Document:

EXHIBIT 10.3

                    1400 65th STREET, EMERYVILLE, CALIFORNIA

                  AMENDED AND RESTATED OFFICE BUILDING NET LEASE

         THIS AMENDED AND RESTATED OFFICE BUILDING NET LEASE COMPLETELY
              REPLACES AND SUPERCEDES THE OFFICE BUILDING NET LEASE
        DATED NOVEMBER 3, 1999, AS AMENDED, BETWEEN LANDLORD AND TENANT.

                             BASIC LEASE INFORMATION

DATE  OF  LEASE:               October  18,  2000

LANDLORD:                      BEP-EMERYVILLE,  L.P.

LANDLORD'S  ADDRESS:           c/o  Ellis  Partners,  Inc.
                               433  California  Street,  Suite  610
                               San  Francisco,  California  94104
                               Attention:  James  F.  Ellis

TENANT:                        EVOLVE  SOFTWARE,  INC.

TENANT'S  ADDRESS:             1400  65th  Street
                               Emeryville,  CA  94608
                               Attn:  Douglas Sinclair, Chief Financial Officer

BUILDING:                      EmeryTech  Building  located  at:
                               1400-65th  Street,  Emeryville,  California

LEASED  PREMISES:              Approximately 51,261 rentable square feet on the
                               entire East-Hi-Bay  and  the  ground floor of the
                               West-Hi-Bay  of  the  Building  (the  "Existing
                               Premises").

                               Approximately  21,090 rentable square feet on the
                               second  (2nd)  floor  and  third  (3rd)  floor
                               mezzanine  of  the  Building  (the  "Expansion
                               Premises").

RENTABLE  AREA:                Approximately  72,351  rentable  square  feet.

<PAGE>
TERM  COMMENCEMENT
DATE  (EXISTING  PREMISES):    July  21,  2000

SCHEDULED  TERM  COMMENCEMENT
DATE  (EXPANSION  PREMISES):   February  1,  2001

TERM  EXPIRATION  DATE:        July  20,  2007

OPTION  TO  EXTEND:            Number  of  Extension  Periods:  One  (1)
                               Years  per  Extension  Period:   Five  (5)

BASE  RENT  (NNN):             FOR  THE  EXISTING  PREMISES
                               ----------------------------

                               $112,774.20.00  (calculated on the basis of $2.20
                               per month per rentable square foot); beginning on
                               the first (1st) anniversary of the Term
                               Commencement  Date for the Existing Premises, and
                               each anniversary thereafter during the Term, Base
                               Rent (NNN)  shall  increase at three percent (3%)
                               per  annum.

                               FOR  THE  EXPANSION  PREMISES
                               -----------------------------

                               $71,706.00  (calculated on the basis of $3.40 per
                               month per rentable square foot); beginning on the
                               first  (1st) anniversary of the Term Commencement
                               Date  for  the  Expansion  Premises,  and  each
                               anniversary thereafter during the Term, Base Rent
                               (NNN)  shall  increase  at three percent (3%) per
                               annum.  Notwithstanding  the  foregoing,  no Base
                               Rent  for the Expansion Premises shall be payable
                               until  after  the  thirtieth (30th) day after the
                               Term  Commencement  Date  for  the  Expansion
                               Premises;  however,  Tenant's Proportionate Share
                               of the Basic Operating  Cost  for  the  Expansion
                               Premises  shall  be  payable  from  the  Term
                               Commencement  Date.

TENANT'S  PROPORTIONATE
SHARE:                         Approximately  47.24%.

PARKING  SPACES:               153

                                       ii
<PAGE>
SECURITY  DEPOSIT:             $2,078,279.25  (for  the  Existing  Premises)
                               $822,847.78  (for  the  Expansion  Premises)

                               $2,901,127.03  (total  Security  Deposit  for the
                               Leased  Premises)

GUARANTOR:                     None

LANDLORD'S  BROKER:            CB  Richard  Ellis

TENANT'S  BROKER:              Colliers  International

               [INTENTIONALLY LEFT BLANK, SIGNATURE PAGE FOLLOWS.]

                                       iii
<PAGE>
     The  foregoing  BASIC  LEASE  INFORMATION is incorporated herein and made a
part of the LEASE to which it is attached.  If there is any conflict between the
BASIC  LEASE  INFORMATION  and  the  LEASE,  the  BASIC  LEASE INFORMATION shall
control.

                                   "LANDLORD":

                                   BEP-EMERYVILLE,  L.P.,
                                   a  Delaware  limited  partnership

                                   By:   EPI  Investors  103  LLC,
                                         a  California limited liability company
                                         Its:  General  Partner

                                         By:   Ellis  Partners,  Inc.,
                                         a  California  corporation

                                         Its:  Managing  Member

                                       By:     /s/  James F Ellis
                                          ------------------------------------
                                       Name:   James F Ellis
                                            ----------------------------------
                                       Title:  Vice President
                                             ---------------------------------

                                   "TENANT":

                                   EVOLVE  SOFTWARE,  INC.,
                                   a  Delaware  corporation

                                   By:     /s/ Doug Sinclair
                                       ---------------------------------
                                   Name:   Doug Sinclair
                                        --------------------------------
                                   Title:  CFO
                                         -------------------------------

                                       iv
<PAGE>
<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
                                -----------------

                                                                           Page
                                                                           ----
<S>                                                                        <C>
Article 1.     Definitions  . . . . . . . . . . . . . . . . . . . . . . . .   1
     1.01.     Definitions. . . . . . . . . . . . . . . . . . . . . . . . .   1
Article 2.     Leased Premises  . . . . . . . . . . . . . . . . . . . . . .   4
     2.01.     Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
     2.02.     Acceptance of Leased Premises. . . . . . . . . . . . . . . .   4
     2.03.     [Intentionally Deleted.] . . . . . . . . . . . . . . . . . .   4
     2.04.     Reservation of Rights. . . . . . . . . . . . . . . . . . . .   4
     2.05.     Associated Rights Granted to Tenant. . . . . . . . . . . . .   5
Article 3.     Term, Use and Rent . . . . . . . . . . . . . . . . . . . . .   6
     3.01.     Term . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
     3.02.     Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
     3.03.     Base Rent. . . . . . . . . . . . . . . . . . . . . . . . . .   6
     3.04.     Tenant's Proportionate Share of Basic Operating Cost . . . .   7
     3.05.     Basic Operating Cost . . . . . . . . . . . . . . . . . . . .  10
Article 4.     Landlord's Covenants . . . . . . . . . . . . . . . . . . . .  13
     4.01.     Basic Services . . . . . . . . . . . . . . . . . . . . . . .  13
     4.02.     Extra Services . . . . . . . . . . . . . . . . . . . . . . .  15
     4.03.     Window Coverings . . . . . . . . . . . . . . . . . . . . . .  16
     4.04.     Graphics and Signage . . . . . . . . . . . . . . . . . . . .  16
     4.05.     Tenant Extra Improvements. . . . . . . . . . . . . . . . . .  16
     4.06.     Repair Obligation. . . . . . . . . . . . . . . . . . . . . .  17
     4.07.     Peaceful Enjoyment . . . . . . . . . . . . . . . . . . . . .  17
Article 5.     Tenant's Covenants . . . . . . . . . . . . . . . . . . . . .  18
     5.01.     Payments by Tenant . . . . . . . . . . . . . . . . . . . . .  18
     5.02.     Tenant Improvements. . . . . . . . . . . . . . . . . . . . .  18
     5.03.     Taxes on Personal Property and Tenant Extra Improvements . .  18
     5.04.     Repairs by Tenant. . . . . . . . . . . . . . . . . . . . . .  18
     5.05.     Waste. . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
     5.06.     Assignment or Sublease . . . . . . . . . . . . . . . . . . .  19
     5.07.     Alterations, Additions and Improvements. . . . . . . . . . .  21
     5.08.     Compliance With Laws and Insurance Standards . . . . . . . .  22
     5.09.     No Nuisance; No Overloading. . . . . . . . . . . . . . . . .  23
     5.10.     Furnishing of Financial Statements; Tenant's Representations  23
     5.11.     Entry by Landlord. . . . . . . . . . . . . . . . . . . . . .  24
     5.12.     Nondisturbance and Attornment. . . . . . . . . . . . . . . .  24
     5.13.     Estoppel Certificate . . . . . . . . . . . . . . . . . . . .  25
     5.14.     Security Deposit . . . . . . . . . . . . . . . . . . . . . .  26
     5.15.     Surrender. . . . . . . . . . . . . . . . . . . . . . . . . .  28
     5.16.     Tenant's Remedies. . . . . . . . . . . . . . . . . . . . . .  28
     5.17.     CC&Rs/Rules and Regulations. . . . . . . . . . . . . . . . .  29
Article 6.     Environmental Matters. . . . . . . . . . . . . . . . . . . .  29
     6.01.     Hazardous Materials Prohibited . . . . . . . . . . . . . . .  29
     6.02.     Limitations on Assignment and Subletting . . . . . . . . . .  31

