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                                                                   Exhibit 10.12

                                LOAN AGREEMENT

     This Loan Agreement is entered into as of October 6, 1997 (this "Loan
Agreement") between CrossRoute Software, Inc., a California corporation (herein
called "Borrower"), and Imperial Bank (herein called "Bank").

     1.   The Commitment. Subject to all the terms and conditions of this Loan
Agreement and prior to the termination of its commitment as hereinafter
provided, Bank hereby agrees to make loans (each a "loan" or collectively,
"loans") to Borrower in such amounts as Borrower shall request pursuant to this
Section 1C at any time from the date hereof through October 5, 1998 (the
"Availability End Date"), in an aggregate principal amount not to exceed
$750,000.00 (the "Commitment"). If at any time or for any reason, the
outstanding principal amount of the Loan Account (as hereinafter defined) is
greater than the Commitment, Borrower shall immediately pay to Bank, in cash,
the amount of such excess. Any commitment of Bank, pursuant to the terms of this
Loan Agreement, to make Loans shall expire on the Availability End Date, subject
to Bank's right to renew said commitment in its sole and absolute discretion at
Borrower's request. Any such renewal of said commitment shall not be binding
upon Bank unless it is in writing and signed by an officer of Bank. Loans which
are repaid by Borrower may not be reborrowed. Borrower promises to pay to Bank
the outstanding unpaid principal balance (and all accrued unpaid interest
thereon) of the Loan Account on October 5, 2001 ("Maturity Date").

          A.  Loans. The amount of each Loan made by Bank-to Borrower hereunder
shall be debited to the loan ledger account of Borrower maintained by Bank for
the Commitment (herein called the "Loan Account") and Bank shall credit the Loan
Account with all loan repayments in respect thereof made by Borrower. When
Borrower desires to obtain a Loan, Borrower shall notify Bank (which notice
shall be signed by an officer of Borrower and shall be irrevocable) in
accordance with Section 2 hereof, to be received no later than 3:00 p.m. Pacific
time one (1) Banking Day before the day on which the Loan is to be made. When
Borrower desires to obtain a Loan to purchase equipment, software or furniture
(herein called an "Equipment Advance"), the notice shall be signed by an officer
of Borrower and include a copy of the invoice for the equipment to be financed.
Loans for equipment will be limited to one hundred percent (100%) of the invoice
amount for such equipment approved from time to time by Bank and purchased by
Borrower subsequent to April 1, 1997, less any taxes, shipping and freight
charges or discounts, warranty charges, installation expenses and similar soft
costs. Loans for software and furniture will be limited to: (a) one hundred
percent of the invoice amount for such software and furniture approved from time
to time by Bank, less any taxes, shipping and freight charges or discounts,
warranty charges, installation expenses and similar soft costs and (b)
$200,000.00.

              (1) SVB Advance. Subject to the availability of the Commitment and
in reliance on the representations and warranties of Borrower set forth herein,
in order to repay all existing loans and related indebtedness ("SVB Loans") owed
by Borrower to Silicon Valley Bank ("SVB"), Bank hereby agrees to make loans to
Borrower in an aggregate principal amount not to exceed $250,000.00 (the "SVB
Advance"); provided, however, that the outstanding amounts under the SVB Advance
shall be deemed to constitute Loans for the purpose of calculating the
availability under the Commitment. If at any time or for any reason, the
outstanding amount of the SVB Advance is greater than $250,000.00, Borrower
shall pay immediately to Bank, in cash, the amount of such excess.

              (2) Limitations on Advance of any Loan. Notwithstanding any of the
foregoing provisions contained in this Section 1, prior to any advance of a
Loan, except for the initial advance of a Loan to repay the SVB Loans, Bank
shall have received satisfactory evidence of the release of all existing liens
against the Collateral to ensure Bank's first priority lien in the Collateral.

          B.  Principal Repayment and Interest Payments on SVB Advance. Borrower
further promises to pay to Bank, on or before the tenth day of the month
immediately following the date of the SVB Advance and on or before the tenth
(10th) day of each month thereafter through October 5, 1999, (a) the outstanding
principal balance of the SVB Advance in twenty-four (24) equal monthly
installments plus (b) interest on the average daily unpaid balance of the of the
SVB Advance accruing from and after the date of the SVB Advance, during the
immediately preceding month at a rate of interest and computed in accordance
with Section 1.C. hereof.

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          C.  Interest Payments Prior to Maturity Date. Borrower further
promises to pay to Bank from the date of the initial Equipment Advance through
October 5, 1998, on or before the tenth (10th) day of each month, interest on
the average daily unpaid balance of the Equipment Advance during the immediately
preceding month at a rate of interest equal to one percent (1%) per annum in
excess of the Prime Rate, which shall vary concurrently with any change in the
Prime Rate. Interest shall be computed at the above rate on the basis of the
actual number of days during which the principal balance of the Loan Account is
outstanding divided by 360, which shall for interest computation purposes be
considered one (1) year.

          D.  Principal Repayment and Interest Payments Following Availability
End Date. Borrower further promises to pay to Bank, on or before October 5, 1998
and on or before the tenth (10th) day of each month thereafter through the
Maturity Date, (a) the outstanding principal balance of the Equipment Advance on
the Availability End Date in thirty-six (36) equal monthly installments plus (b)
interest on the average daily unpaid balance of the Loan Account accruing from
and after October 5, 1998, during the immediately preceding month at the rate of
interest and computed in accordance with Section 1.C. hereof.

     2.   Loan Requests. Requests for Loans hereunder shall be in writing duly
executed by Borrower in a form satisfactory to Bank and shall contain a
certification setting forth the matters referred to in Section 1, which shall
disclose that Borrower is entitled to the amount and type of Loan being
requested. Bank is hereby authorized to charge Borrower's deposit account with
Bank for all sums due Bank under this Loan Agreement.

     3.   Delivery of Payments. Payment to Bank of all amounts due hereunder
shall be made at its Santa Clara Valley Regional office, or at such other place
as may be designated in writing by Bank from time to time. If any payment date
fall on a day that is not a day that Bank is open for the transaction of
business ("Banking Day"), the payment due date shall be extended to the next
Banking Day.

     4.   Late Charge. If any interest payment, principal payment or principal
balance payment required hereunder is not received by Bank on or before ten (10)
days from the date in which such payment becomes due, Borrower shall pay to
Bank, a late charge equal to the lesser of (a) five percent (5.0%) of the amount
of such unpaid payment, in addition to said unpaid payment or (b) the maximum
amount permitted to be charged by applicable law, until remitted to Bank;
provided; however, nothing contained in this Section 4, shall be construed as
any obligation on the part of Bank to accept payment of any past due payment or
less than the total unpaid principal balance of the applicable Loan Account
following the Maturity Date. All payments shall be applied first to any late
charges due hereunder, next to accrued interest then payable and the remainder,
if any, to reduce any unpaid principal due under the applicable Loan Account.

     5.   Default Interest. From and after the Maturity Date, or such earlier
date as all sums owing under any Loan Account becomes due and payable by
acceleration or otherwise, or upon the occurrence of an Event of Default, at the
option of Bank all sums owing under the applicable Loan Account shall bear
interest until paid in full at a rate equal to the lesser of (a) five percent
(5.0%) per annum in excess of the then applicable interest rate provided for in
Section 1.C. hereof or (b) the maximum amount permitted to be charged by
applicable law, until all obligations hereunder are repaid in full or the Event
of Default is waived or cured to the satisfaction of Bank, as applicable.

     6.   Definitions. As used in this Loan Agreement and unless otherwise
defined herein, all initially capitalized terms shall have the meanings set
forth on Exhibit A attached hereto and incorporated herein by this reference.

     7.   Representations and Warranties. Borrower represents and warrants to
Bank: (a) That Borrower is a corporation, duly organized and existing in the
State of its incorporation and the execution, delivery and performance of each
of the Loan Documents are within Borrower's corporate powers, have been duly
authorized and are not in conflict with law or the terms of any charter, by-law
or other incorporation papers, or of any indenture, agreement or undertaking to
which Borrower is a party or by which Borrower is bound or affected; (b)
Borrower is, and at the time the Collateral becomes subject to Bank's security
interest will be, the true and lawful owner of and has, and at the time the
Collateral becomes subject to Bank's security interest will have, good and clear
title to the Collateral, subject only to Bank's rights therein and to Permitted
Liens; (c) Each Account is, and at the time the Account comes into existence
will be, a true and correct statement of a bona fide indebtedness incurred by
the debtor named therein in the amount of the Account for either

                                       2.
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merchandise sold or delivered (or being held subject to Borrower's delivery
instructions) to, or services rendered, performed and accepted by, the account
debtor; (d) That there are and will be no defenses, counterclaims, or setoffs
which may be asserted against the Accounts from time to time, except as
permitted in the definition thereof; (e) Any and all financial information,
including information relating to the Collateral, submitted by Borrower to Bank,
whether previously or in the future, is and will be true and correct; (f) There
is no litigation or other proceeding pending or threatened against or affecting
Borrower, and Borrower is not in default with respect to any order, writ,
injunction, decree or demand of any court or other governmental or regulatory
authority; (g) (i) The consolidated balance sheets of Borrower dated as of
August 31, 1997, and the related consolidated profit and loss statements for the
fiscal year then ended, copies of which have heretofore been delivered to Bank
by Borrower, and all other statements and data submitted in writing by Borrower
to Bank in connection with Borrower's request for credit are true and correct,
and said balance sheet and profit and loss statement accurately present the
financial condition of Borrower as of the date thereof and the results of the
operations of Borrower for the period covered thereby, and have been prepared in
accordance with GAAP, (ii) since such date, there have been no material adverse
changes in the financial condition of Borrower, and (iii) Borrower has no
knowledge of any liabilities, contingent or otherwise, which are not reflected
in said balance sheet, and Borrower has not entered into any special commitments
or substantial contracts which are not reflected in said balance sheet, other
than in the ordinary and normal course of its business, which may have a
Material Adverse Effect upon its financial condition, operations or business as
now conducted;  (h) Borrower has no liability for any delinquent local, state
or federal taxes, and, if Borrower has contracted with any government agency, it
has no liability for renegotiation of profits; and (i) Borrower, as of the date
hereof, possesses all necessary trademarks, trade names, copyrights, patents,
patent rights, and licenses to conduct its business as now operated, without any
known conflict with valid trademarks, trade names, copyrights, patents, patent
rights and license rights of others.

     8.   Negative Covenants. Borrower agrees that so long as any loans,
obligations or liabilities remain outstanding or unpaid to Bank or the
commitment of Bank hereunder is in effect, neither Borrower, nor any of its
subsidiaries ("Subsidiaries") will, without the prior written consent, which
will not unreasonably be withheld, of Bank:

          A.  Make any substantial change in the character of its business as
     now conducted;

          B.  Create, incur, assume or permit to exist any Indebtedness other
than loans from Bank except obligations now existing as shown in the financial
statements referenced in Section 7.(g)(i), excluding those being refinanced by
Bank, Subordinated Debt and Permitted Indebtedness;

          C.  Create, incur, assume or permit to exist any mortgage, pledge,
encumbrance, lien or charge of any kind (including the charge upon property at
any time purchased or acquired under conditional sale or other title retention
agreement) upon any asset now owned or hereafter acquired by it, other than
Permitted Liens and liens in favor of Bank;

          D.  Sell, dispose of or grant a security interest in any of the
Collateral other than to Bank (other than the disposing of such Collateral in
the ordinary and normal course of its business as now conducted or other assets
which are obsolete or otherwise considered surplus), or execute any financing
statements covering the Collateral in favor of any secured party or Person other
than Bank;

          E.  Sell, transfer, assign, mortgage, pledge, license, lease, grant a
security interest in, or otherwise encumber any of its Intellectual Property,
other than licenses or leases conducted in the ordinary and normal course of its
business;

          F.  Make any loans or advances to any Person or other entity other
than in the ordinary and normal course of its business as now conducted
(provided that such loans or advances are not made to any Person or entity which
is controlled by or under common control with Borrower).

          G.  Purchase or otherwise acquire for an amount greater than Five
Hundred Thousand Dollars ($500,000), all or substantially all of the assets or
business of any Person or other entity; or liquidate, dissolve, merge or
consolidate, or commence any proceedings therefore; or, except in the ordinary
and normal course of its business as now conducted, sell (including, without
limitation, the selling of any property or other asset accompanied by the
leasing back of

                                       3.
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the same) any assets including any fixed assets, any property, or other assets
necessary for the continuance of its business as now conducted; and

          H.  Declare or pay any dividend or make any other distribution on any
of its capital stock now outstanding or hereafter issued or purchase, redeem or
retire any of such stock other than in dividends or distributions payable in
Borrower's or any such Subsidiary's capital stock, except for the repurchase of
Borrower's capital stock from officers, directors, employees or consultants of
Borrower upon termination of their employment with or rendering of service to
Borrower.

     9.   Affirmative Covenants. Borrower affirmatively covenants that so long
as any loans, obligations or liabilities remain outstanding or unpaid to Bank or
the commitment of Bank hereunder is in effect, it will:

          A.  Furnish Bank from time to time such financial statements and
information as Bank may reasonably request and inform Bank immediately upon the
occurrence of a material adverse change therein;

          B.  Permit representatives of Bank to conduct an audit of Borrower's
books and records relating to the Collateral and make extracts therefrom, with
results satisfactory to Bank, provided that Bank shall use its best efforts to
not interfere with the conduct of Borrower's business, and to the extent
possible to arrange for verification of the Accounts directly with the account
debtors obligated thereon or otherwise, all under reasonable procedures
acceptable to Bank and at Borrower's sole expense;

          C.  Promptly notify Bank of any attachment or other legal process
levied against any of the Collateral and any information received by Borrower
relative to the Collateral, including the Accounts, the account debtors or other
Persons obligated in connection therewith, which may in any way affect the value
of the Collateral or the rights and remedies of Bank in respect thereto;

          D.  Reimburse Bank upon demand for any and all legal costs, including
reasonable attorneys' fees, and other expense incurred in collecting any sums
payable by Borrower under any Loan Account or any other obligation secured
hereby enforcing any term or provision of this Loan Agreement or otherwise or in
the checking, handling and collection of the Collateral and the preparation and
enforcement of any agreement relating thereto;

          E.  Notify Bank of each location and of each office of Borrower at
which records of Borrower relating to the Accounts are kept;

          F.  Provide, maintain and deliver to Bank policies insuring the
Collateral against loss or damage by such risks and in such amounts, forms and
companies as Bank may require (to the extent customarily maintained by
businesses similar to Borrower) and with loss payable to Bank, and, in the event
Bank takes possession of the Collateral, the insurance policy or policies and
any unearned or returned premium thereon shall at the option of Bank become the
sole property of Bank, such policies and the proceeds of any other insurance
coveting or in any way relating to the Collateral, whether now in existence or
hereafter obtained, being hereby assigned to Bank;

          G.  In the event the unpaid balance of any Loan Account shall exceed
the maximum amount of outstanding loans to which Borrower is entitled under
Section 1 hereof, as applicable, Borrower shall immediately pay to Bank for
credit to such Loan Account the amount of such excess;

          H.  Maintain and preserve all rights, franchises and other authority
adequate and necessary for the conduct of its business and maintain and preserve
its existence in the State of its incorporation and any other state(s) in which
Borrower conducts its business, except with respect to such other state(s), as
the failure to do so would not have a Material Adverse Effect;

          I.  Maintain public liability, property damage and workers
compensation insurance and insurance on all its insurable property against fire
and other hazards with responsible insurance carriers to the extent usually
maintained

                                       4.
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by similar businesses. Borrower shall provide evidence of property insurance in
amounts and types acceptable to Bank, and certificates naming Bank as a loss
payee;

          J.  Pay and discharge, before the same becomes delinquent and
penalties accrue thereon, all taxes, assessments and governmental charges upon
or against it or any of its properties, and any of its other liabilities at any
time existing, except to the extent and so long as: (1) the same are being
contested in good faith and by appropriate proceedings in such manner as not to
cause any Material Adverse Effect or the loss of any right of redemption from
any sale thereunder; and (2) it shall have set aside on its books reserves
(segregated to the extent required by GAAP);

          K.  Maintain a standard and modern system of accounting in accordance
with GAAP on a basis consistently maintained; permit Bank's representatives to
have access to, and to examine its properties, books and records at all
reasonable times; provided that Bank shall use its best efforts to not interfere
with the conduct of Borrower's business;

          L.  Maintain its properties, equipment and facilities in good order
and repair;

          M.  Maintain its primary banking accounts with Bank or Imperial
Securities Corporation; and

          N.  Prior to allowing any of Borrower's raw materials, work in
process, furnished goods inventory and property, plant and equipment to be
transported to or be held at any contract manufacturer, warehouse or other
location (other than with bona fide distributors and retail accounts), Borrower
shall provide notice to Bank and Borrower shall have complied with such filing
and notice requirements as shall, in Bank's opinion, assure Borrower's and
Bank's priority in such property over creditors of such contract manufacturer,
warehouseman or operator of such other location, including, without limitation,
making filings under California Commercial Code (S)2326, providing notice under
California Commercial Code (S)9114 and making filings and publications as
required under California Civil Code (S)3440.1 and (S)3440.5 All such filings,
notices and publications shall be in form and substance satisfactory to Bank.

     10.  Financial Covenants and Information. All financial covenants and
financial information referenced herein shall be interpreted and prepared in
accordance with GAAP as used in the United States of America applied on a basis
consistent with previous years. Compliance with the financial covenants shall be
calculated and monitored on a monthly basis, except as shall be expressly stated
to the contrary. Borrower affirmatively covenants that so long as any loans,
obligations or liabilities remain outstanding or unpaid to Bank or any
commitment is outstanding hereunder, it will, on a consolidated basis:

          A.  At all times, maintain a Minimum Tangible Net Worth (meaning all
assets, excluding any value for goodwill, trademarks, patents, copyrights,
organization expense and other similar intangible items, less all liabilities
(excluding deferred revenue), plus Subordinated Debt) of not less than
$1,000,000.00,

          B.  At all times maintain a Minimum Quick Ratio (meaning all cash plus
Accounts divided by current liabilities (excluding deferred revenue)) of not
less than 1.25:1.00;

          C.  As soon as it is available, but not later than twenty-five (25)
days after and as of the end of each month, deliver to Bank internally-prepared
financial statement consisting of a balance sheet and profit and loss statement,
in form satisfactory to Bank, and a Compliance Certificate in the form of
Exhibit B attached hereto and incorporated herein by this reference, certified
by an officer of Borrower;

          D.  As soon as it is available, but not later than one hundred twenty
(120) days after the end of Borrower's fiscal year, deliver to Bank unqualified
copies of Borrower's consolidated financial statements together with changes in
financial position audited by an independent certified public accountant
selected by Borrower but acceptable to Bank;]

          E.  Upon the reasonable request of Bank, deliver to Bank current
budgets, sales projections, operating plans and other financial exhibits and
information in form and substance satisfactory to Bank; and

                                       5.
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          F.  Upon any officer becoming aware, deliver immediately to Bank
written notice of any pending or threatened litigation claiming, or reasonably
likely to result in, damages against Borrower in an amount in excess of
$50,000.00.

     11.  Loan Fee. In addition to any other amounts due, or to become due,
concurrent with the execution hereof, in connection with the Equipment Advance,
Borrower shall deliver to Bank a loan fee in the amount of One Thousand Two
Hundred and Fifty Dollars ($1,250.00).

     12.  Default and Remedies. The occurrence of any one or more of the
following shall constitute an "Event of Default": (a) Default be made in the
payment of any obligation by Borrower under any Loan Document; (b) Except for
any failure to pay as described in clause (a) above, breach be made in any
warranty, statement, promise, term or condition, contained herein or in any
other Loan Document and the same shall not have been cured to the satisfaction
of Bank within fifteen (15) days after Borrower shall have become aware thereof,
whether by written notice from Bank, or otherwise, (except that no cure period
shall exist for breaches in respect of Borrower's obligations under Section 8,
Subsections 9.A., 9.B., 9.C., 9.F., 9.G., 9.H. and 9.I., Subsections 10.A.,
10.B., 10.C., and 10.D. of this Loan Agreement, and Sections 1 and 2 of the
General Security Agreement); (c) Any statement, warranty or representation made
by Borrower at any time proves false; (d) Borrower defaults in the repayment of
any principal of or the payment of any interest on any indebtedness exceeding in
the aggregate principal amount $10,000.00 or breaches or violates any term or
provision of any promissory note, loan agreement, mortgage, indenture or other
evidence of such indebtedness pursuant to which amounts outstanding in the
aggregate exceed $10,000.00 if the effect of such breach is to permit the
acceleration of such indebtedness, whether or not waived by the note holder or
obligee, and such failure shall not have been cured to Bank's satisfaction
within fifteen (15) calendar days after Borrower shall become aware thereof,
whether by written notice from Bank or otherwise, or there has in fact been an
acceleration of such indebtedness; (e) Borrower becomes insolvent or makes an
assignment for the benefit of creditors; (f) Any proceeding be commenced by
Borrower under any bankruptcy, reorganization, arrangement, readjustment of debt
or moratorium law or statute or, any such a proceeding is commenced against
Borrower and is not dismissed or stayed within ten (10) days (provided that no
Loans will be made prior to the dismissal of such proceeding); (g) Any money
judgment, writ of attachment, garnishment, execution or other legal process be
entered against Borrower or issued against any material property of Borrower
which is not fully covered by insurance (subject to reasonable deductibles) and
remains unvacated, unbonded, unstayed or unpaid or undischarged for more than
fifteen (15) days (whether or not consecutive) or in any event later than five
(5) days prior to the date of any proposed sale thereunder, or if any assessment
for taxes against Borrower other than against any of its real property, is made
by the Federal or State government or any department thereof; or (h) Any change
in Borrower's financial condition or operations which has a Material Adverse
Effect. on the occurrence and during the continuance of an Event of Default,
Bank may, at its option and without demand first made and without notice to
Borrower, do any one or more of the following: (i) Terminate its obligation to
make loans to Borrower as provided in Section 1 hereof; (ii) Declare all sums
secured hereby immediately due and payable; (iii) Immediately take possession of
the Collateral wherever it may be found, using all legally permissible means to
do so, or require Borrower to assemble the Collateral and make it available to
Bank at a place designated by Bank which is reasonably convenient to Borrower
and Bank, and Borrower waives all claims for damages due to or arising from or
connected with any such taking; (iv) Proceed in the foreclosure of Bank's
security interest and sale of the Collateral in any manner permitted by law, or
provided for herein; (v) Sell, lease or otherwise dispose of the Collateral at
public or private sale, with or without having the Collateral at the place of
sale, and upon terms and in such manner as Bank may determine, and Bank may
purchase same at any such sale; (vi) Retain the Collateral in full satisfaction
of the obligations secured thereby to the extent permitted under the Uniform
Commercial Code; or (vii) Exercise any remedies of a secured party under the
Uniform Commercial Code. Prior to any such disposition, Bank may, at its option,
cause any of the Collateral to be repaired or reconditioned in such manner and
to such extent as Bank may deem advisable, and any sums expended therefor by
Bank shall be repaid by Borrower and secured hereby. Bank shall have the right
to enforce one or more remedies hereunder successively or concurrently, and any
such action shall not stop or prevent Bank from pursuing any further remedy
which it may have hereunder or by law. If a sufficient sum is not realized from
any such disposition of the Collateral to pay all obligations secured by this
Loan Agreement, Borrower hereby promises and agrees to pay Bank any deficiency.

     13.  Records Retention. Borrower authorizes Bank to destroy all invoices,
delivery receipts, reports and other types of documents and records submitted to
Bank in connection with the transactions contemplated herein at any time
subsequent to four (4) months from the time such items are delivered to Bank.

                                       6.
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     14.  Attorneys' Fees. Borrower agrees to reimburse Bank up to $2,000.00 for
its reasonable attorneys' fees and expenses incurred in connection with the
negotiation, preparation, execution and delivery of the Loan Documents.

     15.  Governing Law; Judicial Reference.

          A.  Governing Law. This Agreement shall be deemed to have been made in
the State of California and the validity, construction, interpretation, and
enforcement hereof, and the rights of the parties hereto, shall be determined
under, governed by, and construed in accordance with the internal laws of the
State of California, without regard to principles of conflicts of law.

          B.  Judicial Reference.

              (1) Other than (a) nonjudicial foreclosure and all matters in
connection therewith regarding security interests in real or personal property;
or (b) the appointment of a receiver, or the exercise of other provisional
remedies (any and all of which may be initiated pursuant to applicable law),
each controversy, dispute or claim between the parties arising out of or
relating to this Loan Agreement or the other Loan Documents, which controversy,
dispute or claim-is not settled in writing within thirty (30) days after the
"Claim Date" (defined as the date on which a party subject to this Loan
Agreement gives written notice to all other parties that a controversy, dispute
or claim exists), will be settled by a reference proceeding in California in
accordance with the provisions of Section 638 et seq. of the California Code of
Civil Procedure, or their successor section ("CCP"), which shall constitute the
exclusive remedy for the settlement of any controversy, dispute or claim
concerning this Loan Agreement, including whether such controversy, dispute or
claim is subject to the reference proceeding and except as set forth above, the
parties waive their rights to initiate any legal proceedings against each other
in any court or jurisdiction other than the Superior Court in the County where
the real property, if any, is located or Santa Clara County, if none (the
"Court"). The referee shall be a retired Judge of the Court selected by mutual
agreement of the parties, and if they cannot so agree within forty-five (45)
days after the Claim Date, the referee shall be promptly selected by the
Presiding Judge of the Court (or his/her representative). The referee shall be
appointed to sit as a temporary judge, with all of the powers for a temporary
judge, as authorized by law, and upon selection should take and subscribe to the
oath of office as provided for in Rule 244 of the California Rules of Court (or
any subsequently enacted Rule). Each party shall have one peremptory challenge
pursuant to CCP (S) 170.6. The referee shall (x) be requested to set the matter
for hearing within sixty (60) days after the date of selection of the referee
and (y) try any and all issues of law or fact and report a statement of decision
upon them, if possible, within ninety (90) days of the Claim Date. Any decision
rendered by the referee will be final, binding and conclusive and judgement
shall be entered pursuant to CCP (S) 644 in any court in the State of California
having jurisdiction. Any party may apply for a reference proceeding at any time
after thirty (30) days following notice to any other party of the nature of the
controversy, dispute or claim, by filing a petition for a hearing and/or trial.
All discovery permitted by this Loan Agreement shall be completed no later than
fifteen (15) days before the first hearing date established by the referee. The
referee may extend such period in the event of a party's refusal to provide
requested discovery for any reason whatsoever, including, without limitation,
legal objections raised to such discovery or unavailability of a witness due to
absence or illness. No party shall be entitled to "priority" in conducting
discovery. Depositions may be taken by either party upon seven (7) days written
notice, and request for production or inspection of documents shall be responded
to Within ten (10) days after service. All disputes relating to discovery which
cannot be resolved by the parties Shall be submitted to the referee whose
decision shall be final and binding upon the parties. Pending appointment of the
referee as provided herein, the Superior Court is empowered to issue temporary
and/or provisional remedies, as appropriate.

              (2) Except as expressly set forth in this Loan Agreement, the
referee shall determine the manner in which the reference proceeding is
conducted including the time and place of all hearings, the order of
presentation of evidence, and all other questions that arise with respect to the
course of the reference proceeding. All proceedings and hearings conducted
before the referee, except for trial, shall be conducted without a court
reporter except that when any party so requests, a court reporter will be used
at any hearing conducted before the referee. The party making such a request
shall have the obligation to arrange for and pay for the court reporter. The
costs of the court reporter at the trial shall be borne equally by the parties.

                                       7.
<PAGE>

          (3) The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, to provide all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon the parties. The referee shall issue a single judgment at the close
of the reference proceeding which shall dispose of all of the claims of the
parties that are the subject of the reference. The parties hereto expressly
reserve the right to contest or appeal from the final judgment or any appealable
order or appealable judgment entered by the referee. The parties hereto
expressly reserve the right to findings of fact, conclusions of laws, a written
statement of decision, and the right to move for a new trial or a different
judgment, which new trial, if granted, is also to be a reference proceeding
under this provision.

          (4) In the event that the enabling legislation which provides for
appointment of a referee is repealed (and no successor statute is enacted), any
dispute between the parties that would otherwise be determined by the reference
procedure herein described will be resolved and determined by arbitration. The
arbitration will be conducted by a retired judge of the Court, in accordance
with the California Arbitration Act, (S) 1280 through (S) 1294.2 of the CCP as
amended from time to time. The limitations with respect to discovery as set
forth hereinabove shall apply to any such arbitration proceeding.

     16.  Miscellaneous Provisions.

          A.  Nothing herein shall in any way limit the effect of the conditions
set forth in any other security or other agreement executed by Borrower; but
each and every condition hereof shall be in addition thereto.

          B.  No failure or delay on the part of Bank, in the exercise of any
power, right or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof.

          C.  All rights and remedies existing under this Loan Agreement or any
other Loan Document are cumulative to, and not exclusive of, any rights or
remedies otherwise available.

          D.  All headings and captions in this Loan Agreement and any related
documents are for convenience only and shall not have any substantive effect.

          E.  This Loan Agreement may be executed in any number of counterparts,
each of which when so delivered shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument. Each such
agreement shall become effective upon the execution of a counterpart hereof or
thereof by each of the parties hereto and telephonic notification that such
executed counterparts has been received by Borrower and Bank.

BANK:                              BORROWER:

IMPERIAL BANK                      CrossRoute Software, Inc.
                                   a California corporation

By:   /s/ Sunita R. Patel          By:   /s/ Ken Ross
      -------------------                ------------
      Sunita R. Patel                    Kenneth Ross
      Assistant Vice President           President and Chief Executive Officer

LIST OF EXHIBITS AND SCHEDULES
------------------------------

Exhibit A: Definitions
 SCHEDULE 1 TO EXHIBIT A: List of Specific Permitted Indebtedness
 SCHEDULE 2 TO EXHIBIT A: List of Specific Permitted Liens

                                       8.
<PAGE>

                                   Exhibit A

                                  DEFINITIONS

     "Accounts" means any right to payment for goods sold or leased, or to be
sold or to be leased, or for services rendered or to be rendered no matter how
evidenced, including accounts receivable, contract rights, chattel paper,
instruments, purchase orders, notes, drafts, acceptances, general intangibles
and other forms of obligations and receivables.

     "Capital Lease" means, as to any Person, any lease of any Property by such
Person as lessee that is, or should be in accordance with Financing Accounting
Standards Board Statement No. 13, classified and accounted for as a "capital
lease" on the balance sheet of such Person prepared in accordance with GAAP.

     "Capital Lease Obligation" means, with respect to any Capital Lease, the
amount of the obligation of the lessee thereunder that, in accordance with GAAP,
would appear on a balance sheet of such lessee in respect of such Capital Lease
or otherwise be disclosed in a note to such balance sheet.

     "Collateral" means any and all personal property of Borrower which is
assigned or hereafter is assigned to Bank as security or in which Bank now has
or hereafter acquires a security interest hereunder (including, without
limitation, the Accounts), or pursuant to the terms of the General Security
Agreement, the Intellectual Property Security Agreement or otherwise.

     "Contingent Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend, letter of credit or other obligation of another,
including, without limitation, any such obligation directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in the ordinary
course of business), co-made or discounted or sold with recourse by that Person,
or in respect of which that Person is otherwise directly or indirectly liable,
including, without limitation, any such obligation for which that Person is in
effect liable through any agreement (contingent or otherwise) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, capital stock purchases, capital contributions or
otherwise), or to maintain the solvency of the obligor of such obligation, or to
make payment for any products, materials or supplies or for any transportation,
services or lease regardless of the non-delivery or non-furnishing thereof, in
any such case if the purpose or intent of such agreement is to provide assurance
that such obligation will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such obligation will be
protected (in whole or in part) against loss in respect thereof. The amount of
any Contingent Obligation of any Person shall be deemed to be an amount equal to
the maximum amount of such Person's liability with respect to the stated or
determinable amount of the primary obligation for which such Contingent
Obligation is incurred or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder).

     "Event of Default" has the meaning set forth in Section 12.

     "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other Person as may be approved by the significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.

     "General Security Agreement" means that certain General Security Agreement
(Tangible and Intangible Personal Property) dated of even date herewith, made by
Borrower in favor of Bank.

     "Indebtedness" means, as to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money, including, without limitation,
all of such indebtedness outstanding under this Loan Agreement and any of the
other Loan Documents, (b) all Capital Lease Obligations of such Person, (c) to
the extent of the outstanding indebtedness thereunder, other than in the
ordinary and normal course of business as it is now conducted, any obligation of
such Person representing an extension of credit to such Person, whether or not
for borrowed money, (d) any obligation of such Person

                                   Exhibit A
                                  Page 1 of 5

<PAGE>

for the deferred purchase price of Property or services (other than (i) trade or
other accounts payable in the ordinary course of business in accordance with
customary industry terms and (ii) deferred franchise fees). (e) all Contingent
Obligations, (f) any obligation of such Person of the nature described in
clauses (a), (b), (c), (d) or (e) above, that is secured by a Lien on assets of
such Person and which is non-recourse to the credit of such Person, but Only to
the extent of the fair market value of the assets so subject to the Lien, (g)
obligations of such Person arising under acceptance facilities or under
facilities for the discount of accounts receivable of such Person, (h) any
obligation of such Person to reimburse the issuer of any letter of credit issued
for the account of such Person upon which a draw has been made, and (i) any
lease having the effect of indebtedness, whether or not the same shall be
treated as such on the balance sheet of Borrower under GAAP.

     "Lien" means any mortgage, pledge, security interest, lien or other charge
or encumbrance, including the lien or retained security title of a conditional
vendor, upon or with respect to any property or assets.

     "Loan Documents" means this Loan Agreement, the General Security Agreement
and that certain Agreement to Provide Insurance (Real or Personal Property)
dated of even date herewith, each as executed by Borrower in favor of Bank,
together with all other documents entered into or delivered pursuant to any of
the foregoing, in each case as originally executed or as the same may from time
to time be modified, amended, supplemented or restated.

     "Loans" means individually and collectively, the Equipment Advance and the
SVB Advance advanced pursuant to Section 1.

     "Material Adverse Effect" means any set of circumstances or events which
(a) has or could reasonably be expected to have any material adverse effect upon
the validity or enforceability of any material provision of any Loan Document,
(b) is or could reasonably be expected to be material and adverse to the
condition (financial or otherwise) or business operations of Borrower, (c)
materially impairs or could reasonably be expected to materially impair the
ability of Borrower, to perform its material Obligations, (d) materially impairs
or could reasonably be expected to materially impair the value or priority of
Bank's security interest in any Collateral or (e) materially impairs or could
reasonably be expected to materially impair the ability of Bank to enforce any
of its legal remedies pursuant to the Loan Documents.

     "Maturity Date" has the meaning set forth in Section 1.

     "Permitted Indebtedness" means the following:

          (1) indebtedness of Borrower or Indebtedness and Contingent
     Obligations of its Subsidiaries in favor of Bank arising under this Loan
     Agreement and the other Loan Documents;

          (2) the existing Indebtedness and Contingent Obligations disclosed on
     Schedule 1 attached hereto and incorporated herein by this reference;
     provided that the principal amount thereof is not increased and the terms
     thereof are not modified to impose more burdensome terms upon Borrower or
     any of its Subsidiaries;

          (3) the Subordinated Debt;

          (4) extensions, renewals or refinancings of Indebtedness permitted
     under this Loan Agreement, other than clause (3) immediately above;

          (5) accrued dividends on the preferred stock of Borrower;

          (6) interest rate and currency hedging agreements;

          (7) guaranties of any Subsidiary's suppliers in connection with the
     purchase of supplies in the ordinary course of business;

          (8) guaranties of lease obligations incurred in the ordinary course of
     business and to the extent otherwise permitted hereunder;

                                   Exhibit A
                                  Page 2 of 5

<PAGE>

          (9)  Contingent Obligations constituting Permitted Liens; and

          (10) the indebtedness referred to in clause (3)(a) of the definition
     of Permitted Liens.

     "Permitted Liens" means the following:

          (1)  liens and security interests existing as of this date and
disclosed in Schedule 2 attached hereto and incorporated herein by this
reference;

          (2)  liens for taxes, fees, assessments or other governmental charges
or levies, either not delinquent or being contested in good faith by appropriate
proceedings;

          (3)  liens and security interests (a) upon or in any equipment
acquired or held by Borrower to secure the purchase price of such equipment or
indebtedness incurred solely for the purpose of financing the acquisition of
such equipment and in an amount not greater than the purchase price thereof or
(b) existing on such equipment at the time of its acquisition, provided that the
lien and security interest is confined solely to the properly so acquired and
improvements thereon, and the proceeds of such equipment;

          (4)  liens consisting of leases or subleases and licenses and
sublicenses granted to others in the ordinary course of Borrower's business not.
interfering in any material respect with the business of Borrower and any
interest or title of a lessor or licensor under any lease or license, as
applicable;

          (5)  liens securing claims or demands, of materialmen, mechanics,
carriers, warehousemen, landlords and other like persons or entities imposed
without action of such parties, provided that the payment thereof is not yet
required;

          (6)  liens incurred or deposits made in the ordinary course of
Borrower's business in connection with worker's compensation, unemployment
insurance, social security and other like laws;

          (7)  liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default;

          (8)  easements, reservations, rights-of-way, restrictions, minor
defects or irregularities in title and other similar charges or encumbrances
affecting real property not interfering in any material respect with the
ordinary conduct of Borrower's business;

          (9)  liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;

          (10) liens that are not prior to Bank's security interest which
constitute rights of set-off of a customary nature;

          (11) any interest or title of a lessor in equipment subject to any
Capitalized Lease otherwise permitted hereunder; and

          (12) any liens arising from the filing of any financing statements
relating to true leases otherwise permitted hereunder.

     "Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, firm, joint stock
company, estate, entity or governmental agency.

                                   Exhibit A
                                  Page 3 of 5

<PAGE>

     "Property" means any interest in any kind of property or asset, whether
real, personal or mixed, whether tangible or intangible.

                                   Exhibit A
                                  Page 4 of 5

<PAGE>

                            Schedule 1 to Exhibit A

                        SPECIFIC PERMITTED INDEBTEDNESS

                            Schedule 1 to Exhibit A
                                  Page 1 of 1

<PAGE>

                            Schedule 2 to Exhibit A

                            SPECIFIC PERMITTED LIENS

                            Schedule 2 to Exhibit A
                                  Page 1 of 1

<PAGE>

                                   Exhibit B

                            COMPLIANCE CERTIFICATE

The consolidated financial statements dated as of _______________ of CrossRoute
Software, Inc. a California corporation ("Borrower") attached hereto and
submitted to Imperial Bank ("Bank") pursuant to that certain Loan Agreement
dated as of October 6, 1997, entered into between Borrower and Bank (the "Loan
Agreement"), are in compliance with all financial covenants (unless otherwise
noted below) as specified in Section 10 therein, as follows:

     Covenant:                                          Actual:

     A.  Minimum Tangible Net Worth of:
         -----------------------------                 ----------------

         $1,000,000.00

     B.  Minimum Quick Ratio:
         -------------------                           -----------------

          1.25:1.00

Exceptions: (if none, so state):

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

The undersigned authorized officer of Borrower hereby certifies that Borrower is
in complete compliance with the terms and conditions of the Loan Agreement for
the period ending _________, ___, and as of the date of this Compliance

Certificate the representations and warranties stated therein are true, accurate
and complete as of the date hereof (except as to those representations and
warranties which specifically reference a particular date and except as noted
above).

The undersigned further certifies that s/he knows of no pending conditions which
may cause an Event of Default (as defined in the Loan Agreement) to exist in the
next thirty (30) days. The required support documents for this certification are
attached and prepared in accordance with GAAP consistently applied.

Date: October 6, 1977                      CrossRoute Software, Inc.,
                                           a California corporation

                                           By:
                                              --------------------------------
                                                  Bruce Hausmann
                                                  Controller

                                   Exhibit B
                                  Page 1 of 2

<PAGE>

                      AMENDED AND RESTATED LOAN AGREEMENT

     THIS AMENDED AND RESTATED LOAN AGREEMENT is entered into as of September 8,
1998 (this "Restated Loan Agreement") between CROSSROUTE SOFTWARE, INC., a
California corporation (herein called "Borrower"), and IMPERIAL BANK (herein
called "Bank"). This Restated Loan Agreement amends, restates and supersedes in
its entirety the Original Loan Agreement (as hereinafter defined).

                                    RECITALS

     A.  Borrower and Bank entered into that certain Loan Agreement dated as of
October 6, 1997 (the "Original Loan Agreement"), pursuant to which Bank agreed
to extend and make loans available to Borrower under the Facility-A Commitment
(as hereinafter defined).

     B.  Borrower and Bank desire to amend and restate the Loan Agreement in its
entirety to, among other things, modify certain financial covenants and
reporting requirements under the Facility-A Commitment and to extend and make
available to Borrower additional advances of credit, all as more fully set forth
herein.

     C.  Bank has agreed to make and maintain the credit facilities described in
this Restated Loan Agreement, but only upon the terms and subject to the
conditions hereinafter set forth and in reliance on the representations and
warranties set forth herein.

                                   AGREEMENT

     NOW, THEREFORE, in Consideration of the foregoing recitals and the mutual
covenants hereinafter set forth, and intending to be legally bound, Borrower and
Bank hereby agree as follows:

     1.   Commitments.

          A.  Facility-A Commitment. Subject to all the terms and conditions of
this Restated Loan Agreement and prior to the termination of its commitment as
hereinafter provided, Bank hereby agrees to make loans (each a "Facility-A
Loan") to Borrower in such amounts as Borrower shall request pursuant to this
Section 1.A. at any time from the date hereof through October 5, 1998 (the
"Facility-A Availability End Date"), in an aggregate principal amount not to
exceed $750,000.00 (the "Facility-A Commitment"). If at any time or for any
reason, the outstanding principal amount of the Facility-A Loan Account (as
hereinafter defined) is greater than the Facility-A Commitment, Borrower shall
immediately pay to Bank, in cash, the amount of such excess. Any commitment of
Bank, pursuant to the terms of this Restated Loan Agreement, to make Facility-A
Loans shall expire on the Facility-A Availability End Date, subject to Bank's
right to renew said commitment in its sole and absolute discretion at Borrower's
request. Any such renewal of said commitment shall not be binding upon Bank
unless it is in writing and signed by an officer of Bank. Facility-A Loans that
are repaid by Borrower may not be reborrowed. Borrower promises to pay to Bank
the outstanding unpaid principal balance (and all accrued unpaid interest
thereon) of the Facility-A Loan Account on or before October 5, 2001 ("Facility-
A Maturity Date").

               (1)  Facility-A Loans. Facility-A Loans may only be used to
purchase or reimburse the cost of acquiring equipment purchased by Borrower
after April 1, 1997 or (b) purchase or reimburse the cost of acquiring software
or furniture purchased by Borrower. The amount of each Facility-A Loan made by
Bank to Borrower hereunder shall be debited to the loan ledger account of
Borrower maintained by Bank for the Facility-A Commitment (herein called the
"Facility-A Loan Account") and Bank shall credit the Facility-A Loan Account
with all loan repayments in respect thereof made by Borrower. When Borrower
desires to obtain a Facility-A Loan, Borrower shall notify Bank (which notice
shall be signed by an officer of Borrower and shall be

                                      1.
<PAGE>

irrevocable) in accordance with Section 2 hereof, to be received no later than
3:00 p.m. Pacific time one (1) Banking Day before the day on which the Loan is
to be made. When Borrower desires to obtain a Facility-A Loan to purchase
equipment, software or furniture, the notice shall be signed by an officer of
Borrower and include a copy of the invoice for the equipment, software or
furniture to be financed. Facility-A Loans for equipment will be limited to one
hundred percent (100%) of the invoice amount for such equipment approved from
time to time by Bank, less any taxes, shipping and freight charges or discounts,
warranty charges, installation expenses and similar soft costs. Facility-A Loans
for software and furniture will be limited to: (a) one hundred percent of the
invoice amount for such software and furniture approved from time to time by
Bank, less any taxes, shipping and freight charges or discounts, warranty
charges, installation expenses and similar soft costs and (b) the maximum
aggregate total amount of $200,000.00.

                    (a) SVB Advance. Subject to the availability of the
Facility-A Commitment and in reliance on the representations and warranties of
Borrower set forth herein, in order to repay all existing loans and related
indebtedness ("SVB Loans") owed by Borrower to Silicon Valley Bank ("SVB"), Bank
hereby agrees to make one Facility-A Loan to Borrower in an aggregate principal
amount not to exceed $250,000.00 (the "SVB Advance"); provided, however, that
the outstanding amount under the SVB Advance shall be deemed to constitute a
Facility-A Loan for the purpose of calculating the availability under the
Facility-A Commitment.

                    (b) Limitations on Advance of any Facility-A Loan.
Notwithstanding any of the foregoing provisions contained in this Section 1.A.
prior to any advance of a Facility-A Loan, except for the initial advance of a
Facility-A Loan to repay the SVB Loans, Bank shall have received satisfactory
evidence of the release of all existing liens against the Collateral to ensure
Bank's first priority lien in the Collateral.

               (2)  Interest Payments Prior to Facility-A Maturity Date.
Borrower further promises to pay to Bank from the date of the initial advance of
a Facility-A Loan (including the SVB Advance) through the Facility-A Maturity
Date, on or before the tenth (10th) day of each month, interest on the average
daily unpaid balance of the Facility-A Loan Account during the immediately
preceding month at a rate of interest equal to one percent (1%) per annum in
excess of the rate of interest which Bank has announced as its prime lending
rate (the "Prime Rate"), which shall vary concurrently with any change in the
Prime Rate. Interest shall be computed at the above rate on the basis of the
actual number of days during which the principal balance of the Facility-A Loan
Account is outstanding divided by 360, which shall for interest computation
purposes be considered one (1) year.

               (3)  Principal Repayment and Interest Payments on SVB Advance.
Borrower further promises to pay to Bank, on or before the tenth (10th day of
the month immediately following the date of the SVB Advance and on or before the
tenth (10th) day of each month thereafter through October 5, 1999, (a) the
outstanding principal balance of the SVB Advance in twenty-four (24) equal
monthly installments plus (b) interest on the average daily unpaid balance of
the SVB Advance accruing during the immediately preceding month at a rate of
interest and computed in accordance with Section 1.A.(2) hereof.

               (4)  Principal Repayment and Interest Payments Following
Availability End Date. Borrower further promises to pay to Bank, on or before
the tenth (10th) day of the month immediately following the Facility-A
Availability End Date and on or before the tenth (10th) day of each month
thereafter through the Facility-A Maturity Date, (a) the outstanding principal
balance of the Facility-A Loan Account (excluding the SVB Advance) on the
Facility-A Availability End Date in thirty-six (36) equal monthly installments
plus (b) interest on the average daily unpaid balance of the Facility-A Loan
Account (excluding the SVB Advance) accruing during the immediately preceding
month at the rate of interest and computed in accordance with Section 1.A.(2)
hereof.

          B.   Facility-B Commitment. Subject to all the terms and conditions of
this Restated Loan Agreement and prior to the termination of its commitment as
hereinafter provided, Bank hereby agrees to make

                                      2.
<PAGE>

loans (each a "Facility-B Loan") to Borrower, from time to time and in such
amounts as Borrower shall request pursuant to this Section 1.B., up to an
aggregate principal amount outstanding under the Facility-B Loan Account (as
hereinafter defined) not to exceed the least off (a) seventy-five percent
(75.0%) of Eligible Accounts (as the same may be adjusted from time to time as
provided for under Section 9.B. hereof, the "Borrowing Base") or (h) $750,000.00
(the "Facility-B Commitment"). If at any time or for any reason, the outstanding
principal amount of the Facility-B Loan Account is greater than the least of:
(x) the Borrowing Base or (y) the Facility-B Commitment, Borrower shall
immediately pay to Bank, in cash, the amount of such excess. Any commitment of
Bank, pursuant to the terms of this Restated Loan Agreement, to make Facility-B
Loans shall expire on the Facility-B Maturity Date (as hereinafter defined),
subject to Bank's right to renew said commitment in its sole and absolute
discretion at Borrower's request. Any such renewal of said commitment shall not
be binding upon Bank unless it is in writing and signed by an officer of Bank.
Provided that no Event of Default (as hereinafter defined) has occurred and is
continuing, all or any portion of the Facility-B Loans advanced by Bank that are
repaid by Borrower shall be available for reborrowing in accordance with the
terms hereof. Borrower promises to pay to Bank the entire outstanding unpaid
principal balance (and all accrued unpaid interest thereon) of the Facility-B
Loan Account on or before September 7, 1999 ("Facility-B Maturity Date").

               (1)  Facility-B Loans. Facility-B Loans may only be used to
support Borrower's working capital, needs. The amount of each Facility-B Loan
made by Bank to Borrower hereunder shall be debited to the loan ledger account
of Borrower maintained by Bank for the Facility-B Commitment (herein called the
"Facility-B Loan Account") and Bank shall credit the Facility-B Loan Account
with all loan repayments in respect thereof made by Borrower. When Borrower
desires to obtain a Facility-B Loan, Borrower shall notify Bank (which notice
shall be signed by an officer of Borrower and shall be irrevocable) in
accordance with Section 2 hereof, to be received no later than 3:00 p.m. Pacific
time one (1) Banking Day (as hereinafter defined) before the day on which the
Facility-B Loan is to be made.

                    (a) Letter of Credit Usage and Sublimit. Subject to the
availability of the Facility-B Commitment and in reliance on the representations
and warranties of Borrower set forth herein, at any time and from time to time
from the date hereof through the Banking Day immediately prior to the Facility-B
Maturity Date, Bank shall issue for the account of Borrower such standby and
commercial letters of credit ("Letters of Credit") as Borrower may request,
which request shall be made by delivering to Bank a duly executed letter of
credit application on Bank's standard form; provided, however, that the
outstanding and undrawn amounts under all such Letters of Credit (i) shall not
at any time exceed $200,000.00 and (ii) shall be deemed to constitute Facility-B
Loans for the purpose of calculating availability under the Facility-B
Commitment. Unless Borrower shall have deposited with Bank cash collateral in an
amount sufficient to cover all undrawn amounts under each such Letter of Credit
and Bank shall have agreed in writing, no Letter of Credit shall have an
expiration date that is later than the Facility-B Maturity Date. All Letters of
Credit shall be in form and substance acceptable to Bank in its sole discretion
and shall be subject to the terms and conditions of Bank's form application and
letter of credit agreement. Borrower will pay any standard issuance and other
fees that Bank notifies Borrower will be charged for issuing and processing
Letters of Credit for Borrower.

               (2)  Interest Payments on Facility-B Loans. Borrower further
promises to pay to Bank from the date of the advance of the initial Facility-B
Loan through the Facility-B Maturity Date, on or before the tenth (10th) day of
each month, interest on the average daily unpaid balance of the Facility-B Loan
Account during the immediately preceding month at a rate of interest equal to
one-half of one percent (0.50%) per annum in excess of Prime Rate, which shall
vary concurrently with any change in the Prime Rate. Interest shall be computed
at the above rate on the basis of the actual number of days during which the
principal balance of the Facility-B Loan Account is outstanding divided by 360,
which shall for interest computation purposes be considered one (1) year.

               (3)  Limitation on Advance of any Facility-B Loan.
Notwithstanding any of the provisions contained in this Section 1.B. hereof,
prior to any advance of a Facility-B Loan, a representative of

                                      3.
<PAGE>

Bank shall have conducted an audit of Borrower's books and records relating to
the Collateral and made extracts therefrom, and arranged for verification of the
Accounts, directly with the account debtors or otherwise, all with results
satisfactory to Bank, the cost of such audit of which shall be at Borrower's
sole expense. Based on Bank's review of such audit, and prior to the advance of
a Facility-B Loan in accordance with the terms of this Section 1.B.(3), Bank may
adjust the Borrowing Base percentage, in its sole and reasonable discretion, as
provided for under Section 9.B. hereof.

          C.   Facility-C Commitment. Subject to all the terms and conditions of
this Restated Loan Agreement and prior to the termination of its commitment as
hereinafter provided, Bank hereby agrees to make loans (each a "Facility-C
Loan") to Borrower in such amounts as Borrower shall request pursuant to this
Section 1.C. at any time from the date hereof through September 7, 1999 (the
"Facility-C Availability End Date"), in an aggregate principal amount not to
exceed $750,000.00 (the "Facility-C Commitment"). If at any time or for any
reason, the outstanding principal amount of the Facility-C Loan Account (as
hereinafter defined) is greater than the Facility-C Commitment, Borrower shall
immediately pay to Bank, in cash, the amount of such excess. Any commitment of
Bank, pursuant to the terms of this Restated Loan Agreement, to make Facility-C
Loans shall expire on the Facility-C Availability End Date, subject to Bank's
right to renew said commitment in its sole and absolute discretion at Borrower's
request. Any such renewal of said commitment shall not be bidding upon Bank
unless it is in writing and signed by an officer of Bank. Facility-C Loans that
are repaid by Borrower may not be reborrowed. Borrower promises to pay to Bank
the outstanding unpaid principal balance (and all accrued unpaid interest
thereon) of the Facility-C Loan Account on or before September 7, 2002
("Facility-C Maturity Date").

               (1)  Facility-C Loans. Facility-C Loans may only be used to
purchase or reimburse the cost of acquiring equipment and software purchased by
Borrower after January 1, 1998. The amount of each Facility-C Loan made by Bank
to Borrower hereunder shall be debited to the loan ledger account of Borrower
maintained by Bank for the Facility-C Commitment (herein called the "Facility-C
Loan Account") and Bank shall credit the Facility-C Loan Account with all loan
repayments in respect thereof made by Borrower. When Borrower desires to obtain
a Facility-C Loan, Borrower shall notify Bank (which notice shall be signed by
an officer of Borrower and shall be irrevocable) in accordance with Section 2
hereof, to be received no later than 3:00 p.m. Pacific time one (1) Banking Day
before the day on which the Facility-C Loan is to be made. The notice shall be
signed by an officer of Borrower and include a copy of the invoice for the
equipment or software to be financed. Equipment Loans for equipment will be
limited to one hundred percent 100.00%) of the invoice amount for such
equipment, approved from time to time by Bank, less any taxes, shipping and
freight charges or discounts, warranty charges, installation expenses and other
similar soft costs. Facility-C Loans for software will be limited to: (a) one
hundred percent (100.00%) of the invoice amount for such software, approved from
time to time by Bank, less any taxes, shipping and freight charges or discounts,
warranty charges, installation expenses and other similar soft costs and (b) the
maximum aggregate total amount of $350,000.00.

               (2)  Interest Payments Prior to Facility-C Maturity Date.
Borrower further promises to pay to Bank from the date of the advance of the
initial Facility-C Loan through the Facility-C Maturity Date, on or before the
tenth (10') day of each month, interest on the average daily unpaid balance of
the Facility-C Loan Account during the immediately preceding month at a rate of
interest equal to three quarters of one percent (0.75%) per annum in excess of
the Prime Rate, which shall vary concurrently with any change in the Prime Rate.
Interest shall be computed at the above rate on the basis of the actual number
of days during which the principal balance of the Facility-C Loan Account is
outstanding divided by 360, which shall for interest computation purposes be
considered one (1) year.

               (3)  Principal Payments Following Facility-C Availability End
Date. Borrower further promises to pay to Bank, on or before the tenth (10th)
day of the month immediately following the Facility-C Availability End Date and
on or before the tenth (10th) day of each month thereafter through the Facility-
C Maturity Date, (a) the outstanding principal balance of the Facility-C Loan
Account on the Facility-C Availability End Date in thirty-six (36) equal monthly
installments plus (b) interest on the average daily unpaid

                                      4.
<PAGE>

balance of the Facility-C Loan Account accruing during the immediately preceding
month at the rate of interest and computed in accordance with Section 1.C.(2)
hereof.

     2.   Loan Requests. Requests for Loans hereunder shall be in writing duly
executed by Borrower in a form satisfactory to Bank and shall contain a
certification setting forth the matters referred to in Section 1, which shall
disclose that Borrower is entitled to the amount and type of Loan being
requested. Bank is hereby authorized to charge Borrower's deposit account with
Bank for all sums due Bank under this Restated Loan Agreement.

     3.   Delivery of Payments. Payment to Bank of all amounts due hereunder
shall be made at its Santa Clara Valley Regional office, or at such other place
as may be designated in writing by Bank from time to time. If any payment date
fall on a day that is not a day that Bank is open for the transaction of
business ("Banking Day"), the payment due date shall be extended to the next
Banking Day.

