Document:

Exhibit 10.08

 

 

 

 

Lease
between

Sobrato Interests III and Siebel Systems, Inc.

Building 2 - 2211 Bridgepointe Parkway, San Mateo

 

SectionPage #

Parties*

Premises
*
Definitions
*

Description
*

Use
*
Permitted Uses
*

Uses Prohibited
*

Advertisements and
Signs*

Covenants, Conditions and
Restrictions*

Term and Rental
*
Base Monthly Rent
*

Rental Adjustment
*

Late Charges
*

Security Deposit
*

Construction
*
Building Shell Plans
*

Tenant Improvement
Plans*

Tenant Improvement
Pricing*

Change Orders
*

Building Shell Costs
*

Tenant Improvement
Costs*

Construction
*

General Contractor Overhead &
Profit*

Tenant Delays
*

Insurance
*

Punch List &
Warranty*

Other Work by Tenant
*

Acceptance of Possession and
Covenants to Surrender*
Delivery and
Acceptance*

Condition Upon
Surrender*

Failure to Surrender
*

Alterations and
Additions*
Tenant's Alterations
*

Free From Liens
*

Compliance With Governmental
Regulations*

Maintenance of
Premises*
Landlord's Obligations
*

Tenant's Obligations
*

Landlord and Tenant's Obligations
Regarding Reimbursable Operating Costs
*

Reimbursable Operating
Costs*

Tenant's Allocable
Share*

Exclusions to Reimbursable
Operating Costs*

Waiver of Liability
*

Tenant's Right to
Audit*

Hazard Insurance
*
Tenant's Use
*

Landlord's Insurance
*

Tenant's Insurance
*

Waiver
*

Taxes
*

Utilities
*

Toxic Waste and Environmental
Damage*
Tenant's
Responsibility*

Tenant's Indemnity Regarding
Hazardous Materials*

Landlord's Indemnity Regarding
Hazardous Materials*

Actual Release by
Tenant*

Environmental
Monitoring*

Tenant's Default
*
Remedies
*

Right to Re-enter
*

Abandonment
*

No Termination
*

Non-Waiver
*

Performance by
Landlord*

Landlord's  Liability
*
Limitation on Landlord's
Liability*

Limitation on Tenant's
Recourse*

Indemnification of
Landlord*

Destruction of
Premises*
Landlord's Obligation to
Restore*

Limitations on Landlord's
Restoration Obligation*

Tenant's Rights with Respect to a
Destruction of the Premises*

Condemnation
*

Assignment or Sublease
*
Consent by Landlord
*

Assignment or Subletting
Consideration*

No Release
*

Reorganization of
Tenant*

Permitted Transfers
*

Effect of Default
*

Effects of Conveyance
*

Successors and Assigns
*

Option to Extend the Lease
Term*
Grant and Exercise of
Option*

Determination of Fair Market
Rental*

Resolution of a Disagreement over
the Fair Market Rental*

Personal to Tenant
*

Extension Right in the Event the
Building 3 Option is Not Exercised
*

Option to Extend the Lease
Term*
Grant and Exercise of
Option*

Lease Commencement and Base Monthly
Rent*

Right of First Offering to
Lease*

Exclusions
*

Right of First Offering to
Purchase*
Grant and Exercise of
Option*

Exclusions
*

General Provisions
*
Attorney's Fees
*

Authority of Parties
*

Brokers
*

Choice of Law
*

Dispute Resolution
*

Entire Agreement
*

Entry by Landlord
*

Estoppel Certificates
*

Exhibits
*

Interest
*

Modifications Required by
Lender*

No Presumption Against
Drafter*

Notices
*

Property Management
*

Rent
*

Representations
*

Rights and Remedies
*

Severability
*

Submission of Lease
*

Subordination
*

Survival of
Indemnities*

Time
*

Transportation Demand Management
Programs*

EXHIBIT A - Premises and Project -
Initial Buildout*

EXHIBIT B - Premises and Project -
Full Buildout*

EXHIBIT C - Declaration of
Covenants and Grant of Easements*

EXHIBIT D - Shell Plans and
Specifications*

EXHIBIT E - Building Shell
Definition*

EXHIBIT F - Tenant Improvement
Plans and Specifications*

EXHIBIT G - Subordination,
Nondisturbance and Attornment Agreement*

1.Parties:    THIS LEASE, is entered
into on this 11th day of March, 1999, ("Effective Date") between
SOBRATO INTERESTS III, a California Limited Partnership, whose address is 10600
North De Anza Boulevard, Suite 200, Cupertino, CA  95014-2075 and SIEBEL
SYSTEMS, INC., a Delaware Corporation, whose address is 1855 South Grant Street,
San Mateo, California, CA  94402-2667, hereinafter called respectively Landlord
and Tenant.

2.Premises:    

A.Definitions.    

i.Building.    The term
"Building" shall mean that five (5) story steel frame building
containing approximately 141,496 rentable square feet and all Tenant
Improvements installed therein to be constructed by Landlord and leased by
Tenant pursuant to the terms of this Lease in the location labeled as Building 2
on Exhibit "A" attached hereto and commonly known as 2211
Bridgepointe Parkway.  

ii.Building 1.    The term
"Building 1" shall mean that five (5) story steel frame building
containing approximately 141,496 rentable square feet to be constructed by
Landlord and leased by Tenant pursuant to a separate lease between the Parties
of even date herewith ("Building 1 Lease") in the location labeled as
Building 1 on Exhibit "A" and commonly known as 2215
Bridgepointe Parkway.

iii.Building 3.     The term
"Building 3" shall mean that five (5) story steel frame building
containing approximately 167,505 rentable square feet to be constructed by
Landlord and leased by Tenant or by a third party pursuant to the terms of
Section 19 of this Lease in the location labeled as Building 3 on Exhibit
"B" and commonly known as 2207 Bridgepointe Parkway. 

iv.Common Area.    The term
"Common Area" shall mean that certain real property beneath and
surrounding the Building, Building 1 and Building 3 consisting initially of an
underground parking garage of approximately 455 parking spaces, on-grade parking
lots consisting of approximately 255 parking spaces, the first two levels of the
above grade parking structure consisting of approximately 280 cars, recreation
areas and the adjacent landscaped site areas as shown on Exhibit
"A".  At the time of construction of Building 3 the Common Area
will be modified by the completion of the above grade parking structure to total
approximately 850 parking spaces and changes to portions of the landscaped sites
areas resulting in total parking at full buildout of 1,560 spaces as shown in
Exhibit "B" attached hereto.

Landlord shall have the power to allocate to each tenant in
the Project, the number of parking spaces in the podium garage, above-grade
parking structure or other portions of the Project as to which Tenant may have
the use in connection with its Building; provided that (i) such allocation is
requested by at least one (1) tenant in the Project, (ii) Landlord shall not
allocate to Tenant materially less than the Tenant's prorata share of parking
calculated on the basis of the square footage of the buildings in the Project,
and (iii) Landlord shall allocate parking in a manner so as to maximize the
adjacency of parking to each building. Landlord shall further retain the right
to restrict an appropriate amount of the parking for visitors of the Project or
for car pooling (as may be required by a TDM program).  At the request of Tenant
or any other tenant in the Project, Landlord further agrees to restrict up to
ten (10) spaces per building for key employees of Tenant (or of other tenants in
the Project) or for other reasonable uses.  Tenant shall be responsible for
seeing that the total number of vehicles parked in the Project by employees and
invitees of Tenant does not exceed the number of total spaces allocated to the
Building.

v.Project.    The term
"Project" shall be that certain  real property consisting of
approximately 10.8 acres at the corner of Bridgepointe Circle and Bridgepointe
Parkway in San Mateo, California  and all improvements constructed thereon
consisting at full buildout of the Building, Building 1, Building 3 and the
Common Area as shown in Exhibit "B". 

vi.Premises.    The term
"Premises" shall mean the Building and a non-exclusive right to use
the Common Area. Unless expressly provided otherwise, the term Premises as used
herein shall include the Tenant Improvements (defined in Section 5.B)
constructed by Tenant pursuant to Section 5.B.

B.Grant:    Landlord hereby leases the
Premises to Tenant, and Tenant hires the Premises from Landlord. 

C.Recordation of Parcel Map and Declaration:
 Tenant consents to recordation by Landlord of a Parcel Map (Parcel
Map") and a Declaration of Covenants, Conditions and Restrictions
("Declaration").  The Parcel Map and the Declaration shall be
substantially in the form attached hereto as Exhibit "C" with
such changes as may be may be desired by Landlord or Landlord's lenders to
facilitate the operation, construction, financing, sale and/or leasing of the
Project, provided such changes do not materially and adversely affect Tenant's
use of the Premises, and with such changes as may be required by the city or
other governmental authority having jurisdiction over the Project.   Landlord is
seeking approval of the Parcel Map and Declaration to subdivide the existing
parcel into the four lots to facilitate Landlord's operation, construction,
financing, lease and/or sale of the Project as individual buildings.  Landlord's
failure to obtain approval of the Parcel Map or Declaration shall in no way
invalidate this Lease.  In the event the Parcel Map and Declaration are recorded
by Landlord, the Section 2.A.vi shall be replaced by following:  The term
"Premises" shall mean (i) the land area within Lot 1; (ii) the
Building; and (iii) the nonexclusive right to use the Common Area in accordance
with the terms and conditions of the Declaration and this Lease.  This Lease
shall be subject and subordinate in all respects to the Declaration, as the same
may be amended from time to time.  Tenant covenants and agrees to refrain from
doing or causing to be done, or permitting any thing or act to be done, which
would constitute a default under the Declaration or which would or might make
Landlord liable for any damages, claims or penalty. All assessments charged to
the Premises pursuant to the Declaration, (other than those assessments which
represent: the costs required to be paid and borne by Landlord under the express
terms of this Lease (such as Landlord's maintenance costs pursuant to Section
8.A; fines, penalties and costs of suit charged by the Association, to the
extent not caused by Tenant's breach of this Lease or violation of the
Declaration; reimbursements to the Association for diminution of the
Association's insurance proceeds, to the extent not caused by Tenant's violation
of the insurance provisions of the Declaration; and assessments levied against
the Premises because of the nonpayment of assessments levied on other lots
within the Project other than the Premises) shall constitute a part of Tenant's
Allocable Share of Reimbursable Operating Costs pursuant to Article 8 of this
Lease.

Following recordation of the Declaration, if owners and
occupants of Building 1 or Building 3 are violating the terms and conditions of
the Declaration and such violation materially and adversely affects Tenant's
rights under this Lease, then within a reasonable time following Tenant's
request, Landlord shall take reasonable steps to enforce the provisions of the
Declaration relating to such violation, in accordance with the procedures
established in the Declaration, the cost of which shall be a Reimbursable
Operating Cost pursuant to Article 8 of this Lease.

3.Use:    

A.Permitted Uses:    Tenant shall use the
Premises only for the following purposes and shall not change the use of the
Premises without the prior written consent of Landlord:  General office uses
including research and development and other incidental uses (such incidental
uses shall include without limitation, a gymnasium and/or a cafeteria for use of
Tenant's employees). Tenant shall use only the number of parking spaces
allocated to Tenant under this Lease. Following recordation of the Declaration,
if occupants of Building 1 or Building 3 are using parking spaces in excess of
the number of spaces to which they are entitled under the Declaration, then
within a reasonable time following Tenant's request, Landlord shall seek to
enforce the provisions of the Declaration relating to such excessive use, in
accordance with the procedures established in the Declaration, the cost of which
shall be a Reimbursable Operating Cost pursuant to Article 8 of this Lease.
Prior to recording the Declaration, Landlord shall cause the Declarants of the
Declaration to confirm in writing for the benefit of Tenant that the signs and
window coverings to be installed pursuant to Section 3.C of this Lease are
approved by the Declarants.  Landlord shall promptly send to Tenant all notices
received from the Association pertaining to the Association's entry onto the
Premises and Common Area, insurance coverage affecting the Premises, and
assessments levied against the Premises.  All commercial trucks and delivery
vehicles shall be (i) loaded and unloaded in a manner which does not interfere
with the businesses of other occupants of the Project, and (ii) permitted to
remain on the Project only so long as is reasonably necessary to complete the
loading and unloading.  Landlord makes no representation or warranty that any
specific use of the Premises desired by Tenant is permitted pursuant to any
Laws.

B.Uses Prohibited:    Tenant shall not commit
or suffer to be committed on the Premises any waste, nuisance, or other act or
thing which may disturb the quiet enjoyment of any other tenant in or around the
Premises, nor allow any sale by auction or any other use of the Premises for an
unlawful purpose. Tenant shall not (i) damage or overload the electrical,
mechanical or plumbing systems of the Premises, (ii) attach, hang or suspend
anything from the ceiling, walls or columns of the building or set any load on
the floor in excess of the load limits for which such items are designed, or
(iii) generate dust, fumes or waste products which create a fire or health
hazard or damage the Premises or in the soils surrounding the Building.  No
materials, supplies, equipment, finished products or semi-finished products, raw
materials or articles of any nature, or any waste materials, refuse, scrap or
debris, shall be stored upon or permitted to remain on any portion of the
Premises outside of the Building without Landlord's prior approval, which
approval may be withheld in its sole discretion.  

C.Advertisements and Signs:    Tenant shall be
permitted to place two (2) signs mounted on the building, one monument sign
within the Common Area, and any directional signs necessary within the Common
Area, provided such signs are approved by the city or other governing authority.
Tenant shall be entitled to additional signage on Building 1 and Building 3 (if
leased) pursuant to the leases for these buildings.  Any sign placed on the
Premises shall be removed by Tenant, at its sole cost, prior to the Expiration
Date or promptly following the earlier termination of the lease, and Tenant
shall repair, at its sole cost, any damage or injury to the Premises caused
thereby, and if not so removed, then Landlord may have same so removed at
Tenant's expense.

D.Covenants, Conditions and Restrictions: 
This Lease is subject to the effect of (i) easements, mortgages or deeds of
trust, ground leases, rights of way of record and any other matters or documents
of record; and (ii) any zoning laws of the city, county and state where the
Building is situated (collectively referred to herein as
"Restrictions") and Tenant will conform to and will not violate the
terms of any such Restrictions.  

Tenant acknowledges that as to certain matters set forth
in this Lease, the Association (defined in the Declaration) has or will have
rights of approval or disapproval. If any matter requiring the Association's
approval is submitted to Landlord by Tenant for Landlord's approval, Landlord
shall respond to Tenant in a timely fashion.  If Landlord approves such matter
and such matter further requires the Association's approval, Landlord shall
promptly submit the same to  the Association, as applicable.  In no event,
however, shall Landlord's disapproval be deemed unreasonable if the Association
has disapproved of such matter nor shall Landlord have any liability to Tenant
by reason thereof.

4.Term and Rental:    

A.Base Monthly Rent:    The term ("Lease
Term") shall be for one hundred forty four (144) months, commencing on
substantial completion of construction as finally determined pursuant to Section
5.G (the "Commencement Date") estimated to occur on August 1, 2000,
and ending one hundred forty four (144) months thereafter, ("Expiration
Date").  Notwithstanding the fact that the Lease Term begins on the
Commencement Date, this Lease and all of the obligations of Landlord and Tenant
shall be binding and in full force and effect from and after the Effective Date
except for those obligations which begin on the Commencement Date.  In addition
to all other sums payable by Tenant under this Lease, Tenant shall pay as base
monthly rent ("Base Monthly Rent") for the Premises the amount of
Three Hundred Twenty Thousand Sixty Four Dollars ($320,064.00).  Base Monthly
Rent and Tenant's payment of operating expenses and taxes pursuant to Section 8
shall be payable beginning on the Commencement Date in advance on or before the
first day of each calendar month during the Lease Term.  All sums payable by
Tenant under this Lease shall be paid to Landlord in lawful money of the United
States of America, without offset or deduction and without prior notice or
demand, at the address specified in Section 1 of this Lease or at such place or
places as may be designated in writing by Landlord during the Lease Term.  Base
Monthly Rent for any period less than a calendar month shall be a pro rata
portion of the monthly installment.

B.Rental Adjustment:  

(i)For Variation in Rentable Square Feet:
Upon Substantial Completion of construction, the Building shall be measured
(from outside wall to outside wall including all areas covered by a structural
roof), and if the actual square footage differs from 141,496 square feet, the
initial Base Monthly Rent hereunder shall be adjusted to the product of Two and
262/1000 Dollars ($2.262) and the actual rentable square feet of the Building.

(ii)Periodic Adjustment:    Beginning
thirty (30) months after the Commencement Date, and every thirty (30) months
thereafter, the then-payable Base Monthly Rent shall be increased by seven and
50/100 percent (7.50%).

C.Late Charges:    Tenant hereby acknowledges
that late payment by Tenant to Landlord of Base Monthly Rent and other sums due
hereunder will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which is extremely difficult to ascertain.  Such costs include
but are not limited to:  administrative, processing, accounting, and late
charges which may be imposed on Landlord by the terms of any contract, revolving
credit, mortgage, or trust deed covering the Premises.  Accordingly, if any
installment of Base Monthly Rent or other sum due from Tenant shall not be
received by Landlord or its designee within ten (10) days after the rent is due,
Tenant shall pay to Landlord a late charge equal to five (5%) percent of such
overdue amount, which late charge shall be due and payable on the same date that
the overdue amount was due. The parties agree that such late charge represents a
fair and reasonable estimate of the costs Landlord will incur by reason of late
payment by Tenant, excluding interest and attorneys fees and costs.  If any rent
or other sum due from Tenant remains delinquent for a period in excess of thirty
(30) days then, in addition to such late charge, Tenant shall pay to Landlord
interest on any rent that is not paid when due at the Agreed Interest Rate
specified in Section 21.J following the date such amount became due until
paid.  Acceptance by Landlord of such late charge shall not constitute a waiver
of Tenant's default with respect to such overdue amount nor prevent Landlord
from exercising any of the other rights and remedies granted hereunder.  In the
event that a late charge is payable hereunder, whether or not collected, for
three (3) consecutive installments of Base Monthly Rent, then the Base Monthly
Rent shall automatically become due and payable quarterly in advance, rather
than monthly, notwithstanding any provision of this Lease to the contrary.
After four (4) quarterly installments have been paid on time, rent shall again
be payable monthly.  

D.Security Deposit:    

(i)Amount: Within ten (10) days
following the Effective Date, Tenant shall deposit with Landlord a letter of
credit ("Letter of Credit") in a form reasonably acceptable to
Landlord in the amount of Eight Million Four Hundred Thousand Dollars
($8,400,000.00) to secure Tenant's obligation to complete Tenant Improvements in
the Building and in Building 1 pursuant to this Lease and the Building 1 Lease.
Upon Landlord's receipt of evidence reasonably satisfactory to Landlord of lien
free completion of the Tenant Improvements and that Tenant has fully paid for
the cost of all of Tenant Improvements for the Building and for Building 1, the
Letter of Credit shall be cancelled and returned to Tenant by Landlord.
Notwithstanding the foregoing, in the event Tenant elects to defer construction
on a portion of the non-core Tenant Improvements in Building 1 (as provided
further and restricted in Section 5.B), Landlord shall not require Tenant to
continue to post the Letter of Credit after payment in full for all other Tenant
Improvements associated with the Building and Building 1.  

(ii)   Use by Landlord:     Landlord shall
be entitled to draw against the full amount of the Letter of Credit at any time
provided only that Landlord certifies to the issuer of the Letter of Credit that
Tenant has failed to make a payment for Tenant Improvement costs as provided in
5.F, that Tenant has failed to timely renew or extend the Letter of Credit as
required by this subsection (ii), or that Tenant has failed to amend the Letter
of Credit or obtain a new Letter of Credit as required by this subsection (ii)
and such failure has not been cured within ten (10) days following Landlord's
notice to Tenant.  Tenant shall keep the Letter of Credit in effect at all times
prior to payment in full for the Tenant Improvements for the Building and for
Building 1.  At least sixty (60) days prior to expiration of any Letter of
Credit, the term thereof shall be renewed or extended for a period until Tenant
has paid in full for the Tenant Improvements for Building 1.  Subject to the
notice requirement and cure period provided herein, Tenant's failure to so renew
or extend the Letter of Credit shall be a material default of this Lease by
Tenant entitling Landlord to draw down on the entire amount of the Letter of
Credit.  Any amounts drawn on the Letter of Credit shall be used to pay for the
cost of the Tenant Improvements. In the event the Letter of Credit is drawn by
Landlord, and the proceeds used to pay for the completion of the Tenant
Improvements in the Building and Building 1, after Landlord's completion of the
Tenant Improvements in the Building 1, Landlord shall refund to Tenant any
excess proceeds from the Letter of Credit. In the event of termination of
Landlord's interest in this Lease, Landlord may deliver the Letter of Credit to
Landlord's successor in interest in the Premises and thereupon be relieved of
further responsibility with respect to the Letter of Credit.  Except as provided
herein, no other security deposit shall be required by Tenant.

(iii)  Letter of Credit Fee:  Landlord and
Tenant agree to share equally in the fee charged to provide the Letter of
Credit.  In no event, however, shall Landlord's share of the fee exceed the sum
of Forty Two Thousand Dollars ($42,000.00) per annum.   

5.Construction :

A.Building Shell Plans: The Building Shell shall
be constructed in accordance with the Building Shell plans and guideline
specifications prepared by Korth Sunseri Hagey ("Shell Architect").
The design development drawings for the Building Shell are attached hereto as
Exhibit "D" ("Preliminary Shell Plans and
Specifications"). The Parties have generally approved the Preliminary Shell
Plans, however, Tenant reserves the right to work in a diligent manner with
Landlord and his design team to refine the Preliminary Plans and Specifications
to accommodate Tenant's requirements such that this activity does not delay the
issuance of the working drawings for the Building Shell ("Shell Permit
Drawings") on schedule.  The current schedule anticipates completion of the
Shell Permit Drawings on May 5, 1999.  Such refinements shall be limited to the
following areas: (i) structural issues relating to the support of the rooftop
HVAC system and other framing for its distribution inside the Building; (ii)
planning issues relating to the sizing and placement of the base building
electrical system; (iii) planning and specification issues relating to the
design of the Building security systems; (iv) utility services relating to
communications entrances from the street to the Building; (v) design of the main
electrical service and emergency power service to the Building; and (vi)
definition of the work that will be completed as a part of the construction of
the Building as it affects Tenant's ability to access the Building during the
construction of the other Buildings in the Project.  The Shell Permit Drawings
(i) shall be consistent with the Preliminary Shell Plans in all material
respects, and (ii) shall provide for materials to be of a quality consistent
with a "Class A" office project the where materials are not currently
specified in the Preliminary Shell Plans.  Landlord shall contract for the
installation of the pile foundation system and shall begin this work immediately
following the Effective Date.  Upon completion of the Shell Permit Drawings,
Landlord shall select a general contractor ("General Contractor") on
the basis of a competitive bid of both the cost to construct the Building Shell
and the fee and general conditions bid to construct the Tenant Improvements.
Thereafter, Landlord shall cause the General Contractor to complete construction
of the Building Shell. The Building Shell shall include those items set forth in
the attached Exhibit "E" ("Building Shell
Definition") which scope includes the cost of the parking structures.  In
the event of a conflict between Exhibit "D" and Exhibit
"E", Exhibit "E" shall govern.

B.Tenant Improvement Plans:    Tenant, at
Tenant's sole cost and expense, will hire an interior architect ("Interior
Architect") to prepare plans and outline specifications to be attached as
Exhibit "F" ("Tenant Improvement Plans and
Specifications") with respect to the construction of improvements to the
interior premises ("Tenant Improvements").  The Tenant Improvement
Plans and Specifications plans shall be completed for all aspects of the work by
October 1, 1999 with all detail necessary for submittal to the city and for
construction and shall include any information required by the relevant agencies
regarding Tenant's use of Hazardous Materials if applicable.  The Tenant
Improvements shall consist of all items not included within the scope of the
Building Shell Definition. All Tenant Improvements affecting or otherwise
related to the Building Core will be subject to Landlord's reasonable approval.
The "Building Core" shall include those items typically associated in
the industry with an office building core including elevators, restrooms, fire
sprinklers, HVAC and electrical systems distributed to each floor, exiting stair
finishes and a finished building lobby.  As to the balance of the Tenant
Improvements, Landlord shall not have rights of approval, however, Tenant
Improvement Plans shall provide for the creation of finished office space ready
for occupancy with a minimum buildout in all areas of the Premises consisting
of: (i) fire sprinklers, (ii) floorcoverings, (iii) overhead ceiling system (iv)
distribution of the HVAC system, (v) overhead florescent lighting, and (vi) any
other work required by the City of San Mateo necessary to obtain a Certificate
of Occupancy.  Tenant shall have the right to defer installation of the Tenant
Improvements not associated with the Building Core in up to twenty percent (20%)
of the rentable square footage of the Building.  Except as provided in the
preceding sentence, Tenant shall have no rights or ability to delay installation
of any of the Tenant Improvements.  The Tenant Improvement Plans and
Specifications shall be prepared in sufficient detail to allow General
Contractor to construct the Tenant Improvements.  The General Contractor shall
construct the Tenant Improvements in accordance with all Tenant Improvement
Plans and Specifications. The Tenant Improvements shall not be removed or
altered by Tenant without the prior written consent of Landlord as provided in
Section 7.  Tenant shall have the right to depreciate and claim and collect any
investment tax credits in the Tenant Improvements during the Lease Term.  Tenant
shall further retain the right to encumber its leasehold interest with a first
priority security interest, provided such lienholder has no right to remove any
Tenant Improvements installed by Tenant pursuant to this Lease in the event of a
default by Tenant under such encumbrance.  Upon expiration of the Lease Term or
any earlier termination of the Lease, the Tenant Improvements shall become the
property of Landlord and shall remain upon and be surrendered with the Premises,
and title thereto shall automatically vest in Landlord without any payment
therefore.

C.Tenant Improvement Pricing. Within ten (10)
days after completion of the Tenant Improvements Plans and Specifications,
Landlord shall cause the General Contractor to submit to Tenant competitive bids
from at least three (3) subcontractors for each aspect of the work in excess of
Fifty Thousand and No/100 Dollars ($50,000.00) related to the Tenant
Improvements.  Landlord shall cause the General Contractor to utilize the low
bid in each case unless Tenant approves General Contractor's use of another
subcontractor, and the cost of the Tenant Improvements shall be based upon
construction expenses equal to (i) the bid amounts as approved by Tenant, (ii) a
reasonable contingency approved by Tenant to protect the General Contractor
against cost overruns, and (iii) the general contractor fee specified in Section
5.H below ("Tenant Improvement Budget").  Upon Tenant's written
approval of the Tenant Improvement Budget, which approval shall not be
unreasonably withheld or delayed, Landlord and Tenant shall be deemed to have
given their respective approvals of the final Tenant Improvement Plans and
Specifications on which the cost estimate was made, and General Contractor shall
proceed with the construction of the Tenant Improvements in accordance with the
terms of Section 5.G below.  If Tenant does not specifically approve or
disapprove the bids within ten (10) business days, Tenant shall be deemed to
have approved the bids.

D.Change Orders:   Tenant shall have the right
to order changes in the manner and type of construction of the Tenant
Improvements. Upon request and prior to Tenant's submitting any binding change
order, Landlord shall cause the General Contractor to promptly provide Tenant
with written statements of the cost to implement and the time delay and
increased construction costs associated with any proposed change order, which
statements shall be binding on General Contractor.  If no time delay or
increased construction cost amount is noted on the written statement, the
parties agree that there shall be no adjustment to the construction cost or the
Commencement Date associated with such change order.  If ordered by Tenant,
Landlord shall cause the General Contractor to implement such change order and
the cost of constructing the Tenant Improvements shall be increased or decreased
in accordance with the cost statement previously delivered by General Contractor
to Tenant for any such change order.  In no event, however, shall Tenant have
the right to eliminate the minimum buildout requirements specified in Section
5.B above.

E. Building Shell Costs:   Landlord shall pay
all costs associated with the Building Shell.

F. Tenant Improvement Costs:     Tenant shall
pay all costs associated with the Tenant Improvements.  The cost of Tenant
Improvements shall consist of only the following to the extent actually incurred
by General Contractor in connection with the construction of Tenant
Improvements:  construction costs, all permit fees, construction taxes or other
costs imposed by governmental authorities related to the Tenant Improvements,
and General Contractor overhead and profit as described in Section 5.H below.
During the course of construction of Tenant Improvements, Landlord may deliver
to Tenant not more than once each calendar month a written request for payment
prepared by the General Contractor ("Progress Invoice") which shall
include and be accompanied by General Contractor's certified statements setting
forth the amount requested, certifying the percentage of completion of each item
for which reimbursement is requested, and if requested by Tenant, a certificate
from Landlord's Architect certifying the percentage completion.  Tenant shall
pay the amount due pursuant to the Progress Invoice less a ten percent (10%)
retention directly to the General Contractor, within thirty (30) days after
Tenant's receipt of the above items. All costs for Tenant Improvements shall be
fully documented to and verified by Tenant.

G. Construction:    The Building Shell and
Tenant Improvements shall be deemed substantially complete ("Substantially
Complete" or "Substantial Completion") when the Building Shell
and Tenant Improvements have been substantially completed in accordance with the
Shell Plans and Specifications and Tenant Improvement Plans and Specifications,
as evidenced by the completion of a final inspection or the issuance of a
certificate of occupancy or its equivalent by the appropriate governmental
authority for the Building Shell and Tenant Improvements, and the issuance of a
certificate by the Architect certifying that the Building Shell and Tenant
Improvements have been completed in accordance with the plans.  Installation of
(i) Tenant's data and phone cabling, (ii) Tenant's furniture, or (iii) the
exterior landscaping shall not be required in order to deem the Premises
Substantially Complete.  Any prevention, delay or stoppage due to strikes,
lockouts, inclement weather unusual for the season it which it occurs, labor
disputes, inability to obtain labor, materials, fuel or reasonable substitutes
therefor, governmental restrictions, regulations, controls, civil commotion,
fire or other act of God, and another causes beyond the reasonable control of
Landlord (except financial inability) shall extend the dates contained in this
Section 5.G by a period equal to the period of any said prevention, delay or
stoppage.  

If Landlord cannot obtain building permits or
Substantially Complete construction by the dates set forth herein, this Lease
shall not be void or voidable nor shall Landlord be liable for any loss or
damage resulting therefrom.  Notwithstanding anything to the contrary contained
herein, if Landlord has not delivered the Premises substantially completed to
Tenant on or before August, 1, 2001 ("Termination Date"), Tenant shall
have the right to cancel this Lease by providing Landlord written notice within
sixty (60) days following the Termination Date as Tenant's sole and exclusive
remedy for such failure.  In such event, Landlord shall return the Letter of
Credit to Tenant and thereafter neither party shall have any further liability
to the other under this Lease.

H. General Contractor Overhead & Profit:
As compensation to General Contractor for its services related to
construction of the Building Shell and Tenant Improvements, General Contractor
shall receive a fee based upon the cost of construction determined and agreed
upon by Landlord and Tenant at the time of the competitive bid of the Building
Shell.  Except as provided therein, Landlord or General Contractor shall not
receive any other fee or payment from Tenant in connection with General
Contractor's services.