                                       i
<PAGE>
                                TABLE OF CONTENTS
                                -----------------
                                   (Continued)
                                                                            Page

     6.03.     Right of Entry . . . . . . . . . . . . . . . . . . . . . . .  31
     6.04.     Notice to Landlord . . . . . . . . . . . . . . . . . . . . .  31
Article 7.     Insurance, Indemnity, Condemnation, Damage and Default . . .  31
     7.01.     Landlord's Insurance . . . . . . . . . . . . . . . . . . . .  31
     7.02.     Tenant's Liability Insurance . . . . . . . . . . . . . . . .  32
     7.03.     Tenant's Additional Insurance Requirements . . . . . . . . .  33
     7.04.     Indemnity and Exoneration. . . . . . . . . . . . . . . . . .  34
     7.05.     Waiver of Subrogation. . . . . . . . . . . . . . . . . . . .  36
     7.06.     Condemnation . . . . . . . . . . . . . . . . . . . . . . . .  36
     7.07.     Damage or Destruction. . . . . . . . . . . . . . . . . . . .  36
     7.08.     Default by Tenant. . . . . . . . . . . . . . . . . . . . . .  38
Article 8.     Option to Renew. . . . . . . . . . . . . . . . . . . . . . .  42
     8.01.     Option to Renew. . . . . . . . . . . . . . . . . . . . . . .  42
Article 9.     Miscellaneous Matters. . . . . . . . . . . . . . . . . . . .  44
     9.01.     Parking. . . . . . . . . . . . . . . . . . . . . . . . . . .  44
     9.02.     Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . .  45
     9.03.     No Waiver. . . . . . . . . . . . . . . . . . . . . . . . . .  45
     9.04.     Recording. . . . . . . . . . . . . . . . . . . . . . . . . .  45
     9.05.     Holding Over . . . . . . . . . . . . . . . . . . . . . . . .  45
     9.06.     Transfers by Landlord. . . . . . . . . . . . . . . . . . . .  46
     9.07.     Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . .  46
     9.08.     Termination; Merger. . . . . . . . . . . . . . . . . . . . .  46
     9.09.     Amendments; Interpretation . . . . . . . . . . . . . . . . .  46
     9.10.     Severability . . . . . . . . . . . . . . . . . . . . . . . .  46
     9.11.     Notices. . . . . . . . . . . . . . . . . . . . . . . . . . .  47
     9.12.     Force Majeure. . . . . . . . . . . . . . . . . . . . . . . .  47
     9.13.     Guarantor. None. . . . . . . . . . . . . . . . . . . . . . .  47
     9.14.     Successors and Assigns . . . . . . . . . . . . . . . . . . .  47
     9.15.     Further Assurances . . . . . . . . . . . . . . . . . . . . .  47
     9.16.     Incorporation of Prior Agreements. . . . . . . . . . . . . .  47
     9.17.     Applicable Law . . . . . . . . . . . . . . . . . . . . . . .  48
     9.18.     Time of the Essence. . . . . . . . . . . . . . . . . . . . .  48
     9.19.     No Joint Venture . . . . . . . . . . . . . . . . . . . . . .  48
     9.20.     Authority. . . . . . . . . . . . . . . . . . . . . . . . . .  48
     9.21.     Declaration of Covenants, Conditions and Restrictions. . . .  48
     9.22.     Offer. . . . . . . . . . . . . . . . . . . . . . . . . . . .  48
     9.23.     Building Access. . . . . . . . . . . . . . . . . . . . . . .  48
     9.24.     Exhibits; Addenda. . . . . . . . . . . . . . . . . . . . . .  48
     9.25.     Approvals. . . . . . . . . . . . . . . . . . . . . . . . . .  49
</TABLE>

                                       ii
<PAGE>
EXHIBITS:

     Exhibit  A-1 -  Site  Plan  of  the  Leased  Premises
     Exhibit  A-2 -  Floor  Plan  of  the  Leased  Premises
     Exhibit  B  -   Initial  Improvement  of the Leased Premises (Existing
                     Premises)
     Exhibit  B-1 -  Preliminary  Plans
     Exhibit  B-2 -  Warm  Shell  Specifications
     Exhibit  C  -   Confirmation  of  Term  of  Lease
     Exhibit  D  -   Confidentiality  Agreement
     Exhibit  E  -   Building  Rules  and  Regulations
     Exhibit  F  -   Estimated  Budget
     Exhibit  G  -   Initial  Improvement of the Leased Premises (Expansion
                     Premises)

                                       i
<PAGE>
                            OFFICE BUILDING NET LEASE

     THIS  LEASE,  made  as of the date specified in the BASIC LEASE INFORMATION
sheet,  by  and  between  the  landlord specified in the BASIC LEASE INFORMATION
sheet ("Landlord") and the tenant specified in the BASIC LEASE INFORMATION sheet
("Tenant").

                                   ARTICLE 1.
                                  DEFINITIONS

     1.01.     DEFINITIONS.  Terms  used  herein  shall  have  the  following
meanings:

     1.02.     "ADDITIONAL  RENT"  shall mean all monetary obligations of Tenant
under  this  Lease  other  than  the  obligation  for  payment  of  Net  Rent.

     1.03.     "BASE  RENT"  shall mean the sums due from time to time as rental
for  the  Leased  Premises.

     1.04.     [INTENTIONALLY  DELETED]

     1.05.     "BASIC  OPERATING  COST"  shall have the meaning given in Section
3.05.