     4.   Late Charge. If any interest payment, principal payment or principal
balance payment required hereunder is not received by Bank on or before ten (10)
days from the date in which such payment becomes due, Borrower shall pay to
Bank, a late charge equal to the lesser of (a) five percent (5.0%) of the amount
of such unpaid payment, in addition to said unpaid payment or (b) the maximum
amount permitted to be charged by applicable law, until remitted to Bank;
provided; however, nothing contained in this Section 4, shall be construed as
any obligation on the part of Bank to accept payment of any past due payment or
less than the total unpaid principal balance of the applicable Loan Account
following the Facility-A Maturity Date, the Facility-B Maturity Date and/or the
Facility-C Maturity Date, as applicable. All payments shall be applied first to
any late charges due hereunder, next to accrued interest then payable and the
remainder, if any, to reduce any unpaid principal due under the applicable Loan
Account.

     5.    Default Interest. From and after the Facility-A Maturity Date, the
Facility-B Maturity Date and/or the Facility-C Maturity Date, as applicable, or
such earlier date as all sums owing under any Loan Account becomes due and
payable by acceleration or otherwise, or upon the occurrence of an Event of
Default, at the option of Bank all sums owing under the applicable Loan Account
shall bear interest until paid in full at a rate equal to the lesser of (a) five
percent (5.0%) per annum in excess of the then applicable interest rate provided
for in Sections 1.A.(2), 1.B.(2) and 1.C.(2) hereof or (b) the maximum amount
permitted to be charged by applicable law, until all obligations hereunder are
repaid in full or the Event of Default is waived or cured to the satisfaction of
Bank, as applicable.

     6.   Definitions. As used in this Restated Loan Agreement and unless
otherwise defined herein, all initially capitalized terms shall have the
meanings set forth on Exhibit A attached hereto and incorporated herein by this
reference.

     7.   Representations and Warranties. Borrower represents and warrants to
Bank: (a) That Borrower is a corporation, duly organized and existing in the
State of its incorporation and the execution, delivery and performance of each
of the Loan Documents are within Borrower's corporate powers, have been duly
authorized and are not in conflict with law or the terms of any charter, by-law
or other incorporation papers, or of any indenture, agreement or undertaking to
which Borrower is a party or by which Borrower is bound or affected; (b)
Borrower is, and at the time the Collateral becomes subject to Bank's security
interest will be, the true and lawful owner of and has, and at the time the
Collateral becomes subject to Bank's security interest will have, good and clear
title to the Collateral, subject only to Bank's rights therein and to Permitted
Liens; (c) Each Account is, and at the time the Account comes into existence
will be, a true and correct statement of a bona fide indebtedness incurred by
the debtor named therein in the amount of the Account for either merchandise
sold Or delivered (or being held subject to Borrower's delivery instructions)
to, or services rendered, performed and accepted by, the account debtor; (d)
That there are and will be no defenses, counterclaims, or setoffs which may be
asserted against the Accounts from time to time represented by Borrower to be
Eligible Accounts, except as permitted in the

                                      5.
<PAGE>

definition thereof; (e) Any and all financial information, including information
relating to the Collateral, submitted by Borrower to Bank, whether previously or
in the future, is and will be true and correct; (f) There is no litigation or
other proceeding pending or threatened against or affecting Borrower, and
Borrower is not in default with respect to any order, writ, injunction, decree
or demand of any court or other governmental or regulatory authority; (g) (i)
The consolidated balance sheets of Borrower dated as of May 31, 1998, and the
related consolidated profit and loss statements for the fiscal year then ended,
copies of which have heretofore been delivered to Bank by  Borrower, and all
other statements and data submitted in writing by Borrower to Bank in connection
with Borrower's request for credit are true and correct, and said balance sheet
and profit and loss statement accurately present the financial condition of
Borrower as of the date thereof and the results of the operations of Borrower
for the period covered thereby, and have been prepared in accordance with GAAP,
(ii) since such date, there have been no material adverse changes in the
financial condition of Borrower, and (iii) Borrower has no knowledge of any
liabilities, contingent or otherwise, which are not reflected in said balance
sheet, and Borrower has not entered into any special commitments or substantial
contracts which are not reflected in said balance sheet, other than in the
ordinary and normal course of its business, which may have a Material Adverse
Effect upon its financial condition, operations or business as now conducted;
(h) Borrower has no liability for any delinquent local, state or federal taxes,
and, if Borrower has contracted with any government agency, it has no liability
for renegotiation of profits; and (i) Borrower, as of the date hereof, possesses
all necessary Trademarks, trade names, Copyrights, Patents, patent rights, and
licenses to conduct its business as now operated, without any known conflict
with valid Trademarks, trade names, Copyrights, Patents, patent rights and
license rights of others; and 0) Borrower and its Subsidiaries (as hereinafter
defined) have reviewed the areas within their operations and business which
could be adversely affected by, and have developed or are developing a program
to address on a timely basis, the Year 2000 Problem and have made related
appropriate inquiry of material suppliers and vendors, and based on such review
and program, the Year 2000 Problem will not have a Material Adverse Effect upon
its financial condition, operations or business as now conducted.

     8.   Negative Covenants. Borrower agrees that so long as any loans,
obligations or liabilities remain outstanding or unpaid to Bank or the
commitment of Bank hereunder is in effect, neither Borrower, nor any of its
subsidiaries ("Subsidiaries") will, without the prior written consent of Bank,
which consent shall not be unreasonably withheld:

          A.   Make any substantial change in the character of its business as
now conducted;

          B.   Create, incur, assume or permit to exist any Indebtedness other
than loans from Bank except obligations now existing as shown in the financial
statements referenced in Section 7.(g)(i), excluding those being refinanced by
Bank, Subordinated Debt and Permitted Indebtedness;

          C.   Create, incur, assume or permit to exist any mortgage, pledge,
encumbrance, lien or charge of any kind (including the charge upon property at
any time purchased or acquired under conditional sale or other title retention
agreement) upon any asset now owned or hereafter acquired by it, other than
Permitted Liens and liens in favor of Bank;

          D.   Sell, dispose of or grant a security interest in any of the
Collateral other than to Bank (other than the disposing of such Collateral in
the ordinary and normal course of its business as now conducted or other assets
which are obsolete or otherwise considered surplus), or execute any financing
statements covering the Collateral in favor of any secured party or Person other
than Bank;

          E.   Sell, transfer, assign, mortgage, pledge, license, lease, grant a
security interest in, or otherwise encumber any of its Intellectual Property,
other than licenses or leases of its intellectually property granted in the
ordinary and normal course of its business;

                                      6.
<PAGE>

          F.   Make any loans or advances to any Person or other entity other
than in the ordinary and normal course of its business as now conducted
(provided that such loans or advances are not made to any Person or entity that
is controlled by or under common control with Borrower). Notwithstanding the
foregoing provision, Borrower shall be permitted to accept full recourse
promissory notes from its employees in payment for its capital stock purchased
by such employees;

          G.   (1) Purchase or otherwise acquire all or substantially all of the
assets or business of any Person or other entity; or (2) liquidate, dissolve,
merge or consolidate, or commence any proceedings therefore; or (3) except in
the ordinary and normal course of its business as now conducted, sell
(including, without limitation, the selling of any property or other asset
accompanied by the leasing back of the same) any assets including any fixed
assets, any property, or other assets necessary for the continuance of its
business as now conducted. Notwithstanding the foregoing, upon the consent of
Bank, which consent shall not be unreasonably withheld, Borrower may proceed
with any acquisition of up to $500,000.00, (a) so long as no Event of Default
has occurred and is continuing or would exist after giving effect to such
transaction; (b) Borrower is the surviving corporation and (c) prior to
consummating such transaction, Borrower executes and delivers to Bank all such
additional agreements, documents and instruments as Bank may require in order to
affirm, effectuate or further assure its continuing, first priority lien in the
Collateral after giving effect to such transaction; and

          H.   Declare or pay any dividend or make any other distribution on any
of its capital stock now outstanding or hereafter issued or purchase, redeem or
retire any of such stock other than in dividends or distributions payable in
Borrower's or any such Subsidiary's capital stock, except for the repurchase of
Borrower's capital stock from officers, directors, employees or consultants of
Borrower upon termination of their employment with or rendering of service to
Borrower.

     9.   Affirmative Covenants. Borrower affirmatively covenants that so long
as any loans, obligations or liabilities remain outstanding or unpaid to Bank or
the commitment of Bank hereunder is in effect, it will:

          A.   Furnish Bank from time to time such financial statements and
information as Bank may reasonably request and inform Bank immediately upon the
occurrence of a material adverse change therein;

          B.   Notwithstanding the provisions contained in Section l.A.(3)
hereof, permit representatives of Bank to conduct an audit of Borrower's books
and records relating to the Collateral and make extracts therefrom, with results
satisfactory to Bank, provided that Bank shall use its best efforts to not
interfere with the conduct of Borrower's business, and to the extent possible to
arrange for verification of the Accounts directly with the account debtors
obligated thereon or otherwise, all under reasonable procedures acceptable to
Bank and at Borrower's sole expense; provided further that, prior to an Event of
Default, Borrower shall not be responsible for the expense of more than one (1)
such audit, in any fiscal year the cost of such audit of which shall not exceed
$1,500.00. Borrower hereby acknowledges and agrees that upon completion of any
such audit, including any such audit conducted in accordance with the provisions
of Section 1.A.(3) hereof, Bank shall have the right to adjust the Borrowing
Base percentage, in its sole and reasonable discretion, based on its review of
the results of such Collateral audit;

          C.   Promptly notify Bank of any attachment or other legal process
levied against any of the Collateral and any information received by Borrower
relative to the Collateral, including the Accounts, the account debtors or other
Persons obligated in connection therewith, which may in any way affect the value
of the Collateral or the rights and remedies of Bank in respect thereto;

          D.   Notwithstanding the provisions of Section 14 hereof, reimburse
Bank upon demand for any and all legal costs, including reasonable attorneys'
fees, and other expenses incurred in (1) collecting any sums payable by Borrower
under any Loan Account or any other obligation secured hereby, (2) enforcing any

                                      7.
<PAGE>

term or provision of this Restated Loan Agreement or otherwise or (3) the
checking, handling and collection of the Collateral and the preparation and
enforcement of any agreement relating thereto in connection with the occurrence
and continuance of an Event of Default;

          E.   Notify Bank of each location and of each office of Borrower at
which records of Borrower relating to the Accounts are kept;

          F.   Provide, maintain and deliver to Bank policies insuring the
Collateral against loss or damage by such risks and in such amounts, forms and
companies as Bank may require (to the extent customarily maintained by
businesses similar to Borrower) and with loss payable to Bank, and, in the event
Bank takes possession of the Collateral, the insurance policy or policies and
any unearned or returned premium thereon shall at the option of Bank become the
sole property of Bank, such policies and the proceeds of any other insurance
covering or in any way relating to the Collateral, whether now in existence or
hereafter obtained, being hereby assigned to Bank;

          G.   In the event the unpaid balance of any Loan Account shall exceed
the maximum amount of outstanding loans to which Borrower is entitled under
Section 1 hereof, as applicable, Borrower shall immediately pay to Bank for
credit to such Loan Account the amount of such excess;

          H.   Maintain and preserve all rights, franchises and other authority
adequate and necessary for the conduct of its business and maintain and preserve
its existence in the state of its incorporation and any other state(s) in which
Borrower conducts its business, except with respect to such other state(s), as
the failure to do so would not have a Material Adverse Effect;

          I.   Maintain public liability, property damage and workers
compensation insurance and insurance on all its insurable property against fire
and other hazards with responsible insurance carriers to the extent usually
maintained by similar businesses. Borrower shall provide evidence of property
insurance in amounts and types acceptable to Bank, and certificates naming Bank
as a loss payee;

          J.   Pay and discharge, before the same becomes delinquent and
penalties accrue thereon, all taxes, assessments and governmental charges upon
or against it or any of its properties, and any of its other liabilities at any
time existing, except to the extent and so long as: (1) the same are being
contested in good faith and by appropriate proceedings in such manner as not to
cause any Material Adverse Effect or the loss of any right of redemption from
any sale thereunder; and (2) it shall have set aside on its books reserves
(segregated to the extent required by GAAP);

          K.   Maintain a standard and modem system of accounting in accordance
with GAAP on a basis consistently maintained; permit Bank's representatives to
have access to, and to examine its properties, books and records at all
reasonable times; provided that Bank shall use its best efforts to not interfere
with the conduct of Borrower's business;

          L.   Maintain its properties, equipment and facilities in good order
and repair;

          M.   Maintain its primary banking and operating accounts with Bank or
Imperial Securities Corporation;

          N.   Prior to allowing any of Borrower's raw materials, work in
process, finished goods inventory and property, plant and equipment to be
transported to or be held at any contract manufacturer, warehouse or other
location (other than with bona fide distributors and retail accounts), Borrower
shall provide notice to Bank and Borrower shall have complied with such filing
and notice requirements as shall, in Bank's opinion, assure Borrower's and
Bank's priority in such property over creditors of such contract manufacturer,

                                      8.
<PAGE>

warehouseman or operator of such other location, including, without limitation,
making filings under California Commercial Code (S)2326, providing notice under
California Commercial Code (S)9114 and making filings and publications as
required under California Civil Code (S)3440.1 and (S)3440.5 All such filings,
notices and publications shall be in form and substance satisfactory to Bank;
and

          O.   Borrower shall perform all acts reasonably necessary to ensure
that Borrower and any business in which Borrower holds a substantial interest
becomes Year 2000 Compliant in a timely manner. Such acts shall include, without
limitation, performing a comprehensive review and assessment of all of
Borrower's systems and adopting a detailed plan, with an itemized budget, for
the remediation, monitoring and testing of such systems. If requested by Bank,
Borrower shall immediately deliver a statement to Bank summarizing the Year 2000
exposure, program or progress of Borrower and its Subsidiaries or other evidence
of Borrower's compliance with the terms of this Section, certified by an officer
of Borrower.

     10.  Financial Covenants and Information. All financial covenants and
financial information referenced herein shall be interpreted and prepared in
accordance with GAAP as used in the United States of America applied on a basis
consistent with previous years. Compliance with the financial covenants shall be
calculated and monitored on a monthly basis, except as shall be expressly stated
to the Contrary. Borrower affirmatively covenants that so long as any loans,
obligations or liabilities remain outstanding or unpaid to Bank or any
commitment is outstanding hereunder, it will, on a consolidated basis:

          A.   At all times, maintain a Minimum Tangible Net Worth of not less
than $3,000,000.00. As used herein, "Tangible Net Worth" shall mean all assets,
excluding any value for goodwill, Trademarks, Patents, Copyrights, organization
expense and other similar intangible items, less all liabilities (excluding
deferred revenue), plus Subordinated Debt;

          B.   At all times maintain a Minimum Term Liquidity Coverage Ratio of
not less than 1.50:1.00. As used herein "Term Liquidity Coverage Ratio" means
the sum of all unrestricted cash and cash equivalents plus the net availability
under the Facility-B Commitment divided by the total outstanding term
indebtedness owing by Borrower to Bank;

          C.   At all times maintain a Maximum Net Loss in any single month not
in excess of $1,000,000.00;

          D.   As soon as it is available, but not later than thirty (30) days
after and as of the end of each month, deliver to Bank an internally-prepared
financial statement consisting of a balance sheet and profit and loss statement,
in form satisfactory to Bank, and a Compliance Certificate in the form of
Exhibit B attached hereto and incorporated herein by this reference, certified
by an officer of Borrower;

          E.   As soon as it is available, but not later than one hundred twenty
(120) days after the end of Borrower's fiscal year, deliver to Bank unqualified
copies of Borrower's consolidated financial statements together with changes in
financial position audited by an independent certified public accountant
selected by Borrower but acceptable to Bank;

          F.   So long as any amounts remain outstanding and unpaid under the
Facility-B Loan Account, as soon as it is available, but not later than twenty
(20) days after and as of the end of each month, deliver to Bank, in such form
and detail as Bank may require, statements showing aging of the Accounts and
Borrower's accounts payable, together with a Borrowing Base Certificate in the
form of Exhibit C attached hereto and incorporated herein by this reference,
certified by an officer of Borrower. Notwithstanding the foregoing, as a
condition to any request for a Facility-B Loan, Borrower shall have delivered to
Bank said aging statements as well as a Borrowing Base Certificate covering the
most recent month then ended prior to the date of Borrower's request for an
advance for a Facility-B Loan;

                                      9.
<PAGE>

          G.   Upon the reasonable request of Bank, deliver to Bank current
budgets, sales projections, operating plans and other financial exhibits and
information in form and substance satisfactory to Bank; and

          H.   Upon any officer becoming aware, deliver immediately to Bank
written notice of any pending or threatened litigation claiming, or reasonably
likely to result in, damages against Borrower in an amount in excess of
$50,000.00.

     11.  Loan Fee. Borrower has paid, and Bank hereby acknowledges receipt of
(a) in respect of the Facility-B Commitment, a loan fee in the amount of Two
Thousand Five Hundred Dollars ($2,500.00) and (b) in respect of the Facility-C
Commitment,a loan fee in the amount of Two Thousand Five Hundred Dollars
($2,500.00).

     12.  Default and Remedies. The occurrence of any one or more of the
following shall constitute an "Event of Default": (a) Default be made in the
payment of any obligation by Borrower under any Loan Document; (b) Except for
any failure to pay as described in clause (a) above, breach be made in any
warranty, statement, promise, term or condition, contained herein or in any
other Loan Document and the same shall not have been cured to the satisfaction
of Bank within fifteen (15) days after Borrower shall have become aware thereof,
whether by written notice from Bank, or otherwise, (except that no cure period
shall exist for breaches in respect of Borrower's obligations under Section 8,
Subsections 9.A., 9.B., 9.C., 9.F., 9.G., 9.H., 9:I and 9.0., Subsections 10.A.,
10.B., 10.C., 10.D., 10.E. and 10.F. of this Restated Loan Agreement, and
Sections 1 and 2 of the Restated Security Agreement); (c) Any statement,
warranty or representation made by Borrower at any time proves false; (d)
Borrower defaults in the repayment of any principal of or the payment of any
interest on any indebtedness exceeding in the aggregate principal amount
$10,000.00 or breaches or violates any term or provision of any promissory note,
loan agreement, mortgage, indenture or other evidence of such indebtedness
pursuant to which amounts outstanding in the aggregate exceed $10,000.00 if the
effect of such breach is to permit the acceleration of such indebtedness,
whether or not waived by the note holder or obligee, and such failure shall not
have been cured to Bank's satisfaction within fifteen (15) calendar days after
Borrower shall become aware thereof, whether by written notice from Bank or
otherwise, or there has in fact been an acceleration of such indebtedness; (e)
Borrower becomes insolvent or makes an assignment for the benefit of creditors;
(0 Any proceeding be commenced by Borrower under any bankruptcy, reorganization,
arrangement, readjustment of debt or moratorium law or statute or, any such a
proceeding is commenced against Borrower and is not dismissed or stayed within
ten (10) days (provided that no Loans will be made prior to the dismissal of
such proceeding); (g) Any money judgment, writ of attachment, garnishment,
execution or other legal process be entered against Borrower or issued against
any material property of Borrower which is not fully covered by insurance
(subject to reasonable deductibles) and remains unvacated, unbonded, unstayed or
unpaid or undischarged for more than fifteen (15) days (whether or not
consecutive) or in any event later than five (5) days prior to the date of any
proposed sale thereunder, or if any assessment for taxes against Borrower other
than against any of its real property, is made by the Federal or State
government or any department thereof; or (h) Any change in Borrower's financial
condition or operations which has a Material Adverse Effect. Upon the occurrence
and during the continuance of an Event of Default, Bank may, at its option and
without demand first made and without notice to Borrower, do any one or more of
the following: (i) Terminate its obligation to make loans to Borrower as
provided in Section 1 hereof; (ii) Declare all sums secured hereby immediately
due and payable; (iii) Immediately take possession of the Collateral wherever it
may be found, using all legally permissible means to do so, or require Borrower
to assemble the Collateral and make it available to Bank at a place designated
by Bank which is reasonably convenient to Borrower and Bank, and Borrower waives
all claims for damages due to or arising from or connected with any such taking;
(iv) Proceed in the foreclosure of Bank's security interest and sale of the
Collateral in any manner permitted by law, or provided for herein; (v) Sell,
lease or otherwise dispose of the Collateral at public or private sale, with or
without having the Collateral at the place of sale, and upon terms and in such
manner as Bank may determine, and Bank may purchase same at any such sale; (vi)
Retain the Collateral in full satisfaction of the obligations secured thereby to
the extent permitted under the Uniform Commercial Code; or (vii) Exercise any
remedies of a secured party under the Uniform Commercial Code. Prior to any such

                                      10.
<PAGE>

disposition, Bank may, at its option, cause any of the Collateral to be repaired
or reconditioned in such manner and to such extent as Bank may deem advisable,
and any sums expended therefor by Bank shall be repaid by Borrower and secured
hereby. Bank shall have the right to enforce one or more remedies hereunder
successively or concurrently, and any such action shall not estop or prevent
Bank from pursuing any further remedy that it may have hereunder or by law. If a
sufficient sum is not realized from any such disposition of the Collateral to
pay all obligations secured by this Restated Loan Agreement, Borrower hereby
promises and agrees to pay Bank any deficiency.

     13.  Records Retention. Borrower authorizes Bank to destroy all invoices,
delivery receipts, reports and other types of documents and records submitted to
Bank in connection with the transactions contemplated herein at any time
subsequent to four (4) months from the time such items are delivered to Bank.

     14.  Attorneys' Fees. Borrower agrees to reimburse Bank up to $3,500.00 for
its reasonable attorneys' fees and expenses incurred in connection with the
negotiation, preparation, execution and delivery of the Loan Documents.

     15.  Governing Law; Judicial Reference.

          A.   Governing Law. This Agreement shall be deemed to have been made
in the State of California and the validity, construction, interpretation, and
enforcement hereof, and the rights of the parties hereto, shall be determined
under, governed by, and construed in accordance with the internal laws of the
State of California, without regard to principles of conflicts of law.

          B.   Judicial Reference.

               (1)  Other than (a) nonjudicial foreclosure and all matters in
connection therewith regarding security interests in real or personal property;
or (b) the appointment of a receiver, or the exercise of other provisional
remedies (any and all of which may be initiated pursuant to applicable law),
each controversy, dispute or claim between the parties arising out of or
relating to this Restated Loan Agreement or the other Loan Documents, which
controversy, dispute or claim is not settled in writing within thirty (30) days
after the "Claim Date" (defined as the date on which a party subject to this
Restated Loan Agreement gives written notice to all other parties that a
controversy, dispute or claim exists), will be settled by a reference proceeding
in California in accordance with the provisions of Section 638 et seq. of the
California Code of Civil Procedure, or their successor section ("CCP"), which
shall constitute the exclusive remedy for the settlement of any controversy,
dispute or claim concerning this Restated Loan Agreement, including whether such
controversy, dispute or claim is subject to the reference proceeding and except
as set forth above, the parties waive their rights to initiate any legal
proceedings against each other in any court or jurisdiction other than the
Superior Court in the County where the real property, if any, is located or
Santa Clara County, if none (the "Court"). The referee shall be a retired Judge
of the Court selected by mutual agreement of the parties, and if they cannot so
agree within forty-five (45) days after the Claim Date, the referee shall be
promptly selected by the Presiding Judge of the Court (or his/her
representative). The referee shall be appointed to sit as a temporary judge,
with all of the powers for a temporary judge, as authorized by law, and upon
selection should take and subscribe to the oath of office as provided for in
Rule 244 of the California Rules of Court (or any subsequently enacted Rule).
Each party shall have one peremptory challenge pursuant to CCP (S) 170.6. The
referee shall (x) be requested to set the matter for hearing within sixty (60)
days after the date of selection of the referee and (y) try any and all issues
of law or fact and report a statement of decision upon them, if possible, within
ninety (90) days of the Claim Date. Any decision rendered by the referee will be
final, binding and conclusive and judgement shall be entered pursuant to CCP (S)
644 in any court in the State of California having jurisdiction. Any party may
apply for a reference proceeding at any time after thirty (30) days following
notice to any other party of the nature of the controversy, dispute or claim, by
filing a petition for a hearing and/or trial. All discovery permitted by this
Restated Loan Agreement shall be completed no later than fifteen (15) days
before the first hearing date established by the referee. The

                                      11.
<PAGE>

referee may extend such period in the event of a party's refusal to provide
requested discovery for any reason whatsoever, including, without limitation,
legal objections raised to such discovery or unavailability of a witness due to
absence or illness. No party shall be entitled to "priority" in conducting
discovery. Depositions may be taken by either party upon seven (7) days written
notice, and request for production or inspection of documents shall be responded
to within ten (10) days after service. All disputes relating to discovery which
cannot be resolved by the parties shall be submitted to the referee whose
decision shall be final and binding upon the parties. Pending appointment of the
referee as provided herein, the Superior Court is empowered to issue temporary
and/or provisional remedies, as appropriate.

               (2)  Except as expressly set forth in this Restated Loan
Agreement, the referee shall determine the manner in which the reference
proceeding is conducted including the time and place of all hearings, the order
of presentation of evidence, and all other questions that arise with respect to
the course of the reference proceeding. All proceedings and hearings conducted
before the referee, except for trial, shall be conducted without a court
reporter except that when any party So requests, a court reporter will be used
at any hearing conducted before the referee. The party making such a request
shall have the obligation to arrange for and pay for the court reporter. The
costs of the court reporter at the trial shall be borne equally by the parties.

               (3)  The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, to provide all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon the parties. The referee shall issue a single judgment at the close
of the reference proceeding that shall dispose of all of the claims of the
parties that are the subject of the reference. The parties hereto expressly
reserve the right to contest or appeal from the final judgment or any appealable
order or  appealable judgment entered by the referee. The parties hereto
expressly reserve the right to findings of fact, conclusions of laws, a written
statement of decision, and the right to move for a new trial or a different
judgment, which new trial, if granted, is also to be a reference proceeding
under this provision.

               (4)  In the event that the enabling legislation which provides
for appointment of a referee is repealed (and no successor statute is enacted),
any dispute between the parties that would otherwise be determined by the
reference procedure herein described will be resolved and determined by
arbitration. The arbitration will be conducted by a retired judge of the Court,
in accordance with the California Arbitration Act, (S) 1280 through (S) 1294.2
of the CCP as amended from time to time. The limitations with respect to
discovery as set forth hereinabove shall apply to any such arbitration
proceeding.

     16.  Miscellaneous Provisions.

          A.   Nothing herein shall in any way limit the effect of the
conditions set forth in any other security or other agreement executed by
Borrower, but each and every condition hereof shall be in addition thereto.

          B.   No failure or delay on the part of Bank, in the exercise of any
power, right or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof.

          C.   All rights and remedies existing under this Restated Loan
Agreement or any other Loan Document are cumulative to, and not exclusive of,
any rights or remedies otherwise available.

          D.   All headings and captions in this Restated Loan Agreement and any
related documents are for convenience only and shall not have any substantive
effect.

                                      12.
<PAGE>

          E.   This Restated Loan Agreement is not intended to be, and shall not
be construed to create, a novation or accord and satisfaction, and, except as
otherwise provided herein, the Original Loan Agreement is amended and restated
in full by the terms of this Restated Loan Agreement and all obligations
outstanding under the Original Loan Agreement are governed by the terms of this
Restated Loan Agreement.

          F.   This Restated Loan Agreement may be executed in any number of
counterparts, each of which when so delivered shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument. Each
such agreement shall become effective upon the execution of a counterpart hereof
or thereof by each of the parties hereto and telephonic notification that such
executed counterparts has been received by Borrower and Bank.

Bank:                                   Borrower:

Imperial Bank                           CrossRoute Software, Inc.,
                                        a California corporation

By:___________________________          By: /s/ Bruce Hausmann
                                           ---------------------------------
     Sunita R. Patel                         Bruce Hausmann
     Assistant Vice President                Vice President, Finance

LIST OF EXHIBITS AND SCHEDULES
------------------------------

EXHIBIT A: Definitions
 SCHEDULE 1 TO EXHIBIT A: List of Specific Permitted Indebtedness
 SCHEDULE 2 TO EXHIBIT A: List of Specific Permitted Liens

EXHIBIT B: Compliance Certificate

EXHIBIT C: Borrowing Base Certificate

                                      13.
<PAGE>

                                   Exhibit A

                                  DEFINITIONS

     "Accounts" means any right to payment for goods sold or leased, or to be
sold or to be leased, or for services rendered or to be rendered no matter how
evidenced, including accounts receivable, contract rights, chattel paper,
instruments, purchase orders, notes, drafts, acceptances, general intangibles
and other forms of obligations and receivables.

     "Approved Account" means the Account of any account debtor which is a
"Fortune 500" company and approved by Bank in its sole and reasonable
discretion.

     "Capital Lease" means, as to any Person, any lease of any Property by such
Person as lessee that is, or should be in accordance with Financing Accounting
Standards Board Statement No. 13, classified and accounted for as a "capital
lease" on the balance sheet of such Person prepared in accordance with GAAP.

     "Capital Lease Obligation" means, with respect to any Capital Lease, the
amount of the obligation of the lessee thereunder that, in accordance with GAAP,
would appear on a balance sheet of such lessee in respect of such Capital Lease
or otherwise be disclosed in a note to such balance sheet.

     "Collateral" means any and all personal property of Borrower which is
assigned or hereafter is assigned to Bank as security or in which Bank now has
or hereafter acquires a security interest hereunder (including, without
limitation, the Accounts), Or pursuant to the terms of the Restated Security
Agreement, the IP Security Agreement or otherwise.

     "Contingent Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend, letter of credit or other obligation of another,
including, without limitation, any such obligation directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in the ordinary
course of business), co-made or discounted or sold with recourse by that Person,
or in respect of which that Person is otherwise directly or indirectly liable,
including, without limitation, any such obligation for which that Person is in
effect liable through any agreement (contingent or otherwise) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, capital stock purchases, capital contributions or
otherwise), or to maintain the solvency of the obligor of such obligation, or to
make payment for any products, materials or supplies or for any transportation,
services or lease regardless of the non-delivery or non-furnishing thereof, in
any such case if the purpose or intent of such agreement is to provide assurance
that such obligation will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such obligation will be
protected (in whole or in part) against loss in respect thereof. The amount of
any Contingent Obligation of any Person shall be deemed to be an amount equal to
the maximum amount of such Person's liability with respect to the stated or
determinable amount of the primary obligation for which such Contingent
Obligation is incurred or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder).

     "Eligible Accounts" means such of Borrower's Accounts as Bank in its sole
reasonable discretion shall determine are eligible from time to time; provided,
however, that in no event shall Eligible Accounts include the following:

          (1)  all Accounts under which payment is not received within ninety
     (90) days from the applicable invoice date;

                                   Exhibit A
                                  Page 1 of 6
<PAGE>

          (2)  all Accounts against which the account debtor or any other Person
     obligated to make payment thereon asserts any defense, offset, counterclaim
     or other right to avoid or reduce the liability represented by the
     Accounts;

          (3)  any Accounts if the account debtor or any other Person liable in
     connection therewith is insolvent, subject to bankruptcy or receivership
     proceedings or has made an assignment for the benefit of creditors or whose
     credit standing is unacceptable to Bank and Bank has so notified Borrower;

          (4)  Accounts with respect to which the account debtor is an officer,
     director, shareholder, employee or Subsidiary;

          (5)  Accounts due from an account debtor if more than fifty percent
     (50%) of the aggregate amount of Accounts of such account debtor have at
     that time remained unpaid for more than ninety (90) days from the
     applicable invoice date;

          (6)  Accounts with respect to international transactions unless either
     (a) such Accounts are insured or covered by a letter of credit in a manner
     and form acceptable to the Bank or (b) Bank shall have otherwise permitted
     in writing in its sole and absolute direction;

          (7)  salesperson's accounts for promotional purposes;

          (8)  the amount by which the aggregate of all Accounts of an account
     debtor exceeds twenty-five percent (25.0%) of the total accounts receivable
     balance ("Concentration Limit"); provided, however, the Concentration Limit
     for an Approved Account shall be thirty percent (30.0%);

          (9)  Accounts where the account debtor is a seller to borrower, to the
     extent that a potential offset exists; and

          (10) Accounts where the account debtor is a federal governmental
     entity, federal agency or instrumentality thereof.

     "Event of Default" has the meaning set forth in Section 12.

     "Facility-A Maturity Date" has the meaning set forth in Section 1.A.

     "Facility-B Maturity Date" has the meaning set forth in Section 1.B.

     "Facility-C Maturity Date" has the meaning set forth in Section 1.C.

     "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other Person as may be approved by the significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.

     "Indebtedness" means, as to any Person, without duplication, (a)all
indebtedness of such Person for borrowed money, including, without limitation,
all of such indebtedness outstanding under this Restated Loan Agreement and any
of the other Loan Documents, (b) all Capital Lease Obligations of such Person,
(c) to the extent of the outstanding indebtedness thereunder, other than in the
ordinary and normal course of business as it is now conducted, any obligation of
such Person representing an extension of credit to such Person, whether or not

                                   Exhibit A
                                  Page 2 of 6
<PAGE>

for borrowed money, (d) any obligation of such Person for the deferred purchase
price of Property or services (other than (i) trade or other accounts payable in
the ordinary course of business in accordance with customary industry terms and
(ii) deferred franchise fees), (e) all Contingent Obligations, (f) any
obligation of such Person of the nature described in clauses (a), (b), (c), (d)
or (e) above, that is secured by a Lien on assets of such Person and which is
non-recourse to the credit of such Person, but only to the extent of the fair
market value of the assets so subject to the Lien, (g) obligations of such
Person arising under acceptance facilities or under facilities for the discount
of accounts receivable of such Person, (h) any obligation of such Person to
reimburse the issuer of any letter of credit issued for the account of such
Person upon which a draw has been made, and (i) any lease having the effect of
indebtedness, whether or not the same shall be treated as such on the balance
sheet of Borrower under GAAP.

     "IP Security Agreement" means that certain Collateral Assignment, Patent
Mortgage and Security  Agreement dated of even date herewith, made by Borrower
in favor of Bank.

     "Intellectual Property" means

          (1)  Any and all copyright, rights, copyright applications, copyright
     registrations and like protection in each work or authorship and derivative
     work thereof, whether published or unpublished and whether or not the same
     also constitutes a trade secret, now or hereafter existing, created,
     acquired or held (collectively, the "Copyrights");

          (2)  Any and all trade secrets, and any and all intellectual property
     rights in computer software and computer software products now Or hereafter
     existing, created, acquired or held;

          (3)  Any and all design rights which may be available to Borrower now
     or hereafter existing, created, acquired or held;

          (4)  Any patents, patent applications and like protections, including,
     without limitation, improvements, divisions, continuations, renewals,
     reissues, extensions and continuations-in-part of the same, including,
     without limitation, the patents and patent applications (collectively, the
     "Patents");

          (5)  Any trademark and servicemark rights, whether registered or not,
     applications, to register and registrations of the same and like
     protections, and the entire goodwill of the business of Borrower connected
     with and symbolized by such trademarks (collectively, the "Trademarks");

          (6)  Any and all claims for damages by way of past, present and future
     infringements of any of the rights included above, with the right, but not
     the obligation, to sue for and collect such damages for said use or
     infringement of the intellectual property rights identified above;

          (7)  Any licenses or other rights to use any of the Copyrights,
     Patents or Trademarks and all license fees and royalties arising from such
     use to the extent permitted by such license or rights;

          (8)  Any amendments, extensions, renewals and extensions of any of the
     Copyrights, Patents or Trademarks; and

          (9)  Any proceeds and products of the foregoing, including, without
     limitation, all payments under insurance or any indemnity or warranty
     payable in respect of any of the foregoing.

     "Lien" means any mortgage, pledge, security interest, lien or other charge
or encumbrance, including the lien or retained security title of a conditional
vendor, upon or with respect to any property or assets.

                                   Exhibit A
                                  Page 3 of 6
<PAGE>

     "Loan Account or Loan Accounts" means individually and collectively, the
Facility-A Loan Account, the Facility-B Loan Account and the Facility-C Loan
Account.

     "Loan Documents" means this Restated Loan Agreement, the Restated Security
Agreement, the IP Security Agreement and that certain Agreement to Provide
Insurance (`Real or Personal Property) dated of even date herewith, each as
executed by Borrower in favor of Bank, together with all other documents entered
into or delivered pursuant to any of the foregoing, in each case as originally
executed or as the same may from time to time be modified, amended, supplemented
or restated.

     "Loans" means individually and collectively, the Facility-A Loans, the
Facility-B Loans and the Facility-C Loans advanced pursuant to Section 1.

     "Material Adverse Effect" means any set of circumstances or events which
(a) has or could reasonably be expected to have any material adverse effect upon
the validity Or enforceability of any material provision of any Loan Document,
(b) is or could reasonably be expected to be material and adverse to the
condition (financial or otherwise) or business operations of Borrower, (c)
materially impairs or could reasonably be expected to materially impair the
ability of Borrower, to perform its material Obligations, (d) materially impairs
or could reasonably be expected to materially impair the value or priority of
Bank's security interest in any Collateral or (e) materially impairs or could
reasonably be expected to materially impair the ability of Bank to enforce any
of; its legal remedies pursuant to the Loan Documents.

     "Permitted Indebtedness" means the following:

          (1)  indebtedness of Borrower or Indebtedness and Contingent
     Obligations of its Subsidiaries in favor of Bank arising under this
     Restated Loan Agreement and the other Loan Documents;

          (2)  the existing Indebtedness and Contingent Obligations disclosed on
     Schedule 1 attached hereto and incorporated herein by this reference;
     provided that the principal amount thereof is not increased and the terms
     thereof are not modified to impose more burdensome terms upon Borrower or
     any of its Subsidiaries;

          (3)  the Subordinated Debt;

          (4)  extensions, renewals or refinancings of Indebtedness permitted
     under this Restated Loan Agreement, other than clause (3) immediately
     above;

          (5)  accrued dividends on the preferred stock of Borrower;

          (6)  interest rate and currency hedging agreements;

          (7)  guaranties of any Subsidiary's suppliers in connection with the
     purchase of supplies in the ordinary course of business;

          (8)  guaranties of lease obligations incurred in the ordinary course
     of business and to the extent otherwise permitted hereunder;

          (9)  Contingent Obligations constituting Permitted Liens; and

          (10) the indebtedness referred to in clause (3)(a) of the definition
     of Permitted Liens.

                                   Exhibit A
                                  Page 4 of 6
<PAGE>

     "Permitted Liens" means the following:

          (1)  liens and security interests existing as of this date and
     disclosed in Schedule 2 attached hereto and incorporated herein by this
     reference;

          (2)  liens for taxes, fees, assessments or other governmental charges
     or levies, either not delinquent or being contested in good faith by
     appropriate proceedings;

          (3)  liens and security interests (a) upon or in any equipment
     acquired or held by Borrower to secure the purchase price of such equipment
     or indebtedness incurred solely for the purpose of financing the
     acquisition of such equipment and in an amount not greater than the
     purchase price thereof or (b) existing on such equipment at the time of its
     acquisition, provided that the lien and security interest is confined
     solely to the property so acquired and improvements thereon, and the
     proceeds of such equipment;

          (4)  liens consisting of leases or Subleases and licenses and
     sublicenses granted to others in the ordinary course of Borrower's business
     not interfering in any material respect with the business of Borrower and
     any interest or title of a lessor or licensor under any lease or license,
     as applicable;

          (5)  liens securing claims or demands of materialmen, mechanics,
     carriers, warehousemen, landlords and other like persons or entities
     imposed without action of such parties, provided that the payment thereof
     is not yet required;

          (6)  liens incurred or deposits made in the ordinary course of
     Borrower's business in connection with worker's compensation, unemployment
     insurance, social security and other like laws;

          (7)  liens arising from judgments, decrees or attachments in
     circumstances not constituting an Event of Default;

          (8)  easements, reservations, rights-of-way, restrictions, minor
     defects or irregularities in title and other similar charges or
     encumbrances affecting real property not interfering in any material
     respect with the ordinary conduct of Borrower's business;

          (9)  liens in favor of customs and revenue authorities arising as a
     matter of law to secure payment of customs duties in connection with the
     importation of goods;

          (10) liens that are not prior to Bank's security interest which
     constitute rights of set-off of a customary nature;

          (11) any interest or title of a lessor in equipment subject to any
     Capitalized Lease otherwise permitted hereunder, and

          (12) any liens arising from the filing of any financing statements
     relating to true leases otherwise permitted hereunder.

     "Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, firm, joint stock
company, estate, entity or governmental agency.

                                   Exhibit A
                                  Page 5 of 6
<PAGE>

     "Property" means any interest in any kind of property or asset, whether
real, personal or mixed, whether tangible or intangible.

     "Restated Security Agreement" means that certain Amended and Restated
General Security Agreement dated of even date herewith, made by Borrower in
favor of Bank.

     "Subordinated Debt" means indebtedness of Borrower, the repayment of
principal of which is fully subordinated in time and right of payment to the
Loans, and has been approved in Bank's sole and absolute discretion and in
writing.

     "Year 2000 Compliant" means, in regard to Borrower or any Person, that all
software, hardware, firmware, equipment, goods or systems utilized by or
material to the business operations or financial condition of Borrower or such
Person, will properly perform date sensitive functions before, during and after
the year 2000.

     "Year 2000 Problem" means the risk that any computer applications used by
Borrower and its Subsidiaries may be unable to recognize and properly perform
date-sensitive functions involving certain dates prior to and any date on or
after December 31, 1999.
                                   Exhibit A
                                  Page 6 of 6
<PAGE>

                            Schedule 1 to Exhibit A

                        SPECIFIC PERMITTED INDEBTEDNESS

                           List or indicate "None".

                            Schedule 1 to Exhibit A
                                  Page 1 of 1
<PAGE>

                            Schedule 2 to Exhibit A

                           SPECIFIC PERMITTED LIENS

                            List or indicate "None"

                            Schedule 2 to Exhibit A
                                  Page 1 of 1
<PAGE>

                                   Exhibit B

                            COMPLIANCE CERTIFICATE

The consolidated financial statements dated as of __________________ of
CROSSROUTE SOFTWARE, INC., a California corporation ("Borrower") attached hereto
and submitted to IMPERIAL BANK ("Bank") pursuant to that certain Amended and
Restated Loan Agreement dated as of September 8, 1998, entered into between
Borrower and Bank (the "Restated Loan Agreement"), are in compliance with all
financial covenants (unless otherwise noted below) as specified in Section 10
therein, as follows:

--------------------------------------------------------------------------------
COVENANT:                                               ACTUAL:
--------------------------------------------------------------------------------
A.   Minimum Tangible Net Worth of:
     -----------------------------

     $3,000,000.00
--------------------------------------------------------------------------------
B.   Minimum Term Liquidity Coverage Ratio:
     -------------------------------------

     1.50:1.00

--------------------------------------------------------------------------------
C.   Maximum Net Loss:
     ----------------

     $1,000,000.00
--------------------------------------------------------------------------------

Exceptions: (if none, so state):

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

The undersigned authorized officer of Borrower hereby certifies that Borrower is
in complete compliance with the terms and conditions of the Restated Loan
Agreement for the period ending ________________, ______, and as of the date of
this Compliance Certificate the representations and warranties stated therein
are true, accurate and complete as of the date hereof (except as to those
representations and warranties which specifically reference a particular date
and except as noted above).

The undersigned further certifies that s/he knows of no pending conditions which
may cause an Event of Default (as defined in the Restated Loan Agreement) to
exist in the next thirty (30) days. The required support documents for this
certification are attached and prepared in accordance with GAAP consistently
applied.

Date:________________                   CROSSROUTE SOFTWARE, INC.,
                                        a California corporation

                                        By:_____________________________________
                                        Name:___________________________________
                                        Title:__________________________________

                                   Exhibit B
                                  Page 1 of 1
<PAGE>

                                   Exhibit C

                          BORROWING BASE CERTIFICATE

                     (To be provided and attached by Bank)

                                   Exhibit C
<PAGE>

                  [LETTERHEAD OF IMPERIAL BANK APPEARS HERE]

November 18, 1998

Extricity Software, Inc.
555 Twin Dolphin Drive, Suite 600
Redwood Shores, CA 94065

Attention:  Bruce Hausmann
            Ken Ross

Re: Imperial Bank Loan No. 00720000111

Gentlemen:

With reference to the Loan Agreement dated October 6, 1997 and the Amended
and Restated Loan Agreement dated September 8, 1998 between Imperial Bank
("Bank") and Extricity Software, Inc. ("Borrower") in connection with the
above-referenced loan ("Loan"), and as amended from time to time, the Bank
and Borrower hereby modify the following numbered terms and conditions of
the Amended and Restated Loan Agreement (hereinafter referred to as the
"Loan Agreement"):

1.   Section C of Paragraph 10 of the Loan Agreement is deleted in its
     entirety and is replaced with the following:

     C.   Borrower to maintain a Maximum Net Loss in any single month not
          in excess of $1,500,000 beginning with the month ending October
          31, 1998 through the month ending June 30, 1999, thereafter
          maintain a Maximum Net Loss in any month not in excess of
          $1,000,000.

Except for the above-described modifications, the Agreement shall remain
unaltered and in full force and effect.

Please acknowledge your approval by signing and returning the original of
this letter to me.

Sincerely,

/s/ Sunita Patel
Sunita Patel
Assistant Vice President
Emerging Growth Industries
<PAGE>

Extricity Software, Inc.
November 18, 1998
Page 2 of 2
--------------------------------------------------------------------------------

Accepted and agreed to:

EXTRICITY SOFTWARE, INC.

By:    /s/ [ILLEGIBLE]^^
       -----------------------------

Title: Vice President, Finance
       -----------------------------

Date:  12/4/98
       -----------------------------
<PAGE>

                         [LETTERHEAD OF IMPERIAL BANK]

April 6, 1999

Extricity Software. Inc.
555 Twin Dolphin Drive, Suite 600
Redwood Shores, CA 94065

Attention:  Stephen Albertolle
            Eric Niiya

Re:  Imperial Bank Loan No. 00720000111

Gentlemen:

With reference to the Amended and Restated Loan Agreement dated September 8,
1998 between Imperial Bank ("Bank") and Extricity Software, Inc., formerly
Crossroute Software, Inc, ("Borrower") in connection with the above-referenced
loan ("Loan"). and as amended from time to time, the Bank and Borrower hereby
modify the following numbered terms and conditions of the Amended and Restated
Loan Agreement (hereinafter referred to as the "Loan Agreement"):

1.   Section A of Paragraph 10 of the Loan Agreement is deleted in its entirety
     and is replaced with the following:

     A.   At all times maintain a Minimum Tangible Net Worth of not less than
          $3,000,000, except for the period beginning with the month ending
          February 28, 1999 through the earlier of 1) the month ending June 30,
          1999 or 2) upon maintaining a Minimum Tangible Net Worth of not less
          than $3,000,000 during which time no further advances under Facility
          A, Facility B or Facility C will be made by Bank to Borrower. As used
          herein, "Tangible Net Forth" shall mean all assets, excluding any
          value for goodwill, Trademarks, Patents, Copyrights, organization
          expense and other similar intangible items, less all liabilities
          (excluding deferred revenue), plus Subordinated Debt;

Except for the above-described modifications, the Agreement shall remain
unaltered and in full force and effect.
<PAGE>

Extricity Software, Inc.
April 6, 1999
Page 2 of 2
--------------------------------------------------------------------------------

Please acknowledge your approval by signing and returning the original of this
letter to me.

Sincerely,

/s/ Sunita Patel

Sunita Patel
Assistant Vice President
Emerging Growth Industries

Accepted and agreed to:

EXTRICITY SOFTWARE, INC.

By:  /s/ Steve Albertolle
     --------------------

Title:  VP Finance and Administration and CFO
        -------------------------------------

Date:   April 7, 1999
        -------------
<PAGE>

April 6, 1999

Extricity Software, Inc.
555 Twin Dolphin Drive, Suite 600
Redwood Shores, CA 94065

Attention: Stephen Albertolle
           Eric Niiya

Re: Imperial Bank Loan No. 00720000111

Gentlemen:

With reference to the Amended and Restated Loan Agreement dated September 8,
1998 between Imperial Bank ("Bank") and Extricity Software, Inc., formerly
Crossroute Software, Inc, ("Borrower") in connection with the above-referenced
loan ("Loan"), and as amended from time to time, the Bank and Borrower hereby
modify the following numbered terms and conditions of the Amended and Restated
Loan Agreement (hereinafter referred to as the "Loan Agreement"):

1.   Section C of Paragraph 10 of the Loan Agreement is deleted in its entirety
     and is replaced with the following:

     C.   Borrower to maintain a Maximum Net Loss in any single month not in
          excess of $1,500,000, except for the month ending June 30, 1999, in
          which Borrower is to maintain a Maximum Net Loss not in excess of
          $1,650,000;

Except for the above-described modifications, the Agreement shall remain
unaltered and in full force and effect.

Please acknowledge your approval by signing and returning the original of this
letter to me.

Sincerely,

/s/ Sunita Patel

Sunita Patel
Assistant Vice President
Emerging Growth Division
<PAGE>

Extricity Software, Inc.
August 5, 1999
Page 2 of 2
--------------------------------------------------------------------------------

Accepted and agreed to:

EXTRICITY SOFTWARE, INC.

By:  /s/ Stephen Albertolle
     ----------------------

Title:  VP Finance and CFO
        ------------------

Date:   9-7-99
        ------
<PAGE>

                         [LETTERHEAD OF IMPERIAL BANK]

September 7, 1999

Stephen Albertolle
Extricity Software
555 Twin Dolphin Drive
Suite 600
Redwood Shores, CA 94065

Re: Loan # 00720000111/ 05 Note Number/ $750,000 Note Amount

Dear Steve:

Imperial Bank has approved an extension of your credit facility shown above as
evidenced by the Loan Agreement dated September 8, 1998, from its current
maturity of September 7, 1999 to December 7, 1999.

Except as modified and extended hereby, the existing documentation as amended
concerning your obligations remains in full force and effect.

Sincerely,

/s/ Sunita Patel

Sunita Patel
Vice President
Emerging Growth Industries Group

Acknowledged and accepted on September, 9, 1999.

By:
EXTRICITY SOFTWARE, INC.

/s/ Steve Albertolle
--------------------

Title:  VP Finance and CFO
        ------------------
<PAGE>

                         [LETTERHEAD OF IMPERIAL BANK]

April 27, 2000

Extricity Software, Inc.
555 Twin Dolphin Drive, Ste. 600
Redwood Shores, CA 94065

Attention:  Steven Albertolle
            Eric Niiya

Re:  Imperial Bank Loan No. 00720000111

Gentlemen:

With reference to the Amended and Restated Loan Agreement dated September 8,
1998 between Imperial Bank ("Bank") and Extricity Software, Inc., formerly
Crossroute Software, Inc. ("Borrower") in connection with the above referenced
loan ("Loan"), and as amended from time to time, the Bank and Borrower hereby
agree to waive for the periods ended January 31, 2000, February 28, 2000 and
March 31, 2000, the requirement under Section C of Paragraph 10 of the Loan
agreement, requiring a Maximum Net Loss in any single month not in excess of
$1,500,000, except for the month ending June 30, 1999, in which Borrower is to
maintain a Maximum Net Loss not in excess of $1,650,000.

This waiver should not be construed as a permanent waiver of any terms and
conditions.  Except for the above waiver, the Agreement shall remain unaltered
and in full force and effect.

Please acknowledge your approval by signing and returning this original letter
to my attention.

Sincerely,

/s/ Dan Sanchez
Dan Sanchez
Vice President
Emerging Growth Division
<PAGE>

Extricity Software, Inc.
April 27, 2000
Page 2 of 2

          Accepted and Agreed to:

          EXTRICITY SOFTWARE, INC.

          By:    /s/ Steve Albertulle
                 -----------------------

          Title: CFO and VP of Finance
                 -----------------------
                 and Administration
                 -----------------------

          Date:  April 27, 2000
                 -----------------------
<PAGE>

                         [LETTERHEAD OF IMPERIAL BANK]

April 27, 2000

Stephen Albertolle
Extricity Software
555 Twin Dolphin Drive
Suite 600
Redwood Shores, CA 94065

Re:  Loan # 00720000111/ 05 Note Number/ $750,000 Note Amount

Dear Steve:

Imperial Bank has approved an extension of your credit facility shown above as
evidenced by the Loan Agreement dated September 8, 1998, from its current
maturity of April 7, 2000 to May 7, 2000.

Except as modified and extended hereby, the existing documentation as amended
concerning your obligations remains in full force and effect.

Sincerely,

/s/ Dan Sanchez

Dan Sanchez
Vice President
Emerging Growth Industries Group

Acknowledged and accepted on April 27, 2000.

EXTRICITY SOFTWARE, INC.

By: /s/ Steve Albertolle
    ---------------------
Title: CFO and VP of Finance and Administration
       -----------------------------------------
<PAGE>

                                FIRST AMENDMENT

                                       TO

                              AMENDED AND RESTATED

                                 LOAN AGREEMENT
                                 --------------

     This First Amendment to Amended and Restated Loan Agreement is entered into
as of May 1, 2000 (the "Amendment"), by and between IMPERIAL BANK ("Bank") and
EXTRICITY, INC., formerly known as CROSSROUTE SOFTWARE, INC. ("Borrower").

                                    RECITALS
                                    --------

     Borrower has changed its name from "CrossRoute Software, Inc." to
"Extricity, Inc."  Borrower and Bank are parties to that certain Amended and
Restated Loan Agreement dated as of September 8, 1998 as amended thereafter (the
"Agreement"), that certain Amended and Restated General Security Agreement dated
as of September 8, 1998 (the "Security Agreement"), and that certain Collateral
Assignment, Patent Mortgage and Security Agreement dated as of September 8, 1998
(the "Collateral Assignment").  Since execution of the Loan Documents, Borrower
has since changed its name from CROSSROUTE SOFTWARE, INC. to EXTRICITY, INC.
The parties desire to amend the Agreement in accordance with the terms of this
Amendment.

          NOW, THEREFORE, the parties agree as follows:

     1.  Wherever the name "CrossRoute Software, Inc." appears in the Loan
Agreement and any related documents (the "Loan Documents") it shall mean
"Extricity, Inc." Any reference in the Loan Documents to Borrower, the
undersigned or other terms that refer to "CrossRoute Software, Inc." shall mean
and refer to "Extricity, Inc."

     2.  The reference in Section 1.B. to "$750,000.00 (the "Facility -B
Commitment")" is hereby revised to read "$1,500,000.00 (the "Facility -B
Commitment")".

     3.  The last sentence in Section 1.B. is hereby replaced with the
following:

                   "Borrower promises to pay to Bank the entire outstanding
unpaid principal balance (and all accrued unpaid interest thereon) of the
Facility-B Loan Account on or before May 1, 2001. ("Facility-B Maturity Date").

     4.  In Section 10.D., after the words "an internally-prepared financial
statement", add the following: "prepared in accordance with GAAP,".

     5.  Section 10.E. of the Agreement is hereby replaced in its entirety with
the following:

                   "Beginning with the fiscal year ended March 31, 2000, as soon
as it is available, but not later than one hundred twenty (120) days after the
end of Borrower's fiscal year, deliver to Bank unqualified copies of Borrower's
consolidated financial statements together with changes in financial position
audited by an independent certified public accountant selected by Borrower but
acceptable to Bank;"

     6.  The following new Section 10.I. is hereby added to the Agreement:

                   "I. At all times, maintain, a ratio of Quick Assets to
     Current Liabilities minus Deferred Maintenance Revenue of at least 1.50 to
     1.0.; and

          Section 10.C. of the Agreement is hereby replaced in its entirety with
     the following:

                   Beginning with the fiscal quarter and the month ending June
     30, 2000, Borrower shall not suffer a loss (excluding expenses related to
     amortization of deferred compensation) in excess of

                                       1
<PAGE>

30, 2000; $9,000,000 for the fiscal quarter ended December 31, 2000; $6,500,000
for the fiscal quarter ended March 31, 2001.

     7. The following new definitions are hereby added to Exhibit A of the
                                                          ---------
Agreement:

            "Bank Expenses" means all: reasonable costs or expenses (including
reasonable attorneys' fees and expenses) incurred in connection with the
preparation, negotiation, administration, and enforcement of the Loan Documents;
reasonable Collateral audit fees; and Bank's reasonable attorneys' fees and
expenses incurred in amending, enforcing or defending the Loan Documents
(including fees and expenses of appeal), incurred before, during and after an
Insolvency Proceeding, whether or not suit is brought.

            "Current Liabilities" means, as of any applicable date, all amounts
that should, in accordance with GAAP, be included as current liabilities on the
consolidated balance sheet of Borrower and its Subsidiaries, as at such date,
plus, to the extent not already included therein, all outstanding Credit
Extensions made under this Agreement, including all Indebtedness that is payable
upon demand or within one year from the date of determination thereof unless
such Indebtedness is renewable or extendible at the option of Borrower or any
Subsidiary to a date more than one year from the date of determination.

            "Deferred Maintenance Revenue" is all amounts received in advance of
performance under maintenance contracts and not yet recognized as revenue.

            "GAAP" means generally accepted accounting principles as in effect
from time to time.

