Exhibit 10.13












                                 LEASE AGREEMENT


                                     between


                          SEAPORT PLAZA ASSOCIATES, LLC
                                  as "Landlord"


                                       and


                                 THE 3DO COMPANY
                                   as "Tenant"


<PAGE>

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

SECTION                                                                                                        PAGE
-------                                                                                                        ----
<S>                                                                                                              <C>
1.      PREMISES..................................................................................................4
2.      TERM......................................................................................................4
3.      RENT......................................................................................................5
4.      SECURITY DEPOSIT..........................................................................................9
5.      USE AND COMPLIANCE WITH LAWS.............................................................................10
6.      TENANT IMPROVEMENTS & ALTERATIONS........................................................................12
7.      MAINTENANCE AND REPAIRS..................................................................................14
8.      TENANT'S TAXES...........................................................................................15
9.      UTILITIES AND SERVICES...................................................................................16
10.     EXCULPATION AND INDEMNIFICATION..........................................................................16
11.     INSURANCE................................................................................................17
12.     DAMAGE OR DESTRUCTION....................................................................................18
13.     CONDEMNATION.............................................................................................20
14.     ASSIGNMENT AND SUBLETTING................................................................................21
15.     DEFAULT AND REMEDIES.....................................................................................23
16.     LATE CHARGE AND INTEREST.................................................................................25
17.     WAIVER...................................................................................................26
18.     ENTRY, INSPECTION AND CLOSURE............................................................................26
19.     SURRENDER AND HOLDING OVER...............................................................................27
20.     ENCUMBRANCES.............................................................................................27
21.     ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS...........................................................28
22.     NOTICES..................................................................................................28
23.     ATTORNEYS' FEES..........................................................................................29
24.     QUIET POSSESSION.........................................................................................29
25.     SECURITY MEASURES........................................................................................29
26.     FORCE MAJEURE............................................................................................29
27.     RULES AND REGULATIONS....................................................................................29
28.     LANDLORD'S LIABILITY.....................................................................................30
29.     CONSENTS AND APPROVALS...................................................................................30
30.     WAIVER OF RIGHT TO JURY TRIAL............................................................................30
31.     BROKERS..................................................................................................30
32.     RELOCATION OF PREMISES...................................................................................31
33.     ARBITRATION OF SELECTED DISPUTES.........................................................................31
34.     ENTIRE AGREEMENT.........................................................................................32
35.     MISCELLANEOUS............................................................................................32
36.     AUTHORITY................................................................................................32
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</TABLE>

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<TABLE>
<CAPTION>
                             INDEX OF DEFINED TERMS

<S>                                               <C>                                                                  <C>
Additional Rent....................................10               Tenant..............................................5
Alterations........................................17               Tenant Improvements................................17
Award..............................................29               Tenant's Share.....................................10
Broker.............................................44               Tenant's Taxes.....................................22
Building............................................5               Term................................................5
Building 100........................................5               Trade Fixtures.....................................19
Building 200........................................5               Transfer...........................................31
Building Rules.....................................43               Transferee.........................................31
Building Systems...................................14               Visitors...........................................14
Cessation of Construction Termination Notice........6
Change in Control..................................31
Claims.............................................23
Commencement Date...................................5
Condemnation.......................................29
Condemnor..........................................29
Construction Rider..................................5
Controls...........................................22
Date of Condemnation...............................29
Effective Date......................................6
Encumbrance........................................39
Environmental Losses...............................14
Environmental Requirements.........................14
Event of Default...................................34
Executed Lease Delivery Date........................5
Expiration Date.....................................5
Failure to Commence Termination Notice..............6
Fees...............................................42
Handled by Tenant..................................14
Handling by Tenant.................................14
Hazardous Materials................................14
Hazardous Materials Rent Abatement.................17
HVAC...............................................14
Interest Rate......................................37
Landlord............................................5
Landlord Delay......................................5
Laws................................................8
Mortgagee..........................................40
Newly Enacted Laws..................................8
Operating Costs.....................................7
Outside Date........................................6
Outside Date Termination Notice.....................6
Parking Facility....................................5
Permitted Hazardous Materials......................15
Premises............................................5
Project.............................................5
Property............................................5
Property Manager...................................25
Proposed Transferee................................31
Rent...............................................12
Rent Commencement Date..............................5
Rental Tax.........................................22
Representatives....................................14
Security Deposit...................................12
Service Failure....................................23
Taxes..............................................10
</TABLE>
                                      -ii-
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<TABLE>
<CAPTION>
                             BASIC LEASE INFORMATION
<S>                                     <C>
Lease Date:                             For identification purposes only, the date of this Lease is July 12, 1999

Landlord:                               SEAPORT PLAZA ASSOCIATES, LLC, a California limited liability company

Tenant:                                 The 3DO Company, a California corporation

Project:                                Seaport Plaza, consisting of two (2) buildings (hereinafter referred to as the
                                        "100 Building" and the "200 Building", respectively), the associated land and
                                        common areas

Rentable Area of the Project:           Approximately 159,350 rentable square feet

Address of the 100 Building:            100 Cardinal Way
                                        Redwood City, CA

Rentable Area of the 100 Building:      Approximately 79,675 rentable square feet

Address of the 200 Building:            200 Cardinal Way
                                        Redwood City, CA

Rentable Area of the 200 Building:      Approximately 79,675 rentable square feet

Premises (consisting of the
100 Building and the 200 Building):     Approximately 159,350 rentable square feet

Term:                                   Commencing on the Commencement Date and continuing for 144 full calendar months
                                        following the Rent Commencement Date (plus any partial month following the Rent
                                        Commencement Date); provided, however, that if the Rent Commencement Date is
                                        different for each of the Buildings, then the Term shall only continue for 144
                                        full calendar months following the Rent Commencement Date for the first Building
                                        (plus any partial month following the Rent Commencement Date for the first
                                        Building)

Commencement Date:                      The date Landlord delivers this Lease to Tenant after this Lease has been fully
                                        executed by Landlord and Tenant

Rent Commencement Date:                 December 1, 2000, subject to extension for reasons of Landlord Delay and force
                                        majeure delay, as more particularly described in Section 2 of this Lease

Expiration Date:                        The last day of the 144th full calendar month following the Rent Commencement Date

Base Rent following the                 Months following the Rent Commencement Date:

Rent Commencement Date:                 Months 01 - 12: $2.55 per rentable square foot per month
                                        Months 13 - 24: $2.63 per rentable square foot per month
                                        Months 25 - 36: $2.71 per rentable square foot per month
                                        Months 37 - 48: $2.79 per rentable square foot per month
                                        Months 49 - 60: $2.87 per rentable square foot per month
                                        Months 61 - 72: $2.96 per rentable square foot per month
                                        Months 73 - 84: $3.04 per rentable square foot per month

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                                        Months 85 - 96: $3.14 per rentable square foot per month
                                        Months 97 - 108: $3.23 per rentable square foot per month
                                        Months 109 - 120: $3.33 per rentable square foot per month
                                        Months 121 - 132: $3.43 per rentable square foot per month
                                        Months 133 - 144: $3.53 per rentable square foot per month

Maintenance, Operating Costs and        This is a "triple net lease" where Tenant is responsible for maintenance,
Taxes:                                  operating costs and taxes, all in accordance with the applicable provisions of
                                        the Lease.

Tenant's Share:                         100% (with respect to both the 100 Building and the 200 Building together) and
                                        50% with respect to each such separate Building

Security Deposit:                       (a) $816,000.00 Letter of Credit (including the cash proceeds thereof, as
                                             provided in Section 37 of this Lease), and
                                        (b) $5,240,000.00 Letter of Credit

Landlord's Address for Payment of       Seaport Plaza Associates, LLC
Rent:                                   Ten Almaden Boulevard, Suite 430
                                        San Jose, CA 95113

Landlord's Address                      Seaport Plaza Associates, LLC
for Notices:                            Ten Almaden Boulevard, #430
                                        San Jose, CA 95113

                                        with a copy to:

                                        Seaport Plaza Associates, LLC
                                        2929 Campus Drive, Suite 450
                                        San Mateo, CA  94403
                                        Attn:  General Counsel

Tenant's Address                        Before the Rent Commencement Date:
for Notices:
                                        600 Galveston Drive
                                        Redwood City, CA 94063
                                        Attn: Chief Financial Officer

                                        After the Rent Commencement Date

                                        At the Premises
                                        Attn: Chief Financial Officer

Broker(s):                              Commercial Property Services

Guarantor(s):                           The 3DO Company (a Delaware corporation)

Property Manager:                       Cornerstone Properties Limited Partnership
                                        dba Wilson-Cornerstone Properties Limited Partnership

Additional Provisions:                  37. $816,000.00 Letter of Credit
                                        38. $5,240,000.00 Letter of Credit
                                        39. Parking
                                        40. Tenant's Monument Sign
                                        41. Extension Option
                                        42. Guaranty of Lease and Conditions to Termination of Guaranty
</TABLE>

                                      -2-
<PAGE>

Exhibits:
--------
Exhibit A-1:         The Portion of the Premises located in the 100 Building
Exhibit A-2:         The Portion of the Premises located in the 200 Building
Exhibit A-3:         Monument Sign Location
Exhibit B:           Construction Rider
Exhibit C:           Building Rules
Exhibit D:           Additional Provisions
Exhibit E:           Approved Letter of Credit Form
Exhibit F:           Memorandum of Lease
Exhibit G:           Form of Consent to Assignment
Exhibit H:           Form of Consent to Sublease
Exhibit I:           Form of Guaranty


         The Basic Lease  Information  set forth above is part of the Lease.  In
the event of any conflict  between any provision in the Basic Lease  Information
and the Lease, the Lease shall control.

                                      -3-
<PAGE>



         THIS  LEASE is made as of the Lease  Date set forth in the Basic  Lease
Information,  by  and  between  the  Landlord  identified  in  the  Basic  Lease
Information  ("Landlord"),   and  the  Tenant  identified  in  the  Basic  Lease
Information ("Tenant"). Landlord and Tenant hereby agree as follows:

1.  PREMISES.  Landlord  hereby leases to Tenant,  and Tenant hereby leases from
Landlord  the office  space  identified  in the Basic Lease  Information  as the
Premises (the  "Premises"),  consisting  of the two (2) Buildings  identified as
Building 100 ("Building 100") and ("Building 200") to be constructed by Landlord
at the addresses  specified in the Basic Lease Information (each, a "Building").
The approximate  configuration  and location of Building 100 is shown on Exhibit
A-1.  The  approximate  configuration  and  location of Building 200 is shown on
Exhibit A-2. As more particularly  described in Section 2.1 of Exhibit B to this
Lease,  Landlord  shall have the square feet of rentable  area of the  Buildings
established  by the Building  Architect  upon  completion  of the Final  Working
Drawings  (as such terms are  defined  in  Exhibit B) based upon BOMA,  American
National Standard  Z.651-1996;  provided,  however,  if the rentable area of the
Premises is greater than 160,944  square feet,  Tenant shall not be obligated to
pay Base  Rent,  Operating  Costs  and Taxes (as  hereinafter  defined)  on that
portion  of the  Premises  greater  than  160,944  rentable  square  feet.  Each
Building,  together  with the parking  facilities  serving  such  Building  (the
"Parking  Facility"),  and the  parcel(s) of land on which such Building and the
Parking  Facility are situated and all  appurtenant  easements,  private  roads,
sidewalks,  driveways,  loading  areas and other  improvements  located  thereon
(collectively,  the "Property"), are part of the Project identified in the Basic
Lease Information (the "Project"). [The Project consists of Lot 1 and the parcel
designated   Cardinal  Way,  as  shown  on  that  map  entitled  "SEAPORT  PLAZA
SUBDIVISION  MAP",  filed in the  office  of the  County  Recorder  of San Mateo
County, State of California, on November 17, 1998 in Book 129 of Maps at page(s)
10 and 11.]  Landlord  represents  and warrants to Tenant that  Landlord has not
recorded any covenants, conditions and restrictions against the Project.

2. TERM.

         2.1 Term.  The term of this Lease (the  "Term")  shall  commence on the
Commencement Date as described below and, unless sooner terminated, shall expire
on the Expiration Date set forth in the Basic Lease Information (the "Expiration
Date"). The "Commencement  Date" shall be the date Landlord delivers to Tenant a
fully executed  original copy of this Lease after Landlord and Tenant have fully
executed this Lease (the "Executed Lease Delivery Date").

         2.2 Rent Commencement  Date. The "Rent  Commencement  Date" (which term
shall be used, as applicable,  for (a) both  Buildings if the Rent  Commencement
Date is simultaneous,  or (b) each Building,  if the Rent  Commencement  Date is
different  for each  Building)  shall be the  earlier  of (a)  December  1, 2000
(subject to day for day extension for each day of (i) "Landlord  Delay " as such
term  is  defined  in  the  Construction   Rider  attached  as  Exhibit  B  (the
"Construction  Rider"),  and (ii) force majeure  delay);  or (b) with respect to
either Building, the date upon which Tenant, with Landlord's written permission,
actually  occupies  and  conducts  business in any portion of such  Building (it
being  agreed  by the  parties  that  each  Building  may have a  separate  Rent
Commencement  Date).  Landlord  shall not be liable for any  claims,  damages or
liabilities if the Premises are not ready for occupancy by the Rent Commencement
Date. When the Rent  Commencement  Date has been  established  (whether for each
Building if there are separate  Rent  Commencement  Dates,  or both  Buildings),
Landlord  and Tenant  shall at the  request  of either  party  confirm  the Rent
Commencement Date and Expiration Date in writing.

         2.3 Tenant's Termination Rights Relating to Construction.

                  (a)  Landlord's  Failure to Commence  Base  Building  Work. If
Landlord  does not receive the  foundation  permit and start  driving  indicator
piles as the first step in  construction  of the of the Base  Building  Work (as
defined  in the  Construction  Rider)  within  one  hundred  eighty  (180)  days
following the Executed Lease  Delivery Date,  then Tenant's sole remedy shall be
the right to deliver a notice to  Landlord  ("Failure  to  Commence  Termination
Notice ") electing to terminate  this Lease  effective on Landlord's  receipt of
such notice.  Such Failure to Commence  Termination  Notice must be delivered by
Tenant,  if at all, no earlier than the  expiration  of such one hundred  eighty
(180) day period and no later than  twenty (20) days  following  the end of such
one hundred eighty (180) day period.

                                      -4-
<PAGE>
                  (b) Cessation of  Construction.  If  construction  of the Base
Building  Work ceases for more than one hundred  fifty (150)  consecutive  days,
then  Tenant  may  deliver  a notice to  Landlord  ("Cessation  of  Construction
Termination  Notice")  electing to terminate this Lease  effective on Landlord's
receipt of such notice;  provided,  however,  that such one hundred  fifty (150)
consecutive  day period  shall be  extended  day-for-day  for each day of Tenant
Delay and force majeure delays.  Notwithstanding  any provision in this Lease to
the contrary,  for the purposes of this Section 2.3 (b) "force  majeure"  delays
shall not include delays caused by the investigation,  removal or remediation of
any (known or unknown) Hazardous  Materials (as hereinafter  defined) located on
the  Property.  Such  Cessation  of  Construction  Termination  Notice  must  be
delivered to Landlord by Tenant,  if at all, no earlier than the  expiration  of
such one hundred  fifty  (150) day period (as such one  hundred  fifty (150) day
period may be extended by Tenant  Delay or by such force  majeure  delays as are
not  associated  with  Hazardous  Materials)  and no later than twenty (20) days
following the end of such one hundred fifty (150) day period.

                  (c)  Landlord's  Failure  to  Complete  Construction  of  Base
Building  Work. For purposes of this Section 2, the "Outside Date" shall be June
1, 2001, as extended by the number of days of Tenant Delay;  provided,  however,
the Outside  Date shall not be  extended  by reason of  Landlord  Delay or force
majeure delays.  Notwithstanding any provision in this Lease to the contrary, if
Landlord does not complete construction of the Base Building Work by the Outside
Date,  Tenant's  sole remedy  shall be the right to deliver a notice to Landlord
("Outside Date Termination  Notice ") electing to terminate this Lease effective
on Landlord's  receipt of the Outside Date Termination  Notice  ("Effective Date
"). The Outside Date Termination  Notice must be delivered by Tenant, if at all,
no earlier than the Outside Date and no later than  fifteen (15)  Business  Days
following the Outside Date.

         2.4 Return of Sums and Letters of Credit Upon Tenant's  Termination  of
Lease Pursuant to Section 2.3. Upon any such termination of this Lease by Tenant
pursuant to the provisions of Section 2.3 of this Lease, Landlord promptly shall
return to Tenant  (i) all sums paid by Tenant to  Landlord  under this Lease and
(ii) the Letters of Credit issued in favor of Landlord in  connection  with this
Lease.

3. RENT.

         3.1 Base Rent. Tenant agrees to pay to Landlord the Base Rent set forth
in the Basic Lease Information, without prior notice or demand, on the first day
of each and every calendar month  commencing on the Rent  Commencement  Date for
each Building (if the two Buildings have separate Rent  Commencement  Dates) and
continuing  during the Term,  except that Base Rent for the first full  calendar
month in which Base Rent is payable  shall be paid upon  Tenant's  execution  of
this  Lease  and Base  Rent for any  partial  month  at the  following  the Rent
Commencement Date shall be paid on the Rent Commencement Date. Base Rent for any
partial  month  following the Rent  Commencement  Date or at the end of the Term
shall be prorated based on the actual number of days in the month.

         If the Basic Lease Information  provides for any change in Base Rent by
reference to years or months (without  specifying  particular dates), the change
will take effect on the  applicable  annual or monthly  anniversary  of the Rent
Commencement  Date  (which  won't  necessarily  be the first  day of a  calendar
month).

         3.2 Additional Rent: Operating Costs and Taxes.

                  (a) Definitions.