     1.06.     "BUILDING"  shall  mean  the  building  and  other  improvements
associated  therewith  identified on the Basic Lease Information sheet, commonly
known  as  EmeryTech  and having a Rentable Area of approximately 149,834 square
feet of office space, all as generally identified on Exhibit A-1 hereto which is
                                                     -----------
made  a  part  hereof.

     1.07.     "BUILDING  STANDARD  IMPROVEMENTS"  shall  mean  the  standard
materials ordinarily used by Landlord in the improvement of the Leased Premises.

     1.08.     "COMMON  AREAS"  shall mean (a) the areas on individual floors of
the  Building  devoted  to non-exclusive uses such as common corridors, lobbies,
fire  vestibules,  elevator foyers, stairways, elevators, electric and telephone
closets,  restrooms,  mechanical  closets,  janitor  closets  and  other similar
facilities for the benefit of all tenants (and invitees) on the particular floor
and  other  floors  and (b) other areas of the Project available for the use and
benefit  of  all  tenants  (and  invitees).

     1.09.     "COMPUTATION  YEAR"  shall  mean  a fiscal year consisting of the
calendar year commencing January 1st of each year during the Term, commencing in
the  year  2000 and continuing through the Term with a short or stub fiscal year
in  (i)  in  the year 2000 for the period between the Term Commencement Date and
December  31  of  such  year and (ii) any partial fiscal year in which the Lease
expires  or  is terminated for the period between January 1 of such year and the
date  of  lease  termination  or  expiration.

     1.10.     "LANDLORD'S BROKER" shall mean the individual or corporate broker
identified  on  the  Basic  Lease  Information sheet as the broker for Landlord.

                                        1
<PAGE>
     1.11.     "LANDLORD'S CONTRIBUTION" shall have the meaning given in Exhibit
                                                                         -------
B.

     1.12.     "LANDLORD'S  WORK"  shall  mean  the  improvements  to the Leased
Premises  and the Common Areas to be installed at Landlord's expense pursuant to
Exhibit  B  attached  hereto.
----------

     1.13.     "LEASED  PREMISES"  shall  mean  the floor area more particularly
shown  on the floor plan attached hereto as Exhibit A-2, containing the Rentable
                                            -----------
Area  (as  such  term  is  defined in Section 1.18 below) specified on the Basic
Lease  Information  sheet.

     1.14.     "NET  RENT"  shall  mean  the  total  of  Base  Rent and Tenant's
Proportionate  Share  of  Basic  Operating  Cost.

     1.15.     "PERMITTED  USE" shall mean general office, and any other related
lawful  use; provided, however, that Permitted Use shall not include (a) offices
or  agencies  of  any  foreign  government or political subdivision thereof; (b)
offices  of  any  agency  or bureau of any state, county or city government; (c)
offices  of  any  health  care  professionals;  (d)  schools  or  other training
facilities  which  are  not  ancillary  to  corporate, executive or professional
office  use;  or  (e)  retail  or  restaurant  uses.

     1.16.     "PROJECT"  shall  mean the Building situated at 1400 65th Street,
Emeryville,  California,  the  parking  areas affiliated therewith, and the real
property  on  which  the  Building  and  the  parking  areas  are  located.

     1.17.     "RENT"  shall  mean  Net  Rent  plus  Additional  Rent.

     1.18.     "RENTABLE  AREA"  shall  mean  the  area or areas of space in the
Building  determined  in accordance with the Standard Method for Measuring Floor
Area  in  Office Buildings as most recently published by the Building Owners and
Managers  Association  International  (ANSI-Z65.1-1996)  and  including  a
proportionate  allocation  of  the square footage of the Building's elevator and
mechanical  equipment  areas, telephone and electrical rooms, janitorial service
areas,  public  lobbies  and  corridors,  which  method  of measurement shall be
subject to reasonable revision by Landlord from time to time.  The Rentable Area
of  the  Leased  Premises  has  been  calculated  on  the basis of the foregoing
definition  and  the  application  of  a twelve percent (12%) load factor to the
useable  area  determined  in  accordance with such definition, and prior to the
execution  of  this  Lease,  Tenant  has had an opportunity to verify Landlord's
calculation  of  Rentable  Area  and  make  its own measurements thereof.  It is
agreed for all purposes of this Lease to be the amount stated on the Basic Lease
Information  sheet.

     1.19.     "SECURITY  DEPOSIT"  shall mean the amount specified on the Basic
Lease  Information  sheet  to be paid by Tenant to Landlord and held and applied
pursuant  to  Section  5.14.

     1.20.     "SUBSTANTIAL  COMPLETION"  shall  mean  (and  the Leased Premises
shall  be  deemed  "Substantially Complete") when (i) installation of Landlord's
Work and the Tenant Improvements (and any Tenant Extra Improvements installed by
Landlord's  contractor,  or,  if  permitted  by  Landlord,  any  Tenant  Extra
Improvements  installed  by  Tenant's  contractor  within  the  time  schedule
established by Landlord's contractor or consultant for performance of such

                                        2
<PAGE>
work)  has occurred; (ii) the parking facilities are available for use by Tenant
and  its  employees and Tenant has direct access from the street to the elevator
lobby  on  the  floor  (or  floors) where the Leased Premises are located; (iii)
basic  services  (as  described  in  Section  4.01)  are available to the Leased
Premises;  (iv)  Landlord's  architect  has  issued a certificate of Substantial
Completion  with  respect  to  the  Leased Premises; (v) the Common Areas of the
Project  have  been  completed  and  are  available  for use by Tenant and other
tenants  of  the Building; and (vi) a certificate of occupancy or its equivalent
or  a  temporary  occupancy  permit  for  the Leased Premises has been issued by
appropriate  governmental authorities. Substantial Completion shall be deemed to
have  occurred  notwithstanding  a  requirement to complete "punchlist" items or
similar  corrective  work.

     1.21.     "TENANT  EXTRA  IMPROVEMENTS"  shall mean the improvements to the
Leased  Premises  approved  by  Landlord and to be installed at Tenant's expense
pursuant  to  Exhibit  B,  if  any.
              ----------

     1.22.     "TENANT  IMPROVEMENTS" shall mean the tenant improvements and the
Tenant  Extra  Improvements  (if any) installed or to be installed for Tenant by
Landlord  or by Tenant, as the case may be, pursuant to Exhibit B and Exhibit G,
                                                        ---------     ---------
subject  to  the  Landlord's  Contribution.

     1.23.     "TENANT'S  BROKER"  shall mean the individual or corporate broker
identified  on  the  Basic  Lease  Information  sheet  as the broker for Tenant.

     1.24.     "TENANT'S  PHYSICAL  POSSESSION DATE" shall mean February 1, 2000
or  thirty  (30)  days  prior to the Term Commencement Date, whichever is later,
for  the  Existing  Premises,  and  the Term Commencement Date for the Expansion
Premises  for  the  Expansion  Premises.

     1.25.     "TENANT'S  PROPORTIONATE  SHARE"  is specified on the Basic Lease
Information  sheet and is based on the percentage which the Rentable Area of the
Leased  Premises  bears  to  the  total Rentable Area of the Project, subject to
adjustment  in  the event of the remeasurement of the Building or the Project as
permitted  under  Section  1.18  above.