            "Insolvency Proceeding" means any proceeding commenced by or against
any person or entity under any provision of the United States Bankruptcy Code,
as amended, or under any other bankruptcy or insolvency law, including
assignments for the benefit of creditors, formal or informal moratoria,
compositions, extension generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.

            "Quick Assets" means, at any date as of which the amount thereof
shall be determined, the unrestricted cash and cash-equivalents, accounts
receivable and investments with maturities not to exceed 90 days, of Borrower
determined in accordance with GAAP.

     8. The definition of "IP Security Agreement" is hereby deleted in Exhibit A
                                                                       ---------
of the Agreement.

     9. The Exhibit B, Compliance Certificate and Exhibit C, Borrowing Base
            ---------                             ---------
Certificate of the Agreement are hereby replaced in their entirety with the
Exhibit B, Compliance Certificate and Exhibit C, Borrowing Base Certificate
---------                             ---------
attached hereto and incorporated into the Agreement by this reference.

     10. Bank will not be requiring specific filings on the Borrower's
Intellectual Property at the United States Patent and Trademark Office or the
Copyright Office.

     11. Unless otherwise defined, all initially capitalized terms in this
Amendment shall be as defined in the Agreement. The Agreement, as amended
hereby, shall be and remain in full force and effect in accordance with its
respective terms and hereby is ratified and confirmed in all respects. Except as
expressly set forth herein, the execution, delivery, and performance of this
Amendment shall not operate as a waiver of, or as an amendment of, any right,
power, or remedy of Bank under the Agreement, as in effect prior to the date
hereof. Borrower ratifies and reaffirms the continuing effectiveness of all
promissory notes, guaranties, security agreements, mortgages, deeds of trust,
environmental agreements, and all other instruments, documents and agreements
entered into in connection with the Agreement.

     12. Borrower represents and warrants that the Representations and
Warranties contained in the Agreement are true and correct as of the date of
this Amendment, and that no Event of Default has occurred and is continuing.

                                       2
<PAGE>

     13. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one instrument.

     14. As a condition to the effectiveness of this Amendment, Bank shall have
received, in form and substance satisfactory to Bank, the following:

            (a) this Amendment, duly executed by Borrower;

            (b) any Bank Expenses incurred through the date of this Amendment;

            (c) Corporate Resolutions to Borrow;

            (d) UCC-2 Amendment evidencing Borrower's name change; and

            (e) such other documents, and completion of such other matters, as
Bank may reasonably deem necessary or appropriate.

     IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
first date above written.

                               EXTRICITY, INC.

                               By:    /s/ Stephen Albertolle
                                      ----------------------------------
                               Title: VP Finance, CFO and Secretary

                               IMPERIAL BANK

                               By:    /s/ Dan Sanchez
                                     ----------------------------------
                               Title: Vice President

                                       3
<PAGE>

                                    EXHIBIT B

                             COMPLIANCE CERTIFICATE

TO:   IMPERIAL BANK

FROM: EXTRICITY, INC.

     The undersigned authorized officer of Extricity, Inc. hereby certifies that
in accordance with the terms and conditions of the Amended and Restated Loan
Agreement between Borrower and Bank (the "Agreement"), (i) Borrower is in
complete compliance for the period ending _______________ with all required
covenants except as noted below and (ii) all representations and warranties of
Borrower stated in the Agreement are true and correct in all material respects
as of the date hereof. Attached herewith are the required documents supporting
the above certification. The Officer further certifies that these are prepared
in accordance with Generally Accepted Accounting Principles (GAAP) and are
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes.

 PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES" COLUMN.

<TABLE>
<CAPTION>
Reporting Covenant                        Required                                Complies
------------------                        --------                              ------------
<S>                                       <C>                                  <C>       <C>
Monthly financial statements              Monthly within 30 days                Yes       No
Annual (CPA Audited)                      FYE within 120 days (beg. 3/31/00)    Yes       No
10K and 10Q                               (as applicable)                       Yes       No
A/R & A/P Agings, Borrowing Base Cert.    Monthly within 20 days                Yes       No
A/R Audit                                 Initial and Annual                    Yes       No
IP Report                                 Quarterly within 30 days              Yes       No

Financial Covenant                           Required             Actual          Complies
------------------                           --------           -----------     ------------
Maintain on a Monthly  Basis:
  Minimum Adjusted Quick Ratio               1.50:1.00(1)        _____:1.00     Yes       No
  Maximum Term Liquidity Coverage Ratio      1.50:1.00           _____:1.00     Yes       No
  Minimum Tangible Net Worth                 $ 3,000,000         $________      Yes       No
  Maximum Loss                               $ ________(2)       $________      Yes       No
</TABLE>

(1)  At all times, maintain, a ratio of Quick Assets to Current Liabilities
minus Deferred Maintenance Revenue of at least 1.50 to 1.0.

(2)  Maintain, beginning with the fiscal quarter and the month ending March 31,
2000, Borrower shall not suffer a loss, in excess of $6,000,000 for each fiscal
quarter.
<TABLE>
<CAPTION>
COMMENTS REGARDING EXCEPTIONS:  See Attached.                 BANK USE ONLY
<S>                                                           <C>
                                                              Received by:_______________________________________
Sincerely,                                                                           AUTHORIZED SIGNER

                                                              Date:______________________________________________

___________________________________________________           Verified:__________________________________________
SIGNATURE                                                                            AUTHORIZED SIGNER

___________________________________________________           Date: _____________________________________________
TITLE
                                                              Compliance Status                       Yes      No
___________________________________________________
DATE
</TABLE>

                                       4
<PAGE>

                                    EXHIBIT C
                                    ---------

                           BORROWING BASE CERTIFICATE

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
Borrower: Extricity, Inc.                                                            Lender:  Imperial Bank

Commitment Amount:  $1,500,000.00
-----------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                     <C>

ACCOUNTS RECEIVABLE
      1.  Accounts Receivable Book Value as of ___                                            $___________
      2.  Additions (please explain on reverse)                                               $___________
      3.  TOTAL ACCOUNTS RECEIVABLE                                                           $___________

ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
      4.  Amounts over 90 days due                                    $___________
      5.  Balance of 50% over 90 day accounts                         $___________
      6.  Concentration Limits
      7.  Foreign Accounts                                            $___________
      8.  Governmental Accounts                                       $___________
      9.  Contra Accounts                                             $___________
     10.  Demo Accounts                                               $___________
     11.  Intercompany/Employee Accounts                              $___________
     12.  Other (please explain on reverse)                           $___________
     13.  TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS                                               $___________
     14.  Eligible Accounts (#3 minus #13)                                                   $___________
     15.  LOAN VALUE OF ACCOUNTS (75% of #14)                                                $___________

BALANCES
     16.  Maximum Loan Amount                                                                $___________
     17.  Total Funds Available [Lesser of #16 or #15]                                       $___________
     18.  Present balance owing on Line of Credit                                            $___________
     19.  Outstanding under Sublimits (Letters of Credit)                                    $___________
     20.  RESERVE POSITION (#17 minus #18 and #19)                                           $___________
</TABLE>
The undersigned represents and warrants that the foregoing is true, complete and
correct, and that the information reflected in this Borrowing Base Certificate
complies with the representations and warranties set forth in the Loan and
Security Agreement between the undersigned and Imperial Bank.

EXTRICITY, INC.

By: _______________________________________
             Authorized Signer

                                       5
<PAGE>

                         CORPORATE RESOLUTIONS TO BORROW

Borrower:  EXTRICTY, INC.
--------------------------------------------------------------------------------

     I, the undersigned Secretary or Assistant Secretary of EXTRICITY, INC. (the
"Corporation"), HEREBY CERTIFY that the Corporation is organized and existing
under and by virtue of the laws of the state of its incorporation.

     I FURTHER CERTIFY that at a meeting of the Directors of the Corporation
duly called and held, at which a quorum was present and voting, (or by other
duly authorized corporate action in lieu of a meeting), the following
resolutions were adopted.

     BE IT RESOLVED, that any one (1) of the following named officers,
employees, or agents of this Corporation, whose actual signatures are shown
below:

<TABLE>
<CAPTION>
               NAMES                                POSITIONS                            ACTUAL SIGNATURES
-----------------------------------   --------------------------------------   --------------------------------------
<S>                                   <C>                                      <C>
Barry M. Ariko                        Chairman and CEO                         /s/ Barry M. Ariko
Stephen J. Albertolle                 VP Finance, CFO and Secretary            /s/ Stephen Albertolle
Vicki L. Randall                      General Counsel and Assistant            /s/ Vicki Randall
                                      Secretary
</TABLE>

acting for an on behalf of this Corporation and as its act and deed be, and they
hereby are, authorized and empowered:

     BORROW MONEY. To borrow from time to time from Imperial Bank ("Bank"), on
such terms as may be agreed upon between the officers, employees, or agents and
Bank, such sum or sums of money as in their judgment should be borrowed, without
limitation, including such terms and sums as are specified in that certain First
Amendment to Amended and Restated Loan Agreement dated as of May 1, 2000 (the
"Amendment").

     EXECUTE AMENDMENT. To execute and deliver to Bank the Amendment and related
documents, and also to execute and deliver to Bank one or more renewals,
extensions, modifications, consolidations, or substitutions therefor.

     GRANT SECURITY. To grant a security interest to Bank in the Collateral
described in the Amendment, which security interest shall secure all of the
Corporation's Obligations, as described in the Amendment.

     NEGOTIATE ITEMS. To draw, endorse, and discount with Bank all drafts, trade
acceptances, promissory notes, or other evidences of indebtedness payable to or
belonging to the Corporation or in which the Corporation may have an interest,
and either to receive cash for the same or to cause such proceeds to be credited
to the account of the Corporation with Bank, or to cause such other disposition
of the proceeds derived therefrom as they may deem advisable.

     FURTHER ACTS. In the case of lines of credit, to designate additional or
alternate individuals as being authorized to request advances thereunder, and in
all cases, to do and perform such other acts and things, to pay any

                                       6
<PAGE>

and all fees and costs, and to execute and deliver such other documents and
agreements as they may in their discretion deem reasonably necessary or proper
in order to carry into effect the provisions of these Resolutions.

     BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Bank may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Bank. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.

     I FURTHER CERTIFY that the officers, employees, and agents named above are
duly elected, appointed, or employed by or for the Corporation, as the case may
be, and occupy the positions set forth opposite their respective names; that the
foregoing Resolutions now stand of record on the books of the Corporation; and
that the Resolutions are in full force and effect and have not been modified or
revoked in any manner whatsoever.

     I FURTHER CERTIFY that attached hereto are true and correct copies of the
Certificate of Incorporation and Bylaws of the Corporation.

     IN WITNESS WHEREOF, I have hereunto set my hand on May 1, 2000 and attest
that the signatures set opposite the names listed above are their genuine
signatures.

                                    CERTIFIED TO AND ATTESTED BY:

                                    X
                                    --------------------------------------------

================================================================================

                                       7
<PAGE>

                             AMENDED AND RESTATED
                          GENERAL SECURITY AGREEMENT

     THIS AMENDED AND RESTATED GENERAL SECURITY AGREEMENT is executed as of
September 8, 1998 (this "Restated Security Agreement"), by CROSSROUTE SOFTWARE,
INC., a California corporation (hereinafter called "Grantor"), in favor of
IMPERIAL BANK (hereinafter called "Bank") and amends, restates and supersedes in
its entirety that certain General Security Agreement dated as of October 6, 1997
executed by Grantor in favor of Bank ("Prior General Security Agreement").

     In consideration of financial accommodations given, to be given or
continued, Grantor hereby grants to Bank a security interest in (a) all property
(i) delivered to Bank by Grantor, (ii) which shall be in Bank's possession or
control in any matter or for any purpose, (iii) described below or (iv) now
owned or hereafter acquired by Grantor of the type or class described below
and/or in any exhibit or supplementary schedule hereto, or in any financing
statement filed by Bank and executed by or on behalf of Grantor; and (b) the
proceeds, increase and products of such property, all accessions thereto, and
all property which Grantor may receive on account of such collateral
(collectively referred to as "Collateral") to secure payment and performance of
all of Grantor's present or future debts or obligations to Bank, whether
absolute or contingent (hereafter referred to as "Debt"). See Exhibit A attached
hereto and incorporated herein by this reference for a description of the
Collateral. The Collateral which is not in Bank's possession will be located at
the locations set forth on Exhibit B attached hereto and incorporated herein by
this reference. Unless otherwise defined herein, initially capitalized terms
used herein shall have the meanings given them (A) in the California Uniform
Commercial Code, (B) as defined in that certain Amended and Restated Loan
Agreement dated as of the date hereof entered into by and among Grantor and Bank
(as the same may be modified, amended, supplemented, restated or superceded from
time to time, the "Restated Loan Agreement") or (C) as defined in Exhibit A
attached hereto.

     Grantor hereby represents, warrants and agrees:

     1.   Grantor will immediately pay (a) any Debt when due, (b) Bank's costs
of collecting the Debt, of protecting, insuring or realizing on Collateral, and
any expenditure of Bank referenced herein, including, without limitation,
attorneys' fees and expenses (incurred in connection with Bank's collection of
the Debt upon the occurrence and continuance of an Event of Default), with
interest at the rate of twenty-four percent (24%) per year, or the rate
applicable to the Debt, whichever is less, from the date of expenditure, and (c)
any deficiency after realization of Collateral.

     2.   Grantor will use the proceeds of any loan that becomes Debt hereunder
for the purpose indicated on the application therefor, and will promptly
contract to purchase and pay the purchase price of any property which becomes
Collateral hereunder from the proceeds of any loan made for that purpose.

     3.   As to all Collateral in Grantor's possession or the possession of its
contract manufacturers (unless specifically otherwise agreed to by Bank in
writing), Grantor will:

          (a) Have or has possession of the Collateral at the location disclosed
to Bank and will not remove the Collateral from said location, except for sales
in the ordinary course of Borrower's business.

          (b) Keep the Collateral separate and identifiable.

          (c) Maintain the Collateral in good and saleable condition, repair it
if necessary and otherwise deal with the Collateral in all such ways as are
considered good practice by owners of like property, use it lawfully and only as
permitted by insurance policies, and permit Bank to inspect the Collateral at
any reasonable time in accordance with the terms of the Restated Loan Agreement.

                                       1
<PAGE>

          (d) Not sell, contract to sell, lease, encumber or transfer the
Collateral (other than the disposition of such inventory Collateral in the
ordinary course of Borrower's business and other assets which are obsolete or
otherwise considered surplus)until the Debt has been paid or performed in full,
even though Bank has a security interest in the proceeds of such Collateral.

     4.   As to Collateral which is inventory and accounts, Grantor:

          (a) May, until notice from Bank after the occurrence and during the
continuance of an Event of Default, sell, lease or otherwise dispose of
inventory Collateral in the ordinary course of business only, and collect the
cash proceeds thereof.

          (b) Will, upon notice from Bank after the occurrence and during the
continuance of an Event of Default, deposit all cash proceeds as received in a
demand deposit account with Bank, containing only such proceeds and deliver
statements identifying units of inventory disposed of, accounts which gave rise
to proceeds, and all acquisitions and returns of inventory as required by Bank.

          (c) Will receive in trust after the occurrence and during the
continuance of an Event of Default, schedule on forms satisfactory to Bank and,
upon notice from Bank, deliver to Bank all non-cash proceeds other than
inventory received in trade.

          (d) So long as there does not exist an Event of Default, may obtain
release of Bank's interest in individual units of inventory upon request
therefore, payment to Bank of the release price of such units shown on any
Collateral schedule supplementary hereto, and compliance herewith as to proceeds
thereof.

     5.   As to Collateral which are Accounts, Chattel Paper, General
Intangibles and Proceeds described in Section 4(c) above, Grantor warrants,
represents and agrees:

          (a) All such Collateral is genuine, enforceable in accordance with its
terms and conditions precedent (except as disclosed to and accepted by Bank in
writing), and is supported by consecutively numbered invoices to, or rights
against, the debtors thereon. Grantor will supply Bank with duplicate invoices
or other evidence of Grantor's rights on Bank's request.

          (b) All persons appearing to be obligated on such Collateral have
authority and capacity to contract.

          (c) All Chattel Paper is in compliance with applicable law as to form,
content and manner of preparation and execution and has been properly
registered, recorded, and/or filed to protect Grantor's interest thereunder.

          (d) If an account debtor shall also be indebted to Grantor on another
obligation, any payment made by such account debtor not specifically designated
to be applied on any particular obligation shall be considered to be a payment
on the account in which Bank has a security interest. Should any remittance
include a payment not on an account, it shall be delivered to Bank and, if no
Event of Default has occurred, Bank shall pay Grantor the amount of such
payment.

          (e) Grantor agrees that following the occurrence and during the
continuance of an Event of Default, Grantor shall not compromise, settle or
adjust any Account or renew or extend the time of payment thereof without Bank's
prior written consent.

          (f) Until Bank exercises its rights to collect the Accounts pursuant
to Section 11 hereof, Grantor will collect with diligence all Grantor's
Accounts. Any collection of Accounts by Grantor, whether in the form of cash,
checks, notes, or other instruments for the payment of money (properly endorsed
or assigned where

                                       2
<PAGE>

required to enable Bank to collect same), shall be in trust for Bank. If an
Event of Default has occurred and is continuing, Grantor shall keep all such
collections separate and apart from all other funds and property so as to be
capable of identification as the property of Bank and deliver said collections
daily to Bank in the identical form received. The proceeds of such collections
when received by Bank may be applied by Bank directly to the payment of the
applicable Loan Account or to any other obligation secured hereby. Any credit
given by Bank upon receipt of said proceeds shall be conditional credit subject
to collection. Returned items at Bank's option may be charged to Grantor's
deposit account with Bank. All collections of the Accounts shall be set forth on
an itemized schedule, showing the name of the account debtor, the amount of each
payment and such other information as Bank may request.

          (g) Until Bank exercises its rights to collect the Accounts pursuant
to Section 11 hereof, Grantor may continue its present policies with respect to
returned merchandise and adjustments. However, Grantor shall immediately notify
Bank of all cases involving repossessions, and material loss or damage of or to
merchandise represented by the Accounts.

     6.   Grantor owns all of the Collateral absolutely and no other person has
or claims any interest in any of the Collateral, except for Permitted Liens and
as disclosed to and accepted by Bank in writing. Grantor will defend any
proceeding that may affect title to or Bank's security interest in any of the
Collateral, and will indemnify and hold Bank free and harmless from all costs
and expenses of Bank's defense.

     7.   Grantor will pay when due all existing or future charges, liens or
encumbrances on and all taxes and assessments (except for taxes not yet due and
payable or which are contested in good faith and for which Grantor has set aside
adequate reserves) now or hereafter imposed on or affecting the Collateral and,
if the Collateral is in Grantor's possession, the realty on which the Collateral
is located.

     8.   Grantor will insure the Collateral with Bank as loss payee in form and
amounts with companies, and against risks and liability satisfactory to Bank (to
the extent customarily maintained by businesses similar to Borrower's), and
hereby assigns such policies to Bank, agrees to deliver them to Bank at Banks
request, and authorizes Bank to make any claim thereunder, to cancel the
insurance upon Grantor's default, and to receive payment of and endorse any
instrument in payment of any loss or return premium. If Grantor should fail to
deliver the required insurance policy or policies to Bank, Bank may, at
Grantor's cost and expense, without any duty to do so, get and pay for insurance
naming as the insured, at Bank's option, either both Grantor and Bank, or only
Bank, and the cost thereof shall be secured by this Restated Security Agreement,
and shall be repayable as provided in Section 1 above.

     9.  Grantor will give Bank any information it reasonably requires in
accordance with the terms of the Loan Documents. All information at any time
supplied to Bank by Grantor (including, but not limited to, the value and
condition of Collateral, financial statements, financing statements, and
statements made in documentary Collateral) is correct and complete, and Grantor
will notify Bank of any adverse change in such information. Grantor will
promptly notify Bank of any change of Grantor's residence, chief executive
office or mailing address.

     10.  At any time and from time to time, upon the written request of Bank,
and at the sole expense of Grantor, Grantor shall promptly and duly execute and
deliver any and all such further instruments and documents and take such further
action as Bank may reasonably deem desirable to obtain the full benefits of this
Restated Security Agreement and of the rights and powers herein granted,
including, without limitation, (a) using its best efforts to secure all consents
and approvals necessary or appropriate for the grant of a security interest to
Bank in any Contract or License held by Grantor or in which Grantor has any
rights not heretofore assigned, (b) filing any financing or continuation
statements under the UCC with respect to the security interests granted hereby,
(c) filing or cooperating with Bank in filing any forms or other documents
required to be filed with the United States Patent and Trademark Office, United
States Copyright Office, or any filings in any foreign jurisdiction or under any
international treaty, required to secure or protect Bank's interest in the
Collateral, (d) transferring Collateral to

                                       3
<PAGE>

Bank's possession (if a security interest in such Collateral can be perfected by
possession), (e) placing the interest of Bank as lienholder on the certificate
of title (or other evidence of ownership) of any vehicle owned by Grantor or in
or with respect to which Grantor holds a beneficial interest and (f) using its
best efforts to obtain waivers of liens from landlords and mortgagees. Grantor
also hereby authorizes Bank to file any such financing or continuation statement
without the signature of Grantor. If any amount payable under or in connection
with any of the Collateral is or shall become evidenced by any Instrument, such
Instrument, other than checks and notes received in the ordinary course of
business, shall be duly endorsed in a manner satisfactory to Bank and delivered
to Bank promptly upon Grantor's receipt thereof.

     11.  Upon the occurrence and during the continuation of an Event of Default
Bank may, without prior notice to Grantor, collect the Collateral and may give
notice of assignment of Accounts to any and all account debtors and Grantor does
hereby make, constitute and appoint Bank its irrevocable, true and lawful
attorney-in-fact with power to do any act which Grantor is obligated hereby to
do, to exercise such rights as Grantor may exercise, to use such equipment as
Grantor might use, to enter Grantor's premises to give notice of Bank's security
interest, and to collect Collateral and proceeds and to execute and file in
Grantor's name any financing statements and amendments thereto required to
perfect Bank's security interest hereunder, all to protect and preserve the
Collateral and Bank's rights hereunder. Without limiting the generality of the
foregoing, after and during the continuance of an Event of Default, Bank may:

          (a) Endorse the name of Grantor, collect and receive delivery or
payment of Instruments and Documents constituting Collateral.

          (b) Demand, sue for, give acquittances for, make extension agreements
with respect to or affecting Collateral, exchange it for other Collateral,
release persons liable thereon or take security for the payment thereof, and
compromise, prosecute or defend any action, claim, proceeding or other disputes
in connection therewith.

          (c) Use or operate Collateral for the purpose of preserving Collateral
or its value and for preserving or liquidating Collateral.

     12.  Discharge of Grantor except for full payment, or any extension,
forbearance, change of rate of interest, or acceptance, release or substitution
of Collateral or any impairment or suspension of Bank's rights against Grantor,
or any transfer of Grantor's interest to another shall not affect the liability
of Grantor hereunder. Until the Debt shall have been paid or performed in full,
Bank's rights shall continue even if the Debt is deemed unenforceable. Grantor
hereby waives: (a) any right to require Bank to proceed against Grantor before
any other, or to pursue any other remedy; (b) presentment, protest and notice of
protest, demand and notice of nonpayment, demand or performance, notice of sale,
and advertisement of sale; (c) any right to the benefit of or to direct the
application of any Collateral until the Debt shall have been paid or performed
in full; and (d) any right of subrogation to Bank until the Debt shall have been
paid or performed in full.

     13.  After and during the continuance of an Event of Default, at Bank's
option, without demand or notice, all or any part of the Debt shall immediately
become due and payable. Bank shall have all rights given by law, and may sell,
in one or more sales, Collateral in any county where Bank has an office. Bank
may purchase at such sale. Sales for cash or on credit to a wholesaler, retailer
or user of the Collateral, or at public or private auction, are all to be
considered commercially reasonable. Bank may require Grantor to assemble the
Collateral and make it available to Bank at the entrance to the location where
the Collateral is stored, or at a place designated by Bank.

     14.  Bank's acceptance of partial or delinquent payments or the failure of
Bank to exercise any right or remedy shall not waive any obligation of Grantor
or right of Bank to modify this Restated Security Agreement, or waive any other
similar default.

                                       4
<PAGE>

     15.  Upon the transfer of all or any part of the Debt, Bank may transfer
all or any part of the Collateral. Bank may deliver all or any part of the
Collateral to any Grantor at any time. Any such transfer or delivery shall
discharge Bank from all liability and responsibility with respect to such
Collateral transferred or delivered. This Restated Security Agreement benefits
Bank's successors and assigns and binds Grantor's heirs, legatees, personal
representatives, successors and assigns. Time is of the essence. This Restated
Security Agreement, the other Loan Documents and the exhibit(s) attached hereto
contain the entire security agreement between Bank and Grantor. Grantor will
execute any additional agreements, assignments or documents reasonably required
by Bank to carry this Restated Security Agreement into effect.

     16.  If one or more Grantors sign this Restated Security Agreement, their
liability hereunder shall be joint and several. Any Grantor who is married
hereby agrees that recourse may be had against his or her separate property for
the Debt.

     17.  This Restated Security Agreement shall be governed by and construed in
accordance with the laws of the State of California, to the jurisdiction of
whose courts Grantor hereby agrees to submit. Grantor agrees that service of
process may be accomplished by any means authorized by California law. All words
used herein in the singular shall be considered to have been used in the plural
where the context and construction so require.

     18.  Grantor hereby acknowledges receiving a copy of this Restated Security
Agreement and waives all rights to receive from Bank a copy of any financing
statement or financing change statement filed, or any verification statement
received, at any time in respect of this Restated Security Agreement.

     19.  This Restated Security Agreement is not intended to be, and shall not
be construed to create, a novation or accord and satisfaction, and, except as
otherwise provided herein, the Prior General Security Agreement is amended and
restated in full by the terms of this Restated Security Agreement and all
obligations outstanding under the Prior General Security Agreement are governed
by the terms of this Restated Security Agreement.

                              GRANTOR

                              CROSSROUTE SOFTWARE, INC.,
                              a California corporation

                              By:  /s/ Bruce Hausmann
                                   ------------------
                              Bruce Hausmann
                              Vice President, Finance

                                       5
<PAGE>

                                   EXHIBIT A

                           DESCRIPTION OF COLLATERAL

     1.   Collateral. The Collateral shall consist of all right, title and
interest of Grantor in, to and under all of the following, wherever located and
whether now owned or hereafter owned or acquired in which Grantor now has or
hereafter acquires any right or interest (collectively, the "Collateral"):

          (a)  All Accounts of Grantor;

          (b)  All Chattel Paper of Grantor;

          (e)  All Contracts of Grantor;

          (d) All Deposit Accounts of Grantor;

          (e)  All Documents of Grantor;

          (f)  All Equipment of Grantor;

          (g)  All Fixtures of Grantor;

          (h) All General Intangibles of Grantor;

          (i)  All Instruments of Grantor;

          (j)  All Inventory of Grantor;

          (k) All Investment Property of Grantor;

          (1)  All Licenses of Grantor;

          (m) All property of Grantor held by Bank or any other party for whom
Bank is acting as agent hereunder, including, without limitation, all property
of every description now or hereafter in the possession or custody of or in
transit to Bank or such other party for any purpose, including, without
limitation, safekeeping, collection or pledge, for the account of Grantor, or as
to which Grantor may have any right or power;

          (n) All other goods and personal property of Grantor whether tangible
or intangible and whether now or hereafter owned or existing, leased, consigned
by or to, or acquired by, Grantor and wherever located;

          (o) To the extent not otherwise included, all Proceeds of each of the
foregoing and all accessions to, substitutions and replacements for, and rents,
profits and products of each of the foregoing; and

          (p) All Proceeds of the Intellectual Property of Grantor.

     2.   Defined Terms. Unless otherwise defined herein, the following terms
shall have the following meanings (such meanings being equally applicable to
both the singular and plural forms of the terms defined):

                                   Exhibit A
                                  Page 1 of 5
<PAGE>

     "Accounts" means any "account," as such term is defined in Section 9106 of
the UCC, now owned or hereafter acquired by Grantor or in which Grantor now
holds or hereafter acquires any interest and, in any event, shall include,
without limitation, all accounts receivable, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper,
Documents or Instruments) now owned or hereafter received or acquired by or
belonging or owing to Grantor (including, without limitation, under any trade
name, style or division thereof) whether arising out of goods sold or services
rendered by Grantor or from any other transaction, whether or not the same
involves the sale of goods or services by Grantor (including, without
limitation, any such obligation which may be characterized as an account or
contract right under the UCC) and all of Grantor's rights in, to and under all
purchase orders or receipts now owned or hereafter acquired by it for goods or
services, and all of Grantor's rights to any goods represented by any of the
foregoing (including, without limitation, unpaid seller's rights of rescission,
replevin, reclamation and stoppage in transit and rights to returned, reclaimed
or repossessed goods), and all monies due or to become due to Grantor under all
purchase orders and contracts for the sale of goods or the performance of
services or both by Grantor (whether or not yet earned by performance on the
part of Grantor or in connection with any other transaction), now in existence
or hereafter occurring, including, without limitation, the right to receive the
proceeds of said purchase orders and contracts, and all collateral security and
guarantees of any kind given by any Person with respect to any of the foregoing.

     "Chattel Paper" means any "chattel paper," as such term is defined in
Section 9105(1)(b) of the UCC, now owned or hereafter acquired by Grantor or in
which Grantor now holds or hereafter acquires an interest.

     "Contracts" means all contracts, undertakings, franchise agreements or
other agreements (other than rights evidenced b3, Chattel Paper, Documents or
Instruments) in or under which Grantor may now or hereafter have any right,
title or interest, including, without limitation, any and all right, title and
interest of Grantor under any customer agreements, supply agreements,
distribution agreements, rebate agreements, processing agreements, warehousing
agreements or royalty agreements and shall include, without limitation, with
respect to an Account, any agreement relating to the terms of payment or the
terms of performance thereof.

     "Copyright License" means all of the following now owned or hereafter
acquired by Grantor: any agreement granting any right in and to any Copyright or
Copyright registration (whether Grantor is the licensee or the licensor
thereunder), now owned or hereafter acquired by Grantor, including, without
limitation, licenses pursuant to which Grantor has obtained the exclusive right
to use a copyright owned by a third party.

     "Copyrights" means all of the following now owned or hereafter acquired by
Grantor or in which Grantor now holds or hereafter acquires any interest: (a)
all copyrights, whether registered or unregistered, held pursuant to the laws of
the United States, any state thereof or of any other country or political
subdivision thereof; (b) registrations, applications and recordings in the
United States Copyright Office or in any similar office or agency of the United
States, any state thereof or any other country or political subdivision thereof;
(c) any continuations, renewals or extensions thereof; (d) any registrations to
be issued in any pending applications; (e) prior versions of works covered by a
copyright and all works based upon, derived from, or incorporating such works;
(f) income, royalties, damages, claims, and payments now and hereafter due and
payable with respect to copyrights including, without limitation, damages and
payments for past, present, or future infringement; (g) rights to sue for past,
present and future infringements of copyright; and (h) any other rights
corresponding to any of the foregoing rights throughout the world.

     "Deposit Account" means any "deposit account" as such term is defined in
Section 9105(e) of the UCC, and shall include, without limitation, any demand,
time, savings passbook or like account, now or hereafter maintained by or for
the benefit of Grantor, or in which Grantor now holds or hereafter acquires any
interest, with a bank, savings and loan association, credit union or like
organization (including Bank) and all funds and amounts therein, whether or not
restricted or designated for a particular purpose.

                                   Exhibit A
                                  Page 2 of 5
<PAGE>

     "Documents" means any "documents," as such term is defined in Section
9105(1)(f) of the UCC, now owned or hereafter acquired by Grantor or in which
Grantor now holds or hereafter acquires an interest.

     "Equipment" means any "equipment," as such term is defined in Section
9109(2) of the UCC, now or hereafter owned or acquired by Grantor or in which
Grantor now holds or hereafter acquires an interest, and, in any event, shall
include, without limitation, all machinery, equipment, furnishings, vehicles,
computers and other electronic data-processing and any other office equipment of
any nature whatsoever, any and all additions, substitutions and replacements of
any of the foregoing, wherever located, together with all attachments,
components, parts, equipment and accessories installed thereon or affixed
thereto.

     "Fixtures" means "fixtures," as such term is defined in Section 9313(1)(a)
of the UCC, now or hereafter owned or acquired by Grantor or in which Grantor
now holds or hereafter acquires any interest and, in any event, shall include,
without limitation, regardless of where located, all of the fixtures, systems,
machinery, apparatus, equipment and fittings of every kind and nature whatsoever
and all appurtenances and additions thereto and substitutions or replacements
thereof, now or hereafter attached or affixed to or constituting a part of, or
located in or upon, real property wherever located, including, without
limitation, all heating, electrical, mechanical, lighting, lifting, plumbing,
ventilating, air-conditioning and air cooling, refrigerating, food preparation,
incinerating and power, loading and unloading, communication, sprinkler and
other fire prevention and extinguishing, fixtures, systems, machinery, apparatus
and equipment, any signs, escalators, elevators, boilers or switchboards, and
all engines, motors, dynamos, machinery, pipes, pumps, tanks, conduits and ducts
constituting a part of any of the foregoing, together with all right, title, and
interest of Grantor in and to all extensions, improvements, betterments,
renewals, substitutes, and replacements of, and all additions and appurtenances
to any of the foregoing property, and all conversions of the security
constituted thereby, immediately upon any acquisition or release thereof or any
such conversion, as the case may be.

     "General Intangibles" means any "general intangibles," as such term is
defined in Section 9106 of the UCC, now owned or hereafter acquired by Grantor
or in which Grantor now holds or hereafter acquires an interest, and, in any
event, shall include, without limitation, all right, title and interest which
Grantor may now or hereafter have in or under any Contract, interests in
partnerships, joint ventures and other business associations, licenses, permits,
goodwill, claims in or under insurance policies, including unearned premiums,
uncertificated securities, deposit accounts (including as defined in Section
9105(e) of the UCC), rights to receive tax refunds and other payments and rights
of indemnification; provided, however, that General Intangibles shall not
include the Intellectual Property.

     "Instruments" means any "instrument," as such term is defined in Section
9105(1)(i) of the UCC now owned or hereafter acquired by Grantor or in which
Grantor now holds or hereafter acquires any interest, including, without
limitation, all notes, certificated securities, and other evidences of
indebtedness, other than instruments that constitute, or are a part of a group
of writings that constitute, Chattel Paper.

     "Intellectual Property" means all intellectual property of any kind or
nature, including, without limitation, all Copyrights, Copyright Licenses,
Trademarks, Trademark Licenses, Patents, Patent Licenses, trade secrets,
customer lists, proprietary or confidential information, inventions (whether or
not patented or patentable), technical information, procedures, designs,
knowledge, know-how, software, data bases, data, skill, expertise, recipes,
experience, processes, models, drawings, materials and records.

     "Inventory" means any "inventory," as such term is defined in Section
9109(4) of the UCC, wherever located, now or hereafter owned or acquired by
Grantor or in which Grantor now holds or hereafter acquires any interest and, in
any event, shall include, without limitation, all inventory, merchandise, goods
and other personal property which are held by or on behalf of Grantor for sale
or lease or are furnished or are to be furnished under a contract of service or
which constitute raw materials, work in process or materials used or consumed or
to be used

                                   Exhibit A
                                  Page 3 of 5
<PAGE>

or consumed in Grantor's business, or the processing, packaging, promotion,
delivery or shipping of the same, and all finished goods, whether or not such
inventory is listed on any schedules, assignments or reports furnished to Bank
from time to time and whether or not the same is in transit or in the
constructive, actual or exclusive occupancy or possession of Grantor or is held
by Grantor or by others for Grantor's account, including, without limitation,
all goods covered by purchase orders and contracts with suppliers and all goods
billed and held by suppliers and all inventory which may be located on premises
of Grantor or of any carriers, forwarding agents, truckers, warehousemen,
vendors, selling agents or other Persons.

     "Investment Property" means any "investment property" as such term is
defined in Section 9115(1)(t) of the UCC, now owned or hereafter acquired by
Grantor or in which Grantor now holds or hereafter acquires an interest,
including, without limitation, a security, whether certificated or
uncertificated, a security entitlement, a securities account, a commodity
contract or a commodity account.

     "License" means any license of rights or interests now held or hereafter
acquired by Grantor or in which Grantor now holds or hereafter acquires an
interest, and any renewals or extensions thereof.

     "Loan Account" shall have the meaning ascribed to it in the Restated Loan
Agreement.

     "Loan Documents" shall have the meaning ascribed to it in the Restated Loan
Agreement.

     "Patent License" means any written agreement granting any right with
respect to any invention on which a Patent is in existence, now owned or
hereafter acquired by Grantor or in which Grantor now holds or hereafter
acquires an interest.

     "Patents" means all of the following now owned or hereafter acquired by
Grantor or in which Grantor now holds or hereafter acquires any interest: (a)
all letters patent of the United States or any other country, all registrations
and recordings thereof, and all applications for letters patent of the United
States or any other country or political subdivision thereof, including, without
limitation, registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country or political subdivision thereof;
(b) all reissues, continuations, continuations-in-part or extensions thereof;
(c) all petty patents, divisionals, and patents of addition; and (d) all patents
to issue in any such applications.

     "Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, firm, joint stock company, estate,
entity or governmental agency.

     "Proceeds" means "proceeds," as such term is defined in Section 9306(1) of
the UCC, and, in any event, shall include, without limitation, (a) any and all
Accounts, Chattel Paper, Instruments, cash or other forms of money or currency,
income, royalties or other proceeds, payable to Grantor from time to time in
respect of the Collateral or Grantor's Intellectual Property; (b) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to Grantor
from time to time with respect to any of the Collateral or Grantor's
Intellectual Property; (c) any and all payments (in any form whatsoever) made or
due and payable to Grantor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral or Grantor's Intellectual Property by any governmental body,
authority, bureau or agency (or any person acting under color of governmental
authority); (d) any claim of Grantor against third parties (i) for past, present
or future infringement of any Patent or Patent License, (ii) for past, present
or future infringement of any Copyright or Copyright License, or (iii) for past,
present or future infringement, dilution or misappropriation of any Trademark or
Trademark License or for injury to the goodwill associated with any Trademark,
Trademark registration or Trademark licensed under any Trademark License; (e)
all certificates, dividends, cash, Instruments and other property received or
distributed in respect of or in exchange for any Investment Property; and (f)
any

                                   Exhibit A
                                  Page 4 of 5
<PAGE>

and all other amounts from time to time paid or payable under or in connection
with any of the Collateral, Grantor's Intellectual Property or any Contract.

     "Trademark License" means any written agreement granting any right in and
to any Trademark or Trademark registration (whether Grantor is the licensee or
the licensor thereunder) now owned or hereafter acquired by Grantor or in which
Grantor now holds or hereafter acquires an interest.

     "Trademarks" means any of the following now owned or hereafter acquired by
Grantor or in which Grantor now holds or hereafter acquires an interest: (a) any
and all trademarks, trade names, corporate names, company names, business names,
trade styles, service marks, logos, other source or business identifiers, prints
and labels on which any of the foregoing have appeared or appear, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and any applications in
connection therewith, including, without limitation, registrations, recordings
and applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any state thereof or any other
country or any political subdivision thereof (the "Marks"); (b) any reissues,
extensions or renewals thereof; (c) the goodwill of the business symbolized by
or associated with Marks; (d) income, royalties, damages and payments now and
hereafter due and/or payable with respect to Marks, including, without
limitation, damages, claims and recoveries for past, present or future
infringement, misappropriation, or dilution; and (e) rights to sue for past,
present and future infringements of Marks.

     "UCC" means the Uniform Commercial Code as the same may, from time to time,
be in effect in the State of California; provided, however, in the event that,
by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of Bank's security interest in any Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than the
State of California, the term "UCC" shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to such attachment, perfection or priority and for purposes of definitions
related to such provisions.

                                   Exhibit A
                                  Page 5 of 5
<PAGE>

                                   EXHIBIT B

            LOCATION OF COLLATERAL NOT IN BANK'S POSSESSION

1.  555 Twin Dolphin Drive, Suite 600, Redwood Shores, California 94065.

2.  Please add other address locations, if any. If none, please indicate "None"
    below:

                                   Exhibit B
<PAGE>

         COLLATERAL ASSIGNMENT, PATENT MORTGAGE AND SECURITY AGREEMENT

     THIS COLLATERAL ASSIGNMENT, PATENT MORTGAGE AND SECURITY AGREEMENT is made
as of September 8, 1998 ("Security Agreement"), by and between CROSSROUTE
SOFTWARE, INC., a California corporation ("Debtor"), and IMPERIAL BANK ("Bank").

                                   RECITALS

     A.  Bank has agreed to lend to Debtor certain funds (the "Loans"), and
Debtor desires to borrow such funds from Bank pursuant to the terms of an
Amended and Restated Loan Agreement dated of even date herewith (as the same may
be modified, amended, supplemented, restated or superceded from time to time,
collectively, the "Restated Loan Agreement"). Terms not defined herein shall
have the meanings ascribed to them in the Restated General Security Agreement.

     B.  In order to induce Bank to make the Loans, Debtor has agreed to assign
the Proceeds of certain intangible property to Bank for purposes of securing the
obligations of Debtor to Bank:

     NOW, THEREFORE, the parties hereto agree as follows:

     1.  COLLATERAL ASSIGNMENT, PATENT MORTGAGE AND GRANT OF SECURITY INTEREST.
As collateral security for the prompt and complete payment and performance of
all of Debtor's present or future indebtedness, obligations and liabilities to
Bank, including, without limitation, such indebtedness, obligations and
liabilities under the Restated Loan Agreement and the other documents executed
in connection therewith (as the same may be modified, amended, supplemented,
restated or superceded from time to time, collectively, the "Loan Documents"),
Debtor hereby assigns, transfers, conveys and grants a security interest and
mortgage to Bank, as security, in and to all Proceeds (the "Collateral") of
Debtor's entire right, title and interest in, to and under the following, now or
hereafter existing, created, acquired or held by Debtor (the "Contingent
Collateral"):

          (a) Any and all copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work thereof, whether published or unpublished and whether or not the same also
constitutes a trade secret, including, without limitation, those set forth on
Exhibit A attached hereto and incorporated herein by this reference
(collectively, the "Copyrights");

          (b) Any and all trade secrets, and any and all intellectual property
rights in computer software and computer software products;

          (c) Any and all design rights which may be available to Debtor;

          (d) All patents, patent applications and like protections including,
without limitation, improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same, including, without limitation,
those set forth on Exhibit B attached hereto and incorporated herein by this
reference (collectively, the "Patents");

          (e) Any trademark and servicemark rights, whether registered or not,
applications to register and registrations of the same and like protections, and
the entire goodwill of the business of Debtor connected with and symbolized by
such trademarks, including, without limitation, those set forth on Exhibit C
attached hereto and incorporated herein by this reference (collectively, the
"Trademarks");

                                       1
<PAGE>

          (f) Any and all claims for damages by way of past, present and future
infringement of any of the rights included above, with the right, but not the
obligation, to sue for and collect such damages for said use or infringement of
the intellectual property rights identified above;

          (g) All licenses or other rights to use any of the Copyrights, Patents
or Trademarks, and all license fees and royalties arising from such use to the
extent permitted by such license or rights;

          (h) All amendments, renewals and extensions of any of the Copyrights,
Patents or Trademarks;

          (i) All proceeds and products of the foregoing, including, without
limitation, all payments under insurance or any indemnity or warranty payable in
respect of any of the foregoing; and

          (j) If any state or federal court (including a bankruptcy court) holds
that a security interest in the Contingent Collateral is necessary for the Bank
to have a security interest in the above-described Proceeds (a "Holding"), the
Collateral shall also include the Contingent Collateral. Until such a Holding is
made, the parties agree that unless otherwise specified, all references
hereinafter made to the Collateral shall exclude the Contingent Collateral.

     As used herein, "Proceeds" shall mean "proceeds," as such term is defined
in Section 9-306(1) of the UCC and, in any event, shall include, without
limitation, (a) any and all accounts, chattel paper, and instruments (as such
terms are defined in the UCC), cash, income, royalties, or other proceeds
payable to Debtor :from time to time in respect of the Collateral or Debtor's
Intellectual Property, (b) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to Debtor from time to time with respect to any of
the Collateral or Debtor's Intellectual Property, (c) any and all payments (in
any form whatsoever) made or due and payable to Debtor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral or Debtor's Intellectual
Property by any governmental body, authority, bureau or agency (or any person
acting under color of governmental authority), (d) any damages or settlements
received by Debtor based on any claim of Debtor against third parties (i) for
past, present or future infringement of any Patent or Patent license, (ii) for
past, present or future infringement of any Copyright or Copyright license,
(iii) for past, present or future infringement, dilution or misappropriation of
any Trademark or Trademark license or for injury to the goodwill associated with
any Trademark, Trademark registration or Trademark licensed under any Trademark
license, (e) all certificates, dividends, cash, instruments (as such term is
defined in the UCC) and other property received or distributed in respect of or
in exchange for any investment property (as such term is defined in the UCC) and
(f) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral, Debtor's Intellectual Property or any
Contract.

     THE INTEREST IN THE COLLATERAL BEING ASSIGNED HEREUNDER SHALL NOT BE
CONSTRUED AS A CURRENT ASSIGNMENT, BUT AS A CONTINGENT ASSIGNMENT TO SECURE ALL
OF DEBTOR'S PRESENT OR FUTURE INDEBTEDNESS, OBLIGATIONS AND LIABILITIES TO BANK,
INCLUDING, WITHOUT LIMITATION, SUCH INDEBTEDNESS, OBLIGATIONS AND LIABILITIES
UNDER THE RESTATED LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS.

     2.  AUTHORIZATION AND REQUEST. Debtor authorizes and requests that the
Register of Copyrights and the Commissioner of Patents and Trademarks record
this conditional assignment.

                                       2
<PAGE>

     3.   COVENANTS AND WARRANTIES. Debtor represents, warrants, covenants and
agrees as follows:

          (a) Debtor is now the sole owner of the Collateral. With respect to
the Contingent Collateral, Debtor does not own the intellectual property rights
in any portion of the Debtor's software product that now or hereafter is
licensed from a third party ("Third Party Code"). Debtor has adequate license
rights to make the uses it makes of such Third Party Code, but does not have the
right to grant Bank ownership, use or distribution rights to such Third Party
Code;

          (b) Performance of this Security Agreement does not conflict with or
result in a breach of any agreement to which Debtor is a party or by which
Debtor is bound;

          (e) During the term of this Security Agreement, Debtor will not sell,
transfer, assign or otherwise encumber any interest in the Collateral. With
respect to the Contingent Collateral, unless otherwise provided in the Loan
Documents, Debtor retains the right to sell, transfer, license and assign rights
in its Intellectual Property, in the ordinary course of Debtor's business or as
approved by Debtor's Board of Directors;

          (d) To its knowledge as of the date of this Security Agreement each of
the Patents is valid and enforceable, and there are no Patents, Trademarks or
Copyrights ("Intellectual Property") which have been judged invalid or
unenforceable, in whole or in part, and no claim has been made that any part of
the Intellectual Property violates the rights of any third party;

          (e) Debtor shall promptly advise Bank of any new products or major new
releases of its software products that it makes generally available to its
customers (collectively, the "Releases") and of any patents that issue in the
name of Debtor or that are assigned to Debtor;

          (f) Debtor shall use such efforts as its Board of Directors determines
appropriate to protect, defend and maintain the validity and enforceability of
the Intellectual Property and to detect infringements;

          (g) Debtor shall promptly register the copyright to each new Release
with the U.S. Copyright Office;

          (h) This Security Agreement creates, and in the case of after acquired
Collateral, this Security Agreement will create at the time Debtor first has
rights in such after acquired Collateral, in favor of Bank a valid and perfected
first priority security interest in the Collateral in the United States securing
the payment and performance of all present or future indebtedness, obligations
and liabilities of Debtor to Bank, including, without limitation, such
indebtedness, obligations and liabilities under the Restated Loan Agreement and
the other Loan Documents, upon making the filings referred to in Section 30)
below, subject only to Permitted Liens;

          (i) To its knowledge as of the date of this Security Agreement, except
for, and upon, the filings with, as applicable, (1) the United States Patent and
Trademark office with respect to the Patents and Trademarks, (2) the Register of
Copyrights with respect to the Copyrights and (3) the UCC Division of the
California Secretary of State, necessary to perfect the security interests and
assignment created hereunder, and except as has been already made or obtained,
no authorization, approval or other action by, and no notice to or filing with,
any United States governmental authority or United States regulatory body is
required either (a) for the grant by Debtor of the security interest granted
hereby or for

                                       3
<PAGE>

the execution, delivery or performance of this Security Agreement by Debtor in
the United States or (b) for the perfection in the United States or the exercise
by Bank of its rights and remedies hereunder;

          (j) All information heretofore, herein or hereafter supplied to Bank
by or on behalf of Debtor with respect to the Collateral is accurate and
complete in all material respects;

          (k) Debtor shall not enter into any agreement that would materially
impair or conflict with Debtor's obligations hereunder without Bank's prior
written consent, which consent shall not be unreasonably withheld. Debtor shall
not permit the inclusion in any material contract to which it becomes a party of
any provisions that could or might in any way prevent the creation of a security
interest in Debtor's rights and interests in any property included within the
definition of the Collateral acquired under such contracts, except that certain
contracts may contain anti-assignment provisions that could in effect prohibit
the creation of a security interest in such contracts. The parties acknowledge
and agree that prior to a Holding, the security interest granted hereby only
grants Bank rights as to the Proceeds derived from the Contingent Collateral;
and

          (l) Upon any executive officer of Debtor obtaining actual knowledge
thereof, Debtor will promptly notify Bank in writing of any event that
materially adversely affects the value of any Collateral, the ability of Debtor
to dispose of any Collateral or the rights and remedies of Bank in relation
thereto, including the levy of any legal process against any of the Collateral.
Debtor shall have no obligation to notify Bank of market changes that could
materially adversely affect the value of the Intellectual Property, including
but not limited to the introduction of competitive products.

     4.  BANK'S RIGHTS. Bank shall have the right, but not the obligation, to
take, at Debtor's sole expense, any actions that Debtor is required under this
Security Agreement to take but which Debtor fails to take, after fifteen (15)
days' notice to Debtor. Debtor shall reimburse and indemnify Bank for all
reasonable costs and reasonable expenses incurred in the reasonable exercise of
its rights under this Section 4.

     5.  INSPECTION RIGHTS. Debtor hereby grants to Bank and its employees,
representatives and agents the right to visit, during reasonable hours upon
prior reasonable written notice to Debtor, any of Debtor's plants and facilities
that manufacture, install or store products (or that have done so during the
prior six-month period) that are sold utilizing any of the Intellectual
Property, and to inspect the products and quality control records relating
thereto upon reasonable written notice to Debtor and as often as may be
reasonably requested.

     6.   FURTHER ASSURANCES; ATTORNEY IN FACT.

          (a) On a continuing basis, Debtor will make, execute, acknowledge and
deliver, and file and record in the proper filing and recording places in the
United States, all such instruments, including appropriate financing and
continuation statements and collateral agreements and filings with the United
States Patent and Trademark Office and the Register of Copyrights, and take all
such action as may reasonably be necessary or advisable, or as reasonably
requested by Bank, to perfect Bank's security interest in the Collateral, and
otherwise to carry out the intent and purposes of this Security Agreement, or
for assuring and confirming to Bank the grant or perfection of a security
interest in all Collateral.

          (b) Debtor hereby irrevocably appoints Bank as Debtor's attorney-in-
fact, with full authority in the place and stead of Debtor and in the name of
Debtor, from time to time in Bank's discretion, to take any action and to
execute any instrument which Bank may reasonably deem necessary or advisable to
accomplish the purposes of this Security Agreement, including (i) to modify, in
its reasonable discretion, this Security Agreement without first obtaining
Debtor's approval of or signature to such modification by amending Exhibit A,
Exhibit B or Exhibit C hereof, as appropriate, to include

                                       4
<PAGE>

reference to any material right, title or interest in any Intellectual Property
acquired by Debtor after the execution hereof or to delete any reference to any
right, title or interest in any Intellectual Property in which Debtor no longer
has or claims any right, title or interest, (ii) to file, in its reasonable
discretion, one or more financing or continuation statements and amendments
thereto, relative to any of the Collateral without the signature of Debtor where
permitted by law and (iii) after the occurrence and during the continuance of an
Event of Default, to transfer the Collateral into the name of Bank or a third
party to the extent permitted under the California Uniform Commercial Code. Bank
will not have the right to transfer the Intellectual Property into the name of
Bank or a third party except after a Holding.

     7.   EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" under this Security Agreement:

          (a) An Event of Default occurs under the Restated Loan Agreement or
any of the other Loan Documents; or

          (b) Debtor breaches any warranty or agreement in any material respect
made by Debtor in this Security Agreement and, as to any breach that is capable
of cure, Debtor fails to cure such breach within fifteen (15) days of the
occurrence of such breach if notice thereof has been given to Debtor.

     8.   REMEDIES. Upon the occurrence and during the continuance of an Event
of Default, Bank shall have the right to exercise all the remedies of a secured
party under the California Uniform Commercial Code, including, without
limitation, the right to require Debtor to assemble the collateral and any
tangible property in which Bank has a security interest and to make it available
to Bank at a place designated by Bank. Upon the occurrence and during the
continuance of an Event of Default, Bank shall have a nonexclusive, royalty free
license to use the Copyrights, Patents and Trademarks, to the extent reasonably
necessary to permit Bank to exercise its rights and remedies with respect to the
Collateral and, after a Holding, the Contingent Collateral. The rights of Bank
hereunder are limited to those necessary to permit Bank to exercise its rights
and remedies with respect to the Collateral and Bank will only have the right to
use or transfer the Intellectual Property or the Releases after a Holding.
Debtor will pay any expenses (including reasonable attorneys' fees) incurred by
Bank in connection with the exercise of any of Bank's rights hereunder,
including, without limitation, any expense incurred in disposing of the
Collateral. All of Bank's rights and remedies with respect to the Collateral
shall be cumulative.

     9.   INDEMNITY. Debtor agrees to defend, indemnify and hold harmless Bank
and its officers, employees, and agents against: (a) all obligations, demands,
claims, and liabilities claimed or asserted by any other party in connection
with the transactions contemplated by this Security Agreement and (b) all losses
or expenses in any way suffered, incurred, or paid by Bank as a result of or in
any way arising out of or following any transactions between Bank and Debtor,
whether under this Security Agreement or otherwise (including, without
limitation, reasonable attorneys' fees and reasonable expenses), except for
losses arising from or out of Bank's negligence or willful misconduct.

     10.  REASSIGNMENT. At such time as Debtor shall completely satisfy all of
the obligations secured hereunder, Bank shall execute and deliver to Debtor all
deeds, assignments and other instruments as may be necessary or proper to revest
in Debtor full title to the property assigned hereunder, subject to any
disposition thereof which may have been made by Bank pursuant hereto.

     11.  NO FAILURE OR DELAY. No failure or delay on the part of Bank, in the
exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof.

                                       5
<PAGE>

     12.  ATTORNEYS' FEES. If any action relating to this Security Agreement is
brought by either party hereto against the other party, the prevailing party
shall be entitled to recover reasonable attorneys' fees, costs and
disbursements.

     13.  AMENDMENTS. This Security Agreement may be amended only by a written
instrument signed by both parties hereto.

     14.  COUNTERPARTS. This Security Agreement may be executed in any number of
counterparts, each of which when so delivered shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument. Each
such Security Agreement shall become effective upon the execution of a
counterpart hereof or thereof by each of the parties hereto and telephonic
notification that such executed counterparts has been received by Debtor and
Bank.

     15.  JUDICIAL REFERENCE. The terms and provisions of Section 15.B. of the
Restated Loan Agreement is incorporated herein by this reference and made a part
hereof.

     16.  GOVERNING LAW; JURISDICTION; JURY WAIVER. This Security Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of California, without regard to principles of conflicts of law. Debtor
and Bank consent to the exclusive jurisdiction of any state or federal court
located in Santa Clara County, California. DEBTOR AND BANK EACH WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS SECURITY AGREEMENT AND ANY OTHER LOAN DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.

     17.  CONFLICT. In the event of a conflict between any term and/or provision
contained in this Security Agreement with any term and/or provision contained in
the Restated Security Agreement, the term and/or provision of this Security
Agreement shall govern.

