Document:

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                            2000 EMPLOYMENT AGREEMENT

                      Columbia Bancorp - Neal T. McLaughlin

       This Employment Agreement (the "Agreement") is made and entered into this
1st day of April, 2000 by and between Columbia Bancorp ("Bancorp") and Neal T.
McLaughlin ("Employee").

                                    RECITALS

       (1) Bancorp is an Oregon corporation and bank holding company and is the
sole shareholder of Columbia River Bank (the "Bank"). Bancorp's principal
administrative office is at 420 East Third Street, Suite 200, The Dalles, Oregon
97058.

       (2) Bancorp desires to employ Employee as an officer of Bancorp and the
Bank on the terms and conditions set forth herein.

       Now, therefore, it is agreed:

       1. RELATIONSHIP AND DUTIES.

       1.1 RELATIONSHIP, DUTIES AND TITLE - BANCORP. Bancorp shall employ
Employee as an executive officer of Bancorp with the title of Executive Vice
President and Chief Financial Officer to perform such services and duties as the
Chief Executive Officer of Bancorp may designate from time to time. Subject to
the terms and conditions hereof, Employee shall perform such duties and exercise
such authority as are customarily performed and exercised by persons holding
such office, subject to the general direction of the Chief Executive Officer of
Bancorp. Such services and duties shall be exercised in good faith and in
accordance with standards of reasonable business judgment.

       1.2 RELATIONSHIP, DUTIES AND TITLE - BANK. Employee shall also serve as
an executive officer of the Bank with the title of Executive Vice President and
Chief Financial Officer to perform such services and duties as the Chief
Executive Officer of Bancorp may designate from time to time. Subject to the
terms and conditions hereof, Employee shall perform such duties and exercise
such authority as are customarily performed and exercised by persons holding
such office, subject to the general direction of the Chief Executive Officer of
Bancorp. Such services and duties shall be exercised in good faith and in
accordance with standards of reasonable business judgment.

       1.3 DUTIES; CONFLICTS. Employee shall devote his full time, attention and
efforts to the diligent performance of his duties as an officer of the Bank and
of Bancorp. Employee will not accept employment with any other individual,
corporation, partnership, governmental authority or any other entity, or engage
in any other venture for profit which Bancorp, or any subsidiary, parent, sister
or affiliated corporation of Bancorp, considers to be in conflict with their
best interests or to be in competition with

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their business, or which may interfere in any way with Employee's performance of
his duties hereunder.

       1.4 SERVICE ON OTHER COMPANY BOARDS. Nothing in the Agreement shall
prohibit Employee from serving on the board of directors of any profit or
non-profit corporation not in direct competition with Bancorp or with any
subsidiary, parent, sister or affiliated corporation of Bancorp. In addition,
Employee may own stock in any other corporation whether or not the stock is
publicly traded; provided, that if such corporation operates a business in
competition with Bancorp or with any subsidiary, parent, sister or affiliated
corporation of Bancorp, Employee may not own more than five percent (5%) of the
outstanding shares of such corporation.

       2. TERM OF EMPLOYMENT.

       2.1 TERM. The term of employment under the Agreement shall begin on April
1, 2000 and end on March 31, 2002.

       2.2 EXTENSIONS. Employee's term of employment under the Agreement may be
extended for successive one-year terms beyond the initial term of the Agreement
specified in Section 2.1, subject to the mutual agreement of the parties. The
parties shall reach mutual agreement concerning such extensions on or before a
date which is no less than one year prior to the date of expiration of
Employee's term of employment under the Agreement, including any extensions
thereof.

       3. TERMINATION.

       3.1 DEFINITION. As used in the Agreement, "termination" shall mean the
termination of Employee's employment relation with Bancorp, whether initiated by
Bancorp or by Employee, and whether for cause or without cause.

       3.2 TERMINATION EVENTS. Notwithstanding any other provisions of the
Agreement, the employment of Employee shall terminate immediately on the earlier
to occur of any of the following:

              3.2.1 Employee's death;

              3.2.2 Employee's complete disability. "Complete disability" as
used herein shall mean the inability of Employee, due to illness, accident, or
other physical or mental incapacity, to perform the services required under the
Agreement for an aggregate of ninety (90) days within any period of 180
consecutive days during the term hereof; provided, however, that disability
shall not constitute a basis for discharge for cause;

              3.2.3 The discharge of Employee by Bancorp for cause. "Cause" as
used herein shall mean (i) Employee's negligence or misconduct as shall
constitute, as a matter of law, a breach of the covenants and obligations of
Employee hereunder; (ii) failure or

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refusal of Employee to comply with the provisions of the Agreement; (iii)
Employee's conviction by any duly constituted court with competent jurisdiction
of a crime (other than traffic offenses); (iv) Employee's malfeasance or
incompetence, provided that in applying this criteria Bancorp shall not be
unreasonable or arbitrary, and provided further that prior to effecting a
dismissal under this Section (iv) Bancorp shall afford Employee with fair and
reasonable warning and with a fair and reasonable opportunity to cure any
defects in Employee's performance.

       3.3 TERMINATION BY EMPLOYEE. Employee may terminate his employment with
Bancorp with or without cause by giving thirty (30) days written notice of
termination. "Cause" as used herein shall include Bancorp's failure or refusal
to comply with the provisions of the Agreement.

       3.4 EFFECT OF TERMINATION. The termination of Employee's employment shall
constitute a tender by Employee of his resignation as an officer of Bancorp, as
an officer of Bancorp, and as a member of any board of directors or board
committees of any subsidiary, parent, sister or affiliated corporation of
Bancorp if Employee is a member thereof at the time of termination.

       3.5 PAYMENT ON TERMINATION. If Employee's employment is terminated by
Employee with or without cause, or by Bancorp with or without cause, Employee
shall be paid all base salary and benefits accrued under the Agreement as of the
termination date.

       3.6 SEVERANCE PAYMENT. If Employee's employment is terminated by Employee
with cause, or by Bancorp without cause, Employee shall be paid all base salary
and benefits accrued under the Agreement as of the termination date, and in
addition, shall be entitled to a severance payment equal to the greater of (i)
one month's base salary as of the date of termination multiplied by the number
of full calendar years Employee has been employed by the Bank, Bancorp or any
predecessor thereof, or (ii) one month's base salary as of the date of
termination multiplied by twelve (12). For purposes of Section 3.6(i) a period
of continuous full-time employment for six months or more in a calendar year
shall count as a full calendar year. If for any period Employee has been
employed simultaneously by the Bank and by one or more of its affiliates,
including Bancorp, such period shall count only once in determined the severance
payment under Section 3.6(i). The severance payment provided herein shall be
paid in full within thirty (30) days of the date of Employee's termination.
Employee shall not be entitled to such severance payment if Employee's
employment is terminated by Bancorp with cause, or by Employee without cause,
and in either such case Employee shall only be entitled to receive on
termination a payment equal to Employee's base salary and benefits accrued under
the Agreement as of the termination date, and no other payments.

       3.7 PERFORMANCE BONUS. If Employee's employment is terminated by Employee
with cause, or by Bancorp without cause, Employee shall be paid, in addition to
the amounts payable under Sections 3.5 and 3.6 of the Agreement: (i) all
nonforfeitable deferred compensation, if any; and (ii) unpaid performance bonus
payments, if any,

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payable under Section 4.3 of the Agreement, which shall be declared earned and
payable based upon performance up to, and shall be pro-rated as of, the date of
termination. Employee shall not be entitled to such unpaid performance bonus
payments if Employee's employment is terminated by Bancorp with cause, or by
Employee without cause.

       4. COMPENSATION.

       4.1 BASE SALARY. For the period beginning April 1, 2000 and ending March
31, 2001, Employee shall be paid an annual base salary of $90,000.00, payable in
equal bimonthly installments and subject to any deductions required by law.

       4.2 EXTENSIONS. On or before March 1, 2001, Bancorp shall determine
Employee's annual base salary for the period beginning April 1, 2001 through the
remaining term of employment under the Agreement. If Employee's term of
employment under the Agreement has been extended, Bancorp shall determine
Employee's annual base salary for subsequent periods of Employee's employment at
least 30 (thirty) days prior to the date of beginning of any such extended term.

       4.3 PERFORMANCE BONUS. Employee shall be entitled to consideration for
annual performance bonus compensation for each calendar year constituting a
percentage of annual base salary earned from his employment by Bancorp during
such calendar year. Bonus compensation shall be subject to any deductions
required by law. The management of Bancorp shall timely, and at least once
yearly, determine the amount of and the formulas and methods for establishing
such bonus compensation. The amount of such bonus compensation shall at all
times be discretionary, and Bancorp may decline to award a performance bonus to
Employee in any year.

              4.3.1 Employee shall be entitled to a pro-rata performance bonus
for less than a full year of performance if Employee's employment is terminated
by Employee with cause, or by the Bank without cause (including termination
following a change of control as described in Section 7.4 of the Agreement),
prior to the date on which Employee would otherwise be entitled to consideration
for Employee's annual performance bonus. In such circumstances, such pro-rata
performance bonus shall be declared earned and payable as of the date of
termination.

       5. BENEFITS; PURCHASE OF SHARES.

       5.1 ELIGIBILITY FOR GENERAL BENEFITS. Employee shall be eligible to
participate in any plan of Bancorp or its affiliates relating to stock options,
stock purchases, profit sharing, group life insurance, medical coverage,
education and other retirement or employee benefits that Bancorp or its
affiliates may adopt for the benefit of employees.

       5.2 ADDITIONAL BENEFITS. Employee shall be eligible to participate in any
other benefits which may be or become applicable to Bancorp's executive
employees of similar rank. In addition, Employee shall be entitled to: (i) a
reasonable expense account

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for use in connection with Bank or Bancorp business; and (ii) any other benefits
which in Bancorp's judgment are commensurate with the responsibilities and
functions to be performed by Employee under the Agreement, including the payment
of reasonable expenses for attendance by Employee and Employee's spouse at
annual meetings of the Oregon Bankers Association.

       5.3 SHARE OWNERSHIP. During the term of the Agreement, including
extensions, Employee shall purchase shares of Bancorp Stock, including purchases
through the exercise of stock options, in accordance with the share ownership
policies and requirements established by Bank management in effect from time to
time for employees of comparable rank.

       6. VACATIONS AND LEAVES.

       6.1 PAID VACATION. During the term of the Agreement, Employee shall be
entitled to annual paid vacation benefits identical to those offered to
employees of Bancorp holding executive positions. The timing of vacations shall
be scheduled in a reasonable manner by Employee. Employee shall not be entitled
to receive any additional compensation from Bancorp on account of his failure to
take a vacation, and may not accumulate unused vacation time from one calendar
year to the next.

       6.2 LEAVES WITH OR WITHOUT PAY. The Bancorp Board or the Chief Executive
Officer of Bancorp may grant Employee a leave or leaves of absence, with or
without pay, at such time or times and upon such terms and conditions as the
Bancorp Board or the Chief Executive Officer of Bancorp may determine.

       6.3 MANDATORY ABSENCE. In each calendar year Employee shall be absent
from Bancorp for one period of two consecutive weeks. Such period may include
vacation, leave, sick leave, attendance at seminars or conventions, or any
combination thereof.

       7. CHANGE OF CONTROL.

       7.1 SURVIVAL OF RIGHTS. Employee's rights on termination of employment
under Section 3 of the Agreement, as well as all other rights of Employee under
the Agreement or applicable law, shall survive a change of control of Bancorp or
the Bank whether or not Employee opposed or favored the change of control.

       7.2 RIGHTS ON CHANGE OF CONTROL. If a change of control of Bancorp or the
Bank occurs while the Agreement is in effect, Employee shall have ninety (90)
days following the date such change of control becomes effective to elect to
terminate Employee's employment with cause. If Employee so elects to terminate,
such termination shall constitute a termination by Employee with cause, and
Employee shall receive all payments and benefits due to Employee on termination
by Employee with cause under Section 3 of the Agreement.

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       7.3 BASE COMPENSATION. Following a change of control, there shall be no
reduction in Employee's base compensation in effect prior to the effective date
of the change of control for a period of time equal to the greater of (i) twelve
(12) months from the effective date of the change of control; (ii) one (1) month
for each full calendar year Employee has been employed by Bancorp or the Bank;
or (iii) the remaining term of the Agreement, including any extensions thereof.
For purposes of this Subsection 7.3, a period of continuous full-time employment
for six months or more in a calendar year shall count as a full calendar year.

       7.4 TERMINATION WITHOUT CAUSE. If following a change of control Bancorp
terminates Employee's employment within one (1) year of the effective date of
the change of control because of a reduction in force or for any other reason,
other than for cause pursuant to Section 3.3 of the Agreement, such termination
shall constitute a termination by Bancorp without cause, and Employee shall
receive all payments and benefits due to Employee on termination under Sections
3.5 and 3.6 of the Agreement, plus: (i) all nonforfeitable deferred
compensation, if any; and (ii) unpaid performance bonus payments, if any,
payable under Section 4.3 of the Agreement, which shall be declared earned and
payable based upon performance up to, and shall be pro-rated as of, the date of
termination.

       7.5 OPTIONS AND STOCK. If Employee is a participant in a restricted stock
plan or share option plan, and such plan is terminated involuntarily as a result
of the change of control, all stock and options shall be declared fully vested
and shall be paid, awarded or otherwise distributed. With respect to any
unexercised options under any stock option plan, such options may be exercised
within the period provided in such plan. Effective as of the date of the change
of control, any holding period established for stock paid as bonus or other
compensation shall be deemed terminated, except as otherwise provided by law.

       7.6 DEFINITION. As used in this Section, "control" shall mean the
acquisition during Employee's employment of twenty-five percent (25%) or more of
the voting securities of Bancorp or the Bank by any person, or persons acting as
a group within the meaning of Section 13(d) of the Securities Exchange Act of
1934, or to such acquisition of a percentage between ten percent (10%) and
twenty-five percent (25%) if the Board or the Comptroller of the Currency, the
FDIC, or the Federal Reserve Bank have made a determination that such
acquisition constitutes or will constitute control of Bancorp or the Bank. The
term "person" refers to an individual, corporation, bank, bank holding company,
or other entity, but excludes any Employee Stock Ownership Plan established for
the benefit of employees of Bancorp or any of its subsidiaries or other
affiliates.