     1.26.     "TERM"  shall mean the period commencing with the applicable Term
Commencement  Date  and  ending  at  midnight  on  the  Term  Expiration  Date.

     1.27.     "TERM  COMMENCEMENT  DATE"  shall  mean  the applicable dates set
forth  on  the  Basic  Lease  Information  sheet.

     1.28.     "TERM EXPIRATION DATE" shall mean the date set forth on the Basic
Lease  Information sheet, unless sooner terminated pursuant to the terms of this
Lease  or  unless  extended  pursuant  to  the  provisions  of  Section  8.01.

     1.29.     OTHER  TERMS.  Other  terms  used  in this Lease and on the Basic
Lease  Information  sheet  shall  have  the  meanings  given  to them herein and
thereon.

                                        3
<PAGE>
                                   ARTICLE 2.
                                 LEASED PREMISES

     2.01.     LEASE.  Landlord hereby leases to Tenant and Tenant hereby leases
from  Landlord  the  Leased  Premises  upon  all  of  the  terms,  covenants and
conditions  set  forth  in  this  Lease.

     2.02.     ACCEPTANCE  OF LEASED PREMISES.  Tenant acknowledges that: (a) it
has  been advised by Landlord, Landlord's Broker and Tenant's Broker, if any, to
satisfy  itself with respect to the present and future suitability of the Leased
Premises  for  Tenant's  intended  use;  (b) Tenant has made such inspection and
investigation  as  it deems necessary with reference to such matters and assumes
all  responsibility  therefor  as  the  same relate to Tenant's occupancy of the
Leased  Premises  and  the  term  of  this  Lease;  and (c) neither Landlord nor
Landlord's  Broker  nor  any  of  Landlord's agents has made any oral or written
representations  or  warranties  with  respect  to the condition, suitability or
fitness  of  the  Leased Premises other than as may be specifically set forth in
this  Lease.  Except  as  specifically otherwise set forth in this Lease, Tenant
accepts  the  Leased Premises in its AS IS condition existing on the date Tenant
executes  this  Lease,  subject  to  all  matters of record and applicable laws,
ordinances,  rules  and  regulations.  Tenant acknowledges that neither Landlord
nor  Landlord's  Broker nor any of Landlord's agents has agreed to undertake any
alterations  or  additions or to perform any maintenance or repair of the Leased
Premises except for the routine maintenance and janitorial work specified herein
and  except  as  may  be  expressly set forth in EXHIBIT B.  Notwithstanding the
                                                 ---------
foregoing  and  anything  to the contrary in this Lease, (i) with respect to the
Existing  Premises  only,  prior  to  the Term Commencement Date of the Existing
Premises, Landlord shall complete the Landlord's Work and Substantially Complete
the Tenant Improvements, all in accordance with the provisions of EXHIBIT B, and
                                                                  ---------
(ii)  with respect to the Existing Premises only, Landlord warrants that (A) for
a  period  of  one  (1)  year  from  the  date of Substantial Completion of each
component  of  the  Tenant Improvements and the Landlord Improvements, each such
component shall remain in good condition and repair and free of defects, and (B)
as  of the applicable Term Commencement Date, the roof and all other portions of
the  Existing  Premises  and  the  roof and all other structural portions of the
Expansion  Premises  shall  be  in  good condition and working order and free of
defects.  In  the  event  that  it is determined that the foregoing warranty has
been  violated,  then  it  shall be the obligation of Landlord, after receipt of
written  notice  from  Tenant  setting  forth with specificity the nature of the
violation,  to  promptly,  at  Landlord's  sole  cost,  rectify  such violation.
Tenant's failure to give written notice to Landlord of patent defects within one
hundred  eighty  (180)  days  after  the applicable Term Commencement Date shall
cause  the  conclusive  presumption  that  Landlord  has  complied  with  all of
Landlord's obligations hereunder (except that Landlord shall remain obligated to
correct  any  latent  defects).  Notwithstanding  the foregoing, the cost of the
Tenant  Improvements  for  the Existing Premises shall include the cost incurred
within  the  Existing  Premises,  prior  to  the  Term  Commencement Date of the
Existing  Premises, of causing the Tenant Improvements for the Existing Premises
to  be  constructed  in  accordance  with  the  terms  of  this  Lease including
applicable  government  rules  and  regulations.

     2.03.     [INTENTIONALLY  DELETED.]

                                        4
<PAGE>
     2.04.     RESERVATION  OF RIGHTS.  Landlord reserves the right from time to
time, so long as the parking facilities and reasonable access and basic services
to  the  Leased  Premises  remain  available, to install, use, maintain, repair,
relocate  and/or  replace pipes, conduits, wires and equipment within and around
the  Building  and to do and perform such other acts and make such other changes
in,  to  or  with  respect  to  the  Building  or the Project (including without
limitation  with respect to the driveways, parking areas, walkways and entrances
to the Project) as Landlord may, in the exercise of sound business judgment, and
good  property management practices, determine to be appropriate.  In connection
therewith,  Landlord shall have the right to close temporarily any of the Common
Areas  so  long  as  reasonable  access to the parking facilities and the Leased
Premises  remains  available.  The  Landlord  shall provide Tenant with not less
than  twenty-four  (24)  hours  prior  notice (except in cases of emergency) and
shall  use  reasonable  efforts  to  conduct its activities in a manner which is
least  disruptive  to  Tenant's  use.

     2.05.     ASSOCIATED  RIGHTS  GRANTED  TO  TENANT.

          (a)  Tenant  shall  have  the  right  to install on the roof, in areas
specified  by  Landlord  in  Landlord's  sole  and  absolute  discretion, and at
Tenant's  sole  cost,  the  following  equipment  (the  "Equipment"):

               (1)  Satellite Dish.  One  satellite  dish  with  a  diameter  no
                    --------------
           greater than two  (2)  feet.

               (2)  Supplemental  HVAC.
                    ------------------

                    (i)  A  supplemental  HVAC for the specific, limited purpose
                         of  cooling  a  single  server room within the Existing
                         Premises of not more than 1,000 square feet in size and
                         which  shall  be  part  of the Tenant Improvements; and

                    (ii) A  supplemental  HVAC for the specific, limited purpose
                         of  cooling  a  single server room within the Expansion
                         Premises of not more than 1,000 square feet in size and
                         which  shall  be  part  of  the  Tenant  Improvements.

          (b)  In  installing  the  Equipment,  Tenant  shall adhere to industry
standards  for  installation  and  workmanship,  all  work  to  be  completed to
Landlord's  reasonable  satisfaction.  All  engineering and design work shall be
undertaken by Tenant, at its sole expense. Upon termination of the Lease, Tenant
shall,  if  so  requested by Landlord, remove the Equipment and shall repair, to
Landlord's  reasonable  satisfaction,  any  damage caused by the installation or
removal  of the Equipment. To maintain any roof warranty of the Building, Tenant
shall  use  such  roofing  contractors  as  directed  by  Landlord.

          (c)  Tenant shall, at its sole cost, immediately repair and restore to
its  prior  condition  any  damage  to  the Leased Premises, the Building or the
Project  caused  by the installation, operation or maintenance of the Equipment.
If  Tenant fails to repair and restore damage caused to the Leased Premises, the
Building  or the Project within a reasonable time,

                                        5
<PAGE>
Landlord  shall  have  the  right  to repair and restore such damage and receive
reimbursement  from  Tenant  of  all  costs  incurred  by  Landlord.