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

BANK                                 DEBTOR

IMPERIAL BANK                          CROSSROUTE SOFTWARE, INC.
                                       a California corporation

By:                                    By:/s/ Bruce Hausmann
     ----------------------------         ------------------------------
        Sunita R. Patel                      Bruce Hausmann
        Assistant Vice President             Vice President, Finance

Address of Bank                        Address of Debtor
---------------                        -----------------

226 Airport Parkway                    555 Twin Dolphin Drive, Suite 600
San Jose, California 95110             Redwood Shores, California 94065
                                       Attention:
                                                 -----------------------
with a copy to:
---------------

2460 Sand Hill Road, Suite 102
Menlo Park, California 94025
Attention: Sunita R. Patel

                                       6
<PAGE>

                                   EXHIBIT A

                                  COPYRIGHTS

1.  REGISTERED: List titles below or indicate "None"

            CrossRoute Alliance/(TM)/

2.  UNREGISTERED: List titles below or indicate "None"

            None

3.   APPLICATIONS IN PROCESS: List titles, applicable dates, application
     numbers, etc. below or indicate "None"

            None

                                   Exhibit A
<PAGE>

                                   EXHIBIT B

                     U.S. PATENTS AND PATENT APPLICATIONS

                    (List titles below or indicate "None")

<TABLE>
<CAPTION>
     PATENT            PENDING                  TITLE               ISSUE   FILING
       NO.           APPLICATION                                    DATE     DATE
                         NO.
-----------------------------------------------------------------------------------
<S>                 <C>              <C>                            <C>     <C>
                    PCT/US98/01403   System and Method For                  1/23/98
-----------------------------------------------------------------------------------
                                     Creating, Executing &
-----------------------------------------------------------------------------------
                                     Maintaining Cross-Enterprise
                                     Processes
-----------------------------------------------------------------------------------

-----------------------------------------------------------------------------------
</TABLE>

                                   Exhibit B
<PAGE>

                                   EXHIBIT C

                   U.S. TRADEMARKS AND TRADEMARK APPLICATIONS

                     (List marks below or indicate "None")

<TABLE>
<CAPTION>
     PATENT           PENDING            MARK           REGISTRATION   FILING
       NO.          APPLICATION                             DATE        DATE
                        NO.
-----------------------------------------------------------------------------
<S>                 <C>           <C>                   <C>            <C>
75/125625                         CrossRoute Software        7/16/98
-----------------------------------------------------------------------------
75/265882                         CrossRoute Alliance       12/19/97
-----------------------------------------------------------------------------

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

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

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

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

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

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

-----------------------------------------------------------------------------
</TABLE>

UNREGISTERED TRADEMARKS: List marks below or indicate "None."
-----------------------

                                   Exhibit C<PAGE>

                                                                   EXHIBIT 10.13

                              CONSENT TO SUBLEASE

     This Consent is entered into as of this ____ day of June, 2000, by and
among Davis Associates, a California limited partnership ("Landlord"), Oracle
Corporation, a Delaware Corporation ("Sublandlord"), Extricity, Inc., a
California corporation ("Subtenant"). The parties hereby certify, represent,
warrant and acknowledge as follows:

     1.  Pursuant to that certain Lease dated as of December ___, 1995 and
executed December 21, 1995, as the same has been amended by that certain letter
dated May 18, 2000 from Landlord to Sublandlord (as amended, the "Lease"),
Landlord, as landlord, leased to ("Sublandlord"), as tenant, 69,925 square feet
of rentable space (the "Premises") consisting of the entire Building located at
1 Davis Drive in the City of Belmont, California (the "Building").

     2.  The Lease constitutes the entire agreement between Landlord and
Sublandlord with respect to the Premises, and is presently in full force and
effect. The Lease has not been further modified, changed, altered or amended in
writing, orally or otherwise. As of the date of this Consent to Sublease (this
"Consent"), Landlord has not assigned, encumbered or hypothecated its interest
in the Lease. All capitalized terms used herein shall have the meaning given
those terms in the Lease.

     3.  As of the date of this Consent and to the best of Landlord's knowledge,
neither Landlord nor Sublandlord is in default under the Lease nor has either of
them committed any breach of the Lease; no event has occurred which, but for the
passing of time or the giving or receipt of notice, or both, would constitute a
default under the Lease; and no notice of default has been given under the
Lease. There are no disputes between Landlord and Sublandlord concerning the
Lease, the Premises or the improvements thereon.

     4.  As of the date hereof, Sublandlord has made no alterations to the
Premises that pursuant to the provisions of the Lease, Landlord would require
Sublandlord to remove.

     5.  Landlord has executed this Consent in contemplation of that certain
sublease (the "Sublease") by and between Sublandlord and Subtenant, which
sublease is attached hereto as Exhibit "A", and Landlord hereby consents to
                               -----------
Sublandlord's subleasing of the Premises to Subtenant pursuant to the terms of
the Sublease.

     6.  Sublandlord hereby represents and warrants that Sublandlord (i) has not
transferred or conveyed its interest in the Lease to any person or entity
collaterally or otherwise, and (ii) has full power and authority to enter into
the Sublease and this Consent. Subtenant hereby represents and warrants that
Subtenant has full power and authority to enter into the Sublease and this
Consent.

     7.  Subtenant hereby assumes, with respect to Landlord, all of the
indemnity and insurance obligations of the Sublandlord under the Lease.

     8.  Nothing contained in the Sublease or this Consent shall be construed as
relieving or releasing Sublandlord from any of its obligations under the Lease,
it being expressly understood and agreed that Sublandlord shall remain liable
for such obligations notwithstanding anything contained in the Sublease or any
subsequent assignment(s), sublease(s) or transfer(s) of the interest of the
<PAGE>

tenant under the Lease. Sublandlord shall be responsible for the collection of
all rent due it from Subtenant, and for the performance of all the other terms
and conditions of the Sublease, it being understood that Landlord is not a party
to the Sublease.

     9.  In no event shall the Sublease or this Consent be construed as granting
or conferring upon the Sublandlord or the Subtenant any greater rights than
those contained in the Lease nor shall there be any diminution of the rights and
privileges of the Landlord under the Lease.

     1.  IN WITNESS WHEREOF, the undersigned has executed this Consent as of the
date first written above.

                              "LANDLORD"

                              DAVIS ASSOCIATES,
                              a California limited partnership

                              By: /s/ Phillip Raiser
                                 ------------------------------

                              Print Name:   PHILLIP RAISER
                                            -------------------

                              Title: Agent for the JHR Trust
                                     --------------------------
                                     General Partner

                                       2
<PAGE>

                                  EXHIBIT "A"
                                  -----------

                                    Sublease
                                    --------

                                       3
<PAGE>

                                                         THE RAISER ORGANIZATION

Philip J. Arnautou                                    800 SOUTH CLAREMONT STREET
May 18,2000                                          SAN MATEO. CALIFORNIA 94402
Page 1                                             650 342 - 9026 FAX 344 - 4158
                                                   E-MAIL raiserhq@ix.netcom.com

                                                                       MXX-54640

                                  May 18, 2000

Oracle Corporation
c/o Philip J. Arnautou
Colliers International
100 Hamilton Avenue - Suite 275
Palo Alto, California 94301

          Re:  Oracle Corporation Lease of One Davis Drive, Belmont
               ----------------------------------------------------

Dear Phil:

          In response to your letter of May 9, 2000, we would prefer that Oracle
sublease One Davis Drive for the entire remaining term rather than offer a
three-year sublease. Therefore, by this letter, Davis Associates, a California
limited partnership, as Landlord under the above-referenced Lease, agrees to
waive its rights under Section 14.2 of the Lease to recapture or sublease the
premises due to any sublease of One Davis Drive by Oracle with a sublease term
expiring on September 30, 2006. All other provisions of Section 14 shall remain
in effect, including, without limitation, Landlord's right to consent to any
subletting or assignment and Landlord's right to share in any sublease or
assignment profits.

          This waiver of Section 14.2 does not apply to any Option Period (as
defined in the Lease). Should Oracle exercise either or both of its extension
options, then Section 14.2 will remain in full force and effect during each
Option Period.

                              Very truly yours,

                              Davis Associates,
                              a California limited partnership

                              By:  /s/Phillip H. Raiser
                                   --------------------------------
                                    Phillip H. Raiser,
                                    for the General Partner

                                                     RAISER CONSTRUCTION COMPANY
                                                     RAISER DEVELOPMENT COMPANY
                                                     RAISER PROPERTY MANAGEMENT
                                                     RAISER REAL ESTATE SERVICES
                                                     RAISER SENIOR SERVICES. LLC
                                                     RAISER RESOURCES, LLC
<PAGE>

                                   SUBLEASE

                                    BETWEEN

                              ORACLE CORPORATION,

                            a Delaware corporation

                                      AND

                               EXTRICITY, INC.,

                           a California corporation

                                 June 22, 2000

                                ONE DAVIS DRIVE
                              BELMONT, CALIFORNIA
<PAGE>

                                    SUBLEASE

         THIS SUBLEASE ("Sublease") is entered into as of June 22, 2000, is made
by and between ORACLE CORPORATION, a Delaware corporation (herein called
"Sublandlord") and EXTRICITY, INC., a(n) California Corporation (herein called
"Subtenant"), with reference to the following facts:

     A.  Pursuant to that certain Lease dated as of December ___, 1995 and
executed December 21, 1995, as the same has been amended by that certain letter
dated May 18, 2000 from Landlord (defined below) to Sublandlord (as amended, the
"Master Lease"), Davis Associates ("Landlord"), as Landlord, leased to
Sublandlord, as tenant, certain space (the "Master Lease Premises") consisting
of 69,925 rentable square feet consisting of the entire Building located at 1
Davis Drive in the City of Belmont, California (the "Building").

     B.  Subtenant wishes to sublease from Sublandlord, and Sublandlord wishes
to sublease to Subtenant, the entire Master Lease Premises (hereinafter called
the "Subleased Premises").

          NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged by the parties, Sublandlord and Subtenant hereby agree as follows:

          1.  Sublease. Sublandlord hereby subleases to Subtenant and Subtenant
              --------
hereby subleases from Sublandlord for the term, at the rental, and upon all of
the conditions set forth herein, the Subleased Premises.

          2.  Term. The term of this Sublease ("Term") shall commence on the
              ----
later to occur of (i) the date Sublandlord procures Landlord's consent to the
Sublease (the "Consent") or (ii) the date Sublandlord tenders possession of the
Subleased Premises to Subtenant (the "Commencement Date") and shall end on
September 30, 2006 (the "Expiration Date"), unless sooner terminated pursuant to
any provision hereof. Upon the determination of the Commencement Date, the
parties will enter into a letter agreement memorializing the Commencement Date
and the Schedule of Base Rent payable hereunder.
<PAGE>

          3.  Rent.
              ----

              3.1  Rent Payments.
                   -------------

                   (a) From and after the Commencement Date Subtenant shall pay
to Sublandlord as Base Rent for the Subleased Premises during the Term the
following:

<TABLE>
<CAPTION>

                              Monthly Rate Per Rentable
            Months                  Square Foot               Monthly Payment
            ------                  -----------               ---------------
<S>                           <C>                             <C>

             1- 12                      $6.75                   $471,993.75
            13- 24                      $7.02                   $490,873.50
            25- 36                      $7.30                   $510,452.50
            37- 48                      $7.59                   $530,730.75
            49- 60                      $7.89                   $551,708.25
            60- 72                      $8.21                   $574,084.25
      72-Expiration Date                $8.54                   $597,159.50
</TABLE>

Provided, that Tenant will not be obligated to pay Base Rent with respect to the
final seven (7) days of the Term so long as Tenant has vacated the Subleased
Premises in accordance with the terms of this Sublease as of the date that is
seven (7) days prior to the Expiration Date.

                   (b) If the Term does not end on the last day of a month, the
Base Rent and Additional Rent for that partial month shall be prorated by
multiplying the monthly Base Rent and Additional Rent by a fraction, the
numerator of which is the number of days of the partial month included in the
Term and the denominator of which is the total number of days in the full
calendar month. All Rent (hereinafter defined) shall be payable in lawful money
of the United States, by regular bank check of Subtenant, to Sublandlord at the
address stated herein or to such other persons or at such other places as
Sublandlord may designate in writing.

              3.2  Operating Expenses.
                   ------------------

                   (a) Definitions. For purposes of this Sublease and in
                       -----------
addition to the terms defined elsewhere in this Sublease, the following terms
shall have the meanings set forth below:

                       (1) "Additional Rent" shall mean the sums payable
                            ---------------
pursuant to subparagraph 3.2(b) of this Sublease.

                       (2) "Operating Costs" shall mean "Operating Expenses" (as
                            ---------------
defined in the Master Lease) charged by Landlord to Sublandlord pursuant to the
Master Lease.

                       (3) "Rent" shall mean, collectively, Base Rent,
                            ----
Additional Rent, and all other sums payable by Subtenant to Sublandlord under
this Sublease, whether or not expressly designated as "rent", all of which are
deemed and designated as rent pursuant to the terms of this Sublease.

                                       2
<PAGE>

                       (4) "Subtenant's Percentage Share" shall mean one hundred
                            ----------------------------
percent (100%).

                   (b) In addition to the Base Rent payable pursuant to Section
3.1 above, from and after the Commencement Date, for each calendar year of the
Term, Subtenant, as Additional Rent, shall pay Subtenant's Percentage Share of
Operating Costs payable by Sublandlord for the then current calendar year. It is
expressly acknowledged by the parties hereto that this Subleased is intended to
be "triple net" Sublease, pursuant to which Subtenant shall pay all "pass-
throughs" payable by Sublandlord under the Master Lease and attributable to the
Term. Sublandlord shall give Subtenant written notice of Sublandlord's estimate
of the amount of Additional Rent per month payable pursuant to this Subsection
(b) for each calendar year following the Sublandlord's receipt of Landlord's
estimate of the Operating Costs payable under the Master Lease. Thereafter, the
Additional Rent payable pursuant to this Subsection (b) shall be determined and
adjusted in accordance with the provisions of Subsection 3.2(c) below.

                   (c) For partial calendar years during the term of this
Sublease, the amount of Additional Rent payable pursuant to Subsection 3.2(d)
that is applicable to that partial calendar year shall be prorated based on the
ratio of the number of days of such partial calendar year falling during the
term of this Sublease to 365. The expiration or earlier termination of this
Sublease shall not affect the obligations of Sublandlord and Subtenant pursuant
to Subsection 3.2(d), and such obligations shall survive, remain to be performed
after, any expiration or earlier termination of this Sublease.

          4.  Security Deposit.
              ----------------

                   (a) Concurrently with Subtenant's execution of this Sublease,
Subtenant shall deposit with Sublandlord an irrevocable letter of credit (the
"Letter of Credit"), which Letter of Credit shall: (a) be in the amount of
$8,609,166.00; (b) be issued on the form attached hereto as Exhibit B, with no
                                                            ---------
modifications; (c) name Landlord as its beneficiary; (d) be drawn on an FDIC
insured financial institution satisfactory to the Landlord; and (e) expire no
earlier than sixty (60) days after the Termination Date of this Lease. If any
amendment to the Letter of Credit or issuance of a substitute Letter of Credit
results in fees or charges, then such fees or charges shall be payable solely by
Subtenant.

                   (b) If a default by Subtenant occurs in the payment or
performance of any of the terms, covenants or conditions of this Sublease,
including the payment of Rent (beyond any applicable notice and/or cure
periods), Sublandlord may, to the extent necessary to cure such default, apply
or retain the whole or any part of the Letter of Credit by drawing down upon the
Letter of Credit (the Letter of Credit shall be deemed the "Security Deposit"
for the purposes of this Sublease) and use, apply or retain the whole or any
part of such proceeds, as the case may be, to the extent required for the
payment of any Rent or any other sum as to which Subtenant is in default (beyond
any applicable notice and/or cure periods) including (i) any sum which
Sublandlord may expend or may be required to expend by reason of Subtenant's
default and/or (ii) any damages to which Sublandlord is entitled pursuant to
this Sublease, whether such damages accrue before or after summary proceedings
or other reentry by Sublandlord. If Sublandlord applies or retains any part of
the Security Deposit, Subtenant, upon demand, shall deposit with Sublandlord
the amount so applied or retained so that Sublandlord

                                       3
<PAGE>

shall have the full Security Deposit (i.e., a Letter of Credit in the initial
face amount described above) on hand at all times during the Term. If Subtenant
shall fully and faithfully comply with all the terms, covenants and conditions
of this Sublease, the Security Deposit shall be returned to Subtenant after the
later to occur of (i) the Expiration Date, (ii) delivery of possession of the
Subleased Premises to Sublandlord in the manner required by this Sublease, (iii)
the final reconciliation of any payments of Additional Rent by Subtenant and
(iv) completion by Subtenant to the satisfaction of Landlord and Sublandlord of
any restoration work required in the Subleased Premises or with respect to the
monument signage described in Section 12 below.

          5.  Warrant Agreements. Concurrently with Subtenant's execution and
              ------------------
delivery of this Sublease, Subtenant shall execute Warrant Agreements in the
form of Exhibit C-1 and Exhibit C-2 attached hereto, pursuant to which Subtenant
shall grant to Sublandlord warrants to purchase 20,000 shares of Subtenant's
"Series F" convertible preferred stock at a purchase price of $6.45 per share
and will grant to Landlord warrants to purchase 20,000 shares of Subtenant's
"Series F" convertible preferred stock at a purchase price of $6.45 per share.

          6.  Use and Occupancy.
              -----------------

              6.1  Use. The Subleased Premises shall be used and occupied only
                   ---
for the purposes described in Section 1.9 of the Master Lease.

              6.2  Compliance with Master Lease.
                   ----------------------------

                   (a) Generally. Subtenant agrees that it will occupy the
                       ---------
Subleased Premises in accordance with the terms of the Master Lease and will not
suffer to be done or omit to do any act which may result in a violation of or a
default under any of the terms and conditions of the Master Lease, or render
Sublandlord liable for any damage, charge or expense thereunder. Subtenant
further covenants and agrees to indemnify Sublandlord against and hold
Sublandlord harmless from any claim, demand, action, proceeding, suit,
liability, loss, judgment, expense (including attorneys fees) and damages of any
kind or nature whatsoever arising out of, by reason of, or resulting from,
Subtenant's failure to perform or observe any of the terms and conditions of the
Master Lease or this Sublease. Any other provision in this Sublease to the
contrary notwithstanding, Subtenant shall pay to Sublandlord as Rent hereunder
any and all sums which Sublandlord may be required to pay the Landlord arising
out of the use by Subtenant of additional Building services (e.g. charges
associated with after-hour or excess HVAC usage and overstandard electrical
charges).

                   (b) Sublandlord Not Required to Perform Landlord's
                       ----------------------------------------------
Obligations. Subtenant agrees that Sublandlord shall not be required to perform
-----------
any of the covenants, agreements and/or obligations of Landlord under the Master
Lease and, insofar as any of the covenants, agreements and obligations of
Sublandlord hereunder are required to be performed under the Master Lease by
Landlord thereunder, Subtenant acknowledges and agrees that Sublandlord shall be
entitled to look to Landlord for such performance. Sublandlord shall not be
responsible for any failure or interruption, for any reason whatsoever, of the
services or facilities that may be appurtenant to or supplied at the Building by
Landlord or otherwise, including, without limitation, heat, air conditioning,
ventilation, life-safety, water, electricity, elevator service and cleaning
service, if any; and no failure to furnish, or interruption of, any such
services or facilities shall give rise to any (i) abatement, diminution or
reduction of

                                       4
<PAGE>

Subtenant's obligations under this Sublease, or (ii) liability on the part of
Sublandlord. Notwithstanding the foregoing, Sublandlord shall promptly take such
action as may reasonably be indicated, under the circumstances, to secure such
performance upon Subtenant's request to Sublandlord to do so.

                   (c) Sublandlord's Responsibility. Sublandlord represents to
                       ----------------------------
Subtenant that the Master Lease is in full force and effect and that no notices
of default have been sent or received by Sublandlord with respect to the Master
Lease.

                   (d) Landlord's On-Site Employee. Subtenant expressly
                       ---------------------------
acknowledges that an employee of Landlord who performs maintenance
responsibilities for the Subleased Premises (as well as the property located at
20 Davis Drive) maintains an office in the basement of the Building, without any
deduction in Rent payable hereunder. Such employee shall have access to the
Subleased Premises (other than computer rooms) and the basement of the Building
at all times, as well as use of an office in the Building, in order to allow
Landlord to provide the maintenance and service responsibilities required of
Landlord under the Master Lease, without any deduction in Rent. Subtenant shall
not impair such employee from performing his or her work tasks within the
Subleased Premises.

          7.  Master Lease and Sublease Terms.
              -------------------------------

              7.1  Subject to Master Lease. This Sublease is and shall be at all
                   -----------------------
times subject and subordinate to the Master Lease. Additionally, Subtenant's
rights under this Sublease shall be subject to the terms of the Consent.
Subtenant acknowledges that Subtenant has reviewed and is familiar with all of
the terms, agreements, covenants and conditions of the Master Lease. During the
Term and for all periods subsequent thereto with respect to obligations which
have arisen prior to the termination of this Sublease, Subtenant agrees to
perform and comply with, for the benefit of Sublandlord and Landlord, the
obligations of Sublandlord under the Master Lease which pertains to the
Subleased Premises and/or this Sublease.

              7.2  Incorporation of Master Lease. The terms, conditions and
                   -----------------------------
respective obligations of Sublandlord and Subtenant to each other under this
Sublease shall be the terms and conditions of the Master Lease except for those
provisions of the Master Lease which are directly contradicted by this Sublease
in which event the terms of the Sublease document shall control over the Master
Lease. Therefore, for the purposes of this Sublease, wherever in the Master
Lease the word "Landlord" is used it shall be deemed to mean the Sublandlord
herein and wherever in the Master Lease the word "Tenant" is used it shall be
deemed to mean the Subtenant herein. The time limits contained in the Master
Lease for the giving of notices, making of demands or performing of any act,
condition or covenant on the part of the tenant thereunder, or for the exercise
by the tenant thereunder of any right, remedy or option, are changed for the
purposes of incorporation herein by reference by shortening the same in each
instance by three days, so that in each instance Subtenant shall have three days
less time to observe or perform hereunder than Sublandlord has as the tenant
under the Master Lease. The time limits contained in the Master Lease for the
giving of notices, making of demands or performing of any act, condition or
covenant on the part of Landlord, or for the exercise by Landlord of any right,
remedy or option, are changed for the purposes of incorporation herein by
reference by doubling the same in each instance, so that in each instance
Sublandlord shall have twice as much time to observe or perform hereunder than
Landlord has under the Master Lease.

                                       5
<PAGE>

Any non-liability, release, indemnity or hold harmless provision in the Master
Lease for the benefit of Landlord that is incorporated herein by reference,
shall be deemed to inure to the benefit of Sublandlord, Landlord, and any other
person intended to be benefited by said provision, for the purpose of
incorporation by reference in this Sublease. Any right of Landlord under the
Master Lease of access or inspection and any right of Landlord under the Master
Lease to do work in the Master Lease premises or in the Building and any right
of Landlord under the Master Lease in respect of rules and regulations, which is
incorporated herein by reference, shall be deemed to inure to the benefit of
Sublandlord, Landlord, and any other person intended to be benefited by said
provision, for the purpose of incorporation by reference in this Sublease.

              7.3  Clarification on Incorporation of Master Lease. For the
                   ----------------------------------------------
purposes of incorporation herein, the terms of the Master Lease are subject to
the following additional modifications:

                   (a) In all provisions of the Master Lease (under the terms
thereof and without regard to modifications thereof for purposes of
incorporation into this Sublease) requiring the approval or consent of Landlord,
Subtenant shall be required to obtain the approval or consent of both
Sublandlord and Landlord.

                   (b) In all provisions of the Master Lease requiring Tenant to
submit, exhibit to, supply or provide Landlord with evidence, certificates, or
any other matter or thing, Subtenant shall be required to submit, exhibit to,
supply or provide, as the case may be, the same to both Landlord and
Sublandlord. In any such instance, Sublandlord shall determine if such evidence,
certificate or other matter or thing shall be satisfactory.

                   (c) Sublandlord shall have no obligation to restore or
rebuild any portion of the Sublease Premises after any destruction or taking by
eminent domain.

                   (d) In all provisions of the Master Lease requiring Tenant to
designate Landlord as an additional or named insured on its insurance policy,
Subtenant shall be required to so designate Landlord and Sublandlord on its
insurance policy.

              7.4  Exclusions. Notwithstanding the terms of Section 7.3 above,
                   ----------
Subtenant shall have no rights nor obligations under the following parts,
Sections and Exhibits of the Master Lease: Articles 1, 2, 3, Section 4.3(c)
(second sentence only), Section 5.1, Section 6.1.1 (3/rd/through
8/th/sentences), Section 6.3.1, Section 16.3, Article 21, Article 22, Article
26, Article 27, Article 28, Article 30, Section 31.2, Exhibit C.

              7.5  Sublandlord's Agreement. Sublandlord agrees to maintain the
                   -----------------------
Master Lease, as it pertains to the Subleased Premises, during the Term of this
Sublease.

          8.  Indemnity. Subtenant shall indemnify, defend and hold harmless
              ---------
Sublandlord from and against all losses, costs, damages, expenses and
liabilities, including, without limitation, reasonable attorneys' fees and
disbursements, which Sublandlord may incur or pay out (including, without
limitation, to the landlord under the Master Lease) by reason of (i) any
accidents, damages or injuries to persons or property occurring in or on the
Subleased Premises or the parcel on which the Subleased Premises are located
(including the parking lot) (unless the same shall have been caused by
Sublandlord's gross negligence or willful

                                       6
<PAGE>

misconduct), (ii) any breach or default hereunder on Subtenant's part, (iii) the
successful enforcement of Sublandlord's rights under this Section 8 or any other
Section of this Sublease, (iv) any work done after the date hereof in or to the
Subleased Premises, or (v) any act, omission or negligence on the part of
Subtenant and/or its officers, partners, employees, agents, customers and/or
invitees, or any person claiming through or under Subtenant.

          9.  Limitation on Liability. Sublandlord shall not be liable for
              -----------------------
personal injury or property damage to Subtenant, its officers, agents,
employees, invitees, guests, licensees or any other person in the Sublease
Premises, regardless of how such injury or damage may be caused (unless the same
shall have been caused by Sublandlord's gross negligence or willful misconduct
and, in any event, subject to the application of proceeds of Subtenant's
insurance coverage required hereunder). Any property of Subtenant kept or stored
in the Sublease Premises shall be kept or stored at the sole risk of Subtenant.
Subtenant shall hold Sublandlord harmless from any claims arising out of any
personal injury or property damage occurring in the Sublease Premises, including
subrogation claims by Subtenant's insurance carrier(s).

          10.  Consents and Approvals. In any instance when Sublandlord's
               ----------------------
consent or approval is required under this Sublease, Sublandlord's refusal to
consent to or approve any matter or thing shall be deemed reasonable if, among
other matters, such consent or approval is required under the provisions of the
Master Lease incorporated herein by reference but has not been obtained from
Landlord. If Subtenant shall seek the approval by or consent of Sublandlord and
Sublandlord shall fail or refuse to give such consent or approval, Subtenant
shall not be entitled to any damages for any withholding or delay of such
approval or consent by Sublandlord, it being agreed that Subtenant's sole remedy
in connection with an alleged wrongful refusal or failure to approve or consent
shall be an action for injunction or specific performance and that said remedy
of an action for injunction or specific performance shall be available only in
those cases where Sublandlord shall have expressly agreed in this Sublease not
to unreasonably withhold or delay its consent.

          11.  Furniture. Concurrently with Subtenant's execution and delivery
               ---------
of this Sublease to Sublandlord, Subtenant shall execute and deliver a furniture
lease in the form of Exhibit D attached hereto, pursuant to which Subtenant will
lease from Sublandlord all existing furniture (including cubicles, office
furniture, chairs and conference tables) except that furniture previously
removed by Sublandlord (as more particularly described in Furniture Lease, the
"Furniture"), as well as existing wiring to office and work stations within the
Premises.

          12.  Signage. Provided Landlord consents to Subtenant having monument
               -------
signage rights, Subtenant shall have the right, at Subtenant's sole cost and
expense during the Term to install monument signage identifying Subtenant (but
not any other entity other than assignee of Subtenant's interest hereunder
pursuant to the provisions of a Permitted Transfer). The method of installation
of any such signage and the materials used, shall be subject to the approval of
Sublandlord and Landlord. Subtenant shall have the obligation, at the expiration
or sooner termination of this Sublease, to remove any and all such signage at
Subtenant's sole cost and expense and repair any damage caused by such removal
to the reasonable satisfaction of Sublandlord and Landlord.

          13.  Attorney's Fees. If Sublandlord, Subtenant or Landlord brings an
               ---------------
action to enforce the terms hereof or to declare rights hereunder, the
prevailing party who recovers

                                       7
<PAGE>

substantially all of the damages, equitable relief or other remedy sought in any
such action on trial and appeal shall be entitled to his reasonable attorney's
fees to be paid by the losing party as fixed by the court.

          14.  Subtenant's Acceptance.
               ----------------------

              14.1  Generally. Sublandlord shall deliver, and Subtenant shall
                    ---------
accept, possession of the Subleased Premises in their "AS IS" condition as the
Subleased Premises exists on the Commencement Date hereof; Subtenant expressly
acknowledges that Sublandlord will, prior to the Commencement Date, remove
Sublandlord's security system, all computer servers, and all overhead
projectors, and will deliver the Subleased Premises to Subtenant in "broom
clean" condition. Sublandlord shall have no obligation to furnish, render or
supply any work, labor, services, materials, furniture, fixtures, equipment,
decorations or other items to make the Subleased Premises ready or suitable for
Subtenant's occupancy. In making and executing this Sublease, Subtenant has
relied solely on such investigations, examinations and inspections as Subtenant
has chosen to make or has made and has not relied on any representation or
warranty concerning the Subleased Premises or the Building, except as expressly
set forth in this Sublease. Subtenant acknowledges that Sublandlord has afforded
Subtenant the opportunity for full and complete investigations, examinations and
inspections of the Subleased Premises and the common areas of the Building.
Subtenant acknowledges that it is not authorized to make or do any alterations
or improvements in or to the Subleased Premises except as permitted by the
provisions of this Sublease and the Master Lease and that upon termination of
this Sublease, Subtenant shall deliver the Subleased Premises to Sublandlord in
the same condition as the Subleased Premises were at the commencement of the
Term hereof, reasonable wear and tear excepted; Subtenant expressly acknowledges
that if Subtenant performs alterations within the Subleased Premises and
Landlord or Sublandlord requires their removal, Subtenant will be solely
responsible for the cost of such removal (and any repairs necessitated by such
removal), and that Sublandlord shall have no responsibility to return the
Security Deposit to Subtenant until all such restoration work has been completed
to the satisfaction of Landlord and Sublandlord.

              14.2  Code Issues. If the performance of any work in or about the
                    -----------
Subleased Premises by Subtenant "triggers" a requirement for code-related
upgrades to or improvements of the Master Leased Premises or any common areas,
Subtenant shall be solely responsible for the cost of such code-required upgrade
or improvements.

          15.  Notices: Any notice by either party to the other required,
               -------
permitted or provided for herein shall be valid only if in writing and shall be
deemed to be duly given only if (a) delivered personally, or (b) sent by means
of Federal Express, UPS Next Day Air or another reputable express mail delivery
service guaranteeing next day delivery, or (c) sent by United States Certified
or registered mail, return receipt requested, addressed (i) if to Sublandlord,
at the following addresses:

               Oracle Corporation
               500 Oracle Parkway
               Box LGN2
               Redwood Shores, CA 94065
               Attn: Lease Administrator

                                       8
<PAGE>

               With a copy to:

               Oracle Corporation
               500 Oracle Parkway
               Box 5OP7
               Redwood Shores, CA 94065
               Attn: Legal Department

and (ii) if the Subtenant, at the Subleased Premises, attn: General Counsel.

Or at such other address for either party as that party may designate by notice
to the other. A notice shall be deemed given and effective, if delivered
personally, upon hand delivery thereof (unless such delivery takes place after
hours or on a holiday or weekend, in which event the notice shall be deemed
given on the next succeeding business day), if sent via overnight courier, on
the business day next succeeding delivery to the courier, and if mailed by
United States certified or registered mail, three (3) business days following
such mailing in accordance with this Section.

          16.  Assignment and Subletting.
               -------------------------

                   (a) Generally; Sublandlord's Right to Recapture.
                       -------------------------------------------
Supplementing Article 14 of the Master Lease as incorporated herein, Subtenant
shall have the right to assign or sublease all or a portion of the Subleased
Premises with the consent of Landlord (to be withheld or granted pursuant to the
provisions of the Master Lease) and Sublandlord's consent to any such
transaction to which Landlord has consented shall not be unreasonably withheld,
conditioned or delayed. Notwithstanding the foregoing, in the event that
Subtenant proposes to sublease all or a portion of the Subleased Premises or to
assign its interest in the Sublease (other than pursuant to Permitted Transfer
[defined below]), Sublandlord shall have the right, to be exercised within
twenty (20) days following receipt of Subtenant's notice of request for consent
to such transaction, to terminate this Sublease with respect to the portion of
the Subleased Premises that is the subject of the proposed transaction,
effective as of the date upon which Subtenant's proposed sublease or assignment
is to take effect. If such termination applies to a portion, but not all, of the
Subleased Premises, Subtenant will be responsible for one-half (1/2) of the cost
of design and construction of any demising walls and corridors required in order
to separate the Subleased Premises from the area that is the subject of such
termination and Sublandlord shall be responsible for the remaining one-half
(1/2).

                   (b) Permitted Transfers. Notwithstanding anything to the
                       -------------------
contrary contained herein, Tenant may assign its entire interest under this
Sublease or sublet the Subleased Premises to a wholly owned corporation,
partnership or other legal entity or affiliate, subsidiary or parent of Tenant
or to any successor to Tenant by purchase, merger, consolidation or
reorganization (hereinafter, collectively, referred to as "Permitted Transfer")
without the consent of Sublandlord, provided: (i) Tenant is not in default under
this Sublease; (ii) if such proposed transferee is a successor to Tenant by
purchase, merger, consolidation or reorganization, the continuing or surviving
entity shall own all or substantially all of the assets of Tenant and shall have
a net worth which is at least equal to the greater of Tenant's net worth at the
date of this Sublease or Tenant's net worth at the date of the Permitted
Transfer; (iii) in no event shall any Permitted Transfer release or relieve
Tenant from any of its obligations under this

                                       9
<PAGE>

Sublease and (iv) Subtenant must still procure any consents or approvals
required by Landlord. Tenant shall give Sublandlord written notice at least
thirty (30) days prior to the effective date of such Permitted Transfer. As used
herein: (a) "parent" shall mean a company which owns a majority of Tenant's
voting equity; (b) "subsidiary" shall mean an entity wholly owned by Tenant or
at least fifty-one percent (51%) of whose voting equity is owned by Tenant; and
(c) "affiliate" shall mean an entity controlled, controlling or under common
control with Tenant. Notwithstanding the foregoing, sale of the shares of equity
of any affiliate or subsidiary to which this Sublease. has been assigned or
transferred other than to another parent, subsidiary or affiliate of the
original Tenant named hereunder shall be deemed to be an assignment requiring
the consent of Sublandlord hereunder.

          17.  Brokers. Subtenant represents that it has dealt directly with and
               -------
only with CPS ("CPS"), as a broker in connection with this Sublease. Sublandlord
represents that it has dealt directly with and only with Colliers International
("Colliers"), as a broker in connection with this Sublease. Sublandlord and
Subtenant shall indemnify and hold each other harmless from all claims of any
brokers other than CPS and Colliers claiming to have represented Sublandlord or
Subtenant in connection with this Sublease. Subtenant and Sublandlord agree that
CPS and Colliers shall be paid commissions in connection with this Sublease
pursuant to a separate agreement.

          18.  Complete Agreement. There are no representations, warranties,
               ------------------
agreements, arrangements or understandings, oral or written, between the parties
or their representatives relating to the subject matter of this Sublease which
are not fully expressed in this Sublease. This Sublease cannot be changed or
terminated nor may any of its provisions be waived orally or in any manner other
than by a written agreement executed by both parties.

          19.  Interpretation. Irrespective of the place of execution or
               --------------
performance, this Sublease shall be governed by and construed in accordance with
the laws of the State of California. If any provision of this Sublease or the
application thereof to any person or circumstance shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Sublease and the
application of that provision to other persons or circumstances shall not be
affected but rather shall be enforced to the extent permitted by law. The table
of contents, captions, headings and titles, if any, in this Sublease are solely
for convenience of reference and shall not affect its interpretation. This
Sublease shall be construed without regard to any presumption or other rule
requiring construction against the party causing this Sublease or any part
thereof to be drafted. If any words or phrases in this Sublease shall have been
stricken out or otherwise eliminated, whether or not any other words or phrases
have been added, this Sublease shall be construed as if the words or phrases so
stricken out or otherwise eliminated were never included in this Sublease and no
implication or inference shall be drawn from the fact that said words or phrases
were so stricken out or otherwise eliminated. Each covenant, agreement,
obligation or other provision of this Sublease shall be deemed and construed as
a separate and independent covenant of the party bound by, undertaking or making
same, not dependent on any other provision of this Sublease unless otherwise
expressly provided. All terms and words used in this Sublease, regardless of the
number or gender in which they are used, shall be deemed to include any other
number and any other gender as the context may require. The word "person" as
used in this Sublease shall mean a natural person or persons, a partnership, a
corporation or any other form of business or legal association or entity.

                                      10
<PAGE>

          20.  Counterparts. This Sublease may be executed in separate
               ------------
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument. This Sublease shall be
fully executed when each party whose signature is required has signed and
delivered to each of the parties at least one counterpart, even though no single
counterpart contains the signatures of all parties hereto.

          IN WITNESS WHEREOF, the parties hereto hereby execute this Sublease as
of the day and year first above written.

                                    SUBLANDLORD:
                                    -----------

                                    ORACLE CORPORATION,
                                    a Delaware corporation

                                    By:  /s/ Bruce Lange
                                         ---------------------------------
                                    Print Name:  Bruce Lange
                                                 -------------------------
                                    Title:   VP and Corporate Treasurer
                                             -----------------------------

                                    SUBTENANT:
                                    ----------

                                    EXTRICITY, INC.
                                    a California corporation

                                    By:  /s/ Stephen Albertolle
                                         ---------------------------------

                                    Print Name:   Stephen Albertolle
                                                 -------------------------

                                    Title:   CFO
                                            ------------------------------

                                      11
<PAGE>

                               Subleased Premises
                               ------------------

                                  First Floor
                                  -----------

                                   [Graphic]
<PAGE>

                               Subleased Premises
                               ------------------

                                  Second Floor
                                  ------------

                                   [Graphic]
<PAGE>

                              Subleased Premises
                              ------------------

                                  Lower Level
                                  -----------

                                   [Graphic]
<PAGE>

                                   EXHIBIT B
                                   ---------

     DATE:  _____________

     FROM:                         IMPERIAL BANK
                              INTERNATIONAL DIVISION
                              2015 MANHATTAN BEACH BLVD.
                              REDONDO BEACH, CA 90278
                              U.S.A.
                              TELEX: 3730628 (IMPERIAL INW)
                              SWIFT: IMPBUS66

     APPLICANT:               EXTRICITY, INC.
                              555 TWIN DOLPHIN DRIVE
                              SUITE 600
                              REDWOOD SHORES, CA 94065

     IN FAVOR OF:             ORACLE CORPORATION
                              500 ORACLE PARKWAY
                              REDWOOD CITY, CALIFORNIA 94065

     WE HEREBY ESTABLISH OUR IRREVOCABLE TRANSFERABLE STANDBY LETTER OF CREDIT
     NO. _____ EXPIRING 11/22/01 AT OUR COUNTERS FOR AMOUNT: USD 8,609,166.00
     (EIGHT MILLION SIX HUNDRED NINE THOUSAND ONE HUNDRED SIXTY SIX EXACTLY).

     CREDIT IS AVAILABLE WITH        IMPERIAL BANK
                                     INTERNATIONAL DIVISION
                                     275 BATTERY STREET
                                     SUITE 1100
                                     SAN FRANCISCO, CALIFORNIA
     94111-3305

     BY PAYMENT OF DRAFTS AT SIGHT

     DRAFTS DRAWN ON:                IMPERIAL BANK
                                     INTERNATIONAL DIVISION
                                     275 BATTERY STREET
                                     SUITE 1100
                                     SAN FRANCISCO, CALIFORNIA
     94111-3305

     REQUIRED DOCUMENTS:

1.   THE ORIGINAL OF THIS STANDBY LETTER OF CREDIT AND AMENDMENT(S) IF ANY.

                                       1
<PAGE>

2.   BENEFICIARY'S STATEMENT DATED AND PURPORTEDLY SIGNED BY ONE OF ITS OFFICERS
     WORDED AS FOLLOWS: WE HEREBY CERTIFY THAT THIS DRAW IN THE AMOUNT OF
     USD______ (U.S. DOLLARS ____) UNDER YOUR IREVOCABLE STANDBY LETTER OF
     CREDIT NO. ____ REPRESENTS FUNDS DUE AND OWING TO US AS A RESULT OF THE
     APPLICANT'S FAILURE TO COMPLY WITH ONE OR MORE OF THE TERMS OF THAT CERTAIN
     SUBLEASE BY AND BETWEEN ORACLE CORPORATION, AS SUBLANDLORD, AND EXTRICITY,
     INC., AS SUBTENANT.

     ADDITIONAL CONDITIONS:

     ALL INFORMATION REQUIRED WHETHER INDICATED BY BLANKS, BRACKETS OR
     OTHERWISE, MUST BE COMPLETED AT THE TIME OF DRAWING.

     ALL SIGNATURES MUST BE MANUALLY EXECUTED IN ORIGINALS.

     PARTIAL DRAWINGS MAY BE MADE UNDER THIS LETTER OF CREDIT, PROVIDED,
     HOWEVER, THAT EACH SUCH DEMAND THAT IS PAID BY US SHALL REDUCE THE AMOUNT
     AVAILABLE UNDER THIS LETTER OF CREDIT.

     IT IS A CONDITION OF THIS STANDBY LETTER OF CREDIT THAT IT SHALL BE DEEMED
     AUTOMATICALLY EXTENDED WITHOUT AMENDMENT FOR ONE YEAR PERIODS FROM THE
     PRESENT EXPIRATION DATE HEREOF, AND EACH APPLICABLE ANNIVERSARY THEREOF
     UNLESS SIXTY (60) DAYS PRIOR TO ANY SUCH DATE, WE SHALL NOTIFY YOU IN
     WRITING BY CERTIFIED MAIL OR COURIER SERVICE AT THE ABOVE LISTED ADDRESS
     THAT WE ELECT NOT TO CONSIDER THIS IRREVOCABLE LETTER OR CREDIT RENEWED FOR
     ANY SUCH ADDITIONAL PERIOD. UPON RECEIPT BY YOU OF SUCH NOTICE, YOU MAY
     DRAW HEREUNDER BY MEANS OF YOUR DRAFT (S) ON US AT SIGHT ACCOMPANIED BY
     YOUR ORIGINAL SIGNED STATEMENT WORDED AS FOLLOWS: ORACLE CORPORATION HAS
     RECEIVED NOTICE FROM IMPERIAL BANK THAT THE EXPIRATION DATE OF LETTER OF
     CREDIT NO. ________ WILL NOT BE EXTENDED FOR AN ADDITIONAL PERIOD AS OF THE
     DATE OF THIS DRAWING, ORACLE CORPORATION HAS NOT RECEIVED A SUBSTITUTE
     LETTER OF CREDIT OR OTHER INSTRUMENT ACCEPTABLE TO ORACLE CORPORATION AS
     SUBSTITUTE FOR IMPERIAL BANK LETTER OF CREDIT NO. ________.

     ISSUING BANK WILL SEND CONCURRENTLY WITH ANY NOTICE SENT TO BENEFICIARY, BY
     A NATIONALLY RECOGNIZED COURIER SERVICE OR CERTIFIED MAIL, AN ADDITIONAL
     NOTICE TO:

                                       2
<PAGE>

     SHARTSIS, FRIESE & GINSBURG LLP, ONE MARITIME PLAZA, 18TH FLOOR, SAN
     FRANCISCO, CALIFORNIA, 94111 ATTENTION: JONATHAN M. KENNEDY.

     NOTWITHSTANDING THE ABOVE, THE FINAL EXPIRATION DATE SHALL BE 11/22/06.

     THIS LETTER OF CREDIT IS TRANSFERABLE IN WHOLE ONLY. YOU MAY TRANSFER THIS
     LETTER OF CREDIT TO YOUR TRANSFEREE OR SUCCESSOR UPON SATISFACTORY DELIVERY
     AND PRESENTATION TO THE ISSUING BANK OF (1) THE ORIGINAL STANDBY L/C AND
     AMENDMENTS, IF ANY, FOR PROPER ENDORSEMENT (2) A REQUEST FOR TRANSFER ON
     THE ISSUER'S USUAL TRANSFER FORM (3) VERIFICATION OF SIGNATURE AND
     AUTHORITY ON SUCH TRANSFER FORM SIGNING FOR THE BENEFICIARY (4) PAYMENT OF
     A TRANSFER FEE (NOT TO EXCEED  1/4 OF 1 PERCENT) AND (5) ANY OTHER
     REQUIREMENTS RELATIVE TO THE UCP 500 AND U.S. GOVERNMENT REGULATIONS.

     IMPERIAL BANK, UPON RECEIPT OF BENEFICIARY'S REQUEST, IN A MANNER AS STATED
     HEREIN, TO TRANSFER THIS LETTER OF CREDIT, WILL REQUIRE THAT THE ORIGINAL
     OF THIS LETTER OF CREDIT AND ALL AMENDMENTS THERETO, IF ANY, BE RETURNED TO
     US FOR CANCELLATION. UPON OUR RECEIPT OF SAME, A NEW LETTER OF CREDIT SHALL
     BE ISSUED TO THE TRANSFEREE, AS BENEFICIARY.

     ALL DRAFTS AND DOCUMENTS REQUIRED UNDER THIS LETTER OF CREDIT MUST BE
     MARKED: "DRAWN UNDER IMPERIAL BANK LETTER OF CREDIT NO. ________-.

     ALL DOCUMENTS ARE TO BE DISPATCHED IN ONE LOT BY COURIER SERVICE TO
     IMPERIAL BANK INTERNATIONAL DIVISION, 275 BATTERY STREET, SUITE 1100, SAN
     FRANCISCO, CALIFORNIA 94111-3305.

     THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING.

     WE HEREBY ENGAGE WITH YOU THAT ALL DRAFTS DRAWN UNDER AN IN COMPLIANCE WITH
     THE TERMS OF THIS CREDIT WILL BE DULY HONORED IF DRAWN AND PRESENTED FOR
     PAYMENT AT THIS OFFICE ON OR BEFORE THE EXPIRATION DATE OF THIS CREDIT. WE
     FURTHER ACKNOWLEDGE AN AGREE THAT UPON RECEIPT OF THE COMPLYING
     DOCUMENTATION REQUIRED HEREIN, WE WILL HONOR YOUR DRAW (S) AGAINST THIS
     IRREVOCABLE STANDBY LETTER OF CREDIT WITHOUT INQUIRY INTO THE ACCURACY OF
     BENEFICIARY'S SIGNED STATEMENT.

                                       3
<PAGE>

     EXCEPT SO FAR AS OTHERWISE EXPRESSLY STATED HEREIN, THIS CREDIT IS SUBJECT
     TO THE "UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS" (1993
     REVISION) INTERNATIONAL CHAMBER OF COMMERCE (PUBLICATION NO. 500).

                                       4
<PAGE>

                                  EXHIBIT C-1
                                  -----------

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED ("THE ACT"), OR THE SECURITIES LAWS OF CERTAIN STATES.
THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY
NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION THEREUNDER OR
EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION
OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT
ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.

                 WARRANT TO PURCHASE SERIES F PREFERRED STOCK

                                      OF

                                EXTRICITY, INC.

                            Void after July __, 2004

     This certifies that, for value received, Oracle Corporation or its
permitted registered assigns ("Registered Holder"), is entitled, subject to the
terms and conditions of this Warrant, at any time before 5:00 p.m. Pacific Time
on July , 2004 (the "Expiration Date"), to purchase from Extricity, Inc., a
California corporation (the "Company"), Twenty Thousand (20,000) shares of the
Company's Series F Preferred Stock, no par value per share (the "Warrant
Stock"), as constituted on May 3, 2000 (the "Issue Date"), at the price of Six
Dollars Forty-five Cents ($6.45) per share, or any amount less than $6.45 per
share to which the conversion price of the Series F Preferred Stock may be
reduced as a result of the issuance or deemed issuance of additional shares of
common stock at less than the conversion price of the Series F Preferred Stock
(the "Purchase Price") upon surrender of this Warrant at the principal office of
the Company, together with a duly executed subscription in the form attached
hereto as Exhibit 1 and simultaneous payment of the full Purchase Price therefor
in lawful money of the United States as provided herein. The Purchase Price and
the number and character of shares of Warrant Stock purchasable hereunder are
subject to adjustment as provided herein. Unless the context otherwise requires,
the term "Warrant Stock" shall mean and include the stock and other securities
and property at any time receivable or issuable upon exercise of this Warrant.
The term "Warrant" as used herein, shall include this Warrant and any warrants
delivered in substitution or exchange therefor as provided herein.

1.  Exercise.
    --------

          (a) Exercise Period. Subject to compliance with all applicable
              ---------------
securities laws, this Warrant may be exercised at any time, in whole or in part,
on any business day prior to the Expiration Date, by surrendering this Warrant
at the principal executive office of the Company,

                                       1
<PAGE>

together with the subscription form attached hereto duly executed by the
Registered Holder and payment in full of the Purchase Price or adjusted Purchase
Price therefor, if applicable (as determined in accordance with the terms
hereof) for the number of shares of Warrant Stock to be purchased upon such
exercise of this Warrant. Upon a partial exercise of this Warrant, this Warrant
shall be surrendered, and a new Warrant of the same tenor for purchase of the
number of remaining shares of Warrant Stock not previously purchased shall be
issued by the Company to the Registered Holder. This Warrant shall be deemed to
have been exercised immediately prior to the close of business on the date of
its surrender for exercise and payment in full to the Company of the Purchase
Price as provided above, and the person entitled to receive the shares of
Warrant Stock issuable upon such exercise shall be treated for all purposes as
the holder of record of such shares as of the close of business on such date. As
soon as practicable on or after such date, the Company shall issue and deliver
to the person or persons entitled to receive the same a certificate or
certificates for the number of whole shares of Warrant Stock issuable upon such
exercise, together with cash in lieu of any fraction of a share equal to such
fraction of the current fair market value of one whole share of Warrant Stock as
of the date of exercise, as determined in good faith by the Company's Board of
Directors. No fractional shares may be issued upon any exercise of this Warrant.
Notwithstanding the above, this Warrant must be exercised on the earliest to
occur off (i) the Expiration Date; (ii) six (6) months after the date of closing
of the issuance and sale of shares of Common Stock of the Company in the
Company's first underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended; (iii) the
sale of all or substantially all the assets of the Company; or (iv) the merger
of the Company into or consolidation with any other entity (the "Expiration
Date"). In the event of a proposed transaction of the kind described in (ii),
(iii) or (iv) above, the Company shall notify the Registered Holder at least
thirty (30) days prior to the consummation of such event or transaction.

          (b) Conversion. In lieu of exercising this Warrant or any portion
              ----------
hereof, at any time after the effective date of a Form S-1 registration
statement relating to Common Stock of the Company filed by the Company pursuant
to the Securities Act of 1933, as amended, the Registered Holder shall have the
right to convert this Warrant or any portion hereof into Common Stock by
executing and delivering to the Company at its principal office the written
Subscription Notice in the form attached hereto, specifying the portion of the
Warrant to be converted, and accompanied by this Warrant. The number of shares
of Common Stock to be issued to Registered Holder upon such conversion shall be
computed using the following formula:

          X = (P)(Y)(A-B)/A

          Where

          X=

               the number of shares of Common Stock to be issued to the
               Registered Holder for the portion of the Warrant being converted.

                                       2
<PAGE>

          P=
               the portion of the Warrant being converted expressed as a decimal
               fraction.

          Y=

               the total number of shares of Common Stock issuable upon exercise
               of the Warrant in full.

          A=

               the fair market value of one share of Common Stock, which shall
               mean (i) the closing price of the Company's stock issuable upon
               conversion of such share as reported on the Nasdaq National
               Market or other national exchange on which such stock is traded
               on the last business day immediately prior to the date the notice
               of conversion is received by the Company, or (ii) if this Warrant
               is being converted in conjunction with a public offering of stock
               the per share price to the public pursuant to the offering.

          B=

               the Exercise Price on the date of conversion.

     Any portion of this Warrant that is converted shall be immediately
canceled. This Warrant or any portion hereof shall be deemed to have been
converted immediately prior to the close of business on the date of its
surrender for conversion as provided above, and the person entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as Registered Holder of such shares of record as of the close of
business on such date. As promptly as practicable after such date, the Company
shall issue and deliver to the person or persons entitled to receive the same a
certificate or certificates' for the number of full shares of Common Stock
issuable upon such conversion. If the Warrant shall be converted for less than
the total number of shares of Common Stock then issuable upon conversion,
promptly after surrender of the Warrant upon such conversion, the Company will
execute and deliver a new Warrant, dated the date hereof, evidencing the right
of the Registered Holder to the balance of the Shares purchasable hereunder upon
the same terms and conditions set forth herein.

2.  Valid Issuance. All shares of Warrant Stock issued upon the exercise of this
Warrant shall be validly issued, fully paid and non-assessable. The Company
shall not be required to pay any tax or other charge imposed in connection with
any transfer involved in the issue of any certificate for shares of Warrant
Stock, or any Common Stock or other securities issuable upon conversion of such
Warrant Stock ("Conversion Stock"), in any name other than that of the
Registered Holder of this Warrant, and in such case the Company shall not be
required to issue or deliver any stock certificate or security until such tax or
other charge has been paid, or it has been established to the Company's
satisfaction that no tax or other charge is due.

3.  Transfer and Exchange. This Warrant and the rights hereunder may not be
transferred unless such transfer complies with all applicable securities laws
and the provisions of Section 4.

                                       3
<PAGE>

If a transfer of all or part of this Warrant is permitted in accordance with the
preceding sentence, then this Warrant and all rights hereunder may be
transferred, in whole or in part, on the books of the Company maintained for
such purpose at the principal office of the Company referred to above, by the
Registered Holder hereof in person, or by duly authorized attorney, upon
surrender of this Warrant properly endorsed and upon payment of any necessary
transfer tax or other governmental charge imposed upon such transfer. Upon any
permitted partial transfer, the Company will issue and deliver to the Registered
Holder a new Warrant or Warrants with respect to the shares of Warrant Stock not
so transferred. Each taker and holder of this Warrant, by taking or holding the
same, consents and agrees that when this Warrant shall have been so endorsed,
the person in possession of this Warrant may be treated by the Company, and all
other persons dealing with this Warrant, as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby,
any notice to the contrary notwithstanding; provided, however that until a
transfer of this Warrant is duly registered on the books of the Company, the
Company may treat the Registered Holder hereof as the owner of this Warrant for
all purposes.

4.   Representations and Covenants of the Registered Holder. This Warrant has
been entered into by the Company in reliance upon the following representations
and covenants of the Registered Holder:

     (a) Investment Purpose. The right to acquire Warrant Stock or the Warrant
         ------------------
Stock issuable upon exercise of the Registered Holder's rights contained herein
will be acquired for investment purposes only for the Registered Holder's own
account and not with a view to the sale or distribution of any part thereof, and
the Registered Holder has no present intention of selling, granting any
participation in or otherwise distributing the same.

     (b) Private Issue. The Registered Holder understands (i) that the Warrant
         -------------
Stock issuable upon exercise of this Warrant is not registered under the Act or
qualified under applicable state securities laws on the ground that the issuance
contemplated by this Warrant will be exempt from the registration and
qualifications requirements thereof, and (ii) that the Company's reliance on
such exemption is predicated on the representations set forth in this Section.

     (c) Securities Law Restrictions on Transfer. The Registered Holder agrees
         ---------------------------------------
that, absent an effective registration statement filed with the U.S. Securities
and Exchange Commission under the Act covering the disposition or sale of this
Warrant or the Warrant Stock issued or issuable upon exercise hereof, such
Registered Holder may not sell or transfer this Warrant or any or all of such
Warrant Stock, as the case may be, without first complying with Section 3 and
without first providing the Company with an opinion of counsel, satisfactory to
the Company, to the effect that such sale or transfer will be exempt from the
registration and prospectus delivery requirements of the Act, and such
Registered Holder consents to the Company making a notation on its records, or
giving instructions to any transfer agent of this Warrant, or such Warrant
Stock, in order to implement such restriction on transfer. The shares issued
upon exercise of this Warrant shall bear legends referring to the restrictions
on transfer set forth herein. As a further condition to any transfer of this
Warrant, any permitted transferee must execute and deliver to the Company
representations and warranties similar to those set forth herein and agree in
writing to accept and be bound by all of the terms and conditions of this
Warrant.