I.Tenant Delays:    A "Tenant Delay"
shall mean any delay in Substantial Completion of the Building as a result of
any of the following: (i) Tenant's failure to complete or approve the Tenant
Improvement Plans by the dates set forth in Section 5.B, (ii) Tenant's failure
to approve the bids for construction by the dates set forth in Section 5.C,
(iii) changes to the plans requested by Tenant which delay the progress of the
work, (iv) Tenant's request for materials components, or finishes which are not
available in a commercially reasonable time given the anticipated Commencement
Date, (v) Tenant's failure to make a progress payment for Tenant Improvements as
provided in Section 5.F after notice from Landlord and expiration of the
applicable cure period, (vi) Tenant's request for more than one (1) rebidding of
the cost of all or a portion of the work, and (vii) any errors or omissions in
the Tenant Improvement Plans provided by Tenant's architect unless caused by
misinformation provided by Landlord, Landlord's Architect or the General
Contractor.  Notwithstanding anything to the contrary set forth in this Lease,
and regardless of the actual date the Premises are Substantially Complete, the
Commencement Date shall be deemed to be the date the Commencement Date would
have occurred if no Tenant Delay had occurred as reasonable determined by
Landlord.  In addition, if a Tenant Delay results in an increase in the cost of
the labor or materials, Tenant shall pay the cost of such increases.  

J. Insurance:     General Contractor shall
procure (as a cost of the Building Shell) a "Broad Form" liability
insurance policy in the amount of Three Million Dollars ($3,000,000.00).
Landlord shall also procure (as a cost of the Building Shell) builder's risk
insurance for the full replacement cost of the Building Shell and Tenant
Improvements while the Building and Tenant Improvements are under construction,
up until the date that the fire insurance policy described in Section 9 is in
full force and effect.

K. Punch List & Warranty:   After the
Building Shell and Tenant Improvements are Substantially Complete, Landlord
shall cause the General Contractor to immediately correct any construction
defect or other "punch list" item which Tenant brings to General
Contractor's attention.  All such work shall be performed so as to reasonably
minimize the interruption to Tenant and its activities on the Premises.  General
Contractor shall provide a standard contractor's warranty with respect to the
Building Shell and the Tenant Improvements for one (1) year from the
Commencement Date.  Such warranty shall exclude routine maintenance, damage
caused by Tenant's negligence or misuse, and acts of God. Notwithstanding
anything to the contrary in this Lease, Landlord warrants that on the
commencement of the term hereof, (i) the Premises shall comply with all laws,
codes, ordinances and other governmental requirements then applicable to the
Building Shell and the Common Area, (ii) all components of the Building Shell
shall be in good working order, condition, and repair, and (iii) the Premises,
the Project, and the land and groundwater thereunder, shall be free of
contamination by any Hazardous Materials then regulated by any applicable local,
state, or federal law not caused by Tenant.  In the event of any breach of any
of the foregoing warranties, Landlord shall promptly rectify the same at its
sole cost and expense and shall indemnify, defend, and hold Tenant harmless from
and against any damages, liability, suits, losses, claims, actions, costs or
expenses (including attorneys' and consultants' fees and costs) suffered by
Tenant in connection with any such breach.

L.   Other Work by Tenant:   All work not
described in the Shell Plans and Specifications or Tenant Improvement Plans and
Specifications, such as furniture, telephone equipment, telephone wiring and
office equipment work, shall be furnished and installed by Tenant at Tenant's
cost.  Prior to Substantial Completion, Tenant shall be obligated to (i) provide
active phone lines to any elevators, and (ii) contract with a firm to monitor
the fire system.  When the construction of the Tenant Improvements has proceeded
to the point where Tenant's work of installing its fixtures and equipment in the
Premises can be commenced, General Contractor shall notify Tenant and shall
permit Tenant and its authorized representatives and contractors access to the
Premises before the Commencement Date for the purpose of installing Tenant's
trade fixtures and equipment.  

6.Acceptance of Possession and Covenants to
Surrender:    

A.Delivery and Acceptance:    On the
Commencement Date, Landlord shall deliver and Tenant shall accept possession of
the Premises and enter into occupancy of the Premises on the Commencement Date.
Except as otherwise specifically provided herein, Tenant agrees to accept
possession of the Premises in its then existing condition, subject to all
Restrictions and without representation or warranty by Landlord except as
provided in Section 5.K above.  Tenant's taking possession of any part of the
Premises shall be deemed to be an acceptance of any work of improvement done by
Landlord in such part as complete and in accordance with the terms of this Lease
except for (i) "Punch List" type items of which Tenant has given
Landlord written notice prior to the time Tenant takes possession, and (ii)
Landlord's warranties provided in Section 5.K above.  Within thirty (30) days
after the Commencement Date, Tenant agrees to occupy at least a one (1) floor of
the Premises.

B.Condition Upon Surrender:    Tenant further
agrees on the Expiration Date or on the sooner termination of this Lease, to
surrender the Premises to Landlord in good condition and repair, normal wear and
tear excepted.  In this regard, "normal wear and tear" shall be
construed to mean wear and tear caused to the Premises by the natural aging
process which occurs in spite of prudent application of the commercially
reasonable standards for maintenance, repair replacement, and janitorial
practices, and does not include items of neglected or deferred maintenance.  In
any event, Tenant shall cause the following to be done prior to the Expiration
Date or sooner termination of this Lease: (i) all interior walls shall be free
of holes and gouges, (ii) all tiled floors shall be cleaned and waxed, (iii) all
carpets shall be cleaned and shampooed, (iv) all broken, marred, stained or
nonconforming acoustical ceiling tiles shall be replaced, (v) all cabling placed
above the ceiling by Tenant or Tenant's contractors shall be removed, (vi) all
windows shall be washed; (vii) the HVAC system shall be serviced by a reputable
and licensed service firm and left in "good operating condition and
repair" as so certified by such firm, (viii) the plumbing and electrical
systems and lighting shall be placed in good order and repair (including
replacement of any burned out, discolored or broken light bulbs, ballasts, or
lenses. On or before the Expiration Date or sooner termination of this Lease,
Tenant shall remove all its personal property and trade fixtures from the
Premises.  All property and fixtures not so removed shall be deemed as abandoned
by Tenant.  Tenant shall ascertain from Landlord within ninety (90) days before
the Expiration Date whether Landlord desires to have the Premises or any parts
thereof restored to their condition as of the Commencement Date, or to cause
Tenant to surrender all Alterations (as defined in Section 7) in place to
Landlord.  If Landlord shall so desire, and provided that at the time Landlord
gave its consent to their installation, Landlord also notified Tenant that such
removal would be required, Tenant shall, at Tenant's sole cost and expense,
remove such Alterations as Landlord requires and shall repair and restore said
Premises or such parts thereof before the Expiration Date. Such repair and
restoration shall include causing the Premises to be brought into compliance
with all applicable building codes and laws in effect at the time of the removal
to the extent such compliance is necessitated by the repair and restoration
work.  In no event, however, shall Tenant be required to remove any portion of
the initial Tenant Improvements installed in accordance with the terms of this
Lease. 

C.Failure to Surrender:    If the Premises are
not surrendered at the Expiration Date or sooner termination of this Lease,
Tenant shall be deemed in a holdover tenancy pursuant to this Section 6.C and
Tenant shall indemnify, defend, and hold Landlord harmless against loss or
liability resulting from delay by Tenant in so surrendering the Premises
including, without limitation, any claims made by any succeeding tenant founded
on such delay and costs incurred by Landlord in returning the Premises to the
required condition, plus interest at the Agreed Interest Rate. Any
holding over after the termination or Expiration Date with Landlord's express
written consent, shall be construed as month-to-month tenancy, terminable on
thirty (30) days written notice from either party, and Tenant shall pay as Base
Monthly Rent to Landlord a rate equal to one hundred twenty five percent (125%)
of the Base Monthly Rent due in the month preceding the termination or
Expiration Date, plus all other amounts payable by Tenant under this Lease.  Any
holding over shall otherwise be on the terms and conditions herein specified,
except those provisions relating to the Lease Term and any options to extend or
renew, which provisions shall be of no further force and effect following the
expiration of the applicable exercise period.  If Tenant remains in possession
of the Premises after expiration or earlier termination of this Lease without
Landlord's consent, Tenant's continued possession shall be on the basis of a
tenancy at sufferance and Tenant shall pay as rent during the holdover period an
amount equal to one hundred fifty percent (150%) of the Base Monthly Rent due in
the month preceding the termination or Expiration Date, plus all other amounts
payable by Tenant under this Lease.  This provision shall survive the
termination or expiration of the Lease.

7.Alterations and Additions:     

A.Tenant's Alterations:    Tenant shall not
make, or suffer to be made, any alteration or addition to the Premises
("Alterations"), or any part thereof, without obtaining Landlord's
prior written consent and delivering to Landlord the proposed architectural and
structural plans for all such Alterations at least fifteen (15) days prior to
the start of construction. If such Alterations affect the structure of the
Building, Tenant additionally agrees to reimburse Landlord its reasonable out-
of-pocket costs incurred in reviewing Tenant's plans. Notwithstanding anything
to the contrary contained in this lease, Tenant shall be entitled to construct
Alterations which cost Tenant less than One Hundred Thousand Dollars
($100,000.00) in the aggregate each year, without obtaining Landlord's consent,
provided such Alterations do not affect the exterior of the Premises or
adversely affect the structural integrity or life safety systems of the
Premises.  Tenant shall not proceed to make such Alterations until Tenant has
obtained all required governmental approvals and permits, and provides Landlord
reasonable security, in form reasonably approved by Landlord, to protect
Landlord against mechanics' lien claims.  Tenant agrees to provide Landlord (i)
written notice of the anticipated and actual start-date of the work, (ii) a
complete set of half-size (15" X 21") vellum as-built drawings, and
(iii) a certificate of occupancy for the work upon completion of the Alterations
if required by applicable law.  All Alterations shall be constructed in
compliance with all applicable building codes and laws including, without
limitation, the Americans with Disabilities Act of 1990.  Upon the Expiration
Date, all Alterations, except movable furniture and trade fixtures, shall become
a part of the realty and belong to Landlord but shall nevertheless be subject to
removal by Tenant as provided in Section 6 above.  Alterations which are not
deemed as trade fixtures include heating, lighting, electrical systems, air
conditioning, walls, carpeting, or any other installation which has become an
integral part of the Premises.  All Alterations shall be maintained, replaced or
repaired by Tenant at its sole cost and expense.

B.Free From Liens:    Tenant shall keep the
Premises free from all liens arising out of work performed, materials furnished,
or obligations incurred by Tenant or claimed to have been performed for Tenant.
In the event Tenant fails to discharge any such lien within fifteen (15) days
after receiving notice of the filing, Landlord shall be entitled to discharge
the lien at Tenant's expense and all resulting reasonable costs incurred by
Landlord, including reasonable attorney's fees shall be due from Tenant as
additional rent.

C.Compliance With Governmental Regulations:
The term Laws or Governmental Regulations shall include all federal, state,
county, city or governmental agency laws, statutes, ordinances, standards,
rules, requirements, or orders now in force or hereafter enacted, promulgated,
or issued.  The term also includes government measures regulating or enforcing
public access, traffic mitigation, occupational, health, or safety standards for
employers, employees, landlords, or tenants. Tenant, at Tenant's sole expense
shall make all repairs, replacements, alterations, or improvements needed to
comply with all Governmental Regulations except as otherwise expressly provided
in this Lease.  The judgment of any court of competent jurisdiction or the
admission of Tenant in any action or proceeding against Tenant (whether Landlord
be a party thereto or not) that Tenant has violated any such law, regulation or
other requirement in its use of the Premises shall be conclusive of that fact as
between Landlord and Tenant.

 

8.Maintenance of Premises:

A.Landlord's Obligations:    Landlord at its
sole cost and expense, shall maintain in good condition, order, and repair, and
replace as and when necessary, the foundation, exterior load bearing walls glass
curtainwall, and roof structure of the Building Shell.  Landlord further agrees
to perform repairs and replacements to the Common Area to maintain the Common
Area in good condition, order and repair (subject to Tenant's reimbursement
obligation). Tenant acknowledges and agrees that the Association formed pursuant
to the Declaration may perform the maintenance, repair and restoration
obligations of Landlord under this Section 8.A and other sections of this Lease
on behalf of Landlord and other owners of any portion of the Project, in
discharge of Landlord's maintenance, repair and restoration obligations under
this Lease.  As to increases in annual assessments or the imposition of a
special assessment under the Declaration which would require the vote of the
Owners (as defined in the Declaration), Landlord agrees to vote in favor or such
assessments to the extent Landlord reasonably determines such sums are required
to maintain the Premises in the condition required by this Lease.
Notwithstanding the foregoing, in the event that Tenant leases from Landlord all
of the space then developed within the Project, Tenant shall have the right to
perform the repairs, replacements and maintenance of the Common Area and pay
such costs directly.

B.Tenant's Obligations:    Subject to Sections
15 and 16, Tenant shall clean, maintain, repair and replace when necessary the
Building and every part thereof through regular inspections and servicing,
including but not limited to: (i) all plumbing and sewage facilities, (ii) all
heating ventilating and air conditioning facilities and equipment, (iii) all
fixtures, interior walls floors, carpets and ceilings, (iv) all electrical
facilities and equipment, (v) all automatic fire extinguisher equipment, (vi)
all elevator equipment, and (vii) the roof membrane system.   All wall surfaces
and floor tile are to be maintained in an as good a condition as when Tenant
took possession free of holes, gouges, or defacements.   With respect to items
(ii), (vi) and (vii) above, Tenant shall provide Landlord a copy of a service
contract between Tenant and a licensed service contractor providing for periodic
maintenance of all such systems or equipment in conformance with the
manufacturer's recommendations.  Tenant shall provide Landlord upon request, a
copy of such preventive maintenance contracts and paid invoices for the
recommended work if requested by Landlord.

C.Landlord and Tenant's Obligations Regarding
Reimbursable Operating Costs:    Notwithstanding the provisions of Sections
8, 9, 10 and 11 of this Lease, Tenant agrees to reimburse Landlord for Tenant's
Allocable Share (as defined in Section 8.E below) of the expenses resulting from
Landlord's payment of Reimbursable Operating Costs (as defined in Section 8.D
below) in connection with the Premises or in connection with the Project which
are not otherwise Landlord's obligation hereunder. Tenant agrees to pay its
Allocable Share of the Reimbursable Operating Costs as additional rental within
ten (10) business days of written invoice from Landlord.

D.Reimbursable Operating Costs:    For
purposes of calculating Tenant's Allocable Share of Building and Project Costs,
the term "Reimbursable Operating Costs" is defined as all reasonable
costs and expenses of the nature hereinafter described which are incurred by
Landlord in connection with ownership and operation of the Building or the
Project in which the Premises are located.  All costs and expenses shall be
determined in accordance with generally accepted accounting principles which
shall be consistently applied, including but not limited to the following:  (i)
common area utilities, including water, power, telephone, heating, lighting, air
conditioning, ventilating, and Building utilities to the extent not separately
metered; (ii) common area maintenance and service agreements for the Building
and/or Project and the equipment therein, including without limitation, common
area janitorial services, alarm and security services, exterior window cleaning,
and maintenance of the sidewalks, landscaping, waterscape, roof membrane,
parking garages and parking areas, driveways, service areas, mechanical rooms,
elevators, and the building exterior; (iii) insurance premiums and costs,
including without limitation, the premiums and cost of fire, casualty and
liability coverage and rental abatement and earthquake (if available at
commercially reasonable rates) insurance applicable to the Building or Project;
(iv) repairs, replacements and general maintenance (excluding repairs and
general maintenance paid by proceeds of insurance or by Tenant or other third
parties, and repairs or alterations attributable solely to tenants of the
Building or Project other than Tenant); and (v) all real estate taxes and
assessment installments or other impositions or charges which may be levied on
the Building or Project, upon the occupancy of the Building or Project and
including any substitute or additional charges which may be imposed during, or
applicable to the Lease Term including real estate tax increases due to a sale,
transfer or other change of ownership of the Building or Project, as such taxes
are levied or appear on the City and County tax bills and assessment rolls.
Landlord shall have no obligation to provide guard services or other security
measures for the benefit of the Project.  Tenant assumes all responsibility for
the protection of Tenant and Tenant's Agents from acts of third parties;
provided, however, that nothing contained herein shall prevent Landlord, at its
sole option, from providing security measures for the Project.  This is a
"Net" Lease, meaning that Base Monthly Rent is paid to Landlord net of
all costs and expenses, except as provided otherwise in this Lease.  The
provision for payment of Reimbursable Operating Costs by means of periodic
payment of Tenant's Allocable Share of Building and/or Project Costs is intended
to pass on to Tenant and reimburse Landlord for all costs of operating and
managing the Building and/or Project.

E.Tenant's Allocable Share:    For purposes of
prorating Reimbursable Operating Costs which Tenant shall pay, Tenant's
Allocable Share of Reimbursable Operating Costs shall be computed by multiplying
the Reimbursable Operating Costs by a fraction, the numerator of which is the
rentable square footage of the Premises and the denominator of which is either
the total rentable square footage of the Building if the service or cost is
allocable only to the Building, or the total square footage of the buildings
completed within the Project if the service or cost is allocable to the entire
Project.  Tenant's obligation to share in Reimbursable Operating Costs shall be
adjusted to reflect the Lease Commencement and Expiration dates and is subject
to recalculation in the event of expansion of the Building or Project.

F.Exclusions to Reimbursable Operating Costs:
Notwithstanding anything to the contrary contained in this Lease, the
following costs and expenses shall not be included within Reimbursable Operating
Costs:  (i) Leasing commissions, attorneys' fees, costs, disbursements, and
other expenses incurred in connection with negotiations or disputes with
tenants, or in connection with leasing, renovating, or improving space for
tenants or other occupants or prospective tenants or other occupants of the
Project; (ii) The cost of any service sold to any tenant (including Tenant) or
other occupant for which Landlord is entitled to be reimbursed as an additional
charge or rental over and above the basic rent and escalations payable under the
lease with that tenant; (iii) Any depreciation on the Project; (iv) Expenses in
connection with services or other benefits of a type that are not provided to
Tenant but which are provided another tenant or occupant of the Project; (v)
Costs incurred due to Landlord's violation of any terms or conditions of the
Declaration, this Lease or any other lease relating to the Project; (vi)
Overhead profit increments paid to Landlord's subsidiaries or affiliates for
services on or to the building or for supplies or other materials to the extent
that the cost of the services, supplies, or materials exceeds the cost that
would have been paid had the services, supplies, or materials been provided by
unaffiliated parties on a competitive basis; (vii) All interest, loan fees, and
other carrying costs related to any mortgage or deed of trust or related to any
capital item, and all rental and other payable due under any ground or
underlying lease, or any lease for any equipment ordinarily considered to be of
a capital nature (except janitorial equipment which is not affixed to the
Project.); (viii) Any compensation paid to clerks, attendants, or other persons
in commercial concessions operated by Landlord; (ix) Advertising and promotional
expenditures; (x) Costs of repairs and other work occasioned by fire, windstorm,
or other casualty of a nature required to be insured against under this Lease in
excess of the deductible; (xi) Any costs, fines, or penalties incurred due to
violations by Landlord of any governmental rule or authority, this Lease or any
other lease in the Project, or due to Landlord's negligence or willful
misconduct; (xii) Property management fees; (xiii) Costs for sculpture,
paintings, or other objects of art (and insurance thereon or extraordinary
security in connection therewith); (xiv) The cost of correcting any building
code or other violations which were violations prior to the Commencement Date of
this Lease; (xv) The cost of containing, removing, or otherwise remediating any
contamination of the Project (including the underlying land and ground water) by
any Hazardous Materials where such contamination was not caused by Tenant.

F.Waiver of Liability:     Failure by Landlord
to perform any defined services, or any cessation thereof, when such failure is
caused by accident, breakage, repairs, strikes, lockout or other labor
disturbances or labor disputes of any character or by any other cause, similar
or dissimilar, shall not render Landlord liable to Tenant in any respect,
including damages to either person or property, nor be construed as an eviction
of Tenant, nor cause an abatement of rent, nor relieve Tenant from fulfillment
of any covenant or agreement hereof.  Should any equipment or machinery utilized
in supplying the services listed herein break down or for any cause cease to
function properly, upon receipt of written notice from Tenant of any deficiency
or failure of any services, Landlord shall use reasonable diligence to repair
the same promptly, but Tenant shall have no right to terminate this Lease and
shall have no claim for rebate of rent or damages on account of any
interruptions in service occasioned thereby or resulting therefrom.  Tenant
waives the provisions of California Civil Code Sections 1941 and 1942 concerning
the Landlord's obligation of tenantability and Tenant's right to make repairs
and deduct the cost of such repairs from the rent.  Landlord shall not be liable
for a loss of or injury to person or property, however occurring, through or in
connection with or incidental to furnishing, or its failure to furnish, any of
the foregoing unless causes by its gross negligence or willful misconduct.

G.  Tenant's Right to Audit:   Tenant shall have
the right to audit at Landlord's local offices, at Tenant's expense, Landlord's
accounts and records relating to Reimbursable Operating Costs.   Such audit
shall be conducted by a certified public accountant approved by Landlord, which
approval shall not be unreasonably withheld. If such audit reveals that Landlord
has overcharged Tenant, the amount overcharged shall be paid to Tenant within 30
days after the audit is concluded, together with interest thereon at the rate of
ten percent (10.0%) per annum, from the date paid by Tenant until payment of the
overcharge is made to Tenant. In addition, if the amount paid by Tenant exceeds
the Reimbursable Operating Costs which should have been charged to Tenant by
more than five percent (5.0%), the cost of the audit shall be paid by
Landlord.

9.Hazard Insurance:    

A.Tenant's Use:    Tenant shall not use or
permit the Premises, or any part thereof, to be used for any purpose other than
that for which the Premises are hereby leased; and no use of the Premises shall
be made or permitted, nor acts done, which will cause an increase in premiums or
a cancellation of any insurance policy covering the Project or any part thereof,
nor shall Tenant sell or permit to be sold, kept, or used in or about the
Premises, any article prohibited by the standard form of fire insurance
policies.  Tenant shall, at its sole cost, comply with all requirements of any
insurance company or organization necessary for the maintenance of reasonable
fire and public liability insurance covering the Premises and appurtenances.

B.Landlord's Insurance:    Landlord agrees to
purchase and keep in force fire, extended coverage insurance in an amount equal
to the replacement cost of the Building as determined by Landlord's insurance
company's appraisers. If required by the holder of the first deed of trust on
the property, such fire and property damage insurance may be endorsed to cover
loss caused by such additional perils against which Landlord may elect to
insure, including earthquake and/or flood, and shall contain reasonable
deductibles which, in the case of earthquake and flood insurance may be up to
15% of the replacement value of the property.  Additionally Landlord may
maintain a policy of (i) commercial general liability insurance insuring
Landlord (and such others designated by Landlord) against liability for personal
injury, bodily injury, death and damage to property occurring or resulting from
an occurrence in, on or about the Premises or Project in an amount as Landlord
determines is reasonably necessary for its protection, and (ii) rental lost
insurance covering a twelve (12) month period. Tenant agrees to pay Landlord as
additional rent, on demand, the full cost of said insurance and any insurance
costs allocable to the Building pursuant to the Declaration as evidenced by
insurance billings to Landlord, and in the event of damage covered by said
insurance, the amount of any commercially reasonable deductible under such
policy.  Payment shall be due to Landlord within thirty (30) days after written
invoice to Tenant.  It is understood and agreed that Tenant's obligation under
this Section will be prorated to reflect the Lease Commencement and Expiration
Dates. Tenant acknowledges and agrees that the Association formed pursuant to
the Declaration may procure all or any portion of the insurance required to be
maintained by Landlord under this Lease on behalf of Landlord and in discharge
of Landlord's obligation to procure such insurance under this Lease, under one
or more policies procured by the Association from time to time for the benefit
of Landlord and other owners of any portion of the Project, the cost of which
shall be paid by Tenant pursuant to this section 9.B, provided that the cost to
Tenant shall not be greater than that which Tenant would have had to pay if
Landlord obtained such coverage directly.

C.Tenant's Insurance:    Tenant agrees, at its
sole cost, to insure its personal property, Tenant Improvements and Alterations
for their full replacement value (without depreciation) and to obtain worker's
compensation and public liability and property damage insurance for occurrences
within the Premises with a combined single limit of not less than Five Million
Dollars ($5,000,000.00).  Tenant's liability insurance shall be primary
insurance containing a cross-liability endorsement, and shall provide coverage
on an "occurrence" rather than on a "claims made" basis.
Tenant shall name Master Landlord, Landlord and their respective lenders as an
additional insured and shall deliver evidence of insurance and renewal
certificates to Landlord.  All such policies shall provide for thirty (30) days'
prior written notice to Landlord of any cancellation, termination, or reduction
in coverage.  

D.Waiver:    Landlord and Tenant hereby waive
all rights each may have against the other on account of any loss or damage
sustained by Landlord or Tenant, as the case may be, or to the Premises or its
contents, which may arise from any risk covered by their respective insurance
policies (or which would have been covered had such insurance policies been
maintained in accordance with this Lease) as set forth above.  The parties shall
use their reasonable efforts to obtain from their respective insurance companies
a waiver of any right of subrogation which said insurance company may have
against Landlord, Master Landlord or Tenant, as the case may be.

10.Taxes:    Tenant shall be liable for and shall
pay as additional rental, prior to delinquency, the following:  (i) all taxes
and assessments levied against Tenant's personal property and trade or business
fixtures; (ii) all real estate taxes and assessment installments or other
impositions or charges which may be levied on the Premises or upon the occupancy
of the Premises, including any substitute or additional charges which may be
imposed applicable to the Lease Term; and (iii) real estate tax increases due to
an increase in assessed value resulting from a sale, transfer or other change of
ownership of the Premises as it appears on the City and County tax bills during
the Lease Term.  Tenant's obligation under this Section shall be prorated to
reflect the Lease Commencement and Expiration Dates.  If, at any time during the
Lease Term a tax, excise on rents, business license tax or any other tax,
however described, is levied or assessed against Landlord as a substitute or
addition, in whole or in part, for taxes assessed or imposed on land or
Buildings, Tenant shall pay and discharge its pro rata share of such tax or
excise on rents or other tax before it becomes delinquent; except that this
provision is not intended to cover net income taxes, inheritance, gift or estate
tax imposed upon Landlord.  In the event that a tax is placed, levied, or
assessed against Landlord and the taxing authority takes the position that
Tenant cannot pay and discharge its pro rata share of such tax on behalf of
Landlord, then at Landlord's sole election, Landlord may increase the Base
Monthly Rent by the exact amount of such tax and Tenant shall pay such increase.
If by virtue of any application or proceeding brought by or on behalf of
Landlord, there results a reduction in the assessed value of the Premises during
the Lease Term, Tenant agrees to reimburse Landlord for all costs incurred by
Landlord in connection with such application or proceeding, not to exceed the
amount of any savings realized by Tenant.  In the event the Project is not
subdivided as provided in Section 2.C and the tax bill covers the entire
Project, the real estate taxes and assessments shall be prorated as provided in
Section 8.E.

11.Utilities:    Tenant shall pay directly to the
providing utility all water, gas, electric, telephone, and other utilities
supplied to the Premises.  Landlord shall not be liable for loss of or injury to
person or property, however occurring, through or in connection with or
incidental to furnishing or the utility company's failure to furnish utilities
to the Premises unless caused by Landlord's gross negligence of willful
misconduct, and Tenant shall not be entitled to abatement or reduction of any
portion of Base Monthly Rent or any other amount payable under this Lease.

12.Toxic Waste and Environmental Damage:    

A.Tenant's Responsibility:    Without the
prior written consent of Landlord, Tenant shall not bring, use, or permit upon
the Premises, or generate, create, release, emit, or dispose (nor permit any of
the same) from the Premises any chemicals, toxic or hazardous gaseous, liquid or
solid materials or waste, including without limitation, material or substance
having characteristics of ignitability, corrosivity, reactivity, or toxicity or
substances or materials which are listed on any of the Environmental Protection
Agency's lists of hazardous wastes or which are identified in Division 22 Title
26 of the California Code of Regulations as the same may be amended from time to
time or any wastes, materials or substances which are or may become regulated by
or under the authority of any applicable local, state or federal laws,
judgments, ordinances, orders, rules, regulations, codes or other governmental
restrictions, guidelines or requirements.  ("Hazardous Materials")
except for those substances customary in typical office uses for which no
consent shall be required.  In order to obtain consent, Tenant shall deliver to
Landlord its written proposal describing the toxic material to be brought onto
the Premises, measures to be taken for storage and disposal thereof, safety
measures to be employed to prevent pollution of the air, ground, surface and
ground water.  Landlord's approval may be withheld in its reasonable judgment.
In the event Landlord consents to Tenant's use of Hazardous Materials on the
Premises or such consent is not required, Tenant represents and warrants that it
shall comply with all Governmental Regulations applicable to Hazardous Materials
including doing the following:  (i) adhere to all reporting and inspection
requirements imposed by Federal, State, County or Municipal laws, ordinances or
regulations and will provide Landlord a copy of any such reports or agency
inspections; (ii) obtain and provide Landlord copies of all necessary permits
required for the use and handling of Hazardous Materials on the Premises; (iii)
enforce Hazardous Materials handling and disposal practices consistent with
industry standards; (iv) surrender the Premises free from any Hazardous
Materials arising from Tenant's bringing, using, permitting, generating,
creating, releasing, emitting or disposing of Hazardous Materials; and (v)
properly close the facility with regard to Hazardous Materials including the
removal or decontamination of any process piping, mechanical ducting, storage
tanks, containers, or trenches which have come into contact with Hazardous
Materials and obtain a closure certificate from the local administering agency
prior to the Expiration Date.

B.Tenant's Indemnity Regarding Hazardous
Materials:    Tenant shall, at its sole cost and expense,  comply with all
laws pertaining to, and shall with counsel reasonably acceptable to Landlord,
indemnify, defend and hold harmless Landlord, Master Landlord and their
trustees, shareholders, directors, officers, employees, partners, affiliates,
and agents from, any claims, liabilities, costs or expenses incurred or suffered
by Landlord arising from the bringing, using, permitting, generating, emitting
or disposing of Hazardous Materials by Tenant or a third party through the
surface soils of the Premises during the Lease Term or the violation of any
Governmental Regulation or environmental law, by Tenant or Tenant's Agents.
Tenant's indemnification and hold harmless obligations include, without
limitation, the following arising from the bringing, using, permitting,
generating, emitting or disposing of Hazardous Materials by Tenant or a third
party through the surface soils of the Premises during the Lease Term or the
violation of any Governmental Regulation or environmental law, by Tenant or
Tenant's Agents.:  (i) claims, liability, costs or expenses resulting from or
based upon administrative, judicial (civil or criminal) or other action, legal
or equitable, brought by any private or public person under common law or under
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Resource Conservation and Recovery Act of 1980
("RCRA") or any other Federal, State, County or Municipal law,
ordinance or regulation; (ii) claims, liabilities, costs or expenses pertaining
to the identification, monitoring, cleanup, containment, or removal of Hazardous
Materials from soils, riverbeds or aquifers including the provision of an
alternative public drinking water source; (iii) all costs of defending such
claims; (iv) losses attributable to diminution in the value of the Premises or
the Building; (v) loss or restriction of use of rentable space in the Building;
(vi) Adverse effect on the marketing of any space in the Building; and (vi) all
other liabilities, obligations, penalties, fines, claims, actions (including
remedial or enforcement actions of any kind and administrative or judicial
proceedings, orders or judgments), damages (including consequential and punitive
damages), and costs (including attorney, consultant, and expert fees and
expenses) resulting from the release or violation.  This indemnification shall
survive the expiration or termination o this Lease.