       8. POST TERMINATION COVENANTS.

       8.1 NON-COMPETE COVENANTS. If Employee terminates his employment without
cause, or if Employee's employment is terminated by Bancorp for cause, then for

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one year from the date of such termination Employee will not, without the prior
written consent of Bancorp:

              8.1.1 Undertake full or part-time work, either as an employee or
as a consultant, for another financial institution if such work is to be done,
in whole or in part, in or from an office or other work site in Yamhill, Wasco,
Hood River, Jefferson, Deschutes, Sherman or Gilliam Counties, Oregon, in
Klickitat County, Washington, or in any other county in Oregon or Washington in
which Bancorp or any of its affiliates has a place of business at the time of
termination; or

              8.1.2 Hire for any financial institution or other employer
(including himself) any employee of Bancorp or any of its affiliates, or
directly or indirectly cause such an employee to leave his or her employment to
work for another employer, if such employee is to work in or from an office or
other work site in Yamhill, Wasco, Hood River, Jefferson, Deschutes, Sherman or
Gilliam Counties, Oregon, in Klickitat County, Washington, or in any other
county in Oregon or Washington in which Bancorp or any of its affiliates has a
place of business at the time of termination.

       8.2 LIQUIDATED DAMAGES FOR BREACH OF NON-COMPETE COVENANTS; OTHER
REMEDIES. If Employee breaches the covenants of Section 8.1, Employee shall be
liable to Bancorp for liquidated damages equal to the lesser of (i) $18,000, or
(ii) $1,500 multiplied by the number of months (including fractions thereof)
between the date of breach and one year from the date of Employee's termination
of employment. For example, if the date of breach occurs six months after the
date of Employee's termination, liquidated damages shall be $9,000 (6 x $1,500).
The parties agree that Bancorp's actual money damages upon Employee's breach
will be difficult to compute, and further agree that the liquidated damages
formula provided herein reasonably represents Bancorp's actual money damages.
Employee shall pay the liquidated damages required hereunder within ten (10)
days of the date Bancorp makes written demand for such payment. Nothing herein
shall preclude Bancorp from enforcing any other legal or equitable remedies it
may have upon Employee's breach, including injunctive relief. Such other
remedies may be enforced in addition to Bancorp's right to liquidated damages
under this Section.

       8.3 LIMITATION. The covenants in Section 8.1 do not apply if Employee
terminates his employment for cause, if Employee terminates his employment for
any reason within ninety (90) days after the effective date of a change of
control within the meaning of Section 7 of the Agreement, or if Employee's
employment is terminated by Bancorp without cause.

       8.4 ADDITIONAL COVENANTS. The following provisions shall apply and be
binding on Employee following Employee's termination of employment under all
circumstances, whether termination occurred with cause, without cause, following
illness or disability, because of a change of control, or for any other reason:

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              8.4.1 Employee shall fully cooperate in the defense or prosecution
of any litigation arising from or relating to matters about which Employee has
knowledge based on his employment or other work, paid or unpaid, for Bancorp and
its affiliates. To the extent allowed by law Employee shall receive reasonable
compensation in connection with his performance under this Section 8.4.1;

              8.4.2 Employee shall at all times keep all confidential and
proprietary information gained from his employment by Bancorp, or from other
previous, present or subsequent paid or unpaid work for Bancorp and its
affiliates, in strictest confidence, and will not disclose or otherwise
disseminate such information to anyone, other than to employees of Bancorp or
its affiliates, except as may be required by law, regulation or subpoena; and

              8.4.3 Employee shall not take or use for any purpose confidential
or proprietary information of Bancorp or its affiliates, including without
limitation customer or potential customer lists and trade secrets.

       9. MISCELLANEOUS.

       9.1 RECITALS; LAW; AMENDMENTS. Each and every portion of the Agreement is
contractual and not a mere recital, and all recitals shall be deemed
incorporated into the Agreement. The Agreement shall be governed by and
interpreted according to Oregon law and any applicable federal law. The
Agreement may not be amended except by a subsequent written agreement signed by
all parties hereto.

       9.2 ENTIRE AGREEMENT. The Agreement contains the entire understanding and
agreement of the parties with respect to the parties' relationship, and all
prior negotiations, discussions or understandings, oral or written, are hereby
integrated herein. No prior negotiations, discussions or agreements not
contained herein or in such documents shall be binding or enforceable against
the parties.

       9.3 COUNTERPARTS. The Agreement may be signed in several counterparts.
The signature of one party on any counterpart shall bind such party just as if
all parties had signed that counterpart. Each counterpart shall be considered an
original. All counterparts of the Agreement shall together constitute one
original document.

       9.4 SUCCESSORS AND ASSIGNS. All rights and duties of Bancorp under the
Agreement shall be binding on and inure to the benefit of Bancorp's successors
and assigns, including any person or entity which acquires a controlling
interest in Bancorp and any person or entity which acquires all or substantially
all of Bancorp's assets. Bancorp and any such successor or assign shall be and
remain jointly and severally liable to Employee under the Agreement. Employee
may not assign or transfer Employee's rights or interests in or under the
Agreement other than by a will or by the laws of descent and distribution. The
Agreement shall inure to the benefit of and be enforceable by Employee's estate
or legal representative.

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       9.5 WAIVER. Any waiver by any party hereto of any provision of the
Agreement, or of any breach thereof, shall not constitute a waiver of any other
provision or of any other breach. If any provision, paragraph or subparagraph
herein shall be deemed invalid, illegal or unenforceable in any respect, the
validity and enforceability of the remaining provisions, paragraphs and
subparagraphs shall not be affected.

       9.6 ARBITRATION. Any dispute, controversy, claim or difference concerning
or arising from the Agreement or the rights or performance of either party under
the Agreement, including disputes about the interpretation or construction of
the Agreement, shall be settled through binding arbitration in the State of
Oregon and in accordance with the rules of the American Arbitration Association.
A judgment upon the award rendered in such arbitration may be entered in any
court of competent jurisdiction.

       9.7 EMPLOYEE HANDBOOK. Employee agrees to be bound by the terms and
conditions of any employee handbook of the Bank or its affiliates as may be in
effect from time to time, except that in the event of a conflict between such
employee handbook and the Agreement, the Agreement shall control.

       9.8 CAPTIONS. All captions, titles and headings in the Agreement are for
convenience only, and shall not be construed to limit any term of the Agreement.

       9.9 DEFINITION. When used herein in reference to a corporation,
"affiliate" shall mean, without limitation, any parent or subsidiary of the
corporation and any entity controlled by the corporation.

       9.10 EXCEPTIONS. The Bancorp Board or the management of Bancorp may, in
its discretion, make exceptions to one or more of the conditions contained in
the Agreement, provided that any such exceptions must be approved in writing.

       9.11 PRIOR CONTRACTS. This Agreement replaces and supersedes all prior
written employment agreements between the parties.

/s/ Neal T. McLaughlin
--------------------------------------
Employee

COLUMBIA BANCORP

By: /s/ Terry L. Cochran
    ----------------------------------

Title: President & CEO
       -------------------------------

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                                                                   EXHIBIT 10.13

                                      LEASE

                                 BY AND BETWEEN

                           EAST ARQUES SUNNYVALE, LLC

                                       AND

                            SYMYX TECHNOLOGIES, INC.

            FOR THE PREMISES AT 1263 E. ARQUES, SUNNYVALE, CALIFORNIA

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                       <C>
1.  Premises .......................................................................       2

2.  Possession and Lease Commencement ..............................................       2

3.  Term ...........................................................................       2

4.  Use 2
        4.1  General ...............................................................       2
        4.2  Limitations ...........................................................       2
        4.3  Compliance with Regulations ...........................................       3
        4.4  Hazardous Materials ...................................................       3

5.  Rules and Regulations ..........................................................       4

6.  Rent ...........................................................................       4
        6.1  Base Rent .............................................................       4
        6.2  Additional Rent .......................................................       4

7.  Operating Expenses .............................................................       4
        7.1  Operating Expenses ....................................................       4
               7.1.1  Taxes ........................................................       4
               7.1.2  Insurance ....................................................       5
               7.1.3  Common Area Maintenance ......................................       5
               7.1.4  Utilities ....................................................       5
               7.1.5  Management Fee ...............................................       5
        7.2  Payment of Estimated Operating Expenses ...............................       5
        7.3  Computation of Operating Expense Adjustment ...........................       6
        7.4  Net Lease .............................................................       6
        7.5  Tenant Audit ..........................................................       6

8.  Insurance and Indemnification ..................................................       6
        8.1  Landlord's Insurance ..................................................       6
               8.1.1  Property Insurance ...........................................       7
               8.1.2  Optional Insurance ...........................................       7
        8.2  Tenant's Insurance ....................................................       7
               8.2.1  Property Insurance ...........................................       7
               8.2.2  Liability Insurance ..........................................       7
               8.2.3  Worker's Compensation and Employers' Liability Insurance .....       7
               8.2.4  Commercial Auto Liability Insurance ..........................       7
               8.2.5  General Insurance Requirements ...............................       8
               8.2.6  Indemnification ..............................................       8

9.  Waiver of Subrogation ..........................................................       8

10.  Landlord's Repairs and Maintenance ............................................       9

11.  Tenant's Repairs and Maintenance ..............................................       9

12.  Alterations ...................................................................       9

13.  Signs .........................................................................      10

14.  Inspection/Posting Notices ....................................................      11

15.  Utilities .....................................................................      11

16.  Subordination .................................................................      11

17.  Financial Statements ..........................................................      11

18.  Estoppel Certificate ..........................................................      12
</TABLE>

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<TABLE>
<S>                                                                                       <C>
19.  Security Deposit ..............................................................      12

20.  Tenant's Remedies .............................................................      12

21.  Assignment and Subletting .....................................................      12
        21.1  Assignment and Subletting ............................................      12
               21.1.1  General .....................................................      12
               21.1.2  Conditions of Landlord's Consent ............................      13
        21.2  Bonus Rent ...........................................................      13
        21.3  Corporation ..........................................................      13
        21.4  Unincorporated Entity ................................................      13
        21.5  Liability ............................................................      13

22.  Authority .....................................................................      14

23.  Condemnation ..................................................................      14
        23.1  Condemnation Resulting in Termination ................................      14
        23.2  Condemnation Not Resulting in Termination ............................      14
        23.3  Award ................................................................      14
        23.4  Waiver of CCP Section 1265.130 .......................................      14

24.  Casualty Damage ...............................................................      14
        24.1  General ..............................................................      14
        24.2  Within 120 Days ......................................................      14
        24.3  Greater than 120 Days ................................................      14
        24.4  Greater than 180 Days ................................................      15
        24.5  Tenant's Fault .......................................................      15
        24.6  Insurance Proceeds ...................................................      15
        24.7  Waiver ...............................................................      15
        24.8  Tenant's Personal Property ...........................................      15

25.  Holding Over ..................................................................      15

26.  Default .......................................................................      16
        26.1  Events of Default ....................................................      16
               26.1.1  Abandonment .................................................      16
               26.1.2  Nonpayment of Rent ..........................................      16
               26.1.3  Other Obligations ...........................................      16
               26.1.4  General Assignment ..........................................      16
               26.1.5  Bankruptcy ..................................................      16
               26.1.6  Receivership ................................................      16
               26.1.7  Attachment ..................................................      16
        26.2  Remedies Upon Default ................................................      16
               26.2.1  Termination .................................................      16
               26.2.2  Continuation After Default ..................................      17
        26.3  Damages After Default ................................................      17
        26.4  Late Charge ..........................................................      17
        26.5  Remedies Cumulative ..................................................      17

27.  Liens .........................................................................      17

28.  Transfers by Landlord .........................................................      18

29.  Right of Landlord to Perform Tenant's Covenants ...............................      18

30.  Waiver ........................................................................      18

31.  Notices .......................................................................      18
        31.1  Rent .................................................................      18
        31.2  Other ................................................................      19

32.  Attorneys' Fees ...............................................................      19

33.  Successors and Assigns ........................................................      19
</TABLE>

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<TABLE>
<S>                                                                                       <C>
34.  Force Majeure .................................................................      19

35.  Surrender of Premises .........................................................      19

36.  Miscellaneous .................................................................      19
        36.1  General ..............................................................      19
        36.2  Time .................................................................      19
        36.3  Choice of Law ........................................................      19
        36.4  Entire Agreement .....................................................      19
        36.5  Modification .........................................................      20
        36.6  Severability .........................................................      20
        36.7  Recordation ..........................................................      20
        36.8  Examination of Lease .................................................      20
        36.9  Accord and Satisfaction ..............................................      20
        36.10  Easements ...........................................................      20
        36.11  Drafting and Determination Presumption ..............................      20
        36.12  Exhibits ............................................................      20
        36.13  No Light, Air or View Easement ......................................      20
        36.14  No Third Party Benefit ..............................................      20
        36.15  Quiet Enjoyment .....................................................      20
        36.16  Counterparts ........................................................      20
        36.17  Multiple Parties ....................................................      20
        36.18  Prorations ..........................................................      21

37.  Additional Provisions .........................................................      21
        37.1  Addenda ..............................................................      21
        37.2  Base Rent ............................................................      21
        37.3  Shell ................................................................      21
        37.4  Tenant Work ..........................................................      21
        37.5  Beneficial Occupancy .................................................      22
        37.6  Extension Option .....................................................      22
</TABLE>

EXHIBITS

Exhibit A  Building

Exhibit B  Premises

Exhibit C  Landlord's Plans and Specifications

Exhibit D  Tenant's Plans and Specifications

<PAGE>   5

                             BASIC LEASE INFORMATION
                                 INDUSTRIAL NET

LEASE                                   DATE: February 29, 2000

TENANT:                                 Symyx Technologies, Inc., a Delaware
                                        corporation

TENANT'S NOTICE ADDRESS:                1263 E. Arques Avenue,
                                        Sunnyvale, CA 94086 after the
                                        Commencement Date. Prior to the
                                        Commencement Date Tenant's address will
                                        be Tenant's billing address.

TENANT'S BILLING ADDRESS:               3100 Central Expressway,
                                        Santa Clara, CA 95051

TENANT CONTACT:                         PHONE NUMBER:

LANDLORD:                               East Arques Sunnyvale, LLC, a California
                                        limited liability company

LANDLORD'S NOTICE ADDRESS:              c/o South Bay Development
                                        1690 Dell Avenue
                                        Campbell, CA 95008

BUILDING                                That approximately 36,547 square foot,
DESCRIPTION:                            two-story building known as 1263 E.
                                        Arques, Sunnyvale, California, and the
                                        real property on which the
                                        Building is located, including
                                        all improvements therein and
                                        thereon. The Building is shown
                                        in Exhibit A.

