Document:

<PAGE>

                                                                    EXHIBIT 10.1

CERTIFIED RESOLUTION

Borrower:      IASIAWORKS KOREA LTD.,
               a Korean corporation

Guarantor:     IASIAWORKS, INC.,
               a Delaware corporation

Address:       2000 Alameda de las Pulgas, Suite 125
               San Mateo, CA  94403

Date:          October 7, 2000

     I, the undersigned, Secretary or Assistant Secretary of the above-named
guarantor, a corporation organized under the laws of the state set forth above,
do hereby certify that the following is a full, true and correct copy of
resolutions duly and regularly adopted by the Board of Directors of said
corporation as required by law, and by the by-laws of said corporation, and that
said resolutions are still in full force and effect and have not been in any way
modified, repealed, rescinded, amended or revoked.

          WHEREAS, Korea First Bank ("KFB") and iAsiaWorks Korea Ltd., a Korean
     corporation ("Borrower") are in the process of entering into a loan
     agreement dated as of October 7, 2000 (the "Loan Agreement") whereby KFB is
     agreeing to extend certain financial accommodations to Borrower.

          WHEREAS, KFB has declined to extend such financial accommodations to
     Borrower unless and until this corporation executes a continuing guaranty
     of the obligations of Borrower to KFB (the "Guaranty").

          WHEREAS, because of the business interrelationship of Borrower and
     this corporation, it is in the direct interest and advantage of this
     corporation to execute and deliver the Guaranty to KFB.

          RESOLVED, that any officer of this corporation (the "Authorized
     Officers"), hereby are authorized, directed, and empowered to enter into
     and to deliver to KFB this corporation's absolute and unconditional
     continuing guaranty of the due performance and payment by Borrower of all
     indebtedness to KFB under the Loan Agreement.

          RESOLVED FURTHER, that the Authorized Officers hereby are authorized,
     directed, and empowered, in the name of this corporation, to enter into,
     execute, and deliver to KFB, and KFB is requested to accept, the Guaranty
     and any and all renewals, extensions, and amendments thereof.

          RESOLVED FURTHER, that any and all acts of the Authorized Officers
     done or made heretofore in connection with the financial accommodations
     extended by KFB to Borrower, including but not limited to the execution
     and/or delivery of the Guaranty, are hereby ratified and approved.
<PAGE>

     IN WITNESS WHEREOF, I have hereunto set my hand as such Secretary or
Assistant Secretary on the date set forth above.

                              /s/ Derrick N.D. Hansen
                              -----------------------------------------
                              Derrick N.D. Hansen, Secretary

                                       2
<PAGE>

                                                                  Execution Copy

                                LOAN  AGREEMENT

                               KRW14,000,000,000

                          dated as of October 7, 2000

                                    between

                             iAsiaWorks Korea Ltd.
                                  as Borrower

                                      and

                     Korea First Bank, Yangjae-dong Branch

                                   as Lender

                 _____________________________________________

                                   LEE & KO

                                 Seoul, Korea
<PAGE>

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<CAPTION>
Section                                                          Page
-------                                                          ----
<S>                                                              <C>
1.   Interpretation.............................................    1
2.   The Facility...............................................    5
3.   The Drawdowns..............................................    6
4.   Interest...................................................    7
5.   Repayment, Prepayment and Cancellation.....................    8
6.   Fees and Expenses..........................................    9
7.   Payments and Evidence of Debt..............................   10
8.   Market Disruption..........................................   11
9.   Change of Law or Circumstances.............................   11
10.  Security...................................................   12
11.  Taxes and other Deductions.................................   14
12.  Representations and Warranties.............................   14
13.  Covenants..................................................   16
14.  Events of Default..........................................   19
15.  Default Interest...........................................   22
16.  Indemnities and Pro Rata Sharing...........................   22
17.  Assignment.................................................   23
18.  Governing Law and Jurisdiction.............................   23
19.  Notices....................................................   24
20.  Miscellaneous..............................................   24
</TABLE>

SCHEDULES

Schedule I  CONDITIONS PRECEDENT DOCUMENTS

EXHIBITS

Exhibit A      FORM OF NOTICE OF DRAWDOWN
Exhibit B      FORM OF GUARANTY
Exhibit C      FORM OF PROCESS AGENT APPOINTMENT LETTER
Exhibit D-1    FORM OF LEGAL OPINION (BORROWER'S KOREAN COUNSEL)
Exhibit D-2    FORM OF LEGAL OPINION (GUARANTOR'S U.S. COUNSEL)
Exhibit D-3    FORM OF LEGAL OPINION  (Post Closing)
Exhibit E      FORM OF ASSIGNMENT OF INSURANCE AGREEMENT
<PAGE>

                                LOAN AGREEMENT

THIS LOAN AGREEMENT (this "Agreement") is made on this 10th day of October, 2000

BY AND BETWEEN:

(1)  iAsiaWorks Korea Ltd., a corporation duly organized and existing under the
     laws of the Republic of Korea with its registered head office at BoRaMae
     DaeKyo Building, 6th Floor, 729-21, Bongchon-dong, Kwanak-Gu, Seoul, Korea
     151-706 as borrower ("Borrower"); and

(2)  KOREA FIRST BANK, Yangjae-dong Branch as lender ("Lender").

IT IS HEREBY AGREED as follows:

                          Section 1.  Interpretation

1.1  Definitions.  In this Agreement, unless the context requires otherwise:
     -----------

     "Affiliates" means any person directly or indirectly controlling, directly
     or indirectly controlled by, or under direct or indirect common control
     with, Borrower.  For purposes of this definition, "control" (including
     "controlled by" and "under common control with") means the power, directly
     or indirectly, to direct or cause the direction of the management and
     policies of any person whether through the ownership of voting securities
     or by contract or otherwise, provided that, in any event, any person which
     owns directly or indirectly fifty percent (50%) or more of the securities
     having ordinary voting power for the election of directors or other
     governing body of a corporation or fifty percent (50%) or more of the
     partnership or other ownership interests of any other person will be deemed
     to control such corporation or other person;

     "Assignment of Insurance" means the insurance assignment agreement to be
     entered into by and between the Borrower and the Lender to assign
     Borrower's interest on the right of claims to Insurance Proceeds to secure
     the full performance of the Borrower's obligations hereunder substantially
     in the form of Exhibit E hereto;

     "Availability Period" means the period commencing on the date of this
     Agreement and ending on the earlier of (i) the date one (1) month from the
     date of this Agreement, and (ii) the date on which the Commitment (defined
     hereinafter) is fully drawn, cancelled or terminated under the provisions
     of this Agreement;

     "Banking Day" means a day (excluding Sunday) on which banks are open for
     business in Seoul, Korea;

     "Base Rate" means the final quotation yield rate for A+ three (3) year
     Korean Won-
<PAGE>

     denominated corporate bond as published by the Korea Securities Dealers
     Association or a comparable substitute publication medium on the date
     immediately preceding the Funding Date or the Interest Refixing Date, as
     the case may be;

     "Commitment" means the obligation of the Lender to make Drawdowns available
     to the Borrower hereunder up to the aggregate principal amount of Fourteen
     Billion Korean Won(KRW14,000,000,000) upon terms and subject to the
     conditions of this Agreement or, where the context so requires, such
     principal amount.

     "Drawdown" means the borrowing by the Borrower of the Commitment pursuant
     to Section 3 or, where the context so requires, the amount of such
     drawdown;

     "EBITDA" means earnings before interest, tax, depreciation and amortization
     in accordance with generally accepted accounting principles in Korea;

     "Encumbrance" means:

     (a)  any mortgage, charge, pledge, lien, encumbrance, hypothecation or
          other security interest or security arrangement of any kind ;

     (b)  any arrangement whereby any rights are subordinated to any rights of
          any third party; and

     (c)  any contractual right of set - off whereby the terms and conditions of
          the set-off right granted to other party is more favorable to such
          party than the terms and conditions of the set-off right granted under
          the Civil Code of Korea;

     "Event of Default"  means any event or circumstance specified as such in
     Section 13; and "prospective Event of Default" means any event or
     circumstance which with the giving of notice and/or the passage of time
     and/or the making of any relevant determination and/or the forming of any
     necessary opinion would be an Event of Default;

     "Facility" means the loan facility to be made available under this
     Agreement not to exceed Fourteen Billion Korean Won (14,000,000,000) Korean
     Won;

     "Funding Date" means the date on which the Drawdown actually occurs;

     "Guarantor" means iAsiaWorks, Inc., a corporation organized and existing
     under the laws of Delaware with its registered head office at 2000 Alameda
     de las Pulgas Suite 125, San Mateo, CA  94403, U.S.A;

     "Guaranty" means the unconditional and irrevocable guaranty to be executed
     by Guarantor in the form set forth in Exhibit B;

     "Indebtedness for Borrowed Money" means, as to any Person, without
     duplication, (a) all indebtedness (including principal, interest, fees and
     charges) of such Person for borrowed money or for the deferred purchase
     price of property or services (other than any deferral in connection with
     the provision of credit in the ordinary course of business, including by
     any trade creditor, supplier or utility); (b) all obligations for

                                       2
<PAGE>

     the reimbursement of letters of credit issued for the account of such
     Person (other than letters of credit issued in connection with trade
     transactions in the ordinary course of business); and (c) the aggregate
     amount required to be capitalized under leases under which such Person is
     the lessee;

     "Insurance Policies" means the insurance policies issued by the insurers of
     recognized standing acceptable to the Lender in connection with fire
     insurance and such other insurances as reasonably requested by the Lender
     pursuant to the terms of this Agreement and the Kun-Mortgage Agreements to
     be taken out by the Borrower in respect of the Senan Building, in the
     amount and upon the terms and conditions as reasonable and customary for
     businesses of a like nature in the jurisdiction in which such properties
     and assets are located or in which such businesses are conducted;

     "Insurance Proceeds" means all moneys payable to the Borrower (or the
     security  agent on its behalf) as the result of a claim under any of the
     Insurance Policies.

     "Interest Rate" has the meaning set forth in Section 4.3 (a);

     "Interest Refixing Date" means the third anniversary of the Funding Date;
     provided, however, if such date is not a Banking Day, then it shall be the
     immediately preceding Banking Day;

     "Interest Payment Date" means the last day of an Interest Period;

     "Interest Period" means, in relation to the Loan, an interest period
     ascertained in accordance with Section 4;

     "Korea" means the Republic of Korea;

     "KRW" or "Korean Won" means the lawful currency of Korea;

     "Kun-Mortgage Agreement I" means the kun-mortgage amendment agreement to be
     entered into by and among the Borrower, the Senan Building Owners and the
     Lender pursuant to Section 10.2 in order to modify and expand the scope of
     the secured obligation secured under the existing kun-mortgage of the first
     priority (in the maximum mortgage amount of Thirteen Billion Korean Won
     (KRW 13,000,000,000) on the Senan Building created by the Senan Building
     Owners for the benefit of the Lender) so as  to cover the Facility under
     this Agreement and replace the Senan Building Owners (as existing obligor)
     with the Borrower (as new obligor), in form and substance satisfactory to
     the Lender;

     "Kun-Mortgage Agreement II" means the kun-mortgage agreement to be dated on
     or before the Funding Date entered into by and between the Borrower and the
     Lender for the creation of a new kun-mortgage of the second priority in the
     maximum mortgage amount of Five Billion two hundred million Korean Won
     (KRW5,200,000,000) on Senan Building to secure the Borrower's obligation to
     repay the Facility under this Agreement, in form and substance satisfactory
     to the Lender.

     "Kun-Mortgage Agreements" means both the Kun-Mortgage Agreement I and the
     Kun-Mortgage Agreement II collectively;

                                       3
<PAGE>

     "Kun-Mortgage I" means the first priority kun-mortgage created on the Senan
     Building with the maximum mortgage amount of Thirteen Billion Korean Won
     (KRW 13,000,000,000) as modified  pursuant to the Kun-Mortgage Agreement I;

     "Kun-Mortgage II" means the kun-mortgage established pursuant to the Kun-
     Mortgage Agreement II;

     "Loan" means the aggregate principal amount drawn and for the time being
     outstanding under the Facility;

     "Margin" means two percent (2%);

     "Notice of Drawdown" means a notice in the form set forth in Exhibit A;

     "Repayment Date" means the date five (5) years after the date of the
     Drawdown.

     "Senan Building" means the land of 4,801.2 square meters located at 1423-1
     and 1423-2, Seocho-dong, Seocho-ku, Seoul, Korea and the building located
     thereon. For the avoidance of doubt, any reference to Senan Building will
     include all future additional constructions, improvements and renovations
     thereto, including but not limited to, the construction of  any and all
     additional floors and/or levels;

     "Senan Building Owners" means Senan Corporation, a corporation duly
     organized  in Korea with its registered office at 1423-1 and 1423-2,
     Seocho-dong, Seocho-ku, Seoul, Korea and Mr. Eui-Suk Lee or any other
     persons who own the Senan Building; and

     "Senan Loan" means the principal of and interest on, and all other amounts
     due with respect to the loan extended by the Lender to the Senan
     Corporation under the loan agreement dated April, 21, 2000 entered into by
     and between the Lender and the Senan Building Owners.

1.2  Construction.  In this Agreement, unless the context requires otherwise,
     ------------
     any reference to:

     an "authorization" includes any approvals, consents, licenses, permits,
     franchises, permissions, registrations, resolutions, directions,
     declarations and exemptions;

     "indebtedness" includes any obligation of any person for the payment or
     repayment of money, whether present or future, actual or contingent,
     including but not limited to any such obligation:

     (a)  under or in respect of any acceptance, bill, bond, debenture, note or
          similar instrument;

     (b)  under or in respect of any guarantee, indemnity, counter-security or
          other assurance against financial loss;

     (c)  in respect of the purchase, hire or lease of any asset or service; or

                                       4
<PAGE>

     (d)  in respect of any indebtedness of any other person whether or not
          secured by or benefiting from an Encumbrance on any property or asset
          of such person;

     "law" and/or "regulation"  includes, whether or not having the force of
     law, any constitutional provisions, treaties, conventions, statutes, acts,
     laws, decrees, ordinances, subsidiary and subordinate legislation, orders,
     rules and regulations having the force of law and rules of civil and common
     law and equity;

     a "month" means a period starting on one day in a calendar month and ending
     on the numerically corresponding day in the next calendar month or (if
     there is no such numerically corresponding day or if a period starts on the
     last day in a calendar month) on the last day of such next calendar month;

     an "order" includes any judgment, injunction, decree, determination or
     award of any court, arbitration or administrative tribunal;

     a "person" includes any individual, company, body corporate or
     unincorporated or other juridical person, partnership, firm, joint venture
     or trust or any federation, state or subdivision thereof or any government
     or agency of any thereof; and

     "tax" includes any tax, levy, duty, charge, impost, fee, deduction or
     withholding of any nature now or hereafter imposed, levied, collected,
     withheld or assessed by any taxing or other authority and includes any
     interest, penalty or other charge payable or claimed in respect thereof and
     "taxation" shall be construed accordingly.

1.3  Successors and Assigns.  The expressions "Borrower" and "Lender" shall,
     ----------------------
     where the context permits, include their respective successors and
     permitted assigns and any persons deriving title under them.

1.4  Miscellaneous.  In this Agreement, unless the context requires otherwise,
     -------------
     references to statutory provisions shall be construed as references to
     those provisions as replaced, amended, modified or re-enacted from time to
     time; words importing the singular include the plural and vice versa and
     words importing a gender include every gender; references to this Agreement
     shall be construed as references to such document as the same may be
     amended, supplemented or novated from time to time; unless otherwise
     stated, references to Sections, the Schedules and the Exhibits are to
     sections of and the schedules and the exhibit to this Agreement and
     references to this Agreement include the Schedules and the Exhibits.
     Section headings are inserted for reference only and shall be ignored in
     construing this Agreement.

                           Section 2.  The Facility

2.1  Amount.  Subject to the provisions of this Agreement, the aggregate
     ------
     principal amount of the Facility available to Borrower is Fourteen Billion
     Korean Won (KRW14,000,000,000).

2.2  Purpose.  The proceeds of the Facility shall be used exclusively for
     -------
     Borrower's acquisition of the Senan Building and prepayment of the Senan
     Loan.  The Lender shall not have any responsibility for the application of
     the proceeds by Borrower.

                                       5
<PAGE>

                          Section 3.   The Drawdowns

3.1  Availability of Drawdown.  Subject to Sections 3.2 and 3.3 and the other
     ------------------------
     terms and conditions of this Agreement, Borrower may borrow the Commitment
     on any Banking Day during the Availability Period in a single Drawdown.

3.2  Conditions Precedent to Drawdown.  The obligation of the Lender to make the
     --------------------------------
     Facility available to Borrower in respect of the Drawdown are subject to
     the conditions that:

     (a)  The Lender shall have received, before the Notice of Drawdown is given
          or at such later time as the Lender may agree, all of the documents
          and evidence specified in Schedule I in form and substance reasonably
          satisfactory to the Lender. Copies required to be certified shall be
          certified in a manner satisfactory to the Lender by a duly authorized
          officer of Borrower or other party concerned;

     (b)  The Lender shall have received not later than 12:00 noon (Seoul time)
          on the Banking Day before the date on which such Drawdown is proposed
          to be made (or such later time as the Lender may agree) a duly
          completed and signed Notice of Drawdown;

     (c)  The Kun-Mortgage Agreements and the Assignment of Insurance are duly
          executed by the parties thereto;

     (d)  No Event of Default or prospective Event of Default shall have
          occurred (or would occur as a result of any Drawdown being made) and
          all representations and warranties made by Borrower in or in
          connection with this Agreement shall be true and correct as at the
          date of such Drawdown with reference to the facts and circumstances
          then subsisting; and

     (e)  Not later than 11:00 a.m. (Seoul time) on the Banking Day before the
          date on which such Drawdown is proposed to be made, the Lender shall
          have received and found satisfactory such additional information,
          legal opinions and documents relating or relevant to this Agreement as
          the Lender may reasonably require as a result of circumstances arising
          or becoming known to the Lender since the date of this Agreement.

3.3  Notice of Drawdown Irrevocable.  A Notice of Drawdown once given shall be
     ------------------------------
     irrevocable and Borrower shall be bound to make a Drawdown in accordance
     therewith, except as otherwise provided in this Agreement.  If for any
     reason a Drawdown is not made in accordance with the corresponding Notice
     of Drawdown, Borrower shall on demand pay to the Lender such amount (if
     any) as the Lender may certify to be necessary to compensate it for any
     loss or expense incurred in liquidating or redeploying funds arranged for
     the purpose of the proposed Drawdown or otherwise as a consequence of the
     proposed Drawdown not having been made in accordance with such Notice of
     Drawdown.

                                       6
<PAGE>

3.4  Cancellation.  Any part of the Facility not drawn at the end of the
     ------------
     Availability Period shall be cancelled.

3.5  Post Closing
     -------------

     The Borrower shall, within ten (10) Banking Days from the Funding Date,
     deliver to the Lender:

     (a)  a certified copy of the Real Estate Registry Extracts related to Senan
          Building showing proper registration of the Kun-Mortgage I and Kun-
          Mortgage II;

     (b)  a legal opinion from DW Partners, as Korean counsel to the Borrower,
          (substantially in the form attached as Exhibit D-3) confirming that
          the Kun-Mortgage I, Kun Mortgage II and the Assignment of Insurance
          have been duly created, registered, recorded and perfected in
          accordance with the terms of the relevant Kun-Mortgage Agreements and
          the Insurance Assignment Agreement; and

     (c)  a copy of the Insurance Policies, with endorsements thereto as
          required under this Agreement.

                             Section 4.  Interest

4.1  Interest.  Borrower shall pay interest on the Loan in accordance with the
     --------
     provisions of this Section.

4.2  Interest Periods.  The Interest Periods applicable to the Drawdown shall be
     ----------------
     three (3) months, provided that:

     (a)  the first Interest Period shall commence on the date on which such
          Drawdown is made;

     (b)  each Interest Period (except the first Interest Period in relation to
          the Drawdown) shall commence on the last day of the preceding Interest
          Period;

     (c)  any Interest Period which would otherwise end on a non-Banking Day
          shall instead end on the next following Banking Day or, if that
          Banking Day is in another calendar month, on the immediately preceding
          Banking Day;

     (d)  if any Interest Period commences on the last Banking Day of a calendar
          month or on a day for which there is no numerically corresponding day
          in the calendar month three (3) months thereafter that Interest Period
          shall, subject to paragraph (e), end on the last Banking Day of such
          later calendar month; and

     (e)  any Interest Period which would otherwise extend beyond the Repayment
          Date shall instead end on that date.

4.3  Interest Rate and Calculation. (a)  The rate of interest applicable to Loan
     -----------------------------
     for each Interest Period ("Interest Rate") shall be the rate per annum
                                                                  --- -----
     determined as follows:

                                       7
<PAGE>

          (i)  in respect of the period starting from and including the Funding
               Date to but excluding the Interest Refixing Date, the applicable
               Interest Rate shall be the rate determined by adding the Margin
               to the higher of (x) the Base Rate or (y) 9% p.a. ; and

          (ii) in respect of the period starting from and including the Interest
               Refixing Date until full payment of the Facility, the applicable
               Interest Rate shall be the sum of the Margin and the Base Rate.

     (b)  Interest shall accrue at the Interest Rate from day to day, shall be
          calculated on the basis of the actual number of days elapsed and a 365
          day year, including the first day of the period during which it
          accrues but excluding the last, and shall be paid in arrears on each
          Interest Payment Date. The Lender shall notify Borrower of each
          Interest Rate determined under this Section. For clarification
          purposes of this Section 4.3, the interest rate shall not compound
          daily and rather shall compound on a quarterly basis.

              Section 5.  Repayment, Prepayment and Cancellation

5.1  Repayment.  Subject as otherwise provided herein, Borrower shall repay the
     ---------
     Loan in one lump sum, together with all accrued interest and other monies
     due and payable in connection with the Facility, on the Repayment Date.

5.2  Voluntary Prepayment.  Borrower may prepay all or part of the Loan on any
     --------------------
     Interest Payment Date after the end of the Availability Period, provided
     that:

     (a)  Borrower shall have given to the Lender not less than thirty (30)
          days' prior written notice specifying the amount and date of
          prepayment;

     (b)  the amount of any partial prepayment shall be at least Two Billion
          Korean Won (KRW2,000,000,000) and an integral multiple of One Billion
          Korean Won (KRW1,000,000,000) except in the case of a prepayment in
          full of the entire remaining balance of the Loan; and

     (c)  all other sums then due and payable under this Agreement shall have
          been paid.

5.3  Provisions Applicable to Prepayments. The Borrower may not prepay the Loan
     ------------------------------------
     or any part thereof except in accordance with the express terms of this
     Agreement. Any notice of prepayment given by Borrower under any provision
     of this Agreement shall be irrevocable and Borrower shall be bound to make
     a prepayment in accordance therewith.

5.4  Prepayment Fee.  If the Loan or any part thereof is prepaid under any
     --------------
     provision of this Agreement,  unless otherwise expressly provided in this
     Agreement, the Borrower shall pay to the Lender a prepayment fee in an
     amount calculated as set forth below:

               F =  P x 1.00% + P x V x (D/365)

                                       8
<PAGE>

               F:  prepayment fee
               P:  Principal amount of the Loan that is being prepaid
               V:  Value (not less than zero) equal to the applicable Base Rate
               less the final quotation yield rate for A+ three (3) year Korean
               Won-denominated corporate bond as published by the Korea
               Securities Dealers Association one (1) Banking Day immediately
               prior to the prepayment date
               D:  Actual number of days from the prepayment date to the date of
               next interest rate re-fixing (or maturity) for the Loan

5.5  Other Amounts.  If the Loan or any part thereof is prepaid under any
     -------------
     provision of this Agreement, Borrower shall also pay to the Lender, at the
     time of prepayment, such interest accrued up to the date of prepayment and
     all other sums payable by Borrower under this Agreement.

                         Section 6.  Fees and Expenses

6.1  Front-end Fee.  Borrower shall pay to the Lender a front-end fee in the
     -------------
     amount equivalent to zero point three percent (0.3%) flat of the amount of
     the Facility.  Such front-end fee shall be payable on the earlier of the
     date thirty (30) days from the date of this Agreement and the date of the
     Drawdown.

6.2  Expenses.  Borrower shall forthwith, on demand, and whether or not any
     --------
     Drawdown is made, pay to or reimburse the Lender for all reasonable costs,
     charges and expenses (including legal and other fees on a full indemnity
     basis and translation, communication, advertisement, travel and all other
     out-of-pocket expenses) incurred by it in connection with the negotiation,
     preparation, execution and (where relevant) registration of this Agreement
     and any other documentation required hereunder and the arrangement of the
     Facility and any amendment hereto and any inspection, calculation,
     approval, consent or waiver to be conducted, made or given by the Lender
     pursuant to any provision of this Agreement.

6.3  Enforcement Costs.  Borrower shall from time to time forthwith on demand
     -----------------
     pay to or reimburse the Lender for all reasonable costs, charges and
     expenses (including legal and other fees on a full indemnity basis and all
     other out-of-pocket expenses) incurred by it in exercising any of its
     rights or powers under this Agreement or in suing for or seeking to recover
     any sums due under this Agreement or otherwise preserving or enforcing its
     rights under this Agreement or in defending any claims brought against it
     in respect of this Agreement.

6.4  Taxes.  Borrower shall pay all present and future stamp and other like
     -----
     duties and taxes and all notarial, registration, recording and other like
     fees which may be payable in respect of this Agreement and shall indemnify
     the Lender against all liabilities, costs and expenses which may result
     from any default in paying such duties, taxes or fees.

                   Section 7.  Payments and Evidence of Debt

                                       9
<PAGE>

7.1  Drawdowns.
     ---------

     (a)  Amounts to be advanced by the Lender to Borrower under this Agreement
          shall be made available to the Lender not later than 11:00 a.m. (Seoul
          time) on the date of the relevant Drawdown in same day funds.

     (b)  Subject to paragraph (c) below, the Lender shall make available to
          Borrower the amounts by payment to the account to be designated by
          Borrower in the relevant Notice of Drawdown.

     (c)  In order to eliminate unnecessary movement of cash, the Lender shall
          be entitled to set off from the Drawdown amount, the amount equal to
          the sum of the principal amount of the Senan Loan, interest accrued
          thereon up to the Funding Date and all other sums payable under the
          Senan Loan and deposit only the remaining amount into the Borrower's
          account. For avoidance of doubt, the Borrower shall be deemed to have
          borrowed the full amount of the Drawdown as specified in the Notice of
          Drawdown when the Lender deposits into the Borrower's account the
          portion of the Drawdown amount remaining amount after set-off of the
          Senan Loan.

7.2  Payments by Borrower.   Unless otherwise instructed by the Lender, all
     --------------------
     payments by Borrower under this Agreement shall be made to the Lender not
     later than 11:00 a.m. (Seoul time) on the relevant due date in same day
     funds at the Lending Office of the Lender.

7.3  Allocation of Receipts.  If any amount received by the Lender is less than
     ----------------------
     the full amount due, the Lender shall have the right to allocate the amount
     received towards principal, interest and/or other sums owing hereunder as
     it considers appropriate.

7.4  Banking Days.  Subject to Section 4.2, if any sum would otherwise become
     ------------
     due for payment on a non-Banking Day that sum shall become due on the next
     following Banking Day and interest shall be adjusted accordingly, except
     that if the repayment due under Section 5.1 would then become due in
     another calendar month such repayment shall become due on the immediately
     preceding Banking Day.

7.5  Evidence of Debt.  The Lender shall maintain on its books in accordance
     ----------------
     with its usual practice a set of accounts recording the amounts from time
     to time owing by Borrower hereunder.  In any legal proceeding and otherwise
     for the purposes of this Agreement the entries made in such accounts shall,
     in the absence of manifest error, be conclusive and binding on Borrower as
     to the existence and amounts of the obligations of Borrower recorded
     therein.

7.6  Certificate Conclusive and Binding.  Where any provision of this Agreement
     ----------------------------------
     provides that the Lender may certify or determine an amount or rate payable
     by Borrower, a certificate by the Lender as to such amount or rate shall be
     conclusive and binding on Borrower in the absence of manifest error.

                  Section 8   Substitute Basis of Borrowing

                                      10
<PAGE>

8.1  Notwithstanding anything in this Agreement to the contrary if, on or prior
     to the Interest Refixing Date, the Lender reasonably determines that the
     quotation of interest rate referred to in the definition of the Base  Rate
     is no longer published for purposes of determining the Interest Rate, then
     the Lender shall notify the Borrower in writing of such fact and the
     following provisions shall apply:

     (a)  during the thirty (30) day period following the date of any such
          notice to the Borrower by the Lender ("Negotiation Period"), the
          Lender and the Borrower shall negotiate in good faith for the purpose
          of agreeing upon an alternative, mutually acceptable basis
          ("Substitute Basis") for determining the rate of interest to be
          applicable to the Loan and if, at the expiration of the Negotiation
          Period, the Lender and the Borrower have agreed upon the Substitute
          Basis, the Substitute Basis shall take effect from the date the Lender
          delivered notice to the Borrower hereunder; or

     (b)  if at the expiration of the Negotiation Period, the Substitute Basis
          has not been agreed upon, then the Lender shall have the right, by
          written notice delivered to the Borrower, to declare that for all
          purposes of this Agreement, the Interest Rate shall be, as of the date
          of the expiration of the Negotiation Period, the then prevailing
          interest rate as applied by the Lender to its borrowers for three(3)
          year loan in Korean Won.  In such event, the Borrower shall have the
          option to prepay the Loan, without any payment of prepayment fee as
          set forth in the Section 5.4 of this Agreement, by giving written
          notice to the Lender specifying the prepayment date which is not less
          than fourteen (14) days after such notice is given.  If Borrower
          elects to exercise such option, the Facility shall be cancelled and
          the Borrower shall prepay the Loan in full together with interest
          accrued thereon up to the date of prepayment.

8.2  Notwithstanding anything contained in Section 8.1, if the condition
     referred to in Section 8.1 ceases to exist, then interest on the Loan shall
     again be determined in accordance with the provisions of Section 4.3,
     commencing as of the next Interest Period occurring after the date such
     condition ceases to exist.

                  Section 9.   Change of Law or Circumstances

9.1  Unlawfulness.  If it becomes unlawful for the Lender to give effect to its
     ------------
     obligations hereunder, the Lender shall so notify Borrower, whereupon the
     Lender's Commitment shall be cancelled and its obligation to maintain the
     Loan shall cease.  Borrower shall forthwith after such notification, or
     such longer period as the Lender may certify as being permitted by the
     relevant law, prepay such Loan, without any payment of prepayment fee as
     set forth in the Section 5.4 of this Agreement, in full together with
     interest accrued thereon to the date of prepayment and any other monies
     owing hereunder to the Lender.

9.2  Increased Cost.  If the Lender determines that any change in any applicable
     --------------
     law or regulation or in the interpretation or application thereof or
     compliance by the Lender with any applicable direction, request or
     requirement (whether or not having the force of law) of any competent
     governmental or other authority does or will:

                                      11
<PAGE>

     (a)  subject the Lender to any tax or other payment with reference to sums
          payable by Borrower under this Agreement or oblige the Lender to forgo
          any interest or other return on or calculated by reference to the
          amount of any sum received or receivable by it under this Agreement;
          or

     (b)  impose on the Lender any other condition the effect of which is to (i)
          increase the cost to the Lender of participating in the Facility,
          including without limitation increased costs resulting from complying
          with applicable capital adequacy requirements, or (ii) reduce the
          amount of any payment receivable by, or the effective return to, the
          Lender in respect of the Facility;

     the Lender may so notify Borrower, and Borrower shall from time to time
     upon demand (whether or not the Loan has been repaid) pay to the Lender
     such amounts as the Lender may certify to be necessary to compensate it for
     such tax, payment, increased cost or reduction (each an "increased cost").
     Where such increased cost arises from circumstances contemplated above
     which affect the Lender's business generally or the manner in which or
     extent to which the Lender allocates capital resources, the Lender shall be
     entitled to such increased cost as it determines and certifies is fairly
     allocable to the Facility.  So long as the circumstances giving rise to
     such increased cost continue, Borrower may, after giving the Lender not
     less than thirty (30) days' prior written notice, prepay all (but not only
     part) of the Loan, without any payment of prepayment fee as set forth in
     the Section 5.4 of this Agreement, and upon the giving of such notice the
     Lender's Commitment shall be cancelled and no further Drawdowns shall be
     made.

                             Section 10.  Security

10.1 Mortgage of the Senan Building.  As collateral security for the prompt
     ------------------------------
     payment when due of the principal of and interest on, and all other amounts
     due with respect to the Loan outstanding and all other amounts owing
     hereunder, the Borrower hereby agrees to grant and confirms unto the
     Lender, a first priority kun-mortgage interest on Senan Building to be
     purchased by the Borrower and the maximum mortgage amount of such kun-
     mortgage shall be Eighteen Billion Two Hundred Million Korean Won
     (KRW18,200,000,000).

10.2 Mitigation of Costs and Expense related to Registration of Mortgage.
     ---------------------------------------------------------------------

(a)  Currently, a first priority kun-mortgage ("Existing Mortgage") with the
     maximum mortgage amount being Thirteen Billion Korean Won (KRW
     13,000,000,000) exists on the Senan Building, which is created to secure
     the Senan Loan extended by the Lender to the Senan Corporation.  The
     outstanding principal amount of the Senan Loan as of the date of this
     Agreement is Ten Billion Korean Won (KRW10,000,000,000).  In order to
     reduce the costs and expenses related to the registration of the mortgage
     referred to in Section 10.1 above, the Borrower and the Lender hereby
     agrees to use the Existing Mortgage to secure the Borrower's payment
     obligations hereunder instead of creating a new first priority kun-mortgage
     to secure such obligations.  To this end, instead of deregistering the
     Existing Mortgage and registering a new first priority kun-mortgage on the
     Senan Building, the Borrower agrees to assume all of the Senan
     Corporation's obligation under the Senan Loan and

                                      12
<PAGE>

     under the Existing Mortgage and expand the scope of the secured obligations
     under the Existing Mortgage so that the Facility shall be added as secured
     obligations in addition to the Senan Loan. For that purpose, the following
     steps will be taken:

          (i)  At least one (1) Banking Day prior to the Funding Date, Kun-
          Mortgage Agreement I shall be entered into by and among the Borrower,
          the Senan Building Owners and the Lender.

          (ii) At least one (1) Banking Day prior to the Funding Date, Kun-
          Mortgage Agreement II shall be duly entered into by and between the
          Borrower and the Lender.

     (b)  The Borrower agrees it shall prepay the Senan Loan in full on the
          Funding Date with the proceeds of the Loan hereunder.

10.3 New Registration of Mortgage.
     ----------------------------

     (a)  The Borrower expressly acknowledges and agrees that Lender has agreed
          to the measures under Section 10.2 solely for the benefit of the
          Borrower to save costs and expenses related to the registration of
          kun-mortgage and that, at all times, the economic effect of having
          Kun-Mortgage I and Kun-Mortgage II, as contemplated under Section 10.2
          should be the same as if a new first priority kun-mortgage is
          registered in the maximum mortgage amount of Eighteen Billion Two
          Hundred Million Korean Won (KRW18,200,000,000) for the benefit of the
          Lender for the purpose of securing the Facility. If, for any reason,
          the appropriation of the Existing Mortgage becomes impractical or, at
          the reasonable discretion of the Lender, the Lender's enforcement of
          either Kun-Mortgage I or Kun Mortgage II is adversely affected, the
          Lender shall be entitled to require the Borrower to create a new first
          priority kun-mortgage in the maximum mortgage amount of Eighteen
          Billion Two Hundred Million Korean Won (KRW18,200,000,000) for the
          benefit of the Lender to secure all of the Borrower's obligations
          under this Agreement as originally contemplated in Section 10.1 in
          lieu of Kun-Mortgage I and Kun-Mortgage II.

     (b)  The Borrower currently plans to extend two floors (third and fourth
          floors) to the Senan Building in the near future and hereby expressly
          agrees and acknowledges that such addition to the building will be
          automatically subject to the effects of the Kun-Mortgage I and Kun-
          Mortgage II. The Borrower further covenants that within sixty (60)
          days from the completion of the construction of the third and fourth
          floors of Senan Building, (i) the Borrower shall submit an appraisal
          report prepared by the Korean Appraisal Board showing the appraisal
          results conducted on the Senan Building after the construction of
          third and fourth floors is completed, and (ii) the Borrower shall file
          an application with the competent Real Estate Registry Offices to
          modify the description of the Senan Building recorded on the Real
          Estate Registry (the "Pyojebu" portion of the Real Estate Registry) to
          include such addition of the two floors to the Senan Building.

     (c)  If the application to modify the Pyojebu portion of the Real Estate
          Registry of the Senan Building is rejected by the registry office due
          to the fact that any of the future additional construction, extension,
          improvement, refurbishment,

                                      13
<PAGE>

          remodeling or renovation to the Senan Building has caused the Senan
          Building to be no longer considered as the same as a result of such
          additional construction, extension, improvement, refurbishment,
          remodeling or renovation, the Borrower shall, within fifteen (15) days
          from such rejection by the registry office, complete a new ownership
          registration in the name of the Borrower in respect of the Senan
          Building and registration of a first priority kun-mortgage in the
          maximum mortgage amount of Eighteen Billion two hundred million Korean
          Won (KRW18,200,000,000) securing all of the Borrower's obligations
          under this Agreement for the benefit of the Lender.

10.4 Assignment of Claims to Insurance Proceeds. As a security for the prompt
     -------------------------------------------
     payment when due of the principal of and interest on, and all other amounts
     due with respect to the Loan outstanding and all other amounts owing
     hereunder, the Borrower agrees, to assign all of its rights to claim
     insurance proceeds under the Insurance Policies pursuant to the Assignment
     of Insurance.  The Borrower shall duly complete necessary procedures
     required for perfection of the Assignment of Insurance.