                           (1)  "Operating  Costs"  means all costs of managing,
operating, maintaining and repairing the areas of the Project located outside of
the Buildings,  including,  without limitation, the sidewalks,  driveways, storm
drain lines, water lines, pipes, and landscaping  improvements,  and the Parking
Facility  (including  the  portion of the  Parking  Facility  located  below the
Buildings) (all such areas outside of the Buildings being collectively  referred
to as the "Outside Areas") including all costs,  expenditures,  fees and charges
for: (A) maintenance and repair of the Outside Areas; (B) utilities and services
(including  recycling programs and trash removal),  and associated  supplies and
materials; (C) compensation (including employment taxes and fringe benefits) for
persons (at or below the level  equivalent to senior property  manager or senior
engineering  manager)  who  perform  duties in  connection  with the  operation,
management, maintenance and repair of the Outside Areas, such compensation to be
appropriately  allocated  for persons who also perform  duties  unrelated to the
Project; (D) property (including coverage for earthquake and flood if carried by
Landlord), liability, rental income and other

                                      -5-
<PAGE>
insurance  relating to the Project,  and (i) expenditures for deductible amounts
paid under such insurance,  provided that in any calendar year in which Landlord
pays  the  deductible  amount  under  such  insurance,  Tenant's  Share  of such
deductible  amount shall be limited to  Thirty-Five  Cents  ($0.35) per rentable
square foot in the  Premises  (excluding  earthquake  insurance,  which shall be
payable  pursuant  to the  following  provisions),  and  (ii)  expenditures  for
deductible amounts paid in any calendar year under earthquake insurance, subject
to the  following  limitations:  (x) in the  year in  which  Landlord  pays  the
deductible amount under earthquake  insurance,  Tenant's Share of the deductible
amount under earthquake  insurance shall be limited to Ninety-Four Cents ($0.94)
per rentable square foot in the Premises,  and (y) in subsequent calendar years,
Tenant's Share of that portion of the earthquake  insurance deductible in excess
of  Ninety-Four  Cents  ($0.94) per rentable  square foot in the  Premises  (the
"Excess  Deductible")  under  (x) shall be  amortized  over a period of ten (10)
years  commencing in the calendar year following the year in which Landlord pays
the deductible,  provided that Tenant's Share of the Excess Deductible shall not
exceed Ninety-Four Cents ($0.94) per rentable square foot in the Premises in any
calendar year;  (E) licenses,  permits and  inspections;  (F) complying with the
requirements of any law,  statute,  ordinance or governmental rule or regulation
or any orders pursuant thereto (collectively "Laws") either (i) not in effect as
of the  Rent  Commencement  Date or (ii) as any  Laws in  effect  as of the Rent
Commencement   Date  may  be  amended,   changed,   added  to,   interpreted  or
re-interpreted  by  applicable  governmental  authority  or court  decision,  or
administrative  ruling  subsequent to the Rent  Commencement  Date (such [i] and
[ii] being herein called  "Newly  Enacted  Laws";  (G)  amortization  of capital
replacements,  repairs or  improvements  to (x) the Outside  Areas,  and (y) the
Premises  (as if such  compliance  with  Laws to the  Premises  were part of the
Outside  Areas)  when  required  to comply  with  Laws,  as  provided  under the
provisions  of Section  5.1 of this  Lease,  with  interest  on the  unamortized
balance at the rate paid by Landlord on funds  borrowed to finance  such capital
improvements (or, if Landlord finances such improvements out of Landlord's funds
without borrowing,  the rate that Landlord would have paid to borrow such funds,
as reasonably determined by Landlord),  over their useful life as Landlord shall
reasonably determine;  (H) [intentionally deleted]; (I) property management fees
not to exceed the lesser of (x) the rate of property  management fees charged by
managers  which are  unaffiliated  to Landlord  for managing  comparable  single
tenant commercial  properties,  providing similar services as are being provided
Tenant,  in the vicinity of the Project,  or (y) two and one-half percent (2.5%)
of the Base Rent and Additional Rent at the Project;  (J) accounting,  legal and
other  professional  services  incurred in connection  with the operation of the
Project and the  calculation  of  Operating  Costs and Taxes;  (K) a  reasonable
allowance  for  depreciation  on machinery  and  equipment  used to maintain the
Project;  (L)  contesting  the  validity or  applicability  of any Laws that may
affect  the  Project;  (M) the  Project's  share of any  shared or  common  area
maintenance  fees and  expenses  (including  costs and  expenses  of  operating,
managing,  owning and maintaining the Parking Facility, and an allocation of the
costs  associated with the private road serving the Project);  and (N) any other
cost, expenditure,  fee or charge, whether or not hereinbefore described,  which
in accordance with generally  accepted  property  management  practices would be
considered  an expense of managing,  operating,  maintaining  and  repairing the
Project.

Operating Costs shall not include:

         1)       interest  and  principal  payments  on loans  or  indebtedness
                  secured by the Project;

         2)       costs that  could  properly  be  capitalized  under  generally
                  accepted  accounting  principles  and which are not  otherwise
                  excluded by any of the  Operating  Cost  exclusions  set forth
                  herein,  except  to the  extent  the  costs of such  items are
                  amortized in accordance  with the provisions of Subsection 3.2
                  (a) (1) (G) above;

         3)       utility  charges  paid by Tenant  directly  to the  applicable
                  public utility company;

         4)       leasing  commissions,   attorneys'  fees  and  other  expenses
                  incurred in  connection  with leasing  space in the Project or
                  enforcing such leases;

         5)       depreciation  or  amortization,  other  than  as  specifically
                  enumerated in the definition of Operating Costs above;

         6)       costs, fines or penalties incurred due to the violation of any
                  Law by Landlord, or by Landlord's employees or agents;

                                      -6-
<PAGE>
         7)       repairs or other work  occasioned by fire,  windstorm or other
                  casualty  or  hazard,  provided,   however,  Tenant  shall  be
                  responsible for any deductible  portion of insurance  proceeds
                  as provided in Subsection 3.2 (a)(1)(D) above;

         8)       repairs or rebuilding necessitated by condemnation;

         9)       costs of repairs  directly  resulting  from the  negligence or
                  willful misconduct of Landlord, its agents or employees;

         10)      amounts paid to subsidiaries  or other  affiliates of Landlord
                  (i.e.,  persons  or  companies  controlled  by,  under  common
                  control with, or which  control,  Landlord) for services on or
                  to the Outside Areas (or any portion  thereof),  to the extent
                  only that the costs of such services exceed  competitive costs
                  of such  services were they not so rendered by a subsidiary or
                  other affiliate of Landlord;

         11)      the costs of  maintaining,  repairing or replacing  any of the
                  structural elements of the Parking Facility;

         12)      the costs to correct any  construction  defects in the Outside
                  Areas;

         13)      the costs to comply with any covenant, condition, restriction,
                  or  insurance   underwriter's   requirements   in  effect  and
                  applicable to the Project on the Rent Commencement Date;

         14)      any costs for which  Landlord is entitled to be  reimbursed by
                  Landlord's insurance carrier;

         15)      any costs for which  Landlord is actually  reimbursed by third
                  parties other than Landlord's insurance carrier;

         16)      costs with respect to (a) violation of any Law with respect to
                  Base Building Work, or (b)  construction  or design defects in
                  the Base Building Work;

         17)      the  costs  of   maintaining,   repairing  or  replacing   the
                  structural  elements  of  the  Buildings;

         18)      any costs associated with the  investigation or remediation of
                  Hazardous  Materials (which subject is covered  exclusively by
                  the provisions of Section 5.2 of this Lease); and

         19)      costs  (including  rental and other expenses)  associated with
                  any office used by Landlord for management of the Project.

                  (2)  "Taxes"  means:  all real  property  taxes  and  general,
special or district assessments or other governmental  impositions,  of whatever
kind,  nature or origin,  imposed on or by reason of the ownership or use of the
Project;  governmental  charges,  fees or  assessments  for  transit  or traffic
mitigation   (including   area-wide   traffic   improvement    assessments   and
transportation  system  management  fees),   housing,   police,  fire  or  other
governmental  service or purported  benefits to the Project;  personal  property
taxes assessed on the personal property of Landlord used in the operation of the
Project;  service  payments in lieu of taxes and taxes and  assessments of every
kind and nature  whatsoever  levied or assessed in addition to, in lieu of or in
substitution  for existing or additional real or personal  property taxes on the
Project or the personal property described above; any increases in the foregoing
caused  by  changes  in  assessed  valuation,  tax  rate  or  other  factors  or
circumstances;  and the reasonable cost of contesting by appropriate proceedings
the amount or validity of any taxes,  assessments  or charges  described  above.
Taxes shall not include any state and federal personal or corporate income taxes
measured by the income of Landlord from all sources (other than taxes on rent at
the Property),  as well as any franchise,  inheritance,  or estate,  succession,
gift tax, or capital levy, or any sales tax (except any sales tax  applicable to
the receipt of rent) or  transfer  tax.  Taxes shall not any include  penalty or
interest  for  Landlord's  failure  to pay taxes  when  due,  other  than  those
attributable  to Tenant's  failure to comply  timely with  Tenant's  obligations
under this Lease. Landlord agrees that for the purpose of this Lease any special
assessments  or special  taxes for public  improvements  to the property will be
amortized,  with  interest  at the  rate  payable  to the  assessing  or  taxing
authority,  over the maximum  time  Landlord is  permitted  to pay such  special
assessment or special tax without penalty. To the

                                      -7-
<PAGE>
extent  paid by Tenant or other  tenants  as  "Tenant's  Taxes"  (as  defined in
Section 8 - Tenant's Taxes), "Tenant's Taxes" shall be excluded from Taxes.

                  (3)  "Tenant's  Share" means the Rentable Area of the Premises
divided by the total  Rentable  Area of the  Project,  as set forth in the Basic
Lease  Information.  If the  Rentable  Area of the  Project  is  changed  or the
Rentable  Area of the  Premises is changed by Tenant's  leasing less than all of
the  Premises  or for  any  other  reason,  Tenant's  Share  shall  be  adjusted
accordingly.

         (b) Additional Rent. Tenant shall pay Landlord as "Additional Rent" for
each calendar year or portion thereof  following the Rent  Commencement Date for
each Building,  if the two Buildings have separate Rent  Commencement  Dates (in
which event Tenant's  Share of Additional  Rent shall be 50% for the time period
between  the  Rent  Commencement  Date  for the  first  Building  and  the  Rent
Commencement Date for the second Building), Tenant's Share of the sum of (x) the
amount of Operating Costs, and (y) the amount of Taxes, as follows:

         (1) Operating Costs.

                  (a) Prior to the Rent  Commencement Date Landlord shall notify
Tenant of Landlord's  estimate of Operating  Costs and for the partial  calendar
year  following  the Rent  Commencement  Date;  and prior to each  calendar year
thereafter,  Landlord  shall notify Tenant of  Landlord's  estimate of Operating
Costs for the following calendar year. Commencing on the Rent Commencement Date,
and with respect to subsequent  calendar  years,  on the first day of January of
each calendar year and continuing on the first day of every month  thereafter in
such year,  Tenant shall pay to Landlord  one-twelfth  (1/12th) of the estimated
annual  Operating Costs. If Landlord  thereafter  estimates that Operating Costs
for such year will vary from Landlord's prior estimate,  Landlord may, by notice
to  Tenant,  revise  the  estimate  for such year  (and  Operating  Costs  shall
thereafter be payable based on the revised estimate).

                  (b) As soon as  reasonably  practicable  after the end of each
calendar  year,  Landlord  shall furnish Tenant a statement with respect to such
year,  showing  Operating  Costs for the year,  and the total  payments  made by
Tenant with respect  thereto.  Unless Tenant raises any objections to Landlord's
statement  within  ninety (90) days after  receipt of the same,  such  statement
shall  conclusively be deemed correct and Tenant shall have no right  thereafter
to dispute such  statement or any item therein or the  computation  of Operating
Costs based  thereon.  If Tenant does object to such  statement,  then  Landlord
shall provide Tenant with  reasonable  verification  of the figures shown on the
statement and the parties shall negotiate in good faith to resolve any disputes.
Any  objection of Tenant to Landlord's  statement and  resolution of any dispute
shall not  postpone  the time for  payment of any amounts due Tenant or Landlord
based on  Landlord's  statement,  nor shall any  failure of  Landlord to deliver
Landlord's statement in a timely manner relieve Tenant of Tenant's obligation to
pay any amounts due Landlord based on Landlord's statement.

                  (c) If Tenant's  Operating Costs as finally determined for any
calendar  year  exceeds the total  payments  made by Tenant on account  thereof,
Tenant  shall pay Landlord the  deficiency  within  twenty (20) days of Tenant's
receipt of Landlord's statement. If the total payments made by Tenant on account
thereof exceed  Tenant's  Operating  Costs as finally  determined for such year,
Tenant's  excess payment shall be credited  toward the rent next due from Tenant
under this Lease. For any partial calendar year following the Rent  Commencement
Date or at the end of the Term,  Operating  Costs shall be prorated on the basis
of a 365-day year by computing  Tenant's Share of Operating Costs for the entire
year and then  prorating  such  amount for the number of days  during  such year
included in the Term.  Notwithstanding  the termination of this Lease,  Landlord
shall pay to Tenant or Tenant shall pay to Landlord,  as the case may be, within
twenty (20) days after Tenant's  receipt of Landlord's  final  statement for the
calendar year in which this Lease  terminates,  the difference  between Tenant's
Operating Costs for that year, as finally determined by Landlord,  and the total
amount previously paid by Tenant on account thereof. The obligations of Landlord
to refund any  overpayment of Operating Costs and of Tenant to pay any Operating
Costs not previously paid shall survive the expiration of the Term.

         (2) Taxes.

                  (a) Tenant shall be  responsible  to pay to Landlord  Tenant's
Share of all Taxes  accruing from the Rent  Commencement  Date,  and  continuing
through the Term (including any Extension  Term).  For any partial calendar year
following  the Rent  Commencement  Date or ending at the end of the Term,  Taxes
shall

                                      -8-
<PAGE>

be prorated on the basis of a 365-day year by computing  Tenant's Share of Taxes
for the entire year and then prorating such amount for the number of days during
such year  following  the Rent  Commencement  Date or at the end of the Term. At
such time as Landlord  learns the amount of Taxes due for any calendar  year for
which Tenant is obligated to pay Landlord as provided above in this  subsection,
Landlord shall  promptly give written notice to Tenant of all Taxes due.  Tenant
shall pay such  Taxes to  Landlord  no later than the date which is the later of
(i)  thirty  (30) days  after  Tenant's  receipt of notice of the amount of such
Taxes, or (ii) sixty (60) days prior to the date Taxes become delinquent. Tenant
shall also pay to Landlord on demand all  interest,  penalties  and late charges
with respect to Taxes  resulting from Tenant's  failure to pay Taxes to Landlord
within the time  specified in the  immediately  preceding  sentence.  If for any
reason  Taxes  for  any  calendar  year  during  the  Term  following  the  Rent
Commencement  Date are refunded,  Landlord shall  promptly  refund to Tenant the
amount of refund of Taxes which were paid by Tenant to Landlord. The obligations
of  Landlord to refund any  overpayment  of Taxes and of Tenant to pay any Taxes
not previously paid shall survive the expiration of the Term.

                  (b) Landlord  shall  notify  Tenant in writing of any material
change in any Tax assessment or  reassessment  of the Project within  sufficient
time to allow Tenant to review such assessment or reassessment; and Tenant shall
have the right, at Tenant's cost and expense, to cause Landlord,  by appropriate
proceedings,  to protest or contest any such  assessment or  reassessment of the
Project used as the basis of determining Taxes. Landlord shall cooperate in good
faith with Tenant in connection with any such protest or contest. Landlord shall
promptly  refund to Tenant any  reimbursements  or refunds of Taxes  obtained by
Landlord as a result of any such protest or contest.

         3.3 Payment of Rent.  All  amounts  payable or  reimbursable  by Tenant
under this Lease,  including late charges and interest  (collectively,  "Rent"),
shall constitute rent and shall be payable and recoverable as rent in the manner
provided in this Lease.  All sums  payable to Landlord on demand under the terms
of this Lease  shall be  payable  within  thirty  (30) days  after  notice  from
Landlord of the amounts due. All rent shall be paid without  offset,  recoupment
or  deduction  in lawful  money of the United  States of America to  Landlord at
Landlord's  Address  for  Payment  of  Rent  as set  forth  in the  Basic  Lease
Information, or to such other person or at such other place as Landlord may from
time to time designate.

4.  SECURITY  DEPOSIT.  On  execution of this Lease,  Tenant shall  deposit with
Landlord  the  letters of credit  identified  in Sections 37 and 38 below as the
Security Deposit (collectively, the "Security Deposit", which term shall include
the  $408,000  portion of the cash  deposit as described in Section 37 (b) below
and all amounts drawn on either of both letters of credit),  as security for the
performance of Tenant's  obligations  under this Lease.  Landlord may (but shall
have no obligation to) use the Security  Deposit or any portion  thereof to cure
any breach or default by Tenant under this Lease, or to compensate  Landlord for
any damage it incurs as a result of Tenant's  failure to perform any of Tenant's
obligations  hereunder.   Subject  to  Tenant's  obligation  to  replenish,   if
necessary,  the cash portion of the Security Deposit,  Landlord shall first look
to the cash portion of the  Security  Deposit  before  calling on the letters of
credit.  In such event,  Tenant shall pay to Landlord on demand an amount in the
form of cash,  or a  replacement  letter of credit,  sufficient to replenish the
Security  Deposit to the full  amount of the cash  specified  in the Basic Lease
Information  and the  applicable  Face  Amounts  (defined  in Sections 37 and 38
below) of the  letters of credit.  Notwithstanding  the  foregoing  or any other
provision  of this Lease,  Landlord  agrees that it will only draw on L/C #2 (as
defined in Section 38 below)  the  amount  necessary  to fulfill or perform  the
following  Tenant  obligations  after  first  applying  any cash  portion of the
Security Deposit towards such obligations:  to pay any rent, insurance premiums,
insurance  deductibles or Taxes, to compensate Landlord for any damage it incurs
as a result of Tenant's  failure to perform any of  Tenant's  obligations  under
this Lease,  to  replenish  the $408,000  cash  deposit  portion of the Security
Deposit,  and if Tenant  does not renew or replace L/C #2 as provided in Section
38, Landlord may draw the entire amount of L/C #2. Within thirty (30) days after
the expiration or termination of this Lease,  Landlord shall promptly return the
Security Deposit to Tenant in accordance with the provisions of California Civil
Code Section 1950.7 or any successor statute thereto; provided, however, that if
Tenant  is then in  default  or there is an  outstanding  Claim (as  defined  in
Section 10.1 below) for which Landlord has made written demand upon Tenant, then
Landlord shall be entitled to withhold one hundred twenty-five percent (125%) of
Landlord's  reasonable  estimate  of the amount  that  Tenant  owes  Landlord on
account of such default or Claim until there is settlement, resolved litigation,
or other  disposition  determining  the  validity  of the right of  Landlord  to
withhold  such amount.  Landlord may  commingle any cash portion of the Security
Deposit with Landlord's general and other funds.  Landlord shall not be required
to pay  interest on the Security  Deposit to Tenant.  Tenant  acknowledges  that
Landlord has agreed to accept  letters of credit in lieu of an  additional  cash
deposit as an  accommodation  to Tenant and Tenant  agrees  that the

                                      -9-
<PAGE>

letters of credit and all  amounts  drawn  thereunder  shall be treated  for all
purposes  under this Lease as if a cash  deposit  had been  tendered to Landlord
upon the execution of this Lease.

