the same criteria set forth hereinabove for qualification of
            the initial two (2) arbitrators.

      (ii)  The three (3) arbitrators shall, within fifteen (15) days of the
            appointment of the third arbitrator, reach a decision as to whether
            the parties shall use Landlord's or Tenant's submitted Prevailing
            Rental Rate, and shall notify Landlord and Tenant thereof.

      (iii) The decision of the majority of the three (3) arbitrators shall be
            binding upon Landlord and Tenant.

      (iv)  If either Landlord or Tenant fails to appoint an arbitrator within
            fifteen (15) days after the Outside Agreement Date, the arbitrator
            timely appointed by one of the parties shall reach a decision,
            notify Landlord and Tenant thereof, and such arbitrator's decision
            shall be binding upon Landlord and Tenant.

      (v)   If the two (2) arbitrators fail to agree upon and appoint a third
            arbitrator, both arbitrators shall be dismissed and the matter to be
            decided shall be forthwith submitted to arbitration under the
            Commercial Arbitration Rules of the American Arbitration Association
            then in effect. Such determination shall be final and binding upon
            the parties.

      (vi)  The cost of arbitration shall be borne by Landlord and Tenant
            equally.

      In recognition that the Prevailing Rental may not be determined until
after the commencement of the Extension Period, Tenant shall pay, during the
Extension Period until the Prevailing Rental Rate is determined, 110% of the
amount of Rent then in effect (including Base Rent, and all other charges).
Under no circumstances shall the Rent during the Extension Period ever be less
than 100% of such amount of Rent then in effect, regardless of the Prevailing
Rental Rate, as determined in accordance with the foregoing provisions. If the
Prevailing Rental Rate is determined to be greater than such amount, Tenant
shall pay Landlord, within thirty (30) days after written request therefor, the
difference between the amount required by such determination of the Prevailing
Rental Rate and the amount of Rent theretofore paid by Tenant during the
Extension Period.

      If Tenant shall fail to exercise the option herein provided, said option
shall terminate, and shall be null and void and of no further force and effect.
Tenant's exercise of said option shall not operate to cure any default by Tenant
of any of the terms or provisions in the lease, nor to extinguish or impair any
rights or remedies of Landlord arising by virtue of such


                                       2
<PAGE>
default. If the Lease or Tenant's right to possession of the Premises shall
terminate in any manner whatsoever before Tenant shall exercise the option
herein provided, then immediately upon such termination, sublease or assignment,
the option herein granted to extend the Term, shall simultaneously terminate and
become null and void. Such option is personal to Tenant. Under no
circumstances, whatsoever (except for a transfer to a Related Entity as
expressly described in Article 17(G) of the Lease) shall the assignee under a
complete or partial assignment of the Lease, or a subtenant under a sublease of
the Premises, have any right to exercise the option to extend granted herein.
Time is of the essence of this provision.


                                       3
<PAGE>
                                   RIDER THREE

                                OPTION TO EXPAND
                              RIGHT OF FIRST OFFER

      During the period and subject to the terms and conditions set forth
herein, Tenant shall have an option to expand the Premises to include an
additional full floor within the Building (the Expansion Space"), as set forth
below.

      Tenant shall exercise its option to lease the Expansion Space only by
giving Landlord irrevocable and unconditional written notice thereof no later
than 5:00 p.m. on September 30, 2000. Upon receipt of such exercise by Tenant,
Landlord shall, on or before January 31, 2001, identify to Tenant the location
of the Expansion Space and the anticipated date of its availability, which shall
be not later than October 1, 2002.