                    Section 11.  Taxes and other Deductions

11.1 Payments to be Free and Clear.  All sums payable by Borrower under this
     -----------------------------
     Agreement shall be paid in full without set-off or counterclaim or any
     restriction or condition and free and clear of any tax or other deductions
     or withholdings of any nature.

11.2 Grossing-up of Payments.  If Borrower or any other person is required by
     -----------------------
     any law or regulation to make any deduction or withholding (on account of
     tax or otherwise) from any payment for the account of the Lender, Borrower
     shall, together with such payment, pay such additional amount as will
     ensure that the Lender receives (free and clear of any tax or other
     deductions or withholdings) the full amount which it would have received if
     no such deduction or withholding had been required.  Borrower shall
     promptly forward to Lender copies of official receipts or other evidence
     showing that the full amount of any such deduction or withholding has been
     paid over to the relevant taxation or other authority.

                  Section 12.  Representations and Warranties

Borrower represents and warrants to the Lender as follows:

12.1 Incorporation and Qualification.  Borrower is a corporation duly organized
     -------------------------------
     and validly existing under the laws of Korea.  Guarantor is duly organized
     and validly existing under the laws of its respective jurisdiction of
     organization.  Borrower and the Guarantor are qualified or registered to do
     business in every jurisdiction where the failure to so qualify or register
     could have a material adverse effect on Borrower or the Guarantor.

12.2 Power and Authority.  Borrower has full legal right, power and authority to
     -------------------
     carry on its present business, to own its properties and assets, to incur
     the indebtedness and other obligations provided for in this Agreement, to
     execute and deliver this Agreement and all other documents thereunder and
     to perform and observe the terms and conditions

                                      14
<PAGE>

     thereof.

12.3 Authorization of Borrowing.  Borrower has taken all appropriate and
     --------------------------
     necessary corporate and legal actions to authorize the execution and
     delivery of this Agreement and all other documents thereunder and to
     authorize the performance and observance of the terms and conditions
     thereof.

12.4 Authorizations and Approvals.  Borrower has obtained or effected all
     ----------------------------
     authorizations, if any, necessary for the valid execution, delivery and
     performance of this Agreement and such authorizations are in full force and
     effect or, by the date on which the Notice of Drawdown is given, such
     authorizations will have been obtained and be in full force and effect and
     there has been no default under the conditions of any of the same.

12.5 Agreement Binding; Compliance with Law and Other Agreements.  This
     -----------------------------------------------------------
     Agreement constitutes the legal, valid, binding and unsubordinated
     obligation of Borrower enforceable in accordance with its terms.  The
     execution, delivery and performance of the terms of this Agreement, the
     payment by Borrower of all amounts due on the dates and in the currency
     provided for herein and the application of the proceeds of the Facility as
     provided in Section 2.2 hereof (i) will not violate or contravene any
     provision of law or regulation which is applicable to Borrower; (ii) will
     not conflict with the Articles of Incorporation or by-laws (or comparable
     constituent documents) of Borrower; (iii) will not conflict with or result
     in the breach of any provision of, or in the imposition of any Encumbrance
     under, any agreement or instrument to which Borrower is a party or by which
     it or any of its properties or assets is bound; and (iv) will not
     constitute a default or an event that, with the giving of notice or the
     passing of time, or both, would constitute a default under any such
     agreement or instrument.

12.6 No Event of Default. Borrower is not in default under any agreement or
     -------------------
     obligation applicable to it or its assets or revenues, the consequences of
     which default could materially and adversely affect its business or
     financial condition or its ability to perform its obligations under this
     Agreement and no Event of Default or prospective Event of Default has
     occurred.

12.7 Compliance with Law.  Borrower and the Guarantor are in full compliance
     -------------------
     with all applicable laws, regulations and orders, whether or not having the
     force of law, including without limitation, tax laws.

12.8 Ranking of the Facility.  The claims of the Lender to the Senan Building
     -----------------------
     over which Kun-Mortgage under the Kun-Mortgage Agreements is expressed to
     be created in respect of the obligations of the Borrower under this
     Agreement will rank ahead of the claims of all other creditors of the
     Borrower over such asset and to the extent that those assets are
     insufficient to satisfy such obligations then the remaining claims of the
     Lender against the Borrower under this Agreement will rank at least equally
     and ratably (pari passu) in point of priority and security with the claims
     of all other unsecured and non-subordinated creditors of the Borrower save
     those preferred solely by any bankruptcy, insolvency, liquidation or  other
     similar laws of general application.

12.9 Legal Actions.  All registrations, recordings or filings, if any, required
     -------------
     as a condition to the legality, validity or enforceability of this
     Agreement or any other document to be

                                      15
<PAGE>

       executed and delivered pursuant to the terms of this Agreement have been
       made by Borrower.

12.10  Financial Statements.  The most recent financial statements of Borrower
       --------------------
       for the time being (including the profit and loss account and balance
       sheet) were prepared in accordance with all applicable laws and
       regulations of Korea and generally accepted accounting principles and
       policies consistently applied and show a true and fair view of the
       financial position of Borrower as at the end of, and the results of its
       operations for, the financial period to which they relate and, as at the
       end of such period Borrower did not have any significant liabilities
       (contingent or otherwise) or any unrealized or anticipated losses which
       are not disclosed by or reserved against in, such financial statements,
       and there has been no material adverse change in the business or
       financial condition of Borrower since the date of such financial
       statements.

12.11  Encumbrances. No Encumbrance exists over all or any part of the property,
       ------------
       assets or revenues of Borrower other than those disclosed in the
       financial statements referred to in Section 12.10 or those notified by
       Borrower to Lender on or prior to the date of this Agreement. Kun-
       Mortgage Agreements create or will create first priority security
       interests on Senan Building in accordance with and subject to the terms
       and conditions of such Kun-Mortgage Agreements.

12.12  Litigation.  No litigation, administrative proceeding or arbitration is
       ----------
       presently pending or threatened against Borrower or the Guarantor or
       their assets or revenues which, if adversely determined, could have a
       material effect on the ability of Borrower or Guarantor to perform its
       obligations under this Agreement.

12.13  No Misstatement.  No information, exhibit or report furnished in writing
       ---------------
       by Borrower to the Lender in connection with the negotiation of this
       Agreement contained any misstatement of fact as at the date of such
       exhibit or report or as at the date when such information was given which
       was material in the context of this Agreement or omitted to state a fact
       as at such date which in any such case would be materially adverse to the
       interests of the Lender under this Agreement.

                            Section 13.  Covenants

13.1   Financial Statements.  Throughout the life of this Agreement, Borrower
       --------------------
       shall provide the Lender with copies of its unaudited financial
       statements for the first six (6) months of each fiscal year and its
       audited financial statements for each fiscal year as they are available
       but in any event not later than sixty (60) days after the close of each
       fiscal period covered by an unaudited financial statement and not more
       than ninety (90) days after the close of each fiscal period covered by an
       audited financial statement and such other information respecting the
       financial condition and operations of Borrower as the Lender may from
       time to time request. Each financial statement provided hereunder shall
       have been prepared in accordance with generally accepted accounting
       principles in Korea consistently applied, and be accompanied by a
       certificate executed by the principal financial officer of Borrower
       stating (i) that as of the date of such financial statement Borrower is
       in full compliance with all terms and conditions hereof, including
       without limitation all financial covenants, and of any document executed
       pursuant hereto, and (ii) that as of such date no Event of Default or
       prospective Event of Default

                                      16
<PAGE>

     has occurred and is continuing.

13.2 Taxes.  Borrower shall pay and discharge all taxes, assessments and
     -----
     governmental charges upon them or their respective assets promptly when due
     and, in any event, prior to the date on which penalties may become attached
     thereto.

13.3 Representations & Warranties.  Borrower shall ensure that the
     ----------------------------
     representations and warranties contained in this Agreement remain at all
     times, during the terms of this Agreement as set forth Section 20.1 of this
     Agreement, true and accurate by reference to the facts and circumstances
     from time to time existing.

13.4 Continuing Governmental Authorizations.  Borrower undertakes to maintain in
     --------------------------------------
     full force and effect all governmental authorizations referred to in
     Section 12.4, if any, and to obtain or effect any new or additional
     governmental authorizations, as may be required or advisable in respect of
     the performance by Borrower of any of the terms and conditions of this
     Agreement.

13.5 Maintenance and Continuity of Business.  (a)  Borrower shall maintain  its
     --------------------------------------
     corporate existences in good standing and in compliance with all applicable
     laws and regulations, and Borrower shall maintain the present character of
     its business.

     (b)  Borrower shall maintain insurance on and in relation to its
          businesses, properties and assets with reputable underwriters or
          insurance companies against such risks and in such amount as are
          customary for businesses of a like nature in the jurisdiction in which
          such properties and assets are located or in which such businesses are
          conducted.

     (c)  Borrower shall not, except with the prior written consent of the
          Lender, (i) merge or consolidate with any other corporation or (ii)
          purchase or otherwise acquire all or substantially all of the assets
          of any other corporation or (iii) sell, lease, transfer or otherwise
          dispose of all or any material portion of its property or assets,
          whether by a single transaction or by a number of transactions whether
          related or not.  Lender's consent shall not be unreasonably withheld
          and shall be provided within 10 Banking Days from the date Borrower
          provided the Lender with all reasonably necessary information
          requested by the Lender so as to give such consent.

13.6 Notice.  As soon as possible but in any event within seven (7) days after
     ------
     occurrence, Borrower shall give written notice to the Lender of any Event
     of Default or prospective Event of Default, or any litigation,
     administrative proceeding or arbitration referred to in Section 12.12, and
     of any other matter which has resulted or might result in a material
     adverse change in Borrower's operations or financial condition or affect
     Borrower's ability to pay, when due, any amounts due under this Agreement.

13.7 Encumbrances.  Borrower shall not, except with the prior written consent of
     ------------
     the Lender, permit any loan, debt, guarantee or other obligation
     constituting indebtedness of Borrower or any other person to be secured by
     any Encumbrance on the Senan Building.

13.8 Financial Covenants.   The Borrower shall ensure that, at all times during
     -------------------
     the period starting from the first half of the Borrower's fiscal year of
     2003 until the expiration of

                                      17
<PAGE>

      the term of this Agreement, (a) the ratio of EBITDA to interest expenses
      (incurred in respect of the Indebtedness for Borrowed Money) shall be
      equal or greater than 2.0; and (b) the ratio of Indebtedness for Borrowed
      Money of the Borrower to EBITDA shall be equal or less than 4.0. The
      financial ratios in (a) and (b) shall be calculated on the basis of semi-
      annual unaudited financial statements and annual audited financial
      statements as submitted by the Borrower pursuant to Section 13.1.;
      provided, however, to the extent that no other Event of Default has
      occurred and is concurrently existing, the Lender shall be entitled to
      take actions under Section 14.2 only from the third anniversary of the
      date of the Drawdown even though the Borrower fails to meet either of the
      above financial ratios for the first half of the Borrower's fiscal year of
      2003.

13.9  Accounts.  During the term of this Agreement, the Borrower shall open and
      --------
      maintain a revenue account with the Lender and ensure that the majority of
      the Borrower's servicing fees to be received in consideration for the
      Borrower's provision of services to its customers after the Funding Date
      are deposited into such revenue account; provided that terms received by
      the Borrower from the Lender are comparable to prevailing market rates.
      Further, in the event that a need to deposit any surplus cash with a
      financial institution in Korea arises at any time during the term of this
      Agreement, the Borrower shall deposit such cash in the deposit/savings
      account established with the Lender.

13.10 Use of Facility.  Borrower shall use the proceeds of the Facility
      ---------------
      exclusively for the purposes specified in Section 2.2.

13.11 Security Interest.  Borrower shall maintain Kun-Mortgages under Kun-
      -----------------
      Mortgage Agreement I and Kun-Mortgage Agreement II in full force and
      effect.

13.12 Insurance.
      ----------

      (a)  During the term of this Agreement, the Borrower shall (i) maintain
           the Insurance Policies in full force and effect in accordance with
           its obligations hereunder; (ii) provide to the Lender evidence that
           all Insurance Policies are in full force and effect; (iii) perform
           all of its obligations under the terms of the Insurance Policies; and
           (iv) notify the Lender of any material change intended to be made by
           the Borrower to any of the Insurance Polices and not to make any
           material alteration to any Insurance Policies without the prior
           written consent of the Lender.

      (b)  The Borrower shall use reasonable efforts to protect its interests
           and rights in, and the Lender's interests and rights in, the
           Insurance Policies and any proceeds received therefrom.

      (c)  The Borrower shall notify the Lender upon the occurrence of any event
           that is likely to give rise to a claim under any Insurance Policies.

      (d)  The Borrower shall not, without the prior written consent of the
           Lender, settle, compromise or abandon any claim under any of the
           Insurance Policies.

      (e)  In the event that the Borrower fails to pay any premium when due, the
           Lender,

                                      18
<PAGE>

           on behalf of the Borrower, may, but shall not be obligated to, pay
           any premium or other amounts payable in respect of the Insurance
           Policies or effect any insurance required to be maintained pursuant
           to this Agreement or the Kun-Mortgage Agreements and the Borrower
           will on demand pay to the Lender the amount of any payment made in
           connection with the provisions of this Agreement, together with
           interest on such amount at the Default Interest Rate for the period
           beginning on the date on which the Lender made such payment up to the
           date of receipt of the amount of such payment from the Borrower.

13.13 Further Documents. Borrower shall furnish the Lender with all such other
      -----------------
      documents and instruments and do all such other acts and things as the
      Lender may require to carry out the transactions contemplated herein or in
      the documents to be delivered hereunder.

                        Section 14.  Events of Default

14.1  Events of Default.  Each of the following events or occurrences shall
      -----------------
      constitute an Event of Default under this Agreement:

      (a)  Borrower fails to pay, within three (3) business days, when due any
           sum payable under this Agreement when due or otherwise in accordance
           with the provisions of this Agreement.

      (b)  Any representation, warranty or statement made or deemed to be made
           by Borrower in this Agreement, Kun-Mortgage Agreements or in any
           document executed hereunder or by Guarantor in the Guaranty proves to
           have been incorrect or misleading in any respect considered by the
           Lender to be material.

      (c)  Borrower or Guarantor fails duly and punctually to perform or observe
           any obligation or covenant made by it in this Agreement, Kun-Mortgage
           Agreements or the Guaranty or any other document executed hereunder
           or thereunder and as a result thereof it might reasonably be
           considered by the Lender that the ability of Borrower or Guarantor to
           promptly comply with their respective obligations under this
           Agreement, Kun-Mortgage Agreements or the Guaranty is materially
           adversely affected thereby.

      (d)  Borrower or Guarantor fails to perform or observe any obligation or
           covenant contained in this Agreement or the Guaranty other than as
           referred to in paragraphs (a), (b) and (c) above and such failure is
           not remediable or, if remediable, continues for a period of thirty
           (30) days after receipt by Borrower or Guarantor of notice of such
           failure from the Lender.

      (e)  Borrower or Guarantor fails to discharge when due any Indebtedness
           for Borrowed Money or to honor any guarantee of any Indebtedness for
           Borrowed Money; provided, however, that non-payment by Borrower or
           Guarantor to honor any guarantee or any Indebtedness for Borrowed
           Money is not the result of a bonafide dispute between parties, or
           there occurs any event of default (however so described) under any
           other agreement pursuant to which any other

                                      19
<PAGE>

           indebtedness or guarantee of Borrower or Guarantor is created,
           secured or evidenced, if the effect of such failure or occurrence is
           to cause or permit such indebtedness or guarantee to become or to be
           declared due prior to its normal maturity.

      (f)  Any change occurs in the financial or other condition of Borrower or
           Guarantor which may reasonably be considered by the Lender to
           materially adversely affect the ability of Borrower or Guarantor to
           comply with all or any of their respective obligations under this
           Agreement, Kun-Mortgage Agreements or the Guaranty.

      (g)  Borrower or Guarantor becomes insolvent or commits or permits any act
           of bankruptcy, which term shall include (i) the filing of a petition
           in any bankruptcy, reorganization, winding-up or liquidation
           proceeding or other proceeding analogous in purpose or effect, (ii)
           the failure by Borrower or Guarantor to have any such petition filed
           by another party discharged within thirty (30) days, (iii) the
           application for or consent to the appointment of a receiver or
           trustee for the bankruptcy, reorganization, winding-up or liquidation
           of Borrower or Guarantor, (iv) the making by Borrower or Guarantor of
           an assignment for the benefit of, or any composition or arrangement
           with, its creditors, (v) the admission in writing by Borrower or
           Guarantor of its inability to pay its debts, (vi) the passing of a
           resolution by Borrower or Guarantor approving any reorganization,
           winding-up or liquidation of Borrower or Guarantor, or of a
           substantial portion of its properties or assets, (vii) the entry of
           any court order or judgment confirming the bankruptcy or insolvency
           of Borrower or Guarantor, or approving any reorganization, winding-up
           or liquidation of Borrower or Guarantor or of a substantial portion
           of its properties or assets, (viii) any creditor of Borrower,
           Guarantor exercises a contractual right to assume the financial
           management of Borrower or Guarantor, or (ix) Borrower or Guarantor is
           unable to pay its debts, stops, suspends or threatens to stop or
           suspend payment of all or a material part of (or of a particular type
           of) its indebtedness, begins negotiations or takes any other step
           with a view to the deferral, rescheduling or other readjustment of
           all of (or all of a particular type of) its indebtedness (or of any
           part which it will or might otherwise be unable to pay when due).

      (h)  A writ of attachment or execution or similar process is issued
           against a substantial part of the assets of Borrower or Guarantor
           which remains undismissed, unbonded or undischarged for a period of
           thirty (30) days.

      (i)  Borrower or Guarantor, without the prior written consent of the
           Lender, ceases its operations or sells or otherwise disposes of all
           or a substantial part of its assets (whether by a single transaction
           or a series of transactions), or Borrower or Guarantor decides to
           cease its operations or to sell or otherwise dispose of, or any
           governmental or other authority expropriates or nationalizes or
           threatens to expropriate or nationalize, all or a substantial part of
           its assets.

      (j)  This Agreement, the Guaranty or any provision hereof or thereof
           ceases for any reason to be in full force and effect or is terminated
           or jeopardized or becomes invalid or unenforceable or if there is any
           dispute regarding the validity or

                                      20
<PAGE>

          enforceability of the same in each case in a manner which, in the
          opinion of the Lender, might materially and adversely affect the
          interests of the Lender hereunder, or if there is any purported
          termination or repudiation of the same.

     (k)  Any governmental authorization granted or required in connection with
          this Agreement, Kun-Mortgage Agreements or the Guaranty is terminated
          or revoked or is modified in any manner unacceptable to the Lender.

     (l)  Any of Kun-Mortgage I and/or Kun-Mortgage II is imperiled or
          jeopardized in any way or any of Kun-Mortgage Agreement I and/or Kun-
          Mortgage Agreement II ceases to constitute the legal, valid and
          binding obligations of the Borrower.

     (m)  Assignment of Insurance ceases to constitute the legal, valid and
          binding obligations of the Borrower.

     (n)  Any material part of the Insurance Policies is or becomes void or
          unenforceable for any reason and is not renewed within seven (7) days
          of such Insurance Policies becoming void.

     (o)  Borrower, without the prior written consent of the Lender, voluntarily
          or involuntarily merges or consolidates with any other entity.

     (p)  It becomes impossible or unlawful for Borrower or Guarantor to perform
          or comply with any one or more of their respective obligations under
          this Agreement, Kun-Mortgage Agreements, or the Guaranty.

     (q)  Any event occurs which in the reasonable opinion of the Lender does or
          will prevent or materially imperil fulfillment by Borrower or
          Guarantor of their respective obligations under this Agreement, Kun-
          Mortgage Agreements or the Guaranty.

14.2 Consequences of Default. (a) If an Event of Default shall occur and be
     -----------------------
     continuing, the Lender may, at the same or different times, declare the
     Loan and accrued interest payable hereunder to be, whereupon they shall
     become, immediately due and payable without demand, notice or other legal
     formality of any kind, all of which are expressly waived by Borrower;
     provided, however, that upon the occurrence of any event described in
     --------  -------
     Section 14.1(g), all sums then owing by Borrower hereunder shall, without
     any declaration or other action by the Lender, automatically be immediately
     due and payable, and the Facility shall be immediately cancelled without
     demand, notice or other legal formality of any kind, all of which are
     expressly waived by Borrower.

     (b)  In addition to the actions permitted in paragraph (a) above, the
          Lender may take any action, exercise any other right or pursue any
          other remedy conferred upon it by this Agreement and/or any applicable
          law or regulation or otherwise as a consequence of any Event of
          Default.

14.3 No Waiver.  No waiver of any Event of Default shall constitute a waiver of
     ---------
     any other or any succeeding Event of Default except to the extent provided
     in such waiver.

                                      21
<PAGE>

                         Section 15.  Default Interest

15.1 Non-Payment. (a) If Borrower fails to pay any sum payable under this
     -----------
     Agreement when due, the Borrower shall pay interest accrued on such sum
     from and including the due date to the date of actual payment (as well
     after as before judgment) at the then prevailing default rate published by
     the Lender.

     (b) The default interest contemplated under this Section 15 shall be
     calculated on the basis of the actual number of days elapsed and a 365-day
     year.

15.2 Other Events of Default.   If an Event of Default other than that described
     ------------------------
     in Section 13.1(a) shall occur and be continuing, Borrower shall pay to the
     Lender on demand for the account of each Lender interest on the amount of
     the Loan then outstanding from and including the date of such default to
     and including the date the default is cured (after as well as before
     judgment) at the rate which is two percent (2%) per annum above the
                                                     --- -----
     Interest Rate then applicable to the Loan.

                           Section 16.  Indemnities

16.1 General Indemnity.  Borrower shall indemnify the Lender against all losses,
     -----------------
     liabilities, damages, costs and expenses which the Lender may incur as a
     consequence of any Event of Default or any other breach by Borrower of any
     of its obligations under this Agreement or otherwise in connection with
     this Agreement (including any loss or expense incurred in liquidating or
     redeploying funds acquired to maintain the Lender's Participation in the
     Loan and any interest or fees incurred in funding any unpaid sum, but
     taking into account any interest paid by Borrower in respect of such unpaid
     sum under Section 15).

16.2 Currency Indemnity. Korean Won shall be the currency of account and of
     ------------------
     payment in respect of sums payable under this Agreement. If an amount is
     received in another currency, pursuant to a judgment or order in the
     liquidation of Borrower or otherwise, Borrower's obligations under this
     Agreement shall be discharged only to the extent that the Lender may
     purchase Korean Won with such other currency in accordance with normal
     banking procedures upon receipt of such amount. If the amount in Korean Won
     which may be so purchased, after deducting any costs of exchange and any
     other related costs, is less than the relevant sum payable under this
     Agreement, Borrower shall indemnify the Lender against the shortfall. This
     indemnity shall be an obligation of Borrower independent of and in addition
     to its other obligations under this Agreement and shall take effect
     notwithstanding any time or other concession granted to Borrower or any
     judgment or order being obtained or the filing of any claim in the
     liquidation, dissolution or bankruptcy (or analogous process) of Borrower.

                            Section 17.  Assignment

17.1 Borrower.  Except with the prior written consent of the Lender, Borrower
     --------
     shall not assign or transfer any of its rights or obligations hereunder.

                                      22
<PAGE>

17.2 Lender.  The Lender may assign or transfer all or any part of its rights,
     ------
     benefits and obligations hereunder; provided the assignee or transferee
     agrees to be bound by all of the provisions of this Agreement, including
     without limitation the confidentiality provisions of Section 20.8. Borrower
     shall take any and all actions the Lender may reasonably require to perfect
     and complete any such assignment or transfer, including without limitation
     the giving of its consent thereto. Upon any assignment or transfer by the
     Lender, the assignee or transferee shall be entitled, to the extent of the
     interest assigned or transferred, to the benefit of the indemnities, tax
     reimbursements and rights of set-off of the Lender pursuant to the
     provisions of this Agreement as fully as if it were a party hereto. The
     acts of the Lender or the failure of the Lender to act hereunder shall in
     all circumstances be conclusive and binding on any transferee or assignee
     of the Lender's interest hereunder.

17.3 Subparticipations.  The Lender may at any time grant one or more
     -----------------
     subparticipations in its rights and/or obligations under this Agreement but
     no other party hereto shall be concerned in any way with any
     subparticipation so granted.

17.4 Disclosure. The Lender may disclose to a transferee, assignee or
     ----------
     subparticipant or potential transferee, assignee or subparticipant, such
     information about Borrower as the Lender shall consider appropriate;
     provided, however, if such information includes any confidential
     information about the Borrower, the Lender will cause recipient(s) thereof
     to sign an appropriate non-disclosure agreement.

17.5 Limitations on Assignments.  The Lender agrees that it will not, assign,
     --------------------------
     transfer or grant a subparticipation to a party (or to its Affiliate) whose
     business is in direct competition with the business of the Borrower, except
     with a prior written consent of the Borrower.

                  Section 18.  Governing Law and Jurisdiction

18.1 Governing Law.  This Agreement and the rights and obligations of the
     -------------
     parties hereunder shall be governed by and construed in accordance with the
     laws of Korea.

18.2 Jurisdiction.  Borrower agrees that any legal action or proceeding arising
     ------------
     out of or relating to this Agreement may be brought in the Seoul District
     Court in Seoul, Korea and irrevocably submits to the non-exclusive
     jurisdiction of such court. The foregoing, however, shall not limit the
     rights of the Lender to bring any legal action or proceeding or to obtain
     execution of judgment in any other jurisdiction.

                             Section 19.  Notices

19.1 Delivery.  Each notice, demand or other communication to be given or made
     --------
     under this Agreement shall be in writing and delivered or sent to the
     relevant party at its address or fax number set out below (or such other
     address or telephone number or fax number as the addressee has by five (5)
     days' prior written notice specified to the other party):

     To Borrower:   iAsiaWorks Korea Ltd.
                    BoRaMae DaeKyo Building, 6th Floor, 729-21, Bongchon-Dong,
                    Kwanak-Gu, Seoul 151-706 Korea

                                      23
<PAGE>

                     Fax No.:    822-3284-7700
                     Attention:  Yun Ho Rhee

     and to Lender:  Korea First Bank, Yangjae-Dong Branch
                     Hae Dong Building, 1st Floor, 1362-14, Seocho-Dong,
                     Seocho-Gu, Seoul 137-070 Korea

                     Fax No.:    822-3474-6864
                     Attention:  Yeon Soon Lee

     with a copy to: Korea First Bank
                     100, Kongypung-Dong, chongro-Gu, Seoul 110-702 Korea

                     Fax No.:    822-3702-4945
                     Attention:  Suk Jin Chung

19.2 Deemed Delivery.  Any notice, demand or other communication so addressed to
     ---------------
     the relevant party shall be deemed to have been delivered (i) if given or
     made by letter, when actually delivered to the relevant address, and (ii)
     if given or made by fax, when dispatched with a simultaneous confirmation
     of transmission stating that the correct number of pages has been sent and
     that such transmission is error free (or equivalent), provided that, if
     such day is not a working day in the place to which it is sent, such
     notice, demand or other communication shall be deemed delivered on the next
     following working day at such place.

19.3 Language.  All notices, demands or other communications hereunder and any
     --------
     other documents required to be delivered hereunder shall be in either (i)
     the Korean language or English language or (ii) accompanied by a certified
     translation into the Korean language.

                          Section 20.  Miscellaneous

20.1 Term.  The term of this Agreement shall commence on the date first set
     ----
     forth above and shall end on the date of termination of the Facility or, if
     later, upon payment in full of all principal, interest and other sums
     payable by Borrower hereunder. The representations and warranties of
     Borrower set forth herein shall survive the making of the Loan and the
     indemnities of Borrower contained herein shall survive repayment of the
     Loan.

20.2 Entire Agreement.  This Agreement and the documents referred to herein
     ----------------
     constitute the entire obligations of the parties hereto and supersede any
     prior expressions of intent or understandings with respect to this
     transaction.

20.3 Amendment.  Any amendment or waiver of any provision of this Agreement and
     ---------
     any waiver of any default under this Agreement shall only be effective if
     made in writing and signed by or on behalf of the party against whom the
     amendment or waiver is asserted.  For these purposes, the written approval
     of the Lender against whom an amendment or waiver is asserted is required
     where that amendment or waiver relates to:

                                      24
<PAGE>

     (a)  an increase of the Facility or of any Lender's Commitment or the
          length of the Availability Period or the amount or currency of or the
          due date for any payment of principal or interest on the Loan;

     (b)  a reduction in the rate or rates of interest or any fees or other
          amounts payable to the Lender hereunder; or

     (c)  any voluntary or mandatory prepayment.

20.4 Waiver; Cumulative Rights.  The failure or delay of the Lender to require
     -------------------------
     performance by Borrower of any provision of this Agreement shall not affect
     its right to require performance of such provision nor shall any single or
     partial exercise of the same preclude any further exercise thereof or the
     exercise of any other right, power or remedy. Each and every right, power
     and remedy granted to the Lender hereunder or by law shall be cumulative
     and may be exercised in part or in whole from time to time.

20.5 Severability.  If any one or more of the provisions contained in this
     ------------
     Agreement or any document executed in connection herewith shall be invalid,
     illegal or unenforceable in any respect under any applicable law, the
     validity, legality and enforceability of the remaining provisions contained
     herein shall not in any way be affected or impaired thereby.

20.6 Set-Off.  To the extent permitted by law, the Lender may at any time set-
     -------
     off or apply any and all deposits by Borrower with the Lender at its head
     office or at any branch, subsidiary or affiliate of its head office
     (whether general or special, time or demand, matured or unmatured) in
     reduction of amounts due to it hereunder; provided, however, that the
     Lender shall immediately notify the Borrower of such set-off or
     application.

20.7 Counterparts.  This Agreement may be signed in any number of counterparts.
     ------------
     Any single counterpart or a set of counterparts signed, in either case, by
     all parties hereto shall constitute a full and original agreement for all
     purposes.

20.8 Confidentiality.  In handling any confidential information, Lender shall
     ----------------
     exercise the same degree of care that it exercises with respect to its own
     proprietary information of the same types to maintain the confidentiality
     of any non-public information thereby received or received pursuant to this
     Agreement, except that disclosure of such information may be made (i) as
     required by law, regulations, rule or order, subpoena, judicial order or
     similar order, (ii) as may be required in connection with the examination,
     audit or similar investigation of the Lender (iii) to any actual or
     potential assignee or transferee or subparticipant pursuant to Section 17.4
     and (iv) as the Lender may deem appropriate in connection with the exercise
     of any remedies hereunder.  Confidential information hereunder shall not
     include information that is in the public domain.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized signatories as of the day and year first
written above.

                                      25
<PAGE>

BORROWER
--------

iAsiaWorks Korea Ltd.

By /s/ Nick Pianim
  --------------------------------
Name:  Nick Pianim
Title:  Vice President of Global Business Development

LENDER
------

KOREA FIRST BANK, YANGJAE-DONG BRANCH

By /s/ signature illegible
  --------------------------------
Name:
Title:

                                      26
<PAGE>

                                  SCHEDULE I
                                  ----------

                        CONDITIONS PRECEDENT DOCUMENTS

1.   The Guaranty duly executed by Guarantor.

2.   Certified copies of appropriate consents, licenses, approvals or
     authorizations of and filings or registrations with such governmental
     authorities in any jurisdiction, including Korea, as may be necessary or
     advisable to authorize the borrowings under the Loan Agreement and the
     execution and performance of the Loan Agreement and the Guaranty and to
     permit payment in Won of all payments at the times, at the places and in
     the manner provided for under the Loan Agreement and the Guaranty,
     including without limitation, the approval of Borrower's designated bank in
     respect of the Guaranty.

3.   In relation to Borrower:

     (a)  certified copies of:

          (i)    the Articles of Incorporation;

          (ii)   the Commercial Registry extracts relating to Borrower;

          (iii)  the minutes of a meeting of the board of directors adopting
                 resolutions authorizing the execution, delivery and performance
                 of the Loan Agreement;

          (iv)   a power of attorney issued by the Representative Director of
                 the Borrower in favor of the persons authorized to sign the
                 documents in connection with this transaction, in the event a
                 person other than the Representative Director is authorized to
                 sigh such documents;

          (v)    the seal certificate for the Representative Director
                 participating in the meeting referred to in (iii) above; and

          (vi)   a copy of notice of Assignment of Insurance substantially in
                 the form as attached to the Assignment of Insurance given to
                 the insures.

     (b)  a certificate of the Representative Director certifying (x) the
          documents referred to in paragraph 3(a) above, (y) the incumbency and
          specimen signature and/or seal impression of the person authorized to
          sign the documents as referred to in paragraph 3(a)(iii) above, and
          (z) that the seal impressions set out beside the names of each
          director listed in the minutes of the meeting referred to in paragraph
          3(a)(iii) above are the respective genuine seal impressions of each
          such director.

     (c)  An evidence (in the form of certificates of insurance) that the
          Insurance Policies are in full force and effect.

     (d)  A full set of all registration documents necessary for filing the
          application for
<PAGE>

          registration of the Kun-Mortgage I and Kun-Mortgage II with the
          competent Real Estate Registry Offices, in form and substance
          satisfactory to the Lender and its legal counsel.

4.   In relation to Guarantor:

     (a)  certified copies of:

          (i)    the Certificate of Incorporation and By-laws (or other
                 constitutive documents) of Guarantor;

          (ii)   a good standing certificate issued by the Secretary of the
                 State of Delaware relating to Guarantor; and

          (iii)  the minutes of a meeting of the board of directors of Guarantor
                 adopting resolutions authorizing the execution and performance
                 of the Guaranty and further authorizing the authority of the
                 person signing the Guaranty and any other documents to be
                 executed by Guarantor in relation thereto, and any power of
                 attorney issued in connection therewith.

     (b) a certificate of the Secretary of Guarantor certifying (i) the
         documents referred to in paragraph 4(a) above and (ii) the incumbency
         and specimen signature(s) of the person(s) authorized to sign the
         Guaranty and any other documents to be executed by Guarantor in
         relation thereto.

5.   A letter from the Borrower accepting its appointment as process agent for
     the Guarantor, substantially in the form of Exhibit C hereto.

6.   Favorable legal opinions of (i) Korean counsel to the Borrower, and (ii) US
     counsel to Guarantor, substantially in the form of Exhibits D-1 and D-2
     hereto in form and substance satisfactory to the Lender.

7.   A copy of purchase and sale agreement regarding the Senan Building entered
     into by and between the Senan Building Owners and the Borrower.

8.   Such other documents relating to any of the matters contemplated under the
     Loan Agreement and the Guaranty as the Lender may request.

                                     II-2
<PAGE>

                                   EXHIBIT A
                                   -------

                          FORM OF NOTICE OF DRAWDOWN

                                    [date]

To:  Korea First Bank

     Re:  KRW14,000,000,000 Loan Agreement dated October [_], 2000
          ----------------------------------------------------------

Dear Sirs:

We refer to the above Loan Agreement, and hereby give notice that we wish to
make a Drawdown under the Facility on [     ], 2000 in the amount of KRW[     ].

The proceeds of the Drawdown are to be used exclusively for the purposes
specified in the Loan Agreement.

We hereby irrevocably and unconditionally authorize yourselves to transfer the
proceeds of the Drawdown to the following accounts:

                             [details of accounts]

We hereby certify to you that as of the date of this notice:

(a)  the representations and warranties set out in Section 11 of the Loan
     Agreement, repeated with reference to the facts and circumstances
     subsisting at the date of this notice, remain true and correct;

(b)  no Event of Default or prospective Event of Default has occurred which
     remains unwaived or unremedied or would result from the making of the
     Drawdown; and

(c)  all applicable conditions precedent specified in Section 3 of the Loan
     Agreement have been met.

Terms defined in the Loan Agreement shall have the same meanings when used in
this notice.

                         For and on behalf of
                         iAsiaWorks Korea Ltd.

                         By /s/ Nick Pianim
                           ----------------------------
                         Name:  Nick Pianim
                         Title: Vice President of Global Business Development
<PAGE>

                                   EXHIBIT B
                                   ---------

                               FORM OF GUARANTY

THIS GUARANTY is made on this 10th day of October, 2000

BY:

iAsiaWorks, Inc., a corporation organized and existing under the laws of the
State of [Delaware] with its registered head office at 2000 Alameda de las
Pulgas, Suite 125, San Mateo, California 94403 U.S.A. ("Guarantor").

IN FAVOUR OF:

(1)  the Lender referred to below.

WHEREAS:

(A)  By a loan agreement (the "Loan Agreement") dated [     ], 2000 and made
     between (1) iAsiaWorks Korea Ltd., as borrower ("Borrower") and (2) Korea
     First Bank, Yangjae-dong Branch as lender ("Lender"), the Lender have
     agreed to make available to Borrower a term loan facility in an aggregate
     principal amount of up to KRW14,000,000,000 (the "Facility") upon the terms
     set out therein.

(B)  It is a condition precedent to the Lender making the Facility available to
     Borrower that Guarantor enter into this Guaranty.

NOW THIS GUARANTY WITNESSES as follows:

Section 1.   Interpretation
             --------------

In this Guaranty, unless the context requires otherwise:

(a)  terms and expressions defined in the Loan Agreement shall have the same
     meanings when used in this Guaranty; and

(b)  "Secured Indebtedness" means all and any sums (whether principal, interest,
     fees or otherwise) which are or at any time may become payable by Borrower
     under the Loan Agreement and all other monies hereby secured.

Section 2.   Guaranty
             --------

2.1  In consideration of the Lender granting the Facility to Borrower, Guarantor
     irrevocably and unconditionally guarantees, as primary obligor and not
     merely as surety to the Lender, jointly and severally with Borrower, the
     due and punctual payment of the
<PAGE>

     Secured Indebtedness when and as the same shall become due and payable,
     whether at stated maturity, upon acceleration, extension or otherwise,
     according to the terms of the Loan Agreement.