C.Landlord's Indemnity Regarding Hazardous
Materials:    Landlord shall with counsel reasonably acceptable to Tenant,
indemnify, defend and hold harmless Tenant and Tenant's shareholders, directors,
officers, employees, partners, affiliates, and agents from, any claims,
liabilities, costs or expenses incurred or suffered by Tenant arising from the
bringing, using, permitting, generating, emitting or disposing of Hazardous
Materials by Landlord or the violation of any Governmental Regulation or
environmental law, by Landlord or Landlord's Agents.  Landlord's indemnification
and hold harmless obligations include, without limitation, the following:  (i)
claims, liability, costs or expenses resulting from or based upon
administrative, judicial (civil or criminal) or other action, legal or
equitable, brought by any private or public person under common law or under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Resource Conservation and Recovery Act of 1980
("RCRA") or any other Federal, State, County or Municipal law,
ordinance or regulation; (ii) claims, liabilities, costs or expenses pertaining
to the identification, monitoring, cleanup, containment, or removal of Hazardous
Materials from soils, riverbeds or aquifers including the provision of an
alternative public drinking water source; (iii) all costs of defending such
claims; and (iv) all other liabilities, obligations, penalties, fines, claims,
actions (including remedial or enforcement actions of any kind and
administrative or judicial proceedings, orders or judgments), damages (including
consequential and punitive damages), and costs (including attorney, consultant,
and expert fees and expenses) resulting from the release or violation.  This
indemnification shall survive the expiration or termination o this Lease. 

C.Actual Release by Tenant:    Tenant agrees
to notify Landlord of any lawsuits or orders which relate to the remedying of or
actual release of Hazardous Materials on or into the soils or ground water at or
under the Premises.  Tenant shall also provide Landlord all notices required by
Section 25359.7(b) of the Health and Safety Code and all other notices required
by law to be given to Landlord in connection with Hazardous Materials.  Without
limiting the foregoing, each party shall also deliver to the other party, within
twenty (20) days after receipt thereof, any written notices from any
governmental agency alleging a material violation of, or material failure to
comply with, any federal, state or local laws, regulations, ordinances or
orders, the violation of which or failure to comply with poses a foreseeable and
material risk of contamination of the ground water or injury to humans (other
than injury solely to Tenant, Tenant's Agents and employees within the
Building).

In the event of any release on or into the Premises
or into the soil or ground water under the Premises, the Building or the Project
of any Hazardous Materials used, treated, stored or disposed of by Tenant or
Tenant's Agents, Tenant agrees to comply, at its sole cost, with all laws,
regulations, ordinances and orders of any federal, state or local agency
relating to the monitoring or remediation of such Hazardous Materials.  In the
event of any such release of Hazardous Materials Tenant shall immediately give
verbal and follow-up written notice of the release to Landlord, and Tenant
agrees to meet and confer with Landlord and its Lender to attempt to eliminate
and mitigate any financial exposure to such Lender and resultant exposure to
Landlord under California Code of Civil Procedure Section 736(b) as a result of
such release, and promptly to take reasonable monitoring, cleanup and remedial
steps given, inter alia, the historical uses to which the Property has and
continues to be used, the risks to public health posed by the release, the then
available technology and the costs of remediation, cleanup and monitoring,
consistent with acceptable customary practices for the type and severity of such
contamination and all applicable laws.  Nothing in the preceding sentence shall
eliminate, modify or reduce the obligation of Tenant under 12.B of this Lease to
indemnify and hold Landlord and Master Landlord harmless from any claims
liabilities, costs or expenses incurred or suffered by them rising from the
bringing, using, permitting, generating, emitting or disposing of Hazardous
Materials by Tenant or a third party through the surface soils of the Premises
during the Lease Term or the violation of any Governmental Regulation or
environmental law, by Tenant or Tenant's Agents.  Tenant shall provide Landlord
prompt written notice of Tenant's monitoring, cleanup and remedial steps.

In the absence of an order of any federal, state or local
governmental or quasi-governmental agency relating to the cleanup, remediation
or other response action required by applicable law, any dispute arising between
Landlord and Tenant concerning Tenant's obligation to Landlord under this
Section 12.C concerning the level, method, and manner of cleanup, remediation or
response action required in connection with such a release of Hazardous
Materials shall be resolved by mediation and/or arbitration pursuant to the
provisions of Section 21.E of this Lease.

D.Environmental Monitoring:     Landlord and
its agents shall have the right to inspect, investigate, sample and monitor the
Premises including any air, soil, water, ground water or other sampling or any
other testing, digging, drilling or analysis to determine whether Tenant is
complying with the terms of this Section 12 provided reasonable grounds to
suspect a violation exist.  If Landlord discovers that Tenant is not in
compliance with the terms of this Section 12, any such reasonable costs incurred
by Landlord, including attorneys' and consultants' fees, shall be due and
payable by Tenant to Landlord within thirty (30) days following Landlord's
written demand therefore.

13.Tenant's Default:    The occurrence of any of
the following shall constitute a material default and breach of this Lease by
Tenant:  (i) Tenant's failure to pay any rent including additional rent or any
other payment due under this Lease within ten (10) days following Landlord's
notice of nonpayment, (ii) the abandonment of the Premises by Tenant; (iii)
Tenant's failure to observe and perform any other required provision of this
Lease, where such failure continues for thirty (30) days after written notice
from Landlord, provided, however, that if the nature of the default is such that
it cannot reasonably be cured within the 30-day period, Tenant shall not be
deemed in default if it commences within such period to cure, and thereafter
diligently prosecutes the same to completion; (iv) Tenant's making of any
general assignment for the benefit of creditors; (v) the filing by or against
Tenant of a petition to have Tenant adjudged a bankrupt or of a petition for
reorganization or arrangement under any law relating to bankruptcy (unless, in
the case of a petition filed against Tenant, the same is dismissed after the
filing); (vi) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within sixty
(60) days; (vii) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within sixty (60)
days; (viii) a default by Tenant under the Building 1 Lease (if then leased by
Tenant from Landlord), or (ix) a default by Tenant under the Building 3 Lease
(if leased by Tenant from Landlord).

A.Remedies:    In the event of any such
default by Tenant, then in addition to other remedies available to Landlord at
law or in equity, Landlord shall have the immediate option to terminate this
Lease and all rights of Tenant hereunder by giving written notice of such
intention to terminate.  In the event Landlord elects to so terminate this
Lease, Landlord may recover from Tenant all the following:  (i) the worth at
time of award of any unpaid rent which had been earned at the time of such
termination; (ii) the worth at time of award of the amount by which the unpaid
rent which would have been earned after termination until the time of award
exceeds the amount of such rental loss for the same period that Tenant proves
could have been reasonably avoided; (iii) the worth at time of award of the
amount by which the unpaid rent for the balance of the Lease Term after the time
of award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided; (iv) any other amount necessary to compensate Landlord for
all detriment proximately caused by Tenant's failure to perform its obligations
under this Lease, or which in the ordinary course of things would be likely to
result therefrom; including the following:  (x) reasonable expenses for
repairing, altering or remodeling the Premises if such expenses are necessary to
relet the Premises, (y) reasonable broker's fees, advertising costs or other
expenses of reletting the Premises, and (z) costs of carrying the Premises such
as taxes, insurance premiums, utilities and security precautions and assessments
due under the Declaration, and (v) at Landlord's election, such other reasonable
amounts in addition to or in lieu of the foregoing as may be permitted by
applicable California law.  The term "rent", as used herein, is
defined as the minimum monthly installments of Base Monthly Rent and all other
sums required to be paid by Tenant pursuant to this Lease, all such other sums
being deemed as additional rent due hereunder.  As used in (i) and (ii) above,
"worth at the time of award" shall be computed by allowing interest at
a rate equal to the discount rate of the Federal Reserve Bank of San Francisco
plus five (5%) percent per annum.  As used in (iii) above, "worth at the
time of award" shall be computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award plus one
(1%) percent.  

B.Right to Re-enter:     In the event of any
such default by Tenant, Landlord shall have the right, after terminating this
Lease, to re-enter the Premises and remove all persons and property.  Such
property may be removed and stored in a public warehouse or elsewhere at the
cost of and for the account of Tenant, and disposed of by Landlord in any manner
permitted by law.

C.Abandonment:     If Landlord does not elect
to terminate this Lease as provided in Section 13.A or 13.B above, then the
provisions of California Civil Code Section 1951.4, (Landlord may continue the
lease in effect after Tenant's breach and abandonment and recover rent as it
becomes due if Tenant has a right to sublet and assign, subject only to
reasonable limitations) as amended from time to time, shall apply and Landlord
may from time to time, without terminating this Lease, either recover all rental
as it becomes due or relet the Premises or any part thereof for such term or
terms and at such rental or rentals and upon such other terms and conditions as
Landlord in its sole discretion may deem advisable, with the right to make
alterations and repairs to the Premises.  In the event that Landlord elects to
so relet, rentals received by Landlord from such reletting shall be applied in
the following order to:  (i) the payment of any indebtedness other than Base
Monthly Rent due hereunder from Tenant to Landlord; (ii) the payment of any cost
of such reletting; (iii) the payment of the cost of any alterations and repairs
to the Premises; and (iv) the payment of Base Monthly Rent due and unpaid
hereunder.  The residual rentals, if any, shall be held by Landlord and applied
in payment of future Base Monthly Rent as the same may become due and payable
hereunder.  Landlord shall the obligation to market the space but shall have no
obligation to relet the Premises following a default if Landlord has other
comparable available space within the Building or Project.  In the event the
portion of rentals received from such reletting which is applied to the payment
of rent hereunder during any month be less than the rent payable during that
month by Tenant hereunder, then Tenant shall pay such deficiency to Landlord
immediately upon demand.  Such deficiency shall be calculated and paid monthly.
Tenant shall also pay to Landlord, as soon as ascertained, any reasonable costs
and expenses incurred by Landlord in such reletting or in making such
alterations and repairs not covered by the rentals received from such
reletting.

D.No Termination:     Landlord's re-entry or
taking possession of the Premises pursuant to 13.B or 13.C shall not be
construed as an election to terminate this Lease unless written notice of such
intention is given to Tenant or unless the termination is decreed by a court of
competent jurisdiction. Notwithstanding any reletting without termination by
Landlord because of any default by Tenant, Landlord may at any time after such
reletting elect to terminate this Lease for any such default.

E.Non-Waiver:   Landlord may accept Tenant's
payments without waiving any rights under this Lease, including rights under a
previously served notice of default. No payment by Tenant or receipt by Landlord
of a lesser amount than any installment of rent due shall be deemed as other
than payment on account of the amount due.  If Landlord accepts payments after
serving a notice of default, Landlord may nevertheless commence and pursue an
action to enforce rights and remedies under the previously served notice of
default without giving Tenant any further notice or demand.  Furthermore, the
Landlord's acceptance of rent from the Tenant when the Tenant is holding over
without express written consent does not convert Tenant's Tenancy from a tenancy
at sufferance to a month to month tenancy. No waiver of any provision of this
Lease shall be implied by any failure of Landlord to enforce any remedy for the
violation of that provision, even if that violation continues or is repeated.
Any waiver by Landlord of any provision of this Lease must be in writing.  Such
waiver shall affect only the provision specified and only for the time and in
the manner stated in the writing. No delay or omission in the exercise of any
right or remedy by Landlord shall impair such right or remedy or be construed as
a waiver thereof by Landlord.  No act or conduct of Landlord, including, without
limitation, the acceptance of keys to the Premises, shall constitute acceptance
of the surrender of the Premises by Tenant before the Expiration Date.  Only
written notice from Landlord to Tenant of acceptance shall constitute such
acceptance of surrender of the Premises.  Landlord's consent to or approval of
any act by Tenant which requires Landlord's consent or approvals shall not be
deemed to waive or render unnecessary Landlord's consent to or approval of any
subsequent act by Tenant.

F.Performance by Landlord:    If Tenant fails
to perform any obligation required under this Lease or by law or governmental
regulation, Landlord in its sole discretion may, following notice and expiration
of the applicable cure period, without waiving any rights or remedies and
without releasing Tenant from its obligations hereunder, perform such
obligation, in which event Tenant shall pay Landlord as additional rent all sums
paid by Landlord in connection with such substitute performance, including
interest at the Agreed Interest Rate within thirty (30) days of Landlord's
written notice for such payment.

14.Landlord's  Liability:    

A.Limitation on Landlord's Liability:    In the
event of Landlord's failure to perform any of its covenants or agreements under
this Lease, Tenant shall give Landlord written notice of such failure and shall
give Landlord thirty (30) days to cure or commence to cure such failure prior to
any claim for breach or resultant damages, provided, however, that if the nature
of the default is such that it cannot reasonably be cured within the 30-day
period, Landlord shall not be deemed in default if it commences within such
period to cure, and thereafter diligently prosecutes the same to completion.  In
addition, upon any such failure by Landlord, Tenant shall give notice by
registered or certified mail to any person or entity with a security interest in
the Premises ("Mortgagee") that has provided Tenant with notice of its
interest in the Premises, and shall provide Mortgagee a reasonable opportunity
to cure such failure, including such time to obtain possession of the Premises
by power of sale or judicial foreclosure, if such should prove necessary to
effectuate a cure.  Tenant agrees that each of the Mortgagees to whom this Lease
has been assigned is an expressed third-party beneficiary hereof.  Tenant waives
any right under California Civil Code Section 1950.7 or any other present or
future law to the collection of any payment or deposit from Mortgagee or any
purchaser at a foreclosure sale of Mortgagee's interest unless Mortgagee or such
purchaser shall have actually received and not refunded the applicable payment
or deposit.   Tenant Further waives any right to terminate this Lease and to
vacate the Premises on Landlord's default under this Lease.  Tenant's sole
remedy on Landlord's default is an action for damages or injunctive or
declaratory relief.

B.Limitation on Tenant's Recourse:    If
Landlord is a corporation trust, partnership, joint venture, unincorporated
association or other form of business entity: (i) the obligations of Landlord
shall not constitute personal obligations of the officers, directors, trustees,
partners, joint venturers, members, owners, stockholders, or other principals or
representatives except to the extent of their interest in the Premises.  Tenant
shall have recourse only to the interest of Landlord in the Premises or for the
satisfaction of the obligations of Landlord and shall not have recourse to any
other assets of Landlord for the satisfaction of such obligations.

C.Indemnification of Landlord:    As a
material part of the consideration rendered to Landlord, Tenant hereby waives
all claims against Landlord except to the extent caused by Landlord's gross
negligence, willful misconduct or a breach of this Lease for damages to goods,
wares and merchandise, and all other personal property in, upon or about said
Premises and for injuries to persons in or about said Premises, from any cause
arising at any time to the fullest extent permitted by law, and Tenant shall
indemnify and hold Landlord, Master Landlord and their shareholders, directors,
officers, trustees, employees, partners, affiliates and agents exempt and
harmless from any damage or injury to any person, or to the goods, wares and
merchandise and all other personal property of any person, arising from the use
of the Premises, Building, and/or Project by Tenant and Tenant's Agents or from
the failure of Tenant to keep the Premises in good condition and repair as
herein provided, except to the extent due to the gross negligence or willful
misconduct of Landlord.  Further, in the event Landlord is made party to any
litigation due to the acts or omission of Tenant and Tenant's Agents, Tenant
will indemnify, defend (with counsel reasonably acceptable to Landlord) and hold
Landlord harmless from any such claim or liability including Landlord's costs
and expenses and reasonable attorney's fees incurred in defending such claims
except to the extent due to the gross negligence or willful misconduct of
Landlord.

15.Destruction of Premises:    

A.Landlord's Obligation to Restore: In the
event of a destruction of the Premises during the Lease Term Landlord shall
repair the same to the approximate condition which existed prior to such
destruction.  Such destruction shall not annul or void this Lease; however,
Tenant shall be entitled to a proportionate reduction of Base Monthly Rent while
repairs are being made, such proportionate reduction to be based upon the extent
to which the repairs interfere with Tenant's business in the Premises, as
reasonably determined by the Parties. In no event shall Landlord be required to
replace or restore Alterations, Tenant Improvements, Tenant's fixtures or
personal property.  With respect to a destruction which Landlord is obligated to
repair or may elect to repair under the terms of this Section, Tenant waives the
provisions of Section 1932, and Section 1933, Subdivision 4, of the Civil Code
of the State of California, and any other similarly enacted statute, and the
provisions of this Section 15 shall govern in the case of such destruction.  If
Landlord is required to repair the Premises in the event of destruction pursuant
to this Lease, Landlord agrees that it will not vote under the Declaration in
favor or not repairing the Premises or Common Area.

B.Limitations on Landlord's Restoration
Obligation: Notwithstanding the provisions of Section 15.A, Landlord shall
have no obligation to repair, or restore the Premises if any of the following
occur:  (i) if the repairs cannot be made in three hundred sixty five (365) days
from the date of receipt of all governmental approvals necessary under the laws
and regulations of State, Federal, County or Municipal authorities, as
reasonably determined by Landlord, (ii) if the holder of the first deed of trust
or mortgage encumbering the Building elects not to permit the insurance proceeds
payable upon damage or destruction to be used for such repair or restoration,
(iii) the damage or destruction is not fully covered by the insurance maintained
by Landlord, (iv) the damage or destruction occurs in the last twenty four (24)
months of the Lease Term (unless Tenant commits to exercise any available option
to extend the Lease Term pursuant to Section 18 of this Lease), (v) Tenant is in
default pursuant to the provisions of Section 13 beyond expiration of the
applicable cure period, (vi) Tenant has vacated the Premises for more than
ninety (90) days, or (vii) if repair of the Common Area is necessary before
repairs to the Premises can be

performed and Landlord reasonably determines that repairs to
the Common Area will not be made within one hundred eighty (180) days after the
date of the damage and destruction.  In any such event Landlord may elect either
to (i) complete the repair or restoration, or (ii) terminate this Lease by
providing Tenant written notice of its election within sixty (60) days following
the damage or destruction.

C.  Tenant's Rights with Respect to a Destruction of
the Premises:    Notwithstanding anything to the contrary contained in this
Lease:  Landlord shall give notice to Tenant of its election to rebuild or not
to rebuild the Premises within thirty (30) days of casualty to the Premises and
such notice shall specify Landlord's architect's or engineer's reasonable
estimate as to the time required to rebuild or restore the Premises.  If, in the
reasonable opinion of Landlord's architect or engineer, the Premises will take
longer than three hundred sixty five (365) days to rebuild or restore and
Landlord has elected to perform such rebuilding or restoration, Tenant may,
notwithstanding Landlord's election, terminate this Lease by written notice to
Landlord of such termination within five (5) days after its receipt of
Landlord's notice. Such termination shall be effective thirty (30) days after
the giving of Tenant's notice.  If Landlord fails to restore the Premises
(including reasonable means of access thereto) within a period which is sixty
(60) days longer than the period stated in Landlord's notice to Tenant as the
estimated rebuilding period, 'Tenant, at any time thereafter until such
rebuilding is completed, may terminate this Lease by delivering written notice
to Landlord of such termination, in which event this Lease shall terminate as of
the date of the giving of such notice.  If casualty to the Premises occurs
within the last twenty-four months of the term and the period in which Tenant is
obligated to exercise its option to renew the term pursuant to Section 18 has
not expired, Tenant shall have thirty (30) days after the date of casualty in
which to notify Landlord of its election to exercise such renewal option. If
Tenant elects to renew the term as provided above, Landlord shall have no right
to terminate the Lease pursuant to this Section 15.

16.Condemnation:    If any part of the Premises
shall be taken for any public or quasi-public use, under any statute or by right
of eminent domain or private purchase in lieu thereof, and only a part thereof
remains which is susceptible of occupation hereunder, this Lease shall, as to
the part so taken, terminate as of the day before title vests in the condemnor
or purchaser ("Vesting Date") and Base Monthly Rent payable hereunder
shall be adjusted so that Tenant is required to pay for the remainder of the
Lease Term only such portion of Base Monthly Rent as the value of the part
remaining after such taking bears to the value of the entire Premises prior to
such taking.  If all of the Premises or such part thereof be taken so that there
does not remain a portion susceptible for occupation hereunder, this Lease shall
terminate on the Vesting Date.  If part or all of the Premises be taken, all
compensation awarded upon such taking shall go to Landlord, and Tenant shall
have no claim thereto; but Landlord shall cooperate with Tenant, without cost to
Landlord, to recover compensation for damage to or taking of any Alterations,
Tenant Improvements, or for Tenant's moving costs.  Tenant hereby waives the
provisions of California Code of Civil Procedures Section 1265.130 and any other
similarly enacted statue, and the provisions of this Section 16 shall govern in
the case of such taking.

17.Assignment or Sublease:    

A.Consent by Landlord:    Except as
specifically provided in this Section 17.E, Tenant may not assign, sublet,
hypothecate, or allow a third party to use the Premises without the express
written consent of Landlord which shall not be unreasonably withheld,
conditioned or delayed.  Except in connection with a Permitted Transfer, in the
event Tenant desires to assign this Lease or any interest herein including,
without limitation, a pledge, mortgage or other hypothecation, or sublet the
Premises or any part thereof, Tenant shall deliver to Landlord (i) executed
counterparts of any agreement and of all ancillary agreements with the proposed
assignee/subtenant, (ii) current financial statements of the transferee covering
the preceding three years if available, (iii) the nature of the proposed
transferee's business to be carried on in the Premises, (iv) a statement
outlining all consideration to be given on account of the Transfer, and (v) a
current financial statement of Tenant.  Landlord may condition its approval of
any Transfer to a certification from both Tenant and the proposed transferee of
all consideration to be paid to Tenant in connection with such Transfer.  At
Landlord's request, Tenant shall also provide additional information reasonably
required by Landlord to determine whether it will consent to the proposed
assignment or sublease.  Landlord shall have a fifteen business (15) day period
following receipt of all the foregoing within which to notify Tenant in writing
that Landlord elects to: (i) terminate this Lease in the event of an assignment
only; (ii) permit Tenant to assign or sublet such space to the named
assignee/subtenant on the terms and conditions set forth in the notice; or (iii)
refuse consent.  If Landlord should fail to notify Tenant in writing of such
election within the 15-day period, Landlord shall be deemed to have elected
option (ii) above.  In the event Landlord elects option (i) above, this Lease
shall expire with respect to such part of the Premises on the date upon which
the proposed sublease was to commence, and from such date forward, Base Monthly
Rent and Tenant's Allocable Share of all other costs and charges shall be
adjusted based upon the proportion that the rentable area of the Premises
remaining bears to the total rentable area of the Premises.  In the event
Landlord elects option (ii) above, Landlord's written consent to the proposed
assignment or sublease shall not be unreasonably withheld, provided and upon the
condition that: (i) the proposed assignee or subtenant is engaged in a business
that is limited to the use expressly permitted under this Lease; (ii) the
proposed assignee or subtenant is a company with sufficient financial worth and
management ability to undertake the financial obligation of this Lease and
Landlord has been furnished with reasonable proof thereof; (iii) the proposed
assignment or sublease is in form reasonably satisfactory to Landlord; (iv)
Tenant reimburses Landlord on demand for any reasonable costs that may be
incurred by Landlord in connection with said assignment or sublease, including
the costs of making investigations as to the acceptability of the proposed
assignee or subtenant and legal costs incurred in connection with the granting
of any requested consent; and (vi) Tenant shall not have advertised or
publicized in any way the availability of the Premises without prior notice to
Landlord.  In the event all or any one of the foregoing conditions are not
satisfied, Landlord shall be considered to have acted reasonably if it withholds
its consent.

B.Assignment or Subletting Consideration:
Any rent or other economic consideration realized by Tenant under any
sublease and assignment, in excess of the rent payable hereunder after deducting
(i) reasonable subletting and assignment costs (ii) the Monthly Amortized Cost
(defined below) of the Tenant Improvements paid by Tenant, and (iii) any
economic consideration received by Tenant for services rendered or personal
property sold or leased, shall be divided and paid fifty percent (50%) to
Landlord and fifty percent (50%) to Tenant.  Monthly Amortized Cost shall be
determined by taking sum paid by Tenant for the Tenant Improvements installed in
the Building and dividing this sum by one hundred forty four (144) months.
Tenant's obligation to pay over Landlord's portion of the consideration
constitutes an obligation for additional rent hereunder.  The above provisions
relating to Landlord's right to terminate the Lease and relating to the
allocation of bonus rent are independently negotiated terms of the Lease which
constitute a material inducement for the Landlord to enter into the Lease, and
are agreed by the parties to be commercially reasonable.  No assignment or
subletting by Tenant shall relieve it of any obligation under this Lease.  Any
assignment or subletting except in connection with a Permitted Transfer which
conflicts with the provisions hereof shall be void.

C.No Release:    Any assignment or sublease
except in connection with a Permitted Transfer shall be made only if and shall
not be effective until the assignee or subtenant shall execute, acknowledge, and
deliver to Landlord an agreement, in form and substance satisfactory to
Landlord, whereby the assignee or subtenant shall assume all the obligations of
this Lease on the part of Tenant to be performed or observed and shall be
subject to all the covenants, agreements, terms, provisions and conditions in
this Lease.  Notwithstanding any such sublease or assignment and the acceptance
of rent by Landlord from any subtenant or assignee, Tenant and any guarantor
shall remain fully liable for the payment of Base Monthly Rent and additional
rent due, and to become due hereunder, for the performance of all the covenants,
agreements, terms, provisions and conditions contained in this Lease on the part
of Tenant to be performed and for all acts and omissions of any licensee,
subtenant, assignee or any other person claiming under or through any subtenant
or assignee that shall be in violation of any of the terms and conditions of
this Lease, and any such violation shall be deemed a violation by Tenant.
Tenant shall indemnify, defend and hold Landlord harmless from and against all
losses, liabilities, damages, costs and expenses (including reasonable attorney
fees) resulting from any claims that may be made against Landlord by the
proposed assignee or subtenant or by any real estate brokers or other persons
claiming compensation in connection with the proposed assignment or sublease,
unless caused by Landlord's breach of this Lease.  

D.Reorganization of Tenant:    The provisions
of this Section 17.D shall apply if Tenant is a corporation and: (i) there is a
dissolution, merger, consolidation, or other reorganization of or affecting
Tenant, where Tenant is not the surviving corporation, or (ii) there is a sale
or transfer to one person or entity (or to any group of related persons or
entities) of stock possessing more than 50% of the total combined voting power
of all classes of Tenant's capital stock issued, outstanding and entitled to
vote for the election of directors, and after such sale or transfer of stock
Tenant's stock is no longer publicly traded. In a transaction under clause (i)
the surviving corporation shall promptly execute and deliver to Landlord an
agreement in form reasonably satisfactory to Landlord under which such
corporation assumes the obligations of Tenant hereunder, and in a transaction
under clause (ii) the transferee shall promptly execute and deliver to Landlord
an agreement in form reasonably satisfactory to Landlord under which such
transferee assumes the obligations of Tenant to the extent accruing after such
transferee's acquisition of Tenant's stock possessing more than 50% of the total
combined voting of all classes of Tenant's capital stock issued, outstanding and
entitled to vote for the election of directors.

E.Permitted Transfers:    Notwithstanding
anything contained in this Section 17, Tenant may enter into any of the
following transfers (a "Permitted Transfer") without Landlord's prior
consent, and Landlord shall not be entitled to terminate the Lease or to receive
any part of any subrent resulting therefrom that would otherwise be due pursuant
to Sections 17.A and 17.B.  Tenant may sublease all or part of the Premises or
assign its interest in this Lease to (i) any person or entity which controls, is
controlled by, or is under common control with the original Tenant to this Lease
by means of an ownership interest of more than 50%; (ii) any person or entity
which results from a merger, consolidation or other reorganization in which
Tenant is not the survivor, so long as the survivor has a net worth at the time
of such transfer sufficient to enable it to meet its obligations under this
Lease; and (iii) any person or entity which purchases or otherwise acquires all
or substantially all of the assets of Tenant so long as such acquiring person or
entity has a net worth at the time of such transfer that is sufficient at the
time of such transfer to enable it to meet its obligations under this Lease.

F.Effect of Default:    In the event of Tenant's
default, Tenant hereby assigns all rents due from any assignment or subletting
to Landlord as security for performance of its obligations under this Lease, and
Landlord may collect such rents as Tenant's Attorney-in-Fact, except that Tenant
may collect such rents unless a default occurs as described in Section 13 above.
A Lease termination due to Tenant's default shall not automatically terminate an
assignment or sublease then in existence; rather at Landlord's election, such
assignment or sublease shall survive the Lease termination, the assignee or
subtenant shall attorn to Landlord, and Landlord shall undertake the obligations
of Tenant under the sublease or assignment; except that Landlord shall not be
liable for prepaid rent, security deposits or other defaults of Tenant to the
subtenant or assignee, or for any acts or omissions of Tenant and Tenant's
Agents.

G.Conveyance by Landlord:    As used in this
Lease, the term "Landlord" is defined only as the owner for the time
being of the Premises, so that in the event of any sale or other conveyance of
the Premises or in the event of a master lease of the Premises, Landlord shall
be entirely freed and relieved of all its covenants and obligations hereunder,
and it shall be deemed and construed, without further agreement between the
parties and the purchaser at any such sale or the master tenant of the Premises,
that the purchaser or master tenant of the Premises has assumed and agreed to
carry out any and all covenants and obligations of Landlord hereunder.  Such
transferor shall transfer and deliver Tenant's security deposit to the purchaser
at any such sale or the master tenant of the Premises, and thereupon the
transferor shall be discharged from any further liability in reference
thereto.

F.Successors and Assigns:    Subject to the
provisions this Section 17, the covenants and conditions of this Lease shall
apply to and bind the heirs, successors, executors, administrators and assigns
of all parties hereto; and all parties hereto shall be jointly and severally
liable hereunder.

18.Option to Extend the Lease Term:

A.Grant and Exercise of Option:    Landlord
grants to Tenant, subject to the terms and conditions set forth in this Section
18.A, two (2) options (the "Options") to extend the Lease Term for an
additional term (the "Option Term").  Each Option Term shall be for a
period of sixty (60) months and shall be exercised, if at all, by written notice
to Landlord no earlier than eighteen (18) months prior to the date the Lease
Term would expire but for such exercise but no later than twelve (12) months
prior to the date the Lease Term would expire but for such exercise, time being
of the essence for the giving of such notice.  If Tenant exercises the first
Option or both of the Options, all of the terms, covenants and conditions of
this Lease except this Section shall apply during the Option Term as though the
expiration date of the Option Term was the date originally set forth herein as
the Expiration Date, provided that Base Monthly Rent for the Premises payable by
Tenant during the Option Term shall be the greater of (i) the average amount of
Base Monthly Rent paid during the initial Lease Term, and (ii) ninety five
percent (95%) of the Fair Market Rental as hereinafter defined.  Notwithstanding
anything herein to the contrary, if Tenant is in monetary or material non-
monetary default after expiration of any applicable cure period under any of the
terms, covenants or conditions of this Lease either at the time Tenant exercises
the Option or at any time thereafter prior to the commencement date of the
Option Term, Landlord shall have, in addition to all of Landlord's other rights
and remedies provided in this Lease, the right to terminate the Option upon
notice to Tenant, in which event the expiration date of this Lease shall be and
remain the Expiration Date.  As used herein, the term "Fair Market
Rental" is defined as the rental and all other monetary payments, including
any escalations and adjustments thereto (including without limitation Consumer
Price Indexing) that Landlord could obtain during the Option Term from a third
party desiring to lease the Premises, based upon the current use and other
potential uses of the Premises, as determined by the rents then being obtained
for new leases of space comparable in age and quality to the Premises in the
locality of the Building. The appraisers shall be instructed that the foregoing
five percent (5%) discount is intended to reduce comparable rents which include
(i) brokerage commissions, (ii) tenant improvement allowances, and (iii) vacancy
costs, to account for the fact that Landlord will not suffer such costs in the
event Tenant exercises its Option.