          (d)  No  installation of the Equipment shall be made by Tenant without
the prior written consent of Landlord, which shall not be unreasonably withheld.
Tenant  shall  obtain  all  necessary  governmental  permits  required  for  any
installation,  alteration,  addition,  or  improvement  approved by Landlord and
shall  comply with all applicable governmental law, regulations, ordinances, and
codes.

                                   ARTICLE 3.
                               TERM, USE AND RENT

     3.01.     TERM.  Except as otherwise provided in this Lease, the Term shall
commence  on  the  applicable Term Commencement Date, and shall continue in full
force  for  the Term.  Tenant's obligation to pay Rent and its other obligations
under  this  Lease  shall  commence  upon  the applicable Term Commencement Date
(except  as  expressly  otherwise  provided  herein  with respect to obligations
arising  earlier).  When the Term Commencement Date and the Term Expiration Date
have been ascertained, the parties shall promptly execute a Confirmation of Term
of Lease substantially in the form attached as EXHIBIT C.  Tenant shall be given
                                               ---------
physical  possession  of the Leased Premises on the applicable Tenant's Physical
Possession Date in order for Tenant to install furniture, equipment, cabling and
fixtures,  and otherwise to prepare the Leased Premises for occupancy.  From the
applicable  Tenant's  Physical  Possession  Date  through  the  applicable  Term
Commencement  Date,  Tenant  shall  be  subject  to all of the covenants in this
Lease,  except  that  Tenant  shall  not  be  obligated  to  pay Rent.  Tenant's
obligation  to  pay  Rent  shall commence in accordance with Section 3.03 below.
Provided  Landlord has used reasonable efforts to deliver the Expansion Premises
to  Tenant  on  or  before  February  1,  2001, Landlord shall not be subject to
claims, damages or liabilities by reason thereof, but the Term Commencement Date
for the Expansion Premises shall become the date by which the Expansion Premises
are  delivered to Tenant.  In the event the Expansion Premises are not delivered
to  Tenant  for  any  reason whatsoever on or before, February 1, 2001, Tenant's
Proportionate Share of the Basic Operating Cost for the Expansion Premises shall
not  become  due  and  payable until the date Base Rent is due and payable under
Section  3.03  below.  In  addition, in the event the Expansion Premises are not
delivered  to Tenant for any reason whatsoever on or before, April 1, 2001, then
the  date  Tenant  is  otherwise  obliged  to  commence payment of Rent shall be
delayed  by  one  additional  day  for each day that such delay continues beyond
April  1,  2001.

     3.02.     USE.  Tenant  shall  use  the  Leased  Premises  solely  for  the
Permitted  Use  and for no other use or purpose, except as permitted by Landlord
pursuant  to  Landlord's written consent, which consent will not be unreasonably
withheld.  It  shall  not  be  deemed  unreasonable for Landlord to withhold its
consent  to  a  proposed  change  of use if the proposed use is one set forth in
Section  1.15(a)  through  (e).

     3.03.     BASE  RENT.

     (a)     Tenant  shall  pay the Base Rent to Landlord in accordance with the
Basic  Lease  Information sheet and in the manner described below.  Tenant shall
pay  the  Base  Rent  for the first month Base Rent is payable for the Expansion
Premises  upon  execution  of this Lease.

                                        6
<PAGE>
Commencing  after  the thirtieth (30th) day after the Term Commencement Date for
the  Expansion  Premises, Tenant shall pay the Net Rent (consisting of Base Rent
plus,  when  applicable  in  accordance  with  Section  3.04  below,  Tenant's
Proportionate  Share  of  Basic  Operating  Cost)  in monthly installments on or
before  the  first day of each calendar month during the Term and any extensions
or  renewals  thereof,  in  advance  without  demand  and without any reduction,
abatement,  counterclaim  or  setoff,  in  lawful  money of the United States at
Landlord's  address  specified  on  the Basic Lease Information sheet or at such
other address as may be designated by Landlord in the manner provided for giving
notice  under  Section  9.11  hereof.

          (b) If the Term commences on other than the first day of a month, then
the  Base  Rent  provided  for such partial month shall be prorated based upon a
thirty  (30)-day  month  and the prorated installment shall be paid on the first
day  of  the  calendar month next succeeding the Term Commencement Date together
with the other amounts payable on that day. If the Term terminates on other than
the  last  day  of a calendar month, then the Net Rent provided for such partial
month  shall  be  prorated  based  upon a thirty (30)-day month and the prorated
installment  shall  be  paid on the first day of the calendar month in which the
date  of  termination  occurs.

     3.04.     TENANT'S  PROPORTIONATE  SHARE  OF  BASIC  OPERATING  COST.

          (a) Commencing on the applicable Term Commencement Date and continuing
through  the  remainder  of  the  Term,  Tenant  shall  pay to Landlord Tenant's
Proportionate Share of the Basic Operating Cost attributable to each Computation
Year.

          (b)  During  the first Computation Year, on or before the first day of
each  month  during  such  Computation  Year,  Tenant  shall  pay  to  Landlord
one-twelfth  (1/12th)  of  Landlord's  estimate  of the amount payable by Tenant
under  Section  3.04(a)  as  set  forth  in  Landlord's written notice to Tenant
delivered on or before the Term Commencement Date. During the last month of each
Computation  Year  (or  as  soon thereafter as practicable), Landlord shall give
Tenant  notice  of  Landlord's  estimate  of  the amount payable by Tenant under
Section  3.04(a)  for the following Computation Year. On or before the first day
of  each  month  during  the  following  Computation  Year,  Tenant shall pay to
Landlord  one-twelfth (1/12) of such estimated amount, provided that if Landlord
fails to give such notice in the last month of the prior year, then Tenant shall
continue to pay on the basis of the prior year's estimate until the first day of
the  calendar  month  next succeeding the date such notice is given by Landlord;
and  from  the first day of the calendar month following the date such notice is
given, Tenant's payments shall be adjusted so that the estimated amount for that
Computation  Year  will be fully paid by the end of that Computation Year. If at
any  time  or  times  Landlord  determines that the amount payable under Section
3.04(a)  for  the  current Computation Year will vary from its estimate given to
Tenant,  Landlord,  by  not  less  than  thirty (30) days' notice to Tenant, may
revise its estimate for such Computation Year, and subsequent payments by Tenant
for  such  Computation  Year  shall  be  based  upon  such  revised  estimate.