      The parties acknowledge and agree that a portion of the 20th floor of the
Building, comprising 9,947 rentable square feet (Suite 2000), is currently
leased to another tenant. If any lease for such space is not extended prior to
January 31, 2001, Landlord shall identify Suite 2000 as the Expansion Space. In
such case, the anticipated availability of such space shall be no later than
July 1, 2001. Tenant hereby agrees that such space shall be considered the
Expansion Space notwithstanding the fact that said space does not comprise a
full floor. However, if the Expansion Space is identified as Suite 2000, Suite
2040 on the 20th floor of the Building, comprising 3,263 rentable square feet,
shall be included as part of the Expansion Space if: (1) Tenant delivers written
notice to Landlord of its desire to include Suite 2040 as part of the Expansion
Space within ten (10) days following the date that Suite 2000 is identified as
the Expansion Space by Landlord and (ii) Landlord is able to relocate the then
existing tenant(s) of Suite 2040 without violating any terms, covenants or
conditions of the then existing lease(s) therefor; in such case, Tenant shall
pay any and all direct and indirect costs and expenses associated with and
attributable to such relocation within thirty (30) days following Landlord's
demand therefor.

      If Tenant does not elect to include Suite 2040 as part of the Expansion
Space subject to the terms and conditions set forth in the preceding paragraph,
Tenant shall have, in accordance with the terms of this paragraph, a one-time
right of first offer to lease Suite 2040 when and if it becomes available,
commencing February 1, 2001 (the "First Offer Right"). The First Offer Right
shall terminate upon the expiration or earlier termination of the initial Term
of the Lease in the event Suite 2040 has not been offered to Tenant as provided
herein during such initial term. Landlord and Tenant acknowledge and agree that
Tenant's First Offer Right shall be subject and subordinate to the rights
of tenants leasing said space when the First Offer Right becomes applicable
(including, without limitation, extension options or other rights which may
negatively impact or render unfeasible Tenant's First Offer Right), If Suite
2040 becomes available to lease to the general public from February 1, 2001
through the expiration or earlier termination of the


                                       1
<PAGE>
initial Lease Term, Landlord shall notify Tenant of the availability of such
space. Landlord shall further notify Tenant of Landlord's then current rental
rate and other terms and conditions applicable to such space, which Landlord
shall determine in its sole but reasonable discretion. For a period of ten (10)
days following receipt of Landlord's notice containing such information, Tenant
shall have, on a one-time basis only, the right of first offer to lease Suite
2040, at the rental rate and on the terms and conditions set forth in Landlord's
notice by delivering irrevocable and unconditional written notice thereof to
Landlord. If Tenant fails to elect to lease such space within the ten (10) day
period, then Landlord shall be entitled to lease such space to a third party or
parties and Tenant's First Offer Right shall terminate and be of no further
force and effect.

      If Tenant exercises its right to lease the Expansion Space as set forth
herein, Tenant shall lease such premises in an "as is" condition, when the same
becomes legally available to lease, on the same terms and provisions then in
effect under the Lease, except that monthly Base Rent shall be increased to
reflect the Prevailing Rental Rate for the Expansion Space and Tenant's Prorata
Share of Operating Expenses and Taxes shall be increased to reflect said
additional space. "Prevailing Rental Rate" means the average per square foot
rental rate per month for all leases for comparable space and approximately the
same number of months, executed by tenants in the Building for office space
expansions during the six (6) months immediately prior to the date upon which
such Prevailing Rental Rate is to become effective and payable under the terms
of this Lease, where the rates for such expansions were not set in such leases,
subject to reasonable adjustments for comparable space on more desirable, or
less desirable floors or areas of the Property. If no such comparable space has
been leased during such six (6) month period, the rental rates used for purposes
of this provision shall be adjusted to the amounts Landlord would have used had
leases for such comparable space been entered into at the Building. In all
cases, such rates shall be determined without regard to any free rent periods,
improvement allowances, take-over lease obligations, or other economic
incentives; however, any such economic incentives generally provided by Landlord
in such comparable expansion leases shall also be provided to Tenant. In
addition, if such comparable expansion leases include any economic provisions,
such as but not limited to consumer price index provisions, utility
reimbursements or fixed rent increases, the same shall be included in the
expansion terms provided to Tenant.

