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                                                                    EXHIBIT 4.12

                             WATERGATE OFFICE LEASE

1.       PARTIES: BASIC LEASE PROVISIONS; DEFINED TERMS

         1.1      Parties. This Watergate Office Lease ("Lease") is entered into
in the City of Emeryville, County of Alameda, State of California, between
Spieker Properties, L.P., a California limited partnership ("Landlord"), and
Extensity, Inc., a Delaware corporation ("Tenant").

         1.2      Basic Lease Provisions. The following Basic Lease Provisions
constitute an integral part of this Lease, and each reference in this Lease to
the Basic Lease Provisions shall mean the provisions set forth in this Paragraph
1.2. Section references in this Paragraph 1.2 are to the section in which the
particular Basic Lease Provision is first discussed. In the event of any
conflict between the Basic Lease Provisions and the remainder of the Lease, the
latter shall control.

         Lease Date:            1-12-98

         Address of Landlord:   2200 Powell Street
                                Suite 325
                                Emeryville, CA 94608

         Address of Tenant:        2200 Powell Street
                                   Suite 455
                                   Emeryville, CA 94608

Section 2:  Premises:                 Suite 455
            Building:                 Tower II
                                      2200 Powell Street
                                      Emeryville, CA 94608
            Premises Rentable Area:   3,403 square feet
            Premises Useable Area:    2,934 square feet
            Building Rentable Area:   215,550 square feet
            Tenant Parking:           6 permits
            Parking Charge:           $44.00 per permit

Section 3:  Term:                     17 months
            Commencement Date:        January 15, 1998
            Expiration Date:          June 15, 1999

Section 4:  Base Rent:                Stepped as follows:
                                      1/15/98-1/30/98        $4,338.91 per month
                                      2/01/98-2/01/99        $7,656.75 per month
                                      2/01/99-5/31/99        $7,963.02 per month
                                      6/01/99-6/15/99        $3,981.45 per month

            Security Deposit:         $7,963.02
            Base Year:                1998
            Tenant's Share:           1.58 percent

         1.3      Defined Terms. Words and phrases which are capitalized in this
Lease (other than words which are capitalized solely to denote the beginning of
sentences) are defined terms. The definitions of such words and phrases are set
forth in Section 17 of this Lease.

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2.       PREMISES: COMMON AREAS: TENANT PARKING

         2.1      Demise of Premises. On and subject to the terms. covenants and
conditions set forth in this Lease Landlord demises the Premises to Tenant and
Tenant rents and hires the Premises from Landlord. The usable and rentable area
of the Premises, and the rentable area of the Building, for all purposes under
this Lease, are stipulated to be as specified in the Basic Lease Provisions.
Landlord shall not be liable to Tenant, nor shall Tenant have any claim against
Landlord or defense to the enforcement of this Lease, if it is determined that
the actual rentable or usable area of the Premises or the rentable area of the
Building differs from that specified in the Basic Lease Provisions.

         2.2      Condition of Premises. Except as otherwise expressly provided
in a Scope of Work executed by Landlord and Tenant concurrently with their
execution of this Lease. Tenant shall accept the Premises in an "as is"
condition on the date the Term commences and Landlord shall have no obligation
to improve, alter, remodel or otherwise modify the Premises prior to Tenant's
occupancy. Landlord shall construct or install in the Premises only the
improvements specified in the Scope of Work. The Scope of Work, if any, will be
attached as Exhibit B to this Lease, and Landlord shall use reasonable diligence
to cause the Substantial Completion of Landlord's Work pursuant to the Scope of
Work in a timely manner.

         2.3      Common Areas. During the Term. Tenant shall have the
nonexclusive right to use of the Common Areas for their intended and usual
purpose. However, the manner in which the Common Areas are maintained shall be
at the sole reasonable discretion of Landlord and use thereof shall be subject
to the Rules and Regulations. Landlord reserves the right to make alterations.
additions or deletions to, or to change the location of elements of the Common
Areas. Building or Office Complex, and to use the roof, exterior walls and the
area above and beneath the Premises, together with the right to install, use,
maintain and replace equipment, machinery, pipes, conduits and wiring through
the Premises. which serve other parts of the Building or Office Complex, in a
manner and in locations which do not unreasonably interfere with Tenant's use of
or access to the Premises.

         2.4      Tenant Parking. Tenant shall have the right to obtain the
number of parking permits designated as Tenant Parking in the Basic Lease
Provisions, and each such permit shall authorize Tenant or its employees to park
one passenger automobile in the Parking Facilities. Issuance of such parking
permits shall be subject to Tenant's payment of the Parking Charge for each
permit specified in the Basic Lease Provisions. which Parking Charge shall be
payable on the first day of each calendar month during the Term and may be
increased by Landlord at any time, and from time to time, during the Term upon
not less than thirty (30) days prior written notice to Tenant. Tenant and its
employees shall at all times observe such terms and conditions and charges as
may be established by Landlord from time to time concerning the operation and
use of the Parking Facilities. Tenant's employees shall not be entitled to park
in areas located in the Parking Facilities designated by Landlord for reserved
parking or for use by visitors to the Office Complex.

3.       TERM

         3.1      Period. The Term shall be for the period specified in the
Basic Lease Provisions. The Term shall commence on the Commencement Date and
shall end on the Expiration Date, as such dates are determined under Paragraph
3.2 below, unless sooner terminated pursuant to any provision of this Lease.

         3.2      Term Commencement. The anticipated Commencement Date and the
corresponding Expiration Date are specified in the Basic Lease Provisions.
However, the actual Commencement Date shall be the earlier of (a) the date
Tenant first occupies any part of the Premises, or (b) the date of Substantial
Completion of the Landlord's Work or (c) the date established by Landlord in

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the event of a delay by Tenant, as provided in Paragraph 3.3(iii) below: and the
Expiration Date shall be adjusted so that the period between the actual
Commencement Date and the Expiration Date is equal to the Term specified in the
Basic Lease Provisions. If the actual Commencement Date and the Expiration Date
differ from those inserted in the Base Lease Provisions as of the Lease Date,
then promptly after the Commencement Date Landlord and Tenant shall execute a
written acknowledgment of the Commencement Date and the Expiration Date, and
attach it as Exhibit C to this Lease.

         3.3      Delayed Occupancy.

                                    (i)      Landlord shall use reasonable
diligence to substantially complete any Landlord's Work on or before the
Commencement Date specified in the Basic Lease Provisions. However, this Lease
shall not be void or voidable, nor shall Landlord or its agents or contractors
have any liability to Tenant, by reason of Landlord's failure co substantially
complete Landlord's Work by the Commencement Date specified in the Basic Lease
Provisions, or by reason of Landlord's failure to deliver possession of the
Premises due to any other cause beyond Landlord's reasonable control, and
postponement of Tenant's rental obligation prior to delivery of possession of
the Premises shall be Tenant's exclusive remedy and in sole satisfaction or all
claims Tenant might otherwise have by reason of Landlord's failure to deliver
the Premises by the Commencement Date specified in the Basic Lease Provisions.

                                    (ii)     Time is of the essence in
connection with the delivery to Landlord of each and every drawing, plan,
specification, schedule or other item required to be given by Tenant to Landlord
or to be approved by Tenant pursuant to the schedule in and provisions of the
Scope of Work. Accordingly, notwithstanding any contrary provision of this
Lease, if Landlord is delayed in the Substantial Completion of Landlords Work as
a result of (a) Tenant's failure to approve plans, specifications, changes, cost
estimates and other items within the time limits specified therefor in the Work
Letter, or (b) any change by Tenant in said plans, specifications, or other
items after the expiration of such time limits, or (c) any default by Tenant
relating to its obligations hereunder or under the Scope of Work, then, in any
or all such instances and without limitation as to any other right or remedy
available to Landlord. Landlord may under clause (c) of Paragraph 3.2 determine
in its sole reasonable discretion that the actual Commencement Date is the date
that Substantial Completion of Landlord's Work would have occurred but for such
delay.

         3.4      Holding Over. Tenant shall not be entitled to remain in
possession of the Premises after the Expiration Date or after earlier
termination of this Lease, except with Landlord's prior written consent. Any
such confidence of possession with Landlord's consent shall constitute a month-
to-month tenancy on all of the terms and conditions of this Lease, except that
the Base Rent shall be 150% of the Base Rent in effect as of the Expiration Date
or the earlier termination date. Any such continuance in possession without
Landlord's consent (or after such consent has been withdrawn upon thirty (30)
days' notice to Tenant) shall constitute an unlawful detention of the Premises;
and Tenant shall indemnify, defend and hold Landlord harmless from all claims,
losses or liability resulting from Landlord's inability to timely deliver
possession of the Premises to any succeeding tenant.

4.       BASE  RENT; SECURITY DEPOSIT: OPERATING COSTS: TAXES

         4.1      Base Rent. Tenant shall pay to Landlord as monthly Base Rent
for the Premises, in advance, without deduction, setoff, prior notice or demand,
the sum specified in the Basic Lease Provisions. The first month's Base Rent
shall be paid upon Tenant's execution of this Lease, and the Base Rent for each
calendar month thereafter during the Term shall be paid on the first day of each
such calendar month. If the Commencement Date occurs on a day other than the
first day of a calendar month, the Base Rent payable for the first calendar
month of the Term shall be

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prorated on the basis which the number of days of the Term in the first month
bears to the total number of days in such month: and, in such case. Tenant shall
pay such prorated Base Rent to Landlord on the Commencement Date, and the first
month's Base Rent paid upon execution of this Lease shall be credited against
the Base Rent for the second calendar month. If the Term ends on a day other
than the last day of a calendar month, the Base Rent payable for the last
calendar month of the Term shall be prorated on the basis which the number of
days of the Term in the last calendar month bears to the total number of days in
such month.

         4.2      Security Deposit.

                                    (i)      Upon Tenant's execution of this
Lease, Tenant shall deposit with Landlord the sum specified as the Security
Deposit in the Basic Lease Provisions. which shall be held by Landlord as
security for the faithful performance by Tenant of all of the terms, covenants,
and conditions of this Lease, it being expressly understood and agreed that the
Security Deposit is not an advance deposit for rent or a measure of Landlord's
damages in case of Tenant's default. If at any time Tenant's Base Rent is
increased, the Security Deposit shall also be increased by the same percentage
as the increase in Base Rent and Tenant shall, within ten (10) days after
receipt of notice of such increase in Base Rent deposit cash with Landlord in
an amount sufficient to effect such adjustment.

                                    (ii)     The Security Deposit may be
retained used or applied by Landlord to remedy any default by Tenant, to repair
damage caused by Tenant to any part of the Premises or the Building, and to
clean the Premises upon expiration or earlier termination of this Lease, as well
as to reimburse Landlord for any amount which Landlord may spend by reason of
Tenant's default or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant's default. If any portion of the
Security Deposit is so used or applied. Tenant shall, within ten (10) days after
written demand therefor, deposit cash with Landlord in an amount sufficient to
restore the Security Deposit to the full amount required hereunder, and Tenant's
failure to do so shall be a material breach of this Lease. Landlord shall not be
required to keen the Security Deposit separate from its general funds, and
Tenant shall not be entitled to interest on, or any other compensation for,
Landlord's retention of the Security Deposit. Tenant may not elect to apply any
portion of the Security Deposit toward payment of Base Rent or any other amounts
payable by Tenant under this Lease, although Landlord may elect to do so in the
event Tenant is in default or is insolvent. If Tenant shall fully and faithfully
perform every provision of this Lease to be performed by it, the Security
Deposit or any balance thereof shall be returned to Tenant at Tenant's last
known address (or, at Landlord's option, to the last assignee of Tenant's
interest hereunder) within thirty (30) days after the Term has ended and Tenant
has vacated the Premises.

         4.3      Operating Costs. Tenant shall pay to Landlord Tenant's Share
of the Increased Operating Costs as follows:

                                    (i)      Landlord shall submit to Tenant,
before January 1 of each Subsequent Year, or as soon thereafter as Landlord has
sufficient data, a reasonably detailed statement showing the estimated Increased
Operating Costs for such Subsequent Year, which determination shall be made by
Landlord based upon experience with actual costs and projections. At the first
monthly Base Rent payment date following the submittal of such statement and at
each succeeding monthly rent payment date thereafter during the Subsequent Year,
Tenant shall pay to Landlord an amount equal to one-twelfth (1/12th) of the
Increased Operating Costs. If Landlord does not submit said statement to Tenant
prior to January 1 of any Subsequent Year, Tenant shall continue to pay Tenant's
Share of the Increased Operating Costs at the then existing rate until such
statement is submitted and thereafter, at the monthly Base Rent payment date
next following the submittal of such statement Tenant shall pay Tenant's Share
of the Increased Operating Costs based on the rate set forth in such statement
plus, if the new rate is greater than

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the old rate, the difference accrued from January 1 of such Subsequent Year.
Landlord may revise such estimated Increased Operating Costs at the end of any
calendar quarter.

                                    (ii)     On or before March 31 of the second
and each succeeding Subsequent Year or as soon thereafter as Landlord has
sufficient data. Landlord shall submit to Tenant a reasonably detailed statement
showing the actual Building Operating Costs paid or incurred by Landlord during
the previous calendar year. If Tenant's Share of the actual Increased Operating
Costs is less than the amount of Tenant's Share of the estimated Increased
Operating Costs for the previous Subsequent Year theretofore paid by Tenant,
Landlord shall credit such difference against the next Increased Operating Costs
payments coming due. If Tenant's Share of the actual Increased Operating Costs
is more than the amount of Tenant's Share of the estimated Increased Operating
Costs for such previous Subsequent Year theretofore paid by Tenant. Tenant shall
pay to Landlord the full amount or such difference at the monthly Base Rent
payment date next following the submittal of such statement to Tenant.

                                    (iii)    If the Expiration Date or the date
of earlier termination of this Lease is other than December 31, the Operating
Costs for both the Base Year and the last Subsequent Year shall be prorated
based on what the number of days in the Term in the last subsequent Year bears
to 365; and any amounts owed or to be credited pursuant to Paragraph 4.3.2 shall
be paid at the time in the last Subsequent Year or in the calendar year
immediately following the last Subsequent Year, that such amount is calculated
pursuant to paragraph 4.3(ii).

         4.4      Taxes Payable By Tenant. Tenant shall pay before delinquency
any and all taxes levied or assessed and which become payable by Tenant for
directly or indirectly by Landlord during the Term (excluding, however state and
federal personal or corporate income taxes measured by the income of Landlord
from all sources, capital stock taxes and estate and inheritance taxes), whether
or not now customary or within the contemplation of the parties hereto, which
are based upon, measured by or otherwise calculated with respect to; (a) the
gross or net rental income of Landlord under this Lease, including, without
limitation, any gross receipts tax levied by any taxing authority, or any other
gross income tax or excise tax levied by any taxing authority with respect to
the receipt of the rental payable hereunder; (b) the value of Tenant's
equipment, furniture, fixtures or other personal property located in the
Premises: (c) the possession, lease, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises or any portion
thereof; (d) the value of any leasehold improvements, alterations or additions
made in or to the Premises regardless of whether title to such improvements,
alterations or additions shall be in Tenant or Landlord; or (e) this transaction
or any document to which Tenant is a party creating or transferring an interest
or an estate in the Premises.

         4.5      Late Charges and Interest. All amounts payable under this
Lease shall be paid in lawful money of the United States of America. Any amount
of Base Rent, Tenant's Share of Increased Operating Costs, Parking Charges or
any other amount payable under this Lease which is not paid within ten (10) days
after it is due shall be subject to a late charge of 5% of the amount unpaid.
Any amount due of Landlord that is not paid when due shall bear interest at the
Overdue Rate, except that no interest shall accrue for the month in which a late
charge is assessed. Tenant's failure to perform any monetary obligations under
this Lease shall have the same consequences as Tenant's failure to pay Base
Rent.

5.       USES

         5.1      Authorized. Tenant shall use the Premises solely for general
office purposes and for' no other purpose. Tenant shall not use or permit or
suffer the Premises or any part thereof to be used for any purpose other than
the purpose expressly authorized herein.

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         5.2      Suitability. Tenant acknowledges that neither Landlord nor any
agent of Landlord has made any representation or warranty with respect to the
Premises, the Building or the Office Complex, or with respect to the suitability
of same for the conduct of Tenant's business except, as expressly provided in
this Lease. Tenant's acceptance of the possession of the Premises shall
conclusively establish that the foregoing were at such time in satisfactory
condition.

         5.3      Insurance. Tenant shall not do or suffer anything to be done
in or about the Premises, nor shall Tenant bring or allow anything to be brought
into the Premises, which will in any way increase the rate of any fire insurance
or other insurance upon the Building or its contents, cause a cancellation of
said insurance or otherwise affect said insurance in any manner.

         5.4      Laws. Tenant shall not do or suffer anything to be done in or
about the Premises which will in any way conflict with any law, statute,
ordinance or other governmental rule, regulation or requirement now in force or
which may be subsequently enacted or promulgated. Tenant shall, at its sole cost
and expense, promptly comply with each and all of said governmental measures and
also with the requirements of any board of fire underwriters or other similar
body now or hereafter constituted to deal with the condition. use or occupancy
of the Premises, excluding structural changes not related to or affected by
Tenant's alterations, additions or improvements. Without limiting the generality
of the foregoing, Tenant will maintain throughout the Term a copy of the most
current list of chemicals known to the State of California to cause cancer or
reproductive toxicity, as published by the State Health and Welfare Agency in
accordance with the Safe Drinking Water and Toxic Enforcement Act of 1986
("Proportion 65") Tenant will monitor the chemicals Tenant maintains on the
Premises and will comply with both the warning requirements and the discharge
prohibitions of Proposition 65 for all chemicals on the Premises that appear on
such list. The judgment of any court of competent jurisdiction or the admission
of Tenant in any judicial action, regardless of whether Landlord is a party
thereto, that Tenant has violated any of said governmental measures or
requirements shall be conclusive of that fact as between Landlord and Tenant.

         5.5      Nuisance. Tenant shall not place or permit to be placed on any
floor a load exceeding the floor load which such floor was designed to carry.
Tenant also shall not do or suffer anything to be done in or about the Premises
which will in any way obstruct or interfere with the rights of other tenants or
occupants of the Building or injure or annoy said tenants or occupants, nor
shall Tenant use or suffer the Premises to be used for any unlawful purposes. In
no event shall Tenant cause or permit any nuisance in or about the Premises, and
no loudspeakers or similar devices shall be used without the prior written
approval of Landlord, which approval may be withheld in Landlord's sole
discretion. Tenant shall not commit or suffer to be committed any waste in or
upon the Premises. The provisions of this paragraph are for the benefit of
Landlord only and shall not be constructed to be for the benefit of any tenant
or occupant of the Building.

         5.6      Rules and Regulations. Tenant shall comply with the Rules and
Regulations for the Building, together with all modifications and additions
thereto adopted by Landlord from time to time. If there is any conflict between
the Rules and Regulations and the provisions of this Lease, the Provisions of
this Lease shall prevail. Landlord shall not be responsible to Tenant for the
nonperformance of any of the Rules and Regulations by any other tenant or
occupants of the Building.

6.       SERVICES AND UTILITIES

         6.1      Basic Services by Landlord. Provided Tenant is not in default
under this Lease, and subject to the provisions elsewhere in this Lease and to
the Rules and Regulations of the Building, Landlord shall furnish the premises
with : (a) water, sewage and electricity suitable in Landlord's judgment for the
intended use of the Premises and for the operation of a reasonable number, based
on customary use for general office purposes of desktop office machines and
ordinary copying

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machines: (b) heat and air conditioning between 5:00 a.m. and 5:00 p.m. on days
other than Saturdays, Sundays and generally recognized holidays, in an amount
reasonably required in Landlord's judgment for the comfortable occupation of the
Premises: (c) elevator service, which shall mean service by non-attended
automatic elevators or elevators with attendants, either or both, at the option
of Landlord: and (d) daily Janitorial service (five nights per week) similar to
that which is provided in comparable office buildings in the Oakland/Emeryville
area. Landlord shall maintain the Common Areas in a clean and orderly manner and
in a good state of repair.

         6.2      Additional Heating and Air Conditioning. Landlord shall use
reasonable efforts to provide additional or after-hours heating or air
conditioning at Tenant's request, provided Tenant pays to Landlord the cost of
such services as determined solely by Landlord based upon Landlord's reasonable
estimates of the costs of such additional services, plus a reasonable charge
(not to exceed 10% of the cost of such services) for Landlord's overhead
expense. Tenant shall keep all draperies closed when necessary because of the
sun's positions and at all times cooperate fully with Landlord and abide by all
the regulations and requirements which Landlord may prescribe from time to time
for the proper functioning and protection of the heating, ventilating and air
conditioning systems. Whenever heat-generating machines or equipment or lighting
used in the Premises by Tenants affect the temperature otherwise maintained by
the air conditioning system. Landlord shall have the right to install any
machinery and equipment Landlord deems necessary to restore the temperature
balance in any affected part of the Building, including but not limited to
modifications to the Building's air conditioning system or installation of
supplementary air conditioning units. Tenant shall pay the cost thereof
including installation and any additional costs of operation and maintenance
occasioned thereby, to Landlord upon demand.