                                       4
<PAGE>

     (d) Financial Risk. The Registered Holder has such knowledge and experience
         --------------
in financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment. The Registered Holder has not been organized for the specific
purpose of acquiring this Warrant. The Registered Holder has had access to all
information regarding the Company, its present and prospective business, assets,
liabilities and financial condition that the Registered Holder considers
important to making the decision regarding its investment and has had ample
opportunity to ask questions of and receive answers from the Company's
representatives concerning its investment and to obtain any and all documents
requested in order to supplement or verify any of the information supplied.

     (e) Accredited Investor. Registered Holder is an "accredited investor"
         -------------------
within the meaning of the Securities and Exchange Rule 501 of Regulation D, as
presently in effect.

     (f) "Market Stand-Off" Agreement. The Registered Holder hereby agrees that
         ----------------------------
it shall not, to the extent requested by the Company or an underwriter of
securities of the Company, sell or otherwise transfer or dispose of this Warrant
or any shares of Warrant Stock or other shares of stock of the Company then
owned by the Registered Holder (other than to donees or partners of the
Registered Holder who agree to be similarly bound) for up to one hundred eighty
(180) days following the effective date of a registration statement of the
Company filed under the Act; provided, however, that:

         (i)  such agreement shall be applicable only to the first such
registration statement of the Company which covers securities to be sold on its
behalf to the public in an underwritten offering but not to securities sold
pursuant to such registration statement; and

         (ii) all executive officers and directors of the Company and holders
of more than one (1%) of the Company's outstanding capital stock then holding
Common Stock of the Company enter into similar agreements.

In order to enforce the foregoing covenant, the Company shall have the right to
place restrictive legends on the certificates representing the shares subject to
this Section and to impose stop transfer instructions with respect to the shares
of Warrant Stock and any other shares of stock of the Registered Holder (and the
shares or securities of every other person subject to the foregoing restriction)
until the end of such period.

5.   Adjustment of Purchase Price and Number of Shares. The number and character
of shares of Warrant Stock issuable upon exercise of this Warrant (or any shares
of stock or other securities or property at the time receivable or issuable upon
exercise of this Warrant) and the Purchase Price therefor, are subject to
adjustment upon occurrence of the following events:

     (a) Adjustment for Stock Splits, Stock Dividends, Recapitalizations, etc.
         --------------------------------------------------------------------
The Purchase Price of this Warrant and the number of shares of Warrant Stock
issuable upon exercise of this Warrant shall each be proportionally adjusted to
reflect any stock dividend, stock split, reverse stock split, combination of
shares, reclassification, recapitalization or other similar event altering the
number of outstanding shares of Warrant Stock.

                                       5
<PAGE>

          (b) Adjustment for Other Dividends and Distributions. In case the
              ------------------------------------------------
Company shall make or issue, or shall fix a record date for the determination of
eligible holders entitled to receive, a dividend or other distribution with
respect to the Warrant Stock payable in securities of the Company then, and in
each such case, the Registered Holder of this Warrant, on exercise of this
Warrant at any time after the consummation, effective date or record date of
such event, shall receive, in addition to the shares of Warrant Stock (or such
other stock or securities) issuable on such exercise prior to such date, the
securities of the Company to which such Registered Holder would have been
entitled upon such date if such Registered Holder had exercised this Warrant
immediately prior thereto (all subject to further adjustment as provided in this
Warrant).

     (c) Adjustment for Capital Reorganization, Consolidation, Merger. Subject
         ------------------------------------------------------------
to Section 5(d), if any capital reorganization of the capital stock of the
Company, or any consolidation or merger of the Company with or into another
corporation, or the sale of all or substantially all of the Company's assets to
another corporation shall be effected in such a way that holders of Warrant
Stock will be entitled to receive stock, securities or assets with respect to or
in exchange for their Warrant Stock, and in each such case, the Registered
Holder of this Warrant, upon the exercise this Warrant (as provided in Section
1), at any time after the consummation of such capital reorganization,
consolidation, merger, or sale, shall be entitled to receive, in lieu of the
stock or other securities and property receivable upon the exercise of this
Warrant prior to such consummation, the stock or other securities or property to
which such Registered Holder would have been entitled upon such consummation if
such Registered Holder had exercised this Warrant immediately prior thereto, all
subject to further adjustment as provided in this Section 5; and in each such
case, the terms of this Warrant shall be applicable to the shares of stock or
other securities or property receivable upon the exercise of this Warrant after
such consummation.

     (d) Conversion of Warrant Stock. If all the outstanding shares of the
         ---------------------------
Series F Preferred Stock of the Company are converted into Common Stock pursuant
to the Company's Articles of Incorporation or otherwise, or such Series F
Preferred Stock otherwise ceases to exist, then, from and after the date on
which such Series F Preferred Stock is so converted or ceases to exist then this
Warrant will be exercisable for 20,000 shares of Common Stock of the Company and
the term "Warrant Stock" (wherever used in this Warrant) will thereafter mean
the Company's Common Stock and the Purchase Price will remain Six Dollars Forty-
five Cents ($6.45) per share (subject to subsequent adjustment as provided
herein).

6.   No Impairment. Subject to the provisions of Section 5, the Company will
not, by amendment of its Articles of Incorporation or bylaws, or through
reorganization, consolidation, merger, dissolution, issue or sale of securities,
sale of assets or any other voluntary action, willfully avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Registered Holder of this Warrant against impairment. Without
limiting the generality of the foregoing, subject to the provisions of Section
5, the Company (a) will not increase the par value of any shares of stock
issuable upon the exercise of this Warrant above the amount payable therefor
upon such exercise, and (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Warrant Stock upon the exercise of this Warrant.

                                       6
<PAGE>

7.   Certificate as to Adjustments. In each case of any adjustment in other
stock, securities or property receivable on the exercise of this Warrant, the
Chief Financial Officer of the Company shall compute such adjustment in
accordance with the terms of this Warrant and prepare a certificate setting
forth such adjustment and showing in detail the facts upon which such adjustment
is based. The Company will forthwith mail a copy of each such certificate to the
Registered Holder of this Warrant.

8.   Notices of Record Date. In case:

     (a) the Company shall take a record of the holders of its Warrant Stock (or
other stock or securities at the time receivable upon the exercise of this
Warrant) for the purpose of entitling them to receive any stock dividend; or

     (b) of any consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of the assets of the
Company to another corporation in which holders of the Company's stock are to
receive stock, securities or property of another corporation; or

     (c) of any voluntary dissolution, liquidation or winding-up of the Company;
or

     (d) of any redemption or conversion into Common Stock of all outstanding
Warrant Stock;

then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be, (i)
the date on which a record is to be taken for the purpose of such dividend, and
stating the amount and character of such dividend, or (ii) the date on which
such consolidation, merger, conveyance, dissolution, liquidation, winding-up,
redemption or conversion is to take place, and the time, if any is to be fixed,
as of which the holders of record of Warrant Stock or Common Stock (or such
stock or securities as at the time are receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Warrant Stock or Common
Stock (or such other stock or securities) for securities or other property
deliverable upon such consolidation, merger, conveyance, dissolution,
liquidation or winding-up. Such notice shall be mailed at least ten (10) days
prior to the date therein specified.

9.   Loss or Mutilation. Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant, and of a written indemnity agreement reasonably
satisfactory to the Company, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver in lieu
thereof a new Warrant of like tenor.

10.  Reservation of Warrant Stock. Subject to the provisions of Section 5(d),
the Company shall at all times reserve and keep available for issue upon the
exercise of this Warrant such number of its authorized but unissued shares of
Warrant Stock (and Common Stock if the Warrant Stock is not Common Stock) as
will be sufficient to permit the exercise in full of this Warrant and the
conversion of all shares of Warrant Stock issuable hereunder into Common Stock
(if the Warrant Stock is then convertible into Common Stock).

                                       7
<PAGE>

11.  No Rights or Liabilities as Shareholder. This Warrant does not by itself
entitle the Registered Holder to any voting rights or other rights as a
shareholder of the Company. In the absence of affirmative action by Registered
Holder to purchase Warrant Stock by exercise of this Warrant, no provisions of
this Warrant, and no enumeration herein of the rights or privileges of the
Registered Holder shall cause such Registered Holder to be a shareholder of the
Company for any purpose.

12.  Notices. All notices and other communications from the Company to the
Registered Holder shall be mailed by first-class registered or certified mail,
postage prepaid, to the address furnished to the Company in writing by the last
Registered Holder who shall have furnished an address to the Company in writing.

13.  Change; Waiver. Neither this Warrant nor any term hereof may be changed,
waived, discharged or terminated orally but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.

14.  Headings. The headings in this Warrant are for purposes of convenience in
reference only, and shall not be deemed to constitute a part hereof.

15.  Law Governing. This Warrant shall be construed and enforced in accordance
with, and governed by, the internal laws of the State of Delaware, excluding
that body of law applicable to conflicts of law.

Dated: July __,2000

                         EXTRICITY, INC.

                         By:  /s/ Stephen J. Albertolle
                              -------------------------

                              Stephen J. Albertolle

                              CFO

Acknowledged and Agreed:

Oracle Corporation

By:  /s/ BRUCE LANGE
     -------------------------------

Name:  Bruce Lange
       -----------------------------

Title:  V.P. and Corporate Treasurer
        ----------------------------

                                       8
<PAGE>

                                  EXHIBIT C-2
                                  -----------

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED ("THE ACT"), OR THE SECURITIES LAWS OF CERTAIN STATES.
THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY
NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION THEREUNDER OR
EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION
OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT
ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.

                 WARRANT TO PURCHASE SERIES F PREFERRED STOCK

                                      OF

                                EXTRICITY, INC.

                           Void after July __, 2004

     This certifies that, for value received, Davis Associates or its permitted
registered assigns ("Registered Holder"), is entitled, subject to the terms and
conditions of this Warrant, at any time before 5:00 p.m. Pacific Time on
July, __, 2004 (the "Expiration Date"), to purchase from Extricity, Inc., a
California corporation (the "Company"), Twenty Thousand (20,000) shares of the
Company's Series F Preferred Stock, no par value per share (the "Warrant
Stock"), as constituted on May 3, 2000 (the "Issue Date"), at the price of Six
Dollars Forty-five Cents ($6.45) per share, or any amount less than $6.45 per
share to which the conversion price of the Series F Preferred Stock may be
reduced as a result of the issuance or deemed issuance of additional shares of
common stock at less than the conversion price of the Series F Preferred Stock
(the "Purchase Price") upon surrender of this Warrant at the principal office of
the Company, together with a duly executed subscription in the form attached
hereto as Exhibit 1 and simultaneous payment of the full Purchase Price therefor
in lawful money of the United States as provided herein. The Purchase Price and
the number and character of shares of Warrant Stock purchasable hereunder are
subject to adjustment as provided herein. Unless the context otherwise requires,
the term "Warrant Stock" shall mean and include the stock and other securities
and property at any time receivable or issuable upon exercise of this Warrant.
The term "Warrant" as used herein, shall include this Warrant and any warrants
delivered in substitution or exchange therefor as provided herein.

1.  Exercise.
    --------

          (a) Exercise Period. Subject to compliance with all applicable
              ---------------
securities laws, this Warrant may be exercised at any time, in whole or in part,
on any business day prior to the Expiration Date, by surrendering this Warrant
at the principal executive office of the Company,

                                       1
<PAGE>

together with the subscription form attached hereto duly executed by the
Registered Holder and payment in full of the Purchase Price or adjusted Purchase
Price therefor, if applicable (as determined in accordance with the terms
hereof) for the number of shares of Warrant Stock to be purchased upon such
exercise of this Warrant. Upon a partial exercise of this Warrant, this Warrant
shall be surrendered, and a new Warrant of the same tenor for purchase of the
number of remaining shares of Warrant Stock not previously purchased shall be
issued by the Company to the Registered Holder. This Warrant shall be deemed to
have been exercised immediately prior to the close of business on the date of
its surrender for exercise and payment in full to the Company of the Purchase
Price as provided above, and the person entitled to receive the shares of
Warrant Stock issuable upon such exercise shall be treated for all purposes as
the holder of record of such shares as of the close of business on such date. As
soon as practicable on or after such date, the Company shall issue and deliver
to the person or persons entitled to receive the same a certificate or
certificates for the number of whole shares of Warrant Stock issuable upon such
exercise, together with cash in lieu of any fraction of a share equal to such
fraction of the current fair market value of one whole share of Warrant Stock as
of the date of exercise, as determined in good faith by the Company's Board of
Directors. No fractional shares may be issued upon any exercise of this Warrant.
Notwithstanding the above, this Warrant must be exercised on the earliest to
occur off (i) the Expiration Date; (ii) six. (6) months after the date of
closing of the issuance and sale of shares of Common Stock of the Company in the
Company's first underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended; (iii) the
sale of all or substantially all the assets of the Company; or (iv) the merger
of the Company into or consolidation with any other entity (the "Expiration
Date"). In the event of a proposed transaction of the kind described in (ii),
(iii) or (iv) above, the Company shall notify the Registered Holder at least
thirty (30) days prior to the consummation of such event or transaction.

          (b) Conversion. In lieu of exercising this Warrant or any portion
              ----------
hereof, at any time after the effective date of a Form S-1 registration
statement relating to Common Stock of the Company filed by the Company pursuant
to the Securities Act of 1933, as amended, the Registered Holder shall have the
right to convert this Warrant or any portion hereof into Common Stock by
executing and delivering to the Company at its principal office the written
Subscription Notice in the form attached hereto, specifying the portion of the
Warrant to be converted, and accompanied by this Warrant. The number of shares
of Common Stock to be issued to Registered Holder upon such conversion shall be
computed using the following formula:

          X = (P)(Y)(A-B)/A

          Where

          X=

          the number of shares of Common Stock to be issued to the Registered
          Holder for the portion of the Warrant being converted.

                                       2
<PAGE>

          P=
               the portion of the Warrant being converted expressed as a decimal
               fraction.

          Y=

               the total number of shares of Common Stock issuable upon exercise
               of the Warrant in full.

          A=

               the fair market value of one share of Common Stock, which shall
               mean (i) the closing price of the Company's stock issuable upon
               conversion of such share as reported on the Nasdaq National
               Market or other national exchange on which such stock is traded
               on the last business day immediately prior to the date the notice
               of conversion is received by the Company, or (ii) if this Warrant
               is being converted in conjunction with a public offering of stock
               the per share price to the public pursuant to the offering.

          B=

               the Exercise Price on the date of conversion.

     Any portion of this Warrant that is converted shall be immediately
canceled. This Warrant or any portion hereof shall be deemed to have been
converted immediately prior to the close of business on the date of its
surrender for conversion as provided above, and the person entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as Registered Holder of such shares of record as of the close of
business on such date. As promptly as practicable after such date, the Company
shall issue and deliver to the person or persons entitled to receive the same a
certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion. If the Warrant shall be converted for less than
the total number of shares of Common Stock then issuable upon conversion,
promptly after surrender of the Warrant upon such conversion, the Company will
execute and deliver a new Warrant, dated the date hereof, evidencing the right
of the Registered Holder to the balance of the Shares purchasable hereunder upon
the same terms and conditions set forth herein.

2.   Valid Issuance. All shares of Warrant Stock issued upon the exercise of
this Warrant shall be validly issued, fully paid and non-assessable. The Company
shall not be required to pay any tax or other charge imposed in connection with
any transfer involved in the issue of any certificate for shares of Warrant
Stock, or any Common Stock or other securities issuable upon conversion of such
Warrant Stock ("Conversion Stock"), in any name other than that of the
Registered Holder of this Warrant, and in such case the Company shall not be
required to issue or deliver any stock certificate or security until such tax or
other charge has been paid, or it has been established to the Company's
satisfaction that no tax or other charge is due.

3.   Transfer and Exchange. This Warrant and the rights hereunder may not be
transferred unless such transfer complies with all applicable securities laws
and the provisions of Section 4.

                                       3
<PAGE>

If a transfer of all or part of this Warrant is permitted in accordance with the
preceding sentence, then this Warrant and all rights hereunder may be
transferred, in whole or in part, on the books of the Company maintained for
such purpose at the principal office of the Company referred to above, by the
Registered Holder hereof in person, or by duly authorized attorney, upon
surrender of this Warrant properly endorsed and upon payment of any necessary
transfer tax or other governmental charge imposed upon such transfer. Upon any
permitted partial transfer, the Company will issue and deliver to the Registered
Holder a new Warrant or Warrants with respect to the shares of Warrant Stock not
so transferred. Each taker and holder of this Warrant, by taking or holding the
same, consents and agrees that when this Warrant shall have been so endorsed,
the person in possession of this Warrant may be treated by the Company, and all
other persons dealing with this Warrant, as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby,
any notice to the contrary notwithstanding; provided, however that until a
transfer of this Warrant is duly registered on the books of the Company, the
Company may treat the Registered Holder hereof as the owner of this Warrant for
all purposes.

4.   Representations and Covenants of the Registered Holder. This Warrant has
been entered into by the Company in reliance upon the following representations
and covenants of the Registered Holder:

     (a) Investment Purpose. The right to acquire Warrant Stock or the Warrant
         ------------------
Stock issuable upon exercise of the Registered Holder's rights contained herein
will be acquired for investment purposes only for the Registered Holder's own
account and not with a view to the sale or distribution of any part thereof, and
the Registered Holder has no present intention of selling, granting any
participation in or otherwise distributing the same.

     (b) Private Issue. The Registered Holder understands (i) that the Warrant
         -------------
Stock issuable upon exercise of this Warrant is not registered under the Act or
qualified under applicable state securities laws on the ground that the issuance
contemplated by this Warrant will be exempt from the registration and
qualifications requirements thereof, and (ii) that the Company's reliance on
such exemption is predicated on the representations set forth in this Section.

     (c) Securities Law Restrictions on Transfer. The Registered Holder agrees
         ---------------------------------------
that, absent an effective registration statement filed with the U.S. Securities
and Exchange Commission under the Act covering the disposition or sale of this
Warrant or the Warrant Stock issued or issuable upon exercise hereof, such
Registered Holder may not sell or transfer this Warrant or any or all of such
Warrant Stock, as the case may be, without first complying with Section 3 and
without first providing the Company with an opinion of counsel, satisfactory to
the Company, to the effect that such sale or transfer will be exempt from the
registration and prospectus delivery requirements of the Act, and such
Registered Holder consents to the Company making a notation on its records, or
giving instructions to any transfer agent of this Warrant, or such Warrant
Stock, in order to implement such restriction on transfer. The shares issued
upon exercise of this Warrant shall bear legends referring to the restrictions
on transfer set forth herein. As a further condition to any transfer of this
Warrant, any permitted transferee must execute and deliver to the Company
representations and warranties similar to those set forth herein and agree in
writing to accept and be bound by all of the terms and conditions of this
Warrant.

                                       4
<PAGE>

    (d) Financial Risk. The Registered Holder has such knowledge and experience
        --------------
in financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment. The Registered Holder has not been organized for the specific
purpose of acquiring this Warrant. The Registered Holder has had access to all
information regarding the Company, its present and prospective business, assets,
liabilities and financial condition that the Registered Holder considers
important to making the decision regarding its investment and has had ample
opportunity to ask questions of and receive answers from the Company's
representatives concerning its investment and to obtain any and all documents
requested in order to supplement or verify any of the information supplied.

     (e) Accredited Investor. Registered Holder is an "accredited investor"
         -------------------
within the meaning of the Securities and Exchange Rule 501 of Regulation D, as
presently in effect.

     (f) "Market Stand-Off" Agreement. The Registered Holder hereby agrees that
         ----------------------------
it shall not, to the extent requested by the Company or an underwriter of
securities of the Company, sell or otherwise transfer or dispose of this
Warrant. or any shares of Warrant Stock (other than to donees or partners of the
Registered Holder who agree to be similarly bound) for up to one hundred eighty
(180) days following the effective date of a registration statement of the
Company filed under the Act; provided, however, that:

         (i)  such agreement shall be applicable only to the first such
registration statement of the Company which covers securities to be sold on its
behalf to the public in an underwritten offering but not to securities sold
pursuant to such registration statement; and

         (ii) all executive officers and directors of the Company and holders
of more than one (1%) of the Company's outstanding capital stock then holding
Common Stock of the Company enter into similar agreements.

In order to enforce the foregoing covenant, the Company shall have the right to
place restrictive legends on the certificates representing the shares subject to
this Section and to impose stop transfer instructions with respect to the shares
of Warrant Stock (and the shares or securities of every other person subject to
the foregoing restriction) until the end of such period.

5.   Adjustment of Purchase Price and Number of Shares. The number and character
of shares of Warrant Stock issuable upon exercise of this Warrant (or any shares
of stock or other securities or property at the time receivable or issuable upon
exercise of this Warrant) and the Purchase Price therefor, are subject to
adjustment upon occurrence of the following events:

     (a) Adjustment for Stock Splits, Stock Dividends, Recapitalizations, etc.
         --------------------------------------------------------------------
The Purchase Price of this Warrant and the number of shares of Warrant Stock
issuable upon exercise of this Warrant shall each be proportionally adjusted to
reflect any stock dividend, stock split, reverse stock split, combination of
shares, reclassification, recapitalization or other similar event altering the
number of outstanding shares of Warrant Stock.

     (b) Adjustment for Other Dividends and Distributions. In case the Company
         ------------------------------------------------
shall make or issue, or shall fix a record date for the determination of
eligible holders entitled to receive, a dividend or other distribution with
respect to the Warrant Stock payable in securities of

                                       5
<PAGE>

the Company then, and in each such case, the Registered Holder of this Warrant,
on exercise of this Warrant at any time after the consummation, effective date
or record date of such event, shall receive, in addition to the shares of
Warrant Stock (or such other stock or securities) issuable on such exercise
prior to such date, the securities of the Company to which such Registered
Holder would have been entitled upon such date if such Registered Holder had
exercised this Warrant immediately prior thereto (all subject to further
adjustment as provided in this Warrant).

     (c) Adjustment for Capital Reorganization, Consolidation, Merger. Subject
         ------------------------------------------------------------
to Section 5(d), if any capital reorganization of the capital stock of the
Company, or any consolidation or merger of the Company with or into another
corporation, or the sale of all or substantially all of the Company's assets to
another corporation shall be effected in such a way that holders of Warrant
Stock will be entitled to receive stock, securities or assets with respect to or
in exchange for their Warrant Stock, and in each such case, the Registered
Holder of this Warrant, upon the exercise this Warrant (as provided in Section
1), at any time after the consummation of such capital reorganization,
consolidation, merger, or sale, shall be entitled to receive, in lieu of the
stock or other securities and property receivable upon the exercise of this
Warrant prior to such consummation, the stock or other securities or property to
which such Registered Holder would have been entitled upon such consummation if
such Registered Holder had exercised this Warrant immediately prior thereto, all
subject to further adjustment as provided in this Section 5; and in each such
case, the terms of this Warrant shall be applicable to the shares of stock or
other securities or property receivable upon the exercise of this Warrant after
such consummation.

     (d) Conversion of Warrant Stock. If all the outstanding shares of the
         ---------------------------
Series F Preferred Stock of the Company are converted into Common Stock pursuant
to the Company's Articles of Incorporation or otherwise, or such Series F
Preferred Stock otherwise ceases to exist, then, from and after the date on
which such Series F Preferred Stock is so converted or ceases to exist then this
Warrant will be exercisable for 20,000 shares of Common Stock of the Company and
the term "Warrant Stock" (wherever used in this Warrant) will thereafter mean
the Company's Common Stock and the Purchase Price will remain Six Dollars Forty-
five Cents ($6.45) per share (subject to subsequent adjustment as provided
herein).

6.   No Impairment. Subject to the provisions of Section 5, the Company will
not, by amendment of its Articles of Incorporation or bylaws, or through
reorganization, consolidation, merger, dissolution, issue or sale of securities,
sale of assets or any other voluntary action, willfully avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Registered Holder of this Warrant against impairment. Without
limiting the generality of the foregoing, subject to the provisions of Section
5, the Company (a) will not increase the par value of any shares of stock
issuable upon the exercise of this Warrant above the amount payable therefor
upon such exercise, and (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Warrant Stock upon the exercise of this Warrant.

7.   Certificate as to Adjustments. In each case of any adjustment in other
stock, securities or property receivable on the exercise of this Warrant, the
Chief Financial Officer of the

                                       6
<PAGE>

Company shall compute such adjustment in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment and showing in
detail the facts upon which such adjustment is based. The Company will forthwith
mail a copy of each such certificate to the Registered Holder of this Warrant.

8.   Notices of Record Date. In case:

     (a) the Company shall take a record of the holders of its Warrant Stock (or
other stock or securities at the time receivable upon the exercise of this
Warrant) for the purpose of entitling them to receive any stock dividend; or

     (b) of any consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of the assets of the
Company to another corporation in which holders of the Company's stock are to
receive stock, securities or property of another corporation; or

     (c) of any voluntary dissolution, liquidation or winding-up of the Company;
or

     (d) of any redemption or conversion into Common Stock of all outstanding
Warrant
Stock;

then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be, (i)
the date on which a record is to be taken for the purpose of such dividend, and
stating the amount and character of such dividend, or (ii) the date on which
such consolidation, merger, conveyance, dissolution, liquidation, winding-up,
redemption or conversion is to take place, and the time, if any is to be fixed,
as of which the holders of record of Warrant Stock or Common Stock (or such
stock or securities as at the time are receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Warrant Stock or Common
Stock (or such other stock or securities) for securities or other property
deliverable upon such consolidation, merger, conveyance, dissolution,
liquidation or winding-up. Such notice shall be mailed at least ten (10) days
prior to the date therein specified.

9.   Loss or Mutilation. Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant, and of a written indemnity agreement reasonably
satisfactory to the Company, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver in lieu
thereof a new Warrant of like tenor.

10.  Reservation of Warrant Stock. Subject to the provisions of Section 5(d),
the Company shall at all times reserve and keep available for issue upon the
exercise of this Warrant such number of its authorized but unissued shares of
Warrant Stock (and Common Stock if the Warrant Stock is not Common Stock) as
will be sufficient to permit the exercise in full of this Warrant and the
conversion of all shares of Warrant Stock issuable hereunder into Common Stock
(if the Warrant Stock is then convertible into Common Stock).

11.  No Rights or Liabilities as Shareholder. This Warrant does not by itself
entitle the Registered Holder to any voting rights or other rights as a
shareholder of the Company. In the

                                       7
<PAGE>

absence of affirmative action by Registered Holder to purchase Warrant Stock by
exercise of this Warrant, no provisions of this Warrant, and no enumeration
herein of the rights Or privileges of the Registered Holder shall cause such
Registered Holder to be a shareholder of the Company for any purpose.

12.  Notices. All notices and other communications from the Company to the
Registered Holder shall be mailed by first-class registered or certified mail,
postage prepaid, to the address furnished to the Company in writing by the last
Registered Holder who shall have furnished an address to the Company in writing.

13.  Change; Waiver. Neither this Warrant nor any term hereof may be changed,
waived, discharged or terminated orally but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.

14.  Headings. The headings in this Warrant are for purposes of convenience in
reference only, and shall not be deemed to constitute a part hereof.

15.  Law Governing. This Warrant shall be construed and enforced in accordance
with, and governed by, the internal laws of the State of Delaware, excluding
that body of law applicable to conflicts of law.

Dated: July __,2000

                         EXTRICITY, INC.

                         By:  /s/ Stephen J. Albertolle
                              -------------------------

                              Stephen J. Albertolle

                              CFO

Acknowledged and Agreed:

Oracle Corporation

By:  /s/ Phillip Raiser
     --------------------------

Name:   Phillip Raiser
       ------------------------

Title:  Agent for the JHR Trust
        -----------------------
        General Partner

                                       8
<PAGE>

EXHIBIT 1
---------

                               SUBSCRIPTION FORM
                               -----------------

(To be executed only upon exercise of Warrant)

(1)  The undersigned Registered Holder hereby elects to purchase _____ shares of
     the Series F Preferred Stock of the Company, pursuant to the terms of the
     Warrant dated July __, 2000 (the "Warrant") between the Company and the
     Registered Holder, and tenders herewith

     ( )  payment of the purchase price for such shares in full, together with
     all applicable transfer taxes, if any.

(2)  In exercising its rights to purchase the Series F Preferred Stock of the
     Company, the undersigned hereby confirms and acknowledges the investment
     representations and warranties made in Section 4 of the Warrant.

(3)  Please issue a certificate or certificates representing said shares of
     Series F Preferred Stock in the name of the undersigned or in such other
     name as is specified below.

_______________________________
(Name)

_______________________________
(Address)

Registered Holder:

By:____________________________

Title:_________________________

Date:__________________________

                                       1
<PAGE>

                                   EXHIBIT D
                                   ---------

                                Furniture Lease
                                ---------------

     This Furniture and Equipment Lease ("Lease") is entered into as of June 22,
2000, by and between Oracle Corporation, a Delaware corporation ("Lessor"), and
Extricity, Inc., a California corporation ("Lessee"), with reference to the
following facts:

     A.  Lessor currently leases space (the "Master Lease Premises") in that
certain office building known as Belmont Shores located at 1 Davis Drive,
Belmont, California (the "Building") pursuant to the terms of a lease (as
amended) with Davis Associates ("Master Lease").

     B.  Lessor and Lessee are entering into that certain Sublease of even date
herewith (the "Sublease") pursuant to which Lessor will sublet the entire Master
Lease Premises (referred to herein as the "Subleased Premises") to Lessee. In
addition to subletting the Subleased Premises from Lessor, Lessee desires to
lease from Lessor certain furniture, equipment and furnishings owned or leased
by Lessor and presently located in the Subleased Premises, and Lessor is willing
to lease the same to Lessee on the terms, covenants and conditions hereinafter
set forth.

     NOW, THEREFORE, in consideration of the covenants herein contained, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto do hereby agree as follows (capitalized
terms used and not defined herein will have the meaning given them in the
Sublease):

          1.  LEASE. Lessor agrees to lease to Lessee and Lessee agrees to lease
              -----
from Lessor, subject to the terms, covenants and conditions herein, the items of
furniture, equipment, furnishings and other personal property described in
Schedule I attached hereto and incorporated herein by this reference (the
"Furniture"). Lessor being the owner or primary lessee of the Furniture for all
purposes, this Lease is intended to constitute a true lease of the Furniture and
not an agreement for the sale of or the grant of a security interest in any
Furniture. Lessee's interest in the Furniture is limited to a leasehold.

          2.  TERM. The term of this Lease shall commence upon the Commencement
              ----
Date of the Term of the Sublease and, unless earlier terminated as provided
herein, shall continue for so long as the Sublease shall remain in effect. Prior
to the commencement of the term of this Lease, Lessor and Lessee shall conduct
an inspection of the Furniture in order to identify and inventory the Furniture
and verify its then current condition.

          3.  RENT. Lessee shall pay to Lessor rent for the Furniture (the
              ----
"Furniture Rent") in the amount of $20,208.50 per month. Such Furniture Rent
shall be payable in advance on the first day of each calendar month during the
term hereof, in lawful money of the United States, to Lessor at its offices at
500 Oracle Parkway, Mail Stop LGN2, Redwood City, California 94065, Attention:
Lease Administrator, or to such other person or at such other place as Lessor
may from time to time designate in writing, provided that the first month's
payment of Furniture Rent will be deemed payable concurrently with Lessee's
execution and delivery of this Lease to Lessor. All Furniture Rent and other
amounts payable hereunder shall be due and payable without any offset,
deduction, prior notice or demand and without any abatement, reduction,
counterclaim or other right Lessee may claim against Lessor.

                                       1
<PAGE>

          4.  CONDITION OF FURNITURE. Upon the commencement of the term of this
              ----------------------
Lease, Lessor shall deliver the Furniture to Lessee in good order and repair,
subject to normal wear and tear. Lessee acknowledges that Lessor is not a seller
under the California Uniform Commercial Code and that Lessor makes no warranties
of any nature, including, but not limited to, warranties as to the
merchantability of the Furniture, its fitness for any particular purpose, its
installation, its size, design, capacity or condition, its quality, its
compliance with any law, rule, specification or contract or latent defects.

          5.  LOCATION; LESSOR'S INSPECTIONS; LABELS. All of the Furniture shall
              --------------------------------------
remain in the Subleased Premises (other than the Generator, defined below, which
is located outside of the Subleased Premises) and shall not be removed therefrom
for any reason whatsoever without Lessor's prior written consent. Lessor shall
have the right to enter the Subleased Premises and inspect the Furniture at any
time during normal business hours and upon reasonable advance notice given to
Lessee. If Lessor supplies Lessee with labels stating that the Furniture or any
item thereof is owned by Lessor, Lessee shall affix and keep the same on each
item of Furniture, Lessee shall not alter, deface or remove any of the same and
Lessee shall promptly replace any such labels that may be removed, defaced or
destroyed., Lessee shall not permit the name of any person other than Lessor (or
any primary lessor identified to Lessee) to be placed on any item of Furniture
in a manner that might be interpreted as a claim of any right, title or interest
in or to such item. Notwithstanding the foregoing, Lessee, with Lessor's prior
written consent as to the location and manner of storage and the items to be so
stored, shall have the right to remove specific items of Furniture from the
Subleased Premises and store such items, from time to time.

          6.  TITLE. Title to each item of Furniture (whether full legal title
              -----
or Lessor's interest as primary lessee) shall be and remain with Lessor at all
times, and Lessee shall at no time make any assertion to the contrary. Lessee
shall have no right, title or interest in or to any of the Furniture except its
leasehold interest solely as lessee as provided herein. Each item of Furniture
is and shall at all times remain personal property, notwithstanding the manner
in which it may now or hereafter be affixed or attached to the Subleased
Premises.

          7.  REPAIRS AND MAINTENANCE: USE; ALTERATIONS. Lessee, at its sole
              -----------------------------------------
expense, shall keep the Furniture in good working order, condition and repair
throughout the term of this Lease, ordinary wear and tear excepted. Lessee
represents, warrants and agrees that all Furniture will be used solely for
business purposes and not for personal, family or household purposes. Lessee
shall use the Furniture in a careful, proper manner and shall comply with all
laws, regulations and ordinances relating to its possession, use or maintenance.
Lessee shall use the Furniture in conformity with all insurance policies
relating to the Furniture or its use, and shall use the Furniture only for the
purposes for which it is intended to be used. Any alterations of Furniture shall
be subject to Lessor's prior written approval, which approval, in the case of
any alterations of cubicles located in the Subleased Premises may be conditioned
upon Lessee's use of Lessor's specified vendor perform any such work. Lessee
shall be solely responsible for all labor and materials cost associated with any
such alterations, and Lessor shall have the right, at Lessor's sole option, to
require that Lessee restore any such alterations prior to the expiration of the
term and Lessee's surrender of the Furniture to Lessor.

          8.  SURRENDER. Lessee acknowledges and agrees that each item of the
              ---------
Furniture will have significant value to Lessor at the expiration or earlier
termination of the term of this Lease, and that Lessor intends to retake
possession of the Furniture at that time. In order to effect Lessor's right to
retake possession of the Furniture, Lessor shall have the right to

                                       2
<PAGE>

remove the Furniture and particular items thereof from the Subleased Premises at
any time during the seven (7) day period prior to the expiration of the term of
this Lease. Lessor shall notify Lessee of Lessor's schedule for removal of the
Furniture, and Lessee shall cooperate with Lessor in effecting the removal of
the Furniture from the Subleased Premises in accordance with Lessor's schedule.
The parties shall agree upon an equitable proration of the rent for the final
month of the term hereof based upon Lessor's schedule for removal of the
Furniture.

          9.  RISK OF LOSS. Lessee shall at all times bear the entire risk of
              ------------
loss, theft, destruction or damage, whether partial or complete and whether or
not insured, of each item of the Furniture, and of any condemnation,
confiscation, requisition, seizure, forfeiture or other taking of title to or
use of each item of Furniture, whether partial or complete, from any cause
whatsoever (herein "Loss or Damage"), except to the extent that any such Loss or
Damage may result from the negligence or willful misconduct of Lessor, or its
agents, contractors or employees; and Lessee shall indemnify and defend Lessor
and hold Lessor harmless from and against any and all Loss or Damage, except to
the extent that any such Loss or Damage may result from the negligence or
willful misconduct of Lessor, or its agents, contractors or employees, until
such time as such item of Furniture shall have been returned to Lessor and
received by Lessor in accordance with all terms and conditions of this Lease. No
Loss or Damage shall release, impair or otherwise affect Lessee's obligation to
pay rent or any other obligation of Lessee under this Lease. In the event of any
Loss or Damage to any item of Furniture, Lessee shall notify Lessor thereof in
writing within five (5) days after the occurrence of such Loss or Damage, and
Lessee shall immediately, at Lessee's option and at Lessee's sole expense, with
respect to such item of Furniture, (a) place the same in good working order,
condition and repair, (b) replace the same with like Furniture in good working
order, condition and repair, having equivalent value and utility and with clear
title therein in Lessor (which shall thereupon be deemed substituted for such
item of Furniture for all purposes), or (c) pay to Lessor an amount equal to the
replacement cost of such item of Furniture.

          10.  INSURANCE. Lessee shall, at its own expense, at all times during
               ---------
the term of this Lease, insure the Furniture against risks customarily insured
against (as reasonably approved by Lessor) on similar items of furniture in an
amount not less than the full cost of replacement of the Furniture. The
insurance shall provide thirty (30) days prior written notice to Lessor in the
event of material change to or cancellation or expiration of the insurance.
Lessee shall deliver to Lessor certificates of such insurance and evidence
satisfactory to Lessor of Lessee's payment when due of all premiums on such
insurance. Without relieving Lessee of its obligations under section 9 above, in
the event of any Loss or Damage, if Lessor receives any insurance proceeds as a
consequence of being the loss payee under any insurance policy maintained by
Lessee, Lessor shall make such proceeds available to Lessee for replacement of
any items of Furniture damaged or destroyed.

          11.  LIENS: TAXES. During the term of this Lease, Lessee shall pay all
               ------------
licenses or required fees pertaining to the Furniture and keep the same free of
all claims, liens, charges, security interests and other encumbrances and pay
all taxes, assessments, levies, fees and penalties which may be levied or
assessed on or with respect to this Lease, the Furniture or its use or
possession or any interest herein or therein, or any payments hereunder,
including, but not limited to, all sales and use taxes and all other federal,
state and local taxes however designated, levied or assessed, either on Lessee
or Lessor (except for taxes measured solely by Lessor's net income), or On the
ownership, use or operation of the Furniture. During the term of this Lease,
Lessee shall comply with all federal, state and local laws requiring the filing
of ad valorem and other tax returns relating to the Furniture. If such returns
are required to be filed by

                                       3
<PAGE>

Lessor, Lessee shall so notify Lessor in writing, whereupon Lessee shall provide
Lessor promptly on request such information as Lessor shall require to complete
such returns, and Lessor shall file such returns. If Lessee does not pay any of
the same when due, Lessor shall have the right, but shall not be obligated, to
pay the same, in which event Lessee shall pay to Lessor on demand, as additional
rent, an amount equal to all amounts paid or expenses incurred by Lessor,
together with interest thereon at the annual rate of twelve percent or, if
lower, the maximum rate that Lessor may lawfully charge.

          12.  INDEMNITY. Lessee shall indemnify and defend (by counsel engaged
               ---------
by Lessee, but satisfactory to Lessor) Lessor and its agents, employees,
officers and directors and hold them harmless from and against any and all
claims, liabilities, losses, damages and expenses, including, without
limitation, all court costs and attorneys' and expert witnesses' fees and costs,
arising from or in connection with or based on (a) any of the Furniture or the
possession, condition, operation or use (by whomever operated or used) of any of
the Furniture, or (b) the performance or enforcement of any of the terms, or any
noncompliance or nonperformance of any condition, of this Lease, except to the
extent that any of the foregoing result from the negligence or willful
misconduct of Lessor, or its agents, contractors or employees, or from any
breach on the part of Lessor under any contract made by Lessor affecting any of
the Furniture. Lessee shall satisfy, pay and discharge any and all settlements,
judgments and fines that may be recovered against Lessor in connection
therewith. Lessor shall give Lessee written notice of any such claim.

          13.  ASSIGNMENT.
               ----------

              (a) Lessee expressly covenants and agrees that it shall not
assign, mortgage or encumber this Lease or sublet or lend any of the Furniture
or permit any of the Furniture to be used by anyone other than Lessee.
Notwithstanding the foregoing, Lessee, in connection with a sublease or
assignment consented to by Lessor pursuant to the provisions of the Sublease,
shall have the right to sublease some or all of the Furniture, or assign its
interest in the Furniture to the permitted subtenant or assignee under a such
sublease, provided that (i) no such transaction shall serve to relieve Lessee
from its liability hereunder; (ii) all terms and conditions of this Lease shall
apply to any such sublease or assignment, which shall be expressly made subject
to this Lease, (iii) any amounts received by Lessee in excess of the Furniture
Rent as consideration for any such sublease or assignment of all or any portion
of the Furniture shall be payable to Lessor as additional Furniture Rent. No
assignment or sublease by Lessee shall in any event relieve or release Lessee of
or from any debt, duty, obligation or liability hereunder, and Lessee shall
remain primarily liable hereunder.

              (b) Lessor, in its sole and absolute discretion, may sell, assign,
transfer, pledge, hypothecate, grant security interests in or otherwise encumber
or dispose of this Lease or any of the Furniture or any interest herein or
therein, as a whole or in part, without notice to Lessee. Notwithstanding any
assignment by Lessor, Lessor warrants that so long as Lessee is not in default
hereunder, Lessee shall quietly enjoy use of the Furniture subject to the terms
and conditions of this Lease and, as part of any such assignment, the assignee
thereunder shall agree that Lessee's rights hereunder in and to the Furniture
shall not be disturbed so long as Lessee is not in default hereunder. Lessor
shall notify Lessee in writing of any transfer of this Lease by Lessor; and
Lessee agrees to acknowledge receipt of and comply with any notice thereof given
by Lessor in writing and to provide Lessor or its assignee with such agreements,
consents, conveyances, documents and certificates as may be reasonably requested
by Lessor or its assignee to effect, facilitate or perfect any assignment by
Lessor.

                                       4
<PAGE>

               (c) Subject to the foregoing, this Lease shall inure to the
benefit of and bind Lessor, Lessee and their respective heirs, legatees,
personal representatives, successors and assigns.

          14.  DELINQUENCY CHARGE. Should Lessee fail to pay any Furniture Rent
               ------------------
hereunder or any other sum required to be paid to Lessor by Lessee on the date
due, Lessee agrees to pay to Lessor (a) an amount equal to five percent (5%) of
such rent or other sum, and (b) all of Lessor's costs and expenses incurred or
paid in collecting the delinquent payment, with interest thereon from the date
paid by Lessor until paid by Lessee at the annual rate of twelve percent or, if
lower, the maximum rate Lessor may lawfully charge.

          15.  DEFAULT. Any of the following shall constitute a "default"
               -------
hereunder: (a) Lessee fails to pay when due any rent or any other sum required
to be paid hereunder and such failure continues for ten days from written notice
thereof from Lessor;

               (a) Lessee fails to observe, keep or perform any other term,
covenant or condition of this Lease and such failure continues for thirty days
from written notice thereof from Lessor;

               (b) Lessee becomes insolvent or admits in writing its inability
to pay or fails to pay its debts as they become due, or makes an assignment for
the benefit of its creditors, or applies for or acquiesces in the appointment of
a receiver, trustee or other custodian for any of its properties or assets;

               (c) any proceeding shall be commenced by or against Lessee for
any relief which includes, or might result in, any modification of the
obligations of Lessee under this Lease or relief under any bankruptcy or
insolvency laws or other laws relating to the relief of debtors, adjustment of
indebtedness, reorganization, composition or extension, unless, in the case of
an involuntary proceeding not consented to or acquiesced in by Lessee, such
proceeding shall have been dismissed within 90 days after the same shall have
been commenced (,provided that this Lease shall terminate automatically if
Lessee fails to pay any rent when due hereunder after a proceeding has been
commenced by or against Lessee under the United States Bankruptcy Code);

               (d) Lessee voluntarily or involuntarily, by operation of law or
otherwise, removes, sells, transfers, assigns, grants any security interest in,
pledges, hypothecates, encumbers, parts with possession of or sublets this Lease
or any Furniture, or attempts to do so, except only as and to the extent
expressly permitted hereby; or

               (e) Lessee commits an event of default under the Sublease.

          16.  REMEDIES. On any default hereunder by Lessee, Lessor shall have
               --------
the right, but shall not be obligated, to exercise at any time or from time to
time thereafter any one or more of the following rights and remedies, any of
which rights and remedies may be exercised by Lessor without notice to or demand
on Lessee:

               (a) Advance Rent. If Lessee shall have paid any rent hereunder in
                   ------------
advance of the due date therefor, Lessor may apply any or all thereof to any
obligation of Lessee hereunder.

                                       5
<PAGE>

               (b) Acceleration. Lessor may declare all rent and other amounts
                   ------------
then due or to become due hereunder immediately due and payable and thereupon
may forthwith recover all of such rent or other amounts, with such accelerated
future rents discounted to their present value at the date of default (provided,
however, that this remedy shall only be available to Lessor if Lessee is at any
time in default with respect to the payment of two (2) or more months' rent
hereunder).

               (c) Recovery of Sums Due and to Become Due. In lieu of such
                   --------------------------------------
acceleration, Lessor may recover all rent and other amounts due as of the date
of such default and recover all rent and other sums as they accrue thereafter.

               (d) Proceeding in Court. Lessor may proceed by appropriate court
                   -------------------
action, either at law or in equity, to enforce performance by Lessee of the
terms and conditions of this Lease or to recover damages for the breach hereof
or to regain possession of the Furniture.

               (e) Termination. Any of the foregoing actions by Lessor under
                   -----------
this section 16 shall not constitute a termination of this Lease or any of
Lessee's obligations under this Lease. Lessor may, in its exclusive discretion,
terminate this Lease by express written notice thereof to Lessee.

               (f) Other Remedies. Lessor may pursue any other remedy available
                   --------------
to Lessor at law or in equity. Under all circumstances, Lessee shall also pay to
Lessor, on demand, an amount equal to any and all incidental damages sustained
by Lessor, including, without limitation, all costs of collection, repossession,
transportation, storage, repair, reconditioning, resale or other disposition of
the Furniture, all attorneys', expert witnesses' and accountants' fees and costs
(whether or not suit is commenced), court costs and other costs and expenses
incurred in exercising any rights or remedies hereunder or in enforcing any of
the terms or conditions hereof.

     The discount rate for purposes of determining present value shall be a rate
equal to one percent in excess of the discount rate of the Federal Reserve Bank
of San Francisco as of the date of entry of judgment in favor of Lessor.

     The provisions of this section 16 shall not prejudice Lessor's right to
recover or prove damages for unpaid rent accrued prior to default. No remedy
referred to in this section 16 is intended to be exclusive, but each shall be
cumulative and in addition to any other remedy referred to above or otherwise
available to Lessor at law or in equity and may be exercised concurrently or
consecutively. The exercise or beginning of exercise by Lessor of any one or
more of such remedies shall not preclude the simultaneous or later exercise by
Lessor of any or all of such other remedies. Lessor's remedies shall be
available to Lessor's successors and assigns.

          17.  FURTHER ASSURANCES. Lessee will promptly and duly execute and
               ------------------
deliver to Lessor such further documents and assurances and take such further
action as Lessor may from time to time reasonably request in order more
effectively to carry out the intent and purposes of this Lease and to establish
and protect the rights, interests and remedies intended to be created in favor
of Lessor hereunder, including, without limitation, the execution and filing of
financing statements and continuation statements with respect to the Furniture
and this Lease.

                                       6
<PAGE>

          18.  PERFORMANCE BY LESSOR OF LESSEE'S OBLIGATIONS. If Lessee fails
               ---------------------------------------------
promptly to perform any of its obligations under this Lease, Lessor, on written
notice to Lessee, may (but shall not be obligated to and shall not incur any
liability or obligation to Lessee or any third party for failure to) perform the
same for the account of Lessee without waiving Lessee's failure as a default.
All sums paid or expense or liability incurred by Lessor in such performance
(including reasonable legal fees) shall be promptly reimbursed by Lessee on
demand of Lessor, together with interest thereon from the date paid by Lessor to
the date reimbursed by Lessee at the annual rate of twelve percent or, if lower,
the maximum rate that Lessor may lawfully charge.

          19.  GENERATOR. The parties acknowledge that Furniture includes that
               ---------
certain generator and fuel tank which serve the Premises under the Master Lease
(collectively, "Generator"). Lessee shall operate and maintain the Generator in
accordance with the schedule of periodic maintenance approved in advance by
Lessor, using a vendor either specified by, or approved in writing by, Lessor.
The parties acknowledge that the Generator may be located on the property
located at 20 Davis Drive, which is currently leased by Lessor under a lease
other than the Master Lease, and that such additional lease may, during the term
of this Lease, expire or be terminated, in which event Lessor may no longer have
a right to lease the Generator to Lessee. In such event, Lessor shall reasonably
cooperate with Lessee in attempting to locate an alternative site for the
Generator or a replacement Generator (such replacement to be provided at
Lessee's sole cost and expense). If a replacement Generator cannot ultimately be
made available, the Furniture Rent shall be reduced, effective as of the date on
which the Generator is no longer available to Lessee, to $18,110.75 per month.

          20.  Security System. The parties acknowledge that the Furniture also
               ---------------
includes the existing security system in the Subleased Premises. Lessee shall
perform regularly scheduled maintenance with respect to such security system in
accordance with the schedule approved in writing in advance by Lessor, and using
either Lessor's specified vendor (as of the date of this Lease, such vendor is
Mosler) or an alternative vendor proposed by Lessee and approved in writing in
advance by Lessor in Lessor's sole and absolute discretion.

          21.  NOTICES. All notices, consents and other communications required
               -------
or permitted under this Lease shall be given in accordance with the provisions
of the Sublease.

          22.  ENFORCEMENT. This Lease shall be deemed to have been entered into
               -----------
in the County of San Mateo, State of California, where this Lease is being
signed on behalf of Lessor and Lessee, and all performance on the part of
Lessee, including the payment of all rent and other sums due hereunder, shall be
deemed to have been required to be performed by Lessee in said County. This
Lease shall be governed by and construed, interpreted and enforced in accordance
with the laws of the State of California, without giving effect to principles of
conflicts of law or choice of law. Jurisdiction and venue in any action or
proceeding in connection with this Lease shall be in the proper state or Federal
court located in the City and County of San Francisco or the County of San
Mateo, State of California.

          23.  MISCELLANEOUS. The singular includes the plural and vice versa,
               -------------
as applicable. The term "Lessee" as used herein, if this Lease is signed by more
than one Lessee, means each Lessee, and their obligations and representations
hereunder shall be joint and several. The headings or captions at the beginning
of sections hereof are solely for convenience of reference and are not part of
this Lease.

                                       7
<PAGE>

          24.  TIME. Time is of the essence of this Lease.
               ----

          25.  ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Lease constitutes the
               -----------------------------------
entire agreement between Lessor and Lessee and supersedes all prior or
contemporaneous agreements, promises, representations, correspondence and
negotiations, regarding the subject matter hereof. This Lease may not be
amended, altered or changed except by written agreement signed by Lessor and
Lessee and supported by new consideration. No provision hereof for the benefit
of Lessor and no default of Lessee hereunder may be waived except in writing
signed by Lessor. No failure on the part of Lessor to exercise, and no delay in
exercising, any right or remedy hereunder shall operate as a waiver thereof.
Waiver by Lessor of any provision hereof or default hereunder in any instance
shall not constitute a waiver as to any other provision, default or instance.

          26.  SEVERABILITY. If any provision of this Lease is held invalid,
               ------------
such invalidity shall not affect the other provisions, which shall be given
effect without the invalid provision.

     IN WITNESS WHEREOF, the parties hereto have executed this Furniture Lease
as of the date first above written.

LESSOR:                               LESSEE:

ORACLE CORPORATION,                   EXTRICITY, INC.,
a Delaware corporation                a California corporation

By: /s/ Bruce Lange                   By: /s/ Stephen Albertolle
   --------------------------------      -------------------------------
Name: Bruce Lange                     Name: Stephen Albertolle
     ------------------------------        -----------------------------
Title: V.P. and Corporate Treasurer   Title:  CFO
      -----------------------------           --------------------------

                                       8
<PAGE>

                            SCHEDULE 1 TO EXHIBIT D

                     Furniture Inventory for 1 Davis Drive

Furniture

     Total Cubes: 310

Cube Furniture: Herman Miller Ethospace in 6'x8' configuration.

Each cube comes with the following equipment: 2 pedestal file cabinets, 1 rail
tile, 1 whiteboard tile, 1 Herman Miller Ergon chair, 3 pieces of paper
management trays: 1 vertical, 1 horizontal and 1 slotted, recycle bin and trash
bin.

     Total Offices: 72

Office Furniture:  Hayworth Lundstead Furniture. Each office has one desk and
one return. Office 2020 has two sets of furniture.

Each office comes with the following equipment: two 48" overhead bookshelves,
two 48" tacktiles, whiteboard, recycle bin, trash bin, and 3 Herman Miller Ergon
chairs. 4 offices have four 48" tacktiles and four 48" overhead bookshelves, 3
offices have three 48" tacktiles and three 48" overhead bookshelves.

     Conference Rooms: 4

Furniture in Conference Rooms: one 72" credenza, one 12' conference table, 12
Herman Miller Ergon chairs.

Additional Furniture:
--------------------

Room                               Furniture

0112                Herman Miller Ethospace, 8'x 16' section

0116                Herman Miller Ethospace, 6'x22' section

1002                Reception Area desk, 7'6"x l1'

1100/1104/2100/2106   One Refrigerator each

2106                19" equipment rack with two 96 port patch panels

0102/0108/0110            24x7 supplemental HVAC units - 5 tons

1106/2106/2002            24x7 supplemental HVAC units - 5 tons

Note: See Exhibit A - Sublease Premises for cubicle and office locations.

Generator

Cummings Engine / Onan Generator #500 (500KW or 1000 watts) - Model DSED-82889-
B; Serial # H960615510

                                       1
<PAGE>

Security Equipment Inventory:

Card access Equipment
---------------------

ApC control panels               3

APS(pwr supply)                  3

Star couplers                    3

MRM's(door controllers)         21

Card readers                    21

Lock pwr supplies                3

Relays                          21

CCTV Equipment
--------------

Cameras                         12

Lenses                          12

Time lapse VCR                   1

Multiplexers                     1

Misc.
-----

Rack                             1

UPS                              1

Panic buttons                    1

Exit buttons                     2

Locksets                        21

Transfer hinges                 21

Contacts                        23

                                       2
<PAGE>

                               NET OFFICE LEASE

                                One Davis Drive
                              Belmont, California

1.0  SUMMARY OF TERMS

1.1  Date: This Lease is dated for reference purposes only: December ____, 1995.

1.2  Parties and Notice Addresses:

               Tenant:   Oracle Corporation, a Delaware corporation,
                         500 Oracle Parkway, Box 659601
                         Redwood City, California 94065
                         Attention: Lease Administration

        with a copy to:  Oracle Corporation
                         500 Oracle Parkway, Box 659507
                         Redwood City, California 94065
                         Attention: Legal Department.

               Landlord: Davis Associates, a California limited partnership
                         c/o The Raiser Organization
                         800 S. Claremont Street
                         San Mateo, California 94402

1.3  Premises (Section 2.1):   Approximately 69,925 Rentable Square Feet
                               consisting of the office building located at One
                               Davis Drive, Belmont, California, together with
                               the right to use in common with the tenant of the
                               warehouse building at Eleven Davis Drive the
                               "common areas" of the land on which the buildings
                               are situated (collectively, the "Property"). The
                               Property is more particularly described in
                               Exhibit "A" attached hereto, and the Premises is
                               outlined on Exhibit "B" attached hereto.

1.4  Scheduled Commencement Date (Section 3.2): October l, 1996.

1.5  Expiration Date (Section 3.1): September 30, 2006.

                                       1
<PAGE>

1.6   Base Rent (Section 5.1):

      (a)      Period                     Base Monthly Rent
               ------                     -----------------

               Months 1-30                $79,140.00
               Months 31-60                85,115.25
               Months 61-90                91,683.75
               Months 91-120               98,252.25

      (b)  Advance Rent (Section 5.1): $79,140, payable by Tenant and credited
           against the first Base Monthly Rent due under the Lease in accordance
           with Section 22.1.

1.7   Initial Monthly Estimated Operating Expense Payment (Section 6.1):
      $36,900.00.

1.8   Tenant's Pro Rata Share of Shared Operating Expenses (Section 6.1):
      94'.96%.

1.9   Use (Section 4.1): Premises used solely for: general office purposes,
      which shall include conference, classroom, demonstration p.c. and data
      labs and software sales and development purposes.