PREMISES:                               All of the rentable space in the two-
                                        story building comprised of
                                        approximately 36,547 square feet of
                                        rentable area known as 1263 E. Arques,
                                        Sunnyvale, California. The premises is
                                        outlined on Exhibit B.

PERMITTED USE:                          Office, research and development,
                                        laboratory, light manufacturing,
                                        storage, shipping, receiving and other
                                        legally related uses.

PARKING DENSITY:                        Approximately 151 spaces.

SCHEDULED TERM COMMENCEMENT DATE:       October 1, 2000

LENGTH OF TERM:                         Ten (10) years

RENT:  BASE RENT:                       $91,367.50
                                        (subject to adjustment as provided in
                                        Paragraph 37.2 hereof)

SECURITY DEPOSIT:                       $130,044.44

TENANT'S PROPORTIONATE SHARE:           100%

The foregoing Basic Lease Information is incorporated into and made a part of
this Lease. Each reference in this Lease to any of the Basic Lease Information
shall mean the respective information above and shall be construed to
incorporate all of the terms provided under the particular Lease paragraph
pertaining to such information. In the event of any conflict between the Basic
Lease Information and the Lease, the latter shall control.

                                      -1-
<PAGE>   6

                                      LEASE

        THIS LEASE is made as of the 29th day of February, 2000, by and between
East Arques Sunnyvale, LLC, a California limited liability company (hereinafter
called "Landlord"), and Symyx Technologies, Inc., a Delaware corporation
(hereinafter called "Tenant").

        1. Premises. Landlord leases to Tenant and Tenant leases from Landlord,
upon the terms and conditions hereinafter set forth, those premises (the
"Premises") outlined in red on Exhibit B and described in the Basic Lease
Information. The Premises shall be all or part of a building (the "Building") as
described in the Basic Lease Information. The Building is shown in Exhibit A and
includes the real property of which it is a part. Tenant accepts the area of the
Premises as specified in this Lease as the approximate area of the Premises, and
acknowledges and agrees that Tenant shall in no event be entitled to a
recalculation of the square footage of the Premises and that no such
recalculation shall reduce Tenant's obligations under this Lease in any manner,
including without limitation the amount of Base Rent payable by Tenant or
Tenant's Proportionate Share.

        2. Possession and Lease Commencement. Landlord and Tenant acknowledge
that Landlord has not yet completed the improvements constituting the Building
and the Premises. The term commencement date ("Term Commencement Date") shall be
the earlier of the date on which: (1) Tenant takes possession of some or all of
the Premises and opens for business therein; or (2) the improvements to be
constructed in the Premises by Landlord shall have been substantially completed
in accordance with the plans and specifications described on Exhibit C, whether
or not substantial completion of the Building shall have occurred. If for any
reason Landlord cannot deliver possession of the Premises to Tenant on the
scheduled Term Commencement Date, Landlord shall not be subject to any liability
therefor, nor shall Landlord be in default hereunder nor shall such failure
affect the validity of this Lease, and Tenant agrees to accept possession of the
Premises at such time as such improvements have been substantially completed,
which date shall then be deemed the Term Commencement Date. Tenant shall not be
liable for any Rent for any period prior to the Term Commencement Date (but
without affecting any obligations of Tenant under any work letter appended to
this Lease). In the event of any dispute as to substantial completion of work
performed or required to be performed by Landlord, the certificate of Landlord's
architect or general contractor shall be conclusive. Substantial completion
shall have occurred notwithstanding Tenant's submission of a punchlist to
Landlord, which Tenant shall submit, if at all, within fifteen (15) days after
the Term Commencement Date. Upon Landlord's request, Tenant shall promptly
execute and return to Landlord a Start-Up Letter in which Tenant shall confirm,
among other things, the acceptance of the Premises and the determination of the
Term Commencement Date, in accordance with the terms of this Lease.

        3. Term. The term of this Lease (the "Term") shall commence on the Term
Commencement Date and continue in full force and effect for ten (10) years or
until this Lease is terminated as otherwise provided herein.

        4. Use.

               4.1 General. Tenant shall use the Premises for the permitted use
specified in the Basic Lease Information ("Permitted Use") and for no other use
or purpose. Tenant shall control Tenant's employees, agents, customers,
visitors, invitees, licensees, contractors, assignees and subtenants
(collectively, "Tenant's Parties") in such a manner that Tenant and Tenant's
Parties cumulatively do not exceed the parking density specified in the Basic
Lease Information (the "Parking Density") at any time. Tenant and Tenant's
Parties shall have the nonexclusive right to use, in common with any other
parties occupying the Building, the parking areas, driveways and other common
areas of the Building, subject to such rules and regulations as Landlord may
from time to time prescribe.

               4.2 Limitations. Tenant shall not permit any odors, smoke, dust,
gas, substances, noise or vibrations to emanate from the Premises or from any
portion of the common areas as a result of Tenant's or any Tenant's Party's use
thereof, nor take any action which would constitute a nuisance or would disturb,
obstruct or endanger any other tenants or occupants of the Building or interfere
with their use of their respective premises or common areas. Storage outside the
Premises of materials, vehicles or any other items is prohibited. Tenant shall
not use or allow the Premises to be used for any immoral, improper or unlawful
purpose, nor shall

                                      -2-
<PAGE>   7

Tenant cause or maintain or permit any nuisance in, on or about the Premises.
Tenant shall not commit or suffer the commission of any waste in, on or about
the Premises. Tenant shall not allow any sale by auction upon the Premises, or
place any loads upon the floors, walls or ceilings which endanger the structure,
or place any harmful substances in the drainage system of the Building. No
waste, materials or refuse shall be dumped upon or permitted to remain outside
the Premises except in trash containers placed inside exterior enclosures
designated for that purpose by Landlord. Landlord shall not be responsible to
Tenant for the non-compliance by any other tenant or occupant of the Building
with any of the above-referenced rules or any other terms or provisions of such
tenant's or occupant's lease or other contract.

               4.3 Compliance with Regulations. By entering the Premises, Tenant
accepts the Premises in the condition existing as of the date of such entry.
Tenant shall at its sole cost and expense strictly comply with all existing or
future applicable municipal, state and federal and other governmental statutes,
rules, requirements, regulations, laws and ordinances, including zoning
ordinances and regulations, and covenants, easements and restrictions of record
governing and relating to Tenant's use, occupancy or possession of the Premises,
to Tenant's use of the common areas, or to Tenant's use, storage, generation or
disposal of Hazardous Materials (hereinafter defined) (collectively
"Regulations"). Tenant shall at its sole cost and expense obtain any and all
licenses or permits necessary for Tenant's use of the Premises. Tenant shall at
its sole cost and expense promptly comply with the requirements of any board of
fire underwriters or other similar body now or hereafter constituted. Tenant
shall not do or permit anything to be done in, on, under or about the Building
or bring or keep anything which will in any way increase the rate of any
insurance upon the Premises or the Building or upon any contents therein or
cause a cancellation of said insurance or otherwise affect said insurance in any
manner. Tenant shall indemnify, defend, protect and hold Landlord harmless from
and against any loss, cost, expense, damage, attorneys' fees or liability
arising out of the failure of Tenant to comply with any Regulation. Tenant's
obligations pursuant to the foregoing indemnity shall survive the expiration or
earlier termination of this Lease.

               4.4 Hazardous Materials. "Hazardous Materials" shall mean and
include, but not be limited to, hazardous, toxic and radioactive materials and
those substances defined as "hazardous substances," "hazardous materials,"
"hazardous wastes," "toxic substances," or other similar designations in any
Regulation. Tenant shall not cause, or allow any of Tenant's Parties to cause,
any Hazardous Materials to be used, generated, stored or disposed of on or about
the Premises, the Building or surrounding land or environment in violation of
any Regulations. Tenant shall obtain written consent from the City of Sunnyvale
prior to the introduction of any Hazardous Materials into the Building and
comply on an ongoing basis with all governmental requirements relating thereto.
Notwithstanding the foregoing, Tenant may handle, store, use and dispose of
products containing small quantities of Hazardous Materials for "general office
purposes" (such as toner for copiers) to the extent customary and necessary for
the Permitted Use of the Premises; provided that Tenant shall always handle,
store, use, and dispose of any such Hazardous Materials in a safe and lawful
manner and never allow such Hazardous Materials to contaminate the Premises or
the Building, or surrounding land or environment. Tenant shall immediately
notify Landlord of any Hazardous Materials' contamination of any portion of the
Building of which Tenant becomes aware, whether or not caused by Tenant.
Landlord shall have the right at all reasonable times to inspect the Premises
and to conduct tests and investigations to determine whether Tenant is in
compliance with the foregoing provisions, the costs of all such inspections,
tests and investigations to be borne by Tenant. Tenant shall indemnify, defend,
protect and hold Landlord harmless from and against all liabilities, losses,
costs and expenses (including attorneys' and consultants' fees), demands, causes
of action, claims or judgments directly or indirectly arising out of the use,
generation, storage, release, or disposal of Hazardous Materials by Tenant or
any of Tenant's Parties in, on or about the Premises or the Building or
surrounding land or environment, which indemnity shall include, without
limitation, damages for personal or bodily injury, property damage, damage to
the environment or natural resources occurring on or off the Premises, losses
attributable to diminution in value or adverse effects on marketability, the
cost of any investigation, monitoring, government oversight, repair, removal,
remediation, restoration, abatement, and disposal, and the preparation of any
closure or other required plans, whether such action is required or necessary
prior to or following the expiration or earlier termination of this Lease.
Neither the consent by Landlord to the use, generation, storage, release or
disposal of Hazardous Materials nor the strict compliance by Tenant with all
laws pertaining to Hazardous Materials shall excuse Tenant from Tenant's
obligation of indemnification pursuant to this Paragraph 4.4. Tenant's
obligations pursuant to the foregoing

                                      -3-
<PAGE>   8

indemnity shall survive the expiration or earlier termination of this Lease.
Landlord shall be responsible for costs arising from pre-existing environmental
conditions on the Premises upon demand by Landlord, Tenant shall provide to
Landlord (1) an itemization of Hazardous Materials that are currently used or
have ever been used on the Premises, (2) copies of any reports provided to any
governmental agency relating to Hazardous Materials, and (3) evidence of
compliance with all laws relating to Hazardous Materials.

        5. Rules and Regulations. Tenant shall faithfully observe and comply
with any reasonable rules and regulations and any modifications or additions
thereto which Landlord may from time to time prescribe in writing for the
purpose of maintaining the proper care, cleanliness, safety, traffic flow and
general order of the Premises or the Building. Tenant shall cause Tenant's
Parties to comply with such rules and regulations. Landlord shall not be
responsible to Tenant for the non-compliance by any other tenant or occupant of
the Building with any of such rules and regulations, any other tenant's or
occupant's lease or any Regulations.

        6. Rent.

               6.1 Base Rent. Tenant shall pay to Landlord and Landlord shall
receive, without notice or demand throughout the Term, Base Rent as specified in
the Basic Lease Information, payable in monthly installments in advance on or
before the first day of each calendar month, in lawful money of the United
States, without deduction or offset whatsoever, at the Remittance Address
specified in the Basic Lease Information or to such other place as Landlord may
from time to time designate in writing. Base Rent for the first full month of
the Term shall be paid by Tenant upon Tenant's execution of this Lease. If the
obligation for payment of Base Rent commences on other than the first day of a
month, then Base Rent shall be prorated and the prorated installment shall be
paid on the first day of the calendar month next succeeding the Term
Commencement Date. The Base Rent payable by Tenant hereunder is subject to
adjustment as provided in addenda appended to this Lease (if referred to in
Paragraph 38.1). "Base Rent" shall mean the Base Rent specified in the Basic
Lease Information as it may be so adjusted from time to time.

               6.2 Additional Rent. All monies other than Base Rent required to
be paid by Tenant hereunder, including, but not limited to, Tenant's
Proportionate Share of Operating Expenses, as specified in Paragraph 7 of this
Lease, the interest and late charge described in Paragraphs 26.3 and 26.4, and
any monies spent by Landlord pursuant to Paragraph 30, shall be considered
additional rent ("Additional Rent"). "Rent" shall mean Base Rent and Additional
Rent.

        7. Operating Expenses.

               7.1 Operating Expenses. In addition to the Base Rent required to
be paid hereunder, Tenant shall pay as Additional Rent, Tenant's Proportionate
Share, as defined in the Basic Lease Information, of Operating Expenses (defined
below) in the manner set forth below. "Operating Expenses" shall mean all
expenses and costs of every kind and nature which Landlord shall pay or become
obligated to pay, because of or in connection with the ownership, management,
maintenance, repair, preservation, replacement and operation of the Building and
its supporting facilities (as determined in a reasonable manner) other than
those expenses and costs which are specifically attributable to Tenant or which
are expressly made the financial responsibility of Landlord pursuant to this
Lease. Operating Expenses shall include, but are not limited to, the following:

                    7.1.1 Taxes. All real property taxes and assessments,
possessory interest taxes, sales taxes, personal property taxes, business or
license taxes or fees, gross receipts taxes, service payments in lieu of such
taxes or fees, annual or periodic license or use fees, excises, transit charges,
and other impositions, general and special, ordinary and extraordinary,
unforeseen as well as foreseen, of any kind (including fees "in-lieu" of any
such tax or assessment) which are now or hereafter assessed, levied, charged,
confirmed, or imposed by any public authority upon the Building, its operations
or the Rent (or any portion or component thereof), or any tax, assessment or fee
imposed in substitution, partially or totally, of any of the above. Operating
Expenses shall also include any taxes, assessments, or other fees or impositions
with respect to the development, leasing, management, maintenance, alteration,
repair, use or occupancy by Tenant of the Premises or any portion thereof, or
upon this transaction or any document creating or transferring an interest in
the Premises (excluding,

                                      -4-
<PAGE>   9

however, any development or permit fees incurred in connection with the
development of the Building and the land on which it is located). In the event
that it shall not be lawful for Tenant to reimburse Landlord for all or any part
of such taxes, the monthly rental payable to Landlord under this Lease shall be
revised to net Landlord the same net rental after imposition of any such taxes
by Landlord as would have been payable to Landlord prior to the payment of any
such taxes.

                    7.1.2 Insurance. All insurance premiums and costs,
including, but not limited to, any deductible amounts, premiums and other costs
of insurance incurred by Landlord, including for the insurance coverage set
forth in Paragraph 8.1 herein.