B.Determination of Fair Market Rental:    If
Tenant exercises the Option, Landlord shall send Tenant a notice setting forth
the Fair Market Rental for the Option Term within thirty (30) days following the
Exercise Date.  If Tenant disputes Landlord's determination of Fair Market
Rental for the Option Term, Tenant shall, within thirty (30) days after the date
of Landlord's notice setting forth Fair Market Rental for the Option Term, send
to Landlord a notice stating that Tenant either elects to terminate its exercise
of the Option, in which event the Option shall lapse and this Lease shall
terminate on the Expiration Date, or that Tenant disagrees with Landlord's
determination of Fair Market Rental for the Option Term and elects to resolve
the disagreement as provided in Section 18.C below.  If Tenant elects to resolve
the disagreement as provided in Section 18.C and such procedures are not
concluded prior to the commencement date of the Option Term, Tenant shall pay to
Landlord as Base Monthly Rent the Fair Market Rental as determined by Landlord
in the manner provided above.  If the Fair Market Rental as finally determined
pursuant to Section 18.C is greater than Landlord's determination, Tenant shall
pay Landlord the difference between the amount paid by Tenant and the Fair
Market Rental as so determined in Section 18.C within thirty (30) days after
such determination.  If the Fair Market Rental as finally determined in Section
18.C is less than Landlord's determination, the difference between the amount
paid by Tenant and the Fair Market Rental as so determined in Section 18.C shall
be credited against the next installments of rent due from Tenant to Landlord
hereunder.

C. Resolution of a Disagreement over the Fair
Market Rental:    Any disagreement regarding Fair Market Rental shall be
resolved as follows:

1.Within thirty (30) days after Tenant's response
to Landlord's notice setting forth the Fair Market Rental, Landlord and Tenant
shall meet at least two (2) times at a mutually agreeable time and place, in an
attempt to resolve the disagreement.

2.If within the 30-day period referred to above,
Landlord and Tenant cannot reach agreement as to Fair Market Rental, each party
shall select one appraiser to determine Fair Market Rental.  Each such appraiser
shall arrive at a determination of Fair Market Rental and submit their
conclusions to Landlord and Tenant within thirty (30) days after the expiration
of the 30-day consultation period described above.

3.If only one appraisal is submitted within the
requisite time period, it shall be deemed as Fair Market Rental.  If both
appraisals are submitted within such time period and the two appraisals so
submitted differ by less than ten percent (10%), the average of the two shall be
deemed as Fair Market Rental.  If the two appraisals differ by more than 10%,
the appraisers shall immediately select a third appraiser who shall, within
thirty (30) days after his selection, make and submit to Landlord and Tenant a
determination of Fair Market Rental.  This third appraisal will then be averaged
with the closer of the two previous appraisals and the result shall be Fair
Market Rental.

4.All appraisers specified pursuant to this
Section shall be members of the American Institute of Real Estate Appraisers
with not less than ten (10) years experience appraising office and industrial
properties in the Santa Clara Valley.  Each party shall pay the cost of the
appraiser selected by such party and one-half of the cost of the third
appraiser.

D.Personal to Tenant:    All Options provided
to Tenant in this Lease are personal and granted to Siebel Systems, Inc. and any
Permitted Transferee and are not exercisable by any third party should Tenant
assign or sublet all or a portion of its rights under this Lease, unless
Landlord consents to permit exercise of any option by any assignee or subtenant,
in Landlord's sole and absolute discretion.  In the event Tenant has multiple
options to extend this Lease, a later option to extend the Lease cannot be
exercised unless the prior option has been so exercised.

E.  Extension Right in the Event the Building 3 Option
is Not Exercised:  In the event that the Building 3 Option is not exercised,
Tenant shall have the right to extend the initial term of this Lease to be co-
terminus with the Building 1 Lease.  The exercise of such option shall not
affect Tenant's option to extend the Lease under Section 18.A above.  Base
Monthly Rent during such extended term shall be equal to the Base Monthly Rent
payable immediately prior to such extension subject to adjustment pursuant to
Section 4.B.ii.

19.Option to Lease:

A.Grant and Exercise of Option:    Landlord
grants to Tenant an option to lease Building 3 ("Expansion Option").
As a part of the construction of the Building 3 Landlord shall also complete the
final three (3) levels of the above-grade parking structure within the Common
Area so as to maintain a parking ratio of 3.45 spaces per 1,000 square feet.. In
order to exercise the Expansion Option, Tenant shall give Landlord written
notice no later than twelve (12) months following the Lease Commencement Date
for Building 1, which commencement date is currently estimated at August 1, 2001
("Option Expiration Date").  Tenant shall not be required to make any
option payments prior to the Lease Commencement Date for Building 1, thereafter
Tenant shall pay Landlord concurrently with and in addition to the Base Monthly
Rent, the sum of Fifty Thousand and No/100 Dollars ($50,000.00) each month to
preserve the Expansion Option.  If Tenant fails to (i) exercise the Expansion
Option by the Option Expiration Date, or (ii) make any option payment required
hereunder, the Expansion Option shall terminate and Landlord shall be free any
time thereafter to construct Building 3 for a third party, subject only to
Tenant's right of first offering provided in 19.C below. In the event Tenant
exercises this Expansion Option, the Parties shall enter into a written lease
agreement with a lease term of (12) twelve years on substantially the same terms
and conditions of this Lease except as provided in Section 19.B below.  Further,
in the event that Tenant leases Building 3, this Lease and the lease for
Building 1 shall be extended so as to be coterminous with the lease for Building
3.  Base Monthly Rent under this Lease during such an extended term shall be
equal to the Base Monthly Rent payable immediately preceding the extended term,
subject to continued adjustment pursuant to Section 4.B of this Lease.

B.  Lease Commencement and Base Monthly Rent:
The Lease Commencement Date for the Building 3 shall occur upon completion
of the Building Shell for Building 3, parking structure and Tenant Improvements
for Building 3 estimated to occur eighteen (18) months following Tenant's
exercise of this option.  The initial Base Monthly Rent shall be equal to the
sum of Four Hundred Twelve Thousand Seven Hundred Thirty Two and 32/00 Dollars
($412,732.32) [$2.464 per square foot], subject to increase as follows.
Immediately following Tenant's exercise Landlord shall seek a permanent loan
commitment to construct Building 3.  If that at the time the loan commitment is
obtained for Building 3, the interest rate exceeds seven and 25/100 percent
(7.25%) on the best available non-recourse 25-year amortizing loan, then the
initial Base Monthly Rent for Building 3 shall be increased by Five Thousand
Eight Hundred Sixty Dollars ($5,860.00) [$.035 per square foot ] for every one
quarter percent increase in the interest rate above seven and 25/100 percent
(7.25%).  For example, if the best obtainable interest rate was eight and No/100
percent (8.00%), then the initial Base Monthly Rent would be $430,312.32 [(3 x
$5,860) + $412,732.32] 

C.  Right of First Offering to Lease:    Beginning
on the date that the Expansion Option lapses or terminates and terminating
twelve (12) months thereafter ("First Offering Period"), Landlord
hereby grants Tenant a right of first offering to lease Building 3.  Prior to
Landlord offering to lease Building 3 to a third party during the First Offering
Period, Landlord shall give Tenant written notice of such desire and the terms
and other information under which Landlord intends to lease Building 3.
Provided at the time of exercise, Tenant is not in default beyond the expiration
of any applicable cure period, Tenant shall have the option, which must be
exercised, if at all, by written notice to Landlord within ten (10) days after
Tenant's receipt of Landlord's notice, to lease Building 3 at the rent and terms
of lease specified in the notice.  In the event Tenant timely exercises such
option to lease Building 3, Tenant shall lease Building 3 from Landlord in
accordance with the rent and terms specified in Landlord's notice.  To the
extent not specified in Landlord's notice, the terms of lease shall be otherwise
consistent with this Lease.  In the event Tenant fails to exercise Tenant's
option within said ten (10) day period, Landlord shall have one hundred eighty
(180) days thereafter to lease Building 3 at no less than ninety five percent
(95%) of the rental rate and upon the terms of lease no more favorable than
those specified in the notice to Tenant.  In the event Landlord fails to lease
Building 3 within said one hundred eighty (180) day period or in the event
Landlord proposes to lease Building 3 at less than ninety five percent (95%) of
the rental rate or on other material terms which are more favorable to the
prospective tenant than those proposed to Tenant, Landlord shall be required to
resubmit such offer to Tenant in accordance with this Right of First Offering,
provided further that such resubmittal would occur during the First Offering
Period. 

D.Exclusions: Notwithstanding the
foregoing, this Expansion Option shall automatically terminate, (i) upon the
expiration or sooner termination of the Lease, or (ii) in the event of a
foreclosure or other involuntary transfer of Landlord's interest in the
Building.

20.  Right Of First Offering To Purchase:    

A.Grant and Exercise of Option:    In the
event either or both Master Landlord and Landlord elect to sell their respective
interests in the Building, Master Landlord and Landlord hereby grants Tenant a
right of first offering to purchase their respective interests in the Building
(Master Landlord and Landlord are individually and collectively referred to in
this Section as "Seller").  Prior to Seller offering to sell its
interest in the Building to a third party, Seller shall give Tenant written
notice of such desire and the terms and other information under which Seller
intends to sell the Building.  Provided at the time of exercise, Tenant is not
in default beyond the expiration of any applicable cure period, Tenant shall
have the option, which must be exercised, if at all, by written notice to Seller
within thirty (30) days after Tenant's receipt of Seller's notice, to purchase
its interest in the Building at the sales price and terms of sale specified in
the notice.  In the event Tenant timely exercises such option to purchase its
interest in the Building, Seller shall sell its interest in the Building to
Tenant, and Tenant shall purchase its interest in the Building from Seller in
accordance with the price and terms specified in Seller's notice.  Seller and
Tenant shall, in good faith, attempt to reach agreement on the terms of a
mutually acceptable purchase agreement consistent with the terms set forth in
Seller's notice within thirty (30) days of Seller's notice.  In the event (i)
Seller and Tenant are unable to reach agreement on a mutually acceptable
purchase agreement within such thirty (30) day period or (ii) Tenant fails to
exercise Tenant's option within said thirty (30) day period, Seller shall have
one hundred eighty (180) days thereafter to sell its interest in the Building at
no less than ninety five percent (95%) of the sales price and upon the same or
substantially the same other terms of sale as specified in the notice to Tenant.
In the event Seller fails to sell its interest in the Building within said one
hundred eighty (180) day period or in the event Seller proposes to sell its
interest in the Building at less than ninety five percent (95%) of the sales
price or on other material terms which are more favorable to the prospective
buyer than that proposed to Tenant, Seller shall be required to resubmit such
offer to Tenant in accordance with this Right of First Offering except that
Tenant shall be required to respond to any resubmission within a seven (7) day
period.

B.Exclusions:    This Right of First
Offering shall automatically terminate, (i) upon the expiration or sooner
termination of the Lease, or (ii) in the event of a foreclosure or other
involuntary transfer of Landlord's interest in the Building.   Notwithstanding
the forgoing, this Right of First Offering shall not apply to transfers (but
shall survive such transfers ) of all or a portion of the Building or Project to
(i) John A. Sobrato and/or John M. Sobrato (individually and collectively
"Sobrato"), and (ii) any immediate family member of Sobrato, and (iii)
any trust established, in whole or in art, for the benefit of Sobrato and/or any
immediate family member of Sobrato, (iv) any partnership in which Sobrato or any
immediate family member, either directly or indirectly (e.g., through a
partnership or corporate entity or a trust) retains a general partner interest,
and/or (v) any corporation under the control, either directly or indirectly, by
Sobrato or any immediate family member of Sobrato.

21.General Provisions:

A.Attorney's Fees:    In the event a suit or
alternative form of dispute resolution is brought for the possession of the
Premises, for the recovery of any sum due hereunder, to interpret the Lease, or
because of the breach of any other covenant herein; then the losing party shall
pay to the prevailing party reasonable attorney's fees including the expense of
expert witnesses, depositions and court testimony as part of its costs which
shall be deemed to have accrued on the commencement of such action.  The
prevailing party shall also be entitled to recover all costs and expenses
including reasonable attorney's fees incurred in enforcing any judgment or award
against the other party.  The foregoing provision relating to post-judgment
costs is severable from all other provisions of this Lease.

B.Authority of Parties:   Tenant represents
and warrants that it is duly formed and in good standing, and is duly authorized
to execute and deliver this Lease on behalf of said corporation, in accordance
with a duly adopted resolution of the Board of Directors of said corporation or
in accordance with the by-laws of said corporation, and that this Lease is
binding upon said corporation in accordance with its terms.  At Landlord's
request, Tenant shall provide Landlord with corporate resolutions or other proof
in a form acceptable to Landlord, authorizing the execution of the Lease.

C.Brokers:    Tenant represents it has not
utilized or contacted a real estate broker or finder with respect to this Lease
other than Chris Allen, d/b/a Resource Real Estate Group, which fee shall be
payable by Landlord pursuant to a written agreement and the Parties agree to
indemnify, defend and hold each other harmless against any claim, cost,
liability or cause of action asserted by any other broker or finder.

D.Choice of Law:    This Lease shall be
governed by and construed in accordance with California law.   Except as
provided in Section 21.E, venue shall be Santa Clara County.

E.Dispute Resolution: Landlord and Tenant and
any other party that may become a party to this Lease or be deemed a party to
this Lease including any subtenants agree that, except for any claim by Landlord
for unlawful detainer or any claim within the jurisdiction of the small claims
court (which small claims court shall be the sole court of competent
jurisdiction), any controversy, dispute, or claim of whatever nature arising out
of, in connection with or in relation to the interpretation, performance or
breach of this Lease, including any claim based on contract, tort, or statute,
shall be resolved at the request of any party to this agreement through a two-
step dispute resolution process administered by J.A.M.S. or another judicial
mediation service mutually acceptable to the parties located in Santa Clara
County, California. The dispute resolution process shall involve first,
mediation, followed, if necessary, by final and binding arbitration administered
by and in accordance with the then existing rules and practices of J.A.M.S. or
other judicial mediation service selected. In the event of any dispute subject
to this provision, either party may initiate a request for mediation and the
parties shall use reasonable efforts to promptly select a J.A.M.S. mediator and
commence the mediation. In the event the parties are not able to agree on a
mediator within thirty (30) days, J. A. M. S. or another judicial mediation
service mutually acceptable to the parties shall appoint a mediator. The
mediation shall be confidential and in accordance with California Evidence Code
  1119 et. seq. The mediation shall be held in Santa Clara County, California
and in accordance with the existing rules and practice of J. A. M. S. (or other
judicial and mediation service selected). The parties shall use reasonable
efforts to conclude the mediation within sixty (60) days of the date of either
party's request for mediation.  The mediation shall be held prior to any
arbitration or court action (other than a claim by Landlord for unlawful
detainer or any claim within the jurisdiction of the small claims court which
are not subject to this mediation/arbitration provision and may be filed
directly with a court of competent jurisdiction). Should the prevailing party in
any dispute subject to this Section 19.E attempt an arbitration or a court
action before attempting to mediate, the prevailing party shall not be entitled
to attorney's fees that might otherwise be available to them in a court action
or arbitration and in addition thereto, the party who is determined by the
arbitrator to have resisted mediation, shall be sanctioned by the arbitrator or
judge.

If a mediation is conducted but is unsuccessful, it shall be
followed by final and binding arbitration administered by and in accordance with
the then existing rules and practices of J.A.M.S. or the other judicial and
mediation service selected, and judgment upon any award rendered by the
arbitrator(s) may be entered by any state or federal court having jurisdiction
thereof AS PROVIDED BY CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1280 ET. SEQ,
AS SAID STATUTES THEN APPEAR, INCLUDING ANY AMENDMENTS TO SAID STATUTES OR
SUCCESSORS TO SAID STATUTES OR AMENDED STATUTES, EXCEPT THAT in no event shall
the parties be entitled to propound interrogatories or request for admissions
during the arbitration process. The arbitrator shall be a retired judge or a
licensed California attorney. The venue for any such arbitration or mediation
shall be in Santa Clara County, California.

NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO
HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "MEDIATION AND
ARBITRATION OF DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY
CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE
DISPUTE LITIGATED IN A COURT OR fURY TRIAL.  BY INITIALING IN THE SPACE BELOW
YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE
RIGHTS ARE SPECIFICALLY INCLUDED IN THE "MEDIATION AND ARBITRATION OF DISPUTES"
PROVISION.  IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS
PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION
IS VOLUNTARY.

WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT
DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE "MEDIATION AND ARBITRATION
OF DISPUTES" PROVISION TO NEUTRAL ARBITRATION.

LANDLORD:  ______       TENANT:  _______

F.Entire Agreement:    This Lease and the
exhibits attached hereto contains all of the agreements and conditions made
between the parties hereto and may not be modified orally or in any other manner
other than by written agreement signed by all parties hereto or their respective
successors in interest.  This Lease supersedes and revokes all previous
negotiations, letters of intent, lease proposals, brochures, agreements,
representations, promises, warranties, and understandings, whether oral or in
writing, between the parties or their respective representatives or any other
person purporting to represent Landlord or Tenant.

G.Entry by Landlord:    Upon prior notice to
Tenant and subject to Tenant's reasonable security regulations, Tenant shall
permit Landlord and his agents to enter into and upon the Premises at all
reasonable times, and without any rent abatement or reduction or any liability
to Tenant for any loss of occupation or quiet enjoyment of the Premises thereby
occasioned, unless caused by Landlord's negligence or willful misconduct, for
the following purposes:  (i) inspecting and maintaining the Premises; (ii)
making repairs, alterations or additions (only if agreed by Tenant) to the
Premises; (iii) erecting additional building(s) and improvements on the land
where the Premises are situated or on adjacent land owned by Landlord; and (iv)
performing any obligations of Landlord under the Lease including remediation of
hazardous materials if determined to be the responsibility of Landlord provided
that Landlord agrees to use reasonable efforts to minimize interference with
Tenant's use.  Tenant shall permit Landlord and his agents, at any time within
one hundred eighty (180) days prior to the Expiration Date (or at any time
during the Lease if Tenant is in default hereunder), to place upon the Premises
"For Lease" signs and exhibit the Premises to real estate brokers and
prospective tenants at reasonable hours.

H.Estoppel Certificates:    At any time during
the Lease Term, each party (the "Responding Party") shall, within ten
(10) days following written notice from the other party (the "Requesting
Party"), execute and deliver to the Requesting Party a written statement
certifying, if true, the following:  (i) that this Lease is unmodified and in
full force and effect (or, if modified, stating the nature of such
modification); (ii) the date to which rent and other charges are paid in
advance, if any; (iii) acknowledging that there are not, to Responding Party's
knowledge, any uncured defaults on Requesting Party's part hereunder (or
specifying such defaults if they are claimed); and (iv) such other information
as Requesting Party may reasonably request.  Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of
Requesting Party's interest in the Premises.  The Responding Party's failure to
deliver such statement within such time shall be conclusive upon the Responding
Party that this Lease is in full force and effect without modification, except
as may be represented by the Requesting Party, and that there are no uncured
defaults in Requesting Party's performance.  Tenant agrees to provide, within
five (5) days of Landlord's request, Tenant's most recent three (3) years of
audited financial statements for Landlord's use in financing the Premises or
Landlord's interest therein.

I.Exhibits:    All exhibits referred to are
attached to this Lease and incorporated by reference.

J.Interest:    All rent due hereunder, if not
paid when due, shall bear interest at the rate of the Reference Rate published
by Bank of America, San Francisco Branch, plus two percent (2%) per annum from
that date until paid in full ("Agreed Interest Rate").  This provision
shall survive the expiration or sooner termination of the Lease.  Despite any
other provision of this Lease, the total liability for interest payments shall
not exceed the limits, if any, imposed by the usury laws of the State of
California.  Any interest paid in excess of those limits shall be refunded to
Tenant by application of the amount of excess interest paid against any sums
outstanding in any order that Landlord requires.  If the amount of excess
interest paid exceeds the sums outstanding, the portion exceeding those sums
shall be refunded in cash to Tenant by Landlord.  To ascertain whether any
interest payable exceeds the limits imposed, any non-principal payment(including
late charges) shall be considered to the extent permitted by law to be an
expense or a fee, premium, or penalty rather than interest.

K.Modifications Required by Lender:     If any
Lender of Landlord or ground lessor of the Real Property Requires a modification
of this Lease that will not increase Tenant's cost or expense or materially or
adversely change Tenant's rights and obligations, this Lease shall be so
modified and Tenant shall execute whatever documents are required and deliver
them to Landlord within ten (10) days after the request.

L.No Presumption Against Drafter:    Landlord
and Tenant understand, agree and acknowledge that this Lease has been freely
negotiated by both parties; and that in any controversy, dispute, or contest
over the meaning, interpretation, validity, or enforceability of this Lease or
any of its terms or conditions, there shall be no inference, presumption, or
conclusion drawn whatsoever against either party by virtue of that party having
drafted this Lease or any portion thereof.

M.Notices:    All notices, demands, requests,
or consents required to be given under this Lease shall be sent in writing by
U.S. certified mail, return receipt requested, or by personal delivery or by a
nationally recognized overnight courier addressed to the party to be notified at
the address for such party specified in Section 1 of this Lease, or to such
other place as the party to be notified may from time to time designate by at
least fifteen (15) days prior notice to the notifying party.  When this
Lease requires service of a notice, that notice shall replace rather than
supplement any equivalent or similar statutory notice, including any notices
required by Code of Civil Procedure Section 1161 or any similar or successor
statute.  when a statute requires service of a notice in a particular manner,
service of that notice (or a similar notice required by this lease) shall
replace and satisfy the statutory service-of-notice procedures, including those
required by Code of Civil Procedure Section 1162 or any similar or successor
statute.

N.Property Management:    No property
management fee shall be payable to Landlord.

O.Rent:    All monetary sums due from Tenant
to Landlord under this Lease, including, without limitation those referred to as
"additional rent", shall be deemed as rent.

P.Representations:    Tenant acknowledges that
neither Landlord nor any of its employees or agents have made any agreements,
representations, warranties or promises with respect to the Premises or with
respect to present or future rents, expenses, operations, tenancies or any other
matter.  Except as herein expressly set forth herein, Tenant relied on no
statement of Landlord or its employees or agents for that purpose.

Q.Rights and Remedies:    All rights and
remedies hereunder are cumulative and not alternative to the extent permitted by
law, and are in addition to all other rights and remedies in law and in
equity.

R.Severability:    If any term or provision of
this Lease is held unenforceable or invalid by a court of competent
jurisdiction, the remainder of the Lease shall not be invalidated thereby but
shall be enforceable in accordance with its terms, omitting the invalid or
unenforceable term.

S.Submission of Lease:    Submission of this
document for examination or signature by the parties does not constitute an
option or offer to lease the Premises on the terms in this document or a
reservation of the Premises in favor of Tenant.  This document is not effective
as a lease or otherwise until executed and delivered by both Landlord and
Tenant.

T.Subordination:    This Lease is subject and
subordinate to ground and underlying leases, mortgages and deeds of trust
(collectively "Encumbrances") which may now affect the Premises, to
any covenants, conditions or restrictions of record, and to all renewals,
modifications, consolidations, replacements and extensions thereof; provided,
however, if the holder or holders of any such Encumbrance ("Holder")
require that this Lease be prior and superior thereto, within seven (7) days
after written request of Landlord to Tenant, Tenant shall execute, have
acknowledged and deliver all documents or instruments, in the form presented to
Tenant, which Landlord or Holder deems necessary or desirable for such purposes.
Landlord shall have the right to cause this Lease to be and become and remain
subject and subordinate to any and all Encumbrances which are now or may
hereafter be executed covering the Premises or any renewals, modifications,
consolidations, replacements or extensions thereof, for the full amount of all
advances made or to be made thereunder and without regard to the time or
character of such advances, together with interest thereon and subject to all
the terms and provisions thereof; provided only, that in the event of
termination of any such lease or upon the foreclosure of any such mortgage or
deed of trust, Holder agrees to recognize Tenant's rights under this Lease as
long as Tenant is not then in default beyond the expiration of any applicable
cure period and continues to pay Base Monthly Rent and additional rent and
observes and performs all required provisions of this Lease. Within ten (10)
days after Landlord's written request, Tenant shall execute any documents
required by Landlord or the Holder to make this Lease subordinate to any lien of
the Encumbrance.  If Tenant fails to do so, then in addition to such failure
constituting a default by Tenant, it shall be deemed that this Lease is so
subordinated to such Encumbrance. Notwithstanding anything to the contrary in
this Section, Tenant hereby attorns and agrees to attorn to any entity
purchasing or otherwise acquiring the Premises at any sale or other proceeding
or pursuant to the exercise of any other rights, powers or remedies under such
encumbrance.

This Lease constitutes a sublease under that certain
Ground Lease dated March 5, 1999 (the "Existing Ground Lease") between The
Sobrato 1979 Revocable Trust, As Amended ("Master Landlord"), as landlord and
Landlord, as tenant, covering all of the real property within the Project, a
copy which has been provided to Tenant, and under the Parcel Lease described in
the next sentence. In connection with the subdivision of the Project as
contemplated by Section 2.C above, it is anticipated that a separate Parcel
Lease (as defined in the Existing Ground Lease) will be entered into between
Master Landlord, as landlord, and Landlord, as tenant, for the lot within which
the Building will be constructed.  As used in this Lease, "Master Lease" shall
mean the Existing Ground Lease, until such time as the Parcel Lease is entered
into, and thereafter shall mean the Parcel Lease. Notwithstanding this Section
21.T above, concurrently with the execution of this Lease by Landlord and
Tenant, Landlord and Tenant shall execute in recordable form, and Landlord shall
cause Master Landlord to execute in recordable form, the Subordination,
Nondisturbance and Attornment Agreement attached hereto as Exhibit "G" (the
"SNDA").  Landlord shall cause the SNDA to be recorded at Landlord's cost in the
Official Records of San Mateo County, California within five (5) days after this
Lease is executed by Landlord and Tenant. Similarly, in connection with the
Parcel Lease, within ten (10) days after Landlord's request, Landlord and Tenant
shall execute in recordable form, and Landlord shall cause Master Landlord to
execute in recordable form, a Subordination, Nondisturbance and Attornment
Agreement substantially in the form of the SNDA (the "Revised SNDA"), modified
to refer to the Parcel Lease, Memorandum of Parcel Lease to be recorded in
connection with the Parcel Lease  and the revised Premises description, rather
than the Original Ground Lease, the Memorandum of Ground Lease referenced in the
SNDA and the original Premises described in this Lease.  Landlord shall cause
the Revised  SNDA to be recorded at Landlord's cost in the Official Records of
San Mateo County, California  immediately after recordation of the Memorandum of
Lease recorded for the Parcel Lease.

Notwithstanding the foregoing, Tenant shall not be
required to subordinate its interest under this Lease unless (i) such
subordination' does not materially increase Tenant's obligations, or materially
decrease its rights under this Lease, and (ii) Landlord first obtains from the
holder of the mortgage, deed of trust, or other instrument of security to which
this Lease is to become subordinated a written agreement that provides
substantially  that as long as Tenant performs its obligations under this Lease,
no foreclosure of, deed given in lieu of foreclosure of, or sale under the
encumbrance, and no steps or procedures taken under the encumbrance, shall
affect Tenant's rights hereunder.

U.Survival of Indemnities:  All
indemnification, defense, and hold harmless obligations of Landlord and Tenant
under this Lease shall survive the expiration or sooner termination of the
Lease.

V.Time:    Time is of the essence
hereunder.

W.Transportation Demand Management
Programs:  Should a government agency or municipality require Landlord to
institute TDM (Transportation Demand Management) facilities and/or program,
Tenant agrees that the cost of TDM imposed facilities required on the Premises,
including but not limited to employee showers, lockers, cafeteria, or lunchroom
facilities, shall be paid by Tenant.  Further, any ongoing costs or expenses
associated with a TDM program which are required for the Premises and not
provided by Tenant, such as an on-site TDM coordinator, shall be provided by
Landlord with such reasonable costs being included as additional rent and
reimbursed to Landlord by Tenant within thirty (30) days after demand. If TDM
facilities and programs are instituted on a Project wide basis, Tenant shall pay
its proportionate share of such costs in accordance with Section 8 above.

 

 

 

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

Landlord:  SOBRATO INTERESTS IIITenant:
SIEBEL SYSTEMS, INC.

a California Limited Partnershipa Delaware
Corporation

 

By:  _____________________________By:
_____________________________

Its:  General PartnerIts:
_____________________________

 

Master Landlord:  THE SOBRATO 1979 REVOCABLE TRUST

 

By:  _____________________________

Its:  Trustee

 

EXHIBIT "A" - Building and Project - Initial
Buildout

(being finalized by architect - to be attached)

 

Exhibit "B" - Building and Project - Full
Buildout

 

EXHIBIT "C" - Parcel Map & Declaration of
Covenants and Grant of Easements

 

EXHIBIT "D" - Shell Plans and Specifications

(sheet references to be attached)

 

EXHIBIT "E" - Building Shell Definition

1.Building Structure

(a)All foundations to include footings, piling,
grade beams, foundation walls or other building foundation components required
to support the building structure.

(b)Concrete slab supported on beams and columns above
the parking podium and any other reinforcing or structural connections that may
be necessary or required as specified by structural engineer.

(c)Complete structural framing system comprised of
rolled steel beams, columns, and braced-frame steel construction with corrugated
metal deck and concrete fill,  all members required by code to be fireproofed.
Upper floor systems  provide a minimum of 3" concrete over metal deck and are
designed for an 80 lb. live load plus 20 lb. partition load.  Structural framing
will include intermediate beams for HVAC units at the roof, and for major shafts
on each floor.  A roof screen consistent with the design of the building and
acceptable to the local Building and Planning Departments is included.

(d)Tinted high performance glass including required
caulking and sealants.  Tinted reflective glass window wall system with granite
and stainless steel accents.  Two (2) pair of lobby doors, and two (2) exit
doors per building.  All shell doors will be fitted with electric locks and
conduit to J-boxes ready for connection to the Tenant's security system.

(e)Four (4) ply built up roofing by Owens-Corning,
John Manville, or equal and all flashings over a light weight concrete on
corrugated metal deck roof system.  Title 24 code required roof insulation is
included.

(f)Exterior painting where required with Texcoat
textural paint and all caulking of exterior concrete joints in preparation for
painting.