          (c) Within sixty (60) days following the end of each Computation Year,
Landlord  shall  deliver  to Tenant a statement of amounts payable under Section
3.04(a)  for  such  Computation  Year  prepared  by  Landlord's  agent.  If such
statement  shows  an  amount  owing by Tenant that is less than the payments for
such  Computation  Year  previously  made  by Tenant, Landlord shall credit such
amount  to the next payment(s) of Net Rent falling due under this

                                        7
<PAGE>
Lease.  If  such statement shows an amount owing by Tenant that is more than the
estimated  payments  for such Computation Year previously made by Tenant, Tenant
shall  pay  the deficiency to Landlord within thirty (30) days after delivery of
such  statement.  If,  within  one  (1)  year  of Tenant's receipt of Landlord's
statement,  Tenant  notifies  Landlord  that  Tenant  desires to audit or review
Landlord's  statement, Landlord shall cooperate with Tenant to permit such audit
or review during normal business hours. Landlord shall make available in the San
Francisco  Bay  Area  at  Landlord's,  or  at  Landlord's election at Landlord's
property  manager's  place of business, such books and records as are reasonably
necessary for Tenant to conduct and complete such audit, which books and records
shall  be  prepared  and  maintained  in  accordance  with  generally  accepted
accounting principles applied on a consistent basis. Tenant shall have the right
to  make  copies  of  such  books and records at Tenant's sole cost and expense.
Tenant  shall  bear  all other costs and expenses associated with Tenant's audit
(including  fees  of  Tenant's  auditor)  except as otherwise provided below. If
Tenant conducts a review (rather than an audit as described below) of Landlord's
books  and  records,  Tenant  may thereafter cause the same to be audited at any
time  within  thirty  (30) days of completion of such review; provided, however,
that  Tenant  must  notify  Landlord of its desire to audit Landlord's statement
within  ninety (90) days of Tenant's receipt of Landlord's statement. Within ten
(10)  business  days  of completion of any audit, if Tenant desires to challenge
Landlord's statement, then Tenant shall provide Landlord with a copy of Tenant's
auditor's  report.  Within  thirty  (30)  days of Landlord's receipt of Tenant's
auditor's  report, Landlord shall notify Tenant as to whether Landlord agrees or
disagrees  with the conclusions reached in Tenant's auditor's report. Landlord's
failure  to  respond  shall  be  deemed  to  constitute  a disagreement with the
Tenant's  auditor's  report.  After Landlord's notice, Landlord and Tenant shall
endeavor  to  resolve  any disagreements regarding Tenant's auditor's report. In
the  event  such  audit  reveals  a  discrepancy in Tenant's favor, and Landlord
agrees  with the conclusions of Tenant's auditor, then Landlord shall credit the
amount  of such discrepancy to the next payment(s) of Net Rent falling due under
this  Lease,  and  if  such  discrepancy exceeds five percent (5%) of the amount
property  payable  by  Tenant  for  the  Computation  Year covered by the audit,
Landlord  also  shall  pay  all reasonable costs of the audit. In the event such
audit  reveals a discrepancy in Landlord's favor, Tenant shall pay the amount of
the  discrepancy  to Landlord within ten (10) business days of completion of the
audit.  Any  such  audit  may  only  be  conducted  by an independent locally or
nationally recognized accounting firm or a locally or nationally recognized real
estate  management or consulting firm that is not being compensated by Tenant on
a  contingency  fee  basis. The failure of Tenant to notify Landlord that Tenant
desires an audit within one (1) year of Tenant's receipt of Landlord's statement
under  this  Section  3.04(c)  shall  constitute  an  acceptance  by  Tenant  of
Landlord's  statement  and  a  waiver  by  Tenant of its right to audit for such
Computation  Year.  If Tenant commences an audit in accordance with this Section
3.04(c),  then  such  audit  and the Tenant's auditor's report must be completed
within forty-five (45) days of Tenant's notice to Landlord of Tenant's desire to
audit.  Failure  of Tenant to complete the audit within such forty-five (45) day
period shall constitute an acceptance by Tenant of Landlord's statement for such
Computation  Year.  The respective obligations of Landlord and Tenant under this
Section  3.04(c)  shall  survive  the  Term  Expiration  Date,  and, if the Term
Expiration  Date  is  a  day  other than the last day of a Computation Year, the
adjustment  in  Tenant's Proportionate Share of Basic Operating Cost pursuant to
this  Section 3.04(c) for the Computation Year in which the Term Expiration Date
occurs  shall  be  prorated  in  the  proportion that the number of days in such
Computation  Year  preceding  the  Term  Expiration  Date bears to three hundred
sixty-five  (365).

                                        8
<PAGE>
          (d) Landlord shall have the same remedies for a default in the payment
of  Tenant's Proportionate Share of Basic Operating Cost as for a default in the
payment  of Base Rent. If any review or audit conducted by another tenant of the
Project  reveals  an overcharge which also is applicable to Tenant, then without
regard  to  whether  Tenant has exercised its review and audit rights hereunder,
Landlord  shall  promptly notify Tenant of the discrepancy and credit the excess
amount  against  the  next  payment(s)  of  Net Rent. In the event that Landlord
modifies  any  statement  of  Basic Operating Costs for a particular Computation
Year  after  Tenant's  review  and  audit  rights for such Computation Year have
lapsed,  Tenant's  review  and  audit  rights  shall  be reinstated for the time
periods  and  upon  the  terms  set  forth  in  Section  3.04(c).

          (e)  If  the  parties  cannot  agree  on the results of Tenant's audit
within  sixty  (60)  days  following  delivery  of  Tenant's auditor's report to
Landlord, then either party may commence arbitration with respect to the matters
disputed  in Tenant's audit by notice to the other party ("Arbitration Notice").
The failure of Tenant to provide an Arbitration Notice within one hundred twenty
(120)  days  of  Tenant's  delivery of the Tenant's auditor's report to Landlord
shall  constitute  a  waiver  by Tenant of its right to arbitrate hereunder, and
except  for  such  adjustments  as  have  been agreed to by Landlord, Landlord's
statement  provided  under  Section  3.04(c)  shall be conclusive and binding to
Tenant.  Within  thirty (30) days of the Arbitration Notice, Landlord and Tenant
shall jointly select an arbitrator, who shall be unaffiliated in any manner with
either  Landlord  or  Tenant  and  shall have been active over the five (5) year
period  ending  on  the  date  of  such appointment in the leasing of comparable
commercial  properties  in  the  vicinity  of the Building. Neither Landlord nor
Tenant  shall  consult  with  such arbitrator as to his or her opinion as to the
disputed  matters  prior  to  the  appointment.  The  deter-mina-tion  of  the
arbitra-tor  shall  be  limited  solely  to  issues raised by Tenant's auditor's
report  or  by Landlord's response to Tenant's auditor's report. Such arbitrator
may  hold hearings and require such briefs as the arbitrator, in his or her sole
discretion,  determines is necessary. In addition, Landlord or Tenant may submit
to  the  arbitrator with a copy to the other party within five (5) business days
after  the  appoint-ment  of the arbitrator any data and additional informa-tion
that  such  party  deems relevant to the determination by the arbitrator and the
other  party  may  submit a reply in writing within five (5) business days after
receipt  of  such  data and additional information. The arbitrator shall conduct
such  evidentiary hearings as the arbitrator deems necessary or appropriate, and
shall  conduct  such  arbitration in accordance with the commercial rules of the
American  Arbitration  Association,  insofar  as  the  same  are  not  expressly
inconsistent  with  the  provisions  of  this  Section  3.04(e).

                (1)  The arbitrator shall, within thirty (30) days of his or her
            appointment, reach a decision as to the disputed matters in Tenant's
            auditor's  report,  and  shall  notify  Landlord  and Tenant of such
            determination.

                (2)  The  decision  of  the  arbitrator  shall  be  binding upon
            Landlord  and  Tenant.