5. USE AND COMPLIANCE WITH LAWS.

         5.1 Use.  The  Premises  may be used  and  occupied  only  for  general
business  office,  sales,  administrative,  software  engineering,  and software
research  and  development  purposes  and for no other  use or  purpose  without
Landlord's prior consent,  which consent shall not be unreasonably  withheld. In
addition to other reasons  Landlord may have to withhold  consent to a change in
use of the Premises by Tenant, Landlord may withhold consent if the proposed use
is either not compatible with the use as an office building or violates  another
provision  of this Lease.  Tenant  shall comply with all present and future Laws
relating to Tenant's use or  occupancy  of the  Premises  (and make any repairs,
alterations or improvements as required to comply with all such Laws), and shall
observe the "Building Rules" (as defined in Section 27 - Rules and Regulations),
except  that  repairs or  alterations  required  to comply  with Laws  generally
applicable  to the  condition of the Premises for use as office  space,  and not
required  or  caused  by  Tenant's  particular  use  or  activities  or  by  any
Alterations made or proposed by Tenant,  shall be made by Landlord (and the cost
thereof,  if such cost is not  subject  to any of the  exclusions  to  Operating
Costs, shall be included in Operating Costs either as an expense or as a capital
item to be amortized pursuant to the provisions of Section  3.2(a)(1)(G) above).
Tenant shall not do, bring,  keep or sell anything in or about the Premises that
is prohibited  by, or that will cause a  cancellation  of, or an increase in the
existing premium (unless within fifteen days after Landlord gives Tenant written
notice of such  increase  in premium,  Tenant  agrees in writing to pay for such
increase)  for, any insurance  policy  covering the Project or any part thereof.
Tenant  shall not permit the  Premises to be occupied or used in any manner that
will constitute waste or a nuisance. Tenant shall not, without the prior consent
of Landlord,  bring into the Building or the  Premises  anything  that may cause
substantial noise, odor or vibration, overload the floors in the Building or any
of the heating, ventilating and air-conditioning ("HVAC"), mechanical, elevator,
plumbing, electrical, fire protection, life safety, security or other systems in
the Building ("Building Systems"), or jeopardize the structural integrity of the
Building or any part thereof.

         5.2. Hazardous Materials.

                  (a) Definitions.

                           (1) "Hazardous  Materials"  shall mean any substance:
(A)  that  now  or  in  the  future  is  regulated  or  governed  by,   requires
investigation  or  remediation  under,  or  is  defined  as a  hazardous  waste,
hazardous  substance,  pollutant or contaminant under any governmental  statute,
code, ordinance, regulation, rule or order, and any amendment thereto, including
the  Comprehensive  Environmental  Response  Compensation  and Liability Act, 42
U.S.C.ss.9601  et seq.,  and the  Resource  Conservation  and  Recovery  Act, 42
U.S.C.ss.6901 et seq., or (B) that is toxic,  explosive,  corrosive,  flammable,
radioactive, carcinogenic, dangerous or otherwise hazardous, including gasoline,
diesel fuel, petroleum hydrocarbons, polychlorinated biphenyls (PCBs), asbestos,
radon and urea formaldehyde foam insulation.

                           (2)  "Environmental   Requirements"  shall  mean  all
present and future Laws, orders, permits,  licenses,  approvals,  authorizations
and other requirements of any kind applicable to Hazardous Materials.

                           (3)  "Handled  by Tenant"  and  "Handling  by Tenant"
shall mean and refer to any installation,  handling,  generation,  storage, use,
disposal, discharge, release, abatement, removal,  transportation,  or any other
activity of any type by Tenant or its agents, employees, contractors, licensees,
assignees,    sublessees,    transferees   or   representatives   (collectively,
"Representatives")   or   its   guests,   customers,   invitees,   or   visitors
(collectively,  "Visitors"),  at or about the  Premises  in  connection  with or
involving Hazardous Materials.

                           (4)  "Environmental  Losses" shall mean all costs and
expenses  of  any  kind,  damages,   including   foreseeable  and  unforeseeable
consequential  damages,  fines and  penalties  incurred in  connection  with any
violation of and compliance with  Environmental  Requirements  and all losses of
any kind attributable to the diminution of value, loss of use or adverse effects
on marketability or use of any portion of the Premises or Project.

                  (b)  Tenant's  Covenants.  No  Hazardous  Materials  shall  be
Handled by Tenant at or about the Premises or Project without  Landlord's  prior
written  consent,  which consent may be granted,  denied,  or  conditioned

                                      -10-
<PAGE>

upon  compliance  with  Landlord's  requirements,  all  in  Landlord's  absolute
discretion.  Notwithstanding  the foregoing,  normal quantities and use of those
Hazardous   Materials   customarily  used  in  the  conduct  of  general  office
activities,  such as copier fluids and cleaning supplies  ("Permitted  Hazardous
Materials"),  may be used and stored at the Premises  without  Landlord's  prior
written consent,  provided that Tenant's activities at or about the Premises and
Project and the Handling by Tenant of all  Hazardous  Materials  shall comply at
all times with all Environmental Requirements.  At the expiration or termination
of the Lease,  Tenant  shall  promptly  remove from the Premises and Project all
Hazardous  Materials  Handled by Tenant at the Premises or the  Project.  Tenant
shall keep  Landlord  fully and  promptly  informed of all Handling by Tenant of
Hazardous  Materials other than Permitted Hazardous  Materials.  Tenant shall be
responsible  and liable for the  compliance  with all of the  provisions of this
Section by all of Tenant's  Representatives  and  Visitors,  and all of Tenant's
obligations under this Section (including its indemnification  obligations under
paragraph (e) below) shall survive the expiration or termination of this Lease.

                  (c) Compliance. Tenant shall at Tenant's expense promptly take
all actions required by any governmental  agency or entity in connection with or
as a result of the  Handling by Tenant of  Hazardous  Materials  at or about the
Premises or Project,  including inspection and testing,  performing all cleanup,
removal and remediation work required with respect to those Hazardous Materials,
complying with all closure requirements and post-closure monitoring,  and filing
all required  reports or plans.  All of the  foregoing  work and all Handling by
Tenant  of all  Hazardous  Materials  shall  be  performed  in a good,  safe and
workmanlike manner by consultants  qualified and licensed to undertake such work
and in a manner that will not interfere with any other tenant's quiet  enjoyment
of the Project or Landlord's  use,  operation,  leasing and sale of the Project.
Tenant shall deliver to Landlord prior to delivery to any  governmental  agency,
or  promptly  after  receipt  from  any  such  agency,  copies  of all  permits,
manifests,  closure or remedial action plans,  notices,  and all other documents
relating  to the  Handling  by Tenant  of  Hazardous  Materials  at or about the
Premises or  Project.  If any lien  attaches  to the  Premises or the Project in
connection with or as a result of the Handling by Tenant of Hazardous Materials,
and  Tenant  does not cause the same to be  released,  by  payment,  bonding  or
otherwise,  within ten (10) days after the  attachment  thereof,  Landlord shall
have the right but not the  obligation  to cause the same to be released and any
sums expended by Landlord (plus Landlord's  administrative  costs) in connection
therewith shall be payable by Tenant on demand.

                  (d) Landlord's Rights.  Upon reasonable oral or written notice
to Tenant (and without  notice in  emergencies),  Landlord shall have the right,
but not the  obligation,  to enter the  Premises at any  reasonable  time (i) to
confirm Tenant's compliance with the provisions of this Section 5.2, and (ii) to
perform  Tenant's  obligations  under this Section if Tenant has failed to do so
after reasonable notice to Tenant.  Landlord shall also have the right to engage
qualified Hazardous Materials consultants to inspect the Premises and review the
Handling by Tenant of  Hazardous  Materials,  including  review of all  permits,
reports,  plans,  and other  documents  regarding  same. If Tenant  violates the
provisions  of this Section 5.2, then Tenant shall pay to Landlord on demand the
costs of  Landlord's  consultants'  fees and all costs  incurred  by Landlord in
performing  Tenant's   obligations  under  this  Section.   Landlord  shall  use
reasonable efforts to minimize any interference with Tenant's business caused by
Landlord's  entry into the Premises,  but Landlord shall not be responsible  for
any interference caused thereby.

                  (e)  Tenant's  Indemnification.  Tenant  agrees to  indemnify,
defend,  protect and hold harmless  Landlord and its partners or members and its
or their partners, members,  directors,  officers,  shareholders,  employees and
agents from all  Environmental  Losses and all other  claims,  actions,  losses,
damages,  liabilities,  costs and expenses of every kind,  including  reasonable
attorneys',  experts' and consultants' fees and costs,  incurred at any time and
arising from or in connection with the Handling by Tenant of Hazardous Materials
at or  about  the  Project  or  Tenant's  failure  to  comply  in full  with all
Environmental Requirements with respect to the Premises.

                  (f) Landlord's Representations. Landlord hereby represents and
warrants to Tenant that (i) Landlord has, as of the date of this Lease, Landlord
has given to Tenant a copy of all  environmental  reports  with  respect  to the
Project  which are in Landlord's  possession,  and (ii) Landlord has received no
notification  from any private,  governmental,  or other entity that the Project
does not comply with any environmental Laws.

                  (g) Landlord's Responsibilities and Indemnification.  Landlord
shall not use any of the Land or Building for any activities  involving the use,
generation,   handling,  release,   threatened  release,   treatment,   storage,
discharge, disposal or transportation of any Hazardous Materials, except in such
quantity or concentration  that is customarily  used,  stored or disposed in the
ordinary  course of the business so long as such  activity  duly  complies  with
applicable Laws and good business  practice.  If Landlord violates the foregoing
covenant  resulting in an  Environmental  Claim (as  hereinafter  defined)  with
respect to the Premises,  then Landlord agrees to (a) notify Tenant

                                      -11-
<PAGE>

immediately of any such  Environmental  Claim and (b) clean up any contamination
in full compliance  with all applicable  Laws at Landlord's  cost. In accordance
with the provisions of the  immediately  preceding  sentence,  Landlord shall be
responsible for any Environmental  Claim for Hazardous Materials (x) existing on
the Property on the date of this Lease,  and (y) caused by third parties (except
to the extent  any  Environmental  Claim for  Hazardous  Materials  is caused by
Handling by Tenant).  Any Environmental Claim for Hazardous Materials not caused
by Handling by Tenant shall not be included in  Operating  Costs or otherwise be
the responsibility of Tenant; provided, however, Tenant shall be responsible for
any Environmental  Claim for Hazardous Material to the extent of any Handling by
Tenant of  Hazardous  Materials,  as  otherwise  provided in this  Section  5.2.
"Environmental  Claim" means any claim,  demand,  action, cause of action, suit,
damage, punitive damage, fine, penalty, expense, liability,  criminal liability,
judgment,  or governmental  investigation  relating to remediation or compliance
with requirements of Laws covering Hazardous Materials . The term "Environmental
Claim" also  includes  any costs  incurred in  responding  to efforts to require
remediation  and any claim based upon any asserted or actual breach or violation
of any requirements of any Laws covering Hazardous Materials.

                  Landlord shall  indemnify,  defend,  protect and hold harmless
Tenant and its officers, directors,  employees and shareholders from and against
any and all claims, actions, losses, damages, liabilities, costs and expenses of
every kind, including reasonable attorneys',  experts, and consultants' fees and
costs,  incurred at any time and arising from or in  connection  with  Hazardous
Materials which existed on the Property prior to the Rent Commencement Date.

                  (h) Environmental  Rent Abatement and Termination Right. If at
any time following the Rent  Commencement  Date, any regulatory  agency requires
Tenant to  vacate  all or a  portion  of the  Premises  due to the  presence  of
Hazardous  Materials in the Project (and such Hazardous  Materials have not been
Handled by Tenant),  and as a result  thereof,  Tenant is not able to reasonably
use more than twenty percent (20%) of the Premises then occupied by Tenant for a
period of five (5)  consecutive  Business Days, and Tenant in fact ceases to use
such portion of the Premises for five (5) consecutive Business Days, then Tenant
shall  be  entitled  to (a) an  abatement  of  Base  Rent  and  Additional  Rent
("Hazardous  Materials  Rent  Abatement  ") with  respect to the  portion of the
Premises  that  Tenant is  prevented  from using by reason of such  presence  of
Hazardous  Materials  commencing  on the  sixth  (6th)  Business  Day  following
Tenant's  inability  to  reasonably  use such  portion  of the  Premises  due to
Hazardous  Materials,  and continuing  until Tenant is no longer  prevented from
using such portion of the Premises,  and (b)  terminate  this Lease if Tenant is
not able to reasonably  use more than twenty  percent (20%) of the Premises then
occupied by Tenant for a period of twelve (12) consecutive months, and Tenant in
fact ceases to use such  portion of the  Premises  for twelve  (12)  consecutive
months.


6. TENANT IMPROVEMENTS & ALTERATIONS.

         6.1 Landlord and Tenant shall perform their respective obligations with
respect to design and  construction  of any  improvements  to be constructed and
installed  in the  Premises  (the  "Tenant  Improvements"),  as  provided in the
Construction  Rider.  Except for any Tenant  Improvements  to be  constructed by
Tenant  as  provided  in the  Construction  Rider,  Tenant  shall  not  make any
alterations,  improvements or changes to the Premises, including installation of
any security system or telephone or data communication wiring,  ("Alterations"),
without   Landlord's  prior  written   consent,   which  consent  shall  not  be
unreasonably withheld or delayed;  provided,  however, upon seven (7) days prior
written  notice to Landlord,  Tenant shall have the right to make  installations
and changes to the telephone and data  communication  wiring without  Landlord's
consent on the conditions that Tenant shall (x) at the expiration or termination
of this Lease remove all such  telephone and data  communication  wiring located
above and below ceilings,  in chases and in risers (to the extent,  within seven
(7) days after Landlord's receipt of Tenant's notification of such installation,
Landlord  notifies  Tenant  that  Landlord  will  require  Tenant to remove such
telephone and data  communications  wiring at the  expiration or  termination of
this  Lease),  (y)  obtain  Landlord's  prior  written  consent to any boring or
cutting  through  structural or  load-bearing  portions of the  Premises,  which
consent  shall not be  unreasonably  withheld  so long as such boring or cutting
does not affect the structural  integrity of the Building,  and Tenant  complies
with any requirements of Landlord's  independent structural engineer, and (z) at
the expiration or  termination of this Lease,  Tenant shall restore all portions
of the Premises being detrimentally  affected by any boring or cutting for wires
or cables  done by, or at the  request  of,  Tenant.  Notwithstanding  any other
provision  contained  herein,  Tenant shall not be required to obtain Landlord's
prior consent for minor,  non-structural  Alterations that (a) do not affect any
of the Building Systems,  (b) are not visible from the exterior of the Premises,
and (c) cost less  than One  Hundred  Thousand  Dollars  ($100,000),  so long as
Tenant gives Landlord notice

                                      -12-
<PAGE>

of the  proposed  Alterations  at least ten (10) days  prior to  commencing  the
Alterations  and  complies  with all of the  following  provisions  (except that
Tenant  shall not be  required  to obtain  Landlord's  approval  of any plans or
specifications  therefor).  Any such Alterations shall be completed by Tenant at
Tenant's  sole  cost  and  expense:  (i)  with  due  diligence,  in a  good  and
workmanlike  manner,  using new  materials;  (ii) in  compliance  with plans and
specifications  approved by Landlord,  which approval shall not be  unreasonably
withheld;  (iii)  in  compliance  with the  reasonable  construction  rules  and
regulations  promulgated by Landlord from time to time;  (iv) in accordance with
all applicable Laws (including all work,  whether  structural or non-structural,
inside or outside the  Premises,  required to comply  fully with all  applicable
Laws and necessitated by Tenant's work); and (v) subject to all conditions which
Landlord may reasonably  impose.  Such conditions may include  requirements  for
Tenant to: (i) provide  payment or performance  bonds (but only for  Alterations
costing more than $100,000.00) or additional  insurance (from Tenant or Tenant's
contractors,  subcontractors or design  professionals);  (ii) use contractors or
subcontractors  approved by Landlord,  which approval shall not be  unreasonably
withheld, provided that contractors and subcontractors for Alterations affecting
(x) the Building  Systems are bondable,  are  experienced  and have done work in
buildings  similar to the  Buildings,  (y) the  structure  of the  Building  are
selected  by  Tenant  from  one  of  three  (3)  contractors  or  subcontractors
designated by Landlord; and (iii) remove all or part of the Alterations prior to
or upon  expiration or termination of the Term, as designated by Landlord at the
time  Landlord  approves any such  Alterations.  Landlord's  right to review and
approve (or  withhold  approval of) Tenant's  plans,  drawings,  specifications,
contractor(s)  and other  aspects of  construction  work  proposed  by Tenant is
intended solely to protect Landlord,  the Project and Landlord's  interests.  No
approval  or  consent  by  Landlord  shall  be  deemed  or  construed  to  be  a
representation or warranty by Landlord as to the adequacy, sufficiency,  fitness
or  suitability  thereof or  compliance  thereof with  applicable  Laws or other
requirements.   Except  as  otherwise  provided  in  Landlord's   consent,   all
Alterations  shall  upon  installation  become  part  of the  realty  and be the
property of Landlord.

         Notwithstanding the foregoing, or anything to the contrary contained in
this Lease, upon expiration of this Lease, Tenant shall have the right to remove
its  Alterations  from the Premises on the condition that (x) Tenant repairs all
damage to the Premises resulting from such removal, and (y) where Tenant removes
any such  Alterations,  Tenant  restores  that portion of the Premises  affected
thereby to the  condition  existing  on the Rent  Commencement  Date  (including
capping all utility lines,  if any resulting  from such removal),  ordinary wear
and tear excepted, on the condition that the Alterations can be removed from the
Premises or the Building  without causing any structural  damage to the Premises
and the Building.

         6.2 Before making any Alterations,  Tenant shall submit to Landlord for
Landlord's  prior  reasonable  approval  reasonably  detailed  final  plans  and
specifications  prepared  by a licensed  architect  or  engineer,  a copy of the
construction   contract,   including  the  name  of  the   contractor   and  all
subcontractors  proposed  by  Tenant to make the  Alterations  and a copy of the
contractor's  license.  Tenant  shall  reimburse  Landlord  upon  demand for any
third-party,   out-of-pocket   expenses   reasonably  incurred  by  Landlord  in
connection  with any  Alterations  made by  Tenant,  including  reasonable  fees
charged  by  Landlord's   contractors   or   consultants  to  review  plans  and
specifications  prepared by Tenant and to update the existing as-built plans and
specifications  of the Building to reflect the Alterations.  Tenant shall obtain
all applicable and required permits,  authorizations and governmental  approvals
and  deliver  copies  of  the  same  to  Landlord  before  commencement  of  any
Alterations.