2.2  Guarantor agrees to pay to the Lender any amount of the Secured
     Indebtedness in the currency or respective currencies in which the same is
     payable under the terms of the Loan Agreement at any time on demand against
     the Lender's invoice accompanied by the Lender's simple certificate stating
     that Borrower has failed to pay the same pursuant to the Loan Agreement,
     which invoice shall be final and conclusive as to the amount owed absent
     manifest error.

2.3  This Guaranty shall be a continuing guaranty and shall remain in full force
     and effect until the Secured Indebtedness has been paid in full and shall
     not be (or be construed as to be) discharged by any intermediate discharge
     or payment of or on account of the Secured Indebtedness or any settlement
     of accounts between the Lender and Borrower or anyone else.

Section 3.   Indemnity
             ---------

Without prejudice to the guaranty contained in Section 2, Guarantor
unconditionally and irrevocably undertakes, as a separate, additional and
continuing obligation and as a primary obligor, to indemnify the Lender from
time to time on demand against all losses, liabilities, damages, costs and
expenses whatsoever arising out of any failure by Borrower to make due and
punctual payment of the Secured Indebtedness or in the due and punctual
performance and observance of all other obligations under the Loan Agreement.
This indemnity shall remain in effect notwithstanding that the guaranty under
Section 2 ceases to be valid or enforceable against Guarantor for any reason
whatsoever.

Section 4.   Preservation of Rights
             ----------------------

4.1  The obligations of Guarantor herein contained shall be in addition to and
     not in substitution for any other guaranty or security which the Lender may
     now or hereafter hold in respect of the Secured Indebtedness. The Lender
     may change or release any such guaranty or security and such shall have no
     effect whatsoever on this Guaranty.

4.2  Neither the obligations of Guarantor hereunder nor the rights, powers and
     remedies conferred upon the Lender by this Guaranty or by law shall be
     discharged, impaired or otherwise affected by:

     (a)  the winding-up, dissolution, administration or reorganization of
          Borrower or any change in its status, function, control or ownership;

     (b)  any of the obligations of Borrower under the Loan Agreement being or
          becoming illegal, invalid or unenforceable in any respect;

     (c)  any variation or amendment to the terms of the Loan Agreement or any
          other document referred to therein;

                                      B-2
<PAGE>

     (d)  the granting of any time or indulgence to Borrower or any other
          person;

     (e)  the invalidity or unenforceability of any obligation or liability of
          Borrower under the Loan Agreement;

     (f)  any invalidity or irregularity in the execution of the Loan Agreement
          or this Guaranty;

     (g)  any deficiency in the powers of Borrower to enter into or perform any
          of its obligations under the Loan Agreement or any irregularity in the
          exercise thereof or any lack of authority by any person purporting to
          act on behalf of Borrower;

     (h)  any other guarantee or security which the Lender may now or hereafter
          hold in respect of the Secured Indebtedness being or becoming wholly
          or partly void, voidable or unenforceable;

     (i)  any waiver, exercise, omission to exercise, compromise, renewal or
          release of any rights against Borrower or any other person or any
          compromise, arrangement or settlement with any of the same;

     (j)  any act, omission, event or circumstance which would or may but for
          this provision operate to prejudice, affect or discharge this Guaranty
          or the obligations of Guarantor hereunder; or

     (k)  any dispute between Borrower and any person in relation to the Loan
          Agreement and any amount payable thereunder.

4.3  The Lender shall not be obliged before exercising any of the rights, powers
     or remedies conferred upon it under this Guaranty or by law:

     (a)  to make any demand of Borrower;

     (b)  to take any action or obtain judgement in any court against Borrower;

     (c)  to make or file any claim or proof in a winding-up or dissolution of
          Borrower; or

     (d)  to enforce or seek to enforce any other security taken in respect of
          the Secured Indebtedness.

4.4  Guarantor represents to and undertakes with the Lender that it has not
     taken and will not take any security in respect of its liability under this
     Guaranty whether from Borrower or any other person. So long as any sum
     remains owing by Borrower to the Lender, Guarantor shall not exercise any
     right of subrogation or any other rights of a surety or enforce any
     security or other right or claim against Borrower (whether in respect of
     its liability under this Guaranty or otherwise) or any other person who has
     guaranteed or given any security in respect of the Secured Indebtedness or
     claim in the insolvency or liquidation of Borrower or any such other person
     in competition with the Lender. If Guarantor receives any payment or
     benefit in breach of this Section, it shall hold the

                                      B-3
<PAGE>

     same upon trust for the Lender as a continuing security for the Secured
     Indebtedness.

Section 5.   Costs, Charges and Expenses
             ---------------------------

Guarantor shall from time to time forthwith on demand pay to or reimburse the
Lender for all costs, charges and expenses (including legal and other fees on a
full indemnity basis) incurred by the Lender in connection with the preparation
and execution of this Guaranty and in exercising any of its rights or powers
hereunder or in suing for or seeking to recover any sums due hereunder or
otherwise preserving or enforcing its rights hereunder or in defending any
claims brought against it in respect of this Guaranty or in releasing this
Guaranty upon payment of the Secured Indebtedness.

Section 6.   Taxes and other Deductions
             --------------------------

6.1  All sums payable by Guarantor under this Guaranty shall be paid in full
     without set-off or counterclaim or any restriction or condition and free
     and clear of any tax or other deductions or withholdings of any nature.

6.2  If Guarantor or any other person is required by any law or regulation to
     make any deduction or withholding (on account of tax) from any payment for
     the account of the Lender, Guarantor shall, together with such payment, pay
     such additional amount as will ensure that the Lender receives (free and
     clear of any tax) the full amount which it would have received if no such
     deduction or withholding had been required.  Guarantor shall promptly
     forward to the Lender copies of official receipts or other evidence showing
     that the full amount of any such deduction or withholding has been paid
     over to the relevant taxation or other authority.

Section 7.   Currency Indemnity
             ------------------

If an amount due to the Lender from Guarantor in one currency (the "first
currency") is received by the Lender in another currency (the "second
currency"), Guarantor's obligations in respect of such amount shall only be
discharged to the extent that the Lender may purchase the first currency with
the second currency in accordance with normal banking procedures.  If the amount
of the first currency which may be so purchased (after deducting any costs of
exchange and any other related costs) is less than the amount so due, Guarantor
shall indemnify the Lender against the shortfall.

Section 8.   Representations and Warranties
             ------------------------------

Guarantor represents and warrants to the Lender as follows:

(a)  Guarantor is a corporation duly organized and validly existing under the
     laws of Delaware.  Guarantor is qualified or registered to do business in
     every jurisdiction where the failure to so qualify or register could have a
     material adverse effect on Guarantor.

                                      B-4
<PAGE>

(b)  Guarantor has full legal right, power and authority to carry on its present
     business, to own its properties and assets, to incur the indebtedness and
     other obligations provided for in this Guaranty, to execute and deliver
     this Guaranty and all other documents hereunder and to perform and observe
     the terms and conditions hereof and thereof.

(c)  Guarantor has taken all appropriate and necessary corporate and legal
     action to authorize the execution and delivery of this Guaranty and all
     other documents hereunder and to authorize the performance and observance
     of the terms and conditions hereof and thereof.

(d)  Guarantor has obtained or effected all authorizations necessary for the
     valid execution, delivery and performance of this Guaranty and such
     authorizations are in full force and effect or, by the date on which the
     Notice of Drawdown is given, such authorizations will have been obtained
     and be in full force and effect and there has been no default under the
     conditions of any of the same.

(e)  This Guaranty constitutes the legal, valid and binding obligations of
     Guarantor enforceable in accordance with its terms. The execution, delivery
     and performance of the terms of this Guaranty or the payment by Guarantor
     of all amounts due on the dates and in the currency provided for herein (i)
     will not violate or contravene any provision of law or regulation which is
     applicable to Guarantor; (ii) will not conflict with the Articles of
     Incorporation or By-laws (or comparable constituent documents) of
     Guarantor; (iii) will not conflict with or result in the breach of any
     provision of, or in the imposition of any Encumbrance under, any agreement
     or instrument to which Guarantor is a party or by which it or any of its
     properties or assets is bound; and (iv) will not constitute a default or an
     event that, with the giving of notice or the passing of time, or both,
     would constitute a default under any such agreement or instrument.

(f)  Guarantor is not in default under any agreement or obligation applicable to
     it or its assets or revenues, the consequences of which default could
     materially and adversely affect its business or financial condition or its
     ability to perform its obligations under this Guaranty and no Event of
     Default or prospective Event of Default has occurred.

(g)  Guarantor is in full compliance with all applicable laws, regulations and
     orders, whether or not having the force of law, including without
     limitation, tax laws.

(h)  This Guaranty is the direct, unconditional and general obligation of
     Guarantor.  Guarantor's obligations hereunder rank and will rank at least
     pari passu in priority of payment and in all other respects with all other
     ---- -----
     unsecured indebtedness of Guarantor except for those preferred by operation
     of law.

(i)  All registrations, recordings or filings required as a condition to the
     legality, validity or enforceability of this Guaranty or any other document
     to be executed and delivered pursuant to the terms of this Guaranty have
     been made by Guarantor.

(j)  The most recent audited financial statements of Guarantor for the time
     being (including the income statement, cash flow statement and balance
     sheet) were prepared in accordance with all applicable laws and regulations
     of U.S.A and generally accepted accounting principles and policies
     consistently applied and show a true and fair view of

                                      B-5
<PAGE>

     the financial position of Guarantor as at the end of, and the results of
     its operations for, the financial period to which they relate and, as at
     the end of such period Guarantor did not have any significant liabilities
     (contingent or otherwise) or any unrealized or anticipated losses which are
     not disclosed by or reserved against in, such financial statements, and
     there has been no material adverse change in the business or financial
     condition of Guarantor since the date of such financial statements.

(k)  As of the date of this Guaranty, no Encumbrance exists over all or any part
     of the property, assets or revenues of Guarantor other than those disclosed
     in the financial statements referred to in Section 8(j), except as set
     forth in Schedule 1 attached hereto.

(l)  No litigation, administrative proceeding or arbitration is presently
     pending or threatened against Guarantor or its assets or revenues which, if
     adversely determined, could have a material effect on the ability of
     Guarantor to perform its obligations under this Guaranty.

(m)  Guarantor is generally subject to civil and commercial law and to legal
     proceedings and neither Guarantor nor any of its assets or revenues is
     entitled to claim immunity or privilege (sovereign or otherwise) from any
     set-off, judgment, execution, attachment or other legal process.

Section 9.   Covenants
             ---------

Guarantor undertakes and agrees with the Lender as follows:

(a)  Throughout the life of this Guaranty, Guarantor shall provide the Lender
     with copies of its unaudited financial statements for the first six (6)
     months of each fiscal year and its audited financial statements for each
     fiscal year as they are available but in any event not later than sixty
     (60) days after the close of each fiscal period covered by an unaudited
     financial statement and not more than ninety (90) days after the close of
     each fiscal period covered by an audited financial statement and such other
     information respecting the financial condition and operations of Guarantor
     as the Lender may from time to time reasonably request as soon as
     practicable (but in the case of the Guarantor's annual report to
     stockholders within 90 days after the end of each fiscal year of the
     Guarantor, and in the case of the Guarantor's quarterly reports to
     stockholders within 60 days after the end of such fiscal quarter of the
     Guarantor): (i) at the end of each fiscal year, one copy of its annual
     report to stockholders (the "Annual Report", which Annual Report shall
     contain financial statements audited in accordance with generally accepted
     accounting principles in the U.S.A., consistently applied) and, if not
     included in the Annual Report, its annual report on Form 10-K, or (ii) at
     the end of each fiscal quarter (not including the quarter which also marks
     the end of the Guarantor's fiscal year), one copy of its quarterly report
     on Form 10-Q . Upon the filing and delivery to Lender of each of either an
     Annual Report or a quarterly report on Form 10-Q (each a "Report" and
     collectively, the "Reports"), as applicable, the Guarantor shall provide
     Lender a certificate executed by the principal financial officer of
     Guarantor stating (i) that as of the date of such financial statement
     Guarantor is in full compliance with all terms and conditions hereof,
     including without limitation all financial covenants, and of any document
     executed pursuant hereto, and (ii) that as of such date no Event of Default
     or prospective Event of Default has occurred and is continuing. Each
     financial statement provided hereunder shall have been prepared in
     accordance with generally accepted accounting principles in U.S.A.

                                      B-6
<PAGE>

     consistently applied.

(b)  Guarantor shall pay and discharge all taxes, assessments and governmental
     charges upon it or its assets promptly when due and, in any event, prior to
     the date on which penalties may become attached thereto, except to the
     extent that such taxes, assessments and governmental charges are subject to
     a bona fide dispute.

(c)  Guarantor shall ensure that the representations and warranties set forth in
     Sections 8(a)-(j), (l) and (m) in this Guaranty remain at all times true
     and accurate by reference to the facts and circumstances from time to time
     existing.

(d)  Guarantor undertakes to obtain or effect any governmental authorizations as
     may be required or advisable in respect of the performance by Guarantor or
     Borrower of any of the terms and conditions of this Guaranty or, as the
     case may be, the Loan Agreement.

(e)  Guarantor shall maintain its corporate existence in compliance with all
     applicable laws and regulations, and Guarantor shall maintain the present
     character of its business.

(f)  Guarantor shall maintain insurance on and in relation to its businesses,
     properties and assets with reputable underwriters or insurance companies
     against such risks and in such amount as are customary for businesses of a
     like nature in the jurisdiction in which such properties and assets are
     located or in which such businesses are conducted.

(g)  Guarantor shall notify the Lender in advance if Guarantor  merges or
     consolidates with any other corporation and provide the Lender with such
     information as the Lender may request in connection with such merger or
     consolidation.

(h)  As soon as possible but in any event within seven (7) days after
     occurrence, Guarantor shall give written notice to the Lender of any Event
     of Default or prospective Event of Default, or any litigation,
     administrative proceeding or arbitration referred to in Section 8(l), and
     of any other matter which has resulted or might result in a material
     adverse change in Guarantor's operations or financial condition or affect
     Guarantor's ability to pay, when due, any amounts due under this Guaranty.

(i)  Guarantor shall furnish the Lender with all such other documents and
     instruments and do all such other acts and things as the Lender may
     reasonably require to carry out the transactions contemplated herein or in
     the documents to be delivered hereunder.

Section 10.   Assignment
              ----------

10.1 Guarantor shall not assign or transfer any of its rights or obligations
     hereunder.

10.2 The Lender may at any time assign, transfer or grant subparticipations in
     all or any part of the rights, benefits and obligations under the Loan
     Agreement and this Guaranty pursuant to the terms of Section 17 of the Loan
     Agreement, provided that such assignee or transferee agrees to be bound by
     all of the provisions of this Guaranty, and Guarantor hereby irrevocably
     consents to, and agrees to be bound by, such assignment or transfer.

                                      B-7
<PAGE>

     The Lender may make disclosures in accordance with, and Guarantor shall do
     such acts and things as provided in, Section 17 of the Loan Agreement but
     as if references to Borrower were references to Guarantor.

Section 11.   Governing Law and Jurisdiction
              ------------------------------

11.1 This Guaranty shall be governed by and construed in accordance with the
     laws of Korea.

11.2 Guarantor agrees that any legal action or proceeding arising out of or
     relating to this Guaranty may be brought in the Seoul District Court in
     Seoul, Korea and irrevocably submits to the non-exclusive jurisdiction of
     such court. The foregoing, however, shall not limit the rights of the
     Lender to bring any legal action or proceeding or to obtain execution of
     judgment in any other jurisdiction. Guarantor irrevocably appoints
     iAsiaWorks Korea Ltd. of [    ],Seoul, Korea as its agent to accept on its
     behalf service of any and all process or other documents which may be
     served in any action or proceedings in any Korean courts.  If for any
     reason the agent named above (or its successor) no longer serves as agent
     of Guarantor for this purpose, Guarantor shall promptly appoint a successor
     agent satisfactory to the Lender and notify the Lender thereof, provided
     that until the Lender receives such notification, it shall be entitled to
     treat the agent named above (or its said successor) as the agent of the
     Guarantor for the purposes of this Section. Borrower agrees that any such
     legal process shall be sufficiently served on it if delivered to such agent
     for service at its address for the time being in Korea whether or not such
     agent gives notice thereof to the Guarantor. Guarantor hereby irrevocably
     and unconditionally authorizes such agent as well as the Lender to file
     with any of such courts, in the name of Guarantor, a report regarding the
     appointment by Borrower of its agent for service of process in Korea.

Section 12.   Notices
              -------

12.1 Each notice, demand or other communication to be given or made to Guarantor
     under this Guaranty shall be in writing and delivered at its address or
     telephone number or fax number set out below (or such other address or
     telephone number or fax number as Guarantor has by five (5) days' prior
     written notice specified to the Lender):

     To Guarantor:
                    2000 Alameda de las Pulgas, Suite 125, San Mateo,
                    California 94403 U.S.A.
                    Fax No.:   650 524 1799
                    Attention: Sandhya Nath and Andrew Gidney

12.2 Any notice, demand or other communication so addressed shall be deemed to
     have been delivered (i) if given or made by letter, when actually delivered
     to the relevant address, and (ii) if given or made by fax, when dispatched
     with a simultaneous confirmation of transmission stating that the correct
     number of pages has been sent and that such transmission is error free (or
     equivalent).

12.3 Any notice, demand or other communication from Guarantor to the Lender
     shall be

                                      B-8
<PAGE>

     given or made in accordance with Section 19 of the Loan Agreement.

Section 13.   Miscellaneous
              -------------

13.1 To the extent permitted by law, the Lender may at any time set off or apply
     any and all deposits by Guarantor with the Lender at its head office or at
     any branch, subsidiary or affiliate of its head office (whether general or
     special, time or demand, matured or unmatured) in reduction of amounts due
     to it hereunder; provided, however, that the Lender shall immediately
     notify the Guarantor of such set-off or application.

13.2 The Lender may place and keep any monies received by virtue of this
     Guaranty (whether before or after the insolvency or liquidation of
     Guarantor or Borrower) to the credit of a suspense account for so long as
     it may think fit in order to preserve its rights to sue or prove for the
     whole amount of its claims against Guarantor, Borrower or any other person.

13.3 The failure or delay of the Lender to require performance by Guarantor of
     any provision of this Guaranty shall not affect its right to require
     performance of such provision nor shall any single or partial exercise of
     the same preclude any further exercise thereof or the exercise of any other
     right, power or remedy.  Each and every right, power and remedy granted to
     the Lender hereunder or by law shall be cumulative and may be exercised in
     part or in whole from time to time.

13.4 If any one or more of the provisions contained in this Guaranty shall be
     invalid, illegal or unenforceable in any respect under any applicable law,
     the validity, legality and enforceability of the remaining provisions
     contained herein shall not in any way be affected or impaired thereby.

13.5 Any amendment or waiver of any provision of this Guaranty and any waiver of
     any default under this Guaranty shall only be effective if made in writing
     and signed by the Lender.

                                      B-9
<PAGE>

IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed by its
duly authorized representative as of the day and year first written above.

GUARANTOR
---------

iAsiaWorks, Inc.

By /s/ Nick Pianim
   --------------------------
Name: Nick Pianim
Title: Vice President of Global Business Development

                                     B-10
<PAGE>

                                   EXHIBIT C
                   FORM OF PROCESS AGENT APPOINTMENT LETTER

                               October [_], 2000

iAsiaWorks Korea Ltd.,
BoRaMae DaeKyo Building, 6th Floor
729-21, Bongchon-dong, Kwanak-Gu
Seoul, Korea 151-706

  Re:  Guaranty for KRW 14,000,000,000 Loan Agreement Dated October [_], 2000
       ----------------------------------------------------------------------

     We, the undersigned, hereby appoint you on the terms set out below to
receive on our behalf service of process issued out of the courts of the
Republic of Korea in respect of any legal action or proceedings arising out of
or in connection with the transaction described below.

1.   Upon receipt of any such service of process addressed to us you will on our
     behalf accept such service and will notify us by telex or telecopier at the
     number as may from time to time be specified by us in writing to the effect
     that you have accepted service of process on our behalf. Such notification
     need only inform us of the name of the party issuing the proceedings, the
     date upon which you accepted service of process and the date (if any) by
     which action must be taken to avoid judgment being entered against us in
     default of acknowledgement of service. The notification need not include
     any details of the nature or substance of the claim or claims made by the
     issuing party.

2.   Following such notification by telex or telecopier you will confirm the
     acceptance to us by letter at the address as may from time to time be
     specified by us, enclosing the process documents which you have received.
     In the event that, at our request, you agree to provide some details of the
     nature or substance of the claim or claims made by the issuing party prior
     to the receipt by us of the process documents, we agree that this shall be
     without responsibility on your part and that we will have regard only to
     the process documents in determining our response to the legal action or
     proceedings.

3.   You shall have no other duties whatsoever under the terms of this letter
     save as expressly provided in the foregoing paragraph. This appointment and
     its acceptance shall continue for the life of the transaction described
     below.

4.   Please confirm your agreement to the appointment by signing the
     acknowledgement at the foot of the enclosed copy of this letter and
     returning it to us. Upon receiving your acceptance of the foregoing
     appointment, we will so notify the Lender by delivery to it or to its duly
     appointed agent of a copy of such acceptance. Please note that we have
     irrevocably authorized the Lender to file in our name a report regarding
     such appointment with any court in the Republic of Korea before which a
     legal action or proceeding will be or has been instituted in connection
     with the Loan Agreement and/or the Guaranty described below. You are hereby
     also authorized to file the same report independently.
<PAGE>

     In consideration of your acceptance of this appointment, we hereby agree to
     pay you on acceptance a fee of [_].

               DETAILS OF TRANSACTION CONCERNED IN APPOINTMENT:
               -----------------------------------------------

     The Guaranty issued by iAsiaWorks, Inc. in connection with the Loan
Agreement dated October [_], 2000 made by and between iAsiaWorks Korea Ltd.
("Borrower") and Korea First Bank ("Lender"), providing for a loan (the "Loan")
to the Borrower up to an aggregate principal amount of KRW 14,000,000,000.

     Please confirm your agreement to the appointment by signing the
acknowledgement at the foot of the enclosed copy of this letter and returning it
to us.

                                   For and on behalf of
                                   iAsiaWorks, Inc.

                                   By /s/ Nick Pianim
                                      ----------------------------
                                   Name: Nick Pianim
                                   Title: Vice President of Global Business
                                          Development

     We confirm our agreement to our appointment as your agent for service of
process in accordance with the terms of your letter dated October [_], 2000
which the above is a copy.

                                   For and on behalf of
                                   iAsiaWorks Korea Ltd.,

                                   By /s/ signature illegible
                                      ----------------------------
                                   Name:
                                   Title:

                                      C-2
<PAGE>

                                  EXHIBIT D-1
               FORM OF LEGAL OPINION (BORROWER'S KOREAN COUNSEL)

                                _________, 2000

TO:  KOREA FIRST BANK

Dear Sirs:

We have acted as Korean counsel to iAsiaWorks Korea Ltd. and iAsiaWorks, Inc. in
connection with (1) a loan agreement (the "Loan Agreement") dated October [_],
2000 by and between iAsiaWorks Korea Ltd. (the "Borrower"), as borrower and
Korea First Bank (the "Lender"), as lender, providing for a loan (the "Loan") in
an aggregate principal amount of up to Fourteen Billion Korean Won (KRW
14,000,000,000) and (2) a guaranty (the "Guaranty") dated October [_], 2000 of
iAsiaWorks, Inc. (the "Guarantor") guaranteeing the liabilities of the Borrower
under the Loan Agreement. Unless otherwise defined herein, capitalized terms
used herein shall have the respective meanings specified in the Loan Agreement
and the Closing Opinion.

For purposes of giving our opinion, we have examined the following documents:

(a)  an executed copy of the Loan Agreement;

(b)  an executed copy of the Guaranty;

(c)  an executed copy of the Kun-Mortgage Agreement I;

(d)  an executed copy of the Kun-Mortgage Agreement II;

(e)  an executed copy of the Assignment of Insurance (collectively, with the
documents referred to in (a), (c) and (d) above, the "Agreements");

(f)  an executed copy of the power of attorney;

(g)  a certified copy of the Commercial Registries extracts relating to the
     Borrower;

(h)  a certified copy of the Articles of Incorporation of the Borrower;

(i)  a certified copy of the seal certificate of the Borrower; and

(j)  a certified copy of the minutes of the meting of the Board of Directors of
     the Borrower adopting resolutions authorizing the execution and performance
     of the Agreements.

In addition to the above, we have also examined other laws and documents that we
deemed necessary or required to allow us to provide this opinion. In so doing,
the following assumptions have been made:

(a)  that all seals and signatures are genuine, all documents submitted to us as
     originals are authentic, and that all documents submitted to us as copies
     conform to the originals;
<PAGE>

  (b) that the statements of facts made in such documents are correct, and that
      no change has been made and no action has been taken up to the date of
      this opinion which would undermine the accuracy of any such factual
      statement set forth in any such document, making the said documents
      inaccurate or misleading; and

(c)   Insofar as other facts and information that are material to the opinion
      expressed in this opinion letter, we have relied upon oral statements or
      certificates of officers and other representatives of the Borrower.
      However, please note that we have not undertaken any independent
      investigation to determine the existence or absence of such facts.

DW Partners is presenting this legal opinion confined to and given on the basis
of the laws of the Republic of Korea ("Korea") as at the date hereof. We have
not investigated, and we do not express or imply opinion on, the laws of any
other jurisdiction, nor have we assumed that other such laws will affect the
opinion stated herein.

Based upon the foregoing and subject to the qualifications below, we are of the
opinion that:

1.   The Borrower is a corporation duly organized and validly existing pursuant
     to the laws of Korea. The Borrower has all requisite corporate power and
     authority to execute and deliver, and perform its obligations under this
     Agreements, and to consummate the transactions contemplated thereunder;

2.   The Borrower has the power to and has been duly authorized to execute,
     deliver, and perform the obligations under this Agreements, and to
     consummate the transaction contemplated thereunder;

3.   The execution and delivery of, and performance of its obligations under the
     Agreements by the Borrower does not and will not violate its Articles of
     Incorporation or by-laws, any existing law, regulation, rule or permit
     applicable to the Borrower;

4.   This Agreements and the Guaranty constitute legal, valid and binding
     obligations of each of the Borrower and the Guarantor, as the case may be,
     enforceable against each of them in accordance with the terms thereof; and

5.   Neither the execution and delivery of, nor the performance of its
     obligations under this Agreements by the Borrower requires any
     authorization, consent or approval of, giving of notice to, registration
     with or taking of any other action in respect of, any governmental
     authority or agency of Korea.

This opinion is provided to you under the condition that it is limited to
matters addressed herein only and is not to be read as an opinion on any other
matter. This opinion is being provided to you in our capacity as counsel to
Borrower and hence, subject to the foregoing, it may not be used or relied upon
by any other person for any purpose whatsoever, other than in relation to
regulatory requirements or in response to a court order.

                                     D-1-2
<PAGE>

                                         DW PARTNERS

                                     D-1-3
<PAGE>

                                  EXHIBIT D-2
               FORM OF LEGAL OPINION (GUARANTOR'S U.S. COUNSEL)

                                _________, 2000

TO:  KOREA FIRST BANK

Dear Sirs:

We have acted as counsel to iAasiaWorks, Inc. (the "Guarantor") in connection
with its Guaranty dated October [_], 2000 (the "Guaranty"), which is issued
pursuant to a KRW 14,000,000,000 Loan Agreement dated October [_], 2000 by and
between iAsiaWorks Korea Ltd. (the "Borrower"), as borrower and Korea First Bank
(the "Lender"), as lender (the "Loan Agreement").

For purposes of giving our opinion, we have examined the following documents:

(a)  an executed copy of the Guaranty;

(b)  an executed copy of the Loan Agreement;

(c)  an executed copy of power of attorney;

(d)  a certified copy of the Certificate of Incorporation of the Guarantor and
     all amendment thereto;

(e)  a certified copy of the Bylaws of the Guarantor and all amendments thereto;

(f)  a good standing certificate issued by the Secretary of the Sate of [     ]
     relating to the Guarantor; and

(g)  a certified copy of the minutes of the meeting of the Directors of the
     Guarantor adopting resolutions authorizing the execution and performance of
     the Guaranty.

In addition to the above, we have also examined other laws and documents that we
deemed necessary or required to allow us to provide this opinion.  In so doing,
the following assumptions have been made:

(a)  that all seals and signatures are genuine, all documents submitted to us as
     originals are authentic, and that all documents submitted to us as copies
     conform to the originals;

(b)  that the statements of facts made in such documents are correct, and that
     no change has been made and no action has been taken up to the date of this
     opinion which would undermine the accuracy of any such factual statement
     set forth in any such document, making the said documents inaccurate or
     misleading; and
<PAGE>

(c)  Insofar as other facts and information that are material to the opinion
     expressed in this opinion letter, we have relied upon oral statements or
     certificates of officers and other representatives of the Guarantor.
     However, please note that we have not undertaken any independent
     investigation to determine the existence or absence of such facts.

[         ] is presenting this legal opinion confined to and given on the basis
of the federal laws of the United States of America and the laws of the State of
[      ] as at the date hereof.  We have not investigated, and we do not express
or imply opinion on, the laws of any other jurisdiction, nor have we assumed
that no other such laws will affect the opinion stated herein.

Based upon the foregoing and subject to the qualifications below, we are of the
opinion that:

1.   The Guarantor is a corporation duly organized and validly existing
     pursuant to the laws of the State of [       ]. The Guarantor has all
     requisite corporate power and authority to execute and deliver, and perform
     its obligations under, the Guaranty, and to consummate the transactions
     contemplated thereunder;

2.   The Guarantor has the power to and has been duly authorized to execute,
     deliver, and perform the obligations under the Guaranty, and to consummate
     the transaction contemplated thereunder;

3.   The execution and delivery of, and performance of its obligations under,
     the Guaranty by the Guarantor does not and will not violate its articles of
     incorporation or by-laws, any existing law, regulation, rule or permit in
     the United States applicable to the Guarantor;

4.   The Guaranty constitutes legal, valid and binding obligations of the
     Guarantor enforceable against it in accordance with the terms thereof;

5.   Neither the execution and delivery of, nor the performance of its
     obligations under, the Guaranty by the Guarantor requires any
     authorization, consent or approval of, giving of notice to, registration
     with or taking of any other action in respect of, any governmental
     authority or agency of the Unites States of America or the State of [    ];

6.   It is not necessary to ensure the legality, validity, enforceability or
     admissibility in evidence of the Guaranty that it or any other instrument
     be filed, recorded, registered or enrolled in any court, public office or
     elsewhere in the Unites Sates or that any stamp, registration or similar
     tax be paid in Unites States on or in relation to the Guaranty;

7.   Under the laws of the State of [        ], the choice of the laws of the
     Republic of Korea as the governing law of the Guaranty is a valid choice of
     law;

8.   The submission by the Guarantor to the non-exclusive jurisdiction of the
     courts of the Republic of Korea is, as a matter of contract law, valid,
     binding and not subject to revocation. In the event that a judgment of such
     courts were obtained, the same

                                     D-2-2
<PAGE>

     would be enforced by U.S. courts without a further review on the merits;

9.   Payment made by the Guarantor pursuant to the Guaranty will not be subject
     to any withholding on account of United States federal income tax; and

10.  The Guarantor will not be able to claim sovereign immunity from legal
     proceedings with respect to itself or any of its properties or assets.

This opinion is addressed to you and may be relied upon solely by you and your
counsel. It may not be used or relied upon by any other person for any purpose
whatsoever without our prior written consent.

                                     D-2-3
<PAGE>

                                  EXHIBIT D-3
                     FORM OF LEGAL OPINION (Post Closing)

                                _________, 2000

TO:  KOREA FIRST BANK

Dear Sirs:

We have acted as Korean counsel to iAsiaWorks Korea Ltd. and iAsiaWorks, Inc. in
connection with (1) a loan agreement (the "Loan Agreement") dated October [_],
2000 by and between iAsiaWorks Korea Ltd. (the "Borrower"), as borrower and
Korea First Bank (the "Lender"), as lender, providing for a loan (the "Loan") in
an aggregate principal amount of up to Fourteen Billion Korean Won (KRW
14,000,000,000) and (2) a guaranty (the "Guaranty") dated October [_], 2000 of
iAsiaWorks, Inc. (the "Guarantor") guaranteeing the liabilities of the Borrower
under the Loan Agreement. Reference is made to our opinion dated October [_],
2000 issued in connection with the Loan Agreement (the "Closing Opinion").
Unless otherwise defined herein, capitalized terms used in this opinion shall
have the respective meanings specified in the Loan Agreement and the Closing
Opinion.

For purposes of giving our opinion, we have examined the documents listed in the
Closing Opinion and the following documents:

(a)  an executed copy of the Kun-Mortgage Agreement I;

(b)  an executed copy of the Kun-Mortgage Agreement II;

(c)  certified copies of the real estate registries extracts relating to the
     Kun-Mortgage I and Kun-Mortgage II;

(d)  an executed copy of the Assignment of Insurance;

(e)  an executed copy of the notice of assignment delivered to the Insurer; and

(f)  an executed copy of Insurer's Letter of Undertaking.

In addition to the above, we have also examined other laws and documents that we
deemed necessary or required to allow us to provide this opinion.  In so doing,
the following assumptions have been made:

(a)  that all seals and signatures are genuine, all documents submitted to us as
     originals are authentic, and that all documents submitted to us as copies
     conform to the originals;

(b)  that the statements of facts made in such documents are correct, and that
     no change has been made and no action has been taken up to the date of this
     opinion which would undermine the accuracy of any such factual statement
     set forth in any such document, making the said documents inaccurate or
     misleading; and
<PAGE>

(c)  Insofar as other facts and information that are material to the opinion
     expressed in this opinion letter, we have relied upon oral statements or
     certificates of officers and other representatives of the Borrower.
     However, we have not undertaken any independent investigation to determine
     the existence or absence of such facts.

DW Partners is presenting this legal opinion confined to and given on the basis
of the laws of the Republic of Korea ("Korea") as at the date hereof. We have
not investigated, and we do not express or imply opinion on, the laws of any
other jurisdiction, nor have we assumed that other such laws will affect the
opinion stated herein.

Based upon the foregoing and subject to the qualifications below, we are of the
opinion that:

1.   The Kun-Mortgage I and the Kun-Mortgage II have been duly created,
     registered, recorded and perfected as security interests in the Senan
     Building in favor of the Lender in accordance with the terms of the Kun-
     Mortgage Agreement I, the Kun-Mortgage Agreement II and the Loan Agreement;
     and

2.   The Assignment of Insurance has been duly perfected in accordance with the
     terms of the Assignment of Insurance and the Loan Agreement.

This opinion is provided to you under the condition that it is limited to
matters addressed herein only and is not to be read as an opinion on any other
matter. This opinion is being provided to you in our capacity as counsel to
Borrower and hence, subject to the foregoing, it may not be used or relied upon
by any other person for any purpose whatsoever, other than in relation to
regulatory requirements or in response to a court order.

                                  DW PARTNERS

                                     D-3-2
<PAGE>

                                   EXHIBIT E

                        INSURANCE ASSIGNMENT AGREEMENT

                             iAsiaWorks Korea Ltd.

                                -   BORROWER -

                                      and

                     KOREA FIRST BANK, YANGJAE-DONG BRANCH

                                   - LENDER-

                               October [_], 2000
<PAGE>

                        INSURANCE ASSIGNMENT AGREEMENT

THIS INSURANCE ASSIGNMENT AGREEMENT (the "Agreement") dated as of the [ ]th day
of October, 2000 by and between:

(1)  iAsiaWorks Korea Ltd., a company organized and existing under the law of
     the Republic of Korea ("Korea"), having its registered office at BoRaMae
     DaeKyo Building, 6th Floor, 729-21, Bongchon-dong, Kwanak-Gu, Seoul, Korea
     151-706 (the "Borrower"); and

(2)  KOREA FIRST BANK, YANGJAE-DONG BRANCH (the "Lender").

                                  WITNESSETH:

WHEREAS, by a loan agreement dated October [ ], 2000 (the "Loan Agreement") made
by and between the Borrower and the Lender, the Borrower hereby agrees, subject
to and upon the terms and conditions contained therein, to assign its rights,
titles, claims and interest to the Lender as to any and all insurance proceeds
deriving from any and all policies and contracts of insurance due and payable to
the Borrower under the Loan Agreement.

WHEREAS, for the purpose of securing any and all obligations, debts and
liabilities of the Borrower against the Lender to be incurred hereinafter, under
or with respect to the Loan Agreement, it is a condition precedent to the
Drawdown that the Borrower assign the Assigned Property (as defined in Section
3.01 below) to the Lender pursuant to the terms and conditions contained herein.

NOW, THEREFORE, the parties hereto agree as follows:

Section 1.  Interpretation
            --------------

Words and expressions defined in the Loan Agreement shall, unless otherwise
defined herein below or the context otherwise requires, have the same meaning
when used in this Agreement. References to any agreement or documents shall be
construed as references to such agreement or document as varied, amended,
novated or supplemented from time to time. In addition, the following terms
shall have the following meanings:

1.01   "Insurances" mean all policies and contracts of insurance on the Senan
       Building (hereinafter, the "Building") taken out by the Borrower or with
       respect to which the Borrower is the beneficiary thereof from time to
       time in accordance with the requirements of the Loan Agreement.

1.02   "Insurance Proceeds" mean all of the rights, title and interest, present
       and future, of the Borrower to and in the benefit of the amounts payable
       in respect of the Insurances.

1.03   "Insurer" means collectively, such insurance companies, underwriters and
       insurers as the Lender shall approve with or through whom any and all
       relevant Insurances in connection with the Building in Seoul shall be
       taken out and kept in effect in accordance with the insurance coverage
       plan approved by the Lender in accordance with the Loan
<PAGE>

      Agreement.