(g)One (1) steel fire stair at perimeter of building,
and two (2) interior fire stairs which will extent to the roof.

(h)At grade loading area with screening and scissors
lift external of building.

(i)Riser for Building sprinkler system (no sprinkler
grid or drops).

2.Podium Garage Structure

(a)Podium garage structure with access ramps,
fire sprinkler system, emergency exit stairways, and mechanical venting (if
required).

(b)Lighting in podium parking to a minimum level per
code.

3.Sitework

(a)All work outside the building perimeter walls
shall be considered site work for the Building Shell and shall include asphalt
concrete paving, landscaping, landscape irrigation, storm drainage, utility
service laterals, curbs, gutters, sidewalks, specialty paving (if required),
retaining walls, planters, trash enclosure, parking lot and landscape lighting
and other exterior lighting per code.  All fountains and podium landscaping
shall also be considered site work for the Building Shell.

(b)Paving sections for automobile and truck access
shall be according to the Geologic Soils Report.

(c)All parking lot striping to include handicap
spaces and signage.

(d)Underground site storm drainage system shall be
connected to the city storm system main.

4.Plumbing

(a)Underground sanitary sewer lateral connected
to the city sewer main in the street and stubbed to the core of the
building.

(b)Domestic water mains connected to the city water
main in the street and stubbed to the building.

(c)Roof drain leaders and downspouts piped and
connected to the site storm drainage system.

(d)Gas lines connected to the city or public utility
mains and run to gas meters adjacent to, and in close proximity to the building.
Meter supplied by utility company.

5. Electrical

(a)A primary and secondary electrical service
from the street to the building electrical room in the garage podium including
underground conduit, wire feeders, and transformer pads.  Transformer supplied
by utility company.  

(b) Two 4" Underground conduit from the street to the
building for telephone trunk lines by Pacific Telephone. 

(c)Two 4" conduit from the building to each of the
adjacent buildings for future data connections.

(d)An electrically operated landscape irrigation
system, with controller, that is a complete and functioning system.

(e) Underground conduit from the building to the main
fire protection system post indicated valve (PIV) for installation of
supervisory alarm wiring.

6.General

(a)All construction shall conform to State and
Local Building Codes, Title 24 Regulations, and shall be ADA Compliant.

(b)All building shell work shall be constructed as
described above and as show on the drawings listed in the attached Exhibit
(TBD).

(c)All other costs shall be deemed Tenant
Improvements.

EXHIBIT "F" - Tenant Improvement Plans and
Specifications

(sheet references to be attached)

 

EXHIBIT "G" - Subordination, Nondisturbance
and Attornment AgreementExhibit 10.09

 

 

 

 

Lease between

Sobrato Interests III and Siebel Systems, Inc.

Building 1 - 2215 Bridgepointe Parkway, San Mateo

 

 

SectionPage #

Parties*

Premises
*
Definitions
*

Description
*

Use
*
Permitted Uses
*

Uses Prohibited
*

Advertisements and
Signs*

Covenants, Conditions and
Restrictions*

Term and Rental
*
Base Monthly Rent
*

Rental Adjustment
*

Late Charges
*

Security Deposit
*

Construction
*
Building Shell Plans
*

Tenant Improvement
Plans*

Tenant Improvement
Pricing*

Change Orders
*

Building Shell Costs
*

Tenant Improvement
Costs*

Construction
*

General Contractor Overhead &
Profit*

Tenant Delays
*

Insurance
*

Punch List &
Warranty*

Other Work by Tenant
*

Acceptance of Possession and
Covenants to Surrender*
Delivery and
Acceptance*

Condition Upon
Surrender*

Failure to Surrender*

Alterations and
Additions*
Tenant's Alterations
*

Free From Liens*

Compliance With Governmental
Regulations*

Maintenance of
Premises*
Landlord's Obligations
*

Tenant's Obligations
*

Landlord and Tenant's Obligations
Regarding Reimbursable Operating Costs*

Reimbursable Operating
Costs*

Tenant's Allocable
Share*

Exclusions to Reimbursable
Operating Costs*

Waiver of Liability
*

Tenant's Right to
Audit*

Hazard Insurance
*
Tenant's Use
*

Landlord's Insurance
*

Tenant's Insurance
*

Waiver
*

Taxes
*

Utilities
*

Toxic Waste and Environmental
Damage*
Tenant's
Responsibility*

Tenant's Indemnity Regarding
Hazardous Materials*

Landlord's Indemnity Regarding
Hazardous Materials*

Actual Release by
Tenant*

Environmental
Monitoring*

Tenant's Default
*
Remedies
*

Right to Re-enter
*

Abandonment
*

No Termination
*

Non-Waiver
*

Performance by
Landlord*

Landlord's  Liability
*
Limitation on Landlord's
Liability*

Limitation on Tenant's
Recourse*

Indemnification of
Landlord*

Destruction of
Premises*
Landlord's Obligation to
Restore*

Limitations on Landlord's
Restoration Obligation*

Tenant's Rights with Respect to a
Destruction of the Premises*

Condemnation
*

Assignment or Sublease
*
Consent by Landlord
*

Assignment or Subletting
Consideration*

No Release
*

Reorganization of
Tenant*

Permitted Transfers
*

Effect of Default
*

Effects of Conveyance
*

Successors and Assigns
*

Option to Extend the Lease
Term*
Grant and Exercise of
Option*

Determination of Fair Market
Rental*

Resolution of a Disagreement over
the Fair Market Rental*

Personal to Tenant
*

Option to Extend the Lease
Term*
Grant and Exercise of
Option*

Right of First Offering to
Purchase*
Grant and Exercise of
Option*

Exclusions
*

General Provisions
*
Attorney's Fees
*

Authority of Parties
*

Brokers
*

Choice of Law
*

Dispute Resolution
*

Entire Agreement
*

Entry by Landlord
*

Estoppel Certificates
*

Exhibits
*

Interest
*

Modifications Required by
Lender*

No Presumption Against
Drafter*

Notices
*

Property Management
*

Rent*

Representations
*

Rights and Remedies
*

Severability
*

Submission of Lease
*

Subordination
*

Survival of
Indemnities*

Time*

Transportation Demand Management
Programs*

EXHIBIT A - Premises and Project -
Initial Buildout*

EXHIBIT B - Premises and Project -
Full Buildout*

EXHIBIT C - Declaration of
Covenants and Grant of Easements*

EXHIBIT D - Shell Plans and
Specifications*

EXHIBIT E - Building Shell
Definition*

EXHIBIT F - Tenant Improvement
Plans and Specifications*

EXHIBIT G - Subordination,
Nondisturbance and Attornment Agreement*

1.Parties:    THIS LEASE, is entered
into on this 11th day of March, 1999, ("Effective Date") between
SOBRATO INTERESTS III, a California Limited Partnership, whose address is 10600
North De Anza Boulevard, Suite 200, Cupertino, CA  95014-2075 and SIEBEL
SYSTEMS, INC., a Delaware Corporation, whose address is 1855 South Grant Street,
San Mateo, California, CA  94402-2667, hereinafter called respectively Landlord
and Tenant.

2.Premises:    

A.Definitions.    

i.Building.    The term
"Building" shall mean that five (5) story steel frame building
containing approximately 141,496 rentable square feet and all Tenant
Improvements installed therein to be constructed by Landlord and leased by
Tenant pursuant to the terms of this Lease in the location labeled as Building 1
on Exhibit "A" attached hereto and commonly known as 2215
Bridgepointe Parkway.  

ii.Building 2.    The term
"Building 2" shall mean that five (5) story steel frame building
containing approximately 141,496 rentable square feet to be constructed by
Landlord and leased by Tenant pursuant to a separate lease between the Parties
of even date herewith ("Building 2 Lease") in the location labeled as
Building 2 on Exhibit "A" and commonly known as 2211
Bridgepointe Parkway.

iii.Building 3.     The term
"Building 3" shall mean that five (5) story steel frame building
containing approximately 167,505 rentable square feet to be constructed by
Landlord and leased by Tenant or by a third party pursuant to the terms of
Section 19 of this Lease in the location labeled as Building 3 on Exhibit
"B" and commonly known as 2207 Bridgepointe Parkway. 

iv.Common Area.    The term
"Common Area" shall mean that certain real property beneath and
surrounding the Building, Building 2 and Building 3 consisting initially of an
underground parking garage of approximately 455 parking spaces, on-grade parking
lots consisting of approximately 255 parking spaces, the first two levels of the
above grade parking structure consisting of approximately 280 cars, recreation
areas and the adjacent landscaped site areas as shown on Exhibit
"A".  At the time of construction of Building 3 the Common Area
will be modified by the completion of the above grade parking structure to total
approximately 850 parking spaces and changes to portions of the landscaped sites
areas resulting in total parking at full buildout of 1,560 spaces as shown in
Exhibit "B" attached hereto.

Landlord shall have the power to allocate to each tenant in
the Project, the number of parking spaces in the podium garage, above-grade
parking structure or other portions of the Project as to which Tenant may have
the use in connection with its Building; provided that (i) such allocation is
requested by at least one (1) tenant in the Project, (ii) Landlord shall not
allocate to Tenant materially less than the Tenant's prorata share of parking
calculated on the basis of the square footage of the buildings in the Project,
and (iii) Landlord shall allocate parking in a manner so as to maximize the
adjacency of parking to each building. Landlord shall further retain the right
to restrict an appropriate amount of the parking for visitors of the Project or
for car pooling (as may be required by a TDM program).  At the request of Tenant
or any other tenant in the Project, Landlord further agrees to restrict up to
ten (10) spaces per building for key employees of Tenant (or of other tenants in
the Project) or for other reasonable uses.  Tenant shall be responsible for
seeing that the total number of vehicles parked in the Project by employees and
invitees of Tenant does not exceed the number of total spaces allocated to the
Building.

v.Project.    The term
"Project" shall be that certain  real property consisting of
approximately 10.8 acres at the corner of Bridgepointe Circle and Bridgepointe
Parkway in San Mateo, California  and all improvements constructed thereon
consisting at full buildout of the Building, Building 2, Building 3 and the
Common Area as shown in Exhibit "B". 

vi.Premises.    The term
"Premises" shall mean the Building and a non-exclusive right to use
the Common Area. Unless expressly provided otherwise, the term Premises as used
herein shall include the Tenant Improvements (defined in Section 5.B)
constructed by Tenant pursuant to Section 5.B.

B.Grant:    Landlord hereby leases the
Premises to Tenant, and Tenant hires the Premises from Landlord. 

C.Recordation of Parcel Map and Declaration:
 Tenant consents to recordation by Landlord of a Parcel Map (Parcel
Map") and a Declaration of Covenants, Conditions and Restrictions
("Declaration").  The Parcel Map and the Declaration shall be
substantially in the form attached hereto as Exhibit "C" with
such changes as may be may be desired by Landlord or Landlord's lenders to
facilitate the operation, construction, financing, sale and/or leasing of the
Project, provided such changes do not materially and adversely affect Tenant's
use of the Premises, and with such changes as may be required by the city or
other governmental authority having jurisdiction over the Project.   Landlord is
seeking approval of the Parcel Map and Declaration to subdivide the existing
parcel into the four lots to facilitate Landlord's operation, construction,
financing, lease and/or sale of the Project as individual buildings.  Landlord's
failure to obtain approval of the Parcel Map or Declaration shall in no way
invalidate this Lease.  In the event the Parcel Map and Declaration are recorded
by Landlord, the Section 2.A.vi shall be replaced by following:  The term
"Premises" shall mean (i) the land area within Lot 2; (ii) the
Building; and (iii) the nonexclusive right to use the Common Area in accordance
with the terms and conditions of the Declaration and this Lease.  This Lease
shall be subject and subordinate in all respects to the Declaration, as the same
may be amended from time to time.  Tenant covenants and agrees to refrain from
doing or causing to be done, or permitting any thing or act to be done, which
would constitute a default under the Declaration or which would or might make
Landlord liable for any damages, claims or penalty. All assessments charged to
the Premises pursuant to the Declaration, (other than those assessments which
represent: the costs required to be paid and borne by Landlord under the express
terms of this Lease (such as Landlord's maintenance costs pursuant to Section
8.A; fines, penalties and costs of suit charged by the Association, to the
extent not caused by Tenant's breach of this Lease or violation of the
Declaration; reimbursements to the Association for diminution of the
Association's insurance proceeds, to the extent not caused by Tenant's violation
of the insurance provisions of the Declaration; and assessments levied against
the Premises because of the nonpayment of assessments levied on other lots
within the Project other than the Premises) shall constitute a part of Tenant's
Allocable Share of Reimbursable Operating Costs pursuant to Article 8 of this
Lease.

Following recordation of the Declaration, if owners and
occupants of Building 2 or Building 3 are violating the terms and conditions of
the Declaration and such violation materially and adversely affects Tenant's
rights under this Lease, then within a reasonable time following Tenant's
request, Landlord shall take reasonable steps to enforce the provisions of the
Declaration relating to such violation, in accordance with the procedures
established in the Declaration, the cost of which shall be a Reimbursable
Operating Cost pursuant to Article 8 of this Lease.

3.Use:    

A.Permitted Uses:    Tenant shall use the
Premises only for the following purposes and shall not change the use of the
Premises without the prior written consent of Landlord:  General office uses
including research and development and other incidental uses (such incidental
uses shall include without limitation, a gymnasium and/or a cafeteria for use of
Tenant's employees). Tenant shall use only the number of parking spaces
allocated to Tenant under this Lease. Following recordation of the Declaration,
if occupants of Building 2 or Building 3 are using parking spaces in excess of
the number of spaces to which they are entitled under the Declaration, then
within a reasonable time following Tenant's request, Landlord shall seek to
enforce the provisions of the Declaration relating to such excessive use, in
accordance with the procedures established in the Declaration, the cost of which
shall be a Reimbursable Operating Cost pursuant to Article 8 of this Lease.
Prior to recording the Declaration, Landlord shall cause the Declarants of the
Declaration to confirm in writing for the benefit of Tenant that the signs and
window coverings to be installed pursuant to Section 3.C of this Lease are
approved by the Declarants. Landlord shall promptly send to Tenant all notices
received from the Association pertaining to the Association's entry onto the
Premises and Common Area, insurance coverage affecting the Premises, and
assessments levied against the Premises.  All commercial trucks and delivery
vehicles shall be (i) loaded and unloaded in a manner which does not interfere
with the businesses of other occupants of the Project, and (ii) permitted to
remain on the Project only so long as is reasonably necessary to complete the
loading and unloading.  Landlord makes no representation or warranty that any
specific use of the Premises desired by Tenant is permitted pursuant to any
Laws.

B.Uses Prohibited:    Tenant shall not commit
or suffer to be committed on the Premises any waste, nuisance, or other act or
thing which may disturb the quiet enjoyment of any other tenant in or around the
Premises, nor allow any sale by auction or any other use of the Premises for an
unlawful purpose. Tenant shall not (i) damage or overload the electrical,
mechanical or plumbing systems of the Premises, (ii) attach, hang or suspend
anything from the ceiling, walls or columns of the building or set any load on
the floor in excess of the load limits for which such items are designed, or
(iii) generate dust, fumes or waste products which create a fire or health
hazard or damage the Premises or in the soils surrounding the Building.  No
materials, supplies, equipment, finished products or semi-finished products, raw
materials or articles of any nature, or any waste materials, refuse, scrap or
debris, shall be stored upon or permitted to remain on any portion of the
Premises outside of the Building without Landlord's prior approval, which
approval may be withheld in its sole discretion.  

C.Advertisements and Signs:    Tenant shall be
permitted to place two (2) signs mounted on the building, one monument sign
within the Common Area, and any directional signs necessary within the Common
Area, provided such signs are approved by the city or other governing authority.
Tenant shall be entitled to additional signage on Building 2 and Building 3 (if
leased) pursuant to the leases for these buildings.  Any sign placed on the
Premises shall be removed by Tenant, at its sole cost, prior to the Expiration
Date or promptly following the earlier termination of the lease, and Tenant
shall repair, at its sole cost, any damage or injury to the Premises caused
thereby, and if not so removed, then Landlord may have same so removed at
Tenant's expense.

D.Covenants, Conditions and Restrictions: 
This Lease is subject to the effect of (i) easements, mortgages or deeds of
trust, ground leases, rights of way of record and any other matters or documents
of record; and (ii) any zoning laws of the city, county and state where the
Building is situated (collectively referred to herein as
"Restrictions") and Tenant will conform to and will not violate the
terms of any such Restrictions.  

Tenant acknowledges that as to certain matters set forth
in this Lease, the Association (defined in the Declaration) has or will have
rights of approval or disapproval. If any matter requiring the Association's
approval is submitted to Landlord by Tenant for Landlord's approval, Landlord
shall respond to Tenant in a timely fashion.  If Landlord approves such matter
and such matter further requires the Association's approval, Landlord shall
promptly submit the same to  the Association, as applicable.  In no event,
however, shall Landlord's disapproval be deemed unreasonable if the Association
has disapproved of such matter nor shall Landlord have any liability to Tenant
by reason thereof.

4.Term and Rental:    

A.Base Monthly Rent:    The term ("Lease
Term") shall be for one hundred forty four (144) months, commencing on
substantial completion of construction as finally determined pursuant to Section
5.G (the "Commencement Date") estimated to occur on August 1, 2001,
and ending one hundred forty four (144) months thereafter, ("Expiration
Date").  Notwithstanding the foregoing, Tenant shall have the right to
accelerate the commencement of construction of the Building by giving notice to
Landlord that Tenant wishes Landlord to commence construction of the Building
(the "Acceleration Notice") no later than thirteen (13) months prior
to the desired Commencement Date.  Notwithstanding the fact that the Lease Term
begins on the Commencement Date, this Lease and all of the obligations of
Landlord and Tenant shall be binding and in full force and effect from and after
the Effective Date except for those obligations which begin on the Commencement
Date.  In addition to all other sums payable by Tenant under this Lease, Tenant
shall pay as base monthly rent ("Base Monthly Rent") for the Premises
the amount of Three Hundred Thirty Four Thousand Three Hundred Fifty Five
Dollars ($334,355.00).  Base Monthly Rent and Tenant's payment of operating
expenses and taxes pursuant to Section 8 shall be payable beginning on the
Commencement Date in advance on or before the first day of each calendar month
during the Lease Term.  All sums payable by Tenant under this Lease shall be
paid to Landlord in lawful money of the United States of America, without offset
or deduction and without prior notice or demand, at the address specified in
Section 1 of this Lease or at such place or places as may be designated in
writing by Landlord during the Lease Term.  Base Monthly Rent for any period
less than a calendar month shall be a pro rata portion of the monthly
installment.

B.Rental Adjustment:  

(i)For Variation in Rentable Square Feet:
Upon Substantial Completion of construction, the Building shall be measured
(from outside wall to outside wall including all areas covered by a structural
roof), and if the actual square footage differs from 141,496 square feet, the
initial Base Monthly Rent hereunder shall be adjusted to the product of Two and
363/1000 Dollars ($2.363) and the actual rentable square feet of the Building.

(ii)Periodic Adjustment:    Beginning
thirty (30) months after the Commencement Date, and every thirty (30) months
thereafter, the then-payable Base Monthly Rent shall be increased by seven and
50/100 percent (7.50%).

C.Late Charges:    Tenant hereby acknowledges
that late payment by Tenant to Landlord of Base Monthly Rent and other sums due
hereunder will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which is extremely difficult to ascertain.  Such costs include
but are not limited to:  administrative, processing, accounting, and late
charges which may be imposed on Landlord by the terms of any contract, revolving
credit, mortgage, or trust deed covering the Premises.  Accordingly, if any
installment of Base Monthly Rent or other sum due from Tenant shall not be
received by Landlord or its designee within ten (10) days after the rent is due,
Tenant shall pay to Landlord a late charge equal to five (5%) percent of such
overdue amount, which late charge shall be due and payable on the same date that
the overdue amount was due. The parties agree that such late charge represents a
fair and reasonable estimate of the costs Landlord will incur by reason of late
payment by Tenant, excluding interest and attorneys fees and costs.  If any rent
or other sum due from Tenant remains delinquent for a period in excess of thirty
(30) days then, in addition to such late charge, Tenant shall pay to Landlord
interest on any rent that is not paid when due at the Agreed Interest Rate
specified in Section 21.J following the date such amount became due until
paid.  Acceptance by Landlord of such late charge shall not constitute a waiver
of Tenant's default with respect to such overdue amount nor prevent Landlord
from exercising any of the other rights and remedies granted hereunder.  In the
event that a late charge is payable hereunder, whether or not collected, for
three (3) consecutive installments of Base Monthly Rent, then the Base Monthly
Rent shall automatically become due and payable quarterly in advance, rather
than monthly, notwithstanding any provision of this Lease to the contrary.
After four (4) quarterly installments have been paid on time, rent shall again
be payable monthly.  

D.Security Deposit:    

(i)Amount: Pursuant to the Building 2
Lease, Tenant will deposit with Landlord a letter of credit ("Letter of
Credit") in a form reasonably acceptable to Landlord in the amount of Eight
Million Four Hundred Thousand Dollars ($8,400,000.00) to secure Tenant's
obligation to complete Tenant Improvements in the Building and in Building 2.
Upon Landlord's receipt of evidence reasonably satisfactory to Landlord of lien
free completion of the Tenant Improvements and that Tenant has fully paid for
the cost of all of Tenant Improvements for the Building and for Building 2, the
Letter of Credit shall be cancelled and returned to Tenant by Landlord.
Notwithstanding the foregoing, in the event Tenant elects to defer construction
on a portion of the non-core Tenant Improvements in the Building (as provided
further and restricted in Section 5.B), Landlord shall not require Tenant to
continue to post the Letter of Credit after payment in full for all other Tenant
Improvements associated with the Building and Building 2.

(ii)   Use by Landlord:     Landlord shall
be entitled to draw against the full amount of the Letter of Credit at any time
provided only that Landlord certifies to the issuer of the Letter of Credit that
Tenant has failed to make a payment for Tenant Improvement costs as provided in
5.F, that Tenant has failed to timely renew or extend the Letter of Credit as
required by this subsection (ii), or that Tenant has failed to amend the Letter
of Credit or obtain a new Letter of Credit as required by this subsection (ii)
and such failure has not been cured within ten (10) days following Landlord's
notice to Tenant.  Tenant shall keep the Letter of Credit in effect at all times
prior to payment in full for the Tenant Improvements for the Building and for
Building 2.  At least sixty (60) days prior to expiration of any Letter of
Credit, the term thereof shall be renewed or extended for a period until Tenant
has paid in full for the Tenant Improvements for the Building.  Subject to the
notice requirement and cure period provided herein, Tenant's failure to so renew
or extend the Letter of Credit shall be a material default of this Lease by
Tenant entitling Landlord to draw down on the entire amount of the Letter of
Credit.  Any amounts drawn on the Letter of Credit shall be used to pay for the
cost of the Tenant Improvements.  In the event the Letter of Credit is drawn by
Landlord, and the proceeds used to pay for the completion of the Tenant
Improvements in the Building and Building 2, after Landlord's completion of the
Tenant Improvements in the Building, Landlord shall refund to Tenant any excess
proceeds from the Letter of Credit.  In the event of termination of Landlord's
interest in this Lease, Landlord may deliver the Letter of Credit to Landlord's
successor in interest in the Premises and thereupon be relieved of further
responsibility with respect to the Letter of Credit.  Except as provided herein,
no other security deposit shall be required by Tenant.

(iii)  Letter of Credit Fee:  Landlord and
Tenant agree to share equally in the fee charged to provide the Letter of
Credit.  In no event, however, shall Landlord's share of the fee exceed the sum
of Forty Two Thousand Dollars ($42,000.00) per annum.  

5.Construction :

A.Building Shell Plans: The Building Shell shall
be constructed in accordance with the Building Shell plans and guideline
specifications prepared by Korth Sunseri Hagey ("Shell Architect").
The design development drawings for the Building Shell are attached hereto as
Exhibit "D" ("Preliminary Shell Plans and
Specifications"). The Parties have generally approved the Preliminary Shell
Plans, however, Tenant reserves the right to work in a diligent manner with
Landlord and his design team to refine the Preliminary Plans and Specifications
to accommodate Tenant's requirements such that this activity does not delay the
issuance of the working drawings for the Building Shell ("Shell Permit
Drawings") on schedule.  The current schedule anticipates completion of the
Shell Permit Drawings on May 5, 1999.  Such refinements shall be limited to the
following areas: (i) structural issues relating to the support of the rooftop
HVAC system and other framing for its distribution inside the Building; (ii)
planning issues relating to the sizing and placement of the base building
electrical system; (iii) planning and specification issues relating to the
design of the Building security systems; (iv) utility services relating to
communications entrances from the street to the Building; (v) design of the main
electrical service and emergency power service to the Building; and (vi)
definition of the work that will be completed as a part of the construction of
the Building as it affects Tenant's ability to access the Building during the
construction of the other Buildings in the Project. The Shell Permit Drawings
(i) shall be consistent with the Preliminary Shell Plans in all material
respects, and (ii) shall provide for materials to be of a quality consistent
with a "Class A" office project the where materials are not currently
specified in the Preliminary Shell Plans.  Landlord shall contract for the
installation of the pile foundation system and shall begin this work immediately
following the Effective Date.  Upon completion of the Shell Permit Drawings,
Landlord shall select a general contractor ("General Contractor") on
the basis of a competitive bid of both the cost to construct the Building Shell
and the fee and general conditions bid to construct the Tenant Improvements.
Thereafter, Landlord shall cause the General Contractor to complete construction
of the Building Shell. The Building Shell shall include those items set forth in
the attached Exhibit "E" ("Building Shell
Definition") which scope includes the cost of the parking structures.  In
the event of a conflict between Exhibit "D" and Exhibit
"E", Exhibit "E" shall govern.

B.Tenant Improvement Plans:    Tenant, at
Tenant's sole cost and expense, will hire an interior architect ("Interior
Architect") to prepare plans and outline specifications to be attached as
Exhibit "F" ("Tenant Improvement Plans and
Specifications") with respect to the construction of improvements to the
interior premises ("Tenant Improvements").  The Tenant Improvement
Plans and Specifications plans shall be completed for all aspects of the work by
October 1, 2000, or three (3) months following the Acceleration Notice with all
detail necessary for submittal to the city and for construction and shall
include any information required by the relevant agencies regarding Tenant's use
of Hazardous Materials if applicable.  The Tenant Improvements shall consist of
all items not included within the scope of the Building Shell Definition. All
Tenant Improvements affecting or otherwise related to the Building Core will be
subject to Landlord's reasonable approval. The "Building Core" shall
include those items typically associated in the industry with an office building
core including elevators, restrooms, fire sprinklers, HVAC and electrical
systems distributed to each floor, exiting stair finishes and a finished
building lobby.  As to the balance of the Tenant Improvements, Landlord shall
not have rights of approval, however, Tenant Improvement Plans shall provide for
the creation of finished office space ready for occupancy with a minimum
buildout in all areas of the Premises consisting of: (i) fire sprinklers, (ii)
floorcoverings, (iii) overhead ceiling system (iv) distribution of the HVAC
system, (v) overhead florescent lighting, and (vi) any other work required by
the City of San Mateo necessary to obtain a Certificate of Occupancy.  Tenant
shall have the right to defer installation of the Tenant Improvements not
associated with the Building Core in up to twenty percent (20%) of the rentable
square footage of the Building.  Except as provided in the preceding sentence,
Tenant shall have no rights or ability to delay installation of any of the
Tenant Improvements.  The Tenant Improvement Plans and Specifications shall be
prepared in sufficient detail to allow General Contractor to construct the
Tenant Improvements.  The General Contractor shall construct the Tenant
Improvements in accordance with all Tenant Improvement Plans and Specifications.
The Tenant Improvements shall not be removed or altered by Tenant without the
prior written consent of Landlord as provided in Section 7.  Tenant shall have
the right to depreciate and claim and collect any investment tax credits in the
Tenant Improvements during the Lease Term.  Tenant shall further retain the
right to encumber its leasehold interest with a first priority security
interest, provided such lienholder has no right to remove any Tenant
Improvements installed by Tenant pursuant to this Lease in the event of a
default by Tenant under such encumbrance.  Upon expiration of the Lease Term or
any earlier termination of the Lease, the Tenant Improvements shall become the
property of Landlord and shall remain upon and be surrendered with the Premises,
and title thereto shall automatically vest in Landlord without any payment
therefore.

C.Tenant Improvement Pricing. Within ten (10)
days after completion of the Tenant Improvements Plans and Specifications,
Landlord shall cause the General Contractor to submit to Tenant competitive bids
from at least three (3) subcontractors for each aspect of the work in excess of
Fifty Thousand and No/100 Dollars ($50,000.00) related to the Tenant
Improvements.  Landlord shall cause the General Contractor to utilize the low
bid in each case unless Tenant approves General Contractor's use of another
subcontractor, and the cost of the Tenant Improvements shall be based upon
construction expenses equal to (i) the bid amounts as approved by Tenant, (ii) a
reasonable contingency approved by Tenant to protect the General Contractor
against cost overruns, and (iii) the general contractor fee specified in Section
5.H below ("Tenant Improvement Budget").  Upon Tenant's written
approval of the Tenant Improvement Budget, which approval shall not be
unreasonably withheld or delayed, Landlord and Tenant shall be deemed to have
given their respective approvals of the final Tenant Improvement Plans and
Specifications on which the cost estimate was made, and General Contractor shall
proceed with the construction of the Tenant Improvements in accordance with the
terms of Section 5.G below.  If Tenant does not specifically approve or
disapprove the bids within ten (10) business days, Tenant shall be deemed to
have approved the bids.

D.Change Orders:   Tenant shall have the right
to order changes in the manner and type of construction of the Tenant
Improvements. Upon request and prior to Tenant's submitting any binding change
order, Landlord shall cause the General Contractor to promptly provide Tenant
with written statements of the cost to implement and the time delay and
increased construction costs associated with any proposed change order, which
statements shall be binding on General Contractor.  If no time delay or
increased construction cost amount is noted on the written statement, the
parties agree that there shall be no adjustment to the construction cost or the
Commencement Date associated with such change order.  If ordered by Tenant,
Landlord shall cause the General Contractor to implement such change order and
the cost of constructing the Tenant Improvements shall be increased or decreased
in accordance with the cost statement previously delivered by General Contractor
to Tenant for any such change order.  In no event, however, shall Tenant have
the right to eliminate the minimum buildout requirements specified in Section
5.B above.

E. Building Shell Costs:   Landlord shall pay
all costs associated with the Building Shell.

F. Tenant Improvement Costs:     Tenant shall
pay all costs associated with the Tenant Improvements.  The cost of Tenant
Improvements shall consist of only the following to the extent actually incurred
by General Contractor in connection with the construction of Tenant
Improvements:  construction costs, all permit fees, construction taxes or other
costs imposed by governmental authorities related to the Tenant Improvements,
and General Contractor overhead and profit as described in Section 5.H below.
During the course of construction of Tenant Improvements, Landlord may deliver
to Tenant not more than once each calendar month a written request for payment
prepared by the General Contractor ("Progress Invoice") which shall
include and be accompanied by General Contractor's certified statements setting
forth the amount requested, certifying the percentage of completion of each item
for which reimbursement is requested, and if requested by Tenant, a certificate
from Landlord's Architect certifying the percentage completion.  Tenant shall
pay the amount due pursuant to the Progress Invoice less a ten percent (10%)
retention directly to the General Contractor, within thirty (30) days after
Tenant's receipt of the above items. All costs for Tenant Improvements shall be
fully documented to and verified by Tenant.