      If Tenant exercises the right to lease the Expansion Space, said lease
shall commence the date the Expansion Space is available for occupancy, and
shall continue for the duration of the Term of the Lease (including any
extension terms applicable under the Lease). After Tenant validly exercises the
expansion right provided herein, the parties shall execute an amendment to the
Lease, adding the Expansion Space, or a new lease for the Expansion Space, or
such other documentation as Landlord shall require, promptly after Landlord
shall prepare the same, in order to confirm the leasing of such Expansion Space
to Tenant, but an otherwise valid exercise of the expansion rights contained
herein shall be fully effective, whether or not such confirmatory documentation
is executed.

      If the parties are unable to agree on the Prevailing Rental Rate within
sixty (60) days after Landlord identifies the location thereof (the "Outside
Agreement Date"), the Prevailing Rental


                                       2
<PAGE>
Rate shall be determined by arbitration consistent with the arbitration
provisions applicable under Rider Two to the Lease (option to extend term). In
recognition that the Prevailing Rental Rate may not be determined until after
the commencement of the lease for the Expansion Space, Tenant shall pay, as Rent
for the Expansion Space, until the Prevailing Rental Rate is determined, the
amount of Rent then in effect under the Lease on a per rentable square foot
basis (including Base Rent, and all other charges). Notwithstanding anything to
the contrary herein, under no circumstances shall the Rent under the Lease ever
be less than such amount of Rent then in effect under the Lease on a per
rentable square foot basis, regardless of the Prevailing Rental Rate, as
determined in accordance with the foregoing provisions. If the prevailing Rental
Rate is determined to be greater than such amount, Tenant shall pay Landlord,
within thirty (30) days after written request therefor, the difference between
the amount required by such determination of the Prevailing Rental Rate, and the
amount theretofore paid by Tenant for the Expansion Space.

      The foregoing expansion right shall apply only with respect to the entire
Expansion Space, and may not be exercised with respect to only a portion
thereof. If Tenant shall fail to exercise such expansion right by the date set
forth above, such right shall be deemed to have lapsed and expired, and shall be
of no further force or effect. Landlord may thereafter freely lease all or a
portion of the Expansion Space to any other party, at any time, on any terms, in
Landlord's sole discretion. The foregoing expansion right shall be subject to
any existing rights of any other parties to lease the Expansion Space, if such
existing rights have already been granted prior to the date of this Lease;
provided, however, Landlord hereby represents that as of the date hereof any
existing rights do not make Landlord's ability to provide the Expansion Space
unfeasible.

      If Tenant shall exercise the expansion right granted herein, Landlord does
not guarantee that the Expansion Space will be available on the commencement
date for the lease thereof, if the then existing occupants of the Expansion
Space shall holdover, or for any other reason beyond Landlord's reasonable
control. In such event, rent with respect to the Expansion Space shall be abated
until Landlord legally delivers the same to Tenant, as Tenant's sole recourse.
Tenant's exercise of such expansion right shall not operate to cure any default
by Tenant of any of the terms and provisions in the Lease, nor to extinguish or
impair any rights or remedies of Landlord arising by virtue of such default. The
expansion right herein shall, at Landlords election, be null and void, if Tenant
is in Default under the Lease on the date Tenant exercises its rights hereunder
or at any time thereafter and prior to commencement of the lease for the
Expansion Space. If the Lease or Tenant's right to possession of the Premises
shall terminate in any manner whatsoever before Tenant shall exercise the right
herein provided, or if Tenant shall have subleased or assigned all or any
portion of the Premises (other than to a Related Entity as described in Article
17(G)), then immediately upon such termination, sublease or assignment, the
right to lease the Expansion Space herein granted shall simultaneously terminate
and become null and void. Such right is personal to Tenant and under no
circumstances whatsoever shall the assignee under a complete or partial
assignment of the Lease, or a subtenant under a sublease of the Premises, have
any right to exercise the expansion right granted herein. Tenant agrees that
time is of the essence of this provision.


                                       3