1.04  "Secured Oblgations" shall mean all obligations, liabilities and
      indebtedness of every type and nature of the Borrower form time to time
      owing to the Lender under the Loan Agreement and the Kun-Mortgage
      Agreements.

Section 2.  Representations and Warranties
            ------------------------------

The Borrower hereby warrants and represents to the Lender that as of the date
hereof:

(a)   the Insurances have been duly taken out and is in full force and effect;

(b)   the Borrower has not defaulted on any payments of any premiums due under
      the Insurances nor has breached any conditions to which coverage under the
      Insurances is subject, and there is no action, suit or proceeding
      threatened by or against the Borrower in connection with or arising out of
      the Insurances;

(c)   the Borrower has duly acquired, is the beneficial owner of and has not
      heretofore sold, assigned transferred, hypothecated, charged or pledged or
      otherwise encumbered nor agreed to sell, assign, transfer, hypothecate,
      charge or pledge or otherwise encumber all or any part of its rights or
      interests under the Insurances or any sum which is now or may at any time
      hereafter become due and payable to the Borrower pursuant to the terms of
      the Insurances (other than pursuant to the terms hereof);

(d)   no party, other than the Lender hereunder, has exercised or otherwise
      acquired any right or interest in the Insurances: and

(e)   the assignments herein contained do not constitute a breach of any
      applicable law nor of the obligations of the Borrower under the terms of
      any agreement or other document whatsoever to which the Borrower is a
      party or by the terms of which it is bound.

Section 3.  Assignment of Insurances
            ------------------------

3.01  In consideration of the Lender entering into the Loan Agreement and in
      order to secure the full and punctual payment, performance and discharge
      of the Secured Obligations thereunder, the Borrower hereby assigns and
      agrees to assign to the Lender all its rights, title and interest in (i)
      the Insurances, including all benefits thereof, (ii) all claims, returns
      of premium and other moneys and claims for money due and to become due
      under the Insurances, (iii) all other rights of the Borrower under or in
      respect of the Insurances, and (iv) the Insurance Proceeds (collectively,
      the "Assigned Property").

                                      E-2
<PAGE>

3.02  The Borrower hereby undertakes that upon the execution of this Agreement
      and whenever any Insurances are effected or renewed or substituted, it
      will promptly: (a) execute and deliver to the relevant Insurer(s) a notice
      of assignment substantially in the form attached hereto as Appendix A, (b)
      obtain the consent and acknowledgement of the relevant Insurer(s) thereto
      and (c) take other measures as may be necessary to perfect assignment
      under Korean law.

3.03  The Borrower shall at all times remain liable to perform all obligations
      expressed to be assumed by it under or in respect of the Assigned
      Property, and nothing contained herein and no exercise by the Lender of
      any right under this Agreement shall constitute or be deemed to constitute
      an assumption or acceptance by the Lender of any obligations of the
      Borrower in respect of the Assigned Property.

Section 4.  Covenants and Undertaking of the Borrower
            -----------------------------------------

4.01  The Borrower covenants and undertakes the following with the Lender until
      such time as all of the Secured Obligations under the Loan Agreement have
      been paid, performed and discharged in full:

      (a)  to effect and maintain or cause to be effected and maintained,
           subject to the commercial availability of the required coverage, the
           Insurances in accordance with the terms of the Loan Agreement and
           this Agreement;

      (b)  to procure that the interest of the Lender shall be duly endorsed
           upon all cover notes, policies, certificates of entry or other
           instruments of insurance issued or to be issued in connection with
           the Insurances;

      (c)  to procure that the Insurer shall furnish to the Lender a letter of
           undertaking substantially in the form of Appendix B, but in any
           event, in form and substance acceptable to the Lender;

      (d)  not to make, do, consent or agree to any act or omission which would
           or might render any such instrument of insurance invalid, void,
           voidable or unenforceable or render any sum payable thereunder
           repayable in whole or in part; and

      (e)  to promptly sign, seal, execute, acknowledge, deliver, file and
           register all such additional documents, instruments, agreements,
           certificates, consents and assurances and do all such other acts and
           things as may be reasonably requested by the Lender from time to time
           in order to perfect the security granted by this Agreement or to
           establish, maintain, perfect or preserve the rights of the Lender
           under this Agreement or to obtain the full benefits of this Agreement
           or to enable it to exercise the rights and remedies under this
           Agreement or in respect of the Assigned Property.

4.02  The Borrower shall not sell, assign, transfer, hypothecate, pledge or
      otherwise encumber or agree to sell, assign, transfer, hypothecate, pledge
      or otherwise encumber all or any of its rights, titles and interests in
      and to the Assigned Property.

                                      E-3
<PAGE>

4.03  The Borrower shall make all registrations, filings and records necessary
      to ensure the legality, validity, enforceability or admissibility in
      evidence of this Agreement.

Section 5.  Enforcement by the Lender
            -------------------------

If an Event of Default under the Loan Agreement has occurred and is continuing,
the Lender shall become forthwith entitled, as and when they may see fit to put
into force and to exercise all or any of the power possessed by the Lender as
assignee of the Assigned Property.

Section 6.  Continuing Security
            -------------------

The security created by this Agreement shall be held by the Lender as a
continuing security for the full and punctual payment, performance and discharge
of all of the Secured Obligations and shall not be considered satisfied and
shall not be released or discharged by any intermediate payment, performance,
discharge or satisfaction of any part of the Secured Obligations and shall be a
continuing security until all of the Secured Obligations shall have been paid,
performed and discharged in full. Neither any failure by the Borrower nor any
amendment, modification, variation, supplement, novation, restatement or
replacement of all or part of the Secured Obligations shall discharge, impair,
prejudice or otherwise affect the security created by this Agreement.

Section 7.  Assignment
            -----------

This Agreement and the assignment of Insurances hereunder shall be binding upon
and inure to the benefit of the Lender and its successors and assigns. The
Lender may, in the ordinary course of business and in accordance with the
applicable law, at any time assign all or any part of its rights hereunder to
any party (each an "Assignee") without the consent of the Borrower, provided
that the Lender shall give at least [ ]day prior written notice to the Borrower.
The parties hereto agree that to the extent of any assignment, the Assignee
shall be deemed to have the same rights and benefits under this Agreement. The
Borrower may not assign any of its rights or obligations hereunder without the
prior written consent of the Lender.

Section 8.  Further Assurance
            -----------------
The Borrower agrees that at any time and from time to time upon the written
request of the Assignee, the Borrower shall promptly and duly execute and
deliver any and all such further instruments and documents and take such further
action as the Assignee may reasonably request in order to obtain the full
benefit of this Agreement and the rights and powers granted herein.

9.   Miscellaneous
     -------------

                                      E-4
<PAGE>

9.01 Notices.  Any communication, demand or notice to be given hereunder shall
     --------
     be deemed to be duly given when delivered in writing or by mail or when
     sent by facsimile as follows:

     To Borrower:   iAsiaWorks Korea Ltd.
                    BoRaMae DaeKyo Building, 6th Floor, 729-21, Bongchon-dong,
                    Kwanak-Gu, Seoul, Korea 151-706
                    Fax No.:    822-3284-7700
                    Attention:  Yun Ho Lee

     And to Lender: Korea First Bank, Yangjae-dong Branch

                    Fax No.:
                    Attention:

     with a copy to:  Korea First Bank
                      Fax No.:
                      Attention:

9.02 Governing Law and Jurisdiction. This Agreement and the assignment made
     --------------------------------
     pursuant hereto shall be governed by the laws of the Republic of Korea in
     all respects, including matters of construction, validity and performance.
     The Borrower hereby submits itself to the non-exclusive jurisdiction of the
     Seoul District Court in Seoul, Korea for the purposes of any suit, action
     or proceeding arising out of this Agreement.

9.03 Severability. If any of the provisions of this Agreement shall contravene
     --------------
     any law or regulation or be held invalid, this Agreement shall be construed
     as if not containing those provisions, and the rights and obligations of
     the parties hereto shall be construed and enforced accordingly.

9.04 Amendments, Changes and Modifications. This Agreement shall not be amended,
     ---------------------------------------
     changed, modified, altered or revised without the prior written approval of
     both the Lender and the Borrower.  This Agreement shall not be amended,
     changed, modified, altered or revised by an oral agreement by and between
     the Lender and the Borrower.

9.05 Counterparts. This Agreement may be executed in multiple counterparts, each
     --------------
     of which, when executed, shall constitute an original but all of which
     together shall constitute one and the same instrument.

9.06 Conflict. In the case of a conflict between the provisions of this
     ----------
     Agreement and the provisions of the Loan Agreement, the Loan Agreement
     shall prevail.

                                      E-5
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first above written.

iAsiaWorks Korea Ltd.

By: /s/ Nick Pianim
   -----------------------------
Name: Nick Pianim
Title: Vice President of Global Business Development

KOREA FIRST BANK, YANGJAE-DONG BRANCH

By: /s/ signature illegible
   -----------------------------
Name:
Title:

                                      E-6
<PAGE>

                                  Appendix A
                                  ----------

                         FORM OF NOTICE OF ASSIGNMENT
                         ----------------------------

                                    [date]

To:  [Insurer]

     Re: Senan Building in Seoul, Korea
         ------------------------------

We, iAsiaWorks Korea Ltd.(the "Borrower"), do hereby give notice that we have
assigned to Korea First Bank, Yangjae-dong Branch (the "Lender"), which
expressions shall include its successors, transferees and assigns, all of our
rights, title and interest (including all benefits and claims) to and in the
Insurances pursuant to the terms and conditions provided in a certain insurance
assignment agreement entered into by and between the Borrower and the Lender
dated [     ].

It is hereby agreed between the Borrower and the Lender that your company is
hereby instructed that all Insurance Proceeds shall be paid in accordance with
the following loss payable clause:

1.2  LOSS PAYABLE CLAUSE

     Any claim or money of whatsoever nature and kind payable under or in
     connection with the Insurance shall be paid to the Lender or to its order,
     unless and until you company receives notice from the Lender that the
     Lender has been served.

                                iAsiaWorks Korea Ltd.

                         By:  /s/ Nick Pianim
                            --------------------------------
                         Name: Nick Pianim
                         Title: Vice President of Global Business Development

(fixed date stamp)
<PAGE>

                                  Appendix B
                                  ----------

                                   INSURER'S
                             LETTER OF UNDERTAKING

                                    [date]

To:  KOREA FIRST BANK, YANGJAE-DONG BRANCH
     as the Lender in the Loan Agreement

Dear Sirs,

       IAsiaWorks Korea Ltd. - Senan Building in Seoul (the "Building")
       ---------------------   ----------------------------------------

     We acknowledge receipt of the Notice of Assignment dated [        ]
on and in respect of the Building, we hereby undertake and/or confirm that:

1.   We have accepted your insurance coverage on the Building upon the terms and
     conditions set forth in the Appendix I hereto/1/;

2.   We shall cause all Insurances, and any renewals of such Insurances or any
     Insurances substituted (with your consent) therefor and the benefit of the
     Insurance thereunder, to be received and possessed by you as first
     assignee, and we shall duly perform our obligations in accordance with the
     terms of the Loss Payable Clause set forth in the Notice of Assignment, and
     the said Loss Payable Clause shall be included in and/or endorsed on all
     the Insurances, renewals and substitutes as aforesaid;

3.   Every notice of assignment substantially in the same form of the Notice of
     Assignment which we have received or will from time to time receive shall
     be attached upon all Cover Notes, Insurances and Insurance Slips or
     Contracts, renewals or substitutes as aforesaid; and

4.   We have not received notice of any other assignment relating to the
     Insurances referred to herein.

     Our above undertaking are given subject to our right of set-off or
cancellation on default in payment of any premiums due under the Insurances as
aforesaid, but we undertake with you (until such time as we may receive written
notice to the contrary from you) to advise you immediately if any such premiums
are not paid to us by their due date and not to exercise our right of
cancellation without giving you fourteen (14) days' notice

_______________
/1/Appendix I will be provided by Insurer

                                      E-8
<PAGE>

in writing and a reasonable opportunity of paying any outstanding premiums.
Notwithstanding anything to the contrary contained in any cover Note, Contract
or Insurances or renewals or substitutes, if such defaulted premiums are paid
within such [    ] period, all damages or losses occurring during the period
from the due date of premiums to the time of payment thereof shall be covered as
if such premium were actually paid on the due date; provided, however, that in
the event that such defaulted premium shall not be paid within the aforesaid
fourteen day period, we can exercise our right of cancellation.

     We further undertake (until such time as we may receive written notice to
the contrary from you) to advise you not later than [      ] days prior to the
expiry of the policies aforesaid and any renewals thereof if instruction have
not been received for such renewals or further renewal and in the event of our
receiving instructions to renew or further to renew as aforesaid to advise you
promptly of the details thereof.

     Finally, we undertake to notify you immediately of any material changes
which are proposed to be made in the terms of the insurance, or if we cease to
be insurer for all purposes connected with the Insurance of the Building or of
any circumstances or event whereby the said insurance may become invalid,
voidable or otherwise unenforceable.

                              Yours faithfully,

                              /s/ signature illegible
                              ----------------------------------
                                    [Insurer]

                                      E-9<PAGE>

                                                                   EXHIBIT 10.14

                                 OFFICE LEASE

                          SAN TOMAS PROPERTIES, LLC,

                     a Delaware limited liability company,

                                 as Landlord,

                                      and

                            EXTREME NETWORKS, INC.,

                            a Delaware corporation,

                                  as Tenant.
<PAGE>

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<CAPTION>
                                                                               Page
                                                                               ----
<S>                                                                            <C>
ARTICLE 1 PREMISES, BUILDING, PROJECT, AND COMMON AREAS.......................   3
LEASE TERM; OCCURRENCE OF DELIVERY OF THE PREMISES............................   4
ARTICLE 3 BASE RENT...........................................................   5
ARTICLE 4 ADDITIONAL RENT.....................................................   5
ARTICLE 5 USE OF PREMISES.....................................................  10
ARTICLE 6 SERVICES AND UTILITIES..............................................  10
ARTICLE 7 REPAIRS.............................................................  11
ARTICLE 8 ADDITIONS AND ALTERATIONS...........................................  12
ARTICLE 9 COVENANT AGAINST LIENS..............................................  14
ARTICLE 10 INSURANCE..........................................................  14
ARTICLE 11 DAMAGE AND DESTRUCTION.............................................  16
ARTICLE 12 NONWAIVER..........................................................  17
ARTICLE 13 CONDEMNATION.......................................................  18
ARTICLE 14 ASSIGNMENT AND SUBLETTING..........................................  18
ARTICLE 15 SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES.....  22
ARTICLE 16 HOLDING OVER.......................................................  22
ARTICLE 17 ESTOPPEL CERTIFICATES..............................................  23
ARTICLE 18 SUBORDINATION......................................................  23
ARTICLE 19 DEFAULTS; REMEDIES.................................................  24
ARTICLE 20 COVENANT OF QUIET ENJOYMENT........................................  26
ARTICLE 21 SECURITY DEPOSIT...................................................  26
ARTICLE 22 SUBSTITUTION OF OTHER PREMISES.....................................  26
ARTICLE 23 SIGNS..............................................................  26
ARTICLE 24 COMPLIANCE WITH LAW................................................  27
ARTICLE 25 LATE CHARGES.......................................................  28
ARTICLE 26 LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT...............  28
ARTICLE 27 ENTRY BY LANDLORD..................................................  28
ARTICLE 28 TENANT PARKING.....................................................  29
ARTICLE 29 MISCELLANEOUS PROVISIONS...........................................  29
</TABLE>

                                      (i)
<PAGE>

                                 OFFICE LEASE
                                 ------------

     This Office Lease (the "Lease"), dated as of the date set forth in Section
1 of the Summary of Basic Lease Information (the "Summary"), below, is made by
and between SAN TOMAS PROPERTIES, LLC, a Delaware limited liability company
("Landlord"), and EXTREME NETWORKS, INC., a Delaware corporation ("Tenant").

                      SUMMARY OF BASIC LEASE INFORMATION
                      ----------------------------------

    TERMS OF LEASE                                DESCRIPTION
    -------------                                 -----------

1.  Date:                                   July 28, 2000

2.  Premises

    2.1  Building:                          2820 San Tomas Expressway, Santa
                                            Clara, California.
    2.2  Premises:
                                            Approximately 47,432 rentable square
                                            feet of space located in the
                                            Building, as further set forth in
                                            Exhibit A to the Office Lease.
                                            ---------

3.  Lease Term
    (Article 2).

    3.1  Length of Term:                    Seven (7) years.

    3.2  Lease Commencement Date:           August 16, 2000.

    3.3  Lease Expiration Date:             August 31, 2007.

4.  Base Rent (Article 3):

    4.1  Amount Due:

                                        Monthly            Rental Rate
                    Annual            Installment         per Rentable
Lease Year         Base Rent          of Base Rent         Square Foot
----------         ---------          ------------         -----------
    1            $2,845,920.00         $237,160.00            $5.00
    2            $2,959,756.80         $246,646.40            $5.20
    3            $3,079,285.44         $256,607.12            $5.41
    4            $3,198,814.08         $266,567.84            $5.62
    5            $3,329,726.40         $277,477.20            $5.85
    6            $3,460,638.72         $288,386.56            $6.08
    7            $3,602,934.72         $300,244.56            $6.33

     4.2  Rent Payment Address:             San Tomas Properties, LLC
                                            P.O. Box 641387
                                            San Jose, CA  95134-1387

5.  Tenant's Share                          Tenant's Building Share - 100%
    (Article 4):
                                            Tenant's Phase Share - 19%
<PAGE>

                                        Tenant's Project Share - 10%

6.  Permitted Use                       General office use.
    (Article 5):

7.  Security Deposit                    $237,160.00.
    (Article 21):

8.  Parking Passes                      One hundred fifty (150) unreserved
    (Article 28):                       parking passes.

9.  Address of Tenant                   3585 Monroe Street
    (Section 29.18):                    Santa Clara, California 95051
                                        Attention: Mr. Jeff Westling

10. Address of Landlord                 See Section 29.18 of the Lease.
    (Section 29.18):

11.  Broker(s)                          Colliers International
     (Section 29.24):                   450 W. Santa Clara Street
                                        San Jose, California 95113

12.  Tenant Improvement Allowance       $5.00.
     (Section 2 of Exhibit B):
                   ---------

                                      -2-
<PAGE>

                                   ARTICLE 1
                                   ---------

                 PREMISES, BUILDING, PROJECT, AND COMMON AREAS
                 ---------------------------------------------

     1.1  Premises, Building, Project and Common Areas.
          --------------------------------------------

          1.1.1  The Premises. Landlord hereby leases to Tenant and Tenant
                 ------------
hereby leases from Landlord the premises set forth in Section 2.2 of the Summary
(the "Premises"). The outline of the Premises is set forth in Exhibit A attached
                                                              ---------
hereto. The parties hereto agree that the lease of the Premises is upon and
subject to the terms, covenants and conditions herein set forth, and Tenant
covenants as a material part of the consideration for this Lease to keep and
perform each and all of such terms, covenants and conditions by it to be kept
and performed and that this Lease is made upon the condition of such
performance. The parties hereto hereby acknowledge that the purpose of Exhibit A
                                                                       ---------
is to show the approximate location of the Premises in the "Building," as that
term is defined in Section 1.1.2, below, only, and such Exhibit is not meant to
constitute an agreement, representation or warranty as to the construction of
the Premises, the precise area thereof or the specific location of the "Common
Areas," as that term is defined in Section 1.1.3, below, or the elements thereof
or of the accessways to the Premises or the "Project," as that term is defined
in Section 1.1.2, below. Except as specifically set forth in this Lease and in
the Tenant Work Letter attached hereto as Exhibit B (the "Tenant Work Letter")
Landlord shall not be obligated to provide or pay for any improvement work or
services related to the improvement of the Premises. Tenant also acknowledges
that neither Landlord nor any agent of Landlord has made any representation or
warranty regarding the condition of the Premises, the Building or the Project or
with respect to the suitability of any of the foregoing for the conduct of
Tenant's business, except as specifically set forth in this Lease and the Tenant
Work Letter; provided, however, that in the event that any of the base building
electrical, plumbing or HVAC systems (specifically excluding the "Excluded
Portions," as that term is defined below) are not in good working order as of
the date of delivery of the Premises to Tenant, Tenant shall deliver notice
thereof within thirty (30) days following Landlord's delivery of the Premises to
Tenant and Landlord shall, at Landlord's cost and expense, promptly commence and
diligently pursue the completion of repairs to the applicable system required to
put the same in good working order. For purposes of this Lease, the "Excluded
Portions" shall mean any portion of the electrical, plumbing and HVAC systems
which was not in existence prior to the construction of tenant improvements in
the Building, which Excluded Portions shall specifically shall include the
distribution of the electrical, plumbing and HVAC systems. Subject to Landlord's
reasonable rules and regulations, Tenant shall have access to the Premises,
twenty-four (24) hours a day, three hundred sixty-five (365) days a year.

          1.1.2  The Building and The Project. The Premises are comprised of the
                 ----------------------------
building set forth in Section 2.1 of the Summary. The term "Project," as used in
this Lease, shall mean (i) the Building and the Common Areas, (ii) the land
(which is improved with landscaping, subterranean parking facilities and other
improvements) upon which the Building and the Common Areas are located, (iii)
those certain buildings located at 2600, 2650, 2700, 2730, 2770, 2800, 2840,
2860 and 2880 San Tomas Expressway and the land upon which such adjacent
buildings are located, and (iv) at Landlord's discretion, any additional real
property, areas, land, buildings or other improvements added thereto outside of
the Project.

          1.1.3  Common Areas. Tenant shall have the non-exclusive right to use
                 ------------
in common with other tenants in the Project, and subject to the rules and
regulations referred to in Article 5 of this Lease, those portions of the
Project which are provided, from time to time, for use in common by Landlord,
Tenant and any other tenants of the Project (such areas, together with such
other portions of the Project designated by Landlord, in its discretion,
including certain areas designated for the exclusive use of certain tenants, or
to be shared by Landlord and certain tenants, are collectively referred to
herein as the "Common Areas"). The Common Areas shall consist of the "Project
Common Areas" and the "Building Common Areas." The term "Project Common Areas,"
as used in this Lease, shall mean the portion of the Project designated as such
by Landlord. The term "Building Common Areas," as used in this Lease, shall mean
the portions of the Common Areas located within the Building designated as such
by Landlord. The manner in which the Common Areas are maintained and operated
shall be at the sole discretion of Landlord and the use thereof shall be subject
to such rules, regulations and restrictions as Landlord may make from time to
time. Landlord reserves the right to close temporarily, make alterations or
additions to, or change the location of elements of the Project and the Common
Areas.

                                      -3-
<PAGE>

     1.2  Verification of Rentable Square Feet of Premises and Building. For
          -------------------------------------------------------------
purposes of this Lease, "rentable square feet" and "usable square feet" of the
Premises shall be deemed as set forth in Section 2.2 of the Summary and shall
not be subject to remeasurement or modification.

                                   ARTICLE 2
                                   ---------

              LEASE TERM; OCCURRENCE OF DELIVERY OF THE PREMISES
              --------------------------------------------------

     2.1  Initial Lease Term. The terms and provisions of this Lease shall be
          ------------------
effective as of the date of this Lease. The term of this Lease (the "Lease
Term") shall be as set forth in Section 3.1 of the Summary, shall commence on
the date set forth in Section 3.2 of the Summary (the "Lease Commencement
Date"), and shall terminate on the date set forth in Section 3.3 of the Summary
(the "Lease Expiration Date") unless this Lease is sooner terminated as
hereinafter provided. For purposes of this Lease, the term "Lease Year" shall
mean each consecutive twelve (12) month period during the Lease Term; provided,
however, that the first Lease Year shall commence on the Lease Commencement Date
and end on the last day of the eleventh month thereafter and the second and each
succeeding Lease Year shall commence on the first day of the next calendar
month; and further provided that the last Lease Year shall end on the Lease
Expiration Date. At any time during the Lease Term, Landlord may deliver to
Tenant a notice in the form as set forth in Exhibit C, attached hereto, as a
                                            ---------
confirmation only of the information set forth therein, which Tenant shall
execute and return to Landlord within five (5) days of receipt thereof.

     2.2  Occurrence of Delivery of the Premises.
          --------------------------------------

          2.2.1  Outside Date of Delivery of the Premises. If Landlord does not
                 ----------------------------------------
cause the delivery of the Premises to occur within ninety (90) days following
          ------------------------
the mutual execution and delivery of this Lease (the "Outside Date"), then the
sole remedy of Tenant for such failure shall be the right to deliver a notice to
Landlord (a "Termination Notice") electing to terminate this Lease effective
upon the date occurring five (5) business days following receipt by Landlord of
the Termination Notice (the "Effective Date"). The Termination Notice must be
delivered by Tenant to Landlord, if at all, not earlier than the Outside Date
(as the same may be extended pursuant to the terms of Section 2.2.3 below) nor
later than five (5) business days after the Outside Date. The effectiveness of
any such Termination Notice delivered by Tenant to Landlord shall be governed by
the terms of this Section 2.2.

          2.2.2  Extension of Outside Date After Delivery of the Termination
                 -----------------------------------------------------------
Notice. If Tenant delivers a Termination Notice to Landlord, then Landlord shall
------
have the right to suspend the occurrence of the Effective Date for a period
ending thirty (30) days after the Effective Date by delivering to Tenant, prior
to the Effective Date, a certification from Landlord that it is Landlord's good
faith judgment that the delivery of the Premises will occur within thirty (30)
                        ------------------------
days after the Effective Date (the "Termination Extension Notice"). If the
delivery of the Premises occurs prior to the expiration of such thirty-day
------------------------
period, then the Termination Notice shall of no force or effect, but if the
delivery of the Premises does not occur within such thirty-day period, then this
------------------------
Lease shall terminate upon the expiration of such thirty-day period.

          2.2.3  Extension of Outside Date Prior to the Delivery of Termination
                 ---------------------------------------------------------------
Notice. Additionally, if a Termination Notice has not been delivered by Tenant
------
to Landlord and, prior to the Outside Date, Landlord determines that the
delivery of the Premises will not occur by the Outside Date, Landlord shall have
------------------------
the right to deliver a written notice to Tenant stating Landlord's opinion as to
the date by which the delivery of the Premises shall occur, and Tenant shall be
                      ------------------------
required, within five (5) business days after receipt of such notice, to deliver
a notice to Landlord pursuant to which Tenant shall elect to either terminate
this Lease, in which case this Lease shall immediately terminate and be of no
further force and effect, or to agree to extend the Outside Date to that date
set forth in such notice delivered by Landlord. Failure by Tenant to deliver
such notice or to so elect shall be deemed Tenant's agreement to extend the
Outside Date set forth in Landlord's notice to Tenant. If Tenant agrees to
extend the Outside Date, Landlord shall have a continuing right to deliver a
notice to Tenant which requests Tenant to so elect to either terminate this
Lease or to further extend the Outside Date as set forth in this Section 2.2.3,
above, until the occurrence of the delivery of the Premises or until this Lease
                                   ------------------------
is terminated. Upon the delivery of a Termination Notice by Tenant pursuant to
Section 2.2.1 above in connection with an Outside Date extended pursuant to this
Section 2.2.3, Landlord shall also

                                      -4-
<PAGE>

have the same right to deliver the Termination Extension Notice as to the new
Outside Date, as set forth in Section 2.2.2, above.

          2.2.4  Other Terms. The Effective Date and the Outside Date shall be
          ------------------
extended to the extent of any delays beyond the reasonable control of Landlord,
including "Force Majeure" delays, as that term is defined in Section 29.16 of
this Lease. Upon any termination as set forth in this Section 2.2, Landlord and
Tenant shall be relieved from any and all liability to each other resulting
hereunder. Tenant's rights to terminate this Lease, as set forth in this Section
2.2, shall be Tenant's sole and exclusive remedy at law or in equity for the
failure of the delivery of the Premises to occur as set forth above.

                                   ARTICLE 3
                                   ---------

                                   BASE RENT
                                   ---------

     Tenant shall pay, without prior notice or demand, to Landlord or Landlord's
agent at the address set forth in Section 4.2 of the Summary, or, at Landlord's
option, at such other place as Landlord may from time to time designate in
writing, by a check for currency which, at the time of payment, is legal tender
for private or public debts in the United States of America, base rent ("Base
Rent") as set forth in Section 4 of the Summary, payable in equal monthly
installments as set forth in Section 4 of the Summary in advance on or before
the first day of each and every calendar month during the Lease Term, without
any setoff or deduction whatsoever. The Base Rent for the first full month of
the Lease Term which occurs after the expiration of any free rent period shall
be paid at the time of Tenant's execution of this Lease. If any Rent payment
date (including the Lease Commencement Date) falls on a day of the month other
than the first day of such month or if any payment of Rent is for a period which
is shorter than one month, the Rent for any fractional month shall accrue on a
daily basis for the period from the date such payment is due to the end of such
calendar month or to the end of the Lease Term at a rate per day which is equal
to 1/365 of the applicable annual Rent. All other payments or adjustments
required to be made under the terms of this Lease that require proration on a
time basis shall be prorated on the same basis.

                                   ARTICLE 4
                                   ---------

                                ADDITIONAL RENT
                                ---------------

     4.1  General Terms. In addition to paying the Base Rent specified in
          -------------
Article 3 of this Lease, Tenant shall pay (i) "Tenant's Building Share" of the
annual "Building Direct Expenses," (ii) "Tenant's Phase Share" of the annual
"Phase Direct Expenses", and (iii) "Tenant's Project Share" of the annual
"Project Direct Expenses" as those terms are defined in Sections 4.2, below.
Landlord's estimate of "Tenant's Share of Direct Expenses," as that term is
defined in Section 4.2.1, below, for the first full month of the Lease Term
shall be paid at the time of Tenant's execution of this Lease. Such payments by
Tenant, together with any and all other amounts payable by Tenant to Landlord
pursuant to the terms of this Lease, are hereinafter collectively referred to as
the "Additional Rent", and the Base Rent and the Additional Rent are herein
collectively referred to as "Rent." All amounts due under this Article 4 as
Additional Rent shall be payable for the same periods and in the same manner as
the Base Rent. Without limitation on other obligations of Tenant which survive
the expiration of the Lease Term, the obligations of Tenant to pay the
Additional Rent provided for in this Article 4 shall survive the expiration of
the Lease Term.

     4.2  Definitions of Key Terms Relating to Additional Rent. As used in this
          ----------------------------------------------------
Article 4, the following terms shall have the meanings hereinafter set forth:

          4.2.1.  "Tenant's Share of Direct Expenses" shall mean, collectively,
Tenant's Project Share of Project Direct Expenses, Tenant's Phase Share of Phase
Direct Expenses, and Tenant's Building Share of Building Direct Expenses.

          4.2.2   "Direct Expenses" shall mean "Operating Expenses" and "Tax
Expenses."

          4.2.3   "Project Direct Expenses" shall mean the portion of "Direct
Expenses," as equitably determined by Landlord, which is not attributable to any
particular building in the

                                      -5-
<PAGE>

Project, and is not solely attributable to "Phase 1" or "Phase 2" of the
Project, as those terms are defined in Section 4.2.5, below, but which instead
relate to the Project as a whole.

          4.2.4   "Building Direct Expenses" shall mean the portion of Direct
Expenses, as equitably determined by Landlord, which is attributable solely to
the Building (as opposed to the Project as a whole or either particular phase of
the Project).

          4.2.5 "Phase Direct Expenses" shall mean the portion of Direct
Expenses, as equitably determined by Landlord, which is solely attributable
"Phase 1" of the Project, as that term is defined, below, and which is neither
attributable solely to the Building nor the Project as a whole. For purposes of
this Lease, (i) "Phase 1" of the Project shall be comprised of the buildings
located at 2800, 2820, 2840, 2860 and 2880 San Tomas Expressway and the
corresponding real property and common areas associated with such phase, as
equitably designated by Landlord, and (ii) "Phase 2" of the Project shall be
comprised of the buildings located at 2600, 2650, 2700, 2730 and 2770 San Tomas
Expressway and the corresponding real property and common areas associated with
such phase, as equitably designated by Landlord.

          4.2.6 "Expense Year" shall mean each calendar year in which any
portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires, provided that Landlord, upon notice to Tenant, may
change the Expense Year from time to time to any other twelve (12) consecutive
month period, and, in the event of any such change, Tenant's Share of Direct
Expenses shall be equitably adjusted for any Expense Year involved in any such
change.

          4.2.7 "Operating Expenses" shall mean all expenses, costs and amounts
of every kind and nature which Landlord pays or accrues during any Expense Year
because of or in connection with the ownership, management, maintenance,
security, repair, replacement, restoration or operation of the Project, or any
portion thereof. Without limiting the generality of the foregoing, Operating
Expenses shall specifically include any and all of the following: (i) the cost
of supplying all utilities, the cost of operating, repairing, maintaining, and
renovating the utility, telephone, mechanical, sanitary, storm drainage, and
elevator systems, and the cost of maintenance and service contracts in
connection therewith; (ii) the cost of licenses, certificates, permits and
inspections and the cost of contesting any governmental enactments which may
affect Operating Expenses, and the costs incurred in connection with a
transportation system management program or similar program; (iii) the cost of
all insurance carried by Landlord in connection with the Project; (iv) the cost
of landscaping, relamping, and all supplies, tools, equipment and materials used
in the operation, repair and maintenance of the Project, or any portion thereof;
(v) costs incurred in connection with the parking areas servicing the Project;
(vi) fees and other costs, including Landlord's management fee, which fee shall
not be in excess of three percent (3%) of the annual gross rentals of the
Project, consulting fees, legal fees and accounting fees, of all contractors and
consultants in connection with the management, operation, maintenance and repair
of the Project; (vii) payments under any equipment rental agreements and the
fair rental value of any management office space; (viii) wages, salaries and
other compensation and benefits, including taxes levied thereon, of all persons
engaged in the operation, maintenance and security of the Project; (ix) costs
under any instrument pertaining to the sharing of costs by the Project; (x)
operation, repair, maintenance and replacement of all systems and equipment and
components thereof of the Building; (xi) the cost of janitorial, alarm, security
and other services, replacement of wall and floor coverings, ceiling tiles and
fixtures in common areas, maintenance and replacement of curbs and walkways,
repair to roofs and re-roofing; (xii) amortization (including interest on the
unamortized cost) of the cost of acquiring or the rental expense of personal
property used in the maintenance, operation and repair of the Project, or any
portion thereof; (xiii) the cost of capital improvements or other costs incurred
in connection with the Project; provided, however, that any capital expenditure,
including earthquake deductibles, shall be amortized with interest over its
useful life in accordance with generally accepted accounting principles; (xiv)
costs, fees, charges or assessments imposed by, or resulting from any mandate
imposed on Landlord by, any federal, state or local government for fire and
police protection, trash removal, community services, or other services which do
not constitute "Tax Expenses" as that term is defined in Section 4.2.8, below;
and (xv) payments under any easement, license, operating agreement, declaration,
restrictive covenant, or instrument pertaining to the sharing of costs by the
Building.

     Notwithstanding the foregoing, for purposes of this Lease, Operating
Expenses shall not, however, include (a) marketing costs, including leasing
commissions, advertising and

                                      -6-
<PAGE>

promotional expenses, space planning costs and attorneys' fees in connection
with the negotiation and preparation of letters, deal memos, letters of intent,
leases, and subleases and/or assignments incurred in connection with present or
future tenants or other occupants of the Project, including attorneys' fees and
other costs and expenditures incurred in connection with disputes with present
or prospective tenants or other occupants of the Project; (b) costs, including
permit, license and inspection costs, and any allowance or other tenant
improvement concessions, incurred or provided with respect to the design,
construction and/or installation of other tenants' or occupants' improvements
made for tenants or other occupants in the Project or incurred in renovating or
otherwise improving, decorating, painting or redecorating vacant space for
tenants or other occupants in the Project; (c) bad-debt expenses, rent loss,
depreciation, interest and amortization on mortgages, reserves of any kind or
ground lease payments, if any; (d) depreciation, amortization and interest
payments, except as specifically included in Operating Expenses pursuant to the
terms of this Lease and except on materials, tools, supplies and vendor-type
equipment purchased by Landlord to enable Landlord to supply services Landlord
might otherwise contract for with a third party, where such depreciation,
amortization and interest payments would otherwise have been included in the
charge for such third party's services, all as determined in accordance with
sound real estate management principles, and when depreciation or amortization
is permitted or required, the item shall be amortized over its reasonably
anticipated useful life; (e) expenses in connection with services or other
benefits which are not offered to Tenant or for which Tenant is charged for
directly but which are provided to another tenant or occupant of the Project,
without charge; (f) overhead and profit increment paid to Landlord or to
subsidiaries or affiliates of Landlord for goods and/or services in the Project
to the extent the same exceeds the costs of such by unaffiliated third parties
on a competitive basis; (g) advertising and promotional expenditures, and costs
of signs in or on the Project identifying the owner of the Project or other
tenants' signs; (h) any reserves retained by Landlord; (i) costs associated with
the operation of the business of the partnership or entity which constitutes the
Landlord, as the same are distinguished from the costs of operation of the
Project, including partnership accounting and legal matters, costs of defending
any lawsuits with any mortgagee (except as the actions of the Tenant may be in
issue), costs of selling, syndicating, financing, mortgaging or hypothecating
any of the Landlord's interest in the Project, and costs incurred in connection
with any disputes between Landlord and its employees, between Landlord and
Project management, or between Landlord and other tenants or occupants; (i) the
wages and benefits of any employee who does not devote substantially all of his
or her employed time to the Project unless such wages and benefits are prorated
to reflect time spent on operating and managing the Project vis-a-vis time spent
on matters unrelated to operating and managing the Project; provided, that in no
event shall Operating Expenses for purposes of this Lease include wages and/or
benefits attributable to personnel above the level of Project manager or Project
engineer; (j) all items and services for which Tenant or any other tenant in the
Project reimburses Landlord, provided that Landlord shall use commercially
reasonable efforts to collect such reimbursable amounts, or which Landlord
provides selectively to one or more tenants (other than Tenant) without
reimbursement; (k) costs, other than those incurred in ordinary maintenance and
repair, for sculpture, paintings, fountains or other objects of art; (l) fees
and reimbursements payable to Landlord (including its parent organization,
subsidiaries and/or affiliates) or by Landlord for management of the Project
(including the management of the Project parking facilities) which materially
exceed the amount which would normally be paid to a company, in connection with
the management of comparable buildings and/or the parking facilities of such
comparable buildings, with a general reputation for excellence and integrity
used at "arms length" and which is not, directly or indirectly, affiliated with
Landlord ("Independent Company Test"); (m) costs incurred to comply with
Applicable Laws with respect to hazardous material, which was in existence in
the Building or on the Project prior to the Lease Commencement Date, and was of
such a nature that a federal, state or municipal governmental or quasi-
governmental authority, if it had then had knowledge of the presence of such
hazardous material, in the state, and under the conditions that it then existed
in the Building or on the Project, would have then required the removal,
remediation or other action with respect to such hazardous material; and costs
incurred with respect to hazardous material, which hazardous material is brought
into the Building or onto the Project after the date hereof by Landlord or any
other tenant of the Project or by anyone other than Tenant or Tenant Parties and
is of such a nature, at that time, that a federal, state or municipal
governmental or quasi-governmental authority, if it had then had knowledge of
the presence of such hazardous material, in the state, and under the conditions,
that it then exists in the Building or on the Project, would have then required
the removal, remediation or other action with respect to such hazardous
material; (n)

                                      -7-
<PAGE>

costs arising from Landlord's charitable or political contributions; and (o)
expenses arising from the gross negligence or willful misconduct of Landlord,
its agents, employees or servants.