         6.3      Special Apparatus. Tenant shall not except with Landlord's
prior written consent which consent may be withheld in Landlord's sole
discretion either : (a) use any apparatus or device in the Premises which will
increase the amount of cooling, ventilation, electricity or water supplied to
the Premises beyond that usually supplied for general office use; or (b) connect
with electric current or water pipes any device or apparatus for the purpose of
using electrical current or water , except as such connections now exist or as
may be provided for the Scope of Work. If Landlord consents to the use and/or
connection of any apparatus or device described in clauses (a) and (b) above,
Landlord may install meters and similar monitoring devices to measure the amount
of utilities consumed by such apparatus or devices and Tenant shall pay for the
cost of all work and materials required for the installation, maintenance and
use of such meters and monitoring devices. If Landlord elects not to install a
special meter or monitoring device. Landlord shall determine the amount of
additional utilities and resources consumed by such apparatus of device based
upon Landlord's reasonable estimates and best judgment, and such determination,
made in good faith by Landlord, shall be conclusive on Tenant. Tenant shall pay
to Landlord promptly upon demand the cost of any excess use of utilities and
resources based on the rates charged by the local public utility company or
other supplier furnishing same, plus any additional expense incurred by Landlord
in keeping account of the foregoing and administering same.

         6.4      Interruption In Service. Landlord shall use reasonable efforts
to remedy any interruption in the furnishing of services and utilities. However,
Landlord shall not be in default under this Lease or liable for any damages
directly or indirectly arising from, nor shall the rent be abated by reason of,
any failure to provide or any reduction in any of the above services or
utilities if such failure or reduction is caused by the making of repairs or
improvements to the Premises or the Building, the installation of equipment acts
of God or the elements, labor disturbances of any character, or any other events
or conditions whatsoever beyond the reasonable control of Landlord, or rationing
or restrictions on the use of said services and utilities due to energy
shortages or other causes, whether or not any of the above result from acts or
omissions of Landlord. Furthermore, Landlord shall be entitled to cooperate
voluntarily in a reasonable manner with the efforts of national state or local
governmental bodies or utilities suppliers in reducing energy or other resources
consumption. The failure of Landlord to provide the utilities

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and services specified in this Section 6 shall not constitute a constructive or
other eviction of Tenant.

         6.5  Tenant's Other Utilities. Tenant shall pay prior to delinquency
for all telephone and all other materials and services not expressly required to
be provided by Landlord, which may be furnished to or used in, on or about the
Premises during the Term.

  7.     TENANT'S ALTERATIONS: PROTECTION AGAINST LIENS

         7.1  Landlord's Consent Required. Tenant shall not make or permit to be
made any alterations, additions or improvements to the Premises or any part
thereof, without first obtaining Landlord's written consent. When applying for
such consent Tenant shall if required by Landlord, furnish complete plans and
specifications for such alterations, additions or improvements. All alterations,
additions or improvements to the Premises shall be performed by Contractors
selected and supervised be Landlord for Tenant's account and at Tenant's sole
cost and expense. Within ten (10) days after receipt of a written statement from
Landlord. Tenant shall reimburse Landlord for all cost arising in connection
with Landlord's review of plans and specifications and supervision of
contractors. Landlord shall have the right to require that any contractor
performing alterations, improvements or additions to the Premises shall, prior
to commencement of any work, provide Landlord with a performance bond and labor
and materials payment bond in the amount of the contract price for the work
naming Landlord and Tenant and any other persons designated by Landlord as
co-obligees. All alterations, additions, fixtures and improvements, including
without limitation all improvements made pursuant to a Scope of work, whether
temporary or permanent in character, made in or upon the premises either by
Landlord or Tenant shall at once belong to Landlord and become part of the
Premises and shall remain on the Premises without compensation of any kind to
Tenant, unless Landlord requires their removal under Paragraph 7.2 below. Tenant
shall carry insurance as required by Section 10 covering any improvement,
alterations or additions to the Premises made or paid for by Tenant it being
understood and agreed that none of such alterations, additions or improvements
shall be insured by Landlord nor shall Landlord be required under any provision
of this Lease to repair, reconstruct or reinstall any such alterations,
additions or improvements. Movable furniture and equipment which are removable
without material damage to the building or the Premises shall remain the
property of Tenant.

         7.2  Removal of Tenant's Alterations. Notwithstanding any contrary
provision in this Lease, Tenant shall upon Landlord's written request made prior
to or within thirty (30 ) days following the Expiration Date or the earlier
termination of this lease, promptly remove any alterations, additions or
improvements designated by Landlord to be removed and repair any damage to the
Premises resulting form such removal. Landlord may in connection with any such
removal which might in Landlord's judgment involve damage to the Premises,
require that such removal be performed by a bonded contractor or other person
for whom a bond satisfactory to Landlord has been furnished covering the cost of
repairing the anticipated damages.

         7.3  Protection against Liens. Tenant shall keep the Premises the
Building and the Common Areas free from any liens arising out of work performed
materials furnished, or obligations incurred by Tenant and shall indemnify, hold
harmless and defend Landlord from any liens and encumbrances arising out of any
work performed or materials furnished by or at the direction of Tenant. In the
event that Tenant shall not, within twenty (20) days following imposition of any
such lien, cause such lien to be released of record by payment or posting of a
proper bond , Landlord shall have, in addition to all other remedies provided in
this Lease and by law, the right, but no 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 such sums paid by Landlord and all expenses
incurred by it in connection therewith, including attorneys' fees and costs,
shall be payable by Tenant upon demand with interest at the Overdue Rate from
the date

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such sums are paid or expenses incurred by Landlord. 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 protaction of
Landlord and the Premises, and any other party having an interest therein, from
mechanics' and materialmen's liens, and Tenant shall give to Landlord at least
ten (10) business days' prior written notice of the date of commencement of any
work relating to alterations, additions or improvements in or to the Premises.

8.       MAINTENANCE AND REPAIRS

         8.1      Landlord's Obligations. Subject to Section 15 and 16, Landlord
shall maintain in good order, condition and repair the structural portions of
the Building including the exterior walls, underflooring and roof, the basic
heating, ventilating, air conditioning, plumbing, electrical, and fire detection
and security systems, and all other portions the of Premises not the obligation
of Tenant or any other tenant in the Building. However, if any such maintenance
or repair becomes necessary in whole or in part because of wrongful acts or
omissions by Tenant or Tenant's employees, agents, invitees or customers, or
because of a breaking and entering, Tenant shall pay the entire cost thereof
upon demand. Landlord shall not be liable to Tenant, and rent shall not be
abated, for any failure by Landlord to maintain and repair areas which are being
used in connection with construction of improvements, or for any failure to make
any rapairs or perform any maintenance unless such failure shall continue for an
unreasonable time after written notice of the need therefor is given to Landlord
by Tenant. Landlord shall also not be liable under any circumstances for loss of
profits or for injury to or interference with Tenants's business arising from or
in connection with the making of or the Failure of Landlord to make any repairs,
maintenance, alterations or improvements in or to any portion of the Building or
the Common Areas or in or to fixtures, appurtenances and equipment therein.

         8.2      Tenant's Obligations

                  (i)      Tenant shall maintain the Premises in good order,
condition and repair including the interior surfaces of the ceilings, walls and
floors, all doors, interior windows, and all plumbing pipes, valves and
fixtures, electrical wiring, panels, switches, and all other fixtures and
equipment installed for the use of the Premises by Tenant. Tenant expressly
waives the benefit of any statute, ordinance or judicial decision now or
hereafter in effect which would otherwise afford Tenant the right to make
repairs at Landlord's expense or to terminate this Lease because of Landlord's
failure to keep the Premises in good order, condition and repair.

                  (ii)     Upon the Expiration Date or the earlier termination
of this Lease Tenant shall surrender the Premises in the same condition as
received, except for ordinary wear and tear and damage by fire, earthquake, acts
of God or the elements, not caused by the wrongful omission of Tenant or
Tenant's agents, and shall promptly remove or cause to be removed, at Tenant's
expense, from the Premises and the Building any signs, notices and displays
placed by Tenant.

                  (iii)    Tenant shall repair any damage to the Premises or the
Building caused by or in connection with the removal of any articles of personal
property, business or trade fixtures, machinery, equipment, cabinetwork,
furniture, movable partitions or permanent improvements or additions, including
without limitation, repairing the floor and patching and painting the walls
where required by Landlord to Landlord's reasonable satisfaction, but excluding
any damage caused by reasonable use. Tenant shall indemnify Landlord against any
loss or liability resulting from delay by Tenant in so surrendering the
Premises, including without limitation, any claims made by any succeeding tenant
founded on such delay.

                                        9
<PAGE>

                           (iv)     Tenant shall do all acts required to comply
with all applicable laws, ordinances, regulations and rules of any public
authority relating to Tenant's use and occupancy of the Premises.

                           (v)      If Tenant fails to maintain the Premises in
good order, condition and repair, or to comply with applicable laws, ordinances,
regulations or rules, Landlord shall give Tenant notice to do such acts as are
reasonably required to satisfy its obligations under this paragraph. If Tenant
fails to promptly commence such work and diligently prosecute it to completion,
Landlord shall have the right, but no obligation, to do such acts and expend
such funds as are reasonably required to perform such work. Any amount so
expended by Landlord shall be paid by Tenant promptly after demand with interest
at the Overdue Rate from the date of such work. Landlord shall have no liability
to Tenant for any damage, inconvenience or interference with the use of the
Premises by Tenant as a result of performing any such work.

9.       INDEMNITY AND EXEMPTIONS OF LANDLORD

         9.1      Indemnity. Tenant shall indemnify, hold harmless, and defend
Landlord against any and all claims of liability for any death or injury to any
person or damage to any property whatsoever occurring in, on or about the
Premises or any part thereof, or occurring in, on or about any of the Common
Areas when such injury or damage is caused in whole or in part by the act,
negligence, fault or omission of any duty with respect to the same by Tenant,
its agents, contractors, employees, invitees or customers. Tenants shall further
indemnify, hold harmless and defend Landlord from and against any and all
claims, actions and liabilities arising from (a) any breach or default in the
performance of any obligation on Tenant's part to be performed under this Lease,
or (b) arising from any act or negligence of Tenant, or any of its agents,
contractors, invitees or employees, or (c) any Environmental Damages arising
from the presence of Hazardous Materials upon, within or about the Premises due
to any act or omission of Tenant or any of its agents, contractors, invitees or
employees, or (d) violation of any Environmental Requirements pertaining to the
Premises or the activities therein, and (e) from and against all costs,
attorneys' fees, expenses and liabilities incurred in the defense of any such
claim, action or liability, and any proceeding brought thereon. In case any
action or proceeding be brought against Landlord by reason of any such claim,
Tenant, upon notice from Landlord, shall defend the same at Tenant's expense by
counsel reasonably satisfactory to Landlord: provided, however, that Tenant
shall not be liable for damage to property or death or injury to person(s)
occasioned by the active negligence or intentional misconduct of Landlord or its
agents or employees unless covered by insurance Tenant is required to provide.

         9.2      Exemption of Landlord From Liability. Tenant hereby assumes
all risk of damage to property or injury to persons in, upon or about the
Premises from any cause other than the active negligence or intentional
misconduct of Landlord and its agents or employees. Without limiting the
generality of the foregoing, Landlord shall not be liable for injury or damage
which may be sustained by the person, goods, wares, merchandise or property of
Tenant, its employees, invitees or customers, or any other person in or about
the Premises cause by or resulting from fire, steam, electricity, gas, water or
rain, which may leak or flow from or into any part of the Premises, or from the
breakage, leakage, obstruction or other defects of the pipes, sprinklers, wires,
appliances, plumbing, heating, air conditioning or lighting fixtures of the
same, whether the damage or injury results from conditions arising upon the
Premises or upon other portions of the Building or from other sources. Landlord
shall not be liable for any damages arising from any act or omission of any
other tenant or occupant of the Building.

                                       10

<PAGE>

10.      INSURANCE

         10.1     Tenant's Insurance.

                                    (i)      At all times during the Term Tenant
shall maintain in effect policies of casualty insurance covering (a) all
alterations, additions or improvements in, on or to the Premises as may be made
or paid for by Tenant (other than building standard improvements), and (b) all
trade fixtures, merchandise and other personal property from time to time in, on
or upon the Premises, in an amount not less than their actual replacement cost,
providing protection against any peril included within the classification "Fire
and Extended Coverage" together with insurance against sprinkler damage,
vandalism and malicious mischief, including cost of debris removal and
demolition. Replacement cost for purposes hereof shall be determined by mutual
agreement, or failing such agreement by an accredited appraiser selected by
Landlord, with the cost of such appraisal to be borne by Tenant. The proceeds of
such insurance shall be used for the repair or replacement of the property so
insured. Upon termination of this Lease following a casualty as set forth in
Section 16, the proceeds under clause (a) above shall be paid to Landlord, and
the proceeds under clause (b) above shall be paid to Tenant.

                                    (ii)     At all times during the Term Tenant
shall maintain in effect workers' compensation insurance and comprehensive
public liability and property damage insurance adequate to protect Landlord
against liability for injury to or death of any person or loss or injury to any
property in connection with the activities of Tenant in, on or about the
Premises of with the use, operation or condition of the Premises. Such insurance
at all times shall afford combined single limit coverage in an amount of not
less than Two Million Dollars ($2,000.000). The limits of such insurance shall
not limit the liability of Tenant under this Lease. All public liability and
property damage policies shall contain a provision that Landlord, although,
named as an insured, shall nevertheless be entitled to recovery under said
policies for any loss occasioned to it, its servants, agents or employees by
reason of Tenant's negligence.

                                    (iii)    All insurance required to be
carried by Tenant hereunder shall be issued by responsible insurance companies
acceptable to Landlord and any Mortgagee. All policies of insurance provided for
in this Lease shall be issued by insurance companies licensed to do business in
the State of California, with general policy holder's rating of not less than
"A" and a financial rating of not less than "Class X" as rated in the most
current available "Best's insurance Reports." Each policy shall name Landlord
and at Landlord's request any Mortgagee as an additional insured, as their
respective interests may appear, and a duplicate original of all policies or
certificates evidencing the existence and amounts of such insurance shall be
delivered to Landlord by Tenant at least ten (10) days prior to Tenant's
occupancy of the Premises. All policies of insurance delivered to Landlord must
contain a provision that the company writing said policy will give Landlord
thirty (30) days' written notice in advance of any cancellation or lapse of or
any change in such insurance. All public liability, property damage and other
casualty insurance policies shall be written as primary policies, not
contributing with, and not in excess of coverage which Landlord may carry.
Tenant shall furnish Landlord with renewals or "binders" of any such policy at
least thirty (30) days prior to the expiration thereof. If Tenant does not
procure and maintain such insurance, Landlord may (but shall not be required to)
obtain such insurance on Tenant's behalf and charge Tenant the premiums therefor
which shall be payable upon demand, and no such action by Landlord shall
constitute a waiver of Tenant's default hereunder. Tenant may carry such
insurance under a blanket policy, provided such blanket policy expressly affords
the coverage required by this Lease by a Landlord's protective liability
endorsement or otherwise.

                                       11

<PAGE>

                                    (iv)     Every three (3) years during the
Term or whenever Tenant materially improves or alters the Premises, Tenant shall
increase the policy limits for the insurance to be carried by Tenant under this
Section 10 to such amounts as landlord reasonably determines are appropriate.

         10.2     Landlord's Insurance. At all times during the Term Landlord
shall maintain in effect a policy or policies of insurance covering the Building
in an amount not less than ninety percent (90%) of full replacement cost
(exclusive of the cost of excavations, foundations, footings and all tenant
improvements constructed at the request or cost of Tenant, but inclusive of the
cost of building standard tenant improvements) from time to time during the
Term, providing protection against any peril generally included in the
classification "Fire and Extended Coverage" together with insurance against
sprinkler damage vandalism and malicious mischief. Landlord's obligation to
carry the insurance provided for herein may be brought within the coverage of
any blanket policy or policies of insurance carried and maintained by Landlord.
In addition to the coverage required by this paragraph. Landlord shall be
entitled to procure (and include the premiums therefor in Operating Costs) such
other types of insurance and in such amounts as Landlord may deem to be
necessary or appropriate.

         10.3     Subrogation Waiver. Landlord and Tenant each hereby waive any
and all rights of recovery against the other or against the officers, partners,
employees, agents and representatives of the other, on account of loss or damage
of such waiving party or its property, or the property of others under its
control, to the extent that such loss or damage is insured against under any
fire and extended coverage insurance policy which either may have in force at
the time of such loss or damage. Tenant shall, upon obtaining the polices or
insurance required under this Lease, give notice to its insurance carrier(s)
that the foregoing mutual waiver of subrogation is contained in this Lease. The
waivers set forth herein shall be required and effective only to the extent such
waivers are available from each party's insurer without additional premium; if
an extra charge is incurred to obtain such waiver, it shall be paid by the party
in whose favor the waiver runs within fifteen (15) days after written notice
from the other party, and, if not so paid such other party's waiver under this
paragraph shall be neither required nor effective.

11.      ASSIGNMENT AND SUBLETTING

         11.1     Landlord's Consent Required. Tenant shall not sell, assign,
mortgage, pledge, hypothecate, encumber or otherwise transfer this Lease or any
interest therein, and shall not sublet the Premises or any part thereof, or
suffer or permit the Premises or any part thereof to be occupied by any other
person (the agents, employees, and invitees of Tenant excepted), without the
prior [ILLEGIBLE] of Landlord in each instances and any attempt to do so
without such consent shall be voidable and, at Landlord's election, shall
constitute a noncurable default under this Lease. No interest of Tenant in this
Lease or the Premises shall be assignable by operation of law. Subject to the
terms and conditions contained in this section, Landlord shall not unreasonably
withhold its consent to voluntary assignment of this Lease or a subletting of
the Premises.

         11.2     Tenant's Application. If Tenant desires at any time to assign
this Lease or to sublet the Premises or any portion thereof, Tenant shall submit
to Landlord at least thirty (30) days prior to the proposed effective date of
the assignment or sublease, in writing: (a) a notice of intent to assign or
sublease, setting forth the proposed effective date thereof; (b) the name of the
proposed assignee or subtenant; (c) the nature of the proposed assignee's or
subtenant's business to be carried on in the Premises; (d) the terms and
provisions of the proposed assignment or sublease: and (e) such financial
information as Landlord may request concerning the proposed assignee or
subtenant, including recent financial statements and bank references.

                                       12
<PAGE>
         11.3     Required Provisions. All assignment or sublease agreements
shall (a) contain such terms as are described in Tenant's notice under Paragraph
11.2 above or as otherwise agreed by Landlord. (b) prohibit further assignments
or subleases except with Landlord's written consent, (c) impose the same
obligations and condition on the assignee or sublessee as are imposed on Tenant
by this Lease (except as to rent and term or as otherwise agreed by Landlord),
(d) be expressly subject and subordinate to each and every provision of this
Lease, (e) have a term that expires on or before the Expiration Date. and (f)
provide that Tenant and/or the assignee or sublessee shall pay Landlord the
amount of any additional costs or expenses incurred by Landlord for repairs,
maintanance or otherwise as a result of any change in the nature of occupancy
caused by the assignment or sublease.

         11.4     Bonus Rent. Landlord shall be entitled to receive all Bonus
Rent payable in connection with any assignment or sublease. Within fifteen (15)
days after written request by Landlord. Tenant shall provide and certify to
Landlord all financial information required for the calculation of Bonus Rent.

         11.5     Fees for Review. If Landlord retains the services of an
attorney to review any aspect of the proposed assignment or sublease
transaction. Tenant shall pay to Landlord all attorneys fees reasonably incurred
by Landlord in connection therewith. Tenant shall pay such attorneys fees to
Landlord within thirty (30) days after written request therefor.

         11.6     No Release of Tenant. No consent of Landlord to any assignment
or subletting by Tenant shall relieve Tenant of the obligations to be performed
by Tenant under this Lease whether accruing before or after such assignment or
subletting, and notwithstanding any subsequent modification extension or renewal
of this Lease made with or without Tenant's consent. The consent by Landlord to
any transfer or subletting shall not relieve Tenant from the obligation to
obtain Landlord's express prior written consent to any other transfer or
subleasing. The acceptance by Landlord of payment from any other person shall
not be deemed to be a waiver by Landlord of any provision of this Lease or to be
a consent to any transfer or sublease, or to be a release of Tenant from any
obligation under this Lease. If this Lease is assigned, or if the Premises or
any part thereof are sublet or occupied by any person other than Tenant,
Landlord may after default by Tenant, collect the rent from any such assignee,
transferee, subtenant or occupant and apply the net amount collected to the rent
reserved herein, and no such action by Landlord shall be deemed a consent to
such assignment, transfer, sublease or occupancy.

         11.7     Assumption of Obligations. Each assignee of Tenant shall
assume all obligations of Tenant under this Lease and shall be and remain liable
jointly and severally with Tenant for the payment of the rent and the
performance of all the terms, covenants, conditions and agreements herein
contained on Tenants' part to be performed for the Term. No assignment shall be
binding on Landlord unless the assignee or Tenant delivers to Landlord a
counterpart of the assignment instrument in recordable form which contains a
covenant of assumption by the transferee satisfactory in substance and form to
Landlord, consistent with the requirements of this section. The failure or
refusal of any assignee to execute such instrument of assumption shall not
release or discharge the assignee from its liability to Landlord hereunder.
Landlord shall have no obligation whatsoever to perform any duty to or respond
to any request from any sublessee, it being the obligation of Tenant to
administer the terms of its subleases.