G. Construction:    The Building Shell and
Tenant Improvements shall be deemed substantially complete ("Substantially
Complete" or "Substantial Completion") when the Building Shell
and Tenant Improvements have been substantially completed in accordance with the
Shell Plans and Specifications and Tenant Improvement Plans and Specifications,
as evidenced by the completion of a final inspection or the issuance of a
certificate of occupancy or its equivalent by the appropriate governmental
authority for the Building Shell and Tenant Improvements, and the issuance of a
certificate by the Architect certifying that the Building Shell and Tenant
Improvements have been completed in accordance with the plans.  Installation of
(i) Tenant's data and phone cabling, (ii) Tenant's furniture, or (iii) the
exterior landscaping shall not be required in order to deem the Premises
Substantially Complete.  Any prevention, delay or stoppage due to strikes,
lockouts, inclement weather unusual for the season it which it occurs, labor
disputes, inability to obtain labor, materials, fuel or reasonable substitutes
therefor, governmental restrictions, regulations, controls, civil commotion,
fire or other act of God, and another causes beyond the reasonable control of
Landlord (except financial inability) shall extend the dates contained in this
Section 5.G by a period equal to the period of any said prevention, delay or
stoppage.  

If Landlord cannot obtain building permits or
Substantially Complete construction by the dates set forth herein, this Lease
shall not be void or voidable nor shall Landlord be liable for any loss or
damage resulting therefrom.  Notwithstanding anything to the contrary contained
herein, if Landlord has not delivered the Premises substantially completed to
Tenant on or before August, 1, 2002 ("Termination Date"), Tenant shall
have the right to cancel this Lease by providing Landlord written notice within
sixty (60) days following the Termination Date as Tenant's sole and exclusive
remedy for such failure.  In such event, Landlord shall return the Letter of
Credit to Tenant and thereafter neither party shall have any further liability
to the other under this Lease.

H. General Contractor Overhead & Profit:
As compensation to General Contractor for its services related to
construction of the Building Shell and Tenant Improvements, General Contractor
shall receive a fee based upon the cost of construction determined and agreed
upon by Landlord and Tenant at the time of the competitive bid of the Building
Shell.  Except as provided therein, Landlord or General Contractor shall not
receive any other fee or payment from Tenant in connection with General
Contractor's services.

I.Tenant Delays:    A "Tenant Delay"
shall mean any delay in Substantial Completion of the Building as a result of
any of the following: (i) Tenant's failure to complete or approve the Tenant
Improvement Plans by the dates set forth in Section 5.B, (ii) Tenant's failure
to approve the bids for construction by the dates set forth in Section 5.C,
(iii) changes to the plans requested by Tenant which delay the progress of the
work, (iv) Tenant's request for materials components, or finishes which are not
available in a commercially reasonable time given the anticipated Commencement
Date, (v) Tenant's failure to make a progress payment for Tenant Improvements as
provided in Section 5.F after notice from Landlord and expiration of the
applicable cure period, (vi) Tenant's request for more than one (1) rebidding of
the cost of all or a portion of the work, and (vii) any errors or omissions in
the Tenant Improvement Plans provided by Tenant's architect unless caused by
misinformation provided by Landlord, Landlord's Architect or the General
Contractor.  Notwithstanding anything to the contrary set forth in this Lease,
and regardless of the actual date the Premises are Substantially Complete, the
Commencement Date shall be deemed to be the date the Commencement Date would
have occurred if no Tenant Delay had occurred as reasonable determined by
Landlord.  In addition, if a Tenant Delay results in an increase in the cost of
the labor or materials, Tenant shall pay the cost of such increases.  

J. Insurance:     General Contractor shall
procure (as a cost of the Building Shell) a "Broad Form" liability
insurance policy in the amount of Three Million Dollars ($3,000,000.00).
Landlord shall also procure (as a cost of the Building Shell) builder's risk
insurance for the full replacement cost of the Building Shell and Tenant
Improvements while the Building and Tenant Improvements are under construction,
up until the date that the fire insurance policy described in Section 9 is in
full force and effect.

K. Punch List & Warranty:   After the
Building Shell and Tenant Improvements are Substantially Complete, Landlord
shall cause the General Contractor to immediately correct any construction
defect or other "punch list" item which Tenant brings to General
Contractor's attention.  All such work shall be performed so as to reasonably
minimize the interruption to Tenant and its activities on the Premises.  General
Contractor shall provide a standard contractor's warranty with respect to the
Building Shell and the Tenant Improvements for one (1) year from the
Commencement Date.  Such warranty shall exclude routine maintenance, damage
caused by Tenant's negligence or misuse, and acts of God. Notwithstanding
anything to the contrary in this Lease, Landlord warrants that on the
commencement of the term hereof, (i) the Premises shall comply with all laws,
codes, ordinances and other governmental requirements then applicable to the
Building Shell and the Common Area, (ii) all components of the Building Shell
shall be in good working order, condition, and repair, and (iii) the Premises,
the Project, and the land and groundwater thereunder, shall be free of
contamination by any Hazardous Materials then regulated by any applicable local,
state, or federal law not caused by Tenant.  In the event of any breach of any
of the foregoing warranties, Landlord shall promptly rectify the same at its
sole cost and expense and shall indemnify, defend, and hold Tenant harmless from
and against any damages, liability, suits, losses, claims, actions, costs or
expenses (including attorneys' and consultants' fees and costs) suffered by
Tenant in connection with any such breach.

L.   Other Work by Tenant:   All work not
described in the Shell Plans and Specifications or Tenant Improvement Plans and
Specifications, such as furniture, telephone equipment, telephone wiring and
office equipment work, shall be furnished and installed by Tenant at Tenant's
cost.  Prior to Substantial Completion, Tenant shall be obligated to (i) provide
active phone lines to any elevators, and (ii) contract with a firm to monitor
the fire system.  When the construction of the Tenant Improvements has proceeded
to the point where Tenant's work of installing its fixtures and equipment in the
Premises can be commenced, General Contractor shall notify Tenant and shall
permit Tenant and its authorized representatives and contractors access to the
Premises before the Commencement Date for the purpose of installing Tenant's
trade fixtures and equipment.  

6.Acceptance of Possession and Covenants to
Surrender:    

A.Delivery and Acceptance:    On the
Commencement Date, Landlord shall deliver and Tenant shall accept possession of
the Premises and enter into occupancy of the Premises on the Commencement Date.
Except as otherwise specifically provided herein, Tenant agrees to accept
possession of the Premises in its then existing condition, subject to all
Restrictions and without representation or warranty by Landlord except as
provided in Section 5.K above.  Tenant's taking possession of any part of the
Premises shall be deemed to be an acceptance of any work of improvement done by
Landlord in such part as complete and in accordance with the terms of this Lease
except for (i) "Punch List" type items of which Tenant has given
Landlord written notice prior to the time Tenant takes possession, and (ii)
Landlord's warranties provided in Section 5.K above.  Within thirty (30) days
after the Commencement Date, Tenant agrees to occupy at least a one (1) floor of
the Premises.

B.Condition Upon Surrender:    Tenant further
agrees on the Expiration Date or on the sooner termination of this Lease, to
surrender the Premises to Landlord in good condition and repair, normal wear and
tear excepted.  In this regard, "normal wear and tear" shall be
construed to mean wear and tear caused to the Premises by the natural aging
process which occurs in spite of prudent application of the commercially
reasonable standards for maintenance, repair replacement, and janitorial
practices, and does not include items of neglected or deferred maintenance.  In
any event, Tenant shall cause the following to be done prior to the Expiration
Date or sooner termination of this Lease: (i) all interior walls shall be free
of holes and gouges, (ii) all tiled floors shall be cleaned and waxed, (iii) all
carpets shall be cleaned and shampooed, (iv) all broken, marred, stained or
nonconforming acoustical ceiling tiles shall be replaced, (v) all cabling placed
above the ceiling by Tenant or Tenant's contractors shall be removed, (vi) all
windows shall be washed; (vii) the HVAC system shall be serviced by a reputable
and licensed service firm and left in "good operating condition and
repair" as so certified by such firm, (viii) the plumbing and electrical
systems and lighting shall be placed in good order and repair (including
replacement of any burned out, discolored or broken light bulbs, ballasts, or
lenses. On or before the Expiration Date or sooner termination of this Lease,
Tenant shall remove all its personal property and trade fixtures from the
Premises.  All property and fixtures not so removed shall be deemed as abandoned
by Tenant.  Tenant shall ascertain from Landlord within ninety (90) days before
the Expiration Date whether Landlord desires to have the Premises or any parts
thereof restored to their condition as of the Commencement Date, or to cause
Tenant to surrender all Alterations (as defined in Section 7) in place to
Landlord.  If Landlord shall so desire, and provided that at the time Landlord
gave its consent to their installation, Landlord also notified Tenant that such
removal would be required, Tenant shall, at Tenant's sole cost and expense,
remove such Alterations as Landlord requires and shall repair and restore said
Premises or such parts thereof before the Expiration Date. Such repair and
restoration shall include causing the Premises to be brought into compliance
with all applicable building codes and laws in effect at the time of the removal
to the extent such compliance is necessitated by the repair and restoration
work.  In no event, however, shall Tenant be required to remove any portion of
the initial Tenant Improvements installed in accordance with the terms of this
Lease. 

C.Failure to Surrender:    If the Premises are
not surrendered at the Expiration Date or sooner termination of this Lease,
Tenant shall be deemed in a holdover tenancy pursuant to this Section 6.C and
Tenant shall indemnify, defend, and hold Landlord harmless against loss or
liability resulting from delay by Tenant in so surrendering the Premises
including, without limitation, any claims made by any succeeding tenant founded
on such delay and costs incurred by Landlord in returning the Premises to the
required condition, plus interest at the Agreed Interest Rate. Any
holding over after the termination or Expiration Date with Landlord's express
written consent, shall be construed as month-to-month tenancy, terminable on
thirty (30) days written notice from either party, and Tenant shall pay as Base
Monthly Rent to Landlord a rate equal to one hundred twenty five percent (125%)
of the Base Monthly Rent due in the month preceding the termination or
Expiration Date, plus all other amounts payable by Tenant under this Lease.  Any
holding over shall otherwise be on the terms and conditions herein specified,
except those provisions relating to the Lease Term and any options to extend or
renew, which provisions shall be of no further force and effect following the
expiration of the applicable exercise period.  If Tenant remains in possession
of the Premises after expiration or earlier termination of this Lease without
Landlord's consent, Tenant's continued possession shall be on the basis of a
tenancy at sufferance and Tenant shall pay as rent during the holdover period an
amount equal to one hundred fifty percent (150%) of the Base Monthly Rent due in
the month preceding the termination or Expiration Date, plus all other amounts
payable by Tenant under this Lease.  This provision shall survive the
termination or expiration of the Lease.

7.Alterations and Additions:     

A.Tenant's Alterations:    Tenant shall not
make, or suffer to be made, any alteration or addition to the Premises
("Alterations"), or any part thereof, without obtaining Landlord's
prior written consent and delivering to Landlord the proposed architectural and
structural plans for all such Alterations at least fifteen (15) days prior to
the start of construction. If such Alterations affect the structure of the
Building, Tenant additionally agrees to reimburse Landlord its reasonable out-
of-pocket costs incurred in reviewing Tenant's plans. Notwithstanding anything
to the contrary contained in this lease, Tenant shall be entitled to construct
Alterations which cost Tenant less than One Hundred Thousand Dollars
($100,000.00) in the aggregate each year, without obtaining Landlord's consent,
provided such Alterations do not affect the exterior of the Premises or
adversely affect the structural integrity or life safety systems of the
Premises.  Tenant shall not proceed to make such Alterations until Tenant has
obtained all required governmental approvals and permits, and provides Landlord
reasonable security, in form reasonably approved by Landlord, to protect
Landlord against mechanics' lien claims.  Tenant agrees to provide Landlord (i)
written notice of the anticipated and actual start-date of the work, (ii) a
complete set of half-size (15" X 21") vellum as-built drawings, and
(iii) a certificate of occupancy for the work upon completion of the Alterations
if required by applicable law.  All Alterations shall be constructed in
compliance with all applicable building codes and laws including, without
limitation, the Americans with Disabilities Act of 1990.  Upon the Expiration
Date, all Alterations, except movable furniture and trade fixtures, shall become
a part of the realty and belong to Landlord but shall nevertheless be subject to
removal by Tenant as provided in Section 6 above.  Alterations which are not
deemed as trade fixtures include heating, lighting, electrical systems, air
conditioning, walls, carpeting, or any other installation which has become an
integral part of the Premises.  All Alterations shall be maintained, replaced or
repaired by Tenant at its sole cost and expense.

B.Free From Liens:    Tenant shall keep the
Premises free from all liens arising out of work performed, materials furnished,
or obligations incurred by Tenant or claimed to have been performed for Tenant.
In the event Tenant fails to discharge any such lien within fifteen (15) days
after receiving notice of the filing, Landlord shall be entitled to discharge
the lien at Tenant's expense and all resulting reasonable costs incurred by
Landlord, including reasonable attorney's fees shall be due from Tenant as
additional rent.

C.Compliance With Governmental Regulations:
The term Laws or Governmental Regulations shall include all federal, state,
county, city or governmental agency laws, statutes, ordinances, standards,
rules, requirements, or orders now in force or hereafter enacted, promulgated,
or issued.  The term also includes government measures regulating or enforcing
public access, traffic mitigation, occupational, health, or safety standards for
employers, employees, landlords, or tenants. Tenant, at Tenant's sole expense
shall make all repairs, replacements, alterations, or improvements needed to
comply with all Governmental Regulations except as otherwise expressly provided
in this Lease.  The judgment of any court of competent jurisdiction or the
admission of Tenant in any action or proceeding against Tenant (whether Landlord
be a party thereto or not) that Tenant has violated any such law, regulation or
other requirement in its use of the Premises shall be conclusive of that fact as
between Landlord and Tenant.

 

8.Maintenance of Premises:

A.Landlord's Obligations:    Landlord at its
sole cost and expense, shall maintain in good condition, order, and repair, and
replace as and when necessary, the foundation, exterior load bearing walls glass
curtainwall, and roof structure of the Building Shell. Landlord further agrees
to perform repairs and  replacements to the Common Area to maintain the Common
Area in good condition, order and repair (subject to Tenant's reimbursement
obligation). Tenant acknowledges and agrees that the Association formed pursuant
to the Declaration may perform the maintenance, repair and restoration
obligations of Landlord under this Section 8.A and other sections of this Lease
on behalf of Landlord and other owners of any portion of the Project, in
discharge of Landlord's maintenance, repair and restoration obligations under
this Lease.  As to increases in annual assessments or the imposition of a
special assessment under the Declaration which would require the vote of the
Owners (as defined in the Declaration), Landlord agrees to vote in favor or such
assessments to the extent Landlord reasonably determines such sums are required
to maintain the Premises in the condition required by this Lease.
Notwithstanding the foregoing, in the event that Tenant leases from Landlord all
of the space then developed within the Project, Tenant shall have the right to
perform the repairs, replacements and maintenance of the Common Area and pay
such costs directly.

B.Tenant's Obligations:    Subject to Sections
15 and 16, Tenant shall clean, maintain, repair and replace when necessary the
Building and every part thereof through regular inspections and servicing,
including but not limited to: (i) all plumbing and sewage facilities, (ii) all
heating ventilating and air conditioning facilities and equipment, (iii) all
fixtures, interior walls floors, carpets and ceilings, (iv) all electrical
facilities and equipment, (v) all automatic fire extinguisher equipment, (vi)
all elevator equipment, and (vii) the roof membrane system.   All wall surfaces
and floor tile are to be maintained in an as good a condition as when Tenant
took possession free of holes, gouges, or defacements.   With respect to items
(ii), (vi) and (vii) above, Tenant shall provide Landlord a copy of a service
contract between Tenant and a licensed service contractor providing for periodic
maintenance of all such systems or equipment in conformance with the
manufacturer's recommendations.  Tenant shall provide Landlord upon request, a
copy of such preventive maintenance contracts and paid invoices for the
recommended work if requested by Landlord.

C.Landlord and Tenant's Obligations Regarding
Reimbursable Operating Costs:    Notwithstanding the provisions of Sections
8, 9, 10 and 11 of this Lease, Tenant agrees to reimburse Landlord for Tenant's
Allocable Share (as defined in Section 8.E below) of the expenses resulting from
Landlord's payment of Reimbursable Operating Costs (as defined in Section 8.D
below) in connection with the Premises or in connection with the Project which
are not otherwise Landlord's obligation hereunder. Tenant agrees to pay its
Allocable Share of the Reimbursable Operating Costs as additional rental within
ten (10) business days of written invoice from Landlord.

D.Reimbursable Operating Costs:    For
purposes of calculating Tenant's Allocable Share of Building and Project Costs,
the term "Reimbursable Operating Costs" is defined as all reasonable
costs and expenses of the nature hereinafter described which are incurred by
Landlord in connection with ownership and operation of the Building or the
Project in which the Premises are located.  All costs and expenses shall be
determined in accordance with generally accepted accounting principles which
shall be consistently applied, including but not limited to the following:  (i)
common area utilities, including water, power, telephone, heating, lighting, air
conditioning, ventilating, and Building utilities to the extent not separately
metered; (ii) common area maintenance and service agreements for the Building
and/or Project and the equipment therein, including without limitation, common
area janitorial services, alarm and security services, exterior window cleaning,
and maintenance of the sidewalks, landscaping, waterscape, roof membrane,
parking garages and parking areas, driveways, service areas, mechanical rooms,
elevators, and the building exterior; (iii) insurance premiums and costs,
including without limitation, the premiums and cost of fire, casualty and
liability coverage and rental abatement and earthquake (if available at
commercially reasonable rates) insurance applicable to the Building or Project;
(iv) repairs, replacements and general maintenance (excluding repairs and
general maintenance paid by proceeds of insurance or by Tenant or other third
parties, and repairs or alterations attributable solely to tenants of the
Building or Project other than Tenant); and (v) all real estate taxes and
assessment installments or other impositions or charges which may be levied on
the Building or Project, upon the occupancy of the Building or Project and
including any substitute or additional charges which may be imposed during, or
applicable to the Lease Term including real estate tax increases due to a sale,
transfer or other change of ownership of the Building or Project, as such taxes
are levied or appear on the City and County tax bills and assessment rolls.
Landlord shall have no obligation to provide guard services or other security
measures for the benefit of the Project.  Tenant assumes all responsibility for
the protection of Tenant and Tenant's Agents from acts of third parties;
provided, however, that nothing contained herein shall prevent Landlord, at its
sole option, from providing security measures for the Project.  This is a
"Net" Lease, meaning that Base Monthly Rent is paid to Landlord net of
all costs and expenses, except as provided otherwise in this Lease.  The
provision for payment of Reimbursable Operating Costs by means of periodic
payment of Tenant's Allocable Share of Building and/or Project Costs is intended
to pass on to Tenant and reimburse Landlord for all costs of operating and
managing the Building and/or Project.

E.Tenant's Allocable Share:    For purposes of
prorating Reimbursable Operating Costs which Tenant shall pay, Tenant's
Allocable Share of Reimbursable Operating Costs shall be computed by multiplying
the Reimbursable Operating Costs by a fraction, the numerator of which is the
rentable square footage of the Premises and the denominator of which is either
the total rentable square footage of the Building if the service or cost is
allocable only to the Building, or the total square footage of the buildings
completed within the Project if the service or cost is allocable to the entire
Project.  Tenant's obligation to share in Reimbursable Operating Costs shall be
adjusted to reflect the Lease Commencement and Expiration dates and is subject
to recalculation in the event of expansion of the Building or Project.

F.Exclusions to Reimbursable Operating Costs:
Notwithstanding anything to the contrary contained in this Lease, the
following costs and expenses shall not be included within Reimbursable Operating
Costs:  (i) Leasing commissions, attorneys' fees, costs, disbursements, and
other expenses incurred in connection with negotiations or disputes with
tenants, or in connection with leasing, renovating, or improving space for
tenants or other occupants or prospective tenants or other occupants of the
Project; (ii) The cost of any service sold to any tenant (including Tenant) or
other occupant for which Landlord is entitled to be reimbursed as an additional
charge or rental over and above the basic rent and escalations payable under the
lease with that tenant; (iii) Any depreciation on the Project; (iv) Expenses in
connection with services or other benefits of a type that are not provided to
Tenant but which are provided another tenant or occupant of the Project; (v)
Costs incurred due to Landlord's violation of any terms or conditions of the
Declaration, this Lease or any other lease relating to the Project; (vi)
Overhead profit increments paid to Landlord's subsidiaries or affiliates for
services on or to the building or for supplies or other materials to the extent
that the cost of the services, supplies, or materials exceeds the cost that
would have been paid had the services, supplies, or materials been provided by
unaffiliated parties on a competitive basis; (vii) All interest, loan fees, and
other carrying costs related to any mortgage or deed of trust or related to any
capital item, and all rental and other payable due under any ground or
underlying lease, or any lease for any equipment ordinarily considered to be of
a capital nature (except janitorial equipment which is not affixed to the
Project.); (viii) Any compensation paid to clerks, attendants, or other persons
in commercial concessions operated by Landlord; (ix) Advertising and promotional
expenditures; (x) Costs of repairs and other work occasioned by fire, windstorm,
or other casualty of a nature required to be insured against under this Lease in
excess of the deductible; (xi) Any costs, fines, or penalties incurred due to
violations by Landlord of any governmental rule or authority, this Lease or any
other lease in the Project, or due to Landlord's negligence or willful
misconduct; (xii) Property management fees; (xiii) Costs for sculpture,
paintings, or other objects of art (and insurance thereon or extraordinary
security in connection therewith); (xiv) The cost of correcting any building
code or other violations which were violations prior to the Commencement Date of
this Lease; (xv) The cost of containing, removing, or otherwise remediating any
contamination of the Project (including the underlying land and ground water) by
any Hazardous Materials where such contamination was not caused by Tenant.

F.Waiver of Liability:     Failure by Landlord
to perform any defined services, or any cessation thereof, when such failure is
caused by accident, breakage, repairs, strikes, lockout or other labor
disturbances or labor disputes of any character or by any other cause, similar
or dissimilar, shall not render Landlord liable to Tenant in any respect,
including damages to either person or property, nor be construed as an eviction
of Tenant, nor cause an abatement of rent, nor relieve Tenant from fulfillment
of any covenant or agreement hereof.  Should any equipment or machinery utilized
in supplying the services listed herein break down or for any cause cease to
function properly, upon receipt of written notice from Tenant of any deficiency
or failure of any services, Landlord shall use reasonable diligence to repair
the same promptly, but Tenant shall have no right to terminate this Lease and
shall have no claim for rebate of rent or damages on account of any
interruptions in service occasioned thereby or resulting therefrom.  Tenant
waives the provisions of California Civil Code Sections 1941 and 1942 concerning
the Landlord's obligation of tenantability and Tenant's right to make repairs
and deduct the cost of such repairs from the rent.  Landlord shall not be liable
for a loss of or injury to person or property, however occurring, through or in
connection with or incidental to furnishing, or its failure to furnish, any of
the foregoing unless causes by its gross negligence or willful misconduct.

G.  Tenant's Right to Audit:   Tenant shall have
the right to audit at Landlord's local offices, at Tenant's expense, Landlord's
accounts and records relating to Reimbursable Operating Costs.   Such audit
shall be conducted by a certified public accountant approved by Landlord, which
approval shall not be unreasonably withheld. If such audit reveals that Landlord
has overcharged Tenant, the amount overcharged shall be paid to Tenant within 30
days after the audit is concluded, together with interest thereon at the rate of
ten percent (10.0%) per annum, from the date paid by Tenant until payment of the
overcharge is made to Tenant. In addition, if the amount paid by Tenant exceeds
the Reimbursable Operating Costs which should have been charged to Tenant by
more than five percent (5.0%), the cost of the audit shall be paid by
Landlord.

9.Hazard Insurance:    

A.Tenant's Use:    Tenant shall not use or
permit the Premises, or any part thereof, to be used for any purpose other than
that for which the Premises are hereby leased; and no use of the Premises shall
be made or permitted, nor acts done, which will cause an increase in premiums or
a cancellation of any insurance policy covering the Project or any part thereof,
nor shall Tenant sell or permit to be sold, kept, or used in or about the
Premises, any article prohibited by the standard form of fire insurance
policies.  Tenant shall, at its sole cost, comply with all requirements of any
insurance company or organization necessary for the maintenance of reasonable
fire and public liability insurance covering the Premises and appurtenances.

B.Landlord's Insurance:    Landlord agrees to
purchase and keep in force fire, extended coverage insurance in an amount equal
to the replacement cost of the Building as determined by Landlord's insurance
company's appraisers. If required by the holder of the first deed of trust on
the property, such fire and property damage insurance may be endorsed to cover
loss caused by such additional perils against which Landlord may elect to
insure, including earthquake and/or flood, and shall contain reasonable
deductibles which, in the case of earthquake and flood insurance may be up to
15% of the replacement value of the property.  Additionally Landlord may
maintain a policy of (i) commercial general liability insurance insuring
Landlord (and such others designated by Landlord) against liability for personal
injury, bodily injury, death and damage to property occurring or resulting from
an occurrence in, on or about the Premises or Project in an amount as Landlord
determines is reasonably necessary for its protection, and (ii) rental lost
insurance covering a twelve (12) month period. Tenant agrees to pay Landlord as
additional rent, on demand, the full cost of said insurance and any insurance
costs allocable to the Building pursuant to the Declaration as evidenced by
insurance billings to Landlord, and in the event of damage covered by said
insurance, the amount of any commercially reasonable deductible under such
policy.  Payment shall be due to Landlord within thirty (30) days after written
invoice to Tenant.  It is understood and agreed that Tenant's obligation under
this Section will be prorated to reflect the Lease Commencement and Expiration
Dates. Tenant acknowledges and agrees that the Association formed pursuant to
the Declaration may procure all or any portion of the insurance required to be
maintained by Landlord under this Lease on behalf of Landlord and in discharge
of Landlord's obligation to procure such insurance under this Lease, under one
or more policies procured by the Association from time to time for the benefit
of Landlord and other owners of any portion of the Project, the cost of which
shall be paid by Tenant pursuant to this section 9.B, provided that the cost to
Tenant shall not be greater than that which Tenant would have had to pay if
Landlord obtained such coverage directly.

C.Tenant's Insurance:    Tenant agrees, at its
sole cost, to insure its personal property, Tenant Improvements and Alterations
for their full replacement value (without depreciation) and to obtain worker's
compensation and public liability and property damage insurance for occurrences
within the Premises with a combined single limit of not less than Five Million
Dollars ($5,000,000.00).  Tenant's liability insurance shall be primary
insurance containing a cross-liability endorsement, and shall provide coverage
on an "occurrence" rather than on a "claims made" basis.
Tenant shall name Master Landlord, Landlord and their respective lenders as an
additional insured and shall deliver evidence of insurance and renewal
certificates to Landlord.  All such policies shall provide for thirty (30) days'
prior written notice to Landlord of any cancellation, termination, or reduction
in coverage.  

D.Waiver:    Landlord and Tenant hereby waive
all rights each may have against the other on account of any loss or damage
sustained by Landlord or Tenant, as the case may be, or to the Premises or its
contents, which may arise from any risk covered by their respective insurance
policies (or which would have been covered had such insurance policies been
maintained in accordance with this Lease) as set forth above.  The parties shall
use their reasonable efforts to obtain from their respective insurance companies
a waiver of any right of subrogation which said insurance company may have
against Landlord, Master Landlord or Tenant, as the case may be.

10.Taxes:    Tenant shall be liable for and shall
pay as additional rental, prior to delinquency, the following:  (i) all taxes
and assessments levied against Tenant's personal property and trade or business
fixtures; (ii) all real estate taxes and assessment installments or other
impositions or charges which may be levied on the Premises or upon the occupancy
of the Premises, including any substitute or additional charges which may be
imposed applicable to the Lease Term; and (iii) real estate tax increases due to
an increase in assessed value resulting from a sale, transfer or other change of
ownership of the Premises as it appears on the City and County tax bills during
the Lease Term.  Tenant's obligation under this Section shall be prorated to
reflect the Lease Commencement and Expiration Dates.  If, at any time during the
Lease Term a tax, excise on rents, business license tax or any other tax,
however described, is levied or assessed against Landlord as a substitute or
addition, in whole or in part, for taxes assessed or imposed on land or
Buildings, Tenant shall pay and discharge its pro rata share of such tax or
excise on rents or other tax before it becomes delinquent; except that this
provision is not intended to cover net income taxes, inheritance, gift or estate
tax imposed upon Landlord.  In the event that a tax is placed, levied, or
assessed against Landlord and the taxing authority takes the position that
Tenant cannot pay and discharge its pro rata share of such tax on behalf of
Landlord, then at Landlord's sole election, Landlord may increase the Base
Monthly Rent by the exact amount of such tax and Tenant shall pay such increase.
If by virtue of any application or proceeding brought by or on behalf of
Landlord, there results a reduction in the assessed value of the Premises during
the Lease Term, Tenant agrees to reimburse Landlord for all costs incurred by
Landlord in connection with such application or proceeding, not to exceed the
amount of any savings realized by Tenant.  In the event the Project is not
subdivided as provided in Section 2.C and the tax bill covers the entire
Project, the real estate taxes and assessments shall be prorated as provided in
Section 8.E.

11.Utilities:    Tenant shall pay directly to the
providing utility all water, gas, electric, telephone, and other utilities
supplied to the Premises.  Landlord shall not be liable for loss of or injury to
person or property, however occurring, through or in connection with or
incidental to furnishing or the utility company's failure to furnish utilities
to the Premises unless caused by Landlord's gross negligence of willful
misconduct, and Tenant shall not be entitled to abatement or reduction of any
portion of Base Monthly Rent or any other amount payable under this Lease.

12.Toxic Waste and Environmental Damage:    

A.Tenant's Responsibility:    Without the
prior written consent of Landlord, Tenant shall not bring, use, or permit upon
the Premises, or generate, create, release, emit, or dispose (nor permit any of
the same) from the Premises any chemicals, toxic or hazardous gaseous, liquid or
solid materials or waste, including without limitation, material or substance
having characteristics of ignitability, corrosivity, reactivity, or toxicity or
substances or materials which are listed on any of the Environmental Protection
Agency's lists of hazardous wastes or which are identified in Division 22 Title
26 of the California Code of Regulations as the same may be amended from time to
time or any wastes, materials or substances which are or may become regulated by
or under the authority of any applicable local, state or federal laws,
judgments, ordinances, orders, rules, regulations, codes or other governmental
restrictions, guidelines or requirements.  ("Hazardous Materials")
except for those substances customary in typical office uses for which no
consent shall be required.  In order to obtain consent, Tenant shall deliver to
Landlord its written proposal describing the toxic material to be brought onto
the Premises, measures to be taken for storage and disposal thereof, safety
measures to be employed to prevent pollution of the air, ground, surface and
ground water.  Landlord's approval may be withheld in its reasonable judgment.
In the event Landlord consents to Tenant's use of Hazardous Materials on the
Premises or such consent is not required, Tenant represents and warrants that it
shall comply with all Governmental Regulations applicable to Hazardous Materials
including doing the following:  (i) adhere to all reporting and inspection
requirements imposed by Federal, State, County or Municipal laws, ordinances or
regulations and will provide Landlord a copy of any such reports or agency
inspections; (ii) obtain and provide Landlord copies of all necessary permits
required for the use and handling of Hazardous Materials on the Premises; (iii)
enforce Hazardous Materials handling and disposal practices consistent with
industry standards; (iv) surrender the Premises free from any Hazardous
Materials arising from Tenant's bringing, using, permitting, generating,
creating, releasing, emitting or disposing of Hazardous Materials; and (v)
properly close the facility with regard to Hazardous Materials including the
removal or decontamination of any process piping, mechanical ducting, storage
tanks, containers, or trenches which have come into contact with Hazardous
Materials and obtain a closure certificate from the local administering agency
prior to the Expiration Date.