     If Landlord is not furnishing any particular work or service (the cost of
which, if performed by Landlord, would be included in Operating Expenses) to a
tenant who has undertaken to perform such work or service in lieu of the
performance thereof by Landlord, Operating Expenses shall be deemed to be
increased by an amount equal to the additional Operating Expenses which would
reasonably have been incurred during such period by Landlord if it had at its
own expense furnished such work or service to such tenant. If the Project is not
at least ninety-five percent (95%) occupied during all or a portion of any
Expense Year, Landlord may elect to make an appropriate adjustment to the
components of Operating Expenses for such year to determine the amount of
Operating Expenses that would have been incurred had the Project been ninety-
five percent (95%) occupied; and the amount so determined shall be deemed to
have been the amount of Operating Expenses for such year.

          4.2.8  Taxes.
                 -----

                 4.2.8.1 "Tax Expenses" shall mean all federal, state, county,
or local governmental or municipal taxes, fees, charges or other impositions of
every kind and nature, whether general, special, ordinary or extraordinary,
(including, without limitation, real estate taxes, general and special
assessments, transit taxes, leasehold taxes or taxes based upon the receipt of
rent, including gross receipts or sales taxes applicable to the receipt of rent,
unless required to be paid by Tenant, personal property taxes imposed upon the
fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances,
furniture and other personal property used in connection with the Project, or
any portion thereof), which shall be paid or accrued during any Expense Year
(without regard to any different fiscal year used by such governmental or
municipal authority) because of or in connection with the ownership, leasing and
operation of the Project, or any portion thereof.

                 4.2.8.2 Tax Expenses shall include, without limitation: (i) Any
tax on the rent, right to rent or other income from the Project, or any portion
thereof, or as against the business of leasing the Project, or any portion
thereof; (ii) Any assessment, tax, fee, levy or charge in addition to, or in
substitution, partially or totally, of any assessment, tax, fee, levy or charge
previously included within the definition of real property tax, it being
acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election ("Proposition 13")
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants, and, in further
recognition of the decrease in the level and quality of governmental services
and amenities as a result of Proposition 13, Tax Expenses shall also include any
governmental or private assessments or the Project's contribution towards a
governmental or private cost-sharing agreement for the purpose of augmenting or
improving the quality of services and amenities normally provided by
governmental agencies; (iii) Any assessment, tax, fee, levy, or charge allocable
to or measured by the area of the Premises or the Rent payable hereunder,
including, without limitation, any business or gross income tax or excise tax
with respect to the receipt of such rent, or upon or with respect to the
possession, leasing, operating, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises, or any portion thereof; and (iv) Any
assessment, tax, fee, levy or charge, upon this transaction or any document to
which Tenant is a party, creating or transferring an interest or an estate in
the Premises.

                 4.2.8.3 Any costs and expenses (including, without limitation,
reasonable attorneys' fees) incurred in attempting to protest, reduce or
minimize Tax Expenses shall be included in Tax Expenses in the Expense Year such
expenses are paid. Refunds of Tax Expenses shall be credited against Tax
Expenses and refunded to Tenant regardless of when received, based on the
Expense Year to which the refund is applicable, provided that in no event shall
the amount to be refunded to Tenant for any such Expense Year exceed the total
amount paid by Tenant as Additional Rent under this Article 4 for such Expense
                                                    ---------
Year. If Tax Expenses for any period during the Lease Term or any extension
thereof are increased after payment thereof for any reason, including, without
limitation, error or reassessment by applicable governmental or municipal
authorities, Tenant shall pay Landlord upon demand Tenant's Share of any such
increased Tax Expenses included by Landlord as Tax Expenses pursuant to the
terms of this Lease. Notwithstanding anything to the contrary contained in this
Section 4.2.8 (except as

                                      -8-
<PAGE>

set forth in Section 4.2.8.1, above), there shall be excluded from Tax Expenses
(i) all excess profits taxes, franchise taxes, gift taxes, capital stock taxes,
inheritance and succession taxes, estate taxes, federal and state income taxes,
and other taxes to the extent applicable to Landlord's general or net income (as
opposed to rents, receipts or income attributable to operations at the Project),
(ii) any items included as Operating Expenses, and (iii) any items paid by
Tenant under Section 4.5 of this Lease.

          4.2.9  "Tenant's Building Share" shall mean the percentage set forth
in Section 5 of the Summary.

          4.2.10 "Tenant's Phase Share" shall mean the percentage set forth in
Section 5 of the Summary.

          4.2.11 "Tenant's Project Share" shall mean the percentage set forth in
Section 5 of the Summary.

     4.3  Intentionally Deleted.
          ---------------------

     4.4  Calculation and Payment of Additional Rent. For each Expense Year
          ------------------------------------------
during the Lease Term, Tenant shall pay to Landlord, in the manner set forth in
Section 4.4.1, below, and as Additional Rent, an amount equal to Tenant's Share
of Direct Expenses.

          4.4.1  Statement of Actual Direct Expenses and Payment by Tenant.
                 ---------------------------------------------------------
Landlord shall give to Tenant following the end of each Expense Year, a
statement (the "Statement") which shall state the Direct Expenses incurred or
accrued for such preceding Expense Year. Landlord shall use commercially
reasonable diligent efforts to provide such Statement in as prompt a manner as
reasonably possible. Upon receipt of the Statement for each Expense Year
commencing or ending during the Lease Term, Tenant shall pay, with its next
installment of Base Rent due, the full amount of Tenant's Share of the Direct
Expenses for such Expense Year, less the amounts, if any, paid during such
Expense Year as "Estimated Expenses," as that term is defined in Section 4.4.2,
below. The failure of Landlord to timely furnish the Statement for any Expense
Year shall not prejudice Landlord or Tenant from enforcing its rights under this
Article 4. Even though the Lease Term has expired and Tenant has vacated the
Premises, when the final determination is made of Tenant's Share of Direct
Expenses for the Expense Year in which this Lease terminates, Tenant shall
immediately pay to Landlord such amount. The provisions of this Section 4.4.1
shall survive the expiration or earlier termination of the Lease Term.

          4.4.2  Statement of Estimated Direct Expenses. In addition, Landlord
                 --------------------------------------
shall give Tenant a yearly expense estimate statement (the "Estimate Statement")
which shall set forth Landlord's reasonable estimate (the "Estimate") of what
the total amount of Direct Expenses for the then-current Expense Year shall be
and the estimated Tenant's Share of Direct Expenses (the "Estimated Expenses").
Landlord shall use commercially reasonable diligent efforts to provide such
Estimate Statement in as prompt a manner as reasonably possible. The failure of
Landlord to timely furnish the Estimate Statement for any Expense Year shall not
preclude Landlord from enforcing its rights to collect any Estimated Expenses
under this Article 4, nor shall Landlord be prohibited from revising any
Estimate Statement or Estimated Expenses theretofore delivered to the extent
necessary. Thereafter, Tenant shall pay, with its next installment of Base Rent
due, a fraction of the Estimated Expenses for the then-current Expense Year
(reduced by any amounts paid pursuant to the next to last sentence of this
Section 4.4.2). Such fraction shall have as its numerator the number of months
which have elapsed in such current Expense Year, including the month of such
payment, and twelve (12) as its denominator. Until a new Estimate Statement is
furnished (which Landlord shall have the right to deliver to Tenant at any
time), Tenant shall pay monthly, with the monthly Base Rent installments, an
amount equal to one-twelfth (1/12) of the total Estimated Expenses set forth in
the previous Estimate Statement delivered by Landlord to Tenant.

     4.5  Taxes and Other Charges for Which Tenant Is Directly Responsible.
          ----------------------------------------------------------------

          4.5.1  Tenant shall be liable for and shall pay ten (10) days before
delinquency, taxes levied against Tenant's equipment, furniture, fixtures and
any other personal property located in or about the Premises. If any such taxes
on Tenant's equipment, furniture, fixtures and any other personal property are
levied against Landlord or Landlord's property or if the assessed

                                      -9-
<PAGE>

value of Landlord's property is increased by the inclusion therein of a value
placed upon such equipment, furniture, fixtures or any other personal property
and if Landlord pays the taxes based upon such increased assessment, which
Landlord shall have the right to do regardless of the validity thereof but only
under proper protest if requested by Tenant, Tenant shall upon demand repay to
Landlord the taxes so levied against Landlord or the proportion of such taxes
resulting from such increase in the assessment, as the case may be.

          4.5.2  If the tenant improvements in the Premises, whether installed
and/or paid for by Landlord or Tenant and whether or not affixed to the real
property so as to become a part thereof, are assessed for real property tax
purposes at a valuation higher than the valuation at which tenant improvements
conforming to Landlord's "building standard" in other space in the Building are
assessed, then the Tax Expenses levied against Landlord or the property by
reason of such excess assessed valuation shall be deemed to be taxes levied
against personal property of Tenant and shall be governed by the provisions of
Section 4.5.1, above.

          4.5.3  Notwithstanding any contrary provision herein, Tenant shall pay
prior to delinquency any (i) rent tax or sales tax, service tax, transfer tax or
value added tax, or any other applicable tax on the rent or services herein or
otherwise respecting this Lease, (ii) taxes assessed upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any portion of the Project, including
the Project parking facility; or (iii) taxes assessed upon this transaction or
any document to which Tenant is a party creating or transferring an interest or
an estate in the Premises.

                                   ARTICLE 5
                                   ---------

                                USE OF PREMISES
                                ---------------

     5.1  Permitted Use. Tenant shall use the Premises solely for the Permitted
          -------------
Use set forth in Section 6 of the Summary and Tenant shall not use or permit the
Premises or the Project to be used for any other purpose or purposes whatsoever
without the prior written consent of Landlord, which may be withheld in
Landlord's sole discretion.

     5.2  Prohibited Uses. The uses prohibited under this Lease shall include,
          ---------------
without limitation, use of the Premises or a portion thereof for (i) offices of
any agency or bureau of the United States or any state or political subdivision
thereof; (ii) offices or agencies of any foreign governmental or political
subdivision thereof; (iii) offices of any health care professionals or service
organization; (iv) schools or other training facilities which are not ancillary
to corporate, executive or professional office use; (v) retail or restaurant
uses; or (vi) communications firms such as radio and/or television stations.
Tenant shall not allow occupancy density of use of the Premises which is greater
than the average density of the other tenants of the Building. Tenant further
covenants and agrees that Tenant shall not use, or suffer or permit any person
or persons to use, the Premises or any part thereof for any use or purpose
contrary to the provisions of the Rules and Regulations set forth in Exhibit D,
                                                                     ---------
attached hereto, or in violation of the laws of the United States of America,
the State of California, or the ordinances, regulations or requirements of the
local municipal or county governing body or other lawful authorities having
jurisdiction over the Project) including, without limitation, any such laws,
ordinances, regulations or requirements relating to hazardous materials or
substances, as those terms are defined by applicable laws now or hereafter in
effect. Tenant shall not do or permit anything to be done in or about the
Premises which will in any way damage the reputation of the Project or obstruct
or interfere with the rights of other tenants or occupants of the Building, or
injure or annoy them or use or allow the Premises to be used for any improper,
unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit
any nuisance in, on or about the Premises. Tenant shall comply with all recorded
covenants, conditions, and restrictions now or hereafter affecting the Project.

                                   ARTICLE 6
                                   ---------

                            SERVICES AND UTILITIES
                            ----------------------

     6.1  In General. Tenant will be responsible, at its sole cost and expense,
          ----------
for the furnishing of all services and utilities to the Premises, including, but
not limited to heating, ventilation and air-conditioning, electricity, water,
telephone, janitorial and interior Building

                                      -10-
<PAGE>

security services. The Premises shall be separately metered for electricity and
water, and Tenant shall pay the cost of such utilities directly to the
applicable utility provider.

     6.2  Interruption of Use. Tenant agrees that Landlord shall not be liable
          -------------------
for damages, by abatement of rent (except as provided in Section 6.4 of this
Lease) or otherwise, for failure to furnish or delay in furnishing any service
(including telephone and telecommunication services), or for any diminution in
the quality or quantity thereof, when such failure or delay or diminution is
occasioned, in whole or in part, by repairs, replacements, or improvements, by
any strike, lockout or other labor trouble, by inability to secure electricity,
gas, water, or other fuel at the Building after reasonable effort to do so, by
any accident or casualty whatsoever, by act or default of Tenant or other
parties, or by any other cause beyond Landlord's reasonable control; and such
failures or delays or diminution shall never be deemed to constitute an eviction
or disturbance of Tenant's use and possession of the Premises or relieve Tenant
from paying rent or performing any of its obligations under this Lease.
Furthermore, Landlord shall not be liable under any circumstances for a loss of,
or injury to, property or for injury to, or interference with, Tenant's
business, including, without limitation, loss of profits, however occurring,
through or in connection with or incidental to a failure to furnish any services
or utilities.

     6.3  No Obligation. Provided that Landlord agrees to provide service
          -------------
utility connections to the Project, including electricity, water and sewage
connections, Landlord shall have no obligation to provide any services or
utilities to the Building, including, but not limited to heating, ventilation
and air-conditioning, electricity, water, telephone, janitorial and interior
Building security services.

     6.4  Abatement of Rent. In the event that Tenant is prevented from using,
          -----------------
and does not use, the Premises or any portion thereof, as a result of (i) any
repair, maintenance, "Renovations," as that term is defined in Section 29.30 of
this Lease, or alteration performed by Landlord, or which Landlord failed to
perform, after the Lease Commencement Date and required by this Lease, which
substantially interferes with Tenant's use of the Premises, or (ii) any failure
to provide services, utilities or access to the Premises as required by this
Lease (either such set of circumstances as set forth in items (i) or (ii),
above, to be known as an "Abatement Event"), then Tenant shall give Landlord
notice of such Abatement Event, and if such Abatement Event continues for five
(5) consecutive business days after Landlord's receipt of any such notice (the
"Eligibility Period"), then the Base Rent and Tenant's Share of Direct Expenses
shall be abated or reduced, as the case may be, after expiration of the
Eligibility Period for such time that Tenant continues to be so prevented from
using, and does not use, the Premises or a portion thereof, in the proportion
that the rentable area of the portion of the Premises that Tenant is prevented
from using, and does not use, bears to the total rentable area of the Premises;
provided, however, in the event that Tenant is prevented from using, and does
not use, a portion of the Premises for a period of time in excess of the
Eligibility Period and the remaining portion of the Premises is not sufficient
to allow Tenant to effectively conduct its business therein, and if Tenant does
not conduct its business from such remaining portion, then for such time after
expiration of the Eligibility Period during which Tenant is so prevented from
effectively conducting its business therein, the Base Rent and Tenant's Share of
Direct Expenses for the entire Premises shall be abated for such time as Tenant
continues to be so prevented from using, and does not use, the Premises. If,
however, Tenant reoccupies any portion of the Premises during such period, the
Rent allocable to such reoccupied portion, based on the proportion that the
rentable area of such reoccupied portion of the Premises bears to the total
rentable area of the Premises, shall be payable by Tenant from the date Tenant
reoccupies such portion of the Premises. Such right to abate Base Rent and
Tenant's Share of Direct Expenses shall be Tenant's sole and exclusive remedy at
law or in equity for an Abatement Event. Except as provided in this Section 6.4,
nothing contained herein shall be interpreted to mean that Tenant is excused
from paying Rent due hereunder.

                                   ARTICLE 7
                                   ---------

                                    REPAIRS
                                    -------

     Tenant shall, at Tenant's own expense, pursuant to the terms of this Lease,
including without limitation Article 8 hereof, keep, maintain, repair and
improve the Premises, and every portion thereof, including, without limitation,
all improvements, fixtures and furnishings therein and all equipment within the
Premises or exclusively serving the Premises, and the floor or floors of the
Building on which the Premises are located, in good order, repair and condition
at all

                                      -11-
<PAGE>

times during the Lease Term. In addition, Tenant shall, at Tenant's own expense,
but under the supervision and subject to the prior approval of Landlord, and
within any reasonable period of time specified by Landlord, pursuant to the
terms of this Lease, including without limitation Article 8 hereof, promptly and
adequately repair all damage to the Premises and replace or repair all damaged,
broken, or worn fixtures and appurtenances, except for damage caused by ordinary
wear and tear or beyond the reasonable control of Tenant; provided however,
that, at Landlord's option, or if Tenant fails to make such repairs, Landlord
may, but need not, make such repairs and replacements, and Tenant shall pay
Landlord the cost thereof, including a percentage of the cost thereof (to be
uniformly established for the Building and/or the Project) sufficient to
reimburse Landlord for all overhead, general conditions, fees and other costs or
expenses arising from Landlord's involvement with such repairs and replacements
forthwith upon being billed for same. Notwithstanding the foregoing, Landlord
shall be responsible for repairs to the exterior walls, foundation and roof of
the Building, the structural portions of the floors of the Building, and the
systems and equipment of the Building, except to the extent that such repairs
are required due to the negligence or willful misconduct of Tenant; provided,
however, that if such repairs are due to the negligence or willful misconduct of
Tenant, Landlord shall nevertheless make such repairs at Tenant's expense, or,
if covered by Landlord's insurance, Tenant shall only be obligated to pay any
deductible in connection therewith. Landlord may, but shall not be required to,
enter the Premises at all reasonable times to make such repairs, alterations,
improvements or additions to the Premises or to the Project or to any equipment
located in the Project as Landlord shall desire or deem necessary or as Landlord
may be required to do by governmental or quasi-governmental authority or court
order or decree; provided that Landlord shall use commercially reasonable
efforts to notify Tenant in advance of such entries, so that Tenant may elect to
have an employee of Tenant accompany Landlord during such entry (provided such
employee does not unreasonably interfere with Landlord's work). Tenant hereby
waives any and all rights under and benefits of subsection 1 of Section 1932 and
Sections 1941 and 1942 of the California Civil Code or under any similar law,
statute, or ordinance now or hereafter in effect.

                                   ARTICLE 8
                                   ---------

                           ADDITIONS AND ALTERATIONS
                           -------------------------

     8.1  Landlord's Consent to Alterations. Tenant may not make any
          ---------------------------------
improvements, alterations, additions or changes to the Premises or any
mechanical, plumbing or HVAC facilities or systems pertaining to the Premises
(collectively, the "Alterations") without first procuring the prior written
consent of Landlord to such Alterations, which consent shall be requested by
Tenant not less than thirty (30) days prior to the commencement thereof, and
which consent shall not be unreasonably withheld by Landlord, provided it shall
be deemed reasonable for Landlord to withhold its consent to any Alteration
which adversely affects the structural portions or the systems or equipment of
the Building or is visible from the exterior of the Building. The construction
of the initial improvements to the Premises shall be governed by the terms of
the Tenant Work Letter and not the terms of this Article 8.

     8.2  Manner of Construction. Landlord may impose, as a condition of its
          ----------------------
consent to any and all Alterations or repairs of the Premises or about the
Premises, such requirements as Landlord in its sole discretion may deem
desirable, including, but not limited to, the requirement that Tenant utilize
for such purposes only contractors, subcontractors, materials, mechanics and
materialmen selected by Tenant and reasonably approved by Landlord, and the
requirement that all Alterations conform in terms of quality and style to the
building's standards established by Landlord. If such Alterations will involve
the use of or disturb hazardous materials or substances existing in the
Premises, Tenant shall comply with Landlord's rules and regulations concerning
such hazardous materials or substances. Tenant shall construct such Alterations
and perform such repairs in a good and workmanlike manner, in conformance with
any and all applicable federal, state, county or municipal laws, rules and
regulations and pursuant to a valid building permit, issued by the City of Santa
Clara, all in conformance with Landlord's construction rules and regulations. In
the event Tenant performs any Alterations, for non-general office use, in the
Premises which require or give rise to governmentally required changes to the
"Base Building," as that term is defined below, then Landlord shall, at Tenant's
expense, make such changes to the Base Building. The "Base Building" shall
include the structural portions of the Building, and the public restrooms and
the systems and equipment located in the internal core of the Building on the
floor or floors on which the Premises are located. In performing the work of any
such Alterations, Tenant shall have the work performed in such manner so as not
to obstruct access to the Project or any portion thereof, by any other tenant of
the Project, and so as not to obstruct the

                                      -12-
<PAGE>

business of Landlord or other tenants in the Project. Tenant shall not use (and
upon notice from Landlord shall cease using) contractors, services, workmen,
labor, materials or equipment that, in Landlord's reasonable judgment, would
disturb labor harmony with the workforce or trades engaged in performing other
work, labor or services in or about the Building or the Common Areas. In
addition to Tenant's obligations under Article 9 of this Lease, upon completion
of any Alterations, Tenant agrees to cause a Notice of Completion to be recorded
in the office of the Recorder of the County of Santa Clara in accordance with
Section 3093 of the Civil Code of the State of California or any successor
statute, and Tenant shall deliver to the Project management office a
reproducible copy of the "as built" drawings of the Alterations as well as all
permits, approvals and other documents issued by any governmental agency in
connection with the Alterations.

     8.3  Payment for Improvements. If payment is made directly to contractors,
          ------------------------
Tenant shall comply with Landlord's requirements for final lien releases and
waivers in connection with Tenant's payment for work to contractors. Whether or
not Tenant orders any work directly from Landlord, Tenant shall pay to Landlord
a percentage of the cost of such work sufficient to compensate Landlord for all
overhead, general conditions, fees and other costs and expenses arising from
Landlord's involvement with such work.

     8.4  Construction Insurance. In addition to the requirements of Article 10
          ----------------------
of this Lease, in the event that Tenant makes any Alterations, prior to the
commencement of such Alterations, Tenant shall provide Landlord with evidence
that Tenant carries "Builder's All Risk" insurance in an amount approved by
Landlord covering the construction of such Alterations, and such other insurance
as Landlord may require, it being understood and agreed that all of such
Alterations shall be insured by Tenant pursuant to Article 10 of this Lease
immediately upon completion thereof. In addition, in the event Tenant performs
Alterations in the Premises which cost exceeds, in the aggregate, $50,000.00,
Landlord may, in its discretion, require Tenant to obtain a lien and completion
bond or some alternate form of security satisfactory to Landlord in an amount
sufficient to ensure the lien-free completion of such Alterations and naming
Landlord as a co-obligee.

     8.5  Landlord's Property. All Alterations, improvements, fixtures,
          -------------------
equipment and/or appurtenances which may be installed or placed in or about the
Premises, from time to time, shall be at the sole cost of Tenant and shall be
and become the property of Landlord at the end of the Lease Term, except that
Tenant may remove any Alterations, improvements, fixtures and/or equipment which
Tenant can substantiate to Landlord have not been paid for with any Tenant
improvement allowance funds provided to Tenant by Landlord, provided Tenant
repairs any damage to the Premises and Building caused by such removal and
returns the affected portion of the Premises to a building standard tenant
improved condition as determined by Landlord; provided, however, that in the
event that Tenant's request for Landlord's approval of any particular Alteration
requests a determination by Landlord as to whether or not such Alteration shall
be required to be removed upon the expiration or earlier termination of this
Lease in accordance with the terms hereof, then Landlord's approval shall
contain such a determination (and if such consent does not affirmatively require
removal, Tenant shall have no obligation to remove the applicable Alteration).
Furthermore, Landlord may, by written notice to Tenant prior to the end of the
Lease Term, or given following any earlier termination of this Lease, require
Tenant, at Tenant's expense, to (i) remove any Alterations or improvements in
the Premises, and/or (ii) remove any "Above Building Standard Tenant
Improvements," as that term is defined in Section 2.4 of the Tenant Work Letter,
located within the Premises and replace the same with then existing "Building
Standard Tenant Improvements," as that term is defined in Section 2.3 of the
Tenant Work Letter, and to repair any damage to the Premises and Building caused
by such removal and to return the affected portion of the Premises to a building
standard tenant improved condition as determined by Landlord. If Tenant fails to
complete such removal and/or to repair any damage caused by the removal of any
Alterations or improvements in the Premises, and returns the affected portion of
the Premises to a building standard tenant improved condition as determined by
Landlord, then at Landlord's option, either (A) Tenant shall be deemed to be
holding over in the Premises and Rent shall continue to accrue in accordance
with the terms of Article 16, below, until such work shall be completed, or (B)
Landlord may do so and may charge the cost thereof to Tenant. Tenant hereby
protects, defends, indemnifies and holds Landlord harmless from any liability,
cost, obligation, expense or claim of lien in any manner relating to the
installation, placement, removal or financing of any such Alterations,
improvements, fixtures and/or equipment in, on or about the Premises, which
obligations of Tenant shall survive the expiration or earlier termination of
this Lease.

                                      -13-
<PAGE>

                                   ARTICLE 9
                                   ---------

                            COVENANT AGAINST LIENS
                            ----------------------

     Tenant shall keep the Project and Premises free from any liens or
encumbrances arising out of the work performed, materials furnished or
obligations incurred by or on behalf of Tenant, and shall protect, defend,
indemnify and hold Landlord harmless from and against any claims, liabilities,
judgments or costs (including, without limitation, reasonable attorneys' fees
and costs) arising out of same or in connection therewith. Tenant shall give
Landlord notice at least twenty (20) days prior to the commencement of any such
work on the Premises (or such additional time as may be necessary under
applicable laws) to afford Landlord the opportunity of posting and recording
appropriate notices of non-responsibility. Tenant shall remove any such lien or
encumbrance by bond or otherwise within five (5) days after notice by Landlord,
and if Tenant shall fail to do so, Landlord may pay the amount necessary to
remove such lien or encumbrance, without being responsible for investigating the
validity thereof. The amount so paid shall be deemed Additional Rent under this
Lease payable upon demand, without limitation as to other remedies available to
Landlord under this Lease. Nothing contained in this Lease shall authorize
Tenant to do any act which shall subject Landlord's title to the Building or
Premises to any liens or encumbrances whether claimed by operation of law or
express or implied contract. Any claim to a lien or encumbrance upon the
Building or Premises arising in connection with any such work or respecting the
Premises not performed by or at the request of Landlord shall be null and void,
or at Landlord's option shall attach only against Tenant's interest in the
Premises and shall in all respects be subordinate to Landlord's title to the
Project, Building and Premises.

                                  ARTICLE 10
                                  ----------

                                   INSURANCE
                                   ---------

     10.1  Indemnification and Waiver. Tenant hereby assumes all risk of damage
to property or injury to persons in, upon or about the Premises from any cause
whatsoever and agrees that Landlord, its partners, subpartners and their
respective officers, agents, servants, employees, and independent contractors
(collectively, "Landlord Parties") shall not be liable for, and are hereby
released from any responsibility for, any damage either to person or property or
resulting from the loss of use thereof, which damage is sustained by Tenant or
by other persons claiming through Tenant. Tenant shall indemnify, defend,
protect, and hold harmless the Landlord Parties from any and all loss, cost,
damage, expense and liability (including without limitation court costs and
reasonable attorneys' fees) incurred in connection with or arising from any
cause in, on or about the Premises, any violation of any of the requirements,
ordinances, statutes, regulations or other laws, including, without limitation,
any environmental laws which violation, with respect to environmental laws, is
caused by Tenant; any acts, omissions or negligence of Tenant or of any person
claiming by, through or under Tenant, or of the contractors, agents, servants,
employees, invitees, guests or licensees of Tenant or any such person, in, on or
about the Project or any breach of the terms of this Lease, either prior to,
during, or after the expiration of the Lease Term, provided that the terms of
the foregoing indemnity shall not apply to the gross negligence or willful
misconduct of Landlord. Should Landlord be named as a defendant in any suit
brought against Tenant in connection with or arising out of Tenant's occupancy
of the Premises, Tenant shall pay to Landlord its costs and expenses incurred in
such suit, including without limitation, its actual professional fees such as
appraisers', accountants' and attorneys' fees. Further, Tenant's agreement to
indemnify Landlord pursuant to this Section 10.1 is not intended and shall not
                                    ------------
relieve any insurance carrier of its obligations under policies required to be
carried by Tenant pursuant to the provisions of this Lease, to the extent such
policies cover the matters subject to Tenant's indemnification obligations; nor
shall they supersede any inconsistent agreement of the parties set forth in any
other provision of this Lease. The provisions of this Section 10.1 shall survive
the expiration or sooner termination of this Lease with respect to any claims or
liability arising in connection with any event occurring prior to such
expiration or termination.

     10.2  Landlord's Fire and Casualty Insurance. Landlord shall carry
           --------------------------------------
commercial general liability insurance with respect to the Building during the
Lease Term, and shall further insure the Building during the Lease Term against
loss or damage due to fire and other casualties covered within the
classification of fire and extended coverage, vandalism coverage and malicious
mischief, sprinkler leakage, water damage and special extended coverage. Such
coverage shall be in such amounts, from such companies, and on such other terms
and

                                      -14-
<PAGE>

conditions, as Landlord may from time to time reasonably determine.
Additionally, at the option of Landlord, such insurance coverage may include the
risks of earthquakes and/or flood damage and additional hazards, a rental loss
endorsement and one or more loss payee endorsements in favor of the holders of
any mortgages or deeds of trust encumbering the interest of Landlord in the
Building or the ground or underlying lessors of the Building, or any portion
thereof. Notwithstanding the foregoing provisions of this Section 10.2, the
coverage and amounts of insurance carried by Landlord in connection with the
Building shall, at a minimum, be comparable to the coverage and amounts of
insurance which are carried by reasonably prudent landlords of comparable
buildings in the vicinity, and Worker's Compensation and Employer's Liability
coverage as required by applicable law. Tenant shall, at Tenant's expense,
comply with all customary insurance company requirements pertaining to the use
of the Premises. If Tenant's conduct or use of the Premises other than for
normal office purposes causes any increase in the premium for such insurance
policies then Tenant shall reimburse Landlord for any such increase. Tenant, at
Tenant's expense, shall comply with all rules, orders, regulations or
requirements of the American Insurance Association (formerly the National Board
of Fire Underwriters) and with any similar body.

     10.3  Tenant's Insurance. Tenant shall maintain the following coverages in
           ------------------
the following amounts.

           10.3.1  Commercial General Liability Insurance covering the insured
against claims of bodily injury, personal injury and property damage (including
loss of use thereof) arising out of Tenant's operations, and contractual
liabilities (covering the performance by Tenant of its indemnity agreements)
including a Broad Form endorsement covering the insuring provisions of this
Lease and the performance by Tenant of the indemnity agreements set forth in
Section 10.1 of this Lease, for limits of liability not less than:

           Bodily Injury and                 $3,000,000 each occurrence
           Property Damage Liability         $3,000,000 annual aggregate

           Personal Injury Liability         $3,000,000 each occurrence
                                             $3,000,000 annual aggregate
                                             0% Insured's participation

           10.3.2  Physical Damage Insurance covering (i) all office furniture,
business and trade fixtures, office equipment, free-standing cabinet work,
movable partitions, merchandise and all other items of Tenant's property on the
Premises installed by, for, or at the expense of Tenant, (ii) the "Tenant
Improvements," as that term is defined in Section 2.1 of the Tenant Work Letter,
and any other improvements which exist in the Premises as of the Lease
Commencement Date (excluding the Base Building) (the "Original Improvements"),
and (iii) all other improvements, alterations and additions to the Premises.
Such insurance shall be written on an "all risks" of physical loss or damage
basis, for the full replacement cost value (subject to reasonable deductible
amounts) new without deduction for depreciation of the covered items and in
amounts that meet any co-insurance clauses of the policies of insurance and
shall include coverage for damage or other loss caused by fire or other peril
including, but not limited to, vandalism and malicious mischief, theft, water
damage of any type, including sprinkler leakage, bursting or stoppage of pipes,
and explosion, and providing business interruption coverage for a period of one
year.

           10.3.3  Worker's Compensation and Employer's Liability or other
similar insurance pursuant to all applicable state and local statutes and
regulations.

     10.4  Form of Policies. The minimum limits of policies of insurance
           ----------------
required of Tenant under this Lease shall in no event limit the liability of
Tenant under this Lease. Such insurance shall (i) name Landlord, Landlord's
lender, and any other party the Landlord so specifies, as an additional insured,
including Landlord's managing agent, if any; (ii) specifically cover the
liability assumed by Tenant under this Lease, including, but not limited to,
Tenant's obligations under Section 10.1 of this Lease; (iii) be issued by an
insurance company having a rating of not less than A-X in Best's Insurance Guide
or which is otherwise acceptable to Landlord and licensed to do business in the
State of California; (iv) be primary insurance as to all claims thereunder and
provide that any insurance carried by Landlord is excess and is non-contributing
with any insurance requirement of Tenant; (v) be in form and content reasonably
acceptable to Landlord; and (vi) provide that said insurance shall not be
canceled or coverage

                                      -15-
<PAGE>

changed unless thirty (30) days' prior written notice shall have been given to
Landlord and any mortgagee of Landlord. Tenant shall deliver said policy or
policies or certificates thereof to Landlord on or before the Lease Commencement
Date and at least thirty (30) days before the expiration dates thereof. In the
event Tenant shall fail to procure such insurance, or to deliver such policies
or certificate, Landlord may, at its option, procure such policies for the
account of Tenant, and the cost thereof shall be paid to Landlord within five
(5) days after delivery to Tenant of bills therefor.

     10.5  Subrogation. Landlord and Tenant intend that their respective
           -----------
property loss risks shall be borne by reasonable insurance carriers to the
extent above provided, and Landlord and Tenant hereby agree to look solely to,
and seek recovery only from, their respective insurance carriers in the event of
a property loss to the extent that such coverage is agreed to be provided
hereunder. The parties each hereby waive all rights and claims against each
other for such losses, and waive all rights of subrogation of their respective
insurers, provided such waiver of subrogation shall not affect the right to the
insured to recover thereunder. The parties agree that their respective insurance
policies are now, or shall be, endorsed such that the waiver of subrogation
shall not affect the right of the insured to recover thereunder, so long as no
material additional premium is charged therefor.

     10.6  Additional Insurance Obligations. Tenant shall carry and maintain
           --------------------------------
during the entire Lease Term, at Tenant's sole cost and expense, increased
amounts of the insurance required to be carried by Tenant pursuant to this
Article 10 and such other reasonable types of insurance coverage and in such
reasonable amounts covering the Premises and Tenant's operations therein, as may
be reasonably requested by Landlord.

                                  ARTICLE 11
                                  ----------

                            DAMAGE AND DESTRUCTION
                            ----------------------

     11.1  Repair of Damage to Premises by Landlord. Tenant shall promptly
           ----------------------------------------
notify Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any Common Areas serving or providing access to the
Premises shall be damaged by fire or other casualty, Landlord shall promptly and
diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord's reasonable control, and subject to all other terms of
this Article 11, restore the Base Building and such Common Areas. Such
restoration shall be to substantially the same condition of the Base Building
and the Common Areas prior to the casualty, except for modifications required by
zoning and building codes and other laws or by the holder of a mortgage on the
Building or Project or any other modifications to the Common Areas deemed
desirable by Landlord, provided that access to the Premises and any common
restrooms serving the Premises shall not be materially impaired. Upon the
occurrence of any damage to the Premises, upon notice (the "Landlord Repair
Notice") to Tenant from Landlord, Tenant shall assign to Landlord (or to any
party designated by Landlord) all insurance proceeds payable to Tenant under
Tenant's insurance required under Section 10.3 of this Lease, and Landlord shall
repair any injury or damage to the Tenant Improvements and the Original
Improvements installed in the Premises and shall return such Tenant Improvements
and Original Improvements to their original condition; provided that if the cost
of such repair by Landlord exceeds the amount of insurance proceeds received by
Landlord from Tenant's insurance carrier, as assigned by Tenant, the cost of
such repairs shall be paid by Tenant to Landlord prior to Landlord's
commencement of repair of the damage. In the event that Landlord does not
deliver the Landlord Repair Notice within sixty (60) days following the date the
casualty becomes known to Landlord, Tenant shall, at its sole cost and expense,
repair any injury or damage to the Tenant Improvements and the Original
Improvements installed in the Premises and shall return such Tenant Improvements
and Original Improvements to their original condition. Whether or not Landlord
delivers a Landlord Repair Notice, prior to the commencement of construction,
Tenant shall submit to Landlord, for Landlord's review and approval, all plans,
specifications and working drawings relating thereto, and Landlord shall select
the contractors to perform such improvement work. Landlord shall not be liable
for any inconvenience or annoyance to Tenant or its visitors, or injury to
Tenant's business resulting in any way from such damage or the repair thereof;
provided however, that if such fire or other casualty shall have damaged the
Premises or Common Areas necessary to Tenant's occupancy, Landlord shall allow
Tenant a proportionate abatement of Rent to the extent Landlord is reimbursed
from the proceeds of rental interruption insurance purchased by Landlord as part
of Operating Expenses, during the time and to the extent the Premises are unfit
for occupancy for

                                      -16-
<PAGE>

the purposes permitted under this Lease, and not occupied by Tenant as a result
thereof; provided, further, however, that if the damage or destruction is due to
the negligence or wilful misconduct of Tenant or any of its agents, employees,
contractors, invitees or guests, Tenant shall be responsible for any reasonable,
applicable insurance deductible (which shall be payable to Landlord upon demand)
and there shall be no rent abatement. In the event that Landlord shall not
deliver the Landlord Repair Notice, Tenant's right to rent abatement pursuant to
the preceding sentence shall terminate as of the date which is reasonably
determined by Landlord to be the date Tenant should have completed repairs to
the Premises assuming Tenant used reasonable due diligence in connection
therewith.