         11.8     Deemed Transfers. If Tenant is a privately held corporation,
or is an unincorporated association or partnership, the transfer, assignment or
hypothecation of any stock or interest in such corporation, association or
partnership in the aggregate from the Lease Date in excess of fifty percent
(50%) shall be deemed an assignment or transfer within the meaning of this
section. However, nothing in this section shall prohibit Tenant from assigning
this Lease or subletting the Premises or any part thereof to any corporation
which controls Tenant is controlled by Tenant or is under common control with
Tenant provided Tenant gives Landlord at Least thirty (30) days

                                       13
<PAGE>

prior written notice of such subletting or assignment and such subletting or
assignment shall not release or discharge Tenant from any liability under this
Lease.

         11.9     Landlord's Option to Recapture. Landlord reserves the option,
to be exercised by giving notice to Tenant within fifteen (15) days after
receipt of Tenant's notice of intent to assign or sublease (it being agreed that
no revocation or withdrawal by Tenant of such notice of intent to assign or
sublease shall affect Landlord's option) to recapture the portion of the
Premises described in Tenant's notice for the remainder of the Term and to
terminate this Lease with respect to such recaptured Premises. The effective
date of such recapture and termination shall be as specified in Landlord's
notice of exercise of its recapture option, but shall not be less than thirty
(30) days nor more than sixty (60) days after the delivery of such notice. The
option to recapture reserved to Landlord hereunder shall also arise in the event
Tenant shall, voluntarily or involuntarily, sell, assign, mortgage, pledge,
encumber or otherwise transfer this Lease or any interest herein, or sublet the
Premises or any portion thereof, or suffer or permit the Premises to be occupied
by any third person (the agents, employees, invitees and customers of Tenant
excepted), without first obtaining the written consent of Landlord; and in such
event the recapture option shall apply to the entire Premises and be exercisable
by Landlord at any time after the occurrence of the event for which Landlord's
consent was required but not obtained by Tenant. If this Lease is terminated
pursuant to Landlord's recapture option with respect to only a portion of the
Premises, the Base Rent required under this Lease and Tenant's Share shall be
adjusted proportionately based on the rentable square footage retained by Tenant
and the rentable square footage of the Premises leased by Tenant immediately
prior to such recapture and cancellation and Landlord and Tenant shall thereupon
execute an amendment of this Lease in accordance therewith. If Landlord so
recaptures a portion of the Premises it shall construct and erect as its sole
cost such partitions as may be required to sever the space retained by Tenant
from the space recaptured by Landlord; provided however that Tenant shall bear
the cost of painting covering or otherwise decoration the surfaces of such
partitions which face the remaining Premises. Landlord may, without limitation,
lease the recaptured portion of the Premises to the proposed subtenant or
assignee, on the same or different terms as were proposed by Tenant, without
liability to Tenant.

12. SUBORDINATION AND ATTORNMENT

         12.1     Subordination. Upon the written request of Landlord or any
Mortgagee, Tenant will in writing subordinate its rights under this Lease to the
lien of any mortgage or deed of trust now or hereafter in force against the
Premises, the Building or the underlying land and to all advances made or
hereafter to be made upon the security thereof, and to all extensions,
modifications and renewals thereunder. Tenant shall also, upon Landlord's
request, subordinate its rights hereunder to any ground or underlying lease
which may now exist or hereafter be executed affecting the Building and/or the
underlying land. Tenant shall have the right to condition its subordination upon
the execution and delivery of an attornment and nondisturbance agreement as
described in Paragraph 12.2, between the Mortgagee or the lessor under any such
ground or underlying lease and Tenant. Tenant shall not subordinate its rights
hereunder to any lien other than that of a first mortgage or first deed of trust
except with the prior written consent of the Mortgagee holding such first
mortgage or deed of trust.

         12.2     Attornment. Upon the written request of the Landlord or any
Mortgagee or any lessor under a ground or underlying leases, Tenant shall attorn
to any such Mortgagee or lessor, provided such Mortgagee or lessor agrees that
if Tenant is not in default under this Lease, Tenant's possession of the
Premises in accordance with the terms of this Lease shall not be disturbed. Such
agreement shall provide among other things, (a) that this Lease shall remain in
full force and effect, (b) that Tenant pay rant to said Mortgagee or lessor from
the date of said attornment. (c) that said Mortgagee or lessor shall not be
responsible to Tenant under this Lease except for obligations accruing
subsequent to the date of such attornment, and (d) that Tenant in

                                       14
<PAGE>
the event of foreclosure or a deed in lieu thereof or a termination of the
ground or underlying lease, will enter into a new lease with the Mortgagee,
lessor or other person having or acquiring title on the same terms and
conditions as this Lease and for the balance of the Term.

         12.3     Nonmaterial Amendments. If any lender should require any
modification of this Lease as a condition of loans secured by a lien on the
Premises, the Building or the land underlying the Building, or if any such
modification is required as a condition to a ground or underlying lease, Tenant
will approve and execute any such modifications, promptly after request by
Landlord provided no such modification shall relate to the rent payable
hereunder, the length of the Term or otherwise materially change the rights or
obligations of Landlord or Tenant.

13.      DEFAULT BY TENANT

         13.1     Acts Constituting Default. In addition to the events specified
as a default elsewhere in this Lease, the failure of Tenant to perform each
covenant made under this Lease, or any abandonment of the Premises by Tenant,
shall constitute a default hereunder. However, Landlord shall not commence any
action to terminate Tenant's right of possession as a consequence of a default
until any period of grace with respect thereto has elapsed; provided, that any
such period of grace shall be in lieu of and not in addition to the period
during which Tenant may cure such default following the delivery of notice
pursuant to California Code of Civil Procedure Section 1161.

                                    (i)      Subject to the limitation expressed
in Paragraph 13.1.3. Tenant shall have a period of three (3) days from the date
of written notice from Landlord within which to cure any default in the payment
of any monetary obligations of Tenant under this Lease.

                                    (ii)     Tenant shall have a period of
fifteen (15) days from the date of written notice from Landlord within which to
cure any other default under this Lease which is capable of being cured:
provided, however, that with respect to any default which cannot reasonably be
cured within fifteen (15) days, the default shall not be deemed to be uncured if
Tenant commences to cure within five (5) days from Landlord's notice and
thereafter prosecutes diligently and continuously to completion all acts
required to cure the default.

                                    (iii)    There shall be no period of grace
with respect to any default by Tenant which is not capable of being cured.
Landlord and Tenant stipulate that the following defaults are not capable of
being cured by Tenant: (a) any default which is specified in this Lease as being
incurable; (b) any unauthorized sale, assignment, mortgage, pledge,
hypothecation, encumbrance or other transfer of this Lease or any interest
herein, or any unauthorized subletting of all or any portion of the Premises;
(c) the commission of waste by Tenant; (d) the failure of Tenant to pay rent or
any other monetary obligation of Tenant hereunder on the due date thereof where
such failure occurs on more than three (3) consecutive occasions or more than
six (6) occasions during any twelve (12) month period; and (e) any other default
which is recognized under California law as being incurable.

         13.2     Landlord's Remedies. If Tenant fails to cure a default, or in
the event of a default which is not capable of being cured by Tenant, Landlord
shall have the following rights and remedies in addition to any other rights and
remedies available to Landlord at law or in equity:

                                    (i)      Landlord shall have all rights and
remedies provided by California Civil Code Section 1951.2 (or any successor
statute), including nut not limited to recovery of 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 award exceeds the amount of rental loss for the same period that
Tenant proves could be reasonably avoided, as computed pursuant to subsection
(b) of said Section 1951.2;

                                       15

<PAGE>

                                    (ii)     Landlord shall have rights and
remedies provided by California Civil Code Section 1951.4 ( or any successor
statute), which allows landlord to continue this Lease in effect and to enforce
all of its rights and remedies under this Lease, including the right to recover
rent as it becomes due, for so long as Landlord does not terminate Tenant's
right to possession. Acts of maintenance or preservation, efforts to relet the
Premises, or the appointment of receiver upon the Landlord's initiative to
protect its interest under this Lease shall not constitute a termination of
Tenant's right to possession; and

                                    (iii)    Landlord shall have the right but
not the obligation to make any payment or perform any act on Tenant's part as
may be required to cure Tenant's default, without waiving its rights based upon
such default by Tenant and without releasing Tenant from any of its obligations.
All sums so paid and all costs incurred by Landlord together with interest
thereon at the Overdue Rate from the date of such payment or the incurrence of
such cost by Landlord, whichever occurs first, shall be paid to Landlord on
demand.

14.      DEFAULT BY LANDLORD

         14.1     Existence of Default. Landlord shall not be deemed to be in
default in the performance of any obligation under this Lease unless and until
it has failed to perform such obligation within thirty (30) days after receipt
of written notice by Tenant to Landlord specifying such failure: provided,
however, that if the nature of Landlord's default is such that more than thirty
(30) days are required for its cure, then Landlord shall not be deemed to be in
default if it commences such cure within the thirty (30) day period and
thereafter diligently prosecutes such cure to completion.

         14.2     Mortgagee's Right To Cure. Tenant shall give any Mortgagee a
copy, by registered mail, of any notice of default served upon Landlord,
provided that Tenant previously has been notified in writing (by way of Notice
of Assignment of Rents and Leases, or otherwise), of the address of such
Mortgagee. If landlord fails to cure such default within the time provided in
this Lease, any such Mortgagee shall have an additional forty-five (45) days
within which to cure such default by Landlord, or if such default cannot be
cured within that time, then such additional time as may be necessary if within
that forty-five (45) day period the Mortgagee has commenced and is pursuing the
remedies necessary to cure such default (including but not limited to
commencement of foreclosure proceedings, if necessary to effect such cure), in
which event this Lease shall not be terminated while such remedies are being so
pursued.

         14.3     Judgment Against Landlord. If Tenant recovers any judgement
against Landlord for a default by Landlord under this Lease, the judgement shall
be satisfied only out of the interest of Landlord in the Building and neither
Landlord nor any of its partners, officers, employees or agents shall be
personally liable for any such default or for any deficiency.

15.      CONDEMNATION

         15.1     Termination Due To Taking. If all or any part of the Premises
are the subject of a Taking, either Landlord or Tenant may, by written notice
given to the other within thirty (30) days of receipt of notice of such Taking,
elect to terminate this Lease as of the date possession is transferred pursuant
to the Taking, provided however, that before tenant may terminate this Lease for
a Taking, such Taking must be of such an extent and nature as to substantially
impede Tenant's use of the Premises. If any part of the Building other than the
Premises shall be the subject of a Taking, Landlord may elect to terminate this
Lease. If there is a Taking of all or a part of the Parking Facilities and the
parking rights granted to Tenant under Paragraph 2.4 are substantially reduced
thereby, Landlord shall have the right to provided replacement parking to
compensate for such reduction within other parking areas serving the Office
Complex. If such replacement parking is not provided, then for a period of
thirty (30) days after Landlord notifies

                                       16
<PAGE>
Tenant that such replacement parking cannot be provided. Tenant shall have the
right to terminate this Lease, effective at a time specified by Tenant not to
exceed thirty (30) days from the date of the notice.

         15.2     No Termination Due To Taking. If a partial Taking of the
Premises does not result in a termination of this Lease, Base Rent, Tenant's
Share of Increased Operating Costs and Tenant's parking rights shall be reduced
in proportion to what the area of the Premises taken bears to the area of the
Premises immediately prior to the Taking. No temporary taking of the Premises or
any part of the Building shall terminate this Lease, except at Landlord's
election, or give Tenant any right to any abatement of Base Rent or Increased
Operating Costs, except that Base Rent and Operating Costs shall be reduced in
accordance with the preceding sentence during that portion of any temporary
Taking of the Premises lasting more than thirty (30) days. Each party hereto
waives the provisions of California Code of Civil Procedure Section 1265.130 (or
any successor statute) allowing either party to file a petition to terminate
this Lease for a partial Taking.

         15.3     Award For Taking. No award for any partial or entire Taking
shall be apportioned, and Tenant hereby assigns to Landlord any and all rights
of Tenant to any portion of the award for a Taking. However, nothing contained
herein shall be deemed to give Landlord any interest in or to require Tenant to
assign to Landlord any award made to Tenant for taking of personal property
belonging to Tenant.

16.       DAMAGE AND DESTRUCTION

         16.1     Partial Damage - Insured. If the Premises or the Building are
damaged by a risk covered under fire and extended coverage insurance insuring
Landlord, then Landlord shall restore such damage provided insurance proceeds
are available to Landlord to pay ninety percent (90%) or more of the cost of
restoration, and provided such restoration by Landlord can be completed within
eight (8) months after the commencement of work in the opinion of a licensed
architect or engineer appointed by Landlord. In such event this Lease shall
continue in full force and effect, except that Tenant shall, so long as the
damage is not due to the act or omission of Tenant, be entitled to an equitable
reduction of Base Rent and Tenant's Share of Excess Building Operating Costs
while such restoration takes place, such reduction to be based upon the extent
to which the damage or restoration efforts materially interfere with Tenant's
use of the Premises.

         16.2     Partial Damage - Uninsured. If the Premises or the Building
are damaged by a risk not covered by such insurance or if the insurance proceeds
available to Landlord are less than eighty percent (80%) of the cost of
restoration, or if the restoration cannot be completed within eight (8) months
after the commencement of work in the opinion of the licensed architect or
engineer appointed by Landlord, then Landlord shall have the option either to
(a) repair or restore such damage, this Lease continuing in full force and
effect, with the Base Rent and Tenant's Share of Excess Building Operating Costs
to be equitably reduced as provided in Paragraph 16.1, or (b) give notice to
Tenant at any time within ninety (90) days after such damage terminating this
Lease as of a date to be specified in such notice, which date shall be not less
than thirty (30) nor more than sixty (60) days after the giving of such notice.
If such notice is given, this Lease shall expire and any interest of Tenant in
the Premises shall terminate on the date specified in such notice. The Base Rent
and Tenant's Share of Excess Building Operating Costs during the period prior to
the termination shall be reduced as provided in Paragraph 16.1 and paid up
through the date of termination.

         16.3     Total Destruction. If the Premises are totally destroyed or in
Landlord's judgment the Premises cannot be restored as required herein under
applicable laws and regulations, notwithstanding the availability of insurance
proceeds, this Lease shall be terminated effective as of the date of the damage.

                                       17

<PAGE>

         16.4     Landlord's Obligations. Any restoration by Landlord pursuant
to Paragraphs 16.1 or 16.2 shall be commenced as soon as reasonably possible
after the date of damage and prosecuted diligently to completion at the earliest
possible date. Landlord shall not be required to carry insurance of any kind on
Tenant's property and shall not be required to repair any injury or damage
thereto by fire or other causes, or to make any restoration or replacement of
any paneling, decorations, partitions, ceilings, floor covering, office fixtures
or any other improvements or property installed in the Premises by or at the
direct or indirect expense of Tenant (other than building standard tenant
improvements), and Tenant shall be required to restore or replace same in the
event of damage. Tenant shall have no claim against Landlord for any loss
suffered by reason of any such damage, destruction, repair or restoration.
Notwithstanding anything to the contrary contained in this section, Landlord
shall have no obligation to repair, reconstruct or restore the Premises with
respect to damage or destruction as described in this section occurring during
the last twelve (12) months of the Term.

         16.5     Waiver by Tenant. Tenant shall have no right to terminate this
Lease as a result of any statutory provisions now or hereafter in effect
pertaining to the damage and destruction of the Premises or the Building, except
as expressly provided herein, and Tenant expressly waives the provisions of
California Civil Code Sections 1932(2) and 1933(4) with respect to any damage or
destruction of the Premises.

         17.      DEFINITIONS

         17.1     "Base Rent" means the monthly rent payable pursuant to
Paragraph 4.1 and as specified in the Basic Lease Provisions.

         17.2     "Base Year" means the calendar year specified in the Basic
Lease Provisions.

         17.3     "Basic Lease Provisions" means the provisions contained in
Paragraph 1.2 of this Lease.

         17.4     "Bonus Rent" means the excess of (a) all consideration
received by Tenant from an assignment of this Lease or a sublease of all or any
portion of the Premises over (b) the Base Rent, Increased Operating Costs and
other charges payable by Tenant to Landlord under this Lease (prorated, in the
case of a sublease of less than all of the Premises, to reflect obligations
allocable to only the portion of the Premises so sublet). In determining the
total consideration under the foregoing clause (a), Tenant shall be entitled to
exclude therefrom reasonable leasing commissions paid by Tenant to any
unaffiliated third party, payments attributable to the amortization of the cost
of improvements Tenant must make to the Premises at its cost to ready same for
the assignee or sublessee, and other reasonable, out-of-pocket costs paid by
Tenant which are directly related to Tenant's obtaining the assignment or
sublease.

         17.5     "Building" means the highrise office building described in the
Basic Lease Provisions, the parcels of land on which such office building is
situated, all other improvements situated on the land, and all rights end
easements appurtenant thereto. Except where the context requires otherwise,
references to the "Building" shall include the Common Areas and the Parking
Facilities serving the Building and other buildings in the Office Complex.

         17.6     "Commencement Date" means the date determined pursuant to
Paragraph 3.2 of this Lease for the commencement of the Term.

         17.7     "Common Areas" means  areas within the Building (including
common corridors and hallways, stairwells, elevators, restrooms, lobbies and
other public areas) and within the Office Complex which are available for
nonexclusive use by Tenant and other tenants of the Building or the Office
Complex.

                                       18

<PAGE>

         17.8     "Environmental Damages" means all claims, judgments, damages,
losses; penalties, fines, liabilities, strict costs and expenses of defense of
any claim and of any settlement or judgment, including without limitation
reasonable attorneys' fees and consultants' fees, any of which are incurred at
any time as a result of the existence of "Hazardous Material" upon, about,
beneach the Premises or migrating or threatening to migrate to or from the
Premises, or the existence of a violation of "Environmental Requirements"
pertaining to the Premises, including, without limitation: (a) damages for
personal injury, or injury to property or natural resources occurring upon or
off of the Premises, foreseeable or unforeseeable, including, without
limitation, lost profits, consequential damages, interest and penalties
including but not limited to claims brought by or on behalf of employees of
Tenant, with respect to which Tenant waives any immunity to which it may be
entitled under any industrial or worker's compensation laws; (b) diminution in
the value of the Premises, and damages for the loss of or restriction on the use
of or adverse impact on the marketing of rentable or usable space or of any
amenity of the Premises: (c) fees incurred for the services of attorneys,
consultant, contractors, experts, laboratories and all other costs incurred in
connection with the investigation or remediation of such "Hazardous Materials"
or violation of "Environmental Requirements" including, but not limited to, the
preparation of any feasibility studies or reports or the performance of any
cleanup, remedial, removal, containment, restoration or monitoring work required
by any federal, state or local governmental agency or political subdivision, or
reasonably necessary to make full economic use of the Premises or any other
property or otherwise expended in connection with such conditions, and including
without limitation any attorneys' fees, costs and expenses incurred in enforcing
this agreement or collecting any sums due hereunder; and (d) liability to any
third person or governmental agency to indemnify such person or agency for costs
expended in connection with the items referenced in subparagraph(c) herein.

         17.9     "Environmental Requirements" means all applicable present and
future statutes, regulations, rules, ordinances, codes, licenses, permits,
orders, approvals, plans, authorizations, concessions, franchises and similar
items, of all governmental agencies, departments, commissions, boards, bureaus,
or instrumentalities of the United States, states and political subdivisions
thereof and all applicable judicial and administrative and regulatory decrees,
judgments and orders relating to the protection of human health or the
environment, including, without limitation: (a) all requirements, including but
not limited to, those pertaining to reporting, licensing, permitting,
investigation and remediation of emissions, discharges, releases or threatened
releases of "Hazardous Materials," chemical substances, pollutants, contaminants
or hazardous or toxic substances, materials or wastes whether solid, liquid or
gaseous in nature, into the air, surface water, groundwater or land, or relating
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of chemical substances, pollutants, contaminants or
hazardous or toxic substances, materials, or wastes, whether solid, liquid or
gaseous in nature; and (b) all requirements pertaining to the protection of the
health and safety of employees or the public.

         17.10    "Expiration Date" means the scheduled date on which the Term
will expire as determined pursuant to Paragraph 3.2 of this Lease.

         17.11    "Hazardous Materials" means any chemical substance (a) the
presence of which requires investigation or remediation under any federal, state
or local statute, regulation, ordinance, order, action or policy; or (b) which
is or becomes defined as a "hazardous waste" or "hazardous substance" under any
federal, state or local statute, regulation or ordinance or amendments thereto;
or (c) which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by
any governmental authority, agency, department, commission, board, agency or
instrumentality of the United States, the State of California or any political
subdivision thereof: or (d) the presence of which on the Premises causes or
threatens to cause a nuisance upon the Premises or to adjacent properties or
poses or threatens to pose a hazard to the Premises or the health or safety of
persons on or

                                       19

<PAGE>
 about the Premises; or (e) without limitation, which contains gasoline, diesel
fuel or other petroleum hydrocarbons; or (f) which contains polychlorinated
bipheynols(PCBs), asbestos or urea formaldehyde foam insulation.

         17.12    "Increased Operating Costs" means the amount by which the
Operating Costs during any Subsequent Year exceed the Operating Costs for the
Base Year.