1.10  Option to Renew (Section 26): Two five-year options to renew at the then
      existing Fair Market Rental Rate.

1.11  Right of First Offer (Section 27): Right of first offer to purchase the
      Premises.

1.12  Right of First Refusal (Section 28): Right of first refusal to lease the
      warehouse building at 11 Davis Drive, Belmont.

1.13  Brokers:

         Landlord's Broker: Cornish & Carey Commercial.

         Cooperating Broker: Colliers Advisory Group, a division of Colliers
Parrish International, Inc.

1.14  Contents: This Lease consists of Sections 1 through 31, and Exhibits A
      through D.

1.15  Conflicts: In the event of any conflict between the foregoing summary of
      terms and the following, more detailed, provisions of this Lease, the more
      detailed provisions shall control.

2.0   PREMISES

2.1   Description. Landlord hereby leases to Tenant, and Tenant hereby leases
      from Landlord, the "Premises", as outlined in the site plan attached
      hereto as Exhibit "B", together with the right, in

                                       2
<PAGE>

      common with the occupants of the warehouse building at Eleven Davis Drive,
      to use the "Common Areas" (as defined in Section 6.4.3).

2.2   Initial Tenant Improvements.

      (a) Landlord shall be responsible, at Landlord's cost, for ensuring that
      as of the Commencement. Date the Premises is in compliance with all
      requirements of the Americans With Disabilities Act and that the deferred
      maintenance items with respect to the HVAC system described in the
      December 5, 1995 memorandum from Critchfield Mechanical, Incorporated to
      Cliff Berry has been completed.

      (b) Tenant shall be responsible for completing all refurbishments to the
      interior of the Premises, including, without limitation, repainting,
      recarpeting, erecting exterior signage complying with the provisions of
      this Lease, installing telecommunications and security systems, and making
      such minor modifications to the configuration of the existing offices as
      Landlord may reasonably approve (the "Initial Tenant Improvements").
      Landlord may require, as a condition to its consent to any change in the
      existing floor plan or any other modification to the Premises which is
      structural in nature, that Tenant remove all such improvements at the end
      of the Lease Term and return the Premises to the its original condition,
      reasonable wear and tear excepted, if so requested by Landlord.
      Notwithstanding the foregoing, Tenant may make minor changes in office
      sizes and configurations (provided the total number of offices is not
      reduced by more than 5% and the reconfigured offices are of a standard and
      reusable size and incorporate the same finishes as the remainder of the
      Premises), eliminate the main corridor on the second floor of the Premises
      and eliminate the basement lunch room (provided that Tenant leaves in
      place all existing kitchen appliances and fixtures), without any
      obligation to restore the Premises at the end of the Lease Term. Landlord
      shall advise Tenant at the time it approves any request for modifications
      to the Premises whether Landlord reserves the right, as a condition of its
      consent, to require restoration with respect to the modification approved.

      (c) Tenant shall cause its architects and engineers to prepare all
      drawings and specifications necessary to describe in reasonable detail the
      scope and nature of the proposed Initial Tenant Improvements, including
      all documentation necessary to describe all structural, mechanical,
      electrical, lighting, life safety, fire sprinkler and other components of
      the proposed improvements (the "Contract Documents"). Tenant shall deliver
      the Contract Documents to Landlord's property manager for Landlord's
      approval. Within five (5) business days following delivery of the Contract
      Documents to Landlord's property manager, Landlord shall notify Tenant of
      its approval or disapproval of the Contract Documents and, if Landlord
      disapproves the Contract Documents, the revisions Landlord will require.
      As promptly as reasonably possible thereafter, Tenant shall submit revised
      Contract Documents to Landlord's property manager, incorporating the
      revisions required by Landlord. All revised Contract Documents shall be
      subject to Landlord's approval in the manner described above. If Landlord
      fails to approve or disapprove any Contract Documents within five (5)
      business days following delivery to Landlord's property manager, Landlord
      shall be deemed to have approved the Contract Documents so submitted,
      Tenant shall also be responsible for obtaining all government permits and
      approvals required to complete the Initial Tenant Improvements.

                                       3
<PAGE>

     (d) Tenant shall enter into a guaranteed maximum price construction
     contract with Raiser Construction Company substantially in the form
     attached hereto as Exhibit "C" to complete all of the Initial Tenant
     Improvements other than the installation of telecommunications and security
     systems, for which Tenant shall contract with specialty contractors
     reasonably acceptable to Landlord. Landlord agrees to have a Landlord
     representative in attendance at weekly project meetings with Tenant and its
     primary contractors during both the planning and construction phases of the
     Initial Tenant Improvements. Tenant shall not be required to pay Landlord a
     separate fee for construction administration or supervision in connection
     with the Initial Tenant Improvements.

     (e) Landlord shall provide to Tenant a tenant improvement allowance in the
     amount of Two Hundred Thirty-Seven Thousand Three Hundred and No/100
     Dollars ($237,300) (the "Tenant Improvement Allowance") to cover costs
     actually incurred by Tenant in completing the Initial Tenant Improvements,
     including without limitation the cost of Tenant's architects and engineers,
     permit fees and related "soft costs." Tenant shall be responsible for
     paying all costs of the Initial Tenant Improvements in excess of the Tenant
     Improvement Allowance. In the event the full Tenant Improvement Allowance
     is not expended to pay for the Initial Tenant Improvements, the excess
     shall be applied by Landlord as a credit against the Base Monthly Rent next
     due and payable. All disbursements from the Tenant Improvement Allowance
     shall be made pro rata with payments made directly by Tenant, based on a
     budget for the Initial Tenant Improvements approved by Landlord and Tenant,
     as it may be amended from time to time. Landlord shall disburse funds from
     the Tenant Improvement Allowance either directly to Raiser Construction
     Company, its subcontractors and suppliers or Tenant's specialty contractors
     pursuant to draw requests submitted on AIA G702 or G703 forms and approved
     by Tenant or to Tenant upon presentation to Landlord of invoices evidencing
     amounts advanced by Tenant. All disbursements shall be made within five (5)
     business days following a request therefor, accompanied by appropriate
     supporting documentation, including without limitation evidence of
     corresponding direct payments by Tenant.

3.0  TERM

3.1  Period. The "Term" of this Lease shall be approximately ten years,
     commencing on the Commencement Date, as defined in Section 3.2 below and
     terminating on the Expiration Date set forth in Section 1.5 above. For
     purposes of this Lease, "Lease Month" shall mean a period of one (1) month,
     the first such period commencing on the first day of the first full
     calendar month of the Term, and consecutive periods beginning in one-month
     intervals thereafter.

3.2  Commencement. The Term shall commence on the earlier to occur of (a) the
     date Tenant opens for business in the Premises and (b) October 1, 1996,
     provided that the October 1, 1996 outside date for commencement of the
     Lease Term shall be extended by one day for each day (if any) beyond June
     30, 1996 during which Visa International remains in possession of the
     Premises, thereby impeding commencement of the Initial Tenant Improvements.
     If the actual date of commencement of the Term of this Lease (the
     "Commencement Date") shall be any date other than the date set forth in
     Section 1.4, Landlord and Tenant shall confirm the same in writing promptly
     upon the occurrence of the same; provided, however, that failure of
     Landlord or Tenant to confirm the same in writing shall not affect

                                       4
<PAGE>

     any obligation or Tenant hereunder or Landlord's determination of such date
     pursuant to this Section 3.2. Except as otherwise expressly provided in
     Section 3.3, if Landlord, for any reason whatsoever, cannot deliver
     possession of the Premises to Tenant on the date specified in Section 1.4,
     this Lease shall not be void or voidable, nor shall Landlord be liable to
     Tenant for any loss or damage resulting therefrom.

3.3  Early Entry. Landlord shall deliver access to the Premises (which shall be
     in broom clean condition) to Tenant on or before July 1, 1996 solely for
     the purpose of completing the Initial Tenant Improvements. Such early entry
     shall be subject to all of the terms and conditions of this Lease, provided
     that Tenant shall not be obligated to pay any Base Rent or Additional Rent
     for the period prior to the Commencement Date. Tenant shall also have the
     right during such period to install furniture and equipment and otherwise
     prepare the Premises for the conduct of Tenant's business, provided that
     Tenant conducts such activities in a manner so as not to interfere with or
     delay completion of the initial Tenant Improvements. In the event that
     Landlord is unable to deliver access to the Premises on or before July 1,
     1996 because of a holding over by the existing tenant, Visa International,
     Landlord shall not be deemed to be in breach of the Lease, but the October
     1, 1996 outside Commencement Date shall be postponed by one day for each
     day of holding over beyond June 30, 1996, as provided in Section 3.2. In
     the event Visa International remains in possession of the Premises for a
     period of three full calendar months from and after June 30, 1996, Tenant
     shall have the right, at its sole discretion, to terminate this Lease.

4.0  USE

4.1  Authorized. The Premises may be used and occupied only for the purposes
     specified in Section 1.8 hereof, and for no other purpose or purposes.

4.2  Compliance. Tenant accepts the Premises by its occupancy and subject to all
     applicable laws, ordinances, rules, regulations, orders, permits,
     restrictions of record, and requirements in effect during the Term
     (collectively, "Laws"), with which Tenant shall comply at its sole cost as
     they relate to Tenant's use of the Premises or (o the operation of Tenant's
     business or to improvements or alterations made to the Premises by Tenant,
     Tenant shall not place a load upon the floor of the Premises exceeding the
     load per square foot such floor was designed to carry, as determined by
     Landlord or its structural engineer. Partitions shall be considered as part
     of the load. Landlord may prescribe the weight and position of all safes,
     files and heavy equipment that Tenant desires to place in the Premises, so
     as properly to distribute their weight.

4.3  Restricted Activities.

     (a)  Tenant shall not do or permit to be done in or about the Premises
          anything that is prohibited by any Law that is now in force or may
          hereafter be enacted. Tenant shall not use or store on the Premises
          any hazardous or toxic or radioactive materials, substances, or wastes
          (collectively, "Hazardous Materials"), except for such substances as
          are required in the ordinary conduct of Tenant's business conducted in
          the Premises and are used and stored in compliance with all

                                       5
<PAGE>

          applicable Laws and all precautions and guidelines now or hereafter
          promulgated pursuant thereto. Tenant, at its sole cost, shall comply
          with all Laws and all precautions and guidelines now or hereafter
          promulgated pursuant thereto relating to the treatment, production,
          storage, handling, transfer, processing, transporting) use and
          disposal of any Hazardous Materials (collectively, "Restricted
          Activities"). If Tenant does engage in any Restricted Activities,
          Tenant shall deliver to Landlord advance written notice of its
          activities and Tenant shall be solely responsible for and shall
          defend, indemnify, reimburse, protect, and hold Landlord and each of
          Landlord's partners, employees, agents, successors or assigns harmless
          from and against all claims, losses, damages, expenses, costs and
          liabilities, including reasonable attorneys' fees, arising out of or
          in connection with (a) Restricted Activities by Tenant, its employees,
          agents, contractors, licensees, or invitees ("Agents") and (b) the
          removal, clean-up and restoration work and materials necessary to
          return the Premises and any other property to their condition existing
          prior to the Restricted Activities. If at any time during the term of
          this Lease, as it may be extended, Tenant becomes aware of any (i)
          actual or threatened material release of any Hazardous Materials on,
          under, or about the Premises or any adjacent property (except any
          release that is in compliance with applicable Laws and, if required, a
          permit issued by the appropriate governmental agency), or (ii)
          inquiry, investigation, proceeding or claim by any governmental agency
          or private party regarding Restricted Activities or Hazardous
          Materials on, under, or about the Premises, then Tenant shall within
          five (5) days after first learning of such inquiry, investigation,
          proceeding or claim give Landlord written notice of same.

     (b)  Notwithstanding anything contained in this Lease to the contrary,
          Tenant shall have no obligation to clean up or to indemnify, defend or
          hold Landlord harmless with respect to any Hazardous Materials which
          were not used, generated, manufactured, stored, released, disposed of
          or transported to, from or within the Premises by Tenant or its
          subtenants or any of their respective agents, employees or contractors
          during the Term of this Lease. Landlord waives any right of
          contribution against Tenant with respect to any cleanup or remediation
          costs incurred by Landlord with respect to any Hazardous Materials and
          any such costs shall not be included as a part of any Operating
          Expenses payable by Tenant hereunder. Further, Landlord shall
          indemnify, defend, protect and hold Tenant, and each of Tenant's
          directors, officers, employees, agents, successors and assigns,
          harmless from and against any and all environmental remediation or
          cleanup costs, tort damages, fees (including, without limitation,
          reasonable attorney's fees and costs) and penalties arising from or
          caused by Landlord's (or Landlord's agents, employees or contractors)
          use, generation, manufacture, storage, release, disposal or
          transportation of Hazardous Materials to, in or under, about or from
          the Premises.

     (c)  Landlord hereby represents to Tenant that Landlord has no knowledge of
          the presence or discharge on, in or under the Premises of any
          Hazardous Materials in violation of applicable Laws. For the purposes
          of this Section 4.3(c), "Landlord's knowledge" shall mean the actual
          current knowledge, without independent investigation or inquiry, of
          John Raiser, Harvey Chapman, Jr., and Nancy Rancatore.

                                       6
<PAGE>

     (d)  The obligations of Landlord and Tenant under this Section 4.3 shall
          survive the termination of this Lease.

5.0  RENT

5.1  Base Monthly Rent. Tenant shall pay to Landlord at the place designated in
     Section 1.2, or at such place as Landlord may otherwise designate, in
     writing, without prior notice or demand, as Base Monthly Rent for the
     Premises, the amount specified in Section 1.6(a) for the applicable Lease
     Month, All such rent payments shall be payable in advance on the first day
     of each month during the Lease Term (subject to the provisions of Section
     17.3), provided that in the event the Commencement Date is other than the
     first day of a calendar month, then the rent for the period from and
     including the Commencement Date to and including the last day of said
     calendar month, shall be that proportion of said Base Monthly Rent which
     the number of days between the Commencement Date and the first, day of said
     calendar month bears to thirty (30), and shall be due and payable on the
     Commencement Date. The payment of advance rent made by Tenant pursuant to
     Section 1.6(b) shall be applied to the Base Monthly Rent first due from and
     after the Commencement Date until credited in full.

5.2  Interest. Any installment of rent due under this Lease, or any other sum
     not paid to Landlord, within five (5) days of the date due hereunder, shall
     bear interest to the extent enforceable by law, at a rate (the "Default
     Rate") equal to the lesser of the maximum rate Landlord may then lawfully
     charge for the lending of money or 10% per annum from the first day of the
     month in which such installment of rent or other sum became due and payable
     until the same shall have been fully paid, but the payment of such interest
     shall not excuse or cure any default by Tenant under this Lease.

5.3  Late Charge. Tenant hereby acknowledges that the late payment by Tenant to
     Landlord of rent or any other sum due hereunder will cause Landlord to
     incur costs not contemplated by this Lease, the exact amount of which
     will be extremely difficult to ascertain. Such costs may include, but are
     not limited to, administrative, processing and accounting charges, and late
     charges which may be imposed on Landlord by the terms of any ground lease,
     mortgage or trust deed covering the Premises. Accordingly, if any
     installment of rest, or any other sum due from Tenant, shall not be
     received by Landlord within five (5) days after the date due under this
     Lease, then Tenant shall pay to Landlord, in addition to the interest
     provided above, A LATE CHARGE IN THE AMOUNT OF FIVE CENTS FOR EACH ONE;
     DOLLAR DUE. The parties agree that such late charge represents a fair, and
     reasonable estimate of the cost Landlord will incur by reason of late
     payment by Tenant. Acceptance of such late charge by Landlord shall in no
     event constitute a waiver of Tenant s default with respect to such overdue
     amount, or prevent Landlord from exercising any of its rights or remedies
     hereunder.

5.4  Additional Rent; Payment. All sums of money due Landlord hereunder not
     specifically characterized as rent shall nevertheless constitute additional
     rent, and if a time for payment is not expressly stated herein, such sums
     shall be payable on the date on which the next installment of Base Monthly
     Rent is payable, All payments due from Tenant to Landlord shall be paid to
     Landlord without deduction, offset or counterclaim.

                                       7
<PAGE>

6.0  OPERATIONS

6.1  Building Operations and Management.

     6.1.1  Management and Operation of the Premises. Landlord, through its
            property management company, shall provide all services reasonably
            required in connection with the ordinary management and operation of
            the Premises. The property manager shall contract with third party
            providers to provide the following services to the Premises:
            janitorial; janitorial supplies; window washing; pest control;
            exterior and lobby landscaping; fire safety monitoring; HVAC
            maintenance; elevator maintenance; and parking lot maintenance. The
            original service providers shall be the companies presently employed
            by Raiser Property Management Company at the Premises. In the event
            Tenant is dissatisfied with the services of such provider, Tenant
            shall give written notice to Landlord's property manager, who shall
            work with the provider to rectify promptly the deficiencies
            identified by Tenant; provided, however, that if the deficiencies
            have not been corrected to Tenant's reasonable satisfaction within
            ninety (90) days, Tenant shall give written notice thereof to
            Landlord and Landlord shall select a new service provider, after
            consultation with Tenant. In the event that Tenant is dissatisfied
            with the services of Raiser Property Management Company, Tenant
            shall notify Landlord in writing. Tenant agrees to work with
            Landlord for a period of ninety (90) days following receipt by
            Landlord of such notice to address Tenant's property management
            concerns. If, at the end of such ninety (90) day period, Raiser
            Property Management Company has failed to take any corrective action
            reasonably requested by Tenant, Tenant may require Landlord to
            select a replacement property management company. Tenant may also
            require Landlord, not more frequently than once each Lease Year, to
            solicit bids for the provision of services rendered by one or more
            of the providers described above to ensure that the rates being paid
            with respect to the Premises are competitive with the charges of
            other providers for similar services. Landlord shall, in all events,
            consult with Tenant before changing any service provider. All of the
            foregoing costs shall be Operating Expenses of the Premises, Tenant
            shall be responsible, at Tenant's sole cost, for all maintenance and
            repair of its security, telecommunications and electronic systems.
            In addition, if Tenant is entitled to a lower utility rate than
            Landlord, Tenant shall pay directly such utilities for the Premises
            as are available at the lower rate. Landlord shall be entitled to
            include within Operating Expenses a property management fee equal to
            2-1/2% of the Base Monthly Rent. Tenant shall pay no additional
            charge for the services of Landlord's property management or
            accounting staff. Operating Expenses shall, however, include the
            salary costs of the day maintenance engineer.

     6.1.2  Major Repairs Landlord shall make all necessary repairs and
            replacements to the structural components of the Premises,
            including, without limitation, the roof, exterior walls and
            foundations, and all necessary replacements of building systems,
            upon receipt of written notice from Tenant of the need for such
            repairs or replacements or upon Landlord's reasonable determination
            that such repairs or replacements are required. In addition,
            Landlord shall make all alterations and improvements to the Premises
            required by any governmental authority after

                                       8
<PAGE>

            the commencement of the Lease Term or reasonably required for the
            health and safety of Tenant or Tenant's employees. The cost of all
            such repairs and replacements shall be amortized over the usable
            life of the improvement, and Tenant shall pay to Landlord each month
            as additional rent hereunder an amount equal to the monthly
            amortization of such cost, together with interest on the unamortized
            balance at the rate of 10% per annum. Notwithstanding the foregoing,
            such repairs shall be made by Landlord at Tenant's expense, payable
            by Tenant upon demand, in the event such repairs are required as a
            result of damage caused by acts or omissions of Tenant.

     6.1.3  Ordinary Repairs. By entry hereunder, Tenant accepts the Premises as
            being in the condition in which Landlord is obligated to deliver the
            Premises. Landlord, as an Operating Expense, shall maintain the
            Premises in good order and condition promptly make all repairs
            necessary to maintain such condition, and repair any damage to the
            Premises caused by Tenant or its agents. Such maintenance and repair
            obligation shall include without limitation (i) all subfloors and
            floor coverings, (ii) all plumbing within the Premises (including
            all sinks, toilets, faucets, pipes and drains), (iii) all fixtures,
            interior walls, floors, carpets and ceilings, (iv) all interior and
            exterior windows, doors, entrances, plate glass, showcase and
            skylights, (v) all electrical facilities, wiring and equipment,
            including lighting fixtures, lamps, bulbs and tubes, fans, vents and
            exhaust equipment in the Premises, (vi) all automatic fire
            extinguisher equipment and systems (including full sprinkler
            testing) in the Premises, (vii) all HVAC systems appurtenant to the
            Premises, and (viii) all interior repainting.

6.2    Taxes. Landlord shall pay, as a Shared Operating Expense (as defined in
       Section 6.4.3) all taxes, including any form of assessment, license, fee,
       commercial rental tax, levy, penalty or tax (other than net income,
       franchise, inheritance or estate taxes) imposed by any authority having
       the power to do so with respect to the Property or the improvements,
       fixtures or activities conducted on the Premises. Shared Operating
       Expenses shall also include Landlord's cost of contesting any such taxes
       if Tenant, in its sole discretion, approves any such contest.
       Alternatively, Tenant shall have the right, at its sole cost and expense,
       to contest directly any such taxes, and Landlord will cooperate with
       Tenant in connection with any contest of taxes undertaken by Tenant.
       Taxes shall include without limitation taxes that are (i) upon any legal
       or equitable interest of Landlord in the Property; (ii) upon this Lease,
       the rent payable hereunder or the value thereof; (iii) with respect to
       any right to occupancy, use, leasing, operation, management, maintenance,
       alteration, or repair of the Property; or (iv) imposed in substitution
       for, or in addition to, existing or additional taxes against any part of
       the Property whether or not now customary or within the contemplation of
       the parties. If it shall not be lawful for Tenant to reimburse Landlord
       for any Of the taxes covered by this Article, the Base Monthly Rent
       payable to Landlord under the terms of this Lease shall be increased by
       the amount of such taxes. Tenant shall pay prior to delinquency all taxes
       assessed against and levied upon its trade fixtures, furnishings,
       equipment and other personal property.

6.3  Insurance.

6.3.1  Landlord's Insurance. During the Term of this Lease, Landlord shall
       maintain in effect the following insurance coverages, the cost of which
       shall be included in the Operating Expenses for the Premises.

                                       9
<PAGE>

     (a)  Coverages:

          (i)    Commercial general liability insurance in such amount as shall
                 be required by the holder of any deed of trust encumbering the
                 Premises or in such greater amount as may be reasonably
                 proposed by Landlord and approved by Tenant, which approval
                 will not be unreasonably withheld, insuring against personal or
                 bodily injury and property damage incurred in connection with
                 Landlord's acts or omissions and those Of Landlord's agents,
                 employees, representatives and contractors in, on or about the
                 Premises. Such policy or policies shall include a "separation
                 of insureds" provision and shall (as extended, if necessary, by
                 endorsement) provide contractual liability (including, without
                 limitation, Landlord's indemnity obligations under this Lease)
                 and owner and contractor protective liability.

          (ii)   Property Insurance. A policy or policies of insurance covering
                 loss or damage to the Premises (including any alterations),
                 except for foundations, footings and underground installations,
                 in an amount not less than the full replacement cost thereof,
                 on an agreed amount basis, without any deduction being made for
                 depreciation, as such. replacement cost may increase from time
                 to time, together with a "building ordinance" endorsement with
                 limits of not less than Five Hundred Thousand Dollars
                 ($500,000) per occurrence, providing protection against all
                 perils included within the classification of fire, extended
                 coverage, vandalism, malicious mischief, special extended
                 perils (all risk) and sprinkler leakage.

          (iii)  Boiler and Machinery Insurance. Full coverage boiler and
                 machinery insurance on all boilers, air conditioning equipment
                 and other pressure vessel systems located in or about the
                 Premises, with limits of not less than One Million Dollars
                 ($1,000,000) per occurrence.

          (iv)   Rent Loss. Rent (including Operating Expenses and Taxes) loss
                 insurance insuring against any loss of rental from damage or
                 destruction of the Premises for a period of one year from the
                 date of such damage or destruction.

          (v)    Any additional coverages which may be required from time to
                 time by applicable Laws or by any Encumbrance Holder (as
                 defined in Section 15.1).

     (b)  Approved Deductible. The deductible amount ("Approved Deductible")
          under any property insurance policy to be obtained by Landlord shall
          not exceed $25,000 per occurrence, unless Landlord proposes to Tenant
          and Tenant shall consent to a higher deductible amount.
          Notwithstanding the foregoing, the deductible under any policy of
          earthquake insurance shall be in such amount as may be commonly
          available under policies Of earthquake insurance covering properties
          similar to the Premises. The "Approved Deductible" for purposes of
          determining what portion of the costs of repairing any damage and
          destruction arising from an

                                      10
<PAGE>

            earthquake are includable in Operating Expenses shall be an amount
            equal to the Approved Deductible applicable to other types of
            casualties. The amount of any loss arising from an earthquake that
            is within the deductible amount under the earthquake insurance
            policy, but in excess of such "Approved Deductible" amount shall be
            considered an uninsured loss for the purposes of Section 10.1.

       (c)  Tenant agrees not to do anything or fail to do anything which will
            violate the terms of any such insurance, increase the cost of such
            insurance or prevent Landlord from procuring policies satisfactory
            to Landlord. Tenant shall pay any increases in insurance premiums
            resulting from the nature of Tenant's occupancy or any act or
            omission of Tenant upon receipt of written notice from Landlord
            setting forth the amount of the premium increase and all reasons
            therefor given by Landlord's insurer.

6.3.2  Tenant's Insurance. Tenant agrees to maintain in full force and effect at
       all times during the Term, at its own expense, for the protection of
       Tenant and Landlord, as their interests may appear, policies of insurance
       issued by a responsible carrier or carriers reasonably acceptable to
       Landlord which afford the following coverages:

       (a)  Worker's Compensation. Statutory limits.

       (b)  Employer's Liability - Not less than:

               Bodily Injury by Accident: $250,000 each accident

               Bodily Injury by Disease; $250,000 policy limit

               Bodily Injury by Disease: $250,000 each employee

       (c) Commercial General Liability Insurance with limits not less than the
       following: $2,000,000 for the occurrence limit, general aggregate limit,
       product/completed operations aggregate limit, personal injury and
       advertising aggregate limit, $50,000 fire damage (any one fire), and
       $5,000 medical expense (any one person), covering Bodily Injury, Personal
       Injury and Property Damage liability occasioned by or arising out of or
       in connection with the use, operation and occupancy of the Premises. Such
       insurance shall be provided on a coverage form at least as broad as the
       most recent edition of the standard Commercial General Liability Coverage
       Form (CG0001) published by ISO Commercial Risk Services, Inc. Such policy
       must cover events that occur during the policy period regardless of when
       the claim is made. The policy must name Landlord and Raiser Property
       Management Company as additional insureds using an endorsement form at
       least as broad as the most recent addition of the Additional Insured
       Managers or Lessors of Premises Endorsement (CG2011) as published by ISO
       Commercial Risk Services, Inc. Such insurance shall be primary insurance
       to, and non-contributing with, any other insurance that may be available
       to Landlord.

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<PAGE>

       (d)  Prior to the commencement of any work with respect to the Initial
       Tenant Improvements or any alterations (as defined in Section 7.2 below),
       any contractor (other than Raiser Construction Company) retained by
       Tenant shall file with Landlord valid certificates of insurance and
       amendatory riders or endorsements to such contractor's insurance
       policies, all in form and substance reasonably satisfactory to Landlord,
       naming Landlord and Raiser Property Management Company as additional
       insureds thereunder using an endorsement form at least as broad as the
       most recent edition of Additional Insured - Owners, Lessors or
       Contractors Form B (CG2010) published by the Insurance Services Office,
       Inc. These policies shall be primary insurance to any other insurance
       that may be available to Landlord. Such endorsements or amendatory riders
       shall indicate that as respects such additional insureds, there shall be
       severability of interests under such insurance policies for all coverages
       provided under such insurance policies. The certificates and amendatory
       riders or endorsements Shall clearly indicate the specific coverage and
       shall contain a provision requiring the giving of written notice to
       Landlord at least thirty (30) days prior to the cancellation, non-renewal
       or material modification of any such policies. All insurance companies
       must meet with the approval of Landlord and Landlord's lender, Landlord's
       approval shall not be unreasonably withheld. The insurance required by
       this Section 6.3.2(d) shall include the following coverages and limits of
       liability, provided that such insurance shall in all events include all
       coverages and limits required by Law:

       (i)   Commercial General Liability insurance in an aggregate limit of not
less than $2,000,000, including the following:

           (1) Product-Comp/OPS aggregate limit of not less than $2,000,000;

           (2) Personal and Advertising Injury limit of not less than
               $2,000,000;

           (3) Each occurrence limit of not less than $2,000,000;

           (4) Fire Damage (any one fire) limit of not less than $50,000; and

           (5) Medical Expense (any one person) limit of not less than
               $5,000.

       (ii)  Automobile Liability (and auto) insurance in an aggregate limit of
not less than $2,000,000.

       (iii) Workmen's Compensation and Employer's Liability insurance for not
less than the statutory limits and in no event less than the following:

             1.   Each accident                $100,000

             2.   Disease. policy limit        $500,000

             3.   Disease - each employee      $100,000

                                      12
<PAGE>

       If any contractor (other than Raiser Construction Company) hired by
       Tenant fails to purchase or maintain the liability insurance specified by
       this Section 6.3.2(d) within ten (10) days following notice by Landlord
       to Tenant that Landlord intends to purchase such insurance pursuant to
       this Section 6.3.2(d). Landlord may (but shall not be obligated to)
       purchase such insurance on such contractor's behalf and at Tenant's
       expense, and Landlord shall be entitled to reimbursement from Tenant of
       all sums so spent within ten (10) days of demand therefor, accompanied by
       evidence of the premiums paid by Landlord, When such insurance, due to
       the attainment of a normal expiration date or renewal date, shall expire,
       such contractor shall, prior to expiration, supply Landlord with updated
       replacement certificates of insurance and amendatory riders or
       endorsements that clearly evidence the continuation of all coverage in
       the same manner, limits of protection, and scope of coverage, as was
       provided by the certificates and amendatory riders or endorsements
       originally supplied. Tenant's contractor shall protect its own interests
       against loss or damage by fire, lightning or any other cause to any parts
       of its tools, equipment and any temporary structure provided by such
       contractor to facilitate its work.

6.3.3  Certificates. For all insurance required to be maintained by Tenant under
       this Lease, Tenant shall deliver to Landlord, prior to the Commencement
       Data, duly executed certificates of insurance, and, with respect to the
       insurance policy described in Subsection 6.3.2(c) above, a copy of the
       Additional Insured Managers or Lessors of Premises Endorsement (CG2011).
       Such certificates shall provide an obligation by the insurer to notify
       Landlord in writing at least thirty (30) days prior to cancellation or
       non-renewal of any such insurance, Tenant shall deliver to Landlord duly
       executed renewal certificates at least thirty (30) days prior to the
       expiration of any insurance policy required hereunder. Landlord shall
       likewise deliver to Tenant, prior to the Commencement Date and prior to
       any expiration date, certificates of insurance or renewal evidencing the
       insurance coverages Landlord is obligated to maintain pursuant to Section
       6.3.1.

6.3.4  Increased Coverage. Upon demand, Tenant shall provide Landlord, at
       Tenant's expense, with such increased amount of existing insurance, and
       such other insurance as Landlord or Landlord's lender may reasonably
       require to afford Landlord and Landlord's lender adequate protection,
       provided that absent a change in applicable law or in the requirements of
       Landlord's lender. Landlord may not increase Tenant's insurance coverages
       more often than once every three (3) years during the Term of this Lease.

6.3.5  Co-Insurer. If, on account of the failure of Tenant to comply with any of
       the provisions hereunder, Landlord is adjudged a co-insurer by its
       insurance carrier, then, any loss or damage Landlord shall sustain by
       reason thereof, including reasonable attorneys' fees and costs, shall be
       borne by Tenant and shall be immediately paid by Tenant upon receipt of a
       bill therefor and evidence of such loss.

6.3.6  No Limitation or Liability. Landlord and its Agents make no
       representation that the limits of liability specified to be carried by
       Tenant under this Lease are adequate to protect Tenant. If Tenant
       believes that any such insurance coverage is insufficient, Tenant shall
       provide, at its own expense, such additional insurance as Tenant deems
       adequate.

                                      13
<PAGE>

6.3.7  Insurance Requirements. All insurance required to be maintained by Tenant
       under this Lease shall be in a form reasonably satisfactory to Landlord
       and shall be carried with companies that have a general policy holder's
       rating of not less than "A" and a financial rating of not less than Class
       "X" in the most current edition of Best's Insurance Reports; shall
       provide that such policies shall not be subject to material alteration or
       cancellation except after at least thirty (30) days' prior written notice
       to Landlord; and shall be primary as to Landlord. Tenant's insurance may
       be carried under blanket policies and, so long as Oracle Corporation is
       the Tenant hereunder, a portion of such coverages reasonably approved by
       Landlord may be the subject of self-insurance. If Tenant fails to procure
       and maintain the insurance required hereunder, Landlord may, but shall
       not be required to, upon ten (10) days' prior written notice to Tenant
       and Tenant's continued failure to deliver evidence of the required
       insurance, order such insurance at Tenant's expense and Tenant's
       reimbursement to Landlord for the premiums therefor shall be deemed
       additional rent hereunder. Such reimbursement shall include all sums
       disbursed, incurred or deposited by Landlord including Landlord's costs,
       expenses and reasonable attorneys' Fees with interest thereon at the
       Default Rate.

6.3.8  Waiver. Notwithstanding anything to the contrary contained herein, to the
       extent of insurance proceeds received with respect to the loss (or which
       would have been received had the insurance required under this Lease been
       maintained), Tenant and Landlord each hereby waive any right of recovery
       against the other party for any loss or damage sustained by such other
       party with respect to the Property, the Premises, the contents of same,
       or any Operation therein, whether or not such loss is caused by the fault
       or negligence of such other party. Landlord and Tenant shall each obtain
       from their respective insurers under policies of property insurance
       maintained by either of them at any time during the Term hereof insuring
       or covering the Property or any portion thereof or operations therein, a
       waiver of all rights of subrogation which the insurer of one party might
       have against the other party, and Landlord and Tenant shall each
       indemnify the other against any loss or expense, including reasonable
       attorneys' fees, resulting from the failure to obtain such waiver.

6.4    Operating Expenses.

6.4.1  Tenant shall pay as additional rent, on a monthly basis and concurrently
       with Base Monthly Rent, all "Operating Expenses" of the Premises.
       Initially, Tenant shall pay the amount set forth in Section 1.7 (which
       may be revised from time to time), which is Landlord's initial estimate
       of the monthly Operating Expenses. Landlord shall provide Tenant with a
       statement of the actual amount of such expenses within one hundred twenty
       (120) days following the end of each calendar year, which statement shall
       be certified by Landlord as to its accuracy and completeness. Within
       thirty (30) days of Tenant's receipt of such statement, Tenant shall pay
       to Landlord the amount by which actual Operating Expenses exceed Tenant's
       Operating Expense payments for such year and any excess amounts paid by
       Tenant shall be credited to reduce Tenant's payments for the next ensuing
       period or paid to Tenant, if the Lease Term has expired. Notwithstanding
       anything to the contrary in this Lease, at Landlord's request, Tenant
       shall pay to Landlord in a single installment (rather than in monthly
       installments): (a) each insurance premium included in the Operating
       Expenses and (b) Tenant's pro rata share of each bill for "taxes" as such
       term is used in Section 6.2 within ten (10) days before such amount is
       due and payable by Landlord. The terms of this Section 6.4. i shall
       survive the termination of this Lease.

                                      14
<PAGE>

6.4.2  Definition of Operating Expenses. Operating Expenses shall include all
       costs reasonably incurred by Landlord to ensure, pay taxes with respect
       to, manage, operate and maintain and make all necessary repairs to the
       Premises, including, without limitation, Tenant's pro rata share (as set
       forth in Section 1.8) of the Shared Operating Expenses described in
       Section 6.4.3. Operating Expenses shall include without limitation costs
       of janitorial, maintenance, security (if any) and other services; the.
       property management fee described in Section 6.1.1; costs of all
       electricity, gas and other power and water, waste disposal and other
       utilities attributable solely to Tenant's use; costs of materials and
       supplies; license costs; depreciation on equipment and other personal
       property; the deductible portion of any insured loss under Landlord's
       casualty insurance (but not In excess of the amount of the Approved
       Deductible); and the amortized costs of capital improvements made by
       Landlord to the premises pursuant to 6.1.2. Operating Expenses shall not
       include the following:

       (a)  leasing commissions and advertising, marketing or promotional
            expenses, including such expenses incurred in leasing or procuring
            new tenants;

       (b)  repairs or rebuilding necessitated by condemnation or casualty
            (except for deductible amounts up to the amount of the Approved
            Deductible);

       (c)  depreciation and amortization of the improvements on the Property;

       (d)  debt service payments on any indebtedness applicable to the
            Premises, including any mortgage debt or ground rents;

       (e)  any costs associated with the sale or financing of the Premises or
            any portion thereof;

       (f)  reserves for repairs, maintenance and/or replacement;

       (g)  any amounts paid to any person, firm or corporation related or
            otherwise affiliated with Landlord or any general partner, officer
            or director of Landlord or any of its general partners, to the
            extent the amount paid exceeds arms-length competitive prices paid
            in the Belmont/San Mateo/Redwood Shores area for the services or
            goods provided;

       (h)  costs relating to maintaining Landlord's existence, either as a
            corporation, partnership or other entity, such as trustee's fees,
            annual fees, partnership or organization or administration expenses,
            deed recordation expenses, legal and accounting fees;

       (i)  costs incurred as a result of Landlord's violation of any terms and
            conditions of this Lease or any law, ordinance or governmental rule
            or regulation affecting the Premises (other than changes at any time
            after the Commencement Date in any building codes or other
            ordinances applicable to the physical condition of the Premises);
            and

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       (j)  the cost of removal or replacement of halon, freon or CFC's in the
            Premises, other than as a part of the ordinary maintenance of the
            HVAC system.

       Landlord shall not recover through Operating Expenses any item of cost
       more than once. Subject to Tenant's approval of the Annual Budget in an
       amount sufficient to do so, Landlord shall, at all times during the term
       of this Lease, operate and repair the Premises in a lawful, efficient and
       businesslike manner in accordance with sound property management
       practices consistent with comparable first class office buildings in the
       Belmont/San Mateo/Redwood Shores area. Tenant shall only be liable for
       Operating Expenses incurred by Landlord which are attributable to the
       Term of this Lease.

6.4.3  Shared Operating Expenses. Shared Operating Expenses shall include all
       costs incurred by Landlord to pay taxes with respect to the Property and
       to manage, operate and maintain and make all necessary repairs m the
       "Common Areas," which shall mean all facilities within the Property,
       other than the One Davis Drive and Eleven Davis Drive buildings, that are
       provided by Landlord for the use of tenants of the Property, including,
       without limitation, the parking areas, sidewalks, landscaped areas,
       service areas, and trash disposal facilities. Shared Operating Expenses
       shall include without limitation costs of landscape maintenance and
       replacement; operation, repair and maintenance of concrete walkway curbs
       and parking areas; costs of electricity, gas, water and other utilities
       attributable to the Common Areas; and insurance premiums for any
       insurance with respect to the Common Areas.

6.5    Waiver. Because this Lease contains the entire agreement of the parties
       for maintenance of the Premises and the Property, the parties agree that
       statutory provisions pertaining to maintenance of leased property shall
       not be applicable to this Lease, and Landlord and Tenant waive their
       rights under such provisions.

6.6    Annual Budget. Not later than November 1 of each Lease Year, Landlord
       shall submit to Tenant, for Tenant's approval, an annual budget for
       estimated Operating Expenses and capital repairs and replacements for the
       ensuing calendar year (the "Annual Budget"). In addition, in the event
       that Landlord experiences or anticipates a substantive deviation from the
       Annual Budget previously approved by Tenant for any calendar year,
       Landlord shall submit to Tenant a revised Annual Budget. Tenant's
       approval of the Annual Budget and any revised Annual Budget shall not be
       unreasonably withheld and shall be deemed given if not objected to in a
       writing itemizing each objection on a line item basis delivered to
       Landlord within ten (10) business days following receipt by Tenant of the
       proposed Annual Budget. Landlord and Tenant shall endeavor in good faith
       to resolve all disputed items within thirty (30) days following delivery
       of Tenant's objections, and Landlord shall not expend any sums which are
       within the control of Landlord in excess of the most recently approved
       Annual Budget for any disputed line items unless required, in Landlord's
       reasonable business judgment, to prevent injury to persons, damage to
       Tenant's property or to prevent further deterioration of the Premises or
       required by law. Tenant shall have the right, no more often than annually
       and at Tenant's sole cost, to audit any Operating Expense statements
       delivered by Landlord during the Term of the Lease.

7.0    ALTERATIONS, ADDITIONS OR FIXTURES

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7.1  Installation and Removal. Subject to Article 8, Tenant shall have the right
     to install its trade fixtures in the Premises during the term of this
     Lease; provided, however, that no such installation or removal thereof
     shall adversely affect the structural portion of the Premises or building
     operating systems and that Tenant shall repair any damage to the Premises
     caused thereby.

7.2  Landlord's Approval. Except for repainting, carpeting, movement of
     demountable partitions and other changes which are not structural in
     nature, do not exceed $10,000 on a per project basis, and do not adversely
     affect building operating systems or change the existing floor plan of the
     Premises ("Minor Alterations"), Tenant shall not make or permit to be made
     any alterations, additions or improvements (collectively "alterations") to
     the Premises without Landlord's prior written approval as more particularly
     described in this Section 7.2. Prior to commencing any alterations other
     than Minor Alterations, Tenant shall submit to Landlord complete, finished
     drawings and specifications (the "Drawings") for the alterations along with
     a proposed schedule for their completion. The Drawings shall be subject to
     Landlord's approval. The Drawings shall be prepared by architects and (if
     necessary) mechanical, electrical and structural engineers who are duly
     licensed by the State of California and shall be delivered to Landlord's
     property manager for Landlord's approval. Within five (5) business days
     after delivery of the Drawings to Landlord's property manager, Landlord
     shall notify Tenant of its approval or disapproval of the Drawings, and if
     Landlord disapproves the Drawings, Landlord shall notify Tenant of the
     revisions that Landlord requires in order to obtain such approval. If
     Landlord fails to approve or disapprove the Drawings within such five (5)
     business day period, Landlord shall be deemed to have approved the
     Drawings. Tenant and Tenant's architect and engineer (if any) shall meet
     with Landlord, Landlord's architect, engineer and contractor (or, at
     Landlord's sole discretion, any one or more of the foregoing) within a
     reasonable period of time after any request for such meeting by Landlord to
     answer questions or provide additional information with respect to the
     Drawings, As promptly as reasonably possible thereafter, Tenant shall
     submit to Landlord's properly manager modified Drawings, with changes
     highlighted, incorporating the revisions required by Landlord. The modified
     Drawings shall be subject to Landlord's approval. If Landlord fails to
     approve or disapprove the modified Drawings within five (5) business days
     after delivery of the modified Drawings, Landlord shall be deemed to have
     approved the modified Drawings. The final Drawings approved by Landlord are
     hereinafter referred to as the "Final Drawings," Tenant shall not commence
     any work on the alterations until Landlord has finally approved the Final
     Drawings. Any changes in the alterations from the Final Drawings shall be
     subject to Landlord's prior approval. Landlord's review and approval of all
     Drawings (including without limitation changes to the Final Drawings)
     shall, at Landlord's election, include the review and approval of
     Landlord's engineering consultants.

7.3  Alterations. This Section 7.3 shall apply to all alterations including
     without limitation Minor Alterations. All alterations other than Minor
     Alterations shall be made by Raiser Construction Company (provided that
     Raiser Construction Company is then still an affiliate of Landlord)
     pursuant to a contract substantially in the form of Exhibit "C" to this
     Lease. Landlord shall not charge a separate fee for construction
     administration or supervision for any alterations made by Raiser
     Construction Company. In making any alterations, Tenant shall comply with
     Article 8, All alterations shall be constructed in a good and workmanlike
     manner, and shall comply with all laws, codes and ordinances applicable to
     the Premises. In addition, all alterations other than Minor Alterations
     shall be constructed in accordance

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<PAGE>

     with the Final Drawings. Any damage caused by Tenant or its employees or
     agents shall be repaired at Tenant's expense. Tenant shall hold Landlord
     harmless from and indemnify, protect, defend and reimburse Landlord against
     any and all claims arising from the errors and omissions of Tenant's
     architects and engineers, and Tenant hereby waives all such claims against
     Landlord. AI{ alterations to the Premises which are made by Tenant shall be
     the property of Tenant until the expiration or earlier termination of this
     Lease; at that time all such alterations shall remain on the Premises and
     become the property of Landlord without payment therefor, unless, as a
     condition to Landlord's approval of the alterations (other than minor
     changes in office sizes and configurations, which shall not require
     restoration provided the total number of offices is not reduced and the
     reconfigured offices are of a standard and reusable size and incorporate
     the same finishes as the remainder of the Premises). Landlord reserves the
     right to require removal of the alterations and Landlord elects by written
     notice to Tenant to remove the same, in which event Tenant shall remove
     such alterations and restore to the Premises to its condition prior to
     making the alterations, reasonable wear and tear excepted. Tenant shall be
     responsible for the cost of all additional alterations or improvements
     required by Law to be made to, in, or on the Premises as a result of any
     alterations made by Tenant. Promptly upon completion of any alterations,
     Tenant shall deliver to Landlord a complete set of "as-built" plans and
     specifications showing the subject alterations as installed in the
     Premises. In addition, upon completion of any alterations, Tenant shall
     deliver to Landlord, within five (5) days after receipt thereof, copies of
     any and all required certificates of occupancy (or other necessary
     authorization to occupy the Premises) issued by the appropriate
     governmental authorities.

8.0  MECHANICS' LIENS

8.1  Tenant's Rights. Tenant shall give Landlord ten (10) day's written notice
     prior to the commencement of work in the Premises so that Landlord may post
     notices of nonresponsibility. Tenant shall keep the Premises and Property
     free and clear of any liens arising out of work done by or for Tenant.
     Should any such lien or notice of lien be filed, Tenant shall bond against
     or discharge the same within fifteen (15) days after such filing, and shall
     indemnify, defend, reimburse, protect, and hold Landlord harmless from and
     against any and all loss or liability arising out of Tenant's failure to do
     so.

9.0  ENTRY BY LANDLORD

9.1  Landlord's Rights. Tenant shall permit Landlord and its agents to enter the
     Premises at all reasonable times and upon reasonable advance notice for the
     purpose of inspection, maintenance, making repairs, serving or posting
     notices, showing the Premises to prospective purchasers, lenders, or
     Tenants, or placing "For Lease" signs at any time within three hundred
     sixty (360) days prior to the expiration of this Lease, without any rebate
     of rent and without any liability to Tenant for any loss of occupation or
     quiet enjoyment thereby occasioned. Tenant shall have the right to require
     that Landlord or its agents be accompanied by a representative of Tenant
     and to limit access to any high security or product development areas
     within the Premises. Landlord shall make reasonable efforts to minimize any
     inconvenience to Tenant in exercising the foregoing rights and shall make
     all reasonable efforts to

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<PAGE>

      insure that Landlord's maintenance and repair activities are conducted so
      as not to interfere with Tenant's use of the Premises for Tenant's
      business purposes, including scheduling work which might be disruptive
      during non-business hours. Notwithstanding the foregoing, Landlord shall
      have the right to enter any portion of the Premises without advance notice
      if reasonably required to prevent injury to persons or damage to property
      or otherwise to respond to emergencies.

10.0  DAMAGE BY FIRE OR OTHER CASUALTY

10.1  Repair; Landlord's Right to Terminate. If the Premises shall be damaged or
      destroyed by fire or other casualty, Tenant shall promptly notify
      Landlord, and Landlord, within thirty (30) days following the date of any
      such notice, shall notify Tenant of Landlord's good faith estimate of the
      time required to repair such damage in the manner described herein
      ("Landlord's Repair Notice"). Subject to the conditions set forth in this
      Article 10, Landlord shall promptly repair such damage and restore the
      Premises to substantially the same condition in which they were
      immediately prior to such damage or destruction, using materials and
      workmanship equal to or better in quality than those originally
      incorporated in the Premises. Landlord's restoration shall not include the
      repair, restoration or replacement of the fixtures, furniture or any other
      property of Tenant. All statutory or common law rights of termination with
      respect to the destruction of leased premises shall not be applicable to
      this Lease. If a material casualty occurs during the last twelve (12)
      months of the Term or any extension thereof, Landlord may cancel this
      Lease, except that Landlord may not so terminate this Lease if Tenant has
      the right, to extend the Term for at least three (3) more years and does
      so within thirty (30) days after the date of casualty. If, pursuant to
      Landlord's Repair Notice, net insurance proceeds available for restoration
      will not be adequate to complete such restoration (unless due to
      Landlord's failure to maintain the insurance coverage required hereunder),
      or it; the Premises cannot be fully repaired within two hundred forty
      (240) days from the date of such damage, either Landlord or Tenant may
      terminate this Lease by giving written notice (in Landlord's case, such
      notice to be given concurrently with the delivery of Landlord's Repair
      Notice and, in Tenant's case, such notice to be delivered within thirty
      (30) days after the delivery of Landlord's Repair Notice) which specifies
      a termination date no less than thirty (30) days after its transmission.

10.2  Rent Abatement. The Base Monthly Rent and Operating Expenses shall abate
      during any period when there is substantial interference with Tenant's use
      of the Premises (in proportion to the unusable area), commencing with the
      damage or destruction and ending upon substantial completion by Landlord
      of the repair or reconstruction of the Premises. Tenant shall not be
      entitled to any compensation or damages from Landlord for loss of use of
      the Premises, damage to Tenant's personal property or any inconvenience
      occasioned by such damage, repair or restoration.

11.0  INDEMNIFICATION

11.1  Tenant's Obligations. Subject to Section 6.3.8 above, Tenant shall hold
      harmless, indemnify, reimburse, protect, and defend Landlord and
      Landlord's agents, employees, officers, directors,

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<PAGE>

      shareholders and partners against all claims, actions, damages, liability
      and expense (including, without limitation, reasonable fees of attorneys,
      investigators and experts) howsoever caused (a) in connection with loss of
      life, injury, or damage to property, in or about the Premises, or (b)
      arising out of the occupancy or use of the Premises by Tenant or any
      "transferee" (as defined in Section 14.1 below), or (c) occasioned wholly
      or in part by any act or omission of Tenant or any transferee, or any
      Agent of, or any person or entity claiming through, Tenant or any
      transferee, except to the extent such loss, injury or damage was caused by
      the negligence or willful misconduct of Landlord or its employees or
      contractors. Tenant shall also indemnify, defend, reimburse, protect and
      hold Landlord harmless from, any and all loss, cost, expense, liability or
      damage howsoever caused arising out of any breach, violation, or
      nonperformance by Tenant or any transferee, or any Agent of, or any person
      or entity claiming through, Tenant or any transferee, of any term,
      covenant, or provision of this Lease. Without limiting the foregoing,
      Tenant forever releases and waives all claims against Landlord arising out
      of loss of life, injury or damage to property arising at any time and from
      any cause other than by reason of the negligence or willful misconduct of
      Landlord or its employees or contractors. In no event shall Landlord be
      liable to Tenant for any indirect or consequential damages, including
      without limitation any claims for lost profits or business opportunities.
      Tenant shall promptly notify Landlord of any casualty or accident on or
      about the Premises. All obligations of Tenant set forth in this Section
      11.1 or elsewhere in this Lease to hold harmless, indemnify, reimburse,
      protect and defend shall survive the termination of this Lease with
      respect to any event occurring prior to such termination.

11.2  Landlord's Obligations. Landlord shall indemnify, defend, protect and hold
      harmless Tenant and Tenant's agents, employees, officers, directors,
      shareholders and partners from and against all liabilities, obligations,
      damages, penalties; claims, causes of action, costs, charges and expenses,
      including reasonable attorneys' fees, court costs and administrative costs
      which may be imposed upon or incurred by, or asserted by reason of, any of
      the following that shall occur during the Term or during any period of
      time prior to the Commencement Date:

      (a)  any work or act done in or about the Premises by Landlord or its
           agents, contractors or employees;

      (b)  any accident, injury or damage to any persons or property occurring
           in, or about the Premises to the extent caused by the negligence or
           willful misconduct of Landlord or its agents, contractors or
           employees; and

      (c)  any failure on the part of Landlord to perform or comply with any of
           the covenants, agreements, terms; provisions, conditions or
           limitations contained in this Lease on its part to be performed or
           complied with.

      The obligation of Landlord to indemnify contained in this section shall
      not be limited by any limitation on the amount or type of damages,
      compensation or benefits payable by or for Landlord, its agents, employees
      or contractors under Workers' or Workmen's Compensation Acts, Disability
      Benefit Acts or other employee benefit acts, or under any other insurance
      coverage Landlord may obtain.

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12.0  CONDEMNATION

12.1  Permanent Taking. If (i) all of the Premises are covered by a
      condemnation, (ii) any part of the Premises is covered by a condemnation
      and the remainder thereof is insufficient for the reasonable operation
      therein of Tenant's business, (iii) as a result of the condemnation,
      Tenant no longer has. reasonable access to the Premises or Landlord is
      unable to provide the minimum number of parking spaces required by law or
      (iv) any of the part of the Premises is covered by a condemnation and, in
      Landlord's opinion, it would be impractical to restore the remainder
      thereof, then this Lease shall terminate and all obligations hereunder
      shall cease as of the date upon which possession is taken by the
      condemnor. If there is a condemnation and this Lease has not been
      terminated pursuant to this Section, the obligations of Landlord and
      Tenant shall be unaffected by such condemnation except that rent shall
      abate in proportion to the area, if any, of the Premises covered by such
      condemnation. Statutory provisions with respect to termination upon a
      partial taking of leased premises shall not be applicable to this Lease.

12.2  Award. In the event of a condemnation, Tenant shall have the right to make
      a separate claim against the condemnor to the extent that such claim does
      not reduce the sums otherwise payable by the condemnor to Landlord. Except
      as aforesaid, Tenant hereby assigns to Landlord all other claims against
      the condemnor.

12.3  Temporary Taking. No temporary taking of the Premises shall terminate this
      Lease or give Tenant any right to any abatement of rent. Any award made to
      Tenant by reason of such temporary taking shall belong entirely to Tenant
      and Landlord shall not be entitled to share therein.

13.0  QUIET ENJOYMENT

13.1  Tenant's Rights. Landlord covenants that Tenant, upon performing the
      terms, conditions and covenants of this Lease, shall have quiet and
      peaceful possession of the Premises as against any person claiming the
      same by, through or under Landlord, subject, however to the exceptions,
      reservations and conditions of this Lease.

14.0  ASSIGNMENT AND SUBLETTING

14.1  Limitation. Tenant shall not transfer this Lease, voluntarily or by
      operation of law, or allow any other person or entity to occupy the
      Premises, without the prior written consent of Landlord, which consent
      shall not be unreasonably withheld, "Transfer" shall include any sublease,
      assignment, mortgage or hypothecation of this Lease or Tenant's interest
      therein or in all or a portion of the Premises, but expressly shall not
      include (i) any transfer of the stock of Tenant, (ii) any transfer to an
      entity controlling, controlled by or under common control with Tenant,
      whether as part of a corporate reorganization or otherwise, (iii) a
      transfer incident to the sale of a material portion of the assets of

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      Tenant and (iv) subleases or occupancy agreements with user group
      representatives, consultants or project development partners. A consent to
      one transfer shall not be deemed to be a consent to any subsequent
      transfers. Any transfer without Landlord's consent shall be void at the
      option of Landlord, and Landlord may exercise any or all of its rights
      under Article 17 hereof.

14.2  Offer to Landlord. Tenant acknowledges that the terms of this Lease,
      including rent, have been based on the understanding that Tenant shall
      physically occupy the Premises for the entire Term. Therefore, upon
      Tenant's request, to transfer all or a portion of the Premises, Landlord
      shall be entitled (a) to sublease from Tenant for Landlord's own account
      the portion of the Premises proposed to be transferred by Tenant, upon the
      same terms as those proposed but otherwise upon the form of this Lease, or
      (b) if the proposed transfer is for the entire Premises for a term ending
      within the last year of the Term of this Lease, to terminate this Lease.
      If Landlord so subleases for its own account or terminates this Lease,
      Landlord shall have the further right to transfer the Premises to any
      person and, in the case of a sublet from Tenant by Landlord, Tenant shall
      be relieved of any liability with respect to such portion of the Premises
      so subleased by Landlord until the term of such sublease expires or is
      terminated, Landlord's failure to elect to sublet from Tenant for
      Landlord's own account or to terminate this Lease pursuant to this Section
      shall not obligate Landlord to consent to the proposed transfer.