                    7.1.3 Common Area Maintenance.

                         (a) Repairs, replacements, and general maintenance of
and for the Building and public and common areas of the Building, including, but
not limited to, the roof, pest extermination, landscaped areas, parking and
service areas, driveways, truck staging areas, rail spur areas, fire sprinkler
systems, sanitary and storm sewer lines, utility services, electric and
telephone equipment and wiring servicing, exterior lighting, and any other items
or areas which affect the operation or exterior appearance of the Building,
which determination shall be at Landlord's discretion, except for: those items
expressly made the financial responsibility of Landlord pursuant to Paragraph 10
hereof; those items to the extent paid for by the proceeds of insurance; and
those items attributable solely or jointly to specific tenants of the Building.

                         (b) Repairs, replacements, and general maintenance
shall include the cost of any capital improvements made to or capital assets
acquired for the Building, including present or future repair work, are
reasonably necessary for the health and safety of the occupants of the Building,
or are required under any governmental law or regulation, such costs or
allocable portions thereof to be amortized over the useful life of such
improvement in accordance with IRS rules and regulations, or if not applicable,
in accordance with generally accepted accounting principles, together with
interest on the unamortized balance at the "prime rate" charged by Wells Fargo
Bank, N.A. (San Francisco) or its successor at the time such improvements or
capital assets are constructed or acquired, plus two (2) percentage points, but
in no event more than the maximum rate permitted by law.

                         (c) Payment under or for any easement, license, permit,
operating agreement, declaration, restrictive covenant or instrument relating to
the Building.

                         (d) All expenses related to services and costs of
supplies and equipment used in maintaining the Premises, Building, the equipment
therein and the adjacent sidewalks, driveways, parking and service areas,
including, without limitation, expenses related to service agreements regarding
security and fire and other alarm systems, janitorial services to the extent not
addressed in Paragraph 11 hereof, window cleaning, elevator maintenance,
Building exterior maintenance, landscaping and expenses related to the
administration, management and operation of the Building, including without
limitation salaries, wages and benefits.

                    7.1.4 Utilities. The cost of supplying any utilities which
benefit all or a portion of the Premises or the Building to the extent not
addressed in Paragraph 15 hereof.

                    7.1.5 Management Fee. A management and accounting cost
recovery fee equal to two percent (2%) of the sum of Base Rent.

        The above enumeration of services and facilities shall not be deemed to
impose an obligation on Landlord to make available or provide such services or
facilities except to the extent Landlord has specifically agreed elsewhere in
this Lease to make the same available or provide the same. Without limiting the
generality of the foregoing, Tenant acknowledges and agrees that it shall be
responsible for providing adequate security for its use of the Premises and that
Landlord shall have no obligation or liability with respect thereto, except to
the extent Landlord has specifically agreed elsewhere in this Lease to provide
the same.

               7.2 Payment of Estimated Operating Expenses. "Estimated Operating
Expenses" for any particular year shall mean Landlord's estimate of the
Operating Expenses for

                                      -5-
<PAGE>   10

such fiscal year made with respect to such fiscal year as hereinafter provided.
Landlord shall have the right from time to time to revise its fiscal year and
interim accounting periods so long as the periods as so revised are reconciled
with prior periods in a reasonable manner. During the last month of each fiscal
year during the Term, or as soon thereafter as practicable, Landlord shall give
Tenant written notice of the Estimated Operating Expenses for the ensuing fiscal
year. Tenant shall pay Tenant's Proportionate Share of the Estimated Operating
Expenses with installments of Base Rent for the fiscal year to which the
Estimated Operating Expenses applies in monthly installments on the first day of
each calendar month during such year, in advance. If at any time during the
course of the fiscal year, Landlord determines that Operating Expenses are
projected to vary from the then Estimated Operating Expenses by more than ten
percent (10%), Landlord may, by written notice to Tenant, revise the Estimated
Operating Expenses for the balance of such fiscal year, and Tenant's monthly
installments for the remainder of such year shall be adjusted so that by the end
of such fiscal year Tenant has paid to Landlord Tenant's Proportionate Share of
the revised Estimated Operating Expenses for such year.

               7.3 Computation of Operating Expense Adjustment. "Operating
Expense Adjustment" shall mean the difference between Estimated Operating
Expenses and actual Operating Expenses for any fiscal year determined as
hereinafter provided. Within one hundred twenty (120) days after the end of each
fiscal year, as determined by Landlord, or as soon thereafter as practicable,
Landlord shall deliver to Tenant a statement of actual Operating Expenses for
the fiscal year just ended, accompanied by a computation of Operating Expense
Adjustment. If such statement shows that Tenant's payment based upon Estimated
Operating Expenses is less than Tenant's Proportionate Share of Operating
Expenses, then Tenant shall pay to Landlord the difference within twenty (20)
business days after receipt of such statement. If such statement shows that
Tenant's payments of Estimated Operating Expenses exceed Tenant's Proportionate
Share of Operating Expenses, then (provided that Tenant is not in default under
this Lease) Landlord shall pay to Tenant the difference within twenty (20) days
after delivery of such statement to Tenant. If this Lease has been terminated or
the Term hereof has expired prior to the date of such statement, then the
Operating Expense Adjustment shall be paid by the appropriate party within
twenty (20) days after the date of delivery of the statement. Should this Lease
commence or terminate at any time other than the first day of the fiscal year,
Tenant's Proportionate Share of the Operating Expense Adjustment shall be
prorated by reference to the exact number of calendar days during such fiscal
year that this Lease is in effect.

               7.4 Net Lease. This shall be a triple net Lease and Base Rent
shall be paid to Landlord absolutely net of all costs and expenses, except as
specifically provided to the contrary in this Lease. The provisions for payment
of Operating Expenses and the Operating Expense Adjustment are intended to pass
on to Tenant and reimburse Landlord for all costs and expenses of the nature
described in Paragraph 7.A. incurred in connection with the ownership,
management, maintenance, repair, preservation, replacement and operation of the
Building and such additional facilities now and in subsequent years as may be
determined by Landlord to be necessary to the Building.

               7.5 Tenant Audit. If Tenant shall dispute the amount set forth in
any statement provided by Landlord under Paragraph 7.2 or 7.3 above, Tenant
shall have the right, not later than forty five (45) days following receipt of
such statement and upon the condition that Tenant shall first deposit with
Landlord the full amount in dispute, to cause Landlord's books and records with
respect to Operating Expenses for such fiscal year to be audited by certified
public accountants selected by Tenant and subject to Landlord's reasonable right
of approval. The Operating Expense Adjustment shall be appropriately adjusted on
the basis of such audit. If such audit discloses a liability for a refund in
excess of five percent (5%) of Tenant's Proportionate Share of the Operating
Expense Adjustment previously reported, the cost of such audit shall be borne by
Landlord; otherwise the cost of such audit shall be paid by Tenant. If Tenant
shall not request an audit in accordance with the provisions of this Paragraph
7.5 within forty five (45) days after receipt of Landlord's statement provided
pursuant to Paragraph 7.2 or 7.3, such statement shall be final and binding for
all purposes hereof.

        8. Insurance and Indemnification.

               8.1 Landlord's Insurance. All insurance maintained by Landlord
shall be for the sole benefit of Landlord and under Landlord's sole control.

                                      -6-
<PAGE>   11

                    8.1.1 Property Insurance. Landlord agrees to maintain
property insurance insuring the Building with what is commonly known as
"all-risk" coverage, including fire, vandalism, and malicious mischief in an
amount not less than the replacement cost thereof, in the form and with
deductibles and endorsements as selected by Landlord. At its election, Landlord
may also obtain earthquake, and/or flood insurance in amounts selected by
Landlord.

                    8.1.2 Optional Insurance. Landlord, at Landlord's option,
may also carry insurance against loss of rent, in an amount equal to the amount
of Base Rent and Additional Rent that Landlord could be required to abate to all
Building tenants in the event of condemnation or casualty damage for a period of
twelve (12) months. Landlord may also carry such other insurance as Landlord may
deem prudent or advisable, including, without limitation, liability insurance in
such amounts and on such terms as Landlord shall determine. Landlord shall not
be obligated to insure any furniture, machinery, goods, inventory or supplies,
or other personal property or fixtures which Tenant may keep or maintain in the
Premises, or any leasehold improvements, additions or alterations within the
Premises, unless Tenant so requests, specifically identifying such leasehold
improvements, additions or alterations to be insured, at Tenant's cost.

               8.2 Tenant's Insurance.

                    8.2.1 Property Insurance. Tenant shall procure at Tenant's
sole cost and expense and keep in effect from the date of this Lease and at all
times until the end of the Term, insurance on all personal property and fixtures
of Tenant and all improvements, additions or alterations made by or for Tenant
to the Premises (not insured by Landlord pursuant to paragraph 8.1.2) on an "All
Risk" basis, insuring such property for the full replacement value of such
property.

                    8.2.2 Liability Insurance. Tenant shall procure at Tenant's
sole cost and expense and keep in effect from the date of this Lease and at all
times until the end of the Term Commercial General Liability insurance applying
to the use and occupancy of the Premises and the Building, and any part of
either, and any areas adjacent thereto, and the business operated by Tenant or
by any other occupant of the Premises. Such insurance shall include Broad Form
Contractual Liability insurance coverage insuring all of Tenant's indemnity
obligations under this Lease. Such coverage shall have a minimum combined single
limit of liability of at least Five Million Dollars ($5,000,000), and a minimum
general aggregate limit of Ten Million Dollars ($10,000,000), with an
"Additional Insured -- Managers or Lessors of Premises Endorsement" and the
"Amendment of the Pollution Exclusion Endorsement." All such policies shall be
written to apply to all bodily injury, property damage or loss, personal injury
and other covered loss, however occasioned, occurring during the policy term,
shall be endorsed to add Landlord and any party holding an interest to which
this Lease may be subordinated as an additional insured, and shall provide that
such coverage shall be "primary" and non-contributing with any insurance
maintained by Landlord, which shall be excess insurance only. Such coverage
shall also contain endorsements: (i) deleting any employee exclusion on personal
injury coverage; (ii) including employees as additional insureds; and (iii)
providing for coverage of employer's automobile non-ownership liability. All
such insurance shall provide for the severability of interests of insureds; and
shall be written on an "occurrence" basis, which shall afford coverage for all
claims based on acts, omissions, injury and damage, which occurred or arose (or
the onset of which occurred or arose) in whole or in part during the policy
period. Tenant shall also procure at Tenant's sole cost and expense and keep in
effect during the Term of this Lease, Legal Liability Insurance covering direct
physical damage and loss of use of the Building for which Tenant is legally
obligated in an amount of the full replacement value of the Building.

                    8.2.3 Worker's Compensation and Employers' Liability
Insurance. Tenant shall carry Workers' Compensation Insurance as required by any
Regulation, throughout the Term at Tenant's sole cost and expense. Tenant shall
also carry Employers' Liability Insurance in amounts not less than One Million
Dollars ($1,000,000) each accident for bodily injury by accident; One Million
Dollars ($1,000,000) policy limit for bodily injury by disease; and One Million
Dollars ($1,000,000) each employee for bodily injury by disease, throughout the
Term at Tenant's sole cost and expense.

                    8.2.4 Commercial Auto Liability Insurance. Tenant shall
procure at Tenant's sole cost and expense and keep in effect from the date of
this Lease and at all times

                                      -7-
<PAGE>   12

until the end of the Term commercial auto liability insurance with a combined
limit of not less than Five Million Dollars ($5,000,000) for bodily injury and
property damage for each accident. Such insurance shall cover liability relating
to any auto (including owned, hired and non-owned autos).

                    8.2.5 General Insurance Requirements. All coverages
described in this Paragraph 8.2 shall be endorsed to (i) provide Landlord with
thirty (30) days' notice of cancellation or change in terms; and (ii) waive all
rights of subrogation by the insurance carrier against Landlord. If at any time
during the Term Landlord's lender or lender's requires that the amount or
coverage of insurance which Tenant is required to carry under this Paragraph 8.2
be increased or if Tenant's use of the Premises should change with or without
Landlord's consent, Landlord shall have the right to require Tenant to increase
the amount or change the types of insurance coverage required under this
Paragraph 8.2. All insurance policies required to be carried under this Lease
shall be written by companies rated A X or better in "Best's Insurance Guide"
and authorized to do business in the State of California. In any event
deductible amounts shall not exceed Five Thousand Dollars ($5,000). Tenant shall
deliver to Landlord on or before the Term Commencement Date, and thereafter at
least thirty (30) days before the expiration dates of the expired policies,
certified copies of Tenant's insurance policies, or a certificate evidencing the
same issued by the insurer thereunder; and, in the event Tenant shall fail to
procure such insurance, or to deliver such policies or certificates, Landlord
may, at Landlord's option and in addition to Landlord's other remedies in the
event of a default by Tenant hereunder, procure the same for the account of
Tenant, and the cost thereof shall be paid to Landlord as Additional Rent.

                    8.2.6 Indemnification. Notwithstanding anything to the
contrary contained in this Lease, Landlord shall in no event be liable and
Tenant hereby waives all claims against Landlord for any loss, damage, injury or
death to or of any person or property (including without limitation personal
property) caused by theft, fire, rain or water leakage, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, HVAC or lighting fixtures, electrical or other systems, or
by acts of God (including without limitation flood or earthquake), acts of a
public enemy, riot, strike, insurrection, war, court order, requisition or order
of governmental body or authority or for any damage or inconvenience which may
arise through repair, except as expressly otherwise provided in Paragraph 10. In
addition, Landlord shall in no event be liable for injury to Tenant's business
or any loss of income or profit therefrom or for consequential damages,
regardless of Landlord's negligence or misconduct. Tenant shall indemnify,
defend by counsel reasonably acceptable to Landlord, protect and hold Landlord
harmless from and against any and all claims, liabilities, losses, costs, loss
of rents, liens, damages, injuries or expenses, including reasonable attorneys'
fees and court costs, arising out of or related to: (1) claims of injury to or
death of persons or damage to property occurring or resulting directly or
indirectly from the use or occupancy of the Premises by Tenant or Tenant's
Parties, or from activities of Tenant or Tenant's Parties; (2) claims arising
from work or labor performed, or for materials or supplies furnished to or at
the request of Tenant in connection with performance of any work done for the
account of Tenant within the Premises; (3) claims arising from any breach or
default on the part of Tenant in the performance of any covenant contained in
this Lease; and (4) claims arising from the negligence or intentional acts or
omissions of Tenant or Tenant's Parties. The foregoing indemnity by Tenant shall
not be applicable to claims to the extent arising from the sole negligence or
willful misconduct of Landlord. The provisions of this Paragraph shall survive
the expiration or earlier termination of this Lease.