         17.13    "Landlord's Work" means the work, if any, to be performed by
Landlord to ready the Premises for Tenant's occupancy, as specified in the Scope
of Work.

         17.14    "Lease Date" means the date specified in the Basic Lease
Provisions, which shall be the effective date of execution of this Lease by
Landlord and Tenant unless otherwise provided in this Lease.

         17.15    "Mortgagee" means the holder of any mortgage or deed of trust
secured by the Building or the Premises or any portion thereof.

         17.16    "Office Complex" means the development comprised of the three
office buildings commonly known as Watergate Towers I, II and III, addressed,
respectively, as 1900 Powell Street, 2200 Powell Street and 2000 Powell Street,
respectively, Emeryville, California.

         17.17    "Operating Costs" means all actual costs of ownership,
operation, maintenance, repair and management of the Building, including the
Building's share of all such costs of the Parking Facilities and the common
Areas which are shared with other buildings in the Office Complex to be based on
Landlord's reasonable allocation among the buildings. If during the Base Year or
any subsequent Year the Building is less than ninety-five percent (95%)
occupied, those Operating Costs which vary based on the level of occupancy shall
be adjusted upward to reflect, in Landlord's reasonable judgment, the Operating
Costs that would apply during such year if the Building were at least
ninety-five percent (95%) occupied.

                  17.17.1  Operating Cost shall include:

                           (a)      salaries, and other compensation, including
payroll taxes, vacation, holiday and other paid absences, and welfare,
retirement and other fringe benefits, paid to employees, independent contractors
or agents of Landlord engaged in the operation, repair, management or
maintenance of the Building, including (i) elevator operators, (ii) window
cleaners, miscellaneous repair personnel, janitors, cleaning personnel and
porters, (iii) security personnel and caretakers, and (iv) engineers, mechanics,
electricians and plumbers;

                           (b)      repairs and maintenance of the Building and
the costs of supplies, tools, materials and equipment for such repairs and
maintenance that are under generally accepted accounting principles not
capitalized;

                           (c)      premiums and other charges incurred by
Landlord for insurance on the Building and for Landlord's employees, including
(i) fire and extended coverage insurance, and earthquake, windstorm flood, and
explosion insurance, (ii) public liability and property damages insurance, (iii)
workers' compensation insurance, (iv) boiler and machinery insurance, sprinkler
leakage, water damage and related liability insurance, and burglary, fidelity
and pilferage insurance on equipment and materials, (v) health, accident and
group life insurance, (vi) all such insurance as Landlord is required to carry
under Section 10 of this Lease, and (vii) such other insurance as is customarily
carried by operators of comparable first-class office buildings in the San
Francisco Bay Area:

                                       20
<PAGE>

                           (d)      costs incurred for inspection and servicing,
including all outside maintenance contracts necessary for the maintenance of the
Building, such as janitorial and window cleaning, rubbish removal,
exterminating, water treatment, elevator, electrical, plumbing and mechanical
equipment, and the cost of materials, tools supplies and equipment used for
inspection and servicing of the Building;

                           (e)      cost incurred for electricity, water, gas,
fuel and other utilities;

                           (f)      payroll taxes, federal taxes, state and
local unemployment taxes, and social security taxes paid for the employees of
Landlord engaged in the operation, maintenance and repair of the Building;

                           (g)      sales, use and excise taxes on goods and
services purchased by Landlord for use in the Building;

                           (h)      license, permit and inspection fees;

                           (i)      accounting and legal fees;

                           (j)      customary management fees not to exceed five
percent (5%) of the gross revenues of the Building;

                           (k)      the annual amortization over its useful
life, with a reasonable salvage value on a straightline basis, of the costs of
any capital improvements made by Landlord and required by any changes in
applicable laws, rules and regulations of any governmental authority enacted
after the Building was completed;

                           (l)      the annual amortization over its useful
life, with a reasonable salvage value on a straightline basis, of the costs of
any equipment or capital improvements made by Landlord after the Building was
completed as a labor-saving measure or to accomplish other savings in operating,
repairing, managing or maintaining the Building, but only to the extent of the
savings;

                           (m)      the annual amortization, over its useful
life on a straight line basis, of the cost of any exterior window draperies
provided by Landlord and the carpeting in the Common Areas;

                           (n)      any costs for substituting work, labor,
materials or services in place of any of the above items, or for any additional
work, labor, materials, services or improvements to comply with any governmental
laws, rules regulations or other requirements applicable to the Building enacted
after the Building was completed which are considered operating expenses under
Generally Accepted Accounting Principles;

                           (o)      other costs reasonably necessary to
maintain, operate, repair and manage the Building in a first-class manner and
condition;

                           (p)      all real property taxes on the Building, the
land on which the Building is situated, and the various estates in the Building
and a proportion of the real property taxes on the land and improvements
comprising the Parking Facilities and the Common Areas shared with other
buildings in the Office Complex, based on Landlord's reasonable allocation among
the buildings using such facilities and areas;

                           (q)      all personal property taxes levied on
property used in the operation of the Building;

                                       21

<PAGE>

                           (r)      all taxes of every kind and nature
whatsoever levied or assessed in lieu of or in substitution for existing or
additional real or personal property taxes on the Building, land or personal
property other than taxes covered by paragraph 4.5, including, but not limited
to, any charge, levy, excise or assessment upon Landlord's business of leasing
the Premises or other portions of the Building or the Parking Facilities; and

                           (s)      the cost to Landlord contesting the amount,
validity or applicability of any of the foregoing items.

                  17.17.2  Operating Costs shall exclude:

                           (a)      leasing commissions, costs, disbursements
and other expenses incurred for leasing, renovating or improving space for
tenants;

                           (b)      the cost of electricity or other services
sold to tenants for which Landlord is to be reimbursed as a charge over the rent
payable under the leases with such tenants;

                           (c)      costs incurred because Landlord or another
tenants violated the terms of any lease of the Building;

                           (d)      interest on debt or amortization payments on
mortgages or deeds of trust or any other debt for borrowed money, except as
herein expressly permitted;

                           (e)      items and services for which Tenant
reimburses Landlord or pays third parties or that Landlord provides selectively
to one or more tenants of the Building other than Tenant without reimbursement;

                           (f)      advertising and promotional expenses;

                           (g)      repairs or other work needed because of fire
or other casualty insured against by Landlord;

                           (h)      costs incurred in operating the Parking
Facilities except to the extent the cost of operating the Parking Facilities
exceeds the revenues generated from operation thereof;

                           (i)      nonrecurring costs incurred to remedy
structural defects in the original construction materials or insulation; and

                           (j)      costs incurred by Landlord for alterations
that are considered capital improvements under generally accepted accounting
principles except to the extent the same are expressly permitted under Paragraph
17.17.1.

         17.18    "Overdue Rate" means the lesser of: (a) eighteen percent (18%)
per annum; or (b) the maximum rate permitted under applicable usury law.

         17.19    "Parking Charge" means the monthly amount to be paid by Tenant
for each parking permit issued to Tenant pursuant to paragraph 2.4, which amount
is specified in the Basic Lease Provisions and subject to increase.

         17.20    "Parking Facilities" means the parking lot(s) and parking
structure(s) located within or adjacent to the Office Complex and designated by
Landlord as serving the Building.

                                       22
<PAGE>

         17.21 "Premises" means the portion of the Building demised by this
Lease, as designated by suite number in the Basic Lease Provisions and shown on
Exhibit A to this Lease.

         17.22 "Rules and Regulations" means the rules and regulations
regulating the use of the Premises, the Common Areas, Parking Facilities and
other portions of the Building promulgated by Landlord from time to time as
provided in paragraph 5.6 of this Lease.

         17.23 "Security Deposit" means the amount specified in the Basic Lease
Provisions, which is to be held by Landlord to secure Tenant's performance of
its obligations under this Lease as provided in paragraph 4.2.

         17.24 "Scope of Work" means the Scope of Work Agreement if any,
executed by Landlord and Tenant concurrently with their execution of the Lease,
which will be attached as Exhibit B to this Lease and will establish the full
extent of Landlord's Work in readying the Premises for Tenant's occupancy
hereunder.

         17.25 "Subsequent Year" means any calendar year during the Term after
the Base Year.

         17.26 "Substantial Completion" means (a) completion, as determined in
the event of a dispute by Landlord's architect in accordance with AIA standards,
of Landlord's Work except for such items as constitute a minor defect or
deficiency which can be completed or corrected after occupancy without causing
any material interference with Tenant's use of the Premises, and (b) the
issuance of a certificate of occupancy by the City of Emeryville or such other
governmental authorization as may be required for occupancy of the Premises.

         17.27 "Taking" means the taking of property or any interest therein for
public or quasi public use by exercise of the power of eminent domain or
otherwise, or a taking in the nature of inverse condemnation, with or without
litigation, or a transfer of property or any interest therein pursuant to an
agreement entered into under threat of exercise of the power of eminent domain.

         17.28 "Tenant Parking" means the number of permits to park passenger
automobiles in the Parking Facilities which are to be issued to Tenant pursuant
to paragraph 2.4, and as specified in the Basic Lease Provisions.

         17.29 "Tenant's Share" means the ratio that the rentable square footage
of the Premises bears to the total rentable square footage of the Building. If
the rentable square footage of the Premises and/or the total rentable square
footage of the Building changes, Tenant's Share shall be appropriately adjusted
so that it at all times reflects the proportion which the rentable square
footage of the Premises bears to the total rentable square footage of the
Building.

         17.30 "Term" means the term of this Lease, including any permitted
extensions or renewals thereof.

18. MISCELLANEOUS PROVISIONS

         18.1 Estoppel Certificates. Within ten (10) days following any written
request Landlord may make from time to time, Tenant without any charge therefor,
shall execute, acknowledge and deliver a statement certifying: (a) the
Commencement Date of this Lease; (b) the fact that this Lease is unmodified and
in full force and effect (or, if there have been modifications hereto, that this
Lease is in full force and effect, as modified, and stating the date and nature
of such modifications); (c) the date to which the rent and other sums payable
under this Lease have been paid; (d) the fact that there are no current defaults
under this Lease by either Landlord or Tenant except as specified in the
statement; and (e) such other matters as may be reasonably requested by
Landlord. Landlord and Tenant intend that any statement delivered pursuant to
this

                                       23

<PAGE>

paragraph may be relied upon by a mortgagee, beneficiary, purchaser or
prospective purchaser of the Building or any interest therein. Tenant's failure
to deliver any such statement within said ten (10) day period shall constitute a
material default, and Tenant shall indemnify and hold Landlord harmless form and
against any and all liability, loss, cost, damage and expense which Landlord may
sustain or incur as a result of or in connection with Tenant's failure or delay
in delivering such statement. If Landlord elects to sell the Building or to
obtain loans secured by a lien on the Building, Tenant, promptly after demand,
shall provide to any such purchaser or lender financial statements of Tenant
reasonably required by the purchaser or lender. The financial statements so
provided shall be kept confidential as to any parties other than the purchaser
or lender.

         18.2 Surrender of Premises. A voluntary or other surrender of this
Lease by Tenant or the mutual cancellation of this Lease shall not work a merger
and shall, at the option of Landlord, terminate all or any existing subleases or
subtenancies, or may, at the option of Landlord, operate as an assignment to it
of any or all such subleases or subtenancies.

         18.3 Light and Air. No diminution of light, air or view by any
structure which may hereafter be erected (whether or not by Landlord) shall
entitle Tenant to any reduction of rent under this Lease, result in any
liability of Landlord to Tenant, or in any other way affect this Lease.

         18.4 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 the term, covenant or condition itself or a waiver of
any subsequent breach of the same or any other term, covenant or condition
contained herein. Furthermore, 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 accepts 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 to 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.

         18.5 Attorneys' Fees. In the event that any action or proceeding
(including arbitration) is brought to enforce or interpret any term, covenant or
condition of this Lease on the part of Landlord or Tenant, the prevailing party
in such action or proceeding (whether after trial or appeal) shall be entitled
to recover from the party not prevailing its expenses therein, including
reasonable attorneys' fees and all allowable costs. If Landlord is made a party
to any action or proceeding commenced by a third party due to any
actual or alleged act or omission of Tenant or Tenant's agents, employees,
contractors, invitees or subtenants, Tenant shall indemnify and hold Landlord
harmless from all costs incurred in such action or proceeding, including
reasonable attorneys' fees. If Tenant requests Landlord's consent to, approval
of or signature on any instrument or agreement which would alter or affect
Landlord's legal rights and duties, Tenant shall reimburse Landlord upon demand
for Landlord's reasonable attorneys' fees incurred in connection with the review
and evaluation of the requested action.

         18.6 Notices. Any notice required or permitted under this Lease shall
be in writing and shall be delivered either personally or by depositing same in
the United States Mail, postage prepaid, registered or certified, return receipt
requested, addressed to the intended recipient at such party's address set forth
in the Basic Lease Provisions or at such other address as such party has
theretofore specified by written notice delivered in accordance with this
paragraph. Any notice delivered by mail in the manner specified in this
paragraph shall be deemed delivered on the earlier of the third day following
deposit hereof in the United States Mail or on the delivery date shown on the
return receipt prepared in connection therewith; and any such notice specifying
a default by Tenant shall be deemed sufficient for all purposes under California
Code of Civil

                                       24

<PAGE>

Procedure Section 1161 and 1162, notwithstanding the fact that such notice is
not personally served on Tenant or that such notice does not demand possession
of the Premises as an alternative to Tenant's curing of such default.

         18.7     Merger. Notwithstanding the acquisition (if same should occur)
by the same party of the title and interests of both Landlord and Tenant under
this Lease, there shall never be a merger of the estates of Landlord and Tenant
under this Lease, but instead the separate estates, rights, duties and
obligations of Landlord and Tenant, as existing hereunder, shall remain
unextinguished and continue, separately, in full force and effect until this
Lease expires or otherwise terminates in accordance with the express provisions
herein contained.

         18.8     Substituted Premises. [Deleted]

         18.9     Headings. Words used in neuter gender include the feminine and
masculine, where applicable. If there is more than one Tenant, the obligations
imposed under this Lease upon Tenant shall be joint and several. The headings
and titles to the sections and paragraphs of this Lease are used for convenience
only and shall have no effect upon the construction or interpretation of this
Lease.

         18.10    Time And Applicable Law. Time is of the essence of this Lease
and all of its provisions. This Lease shall in all respects be governed by and
interpreted in accordance with the laws of the States of California.

         18.11    Successors And Assigns. Each conveyance by Landlord or its
successors in interest of Landlord's interest in the Building or the Premises
prior to the expiration or termination of this Lease shall be subject to this
Lease and shall relieve the grantor of all further liability or obligations as
Landlord, except for such liability or obligations accruing prior to the date of
such conveyance. If any Security Deposit has been given to Landlord, Landlord
shall deliver such Security Deposit to Landlord's successor in interest and
thereupon be released of all further liability with regard thereto without the
requirement of any notice thereof to Tenant. Tenant agrees to attorn to
Landlord's successors in interest, whether such interest is acquired by sale,
transfer, foreclosure, deed in lieu of foreclosure or otherwise. Subject to the
foregoing and to the provisions of Section 16, the terms, covenants and
conditions contained herein shall be binding upon and inure to the benefit of
the heirs, successors, executors, administrators and assigns of the parties
hereto.

         18.12    Entry by Landlord. Landlord and its authorized representative
shall have the right to enter the Premises: (a) to inspect the Premises; (b) to
supply any service provided to Tenant hereunder; (c) to show the Premises to
prospective brokers; agents, purchasers, lenders or tenants; (d) to post notices
of non-responsibility, (e) to alter, improve or repair the Premises and any
other portion of the Building; and (f) to erect scaffolding and other necessary
structures, where required by the work to be performed, all without reduction or
abatement of rent. Tenant hereby waives any claim for damages for any injury to
or interference with Tenant's business or quiet enjoyment of the Premises or any
other loss occasioned by such entry. Landlord shall at all times have a key to
unlock all doors in and about the Premises, excluding Tenant's vaults and
safes, and Landlord shall have the right to use any means which Landlord deems
proper to open said doors in an

                                       25
<PAGE>

emergency, and any such entry to the Premises shall not under any circumstances
be construed or deemed to be a forcible or unlawful entry into the Premises or
a detainer of the Premises or an eviction of Tenant from any portion of the
Premises.

         18.13    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
understandings made between the parties other than those set forth in this Lease
and its exhibits. This Lease may not be modified except by a written instrument
duly executed by the parties hereto.

         18.14    Severability. If any provision of this Lease or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Lease and the application of
such provision to other persons or circumstances shall not be affected thereby
and shall be enforced to the greatest extent permitted by law.

         18.15    Signs. Tenant shall not place or permit to be placed in or
upon the Premises where visible from outside the Premises or any part of the
Building, any signs, notices, drapes, shuttars, blinds or window coatings, or
displays of any type without the prior written consent of Landlord. Landlord
shall consent to the location at the cost of Tenant, of a building standard sign
on or near the entrance of the Premises and shall include Tenant in the Building
directories located in the Building. Landlord reserves the right in Landlord's
sole discretion to place and Locate on the roof and exterior of the Building and
in any area of the Building not leased to Tenant, such signs, notices, displays
and similar items as Landlord deems appropriate in the proper operation of the
Building.

         18.16    Execution By Landlord. The submission of this document for
examination and negotiation does not constitute an offer to lease, or a
reservation of, or option for, the Premises. This document becomes effective and
binding only upon execution and delivery hereof by Tenant and by Landlord. No
act or omission of any employee or agent of Landlord or of Landlord's broker
shall alter, change or modify any of the provisions hereof.

         18.17    Brokers. Tenant shall hold Landlord harmless from all damages
(including attorneys fees and costs) resulting from any claims that may be
asserted against Landlord by any broker, finder, or other person with whom
Tenant has or purportedly has dealt, except the leasing agent for the Building
duly appointed by Landlord.

         18.18    Name Of Building. Tenant shall not use the name of the
Building for any purpose other than the address of the business to be conducted
by Tenant in the Premises. Tenant shall not use any picture of the Building in
its advertising, stationery or in any other manner so as to imply that the
entire Building is leased by Tenant. Landlord expressly reserves the right at
any time to change the name or street address of the Building without in any
manner being liable to Tenant therefor.

         18.19    Nonrecordability Of Lease. Tenant agrees that in no event
shall this Lease or a memorandum hereof be recorded without Landlord's express
prior written consent, which consent Landlord may withhold in its sole
discretion.

         18.20    Construction. All provisions hereof, whether covenants or
conditions, shall be deemed to be both covenants and conditions. The definitions
contained in this Lease shall be used to interpret the Lease. All rights and
remedies of Landlord and Tenant shall, except as otherwise expressly provided,
be cumulative and non-exclusive of any other remedy at law or in equity.

         18.21    Inability To Perform. This Lease and the obligations of Tenant
hereunder shall not be affected or impaired because Landlord is unable to
fulfill any of its obligations hereunder or is

                                       26
<PAGE>

delayed in doing so, if such inability or delay is caused by reason of force
majeure, strike, labor troubles, acts of God, acts of government, unavailability
of materials or labor, or any other cause beyond the control of Landlord.

         18.22    Authority. If Tenant is a corporation, each individual
executing this Lease on behalf of Tenant represents and warrants that Tenant is
qualified to do business in California and that he is duly authorized to execute
and deliver this Lease on behalf of Tenant and shall deliver appropriate
certification to that effect if requested. If Tenant is a partnership, joint
venture, or other unincorporated association, each individual executing this
Lease on behalf of Tenant represents and warrants that he is duly authorized to
execute and deliver this Lease on behalf of Tenant and that this Lease is
binding on Tenant. Furthermore, Tenant agrees that the execution of any written
consent hereunder, or any written modification or termination of this Lease, by
any general partner of Tenant or any other authorized agent of Tenant, shall be
binding on Tenant.

         18.23    Quiet Enjoyment. So long as Tenant is not in default under
this Lease, Tenant shall have quiet enjoyment of the Premises for the Term,
subject to all the terms and conditions of this Lease and all liens and
encumbrances prior to this Lease.

19.      CONTINGENCY: The effectiveness of this Lease is specifically
conditioned on the full execution of the Termination Agreement between Sybase as
Tenant and Spieker Properties, L.P. as Landlord for reduced premises equaling
3,403 rentable square feet and 2,934 useable square feet. If said Termination
Agreement is not fully executed and commenced, this Lease shall be of no further
force or effect and without recourse to either party.

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

                                    LANDLORD

                                    SPIEKER PROPERTIES, L.P.,
                                    A CALIFORNIA LIMITED PARTNERSHIP

                                    By: Spieker Properties, Inc.,
                                        a Maryland corporation,
                                        its general partner

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

                                        Its: SENIOR VICE PRESIDENT

                                        Date: 3/3/98

                                    TENANT

                                    EXTENSITY, INC.
                                    A DELAWARE CORPORATION

                                    By:  /s/ S. Sasson
                                         -------------------------------

                                    Its: PRESIDENT

                                    Date: 1-12-98

                                       27

<PAGE>

                                    EXHIBIT A

                              [FLOOR PLAN GRAPHIC]

Tower II          2200 Powell Street        Emeryville, CA 94608         Floor 4

<PAGE>

                                    Exhibit B

                                  Scope of Work

1.       Scope of Work to that certain Lease between Spieker Properties, L.P., a
California limited partnership ("Landlord"), and Extensity, Inc., a Delaware
corporation ("Tenant"), dated 1-12-98, 1997.