     11.2  Landlord's Option to Repair. Notwithstanding the terms of Section
           ---------------------------
11.1 of this Lease, Landlord may elect not to rebuild and/or restore the
Premises, Building and/or Project, and instead terminate this Lease, by
notifying Tenant in writing of such termination within sixty (60) days after the
date of discovery of the damage, such notice to include a termination date
giving Tenant sixty (60) days to vacate the Premises, but Landlord may so elect
only if the Building or Project shall be damaged by fire or other casualty or
cause, whether or not the Premises are affected, and one or more of the
following conditions is present: (i) in Landlord's reasonable judgment, repairs
cannot reasonably be completed within one hundred eighty (180) days after the
date of discovery of the damage (when such repairs are made without the payment
of overtime or other premiums); (ii) the holder of any mortgage on the Building
or Project or ground lessor with respect to the Building or Project shall
require that the insurance proceeds or any portion thereof be used to retire the
mortgage debt, or shall terminate the ground lease, as the case may be; (iii)
the damage is not fully covered by Landlord's insurance policies, excluding
deductibles; or (iv) Landlord decides to rebuild the Building or Common Areas so
that they will be substantially different structurally or architecturally; or
(v) the damage occurs during the last twelve (12) months of the Lease Term;
provided, however, that if Landlord does not elect to terminate this Lease
pursuant to Landlord's termination right as provided above, and (I) the damage
occurs during the last twelve (12) months of the Lease Term, or (II) the repairs
cannot, in the reasonable judgment of Landlord, be completed within one hundred
eighty (180) days after being commenced, Tenant may elect, no earlier than sixty
(60) days after the date of the damage and not later than ninety (90) days after
the date of such damage, to terminate this Lease by written notice to Landlord
effective as of the date specified in the notice, which date shall not be less
than thirty (30) days nor more than sixty (60) days after the date such notice
is given by Tenant. At any time, from time to time, after the date occurring
sixty (60) days after the date of the damage, Tenant may request that Landlord
inform Tenant of Landlord's reasonable opinion of the date of completion of the
repairs and Landlord shall respond to such request within five (5) business
days.

     11.3  Waiver of Statutory Provisions. The provisions of this Lease,
           ------------------------------
including this Article 11, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building or the Project, and any statute or regulation of
the State of California, including, without limitation, Sections 1932(2) and
1933(4) of the California Civil Code, with respect to any rights or obligations
concerning damage or destruction in the absence of an express agreement between
the parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all or
any part of the Premises, the Building or the Project.

                                  ARTICLE 12
                                  ----------

                                   NONWAIVER
                                   ---------

     No provision of this Lease shall be deemed waived by either party hereto
unless expressly waived in a writing signed thereby. The waiver by either party
hereto of any breach of any term, covenant or condition herein contained shall
not be deemed to be a waiver of any subsequent breach of same or any other term,
covenant or condition herein contained. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular Rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
Rent. No acceptance of a lesser amount than the Rent herein stipulated shall be
deemed a waiver of Landlord's right to receive the full amount

                                      -17-
<PAGE>

due. No receipt of monies by Landlord from Tenant after the termination of this
Lease shall in any way alter the length of the Lease Term or of Tenant's right
of possession hereunder, or after the giving of any notice shall reinstate,
continue or extend the Lease Term or affect any notice given Tenant prior to the
receipt of such monies, it being agreed that after the service of notice or the
commencement of a suit, or after final judgment for possession of the Premises,
Landlord may receive and collect any Rent due, and the payment of said Rent
shall not waive or affect said notice, suit or judgment.

                                  ARTICLE 13
                                  ----------

                                 CONDEMNATION
                                 ------------

     If the whole or any part of the Premises shall be taken by power of eminent
domain or condemned by any competent authority for any public or quasi-public
use or purpose, or if any adjacent property or street shall be so taken or
condemned, or reconfigured or vacated by such authority in such manner as to
require the use, reconstruction or remodeling of any part of the Premises,
Building or Project, or if Landlord shall grant a deed or other instrument in
lieu of such taking by eminent domain or condemnation, Landlord shall have the
option to terminate this Lease effective as of the date possession is required
to be surrendered to the authority.  If any portion of the Premises is taken and
such taking materially impairs Tenant's ability to use the Premises or conduct
it's business therein, or if access to the Premises is substantially impaired,
in each case for a period in excess of ninety (90) days, Tenant shall have the
option to terminate this Lease effective as of the date possession is required
to be surrendered to the authority.  Tenant shall not because of such taking
assert any claim against Landlord or the authority for any compensation because
of such taking and Landlord shall be entitled to the entire award or payment in
connection therewith, except that Tenant shall have the right to file any
separate claim available to Tenant for any taking of Tenant's personal property
and fixtures belonging to Tenant and removable by Tenant upon expiration of the
Lease Term pursuant to the terms of this Lease, and for moving expenses, so long
as such claims do not diminish the award available to Landlord, its ground
lessor with respect to the Building or Project or its mortgagee, and such claim
is payable separately to Tenant.  All Rent shall be apportioned as of the date
of such termination.  If any part of the Premises shall be taken, and this Lease
shall  not be so terminated, the Rent shall be proportionately abated.  Tenant
hereby waives any and all rights it might otherwise have pursuant to Section
1265.130 of The California Code of Civil Procedure.  Notwithstanding anything to
the contrary contained in this Article 13, in the event of a temporary taking of
all or any portion of the Premises for a period of one hundred and eighty (180)
days or less, then this Lease shall not terminate but the Base Rent and the
Additional Rent shall be abated for the period of such taking in proportion to
the ratio that the amount of rentable square feet of the Premises taken bears to
the total rentable square feet of the Premises.  Landlord shall be entitled to
receive the entire award made in connection with any such temporary taking.

                                  ARTICLE 14
                                  ----------

                           ASSIGNMENT AND SUBLETTING
                           -------------------------

     14.1  Transfers.  Tenant shall not, without the prior written consent of
           ---------
Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to
attach to, or otherwise transfer, this Lease or any interest hereunder, permit
any assignment, or other transfer of this Lease or any interest hereunder by
operation of law, sublet the Premises or any part thereof, or enter into any
license or concession agreements or otherwise permit the occupancy or use of the
Premises or any part thereof by any persons other than Tenant and its employees
and contractors (all of the foregoing are hereinafter sometimes referred to
collectively as "Transfers" and any person to whom any Transfer is made or
sought to be made is hereinafter sometimes referred to as a "Transferee").  If
Tenant desires Landlord's consent to any Transfer, Tenant shall notify Landlord
in writing, which notice (the "Transfer Notice") shall include (i) the proposed
effective date of the Transfer, which shall not be less than thirty (30) days
nor more than one hundred eighty (180) days after the date of delivery of the
Transfer Notice, (ii) a description of the portion of the Premises to be
transferred (the "Subject Space"), (iii) all of the terms of the proposed
Transfer and the consideration therefor, including calculation of the "Transfer
Premium", as that term is defined in Section 14.3 below, in connection with such
Transfer, the name and address of the proposed Transferee, and an executed copy
of all documentation effectuating the proposed Transfer, including all operative
documents to evidence such Transfer and all agreements incidental or related to
such Transfer, provided that Landlord shall have the

                                      -18-
<PAGE>

right to require Tenant to utilize Landlord's standard Transfer documents in
connection with the documentation of such Transfer, (iv) current financial
statements of the proposed Transferee certified by an officer, partner or owner
thereof, business credit and personal references and history of the proposed
Transferee and any other information required by Landlord which will enable
Landlord to determine the financial responsibility, character, and reputation of
the proposed Transferee, nature of such Transferee's business and proposed use
of the Subject Space and (v) an executed estoppel certificate from Tenant in the
form attached hereto as Exhibit E. Any Transfer made without Landlord's prior
                        ---------
written consent shall, at Landlord's option, be null, void and of no effect, and
shall, at Landlord's option, constitute a default by Tenant under this Lease.
Whether or not Landlord consents to any proposed Transfer, Tenant shall pay
Landlord's review and processing fees, as well as any reasonable professional
fees (including, without limitation, attorneys', accountants', architects',
engineers' and consultants' fees) incurred by Landlord, within thirty (30) days
after written request by Landlord.

     14.2  Landlord's Consent. Landlord shall not unreasonably withhold its
           ------------------
consent to any proposed Transfer of the Subject Space to the Transferee on the
terms specified in the Transfer Notice. Without limitation as to other
reasonable grounds for withholding consent, the parties hereby agree that it
shall be reasonable under this Lease and under any applicable law for Landlord
to withhold consent to any proposed Transfer where one or more of the following
apply:

           14.2.1 The Transferee is of a character or reputation or engaged in a
business which is not consistent with the quality of the Building or the
Project, or would be a significantly less prestigious occupant of the Building
than Tenant;

           14.2.2 The Transferee intends to use the Subject Space for purposes
which are not permitted under this Lease;

           14.2.3 The Transferee is either a governmental agency or
instrumentality thereof;

           14.2.4 INTENTIONALLY DELETED;

           14.2.5 The Transferee is not a party of reasonable financial worth
and/or financial stability in light of the responsibilities to be undertaken in
connection with the Transfer on the date consent is requested;

           14.2.6 The proposed Transfer would cause a violation of another lease
for space in the Project, or would give an occupant of the Project a right to
cancel its lease;

           14.2.7 The terms of the proposed Transfer will allow the Transferee
to exercise a right of renewal, right of expansion, right of first offer, or
other similar right held by Tenant (or will allow the Transferee to occupy space
leased by Tenant pursuant to any such right); or

           14.2.8 Either the proposed Transferee, or any person or entity which
directly or indirectly, controls, is controlled by, or is under common control
with, the proposed Transferee, (i) occupies space in the Project at the time of
the request for consent, or (ii) is negotiating with Landlord to lease space in
the Project at such time, or (iii) has negotiated with Landlord during the
twelve (12)-month period immediately preceding the Transfer Notice; provided in
each event that Landlord has space in the Project reasonably capable of
satisfying the proposed Transferee's space requirement.

     If Landlord consents to any Transfer pursuant to the terms of this Section
14.2 (and does not exercise any recapture rights Landlord may have under Section
14.4 of this Lease), Tenant may within six (6) months after Landlord's consent,
but not later than the expiration of said six-month period, enter into such
Transfer of the Premises or portion thereof, upon substantially the same terms
and conditions as are set forth in the Transfer Notice furnished by Tenant to
Landlord pursuant to Section 14.1 of this Lease, provided that if there are any
changes in the terms and conditions from those specified in the Transfer Notice
(i) such that Landlord would initially have been entitled to refuse its consent
to such Transfer under this Section 14.2, or (ii) which would cause the proposed
Transfer to be more favorable to the Transferee than the terms set forth in
Tenant's original Transfer Notice, Tenant shall again submit the Transfer to
Landlord for its approval and other action under this Article 14 (including
Landlord's right of recapture, if any, under Section 14.4 of this Lease).
Notwithstanding anything to the contrary in this Lease, if

                                      -19-
<PAGE>

Tenant or any proposed Transferee claims that Landlord has unreasonably withheld
or delayed its consent under Section 14.2 or otherwise has breached or acted
unreasonably under this Article 14, their sole remedies shall be a declaratory
judgment and an injunction for the relief sought without any monetary damages,
and Tenant hereby waives all other remedies, including, without limitation, any
right at law or equity to terminate this Lease, on its own behalf and, to the
extent permitted under all applicable laws, on behalf of the proposed
Transferee. Tenant shall indemnify, defend and hold harmless Landlord from any
and all liability, losses, claims, damages, costs, expenses, causes of action
and proceedings involving any third party or parties (including without
limitation Tenant's proposed subtenant or assignee) who claim they were damaged
by Landlord's wrongful withholding or conditioning of Landlord's consent.

     14.3  Transfer Premium.  If Landlord consents to a Transfer, as a condition
           ----------------
thereto which the parties hereby agree is reasonable, Tenant shall pay to
Landlord seventy-five percent (75%) of any "Transfer Premium," as that term is
defined in this Section 14.3, received by Tenant from such Transferee. "Transfer
Premium" shall mean all rent, additional rent or other consideration payable by
such Transferee in connection with the Transfer in excess of the Rent and
Additional Rent payable by Tenant under this Lease during the term of the
Transfer on a per rentable square foot basis if less than all of the Premises is
transferred, after deducting the reasonable expenses incurred by Tenant for (i)
any free base rent reasonably provided to the Transferee, (ii) any changes,
alterations and improvements to the Premises in connection with the Transfer,
and (iii) any legal expenses and any brokerage commissions in connection with
the Transfer. "Transfer Premium" shall also include, but not be limited to, key
money, bonus money or other cash consideration paid by Transferee to Tenant in
connection with such Transfer, and any payment in excess of fair market value
for services rendered by Tenant to Transferee or for assets, fixtures,
inventory, equipment, or furniture transferred by Tenant to Transferee in
connection with such Transfer. In the calculations of the Rent (as it relates to
the Transfer Premium calculated under this Section 14.3), and the Transferee's
Rent and Quoted Rent under Section 14.2 of this Lease, the Rent paid during each
annual period for the Subject Space, and the Transferee's Rent and the Quoted
Rent, shall be computed after adjusting such rent to the actual effective rent
to be paid, taking into consideration any and all leasehold concessions granted
in connection therewith, including, but not limited to, any rent credit and
tenant improvement allowance. For purposes of calculating any such effective
rent all such concessions shall be amortized on a straight-line basis over the
relevant term.

     14.4  Landlord's Option as to Subject Space. Notwithstanding anything to
           -------------------------------------
the contrary contained in this Article 14, Landlord shall have the option, by
giving written notice to Tenant within thirty (30) days after receipt of any
Transfer Notice, to recapture the Subject Space for the remainder of the Lease
Term. Such recapture shall cancel and terminate this Lease with respect to the
Subject Space as of the date stated in the Transfer Notice as the effective date
of the proposed Transfer. In the event of a recapture by Landlord, if this Lease
shall be canceled with respect to less than the entire Premises, then (i) the
Rent reserved herein shall be prorated on the basis of the number of rentable
square feet retained by Tenant in proportion to the number of rentable square
feet contained in the Premises; (ii) this Lease as so amended shall continue
thereafter in full force and effect, and upon request of either party, the
parties shall execute written confirmation of the same; and (iii) Landlord shall
construct or cause to be constructed a demising wall separating that portion of
the Premises recaptured by Landlord from that portion of the Premises retained
by Tenant; provided that, Tenant hereby agrees that, notwithstanding Tenant's
occupancy of its retained portion of the Premises during the construction of
such demising wall by Landlord, Landlord shall be permitted to construct such
demising wall during normal business hours, without any obligation to pay
overtime other premiums, and the construction of such demising wall by Landlord
shall in no way constitute a constructive eviction of Tenant nor entitle Tenant
to any abatement of Rent (except as provided in Section 6.4 of this Lease), and
Landlord shall have no responsibility or for any reason be liable to Tenant for
any direct or indirect injury to or interference with Tenant's business arising
from the construction of such demising wall, nor shall Tenant be entitled to any
compensation or damages from Landlord for loss of the use of the whole or any
part of its retained portion of the Premises or of Tenant's personal property or
improvements resulting from the construction of such demising wall, or for any
inconvenience or annoyance occasioned by the construction of such demising wall.
Notwithstanding the foregoing, Landlord shall use commercially reasonable
efforts to perform the construction of the demising wall so as to minimize
interference with Tenant's use of, and access to the Premises. If Landlord
declines, or fails to elect in a timely manner, to recapture the Subject Space
under this Section 14.4, then, provided Landlord has consented to the proposed

                                      -20-
<PAGE>

Transfer, Tenant shall be entitled to proceed to transfer the Subject Space to
the proposed Transferee, subject to provisions of this Article 14.

     14.5  Effect of Transfer. If Landlord consents to a Transfer, (i) the terms
           ------------------
and conditions of this Lease shall in no way be deemed to have been waived or
modified, (ii) such consent shall not be deemed consent to any further Transfer
by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,
promptly after execution, an original executed copy of all documentation
pertaining to the Transfer in form reasonably acceptable to Landlord, (iv)
Tenant shall furnish upon Landlord's request a complete statement, certified by
an independent certified public accountant, or Tenant's chief financial officer,
setting forth in detail the computation of any Transfer Premium Tenant has
derived and shall derive from such Transfer, and (v) no Transfer relating to
this Lease or agreement entered into with respect thereto, whether with or
without Landlord's consent, shall relieve Tenant or any guarantor of the Lease
from any liability under this Lease, including, without limitation, in
connection with the Subject Space. Landlord or its authorized representatives
shall have the right at all reasonable times to audit the books, records and
papers of Tenant relating to any Transfer, and shall have the right to make
copies thereof. If the Transfer Premium respecting any Transfer shall be found
understated, Tenant shall, within thirty (30) days after demand, pay the
deficiency, and if understated by more than two percent (2%), Tenant shall pay
Landlord's costs of such audit.

     14.6  Additional Transfers. For purposes of this Lease, the term "Transfer"
           --------------------
shall also include (i) if Tenant is a partnership, the withdrawal or change,
voluntary, involuntary or by operation of law, of fifty percent (50%) or more of
the partners, or transfer of fifty percent (50%) or more of partnership
interests, within a twelve (12)-month period, or the dissolution of the
partnership without immediate reconstitution thereof, and (ii) if Tenant is a
closely held corporation (i.e., whose stock is not publicly held and not traded
through an exchange or over the counter), (A) the dissolution, merger,
consolidation or other reorganization of Tenant or (B) the sale or other
transfer of an aggregate of fifty percent (50%) or more of the voting shares of
Tenant (other than to immediate family members by reason of gift or death),
within a twelve (12)-month period, or (C) the sale, mortgage, hypothecation or
pledge of an aggregate of fifty percent (50%) or more of the value of the
unencumbered assets of Tenant within a twelve (12)-month period.

     14.7  Occurrence of Default. Any Transfer hereunder shall be subordinate
           ---------------------
and subject to the provisions of this Lease, and if this Lease shall be
terminated during the term of any Transfer, Landlord shall have the right to:
(i) treat such Transfer as cancelled and repossess the Subject Space by any
lawful means, or (ii) require that such Transferee attorn to and recognize
Landlord as its landlord under any such Transfer. If Tenant shall be in default
under this Lease, Landlord is hereby irrevocably authorized, as Tenant's agent
and attorney-in-fact, to direct any Transferee to make all payments under or in
connection with the Transfer directly to Landlord (which Landlord shall apply
towards Tenant's obligations under this Lease) until such default is cured. Such
Transferee shall rely on any representation by Landlord that Tenant is in
default hereunder, without any need for confirmation thereof by Tenant. Upon any
assignment, the assignee shall assume in writing all obligations and covenants
of Tenant thereafter to be performed or observed under this Lease. No collection
or acceptance of rent by Landlord from any Transferee shall be deemed a waiver
of any provision of this Article 14 or the approval of any Transferee or a
release of Tenant from any obligation under this Lease, whether theretofore or
thereafter accruing. In no event shall Landlord's enforcement of any provision
of this Lease against any Transferee be deemed a waiver of Landlord's right to
enforce any term of this Lease against Tenant or any other person. If Tenant's
obligations hereunder have been guaranteed, Landlord's consent to any Transfer
shall not be effective unless the guarantor also consents to such Transfer.

     14.8  Non-Transfers.  Notwithstanding anything to the contrary contained in
           -------------
this Article 14, neither (i) an assignment to an entity which acquires all or
substantially all of the stock or assets of Tenant, (ii) an assignment of the
Premises to a transferee which is the resulting entity of a merger or
consolidation of Tenant with another entity, nor (iii) an assignment or
subletting of all or a portion of the Premises to an affiliate of Tenant (an
entity which is controlled by, controls, or is under common control with,
Tenant) (collectively, "Affiliates"), shall be deemed a Transfer under this
Article 14, provided that Tenant notifies Landlord of any such assignment or
sublease and promptly supplies Landlord with any documents or information
reasonably requested by Landlord regarding such assignment or sublease or such
affiliate, and further provided that such assignment or sublease is not a
subterfuge by Tenant to avoid its

                                      -21-
<PAGE>

obligations under this Lease. "Control," as used in this Section 14.8, shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person or entity, whether by
ownership of voting securities, by contract, or otherwise.

                                  ARTICLE 15
                                  ----------

                     SURRENDER OF PREMISES; OWNERSHIP AND
                     ------------------------------------
                           REMOVAL OF TRADE FIXTURES
                           -------------------------

     15.1  Surrender of Premises. No act or thing done by Landlord or any agent
           ---------------------
or employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in writing by Landlord. The delivery of keys to the
Premises to Landlord or any agent or employee of Landlord shall not constitute a
surrender of the Premises or effect a termination of this Lease, whether or not
the keys are thereafter retained by Landlord, and notwithstanding such delivery
Tenant shall be entitled to the return of such keys at any reasonable time upon
request until this Lease shall have been properly terminated. The voluntary or
other surrender of this Lease by Tenant, whether accepted by Landlord or not, or
a mutual termination hereof, shall not work a merger, and at the option of
Landlord shall operate as an assignment to Landlord of all subleases or
subtenancies affecting the Premises or terminate any or all such sublessees or
subtenancies.

     15.2  Removal of Tenant Property by Tenant. Upon the expiration of the
           ------------------------------------
Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject
to the provisions of this Article 15, quit and surrender possession of the
Premises to Landlord in as good order and condition as when Tenant took
possession and as thereafter improved by Landlord and/or Tenant, reasonable wear
and tear and repairs which are specifically made the responsibility of Landlord
hereunder excepted. Upon such expiration or termination, Tenant shall, without
expense to Landlord, remove or cause to be removed from the Premises all debris
and rubbish, and such items of furniture, equipment, business and trade
fixtures, free-standing cabinet work, movable partitions and other articles of
personal property owned by Tenant or installed or placed by Tenant at its
expense in the Premises, and such similar articles of any other persons claiming
under Tenant, as Landlord may, in its sole discretion, require to be removed,
and Tenant shall repair at its own expense all damage to the Premises and
Building resulting from such removal.

                                  ARTICLE 16
                                  ----------

                                 HOLDING OVER
                                 ------------

     If Tenant holds over after the expiration of the Lease Term or earlier
termination thereof, with or without the express or implied consent of Landlord,
such tenancy shall be from month-to-month only, and shall not constitute a
renewal hereof or an extension for any further term, and in such case Rent shall
be payable at a monthly rate equal to (I) 150% during the first sixty (60) days
of holdover, and (II) 200% thereafter, of the greater of (i) the Rent applicable
during the last rental period of the Lease Term under this Lease, and (ii) the
then-current market rent for the Premises (as reasonably determined by
Landlord).  Such month-to-month tenancy shall be subject to every other
applicable term, covenant and agreement contained herein.  For purposes of this
Article 16, a holding over shall include Tenant's remaining in the Premises
after the expiration or earlier termination of the Lease Term, as required
pursuant to the terms of Section 8.5, above, to remove any required improvements
or Alterations (and to complete any corresponding repairs or restorations as set
forth in Section 8.5 of this Lease).  Nothing contained in this Article 16 shall
be construed as consent by Landlord to any holding over by Tenant, and Landlord
expressly reserves the right to require Tenant to surrender possession of the
Premises to Landlord as provided in this Lease upon the expiration or other
termination of this Lease.  The provisions of this Article 16 shall not be
deemed to limit or constitute a waiver of any other rights or remedies of
Landlord provided herein or at law.  If Tenant fails to surrender the Premises
upon the termination or expiration of this Lease, in addition to any other
liabilities to Landlord accruing therefrom, Tenant shall protect, defend,
indemnify and hold Landlord harmless from all loss, costs (including reasonable
attorneys' fees) and liability resulting from such failure, including, without
limiting the generality of the foregoing, any claims made by any succeeding
tenant founded upon such failure to surrender and any lost profits to Landlord
resulting therefrom.

                                      -22-
<PAGE>

                                  ARTICLE 17
                                  ----------

                             ESTOPPEL CERTIFICATES
                             ---------------------

     Within ten (10) days following a request in writing by Landlord, Tenant
shall execute, acknowledge and deliver to Landlord an estoppel certificate,
which, as submitted by Landlord, shall be substantially in the form of Exhibit
                                                                       -------
E, attached hereto (or such other form as may be required by any prospective
-
mortgagee or purchaser of the Project, or any portion thereof), indicating
therein any exceptions thereto that may exist at that time, and shall also
contain any other information reasonably requested by Landlord or Landlord's
mortgagee or prospective mortgagee.  Any such certificate may be relied upon by
any prospective mortgagee or purchaser of all or any portion of the Project.
Tenant shall execute and deliver whatever other instruments may be reasonably
required for such purposes.  At any time during the Lease Term, Landlord may
require Tenant to provide Landlord with a current financial statement and
financial statements of the two (2) years prior to the current financial
statement year.  Such statements shall be prepared in accordance with generally
accepted accounting principles and, if such is the normal practice of Tenant,
shall be audited by an independent certified public accountant.  Failure of
Tenant to timely execute, acknowledge and deliver such estoppel certificate or
other instruments shall constitute an acceptance of the Premises and an
acknowledgment by Tenant that statements included in the estoppel certificate
are true and correct, without exception.

                                  ARTICLE 18
                                  ----------

                                 SUBORDINATION
                                 -------------

     This Lease shall be subject and subordinate to all present and future
ground or underlying leases of the Building or Project and to the lien of any
mortgage, trust deed or other encumbrances now or hereafter in force against the
Building or Project or any part thereof, if any, and to all renewals,
extensions, modifications, consolidations and replacements thereof, and to all
advances made or hereafter to be made upon the security of such mortgages or
trust deeds, unless the holders of such mortgages, trust deeds or other
encumbrances, or the lessors under such ground lease or underlying leases,
require in writing that this Lease be superior thereto.  Landlord shall use
commercially reasonable efforts to provide Tenant with a non-disturbance
agreement in a commercially reasonable form from Landlord's presently existing
lender holding a first deed of trust on the Building on or before the date which
is the later to occur of (i) thirty (30) days following the mutual execution and
delivery of this Lease by Landlord and Tenant, and (ii) thirty (30) days
following Tenant's execution and delivery of such non-disturbance agreement.
Landlord's delivery to Tenant of commercially reasonable non-disturbance
agreement(s) in favor of Tenant from any ground lessors, mortgage holders or
lien holders of Landlord who later come into existence at any time prior to the
expiration of the Lease Term shall be in consideration of, and a condition
precedent to, Tenant's agreement to be bound by the terms of this Article 18.
                                                                  ----------
Tenant covenants and agrees in the event any proceedings are brought for the
foreclosure of any such mortgage or deed in lieu thereof (or if any ground lease
is terminated), to attorn, without any deductions or set-offs whatsoever, to the
lienholder or purchaser or any successors thereto upon any such foreclosure sale
or deed in lieu thereof (or to the ground lessor), if so requested to do so by
such purchaser or lienholder or ground lessor, and to recognize such purchaser
or lienholder or ground lessor as the lessor under this Lease, provided such
lienholder or purchaser or ground lessor shall agree to accept this Lease and
not disturb Tenant's occupancy, so long as Tenant timely pays the rent and
observes and performs the terms, covenants and conditions of this Lease to be
observed and performed by Tenant.  Landlord's interest herein may be assigned as
security at any time to any lienholder.  Tenant shall, within five (5) days of
request by Landlord, execute such further instruments or assurances as Landlord
may reasonably deem necessary to evidence or confirm the subordination or
superiority of this Lease to any such mortgages, trust deeds, ground leases or
underlying leases.  Tenant waives the provisions of any current or future
statute, rule or law which may give or purport to give Tenant any right or
election to terminate or otherwise adversely affect this Lease and the
obligations of the Tenant hereunder in the event of any foreclosure proceeding
or sale.

                                      -23-
<PAGE>

                                  ARTICLE 19
                                  ----------

                               DEFAULTS; REMEDIES
                               ------------------

     19.1  Events of Default.  The occurrence of any of the following shall
           -----------------
constitute a default of this Lease by Tenant:

           19.1.1  Any failure by Tenant to pay any Rent or any other charge
required to be paid under this Lease, or any part thereof, when due unless such
failure is cured within three (3) days after notice; or

           19.1.2  Except where a specific time period is otherwise set forth
for Tenant's performance in this Lease, in which event the failure to perform by
Tenant within such time period shall be a default by Tenant under this Section
19.1.2, any failure by Tenant to observe or perform any other provision,
covenant or condition of this Lease to be observed or performed by Tenant where
such failure continues for ten (10) days after written notice thereof from
Landlord to Tenant; provided that if the nature of such default is such that the
same cannot reasonably be cured within a ten (10) day period, Tenant shall not
be deemed to be in default if it diligently commences such cure within such
period and thereafter diligently proceeds to rectify and cure such default, but
in no event exceeding a period of time in excess of thirty (30) days after
written notice thereof from Landlord to Tenant; or

           19.1.3  To the extent permitted by law, a general assignment by
Tenant or any guarantor of this Lease for the benefit of creditors, or the
taking of any corporate action in furtherance of bankruptcy or dissolution
whether or not there exists any proceeding under an insolvency or bankruptcy
law, or the filing by or against Tenant or any guarantor of any proceeding under
an insolvency or bankruptcy law, unless in the case of a proceeding filed
against Tenant or any guarantor the same is dismissed within sixty (60) days, or
the appointment of a trustee or receiver to take possession of all or
substantially all of the assets of Tenant or any guarantor, unless possession is
restored to Tenant or such guarantor within thirty (30) days, or any execution
or other judicially authorized seizure of all or substantially all of Tenant's
assets located upon the Premises or of Tenant's interest in this Lease, unless
such seizure is discharged within thirty (30) days; or

           19.1.4  Abandonment or vacation of all or a substantial portion of
the Premises by Tenant; or

           19.1.5  The failure by Tenant to observe or perform according to the
provisions of Articles 17 or 18 of this Lease where such failure continues for
more than two (2) business days after notice from Landlord; or

           19.1.6  Tenant's failure to occupy the Premises within ten (10)
business days after the Lease Commencement Date.

     The notice periods provided herein are in lieu of, and not in addition to,
any notice periods provided by law.

     19.2  Remedies Upon Default. Upon the occurrence of any event of default by
           ---------------------
Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity (all of which remedies shall be distinct, separate
and cumulative), the option to pursue any one or more of the following remedies,
each and all of which shall be cumulative and nonexclusive, without any notice
or demand whatsoever.

           19.2.1  Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
without prejudice to any other remedy which it may have for possession or
arrearages in rent, enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying the Premises or any part
thereof, without being liable for prosecution or any claim or damages therefor;
and Landlord may recover from Tenant the following:

                         (i)  The worth at the time of any unpaid rent which has
been earned at the time of such termination; plus

                                      -24-
<PAGE>

                         (ii)  The worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided; plus

                         (iii) The worth at the 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 have been
reasonably avoided; plus

                         (iv)  Any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, specifically including but not limited to, brokerage
commissions and advertising expenses incurred, expenses of remodeling the
Premises or any portion thereof for a new tenant, whether for the same or a
different use, and any special concessions made to obtain a new tenant; and

                         (v)   At Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time to time by
applicable law.

     The term "rent" as used in this Section 19.2 shall be deemed to be and to
mean all sums of every nature required to be paid by Tenant pursuant to the
terms of this Lease, whether to Landlord or to others.  As used in Paragraphs
19.2.1(i) and (ii), above, the "worth at the time of award" shall be computed by
allowing interest at the rate set forth in Article 25 of this Lease, but in no
case greater than the maximum amount of such interest permitted by law.  As used
in Paragraph 19.2.1(iii) above, the "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 percent (1%).

          19.2.2  Landlord shall have the remedy described in California Civil
Code Section 1951.4 (lessor may continue lease in effect after lessee's breach
and abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.

          19.2.3  Landlord shall at all times have the rights and remedies
(which shall be cumulative with each other and cumulative and in addition to
those rights and remedies available under Sections 19.2.1 and 19.2.2, above, or
any law or other provision of this Lease), without prior demand or notice except
as required by applicable law, to seek any declaratory, injunctive or other
equitable relief, and specifically enforce this Lease, or restrain or enjoin a
violation or breach of any provision hereof.

     19.3 Subleases of Tenant.  Whether or not Landlord elects to terminate this
          -------------------
Lease on account of any default by Tenant, as set forth in this Article 19,
                                                                ----------
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed
to Tenant's interest in such subleases, licenses, concessions or arrangements.
In the event of Landlord's election to succeed to Tenant's interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date
of notice by Landlord of such election, have no further right to or interest in
the rent or other consideration receivable thereunder.

     19.4 Form of Payment After Default. Following the occurrence of an event of
          -----------------------------
default by Tenant, Landlord shall have the right to require that any or all
subsequent amounts paid by Tenant to Landlord hereunder, whether to cure the
default in question or otherwise, be paid in the form of cash, money order,
cashier's or certified check drawn on an institution acceptable to Landlord, or
by other means approved by Landlord, notwithstanding any prior practice of
accepting payments in any different form.

     19.5 Efforts to Relet.  No re-entry or repossession, repairs, maintenance,
          ----------------
changes, alterations and additions, reletting, appointment of a receiver to
protect Landlord's interests hereunder, or any other action or omission by
Landlord shall be construed as an election by Landlord to terminate this Lease
or Tenant's right to possession, or to accept a surrender of the Premises, nor
shall same operate to release Tenant in whole or in part from any of Tenant's

                                      -25-
<PAGE>

obligations hereunder, unless express written notice of such intention is sent
by Landlord to Tenant.  Tenant hereby irrevocably waives any right otherwise
available under any law to redeem or reinstate this Lease.

                                  ARTICLE 20
                                  ----------

                          COVENANT OF QUIET ENJOYMENT
                          ---------------------------

     Landlord covenants that Tenant, on paying the Rent, charges for services
and other payments herein reserved and on keeping, observing and performing all
the other terms, covenants, conditions, provisions and agreements herein
contained on the part of Tenant to be kept, observed and performed, shall,
during the Lease Term, peaceably and quietly have, hold and enjoy the Premises
subject to the terms, covenants, conditions, provisions and agreements hereof
without interference by any persons lawfully claiming by or through Landlord.
The foregoing covenant is in lieu of any other covenant express or implied.

                                  ARTICLE 21
                                  ----------

                                SECURITY DEPOSIT
                                ----------------

     Concurrent with Tenant's execution of this Lease, Tenant shall deposit with
Landlord a security deposit (the "Security Deposit") in the amount set forth in
Section 7 of the Summary, as security for the faithful performance by Tenant of
all of its obligations under this Lease.  If Tenant defaults with respect to any
provisions of this Lease, including, but not limited to, the provisions relating
to the payment of Rent, the removal of property and the repair of resultant
damage, Landlord may, without notice to Tenant, but shall not be required to
apply all or any part of the Security Deposit for the payment of any Rent or any
other sum in default and Tenant shall, upon demand therefor, restore the
Security Deposit to its original amount.  Any unapplied portion of the Security
Deposit shall be returned to Tenant, or, at Landlord's option, to the last
assignee of Tenant's interest hereunder, within sixty (60) days following the
expiration of the Lease Term.  Tenant shall not be entitled to any interest on
the Security Deposit.  Tenant hereby waives the provisions of Section 1950.7 of
the California Civil Code, or any successor statute.

                                  ARTICLE 22
                                  ----------

                         SUBSTITUTION OF OTHER PREMISES
                         ------------------------------

     Landlord shall have the right, not more than once during the Lease Term, to
relocate the Premises to other space in the Project comparable to the Premises,
and all terms hereof shall apply to the new space with equal force; provided
that Tenant's Base Rent shall not be increased as a result of such relocation of
the Premises; and provided further that Tenant shall not be required to pay Base
Rent for the first (1st) two (2) full months following such relocation.  In such
event, Landlord shall give Tenant at least ninety (90) days prior written
notice, shall provide Tenant, at Landlord's sole cost and expense, with tenant
improvements at least equal in quality to those in the Premises and shall move
Tenant's effects to the new space at Landlord's sole cost and expense at such
time and in such manner as to inconvenience Tenant as little as reasonably
practicable.  In addition, Landlord shall reimburse Tenant for the reasonable
costs and expenses incurred by Tenant in connection with such relocation
(including, but not limited to, the costs of reasonable supplies of replacement
stationery, change of address notices, and telephone and computer installations,
cabling and wiring), within thirty (30) days of Landlord's receipt of an invoice
therefor.  Simultaneously with such relocation of the Premises, the parties
shall immediately execute an amendment to this Lease stating the relocation of
the Premises.