         6.3 Tenant  shall keep the  Premises  and the Project free and clear of
all liens arising out of any work performed,  materials furnished or obligations
incurred by Tenant.  If any such lien  attaches to the  Premises or the Project,
and  Tenant  does not cause  the same to be  released  by  payment,  bonding  or
otherwise  within  ten  (10)  days  after  Tenant's  receipt  of  notice  of the
attachment  thereof,  Landlord  shall have the right but not the  obligation  to
cause  the  same to be  released,  and  any  sums  expended  by  Landlord  (plus
Landlord's  administrative  costs) in connection  therewith  shall be payable by
Tenant on demand with interest  thereon from the date of expenditure by Landlord
at the Interest Rate (as defined in Section 16.2 - Interest).  Tenant shall give
Landlord  at least  ten (10)  days'  notice  prior  to the  commencement  of any
Alterations  and cooperate with Landlord in posting and  maintaining  notices of
non-responsibility in connection therewith.

         6.4 Subject to the  provisions of Section 5 - Use and  Compliance  with
Laws and the  foregoing  provisions  of this  Section,  Tenant may  install  and
maintain  furnishings,  equipment,  movable  partitions,  business equipment and
other trade fixtures ("Trade Fixtures") in the Premises, provided that the Trade
Fixtures can be removed from the Premises or the Building  without damage to the
structure of the Premises and the  Building.  Tenant shall  promptly  repair any
damage to the Premises or the Building caused by any  installation or removal of
such Trade Fixtures.

                                      -13-
<PAGE>

7. MAINTENANCE AND REPAIRS.

         7.1 By  taking  possession  of the  Premises  Tenant  agrees  that  the
Premises are then in a good and tenantable condition, subject to (a) any defects
in the Base Building Work of which Tenant  notifies  Landlord in writing  within
one (1) year after the Rent Commencement Date for the applicable  Building,  (b)
completion  of any  "punchlist"  items  pursuant to the  provisions of Exhibit B
attached hereto, and (c) Landlord's obligations under Sections 7.2, 12 and 13 of
this Lease.  Landlord hereby assigns to Tenant all  construction  warranties for
the Base Building Work, on the condition that Landlord shall also have the right
to enforce such construction warranties. Subject to Landlord's obligations under
Sections 7.2, 12 and 13 of this Lease, from and after the Rent Commencement Date
and continuing  thereafter  throughout the Term,  Tenant shall be responsible to
clean, maintain and repair the Premises, including providing janitorial services
and disposal of trash;  and to that end,  commencing upon the Rent  Commencement
Date and continuing  thereafter throughout the Term, Tenant, at Tenant's expense
but under the  reasonable  direction of Landlord,  shall repair and maintain the
Premises,  including,  without  limitation,  the interior of the  Premises,  the
exterior  of the  Buildings  (including  repair  and  maintenance  of  the  roof
membrane,  and washing the exterior of the Buildings,  but excluding  Landlord's
repair obligations contained in Section 7.2 below), the heating, ventilating and
air  conditioning  system or systems  serving the Premises,  the  electrical and
plumbing  systems  serving the  Premises,  including  the  lighting and plumbing
fixtures,  the  restrooms  serving  the  Premises,  interior  stairways  in  the
Premises,  the interior and exterior  glass,  including  caulking (but excluding
structural  portions of the exterior of the Buildings),  plate glass  skylights,
interior  walls,  floor  coverings,  ceiling  (ceiling  tiles and grid),  Tenant
Improvements,  Alterations,  fire extinguishers,  outlets and fixtures,  and any
appliances (including  dishwashers,  hot water heaters and garbage disposers) in
the Premises, in a reasonably good condition,  and keep the Premises in a clean,
safe and orderly  condition.  Prior to the Rent  Commencement  Date Tenant shall
provide  Landlord with a copy of a service  contract with a licensed  commercial
Heating,  Ventilating and  Air-conditioning  maintenance company (which contract
and company shall be subject to Landlord's prior approval,  which approval shall
not be  unreasonably  withheld),  to  maintain,  on an  ongoing  basis (at least
quarterly),  the heating,  ventilating and  air-conditioning  system serving the
Premises.  If Tenant  fails to perform its  maintenance  and repair  obligations
under this Section 7.1,  and such failure  continues  for thirty (30) days after
written  notice from Landlord to Tenant,  then Landlord  shall have the right to
perform such maintenance and repairs at Tenant's expense.

         Notwithstanding  the  foregoing  provisions  of this  Section  7.1, and
without in any way  relieving  Landlord of its  obligations  under Section 12 of
this Lease,  if (a) at any time during the period  beginning  on the first (1st)
anniversary date of the Rent Commencement Date (for the applicable Building,  if
each  Building has a separate  Rent  Commencement  Date) and ending on the first
(1st) day of the eighty-fifth  (85th) full calendar month of the initial Term of
this  Lease,  (b) it appears to Tenant  that any  individual  repair to the Base
Building Work costs more than Fifty Thousand Dollars  ($50,000.00),  and (c) the
repair is not the result of  Tenant's  negligence  or willful  misconduct,  then
Tenant may request Landlord to make such repair  ("Tenant's Base Building Repair
Request"). Upon receipt of Tenant's Base Building Repair Request, Landlord shall
request  three (3)  qualified  contractors  selected  by  Landlord  to give cost
estimates for the repair described in Tenant's Base Building Repair Request.  If
the lowest  estimate from such three (3) contractors for the cost of the repairs
described in Tenant's  Base  Building  Repair  Request  exceeds  Fifty  Thousand
Dollars  ($50,000.00),  then Landlord shall cause such repairs ("Landlord's Base
Building  Repair for Tenant") to the Base Building Work to be made at Landlord's
expense.  The costs of  Landlord's  Base  Building  Repair for  Tenant  shall be
amortized  straight-line  over its useful  life,  as  reasonably  determined  by
Landlord,  and be included in Operating  Costs in the calendar year in which the
repair is made and in each calendar year thereafter  during the Term,  including
any Extension  Period (as defined in Section 41 of this Lease);  provided,  such
amortized  costs shall not be included  in  determining  Fair Market Base Rental
applicable to any Extension Period.

         Notwithstanding  the  foregoing  provisions  of this  Section  7.1, and
without in any way  relieving  Landlord of its  obligations  under Section 12 of
this  Lease,  if (a) less than five (5) years  remain in the Term of this Lease,
(b)  it  appears  to  Tenant  that  any  individual  repair  which  is  Tenant's
responsibility  under this Section 7.1 costs more than Fifteen  Thousand Dollars
($15,000.00),  and (c) the repair is not the result of  Tenant's  negligence  or
willful  misconduct,  then  Tenant  may  request  Landlord  to make such  repair
("Tenant's Repair Request").  Upon receipt of Tenant's Repair Request,  Landlord
shall request three (3) qualified  contractors selected by Landlord to give cost
estimates for the repair  described in Tenant's  Repair  Request.  If the lowest
estimate from such three (3) contractors  for the cost of the repairs  described
in Tenant's Repair Request exceeds Fifteen Thousand Dollars  ($15,000.00),  then
Landlord shall cause such repairs ("Landlord's Repair for Tenant") to be made at
Landlord's expense. The costs of

                                      -14-
<PAGE>
Landlord's  Repair for Tenant shall be amortized  straight-line  over its useful
life, as reasonably  determined by Landlord,  and be included in Operating Costs
in the  calendar  year in which  the  repair is made and in each  calendar  year
thereafter  during the Term,  including  any  Extension  Period  (as  defined in
Section 41 of this Lease);  provided, such amortized costs shall not be included
in determining Fair Market Base Rental applicable to any Extension Period.

         7.2 Landlord  shall  maintain or cause to be  maintained  in reasonably
good  order,  condition  and  repair,  (a) the  structural  portions of the roof
(excluding  the roof  membrane),  columns,  footings,  foundations,  floors  and
exterior  walls of the  Buildings  (excluding  glass and  window  caulking)  and
structural portions of any other improvements  located in the Outside Areas, (b)
the main water lines, pipes and conduit serving the Premises (including the fire
protection  loop) to the  point of entry  into the  Buildings,  (c) the  Parking
Structure  below the Buildings,  and (d) all other portions of the Outside Areas
not listed in (a), (b) and (c) above, the costs of which items contained in this
Section 7.2 shall be included as a part of Operating Costs (except for the costs
of maintenance of levees,  which shall be at Landlord's  sole cost),  subject to
the terms,  conditions,  exclusions and limitations  contained in Section 3.2 of
this Lease. Landlord shall maintain or cause to be maintained in reasonably good
order,  condition and repair all levees located in the Outside Areas,  the costs
of which  maintenance  of  levees  shall not be  included  in  Operating  Costs.
Additionally,  Landlord shall perform and construct, at Landlord's sole cost and
expense, any repair,  maintenance or improvements to the Premises or the Project
(i)   necessitated  by  the  acts  or  omissions  of  Landlord,   or  Landlord's
contractors,  agents  or  employees,  (ii)  required  as a  consequence  of  any
violation  of any Law with  respect  to the  original  construction  of the Base
Building Work, or  construction  or design defects in the Base Building Work, or
(iii) for which  Landlord  has a right to  receive  reimbursement  from  others.
Landlord  shall be under no  obligation  to inspect the  Premises.  Tenant shall
promptly  report in writing to Landlord any defective  condition known to Tenant
which  Landlord is required to repair.  As a material part of the  consideration
for this Lease,  Tenant hereby waives any benefits of any applicable existing or
future Law,  including the provisions of California Civil Code Sections 1932(1),
1941 and 1942, that allows a tenant to make repairs at its landlord's expense.

         7.3 Landlord  hereby  reserves the right,  at any time and from time to
time,  without  liability  to Tenant,  and  without  constituting  an  eviction,
constructive  or otherwise,  or entitling  Tenant to any abatement of rent or to
terminate  this  Lease  or  otherwise  releasing  Tenant  from  any of  Tenant's
obligations under this Lease:

                  (a) To reduce,  increase,  enclose or otherwise  change at any
time and from time to time the size, number, location, lay-out and nature of the
Outside Areas  (including  the Parking  Facility,  subject to the  provisions of
Section 39 - Parking of this  Lease) and other  tenancies  and  premises  in the
Project; and

                  (b) If any governmental  authority  promulgates or revises any
Law or imposes controls or guidelines on Landlord or the Project relating to the
use or  conservation  of energy or utilities or the  reduction of  automobile or
other  emissions or reduction or management of traffic or parking on the Project
(collectively "Controls"), to comply with such Controls, or make any alterations
to the Project related thereto.

                  (c) In exercising its rights under this Section 7.3,  Landlord
shall not materially and permanently impair Tenant's access to the Premises.

8.  TENANT'S  TAXES.  "Tenant's  Taxes"  shall mean (a) all taxes,  assessments,
license fees and other  governmental  charges or impositions  levied or assessed
against or with respect to Tenant's  personal  property or Trade Fixtures in the
Premises,  whether any such  imposition  is levied  directly  against  Tenant or
levied  against  Landlord  or the  Project,  (b) all  rental,  excise,  sales or
transaction privilege taxes arising out of this Lease (excluding, however, state
and  federal  personal  or  corporate  income  taxes  measured  by the income of
Landlord from all sources) imposed by any taxing authority upon Landlord or upon
Landlord's  receipt of any rent payable by Tenant  pursuant to the terms of this
Lease ("Rental Tax"), and (c) any increase in Taxes attributable to inclusion of
a value placed on Tenant's  personal  property,  Trade Fixtures or  Alterations.
Tenant  shall pay any Rental Tax to Landlord in addition to and at the same time
as Base Rent is payable under this Lease, and shall pay all other Tenant's Taxes
before  delinquency  (and,  at  Landlord's   request,   shall  furnish  Landlord
satisfactory  evidence thereof).  If Landlord pays Tenant's Taxes or any portion
thereof,  Tenant  shall  reimburse  Landlord  upon demand for the amount of such
payment, together with interest at the Interest Rate from the date of Landlord's
payment to the date of Tenant's reimbursement.

                                      -15-
<PAGE>

9. UTILITIES AND SERVICES.

         9.1. Description of Services and Payment of Utilities.

                  (a) If the temperature  otherwise maintained in any portion of
the  Premises by the HVAC systems of the Building is affected as a result of any
lights,  machines or equipment used by Tenant in the Premises,  or for any other
reason,  then Landlord shall not be responsible to make any changes or additions
to the HVAC, it being the  responsibility  of Tenant,  at Tenant's sole cost and
expense,  to install any machinery or equipment desired by Tenant to restore the
temperature, including modifications to the standard air-conditioning equipment,
subject to the provisions of Section 6.1 of this Lease.

                  (b)  Electricity,  water,  sanitary  sewer and any gas will be
separately  metered for the Premises.  Tenant shall pay prior to delinquency all
charges  for water,  gas,  electricity,  telephone  and other  telecommunication
services,  janitorial  service,  trash  pick-up,  sewer and all  other  services
consumed  on or  supplied  to the  Premises,  and all  taxes,  levies,  fees and
surcharges thereon.

         9.2  Interruption  of Services.  In the event of an  interruption in or
failure or  inability  to provide any  services or  utilities to the Premises or
either Building for any reason (a "Service Failure"), such Service Failure shall
not, regardless of its duration,  impose upon Landlord any liability whatsoever,
constitute an eviction of Tenant,  constructive or otherwise,  entitle Tenant to
an abatement of rent or to terminate this Lease or otherwise release Tenant from
any of Tenant's  obligations under this Lease. Tenant hereby waives any benefits
of any applicable existing or future Law, including the provisions of California
Civil Code Section 1932(1), permitting the termination of this Lease due to such
interruption,  failure or inability.  Notwithstanding the foregoing, if there is
any Service Failure caused by the negligence or willful  misconduct of Landlord,
or its agents,  employees  or  contractors,  and such Service  Failure  prevents
Tenant from reasonably  using any material  portion of the Premises for a period
of five (5)  consecutive  Business  Days and  Tenant in fact  ceases to use such
portion of the  Premises for five (5)  consecutive  Business  Days,  then Tenant
shall be  entitled to (a) an  abatement  of Base Rent and  Additional  Rent with
respect to the portion of the Premises  that Tenant is  prevented  from using by
reason of such  Service  Failure  commencing  on the sixth  (6th)  Business  Day
following the occurrence of the Service  Failure and continuing  until Tenant is
no longer  prevented  from using such portion of the  Premises,  and (b) if such
interruption  continues  for one hundred  eighty  (180)  consecutive  days after
Tenant gives Landlord written notice of such interruption,  terminate this Lease
by written  notice to Landlord at any time after such one hundred  eighty  (180)
consecutive days, provided,  however, if following such one hundred eighty (180)
consecutive  day  period  such  interruption  is cured  prior to  Tenant  giving
Landlord written notice terminating this Lease, then Tenant shall no longer have
the right to terminate this Lease under this sentence due to such interruption.

10. EXCULPATION AND INDEMNIFICATION.

         10.1 Landlord's  Indemnification  of Tenant.  Landlord shall indemnify,
protect,  defend and hold Tenant harmless from and against any claims,  actions,
liabilities,  damages,  costs or expenses,  including reasonable attorneys' fees
and costs  incurred in  defending  against the same  ("Claims")  asserted by any
third party against Tenant for loss,  injury or damage, to the extent such loss,
injury  or  damage is caused by the  willful  misconduct  or  negligent  acts or
omissions of Landlord or its authorized representatives.

         10.2  Tenant's  Indemnification  of Landlord.  Tenant shall  indemnify,
protect,  defend and hold  Landlord and  Landlord's  authorized  representatives
harmless  from and against  Claims  arising  from (a) the acts or  omissions  of
Tenant or Tenant's  Representatives or Visitors in or about the Project,  or (b)
any  construction or other work undertaken by Tenant on the Premises  (including
any design defects), or (c) any breach or default under this Lease by Tenant, or
(d) any loss,  injury or damage,  howsoever  and by  whomsoever  caused,  to any
person  or  property,  occurring  in or about  the  Premises  during  the  Term,
excepting only Claims described in this clause (d) to the extent they are caused
by the willful  misconduct  or  negligent  acts or  omissions of Landlord or its
authorized representatives. This Section shall not apply to Hazardous Materials,
the subject of which is governed by the provisions of Section 5.2 of this Lease.

         10.3  Damage to Tenant and  Tenant's  Property.  Landlord  shall not be
liable to Tenant for any loss,  injury or other  damage to Tenant or to Tenant's
property  in or about the  Premises  or the  Project  at any time from any cause
(including  defects in the Property or in any  equipment  in the Project;  fire,
explosion  or other  casualty;

                                      -16-
<PAGE>
bursting,  rupture, leakage or overflow of any plumbing or other pipes or lines,
sprinklers,  tanks, drains, drinking fountains or washstands in, above, or about
the Premises or the Property;  or acts of other tenants in the Project).  Tenant
hereby waives all claims against Landlord for any such loss, injury or damage to
Tenant or  Tenant's  property,  and the cost and  expense of  defending  against
claims  relating  thereto,  including  any  loss,  injury  or  damage  caused by
Landlord's negligence (active or passive) or willful misconduct. Notwithstanding
any other provision of this Lease to the contrary, in no event shall Landlord be
liable to Tenant for any punitive or  consequential  damages or damages for loss
of  business  by Tenant,  except to the  extent  that  consequential  damages or
damages  for loss of  business  by Tenant are  incurred as a result of the gross
negligence  or  willful   misconduct   of  Landlord  or  Landlord's   authorized
representatives.

         10.4.  Survival.  The  obligations of the parties under this Section 10
shall survive the expiration or termination of this Lease.

11. INSURANCE.

         11.1 Tenant's Insurance.

                  (a) Liability  Insurance.  Tenant shall maintain in full force
throughout the Term,  commercial general liability  insurance providing coverage
on an  occurrence  form basis with limits of not less than Ten  Million  Dollars
($10,000,000.00) each occurrence for bodily injury and property damage combined,
Ten Million Dollars  ($10,000,000.00) annual general aggregate,  and Ten Million
Dollars  ($10,000,000.00)  products and completed  operations  annual aggregate.
Tenant's  liability  insurance  coverage  may be  provided by a  combination  of
primary,  excess and umbrella  policies,  but these  policies must be absolutely
concurrent in all respects regarding the coverage afforded by the policies.  The
coverage  of any  excess  or  umbrella  policy  must be at least as broad as the
coverage of the primary policy.  Tenant's liability insurance policy or policies
shall:  (i) include  premises and operations  liability  coverage,  products and
completed  operations  liability  coverage,  broad form property damage coverage
including  completed   operations,   blanket   contractual   liability  coverage
including,  to the maximum  extent  possible,  coverage for the  indemnification
obligations  of Tenant under this Lease,  and personal  and  advertising  injury
coverage;  (ii)  provide that the  insurance  company has the duty to defend all
insureds under the policy; (iii) provide that defense costs are paid in addition
to and do not deplete any of the policy limits;  (iv) cover liabilities  arising
out of or incurred in connection  with Tenant's use or occupancy of the Premises
or the  Project;  (v) extend  coverage  to cover  liability  for the  actions of
Tenant's  Representatives and Visitors; and (vi) [intentionally  deleted].  Each
policy of  liability  insurance  required by this Section  shall:  (i) contain a
separation of insureds  clause or otherwise  provide  cross-liability  coverage;
(ii) provide that any waiver of  subrogation  rights or release  prior to a loss
does not void coverage; (iii) provide that it is primary insurance; (iv) provide
that any  failure  to comply  with the  reporting  provisions  shall not  affect
coverage provided to Landlord,  its partners,  property managers and Mortgagees;
and (v) name  Landlord,  its partners,  the Property  Manager  identified in the
Basic Lease  Information  (the  "Property  Manager"),  and such other parties in
interest as Landlord  may from time to time  reasonably  designate  to Tenant in
writing, as additional  insureds.  Such additional insureds shall be provided at
least the same extent of coverage as is provided to Tenant under such  policies.
All endorsements  effecting such additional  insured status shall be at least as
broad as additional  insured  endorsement form number CG 20 11 11 85 or CG 20 11
01 96 promulgated by the Insurance Services Office.