2.   The Premises will be delivered "as is" in their current condition, however
     Landlord at Landlord's sole cost and expense shall cause to have the
     following work completed utilizing Building Standard materials:

         1.       Provide new carpet and paint in the area as depicted in
                  Exhibit B-1.

         2.       Construct one office and wing wall near reception area.

         3.       Construct demising wall as depicted and construct encased
                  opening to Suite 400.

3.       Tenant, at Tenant's sole cost and expense, shall be responsible for the
cost of telephone and computer installation, including wiring.

"LANDLORD"

SPIEKER PROPERTIES, L.P.
A CALIFORNIA LIMITED PARTNERSHIP

By:      Spieker Properties, Inc.
         a Maryland Corporation

Its:     General Partner

BY /s/ [ILLEGIBLE]                           Date: 3/3/98
   -----------------------------
         John Winther
         Senior Vice President

"TENANT"

EXTENSITY, INC.
A DELAWARE CORPORATION

By: /s/ S. Sasson                            Date: 2-24-98
    ---------------------------

Its: President & CEO

Print Name: Sharam Sasson

<PAGE>

                                   EXHIBIT B-1

                              [FLOOR PLAN GRAPHIC]

Tower II    2200 Powell Street     Emeryville, CA 94608    Floor 4
<PAGE>

                              AMENDMENT NUMBER ONE

Between:          Spieker Properties, L.P., a California Limited Partnership

                  As Landlord

And:              Extensity, Inc., a California Corporation

                  As Tenant

Covering the Premises known as: 2200 Powell Street, Suite 400
                                Emeryville, California 94608

This AMENDMENT NUMBER ONE amends that certain Lease between Landlord and Tenant
dated January 12, 1998 ("Lease") for premises on the fourth (4th) floor of
Watergate Tower II, commonly known and described as Suite 400, 2200 Powell
Street, Emeryville, CA ("Premises"). Landlord and Tenant hereby mutually
acknowledge and agree that Tenant shall expand their premises as follows:

1.       PREMISES

         Tenant shall lease an additional 3,072 rentable square feet of space
         located in Watergate Tower II, more commonly known as 2200 Powell
         Street, at the Watergate Office Tower Complex in Emeryville,
         California, as outlined in red on the attached Exhibit "A" ("Expansion
         Premises"). The total Premises shall now be 6,475 rentable square feet.

2.       TERM

         The Term for the Expansion Premises shall commence on June 1, 1998 and
         expire on June 15, 1999.

3.       BASE RENT

         Effective June 1, 1998, the Base Rent for the Expansion Premises will
         be stepped as follows:

                  6/01/98 - 1/31/99          $6,881.28 per month
                  2/01/99 - 5/31/99          $7,188.48 per month
                  6/01/99 - 6/15/99          $3,833.86 per month

         The new combined monthly total shall be as follows:

                  6/01/98 - 1/31/99          $14,538.03 per month
                  2/01/99 - 5/31/99          $15,151.50 per month
                  6/01/99 - 6/15/99          $ 7,815.31 per month

4.       TENANT'S PROPORTIONATE SHARE

         For purposes of calculating tax and operating expense increases,
         Tenant's proportionate share for the Expansion Premises shall be 1.34%.
         The total proportionate share for the combined Premises shall now be
         2.83%.

5.       BASE YEAR

         Tenant shall be responsible for paying its proportionate share of tax
         and operating expense increases which occur over the Base Year 1998.

<PAGE>

6.       CONDITION OF PREMISES

         Occupancy of the Premises by Tenant shall conclusively determine that
         Tenant accepts the Premises in "as-is" condition, other than the
         following improvements:

                  1.       Stretch and clean carpet.

                  2.       Touch up paint where necessary.

                  3.       Demolish demising wall and existing wall.

7.       SECURITY DEPOSIT

         Tenant's Security Deposit Lease shall be increased by $7,188.48 to
         equal $15,151.50.

8.       MISCELLANEOUS

         Capitalized words and phrases used in this Amendment and not
         specifically defined herein shall have the meanings given them in the
         Lease. In case of conflict between the Lease and this Amendment, the
         latter shall control.

         The Lease remains in full force and effect, and is unmodified except as
         provided in this Amendment; and Landlord and Tenant hereby ratify and
         approve the Lease.

         IN WITNESS WHEREOF, the parties hereto have signed and sealed this
         Amendment this 28th day of APRIL 1998.

         "LANDLORD"

         SPIEKER PROPERTIES, L.P.
         A CALIFORNIA LIMITED PARTNERSHIP

         By: Spieker Properties, Inc.
             a Maryland Corporation

         Its: General Partner

         BY /s/ [ILLEGIBLE]                  Date: 5/29/98
            ---------------------------

         "TENANT"

         EXTENSITY, INC.
         A CALIFORNIA CORPORATION

         By: /s/ S. Sasson                   Date: 4-27-98
             -------------

         Its: PRESIDENT

         Print Name: SHARAM SASSON

<PAGE>

                                    EXHIBIT A

                              [FLOOR PLAN GRAPHIC]

Tower II    2200 Powell Street     Emeryville, CA 94608    Floor 4
<PAGE>

                              AMENDMENT NUMBER TWO

Between:          Spieker Properties, L.P., a California Limited Partnership

                  As Landlord

And:              Extensity, Inc., a Delaware Corporation

                  As Tenant

Covering the Premises known as:     2200 Powell Street, Suite 400
                                    Emeryville, California 94608

This AMENDMENT NUMBER TWO amends that certain Lease between Landlord and Tenant
dated January 12, 1998, and later amended in Amendment One, dated April 28,1998,
("Lease") for premises located on the fourth (4th) floor of the building known
as Watergate Tower II, at 2200 Powell Street, Emeryville, California
("Building").

Landlord and Tenant hereby mutually acknowledge and agree that effective October
26,1998, Tenant shall expand the premises to include an additional 4,850
rentable square feet, commonly known as Suite 450.

1.       PREMISES

         Effective October 26, 1998, the Premises shall include an additional
         4,850 rentable square feet, for a total of 11,325 rentable square feet,
         (excluding Fetzer Vineyards sublease space), as shown in Exhibit "A".

2.       TERM

         The Term for Suite 450, consisting of 4,850 rentable square feet shall
         commence on October 26, 1998, and expire on June 15, 1999.

3.       BASE RENT

         The Base Rent shall include normal full services and shall be as
         follows:

         SUITE 450:

                  10/26/98 - 6/15/99:                  $10,815.50 per month

4.       TENANT'S PROPORTIONATE SHARE

         For purposes of calculating tax and operating expense increases,
         effective October 26, 1998, Tenant's proportionate share of the
         building for Suite 450 (4,850 rentable square feet) shall be 2.12%.

5.       BASE YEAR

         Tenant shall be responsible for paying its proportionate share of tax
         and operating expense increases which occur over the Base Year 1999.

7.       TENANT IMPROVEMENTS

         Tenant agrees to accept the Premises in "as-is" condition.

<PAGE>

8.       SECURITY DEPOSIT

         Tenant shall pay to Landlord a Security deposit in the amount of
         $10,815.50

9.       MISCELLANEOUS

         Capitalized words and phrases used in this Amendment and not
         specifically defined herein shall have the meanings given them in the
         Lease. In case of conflict between the Lease and this Amendment, the
         latter shall control.

         The Lease remains in full force and effect, and is unmodified except as
         provided in this Amendment; and Landlord and Tenant hereby ratify and
         approve the Lease.

         IN WITNESS WHEREOF, the parties hereto have signed and sealed this
         Amendment this 19TH day of OCTOBER 1998.

         "LANDLORD"

         SPIEKER PROPERTIES, L.P.
         A CALIFORNIA LIMITED PARTNERSHIP

         By: Spieker Properties, Inc.
             a Maryland Corporation

         Its: General Partner

         BY /s/ [ILLEGIBLE]                              Date: 10/19/98
            ------------------

         "TENANT"

         EXTENSITY, INC.
         A DELAWARE CORPORATION

         By: /s/ S. Sasson                               Date: 10/19/98
             -----------------
         Its: PRESIDENT & CEO

         Print Name: SHARAM SASSON

<PAGE>

                                  EXHIBIT "A"

                              (FLOOR PLAN GRAPHIC)

                                                 ADDRESS :  WATERGATE TOWER II
                                                            2200 POWELL STREET
                                                            EMERYVILLE, CA 94608

                                                 FLOOR :    4th FLOOR

<PAGE>

                             AMENDMENT NUMBER THREE

Between: Spieker Properties, L.P., a California Limited Partnership

         As Landlord

And:     Extensity, Inc., a Delaware Corporation

         As Tenant

Covering the Premises known as: 2200 Powell Street, Suite 400
                                Emeryville, California 94608

This AMENDMENT NUMBER THREE amends that certain Lease between Landlord and
Tenant dated January 12, 1998, and later amended in Amendment One, dated April
28,1998, and Amendment Number Two dated October 12, 1998 (the "Lease") for
premises located on the fourth (4th) floor of the building known as Watergate
Tower II, at 2200 Powell Street, Emeryville, California ("Building").

Effective July 16,1999, the Lease shall include Suites 400,410, 450 and 455,
consisting of 19,839 rentable square feet (the "Premises"), and for purposes of
this Amendment shall be referred to as Suite 400.

Effective July 16, 1999, the Lease Term shall be extended by four (4) years, to
June 30, 2003.

1.       PREMISES

         Suite 400, consisting of 19,839 rentable square feet, and as shown in
         red on the attached Exhibit "A".

2.       TERM

         The term of the Lease shall commence June 16, 1999, and shall expire on
         June 30, 2003.

3.       BASE RENT

         The Base Rent shall include normal full services and shall be as
         follows:

<TABLE>
<S>                    <C>
6/16/99-6/30/99:       $42,671.83 per month
 7/1/99-6/30/00:       $39,678.00 per month
 7/1/00-6/30/01:       $47,216.82 per month
 7/1/01-6/30/02:       $49,399.11 per month
 7/1/02-6/30/03:       $50,986.23 per month
</TABLE>

4.       TENANT'S PROPORTIONATE SHARE

         Effective June 16, 1999, Tenant's proportionate share of the building
         for the purposes of calculated operating expense and tax increases
         shall be 8.66%.

5.       BASE YEAR

         Tenant shall be responsible for paying its proportionate share of tax
         and operating expense increases which occur over the Base Year 1999.

<PAGE>

6.       FIRST RIGHT TO NEGOTIATE FOR ADDITIONAL SPACE

         GRANT OF RIGHT. During the Term of this Lease and provided Tenant is
         not in default under this Lease, Tenant shall have the right to
         negotiate (the "Negotiation Right") to lease an additional 8,210
         rentable square feet of office space on the Third (3rd ) Floor in the
         Building (the "Spieker Space") as such space becomes available. This
         Negotiation Right shall arise and may be exercised only in accordance
         with the terms of this section.

         NOTICE OF SPACE REQUIREMENT. As Tenant requires additional space,
         Tenant shall notify Landlord in writing of its additional space
         requirements, (the "Requirement Notice"). Tenant's Negotiation Right
         shall become operative upon Landlord's receipt of Tenant's Requirement
         Notice; provided, however, that such Negotiation Right shall be subject
         to any preexisting options, rights of refusal or rights to negotiate
         contained in leases with other tenants. For purposes hereof, a right of
         refusal or right to negotiate in another lease shall be deemed to
         preexist Tenant's Negotiation Right where the same became operative
         prior to the date Tenant delivered its Requirement Notice to Landlord,
         (even though such other lease may have been executed after the
         execution of this Lease). Tenant shall immediately notify Landlord in
         writing of the cessation of any requirement for additional space as set
         forth in a previously delivered Requirement Notice; and such subsequent
         notice shall serve to terminate any previous Requirement Notice and
         Tenant's Negotiation Right.

         EXERCISE OF NEGOTIATION RIGHT. Where Tenant's Negotiation Right is
         operative and not subject to any preexisting options, rights of refusal
         or rights to negotiate in other leases, the following procedure shall
         apply:

         (a) At such time the Spieker Space is available for lease, Landlord
         shall give Tenant notice thereof and shall specify in such notice the
         rent and other basic terms on which Landlord is willing to lease the
         Spieker Space to Tenant (the "Offer Notice"), provided that:

         (b) Tenant shall have a period of ten (10) days after receipt of the
         Offer Notice within which to notify Landlord to writing of Tenant's
         exercise of the Negotiation Right. Should Tenant fail to so notify
         Landlord in writing within said ten (10) day period, Tenant's
         Negotiation Right shall lapse and Landlord shall be free to deal with
         the Spieker Space described in the Offer Notice without regard thereto.

7.       TENANT IMPROVEMENTS

         Landlord shall, at Landlord's sole cost and expense, provide the
         following Tenant Improvements within the Premises:

         1. Conduct an audit of the existing Heating, Air Conditioning and
         Ventilation system on the fourth (4th) Floor. (A copy of which shall be
         provided to Tenant) Landlord agrees to have the Premises mechanically
         engineered if necessary, to correct any existing deficiencies or
         otherwise make any necessary repairs

         2. Sand and tape seams on the existing de-mountable partitions

         3. Paint all existing painted surfaces

         4. Paint the top track of the existing de-mountable partitions

         5. Remove existing 6" base, and re-install building standard 4" base in
         a color selected by Tenant

         6. Provide and install building standard carpet throughout the Premises
         in a color selected by Tenant

         7. Provide and install soundproofing in two conference rooms and four
         private offices, to be selected by Tenant.

         8. Remove 3/4 height wall at existing entrance to Suite 450

         9. Remove a portion of the demising wall at the west end of Suite 450

         10. Remove glass entry doors to Suite 450 at corridor, and replace with
         a single building standard door

         11. Remove one partition wall between two interior offices.

         Additionally, Landlord shall provide to Tenant a Tenant Improvement
         Allowance of $1.50 per rentable square foot, to be utilized by Tenant
         at Tenant's discretion.

8.       SECURITY DEPOSIT

         By January 15, 1999, Tenant shall pay to Landlord a security deposit in
         the amount of $25,217.61

<PAGE>

9.       MISCELLANEOUS

         Capitalized words and phrases used in this Amendment and not
         specifically defined herein shall have the meanings given them in the
         Lease. In case of conflict between the Lease and this Amendment, the
         latter shall control.

         The Lease remains in full force and effect, and is unmodified except as
         provided in this Amendment; and Landlord and Tenant hereby ratify and
         approve the Lease.

         IN WITNESS WHEREOF, the parties hereto have signed and sealed this
         Amendment this 19TH day of OCTOBER 1998.

         "LANDLORD"

         SPIEKER PROPERTIES, L.P.
         A CALIFORNIA LIMITED PARTNERSHIP

         By: Spieker Properties, Inc.
             a Maryland Corporation

         Its: General Partner

         BY /s/ [ILLEGIBLE]                  Date: 10/19/98
            ---------------

         "TENANT"

         EXTENSITY, INC.
         A DELAWARE CORPORATION

         BY /s/ S.Sasson                     Date: 10/19/98
            ------------

         Its: PRESIDENT & CEO

         Print Name: SHARAM SASSON

<PAGE>

         Watergate Office Towers
         2200 Powell Street
         Emeryville, CA 94608
         4th Floor

                              [FLOOR PLAN GRAPHIC]

                                   EXHIBIT "A"

<PAGE>

                               EXPANSION AGREEMENT

AMENDMENT NUMBER FOUR TO THAT LEASE DATED JANUARY 12, 1998, BETWEEN SPIEKER
PROPERTIES, L.P., AS LANDLORD, AND EXTENSITY, INC., A DELAWARE CORPORATION, AS
TENANT (THE "LEASE"), FOR PREMISES LOCATED AT 2200 POWELL STREET, EMERYVILLE,
CALIFORNIA.

Effective July 20, 1999, the above described Lease will be amended as follows
to provide for Tenant's expansion premises:

1.       PREMISES. Approximately 1,773 square feet of rentable area (which
         includes a portion of the building common area) located on the 10th
         floor of the building known as Suite 1025. The premises as expanded
         herein are approximately as shown outlined in red on the attached floor
         plan (Exhibit A - Suite 1025).

2.       OCCUPANCY DENSITY. 12 people

3.       RENT. Base Rent for the premises shall be as follows:

         8/1/99 - 8/31/99:  Four thousand one hundred eighty-four and
                            twenty-eight l00ths ($4,184.28)

                            Thereafter the rent shall continue on a
                            month-to-month basis.

4.       TERM. The term shall commence on August 1, 1999, and continue on a
         month-to-month basis. Either party shall have the right to terminate
         this lease upon at least thirty (30) days prior written notice to the
         other party.

5.       TENANT'S PROPORTIONATE SHARE. .77%

6.       BASE YEAR. The Base Year for Tenant's proportionate share of Operating
         Costs shall be the Calendar Year 1999.

All other terms and conditions of the Lease shall remain in full force and
effect and shall apply to the expansion premises as well as to the original
premises.

Dated: 7/28/99

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

LANDLORD: SPIEKER PROPERTIES, L.P., a California limited partnership
By Spieker Properties, Inc., a Maryland corporation, its general partner

         By: /s/ [ILLEGIBLE]
             ---------------------------------
         Its: SENIOR VICE PRESIDENT

TENANT: EXTENSITY, INC., A DELWARE CORPORATION

By: /s/ Kenneth Hahn
    -------------------------------------
Its: VP FINANCE

<PAGE>

                        EXPANSION AGREEMENT

AMENDMENT NUMBER FIVE TO THAT LEASE DATED JANUARY 12, 1998, BETWEEN SPIEKER
PROPERTIES, L.P., AS LANDLORD, AND EXTENSITY, INC., A DELAWARE CORPORATION, AS
TENANT (THE "LEASE"), FOR PREMISES LOCATED AT 2200 POWELL STREET, EMERYVILLE,
CALIFORNIA.

Effective September 15, 1999, the above described Lease will be amended as
follows to provide for Tenant's expansion premises:

1.       PREMISES. Approximately 1,262 square feet of rentable area (which
         includes a portion of the building common area) located on the 3rd
         floor of the building known as Suite 375. The premises as expanded
         herein are approximately as shown outlined in red on the attached floor
         plan (Exhibit A - Suite 375).

2.       OCCUPANCY DENSITY. 8 people

3.       RENT. Base Rent for the premises shall be as follows:

         9/15/99-6/30/00: Two thousand seven hundred eighty-nine and 02/100ths
                          ($2,789.02)

                          Plus in each case operating expenses pursuant to
                          Paragraph 4.3 of the lease over the Calendar Year
                          1999.

         7/1/00-6/30/01:  Three thousand one hundred seventeen and 14/100ths
                          ($3,117.14)

                          Plus in each case operating expenses pursuant to
                          Paragraph 4.3 of the lease over the Calendar Year
                          1999.

         7/1/01-6/30/02:  Three thousand two hundred thirty and 72/100ths
                          ($3,230.72)

                          Plus in each case operating expenses pursuant to
                          Paragraph 4.3 of the lease over the Calendar Year
                          1999.

         7/1/02-6/30/03:  Three thousand four hundred thirty-two and 64/100ths
                          ($3,432.64)

                          Plus in each case operating expenses pursuant to
                          Paragraph 4.3 of the lease over the Calendar Year
                          1999.

4.       TERM. The term shall commence on September 15, 1999, and shall expire
         on June 30, 2003.

5.       TENANT'S PROPORTIONATE SHARE. Tenant's proportionate share for the
         Expansion Premises pursuant to this Amendment Five is .55%. Tenant's
         proportionate share for the entire Premises, consisting of the 4th
         Floor premises, and Suite 375 shall be 9.21%.

6.       BASE YEAR. The Base Year for Tenant's proportionate share of Operating
         Costs shall be the Calendar Year 1999.

7.       TENANT IMPROVEMENTS. Tenant agrees to accept the premises as so
         expanded in "as-is" condition, and Landlord shall have no obligation to
         provide any improvement to the premises. If Tenant leases from Landlord
         the space on the north side of the 3rd Floor, and consisting of
         approximately 8,022 rentable square feet (the "Data Plus space") as
         shown outlined in blue on the attached Exhibit "A", Landlord agrees to
         provide new building standard paint and building standard carpet in the
         Expansion Premises at the same time Landlord makes improvements (if
         any) to the Data Plus Space.

<PAGE>

8.       EFFECTIVE DATE. The Effective Date of this Amendment Five is contingent
         upon the relocation of the existing tenant in Suite 375 to new
         premises. This relocation is anticipated to occur on or near September
         14, 1999. The Landlord shall not be held liable for any delay in the
         delivery of the Expansion Premises to Tenant, however, Landlord shall
         make all commercially reasonable efforts to ensure the Effective Date
         of this Agreement.

9.       DEFINITIONS. As of the Effective Date, the Expansion Premises as
         defined in this Amendment Five shall be deemed to be part of the
         Premises as defined in the Lease.

All other terms and conditions of the Lease shall remain in full force.