        9. Waiver of Subrogation. To the extent permitted by law and without
affecting the coverage provided by insurance to be maintained hereunder or any
other rights or remedies, Landlord and Tenant each waive any right to recover
against the other for: (a) damages for injury to or death of persons; (b)
damages to property, including personal property; (c) damages to the Premises or
any part thereof; and (d) claims arising by reason of the foregoing due to
hazards covered by insurance to the extent of proceeds recovered therefrom. This
provision is intended to waive fully, any rights and/or claims arising by reason
of the foregoing, but only to the extent that any of the foregoing damages
and/or claims referred to above are covered, and only to the extent of such
coverage, by insurance actually carried by either Landlord or Tenant. This
provision is also intended to waive fully, and for the benefit of each party,
any rights and/or claims which might give rise to a right of subrogation on any
insurance carrier. Subject to all qualifications of this Paragraph 9, Landlord
waives its rights as specified in this Paragraph 9 with respect to any subtenant
that it has approved pursuant to Paragraph 21 but only in exchange for

                                      -8-
<PAGE>   13

the written waiver of such rights to be given by such subtenant to Landlord.
Each party shall cause each insurance policy obtained by it to provide that the
insurance company waives all right of recovery by way of subrogation against
either party in connection with any damage covered by any policy.

        10. Landlord's Repairs and Maintenance. Landlord shall at Landlord's
expense maintain in good repair, reasonable wear and tear excepted, the
structural soundness of the roof, foundations, and exterior walls of the
Building. The term "exterior walls" shall not include windows, glass or plate
glass, doors, dock bumpers or dock plates, special store fronts or office
entries. Any damage caused by or repairs necessitated by any act of Tenant or
Tenant's Parties may be repaired by Landlord at Landlord's option and Tenant's
expense. Tenant shall immediately give Landlord written notice of any defect or
need of repairs in such components of the Building after which Landlord shall
have a reasonable opportunity and the right to enter the Premises at all
reasonable times to repair same. Landlord's liability with respect to any
defects, repairs, or maintenance for which Landlord is responsible under any of
the provisions of this Lease shall be limited to the cost of such repairs or
maintenance, and there shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant's business
arising from the making of repairs, alterations or improvements in or to any
portion of the Premises or to fixtures, appurtenances or equipment in the
Building, except as provided in Paragraph 24. By taking possession of the
Premises, Tenant accepts them as being in good order, condition and repair and
the condition in which Landlord is obligated to deliver them.

        11. Tenant's Repairs and Maintenance. Tenant shall at all times during
the Term at Tenant's expense maintain all parts of the Premises in a
first-class, good, clean and secure condition and promptly make all necessary
repairs and replacements, as determined by Landlord, including but not limited
to, all windows, glass, doors, walls, including demising walls, and wall
finishes, floors and floor covering, heating, ventilating and air conditioning
systems, non-structural roof elements, ceiling insulation, truck doors,
hardware, dock bumpers, dock plates and levelers, plumbing work and fixtures,
downspouts, entries, skylights, smoke hatches, roof vents, electrical and
lighting systems, and fire sprinklers, with materials and workmanship of the
same character, kind and quality as the original. Tenant shall at Tenant's
expense also perform regular removal of trash and debris. If Tenant uses rail
and if required by the railroad company, Tenant agrees to sign a joint
maintenance agreement governing the use of the rail spur, if any. Tenant shall,
at Tenant's own expense, enter into a regularly scheduled preventative
maintenance/service contract with a maintenance contractor for servicing all hot
water, heating and air conditioning systems and equipment within or serving the
Premises and provide Landlord with copies of all service agreements,
recommendations, and work completed by said contractor.. The maintenance
contractor and the contract must be approved by Landlord. The service contract
must include all services suggested by the equipment manufacturer within the
operation/maintenance manual and must become effective and a copy thereof
delivered to Landlord within thirty (30) days after the Term Commencement Date.
Landlord may, upon notice to Tenant, enter into such a service contract on
behalf of Tenant or perform the work and in either case charge Tenant the cost
thereof along with a reasonable amount for Landlord's overhead. Notwithstanding
anything to the contrary contained herein, Tenant shall, at its expense,
promptly repair any damage to the Premises or the Building resulting from or
caused by any act of Tenant or Tenant's Parties.

        12. Alterations.

               12.1 Tenant shall not make, or allow to be made, any alterations,
physical additions, improvements or partitions, including without limitation the
attachment of any fixtures or equipment, in, about or to the Premises
("Alterations") without obtaining the prior written consent of Landlord, which
consent shall not be unreasonably withheld with respect to proposed Alterations
which: (a) comply with all applicable Regulations; (b) are, in Landlord's
opinion, compatible with the Building and its mechanical, plumbing, electrical,
heating/ventilation/air conditioning systems; and (c) will not interfere with
the use and occupancy of any other portion of the Building by any other tenant
or its invitees. Specifically, but without limiting the generality of the
foregoing, Landlord shall have the right of written consent for all plans and
specifications for the proposed Alterations, construction means and methods, all
appropriate permits and licenses, any contractor or subcontractor to be employed
on the work of Alterations, and the time for performance of such work, and may
impose rules and regulations for contractors and subcontractors performing such
work. Tenant shall also supply to Landlord any documents and information
reasonably requested by Landlord in connection with Landlord's consideration

                                      -9-
<PAGE>   14

of a request for approval hereunder. Tenant shall cause all Alterations to be
accomplished in a first-class, good and workmanlike manner, and to comply with
all applicable Regulations. Tenant shall at Tenant's sole expense, perform any
additional work required under applicable Regulations due to the Alterations
hereunder. No consent by Landlord to any proposed Alteration or additional work
shall constitute a waiver of Tenant's obligations under this Paragraph 12.
Tenant shall reimburse Landlord for all costs which Landlord may incur in
connection with granting approval to Tenant for any such Alterations other than
the Tenant Improvements set forth in Exhibit B, including any reasonable costs
or expenses which Landlord may incur in electing to have outside architects and
engineers review said plans and specifications. All such Alterations shall
remain the property of Tenant until the expiration or earlier termination of
this Lease, at which time they shall be and become the property of Landlord if
Landlord so elects; provided, however, that Landlord may, at Landlord's option,
require that Tenant, at Tenant's expense, remove any or all Alterations made by
Tenant and restore the Premises by the expiration or earlier termination of this
Lease, to their condition existing prior to the construction of any such
Alterations. All such removals and restoration shall be accomplished in a good
and workmanlike manner so as not to cause any damage to the Premises whatsoever.
If Tenant fails to remove such Alterations or Tenant's trade fixtures or
furniture, Landlord may keep and use them or remove any of them and cause them
to be stored or sold in accordance with applicable law, at Tenant's sole
expense. In addition to and wholly apart from Tenant's obligation to pay
Tenant's Proportionate Share of Operating Expenses, Tenant shall be responsible
for and shall pay prior to delinquency any taxes or governmental service fees,
possessory interest taxes, fees or charges in lieu of any such taxes, capital
levies, or other charges imposed upon, levied with respect to or assessed
against its personal property, on the value of Alterations within the Premises,
and on Tenant's interest pursuant to this Lease, or any increase in any of the
foregoing based on such Alterations. To the extent that any such taxes are not
separately assessed or billed to Tenant, Tenant shall pay the amount thereof as
invoiced to Tenant by Landlord.

Notwithstanding the foregoing, Tenant shall have the right to construct
nonstructural alterations and improvements without Landlord's prior approval, if
the cost of such construction does not exceed $25,000 in any one calendar year.
Upon Tenant's request from time to time, Landlord shall advise Tenant in writing
whether Landlord will require Tenant to remove any alterations or improvements
upon the termination or earlier expiration of this Lease. Tenant's trade
fixtures, furniture, equipment and other personal property installed in the
Premises shall at all times be Tenant's property, and Tenant may remove any or
all of such property from the Premises at any time and from time to time
provided that Tenant repairs all damage caused by such removal. Landlord shall
have no lien whatsoever in any item of such property and Landlord waives all
such liens. Within ten (10) days following Tenant's request from time to time,
Landlord shall execute documents in form reasonably acceptable to Tenant and
Landlord to evidence Landlord's waiver of any lien in any of such property and
giving any lenders holding a security interest or lien on such property
reasonable rights of access to the Premises to remove such property, provided
that such lenders repair all damage caused by such removal and remove such
property on a timely basis.

               12.2 In compliance with Paragraph 27 hereof, at least ten (10)
business days before beginning construction of any Alteration, Tenant shall give
Landlord written notice of the expected commencement date of that construction
to permit Landlord to post and record a notice of non-responsibility. Upon
substantial completion of construction, Tenant shall cause a timely notice of
completion to be recorded in the office of the recorder of the county in which
the Building is located.

        13. Signs. All signs, notices and graphics of every kind or character,
visible in or from public view or corridors, the common areas or the exterior of
the Premises, shall be subject to Landlord's prior written approval, which
Landlord shall have the right to withhold in its reasonable discretion, and
shall be subject to any restrictions imposed by the City of Sunnyvale and the
Oakmead Park Development. Tenant shall not place or maintain any banners
whatsoever or any window decor in or on any exterior window or window fronting
upon any common areas or service area or upon any truck doors or man doors
without Landlord's prior written approval which Landlord shall have the right to
withhold in its absolute and sole discretion. Any installation of signs or
graphics on or about the Premises shall be subject to any Regulations and to any
other requirements imposed by Landlord. Tenant shall remove all such signs or
graphics by the termination of this Lease. Such installations and removals shall
be made in such manner as to avoid injury to or defacement of the Premises,
Building and any other improvements

                                      -10-
<PAGE>   15

contained therein, and Tenant shall repair any injury or defacement including
without limitation discoloration caused by such installation or removal.

        14. Inspection/Posting Notices. After reasonable notice, except in
emergencies where no such notice shall be required, Landlord and Landlord's
agents and representatives, shall have the right to enter the Premises to
inspect the same, to clean, to perform such work as may be permitted or required
hereunder, to make repairs or alterations to the Premises or to other tenant
spaces therein, to deal with emergencies, to post such notices as may be
permitted or required by law to prevent the perfection of liens against
Landlord's interest in the Building or to exhibit the Premises to prospective
tenants, purchasers, encumbrancers or to others, or for any other purpose as
Landlord may deem necessary or desirable; provided, however, that Landlord shall
use reasonable efforts not to unreasonably interfere with Tenant's business
operations. Tenant shall not be entitled to any abatement of Rent by reason of
the exercise of any such right of entry. At any time within six (6) months prior
to the expiration of the Term or following any earlier termination of this Lease
or agreement to terminate this Lease, Landlord shall have the right to erect on
the Premises a suitable sign indicating that the Premises are available for
lease.

        15. Utilities. Tenant shall pay directly for all water, gas, heat, air
conditioning, light, power, telephone, sewer, sprinkler charges and other
utilities and services used on or from the Premises, together with any taxes,
penalties, surcharges or the like pertaining thereto, and maintenance charges
for utilities and shall furnish all electric light bulbs, ballasts and tubes. If
any such services are not separately metered to Tenant, Tenant shall pay a
proportion, as determined by Landlord, of all charges jointly serving other
premises. Landlord shall not be liable for any damages directly or indirectly
resulting from nor shall the Rent or any monies owed Landlord under this Lease
herein reserved be abated by reason of: (a) the installation, use or
interruption of use of any equipment used in connection with the furnishing of
any such utilities or services; (b) the failure to furnish or delay in
furnishing any such utilities or services when such failure or delay is caused
by acts of God or the elements, labor disturbances of any character, or any
other accidents or other conditions beyond the reasonable control of Landlord;
or (c) the limitation, curtailment, rationing or restriction on use of water,
electricity, gas or any other form of energy or any other service or utility
whatsoever serving the Premises. Landlord shall be entitled to cooperate
voluntarily and in a reasonable manner with the efforts of national, state or
local governmental agencies or utility suppliers in reducing energy or other
resource consumption. The obligation to make services available hereunder shall
be subject to the limitations of any such voluntary, reasonable program.

        16. Subordination. Without the necessity of any additional document
being executed by Tenant for the purpose of effecting a subordination, the Lease
shall be subject and subordinate at all times to: (a) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Premises and/or the land upon which the Premises are situated, or both; and (b)
any mortgage or deed of trust which may now exist or be placed upon the
Building, the land upon which the Premises are situated, or said ground leases
or underlying leases, or Landlord's interest or estate in any of said items
which is specified as security. Notwithstanding the foregoing, Landlord shall
have the right to subordinate or cause to be subordinated any such ground leases
or underlying leases or any such liens to this Lease. In the event that any
ground lease or underlying lease terminates for any reason or any mortgage or
deed of trust is foreclosed or a conveyance in lieu of foreclosure is made for
any reason, Tenant shall, notwithstanding any subordination, attorn to and
become the Tenant of the successor in interest to Landlord and Tenant shall not
be disturbed in its possession under this Lease by such successor in interest so
long as Tenant is not in default under this Lease. Within ten (10) business days
after request by Landlord, Tenant shall execute and deliver any additional
documents evidencing Tenant's attornment or the subordination of this Lease with
respect to any such ground leases or underlying leases or any such mortgage or
deed of trust, in the form requested by Landlord or by any ground landlord,
mortgagee, or beneficiary under a deed of trust, subject to such nondisturbance
requirement. Landlord shall exercise diligent efforts to obtain a nondisturbance
agreement from Landlord's existing lender in the customary form used by such
lender.

        17. Financial Statements. At the request of Landlord from time to time,
Tenant shall provide to Landlord Tenant's current financial statements or other
information discussing financial worth of Tenant and any guarantor, which
Landlord shall use solely for purposes of this Lease and in connection with the
ownership, management, financing and disposition of the Building.
Notwithstanding the foregoing, so long as Tenant is a publicly traded company,

                                      -11-
<PAGE>   16

Tenant shall be obligated to provide only those documents which Tenant is
required to provide to the public or to governmental authorities.