                (3)  If  Landlord and Tenant fail to agree upon and appoint such
            arbitrator, then the appointment of the arbi-trator shall be made by
            the  American  Arbitration  Association.

                                        9
<PAGE>
                (4)  If  Landlord  and  Tenant  fail to agree upon other matters
            relating  to  the  arbitration,  then  the  rules  of  the  American
            Arbitration  Association  shall  govern  such  arbitration.

                (5)  The  cost of arbitration shall be paid by the substantially
            unsuccessful party. As used herein, Landlord shall only be deemed to
            be  the  substantially  unsuccessful  party  if  the  discrepancy in
            Tenant's  favor  is  greater  then  five  percent  (5%)  of Tenant's
            Proportionate  Share  of Basic Operating Cost paid by Tenant for the
            Computation  Year  being  audited.

                (6)  The  arbitration  proceeding  and  all  evidence  given  or
            discovered pursuant thereto shall be maintained in confidence by all
            parties.

                (7)  Judgment  upon  the award rendered by the arbitrator may be
            entered  by  either  party  into  any  court having jurisdiction, or
            application  may be made to such court for a judicial recognition of
            the  award  or  an order of enforcement thereof, as the case may be.

     3.05.     BASIC  OPERATING  COST.

          (a)  Basic  Operating  Cost shall mean all commercially reasonable and
necessary expenses and costs (but not specific costs which are separately billed
to  and paid by particular tenants of the Project ) as determined by Landlord in
its  reasonable  opinion  of  every  kind and nature which Landlord shall pay or
become  obligated  to  pay  because  of  or  in  connection with the management,
ownership,  maintenance,  repair,  preservation and operation of the Project and
its  supporting  facilities  directly  servicing  the  Project  (determined  in
accordance  with generally accepted accounting principles, consistently applied)
including,  but  not  limited  to,  the  following:

                (1)  Wages,  salaries  and  related expenses and benefits of all
            on-site  and  off-site  employees  and  personnel  engaged  in  the
            operation,  maintenance,  repair and security of the Project, to the
            extent  such  charges are directly allocable to services rendered by
            the  employees  and  personnel  for  the  benefit  of  the  Project.

                (2)  Costs  of  Landlord's  office  (or of a property management
            office if Landlord is not the property manager) and office operation
            in  the  Project  (provided,  however,  if  such  office is used for
            business activities other than Project management, only a reasonable
            allocation of such cost may be included in Basic Operating Cost), as
            well  as  the  costs  of  operation  of  a  room  for  delivery  and
            distribution  of  mail  to  tenants  of  the  Building.

                (3) All supplies, materials, equipment and equipment rental used
            in  the  operation,  maintenance,  repair  and  preservation  of the
            Project.

                (4)  Utilities,  including  water,  sewer  and power, telephone,
            communication  and  cable  television facilities, lighting, heating,
            air  conditioning  and  ventilating  the  entire  Project; provided,
            however that the Leased Premises

                                       10
<PAGE>
            shall  be  (A)  separately metered for lights and convenience power,
            and (B) separately metered using Landlord's energy management system
            for  the  Project  for  air  conditioning  and  ventilation.

                (5)  All  maintenance, janitorial and service agreements for the
            Project  and  the  equipment therein, including, without limitation,
            alarm  and/or  security  service,  window  cleaning,  elevator
            maintenance,  sidewalks,  landscaping, Building exterior and service
            areas; provided, however, that Tenant shall have the right to employ
            its  own janitor to clean the Leased Premises, in which event Tenant
            shall  not  be  charged  by  Landlord for janitorial services to the
            Leased  Premises  but  Tenant  shall  be responsible for its prorata
            share  of  janitorial  services  to  the  Common  Areas.

                (6)  A  management  cost recovery in an amount not to exceed the
            lesser  of  four percent (4%) of all Rent (excluding such management
            cost  recovery) derived from the Project or the actual costs charged
            by  the  property  manager.

                (7)  Day-to-day  ordinary  and  reasonable  legal and accounting
            services incurred to the extent attributable to the normal operation
            of  the  Project,  excluding  those  expenses  incurred  in  lease
            negotiations,  termination  of  leases, extension of leases or legal
            costs  incurred  in  proceedings  by or against any specific tenant.

                (8) All insurance costs, including, but not limited to, the cost
            of  all  risk  property and liability coverage and rental income and
            earthquake  insurance  applicable  to  the  Project  and  Landlord's
            personal  property  used  in  connection  therewith,  as  well  as
            commercially  reasonable  deductible  amounts  applicable  to  such
            insurance;  provided,  however,  that Landlord may, but shall not be
            obligated  to,  carry  earthquake  insurance.

                (9)  Repairs,  replacements  and general maintenance (except for
            repairs  paid by proceeds of insurance or by Tenant or other tenants
            of the Project or third parties, and alterations attributable solely
            to  tenants  of  the  Project  other  than  Tenant).

                (10)  All  real  estate  or  personal property taxes, possessory
            interest  taxes, business or license taxes or fees, service payments
            in  lieu  of  such  taxes or fees, annual or periodic license or use
            fees, excises, transit charges, housing fund assessments, open space
            charges,  assessments,  bonds,  levies, fees or charges, general and
            special, ordinary and extraordinary, unforeseen as well as foreseen,
            of  any  kind  which  are  assessed,  levied,  charged, confirmed or
            imposed  by any public authority upon the Project (or any portion or
            component  thereof),  its  operations,  this  Lease, or the Rent due
            hereunder  (or  any  portion  or  component  thereof),  except:  (i)
            inheritance  or  estate  taxes  imposed upon or assessed against the
            Project,  or  any  part  thereof  or  interest  therein,  and  (ii)
            Landlord's personal or corporate income, gift, franchise or transfer
            taxes.

                                       11
<PAGE>
                (11)  Amortization  in  accordance  with  generally  accepted
            accounting  principles,  consistently  applied  (together  with
            reasonable  financing  charges)  of capital improvements made to the
            Project  subsequent  to  the applicable Term Commencement Date which
            are  designed  to  improve  the  operating efficiency of the Project
            (provided that the amortized amount shall not exceed the anticipated
            cost  savings), or which may be required by governmental authorities
            pursuant  to  laws not in effect on the applicable Term Commencement
            Date,  including those improvements required for energy conservation
            and  for  the  benefit  of  individuals  with  disabilities  ("ADA
            Improvements")  or  for  energy  conservation.

          (b)  With  respect  to  subsection  3.05(a)(11)  above, to the best of
Landlord's  knowledge,  the  Project  is  in  compliance with the Americans with
Disabilities  Act  and  state  law  applicable  to  access  by  disabled persons
(collectively,  "ADA").  ADA  Improvements, as defined in subsection 3.05(a)(11)
above,  includes  ADA  compliance  work  in  any part of the Project required by
governmental  authorities  due to changes in law, rules or regulations after the
date  of  this  Lease.  ADA  Improvements,  for  the  purposes  of  subsection
3.05(a)(11),  shall not include any ADA compliance work in other tenant's spaces
in  the  Project which is triggered by virtue of tenant improvement work in such
space.  Tenant  shall  not  be  responsible for the cost of improvements for ADA
compliance  work  triggered  by multi-tenanting of the Building. Tenant shall be
responsible  for  one  hundred percent (100%) of the cost of ADA compliance work
triggered by the Tenant Improvements (or any subsequent alterations or additions
made by Tenant). Tenant shall promptly reimburse Landlord for any costs incurred
by  Landlord with respect thereto. If not otherwise paid for by Tenant, Landlord
shall  be entitled to deduct from Landlord's Contribution any amount incurred by
Landlord  with  respect  to  ADA  compliance  work  triggered  by  the  Tenant
Improvements.  Notwithstanding  the  foregoing, Landlord and not Tenant shall be
responsible for ADA compliance work exterior to the Leased Premises triggered by
the  Tenant  Improvements  which  Landlord  was  obligated to comply with on the
applicable  Term  Commencement  Date.