Dated: AUGUST 26, 1999

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

LANDLORD: SPIEKER PROPERTIES, L.P., a California limited partnership
By: Spieker Properties, Inc., a Maryland corporation, its general partner

         By: /s/ [ILLEGIBLE]
             ------------------------------------
         Its: SENIOR VICE PRESIDENT

TENANT: EXTENSITY, INC., A DELWARE CORPORATION

By: /s/ Kenneth Hahn
    ---------------------------------------
Its: VP FINANCE

<PAGE>

                                   EXHIBIT A

                              [FLOOR PLAN GRAPHIC]

                                                 ADDRESS :  WATERGATE TOWER II
                                                            2200 POWELL STREET
                                                            EMERYVILLE, CA 94608

                                                 FLOOR :    3rd FLOOR

<PAGE>

                               EXPANSION AGREEMENT

AMENDMENT NUMBER SIX DATED SEPTEMBER 10, 1999, TO THAT LEASE DATED JANUARY 12,
1998, AS AMENDED BY THAT AMENDMENT ONE DATED APRIL 28, 1998, THAT AMENDMENT
NUMBER TWO DATED OCTOBER 12, 1998, THAT AMENDMENT NUMBER THREE DATED OCTOBER 19,
1998, THAT AMENDMENT NUMBER FOUR DATED JULY 28, 1999, AND THAT AMENDMENT NUMBER
FIVE DATED AUGUST 26, 1999, BETWEEN SPIEKER PROPERTIES, L.P., AS LANDLORD, AND
EXTENSITY, INC, A DELAWARE CORPORATION, AS TENANT, COLLECTIVELY (THE "LEASE"),
FOR PREMISES LOCATED AT 2200 POWELL STREET, EMERYVILLE CALIFORNIA.

Effective as of the date of this Amendment, the above-described Lease will be
amended as follows:

1.       EXPANSION PREMISES. Approximately 1,550 square feet of rentable area
         (which includes a portion of the building common area) located on the
         3rd floor of the building, which represents a portion of the Suite
         commonly known as Suite 325. The term "Premises" as used in the Lease
         is amended to mean the original Premises as expanded herein and are as
         approximately as shown outlined in red on the attached Exhibit "A".

2.       OCCUPANCY DENSITY. 10 people (1/150)

3.       TERM. The Term shall commence May 10, 1999 and expire June 30, 2003.

4.       RENT. Base Rent for the Premises shall be as follows:

         5/10/99 - 6/30/00:   $3,394.50 per month

          7/1/00 - 6/30/01:   $3,720.00 per month

          7/1/01 - 6/30/02:   $3,859.50 per month

          7/1/02 - 6/30/03:   $4,092.00 per month

                              plus in each case any increases in Operating
                              Expenses per Paragraph 4.3 of the Lease over the
                              Calendar Year 1999.

5.       TENANT'S PROPORTIONATE SHARE. Tenant's porportionate share of operating
expenses for the Expansion Premises shall be .68%. Tenant's Base Year shall be
the Calendar Year 1999.

6.       TENANT IMPROVEMENTS. Tenant agrees to accept the Premises as so
expanded in "as is" condition except that Landlord agrees to provide one
temporary demising wall at the west end of the expanded Premises.

7.       TENANT'S MUST-TAKE OBLIGATION. Effective as of December 1, 1999 (the
"Delivery Date"), Tenant shall be required to lease from Landlord and Landlord
shall be required to lease to Tenant those certain premises located on the 3rd
Floor of the Building representing the remaining portion of the suite commonly
known as Suite 325, consisting of approximately 6,660 rentable square feet (the
"Must-Take Space"), as shown on the attached Exhibit "A" outlined in green, as
follows:
<PAGE>

         (a)      The commencement date of the Term with respect to the
                  Must-Take Space shall be referred to as the "Must-Take
                  Commencement Date." The Term with respect to the Must-Take
                  Space shall end concurrently with the expiration of the Term
                  of the Lease as to the original Premises.

         (b)      The Basic Rent payable for the Must-Take Space shall be as
                  follows:

         12/1/99 - 6/30/00:   $13,786.20 per month

          7/1/00 - 6/30/01:   $15,784.20 per month

          7/1/01 - 6/30/02:   $16,383.60 per month

          7/1/02 - 6/30/03:   $17,582.40 per month

                              plus in each case any increase in operating
                              expenses per Paragraph 4.3 of the Lease over the
                              Calendar Year 1999.

         (c)      The Must-Take Space shall be leased to Tenant "as is" and in
                  its then existing condition and state of improvement and
                  Landlord shall have no obligation to make any improvements,
                  repairs or alterations thereof; provided, however, (i) such
                  space shall be delivered to Tenant broom clean and in a usable
                  condition, (ii) Landlord shall construct five(5) private
                  offices with building standard finishes along the west wall of
                  the Must-Take Space, and provide for sufficient power
                  requirements (two electrical duplexes) and sufficient
                  phone/data locations (two phone/data drops [exclusive of
                  Tenant's cabling]), in each office and (iii) remove the
                  temporary demising wall originally constructed between the
                  Expansion Premises and the Must-Take Space. Said work shall
                  constitute permanent improvements to the Must-Take Space which
                  become Landlord's property upon installation pursuant to the
                  Lease.

         (d)      Landlord shall have no liability to Tenant for any damages
                  resulting from any delay in delivering possession of the
                  Must-Take Space to Tenant, if said delay is caused by the
                  holding over of a tenant in the space in which Landlord
                  intends to move, provided, however, Landlord, at its expense,
                  shall take all action reasonably necessary, including required
                  legal proceedings, to secure possession of the Must-Take Space
                  prior to the Must-Take Commencement Date.

         (e)      Effective upon the Must-Take Commencement Date, Tenant's
                  proportionate share of operating expenses for the Must-Take
                  Space shall be 2.9%. The Base Year shall be the Calendar Year
                  1999. As of the Must-Take Commencement Date, the Must-Take
                  Space shall be deemed to be part of the Premises, and except
                  as specifically set forth herein, shall be leased to Tenant
                  upon the same terms and conditions in the lease.

8.       SECURITY DEPOSIT. Landlord acknowledges that it is currently holding
Tenant's security deposit in the amount of $51,184.24.

All other terms and conditions of the Lease shall remain in full force and
effect and shall apply to the expansion premises as well as to the original
premises.

<PAGE>

Dated: SEPT. 20, 1999

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

Landlord: SPIEKER PROPERTIES, L.P., a California limited partnership
By: Spieker Properties, Inc., a Maryland corporation, its general partner

         By: /s/ [ILLEGIBLE]
             -------------------------------------
         Its: SENIOR VICE PRESIDENT

TENANT: EXTENSITY, INC. a Delaware corporation

By: /s/ Kenneth Hahn
    ------------------------------
Its: VP FINANCE

<PAGE>

                                   EXHIBIT A

                              [FLOOR PLAN GRAPHIC]

Tower II     2200 Powell Street     Emeryville, CA 94608      Floor 3

<PAGE>

                               EXPANSION AGREEMENT

AMENDMENT NUMBER SEVEN DATED DECEMBER 2, 1999, TO THAT LEASE DATED JANUARY 12,
1998, AS AMENDED BY THAT AMENDMENT ONE DATED APRIL 28, 1998, THAT AMENDMENT
NUMBER TWO DATED OCTOBER 19, 1998, THAT AMENDMENT NUMBER THREE DATED OCTOBER 19,
1998, THAT AMENDMENT NUMBER FOUR DATED JULY 28, 1999, THAT AMENDMENT NUMBER FIVE
DATED AUGUST 26, 1999 AND THAT AMENDMENT NUMBER SIX DATED SEPTEMBER 20, 1999,
BETWEEN SPIEKER PROPERTIES, L.P., AS LANDLORD, AND EXTENSITY, INC. A DELAWARE
CORPORATION, AS TENANT, COLLECTIVELY (THE "LEASE"), FOR PREMISES LOCATED AT 2200
POWELL STREET, EMERYVILLE, CALIFORNIA.

Effective as of the date of this Amendment, the Lease will be amended as follows
to provide for Tenant's expansion and for the extension of the lease term for
the original premises:

1.       EXPANSION PREMISES. Approximately 9,260 square feet of rentable area
         (which includes a portion of the building common area) located on the
         3rd floor of the building known as 2200 Powell Street, Suite 350,
         containing 7,910 rentable square feet and Suite 385, containing 1,350
         rentable square feet. The term "Premises" as used in the Lease is
         amended to mean the original Premises as expanded herein and are as
         approximately as shown outlined in red on the attached Exhibit "A".

2.       OCCUPANCY DENSITY. 62 people (Suite 350=53 people; Suite 385=9 people)

3.       RENT. Base Rent for the Premises as expanded herein shall be as
         follows:

         Suite 350

         Delivery Date-6/30/01     $20,170.50 per month

         7/01/01-6/30/02           $20,961.50 per month

         7/01/02-6/30/03           $21,752.50 per month

         7/01/03-6/30/04           $22,543.50 per month

<PAGE>

         Suite 385

         Delivery Date-6/30/01    $3,442.50 per month

         7/01/01-6/30/02          $3,577.50 per month

         7/01/02-6/30/03          $3,712.50 per month

         7/01/03-6/30/04          $3,847.50 per month

5.       SECURITY DEPOSIT. The Security Deposit under the Lease shall be
         increased by $26,391.00 for a total Security Deposit of $77,575.24.

6.       TENANT'S PROPORTIONATE SHARE. Tenant's proportionate share for suite
         350 shall be 3.66% and .62% for suite 385. Tenant's Base Year for Suite
         350 and Suite 385 shall be the Calendar Year 1999.

7.       TENANT IMPROVEMENTS. As per a mutually agreed upon plan prepared by
         Landlord's architect dated 8/11/99 and attached hereto as Exhibit B.

8.       TERM. The term and rental obligation shall commence on the date that
         Landlord is able to deliver each of the Expansion Premises to Tenant,
         which shall be the date which is one day after the Expansion Premises
         have been vacated by the prior tenant, (the "Delivery Date").

9.       EXTENSION. Landlord and Tenant hereby agree that the Term of the Lease
         for the original Premises, which Premises consists of approximately
         29,311 square feet of rentable area, (19,839 on the 4th floor, Suite
         375 containing 1,262 rentable square feet and Suite 325 containing
         8,210 rentable square feet), but specifically excluding Suite 1025
         containing 1,773 rentable square feet and leased on a month to month
         basis pursuant to Amendment Number Four, is hereby renewed and extended
         for an additional term of approximately twelve (12) months, to commence
         upon the 1st day of July, 2003, and to end on the last day of June,
         2004, subject to all of the provisions of the covenants and agreements
         contained in the Lease.

         The Base Rent for the original Premises during the extended term shall
         be as follows:

               7/01/03 - 6/30/04       $80,312.14 per month

<PAGE>

All other terms and conditions of the Lease shall remain in full force and
effect and shall apply to the Expansion Premises as well as to the original
premises.

Dated: DECEMBER 18, 1999

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

LANDLORD:

SPIEKER PROPERTIES, L.P.,
a California limited partnership

By: Spieker Properties, Inc.,
    a Maryland corporation,
    its general partner

    By: /s/ [ILLEGIBLE]
        ------------------------------------
    Its: SENIOR VICE PRESIDENT

TENANT:

EXTENSITY, INC.
a Delaware corporation

By: /s/ Kenneth Hahn
    ---------------------------------

<PAGE>

                                   EXHIBIT A

                              (FLOOR PLAN GRAPHIC)

                                                 ADDRESS :  WATERGATE TOWER II
                                                            2200 POWELL STREET
                                                            EMERYVILLE, CA 94608

                                                 FLOOR :    3rd FLOOR
                                                            6/22/99

<PAGE>

[ILLEGIBLE]                        EXHIBIT B                         [ILLEGIBLE]

                                   SPACE PLAN

                              (FLOOR PLAN GRAPHIC)

                                  [ILLEGIBLE]

<PAGE>

                             AMENDMENT NUMBER EIGHT

AMENDMENT NUMBER EIGHT DATED TO THAT LEASE DATED JANUARY 18, 1998, AS AMENDED BY
THAT AMENDMENT ONE DATED APRIL 28, 1998, THAT AMENDMENT NUMBER TWO DATED OCTOBER
12, 1998, THAT AMENDMENT NUMBER THREE DATED OCTOBER 19, 1998, THAT AMENDMENT
NUMBER FOUR DATED JULY 28, 1999, THAT AMENDMENT NUMBER FIVE DATED AUGUST 26,
1999, THAT AMENDMENT NUMBER SIX DATED SEPTEMBER 10, 1999 AND THAT AMENDMENT
NUMBER SEVEN DATED DECEMBER 2, 1999, BETWEEN SPIEKER PROPERTIES, L.P., AS
LANDLORD, AND EXTENSITY, INC, A DELAWARE CORPORATION, AS TENANT, COLLECTIVELY
(THE "LEASE"), FOR PREMISES LOCATED AT 2200 POWELL STREET, EMERYVILLE
CALIFORNIA.THIS

Effective as of the Delivery Date, the Lease will be amended as follows to
provide for Tenant's Expansion Premises:

1.       EXPANSION PREMISES. Approximately 2,280 square feet of rentable area
         (which includes a portion of the building common area) located on the
         ground floor of the building known as Suite 110 approximately as shown
         outlined in red on the attached floor plan. (Exhibit A) The term
         "Premises" as used in the Lease is amended to mean the original
         Premises plus the Expansion Premises. The Premises as expanded herein
         shall consist of approximately 40,851 rentable square feet.

2.       TERM COMMENCEMENT DATE. The Term for the Expansion Premises shall
         commence upon the date which Landlord is able to deliver the Expansion
         Premises ("Delivery Date") The Delivery Date is estimated to be March
         1, 2000 for the portion of the Building currently known as Suite 110
         (1,036 rentable square feet) and March 6, 2000 for the portion of the
         Building currently known as Suite 120 (1,244 rentable square feet).
         Tenant hereby acknowledges that Davis Murray and Jack: Runnion are
         currently in possession of the Expansion Premises and understands that
         Landlord's delivery of the Expansion Premises as provided herein is
         subject to Davis Murray and Jack Runnion surrendering the Expansion
         Premises to Landlord in a timely manner in accordance with the leases
         between Spieker Properties and Davis Murray & Jack Runnion.

3.       SECURITY DEPOSIT. The Security Deposit under the Lease shall be
         increased by $46,424.76 for a total Security Deposit of $124,000.00.

4.       TENANT'S PROPORTIONATE SHARE. Tenant's Proportionate Share for the
         Expansion Premises shall be 1.05%. Tenant's Proportionate Share for the
         Premises as expanded herein shall be 18.21%. Tenant's Base Year shall
         remain the calendar year 1999.

<PAGE>

5.       TENANT IMPROVEMENTS. Tenant agrees to accept the Expansion Premises "as
         is" condition.

8.       BASE RENT. The Base Rent for the Premises as expanded herein shall be
         as follows:

3/01/00-6/30/01:  Six thousand eight hundred forty and 00/100 dollars
                  ($6,840.00) per month plus operating expenses per Paragraph
                  4.3 of the Lease. Operating Expenses through December 31, 2000
                  are estimated to be $0 per month.

7/01/01-6/30/02:  Seven thousand one hundred thirteen and 60/100ths dollars
                  ($7,113.60) per month plus operating expenses per Paragraph
                  4.3 of the Lease.

7/01/02-6/30/03:  Seven thousand three hundred ninety eight and 14/100ths
                  dollars ($7,398.14) per month plus operating expenses per
                  Paragraph 4.3 of the Lease.

7/01/03-6/30/04:  Seven thousand six hundred ninety four and 07/100ths dollars
                  ($7,694.07) per month plus operating expenses per Paragraph
                  4.3 of the Lease.

             The Base Rent schedule as follows details the original Premises
plus the Expansion Premises (hereinafter the "Premises") and assumes Tenant's
occupancy on or about May 15, 2000 of Suites 350 and 385 in accordance with
Amendment Seven of the Lease:

3/01/00-4/31/00:  Sixty six thousand four hundred eighty seven and 72/100
                  dollars ($66,487.72) per month plus operating expenses per
                  Paragraph 4.3 of the Lease. Operating Expenses through
                  December 31, 2000 are estimated to be $0 per month.

5/01/00-6/30/00:  Ninety thousand one hundred and 72/100ths dollars ($90,100.72)
                  per month plus operating expenses per Paragraph 4.3 of the
                  Lease.

7/01/00-6/30/01:  One hundred thousand two hundred ninety one and 16/100ths
                  dollars ($100,291.16) per month plus operating expenses per
                  Paragraph 4.3 of the Lease.

7/01/01-6/30/02:  One hundred four thousand five hundred twenty five and
                  53/100ths dollars ($104,525.53) per month plus operating
                  expenses per Paragraph 4.3 of the Lease.

7/01/02-6/30/03:  One hundred eight thousand nine hundred fifty six and
                  41/100ths dollars ($108,956.41) per month plus operating

<PAGE>

                  expenses per Paragraph 4.3 of the Lease.

7/01/03-6/30/04:  One hundred fourteen thousand three hundred ninety seven and
                  21/100ths dollars ($114,397.21) per month plus operating
                  expenses per Paragraph 4.3 of the Lease.

10.      OCCUPANCY DENSITY. The Occupancy Density for the Premises as expanded
         herein shall be 204 (5 per 1,000 rentable square feet).

11.      PARKING DENSITY. The Parking Density for the Premises as expanded
         herein shall be 105 (3 per 1,000 usable square feet) unreserved parking
         spaces.

All other terms and conditions of the Lease shall remain in full force and
effect and shall apply to the Expansion Premises as well as to the original
premises.

Dated: 3/17/00

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

LANDLORD:

SPIEKER PROPERTIES, L.P.,
a California limited partnership

By:    Spieker Properties, Inc.,
       a Maryland corporation,
       its general partner

       By: /s/ John R. Winther                    Date: 3/17/00
           -----------------------------
           John R. Winther
       Its: Senior Vice President

TENANT:

EXTENSITY INC., a Delaware corporation

By:  /s/ Kenneth Hahn                             Date: 2/25/00
     ---------------------
     Kenneth Hahn
Its: Chief Financial Officer

<PAGE>

                              [FLOOR PLAN GRAPHIC]

                                  EXHIBIT "A"
<PAGE>

                              AMENDMENT NUMBER NINE

AMENDMENT NUMBER NINE TO THAT LEASE DATED JANUARY 18, 1998, AS AMENDED BY THAT
AMENDMENT ONE DATED APRIL 28, 1998, THAT AMENDMENT NUMBER TWO DATED OCTOBER 12,
1998, THAT AMENDMENT NUMBER THREE DATED OCTOBER 19, 1998, THAT AMENDMENT NUMBER
FOUR DATED JULY 28, 1999, THAT AMENDMENT NUMBER FIVE DATED AUGUST 26, 1999, THAT
AMENDMENT NUMBER SIX DATED SEPTEMBER 10, 1999, THAT AMENDMENT NUMBER SEVEN DATED
DECEMBER 2, 1999, AND THAT AMENDMENT NUMBER EIGHT DATED MARCH 17, 2000 BETWEEN
SPIEKER PROPERTIES, L.P., AS LANDLORD, AND EXTENSITY, INC, A DELAWARE
CORPORATION, AS TENANT, COLLECTIVELY (THE "LEASE"), FOR PREMISES LOCATED AT 2200
POWELL STREET, EMERYVILLE CALIFORNIA.

Effective April 15, 2000, the above described Lease will be amended as follows
to provide for Tenant's Expansion Premises:

1.       PREMISES. Approximately 396 square feet of rentable area (which
         includes a portion of the building common area) located on the 1st
         floor of the building known as Suite 102. The premises as expanded
         herein are approximately as shown outlined in red on the attached floor
         plan (Exhibit A - Suite 102).

2.       OCCUPANCY DENSITY. 6 people

3.       RENT. Base Rent for the premises shall be as follows:

         4/15/00-5/14/00:    One thousand five hundred eighty-four dollars
                             ($1,584.00) Thereafter the rent shall continue on a
                             month-to-month basis.

4.       TERM. The term shall commence on April 15, 2000 and continue on a
         month-to-month basis. Either party shall have the right to terminate
         this lease upon at least thirty (30) days prior written notice to the
         other party.

<PAGE>

5.       TENANT'S PROPORTIONATE SHARE. 0.02%. The Base Year for Tenant's
         proportionate share of Operating Costs shall be the Calendar Year 1999.

All other terms and conditions of the Lease shall remain in full force and
effect and shall apply to the expansion premises as well as to the original
premises.

Dated: 4/14/00

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

LANDLORD: SPIEKER PROPERTIES, L.P., a California limited partnership
By: Spieker Properties, Inc., a Maryland corporation, its general partner

By: /s/ John R. Winther
    --------------------------

         John R. Winther

Its:     Senior Vice President

TENANT: EXTENSITY, INC., A DELWARE CORPORATION

By: /s/ Kenneth Hahn
    ----------------------

         Kenneth Hahn

Its: Chief Financial Officer

<PAGE>

                 EXHIBIT A - PREMISES 2200 POWELL ST. SUITE 102

                                  [FLOOR PLAN GRAPHIC]

                                                 ADDRESS:   WATERGATE TOWER II
                                                            2200 POWELL STREET
                                                            EMERYVILLE, CA 94608
                                                 FLOOR:     1st FLOOR

<PAGE>

                              AMENDMENT NUMBER TEN

AMENDMENT NUMBER TEN DATED MAY 30, 2000 TO THAT LEASE DATED JANUARY 18, 1998, AS
AMENDED BY THAT AMENDMENT ONE DATED APRIL 28, 1998, THAT AMENDMENT NUMBER TWO
DATED OCTOBER 12, 1998, THAT AMENDMENT NUMBER THREE DATED OCTOBER 19, 1998, THAT
AMENDMENT NUMBER FOUR DATED JULY 28, 1999, THAT AMENDMENT NUMBER FIVE DATED
AUGUST 26, 1999, THAT AMENDMENT NUMBER SIX DATED SEPTEMBER 10, 1999, THAT
AMENDMENT NUMBER SEVEN DATED DECEMBER 2, 1999, THAT AMENDMENT NUMBER EIGHT DATED
MARCH 17, 2000 AND THAT AMENDMENT NUMBER NINE DATED APRIL 14, 2000 BETWEEN
SPIEKER PROPERTIES, L.P., AS LANDLORD, AND EXTENSITY, INC, A DELAWARE
CORPORATION, AS TENANT, COLLECTIVELY (THE "LEASE"), FOR PREMISES LOCATED AT 2200
POWELL STREET, EMERYVILLE CALIFORNIA.