        18. Estoppel Certificate. Tenant agrees from time to time, within ten
(10) days after request of Landlord, to deliver to Landlord, or Landlord's
designee, an estoppel certificate stating that this Lease is in full force and
effect, that this Lease has not been modified (or stating all modifications,
written or oral, to this Lease), the date to which Rent has been paid, the
unexpired portion of this Lease, that there are no current defaults by Landlord
or Tenant under this Lease (or specifying any such defaults), and such other
matters pertaining to this Lease as may be reasonably requested by Landlord.
Failure by Tenant to execute and deliver such certificate shall constitute an
acceptance of the Premises and acknowledgment by Tenant that the statements
included are true and correct without exception. Tenant agrees that if Tenant
fails to execute and deliver such certificate within such ten (10) day period,
Landlord may execute and deliver such certificate on Tenant's behalf and that
such certificate shall be binding on Tenant. Landlord and Tenant intend that any
statement delivered pursuant to this Paragraph may be relied upon by any
mortgagee, beneficiary, purchaser or prospective purchaser of the Building or
any interest therein. The parties agree that Tenant's obligation to furnish such
estoppel certificates in a timely fashion is a material inducement for
Landlord's execution of the Lease, and shall be an event of default if Tenant
fails to fully comply or makes any material misstatement in any such
certificate.

        19. Security Deposit. Tenant agrees to deposit with Landlord upon
execution of this Lease, a Security Deposit as stated in the Basic Lease
Information which sum shall be held by Landlord, without obligation to pay
interest, as security for the performance of Tenant's covenants and obligations
under this Lease. The Security Deposit is not an advance rental deposit or a
measure of damages incurred by Landlord in case of Tenant's default. Upon the
occurrence of any event of default by Tenant, Landlord may from time to time,
without prejudice to any other remedy provided herein or provided by law, use
such fund to the extent necessary to make good any arrears of Rent or other
payments due to Landlord hereunder, and any other damage, injury, expense or
liability caused by such event of default, and Tenant shall pay to Landlord, on
demand, the amount so applied in order to restore the Security Deposit to its
original amount. Although the Security Deposit shall be deemed the property of
Landlord, any remaining balance of such deposit shall be returned by Landlord to
Tenant at such time after termination of this Lease that all of Tenant's
obligations under this Lease have been fulfilled. Landlord may use and commingle
the Security Deposit with other funds of Landlord.

        20. Tenant's Remedies. The obligations and liability of Landlord to
Tenant for any default by Landlord under the terms of this Lease are not
personal obligations of Landlord or of the individual or other partners of
Landlord or its or their partners, directors, officers, or shareholders, and
Tenant agrees to look solely to Landlord's interest in the Building for the
recovery of any amount from Landlord, and shall not look to other assets of
Landlord nor seek recourse against the assets of the individual or other
partners of Landlord or its or their partners, directors, officers or
shareholders. Any lien obtained to enforce any such judgment and any levy of
execution thereon shall be subject and subordinate to any then existing lien,
mortgage or deed of trust on the Building.

        21. Assignment and Subletting.

               21.1 Assignment and Subletting.

                    21.1.1 General. Tenant shall not assign or pledge this Lease
or sublet the Premises or any part thereof, whether voluntarily or by operation
of law, or permit the use or occupancy of the Premises or any part thereof by
anyone other than Tenant, or suffer or permit any such assignment, pledge,
subleasing or occupancy, without Landlord's prior written consent except as
provided herein. If Tenant desires to assign this Lease or sublet any or all of
the Premises, Tenant shall give Landlord written notice (the "Transfer Notice")
at least thirty (30) days prior to the anticipated effective date of the
proposed assignment or sublease, which shall contain all of the information
reasonably requested by Landlord to address Landlord's decision criteria
specified hereinafter. Landlord shall then have a period of twenty (20) days
following receipt of the Transfer Notice to notify Tenant in writing that
Landlord elects either: (1) to terminate this Lease as to the space so affected
as of the date so requested by Tenant; or (2) to consent to the proposed
assignment or sublease, subject, however, to Landlord's prior written consent of
the proposed assignee or subtenant and of any related documents or agreements

                                      -12-
<PAGE>   17

associated with the assignment or sublease. If Landlord should fail to notify
Tenant in writing of such election within said period, Landlord shall be deemed
to have waived option (1) above, but written consent by Landlord of the proposed
assignee or subtenant shall be required. If Landlord does not exercise option
(1) above, Landlord's consent to a proposed assignment or sublet shall not be
unreasonably withheld. Not withstanding the foregoing, Landlord's consent shall
not be required for any proposed sublease or assignment to a parent, subsidiary
or affiliate of Tenant or to any entity into which Tenant merges or which
acquires all or substantially all of the assets of Tenant.

                    21.1.2 Conditions of Landlord's Consent. Without limiting
the other instances in which it may be reasonable for Landlord to withhold
Landlord's consent to an assignment or subletting, Landlord and Tenant
acknowledge that it shall be reasonable for Landlord to withhold Landlord's
consent in the following instances: the use of the Premises by such proposed
assignee or subtenant would not be a Permitted Use or would violate any
exclusivity arrangement which Landlord has with any other tenant or occupant or
would increase the Parking Density of the Building; the proposed assignee or
subtenant is not of sound financial condition as determined by Landlord in
Landlord's sole discretion reasonably exercised; the proposed assignee or
subtenant is a governmental agency; the proposed assignee or subtenant does not
have a good reputation as a tenant of property; the proposed assignee or
subtenant is a person with whom Landlord is negotiating to lease space in the
Building or is a present tenant of the Building; the assignment or subletting
would entail any Alterations which would lessen the value of the leasehold
improvements in the Premises; or Tenant is in default of any obligation of
Tenant under this Lease, or Tenant has defaulted under this Lease on three (3)
or more occasions during any twelve (12) months preceding the date that Tenant
shall request consent. Failure by Landlord to consent to a proposed assignee or
subtenant shall not cause a termination of this Lease. Upon a termination under
Paragraph 21.1.1, Landlord may lease the Premises to any party, including
parties with whom Tenant has negotiated an assignment or sublease, without
incurring any liability to Tenant. At the option of Landlord, a surrender and
termination of this Lease shall operate as an assignment to Landlord of some or
all subleases or subtenancies. Landlord shall exercise this option by giving
notice of that assignment to such subtenants on or before the effective date of
the surrender and termination.

                    21.2 Bonus Rent. Any Rent or other consideration realized by
Tenant under any such sublease or assignment in excess of the Rent payable
hereunder, after the amortization of a reasonable brokerage commission and
reasonable tenant improvement costs incurred by Tenant over the remaining term
of the Lease, shall be divided and paid, seventy-five percent (75%) to Tenant,
twenty-five percent (25%) to Landlord. In any subletting or assignment
undertaken by Tenant, Tenant shall diligently seek to obtain the maximum rental
amount available in the marketplace for comparable space available for primary
leasing.

                    21.3 Corporation. If Tenant is a corporation, a transfer of
corporate shares by sale, assignment, bequest, inheritance, operation of law or
other disposition (including such a transfer to or by a receiver or trustee in
federal or state bankruptcy, insolvency or other proceedings) resulting in a
change in the present control of such corporation or any of its parent
corporations by the person or persons owning a majority of said corporate
shares, shall constitute an assignment for purposes of this Lease. The foregoing
provisions of this paragraph 21.3 shall not be applicable to Tenant if Tenant is
a publicly traded company.

                    21.4 Unincorporated Entity. If Tenant is a partnership,
joint venture, unincorporated limited liability company or other unincorporated
business form, a transfer of the interest of persons, firms or entities
responsible for managerial control of Tenant by sale, assignment, bequest,
inheritance, operation of law or other disposition, so as to result in a change
in the present control of said entity and/or a change in the identity of the
persons responsible for the general credit obligations of said entity shall
constitute an assignment for all purposes of this Lease.

                    21.5 Liability. No assignment or subletting by Tenant,
permitted or otherwise, shall relieve Tenant of any obligation under this Lease
or alter the primary liability of the Tenant named herein for the payment of
Rent or for the performance of any other obligations to be performed by Tenant,
including obligations contained in Paragraph 25 with respect to any assignee or
subtenant. Any assignment or subletting which conflicts with the provisions
hereof shall be void.

                                      -13-
<PAGE>   18

        22. Authority. Landlord represents and warrants that it has full right
and authority to enter into this Lease and to perform all of Landlord's
obligations hereunder and that all persons signing this Lease on its behalf are
authorized to do. Tenant represents and warrants that it has full right and
authority to enter into this Lease and to perform all of Tenant's obligations
hereunder and that all persons signing this Lease on its behalf are authorized
to do.

        23. Condemnation.

               23.1 Condemnation Resulting in Termination. If the whole or any
substantial part of the Building of which the Premises are a part should be
taken or condemned for any public use under governmental law, ordinance or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof, and the taking would prevent or materially interfere with the Permitted
Use of the Premises, this Lease shall terminate and the Rent shall be abated
during the unexpired portion of this Lease, effective when the physical taking
of said Premises shall have occurred.

               23.2 Condemnation Not Resulting in Termination. If a portion of
the Building of which the Premises are a part should be taken or condemned for
any public use under governmental law, ordinance or regulation, or by right of
eminent domain, or by private purchase in lieu thereof, and the taking
materially interferes with the Permitted Use of the Premises, and this Lease is
not terminated as provided in Paragraph 23.1 above, the Rent payable hereunder
during the unexpired portion of the Lease shall be reduced, beginning on the
date when the physical taking shall have occurred, to such amount as may be fair
and reasonable under all of the circumstances.

               23.3 Award. Landlord shall be entitled to any and all payment,
income, rent, award or any interest therein whatsoever which may be paid or made
in connection with such taking or conveyance and Tenant shall have no claim
against Landlord or otherwise for the value of any unexpired portion of this
Lease. Notwithstanding the foregoing, any compensation specifically and
separately awarded Tenant for Tenant's personal property and moving costs, shall
be and remain the property of Tenant.

               23.4 Waiver of CCP Section 1265.130. Each party waives the
provisions of California Civil Code Procedure section 1265.130 allowing either
party to petition the superior court to terminate this Lease as a result of a
partial taking.

        24. Casualty Damage.

               24.1 General. If the Premises or Building should be damaged or
destroyed by fire, tornado, or other casualty (collectively, "Casualty"), Tenant
shall give immediate written notice thereof to Landlord. Within thirty (30) days
after Landlord's receipt of such notice, Landlord shall notify Tenant whether in
Landlord's estimation material restoration of the Premises can reasonably be
made either: (1) within one hundred eighty (180) days; or (2) in more than one
hundred eighty (180) days from the date of such notice and receipt of required
permits for such restoration. Landlord's determination shall be binding on
Tenant.

               24.2 Within 180 Days. If the Premises or Building should be
damaged by Casualty to such extent that material restoration can in Landlord's
estimation be reasonably completed within one hundred eighty (180) days after
the date of such damage and receipt of required permits for such restoration,
this Lease shall not terminate. Provided that insurance proceeds, plus any
voluntary contributions from Tenant are received by Landlord to fully repair the
damage, Landlord shall proceed to rebuild and repair the Premises in the manner
determined by Landlord, except that Landlord shall not be required to rebuild,
repair or replace any part of the uninsured Alterations which may have been
placed on or about the Premises by Tenant. If the Premises are untenantable in
whole or in part following such damage, the Rent payable hereunder during the
period in which they are untenantable shall be abated proportionately, and to
the extent the Premises are unfit for occupancy.

               24.3 Greater than 180 Days. If the Premises or Building should be
damaged by Casualty to such extent that rebuilding or repairs cannot in
Landlord's estimation be reasonably completed in more than one hundred eighty
(180) days but within two hundred forty (240) days after the date of such damage
and receipt of required permits for such rebuilding or repair, then Landlord
shall have the option of either: (1) terminating this Lease effective upon the
date of the

                                      -14-
<PAGE>   19

occurrence of such damage, in which event the Rent shall be abated during the
unexpired portion of this Lease; or (2) electing to rebuild or repair the
Premises in the manner determined by Landlord. Notwithstanding the above,
Landlord shall not be required to rebuild, repair or replace any part of the
uninsured Alterations which may have been placed, on or about the Premises by
Tenant. If the Premises are untenantable in whole or in part following such
damage, the Rent payable hereunder during the period in which they are
untenantable shall be abated proportionately, and to the extent the Premises are
unfit for occupancy. In the event that Landlord should fail to complete such
repairs and rebuilding within two hundred forty (240) days after the date upon
which Landlord is notified by Tenant of such damage and receipt of required
permits, such period of time to be extended for delays caused by the fault or
neglect of Tenant or otherwise by Tenant or because of acts of God, acts of
public agencies, labor disputes, strikes, fires, freight embargoes, rainy or
stormy weather, inability to obtain materials, supplies or fuels, or delays of
the contractors or subcontractors or any other causes or contingencies beyond
the reasonable control of Landlord, Tenant may at Tenant's option within ten
(10) days after the expiration of such two hundred forty (240) day period (as
such may be extended), terminate this Lease by delivering written notice of
termination to Landlord as Tenant's exclusive remedy, whereupon all rights
hereunder shall cease and terminate thirty (30) days after Landlord's receipt of
such termination notice.

               24.4 Greater than 240 Days. If the Premises or Building should be
so damaged by Casualty that rebuilding or repairs cannot in Landlord's
estimation be completed two hundred forty (240) days after such damage and
receipt of required permits for such rebuilding or repair, this Lease shall
terminate and the Rent shall be abated during the unexpired portion of this
Lease, effective upon the date of the occurrence of such damage.

               24.5 Tenant's Fault. Notwithstanding anything herein to the
contrary, if the Premises or any other portion of the Building are damaged by
Casualty resulting from the fault, negligence, or breach of this Lease by Tenant
or any of Tenant's Parties, Base Rent and Additional Rent shall not be
diminished during the repair of such damage and Tenant shall be liable to
Landlord for the cost and expense of the repair and restoration of the Building
caused thereby to the extent such cost and expense is not covered by insurance
proceeds.

               24.6 Insurance Proceeds. Notwithstanding anything herein to the
contrary, in the event that the Premises or Building are damaged or destroyed
and are not fully covered by the insurance proceeds received by Landlord or in
the event that the holder of any indebtedness secured by a mortgage or deed of
trust covering the Premises requires that the insurance proceeds be applied to
such indebtedness, then in either case Landlord shall have the right to
terminate this Lease by delivering written notice of termination to Tenant
within thirty (30) days after the date of notice to Landlord that said damage or
destruction is not fully covered by insurance or such requirement is made by any
such holder, as the case may be, whereupon all rights and obligations hereunder
shall cease and terminate.