                  (b) Property Insurance.  Tenant shall at all times maintain in
effect with respect to any  Alterations and Tenant's Trade Fixtures and personal
property,  commercial property insurance providing coverage, on an "all risk" or
"special form" basis, in an amount equal to at least 90% of the full replacement
cost of the covered  property.  Tenant may carry such insurance  under a blanket
policy,  provided that such policy  provides  coverage  equivalent to a separate
policy.  During the Term, the proceeds from any such policies of insurance shall
be used for the repair or  replacement  of the  Alterations,  Trade Fixtures and
personal  property so insured.  Landlord  shall be provided  coverage under such
insurance to the extent of its insurable interest and, if requested by Landlord,
both Landlord and Tenant shall sign all documents reasonably necessary or proper
in connection  with the  settlement  of any claim or loss under such  insurance.
Landlord  will have no obligation to carry  insurance on any  Alterations  or on
Tenant's Trade Fixtures or personal property.

                  (c)  Requirements  For All Policies.  Each policy of insurance
required  under this  Section  11.1 shall:  (i) be in a form,  and written by an
insurer,  reasonably acceptable to Landlord, (ii) be maintained at Tenant's sole
cost and expense, and (iii) require at least thirty (30) days' written notice to
Landlord  prior to any  cancellation,

                                      -17-
<PAGE>

nonrenewal or material  modification of insurance coverage.  Insurance companies
issuing such  policies  shall have rating  classifications  of "A" or better and
financial  size  category  ratings  of "VII" or better  according  to the latest
edition of the A.M. Best Key Rating Guide. All insurance  companies issuing such
policies shall be admitted  carriers  licensed to do business in the state where
the Property is located.  Any deductible  amount under such insurance  shall not
exceed $5,000. Tenant shall provide to Landlord, upon request, evidence that the
insurance  required to be carried by Tenant pursuant to this Section,  including
any endorsement  effecting the additional  insured status,  is in full force and
effect and that premiums therefor have been paid.

                  (d) Updating  Coverage.  Tenant shall  increase the amounts of
insurance as required by any Mortgagee, and, not more frequently than once every
three (3) years, as reasonably  recommended by Landlord's  insurance broker, if,
in the  reasonable  opinion  of either of them,  the  amount of  insurance  then
required under this Lease is not adequate,  but in no event shall such increased
amounts of  insurance  be in excess of that  required  by  landlords  (which are
unrelated to Landlord) of  comparable  buildings in the general  vicinity of the
Buildings.  Any limits set forth in this Lease on the amount or type of coverage
required by Tenant's  insurance  shall not limit the  liability  of Tenant under
this Lease.

                  (e)  Certificates  of  Insurance.  Prior to any entry  into or
occupancy  of the  Premises  by  Tenant,  and not more than ten (10) days  after
expiration  of any  policy  thereafter,  Tenant  shall  furnish  to  Landlord  a
certificate of insurance  reflecting that the insurance required by this Section
is in force,  accompanied  by an  endorsement  showing the  required  additional
insureds  satisfactory  to Landlord in substance and form.  Notwithstanding  the
requirements  of this paragraph,  Tenant shall at Landlord's  request provide to
Landlord a certified  copy of each insurance  policy  required to be in force at
any time pursuant to the requirements of this Lease or its Exhibits.

         11.2 Landlord's Insurance.  Commencing upon the date that the builder's
risk coverage carried by Landlord on the construction of Building  expires,  and
continuing  through the Term,  to the extent such  coverages  are available at a
commercially reasonable cost, Landlord shall maintain in effect insurance on the
Buildings with responsible  insurers,  on an "all risk" or "special form" basis,
insuring  the  Buildings  and the Tenant  Improvements  in an amount equal to at
least 90% of the replacement cost thereof, excluding land, foundations, footings
and  underground  installations.  Landlord  may, but shall not be obligated  to,
carry insurance against additional perils and/or in greater amounts.

         11.3  Mutual  Waiver  of Right of  Recovery  & Waiver  of  Subrogation.
Notwithstanding any other provision in this Lease to the contrary,  Landlord and
Tenant  each  hereby  waive any right of  recovery  against  each  other and the
partners, managers, members,  shareholders,  officers, directors, and sublessees
which have been approved by Landlord pursuant to the provisions of Section 14 of
this  Lease (on the  condition  that any such  sublessee  agrees in  writing  to
provide for the benefit of Landlord a reciprocal  waiver as is contained in this
Section  11.3),  and  authorized  representatives  of each other for any loss or
damage that is covered by any policy of property insurance  maintained by either
party (or required by this Lease to be maintained)  with respect to the Premises
or the  Property  or any  operation  therein,  regardless  of  cause,  including
negligence  (active or passive) of the party benefiting from the waiver.  If any
such  policy of  insurance  relating  to this  Lease or to the  Premises  or the
Property does not permit the foregoing  waiver or if the coverage under any such
policy would be  invalidated as a result of such waiver,  the party  maintaining
such policy  shall  obtain  from the  insurer  under such policy a waiver of all
right of recovery by way of subrogation  against either party in connection with
any claim, loss or damage covered by such policy.

12. DAMAGE OR DESTRUCTION.

         12.1 Landlord's Duty to Repair.

                  (a) If all or  any  part  of  either  Building  in  which  the
Premises is located are rendered  untenantable  or inaccessible by damage to all
or any part of the Property  from fire or other  casualty  then,  unless  either
party is entitled  to and elects to  terminate  this Lease  pursuant to Sections
12.2 - Landlord's  Right to Terminate  and 12.3 - Tenant's  Right to  Terminate,
Landlord shall, at its expense, use reasonable efforts to repair and restore the
Premises and/or the Property,  as the case may be, to substantially their former
condition to the extent  permitted by then  applicable  Laws,  provided that any
changes to the Premises and/or  Property  required by then applicable Law do not
materially,  adversely  affect  Tenant's  use  and  occupancy  of the  Premises;
provided,  however, in no event shall

                                      -18-
<PAGE>
Landlord  have any  obligation  for repair or  restoration  for any of  Tenant's
personal property, Trade Fixtures or Alterations.

                  (b) If Landlord is required or elects to repair  damage to the
Premises and/or the Property,  this Lease shall continue in effect, but Tenant's
Base Rent and Additional  Rent shall be abated with regard to any portion of the
Premises  that  Tenant is  prevented  from using by reason of such damage or its
repair from the date of the casualty until substantial  completion of Landlord's
repair of the affected  portion of the Premises as required under this Lease. If
this Lease is terminated  following any fire or other  casualty  pursuant to the
provision of this Section 12, then Tenant's Base Rent and Additional  Rent shall
be abated  from and after the date of such fire or other  casualty.  In no event
shall  Landlord  be liable to Tenant by reason of any injury to or  interference
with  Tenant's  business or property  arising from fire or other  casualty or by
reason of any repairs to any part of the Property necessitated by such casualty.

         12.2  Landlord's  Right to  Terminate.  Landlord may elect to terminate
this  Lease  following  damage by fire or other  casualty  under  the  following
circumstances:

                  (a) If, in the reasonable  judgment of Landlord,  that portion
of the Property which has been damaged, and the Premises cannot be substantially
repaired and restored under applicable Laws within one (1) year from the date of
Landlord's Casualty Election Notice (as hereinafter defined);

                  (b) If,  in the  reasonable  judgment  of  Landlord,  adequate
proceeds are not, for any reason (other than Landlord's  failure to maintain the
"all risk" insurance required under Section 11.2 of this Lease),  made available
to Landlord from Landlord's  insurance  policies  (and/or from Landlord's  funds
made  available  for  such  purpose,  it being  agreed  that  Landlord  shall be
obligated to contribute the difference,  not to exceed $250,000.00,  between the
amount of the proceeds  made  available to Landlord  from  Landlord's  insurance
policies and the cost to make the required repairs) to make the required repairs
and Landlord notifies Tenant in writing that Landlord has elected not to restore
the Premises but instead intends to either (x) demolish the Premises without the
intent to restore it to  substantially  its original  condition  within nine (9)
months after such demolition,  or (y) replace the Premises with a materially and
substantially different structure;  provided,  however,  Landlord shall not have
the right to terminate this Lease pursuant to the provisions of this  Subsection
(b) if Landlord  restores or repairs the Premises  within one (1) year following
the date of any such  fire or other  casualty.  In  determining  whether  or not
adequate proceeds are available to Landlord,  the following funds shall be taken
into account:  (i) proceeds from Landlord's insurance policies actually received
by  Landlord,  (ii) any  additional  funds  Landlord  makes  available  for such
purpose,  which funds  shall be not less than  $250,000.00  (provided,  Landlord
shall not be required to  contribute  more than  $250,000.00  out of  Landlord's
funds to make the required  repairs  arising  from any fire or other  casualty),
(iii) any funds  Tenant  elects to make  available  for such purpose at Tenant's
sole option  (which  option  Tenant may  exercise by written  notice to Landlord
within thirty (30) days after Landlord  notifies  Tenant that Landlord elects to
terminate  the Lease under this  subsection)  and (iv) any payments of Operating
Expenses which relate to insurance  deductibles  paid by Tenant in the 12 months
following the casualty;

                  (c) If either  Building  in which the  Premises  is located is
damaged  or  destroyed  during  the last two (2) years of the Term to the extent
that,  in the  reasonable  judgment of Landlord,  the cost to repair and restore
such Building would exceed  seventy-five  percent (75%) of the full  replacement
cost of such Building;  provided,  however, that Landlord may not terminate this
Lease pursuant to this Subsection (c) if (i) Tenant has any remaining  Extension
Option and (ii)  within  thirty (30) days after the date  Tenant  receives  from
Landlord written notification  terminating this Lease pursuant to the provisions
of this subsection (c),  Tenant delivers to Landlord  written notice  exercising
such Extension Option ("Tenant's  Termination Override") at the Fair Market Base
Rental to be  determined at the time of Tenant's  Termination  Override (and for
the purposes of this  subsection (c) the  restrictions  on the time within which
Tenant must exercise such Extension Option are hereby waived); or

                  (d) If the fire or other casualty  occurs during the last year
of the Term, and the repairs and  restoration  would either (i) take longer than
ninety (90) days to complete  following the date of the fire or other  casualty,
or (ii) would not be completed at least ninety (90) days prior to the expiration
of the Term.

If any of the circumstances  described in subparagraphs  (a), (b), (c) or (d) of
this Section 12.2 occur or arise, Landlord shall give Tenant notice ("Landlord's
Casualty  Election  Notice")  within one hundred and twenty (120)

                                      -19-
<PAGE>
days  after the date of the  casualty,  specifying  whether  Landlord  elects to
terminate this Lease as provided above and, if not,  Landlord's  estimate of the
time required to complete Landlord's repair obligations under this Lease.

         12.3 Tenant's Right to Terminate.  If all or a substantial  part of the
Premises are rendered  untenantable or inaccessible by damage to all or any part
of the Property  from fire or other  casualty,  and  Landlord  does not elect to
terminate as provided  above,  then Tenant may elect to terminate  this Lease if
(a)  Landlord's  estimate of the time  required to  complete  Landlord's  repair
obligations  under  this  Lease is  greater  than one (1) year  from the date of
Landlord's  Casualty  Election  Notice,  in  which  event  Tenant  may  elect to
terminate  this Lease by giving  Landlord  notice of such  election to terminate
within thirty (30) days after the date of Landlord's  Casualty  Election Notice,
or (b) Landlord  (x) does not restore the  Premises and the Property  within one
(1) year  following  date of Landlord's  Casualty  Election  Notice,  and (y) in
addition,  after the  expiration of such one (1) year period,  does not complete
Landlord's repair obligations under this Lease within forty-five (45) days after
Landlord's  receipt  of written  demand  from  Tenant to  complete  such  repair
obligations,  or (c) the fire or other  casualty  occurs during the last year of
the Term,  and would  either (i) take  longer  than ninety (90) days to complete
following the date of the fire or other casualty, or (ii) would not be completed
at least ninety (90) days prior to the  expiration of the Term,  then Tenant may
elect  to  terminate  this  Lease  during  the last  year of the Term by  giving
Landlord  written  notice of such election to terminate  within thirty (30) days
following the  determination  of the time to repair or restore the Premises.  In
addition,  if, following any fire or other casualty, any changes to the Premises
and/or Property  required by then applicable Law  materially,  adversely  affect
Tenant's use and occupancy of the Premises,  then Tenant shall have the right to
terminate this Lease by written notice  received by Landlord  within thirty (30)
days after Landlord  notifies  Tenant of such changes (and Landlord shall not be
obligated,  to the extent otherwise  required under this Section 12, to commence
repair and restoration of the  Premises/and or the Building until the earlier of
the date Tenant's  right to terminate  this Lease  pursuant to the provisions of
this sentence expires, or Landlord receives a written waiver of such termination
right signed by Tenant).

         12.4 Waiver.  Landlord and Tenant each hereby waive the  provisions  of
California  Civil  Code  Sections  1932(2),  1933(4)  and any  other  applicable
existing or future Law  permitting the  termination of a lease  agreement in the
event of damage or destruction under any circumstances other than as provided in
Sections  12.2 -  Landlord's  Right to  Terminate  and 12.3 - Tenant's  Right to
Terminate.

13. CONDEMNATION.

         13.1 Definitions.

                  (a) "Award" shall mean all compensation,  sums, or anything of
value awarded, paid or received on a total or partial Condemnation.

                  (b)  "Condemnation"  shall mean (i) a  permanent  taking (or a
temporary  taking for a period extending beyond the end of the Term) pursuant to
the  exercise of the power of  condemnation  or eminent  domain by any public or
quasi-public  authority,  private  corporation  or individual  having such power
("Condemnor"),  whether by legal  proceedings or otherwise,  or (ii) a voluntary
sale or  transfer  by Landlord to any such  authority,  either  under  threat of
condemnation or while legal proceedings for condemnation are pending.

                  (c) "Date of Condemnation"  shall mean the earlier of the date
that  title to the  property  taken is vested in the  Condemnor  or the date the
Condemnor has the right to possession of the property being condemned.

         13.2 Effect on Lease.

                  (a) If the Premises are totally  taken by  Condemnation,  this
Lease shall terminate as of the Date of  Condemnation.  If a portion but not all
of the  Premises is taken by  Condemnation,  this Lease shall  remain in effect;
provided,  however,  that if the  portion of the  Premises  remaining  after the
Condemnation will be unsuitable for Tenant's  continued use, then upon notice to
Landlord  within  thirty  (30)  days  after  Landlord  notifies  Tenant  of  the
Condemnation,  Tenant  may  terminate  this  Lease  effective  as of the Date of
Condemnation.  If (i)  the  private  road  serving  the  Premises  is  taken  by
Condemnation,  (ii) Landlord does not provide an alternative  means of access to
the Premises upon such taking,  and (iii) the Premises  will be  unsuitable  for
Tenant's  continued  use,  then upon notice to Landlord  within thirty (30) days
after Landlord  notifies Tenant of the  Condemnation,  Tenant may terminate this
Lease effective as of the Date of Condemnation.

                                      -20-
<PAGE>
                  (b) If twenty-five  percent (25%) or more of the Project or of
the  parcel(s)  of land on which the  Buildings  are  situated or of the Parking
Facility or of the floor area in the Building or Buildings then leased by Tenant
is taken by Condemnation,  Landlord may elect to terminate this Lease, effective
as of the Date of  Condemnation,  by notice to Tenant  within  thirty  (30) days
after the Date of Condemnation.

                  (c) If all or a portion of the Premises is  temporarily  taken
by a Condemnor for a period greater than twelve (12)  consecutive  months,  then
Tenant  shall  have the  right to  terminate  this  Lease by  written  notice to
Landlord within twenty (20) days following  either (i) notice from the Condemnor
that the  temporary  taking  will be for a  period  in  excess  of  twelve  (12)
consecutive months, or (ii) the expiration of such twelve (12) consecutive month
period;  and for any other temporary taking, not extending beyond the end of the
Term, this Lease shall remain in full force and effect.

         13.3  Restoration.  If this  Lease is not  terminated  as  provided  in
Section  13.2 - Effect on Lease,  Landlord,  at its  expense,  shall  diligently
proceed to repair and restore the Project to substantially  its former condition
(to the extent  permitted by then applicable Laws) and/or repair and restore the
Building  or  Buildings  then  leased by Tenant to an  architecturally  complete
office building; provided, however, that Landlord's obligations to so repair and
restore shall be limited to the amount of any Award received by Landlord and not
required to be paid to any Mortgagee  (as defined in Section 20.2 below).  In no
event shall Landlord have any  obligation to repair or replace any  improvements
in the  Premises  beyond the amount of any Award  received by Landlord  for such
repair  or to  repair  or  replace  any of  Tenant's  personal  property,  Trade
Fixtures,  or Alterations.  Notwithstanding  the foregoing,  if (i) the Premises
and/or Project cannot be restored to substantially  their former condition under
the then  applicable  Laws,  or (ii)  Landlord  has not  received an Award in an
amount  sufficient to complete the  necessary  restoration  work,  then Landlord
shall notify Tenant as soon as is reasonably  practicable  learning of either of
such  conditions,  and Tenant  shall have the right to  terminate  this Lease by
notice to Landlord  within  thirty  (30) days after  receipt of such notice from
Landlord.

         13.4 Abatement and Reduction of Rent. If any portion of the Premises is
taken in a  Condemnation  or is  rendered  permanently  untenantable  by repairs
necessitated by the  Condemnation,  and this Lease is not  terminated,  the Base
Rent and  Additional  Rent  payable  under  this Lease  shall be  proportionally
reduced as of the Date of  Condemnation  based upon the  percentage  of rentable
square feet in the Premises so taken or rendered  permanently  untenantable.  In
addition,  if this Lease remains in effect following a Condemnation and Landlord
proceeds to repair and restore the Premises,  the Base Rent and Additional  Rent
payable  under this Lease  shall be abated  during the period of such  repair or
restoration to the extent such repairs prevent Tenant's use of the Premises.