Effective as of the Delivery Date, the Lease will be amended as follows to
provide for Tenant's Expansion Premises and an extension of the Term as set
forth below:

1.EXPANSION PREMISES. The Expansion Premises shall consist of suites detailed on
the following chart including their respective rentable square footage,
Commencement Date, Starting Base Rent on a per monthly per square foot basis and
their respective Prorata Shares:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
                                  Estimated   Starting                         Scheduled
               Rentable            Delivery   Base Rent        Prorata         Expiration
 Suite       Square Feet            Date      per Sq.Ft.        Share            Date
-----------------------------------------------------------------------------------------
<S>          <C>                 <C>          <C>              <C>             <C>
395              1,093           June 1,2000    $3.66           0.51%          August 31,
                                                                               2006
-----------------------------------------------------------------------------------------
655              2,037           August 1,      $3.66           0.94%          August 31,
                                 2000                                          2006
-----------------------------------------------------------------------------------------
610              1,871           November 1,    $3.66           0.87%          August 31,
                                 2000                                          2006
-----------------------------------------------------------------------------------------
690              1,353           July 1,2001    $3.81           0.63%          August 31,
                                                                               2006
-----------------------------------------------------------------------------------------
620,650 and      4,202           September      $3.97           1.94%          August 31,
660                              1,2001                                        2006
-----------------------------------------------------------------------------------------
Total           10,556                                          4.89%
-----------------------------------------------------------------------------------------
</TABLE>

The Expansion Premises are approximately as shown outlined in red on the
attached floor plan. (Exhibit A) The term "Premises" as used in the Lease is
amended to mean the original Premises plus the Expansion Premises. The Premises
as expanded herein shall consist of approximately 51,407 rentable square feet.

<PAGE>

2. TERM COMMENCEMENT PATE. The Term for the Expansion Premises shall commence
upon the date which Landlord is able to deliver the Expansion Premises
("Estimated Delivery Date") The Estimated Delivery Date is detailed in Paragraph
1 for each of the suites. Tenant hereby acknowledges that each of the suites
referenced in Paragraph 1 of this Amendment is currently occupied and Tenant
understands that Landlord's delivery of the Expansion Premises as provided
herein is subject to each of the existing tenants surrendering the Expansion
Premises to Landlord in a timely manner in accordance with their respective
leases.

3.BASE RENT. The Base Rent for the Expansion Premises as shall be as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
                                                               Suites
                                       Suite      Suite        620,650
            Suite 395    Suite 655      610        690          & 660
   Date      (1,093)      (2,037)     (1,871)    (1,353)       (4,202)       TOTAL
------------------------------------------------------------------------------------
<S>         <C>          <C>          <C>        <C>         <C>          <C>
6/1/00 -    $4,000.38                                                     $ 4,000.38
6/30/00
------------------------------------------------------------------------------------
7/1/00 -    $4,000.38     7,455.42                                        $11,455.80
10/31/00                  (8/1/00-10/31/00)
------------------------------------------------------------------------------------
11/1/00     $4,000.38     7,455.42    6,847.86                            $18,303.66
-6/30/01
------------------------------------------------------------------------------------
7/1/01 -    $4,160.40     7,753.64    6,847.86   5,154.93                 $23,458.59
8/31/01
------------------------------------------------------------------------------------
9/1/01-     $4,160.40     7,753.64    7,121.77   5,154.93    16,681.94    $40,872.68
6/30/02
------------------------------------------------------------------------------------
7/1/02 -    $4,326.82     8,063.79    7,406.64   5,361.13    17,349.22    $42,507.59
6/30/03
------------------------------------------------------------------------------------
7/1/03 -    $4,499.89     8,386.34    7,702.91   5,575.58    18,043.19    $44,207.97
6/30/04
------------------------------------------------------------------------------------
7/1/04 -    $4,679.89     8,721.79    8,011.03   5,798.60    18,764.92    $45,976.23
6/30/05
------------------------------------------------------------------------------------
7/1/05 -    $4,867.09     9,070.66     8331.47   6,030.54    19,515.52    $47,815.28
8/31/06
------------------------------------------------------------------------------------
</TABLE>

4. SECURITY DEPOSIT / LETTER OF CREDIT A. DELIVERY OF LETTER OF CREDIT. In
addition to the existing cash security deposit of $124,000.00 held by Landlord
throughout the term of the this Lease, Tenant shall on execution of this Lease
Amendment, deliver to Landlord and cause to be in effect during the Lease Term
an unconditional, irrevocable letter of credit ("LOC") in the

<PAGE>

amount of $900,000.00 ("LOC AMOUNT") for an initial term extending thirty (30)
days beyond the expiration date of this Lease or any extension thereto. The LOC
shall be in a form acceptable to Landlord and shall be issued by an LOC bank
selected by Tenant and acceptable to Landlord. The text of the LOC shall
expressly state that the LOC shall survive the termination of this Lease. An LOC
bank is a bank that accepts deposits, maintains accounts, has a local office
that will negotiate a letter of credit, and the deposits of which are insured by
the Federal Deposit Insurance Corporation. Tenant shall pay all expenses,
points, or fees incurred by Tenant in obtaining the LOC. The LOC shall not be
mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the
prior written consent of Landlord. Tenant acknowledges that Landlord has the
right to transfer or mortgage its interest in the Project, the Building and in
this Lease and Tenant agrees that in the event of any such transfer or mortgage,
Landlord shall have the right to transfer or assign the LOC and/or the LOC
Security Deposit (as defined below) to the transferee or mortgagee, and in the
event of such transfer, Tenant shall look solely to such transferee or mortgagee
for the return of the LOC and/or the LOC Security Deposit.

B. LANDLORD'S RIGHT TO DRAW ON LETTER OF CREDIT. Landlord shall hold the LOC as
security for the performance of Tenant's obligations under this Lease. If, after
notice and failure to cure within any applicable period provided in this Lease,
Tenant defaults on any provision of this Lease, Landlord may, without prejudice
to any other remedy it has, draw on that portion of the LOC necessary to (a) pay
Rent or other sum in default; (b) pay or reimburse Landlord for any amount that
Landlord may spend or become obligated to spend in exercising Landlord's rights
under Paragraph 13.2 of the Lease (Landlord's Remedies); and/or (c) compensate
Landlord for any expense, loss, or damage that Landlord may suffer because of
Tenant's default. If Tenant fails to renew or replace the LOC at least thirty
(30) days before its expiration, Landlord may, without prejudice to any other
remedy it has, draw on the entire amount of the LOC.

C. LOC SECURITY DEPOSIT. Any amount of the LOC that is drawn on by Landlord but
not applied by Landlord shall be held by Landlord as a security deposit (the
"LOC SECURITY DEPOSIT") in accordance with Paragraph 4 of this Lease.

D. RESTORATION OF LETTER OF CREDIT AND LOC SECURITY DEPOSIT. If Landlord draws
on any poration of the LOC and/or applies all or any portion of such draw,
Tenant shall, within five (5) business days after demand by Landlord, either (a)
deposit cash with Landlord in an amount that, when added to the amount remaining
under the LOC and the amount of any LOC Security Deposit, shall equal the LOC
Amount then required under this Paragraph 3; or (b) reinstate the LOC to the
full LOC Amount.

5. TENANT'S PROPORTIONATE SHARE. Tenant's Proportionate Share for the Expansion
Premises shall be as outlined in Paragraph 1 for each of the respective suites
and increased as of the Delivery Date. Tenant's Base Year shall remain the
calendar year 1999.

6. TENANT IMPROVEMENTS. Tenant agrees to accept the Expansion Premises "as is"
condition with no further obligation from Landlord to improve the Expansion
Premises.

7. TERM EXTENSION. The Term of the Lease for the original Premises is hereby
extended by twenty-six (26) months with a scheduled expiration date of August
31, 2006. The monthly Base Rent schedule for the original Premises during the
extended term is as follows:

<PAGE>

                  7/1/04 - 6/30/05 - $118,973.10 per month

                  7/1/05 - 8/31/06 - $123,732.02 per month.

8. RIGHT OF FIRST OFFER. Landlord and Tenant acknowledge that the tenant
currently occupying suite 675 ("Medtronic") has an option to renew their lease
by providing Landlord with notice of intent to renew as of August 4, 2000. In
the event that Medtronic does not exercise their option to renew, Tenant shall
have the right to lease suite 675 at a starting rental rate of $3.81 per
rentable square foot as of February 1, 2001 on all the same terms and conditions
as pertain to the Expansion Premises in this Amendment Number Ten. Tenant's
right of first offer is conditioned upon Tenant providing written notice to
Landlord no later than August 1, 2000 of Tenant's desire to lease suite 675.

9. OCCUPANCY AND PARKING DENSITY. The Occupancy Density for the Premises as
expanded herein shall be 266 people (5 per 1,000 rentable square feet). The
Parking Density for the Premises as expanded herein shall be 136 unreserved
parking spaces (3 per 1,000 usable square feet).

All other terms and conditions of the Lease shall remain in full force and
effect and shall apply to the Expansion Premises as well as to the original
premises.

Dated: 6/19/00

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

         LANDLORD:
         SPIEKER PROPERTIES, L.P.,
         a California limited partnership
         By: Spieker Properties, Inc.,
         a Maryland corporation,
         its general partner

                  By: /s/ John R. Winther                    Date: 6/19/00
                      -------------------------------
                      John R. Winther
                  Its: Senior Vice President

         TENANT:
         EXTENSITY INC., a Delaware corporation

         By: /s/ Kenneth Hahn                                Date: 30 MAY 2000
             -------------------------
             Kenneth Hahn
         Its: Chief Financial Officer

<PAGE>

                                   EXHIBIT A

                              [FLOOR PLAN GRAPHIC]

                                                 ADDRESS:   WATERGATE TOWER II
                                                            2200 POWELL STREET
                                                            EMERYVILLE, CA 94608
                                                 FLOOR:     6th FLOOR

Tower II        2200 Powell Street         Emeryville, CA 94608       Floor 6

<PAGE>

                                   EXHIBIT A-2

                              [FLOOR PLAN GRAPHIC]

Tower II        2200 Powell Street         Emeryville, CA 94608       Floor 3

<PAGE>

                             AMENDMENT NUMBER ELEVEN

AMENDMENT NUMBER ELEVEN DATED DECEMBER 12, 2000 TO THAT LEASE DATED JANUARY 18,
1998, AS AMENDED BY THAT AMENDMENT ONE DATED APRIL 28, 1998, THAT AMENDMENT
NUMBER TWO DATED OCTOBER 12, 1998, THAT AMENDMENT NUMBER THREE DATED OCTOBER 19,
1998, THAT AMENDMENT NUMBER FOUR DATED JULY 28, 1999, THAT AMENDMENT NUMBER FIVE
DATED AUGUST 26, 1999, THAT AMENDMENT NUMBER SIX DATED SEPTEMBER 10, 1999, THAT
AMENDMENT NUMBER SEVEN DATED DECEMBER 2, 1999, THAT AMENDMENT NUMBER EIGHT DATED
MARCH 17, 2000 THAT AMENDMENT NUMBER NINE DATED APRIL 14, 2000 AND THAT
AMENDMENT NUMBER TEN DATED MAY 30, 2000 BETWEEN SPIEKER PROPERTIES, L.P., AS
LANDLORD, AND EXTENSITY, INC, A DELAWARE CORPORATION, AS TENANT, COLLECTIVELY
(THE "LEASE"), FOR PREMISES LOCATED AT 2200 POWELL STREET, EMERYVILLE
CALIFORNIA.

Effective as of the Delivery Date, the Lease will be amended as follows to
provide for Tenant's Expansion Premises as set forth below:

1.       EXPANSION PREMISES. The Expansion Premises shall consist of suites
detailed on the following chart including their respective rentable square
footage, Commencement Date, starting Base Rent on a per monthly per square foot
basis and their respective Prorata Share:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
                                 Estimated   Starting                         Scheduled
              Rentable            Delivery   Base Rent        Prorata         Expiration
Suite       Square Feet            Date      per Sq.Ft.        Share            Date
----------------------------------------------------------------------------------------
<S>         <C>                  <C>         <C>              <C>             <C>
----------------------------------------------------------------------------------------
 600           7,634             January 1,    $4.15           3.33%          August 31,
                                 2001                                         2006
----------------------------------------------------------------------------------------
 675           1,733             February 1,   $3.81           0.76%          August 31,
                                 2001                                         2006
----------------------------------------------------------------------------------------
Total          9,367                                           4.09%
----------------------------------------------------------------------------------------
</TABLE>

The Expansion Premises are approximately as shown outlined in red on the
attached floor plan (Exhibit A). The term "Premises" as used in the Lease is
amended to mean the original Premises plus the Expansion Premises. The Premises
as expanded herein shall consist of approximately 60,774 rentable square feet.

2.       TERM COMMENCEMENT DATE. The Term for the Expansion Premises shall
commence upon the date which Landlord is able to deliver the Expansion Premises
("Estimated Delivery Date") The Estimated Delivery Date is detailed in Paragraph
1 for each Suite. Tenant hereby acknowledges that each of the suites referenced
in Paragraph 1 of this Amendment are currently occupied and Tenant understands
that Landlord's delivery of the Expansion Premises as provided herein is subject
to each of the existing tenants surrendering the Expansion Premises to Landlord
in a timely manner in accordance with their respective leases.

<PAGE>

3.       BASE RENT. The Base Rent for the Expansion Premises as shall be as
follows:

<TABLE>
<CAPTION>
---------------------------------------------------------------
                      SUITE 600      SUITE 675
                      ---------      ---------
       DATE          (7,634 RSF)    (1,733 RSF)       TOTAL
---------------------------------------------------------------
<S>                  <C>            <C>              <C>
1/1/01 - 1/31/01     $31,681.10                      $31,681.10
---------------------------------------------------------------
2/1/01 - 6/30/02     $32,948.34      $6,602.73       $39,551.07
---------------------------------------------------------------
7/1/02 - 6/30/03     $34,266.28      $6,866.84       $41,133.12
---------------------------------------------------------------
7/1/03 - 6/30/04     $35,636.93      $7,141.51       $42,778.44
---------------------------------------------------------------
7/1/04 - 6/30/05     $37,062.41      $7,427.17       $44,489.58
---------------------------------------------------------------
7/1/05 - 8/31/06     $38,544.90      $7,724.26       $46,269.16
---------------------------------------------------------------
</TABLE>

For reference only, the Base Rent schedule for the Premises as expanded herein
shall be determined by referring to Paragraph 8 of Amendment 8, Paragraph 3 of
Amendment 10 and Paragraph 3 of this Amendment Number 11.

4.       SECURITY DEPOSIT / LETTER OF CREDIT A. DELIVERY OF LETTER OF CREDIT.
Landlord and Tenant hereby acknowledge that Landlord is currently holding a cash
security deposit in the amount of $124,000.00 to be held by Landlord throughout
the term of this Lease. Landlord is also in possession of an unconditional,
irrevocable letter of credit ("LOC") in the amount of $900,000.00. Upon
execution of this Amendment Number Eleven, Tenant agrees to increase the LOC
Amount in accordance with the following schedule under all the same terms and
conditions as the existing LOC as defined in Paragraph 4 of Amendment Number Ten
of this Lease.

<TABLE>
<CAPTION>
------------------------------------------------
                                        TOTAL
DATE OF INCREASE                      LOC AMOUNT
------------------------------------------------
<S>                                   <C>
     1/1/01                           $1,425,000
------------------------------------------------
     1/1/02                           $1,665,000
------------------------------------------------
     1/1/03                           $1,735,000
------------------------------------------------
     1/1/04                           $1,815,000
------------------------------------------------
     1/1/05                           $1,885,000
------------------------------------------------
     1/1/06                           $1,960,000
------------------------------------------------
</TABLE>

5.       TENANT'S PROPORTIONATE SHARE. Tenant's Proportionate Share for the
Expansion Premises shall be as outlined in Paragraph 1 for each of the
respective suites and increased as of the Delivery Date. Tenant's Base Year
shall remain the calendar year 1999.

<PAGE>

6.       TENANT IMPROVEMENTS. Tenant agrees to accept the Expansion Premises in
an "as is" condition with no further obligation from Landlord to improve the
Expansion Premises.

7.       OCCUPANCY AND PARKING DENSITY. The Occupancy Density for the Premises
as expanded herein shall be 304 people (5 per 1,000 rentable square feet). The
Parking Density for the Premises as expanded herein shall be 157 unreserved
parking spaces (3 per 1,000 usable square feet).

8.       CONTINGENCY. Landlord and Tenant hereby acknowledge that the
effectiveness of this Lease Amendment with respect to Suite 600 is conditioned
upon Landlord receiving a fully executed Lease termination Agreement from WREIT,
the current tenant of 2200 Powell, Suite 600.

All other terms and conditions of the Lease shall remain in full force and
effect and shall apply to the Expansion Premises as well as to the original
Premises.

Dated: 12/12/00

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

         LANDLORD:
         SPIEKER PROPERTIES, L.P.,
         a California limited partnership
         By: Spieker Properties, Inc.,
         a Maryland corporation,
         its general partner

            By: /s/ John R. Winther                    Date: 12/12/00
                -------------------------
             John R. Winther
            Its: Senior Vice President

TENANT:
EXTENSITY INC., a Delaware corporation

By: /s/ Kenneth Hahn                                   Date: 11/27/00
    ------------------
    Kenneth Hahn
Its: Chief Financial Officer

<PAGE>

                                    EXHIBIT A
                               EXPANSION PREMISES

                              [FLOOR PLAN GRAPHIC]

                                                 ADDRESS:   WATERGATE TOWER II
                                                            2200 POWELL STREET
                                                            EMERYVILLE, CA 94608
                                                 FLOOR:     6th FLOOR<PAGE>

                                                                    Exhibit 4.17

May 30, 2003

Mr. Arthur Gitajn
69 Woodycrest Avenue
Toronto, Ontario
M4J 3A8

Dear Arthur:

This letter will confirm the terms of your employment as Chief Financial Officer
("CFO") of Geac Computer Corporation Limited ("Geac") effective immediately.

You shall serve faithfully to the best of your ability and shall throughout the
term of your assignment devote your full working time and attention to the
business and affairs of Geac and shall use your best efforts to maintain and
advance that business.

REPORTING OBLIGATION

You will report to the President and Chief Executive Officer of Geac.

DIRECTORSHIP FOR A NON-COMPETING COMPANY

You may seek appointment to and serve as a Director on the Board of a
corporation or other entity that does not compete with Geac or any of its
affiliates. Any such appointment or election shall be subject to the prior
approval of the President and Chief Executive Officer of Geac, who shall have
the discretion to determine whether such corporation or entity competes with
Geac or any of its affiliates. In addition, you agree that, if at any time after
you become a Director of such corporation or other entity, the President and
Chief Executive Officer of Geac determines and provides written notice to you
that, due to changes in the nature of the business of Geac or its affiliates or
due to changes in the nature of the business of such corporation or other entity
or its affiliates, the business of such other corporation or entity competes
with Geac or any of its affiliates, you will resign such directorship forthwith.

DETAILS OF YOUR REMUNERATION

1.       BASE SALARY:

Annual base salary of US$100,000 plus Cdn.$150,000 per annum, subject to annual
review. These amounts will be paid in semi-monthly instalments subject to all
proper withholding taxes and any deductions attributable to your required or
elective contributions to the benefits provided by Geac, including the benefits
referred to in paragraph 3 below.

<PAGE>

                                       2

2.       BONUS:

Your bonus will be determined as described in Schedule "A". If your last date of
active employment with Geac occurs after April 30, 2004, you will receive your
FY2004 bonus in accordance with the terms of the FY2004 executive bonus plan. If
your last date of active employment with Geac occurs before April 30, 2004, you
will receive a pro rata portion of your FY2004 target bonus based on the number
of months employed with Geac in FY2004, which bonus shall be paid on the first
payroll date following your last date of active employment. (For purposes of
this provision, if your last date of active employment with Geac falls on or
later than the 15th day of a month, then full credit will be given for the last
month of employment; if your last date of active employment falls on or earlier
than the 14th day of a month, then no credit will be given for the last month of
employment.)

3.       GROUP BENEFITS:

You will be entitled to receive and participate in all of Geac's standard
employee benefit plans. All such benefits will be provided to you by a provider
or providers in the United States as well as in Canada.

4.       VACATION:

During each fiscal year of your employment with Geac you will be entitled to 4
weeks paid vacation to be taken at mutually agreeable times.