               24.7 Waiver. This Paragraph 24 shall be Tenant's sole and
exclusive remedy in the event of damage or destruction to the Premises or the
Building. As a material inducement to Landlord entering into this Lease, Tenant
hereby waives any rights it may have under sections 1932, 1933(4), 1941 or 1942
of the Civil Code of California with respect to any destruction of the Premises,
Landlord's obligation for tenantability of the Premises and Tenant's right to
make repairs and deduct the expenses of such repairs, or under any similar law,
statute or ordinance now or hereafter in effect.

               24.8 Tenant's Personal Property. In the event of any damage or
destruction of the Premises or the Building, under no circumstances shall
Landlord be required to repair any injury or damage to, or make any repairs to
or replacements of, Tenant's personal property.

        25. Holding Over. Unless Landlord expressly consents in writing to
Tenant's holding over, Tenant shall be only a Tenant at sufferance, whether or
not Landlord accepts any Rent from Tenant or any other person while Tenant is
holding over without Landlord's written consent. If Tenant shall retain
possession of the Premises or any portion thereof without Landlord's consent
following the expiration of this Lease or sooner termination for any reason,
then Tenant shall pay to Landlord for each day of such retention one hundred
fifty (150%) of the amount of daily rental as of the last month prior to the
date of expiration or earlier termination. Tenant shall also indemnify, defend,
protect and hold Landlord harmless from any loss, liability or cost, including
reasonable attorneys' fees, resulting from delay by Tenant in surrendering the
Premises,

                                      -15-
<PAGE>   20

including, without limitation, any claims made by the succeeding tenant founded
on such delay. Acceptance of Rent by Landlord following expiration or earlier
termination shall not constitute a renewal of this Lease, and nothing contained
in this Paragraph 25 shall waive Landlord's right of reentry or any other right.
Additionally, in the event that upon expiration or earlier termination of this
Lease, Tenant has not fulfilled its obligation with respect to repairs and
cleanup of the Premises or any other Tenant obligations as set forth in this
Lease, then Landlord shall have the right to perform any such obligations as it
deems necessary at Tenant's sole cost and expense, and any time required by
Landlord to complete such obligations shall be considered a period of holding
over and the terms of this Paragraph 25 shall apply. The provisions of this
Paragraph 25 shall survive any expiration or earlier termination of this Lease.

        26. Default.

               26.1 Events of Default. The occurrence of any of the following
shall constitute an event of default on the part of Tenant:

                    26.1.1 Abandonment. Abandonment of the Premises for a
continuous period in excess of five (5) days. Tenant waives any right to notice
Tenant may have under section 1951.3 of the Civil Code of the State of
California, the terms of this Paragraph 26.1 being deemed such notice to Tenant
as required by said section 1951.3.

                    26.1.2 Nonpayment of Rent. Failure to pay any installment of
Rent or any other amount due and payable hereunder within five (5) days after
the date when said payment is due.

                    26.1.3 Other Obligations. Failure to commence to perform and
diligently prosecute to completion, any obligation, agreement or covenant under
this Lease other than those matters specified in subparagraphs 1 and 2 of this
Paragraph 26.1, such failure continuing for fifteen (15) days after written
notice of such failure.

                    26.1.4 General Assignment. A general assignment by Tenant
for the benefit of creditors.

                    26.1.5 Bankruptcy. The filing of any voluntary petition in
bankruptcy by Tenant, or the filing of an involuntary petition by Tenant's
creditors, which involuntary petition remains undischarged for a period of
thirty (30) days. In the event that under applicable law, the trustee in
bankruptcy or Tenant has the right to affirm this Lease and continue to perform
the obligations of Tenant hereunder, such trustee or Tenant shall, in such time
period as may be permitted by the bankruptcy court having jurisdiction, cure all
defaults of Tenant hereunder outstanding as of the date of the affirmance of
this Lease and provide to Landlord such adequate assurances as may be necessary
to ensure Landlord of the continued performance of Tenant's obligations under
this Lease.

                    26.1.6 Receivership. The employment of a receiver to take
possession of substantially all of Tenant's assets or the Premises, if such
appointment remains undismissed or undischarged for a period of ten (10) days
after the order therefor.

                    26.1.7 Attachment. The attachment, execution or other
judicial seizure of all or substantially all of Tenant's assets or the Premises,
if such attachment or other seizure remains undismissed or undischarged for a
period of ten (10) days after the levy thereof.

               26.2 Remedies Upon Default.

                    26.2.1 Termination. In the event of the occurrence of any
event of default, Landlord shall have the right to give a written termination
notice to Tenant, and on the date specified in such notice, Tenant's right to
possession shall terminate, and this Lease shall terminate unless on or before
such date all Rent in arrears and all costs and expenses incurred by or on
behalf of Landlord hereunder shall have been paid by Tenant and all other events
of default of this Lease by Tenant at the time existing shall have been fully
remedied to the satisfaction of Landlord. At any time after such termination,
Landlord may recover possession of the Premises or any part thereof and expel
and remove therefrom Tenant and any other person occupying the same, by any
lawful means, and again repossess and enjoy the Premises without prejudice to
any of the remedies that Landlord may have under this Lease, or at law or equity
by any reason of

                                      -16-
<PAGE>   21

Tenant's default or of such termination. Landlord hereby reserves the right to
recognize the continued possession of any subtenant.

                    26.2.2 Continuation After Default. Even though an event of
default may have occurred, this Lease shall continue in effect for so long as
Landlord does not terminate Tenant's right to possession under Paragraph 26.2.1
hereof, and Landlord may enforce all of Landlord's rights and remedies under
this Lease and at law or in equity, including without limitation, the right to
recover Rent as it becomes due, and Landlord, without terminating this Lease,
may exercise all of the rights and remedies of a landlord under section 1951.4
of the Civil Code of the State of California or any successor code section. Acts
of maintenance, preservation or efforts to lease the Premises or the appointment
of a receiver under application of Landlord to protect Landlord's interest under
this Lease or other entry by Landlord upon the Premises shall not constitute an
election to terminate Tenant's right to possession.

               26.3 Damages After Default. Should Landlord terminate this Lease
pursuant to the provisions of Paragraph 26.2.1 hereof, Landlord shall have the
rights and remedies of a Landlord provided by section 1951.2 of the Civil Code
of the State of California, or any successor code sections. Upon such
termination, in addition to any other rights and remedies to which Landlord may
be entitled under applicable law or at equity, Landlord shall be entitled to
recover from Tenant: (1) the worth at the time of award of the unpaid Rent and
other amounts which had been earned at the time of termination, (2) the worth at
the time of award of the amount by which the unpaid Rent that would have been
earned after the date of termination until the time of award exceeds the amount
of such Rent loss that Tenant proves could have been reasonably avoided; (3) the
worth at the time of award of the amount by which the unpaid Rent for the
balance of the Term after the time of the award exceeds the amount of such Rent
loss that the Tenant proves could be reasonably avoided; and (4) any other
amount and court costs necessary to compensate Landlord for all detriment
proximately caused by Tenant's failure to perform Tenant's obligations under
this Lease or which, in the ordinary course of things, would be likely to result
therefrom. The "worth at the time of award" as used in (1) and (2) above shall
be computed at the lesser of the "prime rate," as announced from time to time by
Wells Fargo Bank, N.A. (San Francisco) or its successor, plus five (5)
percentage points, or the maximum interest rate allowed by law ("Applicable
Interest Rate"). The "worth at the time of award" as used in (3) above shall be
computed by discounting such amount at the Federal Discount Rate of the Federal
Reserve Bank of San Francisco at the time of the award plus one percent (1%). If
this Lease provides for any periods during the Term during which Tenant is not
required to pay Base Rent or if Tenant otherwise receives a Rent concession,
then upon the occurrence of an event of default, Tenant shall owe to Landlord
the full amount of such Base Rent or value of such Rent concession, plus
interest at the Applicable Interest Rate, calculated from the date that such
Base Rent or Rent concession would have been payable.

               26.4 Late Charge. In addition to its other remedies, Landlord
shall have the right without notice or demand to add to the amount of any
payment required to be made by Tenant hereunder, and which is not paid and
received by Landlord on or before the sixth day of each calendar month, an
amount equal to six percent (6%) of the delinquency for each month or portion
thereof that the delinquency remains outstanding to compensate Landlord for the
loss of the use of the amount not paid and the administrative costs caused by
the delinquency, the parties agreeing that Landlord's damage by virtue of such
delinquencies would be extremely difficult and impracticable to compute and the
amount stated herein represents a reasonable estimate thereof. Any waiver by
Landlord of any late charges shall not constitute a waiver of other late charges
or any other remedies available to Landlord.

               26.5 Remedies Cumulative. All rights, privileges and elections or
remedies of the parties are cumulative and not alternative, to the extent
permitted by law and except as otherwise provided herein. Tenant waives any
rights provided to Tenant under Code of Civil Procedure section 1179, or any
similar provision of law, which permits Tenant to obtain relief from forfeiture
of this Lease.

        27. Liens. Tenant shall at all times keep the Premises free from liens
arising out of or related to work or services performed, materials or supplies
furnished or obligations incurred by Tenant or in connection with work made,
suffered or done by or on behalf of Tenant in or on the Premises. In the event
that Tenant shall not, within ten (10) business days following the imposition of
any such lien, cause the same to be released of record by payment or posting of
a proper bond, Landlord shall have, in addition to all other remedies provided
herein and by law,

                                      -17-
<PAGE>   22

the right, but not the obligation, to cause the same to be released by such
means as Landlord shall deem proper, including payment of the claim giving rise
to such lien. All sums paid by Landlord on behalf of Tenant and all expenses
incurred by Landlord in connection therefor shall be payable to Landlord by
Tenant on demand with interest at the Applicable Interest Rate. Landlord shall
have the right at all times to post and keep posted on the Premises any notices
permitted or required by law, or which Landlord shall deem proper, for the
protection of Landlord, the Premises and any other party having an interest
therein, from mechanics' and materialmen's liens, and Tenant shall give Landlord
not less than ten (10) business days prior written notice of the commencement of
any work in the Premises which could lawfully give rise to a claim for
mechanics' or materialmen's liens to permit Landlord to post and record a timely
notice of non-responsibility.

        28. Transfers by Landlord. In the event of a sale or conveyance by
Landlord of the Building or a foreclosure by any creditor of Landlord, the same
shall operate to release Landlord from any liability upon any of the covenants
or conditions, express or implied, herein contained in favor of Tenant, to the
extent required to be performed after the passing of title to Landlord's
successor-in-interest and such successor's assumption of Landlord's obligations
under this Lease. In such event, Tenant agrees to look solely to the
responsibility of the successor-in-interest of Landlord under this Lease with
respect to the performance of the covenants and duties of Landlord to be
performed after the passing of title to Landlord's successor-in-interest. This
Lease shall not be affected by any such sale and Tenant agrees to attorn to the
purchaser or assignee. Landlord's successor(s)-in-interest shall not have
liability to Tenant with respect to the failure to perform any of the
obligations of Landlord, to the extent required to be performed prior to the
date such successor(s)-in-interest became the owner of the Building.

        29. Right of Landlord to Perform Tenant's Covenants. All covenants and
agreements to be performed by Tenant under any of the terms of this Lease shall
be performed by Tenant at Tenant's sole cost and expense and without any
abatement of Rent. If Tenant shall fail to pay any sum of money, other than Base
Rent, required to be paid by Tenant hereunder or shall fail to perform any other
act on Tenant's part to be performed hereunder, including Tenant's obligations
under Paragraph 11 hereof, and such failure shall continue for fifteen (15) days
after notice thereof by Landlord, in addition to the other rights and remedies
of Landlord, Landlord may make any such payment and perform any such act on
Tenant's part. In the case of an emergency, no prior notification by Landlord
shall be required. Landlord may take such actions without any obligation and
without releasing Tenant from any of Tenant's obligations. All sums so paid by
Landlord and all incidental costs incurred by Landlord and interest thereon at
the Applicable Interest Rate, from the date of payment by Landlord, shall be
paid to Landlord on demand as Additional Rent.

        30. Waiver. If either Landlord or Tenant waives the performance of any
term, covenant or condition contained in this Lease, such waiver shall not be
deemed to be a waiver of any subsequent breach of the same or any other term,
covenant or condition contained herein. The acceptance of Rent by Landlord shall
not constitute a waiver of any preceding breach by Tenant of any term, covenant
or condition of this Lease, regardless of Landlord's knowledge of such preceding
breach at the time Landlord accepted such Rent. Failure by Landlord to enforce
any of the terms, covenants or conditions of this Lease for any length of time
shall not be deemed to waive or decrease the right of Landlord to insist
thereafter upon strict performance by Tenant. Waiver by Landlord of any term,
covenant or condition contained in this Lease may only be made by a written
document signed by Landlord.

        31. Notices. Each provision of this Lease or of any applicable
governmental laws, ordinances, regulations and other requirements with reference
to sending, mailing, or delivery of any notice or the making of any payment by
Landlord or Tenant to the other shall be deemed to be complied with when and if
the following steps are taken:

               31.1 Rent. All Rent and other payments required to be made by
Tenant to Landlord hereunder shall be payable to Landlord at Landlord's
Remittance Address set forth in the Basic Lease Information, or at such other
address as Landlord may specify from time to time by written notice delivered in
accordance herewith. Tenant's obligation to pay Rent and any other amounts to
Landlord under the terms of this Lease shall not be deemed satisfied until such
Rent and other amounts have been actually received by Landlord.

                                      -18-
<PAGE>   23

               31.2 Other. All notices, demands, consents and approvals which
may or are required to be given by either party to the other hereunder shall be
in writing and either personally delivered, sent by commercial overnight
courier, or mailed, certified or registered, postage prepaid, and addressed to
the party to be notified at the Notice Address for such party as specified in
the Basic Lease Information or to such other place as the party to be notified
may from time to time designate by at least fifteen (15) days notice to the
notifying party. Notices shall be deemed served upon receipt or refusal to
accept delivery. Tenant appoints as its agent to receive the service of all
default notices and notice of commencement of unlawful detainer proceedings the
person in charge of or apparently in charge of occupying the Premises at the
time, and, if there is no such person available during normal business hours,
then such service may be made by attaching the same on the main entrance of the
Premises.

        32. Attorneys' Fees. In the event that Landlord places the enforcement
of this Lease, or any part thereof, or the collection of any Rent due, or to
become due hereunder, or recovery of possession of the Premises in the hands of
an attorney, Tenant shall pay to Landlord, upon demand, Landlord's reasonable
attorneys' fees and court costs, whether incurred at trial, appeal or review. In
any action which Landlord or Tenant brings to enforce its respective rights
hereunder, the unsuccessful party shall pay all costs incurred by the prevailing
party including reasonable attorneys' fees, to be fixed by the court, and said
costs and attorneys' fees shall be a part of the judgment in said action.