B.Tenant's Indemnity Regarding Hazardous
Materials:    Tenant shall, at its sole cost and expense,  comply with all
laws pertaining to, and shall with counsel reasonably acceptable to Landlord,
indemnify, defend and hold harmless Landlord, Master Landlord and their
trustees, shareholders, directors, officers, employees, partners, affiliates,
and agents from, any claims, liabilities, costs or expenses incurred or suffered
by Landlord arising from the bringing, using, permitting, generating, emitting
or disposing of Hazardous Materials by Tenant or a third party through the
surface soils of the Premises during the Lease Term or the violation of any
Governmental Regulation or environmental law, by Tenant or Tenant's Agents.
Tenant's indemnification and hold harmless obligations include, without
limitation, the following arising from the bringing, using, permitting,
generating, emitting or disposing of Hazardous Materials by Tenant or a third
party through the surface soils of the Premises during the Lease Term or the
violation of any Governmental Regulation or environmental law, by Tenant or
Tenant's Agents.:  (i) claims, liability, costs or expenses resulting from or
based upon administrative, judicial (civil or criminal) or other action, legal
or equitable, brought by any private or public person under common law or under
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Resource Conservation and Recovery Act of 1980
("RCRA") or any other Federal, State, County or Municipal law,
ordinance or regulation; (ii) claims, liabilities, costs or expenses pertaining
to the identification, monitoring, cleanup, containment, or removal of Hazardous
Materials from soils, riverbeds or aquifers including the provision of an
alternative public drinking water source; (iii) all costs of defending such
claims; (iv) losses attributable to diminution in the value of the Premises or
the Building; (v) loss or restriction of use of rentable space in the Building;
(vi) Adverse effect on the marketing of any space in the Building; and (vi) all
other liabilities, obligations, penalties, fines, claims, actions (including
remedial or enforcement actions of any kind and administrative or judicial
proceedings, orders or judgments), damages (including consequential and punitive
damages), and costs (including attorney, consultant, and expert fees and
expenses) resulting from the release or violation.  This indemnification shall
survive the expiration or termination o this Lease.

C.Landlord's Indemnity Regarding Hazardous
Materials:    Landlord shall with counsel reasonably acceptable to Tenant,
indemnify, defend and hold harmless Tenant and Tenant's shareholders, directors,
officers, employees, partners, affiliates, and agents from, any claims,
liabilities, costs or expenses incurred or suffered by Tenant arising from the
bringing, using, permitting, generating, emitting or disposing of Hazardous
Materials by Landlord or the violation of any Governmental Regulation or
environmental law, by Landlord or Landlord's Agents.  Landlord's indemnification
and hold harmless obligations include, without limitation, the following:  (i)
claims, liability, costs or expenses resulting from or based upon
administrative, judicial (civil or criminal) or other action, legal or
equitable, brought by any private or public person under common law or under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Resource Conservation and Recovery Act of 1980
("RCRA") or any other Federal, State, County or Municipal law,
ordinance or regulation; (ii) claims, liabilities, costs or expenses pertaining
to the identification, monitoring, cleanup, containment, or removal of Hazardous
Materials from soils, riverbeds or aquifers including the provision of an
alternative public drinking water source; (iii) all costs of defending such
claims; and (iv) all other liabilities, obligations, penalties, fines, claims,
actions (including remedial or enforcement actions of any kind and
administrative or judicial proceedings, orders or judgments), damages (including
consequential and punitive damages), and costs (including attorney, consultant,
and expert fees and expenses) resulting from the release or violation.  This
indemnification shall survive the expiration or termination o this Lease. 

C.Actual Release by Tenant:    Tenant agrees
to notify Landlord of any lawsuits or orders which relate to the remedying of or
actual release of Hazardous Materials on or into the soils or ground water at or
under the Premises.  Tenant shall also provide Landlord all notices required by
Section 25359.7(b) of the Health and Safety Code and all other notices required
by law to be given to Landlord in connection with Hazardous Materials.  Without
limiting the foregoing, each party shall also deliver to the other party, within
twenty (20) days after receipt thereof, any written notices from any
governmental agency alleging a material violation of, or material failure to
comply with, any federal, state or local laws, regulations, ordinances or
orders, the violation of which or failure to comply with poses a foreseeable and
material risk of contamination of the ground water or injury to humans (other
than injury solely to Tenant, Tenant's Agents and employees within the
Building).

In the event of any release on or into the Premises
or into the soil or ground water under the Premises, the Building or the Project
of any Hazardous Materials used, treated, stored or disposed of by Tenant or
Tenant's Agents, Tenant agrees to comply, at its sole cost, with all laws,
regulations, ordinances and orders of any federal, state or local agency
relating to the monitoring or remediation of such Hazardous Materials.  In the
event of any such release of Hazardous Materials Tenant shall immediately give
verbal and follow-up written notice of the release to Landlord, and Tenant
agrees to meet and confer with Landlord and its Lender to attempt to eliminate
and mitigate any financial exposure to such Lender and resultant exposure to
Landlord under California Code of Civil Procedure Section 736(b) as a result of
such release, and promptly to take reasonable monitoring, cleanup and remedial
steps given, inter alia, the historical uses to which the Property has and
continues to be used, the risks to public health posed by the release, the then
available technology and the costs of remediation, cleanup and monitoring,
consistent with acceptable customary practices for the type and severity of such
contamination and all applicable laws.  Nothing in the preceding sentence shall
eliminate, modify or reduce the obligation of Tenant under 12.B of this Lease to
indemnify and hold Landlord and Master Landlord harmless from any claims
liabilities, costs or expenses incurred or suffered by them rising from the
bringing, using, permitting, generating, emitting or disposing of Hazardous
Materials by Tenant or a third party through the surface soils of the Premises
during the Lease Term or the violation of any Governmental Regulation or
environmental law, by Tenant or Tenant's Agents.  Tenant shall provide Landlord
prompt written notice of Tenant's monitoring, cleanup and remedial steps.

In the absence of an order of any federal, state or local
governmental or quasi-governmental agency relating to the cleanup, remediation
or other response action required by applicable law, any dispute arising between
Landlord and Tenant concerning Tenant's obligation to Landlord under this
Section 12.C concerning the level, method, and manner of cleanup, remediation or
response action required in connection with such a release of Hazardous
Materials shall be resolved by mediation and/or arbitration pursuant to the
provisions of Section 21.E of this Lease.

D.Environmental Monitoring:     Landlord and
its agents shall have the right to inspect, investigate, sample and monitor the
Premises including any air, soil, water, ground water or other sampling or any
other testing, digging, drilling or analysis to determine whether Tenant is
complying with the terms of this Section 12 provided reasonable grounds to
suspect a violation exist.  If Landlord discovers that Tenant is not in
compliance with the terms of this Section 12, any such reasonable costs incurred
by Landlord, including attorneys' and consultants' fees, shall be due and
payable by Tenant to Landlord within thirty (30) days following Landlord's
written demand therefore.

13.Tenant's Default:    The occurrence of any of
the following shall constitute a material default and breach of this Lease by
Tenant:  (i) Tenant's failure to pay any rent including additional rent or any
other payment due under this Lease within ten (10) days following Landlord's
notice of nonpayment, (ii) the abandonment of the Premises by Tenant; (iii)
Tenant's failure to observe and perform any other required provision of this
Lease, where such failure continues for thirty (30) days after written notice
from Landlord, provided, however, that if the nature of the default is such that
it cannot reasonably be cured within the 30-day period, Tenant shall not be
deemed in default if it commences within such period to cure, and thereafter
diligently prosecutes the same to completion; (iv) Tenant's making of any
general assignment for the benefit of creditors; (v) the filing by or against
Tenant of a petition to have Tenant adjudged a bankrupt or of a petition for
reorganization or arrangement under any law relating to bankruptcy (unless, in
the case of a petition filed against Tenant, the same is dismissed after the
filing); (vi) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within sixty
(60) days; (vii) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within sixty (60)
days; (viii) a default by Tenant under the Building 2 Lease (if then leased by
Tenant from Landlord), or (ix) a default by Tenant under the Building 3 Lease
(if leased by Tenant from Landlord).

A.Remedies:    In the event of any such
default by Tenant, then in addition to other remedies available to Landlord at
law or in equity, Landlord shall have the immediate option to terminate this
Lease and all rights of Tenant hereunder by giving written notice of such
intention to terminate.  In the event Landlord elects to so terminate this
Lease, Landlord may recover from Tenant all the following:  (i) the worth at
time of award of any unpaid rent which had been earned at the time of such
termination; (ii) the worth at time of award of the amount by which the unpaid
rent which would have been earned after termination until the time of award
exceeds the amount of such rental loss for the same period that Tenant proves
could have been reasonably avoided; (iii) the worth at time of award of the
amount by which the unpaid rent for the balance of the Lease Term after the time
of award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided; (iv) any other amount necessary to compensate Landlord for
all detriment proximately caused by Tenant's failure to perform its obligations
under this Lease, or which in the ordinary course of things would be likely to
result therefrom; including the following:  (x) reasonable expenses for
repairing, altering or remodeling the Premises if such expenses are necessary to
relet the Premises, (y) reasonable broker's fees, advertising costs or other
expenses of reletting the Premises, and (z) costs of carrying the Premises such
as taxes, insurance premiums, utilities and security precautions and assessments
due under the Declaration, and (v) at Landlord's election, such other reasonable
amounts in addition to or in lieu of the foregoing as may be permitted by
applicable California law.  The term "rent", as used herein, is
defined as the minimum monthly installments of Base Monthly Rent and all other
sums required to be paid by Tenant pursuant to this Lease, all such other sums
being deemed as additional rent due hereunder.  As used in (i) and (ii) above,
"worth at the time of award" shall be computed by allowing interest at
a rate equal to the discount rate of the Federal Reserve Bank of San Francisco
plus five (5%) percent per annum.  As used in (iii) above, "worth at the
time of award" shall be computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award plus one
(1%) percent.  

B.Right to Re-enter:     In the event of any
such default by Tenant, Landlord shall have the right, after terminating this
Lease, to re-enter the Premises and remove all persons and property.  Such
property may be removed and stored in a public warehouse or elsewhere at the
cost of and for the account of Tenant, and disposed of by Landlord in any manner
permitted by law.

C.Abandonment:     If Landlord does not elect
to terminate this Lease as provided in Section 13.A or 13.B above, then the
provisions of California Civil Code Section 1951.4, (Landlord may continue the
lease in effect after Tenant's breach and abandonment and recover rent as it
becomes due if Tenant has a right to sublet and assign, subject only to
reasonable limitations) as amended from time to time, shall apply and Landlord
may from time to time, without terminating this Lease, either recover all rental
as it becomes due or relet the Premises or any part thereof for such term or
terms and at such rental or rentals and upon such other terms and conditions as
Landlord in its sole discretion may deem advisable, with the right to make
alterations and repairs to the Premises.  In the event that Landlord elects to
so relet, rentals received by Landlord from such reletting shall be applied in
the following order to:  (i) the payment of any indebtedness other than Base
Monthly Rent due hereunder from Tenant to Landlord; (ii) the payment of any cost
of such reletting; (iii) the payment of the cost of any alterations and repairs
to the Premises; and (iv) the payment of Base Monthly Rent due and unpaid
hereunder.  The residual rentals, if any, shall be held by Landlord and applied
in payment of future Base Monthly Rent as the same may become due and payable
hereunder.  Landlord shall the obligation to market the space but shall have no
obligation to relet the Premises following a default if Landlord has other
comparable available space within the Building or Project.  In the event the
portion of rentals received from such reletting which is applied to the payment
of rent hereunder during any month be less than the rent payable during that
month by Tenant hereunder, then Tenant shall pay such deficiency to Landlord
immediately upon demand.  Such deficiency shall be calculated and paid monthly.
Tenant shall also pay to Landlord, as soon as ascertained, any reasonable costs
and expenses incurred by Landlord in such reletting or in making such
alterations and repairs not covered by the rentals received from such
reletting.

D.No Termination:     Landlord's re-entry or
taking possession of the Premises pursuant to 13.B or 13.C shall not be
construed as an election to terminate this Lease unless written notice of such
intention is given to Tenant or unless the termination is decreed by a court of
competent jurisdiction. Notwithstanding any reletting without termination by
Landlord because of any default by Tenant, Landlord may at any time after such
reletting elect to terminate this Lease for any such default.

E.Non-Waiver:   Landlord may accept Tenant's
payments without waiving any rights under this Lease, including rights under a
previously served notice of default. No payment by Tenant or receipt by Landlord
of a lesser amount than any installment of rent due shall be deemed as other
than payment on account of the amount due.  If Landlord accepts payments after
serving a notice of default, Landlord may nevertheless commence and pursue an
action to enforce rights and remedies under the previously served notice of
default without giving Tenant any further notice or demand.  Furthermore, the
Landlord's acceptance of rent from the Tenant when the Tenant is holding over
without express written consent does not convert Tenant's Tenancy from a tenancy
at sufferance to a month to month tenancy. No waiver of any provision of this
Lease shall be implied by any failure of Landlord to enforce any remedy for the
violation of that provision, even if that violation continues or is repeated.
Any waiver by Landlord of any provision of this Lease must be in writing.  Such
waiver shall affect only the provision specified and only for the time and in
the manner stated in the writing. No delay or omission in the exercise of any
right or remedy by Landlord shall impair such right or remedy or be construed as
a waiver thereof by Landlord.  No act or conduct of Landlord, including, without
limitation, the acceptance of keys to the Premises, shall constitute acceptance
of the surrender of the Premises by Tenant before the Expiration Date.  Only
written notice from Landlord to Tenant of acceptance shall constitute such
acceptance of surrender of the Premises.  Landlord's consent to or approval of
any act by Tenant which requires Landlord's consent or approvals shall not be
deemed to waive or render unnecessary Landlord's consent to or approval of any
subsequent act by Tenant.

F.Performance by Landlord:    If Tenant fails
to perform any obligation required under this Lease or by law or governmental
regulation, Landlord in its sole discretion may, following notice and expiration
of the applicable cure period, without waiving any rights or remedies and
without releasing Tenant from its obligations hereunder, perform such
obligation, in which event Tenant shall pay Landlord as additional rent all sums
paid by Landlord in connection with such substitute performance, including
interest at the Agreed Interest Rate within thirty (30) days of Landlord's
written notice for such payment.

14.Landlord's  Liability:    

A.Limitation on Landlord's Liability:    In the
event of Landlord's failure to perform any of its covenants or agreements under
this Lease, Tenant shall give Landlord written notice of such failure and shall
give Landlord thirty (30) days to cure or commence to cure such failure prior to
any claim for breach or resultant damages, provided, however, that if the nature
of the default is such that it cannot reasonably be cured within the 30-day
period, Landlord shall not be deemed in default if it commences within such
period to cure, and thereafter diligently prosecutes the same to completion.  In
addition, upon any such failure by Landlord, Tenant shall give notice by
registered or certified mail to any person or entity with a security interest in
the Premises ("Mortgagee") that has provided Tenant with notice of its
interest in the Premises, and shall provide Mortgagee a reasonable opportunity
to cure such failure, including such time to obtain possession of the Premises
by power of sale or judicial foreclosure, if such should prove necessary to
effectuate a cure.  Tenant agrees that each of the Mortgagees to whom this Lease
has been assigned is an expressed third-party beneficiary hereof.  Tenant waives
any right under California Civil Code Section 1950.7 or any other present or
future law to the collection of any payment or deposit from Mortgagee or any
purchaser at a foreclosure sale of Mortgagee's interest unless Mortgagee or such
purchaser shall have actually received and not refunded the applicable payment
or deposit.   Tenant Further waives any right to terminate this Lease and to
vacate the Premises on Landlord's default under this Lease.  Tenant's sole
remedy on Landlord's default is an action for damages or injunctive or
declaratory relief.

B.Limitation on Tenant's Recourse:    If
Landlord is a corporation trust, partnership, joint venture, unincorporated
association or other form of business entity: (i) the obligations of Landlord
shall not constitute personal obligations of the officers, directors, trustees,
partners, joint venturers, members, owners, stockholders, or other principals or
representatives except to the extent of their interest in the Premises.  Tenant
shall have recourse only to the interest of Landlord in the Premises or for the
satisfaction of the obligations of Landlord and shall not have recourse to any
other assets of Landlord for the satisfaction of such obligations.

C.Indemnification of Landlord:    As a
material part of the consideration rendered to Landlord, Tenant hereby waives
all claims against Landlord except to the extent caused by Landlord's gross
negligence, willful misconduct or a breach of this Lease for damages to goods,
wares and merchandise, and all other personal property in, upon or about said
Premises and for injuries to persons in or about said Premises, from any cause
arising at any time to the fullest extent permitted by law, and Tenant shall
indemnify and hold Landlord, Master Landlord and their shareholders, directors,
officers, trustees, employees, partners, affiliates and agents exempt and
harmless from any damage or injury to any person, or to the goods, wares and
merchandise and all other personal property of any person, arising from the use
of the Premises, Building, and/or Project by Tenant and Tenant's Agents or from
the failure of Tenant to keep the Premises in good condition and repair as
herein provided, except to the extent due to the gross negligence or willful
misconduct of Landlord.  Further, in the event Landlord is made party to any
litigation due to the acts or omission of Tenant and Tenant's Agents, Tenant
will indemnify, defend (with counsel reasonably acceptable to Landlord) and hold
Landlord harmless from any such claim or liability including Landlord's costs
and expenses and reasonable attorney's fees incurred in defending such claims
except to the extent due to the gross negligence or willful misconduct of
Landlord.

15.Destruction of Premises:    

A.Landlord's Obligation to Restore: In the
event of a destruction of the Premises during the Lease Term Landlord shall
repair the same to the approximate condition which existed prior to such
destruction.  Such destruction shall not annul or void this Lease; however,
Tenant shall be entitled to a proportionate reduction of Base Monthly Rent while
repairs are being made, such proportionate reduction to be based upon the extent
to which the repairs interfere with Tenant's business in the Premises, as
reasonably determined by the Parties. In no event shall Landlord be required to
replace or restore Alterations, Tenant Improvements, Tenant's fixtures or
personal property.  With respect to a destruction which Landlord is obligated to
repair or may elect to repair under the terms of this Section, Tenant waives the
provisions of Section 1932, and Section 1933, Subdivision 4, of the Civil Code
of the State of California, and any other similarly enacted statute, and the
provisions of this Section 15 shall govern in the case of such destruction.  If
Landlord is required to repair the Premises in the event of destruction pursuant
to this Lease, Landlord agrees that it will not vote under the Declaration in
favor or not repairing the Premises or Common Area.

B.Limitations on Landlord's Restoration
Obligation: Notwithstanding the provisions of Section 15.A, Landlord shall
have no obligation to repair, or restore the Premises if any of the following
occur:  (i) if the repairs cannot be made in three hundred sixty five (365) days
from the date of receipt of all governmental approvals necessary under the laws
and regulations of State, Federal, County or Municipal authorities, as
reasonably determined by Landlord, (ii) if the holder of the first deed of trust
or mortgage encumbering the Building elects not to permit the insurance proceeds
payable upon damage or destruction to be used for such repair or restoration,
(iii) the damage or destruction is not fully covered by the insurance maintained
by Landlord, (iv) the damage or destruction occurs in the last twenty four (24)
months of the Lease Term (unless Tenant commits to exercise any available option
to extend the Lease Term pursuant to Section 18 of this Lease), (v) Tenant is in
default pursuant to the provisions of Section 13 beyond expiration of the
applicable cure period, (vi) Tenant has vacated the Premises for more than
ninety (90) days, or (vii) if repair of the Common Area is necessary before
repairs to the Premises can be

performed and Landlord reasonably determines that repairs to
the Common Area will not be made within one hundred eighty (180) days after the
date of the damage and destruction.  In any such event Landlord may elect either
to (i) complete the repair or restoration, or (ii) terminate this Lease by
providing Tenant written notice of its election within sixty (60) days following
the damage or destruction.

C.  Tenant's Rights with Respect to a Destruction of
the Premises:    Notwithstanding anything to the contrary contained in this
Lease:  Landlord shall give notice to Tenant of its election to rebuild or not
to rebuild the Premises within thirty (30) days of casualty to the Premises and
such notice shall specify Landlord's architect's or engineer's reasonable
estimate as to the time required to rebuild or restore the Premises.  If, in the
reasonable opinion of Landlord's architect or engineer, the Premises will take
longer than three hundred sixty five (365) days to rebuild or restore and
Landlord has elected to perform such rebuilding or restoration, Tenant may,
notwithstanding Landlord's election, terminate this Lease by written notice to
Landlord of such termination within five (5) days after its receipt of
Landlord's notice. Such termination shall be effective thirty (30) days after
the giving of Tenant's notice.  If Landlord fails to restore the Premises
(including reasonable means of access thereto) within a period which is sixty
(60) days longer than the period stated in Landlord's notice to Tenant as the
estimated rebuilding period, 'Tenant, at any time thereafter until such
rebuilding is completed, may terminate this Lease by delivering written notice
to Landlord of such termination, in which event this Lease shall terminate as of
the date of the giving of such notice.  If casualty to the Premises occurs
within the last twenty-four months of the term and the period in which Tenant is
obligated to exercise its option to renew the term pursuant to Section 18 has
not expired, Tenant shall have thirty (30) days after the date of casualty in
which to notify Landlord of its election to exercise such renewal option. If
Tenant elects to renew the term as provided above, Landlord shall have no right
to terminate the Lease pursuant to this Section 15.

16.Condemnation:    If any part of the Premises
shall be taken for any public or quasi-public use, under any statute or by right
of eminent domain or private purchase in lieu thereof, and only a part thereof
remains which is susceptible of occupation hereunder, this Lease shall, as to
the part so taken, terminate as of the day before title vests in the condemnor
or purchaser ("Vesting Date") and Base Monthly Rent payable hereunder
shall be adjusted so that Tenant is required to pay for the remainder of the
Lease Term only such portion of Base Monthly Rent as the value of the part
remaining after such taking bears to the value of the entire Premises prior to
such taking.  If all of the Premises or such part thereof be taken so that there
does not remain a portion susceptible for occupation hereunder, this Lease shall
terminate on the Vesting Date.  If part or all of the Premises be taken, all
compensation awarded upon such taking shall go to Landlord, and Tenant shall
have no claim thereto; but Landlord shall cooperate with Tenant, without cost to
Landlord, to recover compensation for damage to or taking of any Alterations,
Tenant Improvements, or for Tenant's moving costs.  Tenant hereby waives the
provisions of California Code of Civil Procedures Section 1265.130 and any other
similarly enacted statue, and the provisions of this Section 16 shall govern in
the case of such taking.

17.Assignment or Sublease:    

A.Consent by Landlord:    Except as
specifically provided in this Section 17.E, Tenant may not assign, sublet,
hypothecate, or allow a third party to use the Premises without the express
written consent of Landlord which shall not be unreasonably withheld,
conditioned or delayed.  Except in connection with a Permitted Transfer, in the
event Tenant desires to assign this Lease or any interest herein including,
without limitation, a pledge, mortgage or other hypothecation, or sublet the
Premises or any part thereof, Tenant shall deliver to Landlord (i) executed
counterparts of any agreement and of all ancillary agreements with the proposed
assignee/subtenant, (ii) current financial statements of the transferee covering
the preceding three years if available, (iii) the nature of the proposed
transferee's business to be carried on in the Premises, (iv) a statement
outlining all consideration to be given on account of the Transfer, and (v) a
current financial statement of Tenant.  Landlord may condition its approval of
any Transfer to a certification from both Tenant and the proposed transferee of
all consideration to be paid to Tenant in connection with such Transfer.  At
Landlord's request, Tenant shall also provide additional information reasonably
required by Landlord to determine whether it will consent to the proposed
assignment or sublease.  Landlord shall have a fifteen business (15) day period
following receipt of all the foregoing within which to notify Tenant in writing
that Landlord elects to: (i) terminate this Lease in the event of an assignment
only; (ii) permit Tenant to assign or sublet such space to the named
assignee/subtenant on the terms and conditions set forth in the notice; or (iii)
refuse consent.  If Landlord should fail to notify Tenant in writing of such
election within the 15-day period, Landlord shall be deemed to have elected
option (ii) above.  In the event Landlord elects option (i) above, this Lease
shall expire with respect to such part of the Premises on the date upon which
the proposed sublease was to commence, and from such date forward, Base Monthly
Rent and Tenant's Allocable Share of all other costs and charges shall be
adjusted based upon the proportion that the rentable area of the Premises
remaining bears to the total rentable area of the Premises.  In the event
Landlord elects option (ii) above, Landlord's written consent to the proposed
assignment or sublease shall not be unreasonably withheld, provided and upon the
condition that: (i) the proposed assignee or subtenant is engaged in a business
that is limited to the use expressly permitted under this Lease; (ii) the
proposed assignee or subtenant is a company with sufficient financial worth and
management ability to undertake the financial obligation of this Lease and
Landlord has been furnished with reasonable proof thereof; (iii) the proposed
assignment or sublease is in form reasonably satisfactory to Landlord; (iv)
Tenant reimburses Landlord on demand for any reasonable costs that may be
incurred by Landlord in connection with said assignment or sublease, including
the costs of making investigations as to the acceptability of the proposed
assignee or subtenant and legal costs incurred in connection with the granting
of any requested consent; and (vi) Tenant shall not have advertised or
publicized in any way the availability of the Premises without prior notice to
Landlord.  In the event all or any one of the foregoing conditions are not
satisfied, Landlord shall be considered to have acted reasonably if it withholds
its consent.

B.Assignment or Subletting Consideration:
Any rent or other economic consideration realized by Tenant under any
sublease and assignment, in excess of the rent payable hereunder after deducting
(i) reasonable subletting and assignment costs (ii) the Monthly Amortized Cost
(defined below) of the Tenant Improvements paid by Tenant, and (iii) any
economic consideration received by Tenant for services rendered or personal
property sold or leased, shall be divided and paid fifty percent (50%) to
Landlord and fifty percent (50%) to Tenant.  Monthly Amortized Cost shall be
determined by taking sum paid by Tenant for the Tenant Improvements installed in
the Building and dividing this sum by one hundred forty four (144) months.
Tenant's obligation to pay over Landlord's portion of the consideration
constitutes an obligation for additional rent hereunder.  The above provisions
relating to Landlord's right to terminate the Lease and relating to the
allocation of bonus rent are independently negotiated terms of the Lease which
constitute a material inducement for the Landlord to enter into the Lease, and
are agreed by the parties to be commercially reasonable.  No assignment or
subletting by Tenant shall relieve it of any obligation under this Lease.  Any
assignment or subletting except in connection with a Permitted Transfer which
conflicts with the provisions hereof shall be void.

C.No Release:    Any assignment or sublease
except in connection with a Permitted Transfer shall be made only if and shall
not be effective until the assignee or subtenant shall execute, acknowledge, and
deliver to Landlord an agreement, in form and substance satisfactory to
Landlord, whereby the assignee or subtenant shall assume all the obligations of
this Lease on the part of Tenant to be performed or observed and shall be
subject to all the covenants, agreements, terms, provisions and conditions in
this Lease.  Notwithstanding any such sublease or assignment and the acceptance
of rent by Landlord from any subtenant or assignee, Tenant and any guarantor
shall remain fully liable for the payment of Base Monthly Rent and additional
rent due, and to become due hereunder, for the performance of all the covenants,
agreements, terms, provisions and conditions contained in this Lease on the part
of Tenant to be performed and for all acts and omissions of any licensee,
subtenant, assignee or any other person claiming under or through any subtenant
or assignee that shall be in violation of any of the terms and conditions of
this Lease, and any such violation shall be deemed a violation by Tenant.
Tenant shall indemnify, defend and hold Landlord harmless from and against all
losses, liabilities, damages, costs and expenses (including reasonable attorney
fees) resulting from any claims that may be made against Landlord by the
proposed assignee or subtenant or by any real estate brokers or other persons
claiming compensation in connection with the proposed assignment or sublease,
unless caused by Landlord's breach of this Lease.  

D.Reorganization of Tenant:    The provisions
of this Section 17.D shall apply if Tenant is a corporation and: (i) there is a
dissolution, merger, consolidation, or other reorganization of or affecting
Tenant, where Tenant is not the surviving corporation, or (ii) there is a sale
or transfer to one person or entity (or to any group of related persons or
entities) of stock possessing more than 50% of the total combined voting power
of all classes of Tenant's capital stock issued, outstanding and entitled to
vote for the election of directors, and after such sale or transfer of stock
Tenant's stock is no longer publicly traded. In a transaction under clause (i)
the surviving corporation shall promptly execute and deliver to Landlord an
agreement in form reasonably satisfactory to Landlord under which such
corporation assumes the obligations of Tenant hereunder, and in a transaction
under clause (ii) the transferee shall promptly execute and deliver to Landlord
an agreement in form reasonably satisfactory to Landlord under which such
transferee assumes the obligations of Tenant to the extent accruing after such
transferee's acquisition of Tenant's stock possessing more than 50% of the total
combined voting of all classes of Tenant's capital stock issued, outstanding and
entitled to vote for the election of directors.

E.Permitted Transfers:    Notwithstanding
anything contained in this Section 17, Tenant may enter into any of the
following transfers (a "Permitted Transfer") without Landlord's prior
consent, and Landlord shall not be entitled to terminate the Lease or to receive
any part of any subrent resulting therefrom that would otherwise be due pursuant
to Sections 17.A and 17.B.  Tenant may sublease all or part of the Premises or
assign its interest in this Lease to (i) any person or entity which controls, is
controlled by, or is under common control with the original Tenant to this Lease
by means of an ownership interest of more than 50%; (ii) any person or entity
which results from a merger, consolidation or other reorganization in which
Tenant is not the survivor, so long as the survivor has a net worth at the time
of such transfer sufficient to enable it to meet its obligations under this
Lease; and (iii) any person or entity which purchases or otherwise acquires all
or substantially all of the assets of Tenant so long as such acquiring person or
entity has a net worth at the time of such transfer that is sufficient at the
time of such transfer to enable it to meet its obligations under this Lease.

F.Effect of Default:    In the event of Tenant's
default, Tenant hereby assigns all rents due from any assignment or subletting
to Landlord as security for performance of its obligations under this Lease, and
Landlord may collect such rents as Tenant's Attorney-in-Fact, except that Tenant
may collect such rents unless a default occurs as described in Section 13 above.
A Lease termination due to Tenant's default shall not automatically terminate an
assignment or sublease then in existence; rather at Landlord's election, such
assignment or sublease shall survive the Lease termination, the assignee or
subtenant shall attorn to Landlord, and Landlord shall undertake the obligations
of Tenant under the sublease or assignment; except that Landlord shall not be
liable for prepaid rent, security deposits or other defaults of Tenant to the
subtenant or assignee, or for any acts or omissions of Tenant and Tenant's
Agents.