         13.5  Awards.  Any Award  made  shall be paid to  Landlord,  and Tenant
hereby  assigns to  Landlord,  and waives all  interest in or claim to, any such
Award,  including  any  claim  for the value of the  unexpired  Term;  provided,
however,  that Tenant  shall be entitled to receive,  or to prosecute a separate
claim for, an Award for a temporary  taking of the Premises or a portion thereof
by a  Condemnor  where this Lease is not  terminated  (to the extent  such Award
relates  to the  unexpired  Term),  or an Award or  portion  thereof  separately
designated for relocation and moving  expenses or the  interruption of or damage
to Tenant's  business,  or loss of  goodwill,  or as  compensation  for Tenant's
personal property, Trade Fixtures or Alterations.

         13.6 Waiver.  Landlord and Tenant each hereby waive the  provisions  of
California Code of Civil  Procedure  Section  1265.130 and any other  applicable
existing or future Law allowing  either party to petition for a  termination  of
this Lease upon a partial taking of the Premises and/or the Property.

14. ASSIGNMENT AND SUBLETTING.

         14.1 Landlord's Consent Required. Tenant shall not assign this Lease or
any interest therein, or sublet or license or permit the use or occupancy of the
Premises or any part  thereof by or for the benefit of anyone other than Tenant,
or in any other manner transfer all or any part of Tenant's  interest under this
Lease (each and all a "Transfer"  and the transferee in any transfer is referred
to herein as a  "Transferee"),  without the prior  written  consent of Landlord,
which consent  (subject to the other provisions of this Section 14) shall not be
unreasonably  withheld.  Notwithstanding  any  provision  in this  Lease  to the
contrary, Tenant shall not mortgage,  pledge,  hypothecate or otherwise encumber
this Lease or all or any part of Tenant's  interest  under this Lease.  The term
"Transfer" shall include any direct or indirect  transfer of ownership  interest
of  the  entity,   whether  in  one  transaction

                                      -21-
<PAGE>
or in a series of related transactions, that results in any person or entity (or
group of related persons or entities) becoming the owners of fifty percent (50%)
or more of the  ownership  interests  of the  entity (a  "Change  of  Control");
provided, however, that none of the following shall constitute a Transfer, or be
considered in determining  whether or not a Change of Control has occurred:  (i)
any transfer of stock in a  corporation  that is the Tenant if the stock of such
corporation is publicly held and traded through an exchange or over the counter;
(ii) if Tenant is a corporation,  any public or private  placements or offerings
of Tenant's  stock,  including any initial  public  offering of such stock;  and
(iii) the issuance of warrants or stock options to purchase  Tenant's stock, and
the exercise of purchase rights under any such warrants or stock options.

         14.2.Reasonable Consent.

                  (a) Prior to any  proposed  Transfer,  Tenant  shall submit in
writing to Landlord (i) the name and legal composition of the proposed assignee,
subtenant,  user or other  transferee (each a "Proposed  Transferee");  (ii) the
nature of the  business  proposed  to be  carried  on in the  Premises;  (iii) a
current balance sheet,  income  statements for the last two years and such other
reasonable financial and other information concerning the Proposed Transferee as
Landlord may request;  and (iv) a copy of the proposed  assignment,  sublease or
other agreement  governing the proposed  Transfer.  Within fifteen (15) Business
Days after Landlord receives all such information it shall notify Tenant whether
it  approves  or  disapproves  such  Transfer  or if it elects to proceed  under
Section 14.7 - Landlord's Right to Space.

                  (b)  Tenant   acknowledges   and  agrees  that,   among  other
circumstances for which Landlord could reasonably withhold consent to a proposed
Transfer,  it shall be reasonable for Landlord to withhold consent where (i) the
Proposed  Transferee  does not intend itself to occupy the entire portion of the
Premises  assigned  or  sublet,  (ii)  Landlord  reasonably  disapproves  of the
Proposed  Transferee's  business  operating  ability or history,  reputation  or
creditworthiness  or  the  character  of the  business  to be  conducted  by the
Proposed  Transferee  at  the  Project,  (iii)  the  Proposed  Transferee  is  a
governmental  agency  or unit or an  existing  tenant  in the  Project,  or (iv)
Landlord  otherwise  determines that the proposed Transfer would have the effect
of materially  decreasing the value of the Project or materially  increasing the
expenses associated with operating, maintaining and repairing the Project.

         14.3 Excess Consideration. If Landlord consents to the Transfer, Tenant
shall pay to Landlord,  as Additional Rent, fifty percent (50%) of all "Sublease
Profits" (as defined  below) within  thirty (30) days after Tenant  receives any
such Sublease Profits.  "Sublease  Profits" shall mean any consideration paid by
the  Transferee  for the  assignment or sublease and, in the case of a sublease,
the excess of the rent and other consideration payable by the subtenant over the
amount of Base Rent and  Additional  Rent payable  hereunder  applicable  to the
subleased  space,  less  any and all  direct,  out-of-pocket  expenses  and cash
concessions,  including costs for necessary  Alterations,  reasonable attorneys'
fees and  brokerage  commission,  paid by  Tenant to  procure  the  assignee  or
subtenant.

14.4 No Release Of Tenant.  No consent by Landlord to any Transfer shall relieve
Tenant of any  obligation  to be performed  by Tenant under this Lease,  whether
occurring  before  or  after  such  consent,  assignment,  subletting  or  other
Transfer. Each Transferee shall be jointly and severally liable with Tenant (and
Tenant  shall be jointly  and  severally  liable with each  Transferee)  for the
payment of rent (or, in the case of a sublease,  rent in the amount set forth in
the sublease) and for the  performance of all other terms and provisions of this
Lease.  The consent by Landlord to any Transfer  shall not relieve Tenant or any
such Transferee from the obligation to obtain  Landlord's  express prior written
consent to any subsequent  Transfer by Tenant or any Transferee.  The acceptance
of rent by  Landlord  from any other  person  (whether  or not such person is an
occupant of the Premises)  shall not be deemed to be a waiver by Landlord of any
provision of this Lease or to be a consent to any  Transfer.  If, in  connection
with any such Transfer,  Tenant gives Landlord a written request for Landlord to
provide an estoppel certificate,  then Landlord agrees to use reasonable efforts
to provide to the Transferee a certificate  stating whether or not this Lease is
in full force and effect, describing any amendments or modifications hereto, the
Term, the monthly Base Rent, the date to which Rent has been paid, the amount of
any  security  deposit or  prepaid  rent,  and  whether  Landlord  in good faith
believes to be true to the best of its knowledge  that either party hereto is in
default under the terms of the Lease.

         14.5  Expenses  and  Attorneys'  Fees.  Tenant shall pay to Landlord on
demand  all  costs  and  expenses  (including  reasonable  attorneys'  fees  for
Landlord's  consent to a  Transfer)  incurred by  Landlord  in  connection  with
reviewing or  consenting  to any proposed  Transfer  (including  any request for
consent to, or any waiver of Landlord's  rights in connection with, any security
interest in any of Tenant's property at the Premises).

                                      -22-
<PAGE>
         14.6  Effectiveness  of  Transfer.  Prior  to the  date  on  which  any
permitted  Transfer  (whether  or  not  requiring  Landlord's  consent)  becomes
effective,  Tenant shall deliver to Landlord a counterpart of the fully executed
Transfer  document and  Landlord's  standard  form of Consent to  Assignment  or
(attached  hereto as  Exhibit  G) or Consent  to  Sublease  (attached  hereto as
Exhibit H) executed by Tenant and the Transferee in which each of Tenant and the
Transferee confirms its obligations  pursuant to this Lease.  Failure or refusal
of a Transferee  to execute any such  instrument  shall not release or discharge
the Transferee from liability as provided herein. The voluntary,  involuntary or
other  surrender of this Lease by Tenant,  or a mutual  cancellation by Landlord
and Tenant,  shall not work a merger,  and any such  surrender  or  cancellation
shall, at the option of Landlord, either terminate all or any existing subleases
or operate as an assignment to Landlord of any or all of such subleases.

         14.7  Landlord's  Right  to  Space.  Notwithstanding  any of the  above
provisions of this Section to the contrary,  if Tenant notifies Landlord that it
desires  to enter  into a  Transfer,  Landlord,  in lieu of  consenting  to such
Transfer, may elect (x) in the case of an assignment or a sublease of the entire
Premises,  to  terminate  this  Lease,  or (y) in the case of a  sublease  which
cumulatively  results in Tenant  subleasing at any given time (whether to one or
more entities other than an Affiliate) one hundred  percent (100%) of one of the
Buildings  for a term which  expires  less than twelve (12) months  prior to the
scheduled  Expiration  Date of this Lease, to terminate this Lease as it relates
to the space proposed to be subleased by Tenant.  In such event, this Lease will
terminate  (or the space  proposed  to be  subleased  will be  removed  from the
Premises  subject to this Lease and the Base Rent and Tenant's  Share under this
Lease shall be proportionately  reduced) on the earlier of sixty (60) days after
the date of  Landlord's  notice to Tenant  making the election set forth in this
Section 14.7 or the date the Transfer was proposed to be effective, and Landlord
may  lease  such  space  to any  party,  including  the  prospective  Transferee
identified by Tenant.

         14.8  Assignment  of  Sublease  Rents.  Tenant  hereby  absolutely  and
irrevocably  assigns to  Landlord  any and all rights to receive  rent and other
consideration from any sublease and agrees that Landlord, as assignee for Tenant
for  purposes  hereof,   or  a  receiver  for  Tenant  appointed  on  Landlord's
application  may (but shall not be  obligated  to) collect  such rents and other
consideration  and apply the same toward Tenant's  obligations to Landlord under
this Lease; provided, however, that Landlord grants to Tenant at all times prior
to occurrence of any breach or default by Tenant a revocable  license to collect
such rents  (which  license  shall  automatically  and without  notice be and be
deemed  to have  been  revoked  and  terminated  immediately  upon any  Event of
Default).

         14.9 Transfer to Affiliate.  Notwithstanding any provision contained in
the Section 14 to the contrary, Tenant shall have the right, without the consent
of Landlord,  upon ten (10) days prior written  notice to Landlord,  to transfer
Tenant's interest in this Lease to an "Affiliate" of Tenant,  and the provisions
of Sections 14.2,  14.3 and 14.7 shall not apply with respect to the transfer to
the Affiliate,  but the transfer to the Affiliate  shall be subject to all other
terms and  conditions of this Lease,  including  the  provisions of this Section
14.9.  Tenant shall remain liable under this Lease after any such transfer.  For
the purposes of this Article 14, the term  "Affiliate"  of Tenant shall mean and
refer to (i) any entity controlling,  controlled by or under common control with
Tenant or Tenant's  parent,  as the case may be,  (ii) a  successor  corporation
resulting  from a merger,  consolidation,  or  nonbankruptcy  reorganization  by
Tenant, or (iii) a purchaser of at least ninety percent (90%) of Tenant's assets
located in the  Premises.  "Control" as used herein  shall mean the  possession,
direct  or  indirect,  of the power to  direct  or cause  the  direction  of the
management  and  policies  of such  controlled  entity;  and the  ownership,  or
possession of the right to vote, in the ordinary direction of its affairs, of at
least fifty percent (50%) of the voting interest in any entity.

15. DEFAULT AND REMEDIES.

         15.1 Events of Default.  The  occurrence of any of the following  shall
constitute an "Event of Default" by Tenant:

                  (a) Tenant  fails to make any payment of rent when due, or any
amount  required  to  replenish  the  security  deposit as provided in Section 4
above,  if payment in full is not  received  by Landlord  within  three (3) days
after written notice that it is due.

                  (b) Tenant abandons the Premises.

                  (c)  Tenant  fails  to  deliver  any  subordination  document,
estoppel  certificate or financial  statement  requested by Landlord  within ten
(10) days  after a second  (2nd)  notice  given  from  Landlord,  following  the

                                      -23-
<PAGE>
applicable  time period with respect to a first (1st) notice from  Landlord,  as
specified in Sections 20 -  Encumbrances  - and 21 - Estoppel  Certificates  and
Financial Statements - below.

                  (d) Tenant violates the  restrictions on Transfer set forth in
Section 14 - Assignment and Subletting.

                  (e) Tenant ceases doing business as a going concern;  makes an
assignment for the benefit of creditors;  is  adjudicated an insolvent,  files a
petition (or files an answer  admitting the material  allegations of a petition)
seeking relief under any state or federal  bankruptcy or other  statute,  law or
regulation  affecting  creditors'  rights;  all or substantially all of Tenant's
assets are subject to judicial seizure or attachment and are not released within
30 days, or Tenant  consents to or acquiesces in the  appointment  of a trustee,
receiver or liquidator for Tenant or for all or any substantial part of Tenant's
assets.

                  (f)  Tenant   fails,   within   ninety  (90)  days  after  the
commencement of any proceedings against Tenant seeking relief under any state or
federal  bankruptcy or other  statute,  law or regulation  affecting  creditors'
rights, to have such proceedings dismissed,  or Tenant fails, within ninety (90)
days after an appointment,  without  Tenant's  consent or  acquiescence,  of any
trustee, receiver or liquidator for Tenant or for all or any substantial part of
Tenant's assets, to have such appointment vacated.

                  (g) Tenant  fails to perform or comply with any  provision  of
this Lease other than those  described  in (a)  through (f) above,  and does not
fully cure such  failure  within  thirty (30) days after notice to Tenant or, if
such failure cannot be cured within such thirty  (30)-day  period,  Tenant fails
within such thirty  (30)-day period to commence,  and thereafter  diligently and
continuously proceeds with all actions necessary to cure such failure as soon as
reasonably  possible but in all events  within  ninety (90) days of such notice,
provided,  however if such failure, by its nature, is not capable of being cured
within such ninety (90) day period,  then Tenant shall have such additional time
to cure such failure so long as Tenant is diligently and continuously proceeding
with all actions necessary to cure such failure as soon as reasonably possible.

         15.2  Remedies.  Upon the  occurrence of an Event of Default,  Landlord
shall have the  following  remedies,  which shall not be exclusive  but shall be
cumulative  and shall be in  addition  to any other  remedies  now or  hereafter
allowed by law:

                  (a) Landlord may terminate Tenant's right to possession of the
Premises at any time by written notice to Tenant. Tenant expressly  acknowledges
that in the  absence  of such  written  notice  from  Landlord,  no other act of
Landlord,  including re-entry into the Premises,  efforts to relet the Premises,
reletting of the Premises for  Tenant's  account,  storage of Tenant's  personal
property and Trade  Fixtures,  acceptance of keys to the Premises from Tenant or
exercise of any other rights and remedies under this Section,  shall  constitute
an acceptance of Tenant's  surrender of the Premises or constitute a termination
of this Lease or of Tenant's  right to  possession  of the  Premises.  Upon such
termination  in writing of Tenant's  right to  possession  of the  Premises,  as
herein  provided,  this Lease shall  terminate and Landlord shall be entitled to
recover damages from Tenant as provided in California  Civil Code Section 1951.2
and any other  applicable  existing  or future Law  providing  for  recovery  of
damages for such breach,  including the worth at the time of award of the amount
by which the rent which would be payable by Tenant  hereunder  for the remainder
of the Term after the date of the award of damages, including Additional Rent as
reasonably  estimated  by  Landlord,  exceeds  the amount of such rental loss as
Tenant  proves could have been  reasonably  avoided,  discounted at the discount
rate published by the Federal  Reserve Bank of San Francisco for member banks at
the time of the award plus one percent (1%).

                  (b) Landlord  shall have the remedy  described  in  California
Civil Code Section  1951.4  (Landlord  may  continue  this Lease in effect after
Tenant's  breach and  abandonment  and recover rent as it becomes due, if Tenant
has the right to sublet or assign, subject only to reasonable limitations).

                  (c)  Landlord  may  cure  the  Event of  Default  at  Tenant's
expense.  If Landlord  pays any sum or incurs any expense in curing the Event of
Default,  Tenant  shall  reimburse  Landlord  upon demand for the amount of such
payment or expense with  interest at the Interest  Rate from the date the sum is
paid or the expense is incurred until Landlord is reimbursed by Tenant.

                                      -24-
<PAGE>
                  (d)  Landlord  may  remove  all  Tenant's  property  from  the
Premises,  and such property may be stored by Landlord in a public  warehouse or
elsewhere at the sole cost and for the account of Tenant.  If Landlord  does not
elect to store any or all of Tenant's  property left in the  Premises,  Landlord
may consider such property to be abandoned by Tenant, and Landlord may thereupon
dispose of such  property  in any  manner  deemed  appropriate  by  Landlord  in
accordance  with  applicable  Law.  Any  proceeds  realized  by  Landlord on the
disposal of any such  property  shall be applied first to offset all expenses of
storage and sale,  then credited  against  Tenant's  outstanding  obligations to
Landlord under this Lease, and any balance  remaining after  satisfaction of all
obligations of Tenant under this Lease shall be delivered to Tenant.

         15.3 Events of Default by Landlord.  It shall  constitute  an "Event of
Default"  by  Landlord  if (a)  Landlord  fails to  perform  or comply  with the
provisions  of  Section  7.2 of this  Lease,  (b) such  failure  materially  and
adversely  affects Tenant's use and occupancy of the Premises,  and (c) Landlord
does not fully cure such failure  within thirty (30) days after  written  notice
("Notice of  Self-Help")  thereof  from  Tenant to Landlord  (with a copy of the
Notice of Self-Help being  simultaneously given by Tenant to any Mortgagee whose
address has been provided to Tenant), or, if such failure cannot be cured within
such thirty (30) day period,  Landlord  fails within such thirty (30) day period
to commence,  and thereafter  diligently  proceed with,  all actions  reasonably
necessary  to cure  such  failure  as  soon as  reasonably  possible;  it  being
understood  that if Landlord has a valid  warranty  claim against the contractor
who  originally  constructed  the part of the  Building  which  is the  cause of
Landlord's  failure to perform or comply with the  provisions  of Section 7.2 of
this Lease,  then Landlord  shall have such time as is  reasonably  necessary to
enforce such warranty claim.  Tenant's Notice of Self-Help must specifically and
comprehensively identify that which Tenant claims Landlord is failing to perform
or to comply with under  Section  7.2 of this Lease,  and must state that Tenant
intends to take such self-help  action  pursuant to Section 15.4 of the Lease if
Landlord  fails to take action within the time  contained in Section 15.3 of the
Lease.  Subject to the foregoing,  Landlord agrees to make reasonable efforts to
promptly commence and diligently proceed with all actions  reasonably  necessary
to cure any Landlord Event of Default within a reasonable time following receipt
of any Notice of Self-Help.