                                  ARTICLE 23
                                  ----------

                                     SIGNS
                                     -----

     23.1  Full Building.  Subject to Landlord's prior written approval, in its
           -------------
reasonable discretion, and provided all signs are in keeping with the quality,
design and style of the Building and Project, Tenant, if the Premises comprise
an entire Building, at its sole cost and expense, may install identification
signage anywhere in the Premises, provided that such signs must not be visible
from the exterior of the Building.

                                      -26-
<PAGE>

     23.2  Prohibited Signage and Other Items. Any signs, notices, logos,
           ----------------------------------
pictures, names or advertisements which are installed and that have not been
separately approved by Landlord may be removed without notice by Landlord at the
sole expense of Tenant. Tenant may not install any signs on the exterior or roof
of the Project or the Common Areas. Any signs, window coverings, or blinds (even
if the same are located behind the Landlord-approved window coverings for the
Building), or other items visible from the exterior of the Premises or Building,
shall be subject to the prior approval of Landlord, in its sole discretion.

     23.3  Monument Signage. The Tenant named in this Lease (the "Original
           ----------------
Tenant") only shall have the non-exclusive right to have a sign on each of the
existing monuments at the entrances to the Project on San Tomas Expressway and
Walsh Road and to have a sign on the existing monument located at the entrance
to the Project (the "Monument"); provided that (i) the location of Tenant's sign
on the Monument shall be designated by Landlord, (ii) the size, materials,
design and other specifications of Tenant's sign on the Monument ("Tenant's
Sign") shall be subject to Landlord's prior written consent, which consent may
be withheld in Landlord's sole discretion; (iii) Tenant's Sign shall comply with
all applicable governmental rules and regulations; and (iv) Tenant's Sign shall
be personal to the Original Tenant, not be transferable to transferees of
Tenant, and shall only apply in the event the Original Tenant occupies the
entire Premises. Landlord shall be responsible for the cost of the Monument, and
Tenant shall be responsible for all costs incurred by Tenant in connection with
the design, construction, installation, maintenance, repair, compliance with
laws and removal of Tenant's Sign. Tenant shall be responsible for the removal
of Tenant's Sign upon the expiration or earlier termination of this Lease, or
upon the expiration of Tenant's right to Tenant's Sign hereunder.

                                  ARTICLE 24
                                  ----------

                              COMPLIANCE WITH LAW
                              -------------------

     Tenant shall not do anything or suffer anything to be done in or about the
Premises or the Project which will in any way conflict with any law, statute,
ordinance or other governmental rule, regulation or requirement now in force or
which may hereafter be enacted or promulgated (collectively, "Applicable Laws").
At its sole cost and expense, Tenant shall promptly comply with all such
Applicable Laws which relate to (i) Tenant's use of the Premises, (ii) the
Alterations or tenant improvements in the Premises, or (iii) the "Base
Building," as that term is defined below, but, as to the Base Building, only to
the extent such obligations are triggered by, and directly related to, Tenant's
Alterations, the Tenant Improvements, or Tenant's use of the Premises for non-
general office use.  Should any standard or regulation now or hereafter be
imposed on Landlord or Tenant by a state, federal or local governmental body
charged with the establishment, regulation and enforcement of occupational,
health or safety standards for employers, employees, landlords or tenants, then
Tenant agrees, at its sole cost and expense, to comply promptly with such
standards or regulations.  Tenant shall be responsible, at its sole cost and
expense, to make all alterations to the Premises as are required to comply with
the governmental rules, regulations, requirements or standards described in this
Article 24.  The judgment of any court of competent jurisdiction or the
----------
admission of Tenant in any judicial action, regardless of whether Landlord is a
party thereto, that Tenant has violated any of said governmental measures, shall
be conclusive of that fact as between Landlord and Tenant.  Landlord shall
comply with all Applicable Laws relating to the Base Building, to the extent
that compliance with such Applicable Laws is not the responsibility of Tenant
under this Lease, provided that Landlord's failure to comply therewith would
prohibit Tenant from obtaining or maintaining a certificate of occupancy for the
Premises, or would unreasonably and materially affect the safety of Tenant's
employees or create a significant health hazard for Tenant's employees or would
prevent Tenant from using the Premises for its intended business purposes.
Landlord shall be permitted to include in Operating Expenses any costs or
expenses incurred by Landlord under this Article 24, but only to the extent
consistent with the terms of Section 4.2.7 above.  For purposes of this Lease,
the "Base Building" shall include the structural portions of the Building, and
the public restrooms and the systems and equipment located in the internal core
of the Building on the floor or floors on which the Premises are located.

                                      -27-
<PAGE>

                                  ARTICLE 25
                                  ----------

                                 LATE CHARGES
                                 ------------

     If any installment of Rent or any other sum due from Tenant shall not be
received by Landlord or Landlord's designee within five (5) days after said
amount is due, then Tenant shall pay to Landlord a late charge equal to five
percent (5%) of the overdue amount plus any attorneys' fees incurred by Landlord
by reason of Tenant's failure to pay Rent and/or other charges when due
hereunder.  The late charge shall be deemed Additional Rent and the right to
require it shall be in addition to all of Landlord's other rights and remedies
hereunder or at law and shall not be construed as liquidated damages or as
limiting Landlord's remedies in any manner.  In addition to the late charge
described above, any Rent or other amounts owing hereunder which are not paid
within ten (10) days after the date they are due shall bear interest from the
date when due until paid at a rate per annum equal to the lesser of (i) the
annual "Bank Prime Loan" rate cited in the Federal Reserve Statistical Release
Publication G.13(415), published on the first Tuesday of each calendar month (or
such other comparable index as Landlord and Tenant shall reasonably agree upon
if such rate ceases to be published) plus four (4) percentage points, and (ii)
the highest rate permitted by applicable law.

                                  ARTICLE 26
                                  ----------

              LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
              ----------------------------------------------------

     26.1  Landlord's Cure. All covenants and agreements to be kept or performed
           ---------------
by Tenant under this Lease shall be performed by Tenant at Tenant's sole cost
and expense and without any reduction of Rent, except to the extent, if any,
otherwise expressly provided herein. If Tenant shall fail to perform any
obligation under this Lease, and such failure shall continue in excess of the
time allowed under Section 19.1.2, above, unless a specific time period is
otherwise stated in this Lease, Landlord may, but shall not be obligated to,
make any such payment or perform any such act on Tenant's part without waiving
its rights based upon any default of Tenant and without releasing Tenant from
any obligations hereunder.

     26.2  Tenant's Reimbursement. Except as may be specifically provided to the
           ----------------------
contrary in this Lease, Tenant shall pay to Landlord, upon delivery by Landlord
to Tenant of statements therefor: (i) sums equal to expenditures reasonably made
and obligations incurred by Landlord in connection with the remedying by
Landlord of Tenant's defaults pursuant to the provisions of Section 26.1; (ii)
sums equal to all losses, costs, liabilities, damages and expenses referred to
in Article 10 of this Lease; and (iii) sums equal to all expenditures made and
obligations incurred by Landlord in collecting or attempting to collect the Rent
or in enforcing or attempting to enforce any rights of Landlord under this Lease
or pursuant to law, including, without limitation, all legal fees and other
amounts so expended. Tenant's obligations under this Section 26.2 shall survive
the expiration or sooner termination of the Lease Term.

                                  ARTICLE 27
                                  ----------

                               ENTRY BY LANDLORD
                               -----------------

     Landlord reserves the right at all reasonable times and upon reasonable
notice to Tenant (except in the case of an emergency) and provided Tenant is
given a reasonable opportunity to supply an employee of Tenant to accompany
Landlord, to enter the Premises to (i) inspect them; (ii) show the Premises to
prospective purchasers, mortgagees or tenants, or to current or prospective
mortgagees, ground or underlying lessors or insurers; (iii) post notices of
nonresponsibility; or (iv) alter, improve or repair the Premises or the
Building, or for structural alterations, repairs or improvements to the Building
or the Building's systems and equipment.  Notwithstanding anything to the
contrary contained in this Article 27, Landlord may enter the Premises at any
time to (A) perform services required of Landlord, including janitorial service;
(B) take possession due to any breach of this Lease in the manner provided
herein; and (C) perform any covenants of Tenant which Tenant fails to perform.
Landlord may make any such entries without the abatement of Rent (except as
provided in Section 6.4 of this Lease) and may take such reasonable steps as
required to accomplish the stated purposes.  Tenant hereby waives any claims for
damages or for any injuries or inconvenience to or interference with Tenant's
business, lost profits, any loss of occupancy or quiet enjoyment of the
Premises, and any other loss occasioned thereby.  For each of the above
purposes, Landlord shall at all times have a key

                                      -28-
<PAGE>

with which to unlock all the doors in the Premises, excluding Tenant's vaults,
safes and special security areas designated in advance by Tenant. In an
emergency, Landlord shall have the right to use any means that Landlord may deem
proper to open the doors in and to the Premises. Any entry into the Premises by
Landlord in the manner hereinbefore described shall not be deemed to be a
forcible or unlawful entry into, or a detainer of, the Premises, or an actual or
constructive eviction of Tenant from any portion of the Premises. No provision
of this Lease shall be construed as obligating Landlord to perform any repairs,
alterations or decorations except as otherwise expressly agreed to be performed
by Landlord herein.

                                  ARTICLE 28
                                  ----------

                                 TENANT PARKING
                                 --------------

     28.1  Tenant Parking Passes. Tenant shall be permitted, throughout the
           ---------------------
Lease Term, to use on a non-exclusive basis, free of charge, the number of
parking passes set forth in Section 8 of the Summary, which passes shall relate
to the Project's parking facilities.. Tenant's continued right to use the
parking passes is conditioned upon Tenant abiding by all rules and regulations
which are prescribed from time to time for the orderly operation and use of the
parking facility where the parking passes are located, including any sticker or
other identification system established by Landlord, Tenant's cooperation in
seeing that Tenant's employees and visitors also comply with such rules and
regulations and Tenant not being in default under this Lease.

     28.2  Other Terms.  Landlord specifically reserves the right to change the
           -----------
size, configuration, design, layout and all other aspects of the Project parking
facility at any time and Tenant acknowledges and agrees that Landlord may,
without incurring any liability to Tenant and without any abatement of Rent
under this Lease, from time to time, close-off or restrict access to the Project
parking facility for purposes of permitting or facilitating any such
construction, alteration or improvements. Landlord may delegate its
responsibilities hereunder to a parking operator in which case such parking
operator shall have all the rights of control attributed hereby to the Landlord.
The parking passes provided to Tenant pursuant to this Article 28 are provided
to Tenant solely for use by Tenant's own personnel and such passes may not be
transferred, assigned, subleased or otherwise alienated by Tenant without
Landlord's prior approval.

     28.3  Parking Procedures. The parking passes initially will not be
           ------------------
separately identified; however Landlord reserves the right in its sole and
absolute discretion to separately identify by signs or other markings the area
to which Tenant's parking passes relate. Landlord shall have no obligation to
monitor the use of such parking facility, nor shall Landlord be responsible for
any loss or damage to any vehicle or other property or for any injury to any
person. Tenant's parking passes shall be used only for parking of automobiles no
larger than full size passenger automobiles, sport utility vehicles or pick-up
trucks. Tenant shall comply with all rules and regulations which may be adopted
by Landlord from time to time with respect to parking and/or the parking
facilities servicing the Project. Tenant shall not at any time use more parking
passes than the number so allocated to Tenant or park its vehicles or the
vehicles of others in any portion of the Project parking facility not designated
by Landlord as a non-exclusive parking area. Tenant shall not have the exclusive
right to use any specific parking space. If Landlord grants to any other tenant
the exclusive right to use any particular parking space(s), Tenant shall not use
such spaces. All trucks (other than pick-up trucks) and delivery vehicles shall
be (i) parked at the loading dock of the Building, (ii) loaded and unloaded in a
manner which does not interfere with the businesses of other occupants of the
Project, and (iii) permitted to remain on the Project only so long as is
reasonably necessary to complete loading and unloading. In the event Landlord
elects in its sole and absolute discretion or is required by any law to limit or
control parking, whether by validation of parking tickets or any other method of
assessment, Tenant agrees to participate in such validation or assessment
program under such reasonable rules and regulations as are from time to time
established by Landlord.

                                  ARTICLE 29
                                  ----------

                            MISCELLANEOUS PROVISIONS
                            ------------------------

     29.1  Terms; Captions.  The words "Landlord" and "Tenant" as used herein
           ---------------
shall include the plural as well as the singular. The necessary grammatical
changes required to make

                                      -29-
<PAGE>

the provisions hereof apply either to corporations or partnerships or
individuals, men or women, as the case may require, shall in all cases be
assumed as though in each case fully expressed. The captions of Articles and
Sections are for convenience only and shall not be deemed to limit, construe,
affect or alter the meaning of such Articles and Sections.

     29.2  Binding Effect. Subject to all other provisions of this Lease, each
           --------------
of the covenants, conditions and provisions of this Lease shall extend to and
shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective heirs, personal
representatives, successors or assigns, provided this clause shall not permit
any assignment by Tenant contrary to the provisions of Article 14 of this Lease.

     29.3  No Air Rights.  No rights to any view or to light or air over any
           -------------
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease.  If at any time any windows of the Premises are
temporarily darkened or the light or view therefrom is obstructed by reason of
any repairs, improvements, maintenance or cleaning in or about the  Project, the
same shall be without liability to Landlord and without any reduction or
diminution of Tenant's obligations under this Lease.

     29.4  Modification of Lease.  Should any current or prospective mortgagee
           ---------------------
ground lessor for the Building or Project require a modification of this Lease,
which modification will not cause an increased cost or expense to Tenant or in
any other way materially and adversely change the rights and obligations of
Tenant hereunder, then and in such event, Tenant agrees that this Lease may be
so modified and agrees to execute whatever documents are reasonably required
therefor and to deliver the same to Landlord within ten (10) days following a
request therefor.  At the request of Landlord or any mortgagee or ground lessor,
Tenant agrees to execute a short form of Lease and deliver the same to Landlord
within ten (10) days following the request therefor.

     29.5  Transfer of Landlord's Interest. Tenant acknowledges that Landlord
           -------------------------------
has the right to transfer all or any portion of its interest in the Project or
Building and in this Lease, and Tenant agrees that in the event of any such
transfer, Landlord shall automatically be released from all liability under this
Lease and Tenant agrees to look solely to such transferee for the performance of
Landlord's obligations hereunder after the date of transfer and such transferee
shall be deemed to have fully assumed and be liable for all obligations of this
Lease to be performed by Landlord, including the return of any Security Deposit,
and Tenant shall attorn to such transferee. Tenant further acknowledges that
Landlord may assign its interest in this Lease to a mortgage lender as
additional security and agrees that such an assignment shall not release
Landlord from its obligations hereunder and that Tenant shall continue to look
to Landlord for the performance of its obligations hereunder.

     29.6  Prohibition Against Recording. Except as provided in Section 29.4 of
           -----------------------------
this Lease, neither this Lease, nor any memorandum, affidavit or other writing
with respect thereto, shall be recorded by Tenant or by anyone acting through,
under or on behalf of Tenant.

     29.7  Landlord's Title.  Landlord's title is and always shall be paramount
           ----------------
to the title of Tenant. Nothing herein contained shall empower Tenant to do any
act which can, shall or may encumber the title of Landlord.

     29.8  Relationship of Parties. Nothing contained in this Lease shall be
           -----------------------
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.

     29.9  Application of Payments. Landlord shall have the right to apply
           -----------------------
payments received from Tenant pursuant to this Lease, regardless of Tenant's
designation of such payments, to satisfy any obligations of Tenant hereunder, in
such order and amounts as Landlord, in its sole discretion, may elect.

     29.10 Time of Essence. Time is of the essence with respect to the
           ---------------
performance of every provision of this Lease in which time of performance is a
factor.

     29.11 Partial Invalidity.  If any term, provision or condition contained in
           ------------------
this Lease shall, to any extent, be invalid or unenforceable, the remainder of
this Lease, or the application of such term, provision or condition to persons
or circumstances other than those with respect to

                                      -30-
<PAGE>

which it is invalid or unenforceable, shall not be affected thereby, and each
and every other term, provision and condition of this Lease shall be valid and
enforceable to the fullest extent possible permitted by law.

     29.12  No Warranty.  In executing and delivering this Lease, Tenant has not
            -----------
relied on any representations, including, but not limited to, any representation
as to the amount of any item comprising Additional Rent or the amount of the
Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in
one or more of the exhibits attached hereto.

     29.13  Landlord Exculpation.  The liability of Landlord or the Landlord
            --------------------
Parties to Tenant for any default by Landlord under this Lease or arising in
connection herewith or with Landlord's operation, management, leasing, repair,
renovation, alteration or any other matter relating to the Project or the
Premises shall be limited solely and exclusively to an amount which is equal to
the lesser of (a) the interest of Landlord in the Building or (b) the equity
interest Landlord would have in the Building if the Building were encumbered by
third-party debt in an amount equal to eighty percent (80%) of the value of the
Building (as such value is determined by Landlord), provided that in no event
shall such liability extend to any sales or insurance proceeds received by
Landlord or the Landlord Parties in connection with the Project, Building or
Premises. Neither Landlord, nor any of the Landlord Parties shall have any
personal liability therefor, and Tenant hereby expressly waives and releases
such personal liability on behalf of itself and all persons claiming by, through
or under Tenant. The limitations of liability contained in this Section 29.13
shall inure to the benefit of Landlord's and the Landlord Parties' present and
future partners, beneficiaries, officers, directors, trustees, shareholders,
agents and employees, and their respective partners, heirs, successors and
assigns. Under no circumstances shall any present or future partner of Landlord
(if Landlord is a partnership), or trustee or beneficiary (if Landlord or any
partner of Landlord is a trust), have any liability for the performance of
Landlord's obligations under this Lease. Notwithstanding any contrary provision
herein, neither Landlord nor the Landlord Parties shall be liable under any
circumstances for injury or damage to, or interference with, Tenant's business,
including but not limited to, loss of profits, loss of rents or other revenues,
loss of business opportunity, loss of goodwill or loss of use, in each case,
however occurring.

     29.14  Entire Agreement. It is understood and acknowledged that there are
            ----------------
no oral agreements between the parties hereto affecting this Lease and this
Lease constitutes the parties' entire agreement with respect to the leasing of
the Premises and supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between the
parties hereto or displayed by Landlord to Tenant with respect to the subject
matter thereof, and none thereof shall be used to interpret or construe this
Lease. None of the terms, covenants, conditions or provisions of this Lease can
be modified, deleted or added to except in writing signed by the parties hereto.

     29.15  Right to Lease.  Landlord reserves the absolute right to effect such
            --------------
other tenancies in the Project as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building or
Project.  Tenant does not rely on the fact, nor does Landlord represent, that
any specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.

     29.16  Force Majeure.  Any prevention, delay or stoppage due to strikes,
            -------------
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease and except as to Tenant's obligations under Articles 5
and 24 of this Lease (collectively, a "Force Majeure"), notwithstanding anything
to the contrary contained in this Lease, shall excuse the performance of such
party for a period equal to any such prevention, delay or stoppage and,
therefore, if this Lease specifies a time period for performance of an
obligation of either party, that time period shall be extended by the period of
any delay in such party's performance caused by a Force Majeure.

     29.17  Waiver of Redemption by Tenant. Tenant hereby waives, for Tenant and
            ------------------------------
for all those claiming under Tenant, any and all rights now or hereafter
existing to redeem by order or

                                      -31-
<PAGE>

judgment of any court or by any legal process or writ, Tenant's right of
occupancy of the Premises after any termination of this Lease.

     29.18  Notices. All notices, demands, statements, designations, approvals
            -------
or other communications (collectively, "Notices") given or required to be given
by either party to the other hereunder or by law shall be in writing, shall be
(A) sent by United States certified or registered mail, postage prepaid, return
receipt requested ("Mail"), (B) transmitted by telecopy, if such telecopy is
promptly followed by a Notice sent by Mail, (C) delivered by a nationally
recognized overnight courier, or (D) delivered personally. Any Notice shall be
sent, transmitted, or delivered, as the case may be, to Tenant at the
appropriate address set forth in Section 9 of the Summary, or to such other
place as Tenant may from time to time designate in a Notice to Landlord, or to
Landlord at the addresses set forth below, or to such other places as Landlord
may from time to time designate in a Notice to Tenant. Any Notice will be deemed
given (i) three (3) days after the date it is posted if sent by Mail, (ii) the
date the telecopy is transmitted, (iii) the date the overnight courier delivery
is made, or (iv) the date personal delivery is made or attempted to be made. If
Tenant is notified of the identity and address of Landlord's mortgagee or ground
or underlying lessor, Tenant shall give to such mortgagee or ground or
underlying lessor written notice of any default by Landlord under the terms of
this Lease by registered or certified mail, and such mortgagee or ground or
underlying lessor shall be given a reasonable opportunity to cure such default
prior to Tenant's exercising any remedy available to Tenant. As of the date of
this Lease, any Notices to Landlord must be sent, transmitted, or delivered, as
the case may be, to the following addresses:

                    DivcoWest Group, LLC
                    150 Spear Street
                    San Francisco, California 94105
                    Attn: Lesli Wang

                    with a copy to:

                    DivcoWest Group, LLC
                    150 Almaden Boulevard
                    Suite 700
                    San Jose, California 95113
                    Attention: Asset Manager

                    and

                    Allen, Matkins, Leck, Gamble & Mallory
                    1999 Avenue of the Stars, Suite 1800
                    Los Angeles, California 90067
                    Attention: Anton N. Natsis, Esq.

     29.19  Joint and Several. If there is more than one Tenant, the obligations
            -----------------
imposed upon Tenant under this Lease shall be joint and several.

     29.20  Authority.  If Tenant is a corporation, trust or partnership, each
            ---------
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in California and that Tenant has full right and authority to execute
and deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so.  In such event, Tenant shall, within ten (10) days after
execution of this Lease, deliver to Landlord satisfactory evidence of such
authority and, if a corporation, upon demand by Landlord, also deliver to
Landlord satisfactory evidence of (i) good standing in Tenant's state of
incorporation and (ii) qualification to do business in California.

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

                                      -32-
<PAGE>

     29.22  Governing Law; WAIVER OF TRIAL BY JURY. This Lease shall be
            --------------------------------------
construed and enforced in accordance with the laws of the State of California.
IN ANY ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT
TO (I) THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF CALIFORNIA,
(II) SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) IN
THE INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE
OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S
USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY
EMERGENCY OR STATUTORY REMEDY. IN THE EVENT LANDLORD COMMENCES ANY SUMMARY
PROCEEDINGS OR ACTION FOR NONPAYMENT OF BASE RENT OR ADDITIONAL RENT, TENANT
SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH
COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION, BUT SHALL BE
RELEGATED TO AN INDEPENDENT ACTION AT LAW.

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

     29.24  Brokers.  Landlord and Tenant hereby warrant to each other that they
            -------
have had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 11 of the Summary (the "Brokers"), and that they know of no
other real estate broker or agent who is entitled to a commission in connection
with this Lease. Each party agrees to indemnify and defend the other party
against and hold the other party harmless from any and all claims, demands,
losses, liabilities, lawsuits, judgments, costs and expenses (including without
limitation reasonable attorneys' fees) with respect to any leasing commission or
equivalent compensation alleged to be owing on account of any dealings with any
real estate broker or agent, other than the Brokers, occurring by, through, or
under the indemnifying party.

     29.25  Independent Covenants.  This Lease shall be construed as though the
            ---------------------
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord's expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord.

     29.26  Project or Building Name and Signage.  Landlord shall have the right
            ------------------------------------
at any time to change the name of the Project or Building and to install, affix
and maintain any and all signs on the exterior and on the interior of the
Project or Building as Landlord may, in Landlord's sole discretion, desire.
Tenant shall not use the name of the Project or Building or use pictures or
illustrations of the Project or Building in advertising or other publicity or
for any purpose other than as the address of the business to be conducted by
Tenant in the Premises, without the prior written consent of Landlord.

     29.27  Counterparts.  This Lease may be executed in counterparts with the
            ------------
same effect as if both parties hereto had executed the same document. Both
counterparts shall be construed together and shall constitute a single lease.

     29.28  Confidentiality. Tenant acknowledges that the content of this Lease
            ---------------
and any related documents are confidential information. Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant's financial,
legal, and space planning consultants.

     29.29  Transportation Management. Tenant shall fully comply with all
            -------------------------
present or future programs intended to manage parking, transportation or traffic
in and around the Building, and in connection therewith, Tenant shall take
responsible action for the transportation planning and management of all
employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other transportation-
related committees or entities.

                                      -33-
<PAGE>

     29.30  Building Renovations.  It is specifically understood and agreed that
            --------------------
Landlord has made no representation or warranty to Tenant and has no obligation
and has made no promises to alter, remodel, improve, renovate, repair or
decorate the Premises, Building, or any part thereof and that no representations
respecting the condition of the Premises or the Building have been made by
Landlord to Tenant except as specifically set forth herein or in the Tenant Work
Letter.  However, Tenant hereby acknowledges that Landlord is currently
renovating or may during the Lease Term renovate, improve, alter, or modify
(collectively, the "Renovations") the Project, the Building and/or the Premises
including without limitation the parking structure, common areas, systems and
equipment, roof, and structural portions of the same, which Renovations may
include, without limitation, (i) installing sprinklers in the Building common
areas and tenant spaces, (ii) modifying the common areas and tenant spaces to
comply with applicable laws and regulations, including regulations relating to
the physically disabled, seismic conditions, and building safety and security,
and (iii) installing new floor covering, lighting, and wall coverings in the
Building common areas, and in connection with any Renovations, Landlord may,
among other things, erect scaffolding or other necessary structures in the
Building, limit or eliminate access to portions of the Project, including
portions of the common areas, or perform work in the Building, which work may
create noise, dust or leave debris in the Building.  Tenant hereby agrees that
such Renovations and Landlord's actions in connection with such Renovations
shall in no way constitute a constructive eviction of Tenant nor entitle Tenant
to any abatement of Rent (except as provided in Section 6.4 of this Lease).
Landlord shall have no responsibility or for any reason be liable to Tenant for
any direct or indirect injury to or interference with Tenant's business arising
from the Renovations, nor shall Tenant be entitled to any compensation or
damages from Landlord for loss of the use of the whole or any part of the
Premises or of Tenant's personal property or improvements resulting from the
Renovations or Landlord's actions in connection with such Renovations, or for
any inconvenience or annoyance occasioned by such Renovations or Landlord's
actions.

     29.31  No Violation.  Tenant hereby warrants and represents that neither
            ------------
its execution of nor performance under this Lease shall cause Tenant to be in
violation of any agreement, instrument, contract, law, rule or regulation by
which Tenant is bound, and Tenant shall protect, defend, indemnify and hold
Landlord harmless against any claims, demands, losses, damages, liabilities,
costs and expenses, including, without limitation, reasonable attorneys' fees
and costs, arising from Tenant's breach of this warranty and representation.

     29.32  Communications and Computer Lines.  Tenant may install, maintain,
            ---------------------------------
replace, remove or use any communications or computer wires and cables
(collectively, the "Lines") at the Project in or serving the Premises, provided
that (i) Tenant shall obtain Landlord's prior written consent, use an
experienced and qualified contractor approved in writing by Landlord, and comply
with all of the other provisions of Articles 7 and 8 of this Lease, (ii) an
acceptable number of spare Lines and space for additional Lines shall be
maintained for existing and future occupants of the Project, as determined in
Landlord's reasonable opinion, (iii) the Lines therefor (including riser cables)
shall be appropriately insulated to prevent excessive electromagnetic fields or
radiation, and shall be surrounded by a protective conduit reasonably acceptable
to Landlord, (iv) any new or existing Lines servicing the Premises shall comply
with all applicable governmental laws and regulations, (v) as a condition to
permitting the installation of new Lines, Landlord may require that Tenant
remove existing Lines located in or serving the Premises and repair any damage
in connection with such removal, and (vi) Tenant shall pay all costs in
connection therewith.  Landlord reserves the right to require that Tenant remove
any Lines located in or serving the Premises which are installed in violation of
these provisions, or which are at any time in violation of any laws or represent
a dangerous or potentially dangerous condition.

     29.33  Development of the Project.
            --------------------------

            29.33.1    Subdivision. Landlord reserves the right to further
                       -----------
subdivide all or a portion of the Project, provided that Tenant's rights under
this Lease are not materially adversely affected thereby. Tenant agrees to
execute and deliver, upon demand by Landlord and in the form requested by
Landlord, any additional documents needed to conform this Lease to the
circumstances resulting from such subdivision.

            29.33.2    The Other Improvements. If portions of the Project or
                       ----------------------
property adjacent to the Project (collectively, the "Other Improvements") are
owned by an entity other than Landlord, Landlord, at its option, may enter into
an agreement with the owner or owners of

                                      -34-
<PAGE>

any or all of the Other Improvements to provide (i) for reciprocal rights of
access and/or use of the Project and the Other Improvements, (ii) for the common
management, operation, maintenance, improvement and/or repair of all or any
portion of the Project and the Other Improvements, (iii) for the allocation of a
portion of the Direct Expenses to the Other Improvements and the operating
expenses and taxes for the Other Improvements to the Project, and (iv) for the
use or improvement of the Other Improvements and/or the Project in connection
with the improvement, construction, and/or excavation of the Other Improvements
and/or the Project. Nothing contained herein shall be deemed or construed to
limit or otherwise affect Landlord's right to convey all or any portion of the
Project or any other of Landlord's rights described in this Lease.

            29.33.3  Construction of Project and Other Improvements. Tenant
                     ----------------------------------------------
acknowledges that portions of the Project and/or the Other Improvements may be
under construction following Tenant's occupancy of the Premises, and that such
construction may result in levels of noise, dust, obstruction of access, etc.
which are in excess of that present in a fully constructed project. Tenant
hereby waives any and all rent offsets or claims of constructive eviction which
may arise in connection with such construction.

     29.34  Office and Communications Services.
            ----------------------------------

            29.34.1  The Provider. Landlord has advised Tenant that certain
                     ------------
office and communications services may be offered to tenants of the Project by a
concessionaire under contract to Landlord ("Provider"). Tenant shall be
permitted to contract with Provider for the provision of any or all of such
services on such terms and conditions as Tenant and Provider may agree.

            29.34.2  Other Terms. Tenant acknowledges and agrees that: (i)
                     -----------
Landlord has made no warranty or representation to Tenant with respect to the
availability of any such services, or the quality, reliability or suitability
thereof; (ii) the Provider is not acting as the agent or representative of
Landlord in the provision of such services, and Landlord shall have no liability
or responsibility for any failure or inadequacy of such services, or any
equipment or facilities used in the furnishing thereof, or any act or omission
of Provider, or its agents, employees, representatives, officers or contractors;
(iii) Landlord shall have no responsibility or liability for the installation,
alteration, repair, maintenance, furnishing, operation, adjustment or removal of
any such services, equipment or facilities; and (iv) any contract or other
agreement between Tenant and Provider shall be independent of this Lease, the
obligations of Tenant hereunder, and the rights of Landlord hereunder, and,
without limiting the foregoing, no default or failure of Provider with respect
to any such services, equipment or facilities, or under any contract or
agreement relating thereto, shall have any effect on this Lease or give to
Tenant any offset or defense to the full and timely performance of its
obligations hereunder, or entitle Tenant to any abatement of rent or additional
rent or any other payment required to be made by Tenant hereunder, or constitute
any accrual or constructive eviction of Tenant, or otherwise give rise to any
other claim of any nature against Landlord.

                                      -35-
<PAGE>

     IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.

                                   "Landlord":

                                   SAN TOMAS PROPERTIES, LLC,
                                   a Delaware limited liability company

                                   By:  DivcoWest Group, LLC,
                                        a Delaware limited liability company
                                        Its: Agent

                                   By:_______________________________________

                                        Its:_________________________________

                                   "Tenant":

                                   EXTREME NETWORKS, INC.,
                                   a Delaware corporation

                                   By:_______________________________________

                                        Its:_________________________________

                                   By:_______________________________________

                                            Its:_____________________________

                                      -36-
<PAGE>

                                   EXHIBIT A
                                   ---------

                              OUTLINE OF PREMISES

                               [TO BE PROVIDED]

                                      -1-
<PAGE>

                                   EXHIBIT B
                                   ---------

                              TENANT WORK LETTER

     This Tenant Work Letter shall set forth the terms and conditions relating
to the construction of the Premises.  This Tenant Work Letter is essentially
organized chronologically and addresses the issues of the construction of the
Premises, in sequence, as such issues will arise during the actual construction
of the Premises.  All references in this Tenant Work Letter to Articles or
Sections of "this Lease" shall mean the relevant portions of Articles 1 through
                                                             ------------------
29 of the Office Lease to which this Tenant Work Letter is attached as Exhibit
--                                                                     -------
B, and all references in this Tenant Work Letter to Sections of "this Tenant
-
Work Letter" shall mean the relevant portions of Sections 1 through 5 of this
                                                 --------------------
Tenant Work Letter.

                                   SECTION 1

                  DELIVERY OF THE PREMISES AND BASE BUILDING

     Upon the full execution and delivery of this Lease by Landlord and Tenant,
Landlord shall deliver the Premises and "Base Building," as that term is defined
below, to Tenant, and Tenant shall accept the Premises and Base Building from
Landlord in their presently existing, "as-is" condition.  The "Base Building"
shall consist of those portions of the Premises which were in existence prior to
the construction of the tenant improvements in the Premises for the prior tenant
of the Premises.

                                   SECTION 2

                              TENANT IMPROVEMENTS

     2.1  Tenant Improvement Allowance.  Tenant shall be entitled to a one-time
          ----------------------------
tenant improvement allowance (the "Tenant Improvement Allowance") in the amount
of $5.00 per rentable square foot of the Premises for the costs relating to the
initial design and construction of Tenant's improvements, which are permanently
affixed to the Premises (the "Tenant Improvements").  In no event shall Landlord
be obligated to make disbursements pursuant to this Tenant Work Letter in a
total amount which exceeds the Tenant Improvement Allowance.

     2.2  Disbursement of the Tenant Improvement Allowance.
          ------------------------------------------------

          2.2.1    Tenant Improvement Allowance Items.  Except as otherwise set
                   ----------------------------------
forth in this Tenant Work Letter, the Tenant Improvement Allowance shall be
disbursed by Landlord only for the following items and costs (collectively the
"Tenant Improvement Allowance Items"):

                    2.2.1.1   Payment of the fees of the "Architect" and the
"Engineers," as those terms are defined in Section 3.1 of this Tenant Work
                                           -----------
Letter, which fees shall, notwithstanding anything to the contrary contained in
this Tenant Work Letter, not exceed an aggregate amount equal to $3.50 per
usable square foot of the Premises, and payment of the fees incurred by, and the
cost of documents and materials supplied by, Landlord and Landlord's consultants
in connection with the preparation and review of the "Construction Drawings," as
that term is defined in Section 3.1 of this Tenant Work Letter;
                        -----------

                    2.2.1.2   The payment of plan check, permit and license fees
relating to construction of the Tenant Improvements;

                    2.2.1.3   The cost of construction of the Tenant
Improvements, including, without limitation, testing and inspection costs,
freight elevator usage, hoisting and trash removal costs, and contractors' fees
and general conditions;

                    2.2.1.4   The cost of any changes in the Base Building when
such changes are required by the Construction Drawings (including if such
changes are due to the fact that such work is prepared on an unoccupied basis),
such cost to include all direct architectural and/or engineering fees and
expenses incurred in connection therewith;

                                      -1-
<PAGE>

                    2.2.1.5   The cost of any changes to the Construction
Drawings or Tenant Improvements required by all applicable building codes (the
"Code");

                    2.2.1.6   The cost of Landlord's Work;

                    2.2.1.7   The cost of the "Coordination Fee," as that term
is defined in Section 4.2.2 of this Tenant Work Letter;
              -------------

                    2.2.1.8   Sales and use taxes; and

                    2.2.1.9   All other costs to be expended by Landlord in
connection with the construction of the Tenant Improvements.

          2.2.2     Disbursement of Tenant Improvement Allowance.  Following
                    --------------------------------------------
Tenant's completion of the construction of the Tenant Improvements, and
Landlord's receipt of the "Allowance Documentation," as that term is defined
below, Landlord shall disburse the Tenant Improvement Allowance to Tenant. For
the purposes of this Tenant Work Letter, the Allowance Documentation shall be
defined as (i) invoices from all of "Tenant's Agents," as that term is defined
in Section 4.1.2 of this Tenant Work Letter, for labor rendered and materials
   -------------
delivered to the Premises; (ii) properly executed mechanics lien releases in
compliance with both California Civil Code Section 3262(d)(2) and either Section
3262(d)(3) or Section 3262(d)(4), (iii) a certificate from Architect, in a form
reasonably acceptable to Landlord, certifying that the construction of the
Tenant Improvements in the Premises has been substantially completed, and (iv)
all other information reasonably requested by Landlord.  Tenant's request for
payment shall be deemed Tenant's acceptance and approval of the work furnished.
Thereafter, Landlord shall deliver a check to Tenant for that portion of the
Tenant Improvement Allowance spent by Tenant, as evidenced by the Allowance
Documentation, provided that Landlord does not dispute any request for payment
based on non-compliance of any work with the "Approved Working Drawings," as
that term is defined in Section 3.4 below, or due to any substandard work which
                        -----------
adversely affects the mechanical, electrical, plumbing, heating, ventilating and
air conditioning, life-safety or other systems of the Building, the curtain wall
of the Building, the structure or exterior appearance of the Building, or any
other tenant's use of such other tenant's leased premises in the Building, or
for any other reason.  Landlord's payment of such amounts shall not be deemed
Landlord's approval or acceptance of the work furnished or materials supplied as
set forth in Tenant's payment request.