G.Conveyance by Landlord:    As used in this
Lease, the term "Landlord" is defined only as the owner for the time
being of the Premises, so that in the event of any sale or other conveyance of
the Premises or in the event of a master lease of the Premises, Landlord shall
be entirely freed and relieved of all its covenants and obligations hereunder,
and it shall be deemed and construed, without further agreement between the
parties and the purchaser at any such sale or the master tenant of the Premises,
that the purchaser or master tenant of the Premises has assumed and agreed to
carry out any and all covenants and obligations of Landlord hereunder.  Such
transferor shall transfer and deliver Tenant's security deposit to the purchaser
at any such sale or the master tenant of the Premises, and thereupon the
transferor shall be discharged from any further liability in reference
thereto.

F.Successors and Assigns:    Subject to the
provisions this Section 17, the covenants and conditions of this Lease shall
apply to and bind the heirs, successors, executors, administrators and assigns
of all parties hereto; and all parties hereto shall be jointly and severally
liable hereunder.

18.Option to Extend the Lease Term:

A.Grant and Exercise of Option:    Landlord
grants to Tenant, subject to the terms and conditions set forth in this Section
18.A, two (2) options (the "Options") to extend the Lease Term for an
additional term (the "Option Term").  Each Option Term shall be for a
period of sixty (60) months and shall be exercised, if at all, by written notice
to Landlord no earlier than eighteen (18) months prior to the date the Lease
Term would expire but for such exercise but no later than twelve (12) months
prior to the date the Lease Term would expire but for such exercise, time being
of the essence for the giving of such notice.  If Tenant exercises the first
Option or both of the Options, all of the terms, covenants and conditions of
this Lease except this Section shall apply during the Option Term as though the
expiration date of the Option Term was the date originally set forth herein as
the Expiration Date, provided that Base Monthly Rent for the Premises payable by
Tenant during the Option Term shall be the greater of (i) the average amount of
Base Monthly Rent paid during the initial Lease Term, and (ii) ninety five
percent (95%) of the Fair Market Rental as hereinafter defined.  Notwithstanding
anything herein to the contrary, if Tenant is in monetary or material non-
monetary default after expiration of any applicable cure period under any of the
terms, covenants or conditions of this Lease either at the time Tenant exercises
the Option or at any time thereafter prior to the commencement date of the
Option Term, Landlord shall have, in addition to all of Landlord's other rights
and remedies provided in this Lease, the right to terminate the Option upon
notice to Tenant, in which event the expiration date of this Lease shall be and
remain the Expiration Date.  As used herein, the term "Fair Market
Rental" is defined as the rental and all other monetary payments, including
any escalations and adjustments thereto (including without limitation Consumer
Price Indexing) that Landlord could obtain during the Option Term from a third
party desiring to lease the Premises, based upon the current use and other
potential uses of the Premises, as determined by the rents then being obtained
for new leases of space comparable in age and quality to the Premises in the
locality of the Building. The appraisers shall be instructed that the foregoing
five percent (5%) discount is intended to reduce comparable rents which include
(i) brokerage commissions, (ii) tenant improvement allowances, and (iii) vacancy
costs, to account for the fact that Landlord will not suffer such costs in the
event Tenant exercises its Option.

B.Determination of Fair Market Rental:    If
Tenant exercises the Option, Landlord shall send Tenant a notice setting forth
the Fair Market Rental for the Option Term within thirty (30) days following the
Exercise Date.  If Tenant disputes Landlord's determination of Fair Market
Rental for the Option Term, Tenant shall, within thirty (30) days after the date
of Landlord's notice setting forth Fair Market Rental for the Option Term, send
to Landlord a notice stating that Tenant either elects to terminate its exercise
of the Option, in which event the Option shall lapse and this Lease shall
terminate on the Expiration Date, or that Tenant disagrees with Landlord's
determination of Fair Market Rental for the Option Term and elects to resolve
the disagreement as provided in Section 18.C below.  If Tenant elects to resolve
the disagreement as provided in Section 18.C and such procedures are not
concluded prior to the commencement date of the Option Term, Tenant shall pay to
Landlord as Base Monthly Rent the Fair Market Rental as determined by Landlord
in the manner provided above.  If the Fair Market Rental as finally determined
pursuant to Section 18.C is greater than Landlord's determination, Tenant shall
pay Landlord the difference between the amount paid by Tenant and the Fair
Market Rental as so determined in Section 18.C within thirty (30) days after
such determination.  If the Fair Market Rental as finally determined in Section
18.C is less than Landlord's determination, the difference between the amount
paid by Tenant and the Fair Market Rental as so determined in Section 18.C shall
be credited against the next installments of rent due from Tenant to Landlord
hereunder.

C. Resolution of a Disagreement over the Fair
Market Rental:    Any disagreement regarding Fair Market Rental shall be
resolved as follows:

1.Within thirty (30) days after Tenant's response
to Landlord's notice setting forth the Fair Market Rental, Landlord and Tenant
shall meet at least two (2) times at a mutually agreeable time and place, in an
attempt to resolve the disagreement.

2.If within the 30-day period referred to above,
Landlord and Tenant cannot reach agreement as to Fair Market Rental, each party
shall select one appraiser to determine Fair Market Rental.  Each such appraiser
shall arrive at a determination of Fair Market Rental and submit their
conclusions to Landlord and Tenant within thirty (30) days after the expiration
of the 30-day consultation period described above.

3.If only one appraisal is submitted within the
requisite time period, it shall be deemed as Fair Market Rental.  If both
appraisals are submitted within such time period and the two appraisals so
submitted differ by less than ten percent (10%), the average of the two shall be
deemed as Fair Market Rental.  If the two appraisals differ by more than 10%,
the appraisers shall immediately select a third appraiser who shall, within
thirty (30) days after his selection, make and submit to Landlord and Tenant a
determination of Fair Market Rental.  This third appraisal will then be averaged
with the closer of the two previous appraisals and the result shall be Fair
Market Rental.

4.All appraisers specified pursuant to this
Section shall be members of the American Institute of Real Estate Appraisers
with not less than ten (10) years experience appraising office and industrial
properties in the Santa Clara Valley.  Each party shall pay the cost of the
appraiser selected by such party and one-half of the cost of the third
appraiser.

D.Personal to Tenant:    All Options provided
to Tenant in this Lease are personal and granted to Siebel Systems, Inc. and any
Permitted Transferee and are not exercisable by any third party should Tenant
assign or sublet all or a portion of its rights under this Lease, unless
Landlord consents to permit exercise of any option by any assignee or subtenant,
in Landlord's sole and absolute discretion.  In the event Tenant has multiple
options to extend this Lease, a later option to extend the Lease cannot be
exercised unless the prior option has been so exercised.

19.Option to Lease:

A.Grant and Exercise of Option:    Landlord
grants to Tenant an option to lease Building 3 under the terms and conditions
specified in the Building 2 Lease.

20.  Right Of First Offering To Purchase:    

A.Grant and Exercise of Option: In the event
either or both Master Landlord and Landlord elect to sell their respective
interests in the Building, Master Landlord and Landlord hereby grants Tenant a
right of first offering to purchase their respective interests in the Building
(Master Landlord and Landlord are individually and collectively referred to in
this Section as "Seller").  Prior to Seller offering to sell its
interest in the Building to a third party, Seller shall give Tenant written
notice of such desire and the terms and other information under which Seller
intends to sell the Building.  Provided at the time of exercise, Tenant is not
in default beyond the expiration of any applicable cure period, Tenant shall
have the option, which must be exercised, if at all, by written notice to Seller
within thirty (30) days after Tenant's receipt of Seller's notice, to purchase
its interest in the Building at the sales price and terms of sale specified in
the notice.  In the event Tenant timely exercises such option to purchase its
interest in the Building, Seller shall sell its interest in the Building to
Tenant, and Tenant shall purchase its interest in the Building from Seller in
accordance with the price and terms specified in Seller's notice.  Seller and
Tenant shall, in good faith, attempt to reach agreement on the terms of a
mutually acceptable purchase agreement consistent with the terms set forth in
Seller's notice within thirty (30) days of Seller's notice.  In the event (i)
Seller and Tenant are unable to reach agreement on a mutually acceptable
purchase agreement within such thirty (30) day period or (ii) Tenant fails to
exercise Tenant's option within said thirty (30) day period, Seller shall have
one hundred eighty (180) days thereafter to sell its interest in the Building at
no less than ninety five percent (95%) of the sales price and upon the same or
substantially the same other terms of sale as specified in the notice to Tenant.
In the event Seller fails to sell its interest in the Building within said one
hundred eighty (180) day period or in the event Seller proposes to sell its
interest in the Building at less than ninety five percent (95%) of the sales
price or on other material terms which are more favorable to the prospective
buyer than that proposed to Tenant, Seller shall be required to resubmit such
offer to Tenant in accordance with this Right of First Offering except that
Tenant shall be required to respond to any resubmission within a seven (7) day
period.

B.Exclusions:    This Right of First
Offering shall automatically terminate, (i) upon the expiration or sooner
termination of the Lease, or (ii) in the event of a foreclosure or other
involuntary transfer of Landlord's interest in the Building.   Notwithstanding
the forgoing, this Right of First Offering shall not apply to transfers (but
shall survive such transfers ) of all or a portion of the Building or Project to
(i) John A. Sobrato and/or John M. Sobrato (individually and collectively
"Sobrato"), and (ii) any immediate family member of Sobrato, and (iii)
any trust established, in whole or in art, for the benefit of Sobrato and/or any
immediate family member of Sobrato, (iv) any partnership in which Sobrato or any
immediate family member, either directly or indirectly (e.g., through a
partnership or corporate entity or a trust) retains a general partner interest,
and/or (v) any corporation under the control, either directly or indirectly, by
Sobrato or any immediate family member of Sobrato.

21.General Provisions:

A.Attorney's Fees:    In the event a suit or
alternative form of dispute resolution is brought for the possession of the
Premises, for the recovery of any sum due hereunder, to interpret the Lease, or
because of the breach of any other covenant herein; then the losing party shall
pay to the prevailing party reasonable attorney's fees including the expense of
expert witnesses, depositions and court testimony as part of its costs which
shall be deemed to have accrued on the commencement of such action.  The
prevailing party shall also be entitled to recover all costs and expenses
including reasonable attorney's fees incurred in enforcing any judgment or award
against the other party.  The foregoing provision relating to post-judgment
costs is severable from all other provisions of this Lease.

B.Authority of Parties:   Tenant represents
and warrants that it is duly formed and in good standing, and is duly authorized
to execute and deliver this Lease on behalf of said corporation, in accordance
with a duly adopted resolution of the Board of Directors of said corporation or
in accordance with the by-laws of said corporation, and that this Lease is
binding upon said corporation in accordance with its terms.  At Landlord's
request, Tenant shall provide Landlord with corporate resolutions or other proof
in a form acceptable to Landlord, authorizing the execution of the Lease.

C.Brokers:    Tenant represents it has not
utilized or contacted a real estate broker or finder with respect to this Lease
other than Chris Allen, d/b/a Resource Real Estate Group, which fee shall be
payable by Landlord pursuant to a written agreement and the Parties agree to
indemnify, defend and hold each other harmless against any claim, cost,
liability or cause of action asserted by any other broker or finder.

D.Choice of Law:    This Lease shall be
governed by and construed in accordance with California law.   Except as
provided in Section 21.E, venue shall be Santa Clara County.

E.Dispute Resolution: Landlord and Tenant and
any other party that may become a party to this Lease or be deemed a party to
this Lease including any subtenants agree that, except for any claim by Landlord
for unlawful detainer or any claim within the jurisdiction of the small claims
court (which small claims court shall be the sole court of competent
jurisdiction), any controversy, dispute, or claim of whatever nature arising out
of, in connection with or in relation to the interpretation, performance or
breach of this Lease, including any claim based on contract, tort, or statute,
shall be resolved at the request of any party to this agreement through a two-
step dispute resolution process administered by J.A.M.S. or another judicial
mediation service mutually acceptable to the parties located in Santa Clara
County, California. The dispute resolution process shall involve first,
mediation, followed, if necessary, by final and binding arbitration administered
by and in accordance with the then existing rules and practices of J.A.M.S. or
other judicial mediation service selected. In the event of any dispute subject
to this provision, either party may initiate a request for mediation and the
parties shall use reasonable efforts to promptly select a J.A.M.S. mediator and
commence the mediation. In the event the parties are not able to agree on a
mediator within thirty (30) days, J. A. M. S. or another judicial mediation
service mutually acceptable to the parties shall appoint a mediator. The
mediation shall be confidential and in accordance with California Evidence Code
  1119 et. seq. The mediation shall be held in Santa Clara County, California
and in accordance with the existing rules and practice of J. A. M. S. (or other
judicial and mediation service selected). The parties shall use reasonable
efforts to conclude the mediation within sixty (60) days of the date of either
party's request for mediation.  The mediation shall be held prior to any
arbitration or court action (other than a claim by Landlord for unlawful
detainer or any claim within the jurisdiction of the small claims court which
are not subject to this mediation/arbitration provision and may be filed
directly with a court of competent jurisdiction). Should the prevailing party in
any dispute subject to this Section 19.E attempt an arbitration or a court
action before attempting to mediate, the prevailing party shall not be entitled
to attorney's fees that might otherwise be available to them in a court action
or arbitration and in addition thereto, the party who is determined by the
arbitrator to have resisted mediation, shall be sanctioned by the arbitrator or
judge.

If a mediation is conducted but is unsuccessful, it shall be
followed by final and binding arbitration administered by and in accordance with
the then existing rules and practices of J.A.M.S. or the other judicial and
mediation service selected, and judgment upon any award rendered by the
arbitrator(s) may be entered by any state or federal court having jurisdiction
thereof AS PROVIDED BY CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1280 ET. SEQ,
AS SAID STATUTES THEN APPEAR, INCLUDING ANY AMENDMENTS TO SAID STATUTES OR
SUCCESSORS TO SAID STATUTES OR AMENDED STATUTES, EXCEPT THAT in no event shall
the parties be entitled to propound interrogatories or request for admissions
during the arbitration process. The arbitrator shall be a retired judge or a
licensed California attorney. The venue for any such arbitration or mediation
shall be in Santa Clara County, California.

NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO
HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "MEDIATION AND
ARBITRATION OF DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY
CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE
DISPUTE LITIGATED IN A COURT OR fURY TRIAL.  BY INITIALING IN THE SPACE BELOW
YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE
RIGHTS ARE SPECIFICALLY INCLUDED IN THE "MEDIATION AND ARBITRATION OF DISPUTES"
PROVISION.  IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS
PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION
IS VOLUNTARY.

WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT
DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE "MEDIATION AND ARBITRATION
OF DISPUTES" PROVISION TO NEUTRAL ARBITRATION.

LANDLORD:  ______       TENANT:  _______

F.Entire Agreement:    This Lease and the
exhibits attached hereto contains all of the agreements and conditions made
between the parties hereto and may not be modified orally or in any other manner
other than by written agreement signed by all parties hereto or their respective
successors in interest.  This Lease supersedes and revokes all previous
negotiations, letters of intent, lease proposals, brochures, agreements,
representations, promises, warranties, and understandings, whether oral or in
writing, between the parties or their respective representatives or any other
person purporting to represent Landlord or Tenant.

G.Entry by Landlord:    Upon prior notice to
Tenant and subject to Tenant's reasonable security regulations, Tenant shall
permit Landlord and his agents to enter into and upon the Premises at all
reasonable times, and without any rent abatement or reduction or any liability
to Tenant for any loss of occupation or quiet enjoyment of the Premises thereby
occasioned, unless caused by Landlord's negligence or willful misconduct, for
the following purposes:  (i) inspecting and maintaining the Premises; (ii)
making repairs, alterations or additions (only if agreed by Tenant) to the
Premises; (iii) erecting additional building(s) and improvements on the land
where the Premises are situated or on adjacent land owned by Landlord; and (iv)
performing any obligations of Landlord under the Lease including remediation of
hazardous materials if determined to be the responsibility of Landlord provided
that Landlord agrees to use reasonable efforts to minimize interference with
Tenant's use.  Tenant shall permit Landlord and his agents, at any time within
one hundred eighty (180) days prior to the Expiration Date (or at any time
during the Lease if Tenant is in default hereunder), to place upon the Premises
"For Lease" signs and exhibit the Premises to real estate brokers and
prospective tenants at reasonable hours.

H.Estoppel Certificates:    At any time during
the Lease Term, each party (the "Responding Party") shall, within ten
(10) days following written notice from the other party (the "Requesting
Party"), execute and deliver to the Requesting Party a written statement
certifying, if true, the following:  (i) that this Lease is unmodified and in
full force and effect (or, if modified, stating the nature of such
modification); (ii) the date to which rent and other charges are paid in
advance, if any; (iii) acknowledging that there are not, to Responding Party's
knowledge, any uncured defaults on Requesting Party's part hereunder (or
specifying such defaults if they are claimed); and (iv) such other information
as Requesting Party may reasonably request.  Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of
Requesting Party's interest in the Premises.  The Responding Party's failure to
deliver such statement within such time shall be conclusive upon the Responding
Party that this Lease is in full force and effect without modification, except
as may be represented by the Requesting Party, and that there are no uncured
defaults in Requesting Party's performance.  Tenant agrees to provide, within
five (5) days of Landlord's request, Tenant's most recent three (3) years of
audited financial statements for Landlord's use in financing the Premises or
Landlord's interest therein.

I.Exhibits:    All exhibits referred to are
attached to this Lease and incorporated by reference.

J.Interest:    All rent due hereunder, if not
paid when due, shall bear interest at the rate of the Reference Rate published
by Bank of America, San Francisco Branch, plus two percent (2%) per annum from
that date until paid in full ("Agreed Interest Rate").  This provision
shall survive the expiration or sooner termination of the Lease.  Despite any
other provision of this Lease, the total liability for interest payments shall
not exceed the limits, if any, imposed by the usury laws of the State of
California.  Any interest paid in excess of those limits shall be refunded to
Tenant by application of the amount of excess interest paid against any sums
outstanding in any order that Landlord requires.  If the amount of excess
interest paid exceeds the sums outstanding, the portion exceeding those sums
shall be refunded in cash to Tenant by Landlord.  To ascertain whether any
interest payable exceeds the limits imposed, any non-principal payment(including
late charges) shall be considered to the extent permitted by law to be an
expense or a fee, premium, or penalty rather than interest.

K.Modifications Required by Lender:     If any
Lender of Landlord or ground lessor of the Real Property Requires a modification
of this Lease that will not increase Tenant's cost or expense or materially or
adversely change Tenant's rights and obligations, this Lease shall be so
modified and Tenant shall execute whatever documents are required and deliver
them to Landlord within ten (10) days after the request.

L.No Presumption Against Drafter:    Landlord
and Tenant understand, agree and acknowledge that this Lease has been freely
negotiated by both parties; and that in any controversy, dispute, or contest
over the meaning, interpretation, validity, or enforceability of this Lease or
any of its terms or conditions, there shall be no inference, presumption, or
conclusion drawn whatsoever against either party by virtue of that party having
drafted this Lease or any portion thereof.

M.Notices:    All notices, demands, requests,
or consents required to be given under this Lease shall be sent in writing by
U.S. certified mail, return receipt requested, or by personal delivery or by a
nationally recognized overnight courier addressed to the party to be notified at
the address for such party specified in Section 1 of this Lease, or to such
other place as the party to be notified may from time to time designate by at
least fifteen (15) days prior notice to the notifying party.  When this
Lease requires service of a notice, that notice shall replace rather than
supplement any equivalent or similar statutory notice, including any notices
required by Code of Civil Procedure Section 1161 or any similar or successor
statute.  when a statute requires service of a notice in a particular manner,
service of that notice (or a similar notice required by this lease) shall
replace and satisfy the statutory service-of-notice procedures, including those
required by Code of Civil Procedure Section 1162 or any similar or successor
statute.

N.Property Management:    No property
management fee shall be payable to Landlord.

O.Rent:    All monetary sums due from Tenant
to Landlord under this Lease, including, without limitation those referred to as
"additional rent", shall be deemed as rent.

P.Representations:    Tenant acknowledges that
neither Landlord nor any of its employees or agents have made any agreements,
representations, warranties or promises with respect to the Premises or with
respect to present or future rents, expenses, operations, tenancies or any other
matter.  Except as herein expressly set forth herein, Tenant relied on no
statement of Landlord or its employees or agents for that purpose.

Q.Rights and Remedies:    All rights and
remedies hereunder are cumulative and not alternative to the extent permitted by
law, and are in addition to all other rights and remedies in law and in
equity.

R.Severability:    If any term or provision of
this Lease is held unenforceable or invalid by a court of competent
jurisdiction, the remainder of the Lease shall not be invalidated thereby but
shall be enforceable in accordance with its terms, omitting the invalid or
unenforceable term.

S.Submission of Lease:    Submission of this
document for examination or signature by the parties does not constitute an
option or offer to lease the Premises on the terms in this document or a
reservation of the Premises in favor of Tenant.  This document is not effective
as a lease or otherwise until executed and delivered by both Landlord and
Tenant.

T.Subordination:    This Lease is subject and
subordinate to ground and underlying leases, mortgages and deeds of trust
(collectively "Encumbrances") which may now affect the Premises, to
any covenants, conditions or restrictions of record, and to all renewals,
modifications, consolidations, replacements and extensions thereof; provided,
however, if the holder or holders of any such Encumbrance ("Holder")
require that this Lease be prior and superior thereto, within seven (7) days
after written request of Landlord to Tenant, Tenant shall execute, have
acknowledged and deliver all documents or instruments, in the form presented to
Tenant, which Landlord or Holder deems necessary or desirable for such purposes.
Landlord shall have the right to cause this Lease to be and become and remain
subject and subordinate to any and all Encumbrances which are now or may
hereafter be executed covering the Premises or any renewals, modifications,
consolidations, replacements or extensions thereof, for the full amount of all
advances made or to be made thereunder and without regard to the time or
character of such advances, together with interest thereon and subject to all
the terms and provisions thereof; provided only, that in the event of
termination of any such lease or upon the foreclosure of any such mortgage or
deed of trust, Holder agrees to recognize Tenant's rights under this Lease as
long as Tenant is not then in default beyond the expiration of any applicable
cure period and continues to pay Base Monthly Rent and additional rent and
observes and performs all required provisions of this Lease. Within ten (10)
days after Landlord's written request, Tenant shall execute any documents
required by Landlord or the Holder to make this Lease subordinate to any lien of
the Encumbrance.  If Tenant fails to do so, then in addition to such failure
constituting a default by Tenant, it shall be deemed that this Lease is so
subordinated to such Encumbrance. Notwithstanding anything to the contrary in
this Section, Tenant hereby attorns and agrees to attorn to any entity
purchasing or otherwise acquiring the Premises at any sale or other proceeding
or pursuant to the exercise of any other rights, powers or remedies under such
encumbrance.

This Lease constitutes a sublease under that certain
Ground Lease dated March 5, 1999 (the "Existing Ground Lease") between The
Sobrato 1979 Revocable Trust, As Amended ("Master Landlord"), as landlord and
Landlord, as tenant, covering all of the real property within the Project, a
copy which has been provided to Tenant, and under the Parcel Lease described in
the next sentence. In connection with the subdivision of the Project as
contemplated by Section 2.C above, it is anticipated that a separate Parcel
Lease (as defined in the Existing Ground Lease) will be entered into between
Master Landlord, as landlord, and Landlord, as tenant, for the lot within which
the Building will be constructed.  As used in this Lease, "Master Lease" shall
mean the Existing Ground Lease, until such time as the Parcel Lease is entered
into, and thereafter shall mean the Parcel Lease. Notwithstanding this Section
21.T above, concurrently with the execution of this Lease by Landlord and
Tenant, Landlord and Tenant shall execute in recordable form, and Landlord shall
cause Master Landlord to execute in recordable form, the Subordination,
Nondisturbance and Attornment Agreement attached hereto as Exhibit "G" (the
"SNDA").  Landlord shall cause the SNDA to be recorded at Landlord's cost in the
Official Records of San Mateo County, California within five (5) days after this
Lease is executed by Landlord and Tenant. Similarly, in connection with the
Parcel Lease, within ten (10) days after Landlord's request, Landlord and Tenant
shall execute in recordable form, and Landlord shall cause Master Landlord to
execute in recordable form, a Subordination, Nondisturbance and Attornment
Agreement substantially in the form of the SNDA (the "Revised SNDA"), modified
to refer to the Parcel Lease, Memorandum of Parcel Lease to be recorded in
connection with the Parcel Lease  and the revised Premises description, rather
than the Original Ground Lease, the Memorandum of Ground Lease referenced in the
SNDA and the original Premises described in this Lease.  Landlord shall cause
the Revised  SNDA to be recorded at Landlord's cost in the Official Records of
San Mateo County, California  immediately after recordation of the Memorandum of
Lease recorded for the Parcel Lease.

Notwithstanding the foregoing, Tenant shall not be
required to subordinate its interest under this Lease unless (i) such
subordination' does not materially increase Tenant's obligations, or materially
decrease its rights under this Lease, and (ii) Landlord first obtains from the
holder of the mortgage, deed of trust, or other instrument of security to which
this Lease is to become subordinated a written agreement that provides
substantially  that as long as Tenant performs its obligations under this Lease,
no foreclosure of, deed given in lieu of foreclosure of, or sale under the
encumbrance, and no steps or procedures taken under the encumbrance, shall
affect Tenant's rights hereunder.

U.Survival of Indemnities:  All
indemnification, defense, and hold harmless obligations of Landlord and Tenant
under this Lease shall survive the expiration or sooner termination of the
Lease.

V.Time:    Time is of the essence
hereunder.

W.Transportation Demand Management
Programs:  Should a government agency or municipality require Landlord to
institute TDM (Transportation Demand Management) facilities and/or program,
Tenant agrees that the cost of TDM imposed facilities required on the Premises,
including but not limited to employee showers, lockers, cafeteria, or lunchroom
facilities, shall be paid by Tenant.  Further, any ongoing costs or expenses
associated with a TDM program which are required for the Premises and not
provided by Tenant, such as an on-site TDM coordinator, shall be provided by
Landlord with such reasonable costs being included as additional rent and
reimbursed to Landlord by Tenant within thirty (30) days after demand. If TDM
facilities and programs are instituted on a Project wide basis, Tenant shall pay
its proportionate share of such costs in accordance with Section 8 above.

 

 

 

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

Landlord:  SOBRATO INTERESTS IIITenant:
SIEBEL SYSTEMS, INC.

a California Limited Partnershipa Delaware
Corporation

 

By:  _____________________________By:
_____________________________

Its:  General PartnerIts:
_____________________________

 

Master Landlord:  THE SOBRATO 1979 REVOCABLE TRUST

 

By:  _____________________________

Its:  Trustee

 

EXHIBIT "A" - Building and Project - Initial
Buildout

(being finalized by architect - to be attached)

 

Exhibit "B" - Building and Project - Full
Buildout

 

EXHIBIT "C" - Parcel Map & Declaration of
Covenants and Grant of Easements

 

EXHIBIT "D" - Shell Plans and Specifications

(sheet references to be attached)

 

EXHIBIT "E" - Building Shell Definition

1.Building Structure

(a)All foundations to include footings, piling,
grade beams, foundation walls or other building foundation components required
to support the building structure.

(b)Concrete slab supported on beams and columns above
the parking podium and any other reinforcing or structural connections that may
be necessary or required as specified by structural engineer.

(c)Complete structural framing system comprised of
rolled steel beams, columns, and braced-frame steel construction with corrugated
metal deck and concrete fill,  all members required by code to be fireproofed.
Upper floor systems  provide a minimum of 3" concrete over metal deck and are
designed for an 80 lb. live load plus 20 lb. partition load.  Structural framing
will include intermediate beams for HVAC units at the roof, and for major shafts
on each floor.  A roof screen consistent with the design of the building and
acceptable to the local Building and Planning Departments is included.

(d)Tinted high performance glass including required
caulking and sealants.  Tinted reflective glass window wall system with granite
and stainless steel accents.  Two (2) pair of lobby doors, and two (2) exit
doors per building.  All shell doors will be fitted with electric locks and
conduit to J-boxes ready for connection to the Tenant's security system.

(e)Four (4) ply built up roofing by Owens-Corning,
John Manville, or equal and all flashings over a light weight concrete on
corrugated metal deck roof system.  Title 24 code required roof insulation is
included.

(f)Exterior painting where required with Texcoat
textural paint and all caulking of exterior concrete joints in preparation for
painting.

(g)One (1) steel fire stair at perimeter of building,
and two (2) interior fire stairs which will extent to the roof.

(h)At grade loading area with screening and scissors
lift external of building.

(i)Riser for Building sprinkler system (no sprinkler
grid or drops).

2.Podium Garage Structure

(a)Podium garage structure with access ramps,
fire sprinkler system, emergency exit stairways, and mechanical venting (if
required).

(b)Lighting in podium parking to a minimum level per
code.

3.Sitework

(a)All work outside the building perimeter walls
shall be considered site work for the Building Shell and shall include asphalt
concrete paving, landscaping, landscape irrigation, storm drainage, utility
service laterals, curbs, gutters, sidewalks, specialty paving (if required),
retaining walls, planters, trash enclosure, parking lot and landscape lighting
and other exterior lighting per code.  All fountains and podium landscaping
shall also be considered site work for the Building Shell.

(b)Paving sections for automobile and truck access
shall be according to the Geologic Soils Report.

(c)All parking lot striping to include handicap
spaces and signage.

(d)Underground site storm drainage system shall be
connected to the city storm system main.

4.Plumbing

(a)Underground sanitary sewer lateral connected
to the city sewer main in the street and stubbed to the core of the
building.

(b)Domestic water mains connected to the city water
main in the street and stubbed to the building.

(c)Roof drain leaders and downspouts piped and
connected to the site storm drainage system.

(d)Gas lines connected to the city or public utility
mains and run to gas meters adjacent to, and in close proximity to the building.
Meter supplied by utility company.

5. Electrical

(a)A primary and secondary electrical service
from the street to the building electrical room in the garage podium including
underground conduit, wire feeders, and transformer pads.  Transformer supplied
by utility company.  

(b) Two 4" Underground conduit from the street to the
building for telephone trunk lines by Pacific Telephone. 

(c)Two 4" conduit from the building to each of the
adjacent buildings for future data connections.

(d)An electrically operated landscape irrigation
system, with controller, that is a complete and functioning system.

(e) Underground conduit from the building to the main
fire protection system post indicated valve (PIV) for installation of
supervisory alarm wiring.

6.General

(a)All construction shall conform to State and
Local Building Codes, Title 24 Regulations, and shall be ADA Compliant.

(b)All building shell work shall be constructed as
described above and as show on the drawings listed in the attached Exhibit
(TBD).

(c)All other costs shall be deemed Tenant
Improvements.

EXHIBIT "F" - Tenant Improvement Plans and
Specifications

(sheet references to be attached)

 

EXHIBIT "G" - Subordination, Nondisturbance
and Attornment Agreement

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