         15.4 Tenant's  Remedies for Default by Landlord.  The following  rights
set forth in this Section  15.4 shall not be  available to any  sublessee of the
Premises,  or any portion thereof. Upon the occurrence of an Event of Default by
Landlord,  Tenant may, in addition to any rights at law or in equity, which have
not been otherwise  waived or released by Tenant under this Lease,  perform such
work as is reasonably  necessary to cure Landlord's failure to perform or comply
with the  provisions  of Section  7.2 of this Lease if (a)  Tenant  delivers  to
Landlord a second notice ("Tenant's Cure  Commencement  Notice") (with a copy of
Tenant's Cure Commencement  Notice being  simultaneously  given by Tenant to any
Mortgagee  whose  address has been provided to Tenant),  advising  Landlord that
Tenant  intends to take the  required  action if Landlord  does not complete the
repair required of Landlord under Section 7.2 of this Lease within ten (10) days
after Tenant's Cure Commencement  Notice, and (b) Landlord fails to complete the
required work within said ten (10) day period; provided, that for those failures
which cannot be cured within thirty (30) days following any Notice of Self Help,
Tenant shall not have the right to give any Cure Commencement  Notice so long as
Landlord has commenced  curing such failure  within such thirty (30) day period,
and is diligently  proceeding with all actions reasonably necessary to cure such
failure as soon as reasonably possible.  Tenant's Cure Commencement Notice shall
specify in reasonable  detail what work Tenant intends to do, or to be caused to
be done,  with the  estimated  cost  thereof  from  the  contractor  who will be
performing  such work.  In  performing  any such work under this  Section  15.4,
Tenant shall use only the services of qualified, licensed and insured commercial
contractors,  who have experience  working on properties similar to the Project,
and whose  quality of work is at least as good as the  quality  of the  original
work in the  Project.  All work done in  accordance  with this  Section  must be
performed at a reasonable and  competitive  cost. If Landlord does not reimburse
Tenant for the reasonable costs,  plus interest,  incurred by Tenant pursuant to
the provisions of this Section within thirty (30) days after Tenant  delivers to
Landlord written demand for payment along with a reasonably  detailed  breakdown
of such costs (including lien waivers from the contractor and all subcontractors
and suppliers  relating to such work), then either party shall have the right to
submit to arbitration  pursuant to the provisions of Section 33 hereinbelow  (a)
the necessity of the service,  repair or  compliance,  (b) whether  Landlord was
obligated to perform the service,  repair or compliance,  and did not do so, and
(c) whether the self-help costs incurred by Tenant were reasonable.

16. LATE CHARGE AND INTEREST.

         16.1 Late  Charge.  If any payment of rent is not  received by Landlord
when due,  Tenant  shall pay to  Landlord  on  demand  as a late  charge  ("Late
Charge") an additional amount equal to four percent (4%) of the

                                      -25-
<PAGE>
overdue payment. Notwithstanding the foregoing, Tenant shall not be obligated to
pay a Late Charge on the first payment of rent not received by Landlord when due
in any consecutive twelve (12) month period unless Tenant does not pay such rent
within five (5) days after written  notice from Landlord (the "Past Due Notice")
that such  payment  of rent is past  due.  Tenant  shall pay the Late  Charge to
Landlord  on demand  commencing  with the second  (2nd) past due  payment in any
twelve (12) month period,  and continuing with each past due payment  thereafter
in such twelve (12) month  period.  A Late Charge shall not be imposed more than
once on any particular  installment  not paid when due, but imposition of a Late
Charge on any payment not made when due does not  eliminate  or  supersede  late
charges  imposed  on  other  (prior)  payments  not made  when  due or  preclude
imposition of a late charge on other installments or payments not made when due.

         16.2 Interest. In addition to the late charges referred to above, which
are  intended to defray  Landlord's  costs  resulting  from late  payments,  any
payment  from Tenant to Landlord  not paid within five (5) days of the date when
due shall at  Landlord's  option bear  interest  from the date due until paid to
Landlord by Tenant at the rate of fifteen percent (15%) per annum or the maximum
lawful rate that Landlord may charge to Tenant under applicable laws,  whichever
is less (the  "Interest  Rate").  Acceptance of any late charge and/or  interest
shall not  constitute  a waiver of Tenant's  default with respect to the overdue
sum or prevent  Landlord  from  exercising  any of its other rights and remedies
under this Lease.

17.  WAIVER.  No provisions of this Lease shall be deemed waived by either party
unless such waiver is in a writing  signed by the waiving  party.  The waiver by
either party of any breach of any  provision of this Lease shall not be deemed a
waiver of such  provision or of any  subsequent  breach of the same or any other
provision  of this Lease.  No delay or omission in the  exercise of any right or
remedy of either  party upon any default by the other  party  shall  impair such
right or  remedy  or be  construed  as a waiver.  Landlord's  acceptance  of any
payments  of rent due  under  this  Lease  shall  not be  deemed a waiver of any
default by Tenant  under this Lease  (including  Tenant's  recurrent  failure to
timely pay rent) other than  Tenant's  nonpayment of the accepted  sums,  and no
endorsement or statement on any check or on any letter accompanying any check or
payment shall be deemed an accord and  satisfaction.  The consent to or approval
by  either  party of any act by the other  party  requiring  the  first  party's
consent  or  approval  shall not be deemed  to waive or render  unnecessary  the
consenting or approving  party's consent to or approval of any subsequent act by
the other party.

18. ENTRY,  INSPECTION AND CLOSURE.  Upon  reasonable  oral or written notice to
Tenant  (and  without  notice  in  emergencies),  Landlord  and  its  authorized
representatives may enter the Premises at all reasonable times to: (a) determine
whether the Premises are in good  condition,  (b)  determine  whether  Tenant is
complying with its obligations  under this Lease, (c) perform any maintenance or
repair of the Premises or the Building that Landlord has the right or obligation
to perform, (d) serve, post or keep posted any notices required or allowed under
the  provisions  of this Lease,  (e) show the Premises to  prospective  brokers,
agents,  buyers,  transferees,  or Mortgagees,  or (f) do any other act or thing
necessary for the safety or  preservation  of the Premises or the  Building.  In
addition,  upon prior oral or written notice to Tenant,  Landlord shall have the
right  during the last twelve (12) months of the Term,  to show the  Premises to
prospective  tenants.  When reasonably  necessary Landlord may temporarily close
entrances,  doors,  corridors,  elevators  or other  facilities  in the Building
without  liability to Tenant by reason of such closure.  Landlord  shall conduct
its activities  under this Section in a manner that will minimize  inconvenience
to Tenant without incurring  additional  expense to Landlord.  In no event shall
Tenant be entitled to an  abatement of rent on account of any entry by Landlord,
and Landlord  shall not be liable in any manner for any  inconvenience,  loss of
business or other damage to Tenant or other  persons  arising out of  Landlord's
entry on the  Premises in  accordance  with this  Section.  Notwithstanding  the
foregoing,  and in addition to any other  rights and  remedies  which Tenant may
have, if as a result of Landlord's gross negligence or wilful misconduct arising
out of Landlord's  entry into the Premises,  Tenant is prevented from reasonably
using any material portion of the Premises for a period of three (3) consecutive
Business  Days and Tenant in fact ceases to use such portion of the Premises for
three (3)  consecutive  Business  Days,  then  Tenant  shall be  entitled  to an
abatement  of Base Rent and  Additional  Rent with respect to the portion of the
Premises  that  Tenant is  prevented  from using by reason of  Landlord's  gross
negligence  or wilful  misconduct  in entering  the Premises  commencing  on the
fourth (4th)  Business Day following the occurrence of such entry and continuing
until Tenant is no longer prevented from using such portion of the Premises.  No
action by Landlord  pursuant to this paragraph  shall  constitute an eviction of
Tenant, constructive or otherwise,  entitle Tenant to an abatement of rent or to
terminate  this  Lease  or  otherwise   release  Tenant  from  any  of  Tenant's
obligations under this Lease.

                                      -26-
<PAGE>
19. SURRENDER AND HOLDING OVER.

         19.1  Surrender.  Upon the  expiration  or  termination  of this Lease,
Tenant shall surrender the Premises and all Tenant  Improvements and Alterations
to Landlord  broom-clean and in their original condition,  except for reasonable
wear and tear,  damage from casualty or condemnation  and any changes  resulting
from approved  Alterations;  provided,  however, that prior to the expiration or
termination  of this Lease Tenant shall remove all  telephone  and other cabling
located above and below  ceilings,  in chases and in risers and installed in the
Project by Tenant and remove from the Premises all  Tenant's  personal  property
and any Trade Fixtures and all Alterations  that Landlord has elected to require
Tenant to remove as provided in Section 6.1 - Tenant Improvements & Alterations,
and repair any damage caused by such  removal.  If such removal is not completed
before the expiration or termination of the Term,  Landlord shall have the right
(but no  obligation) to remove the same, and Tenant shall pay Landlord on demand
for all costs of removal and storage thereof. Landlord shall also have the right
to retain or dispose of all or any  portion of such  property if Tenant does not
pay all such costs and retrieve  the property  within ten (10) days after notice
from Landlord (in which event title to all such property described in Landlord's
notice shall be transferred  to and vest in Landlord).  Tenant waives all Claims
against  Landlord  for any damage or loss to Tenant  resulting  from  Landlord's
removal,  storage,   retention,  or  disposition  of  any  such  property.  Upon
expiration or termination of this Lease or of Tenant's possession,  whichever is
earliest,  Tenant shall  surrender all keys to the Premises or any other part of
the  Building  and  shall  deliver  to  Landlord  all keys for or make  known to
Landlord the combination of locks on all safes,  cabinets and vaults that may be
located in the Premises.  Tenant's  obligations under this Section shall survive
the expiration or termination of this Lease.

         19.2 Holding  Over.  If Tenant  (directly or through any  Transferee or
other  successor-in-interest  of Tenant)  remains in  possession of the Premises
after the expiration or termination of this Lease, Tenant's continued possession
shall be on the basis of a tenancy  at the  sufferance  of  Landlord.  No act or
omission by Landlord,  other than its specific written consent, shall constitute
permission  for Tenant to continue in possession  of the  Premises,  and if such
consent is given or  declared to have been given by a court  judgment,  Landlord
may terminate  Tenant's holdover tenancy at any time upon seven (7) days written
notice.  In such event,  Tenant shall continue to comply with or perform all the
terms and  obligations of Tenant under this Lease,  except that the monthly Base
Rent during  Tenant's  holding  over shall be one hundred  seventy-five  percent
(175%) of the Base Rent payable in the last full month prior to the  termination
hereof.  Acceptance  by  Landlord  of rent  after  such  termination  shall  not
constitute a renewal or extension of this Lease;  and nothing  contained in this
provision  shall be deemed to waive  Landlord's  right of  re-entry or any other
right  hereunder or at law.  Tenant shall  indemnify,  defend and hold  Landlord
harmless from and against all Claims arising or resulting directly or indirectly
from Tenant's failure to timely  surrender the Premises,  including (i) any rent
payable by or any loss,  cost, or damages claimed by any  prospective  tenant of
the Premises, and (ii) Landlord's damages as a result of such prospective tenant
rescinding  or refusing to enter into the  prospective  lease of the Premises by
reason of such failure to timely surrender the Premises.

20. ENCUMBRANCES.

         20.1   Subordination.   This  Lease  is  expressly   made  subject  and
subordinate to any mortgage,  deed of trust,  ground lease,  underlying lease or
like encumbrance  affecting any part of the Property or any interest of Landlord
therein which is now existing or hereafter executed or recorded ("Encumbrance");
provided, however, that such subordination shall only be effective, as to future
Encumbrances,  if the holder of the  Encumbrance  agrees  that this Lease  shall
survive the  termination  of the  Encumbrance  by lapse of time,  foreclosure or
otherwise  and such holder  agrees to  recognize  the rights of Tenant under the
Lease,  all so long as Tenant is not in  default  under  this  Lease  beyond any
applicable  notice and cure period.  Provided the  conditions  of the  preceding
sentence are satisfied, Tenant shall execute and deliver to Landlord, within ten
(10) days after written  request  therefor by Landlord and in a form  reasonably
requested by Landlord,  any additional documents evidencing the subordination of
this Lease with respect to any such Encumbrance and the nondisturbance agreement
of the  holder of any such  Encumbrance.  If the  interest  of  Landlord  in the
Project is transferred  pursuant to or in lieu of proceedings for enforcement of
any Encumbrance,  Tenant shall immediately and  automatically  attorn to the new
owner,  and this Lease shall continue in full force and effect as a direct lease
between the  transferee and Tenant on the terms and conditions set forth in this
Lease.  Landlord represents and warrants to Tenant that as of the Executed Lease
Delivery Date, there is no Encumbrance on Landlord's interest in the Property.

         20.2  Mortgagee  Protection.  Tenant  agrees to give any  holder of any
Encumbrance covering any part of the Project ("Mortgagee"),  by registered mail,
a copy of any notice of default  served upon  Landlord,  provided  that

                                      -27-
<PAGE>
prior to such  notice  Tenant has been  notified in writing (by way of notice of
assignment of rents and leases,  or otherwise) of the address of such Mortgagee.
If Landlord  shall have failed to cure such default within thirty (30) days from
the effective date of such notice of default,  then the Mortgagee  shall have an
additional thirty (30) days within which to cure such default or if such default
cannot be cured within that time,  then such additional time as may be necessary
to cure such  default  (including  the time  necessary to foreclose or otherwise
terminate  its  Encumbrance,  if necessary to effect such cure),  and this Lease
shall not be terminated so long as such remedies are being diligently pursued.

21. ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS.

         21.1 Estoppel Certificates.  Within ten (10) days after written request
therefor, Tenant shall execute and deliver to Landlord, in a form provided by or
satisfactory to Landlord, a certificate stating that this Lease is in full force
and effect,  describing any amendments or  modifications  hereto,  acknowledging
that this Lease is subordinate or prior,  as the case may be, to any Encumbrance
and stating any other information Landlord may reasonably request, including the
Term, the monthly Base Rent, the date to which Rent has been paid, the amount of
any security deposit or prepaid rent,  whether either party hereto is in default
under  the  terms  of  the  Lease,   and  whether  Landlord  has  completed  its
construction  obligations  hereunder (if any). If Tenant fails timely to execute
and deliver such certificate as provided above,  then Landlord and the addressee
of such certificate shall be entitled to rely upon the information  contained in
the certificate  submitted to Tenant as true,  correct and complete,  and Tenant
shall be  estopped  from later  denying,  contradicting  or taking any  position
inconsistent with the information  contained in such certificate.  Any person or
entity purchasing,  acquiring an interest in or extending financing with respect
to the Project  shall be entitled to rely upon any such  certificate.  If Tenant
fails to deliver such certificate  within ten (10) days after Landlord's  second
written  request  therefor,  Tenant  shall be liable to Landlord for any damages
incurred by Landlord  including any profits or other benefits from any financing
of the Project or any interest  therein which are lost or made  unavailable as a
result, directly or indirectly, of Tenant's failure or refusal to timely execute
or deliver such estoppel certificate.

         21.2 Financial Statements.

         (a) During Time  Guaranty is in Effect.  So long as the  Guaranty is in
effect,  and Tenant's  financial  statements  are  included in the  consolidated
financial  statements  of  Guarantor,  then  within ten (10) days after  written
request  therefor,  but not more  than  once a year,  Tenant  shall  deliver  to
Landlord a copy of the consolidated  financial statements  (including at least a
year end balance sheet and a statement of profit and loss) of Guarantor for each
of the  three  most  recently  completed  years,  prepared  in  accordance  with
generally  accepted  accounting  principles  (and,  if such is  Tenant's  normal
practice,  audited by an  independent  certified  public  accountant),  all then
available subsequent interim statements, and such other financial information as
may reasonably be requested by Landlord or required by any Mortgagee;  provided,
however,  so  long  as  Guarantor  is  a  publicly  traded  company,   then  the
requirements  of this  Section  21.2  (a)  shall be  satisfied  by  delivery  of
Guarantor's publicly available financial information.

         (b) During Time Following Termination of Guaranty. If (i) Guarantor has
terminated the Guaranty pursuant to the provisions of Section 42 hereinbelow, or
(ii) Tenant's financial statements are not included in Guarantor's  consolidated
financial statements, then within thirty (30) days after Landlord gives Tenant a
written  request  therefor  in  connection  with any (a)  financing  or proposed
financing  of the  Property  and/or  Project by  Landlord,  or (b) any sale,  or
proposed sale of the Property and/or Project by Landlord, but not more than once
a year,  Tenant  shall  deliver to Landlord a copy of the  financial  statements
(including at least a year end balance sheet and a statement of profit and loss)
of Tenant (and of each guarantor of Tenant's  obligations  under this Lease) for
each of the three most recently  completed  years,  prepared in accordance  with
generally  accepted  accounting  principles  (and,  if such is  Tenant's  normal
practice,  audited by an  independent  certified  public  accountant),  all then
available subsequent interim statements, and such other financial information as
may reasonably be requested by Landlord or required by any Mortgagee.

22. NOTICES. Any notice, demand, request,  consent or approval that either party
desires or is  required  to give to the other party under this Lease shall be in
writing and shall be delivered by messenger or courier service providing written
receipt of delivery,  or sent by U.S.  certified mail, return receipt requested,
postage prepaid, addressed to the other party, including the named addressee, at
the party's  address for notices,  as set forth in the Basic Lease  Information.
Any  notice  required  pursuant  to any Laws  may be  incorporated  into,  given
concurrently

                                      -28-
<PAGE>
with or given separately from any notice required under this Lease provided that
any notices  required  pursuant to any Laws must be served upon and delivered to
Tenant in accordance with the requirements of such Laws. Notices shall be deemed
to have been given and be effective on the earlier of (a) receipt (or refusal of
delivery  or  receipt);  or (b) one (1)  Business  Day after  acceptance  by the
independent  service for delivery,  if sent by independent  messenger or courier
service,  or three (3) Business Days after mailing if sent by mail in accordance
with this  Section.  Either party may change its address for notices  hereunder,
effective  fifteen (15) days after notice to the other party complying with this
Section.  If  Tenant  sublets  the  Premises,  notices  from  Landlord  shall be
effective on the subtenant when given to Tenant pursuant to this Section.

23.  ATTORNEYS' FEES. In the event of any dispute between Landlord and Tenant in
any way  related to this  Lease,  and  whether  involving  contract  and/or tort
claims,  the  non-prevailing  party  shall  pay  to  the  prevailing  party  all
reasonable  attorneys'  fees  and  costs  and  expenses  of  any  type,  without
restriction  by statute,  court rule or  otherwise,  incurred by the  prevailing
party in connection with any action or proceeding  (including any appeal and the
enforcement  of any judgment or award),  whether or not the dispute is litigated
or prosecuted to final judgment  (collectively,  "Fees"). The "prevailing party"
shall be determined based upon an assessment of which party's major arguments or
positions  taken  in the  action  or  proceeding  could  fairly  be said to have
prevailed (whether by compromise,  settlement, abandonment by the other party of
its claim or defense, final decision,  after any appeals, or otherwise) over the
other party's major  arguments or positions on major disputed  issues.  Any Fees
incurred in enforcing a judgment shall be recoverable  separately from any other
amount  included  in the  judgment  and shall  survive  and not be merged in the
judgment. The Fees shall be deemed an "actual pecuniary loss" within the meaning
of Bankruptcy Code Section 365(b)(1)(B),  and notwithstanding the foregoing, all
Fees  incurred by either  party in any  bankruptcy  case filed by or against the
other party, from and after the order for relief until this Lease is rejected or
assumed in such  bankruptcy  case,  will be  "obligations of the debtor" as that
phrase is used in Bankruptcy Code Section 365(d)(3).