          2.2.3     Other Terms.  Landlord shall only be obligated to make
                    -----------
disbursements from the Tenant Improvement Allowance to the extent costs are
incurred by Tenant for Tenant Improvement Allowance Items. All Tenant
Improvement Allowance Items for which the Tenant Improvement Allowance has been
made available shall be deemed Landlord's property under the terms of this
Lease. Any portion of the Tenant Improvement Allowance which is not utilized by
Tenant within six (6) months from the delivery of the Premises to Tenant shall
revert to and become the sole property of Landlord.

     2.3  Standard Tenant Improvement Package.  Landlord has established
          -----------------------------------
specifications (the "Building Standard Tenant Improvements") for the Building
standard components to be used in the construction of the Tenant Improvements in
the Premises.  The quality of Tenant Improvements shall be equal to or of
greater quality than the quality of the Building Standard Tenant Improvements,
provided that Landlord may, at Landlord's option, require the Tenant
Improvements to comply with certain Building Standard Tenant Improvements.
Landlord may make changes to the Specifications for the Standard Improvement
Package from time to time.

     2.4  Removal of Above Building Standard Tenant Improvements.  "Above
          ------------------------------------------------------
Standard Tenant Improvements" shall mean (a) any part of the Tenant Improvements
which do not constitute Building Standard Tenant Improvements, including, but
not limited to, plumbing and millwork; (b) any changes in or additions to the
Tenant Improvements made at the request of Tenant or due to any other act or
omission on the part of Tenant; and (c) a configuration of the Tenant
Improvements which is not usual and customary for normal occupancy. If so
directed by Landlord at the time consent to the Approved Working Drawings is
granted pursuant to the terms of Section 3.4 of this Tenant Work Letter, Tenant,
at its sole cost and expense, shall remove from the Premises any Above Standard
Tenant Improvements designated by Landlord, and shall replace such designated
Above Standard Tenant Improvements to be removed with Building Standard Tenant
Improvements. Such removal and replacement of Above Standard Tenant

                                      -2-
<PAGE>

Improvements shall be performed promptly and shall be completed by Tenant on or
before the end of the Term of this Lease if notice of removal is given at least
thirty (30) days prior to the end of the Term, and if Tenant fails to remove
and/or replace any Above Standard Tenant Improvements, Landlord may do so and
Tenant shall reimburse Landlord for the cost of such removal and/or replacement.

                                   SECTION 3

                             CONSTRUCTION DRAWINGS

     3.1  Selection of Architect/Construction Drawings.  Tenant shall retain the
          --------------------------------------------
architect/space planner designated by Landlord (the "Architect") to prepare the
"Construction Drawings," as that term is defined in this Section 3.1.  Tenant
                                                         -----------
shall retain the engineering consultants designated by Landlord (the
"Engineers") to prepare all plans and engineering working drawings relating to
the structural, mechanical, electrical, plumbing, HVAC, lifesafety, and
sprinkler work in the Premises, which work is not part of the Base Building.
The plans and drawings to be prepared by Architect and the Engineers hereunder
shall be known collectively as the "Construction Drawings."  All Construction
Drawings shall comply with the drawing format and specifications determined by
Landlord, and shall be subject to Landlord's approval.  Tenant and Architect
shall verify, in the field, the dimensions and conditions as shown on the
relevant portions of the base building plans, and Tenant and Architect shall be
solely responsible for the same, and Landlord shall have no responsibility in
connection therewith.  Landlord's review of the Construction Drawings as set
forth in this Section 3, shall be for its sole purpose and shall not imply
              ---------
Landlord's review of the same, or obligate Landlord to review the same, for
quality, design, Code compliance or other like matters.  Accordingly,
notwithstanding that any Construction Drawings are reviewed by Landlord or its
space planner, architect, engineers and consultants, and notwithstanding any
advice or assistance which may be rendered to Tenant by Landlord or Landlord's
space planner, architect, engineers, and consultants, Landlord shall have no
liability whatsoever in connection therewith and shall not be responsible for
any omissions or errors contained in the Construction Drawings, and Tenant's
waiver and indemnity set forth in this Lease shall specifically apply to the
Construction Drawings.

     3.2  Final Space Plan.  Tenant shall supply Landlord with four (4) copies
          ----------------
signed by Tenant of its final space plan for the Premises before any
architectural working drawings or engineering drawings have been commenced. The
final space plan (the "Final Space Plan") shall include a layout and designation
of all offices, rooms and other partitioning, their intended use, and equipment
to be contained therein. Landlord may request clarification or more specific
drawings for special use items not included in the Final Space Plan. Landlord
shall advise Tenant within five (5) business days after Landlord's receipt of
the Final Space Plan for the Premises if the same is unsatisfactory or
incomplete in any respect. If Tenant is so advised, Tenant shall promptly cause
the Final Space Plan to be revised to correct any deficiencies or other matters
Landlord may reasonably require.

     3.3  Final Working Drawings.  After the Final Space Plan has been approved
          ----------------------
by Landlord, Tenant shall supply the Engineers with a complete listing of
standard and non-standard equipment and specifications, including, without
limitation, B.T.U. calculations, electrical requirements and special electrical
receptacle requirements for the Premises, to enable the Engineers and the
Architect to complete the "Final Working Drawings" (as that term is defined
below) in the manner as set forth below. Upon the approval of the Final Space
Plan by Landlord and Tenant, Tenant shall promptly cause the Architect and the
Engineers to complete the architectural and engineering drawings for the
Premises, and Architect shall compile a fully coordinated set of architectural,
structural, mechanical, electrical and plumbing working drawings in a form which
is complete to allow subcontractors to bid on the work and to obtain all
applicable permits (collectively, the "Final Working Drawings") and shall submit
the same to Landlord for Landlord's approval. Tenant shall supply Landlord with
four (4) copies signed by Tenant of such Final Working Drawings. Landlord shall
advise Tenant within five (5) business days after Landlord's receipt of the
Final Working Drawings for the Premises if the same is unsatisfactory or
incomplete in any respect. If Tenant is so advised, Tenant shall immediately
revise the Final Working Drawings in accordance with such review and any
disapproval of Landlord in connection therewith. In addition, if the Final
Working Drawings or any amendment thereof or supplement thereto shall require
alterations in the Base, Shell and Core (as contrasted with the Tenant
Improvements), and if Landlord in its sole and exclusive discretion agrees to
any such alterations, and notifies Tenant of the need and cost for such
alterations, then Tenant shall

                                      -3-
<PAGE>

pay the cost of such required changes upon receipt of bills therefor. Tenant
shall pay all direct architectural and/or engineering fees in connection
therewith.

     3.4  Approved Working Drawings.  The Final Working Drawings shall be
          -------------------------
approved by Landlord (the "Approved Working Drawings") prior to the commencement
of construction of the Premises by Tenant. After approval by Landlord of the
Final Working Drawings, Tenant may submit the same to the appropriate municipal
authorities for all applicable building permits. Tenant hereby agrees that
neither Landlord nor Landlord's consultants shall be responsible for obtaining
any building permit or certificate of occupancy for the Premises and that
obtaining the same shall be Tenant's responsibility; provided, however, that
Landlord shall cooperate with Tenant in executing permit applications and
performing other ministerial acts reasonably necessary to enable Tenant to
obtain any such permit or certificate of occupancy. No changes, modifications or
alterations in the Approved Working Drawings may be made without the prior
written consent of Landlord, which consent may not be unreasonably withheld.

                                   SECTION 4

                    CONSTRUCTION OF THE TENANT IMPROVEMENTS

     4.1  Tenant's Selection of Contractors.
          ---------------------------------

          4.1.1  The Contractor.  A general contractor shall be retained by
                 --------------
Tenant to construct the Tenant Improvements. Such general contractor
("Contractor") shall be selected by Tenant subject to Landlord's reasonable
approval, and Tenant shall deliver to Landlord notice of its selection of the
Contractor upon such selection.

          4.1.2  Tenant's Agents.  All subcontractors, laborers, materialmen,
                 ---------------
and suppliers used by Tenant (such subcontractors, laborers, materialmen, and
suppliers, and the Contractor to be known collectively as "Tenant's Agents")
must be approved in writing by Landlord, which approval shall not be
unreasonably withheld or delayed.  If Landlord does not approve any of Tenant's
proposed subcontractors, laborers, materialmen or suppliers, Tenant shall submit
other proposed subcontractors, laborers, materialmen or suppliers for Landlord's
written approval.

     4.2  Construction of Tenant Improvements by Tenant's Agents.
          ------------------------------------------------------

          4.2.1  Construction Contract; Cost Budget.  Prior to Tenant's
                 ----------------------------------
execution of the construction contract and general conditions with Contractor
(the "Contract"), Tenant shall submit the Contract to Landlord for its approval,
which approval shall not be unreasonably withheld or delayed. Prior to the
commencement of the construction of the Tenant Improvements, and after Tenant
has accepted all bids for the Tenant Improvements, Tenant shall provide Landlord
with a detailed breakdown, by trade, of the final costs to be incurred or which
have been incurred, as set forth more particularly in Sections 2.2.1.1 through
                                                      ------------------------
2.2.1.9, above, in connection with the design and construction of the Tenant
-------
Improvements to be performed by or at the direction of Tenant or the Contractor,
which costs form a basis for the amount of the Contract (the "Final Costs").

          4.2.2  Tenant's Agents.
                 ---------------

                 4.2.2.1  Landlord's General Conditions for Tenant's Agents and
                          -----------------------------------------------------
Tenant Improvement Work.  Tenant's and Tenant's Agent's construction of the
-----------------------
Tenant Improvements shall comply with the following: (i) the Tenant Improvements
shall be constructed in strict accordance with the Approved Working Drawings;
(ii) Tenant's Agents shall submit schedules of all work relating to the Tenant's
Improvements to Contractor and Contractor shall, within five (5) business days
of receipt thereof, inform Tenant's Agents of any changes which are necessary
thereto, and Tenant's Agents shall adhere to such corrected schedule; and (iii)
Tenant shall abide by all rules made by Landlord's Building manager with respect
to the use of freight, loading dock and service elevators, storage of materials,
coordination of work with the contractors of other tenants, and any other matter
in connection with this Tenant Work Letter, including, without limitation, the
construction of the Tenant Improvements. Tenant shall pay a logistical
coordination fee (the "Coordination Fee") to Landlord in an amount equal to the
product of (i) five percent (5%) and (ii) the sum of the Tenant Improvement
Allowance, the Over-Allowance Amount, as such amount may be increased hereunder,
and any other amounts expended by Tenant in connection with the design and
construction of the Tenant Improvements, which

                                      -4-
<PAGE>

Coordination Fee shall be for services relating to the coordination of the
construction of the Tenant Improvements.

               4.2.2.2  Indemnity.  Tenant's indemnity of Landlord as set forth
                        ---------
in this Lease shall also apply with respect to any and all costs, losses,
damages, injuries and liabilities related in any way to any act or omission of
Tenant or Tenant's Agents, or anyone directly or indirectly employed by any of
them, or in connection with Tenant's non-payment of any amount arising out of
the Tenant Improvements and/or Tenant's disapproval of all or any portion of any
request for payment. Such indemnity by Tenant, as set forth in this Lease, shall
also apply with respect to any and all costs, losses, damages, injuries and
liabilities related in any way to Landlord's performance of any ministerial acts
reasonably necessary (i) to permit Tenant to complete the Tenant Improvements,
and (ii) to enable Tenant to obtain any building permit or certificate of
occupancy for the Premises.

               4.2.2.3  Requirements of Tenant's Agents.  Each of Tenant's
                        -------------------------------
Agents shall guarantee to Tenant and for the benefit of Landlord that the
portion of the Tenant Improvements for which it is responsible shall be free
from any defects in workmanship and materials for a period of not less than one
(1) year from the date of completion thereof. Each of Tenant's Agents shall be
responsible for the replacement or repair, without additional charge, of all
work done or furnished in accordance with its contract that shall become
defective within one (1) year after the later to occur of (i) completion of the
work performed by such contractor or subcontractors and (ii) the Lease
Commencement Date. The correction of such work shall include, without additional
charge, all additional expenses and damages incurred in connection with such
removal or replacement of all or any part of the Tenant Improvements, and/or the
Building and/or common areas that may be damaged or disturbed thereby. All such
warranties or guarantees as to materials or workmanship of or with respect to
the Tenant Improvements shall be contained in the Contract or subcontract and
shall be written such that such guarantees or warranties shall inure to the
benefit of both Landlord and Tenant, as their respective interests may appear,
and can be directly enforced by either. Tenant covenants to give to Landlord any
assignment or other assurances which may be necessary to effect such right of
direct enforcement.

               4.2.2.4  Insurance Requirements.
                        ----------------------

                              (a)  General Coverages.  All of Tenant's Agents
                                   -----------------
     shall carry worker's compensation insurance covering all of their
     respective employees, and shall also carry public liability insurance,
     including property damage, all with limits, in form and with companies as
     are required to be carried by Tenant as set forth in this Lease.

                              (b)  Special Coverages.  Tenant shall carry
                                   -----------------
     "Builder's All Risk" insurance in anamount approved by Landlord covering
     the construction of the Tenant Improvements, and such other insurance as
     Landlord may require, it being understood and agreed that the Tenant
     Improvements shall be insured by Tenant pursuant to this Lease immediately
     upon completion thereof. Such insurance shall be in amounts and shall
     include such extended coverage endorsements as may be reasonably required
     by Landlord including, but not limited to, the requirement that all of
     Tenant's Agents shall carry excess liability and Products and Completed
     Operation Coverage insurance, each in amounts not less than $500,000 per
     incident, $1,000,000 in aggregate, and in form and with companies as are
     required to be carried by Tenant as set forth in this Lease.

                              (c)  General Terms.  Certificates for all
                                   -------------
     insurance carried pursuant to this Section 4.2.2.4 shall be delivered to
                                        ---------------
     Landlord before the commencement of construction of the Tenant Improvements
     and before the Contractor's equipment is moved onto the site. All such
     policies of insurance must contain a provision that the company writing
     said policy will give Landlord thirty (30) days prior written notice of any
     cancellation or lapse of the effective date or any reduction in the amounts
     of such insurance. In the event that the Tenant Improvements are damaged by
     any cause during the course of the construction thereof, Tenant shall
     immediately repair the same at Tenant's sole cost and expense. Tenant's
     Agents shall maintain all of the foregoing insurance coverage in force
     until the Tenant Improvements are fully completed and accepted by Landlord,
     except for any Products and Completed Operation Coverage insurance required
     by Landlord, which is to be maintained for ten (10) years following
     completion of the work and acceptance by Landlord and Tenant. All policies
     carried

                                      -5-
<PAGE>

     under this Section 4.2.2.4 shall insure Landlord and Tenant, as their
                ---------------
     interests may appear, as well as Contractor and Tenant's Agents. All
     insurance, except Workers' Compensation, maintained by Tenant's Agents
     shall preclude subrogation claims by the insurer against anyone insured
     thereunder. Such insurance shall provide that it is primary insurance as
     respects the owner and that any other insurance maintained by owner is
     excess and noncontributing with the insurance required hereunder. The
     requirements for the foregoing insurance shall not derogate from the
     provisions for indemnification of Landlord by Tenant under Section 4.2.2.2
                                                                ---------------
     of this Tenant Work Letter. Landlord may, in its discretion, require Tenant
     to obtain a lien and completion bond or some alternate form of security
     satisfactory to Landlord in an amount sufficient to ensure the lien-free
     completion of the Tenant Improvements and naming Landlord as a co-obligee.

          4.2.3  Governmental Compliance.  The Tenant Improvements shall
                 -----------------------
comply in all respects with the following: (i) the Code and other state,
federal, city or quasi-governmental laws, codes, ordinances and regulations, as
each may apply according to the rulings of the controlling public official,
agent or other person; (ii) applicable standards of the American Insurance
Association (formerly, the National Board of Fire Underwriters) and the National
Electrical Code; and (iii) building material manufacturer's specifications.

          4.2.4  Inspection by Landlord.  Landlord shall have the right to
                 ----------------------
inspect the Tenant Improvements at all times, provided however, that Landlord's
failure to inspect the Tenant Improvements shall in no event constitute a waiver
of any of Landlord's rights hereunder nor shall Landlord's inspection of the
Tenant Improvements constitute Landlord's approval of the same. Should Landlord
disapprove any portion of the Tenant Improvements, Landlord shall notify Tenant
in writing of such disapproval and shall specify the items disapproved. Any
defects or deviations in, and/or disapproval by Landlord of, the Tenant
Improvements shall be rectified by Tenant at no expense to Landlord, provided
however, that in the event Landlord determines that a defect or deviation exists
or disapproves of any matter in connection with any portion of the Tenant
Improvements and such defect, deviation or matter might adversely affect the
mechanical, electrical, plumbing, heating, ventilating and air conditioning or
life-safety systems of the Building, the structure or exterior appearance of the
Building or any other tenant's use of such other tenant's leased premises,
Landlord may, take such action as Landlord deems necessary, at Tenant's expense
and without incurring any liability on Landlord's part, to correct any such
defect, deviation and/or matter, including, without limitation, causing the
cessation of performance of the construction of the Tenant Improvements until
such time as the defect, deviation and/or matter is corrected to Landlord's
satisfaction.

          4.2.5  Meetings.  Commencing upon the execution of this Lease, Tenant
                 --------
shall hold weekly meetings at a reasonable time, with the Architect and the
Contractor regarding the progress of the preparation of Construction Drawings
and the construction of the Tenant Improvements, which meetings shall be held at
a location designated by Landlord, and Landlord and/or its agents shall receive
prior notice of, and shall have the right to attend, all such meetings, and,
upon Landlord's request, certain of Tenant's Agents shall attend such meetings.
In addition, minutes shall be taken at all such meetings, a copy of which
minutes shall be promptly delivered to Landlord. One such meeting each month
shall include the review of Contractor's current request for payment.

     4.3  Notice of Completion; Copy of Record Set of Plans.  Within ten (10)
          -------------------------------------------------
days after completion of construction of the Tenant Improvements, Tenant shall
cause a Notice of Completion to be recorded in the office of the Recorder of the
county in which the Building is located in accordance with Section 3093 of the
Civil Code of the State of California or any successor statute, and shall
furnish a copy thereof to Landlord upon such recordation. If Tenant fails to do
so, Landlord may execute and file the same on behalf of Tenant as Tenant's agent
for such purpose, at Tenant's sole cost and expense. At the concllusion of
construction, 9i) Tenant shall cause the Architect and Contractor (A) to update
the Approved Working Drawings as necessary to reflect all changes made to the
Approved Working Drawings as necessary to reflect all changes made to the best
of their knowledge that the "record-set" of as-built drawings are true and
correct, which certification shall survive the expiration or termination of this
Lease, and (C) to deliver to Landlord two (2) sets of copies of such record set
of drawings within ninety (90) days following issuance of a certificate of
occupancy for the Premises, and (ii) Tenant shall deliver to Landlord a copy of
all warranties, guaranties, and operating manuals and information relating to
the improvements, equipment, and systems in the Premises.

                                      -6-
<PAGE>

                                   SECTION 5

                                 MISCELLANEOUS

     5.1  Tenant's Representative.  Tenant has designated Mr. Jeff Westling as
          -----------------------
its sole representative with respect to the matters set forth in this Tenant
Work Letter, who shall have full authority and responsibility to act on behalf
of the Tenant as required in this Tenant Work Letter.

     5.2  Landlord's Representative.  Landlord has designated Ms. Leslie Wang
          -------------------------
as its sole representatives with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.

     5.3  Time of the Essence in This Tenant Work Letter.  Unless otherwise
          ----------------------------------------------
indicated, all references herein to a "number of days" shall mean and refer to
calendar days.  If any item requiring approval is timely disapproved by
Landlord, the procedure for preparation of the document and approval thereof
shall be repeated until the document is approved by Landlord.

     5.4  Tenant's Lease Default.  Notwithstanding any provision to the contrary
          ----------------------
contained in this Lease, if an event of default as described in the Lease or
this Tenant Work Letter has occurred at any time on or before the Substantial
Completion of the Premises, then (i) in addition to all other rights and
remedies granted to Landlord pursuant to this Lease, Landlord shall have the
right to withhold payment of all or any portion of the Tenant Improvement
Allowance and/or Landlord may cause Contractor to cease the construction of the
Premises (in which case, Tenant shall be responsible for any delay in the
substantial completion of the Premises caused by such work stoppage), and (ii)
all other obligations of Landlord under the terms of this Tenant Work Letter
shall be forgiven until such time as such default is cured pursuant to the terms
of this Lease (in which case, Tenant shall be responsible for any delay in the
substantial completion of the Premises caused by such inaction by Landlord).

                                      -7-
<PAGE>

                                   EXHIBIT C
                                   ---------

                          NOTICE OF LEASE TERM DATES

To:  _______________________
     _______________________
     _______________________
     _______________________

     Re:  Office Lease dated ____________, 20__ between ____________________, a
          _____________________ ("Landlord"), and _______________________, a
          _______________________ ("Tenant") concerning the office building
          located at ____________________________, Santa Clara, California.

Gentlemen:

     In accordance with the Office Lease (the "Lease"), we wish to advise you
and/or confirm as follows:

     1.   The Lease Term shall commence on or has commenced on ______________
          for a term of __________________ ending on __________________.

     2.   Rent commenced to accrue on __________________, in the amount of
          ________________.

     3.   If the Lease Commencement Date is other than the first day of the
          month, the first billing will contain a pro rata adjustment.  Each
          billing thereafter, with the exception of the final billing, shall be
          for the full amount of the monthly installment as provided for in the
          Lease.

     4.   Your rent checks should be made payable to __________________ at
          ___________________.

     5.   The exact number of rentable/usable square feet within the Premises is
          ____________ square feet.

                                               "Landlord":

                                                _______________________,
                                                a _____________________

                                               By:_____________________
                                                    Its: ______________
Agreed to and Accepted
as of ____________, 20___.

"Tenant":

_________________________
a _______________________

By: ___________________________
      Its: ____________________

                                   EXHIBIT C

                                      -1-
<PAGE>

                                   EXHIBIT D
                                   ---------

                             RULES AND REGULATIONS

     Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Project. In the event of any
conflict between the Rules and Regulations and the other provisions of this
Lease, the latter shall control.

     1.  Tenant shall not alter any lock or install any new or additional locks
or bolts on any doors or windows of the Premises without obtaining Landlord's
prior written consent. Tenant shall bear the cost of any lock changes or repairs
required by Tenant. Two keys will be furnished by Landlord for the Premises, and
any additional keys required by Tenant must be obtained from Landlord at a
reasonable cost to be established by Landlord. Upon the termination of this
Lease, Tenant shall restore to Landlord all keys of stores, offices, and toilet
rooms, either furnished to, or otherwise procured by, Tenant and in the event of
the loss of keys so furnished, Tenant shall pay to Landlord the cost of
replacing same or of changing the lock or locks opened by such lost key if
Landlord shall deem it necessary to make such changes.

     2.  All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises.

     3.  Landlord reserves the right to close and keep locked all entrance and
exit doors of the Building during such hours as are customary for comparable
buildings in the Santa Clara, California area. Tenant, its employees and agents
must be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register. Access to the Building may be refused unless the
person seeking access has proper identification or has a previously arranged
pass for access to the Building. Landlord will furnish passes to persons for
whom Tenant requests same in writing. Tenant shall be responsible for all
persons for whom Tenant requests passes and shall be liable to Landlord for all
acts of such persons. The Landlord and his agents shall in no case be liable for
damages for any error with regard to the admission to or exclusion from the
Building of any person. In case of invasion, mob, riot, public excitement, or
other commotion, Landlord reserves the right to prevent access to the Building
or the Project during the continuance thereof by any means it deems appropriate
for the safety and protection of life and property.

     4.  No furniture, freight or equipment of any kind shall be brought into
the Building without prior notice to Landlord. All moving activity into or out
of the Building shall be scheduled with Landlord and done only at such time and
in such manner as Landlord designates. Landlord shall have the right to
prescribe the weight, size and position of all safes and other heavy property
brought into the Building and also the times and manner of moving the same in
and out of the Building. Safes and other heavy objects shall, if considered
necessary by Landlord, stand on supports of such thickness as is necessary to
properly distribute the weight. Landlord will not be responsible for loss of or
damage to any such safe or property in any case. Any damage to any part of the
Building, its contents, occupants or visitors by moving or maintaining any such
safe or other property shall be the sole responsibility and expense of Tenant.

     5.  No furniture, packages, supplies, equipment or merchandise will be
received in the Building or carried up or down in the elevators, except between
such hours, in such specific elevator and by such personnel as shall be
designated by Landlord.

     6.  The requirements of Tenant will be attended to only upon application at
the management office for the Project or at such office location designated by
Landlord. Employees of Landlord shall not perform any work or do anything
outside their regular duties unless under special instructions from Landlord.

                                   EXHIBIT D

                                      -1-
<PAGE>

     7.  No sign, advertisement, notice or handbill shall be exhibited,
distributed, painted or affixed by Tenant on any part of the Premises or the
Building without the prior written consent of the Landlord. Tenant shall not
disturb, solicit, peddle, or canvass any occupant of the Project and shall
cooperate with Landlord and its agents of Landlord to prevent same.

     8.  The toilet rooms, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the tenant who, or whose servants, employees, agents, visitors or
licensees shall have caused same.

     9.  Tenant shall not overload the floor of the Premises, nor mark, drive
nails or screws, or drill into the partitions, woodwork or drywall or in any way
deface the Premises or any part thereof without Landlord's prior written
consent. Tenant shall not purchase spring water, ice, towel, linen, maintenance
or other like services from any person or persons not approved by Landlord.

     10. Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machine or machines other than fractional
horsepower office machines shall be installed, maintained or operated upon the
Premises without the written consent of Landlord.

     11. Tenant shall not use or keep in or on the Premises, the Building, or
the Project any kerosene, gasoline, explosive material, corrosive material,
material capable of emitting toxic fumes, or other inflammable or combustible
fluid chemical, substitute or material. Tenant shall provide material safety
data sheets for any Hazardous Material used or kept on the Premises.

     12. Tenant shall not without the prior written consent of Landlord use any
method of heating or air conditioning other than that supplied by Landlord.

     13. Tenant shall not use, keep or permit to be used or kept, any foul or
noxious gas or substance in or on the Premises, or permit or allow the Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Project by reason of noise, odors, or vibrations, or
interfere with other tenants or those having business therein, whether by the
use of any musical instrument, radio, phonograph, or in any other way. Tenant
shall not throw anything out of doors, windows or skylights or down passageways.

     14. Tenant shall not bring into or keep within the Project, the Building or
the Premises any animals, birds, aquariums, or, except in areas designated by
Landlord, bicycles or other vehicles.

     15. No cooking shall be done or permitted on the Premises, nor shall the
Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters' laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors, provided that such use is in accordance
with all applicable federal, state, county and city laws, codes, ordinances,
rules and regulations.

     16. The Premises shall not be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the use of the Premises
provided for in the Summary. Tenant shall not occupy or permit any portion of
the Premises to be occupied as an office for a messenger-type operation or
dispatch office, public stenographer or typist, or for the manufacture or sale
of liquor, narcotics, or tobacco in any form, or as a medical office, or as a
barber or manicure shop, or as an employment bureau without the express prior
written consent of Landlord. Tenant shall not engage or pay any employees on the
Premises except those actually working for such tenant on the Premises nor
advertise for laborers giving an address at the Premises.

     17. Landlord reserves the right to exclude or expel from the Project any
person who, in the judgment of Landlord, is intoxicated or under the influence
of liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.

     18. Tenant, its employees and agents shall not loiter in or on the
entrances, corridors, sidewalks, lobbies, courts, halls, stairways, elevators,
vestibules or any Common Areas for the

                                   EXHIBIT D

                                      -2-
<PAGE>

purpose of smoking tobacco products or for any other purpose, nor in any way
obstruct such areas, and shall use them only as a means of ingress and egress
for the Premises.

     19.  Tenant shall not waste electricity, water or air conditioning and
agrees to cooperate fully with Landlord to ensure the most effective operation
of the Building's heating and air conditioning system, and shall refrain from
attempting to adjust any controls. Tenant shall participate in recycling
programs undertaken by Landlord.

     20.  Tenant shall store all its trash and garbage within the interior of
the Premises. No material shall be placed in the trash boxes or receptacles if
such material is of such nature that it may not be disposed of in the ordinary
and customary manner of removing and disposing of trash and garbage in Santa
Clara, California without violation of any law or ordinance governing such
disposal. All trash, garbage and refuse disposal shall be made only through
entry-ways and elevators provided for such purposes at such times as Landlord
shall designate. If the Premises is or becomes infested with vermin as a result
of the use or any misuse or neglect of the Premises by Tenant, its agents,
servants, employees, contractors, visitors or licensees, Tenant shall forthwith,
at Tenant's expense, cause the Premises to be exterminated from time to time to
the satisfaction of Landlord and shall employ such licensed exterminators as
shall be approved in writing in advance by Landlord.

     21.  Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.

     22.  Any persons employed by Tenant to do janitorial work shall be subject
to the prior written approval of Landlord, and while in the Building and outside
of the Premises, shall be subject to and under the control and direction of the
Building manager (but not as an agent or servant of such manager or of
Landlord), and Tenant shall be responsible for all acts of such persons.

     23.  No awnings or other projection shall be attached to the outside walls
of the Building without the prior written consent of Landlord, and no curtains,
blinds, shades or screens shall be attached to or hung in, or used in connection
with, any window or door of the Premises other than Landlord standard drapes.
All electrical ceiling fixtures hung in the Premises or spaces along the
perimeter of the Building must be fluorescent and/or of a quality, type, design
and a warm white bulb color approved in advance in writing by Landlord. Neither
the interior nor exterior of any windows shall be coated or otherwise
sunscreened without the prior written consent of Landlord. Tenant shall be
responsible for any damage to the window film on the exterior windows of the
Premises and shall promptly repair any such damage at Tenant's sole cost and
expense. Tenant shall keep its window coverings closed during any period of the
day when the sun is shining directly on the windows of the Premises. Prior to
leaving the Premises for the day, Tenant shall draw or lower window coverings
and extinguish all lights. Tenant shall abide by Landlord's regulations
concerning the opening and closing of window coverings which are attached to the
windows in the Premises, if any, which have a view of any interior portion of
the Building or Building Common Areas.

     24.  The sashes, sash doors, skylights, windows, and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the windowsills.

     25.  Tenant must comply with requests by the Landlord concerning the
informing of their employees of items of importance to the Landlord.

     26.  Tenant must comply with all applicable "NO-SMOKING" or similar
ordinances. If Tenant is required under the ordinance to adopt a written smoking
policy, a copy of said policy shall be on file in the office of the Building.

     27.  Tenant hereby acknowledges that Landlord shall have no obligation to
provide guard service or other security measures for the benefit of the
Premises, the Building or the Project. Tenant hereby assumes all responsibility
for the protection of Tenant and its agents, employees, contractors, invitees
and guests, and the property thereof, from acts of third parties, including
keeping doors locked and other means of entry to the Premises closed, whether or
not Landlord, at its option, elects to provide security protection for the
Project or any portion thereof. Tenant further assumes the risk that any safety
and security devices, services and programs

                                   EXHIBIT D

                                      -3-
<PAGE>

which Landlord elects, in its sole discretion, to provide may not be effective,
or may malfunction or be circumvented by an unauthorized third party, and Tenant
shall, in addition to its other insurance obligations under this Lease, obtain
its own insurance coverage to the extent Tenant desires protection against
losses related to such occurrences. Tenant shall cooperate in any reasonable
safety or security program developed by Landlord or required by law.

     28.  All office equipment of any electrical or mechanical nature shall be
placed by Tenant in the Premises in settings approved by Landlord, to absorb or
prevent any vibration, noise and annoyance.

     29.  Tenant shall not use in any space or in the public halls of the
Building, any hand trucks except those equipped with rubber tires and rubber
side guards.

     30.  No auction, liquidation, fire sale, going-out-of-business or
bankruptcy sale shall be conducted in the Premises without the prior written
consent of Landlord.

     31.  No tenant shall use or permit the use of any portion of the Premises
for living quarters, sleeping apartments or lodging rooms.

     32.  Tenant shall not purchase spring water, towels, janitorial or
maintenance or other similar services from any company or persons not approved
by Landlord. Landlord shall approve a sufficient number of sources of such
services to provide Tenant with a reasonable selection, but only in such
instances and to such extent as Landlord in its judgment shall consider
consistent with the security and proper operation of the Building.

     33.  Tenant shall install and maintain, at Tenant's sole cost and expense,
an adequate, visibly marked and properly operational fire extinguisher next to
any duplicating or photocopying machines or similar heat producing equipment,
which may or may not contain combustible material, in the Premises.

     Landlord reserves the right at any time to change or rescind any one or
more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Premises,
Building, the Common Areas and the Project, and for the preservation of good
order therein, as well as for the convenience of other occupants and tenants
therein. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenants, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of any other
tenant, nor prevent Landlord from thereafter enforcing any such Rules or
Regulations against any or all tenants of the Project. Tenant shall be deemed to
have read these Rules and Regulations and to have agreed to abide by them as a
condition of its occupancy of the Premises.

                                   EXHIBIT D

                                      -4-
<PAGE>

                                   EXHIBIT E
                                   ---------

                     FORM OF TENANT'S ESTOPPEL CERTIFICATE

     The undersigned as Tenant under that certain Office Lease (the "Lease")
made and entered into as of ___________, 20__ by and between _______________ as
Landlord, and the undersigned as Tenant, for Premises on the ______________
floor(s) of the office building located at ______________, Santa Clara,
California ____________, certifies as follows:

     1.  Attached hereto as Exhibit A is a true and correct copy of the Lease
and all amendments and modifications thereto. The documents contained in Exhibit
A represent the entire agreement between the parties as to the Premises.

     2.  The undersigned currently occupies the Premises described in the Lease,
the Lease Term commenced on __________, and the Lease Term expires on
___________, and the undersigned has no option to terminate or cancel the Lease
or to purchase all or any part of the Premises, the Building and/or the Project.

     3.  Base Rent became payable on ____________.

     4.  The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.

     5.  Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:

     6.  Tenant shall not modify the documents contained in Exhibit A without
the prior written consent of Landlord's mortgagee.

     7.  All monthly installments of Base Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through ___________. The current monthly installment of Base Rent is
$_____________________.

     8.  All conditions of the Lease to be performed by Landlord necessary to
the enforceability of the Lease have been satisfied and Landlord is not in
default thereunder. In addition, the undersigned has not delivered any notice to
Landlord regarding a default by Landlord thereunder.

     9.  No rental has been paid more than thirty (30) days in advance and no
security has been deposited with Landlord except as provided in the Lease.

     10. As of the date hereof, there are no existing defenses or offsets, or,
to the undersigned's knowledge, claims or any basis for a claim, that the
undersigned has against Landlord.

     11. If Tenant is a corporation or partnership, each individual executing
this Estoppel Certificate on behalf of Tenant hereby represents and warrants
that Tenant is a duly formed and existing entity qualified to do business in
California and that Tenant has full right and authority to execute and deliver
this Estoppel Certificate and that each person signing on behalf of Tenant is
authorized to do so.

     12. There are no actions pending against the undersigned under the
bankruptcy or similar laws of the United States or any state.

     13. Other than in compliance with all applicable laws and incidental to the
ordinary course of the use of the Premises, the undersigned has not used or
stored any hazardous substances in the Premises.

     14. To the undersigned's knowledge, all tenant improvement work to be
performed by Landlord under the Lease has been completed in accordance with the
Lease and has been accepted by the undersigned and all reimbursements and
allowances due to the undersigned under the Lease in connection with any tenant
improvement work have been paid in full.

                                   EXHIBIT E

                                      -1-
<PAGE>

     The undersigned acknowledges that this Estoppel Certificate may be
delivered to Landlord or to a prospective mortgagee or prospective purchaser,
and acknowledges that said prospective mortgagee or prospective purchaser will
be relying upon the statements contained herein in making the loan or acquiring
the property of which the Premises are a part and that receipt by it of this
certificate is a condition of making such loan or acquiring such property.

     Executed at ______________ on the ____ day of ___________, 20__.

                                               "Tenant":

                                               _________________________,
                                               a _______________________

                                               By: _____________________
                                                      Its: _____________

                                               By: _____________________
                                                      Its: _____________

                                   EXHIBIT E

                                      -2-
<PAGE>

                                     INDEX
                                     -----

                                                           Page(s)
                                                           -------

Abatement Event...........................................     11
Additional Rent...........................................      5
Affiliates................................................     21
Alterations...............................................     12
Applicable Laws...........................................     27
Bank Prime Loan...........................................     28
Base Building............................................. 12, 27
Base Rent.................................................      5
Brokers...................................................     33
Builder's All Risk........................................     13
Building Common Areas,....................................      3
Building Common Areas.....................................      3
Building Direct Expenses..................................      6
Direct Expenses...........................................      5
Eligibility Period........................................     11
Estimate..................................................      9
Estimate Statement........................................      9
Estimated Expenses........................................      9
Expense Year..............................................      6
Force Majeure.............................................     31
Independent Company Test..................................      7
Landlord..................................................      1
Landlord Parties..........................................     14
Landlord Repair Notice....................................     16
Lease.....................................................      1
Lease Commencement Date...................................      4
Lease Expiration Date.....................................      4
Lease Term................................................      4
Lease Year................................................      4
Lines.....................................................     34
Mail......................................................     32
Monument..................................................     27
Notices...................................................     32
Operating Expenses........................................      6
Premises..................................................      3
Project Common Areas......................................      3
Project Common Areas,.....................................      3
Project Direct Expenses...................................      5
Proposition 13............................................      8
Provider..................................................     35
Renovations...............................................     34
Rent......................................................      5
Security Deposit..........................................     26
Statement.................................................      9
Subject Space.............................................     18
Summary...................................................      1
Tax Expenses..............................................      8
Tenant....................................................      1
Tenant's Building Share...................................      9
Tenant's Project Share....................................      9
Tenant's Sign.............................................     27
Transfer..................................................     21
Transfer Notice...........................................     18
Transfer Premium..........................................     20
Transferee................................................     18
Transfers.................................................     18

                                     (ii)

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