14.3  Conditions. Notwithstanding the above, the following shall apply to any
      proposed transfer.

      (a)  No transfer shall relieve Tenant of its obligation to pay rent and to
           perform all other obligations to be performed by Tenant hereunder,
           unless Landlord expressly agrees to such release of Tenant in
           writing. The acceptance of rent by Landlord from any person shall not
           be deemed to be a waiver by Landlord of any provision of this Lease
           or to be a consent to any transfer, Any breach of, or default under,
           any provisions of this Lease by any transferee or any other person or
           entity claiming through any transferee, shall be deemed to be a
           breach of, or default under, such provision by Tenant, and in the
           event of any such breach or default, Landlord may proceed directly
           against Tenant without the necessity of exhausting remedies against
           such transferee or other person or entity. Landlord may consent to
           subsequent transfers of this Lease or amendments or modifications to
           this Lease with transferees of Tenant, without notifying Tenant, or
           any successor of Tenant, and without obtaining its or their consent
           thereto, and such action shall not relieve Tenant of liability under
           this Lease.

      (b)  One half of any consideration received by Tenant as a result of a
           sublease or assignment which exceeds the total sums which Tenant is
           obligated to pay Landlord under this Lease, or the prorated portion
           thereof attributable to the subleased or assigned premises if only a
           portion of the Premises is transferred, after deducting Tenant's
           reasonable costs of assigning or subletting, shall be payable to
           Landlord as additional rent under this Lease without affecting or
           reducing any other obligation of the Tenant hereunder.

      (c)  Each transfer to which Landlord has consented shall be an instrument
           in writing in a form satisfactory to Landlord, and shall be executed
           by Tenant and the transferee. Tenant shall

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<PAGE>

           reimburse Landlord for Landlord's reasonable costs and attorneys'
           fees incurred in conjunction with the processing and documentation of
           any requested transfer.

15.0  SUBORDINATION; ESTOPPEL CERTIFICATES

15.1  Subordination. As a condition to the effectiveness of this Lease, Landlord
      shall cause Landlord's existing lender to execute and deliver to Tenant on
      or before May 1, 1996 a Non-Disturbance Agreement in a form reasonably
      acceptable to Tenant containing an undertaking on the part of the existing
      lender that Tenant's rights under this Lease shall not be terminated or
      foreclosed by reason of any foreclosure of the deed of trust presently
      encumbering the Property so long as Tenant is not in default under this
      Lease, At the option of any ground lessor, mortgagee, deed of trust
      beneficiary, or holder of any other hypothecation (each, an "Encumbrance
      Holder") under any ground lease, mortgage, deed of trust, or other
      hypothecation for security (each, an "Encumbrance") hereafter placed upon
      the Premises, this Lease shall be subordinated to any such Encumbrance and
      to any and all advances made on the security thereof and to all renewals,
      modifications, consolidations, replacements and extensions thereof,
      provided that the Encumbrance Holder executes a Non-Disturbance Agreement
      reasonably acceptable to Tenant. Tenant shall execute any documents
      required to effectuate such subordination and non-disturbance within ten
      (10) days after written request. Tenant shall attorn to any purchasers at
      any foreclosure sale, or to any grantee or transferee designated in any
      deed given in lieu of foreclosure, provided that such purchaser or
      transferee agrees to recognize Tenant under the terms of the Lease and
      performs all of the obligations of Landlord to be performed from and after
      the date of the transfer. Notwithstanding anything to the contrary in the
      foregoing, if any Encumbrance Holder shall elect to have this Lease prior
      to its Encumbrance, and shall give notice thereof to Tenant, then this
      Lease shall be deemed prior to such Encumbrance.

15.2  Condition of Lease. Within ten (10) days after request therefor, Landlord
      and Tenant Shall each provide a written statement acknowledging the
      commencement and termination dates of this Lease, that it is in full force
      and effect, has not been modified (or if it has, stating such
      modifications), and providing any other pertinent information as the other
      party might reasonably request.

15.3  Tenant's Failure. If Tenant fails to execute any of the documents referred
      to in Section 15.1 within the time required, then Tenant hereby
      irrevocably appoints Landlord as Tenant's attorney in fact to execute such
      documents on Tenant's behalf, and all statements made in such documents
      shall be deemed true and binding upon Tenant. Tenant understands that its
      failure to execute such documents may cause Landlord serious financial
      damage by causing the failure of a financing transaction. Failure to
      comply with Section 15.1 shall be a material breach of this Lease by
      Tenant, giving Landlord the right to recover damages in addition to the
      remedies set forth in Article 17. If either Landlord or Tenant shall fail
      to provide an estoppel certificate when and as required by Section 15.2,
      all statements set forth in the certificate shall be deemed true and
      binding on the party failing to execute such certificate.

15.4  Annual Reports. Upon request by Landlord from time to time, Tenant hereby
      agrees to deliver to the person designated by Landlord the most recent
      annual report of Tenant.

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16.0  SURRENDER AND HOLDOVER

16.1  Condition at End of Term. Subject to the terms of Articles 2, 7 and 10, at
      the expiration or earlier termination of the Term, Tenant shall promptly
      yield up, in the same condition, order and repair in which they are
      required to be kept during the Term, the Premises and all alterations
      thereto, and all fixtures and equipment servicing the Premises, ordinary
      wear and tear excepted.

16.2  Holdover Terms. If Tenant, or any person claiming through Tenant, shall
      continue to occupy the Premises after the expiration or earlier
      termination of the Term or any renewal thereof, such occupancy shall be
      deemed to be under a month-to-month tenancy under: the same terms set
      forth in this Lease; except that the Base Monthly Rent during such
      continued occupancy shall (except as otherwise provided in Section 16.3)
      be one hundred seventy five percent (175%) of the Base Monthly Rent in
      effect at the end of the Term. Notwithstanding the above, any holding over
      by Tenant, or any person claiming through Tenant, without Landlord's prior
      written consent shall constitute a default hereunder and shall be subject
      to all remedies set forth in Article 17, and Tenant shall indemnify,
      defend, protect, and reimburse Landlord and any replacement Tenant for the
      Premises for any damages or loss suffered by either Landlord or the
      replacement Tenant resulting from the failure of Tenant or any person or
      entity claiming through Tenant timely to vacate the Premises.

16.3  Right to Hold Over. In the event Tenant gives Landlord not less than
      twelve (12) months prior written notice of its intent to hold over after
      the expiration of the Term of this Lease, Tenant shall have the right to
      remain in possession of the Premises for an additional three (3) months on
      all the terms and conditions of this Lease except that the Base Monthly
      Rent during such period shall be one hundred twenty-five percent (125%) of
      the Base Monthly Rent in effect at the end of the Term.

17.0  DEFAULT AND REMEDIES UPON DEFAULT

17.1  Events. The occurrence of any of the following shall constitute a material
      default and breach of this Lease by Tenant:

      (a)  Any failure by Tenant to pay rent or to make any other payment
      required to be made by Tenant hereunder within five (5) days after the
      date due.

      (b)  A failure by Tenant to observe and perform any other provision of
      this Lease, where such failure continues for thirty (30) days after
      written notice thereof by Landlord to Tenant; provided, however, that if
      the default cannot reasonably be cured within thirty (30) days, Tenant
      shall not be deemed to be in default if Tenant shall, within such thirty
      (30) day period, commence to cure and thereafter diligently prosecute the
      same to completion.

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      (c)  Either (1) the appointment of a receiver (except a receiver appointed
      at Landlord's request) to take possession of all or substantially all of
      the assets of Tenant, or (2) a general assignment by Tenant for the
      benefit of creditors, or (3) any action taken by Tenant or by any other
      person against Tenant under any insolvency or bankruptcy act. In such
      event, Landlord may, at its option, declare this Lease terminated and
      forfeited by Tenant in a written notice to Tenant, and Landlord shall be
      entitled to immediate possession of the Premises.

      Tenant agrees that any notice given by Landlord pursuant to this Section
      which is served in compliance with Article 21 of this Lease shall be
      adequate notice for the purpose of Landlord's exercise of the remedies
      specified in Section 17.2 or any other remedies provided by law.
      Therefore, any statutory provision relating to the manner of giving notice
      shall not be applicable to this Lease.

17.2  Landlord's Rights. In the event of any default by Tenant, Landlord, in
      addition to all other remedies provided by law or in equity, shall have
      the immediate option to terminate this Lease and all rights of Tenant
      hereunder by giving written notice of such intention to terminate. If
      Landlord shall elect to so terminate this Lease, Landlord may recover from
      Tenant all damages suffered by Landlord as result of Tenant's default,
      including, but not limited to, the worth at the time of award (computed in
      accordance with Paragraph (3) of Subdivision (a) of Section 1951.2 of the
      California Civil Code) of the amount by which unpaid rent for the balance
      of the Term after the time of award exceeds the amount of such rent loss
      that Tenant proves could be reasonably avoided. In the event of any such
      termination of this Lease, Landlord may then or at any time thereafter by
      judicial process, re-enter the Premises and remove therefrom all persons
      and property and again repossess and enjoy the Premises, without prejudice
      to any other remedies that Landlord may have by reason of Tenant's default
      or of such termination. Landlord has the remedy described in California
      Civil Code Section 1951.4 (Landlord may continue this Lease in effect
      after Tenant's abandonment and recover rent as it becomes due, if Tenant
      has the right to sublet or assign, subject only to reasonable
      limitations). Consequently, if Landlord does not elect to terminate this
      Lease, Landlord may from time to time, without terminating this Lease,
      either recover all rent as it becomes due or re-let the Premises or any
      part thereof for such term and at such rent and upon such other terms and
      conditions as Landlord in its sole discretion may deem advisable with the
      right to make alterations and repairs to the Premises, Any rent received
      by Landlord from a re-letting shall be applied to the payment of (a) any
      indebtedness other than rent due hereunder; (b) the reasonable cost of
      such re-letting; (c) the reasonable cost of any necessary alterations and
      repairs to the Premises; (d) rent due and unpaid hereunder; and (e) the
      residue, if any, shall be held by Landlord and applied in payment of
      future rent as the same may become due and payable hereunder; provided,
      however, that with respect to the costs specified in clauses (b) and (c)
      above ("Reletting Costs"), if the term of any such reletting extends
      beyond the scheduled expiration of the Lease Term, only a portion of such
      Reletting Costs shall be payable by Tenant, such portion to be equal to
      such Reletting Costs multiplied by a fraction, the denominator of which is
      the number of calendar months in the term of such, reletting and the
      numerator of which is the number of calendar months from the commencement
      of such term to the scheduled expiration date of the Lease Term. If the
      rent received from such re-letting is less than the rent payable by
      Tenant, then Tenant shall pay such deficiency to Landlord immediately upon
      demand thereof by Landlord. Such deficiency shall be calculated and paid

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      monthly. Tenant shall also pay to Landlord as soon as ascertained, any
      expenses incurred by Landlord which are not covered by the rent received
      from such re-letting.

17.3  Quarterly Payments. In the event that Tenant, during any period of twelve
      (12) consecutive months, fails on two or more occasions to make payments
      of rent hereunder on or before the date due, Landlord may require Tenant
      thereafter to make advance payments of rent on a quarterly basis and/or by
      certified check.

17.4  Termination. No re-entry or taking possession of the Premises or any other
      action under this Section shall be construed as an election to terminate
      this Lease unless a written notice of such intention be given to Tenant or
      unless the termination thereof is decreed by a Court of competent
      jurisdiction. Notwithstanding any re-letting without termination by
      Landlord because of any default by Tenant, Landlord may at any time after
      such re-letting elect to terminate this Lease for any such default.

17.5  No Waiver. No waiver by either party of any breach by the other shall be a
      waiver of any subsequent breach, nor shall any forbearance by either party
      to seek a remedy for any breach by the other be a waiver of any rights and
      remedies with respect to such or any subsequent breach. Efforts by either
      party to mitigate the damages caused by the other's default in this Lease
      shall not constitute a waiver of the mitigating party's right to recover
      damages hereunder. No custom or practice which may develop between the
      parties in the administration Of the terms hereof shall be construed to
      waive or to lessen the right of either party to insist upon the
      performance by the other in strict accordance with such terms. The
      subsequent acceptance of rent hereunder by Landlord shall not be deemed to
      be a waiver of any preceding breach by Tenant of any agreement, condition
      or provision of this Lease, other than the failure of Tenant to pay the
      particular rent so accepted, regardless of Landlord's knowledge of the
      preceding breach at the time of acceptance or payment of the rent.

17.6  Landlord's Cure of Tenant's Default. Should Tenant fail to perform any
      obligation imposed by this Lease, Landlord may perform or contract for the
      performance of Tenant's obligation after having given Tenant reasonable
      notice of the failure(s) and a reasonable opportunity which in no case
      shall exceed thirty (30) days to remedy the failure, and Tenant shall pay
      Landlord for all costs incurred in connection therewith. The exercise of
      one right or remedy by Landlord shall not in any way impair its right to
      any other right or remedy. Should Tenant consist of more than one person
      or entity, they shall be jointly and severally liable on this Lease.

18.0  LIABILITY OF LANDLORD

18.1  Tenant's Right to Cure; Limitations on Liability. If Landlord shall fail
      to keep or perform any of its obligations under the Lease in respect to
      the making of any payment to Tenant or the performance of any other
      obligation hereunder, and upon the continuance of such failure on
      Landlord's part for thirty (30) days after the delivery to Landlord and
      any mortgagee of written notice of such default (or, in the case of any
      such failure which cannot reasonably be cured within thirty (30) days,
      within such additional period, if any, as may be reasonably required by
      Landlord to cure such failure, provided Landlord has

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      promptly commenced such cure and thereafter continuously prosecutes such
      cure with all due diligence), and without waiving or releasing Landlord
      from any obligation, then Tenant may (but is under no obligation to) (i)
      in the event of Landlord's failure to restore the Premises in accordance
      with Section 10.1, terminate this Lease without incurring any termination
      fee if Tenant's use of the Premises or a substantial portion thereof for
      Tenant's normal business operations has been materially and adversely
      affected or (ii) in the event of Landlord's failure to perform any
      required maintenance or. repair of the Premises, make such payment or
      perform such obligation, and all sums actually paid or incurred by Tenant
      in connection therewith shall reduce the Operating Expenses otherwise
      payable by Tenant under this Lease, or (iii) pursue any other remedies
      available to Tenant at law and in equity to cause Landlord to cure such
      default or to recover damages attributable to Landlord's breach.
      Landlord's (which term includes Landlord's partners, co-ventures, co-
      Tenants, officers, directors, employees, agents (including any property
      manager for the Property), or representatives, all of whom have the
      authority to act on Landlord's behalf) liability to Tenant for any such
      default shall be limited to its ownership interest in the Premises or the
      proceeds of a public sale of such interest pursuant to foreclosure of a
      judgment against Landlord, plus any insurance proceeds actually received
      by Landlord with reference to the Premises and not expended on the
      Premises or to pay claims covered by such proceeds and the net proceeds of
      any sale or refinancing of the Premises. Landlord shall not be liable for
      any deficiency beyond its interest in the Premises and the amount of such
      insurance proceeds; provided, however, that nothing set forth herein shall
      prevent Tenant from seeking specific performance, declaratory relief or
      other equitable relief with respect to the enforcement of any obligation
      of Landlord under this Lease.

18.2  Release or Transfer; Successor Liability. If the original Landlord
      hereunder or any successor owner of the Premises shall transfer its
      interest in the Premises and the transferee shall assume in writing the
      performance of Landlord's obligations under the Lease from and after the
      date of the transfer, then from and after the effective date of the
      transfer, such individual or entity shall be released from all obligations
      under this Lease, except those already accrued. If such individual or
      entity transfers the security deposit to the transferee, such individual
      or entity shall be discharged from any further liability in reference
      thereto. Tenant acknowledges that any successor to Landlord's interest in
      the Premises pursuant to sale or foreclosure under any deed of trust or
      mortgage shall not be bound by any agreement between Landlord and Tenant
      which has not been approved by the holder of such instrument, including
      without limitation, any agreement relating to any advance rents or
      security deposits paid by Tenant in excess of an amount equal to two
      months' rent.

19.0  ATTORNEYS' FEES

19.1  Right to Recover. If as a result of any breach or default in the
      performance of any of the provisions of this Lease, Landlord or Tenant
      uses the services of an attorney in order to secure compliance with such
      provisions or recover damages therefor, or to terminate this Lease or, in
      the case of Landlord to evict Tenant, the defaulting party shall reimburse
      the non-defaulting party upon demand for any and all reasonable attorneys'
      fees and expenses so incurred by the non-defaulting party.

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20.0  INTERPRETATION

20.1  Captions. The captions in this Lease are for convenience only and are not
      a part of this Lease and do not in any way define, limit, describe or
      amplify the terms and provisions of this Lease or the scope or intent
      thereof.

20.2  Entire Agreement. This Lease represents the entire agreement between the
      parties hereto and there are no collateral or oral agreements or
      understandings between Landlord and Tenant with respect to the Premises.
      No right, easements or licenses are acquired in the Premises or any land
      adjacent to the Premises by Tenant by implication or otherwise. There are
      no representations between Landlord and Tenant other than those contained
      in this Lease and all reliance with respect to any representations is
      solely upon the representations contained in tills Lease. All implied
      warranties, including implied warranties of merchantability and fitness,
      are excluded. This Lease shall not be modified in any manner except by an
      instrument in writing executed by the parties. The masculine (or neuter)
      pronoun, singular number, shall include the masculine, feminine and neuter
      genders and the singular and plural number.

20.3  Exhibits. Each writing or plan referred to herein as being attached hereto
      as an Exhibit or otherwise designated herein as an Exhibit hereto is
      hereby made a part hereof.

20.4  Severability; Governing Law. If any provision of this Lease shall be
      declared unenforceable in any respect, such unenforceability shall not
      affect any other provision of this Lease, and each such provision shall be
      deemed to be enforceable and to preserve to the extent possible the intent
      of the parties as set forth herein. This Lease shall be construed and
      enforced in accordance with the laws of the State of California.

21.0  NOTICES

21.1  Methods. Any notice or other communication under this Lease by either
      party to the other shall be in writing and shall be delivered personally
      or by private messenger service, or by overnight commercial delivery
      service, or by certified mail, return receipt requested, postage prepaid,
      and addressed to the parties at the addresses specified in Section 1.2
      hereof, or to such other places as Landlord and Tenant may from time to
      time designate by written notice to the other party. All such notices and
      other communications shall be deemed delivered, given and received: (a)
      the day of sending via personal delivery or private messenger service; (b)
      the following business day after sending via overnight commercial delivery
      service; or (c) three (3) calendar days after deposit in the United States
      mail.

22.0  GOOD FAITH DEPOSIT

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22.1  Application of Deposit. Landlord presently holds Tenant's security deposit
      in the amount of One Hundred Fifty Thousand Dollars ($150,000), plus
      accrued interest, under the terms of Tenant's current lease of the office
      building located at 20 Davis Drive, Belmont, California, which lease
      expires on December 31, 1995, and a good faith deposit in the amount of
      Thirty Thousand Dollars ($30,000) delivered to Landlord upon execution of
      that certain letter of intent, dated November 9, 1995, with respect to the
      lease by Tenant of the Premises and the 20 Davis Drive office building.
      Landlord shall return to Tenant upon expiration of the current lease that
      portion of the security deposit which, when added to the good faith
      deposit, exceeds one month's aggregate Base Monthly Rent under the terms
      of this Lease and the lease executed simultaneously herewith with respect
      to the 20 Davis Drive premises. Seventy-Nine Thousand One Hundred Forty
      Dollars ($79,140.00) shall be applied in payment of the first Base Monthly
      Rent due and payable under the terms of this Lease and the balance shall
      be applied in payment of the first Base Monthly Rent due and payable under
      the terms of the lease of the 20 Davis Drive premises.

23.0  RULES AND REGULATIONS

23.1  Tenant shall faithfully observe and comply with the rules and regulations
      which are attached hereto as Exhibit "D" and made a part of this Lease and
      all modifications of and additions thereto from time to time put into
      effect by Landlord of which Tenant shall have notice.

24.0  PARKING

24.1  Tenant shall have the exclusive right to use and control the use of all of
      the parking spaces located on the Property, including the right to assign
      specific parking spaces to designated individuals, other than the
      seventeen (17) parking spaces located adjacent to Eleven Davis Drive
      identified by cross-hatching on the site plan attached hereto as Exhibit
      "B" which shall be reserved for the exclusive use of the tenant of Eleven
      Davis Drive. In doing so, Tenant shall comply at all times during the term
      of the Lease with all handicapped and other parking requirements which may
      be imposed from time to time by the City of Belmont or any other
      governmental entity having jurisdiction with respect to parking on the
      Property.

25.0  SIGNAGE; SATELLITE DISH

25.1  Signage. Tenant shall have the right to install monument and building
      signs on the Premises, which signs shall comply with all requirements
      imposed by the City of Belmont and shall be subject to the reasonable
      approval of Landlord. Except to the extent paid for from the Tenant
      Improvement Allowance, Tenant shall bear all costs associated with the
      installation of such signage.

25.2  Satellite Dish. Tenant shall have the right, at Tenant's sole cost, to
      install a satellite dish on the roof of the Premises, provided that Tenant
      shall have obtained all required governmental approvals and shall

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<PAGE>

      otherwise install the satellite dish in accordance with the provisions of
      all applicable laws. In the event Landlord installs any other electronic
      transmitter or receiver on the roof of the Premises, such transmitter or
      receiver shall not interfere with the operation of Tenant's satellite
      dish, shall be separately metered for utility purposes and shall not cause
      any increase in Operating Expenses under this Lease.

26.0  OPTION TO EXTEND TERM.

26.1  Condition to Exercise. Tenant shall have two (2) options to extend the
      Term of the Lease (each, an "option" and collectively, the "options") for
      consecutive periods of five (5) years each (each, an "Option Period"); the
      first Option Period shall commence, if at all, on the day immediately
      succeeding the last day of the initial Term (the "Term Expiration Date").
      Tenant's right to exercise each option shall be subject to the following
      conditions:

      (a)  Each option shall be exercised by notice of exercise given to
      Landlord (1) in the case of the first Option Period, not sooner than the
      day which is fifteen (15) months prior to the Term Expiration Date nor
      later than the day which one (1) year prior to the Term Expiration Date,
      and (2) in the case of the second Option Period, not sooner than the day
      which is fifteen (15) months prior to the last day of the first Option
      Period nor later than the day which is one (1) year prior to the last day
      of the first Option Period.

      (b)  At the time an option is exercised, and at the commencement of the
      applicable Option Period, the Lease shall be in full force and effect and
      Tenant shall not then be in default thereunder and, as to the second
      option, the first option shall have been exercised.

      (c)  At the time an option is exercised, and at the commencement of the
      applicable Option Period, Tenant shall have a net worth which is not less
      than one-half of Tenant's net worth as of the date of this Lease.

26.2  Terms of Option. In the event an option is timely exercised, the Lease
      shall be extended for the term of the applicable Option Period upon all of
      the terms and conditions of the Lease; provided that the Base Monthly Rent
      for each Option Period shall be an amount equal to the "Fair Market Rent"
      for the Premises; and further provided that Tenant shall not be entitled
      to any additional Tenant Improvement Allowance or similar allowance. For
      purposes hereof, the "Fair Market Rent" shall mean the effective triple-
      net rate being received by owners of similar single occupancy buildings in
      the vicinity (i.e., of a similar age and quality considering any recent
      renovations or modernization and floor plate size; or, if such comparable
      space is not available, adjustments shall be made in the determination of
      Fair Market Rent to reflect the age and quality of the Premises as
      contrasted to other buildings used for comparison purposes), with similar
      amenities, taking into consideration: location, leasehold improvements or
      allowances provided or to be provided, proposed term of the lease, extent
      of services to be provided, the financial qualifications of the tenant,
      the time the particular rate under consideration became or is to become
      effective, and any other relevant terms or conditions applicable to both
      new and renewing tenants, but excluding any consideration of the
      improvements to the Premises paid for by Tenant after

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<PAGE>

      the Commencement Date of the Term. In no event, however, shall any
      adjustment of Base Monthly Rent pursuant to this section result in a Base
      Monthly Rent for any year of the first Option Period that is less than the
      Base Monthly Rent in effect during the final month of the initial Term, or
      a Base Monthly Rent for any year of the second Option Period that is less
      than the Base Monthly Rent in effect during the final month of the first
      Option Period.

26.3  Establishment of Base Monthly Rent.

      (a)  For each Option Period, within thirty (30) days after receipt of
      Tenant's notice of exercise, Landlord shall notify Tenant in writing of
      Landlord's estimate of the Base Monthly Rent for each year of the
      applicable Option Period, based on the provisions of Section 26.2 above.
      Within thirty (30) days after receipt of such notice from Landlord, Tenant
      shall have the right either to (i) elect to cancel the notice of exercise
      by written notice to Landlord; (ii) accept Landlord's statement of Base
      Monthly Rent as the Base Monthly Rent for the applicable Option Period: or
      (iii) elect to determine the Base Monthly Rent for each year of the Option
      Period pursuant to the "Negotiation/Appraisal Method" set forth below.
      Failure on the part of Tenant to cancel the notice of exercise or to
      require determination of the Base Monthly Rent for the applicable Option
      Period within said thirty (30) day period shall constitute acceptance of
      the Base Monthly Rent for the applicable Option Period as calculated by
      Landlord. To the extent that the determination of Base Monthly Rent for
      the Option Period has not been completed prior to the commencement of the
      Option Period, Tenant shall pay Base Monthly Rent at the rate calculated
      by Landlord, with an adjustment (if applicable) to be made once the Fair
      Market Rent is ultimately determined pursuant to the provisions hereof.

      (b)  The "Negotiation/Appraisal Method" of determining the Base Monthly
      Rent for an Option Period shall consist of the following:

           (i)  During the period commencing with Tenant's election to use the
           Negotiation/Appraisal Method and ending ten (10) days thereafter (the
           "First Negotiation Period"), Landlord and Tenant may, but shall not
           be obligated to, negotiate the subject Base Monthly Rent. If the
           parties agree on such abase Monthly Rent and have executed a written
           agreement establishing the same prior to the expiration of the First
           Negotiation Period, then said Base Monthly Rent shall be binding upon
           the parties. If the parties have not executed such an agreement prior
           to the expiration of the First Negotiation Period, then Tenant shall,
           within fifteen (15) days after the expiration of the First
           Negotiation Period, (1) engage an appraiser ("Tenant's Appraiser"),
           who shall be a member of the American Institute of Real Estate
           Appraisers and familiar with the Fair Market Rent of first-class
           office space in San Mateo County, California, and (2) notify Landlord
           thereof. If Tenant does not engage such appraiser within such fifteen
           (15) day period, then the Base Monthly Rent initially proposed by
           Landlord pursuant to Section 26.3(a) above shall be deemed the
           Minimum Monthly Rent for the applicable Option Period and shall be
           binding upon the parties. If Tenant engages such an appraiser within
           such fifteen (15) day period, then Tenant shall, within thirty (30)
           days after the expiration of the First Negotiation Period, deliver to
           Landlord a copy of Tenant's Appraiser's determination of Fair Market
           Rent for each year of the applicable Option Period. If Tenant fails
           to so deliver a copy of Tenant's Appraiser's determination within
           such thirty (30) day period, then the Base Monthly Rent

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<PAGE>

           initially proposed by Landlord pursuant to Section 26.3(a) above
           shall be deemed the Base Monthly Rent for the applicable Option
           Period and shall be binding upon the parties.

           (ii)  If the Base Monthly Rent for each year of the applicable Option
           Period has not been determined by the date which is thirty (30) days
           after the expiration of the First Negotiation Period, then during the
           following ten (10) days (the "Second Negotiation Period") Landlord
           and Tenant may, but shall not be obligated to, negotiate the subject
           Base Monthly Rent. If the parties agree on such a Base Monthly Rent
           and have executed a written agreement establishing the same prior to
           the expiration of the Second Negotiation Period, then said Base
           Monthly Rent shall be binding upon the parties. If the parties have
           not executed Such an agreement prior to the expiration of the Second
           Negotiation Period, then Landlord shall, within fifteen (15) days
           after the expiration of the Second Negotiation Period, (1) engage an
           appraiser ("Landlord's Appraiser") who shall have qualifications
           which satisfy the requirements set forth above for Tenant's
           Appraiser, and (2) notify Tenant thereof. If Landlord does not engage
           such an appraiser within such fifteen (15) day period, then the Fair
           Market Rent proposed by Tenant's Appraiser shall be deemed the Base
           Monthly Rent for the applicable Option Period and shall be binding
           upon the parties. If Landlord engages such an appraiser within such
           fifteen (15) day period, then Landlord shall, with in thirty (30)
           days after the expiration of the Second Negotiation Period, deliver
           to Tenant a copy of Landlord's Appraiser's determination of Fair
           Market Rent for each year of the applicable Option Period. If
           Landlord fails to so deliver a copy of Landlord's Appraiser's
           determination within such thirty (30) day period, then the Pair
           Market Rent Proposed by Tenant's Appraiser shall be deemed the Base
           Monthly Rent for the applicable Option Period and shall be binding
           upon the parties.

           (iii) If the Base Monthly Rent for each year of the applicable Option
           Period has not been determined by the date which is thirty (30) days
           after the expiration of the Second Negotiation Period, then during
           the following ten (10) days (the "Third Negotiation Period") Landlord
           and Tenant may, but shall not be obligated to, negotiate the subject
           Base Monthly Rent. If the parties agree on such a Base Monthly Rent
           and have executed a written agreement establishing the same prior to
           the expiration of the Third Negotiation Period, then said Base
           Monthly Rent shall be binding upon the parties. If the parties have
           not executed such an agreement prior to the expiration of the Third
           Negotiation Period, then Tenant's Appraiser and Landlord's Appraiser
           shall, within fifteen (15) days after the expiration of the Third
           Negotiation Period, (1) appoint a third appraiser (the "Third
           Appraiser") who shall have qualifications which satisfy the
           requirements set forth above for Tenant's Appraiser, and (2) notify
           Landlord and Tenant of their appointment. If Tenant's Appraiser and
           Landlord's Appraiser shall be unable to timely agree on the
           appointment of the Third Appraiser, then either Landlord or Tenant,
           on behalf of both, may request such an appointment by the American
           Arbitration Association. Within twenty (20) days after the
           appointment of the Third Appraiser, the Third Appraiser shall
           determine the Fair Market Rent for each year of the applicable Option
           Period by selecting either (A) the Pair Market Rent determined by
           Tenant's Appraiser pursuant to clause (i) above, or (B) the Fair
           Market Rent determined by Landlord's Appraiser pursuant to clause
           (ii) above, whichever most closely approximates the Third Appraiser's
           determination of Fair Market Rent for each year of

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<PAGE>

           the applicable Option Period. The Third Appraiser shall have no right
           to propose a middle ground or any modification of either of the two
           proposed determinations. The determination he or she chooses as most
           closely approximating his or her determination shall constitute the
           decision of the app, raisers and such amount shall be final and
           binding upon the parties as the Base Monthly Rent for each year of
           the applicable Option Period.

           (iv)  Each party shall pay the fees and expenses of its respective
           appraiser (if any) and both shall share equally the fees and expenses
           of the Third Appraiser (if any). In the event any of the dates set
           forth in this Section 26.3(b) occur on a Saturday, Sunday, or federal
           holiday, then the time for performance shall be extended to the next
           business day.

           (v)   Notwithstanding any provisions of this Section 26.3(b) to the
           contrary, Tenant shall have (he right at any time on or before the
           date which is nine (9) months prior to the expiration of the then
           current term of the Lease to cancel its notice of exercise by
           delivery of written notice of cancellation to Landlord.

27.0  FIRST RIGHT OF OFFER

27.1  Terms. In the event Landlord decides to sell the Property during the Term
      of the Lease (including any Option Period and provided that Tenant is not
      then in default under the Lease, Landlord shall give Tenant written notice
      of Landlord's desire to sell and the terms, including the purchase price,
      which price shall be net of all sales commissions, upon which Landlord is
      willing to sell the Property ("Landlord's Notice") prior to offering the
      Property for sale to any other person or entity. Tenant shall have a
      period of thirty (30) days following receipt of Landlord's Notice in which
      to notify Landlord of Tenant's interest in purchasing the Property
      substantially on the terms set forth in Landlord's Notice ("Tenant's
      Notice"). The parties shall then enter into good faith negotiations with
      respect to all of the terms of purchase, which shall be set forth in a
      separate Purchase and Sale Agreement. In the event Landlord and Tenant
      fail to enter into a binding Purchase and Sale Agreement on terms
      acceptable to both parties within thirty (30) days following delivery of
      Tenant's Notice to Landlord or in the event Tenant elects not to purchase
      the Property or fails to respond to Landlord's Notice within the thirty
      (30) day period following receipt thereof Landlord shall have the right to
      sell the Property to a third party for a purchase price, after deduction
      of any applicable commissions, which is not less than 90% of the purchase
      price set forth in Landlord's Notice and otherwise on terms substantially
      no less favorable to Landlord than those set forth in Landlord's Notice
      without again offering the Property to Tenant. Tenant shall have the right
      to assign its rights under the terms of any Purchase and Sale Agreement
      executed by Landlord and Tenant pursuant to the provisions of this Section
      27.1 to any assignee, provided that Tenant shall not be relieved of any
      liability thereunder for the failure of its assignee to perform the terms
      of the Agreement. In addition, Tenant shall agree to cooperate with
      Landlord in effecting, at no cost to Tenant, a tax-deferred exchange of
      the Property qualifying as such under the terms of Section 1031 of the
      Internal Revenue Code.

28.0  RIGHT OF FIRST REFUSAL

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<PAGE>

28.1  Terms. Tenant shall have a right of first refusal to lease the
      approximately 8,450 rentable square foot warehouse building located
      adjacent to the Premises, having a street address of Eleven Davis Drive,
      Belmont, California (the "Warehouse"). If, at any time during the Lease
      Term, Landlord receives a bona fide offer from a third party to lease the
      Warehouse, Landlord must give Tenant notice of its intent to lease and the
      terms upon which it proposes to lease. Tenant shall then have five (5)
      days in which to accept or reject Landlord's offer to lease. In the event
      Tenant fails to give written notice of its acceptance to Landlord prior to
      the close of business on the fifth day following receipt of the offer, the
      offer shall expire and Landlord shall have the right to rent the offered
      space to any other person or entity on terms not less favorable than those
      contained in the offer. In the event Landlord fails to enter into a lease
      with another tenant for such space within six months following the date of
      the offer, Landlord must again offer the space to Tenant prior to entering
      into a lease with any other party.

29.0  REASONABLENESS STANDARD

29.1  In any instance under this Lease where a party proposing to take some
      action is required to obtain the consent or approval of the other party,
      the party whose consent or approval is required agrees that such consent
      or approval shall not be unreasonably withheld or delayed unless otherwise
      expressly set forth herein. Tenant agrees that with respect to assignments
      or subleases, it would be reasonable for Landlord to withhold its consent
      if the proposed assignee (a) would make a more intensive or burdensome use
      of the Premises than Tenant's use thereof, or (b) did not have adequate
      financial capacity to perform the obligations of Tenant under the Lease.

30.0  BROKERAGE COMMISSIONS

30.1  Landlord and Tenant each represents and warrants to the other that it has
      dealt with no broker, agent or other person in connection with this
      transaction and that no broker, agent or other person brought about this
      transaction, other than Landlord's Broker and the Cooperating Broker
      identified in Section 1.13, and Landlord and Tenet each agrees to
      indemnify and hold the other harmless from and against any claims by any
      other broker, agent or other person claiming a commission or other form of
      compensation by virtue of having dealt with the indemnifying party with
      regard to this leasing transaction. The provisions of this Section shall
      survive the termination of this Lease.

31.0  MISCELLANEOUS

31.1  Time is of the essence of this Lease and each and all of its provisions.
      Submission of this instrument for examination Or signature by Tenant does
      not constitute a reservation of or option for lease, and it is not
      effective as a lease or otherwise until execution and delivery by both
      Landlord and Tenant. The agreements, conditions and provisions herein
      contained shall, subject to the provisions as to assignment, apply to and
      bind the heirs, executors, administrators, successors and assigns of the
      parties hereto. The voluntary or other surrender of this Lease by Tenant,
      or a mutual cancellation thereof, shall not work

                                      34
<PAGE>

      a merger, and shall, at the option of Landlord, terminate all or any
      existing subleases or subtenancies, or operate as an assignment to it of
      any or all such subleases or subtenancies, if Tenant signs as a
      corporation, each of the persons executing this Lease on behalf of Tenant
      warrants that Tenant is a duly authorized and existing corporation, that
      Tenant has and is qualified to do business in California, that the
      corporation has full right, and authority to enter into this Lease, and
      that each of the persons signing on behalf of the corporation are
      authorized to do so; if so requested by Landlord, Tenant shall deliver to
      Landlord a corporate resolution to this effect.

31.2  If requested by Tenant, Landlord and Tenant shall execute and cause to be
      recorded in the Official Records of San Mateo County, California, a
      memorandum of this Lease in a form reasonably acceptable to both Landlord
      and Tenant.

          IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the respective dates set forth below.

LANDLORD: DAVIS ASSOCIATES, a California limited partnership

          By:  /s/ ^^^
             ----------------------------
             General Partner

Date of Execution by Landlord:  12.21.95
                                ----------------

TENANT:   ORACLE CORPORATION, a Delaware corporation

          By:   /s/ Bruce Lange
              ----------------------------------
          Its:      BRUCE LANGE
              ----------------------------------
                VP AND CORPORATE TREASURER

Date of Execution by Tenant:   12/21/95
                               -----------------

                                      35
<PAGE>

               EXHIBIT A                            FOUNDERS TITLE COMPANY
               ---------
          LEGAL DESCRIPTION                         ORDER NO. 153322
           ONE DAVIS DRIVE                            Run-to-Date

The land referred to in this Report is situated in the County of San Mateo, City
                                                                 ---------------
of Belmont, State of California, and is described as follows:
-----------

A portion of Lot 1, as delineated upon that certain Map entitled "RALSTON PARK
SUBDIVISION, BELMONT, SAN MATED COUNTY, CALIFORNIA", filed for record in the
Office Of the Recorder of the County of San Mateo, State of California, on
February 10th, 1965 in Book 61 of Maps, at Page 37, said portion of Lot 1, being
more particularly described as follows:

BEGINNING at the most Northerly corner of said Got l; thence from said point of
beginning along the most Northerly line of said Lot 1 South 75 52' 04" East
363.78 feet; thence tangent to the preceding course along the arc of a curve to
the left having a radius of 1250 feet and a central angle of 0 degrees 37' 06",
an arc length of 13.49 feet; thence South l0 degrees 04' 26" West 41.89 feet;
thence South 79 degrees 55' 34" East 45.00 feet; thence North 10 degrees 04' 26"
East 40.00 feet; thence from a tangent that bears South 78 degrees 33' 02" East,
along the arc of a curve to the left having a radius of 1250 feet and a central
angle of 3 degrees 33' 31", an arc length of 77.64 feet; thence leaving said
Northerly line South 2 degrees 38' 36" West 338.22 feet to a point on the
Northerly line of Davis Drive as shown on the herein described Map; thence from
said point along said Northerly line South 76 degrees 25' 44" West 234.24 feet;
thence tangent to the preceding course along the arc of a curve to the right
having a radius of 50 feet and a central angle of 33 degrees 21' 19", an arc
length of 29.11 feet; thence tangent to the preceding curve North 70 degrees 12'
57"West 36.80 feet; thence tangent to the preceding course along the arc of a
curve to the right having a radius of 50 feet and a central angle of 48 degrees
11' 23", an act length of 42.05 feet; thence tangent to the preceding curve
North 22 degrees 01' 34" West 420.56 feet; thence tangent to the preceding
course along the arc of a curve to the right having a radius of 50 feet and a
central angle of 31 degrees 54'30", an arc length of 27.85 feet; thence tangent
to the preceding course North9 degrees 52' 56" East 40.33 feet; thence tangent
to the preceding course along the arc of a curve to the right having a radius of
22 feet and a central angle of 23 degrees44' 29", an arc length of 9.12 feet to
the point of beginning.

EXCEPTING THEREFROM an area Deeded to the City of Belmont for Ralston Avenue
Widening described as follows:

BEGINNING at the above described point of beginning of Parcel I; thence from
said point of beginning along the Northerly line of said Parcel I, South 75
degrees 52' 04" East 237.10 feet; thence leaving said Northerly line North 77
degrees 52' 04" West 168.67 feet; thence along the arc of a curve to the right,
tangent to the preceding course, having a radius of 1006.50 feet through a
central angle of 2 degrees 00' 00", an arc length of 35.13 feet; thence tangent
to the preceding curve North 75 degrees S2' 04" West 15.13 feet; thence along
the arc of a curve to the left, tangent to the preceding course, having a radius
of 21.50 feet and a central angle of 61 degrees 09' 52", an arc length of 22.95
feet to a point of cusp on the Easterly line of Davis Drive as shown on the
herein described Map; thence along said Easterly line in a Northerly direction
North 9 degrees 52' 56" East 8.68 feet;

                           Page   2  of   8  Pages
                                ----    ----
<PAGE>

                                                         FOUNDERS TITLE COMPANY

                                                         ORDER NO. 153322
                                                         Run-to-Date

thence along the arc of a curve to the right, tangent to the preceding course,
having a radius of 22.00 feet and a central angle 23 degrees 44' 29", an arc
length of 9.12 feet to the point of beginning.

A.P.N. 043-340-130                      J.P.N. 43-34-340-13

                           Page   3  of   8  Pages
                                ----    ----
<PAGE>

SITE PLAN
--------------------------------------------------------------------------------

          [DIAGRAM APPEARS HERE]                    EXHIBIT B
                                                    ---------

                                                    One Davis Drive
<PAGE>

                             CONSTRUCTION AGREEMENT
                                      FOR
                             INTERIOR IMPROVEMENTS
                                       IN

                             ----------------------
                             __________, CALIFORNIA

                               _________, 199__

                                   EXHIBIT C
<PAGE>

                               TABLE OF CONTENTS

                                                                Page
                                                                ----

<TABLE>
<S>     <C>                                                    <C>
A.      The Work and the Contract Documents.....................   1

B.      Cost of the work........................................   1

C.      Commencement of the Work................................   6

D.      Time of Substantial Completion..........................   8

E.      Force Majeure: Damages for Delays.......................   8

F.      Contractor's Duties and Status..........................   9

G.      Change Orders...........................................  12

H.      Progress Payments.......................................  13

I.      Substantial Completion Procedures and Payments..........  17

J.      Mechanic's Liens........................................  19

K.      Insurance...............................................  20

L.      Contractor's Warranties.................................  23

M.      Owner's Occupancy Before Completion of Work.............  25

N.      Termination of Agreement................................  25

O.      General Provisions......................................  27
        1.  Assignment..........................................  27
        2.  Notices.............................................  27
        3.  Complete Agreement..................................  28
        4.  Successors..........................................  28
        5.  Governing Law.......................................  28
        6.  Remedies............................................  28
        7.  No Waiver...........................................  28
        8.  Governing Contract Documents........................  28
        9.  Contractor's Notice.................................  29
        10. Subcontract Work....................................  29
        11. Status of Architect.................................  29
        12. Confidentiality.....................................  30
        13. Attorneys' Fees.....................................  30
</TABLE>

                                       i
<PAGE>

                             CONSTRUCTION AGREEMENT

     THIS CONSTRUCTION AGREEMENT is made as of the __ day of _________________,
199 __  by and between ORACLE CORPORATION, a Delaware corporation (hereinafter
"Owner"), and ________________ ,a ___________________ corporation (hereinafter
"Contractor"), with respect to the construction of the interior improvements in
the building located at ______________________ in ____________, California (the
"Building"), which Building contains approximately __________________rentable
square feet of space. The construction and completion of the interior
improvements for the Building pursuant to this Agreement is referred to as the
"Project". The Architect for the Project is _______________ (hereinafter called
"Architect").

     A.  The Work and the Contract Documents. Contractor agrees to provide all
         -----------------------------------
labor, materials, supplies, appliances, tools, equipment and supervision and to
do all things necessary to construct and complete the interior improvements for
the Building as described in and reasonably inferable from the plans and
specifications identified in Exhibit A attached hereto (the "Work"). This
                             ---------
Agreement, including all exhibits hereto, the drawings, plans, specifications,
and any addenda or amendments thereto, together with all Change Orders, are
sometimes referred to collectively herein as the "Contract Documents."

     B.   Cost of the Work.
          ----------------

          1.  Owner shall reimburse Contractor for the "Cost of the Work" (as
defined in Paragraph B.6 below) plus a fee ("Contractor's Fee") determined as
provided in Paragraph B.4 below. Contractor guarantees that the maximum price to
the Owner for the Cost of the Work and the Contractor's Fee, subject to
authorized adjustments, shall not exceed the sum of _________ Dollars ($______),
which sum shall be called the Guaranteed Maximum Price, hereinafter sometimes
referred to as the "GMP."

          2.  A contingency fund (the "Contingency Fund") in the amount of
___________________ Dollars ($ ______) is included in the Guaranteed Maximum
Price; this represents _________ percent (______%) of the estimated Cost of
the Work. The Contingency Fund shall be administered jointly by Owner and
Contractor; however, Owner shall not unreasonably withhold approvals of
withdrawals from the Contingency Fund. This Contingency Fund shall not be used
for changes in the Scope of Work (as defined in Article G below) or for upgrades
in the quality of finishes, nor shall the Contingency Fund be used for the
convenience of Contractor in the ordinary scheduling or execution of the Work.
General examples of the use of the Contingency Fund are as follows:

              (a) Coordination items necessary for a complete Project and
inadvertently missed in the Exhibit A documents by
                            ---------
<PAGE>

Architect or other consultants. Examples include items not shown on plans and/or
in specifications which cause a "gap" between subcontractor scope of work or
"gap" between general contractor and subcontractor work and items which are
shown incorrectly, or are impractical, in the plans and/or specifications and
must be modified at a cost.

              (b) Building costs associated with Fire Department plan check
revisions, or compliance with local interpretation of the building/fire codes.

          3.  Allowances for items of equipment and materials are included in
the Guaranteed Maximum Price to the extent the Contract Documents are not
sufficiently specific to permit Subcontractor or vendor pricing for such items.
From time to time after commencement of performance of the Work, Owner shall
cause plans and specifications for the Allowances, or portions thereof, to be
delivered to Contractor. Such plans and specifications shall be deemed to be
part of the Contract Documents. Contractor shall obtain bids for all Allowance
items in accordance with the procedure set forth in Paragraph O.10 below. If the
actual Cost of the Work with respect to an item covered by an Allowance is
greater than the Allowance, the Contractor shall be paid the actual Cost of the
Work for such item, plus a profit and overhead fee equal to ______ percent (_%)
of the amount by which the actual Cost of the Work for that item exceeds the
Allowance for the item. The Guaranteed Maximum Price shall be increased by the
aggregate amount of such excess costs and fees. If the Cost of the Work for an
item is less than the Allowance for that item, the Guaranteed Maximum Price
shall be decreased by the aggregate of the difference between the Allowance and
the actual Cost of the Work for such item, plus ______ percent (___%) of the
amount by which the Allowance for such item exceeds the actual Cost of the Work
for the item (representing the decrease in the Contractor's profit and overhead
fee). Any such increases or decreases in the Guaranteed Maximum Price and
payments relating thereto shall be confirmed in a Change Order pursuant to the
provisions of Article G below.

          4.  In consideration of the performance of this Agreement, Owner
agrees to pay to Contractor in current funds as compensation for his services a
Contractor's Fee equal to _____ percent (__%) of the total Cost of the Work,
subject to the Guaranteed Maximum Price provisions of Paragraph B.1 above. The
Contractor's Fee will be payable in pro rata installments as payments for Cost
of the Work are made to Contractor, pursuant to the progress payment provisions
of Article H below.

          5.  In the event the Cost of the Work plus the Contractor's Fee shall
equal a sum which is less than the Guaranteed Maximum Price, as adjusted
pursuant to the terms of this Agreement, the resulting savings shall be
returned _____ percent ( ___%) to the Owner and percent (____%) to the
Contractor.

                                       2
<PAGE>

          6.  The term "Cost of the Work" shall mean only the following costs
necessarily incurred by Contractor in the proper performance of the Work at
rates no higher than the standard paid at the place of the Project, except
with the prior written consent of Owner:

              (a) Application, permit, license, and testing fees required to
commence and perform the Work, with the exception of testing fees related to
defective or nonconforming Work.

              (b) Losses, expenses, damages and costs reasonably sustained or
incurred in connection with the Work, when not compensated by insurance or
otherwise, and lost deposits (including deposits, lost by reasons of settlement
of disputes related to such deposits), which are sustained by the Contractor in
connection with the Work, but excluding all such losses, expenses, damages and
costs caused by Contractor's (or any supervisory, administrative, managerial or
other personnel of Contractor) negligence, willful misconduct or breach of this
Agreement and warranty repair work required of Contractor by this Agreement.

              (c) Rental charges of all machinery and equipment, exclusive of
hand tools, used for the performance of the Work, whether rented from the
Contractor or others, including installations, repairs and replacements,
dismantling, removal, and cost of lubrication, transportation and delivery
thereof. Notwithstanding the foregoing, any machinery or equipment rented by
Contractor shall be subject to the prior written approval of Owner. The rental
rates for such machinery and equipment shall not exceed eighty percent (80%) of
the blue book rates, and the total rental charges for any such machinery and
equipment shall not exceed the market value of such items.

              (d) All sales, use, gross receipts and other taxes related to the
Work or purchases made in connection therewith which are imposed by any
governmental authority and for which Contractor is liable.

              (e) A pro rata portion, up to an agreed maximum percentage, of
premiums on all bonds and insurance policies to be furnished by Contractor under
this Agreement, with respect to the period of time Contractor is performing the
Work hereunder and taking into consideration other projects of the Contractor
being performed simultaneously with the Work.

              (f) The reasonable travel expenses of the Contractor or employees
of the Contractor outside the counties of San Mateo, San Francisco, Santa Clara
and Alameda, incurred in the discharge of duties related to the performance of
the Work (other than travel between the Project site and the Contractor's main
office or any employee's home), if approved in advance by Owner.

                                       3
<PAGE>

              (g) The following costs incurred by Contractor, as specified in
the Schedule of General Conditions attached hereto as Exhibit B:
                                                      ---------

                  (i)    All labor costs with respect to personnel in the direct
employment of Contractor in the performance of the Work, including such standard
fringe benefits as employee group insurance coverage, employer payroll taxes,
workers' compensation premiums, and other similar costs related thereto.

                  (ii)   Salaries and related standard fringe benefits of
Contractor's employees working solely at the field office, either full-time or
part-time and in whatever capacity employed, covering such portion of their time
as they have devoted to the Work.

                  (iii)  Costs of utilities and all materials, supplies and
equipment used in connection with or incorporated into the Work, including costs
of transportation and storage thereof.

                  (iv)   Costs, including transportation and maintenance, of all
materials, supplies, equipment, temporary facilities and hand tools (other than
those owned by the workmen) which are employed or consumed in the performance of
the Work. All purchases of such materials, supplies, equipment, temporary
facilities and hand tools shall be recorded in a log maintained at the Project
site or Contractor's principal office and shall be subject to inspection by
Owner upon demand. Any such materials, supplies, equipment or tools which are
used, but not consumed, in the performance of the Work shall remain the property
of the Contractor upon completion of the Work; provided, however, that with
respect to any such equipment or tools which cost in excess of $2,000 and have a
useful life of more than one year, the cost of same shall be adjusted as
appropriate on the basis of their market value.

                  (v)    Miscellaneous expenses such as telegrams, facsimiles,
telephone services, express mail, and similar petty cash items related to the
Work and customarily incurred in projects of this nature.

                  (vi)   Costs (excluding promotional expenses, costs of safety
awards and incentives) incurred in connection with job safety requirements for
the performance of the Work such as handrails, ramps, barricades, warning
lights, and required scaffolding, and costs incurred due to an emergency
affecting the safety of persons or property.

                  (vii)  Costs of removal of debris and the final Building
clean-up.

                  (viii) Amounts due to all Subcontractors under subcontracts
related to the performance of the Work.

                                       4
<PAGE>

          7.  The term Cost of the Work shall not include any of the following:

              (a) Salaries of the off-site employees of Contractor.

              (b) Overhead or general expenses of any kind, except as may be
expressly provided otherwise in this Agreement.

              (c) Contractor's capital expenses, including interest on
Contractor's capital employed either in construction plants or in expenditures
on the Work, except as may be expressly provided otherwise in this Agreement.

              (d) Costs due to any warranty work required from Contractor
hereunder or due to the negligence or wilful misconduct of, or the breach of
this Agreement or any other agreement related to the Work by, the Contractor,
any Subcontractor, anyone directly or indirectly employed by any of them, or for
whose acts any of them may be liable, including, but not limited to, costs for
the correction of defective or nonconforming Work, disposal and replacement of
materials and equipment incorrectly ordered or supplied, making good any damage
to property or the Work, or repair of casualty losses not included in
Subparagraph B.6(b) above.

              (e) Costs in excess of the Guaranteed Maximum Price, as set forth
in Article B above and adjusted pursuant to Change Order.

              (f) Fines, penalties, assessments and other costs related to the
failure of Contractor or any Subcontractor to comply with any law, statute,
ordinance, code, rule or regulation applicable to the Work or its performance,
including, without limitation, the Federal Occupational Safety and Health Act,
federal and state fair employment laws, and federal and state wage and hours
laws.

              (g) Amounts to be paid by Contractor for federal, state or local
income and franchise taxes.

              (h) Increases in the Cost of the Work caused by events of Force
Majeure (as defined in Article E below), except to the extent otherwise provided
by way of Change Order in accordance with Articles E and G below.

              (i) Expenses of Contractor's principal office and offices other
than the site office.

              (j) Rental costs of machinery and equipment, except as expressly
provided in Paragraph B.6.

              (k) Any cost not specifically and expressly described in
Paragraph B.6.

                                       5
<PAGE>

              (l) Costs that would cause the GMP (as adjusted by approved
Change Orders) to be exceeded.

              (m) Cost of overtime premium required to meet the Construction
Schedule, unless approved by Change Order.

              (n) Cost of consultants unless approved by Owner in writing.

              (o) Salaries of corporate officers, directors, key administrators
or sales personnel of Contractor.

              (p)  Costs due to weather delays.

          8.  The following items shall be credited against the Cost of the Work
or shall be reimbursed by Contractor to Owner:

              (a) Proceeds of any sale by Contractor of surplus materials,
construction equipment, and temporary structures which have been charged to the
Cost of the Work (other than as a rental charge), whether such sale is made to
Owner, to Contractor, or to a third party, plus the fair market value of non-
expendable tools purchased by the Contractor.

              (b) Discounts earned by the Contractor through advanced or prompt
payments. The Contractor shall obtain all possible trade and time discounts on
bills for materials, supplies and equipment furnished, and shall pay said bills
within the discount periods, provided that Owner timely pays Contractor pursuant
to the terms of this Agreement.

              (c) The full amount of any deposits originally funded by or
charged to Owner which have been returned to the Contractor.

          9.  Contractor shall keep full and detailed accounts and exercise such
controls as may be necessary for proper financial management under this
Agreement, and Contractor's accounting and control systems shall be satisfactory
to Owner. Owner and Owner's accountants shall have access to Contractor's
records, books, correspondence, instructions, drawings, receipts, subcontracts,
purchase orders, vouchers, memoranda and other data relating to this Agreement,
and Contractor shall preserve such items for a period of three (3) years after
final payment, or for such longer period as may be required by law.

     C.   Commencement of the Work. The date the Work is commenced shall be
          ------------------------
known as the "Construction Commencement Date," and the Contractor shall
thereafter promptly execute the Work in a diligent manner.

          1.  The Work shall commence after all of the following conditions have
been satisfied and a separate document in the form of Exhibit C has been
                                                      ---------
executed by Owner and Contractor.

                                       6
<PAGE>

              (a) Receipt by Contractor of a copy of this Agreement, fully
executed by the Owner and Contractor.

              (b) Receipt by the Owner of certificates of insurance evidencing
that the insurance coverages required by this Agreement are in force.

              (c) Receipt by Contractor of certificates of insurance evidencing
that the insurance coverages required by this Agreement are in force.

              (d) Issuance of all necessary building permits, which shall be
obtained by Contractor but with all permit fees to be at Owner's expense.

              (e) Receipt by the Contractor of fully authorized Working Drawings
and Space Plans for the Work in accordance with the following:

                  (i)  The "Space Plan" shall be an easily readable and scalable
floor plan of the entire occupiable space in the Building. Each blueprint
component of the Space Plan shall identify the name, address and phone number of
the architect; name and address of the Project, the date drawn, the name of the
draftperson, a sheet number, the room and intended use; it shall also include
mechanical, electrical and plumbing requirements specifying the rooms or areas
to receive finishes.