24. QUIET POSSESSION.  Subject to Tenant's full and timely performance of all of
Tenant's  obligations  under this Lease and  subject to the terms of this Lease,
including  Section 20 - Encumbrances,  Tenant shall have the quiet possession of
the  Premises  throughout  the Term as against any persons or entities  lawfully
claiming by, through or under Landlord.

25. SECURITY MEASURES. Tenant shall be responsible for all security measures for
the  Premises,  such as the  registration  or search of all persons  entering or
leaving the  Buildings,  requiring  identification  for access to the Buildings,
evacuation of the Buildings for cause,  suspected  cause, or for drill purposes,
the  issuance of magnetic  pass cards or keys for the  Buildings  to prevent any
threat of  property  loss or damage,  bodily  injury or  business  interruption.
Landlord shall have no security  responsibility for the Premises or the Project.
Landlord,  its agents and  employees  shall have no  liability  to Tenant or its
Representatives  or  Visitors  for the  implementation  or  exercise  of, or the
failure to implement or exercise,  any security measures for the Premises or the
Project,  or for any resulting  disturbance  of Tenant's use or enjoyment of the
Premises.

26.  FORCE  MAJEURE.  If either  Landlord or Tenant is delayed,  interrupted  or
prevented from performing any of its  obligations  under this Lease (other than,
with  respect to Tenant the payment of Base Rent,  Additional  Rent or any other
charge  payable by Tenant to Landlord  under this Lease  commencing  on the Rent
Commencement  Date),  including  Landlord's  obligations  under the Construction
Rider and such delay,  interruption  or prevention  is due to fire,  act of God,
governmental act or failure to act, labor dispute,  unavailability  of materials
or any cause outside the reasonable control of Landlord or Tenant, then the time
for performance of the affected  obligations of Landlord or Tenant,  as the case
may be, shall be extended for a period  equivalent  to the period of such delay,
interruption  or  prevention.  The  inability  to pay  money  shall  in no event
constitute force majeure. Notwithstanding the foregoing, force majeure shall not
extend the time for (a) Tenant to terminate  this Lease  following (i) a fire or
other casualty,  as provided in Section 12 of this Lease, or (ii)  Condemnation,
as provided in Section 13 of this Lease,  or (b)  abatement  of Rent or Tenant's
right to terminate this Lease resulting from the interference  with Tenant's use
of the Premises due to the presence of Hazardous Materials, as more specifically
contained in Section 5.2 (h) of this Lease.

27.  RULES AND  REGULATIONS.  Tenant shall be bound by and shall comply with the
rules and regulations  attached to and made a part of this Lease as Exhibit C to
the extent  those rules and  regulations  are not in conflict  with the terms of
this Lease, as well as any reasonable rules and regulations hereafter adopted by
Landlord  for  all  tenants  of the  Project,  upon  notice  to  Tenant  thereof
(collectively,  the "Building  Rules").  Landlord  shall not be

                                      -29-
<PAGE>
responsible to Tenant or to any other person for any violation of, or failure to
observe, the Building Rules by any other tenant or other person.

28. LANDLORD'S LIABILITY. The term "Landlord," as used in this Lease, shall mean
only the owner or owners of the Building at the time in  question.  In the event
of any conveyance of title to the Building, then from and after the date of such
conveyance,  the  transferor  Landlord  shall be relieved of all liability  with
respect to Landlord's  obligations  first arising and to be performed under this
Lease  after the date of such  conveyance.  Notwithstanding  any  other  term or
provision of this Lease, the liability of Landlord for Landlord's  breach of its
obligations under this Lease is limited solely to (a) Landlord's interest in the
Property as the same may from time to time be  encumbered,  (b) any Rent prepaid
by Tenant to Landlord,  (c) proceeds  received by Landlord from  Landlord's  all
risk insurance  policy covering the Building  following a fire or other casualty
to the Premises or the Building,  if Landlord  materially  misappropriates  such
proceeds, and either (i) such proceeds are not used for repair or restoration in
accordance  with the provisions of Section 12 of this Lease,  or (ii) this Lease
is not terminated in accordance with the provisions of Section 12 of this Lease,
(d) Awards  received  by Landlord  from  Condemnation,  if  Landlord  materially
misappropriates  such  Award,  and  either  (iii)  the  Award  is not  used  for
restoration in accordance  with the  provisions of Section 13 of this Lease,  or
(iv) this Lease is not  terminated in accordance  with the provisions of Section
13 of this Lease,  and (e) subject to the provisions of Sections 4 and 37 and 38
of this Lease,  Tenant's Security Deposit or letter of credit given by Tenant to
Landlord; and no personal liability shall at any time be asserted or enforceable
against any other assets of Landlord or against  Landlord's  partners or members
or its or their respective partners, shareholders,  members, directors, officers
or managers on account of any of  Landlord's  obligations  or actions under this
Lease.

29. CONSENTS AND APPROVALS.

         29.1  Determination  in Good Faith.  Wherever  the  consent,  approval,
judgment or determination of Landlord is required or permitted under this Lease,
Landlord  may  exercise  its  good  faith  business   judgment  in  granting  or
withholding such consent or approval or in making such judgment or determination
without  reference  to any  extrinsic  standard  of  reasonableness,  unless the
specific provision contained in this Lease providing for such consent, approval,
judgment or determination  specifies that Landlord's  consent or approval is not
to be unreasonably  withheld,  or that such judgment or  determination  is to be
reasonable,  or  otherwise  specifies  the  standards  under which  Landlord may
withhold its  consent.  If it is  determined  that  Landlord  failed to give its
consent  where  it was  required  to do so under  this  Lease,  Tenant  shall be
entitled to injunctive  relief but shall not to be entitled to monetary  damages
or to terminate this Lease for such failure.  If (a) Tenant requests  Landlord's
consent to a Transfer,  (b) Landlord withholds consent,  and (c) Tenant believes
that Landlord  unreasonably  withheld  consent to a Transfer in violation of the
provisions of Section 14 of this Lease,  then Tenant shall be entitled to invoke
the  arbitration  provisions  of the  subsection  33 below to determine  whether
Landlord  unreasonably  withheld consent to a Transfer,  but Tenant shall not be
entitled to monetary damages.

         29.2 No Liability  Imposed on Landlord.  The review and/or  approval by
Landlord of any item or matter to be reviewed or approved by Landlord  under the
terms of this Lease or any  Exhibits  or Addenda  hereto  shall not impose  upon
Landlord  any  liability  for the  accuracy or  sufficiency  of any such item or
matter or the quality or suitability of such item for its intended use. Any such
review or approval is for the sole purpose of protecting  Landlord's interest in
the Property, and no third parties,  including Tenant or the Representatives and
Visitors of Tenant or any person or entity claiming by, through or under Tenant,
shall have any rights as a consequence thereof.

30.  WAIVER OF RIGHT TO JURY TRIAL.  Landlord and Tenant waive their  respective
rights  to  trial  by  jury  of  any  contract  or  tort  claim,   counterclaim,
cross-complaint,  or cause of  action  in any  action,  proceeding,  or  hearing
brought by either party against the other on any matter arising out of or in any
way  connected  with this Lease,  the  relationship  of Landlord and Tenant,  or
Tenant's  use or  occupancy of the  Premises,  including  any claim of injury or
damage or the  enforcement  of any  remedy  under  any  current  or future  law,
statute, regulation, code, or ordinance.

31.  BROKERS.  Landlord shall pay the fee or commission of the broker or brokers
identified in the Basic Lease  Information  (the  "Broker") in  accordance  with
Landlord's  separate written  agreement with the Broker, if any. Tenant warrants
and  represents  to  Landlord  that in the  negotiating  or making of this Lease
neither Tenant nor anyone acting on Tenant's behalf has dealt with any broker or
finder who might be  entitled to a fee or  commission  for this Lease other than
the Broker.  Tenant shall indemnify and hold Landlord harmless from any claim or
claims,

                                      -30-
<PAGE>
including costs,  expenses and attorney's fees incurred by Landlord  asserted by
any other broker or finder for a fee or commission  based upon any dealings with
or statements made by Tenant or Tenant's Representatives.

32. RELOCATION OF PREMISES.  [Intentionally Deleted].

33. ARBITRATION OF SELECTED DISPUTES.

         33.1.  Disputes  Subject to Arbitration.  If any dispute arises between
Landlord and Tenant (a) as to whether Landlord has unreasonably withheld consent
under  Subsection  6.1 -  Alterations,  Subsections  14.1 and 14.2 - Consent  to
Assignment,  or Subsection 15.3 and 15.4 - Landlord's  Default of this Lease, or
(b) with respect to the number of days of Landlord Delay, Tenant Delay and force
majeure delay under Exhibit B - the Construction  Rider (but not with respect to
any other force majeure delay),  and such dispute is not resolved by the parties
within ten (10) days after  either  party  gives  written  notice  ("Arbitration
Notice") to the other of its desire to arbitrate such dispute, the dispute shall
be resolved  solely by arbitration in accordance  with the provisions of Section
33.2.  Landlord and Tenant agree to cooperate in expediting  the  Arbitration of
any  dispute  subject  to  arbitration  to  achieve a prompt  resolution  of the
dispute.  Any such  arbitration  shall be  limited  exclusively  to the  matters
described  in the first  sentence  of this  Section  33.1,  and  nothing in this
Section 33 shall be construed to require  Landlord or Tenant to submit any other
dispute  to  arbitration  or  otherwise  limit  either  parties  substantive  or
procedural  remedies against the other party. In no event shall any provision of
this  Section  33 in any way limit or delay  exercise  of  Landlord's  rights to
pursue an action in unlawful detainer upon the occurrence of an Event of Default
(as defined in Section 15.1 - "Events of Default").

         33.2  Arbitration.  Any  dispute  between  the  parties  that  is to be
resolved by  arbitration  as provided  in  Subsection  33.1 shall be settled and
decided by  arbitration  conducted by the American  Arbitration  Association  in
accordance  with the Commercial  Arbitration  Rules of the American  Arbitration
Association,  as then in effect,  except as provided below. Any such arbitration
shall be held and conducted in San Mateo,  California before a single arbitrator
(or three (3)  arbitrators)  who shall be selected  as provided in this  Section
33.2.  Landlord and Tenant  shall  endeavor in good faith to agree upon a single
arbitrator.  If Landlord  and Tenant  have not agreed  upon a single  arbitrator
within fifteen (15) days after an Arbitration  Notice is given,  then each party
shall  select one  arbitrator  and give the other party  written  notice of such
selection within twenty (20) days after the Arbitration Notice is given.  Within
ten (10) days of their  selection,  the two (2)  arbitrators  so selected  shall
mutually  agree on the  selection of a third (3rd)  arbitrator.  If either party
fails timely to give written  notice of its  selection,  the  arbitrator  timely
selected  and  designated  in  writing  by the  other  party  shall  be the sole
arbitrator.

         The  provisions  of the  Commercial  Arbitration  Rules of the American
Arbitration  Association  shall  apply and  govern  such  arbitration,  subject,
however, to the following:

                       (a) Any demand for arbitration shall be made by giving an
       Arbitration  Notice and shall be made within a reasonable  time after the
       claim,  dispute or other matter in question has arisen. In no event shall
       the demand for  arbitration  be made after the date that  institution  of
       legal or  equitable  proceedings  based on such  claim,  dispute or other
       matter would be barred by the applicable statute of limitations.

                       (b)  Each  arbitrator  appointed  shall  be a  former  or
       retired  judge or attorney  with at least seven (7) years'  experience in
       real  property  and  commercial  matters,  or  a  nonattorney  with  like
       experience in the area of dispute.

                       (c) At the request of either party (and at the expense of
       the  requesting  party),  proceedings  involving  the  parties  shall  be
       reported by a certified shorthand court reporter.

                       (d) The  arbitrator  (or  arbitrators)  shall  prepare in
       writing and provide to the parties  factual  findings  and a statement of
       the reasons on which the decisions of the arbitrator (or  arbitrators) is
       based.

                       (e) Final  decision by the  arbitrator  (or  arbitrators)
       shall be made  within  thirty  (30)  days  from the date the  arbitration
       proceedings are initiated.

                       (f) The  prevailing  party  shall be  awarded  reasonable
       attorneys' fees, and other costs and expenses incurred in connection with
       the  arbitration,  and each party  shall bear the costs and  expenses  of

                                      -31-
<PAGE>
       expert and nonexpert  witnesses called or presented by such party, unless
       for good cause otherwise determined by the arbitrator (or arbitrators).

                       (g) Costs  and fees of the  arbitrator  (or  arbitrators)
       shall be split evenly between Landlord and Tenant,  unless for good cause
       otherwise determined by the arbitrator (or arbitrators).

                       (h) The arbitrator (or  arbitrators)  shall have no power
       to: (i) add to, modify,  detract from, or alter in any way the provisions
       of this Lease or any amendments or  supplements to this Lease;  (ii) make
       any award of punitive or exemplary damages; or (iii) resolve any disputes
       that the parties have not  specifically  agreed to  arbitrate  under this
       Lease or any amendments or supplements thereto.

                       (i)  The  award  of  decision  of  the   arbitrator   (or
       arbitrators),  which may  include  equitable  relief,  shall be final and
       judgment may be entered on it in accordance  with  applicable  law in any
       court having jurisdiction over the matter.

34.  ENTIRE  AGREEMENT.  This  Lease,  including  the  Exhibits  and any Addenda
attached hereto,  and the documents  referred to herein, if any,  constitute the
entire  agreement  between  Landlord  and Tenant with  respect to the leasing of
space by Tenant  in the  Project,  and  supersede  all prior or  contemporaneous
agreements,  understandings,  proposals and other  representations by or between
Landlord and Tenant,  whether  written or oral,  all of which are merged herein.
Neither  Landlord  nor  Landlord's  agents  have  made  any  representations  or
warranties with respect to the Premises, the Building, the Project or this Lease
except as expressly set forth herein, and no rights, easements or licenses shall
be acquired by Tenant by  implication  or otherwise  unless  expressly set forth
herein.  The  submission of this Lease for  examination  does not  constitute an
option for the  Premises  and this Lease  shall  become  effective  as a binding
agreement only upon execution and delivery  thereof by Landlord to Tenant.  Upon
execution and delivery by Landlord and Tenant,  this Lease shall be effective as
a  binding  agreement  in  accordance  with  and  subject  to all of the  terms,
conditions and provisions set forth in this Lease.

35. MISCELLANEOUS. This Lease may not be amended or modified except by a writing
signed by Landlord and Tenant. Subject to Section 14 - Assignment and Subletting
and Section 28 - Landlord's Liability,  this Lease shall be binding on and shall
inure to the benefit of the parties and their respective successors, assigns and
legal representatives. The determination that any provisions hereof may be void,
invalid,  illegal or unenforceable  shall not impair any other provisions hereof
and all such  other  provisions  of this  Lease  shall  remain in full force and
effect. The unenforceability,  invalidity or illegality of any provision of this
Lease under particular circumstances shall not render unenforceable,  invalid or
illegal  other  provisions  of this Lease,  or the same  provisions  under other
circumstances.  This Lease shall be construed and interpreted in accordance with
the laws  (excluding  conflict  of laws  principles)  of the  State in which the
Building  is  located.  The  provisions  of this  Lease  shall be  construed  in
accordance  with the fair meaning of the language used and shall not be strictly
construed  against  either  party,  even if such party  drafted the provision in
question.  When required by the context of this Lease, the singular includes the
plural.  Wherever  the  term  "including"  is used in this  Lease,  it  shall be
interpreted  as meaning  "including,  but not  limited to" the matter or matters
thereafter enumerated.  The captions contained in this Lease are for purposes of
convenience  only and are not to be used to interpret or construe this Lease. If
more  than  one  person  or  entity  is  identified  as  Tenant  hereunder,  the
obligations of each and all of them under this Lease shall be joint and several.
Time is of the essence with respect to this Lease,  except as to the  conditions
relating  to the  delivery of  possession  of the  Premises  to Tenant.  Neither
Landlord nor Tenant shall  record this Lease;  provided,  that at the request of
either party,  Landlord and Tenant will  execute,  acknowledge  and deliver,  in
recordable  form, a Memorandum of Lease in the form attached hereto as Exhibit F
for  recording in the Official  Records of the County of San Mateo,  California.
Tenant hereby irrevocably appoints Landlord as Tenant's  attorney-in-fact (which
appointment shall survive the expiration or termination of this Lease) with full
power  of  substitution  to  execute,   acknowledge  and  deliver  a  notice  of
termination  of lease in Tenant's  name if Tenant fails to do so within ten (10)
days after request therefor following expiration or termination of this Lease.

36.  AUTHORITY.  If  Tenant is a  corporation,  partnership,  limited  liability
company or other form of business  entity,  each of the persons  executing  this
Lease on  behalf  of  Tenant  warrants  and  represents  that  Tenant  is a duly
organized and validly existing entity,  that Tenant has full right and authority
to enter  into this Lease and that the  persons  signing on behalf of Tenant are
authorized  to do so and have the  power to bind  Tenant to this  Lease.  Tenant
shall provide  Landlord upon request with evidence  reasonably  satisfactory  to
Landlord  confirming  the foregoing  representations.  Landlord  represents  and
warrants that (i) Landlord is a validly formed limited liability company,

                                      -32-
<PAGE>

which is duly  authorized  and  existing  and is qualified to do business in the
State of California; (ii) Landlord, and the individuals executing this Lease for
Landlord,  have the right and authority to enter into this Lease; and (iii) this
Lease is binding upon Landlord in accordance with its terms.


         IN WITNESS WHEREOF, Landlord and Tenant have entered into this Lease as
of the date first above written.

<TABLE>
<CAPTION>
TENANT:                                         LANDLORD:

<S>                                             <C>
THE 3DO COMPANY,                                SEAPORT PLAZA ASSOCIATES, LLC,
a California corporation                        a California limited liability company

                                                By:      CORNERSTONE HOLDINGS, LLC,
By:      ______________________________                  a Delaware limited liability company
Name:    ______________________________                  Its Manager
Title:   ______________________________
                                                         By:      ______________________________
                                                         Name:    ______________________________
                                                         Title:   ______________________________
By:      ______________________________
Name:    ______________________________
Title:   ______________________________

</TABLE>

                                      -33-
<PAGE>