5.       TAX PLANNING FEES:

Geac shall pay (or, at your option, reimburse you) for reasonable fees up to
Cdn.$5,000 per year incurred by you in connection with your annual tax planning
and preparation fees for the calendar years 2003 and 2004 and thereafter upon
approval by the President and Chief Executive Officer.

6.       AUTOMOBILE:

During the period of your employment, Geac shall pay you a car allowance of
Cdn.$640 per month.

TAX EQUALIZATION

To hold you harmless for additional taxes you are obliged to pay as a Canadian
resident of Ontario compared to the taxes you would have paid as a U.S. resident
of the State of Maryland, on the first payroll date after the end of each
calendar year Geac shall pay to you an amount such that the net amount after
Canadian tax withholding will equal 7.2% of your gross calendar year
compensation in excess of Cdn.$80,000, and Geac will remit the appropriate tax
withholding to the Canadian tax authorities for the equalization payment. In the
event your employment is terminated or you resign your employment with Geac
(unless such termination is for Cause, in

<PAGE>

                                       3

which case no payment shall be owing), this payment will be made on the first
payroll date following your last date of employment based on your gross
compensation in excess of Cdn.$80,000 to your last date of employment, and Geac
will remit the appropriate tax withholding to the Canadian tax authorities for
the equalization payment. (If your last date of employment occurs before the
payment of your FY 2003 bonus in July 2003, you will receive an additional tax
equalization payment such that the net amount after Canadian tax withholding
will equal 7.2% of your FY 2003 bonus payment, and this additional tax
equalization payment will be made at the same time as your FY 2003 bonus
payment.) In addition, on the first payroll date following the entering into of
this Agreement Geac shall remit the appropriate tax withholding to Canadian
taxing authorities for the net Cdn.$30,994 paid to you on April 23, 2003 to
compensate you for your additional 2002 income tax liability as a Canadian
resident of Ontario compared to the tax you would have paid as a U.S. resident
of the State of Maryland; and your gross annual compensation for 2003 will
include the gross amount necessary to yield the net Cdn.$30,994 paid to you on
April 23, 2003. In the event that the statutory tax rates for the relevant
jurisdictions change, the parties agree to work in good faith to adjust the tax
equalization formula accordingly.

EXECUTIVE DEVELOPMENT MANAGEMENT PROGRAM

You will be eligible to participate in Geac's Executive Development Management
Program and, as such, will be offered the opportunity to participate in the
advanced senior management training courses offered through Kellogg School of
Business or an equivalent institution.

STOCK OPTIONS

The options to acquire common shares of Geac granted to you prior to the date
hereof shall continue. You shall be considered by the Board along with other
senior executives for the grant of additional options to acquire common shares
of Geac pursuant to Geac's then existing option plan. The options previously
granted to you and any options which may be granted to you in future are herein
referred to as the "Options".

VOLUNTARY RESIGNATION

If you wish to resign your employment with Geac voluntarily you shall provide
Geac with at least three months prior written notice (the "Notice Period"),
which shall set out a proposed date of resignation. Geac may elect to require
you to remain in its employment for all or part of the Notice Period, or may
require that you resign immediately. During this Notice Period you shall fully
cooperate with the Company in devising and carrying out an effective transition
plan. Upon the date of your resignation, Geac shall pay you all unpaid salary
and shall pay any unpaid bonus to that date provided that the conditions for
payment of the bonus have been met. Upon the date of your resignation the
vesting of Options shall cease and you will have no entitlement to pay or
benefits beyond the date of resignation. This paragraph shall be subject to, and
shall not apply in the case of, resignation following a Change in Control.

<PAGE>

                                       4

TERMINATION FOR CAUSE

If you are guilty of any conduct constituting just Cause (as hereinafter
defined) for dismissal, Geac may terminate your employment by providing you with
written notice of termination and your employment and your rights under this
Agreement shall terminate on the day the notice is delivered to you. Upon
termination for Cause you shall be paid all unpaid salary owing to you, the
vesting of Options shall cease immediately and the Options shall terminate
forthwith. You will have no entitlement to pay or benefits beyond the date of
termination.

As used in this Agreement, the term "Cause" shall mean (a) your material failure
to substantially perform your duties with Geac (other than any such failure
resulting from your incapacity due to physical or mental illness) that continues
for more than 30 days after a written demand for substantial performance is
delivered to you by the Chairman of the Audit Committee of Geac, which demand
specifically identifies the manner in which Geac believes that you have not
substantially performed your duties, (b) the wilful engaging by you in conduct
which is materially injurious to Geac or any of its affiliates, monetarily or
otherwise, (c) your conviction of any crime, other than routine traffic
violations or (d) your engaging in any business which materially competes with
any material business of Geac or any of its affiliates.

TERMINATION FOR ANY REASON OTHER THAN CAUSE

This Agreement has a term that will end on April 30, 2004, unless mutually
extended by the parties before it expires. In the event that this Agreement does
expire, the expiry will be considered to be a "Termination for Any Reason Other
than Cause" for the purposes of this Agreement.

Geac shall have the right to terminate your employment at any time for any
reason other than Cause. You shall be entitled to receive on the date of your
termination as CFO (the "Last Date of Employment") a lump sum cash payment (the
"Termination Payment") in an amount equal to 150% of the sum of: (a) at your
option, (i) your base salary received or receivable by you in respect of the
immediately preceding twelve months in the normal payroll cycle or (ii) your
base salary for the calendar month preceding the date of termination multiplied
by 12; (b) your annual car allowance; and (c) the annual bonus paid to you in
fiscal year 2002 (as per the fiscal year 2002 proxy circular). Additionally, you
will receive a lump sum payment of U.S. $75,000 for relocation expenses.

Should your employment with Geac as its CFO be ended, you have agreed that you
will remain as a consultant to Geac at your current salary (but with no
entitlement to a bonus, vacation or benefits beyond those set forth below in
this section) for a period of up to six months from the Last Date of Employment.
Upon the mutual agreement of you and the President and Chief Executive Officer
of Geac, you may not be required generally to be in the office, but in any event
you shall be reasonably available to respond to questions and to attend meetings
in the office from time to time.

<PAGE>

                                       5

Either party may terminate the above-referenced consulting period upon providing
the other party with 30 days' written notice of termination. Upon the ending of
this consulting period, you agree that you will not be entitled to any further
compensation from Geac for the termination of your employment as a consultant
and you also agree to execute a full and final release document in favour of
Geac, in a form acceptable to Geac.

On the first payroll date following your Last Date of Employment, you will
receive a lump sum payment consisting of any outstanding company related
expenses and unused accrued vacation leave and for expenses expected to be
incurred over the next 18 months for cell phone charges (US$2,700), professional
dues (US$1,100), and continuing education (Cdn.$5,100). Subject to the agreement
of the carrier or carriers, Geac will also maintain all of your medical, dental,
disability, and life insurance benefits for a period of 18 months from your Last
Date of Employment. In the event that one or more carriers does not agree to
such an extension of coverage, Geac agrees to pay you an amount equal to the
cost of your obtaining substantially equivalent benefit coverage if you, in
fact, obtain such benefit coverage at your own expense. The vesting of Options
shall cease on your Last Date of Employment, and you shall have the right to
exercise Options vested prior to that date for a period of 183 days from the
Last Date of Employment (provided that in no event shall the period during which
you may exercise Options exceed the Option Period of ten years).

All payments made under this section shall be made to you by a U.S. subsidiary
of Geac by direct deposit to an account in the United States designated by you.
Canadian dollar amounts will be converted to U.S. dollars at Geac's prevailing
expense report currency conversion rate. Geac agrees to convert U.S. dollars
back to Canadian dollars at the same rate for a period of thirty days following
payment.

CHANGE IN CONTROL AND CHANGE AFFECTING YOUR EMPLOYMENT

1.       In the event of a Change in Control and a Change Affecting Your
         Employment within 12 months of a Change in Control, you may elect to
         resign from Geac within 120 days of the Change in Control and Change
         Affecting Your Employment. In the event of your resignation, you will
         be provided with the following:

         (a)      On the effective date of your resignation, Geac will pay you
                  the Termination Payment, calculated as though such effective
                  date was the effective date of the termination of employment
                  by Geac for a reason other than Cause; and

         (b)      Subject to the agreement of the carrier or carriers, Geac will
                  also maintain all of your medical, dental and life insurance
                  benefits for a period of 18 months from your last date of
                  employment. In the event that one or more carriers does not
                  agree to such an extension of coverage, Geac agrees to pay you
                  an amount equal to the cost of your obtaining substantially
                  equivalent benefit coverage if you, in fact, obtain such
                  benefit coverage at your own expense. In such event, you will
                  also be paid, credited or reimbursed, as the case may be, for
                  all unpaid salary (including credit for any vacation earned
                  but not taken), expenses, benefits and

<PAGE>

                                       6

                  other amounts payable to you or earned by you up to the date
                  of resignation. Also, in such event, all unvested Options
                  previously granted shall become fully vested and you shall
                  have the right to exercise those Options for a period of 12
                  months from the date of resignation (provided that in no event
                  shall the period during which you may exercise Options exceed
                  the Option Period of ten years).

2.       In no case will you be entitled to both a payment for Termination for
         Any Reason Other Than Cause and for a resignation in the event of a
         Change in Control and Change Affecting Your Employment.

For the purposes of this Letter Agreement, "Change in Control" and "Change
Affecting Your Employment" are defined as set out in Schedule "B".

PROPERTY OF GEAC

All equipment, material, written correspondence, memoranda, communication,
reports, or other documents pertaining to the business of Geac or its affiliates
used or produced by you in connection with your employment, or in your
possession or under your control, shall at all times remain the property of Geac
and its affiliates. You shall return all property of Geac and its affiliates in
your possession or under your control in good condition within one week of a
request by Geac, or within one week of the termination of your employment.
Notwithstanding the foregoing, you shall be entitled to keep the laptop computer
provided to you by Geac; provided, however, that a condition of this entitlement
shall be that you shall make such computer available to the Geac Information
Technology department prior to the termination of your employment, together with
all information relating to password protection, so as to enable the department
to remove all computer software and information owned by, licensed to or
relating to Geac and its businesses, other than the computer's operating system
software.

NON-DISCLOSURE

You agree to be bound by the terms of the General Confidentiality Agreement
attached hereto as Schedule "C".

RESIGNATION AS OFFICER AND DIRECTOR

You covenant and agree that, upon any notice of your resignation from Geac or
termination of your employment being given, you shall forthwith tender your
resignation from all offices and directorships then held by you at Geac or any
of its subsidiaries and affiliates, such resignation to be effective
immediately, or at such other date as may be mutually agreed to by you and Geac,
and you shall not be entitled to receive any severance payment or compensation
for loss of office or otherwise by reason of the resignation, other than what
has been provided elsewhere in this Agreement. If you fail to resign as set out
above, you will be deemed to have resigned from all offices and directorships,
and Geac is hereby authorized by you to appoint any person in your name and on
your behalf to sign any documents or do any things necessary or required to give
effect to such resignation. Subject to limits imposed by law and the terms and
conditions from time to time of Geac's governing statute, by-laws and any
directors' and officers' insurance

<PAGE>

                                       7

policies, you will continue to be entitled after the time of any such
resignation (and in respect of periods prior to any such resignation) to the
benefit of Geac's policies relating to insurance and indemnification for senior
officers.

CHOICE OF LAW

This Agreement shall be deemed to have been made in and shall be construed in
accordance with the laws of the province of Ontario, Canada.

SUBMISSION TO ARBITRATION

It is hereby agreed that any dispute or controversy in connection with this
Agreement, including its interpretation, will be conclusively settled by
submission to arbitration (the "Arbitration") in accordance with the rules of
arbitration of the Arbitration Act (Ontario) as amended from time to time. The
Arbitration will be conducted before a single arbitrator mutually agreeable to
the parties (the "Arbitrator"). Each party will be responsible for its own legal
costs incurred at the Arbitration. The cost of the Arbitrator will be shared
subject to Geac's agreement to reimburse you for your share of the Arbitrator's
costs in the event you are largely successful at the Arbitration.

NOTICES

Any notice required or permitted hereunder shall be deemed to be delivered on
the date of actual delivery, if delivered personally, or on the date four days
after mailing, if delivered by registered mail. In the case of postal
disruption, delivery shall be made by way of personal delivery.

LEGAL COSTS

Geac shall pay (or, at your option, shall reimburse you) for the reasonable
legal fees and disbursements incurred by you in connection with the drafting and
negotiation of this Agreement.

ENTIRE AGREEMENT

This Agreement contains the entire agreement between you and Geac and its
affiliates with respect to the subject matter hereof. Any and all other oral or
written representations, agreements, arrangements or understandings between you
and Geac and its affiliates are hereby terminated. Any and all employment rights
you may have with or against Geac or any of its affiliates are contained in this
Agreement.

<PAGE>

                                       8

We trust that the above will be acceptable to you and we ask that you indicate
your acceptance of this offer by signing the enclosed copy of this letter and
returning it to my attention by June 5, 2003. This offer becomes null and void
should the signed acceptance not be returned to me by that time.

Arthur, we look forward to your continued participation on the Geac team.

Sincerely,

Geac Computer Corporation Limited

By:                  /s/ Paul D. Birch
    ----------------------------------------------------
    Paul D. Birch, President and Chief Executive Officer

ACCEPTED:

          /s/ Arthur Gitajn                             June 3, 2003
--------------------------------------           --------------------------
ARTHUR GITAJN                                    Date

<PAGE>

                                  SCHEDULE "A"

                                      BONUS

-    Fiscal Year 2003: as set forth in the Geac Fiscal 2003 Executive Bonus
     Plan, which establishes a targeted base bonus for you of C$150,000. In the
     event your last day of employment occurs before the payment of the FY 2003
     bonus in July 2003, Geac waives the requirement that you be employed by
     Geac at the time the bonus is paid.

-    Fiscal Year 2004: as set forth in the Geac Fiscal 2004 Executive Bonus
     Plan, in such form as may be approved by the Board of Directors of Geac,
     with a targeted base bonus for you of C$150,000.

<PAGE>

                                       10

                                  SCHEDULE "B"

"Change in Control" means the occurrence of one or more of the following events:

1.       The sale, lease or transfer, in one or a series of related
         transactions, of all or substantially all of Geac's assets considered
         on a consolidated basis to any person or company or combination of
         persons or companies;

2.       The adoption of a plan relating to the liquidation or dissolution of
         Geac;

3.       The acquisition by any person or company or combination of persons or
         companies acting jointly or in concert of a direct or indirect interest
         in more than 50 percent of the ownership of Geac or the voting power of
         the voting shares of Geac by way of a purchase, merger or consolidation
         or otherwise (other than a creation of a holding company that does not
         involve a change in the beneficial ownership of Geac as a result of
         such transaction);

4.       The amalgamation, merger or consolidation of Geac with or into another
         corporation or the amalgamation or merger of another corporation into
         Geac with the effect that immediately after such transaction the
         shareholders of Geac immediately prior to such transaction hold less
         than 50 percent of the total voting power of all securities generally
         entitled to vote in the election of directors, managers or trustees of
         the person surviving such amalgamation, merger or consolidation; or

5.       During any period of two consecutive years, individuals who at the
         beginning of such period constitute the entire Board of Directors of
         Geac shall cease for any reason to constitute a majority thereof unless
         the election, or the nomination for election by Geac's stockholders, of
         each new director was approved by a vote of at least two-thirds of the
         directors then still in office who were directors at the beginning of
         such period or who, themselves, were approved during such period by the
         requisite two-thirds vote specified above.

"Change Affecting Your Employment" means any of the following circumstances
which are not accepted by you during the 90-day period immediately following the
date on which you become aware of such circumstances:

1.       Any change to your employment conditions with Geac which would
         significantly reduce the nature or status of your responsibilities;

2.       A reduction by Geac in your annual compensation as of the date of the
         Change in Control;

3.       The failure by Geac to continue in effect for your benefit any
         perquisites or participation in any employee benefit plan to which
         other employees of Geac are entitled, to the same extent to which any
         other employees enjoy such benefits;

<PAGE>

                                       11

4.       Any other change which would constitute "constructive dismissal" under
         applicable law; or

5.       Any change in the location of the principal office of Geac which causes
         you to substantially increase your travel time or relocate.

<PAGE>

                                       12

                                  SCHEDULE "C"

     Agreement Respecting Confidentiality, Exclusivity and Non-Solicitation

1.       CONFIDENTIAL INFORMATION

"Confidential Information" means information disclosed to me or acquired by me
as a result of my employment with Geac Computer Corporation Limited ("Geac") and
includes but is not limited to information relating to Geac and its affiliates'
products or developments of new or improved products, marketing strategy, sales
or business plans, the names and information about Geac and its affiliates'
past, present and prospective customers (to whom Geac or an affiliate has made a
proposal during the course of my employment) and clients, trade secrets and any
other information which is not in the public domain and which information can be
reasonably deemed confidential information whether or not such information is
explicitly identified as being confidential. "Confidential Information" shall
not include:

         (a)      Information that was known by me at the time it was disclosed
                  to me by Geac or an affiliate or was acquired by me; or

         (b)      Information that is or becomes publicly known or otherwise
                  enters the public domain through no wrongful act of mine; or

         (c)      Information that is received by me from a third party which
                  has no obligation to maintain it in confidence; or

         (d)      Information that is developed independently by me without use
                  of any Confidential Information.

2.       USE AND DISCLOSURE

While employed by Geac and following the termination of my employment, I shall
not, directly or indirectly, in any way use or disclose to any person any
Confidential Information. I agree and acknowledge that Confidential Information
of Geac and its affiliates is the exclusive property of Geac and its affiliates
and I shall hold all such Confidential Information in trust for Geac and its
affiliates. I confirm and acknowledge my fiduciary duty to use my best efforts
to protect Confidential Information; not to misuse such information; and to
protect such Confidential Information from any misuse, misappropriation, harm,
or interference by others in any manner whatsoever.

3.       GEAC AND AFFILIATES' PROPERTY

Upon ceasing employment with Geac, I will immediately turn over to Geac and its
affiliates all property then in my possession or under my control belonging to
Geac or its affiliates, or any past, present or prospective customer, client,
supplier or business partner of Geac or an affiliate.

<PAGE>

                                       13

4.       EXCLUSIVITY AND DEDICATION

During the period of my employment with Geac:

(a)      I shall devote my entire working time during the regular business hours
         assigned to my position with attention to such duties as may be
         assigned to me by Geac. During such time I shall faithfully and
         diligently serve and endeavour to further the interests of Geac and its
         affiliates;

(b)      I agree that I shall not engage in or become connected with:

         i)       any other business during my regular business hours at Geac;
                  or

         ii)      any business which is in competition with Geac or any of its
                  affiliates at any time.

5.       CONFLICTS

My employment with Geac does not now and shall not in the future conflict with
any obligations or interests that I have with any other person, business,
organization or former employer. I agree to notify Geac in writing immediately
upon having any knowledge to the contrary of any conflict or potential conflict.

6.       NON-SOLICITATION OF CUSTOMERS

I agree that during the term of this Agreement and for a period of 1 year
immediately following the termination of my employment with Geac, I shall not,
on my own behalf or on behalf of any person, firm, partnership, association,
corporation or business organization, entity or enterprise, directly or
indirectly, solicit, contact, call upon, communicate or attempt to communicate
with any customer or prospective customer of Geac or any of its affiliates or
any representative of any customer or prospective customer of Geac of any of its
affiliates, with a view to the sale or provision of any deliverable or service
competitive with any deliverable or service sold or provided or under
development by Geac or any of its affiliates during the 1 year immediately
preceding the termination of my employment.

7.       NON-SOLICITATION OF EMPLOYEES

I agree that while I am employed by Geac, and for a period of 1 year following
the termination of my employment with Geac, I shall not directly or indirectly
solicit, induce or attempt to induce any employee of Geac or any of its
affiliates into leaving his employment with Geac or an affiliate, nor shall I
directly or indirectly participate in any organization's recruitment or hiring
of employees of Geac or any of its affiliates.

<PAGE>

                                       14

8.       TERM

This Agreement shall become effective when signed and shall terminate upon the
termination of my employment with Geac, except that paragraphs 1, 2, 3, 6 and 7
shall survive such termination.

9.       SEVERABILITY

I acknowledge that each paragraph of this Agreement is separate from each other
paragraph of this Agreement and if any one paragraph is found to be invalid, it
shall not invalidate the remainder of this Agreement.

10.      JURISDICTION

This Agreement shall be interpreted in accordance with the laws of the
jurisdiction in which it is signed.

11.      INDEPENDENT LEGAL ADVICE

I acknowledge I have read and understood this Agreement and have had the
opportunity to obtain independent legal advice prior to the execution of this
Agreement. In the event that I did not obtain such advice, I shall not use the
absence of such advice in an attempt to obviate, alter, sever or otherwise
terminate this Agreement or any part thereof.

12.      ENTIRE AGREEMENT

This Agreement shall supersede any previous confidentiality agreement or similar
understanding which I may have had with Geac or any of its affiliates. Any
amendments to this Agreement must be made in writing and signed by both Geac and
me.

DATED at 11 Allstate, Markham, Ontario, Canada, this 3rd day of June, 2003.

      "Arthur Gitajn"                              "Tricia Little"
---------------------------                 -----------------------------
Arthur Gitajn                               Witness

       Arthur Gitajn                                Tricia Little
---------------------------                 -----------------------------
(Print)                                     (Print)

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