                  (ii) The "Working Drawings" shall be a complete set of
blueprints developed from the Space Plan and suitable to permit competitive
subcontractor bidding and the issuance of all building permits. The level of
detail of Working Drawings is intended to permit commencement of construction
and completion of the Work in accordance with such Working Drawings. Working
Drawings include but are not limited to all fully dimensioned floor plans; plans
for all reflected ceilings, electrical outlets/data/telephones, finishes, HVAC,
fire sprinklers, plumbing and electrical installations and all necessary
elevations, details and specifications.

          2.  Within _________ (__) days following execution of this Agreement,
Contractor shall prepare a submittal schedule for all shop drawings, details,
samples, equipment data and other submittal information required herein. In
addition, Contractor shall comply with the Project Schedule prepared by the
Architect or Owner, as such may be periodically updated, for the processing of
all governmental approvals and permits, the prepurchasing of materials and
equipment and the attainment of designated milestones.

          3.  Contractor agrees to keep Owner informed as to the progress of the
Work, and throughout the performance of the Work, Contractor will confer and
cooperate with Owner and will plan and

                                       7
<PAGE>

execute the Work so as to ensure the timely and efficient completion thereof.

     D.  Time of Substantial Completion. Subject to the occurrence of any events
         ------------------------------
of Force Majeure as defined below in Article E and to all other provisions of
this Agreement, Contractor agrees to cause the Work to be "Substantially
Completed" as defined in Article I below on or before __________, all in
accordance with the schedule (including delivery dates for materials and
equipment) attached hereto as Exhibit D (the "Construction Schedule").
                              ---------

     E.  Force Majeure; Damages for Delays. If Contractor shall be delayed at
         ---------------------------------
any time in the progress of the work by any act or neglect of Owner or
Architect, any contractor independently employed by Owner (or any agent or
employee of the foregoing), by changes in the Work ordered by Owner, by
governmental act or failure to act (including issuance of building permits), by
embargo, strike or labor disputes (except where such disputes arise because
Contractor without the consent of Owner has hired non-union workers), by fire or
other casualty, unusual delay in transportation, unavoidable casualties,
unavailability of materials, acts of God (including inclement weather
conditions), or by other causes beyond Contractor's reasonable control, or by
any other cause which Owner and Architect decide justify the delay
(collectively, events of "Force Majeure,") then the time allowed for the Work to
be Substantially Completed shall be extended by the period of such delay and the
GMP shall be equitably adjusted. Contractor shall deliver written notice to
Owner, within five (5) business days after the cause of such delay is known, or
reasonably should be known, to Contractor, of the fact and estimated extent of
such delay. In case of a continuing cause of delay, only one claim is necessary
as long as it is submitted within five (5) business days from the date that the
cause first became known to Contractor.

          If the Work is not Substantially Completed by _____________ (__) days
after the date required for Substantial Completion under the Construction
Schedule, as such date may be extended for events of Force Majeure, then on the
thirty-first (31st) day after such date Contractor will pay Owner for such
delay as damages, an amount equal to ___________________ ($_____) per day until
the Work is Substantially Complete. THE PARTIES HAVE AGREED THAT OWNER'S ACTUAL
DAMAGES, IN THE EVENT THAT CONTRACTOR FAILS TO SUBSTANTIALLY COMPLETE THE WORK
WITHIN THE TIME ESTABLISHED BY THIS AGREEMENT, WOULD BE EXTREMELY DIFFICULT OR
IMPRACTICABLE TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE
PARTIES ACKNOWLEDGE THAT THE ABOVE AMOUNT HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF OWNER'S DAMAGES IN THE EVENT
THAT CONTRACTOR FAILS TO SUBSTANTIALLY COMPLETE THE WORK WITHIN THE TIME
ESTABLISHED BY THIS AGREEMENT.

                  Contractor: _______     Owner:  _______

                                       8
<PAGE>

If Contractor has not Substantially Completed the entire Work by _________ (___)
the date the Work is to be Substantially Completed under the schedule in Article
D above (as such date may be extended by events of Force Majeure), Owner may
terminate this Agreement in accordance with the provisions of Article N below
and in addition may retain the damages for delay provided above.

     F.   Contractor's Duties and Status.
          ------------------------------

          1.  Contractor recognizes the relationship of trust and Confidence
established between Contractor and the Owner by this Agreement. Contractor
covenants with the Owner to furnish its best skill and judgement and to
cooperate with the Architect in promoting the interest of the Owner. Contractor
agrees to (a) furnish efficient business administration and superintendence, (b)
keep upon the Work at all times an adequate supply of skilled and qualified
workmen and materials; (c) secure the execution of the Work in an expeditious
and economical manner; and (d) maintain quality standards commensurate with
reputable northern California contractors. Owner and Architect shall at all
times have access to the Work for review thereof.

          2.  The Contractor shall carefully study and compare the Contract
Documents with each other and with information furnished by the Owner and shall
at once report to the Architect errors, inconsistencies or omissions (including,
without limitation, any variance from applicable laws) discovered. The
Contractor shall not be liable to the Owner or Architect for damage resulting
solely from errors, inconsistencies or omissions in the Contract Documents
unless the Contractor recognized such error, inconsistency or omission and
knowingly failed to report it to the Architect. If the Contractor performs any
construction activity knowing it involves a recognized error, inconsistency or
omission in the Contract Documents without such notice to the Architect, the
Contractor shall assume appropriate responsibility for such performance and
shall bear the attributable costs for correction. Nothing in this Paragraph F.2
shall relieve the Contractor from responsibility to use good faith efforts in
its examination and review of the existing conditions at the Project, the
Construction Schedule, and the Contract Documents, to the end that errors,
omissions or inconsistencies in the Contract Documents that are discovered shall
be promptly reported to the Architect and Owner.

          3.  Before ordering any materials or doing any Work, Contractor and
each of its Subcontractors shall verify all measurements at the site and shall
be responsible for the correctness of same. No extra charge or compensation will
be allowed on account of differences between actual dimensions and the
measurements indicated on the drawings or the plans and specifications. It shall
be understood as part of the Agreement that Contractor and each of its
Subcontractors visited the site and examined the environs and satisfied
themselves as to the conditions under which they would be required to perform
the Work. No

                                       9
<PAGE>

allowance shall be made on behalf of Contractor or any Subcontractor for any
failure to so acquaint themselves with working conditions except concealed and
unforeseeable conditions.

          4.  The Contractor shall supervise and direct the Work, using the
Contractor's best skill and attention. The Contractor shall be solely
responsible for and have control over construction means, methods, techniques,
sequences and procedures and for coordinating all portions of the Work under the
Contract, unless Contract Documents give other specific instructions concerning
these matters.

          5.  The Contractor shall be responsible to the Owner for acts and
omissions of the Contractor's employees, Subcontractors and their agents and
employees, and any other persons performing portions of the Work under a
contract with the Contractor or claiming by, through or under the Contractor and
for any damages, losses, costs and expenses resulting from such acts or
omissions.

          6.  The Contractor shall not be relieved of obligations to perform the
Work in accordance with the Contract Documents either by activities or duties of
the Architect in the Architect's administration of the Contract, or by tests,
inspections or approvals required or performed by persons other than the
Contractor.

          7.  The Contractor shall be responsible for inspection of portions of
Work already performed under this Contract to determine that such portions are
in proper condition to receive subsequent Work.

          8.  If any of the Work is required to be inspected or approved by any
public authority, the Contractor shall cause such inspection or approval to be
performed. No inspection performed or failed to be performed by the Owner shall
be a waiver of any of the Contractor's obligations hereunder or be construed as
an approval or acceptance of the Work or any part thereof.

          9.  Unless otherwise provided in the Contract Documents, the
Contractor shall provide and pay for labor, materials, equipment, tools,
construction equipment and machinery, water, heat, utilities, transportation,
and other facilities and services necessary for proper execution and completion
of the Work, whether temporary or permanent and whether or not incorporated or
to be incorporated in the Work.

          10. The Contractor shall enforce strict discipline and good order
among the Contractor's employees and other persons carrying out the Contract.
The Contractor shall not permit employment of unfit persons or persons not
skilled in tasks assigned to them.

          11.  Tradesmen whose work is unsatisfactory to the Owner or Architect,
or are considered by either Owner or the Architect to

                                      10
<PAGE>

be careless, incompetent, unskilled or otherwise objectionable, shall be
dismissed immediately from the work upon notice from the Owner.

          12.  Contractor shall construct and complete the Project in strict
compliance with all laws, statutes, ordinances, codes, rules and regulations of
all governmental and public authorities having jurisdiction over the Project or
any aspect thereof. Contractor represents and warrants that it is an experienced
general contractor and that it has inspected and is familiar with all visible
conditions at the Project site. It shall be the obligation of Contractor to
review the Contract Documents to determine and to notify the Owner and the
Architect of any discrepancy with building codes and regulations of which the
Contractor has knowledge. If the Contractor observes that portions of the
Contract Documents are at variance with applicable laws, statutes, ordinances,
building codes, rules or regulations, the Contractor promptly shall notify the
Owner and Architect in writing, and necessary changes shall be accomplished by
appropriate Change Order. If Contractor performs any Work which it knows is
contrary to laws, statutes, ordinances, building codes, rules and regulations,
the Contractor shall assume appropriate responsibility therefor and shall bear
the costs and expenses attributable thereto.

          13.  Contractor shall prepare as part of the Work all shop and other
detailed drawings that are required to enable Contractor to perform the work.
Before submitting shop drawings for review, Contractor shall check drawings of
all Subcontractors for conformity with contract requirements, and Contractor
shall see that all work contiguous with and having bearing on the work indicated
on the shop drawings is accurately and distinctly illustrated. Contractor shall
stamp the drawings as evidence that such drawings have been checked, approved or
corrected. Such stamp shall constitute Contractor's warranty to Owner and
Architect that (a) Contractor has utilized reasonable efforts to insure that
such drawings are in strict conformity with the plans and specifications, and
(b) such submitted shop and other drawings have been coordinated with other
components of the Work. Architect will review and approve shop drawings and
other submissions for general conformance with the design concept only and such
review shall not relieve Contractor and each Subcontractor from the
responsibility for adherence to this Agreement concerning quantity and quality
of materials and workmanship, nor shall it relieve Contractor of the
responsibility for dimensions, tolerance and proper assembly.

          14.  Owner reserves the right to perform construction or operations
related to the Project with Owner's own forces, and to award separate contracts
in connection with other portions of the Project or other construction or
operations on the site; provided, however, that Owner shall use all reasonable
efforts to ensure that the exercise of such right does not interfere with the
Construction Schedule or create labor disputes.

                                      11
<PAGE>

          15.  Unless otherwise provided in the Contract Documents, the
Contractor shall secure and pay for the building permit and other permits and
governmental fees, approvals, licenses and inspections necessary for proper
execution and completion of the Work.

          16.  The Contractor shall comply with and give notices required by
laws, ordinances, rules, regulations and lawful orders of public authorities
bearing on performance of the Work.

          17.  Notwithstanding the fact that a dispute, controversy or question
shall have arisen in the interpretation of any provision of the Agreement, the
performance of any work, the delivery of any material, the payment of any monies
to Contractor, or otherwise, Contractor agrees that it will not directly or
indirectly stop or delay the Work, or any part thereof, or stop or delay the
delivery of any materials on its part required to be furnished under this
Agreement, pending the determination of such dispute or controversy. Owner shall
continue to make payments for Work that is not the subject of a dispute.

          18.  Contractor at all times shall keep the Project free from
accumulation of waste materials or rubbish caused by its operations. At the
completion of the Work, Contractor shall remove all of Contractor's waste
materials and rubbish from and about the Project, as well as all of Contractor's
tools, construction equipment, machinery and surplus materials, and shall clean
the inside of all glass surfaces and leave the Work clean and ready for
occupancy in accord with the standards of a first class office facility. If the
Contractor fails to clean up as provided in the Contract Documents, the Owner
may do so and the cost thereof shall be charged to the Contractor who shall pay
such cost immediately upon demand of Owner.

     G.   Change Orders. Changes in the scope of the Work and/or the Guaranteed
          -------------
Maximum Price may be made only in accordance with the following Change Order
provisions.

          1.  Owner may from time to time, by written instructions or drawings
issued to the Contractor, make changes in the Work, issue additional
instructions, require additional Work, or direct the omission of Work previously
ordered, and the provisions of this Agreement shall apply to all such changes,
modifications, and additions (all of the foregoing constitute changes in the
"Scope of the work") with the same effect as if they were embodied in the
original plans and specifications. Any such change shall hereinafter be referred
to as a "Change Order". A Change Order shall consist of a written document
signed by Owner, Architect and Contractor and shall include (i) a description of
the change in the Work; (ii) the amount of adjustment, if any, to the Guaranteed
Maximum Price; and (iii) the amount of adjustment, if any, to the Construction
Schedule.

                                      12
<PAGE>

          2.  Owner may request changes in the Work by giving Contractor a
written Change Order request through the Architect ("Change Order Request"),
setting forth the nature of the requested change. Upon receipt of a Change Order
Request, Contractor shall promptly furnish to Owner a statement setting forth in
detail (with a labor and material breakdown by trade and work classification)
Contractor's good faith estimate of (i) the changes, be they additive or
deductive in nature, in the Guaranteed Maximum Price attributable to the changes
set forth in such Change Order Request, and (ii) the adjustment, if any, to the
Construction Schedule and the date of Substantial Completion resulting from such
Change Order Request. Upon approval by Owner, a Change Order shall be issued and
the Guaranteed Maximum Price and Construction Schedule shall be adjusted as set
forth in such Change Order.

          3.  If a Change Order results in additional costs in order to
prosecute the Work, the Owner shall pay to Contractor an amount equal to the sum
of such additional costs plus a Contractor's Fee of ______ percent (__%) of the
sum of such additional costs; the Guaranteed Maximum Price shall be increased by
the aggregate amount of such additional costs and fees. If a Change Order
results in a decrease in the Cost of the work, the Guaranteed Maximum Price
shall be decreased by an amount equal to the sum of the decrease in such costs
plus _________  percent (__%) of the decrease in such costs. Additional costs
shall be limited to (a) costs of labor; (b) costs of materials, supplies and
equipment; (c) rental costs of machinery and equipment, exclusive of hand tools;
and (d) additional costs of supervision and field office personnel directly
attributable to the change. As work is completed pursuant to a Change Order, the
Contractor shall be reimbursed the Cost of the Work completed pursuant to a
Change Order and paid a pro rata portion of the Contractor's Fee payable with
respect to the Change Order on a percentage of completion basis in accordance
with the provisions of Article H. Retention on Change Orders shall be withheld
in accordance with the provisions of Article H.

     H.   Progress Payments. owner agrees to make progress payments to
          -----------------
Contractor according to the following procedures.

          1.  Included in this Agreement and attached hereto as Exhibit E is a
                                                                ---------
Schedule of Values representing a line item breakdown of the Cost of the Work.
This Schedule of Values shall be used as a basis for Contractor's Applications
for Payment.

          2.  By close of business on the last day of each month Contractor will
submit to Owner an Application for Payment ("Application for Payment") based on
the Schedule of Values and showing as of the end of the month covered by the
Application the percentage of completion of the Work performed under this
Agreement, the value of said completed Work based on the Schedule of Values, and
the amount due and owing to Contractor under the terms of this Agreement,
including amounts due under any fully executed Change Orders. The Application
for Payment shall be

                                      13
<PAGE>

submitted on AIA forms G702 and G703 and shall contain such supporting data as
Owner or Architect may reasonably request, together with lien waivers,
conditional upon payment, for Contractor and any Subcontractor, supplier and
vendor for which payment is requested in such Application for Payment, and
unconditional lien waivers for all prior payment periods from Contractor, and
all Subcontractors, suppliers and vendors. Without limiting the generality of
the foregoing, with each Application for Payment Contractor shall submit
payrolls, petty cash accounts, receipted invoices or invoices with check
vouchers attached, and any other evidence required by Owner or Architect to
demonstrate that cash disbursements already made by Contractor on account of the
Cost of the Work equal or exceed (1) progress payments already received by
Contractor; less (2) that portion of those payments attributable to the
Contractor's Fee; plus (3) payrolls for the period covered by the present
Application for Payment; plus (4) retainage applicable to prior progress
payments. In addition, Contractor's Applications for Payment shall be submitted
together with Contractor's Declaration to Procure Payment, in a form approved by
Owner, listing all persons and firms who have furnished subcontract work,
equipment or materials to the Contractor for the Project and stating that full
payment for all such work, equipment and materials has been made except as
otherwise stated therein. Materials and equipment not yet incorporated into the
Work but delivered, clearly marked as Owner's property, and suitably stored at
the site of the Project shall be considered completed items of Work for purposes
of an Application for Payment, and may be included therein. Contractor shall not
made advance payments to Contractor's, Subcontractors, materialmen or suppliers
without Owner's prior written approval.

          3.  Within twenty-five (25) days after receipt by Owner of an
Application for Payment, and provided Contractor is not in default under this
Agreement, Owner shall pay to Contractor the amount requested subject to the
provisions regarding retainage and disputed amounts described below.

          4.  Owner shall retain ten percent (10%) of the aggregate amount
requested for payment with respect to each Application for Payment. Funds so
retained shall be released in accordance with Paragraph 1.4.

          5.  If any item on an Application for Payment is disputed by Owner or
Architect, Contractor immediately shall be notified of such dispute and shall
submit a verification of such item or a revised Application for Payment. This
procedure, however, shall not be deemed cause for any delay in making a timely
progress payment with regard to all undisputed items on the Application for
Payment. Any payments due Contractor for undisputed items in an Application for
Payment that are not made within thirty-five ('35) days after receipt by Owner
of such Application for Payment shall bear interest at the rate of eight percent
(8%) per annum. For any disputed amount that is later determined to be due
Contractor, Owner shall also pay Contractor

                                      14
<PAGE>

eight percent (8%) interest per annum on such amount from the date that is
thirty-five (35) days after receipt by Owner of the Application for Payment with
respect to such amount until the date of payment.

          6.  Should Contractor neglect or refuse to pay, within thirty (30)
days after it falls due, any bill legitimately incurred and due from Contractor
for which Contractor has been paid on a progress payment basis, Owner, after
giving five (5) days written notice to Contractor of its intention to do so,
shall have the right but not the obligation to pay such bill directly. In such
event, said payment shall be treated as a progress payment made for the benefit
of Contractor.

          7.  Contractor shall promptly pay each Subcontractor, materialman and
supplier, upon receipt of payment from Owner, out of the amount paid to
Contractor on account of such Subcontractor's, materialman's or supplier's
portion of the work, the amount to which such Subcontractor, materialman or
supplier is entitled, reflecting percentages actually retained from payments to
Contractor on account of such Subcontractor's, materialman's or supplier's
portion of the work. Contractor shall, by appropriate agreement with each
Subcontractor, require such Subcontractor to make payments to Sub-subcontractors
in similar manner.

          8.  The amount of each progress payment shall be computed as follows:

              (a) Take that portion of the Guaranteed Maximum Price properly
allocable to completed Work as determined by multiplying the percentage
completion of each portion of the Work by the share of the Guaranteed Maximum
Price allocated to that portion of the Work in the Schedule of Values, less
retainage of ten percent (10%).

              (b) Add that portion of the Guaranteed Maximum Price properly
allocable to materials and equipment delivered and suitably stored at the site
for subsequent incorporation in the Work, less retainage of ten percent (10%).

              (c) Add the Contractor's Fee, less retainage of ten percent (10%).
The Contractor's Fee shall be computed upon the Cost of the Work described in
the two preceding clauses at the rate stated in Paragraph B.4.

              (d) Subtract the aggregate of previous payments made by Owner.

              (e) Subtract the shortfall, if any, indicated by Contractor in the
documentation required to substantiate prior Applications for Payment, or
resulting from errors subsequently discovered by the Owner's accountants in such
documentation.

                                      15
<PAGE>

               (f)  Subtract amounts, if any, for which Architect or Owner has
withheld or nullified a Certificate for Payment.

          9.   Except with Owner's prior approval, payments to Subcontractors
included in Contractor's Applications for Payment shall not exceed an amount for
each Subcontractor calculated as follows:

               (a)  Take that portion of the Subcontract sum properly allocable
to completed Work as determined by multiplying the percentage completion of each
portion of the Subcontractor's Work by the share of the total Subcontract sum
allocated to that portion in the Subcontractor's Schedule of Values, less
retainage of ten percent (10%).

               (b)  Add that portion of the Subcontract sum properly allocable
to materials and equipment delivered and suitably stored at the site for
subsequent incorporation in the Work, less retainage of ten percent (10%).

               (c)  Subtract the aggregate of previous payments made by
Contractor to the Subcontractor.

               (d)  Subtract amounts, if any, for which Architect or Owner has
withheld or nullified a Certificate for Payment by Owner to Contractor for
reasons which are the fault of the Subcontractor.

               (e)  Add, upon Substantial Completion of the entire Work of
Contractor, a sum sufficient to increase the total payments to the Subcontractor
to one hundred percent (100%) of the Subcontract sum, less amounts, if any, for
incomplete Work and unsettled claims. The Subcontract sum is the total amount
stipulated in the Subcontract to be paid by Contractor to the Subcontractor for
the Subcontractor's performance of the Subcontract.

          10.  Nothing contained in this Article H shall be construed to affect
the right to reject in whole or in part any of the Work, should such Work later
be found not to comply with the provisions of this Agreement. All progress
payments are subject to review and correction on subsequent progress payments
and/or on the final payment, to such extent as may be necessary in the
reasonable opinion of Owner to protect Owner from loss arising from the default
of Contractor or the existence of claims. Payment by Owner and acceptance by
Contractor of progress payments based on periodic estimates of quantities of
Work performed shall not, in any way, constitute acceptance of the estimated
quantities used as the basis for computing the amounts of the progress payments.

          11.  Owner shall have title to all completed work, all Work in the
course of construction, and all materials, equipment, tools and supplies for
which payment has been made by Owner under the terms of this Agreement. The
Contractor warrants that title to

                                      16
<PAGE>

all such Work, materials, equipment, tools and supplies shall pass to the Owner
simultaneously upon payment therefor. The Contractor further warrants that upon
submittal of an Application for Payment all Work for which Certificates of
Payment have been previously issued and payments received from the Owner shall,
to the best of the Contractor's knowledge, information and belief, be free and
clear of liens, claims, security interests or encumbrances in favor of the
Contractor, Subcontractors, material suppliers, or other persons or entities
making a claim by reason of having provided labor, materials and equipment
relating to the Work.

     I.   Substantial Completion Procedures and Payments.
          ----------------------------------------------

          1.   Upon receipt from Contractor of written notice that the Work is
Substantially Completed and ready for final inspection and acceptance and
Contractor has obtained a Certificate of Occupancy for the Project, if
applicable (or, if not applicable, evidence of the applicable final inspection
by any relevant governmental authority) (an "Inspection Notice"), Owner and
Architect shall, within ten (10) days, inspect the Work for compliance with the
requirements of this Agreement. The Inspection Notice shall be submitted
together with a complete set of "As Built" drawings and plans covering all of
the Work. For purposes of this Agreement, "Substantially Completed" means
completion of the entire Work, including floor coverings, ceiling systems,
partitions, mechanical equipment, and all utilities in accordance with the Plans
and this Agreement so as to permit occupancy or use of the Project for the
purposes intended by Owner, subject only to minor corrective work or "punch
list" work not rendering the premises unfit for occupancy or use, such as
replacement of broken or defective materials, and adjustments to mechanical
systems. In the event that Owner and Architect shall find the Work described in
the Inspection Notice to have been Substantially Completed in accordance with
this Agreement, the Architect shall promptly issue a Certificate of Substantial
Completion which shall set forth: (i) A statement that the Work described in the
Inspection Notice is Substantially Completed in accordance with this Agreement
and has been accepted by the Owner and Architect; and (ii) the total unpaid
balance of the amount due to Contractor hereunder for such Work, including any
amounts due under Change Orders and any retained amounts.

          2.   All minor corrective work or "punch list" work shall be completed
by Contractor within thirty (30) days after preparation of the punchlist, except
that those items that Contractor, using reasonably diligent efforts, is not able
to complete in such thirty-day period shall be completed as soon as reasonably
possible. If any "punch list" work that would reasonably be expected to be
completed within such thirty (30) day period remains uncompleted at the
expiration of such thirty (30) day period, or if any "punch list" work that
would take longer than thirty (30) days to complete remains uncompleted at the
time such work should reasonably be expected to have been completed, then, in
either such case, the GMP shall be reduced by $_________________ per day

                                      17
<PAGE>

for each day thereafter that any "punch list" work remains uncompleted.

          3.   If the inspection by Architect and Owner discloses any item that
is not in accordance with the requirements of this Agreement, Contractor shall,
before issuance of the Certificate of Substantial Completion, complete or
correct such item(s) upon notification from Architect or Owner. Contractor shall
then submit a request for another inspection by Architect and Owner to determine
Substantial Completion. All warranties shall commence on the date of Substantial
Completion of the Work unless otherwise provided in the Certificate of
Substantial Completion.

          4.   Upon issuance of the Certificate of Substantial Completion, Owner
shall file a Notice of Completion with the County Recorder of San Mateo County.
Subject to the provisions of subparagraphs (a) through (e) of this Paragraph
1.4, and provided Contractor is not in default under this Agreement, upon the
expiration of a period of thirty-five (35) days after the filing of the Notice
of Completion, Owner shall pay to Contractor such amount (the "Final Payment")
as is shown by the Certificate of Substantial Completion to be the unpaid
balance of the Cost of Work and Contractor's Fee (including any remaining
retained funds and amounts due under Change Orders except those Change Orders
which expressly provide that the work described therein is to be completed and
paid for after the date of Substantial Completion and Final Payment).

               (a)  If any mechanic's or materialmen's lien has at that time
been recorded, Owner may withhold the amount thereof until the lien or claim is
removed and released of record or until the Owner is indemnified against such
claim by bond or other means reasonably satisfactory to the Owner; provided,
however, that Contractor shall have such lien removed from the Project by
bonding or otherwise if, as and when required by Owner.

               (b)  So long as any item of Work remains uncompleted, Owner shall
retain an amount equal to two hundred percent (200%) of the value of such
uncompleted item of work based on the Schedule of Values and Architect's
certification, which shall be paid only when such item of Work is completed to
the reasonable satisfaction of Architect and Owner.

               (c)  As condition precedent to the Final Payment, Contractor
shall furnish mechanic's lien waivers and releases from Contractor and from all
Subcontractors, suppliers, and vendors with remaining lien rights respecting the
Project; such waivers and releases shall be on forms acceptable to Owner.

               (d)  Any portion of the Final Payment not paid when due shall be
a late payment and shall bear interest at the rate of eight percent (8%) per
annum.

                                      18
<PAGE>

               (e)  Upon Substantial Completion of all the items of Work
required by the Plans and any Change Orders for a separate and distinct floor of
the Building, and provided Contractor is not in default under this Agreement,
Contractor shall have the right to receive all retainages previously withheld
with respect to the Work allocable to that floor.

          5.   All plans and specifications, drawings, computations, sketches,
test data, survey results, models, photographs, renderings, plans, shop and
proposal drawings and material relating to the Work and prepared by Contractor
or any other person or entity under Contractor (i) are the property of Owner,
(ii) shall not be retained by Contractor or any Subcontractor, supplier or
materialman after the completion of the Work, (iii) shall be delivered to Owner
upon request by Owner (and Contractor shall see that all such material is
obtained from Subcontractors, materialmen and suppliers and delivered to Owner)
and (iv) shall not be used by Contractor or any other person or entity under
Contractor in any way connected with any other work. Contractor shall deliver to
Owner a complete set of coordinated and bound "As Built" drawings and plans
covering all of the Work, plus all operating manuals and warranties relating to
the Work, prior to Final Payment by the Owner.

     J.   Mechanic's Liens. Contractor agrees to make prompt payment to all
          ----------------
Subcontractors, laborers, materialmen and suppliers performing labor upon or
furnishing materials for the Work, subject only to receipt of timely payment
from the Owner for such labor and materials through the progress payments to
which Contractor is then entitled. Contractor agrees to keep the Project and the
Project site free and clear of any and all liens and claims of such
Subcontractors, laborers, materialmen and suppliers, subject to Owner's
performance of its own payment obligations. If any such lien shall be filed at
any time during the progress of the Work, Owner may withhold the amount of such
lien from payments otherwise due Contractor until the same is discharged and
released of record or until the Owner is indemnified by bond or other means
reasonably satisfactory to Owner; provided, however, that Contractor shall have
such lien removed from the Project by bonding or otherwise if, as and when
required by the Owner. Provided that Owner makes timely progress payments of all
undisputed amounts in accordance with the provisions of this Agreement,
Contractor will indemnify Owner from and hold Owner harmless against all liens
and claims of liens for such materials, equipment, labor and other costs, or any
of them, filed against the Project or the Project site or any part thereof
(unless the lien results from a disputed payment that is later resolved against
the Owner), and from and against all expense and liability in connection
therewith, including, but not limited to, court costs and reasonable attorneys'
fees resulting or arising therefrom. Notwithstanding anything to the contrary
contained herein, Contractor shall not be responsible for liens filed or claims
made against the Project by Architect or by any contractor (other than
Contractor) under direct contract with Owner, or by the agents or employees of
any such contractor.

                                      19
<PAGE>

     K.   Insurance.
          ----------

          1.   Contractor's Safety Responsibility. Contractor shall take all
               ----------------------------------
reasonable and legally required precautions for the safety of employees and all
other persons in or about the Project and at any other location where any
portion of the Work is being performed, including, without limitation, the
maintenance of fences, barricades, warning lights, scaffolds, walkways and
ladders which are adequate for safety of such employees and other persons.
Contractor shall also exercise due care in order to protect all work and
material against loss, injury or destruction and shall take all precautionary
measures reasonably required for such purpose.

          2.   Loss or Damage to Work. With the exception of any loss or damage
               ----------------------
to the Work for which Owner is reimbursed under the insurance coverage described
in Paragraph K.6(b) below, Contractor shall be responsible for any loss or
damage to the Work to be performed and furnished under this Agreement however
caused, until after Substantial Completion and final acceptance and payment by
Owner. Contractor shall be responsible for loss of or damage to materials,
tools, equipment, appliances or other personal property owned, rented or used by
Contractor or any Subcontractor or anyone employed by them in the performance of
the Work from whatever cause.

          3.   Contractor's Indemnification and Insurance.
               ------------------------------------------

               (a)  Contractor agrees to indemnify, defend (with counsel
reasonably satisfactory to Owner), and hold Owner and Owner's officers,
directors, agents and employees harmless from and against all liability, claims,
demands, causes of action, damages, losses, or expenses (including attorney's
fees) of any kind or nature arising out of or resulting from any negligent act
or omission, willful misconduct, or breach of this Agreement by Contractor, any
Subcontractor engaged by Contractor, anyone directly employed by any of them or
anyone whose acts any of them may be liable for, except if such shall arise from
the negligence or wilful misconduct of Owner. The obligations of Contractor
under this Paragraph K.3(a) shall not extend to the liability of the Architect,
engineers or other consultants hired and retained directly by Owner, or their
respective agents or employees, arising out of (i) the preparation or approval
of maps, drawings, opinions, reports, surveys, Change Orders, designs, or
specifications, or (ii) the giving or the failure to give directions or
instructions by the Architect, engineers or other consultants hired by Owner, or
their respective agents or employees, provided such giving or failure to give
directions or instructions is the sole cause of the injury or damage. This
indemnification shall survive termination of this Agreement.

               (b)  Contractor and its Subcontractors shall price all Work with
and without the insurance coverage required pursuant to this Paragraph K.3(b).
Owner shall notify Contractor whether

                                      20
<PAGE>

Contractor and its Subcontractors shall be required to procure and maintain such
coverage. If Owner so notifies Contractor, then prior to the commencement of the
Work, or any portion thereof, Contractor shall procure the following insurance
coverage, at its own expense, with respect to performance of the Work. Such
insurance shall be issued by insurance carriers satisfactory to Owner with
minimum limits as set forth below. Such insurance shall be maintained in full
force and effect until Substantial Completion and final acceptance and payment
by Owner:

               (c)  Workers Compensation: Statutory Workers Compensation as
required by state law and Employer's Liability with a minimum limit of
$1,000,000.

               (d)  Commercial General Liability Insurance including Completed
Operations and Contractual Liability Insurance against the liability assumed in
this Agreement with the following minimum limits for bodily injury and property
damage on a claims made basis:

               $5,000,000 per claim made;
               $5,000,000 aggregate per project.

               (e)  Comprehensive Automobile Liability Insurance covering owned,
non-owned and hired automobiles used in connection with the Work covering bodily
injury and property damage with a minimum limit of $1,000,000 per accident.

          Prior to commencing the Work, the Contractor shall furnish a
certificate, satisfactory to Owner, from each insurance company showing that the
above insurance is in force, stating policy numbers, dates of expiration and
limits of liability, and further providing that the insurance will not be
canceled or changed until the expiration of at least thirty (30) days after
written notice of such cancellation or change has been mailed to and received by
Owner. Owner shall be named as an additional insured under each such policy of
insurance with the exception of Contractor's workers compensation policy.
Further, the certificate shall show that the Contractor's insurance is primary.

               (f)  Completed Operations Coverage: Contractor shall provide
Owner with evidence that completed operations insurance is maintained in effect
covering loss sustained during a period of four (4) years following Owner's
filing for record a Notice of Completion.

          4.  Subcontractors' Insurance. Subject to Owner's notification that
              -------------------------
Subcontractors shall be required to procure and maintain insurance, Contractor
shall be responsible to ensure that all Subcontractors have procured Workers
Compensation Insurance, Commercial General Liability Insurance and Comprehensive
Automobile Liability Insurance for losses arising out of the performance of
their work. Contractor shall obtain a certificate from each Subcontractors
insurance company showing that the above insurance

                                      21
<PAGE>

is in force, stating policy numbers, dates of expiration and limits of
liability, and further providing that the insurance will not be canceled or
changed until the expiration of at least thirty (30) days after written notice
of such cancellation or change has been mailed and received by Contractor.
Contractor shall ensure that Owner is named as an additional insured under each
such policy of insurance. Subcontractor limits shall be as follows:

               (a)  Statutory Workers Compensation as required by state law and
Employer's Liability Insurance as follows:

                    (i)    $500,000 each accident for bodily injury by accident;

                    (ii)   $500,000 policy limit for bodily injury by disease;

                    (iii)  $500,000 each employee for bodily injury by
          disease.

               (b)  Comprehensive General Liability Insurance:

                    (i)    $1,000,000 each occurrence;

                    (ii)   $1,000,000 aggregate, or

                    Occurrence form Commercial General Liability Insurance:

                    (i)    $1,000,000 each occurrence;

                    (ii)   $1,000,000 personal injury liability;

                    (iii)  $1,000,000 aggregate for products-completed
          operations;

                    (iv)   $1,000,000 general aggregate.

          5.   Owner's Liability Insurance. Owner shall be responsible for
               ---------------------------
purchasing and maintaining the Owner's usual liability insurance. Optionally,
Owner may purchase and maintain other insurance for self-protection against
claims which may arise from operations under this Agreement, Contractor shall
not be responsible for purchasing and maintaining this optional Owner's
liability insurance unless specifically required by the Contract Documents.

          6.   Property Insurance.
               ------------------

               (a)  Loss of Use Insurance. Owner, at its option, may purchase
                    ---------------------
     and maintain such insurance as will insure Owner against loss of use of
     Owner's property during construction due to fire or other hazards, however
     caused, prior to Substantial Completion and final acceptance and payment.
     Owner waives all

                                      22
<PAGE>

     rights of action against Contractor for loss of use of Owner's property
     prior to Substantial Completion, including consequential losses due to fire
     or other hazards, however caused, to the extent covered by such insurance
     and provided Owner's insurance company agrees to such waiver.

               (b)  Builder's Risk Coverage.
                    -----------------------

                    (i)  Owner shall obtain builder's risk insurance on an "all
risk" policy form, in an amount not less than one hundred percent (100%) of the
completed insurable value of the Work being performed, including, to the extent
not covered by other insurance, the structures upon and in which the Work is
being done and all Work in progress including materials to be incorporated in
the Work which qualify for payment under the terms of this Agreement. Such
insurance shall cover the interests of both Owner and Contractor in the Work as
their interests may appear.

                    (ii) Contractor shall assist Owner in filing and pursuing
any claim and collecting any amounts payable under the builder's risk coverage
described above. All sums payable under the builder's risk coverage shall be
paid to Owner for the purpose of paying the cost, in whole or in part, of
restoring or rebuilding the Work to be constructed in order to assure
Contractor's compliance with its obligation to complete the Work. Owner shall
have the authority to adjust and settle any loss with the insurers. Any costs
incurred in connection with restoring or rebuilding the work which are not
reimbursed by the insurance proceeds shall be treated as a Change Order within
the meaning of Article G of this Agreement, and the Guaranteed Maximum Price
shall be adjusted accordingly.

          7.   Waivers of Subrogation. Contractor and Owner hereby grant to each
               ----------------------
other on behalf of any insurer providing insurance under this Agreement, a
waiver of any right of subrogation as such insurer may acquire against the other
party by virtue of payment of any loss under such insurance; provided, however,
that any such waiver shall be effective only in the event that, and only so long
as, both parties are empowered to grant such a waiver under the terms of the
policy or policies involved without affecting the insurance coverage. This
waiver shall apply only with respect to insurance proceeds and shall not be
applicable to deductibles.

          8.   Bonds. If Owner requests a performance bond and/or a payment bond
               -----
from any of Contractor's Subcontractors, Contractor will be responsible for
ensuring that such Subcontractors provide the same to Owner.

     L.   Contractor's Warranties.
          -----------------------

          1.   Contractor warrants that (i) Contractor is a duly licensed
contractor in compliance with all applicable laws, Contractor will exercise due
care and diligence in the construction of the Work and the Work shall be
performed in accordance with this

                                      23
<PAGE>

Agreement, (ii) all of the Work and services to be performed by Contractor
pursuant to this Agreement shall be the standard and quality specified in the
Contract Documents, and (iii) subject to the qualifications hereunder,
performance of the Work shall comply with the Contract Documents and all safety
codes. Wherever the plans specify use of certain materials and equipment,
Contractor, upon written approval by Owner and Architect, which approval may be
withheld in their sole discretion, may use equivalent materials and equipment.
The Contractor also shall have the right to employ alternate methods of
construction upon written approval of Owner and Architect to the extent that the
scope of the Work and the standards of quality set forth in the Contract
Documents are not adversely affected. Contractor shall be solely responsible for
the adequacy of design executed by Contractor or its Subcontractors in employing
any such alternate methods or materials.

          2.   Contractor warrants for one (1) year from the date of issuance of
the Certificate of Substantial Completion (the "Warranty Period"), on behalf of
the Contractor, its Subcontractors, materialmen and suppliers, that the Work
performed under this Agreement shall be of good quality and free from defects in
workmanship and materials and in compliance with the provisions of Paragraph
L(1). All warranties procured by Contractor from its Subcontractors, materialmen
and suppliers shall be properly executed on a form approved by Owner and shall
be submitted to the Owner prior to the final acceptance of the Work. Contractor
shall cause such warranties to be made directly to Owner, or if the same shall
be made to Contractor, Contractor, if possible, shall assign same to Owner.
During the Warranty Period, upon written request from Owner, such warranties as
may not be assignable shall be enforced (to the extent enforceable) by
Contractor for the Owner's benefit. Contractor shall also deliver to Owner all
operating manuals for equipment installed in the Work.

          3.   Contractor shall to Owner's satisfaction (i) re-execute any parts
of the Work that fail to conform with the requirements of the Contract Documents
and that become apparent during the progress of the Work, (ii) remedy any
defects in the Work due to faulty materials or workmanship that become apparent
within the Warranty Period or within such longer period of time as may be set
forth in the plans and specifications, and (iii) replace, repair or restore any
other parts of the Work or furniture, fixtures, equipment or other items placed
therein (whether by Owner or any other party) that are injured or damaged by any
parts of the Work that do not conform to the requirements of the Contract
Documents or as a result of defects in the Work. The cost to Contractor of
performing any of Contractor's obligations under this Paragraph L shall not be
included in the Cost of the Work, and all corrective work shall be at no cost to
Owner. If Contractor fails to proceed within ten (10) business days after
written notice from Owner to comply with the terms of this paragraph, Owner may
correct any defects in the Work and Contractor shall be liable for all
reasonable costs of such corrective work. If, however, Owner does not desire
Contractor to repair Work

                                      24
<PAGE>

damaged or not done in accordance with this Agreement, a deduction reasonably
specified by Owner from the Contractor's Fee and the Guaranteed Maximum Price
shall be made by Owner, such deduction to be based upon the reasonably
anticipated cost to the Owner of such corrective work.

          4.   Contractor's express warranty in this Paragraph L shall be in
addition to, and not in lieu of, any other remedies Owner may have under this
Agreement, at law, or in equity for defective Work. No payment made by Owner to
Contractor, nor any acceptance, use or occupancy of the Work by Owner or any
other person or entity, shall constitute acceptance of any defective Work or any
Work not in compliance with this Agreement.

     M.   Owner's Occupancy Before Completion of Work. Owner shall have the
          -------------------------------------------
right to occupy any part or parts of the project, and to install its own
fixtures and equipment thereon prior to completion of the Work by Contractor,
provided, however, that any such occupancy or use shall not constitute
acceptance of Work not complying with the requirements of this Agreement. Any
such occupancy must be consistent with the Contractor's sequence for completing
the Work in the occupied part or parts or in other areas of the Project, and may
not materially interfere with the completion of such Work. Contractor shall
coordinate its efforts with any occupancy prior to completion of the Work, and
shall give reasonable notice to Owner of any damage or delay likely to result
from such occupancy, but Owner will assume the risk of Owner's fixtures,
equipment and other personal property, and of any damage to or material delay in
the Work arising out of such occupancy.

     N.   Termination of Agreement.
          ------------------------

          1.   Contractor shall have the following rights with respect to
termination of this Agreement.

               (a)  If through no act or fault of Contractor or any of its
subcontractors, or anyone employed by them, Owner, without justification under
provisions of this Agreement, orders the Work to be stopped for a period in
excess of ninety (90) consecutive days, Contractor, after five (5) days' written
notice to Owner, may elect to terminate this Agreement. If Owner shall not make
any undisputed payment due to Contractor hereunder within thirty (30) days after
the due date for such payment, and provided Contractor is not in default under
this Agreement, Contractor may suspend the Work upon written notice to Owner.
Owner shall be liable to Contractor for the amount of Contractor's actual,
reasonable costs of shut-down, delay and start-up occasioned by a stoppage or
suspension of the Work pursuant to this paragraph, by adjustment to the GMP and
Construction Schedule.

               (b)  If through no act or fault of Contractor or any of its
Subcontractors, construction of the Work shall be stopped pursuant to court
order, or other governmental act or regulation, fire or action of the elements,
national emergency, or any other

                                      25
<PAGE>

cause beyond Contractor's reasonable control (other than those causes described
in Subparagraph N.1(a)), then Contractor, after seven (7) days' written notice
to Owner, may temporarily cease construction of the Work. If the cause of such
stoppage of work is removed within sixty (60) days after Contractor so ceases
construction, Contractor shall resume construction and proceed with the Work;
provided, however, that the amount payable to Contractor hereunder and the
Guaranteed Maximum Price and the Construction Schedule shall be subject to
equitable adjustment as provided above in Article G to account for the
Contractor's additional cost and delays caused by the work stoppage. If the
cause of such stoppage of work cannot be removed for a period of six (6) months,
then either the Contractor or the Owner may elect in writing to terminate this
Agreement.

               (c)  If this Agreement should be terminated as provided in
Subparagraph (a) or (b) above, then Owner shall pay the Contractor, subject to
the provisions of Article H (Progress Payments) for all costs incurred in
connection with the Work (including, without limitation, any costs incurred
pursuant to a Change Order) theretofore completed, plus a Contractor's Fee in an
amount, equal to        percent (    %) of the sum of such costs.

     2.   Termination by Owner.

          (a)  If the Contractor should be adjudged as bankrupt, or if the
Contractor should make a general assignment for the benefit of his creditors, or
if a receiver should be appointed on account of Contractor's insolvency, or if
Contractor should fail to supply enough properly skilled workmen or proper
materials to prosecute the Work as provided herein, or if Contractor should fail
to make prompt payment of amounts properly due to Subcontractors or for
materials or labor after receiving payments from Owner, or if Contractor should
disregard applicable laws or ordinances or otherwise be guilty of a breach of
any material provision of this Agreement or if Contractor should fail to remove
a mechanic's lien on the Project for which Contractor is responsible in the
manner required under this Agreement, then the Owner, upon ten (10) days'
written notice to Contractor, may terminate the employment of the Contractor and
take possession of the Project, the Project site, materials, suppliers,
equipment and tools and finish the Work by whatever method Owner may deem
expedient, and, at Owner's option, assume any or all of the subcontracts now or
hereafter executed by the Contractor hereunder. If this Agreement is so
terminated by Owner, Contractor shall be entitled to receive payment only for
Work completed as of the date of termination, which amounts shall be paid upon
Substantial Completion of the Work by Owner. Contractor shall be responsible for
all costs incurred by Owner due to Contractor's non-performance, default or
negligence. Contractor shall execute and deliver all papers and take all steps,
including assignment of contractual rights, as Owner may reasonably require to
permit Owner to complete the Work.

                                      26
<PAGE>

               (b)  Owner may, without cause, order Contractor in writing to
suspend, delay or interrupt the Work in whole or in part for such period of time
as Owner may determine. Should Owner choose to suspend, delay or interrupt the
Work, an adjustment shall be made to the Construction Schedule and for increases
in the cost of performance of the Contract caused by such suspension, delay or
interruption. No adjustment shall be made to the extent that performance is, was
or would have been so suspended, delayed or interrupted by another cause for
which Contractor is responsible, or if an equitable adjustment is made or denied
under another provision of the Agreement.

               (c)  If Contractor defaults or neglects to carry out the Work in
accordance with this Agreement and fails within a seven (7) day period after
receipt of written notice from Owner to commence and continue correction of such
default or neglect with diligence and promptness, Owner shall have the right,
without prejudice to other remedies Owner may have, to correct such
deficiencies. In such case an appropriate Change Order shall be issued deducting
from payments then or thereafter due Contractor the cost of correcting such
deficiencies, including compensation for Architect's additional services and
expenses made necessary by such default, neglect or failure. If payments then or
thereafter due Contractor are not sufficient to cover such amounts, Contractor
shall pay the difference to Owner.

               (d)  If this Agreement shall be terminated by Owner pursuant to
Subparagraph (a) above, Owner shall have the right to recover from Contractor
any costs in excess of the GMP incurred due to Contractor's nonperformance,
default or negligence. Contractor shall execute and deliver all papers and take
all steps, including assignment of contractual rights, as Owner may reasonably
require to permit Owner to complete the Work.

     O.   General Provisions.
          ------------------

          1.   Assignment. Contractor shall not assign this Agreement, nor shall
               ----------
Contractor assign any monies due or to become due to Contractor hereunder,
without the prior written consent of Owner, which consent may be withheld in
Owner's sole discretion. Owner shall have the right to assign this Agreement
only to a financially responsible person or entity that is capable of
discharging the obligations of the Owner hereunder.

          2.   Notices. All notices hereunder shall be in writing, shall be sent
               -------
by registered or certified mail, return receipt requested, or by personal
delivery or courier service with a request for an acknowledgment of receipt, and
shall be effective on receipt. Notices shall be sent to or delivered to the
following addresses or such other address(es) as a party may designate by notice
given in the manner provided herein:

                                      27
<PAGE>

                    Oracle Corporation
                    500 Oracle Parkway, Box 659506
                    Redwood Shores, California 94065
                    Attention: Corporate Treasurer

          with a copy to:

                    Oracle Corporation
                    500 Oracle Parkway, Box 659507
                    Redwood Shores, California 94065
                    Attention: General Counsel

          and in the case of the Contractor to:

                    _____________________________
                    _____________________________
                    _____________________________
                    Attention:___________________

          and in the case of the Architect to:

                    _____________________________
                    _____________________________
                    _____________________________
                    Attention:___________________

          3.   Complete Agreement. This Agreement, including all exhibits
               ------------------
hereto, represents the full complete understanding of the parties and supersedes
any previous agreements, representations, or understandings, oral or written,
with respect to the subject matter hereof. This Agreement may be modified or
altered only by a written instrument signed by the parties.

          4.   Successors. This Agreement shall inure to the benefit of and
               ----------
shall be binding upon the successors and assigns of Owner and upon the permitted
successors and assigns of Contractor.

          5.   Governing Law. This Agreement shall be governed by and
               -------------
interpreted under the laws of the State of California.

          6.   Remedies. Remedies available hereunder shall be in addition to
               --------
and not a limitation of remedies otherwise available by law.

          7.   No Waiver. No consent or waiver either expressed or implied by
               ---------
either Owner or Architect to any breach by Contractor of any covenant,
obligation, or liability shall be construed as a waiver of right or consent to
any other breach of the same or any other covenant, obligation, or duty.

          8.   Governing Contract Documents. In general, plans and
               ----------------------------
specifications indicate qualities of materials and workmanship, and drawings
indicate dimensions, locations, quantities, and details of

                                      28
<PAGE>

construction. Detailed drawings and specifications shall take precedence over
general drawings and specifications. Supplementary or revised details and
instructions, if approved by the Owner, shall take precedence over original
documents, information and earlier addenda to which they refer. Any item of Work
mentioned in specifications but not shown on drawings or shown on drawings but
not mentioned in specifications, shall be provided as if shown and mentioned in
both.

          9.   Contractor's Notice. Contractors are required by law to be
               -------------------
licensed and regulated by the Contractor's State License Board. Any questions
concerning a contractor may be referred to the Registrar, Contractor's State
License Board, 1020 N. Street, Sacramento, California 95814. Contractor's
license number is __________________.

          10.  Subcontract Work. All portions of the Work shall be performed by
               ----------------
Contractor or under subcontracts entered into by Contractor. The Contractor
shall obtain a minimum of three (3} responsive bids from Subcontractors and from
suppliers of materials or equipment fabricated especially for the Work, all of
which bids shall be presented to the Contractor as sealed bids and which sealed
bids shall be delivered to the Architect and opened and tabulated in the
presence of the Owner, Architect and Contractor. The Owner will then determine
which bids will be accepted. The Owner may designate specific persons or
entities from whom the Contractor shall obtain bids; however, the Contractor
shall not be required to contract with anyone to whom the Contractor has
reasonable objection. Owner shall have, at Owner's request, the right to review
the bid invitations and bid packages prepared by Contractor. Contractor will
receive warranties from all Subcontractors in accordance with specifications and
contractor licensing requirements.

          Contractor shall secure from the electrical and mechanical
subcontractors a covenant warranting the adequacy of their design or engineering
specifications and holding Owner and Contractor harmless from any injury,
liability, delay, or other expenses resulting from any fault or negligence of
the subcontractor in the preparation thereof.

          Each subcontract agreement is assigned by Contractor to Owner,
provided that such assignment shall be effective only after the termination of
this Agreement and only for those subcontract agreements that Owner accepts by
notifying the Subcontractor in writing.

          11.  Status of Architect. Whenever a right to approve or make a
               -------------------
determination or other right is reserved hereunder to Owner, it is understood
that Owner may delegate the exercise of such right to Architect or any other
entity in writing, and Contractor shall be wholly protected in relying upon any
action taken by such representative in the exercise of such right, unless
Contractor is earlier notified in writing by the Owner to the contrary.

                                      29
<PAGE>

Architect shall have authority to review and approve shop drawings for the Work
and, upon prior approval of Owner, Architect also shall have authority to stop
the Work whenever such stoppage may be necessary in Architect's reasonable
opinion to ensure proper performance of this Agreement. Reexamination of
questioned work may be ordered by the Architect or Owner and, if so ordered, the
Work must be uncovered by Contractor. If such Work is found not to be
substantially in accordance with the requirements of the Contract Documents,
Contractor shall pay the cost of uncovering the Work. If the Work is found to be
in accordance with the Contract. Documents, Owner shall pay said cost.
Contractor shall promptly correct all Work rejected by Architect because it
fails to conform to the requirements of the Contract Documents, whether observed
before or after Substantial Completion and whether or not fabricated, installed
or completed. Contractor shall bear the costs of correcting such rejected Work,
including additional testing and inspections and compensation for Architect's
services and expenses made necessary thereby.

          It is understood that the performance of this Agreement by Contractor
is dependent upon the cooperation and the prompt performance by the Owner and
Architect of their respective duties. Owner shall cause Architect to promptly
provide all necessary design details, working drawings, and changes in drawings
or specifications as may be required from time to time. Should errors,
omissions, or discrepancies appear to Contractor in or between the drawings
and/or specifications, or in the work done by others affecting the Work, the
Contractor shall notify the Architect and Owner at once, and the Architect,
subject to Owner's approval, shall instruct the Contractor regarding the manner
in which the Contractor is to proceed with respect to the Work so affected. If
the Contractor proceeds with the work affected without instructions from the
Architect, Contractor shall be responsible for, and shall make good, any
resulting damage or defect.

          12.  Confidentiality. Contractor shall treat all information relating
               ---------------
to the Work and all information supplied to Contractor by Owner or Architect as
confidential and proprietary information of Owner and shall not permit its
release to other parties or make any public announcement or publicity releases
without Owner's written authorization. Contractor shall also require all
Subcontractors, materialmen and suppliers to comply with this requirement.

          13.  Attorneys' Fees. If any party brings any action for the
               ---------------
enforcement or interpretation of this Agreement, the losing party shall pay to
the prevailing party a reasonable sum for attorneys' fees and costs incurred by
the prevailing party. The "prevailing party" will be determined, at the
conclusion of any appeals, if any, by the court before whom the action was
brought, based upon an assessment of which party's major arguments or positions
taken in the suit or proceeding could fairly be said to have prevailed over the
other party's major arguments or positions

                                      30
<PAGE>

on major disputed issues, in the final decision of the court or any appellate
court.

          IN WITNESS WHEREOF, the Owner and Contractor have executed this
Agreement as of the date first written above.

                         OWNER:  ORACLE CORPORATION,
                         a Delaware corporation

                         By: /s/ Bruce Lange
                             -----------------------------------
                         Its: VP and Corporate Treasurer
                             -----------------------------------

                         CONTRACTOR:  Kaiser Construction, Inc.
                                      --------------------------
                         By: /s/ XXX
                             -----------------------------------
                         Its: President
                             -----------------------------------

                                      31
<PAGE>

                                   Exhibit A
                                   ---------

                           PLANS AND SPECIFICATIONS

                               [TO BE COMPLETED]
<PAGE>

                                   Exhibit B
                                   ---------

                        SCHEDULE OF GENERAL CONDITIONS

                               [TO BE COMPLETED]
<PAGE>

                                   EXHIBIT D

                             RULES AND REGULATIONS

     1.   Landlord shall have the right to prescribe the weight, size and
position of all equipment, materials, furniture and other property brought into
the Premises.  Heavy objects shall, if considered necessary by Landlord, stand
on wood strips of such thickness as is necessary to distribute properly the
weight.  Landlord will not be responsible for loss of or damage to any such
property from any cause, and all damage done to the Premises by moving or
maintaining such property shall be repaired at the expense of Tenant.

     2.   Tenant shall not use or keep in or about the Premises any kerosene,
gasoline or other inflammable or combustible fluid or material other than
limited quantities thereof reasonably necessary for the operation or maintenance
of office equipment or, without Landlord's prior written approval, use any
method of heating or air conditioning other than that supplied by Landlord.

     3.   No curtains, draperies, blinds, shutters, shades, screens or other
coverings, hangings or decorations shall be attached to, hung or placed in, or
used in connection with, any window of the Premises without the prior written
consent of Landlord. With the prior consent of Landlord, such items shall be
installed on the office side of the standard window covering for the Premises
and shall in no way be visible from the exterior of the Premises.

     4.   Tenant shall see that the doors of the Premises are closed and locked
and that all water faucets, water apparatus and utilities are shut off before
Tenant or Tenant's employees leave the Premises, so as to prevent waste or
damage, and for any default or carelessness in this regard Tenant shall make
good all injuries sustained to the Premises.

     5.   The toilet rooms, toilets, urinals, washbowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed, no foreign substance of any kind whatsoever shall be thrown therein
and the expense of any breakage, stoppage or damage resulting from the violation
of this rule shall he borne by Tenant.

     6.   No materials 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 or garbage in the City of
Belmont without being in violation of any law or ordinance governing such
disposal.

     7.   The requirements of Tenant will be attended to only upon application
by telephone or in person at the office of Landlord's Property Manager.
Employees of Landlord or Landlord's Property Manager shall not perform any work
or do anything outside of their regular duties unless under special instructions
from Landlord.

     8.   These rules and regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of the Lease.

     9.   Landlord reserves the right to make such other and reasonable rules
and regulations as in its judgment may from time to time be needed for the
safety, care and cleanliness of the Premises and for the preservation of good
order therein.

                                      D-1

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