        33. Successors and Assigns. This Lease shall be binding upon and inure
to the benefit of Landlord, its successors and assigns, and shall be binding
upon and inure to the benefit of Tenant, its successors, and to the extent
assignment is approved by Landlord as provided hereunder, Tenant's assigns.

        34. Force Majeure. If performance by a party of any portion of this
Lease is made impossible by any prevention, delay, or stoppage caused by
strikes, lockouts, labor disputes, acts of God, inability to obtain services,
labor, or materials or reasonable substitutes for those items, government
actions, civil commotions, fire or other casualty, or other causes beyond the
reasonable control of the party obligated to perform, performance by that party
for a period equal to the period of that prevention, delay, or stoppage is
excused. Tenant's obligation to pay Rent, however, is not excused by this
Paragraph 34.

        35. Surrender of Premises. Tenant shall, upon expiration or sooner
termination of this Lease, surrender the Premises to Landlord in the same
condition as existed on the date Tenant completed the Tenant Improvements
described in Exhibit B, normal wear and tear, and casualty and condemnation
excepted, including all holes in walls repaired, all HVAC equipment in operating
order and in good repair, and all floors broom cleaned, and free of any
Tenant-introduced marking or painting, all to the reasonable satisfaction of
Landlord. Tenant shall remove all of its debris from the Building. At or before
the time of surrender, Tenant shall comply with the terms of Paragraph 12.A.
hereof with respect to Alterations to the Premises and all other matters
addressed in such Paragraph. If the Premises are not so surrendered at the
expiration or sooner termination of this Lease, the provisions of Paragraph 25
hereof shall apply. All keys to the Premises or any part thereof shall be
surrendered to Landlord upon expiration or sooner termination of the Term.

        36. Miscellaneous.

               36.1 General. The term "Tenant" or any pronoun used in place
thereof shall indicate and include the masculine or feminine, the singular or
plural number, individuals, firms or corporations, and their respective
successors, executors, administrators and permitted assigns, according to the
context hereof.

               36.2 Time. Time is of the essence regarding this Lease and all of
its provisions.

               36.3 Choice of Law. This Lease shall in all respects be governed
by the laws of the State of California.

               36.4 Entire Agreement. This Lease, together with its exhibits,
contains all the agreements of the parties hereto and supersedes any previous
negotiations. There have been no representations made by the Landlord or its
agents or understandings made between the parties other than those set forth in
this Lease and its exhibits.

                                      -19-
<PAGE>   24

               36.5 Modification. This Lease may not be modified except by a
written instrument signed by the parties hereto.

               36.6 Severability. If, for any reason whatsoever, any of the
provisions hereof shall be unenforceable or ineffective, all of the other
provisions shall be and remain in full force and effect.

               36.7 Recordation. Tenant shall not record this Lease or a short
form memorandum hereof.

               36.8 Examination of Lease. Submission of this Lease to Tenant
does not constitute an option or offer to lease and this Lease is not effective
otherwise until execution and delivery by both Landlord and Tenant.

               36.9 Accord and Satisfaction. No payment by Tenant of a lesser
amount than the total Rent due nor any endorsement on any check or letter
accompanying any check or payment of Rent shall be deemed an accord and
satisfaction of full payment of Rent, and Landlord may accept such payment
without prejudice to Landlord's right to recover the balance of such Rent or to
pursue other remedies.

               36.10 Easements. Landlord may grant easements on the Building and
dedicate for public use portions of the Building without Tenant's consent;
provided that no such grant or dedication shall materially interfere with
Tenant's use and enjoyment of the Premises. Upon Landlord's request, Tenant
shall execute, acknowledge and deliver to Landlord documents, instruments, maps
and plats necessary to effectuate Tenant's covenants hereunder.

               36.11 Drafting and Determination Presumption. The parties
acknowledge that this Lease has been agreed to by both the parties, that both
Landlord and Tenant have consulted with attorneys with respect to the terms of
this Lease and that no presumption shall be created against Landlord because
Landlord drafted this Lease. Except as otherwise specifically set forth in this
Lease, with respect to any consent, determination or estimation of Landlord
required or allowed in this Lease or requested of Landlord, Landlord's consent,
determination or estimation shall be given or made solely by Landlord in
Landlord's good faith opinion, whether or not objectively reasonable.

               36.12 Exhibits. The exhibits attached hereto are hereby
incorporated herein by this reference.

               36.13 No Light, Air or View Easement. Any diminution or shutting
off of light, air or view by any structure which may be erected on lands
adjacent to or in the vicinity of the Building shall in no way affect this Lease
or impose any liability on Landlord.

               36.14 No Third Party Benefit. This Lease is a contract between
Landlord and Tenant and nothing herein is intended to create any third party
benefit.

               36.15 Quiet Enjoyment. Upon payment by Tenant of the Rent, and
upon the observance and performance of all of the other covenants, terms and
conditions on Tenant's part to be observed and performed, Tenant shall peaceably
and quietly hold and enjoy the Premises for the term hereby demised without
hindrance or interruption by Landlord or any other person or persons lawfully or
equitably claiming by, through or under Landlord, subject, nevertheless, to all
of the other terms and conditions of this Lease. Landlord shall not be liable
for any hindrance, interruption, interference or disturbance by other tenants or
third persons, nor shall Tenant be released from any obligations under this
Lease because of such hindrance, interruption, interference or disturbance.

               36.16 Counterparts. This Lease may be executed in any number of
counterparts, each of which shall be deemed an original.

               36.17 Multiple Parties. If more than one person or entity is
named herein as Tenant, such multiple parties shall have joint and several
responsibility to comply with the terms of this Lease.

                                      -20-
<PAGE>   25

               36.18 Prorations. Any Rent payable to Landlord by Tenant for any
fractional month shall be prorated based on a month of 30 days. As used herein,
the term "fiscal year" shall mean the calendar year or such other fiscal year as
Landlord may deem appropriate.

        37. Additional Provisions.

               37.1 Addenda. Exhibits A through C attached hereto are hereby
incorporated into and made a part of this Lease as though fully set forth
herein.

               37.2 Base Rent. Base Rent, net of Basic Operating Costs per
Paragraph 7 of this Lease, for the Premises shall be as follows:

<TABLE>
<CAPTION>
        Months               Base Rent Per Month
        ------               -------------------
<S>                          <C>
        1-12                        $  91,367.50
        13-24                          95,022.00
        25-36                          98,823.00
        37-48                         102,776.00
        49-60                         106,887.00
        61-72                         111,163.00
        73-84                         115,609.00
        85-96                         120,233.00
        97-108                        125,043.00
        109-120                       130,044.00
</TABLE>

               37.3 Shell. Landlord shall, at its sole cost and expense and with
no right of reimbursement from Tenant, pay all costs of constructing the
building shell and associated site improvements which shall mean the shell of
the Building as defined in Exhibit C attached hereto and made a part hereof in
substantial accordance with the plans and specifications provided to Tenant (all
of which shall be collectively referred to as the "Building Shell")

               37.4 Tenant Work. Tenant shall, with the aid of a licensed
architect or engineer, and at Tenant's sole cost and expense, complete plans and
specifications for Tenant's interior improvements, submit them to Landlord for
approval, and obtain Landlord's approval prior to commencement of construction
("Tenant Work").

        The Tenant Work shall include, but not be limited to the following:

        (1)     HVAC system;

        (2)     Interior lighting;

        (3)     Insulation;

        (4)     Office space within the Premises;

        (5)     Lunch room/break room space within the Premises;

        (6)     Interior walls and partitions and painting if required;

        (7)     Plumbing within the Premises;

        (8)     Floor and wall coverings;

        (9)     All electrical distribution panels for Tenant power and
                lighting, distribution lines and outlets, circuits, switches and
                related metering and hook-up charges;

        (10)    Water and gas distribution and related metering and hook-up
                charges;

        (11)    Telephone switch room, panel, distribution system;

        (12)    Window coverings if required;

        (13)    Interior and exterior Tenant signage;

        (14)    Fire safety systems;

        (15)    Restrooms;

        (16)    Any roof screens for HVAC systems;

        (17)    Any city and other agency fees; and

        (18)    Other improvements specific to tenant's occupancy.

        (19)    Architectural design and structural engineering

        All Tenant Works shall be completed in a good and workmanlike manner by
Tenant at Tenant's sole cost and expense, and all materials and equipment
incorporated into the Tenant Improvements (i) will be new and free of defects,
(ii) will conform to all applicable laws, ordinances and regulations of all duly
constituted authorities, including without limitation, Title

                                      -21-
<PAGE>   26

III of the Americans and Disabilities Act of 1990, all regulations issued
thereunder and the Accessibility Guidelines for Buildings and Facilities issued
pursuant thereto, as the same are in affect on the date hereof and may be
hereafter modified, amended or supplemented ("Applicable Laws"), and (iii) will
conform to the final working drawings approved by Landlord and Tenant, including
all changes or modifications thereto approved by Landlord. The approved plan
shall be attached to this Lease, as Exhibit D. Landlord conceptually approves
the construction of improvements similar in quality to those installed at 3100
Central Expressway, Santa Clara, California, but with not more than ten percent
(10%) of the Premises allocated for "wet" laboratory use and the balance in
"generic" improvements, subject to Landlord's approval as to location and
arrangement.

        Landlord will reasonably approve or disapprove said plans and
specifications within five (5) days of receipt of plans and specifications.
Landlord may reasonably disapprove of said plans and specifications for reasons
including, but not limited to: location, distribution and percentage of floor
coverings, dropped ceiling, restrooms (two core minimum per floor), plumbing,
electrical, and/or mechanical systems which are inconsistent with future
divisibility of the building for multi-tenant occupancy. If Landlord has not
notified Tenant of approval or disapproval within five (5) days of receipt of
plans and specifications, the plans and specifications shall be deemed approved.

        All substantive changes must be approved by Landlord.

        Tenant may select a general contractor subject to Landlord's reasonable
consent. Tenant and general contractor shall diligently pursue to completion
said improvements in accordance with the approved plans and specifications.
Tenant acknowledges that Landlord may record a Notice of Non-Responsibility in
regards to the construction of Tenant Improvements.

               37.5 Beneficial Occupancy. Upon execution of the Lease, Tenant
shall have access to the Premises to construct Tenant Improvements, and Tenant
shall be subject to all terms and conditions of the Lease, excepting payment of
Rent. Rental payments shall commence once on the Term Commencement Date.

               37.6 Extension Option. Provided Tenant is not in default of its
obligations under this Lease, Tenant shall have one (1) five (5) year option to
extend the Term of the Premises in "as is" condition at the then current market
rate. The option to extend is personal to the Tenant stated in the Lease and
will not survive any assignment or sublet of the Lease. In no event will the
monthly rental be less than the rental for the last month of the previous term.
Tenant shall give Landlord written notice of its intent to exercise its option
at least one hundred eighty (180) days but not more than two hundred seventy
(270) days prior to the expiration of the current Lease term. Within thirty (30)
days after Tenant exercises its option to release, Landlord will provide Tenant
with fair market rental, as reasonably determined by Landlord, as well as terms
and conditions for the extended term. Tenant shall have thirty (30) days from
notification by Landlord of current rent and terms and conditions to accept
Landlord's fair market rent, terms and conditions.

        The parties are obligated to negotiate in good faith to agree on the
market rental for any option period. If the parties have not mutually agreed on
the market rental adjustment for any option period provided herein within thirty
(30) days from notification by Landlord to Tenant of Landlord's rental
determination, each party hereto shall appoint one representative who shall be a
licensed real estate broker with a minimum of ten (10) years experience in
leasing industrial space in Sunnyvale, California, to determine the fair market
rental for the Premises. The two (2) representatives so appointed shall
determine the current rental value for the subsequent option period for the use
to which Tenant is then utilizing the Premises pursuant to the terms and
conditions of this Lease. The determination of said current rental value shall
be made by said two (2) representatives within sixty (60) days from notification
by Landlord to Tenant of Landlord's rental determination and they shall submit
said determination in writing to Landlord and Tenant.

        If the two (2) representatives of the parties hereto cannot agree on the
rental value for the Premises herein, said two (2) representatives shall choose
a third licensed real estate broker with a minimum of ten (10) years experience
in the leasing of industrial space in Sunnyvale, California, to act as an
arbitrator. If the two representatives cannot or do not agree on a third
representative, either party may have the third representative chosen by the
American Arbitration

                                      -22-
<PAGE>   27

Association or by a judge of the Santa Clara County Superior Court. The current
rental value for the subsequent option period shall be independently determined
by the arbitrator, which said determination shall be made within ninety (90)
days from notification by Landlord to Tenant of Landlord's rental determination.
The role of the arbitrator shall then be to immediately select from the fair
market rent proposals of the representatives the one that most closely
approximates the arbitrator's determination of fair market rental value. The
arbitrator shall have no right to adopt a compromise or middle ground or any
modification of either of the two fair market rent proposals.

        The proposal the arbitrator chooses as most closely approximating his
determination of the question in issue shall constitute the decision and award
and shall be final and binding upon the parties. Each party shall pay the
charges of the representative appointed by such party. The charges and expenses
of the arbitrator, as provided herein, shall be paid by the parties hereto in
equal shares.

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

                                        LANDLORD
                                        East Arques Sunnyvale, LLC,
                                        a California limited liability company

                                        By    /S/ [Unreadable Name]
                                          --------------------------------------
                                              Managing Member

                                        TENANT
                                        Symyx Technologies, Inc.,
                                        a Delaware corporation,

                                        By    /S/ Steven Goldby
                                          --------------------------------------
                                              Its  CEO
                                                 -------------------------------

                                        By
                                          --------------------------------------
                                              Its
                                                 -------------------------------

                                      -23-
<PAGE>   28

                                    EXHIBIT A

                                    BUILDING

                                    [OMITTED]

<PAGE>   29

                                    EXHIBIT B

                                    PREMISES

                                    [OMITTED]

<PAGE>   30

                                    EXHIBIT C

                       LANDLORD'S PLANS AND SPECIFICATIONS

                                    [OMITTED]

<PAGE>   31

                                    EXHIBIT D

                        TENANT'S PLANS AND SPECIFICATIONS

                                    [OMITTED]

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