          (c)  In  the  event any of the Basic Operating Costs are not allocable
solely  to  the  Building or are not provided on a uniform basis, Landlord shall
make  an  appropriate  and  equitable  adjustment,  in  Landlord's  commercially
reasonable judgment, to the relevant cost allocations to the Building and Tenant
shall pay its proportionate share of such Basic Operating Costs allocable solely
to  the  Building and 100% of such Basic Operating Costs allocable solely to the
Leased  Premises.

          (d) Notwithstanding any other provision of this Lease to the contrary,
in the event that the Project is not fully occupied during any year of the Term,
an  adjustment  shall be made in computing Basic Operating Cost for such year so
that  Basic  Operating Cost shall be computed as though the Project had been 95%
occupied  during  such  year. EXHIBIT F to this Lease sets forth Landlord's good
                              ---------
faith,  itemized  estimate  of  the  Basic  Operating  Costs  for  the Building.

          (e)  The following items shall be excluded from Basic Operating Costs:
(i)  deprecia-tion  on  the  Building  and the Project; (ii) debt service; (iii)
rental  under  any ground or underlying lease; (iv) attorneys' fees and expenses
incurred  in connection with lease negotiations with prospective Project tenants
or alleged defaults with other Project tenants; (v) the cost of any

                                       12
<PAGE>
improvements  or  equipment  which  would  be  properly  classified  as  capital
expenditures  (except  for  any  capital  expenditures  expressly  included  in
subsection 3.05(a)(11)); the cost of decorating, improving for tenant occupancy,
painting  or  redeco-rating portions of the Building or Project to be demised to
tenants;  (vii)  advertising  expenses  relating to vacant space; or (viii) real
estate  brokers'  or  other leasing commissions. Notwithstanding anything to the
contrary  in  this  Lease,  "Basic Operating Costs" shall not include and Tenant
shall  in  no  event  have  any  obligation to perform or to pay directly, or to
reimburse  Landlord  for,  all  or  any  portion  of  the  following  repairs,
maintenance,  improvements,  replacements,  premiums,  claims,  losses,  fees,
charges, costs and expenses (collectively, "Costs"): (a) Costs occasioned by the
act,  omission  or  violation  of any law by Landlord, any other occupant of the
Project,  or  their  respective  agents,  employees  or  contractors;  (b) Costs
occasioned  by casualties or by the exercise of the power of eminent domain; (c)
Costs  to  correct  any construction defect in the Project or to comply with any
covenant, condition, restriction, underwriter's requirement or law applicable to
the  Project  on  the  Term  Commencement  Date;  (d)  Costs  of any renovation,
improvement,  painting  or  redecorating  of any portion of the Project not made
available for Tenant's use; (e) earthquake insurance to the extent such premiums
are not commercially reasonable and insurance Costs for coverage not customarily
paid  by  tenants  of  similar  projects in the vicinity of the Leased Premises,
increases in insurance Costs caused by the activities of another occupant of the
Project,  insurance  deductibles in excess of $10,000 per year, and co-insurance
payments;  (f)  Costs  incurred in connection with the presence of any Hazardous
Material,  except  to  the  extent  caused  by  the  release  or emission of the
Hazardous  Material in question by Tenant, its agents, employees, contractors or
invitees;  (g) expense reserves; (h) Costs of structural repairs to the Project;
(i)  Cost which could reasonably be allocated to other buildings in the Project;
and  (j)  any  tax  or  assessment expense or any increase therein (i) levied on
Landlord's  rental  income,  unless such tax or assessment expense is imposed in
lieu of real property taxes; (ii) in excess of the amount which would be payable
if  such  tax  or  assessment expense were paid in installments over the longest
permitted  term;  or  (iii)  attributable  to  Landlord's inheritance, transfer,
estate  or  state  taxes.

                                   ARTICLE 4.
                              LANDLORD'S COVENANTS

     4.01.     BASIC SERVICES.  Landlord shall operate the Project to a standard
of  quality  consistent  with that of other similar-class office projects in the
Emeryville  office  market,  and, subject to Tenant's obligation to pay Tenant's
Proportionate  Share  of  Basic  Operating  Cost,  Landlord  shall:

          (a)  Administer  improvement of the Leased Premises in accordance with
      EXHIBIT  B  (if  any).
      ----------

          (b)  Furnish  Tenant  during Tenant's occupancy of the Leased Premises
      the  following  basic  services:

                (1)  Hot  and  cold water at those points of supply provided for
          general  use  of  other  tenants  in the Project; central heat and air
          conditioning  in season, during the Building hours of operation (which
          shall  be  specified  in  the  rules  and  regulations for the Project
          adopted  pursuant  to  Section 5.17, but in any case shall be not less
          than  7:00  a.m.  to  6:00  p.m.  weekdays  and 8:00 a.m. to 1:00 p.m.

                                       13
<PAGE>
          Saturdays,  excluding public holidays) and at such temperatures and in
          such amounts as are considered reasonably required for the comfortable
          use and occupancy of the Leased Premises (which shall not be less than
          65  degrees Fahrenheit or greater than 76 degrees Fahrenheit, provided
          that  the  outdoor  temperature  is  not  greater  than  95  degrees
          Fahrenheit)  or,  in  all events, as may be permitted or controlled by
          applicable  laws,  ordinances,  rules  and  regulations.

                (2)  Structural  and  exterior  maintenance  (including exterior
          glass  and  glazing)  and  routine  maintenance,  repairs and electric
          lighting service for all public areas and service areas of the Project
          in  the  manner  and to the extent reasonably deemed by Landlord to be
          standard.

                (3)  Janitorial  service to both the Common Areas and the Leased
          Premises  on  a  five  (5)  day  per  week  basis, excluding holidays.

                (4) Electric lighting service throughout the Leased Premises and
          electrical  facilities  to  provide sufficient power for standard size
          personal  computers, network servers and equipment comparable thereto,
          and  other  standard  office  machines  of  similar  low  electrical
          consumption,  but  not  including  electricity  required  for  special
          lighting  in  excess  of Building Standard Improvements, and any other
          item  of electrical equipment which consumes electricity in amounts in
          excess  of standard office equipment, which standard shall be not less
          than  3  watts  per rentable square foot for convenience power and 1.5
          watts per rentable square foot for lighting, and not more than a total
          of 6 watts per rentable square foot for convenience power and lighting
          combined.  Landlord  makes  no  representation that such power will be
          sufficient to run the Equipment described in Section 2.05(a). Electric
          power within the Leased Premises, except for the HVAC system, shall be
          separately metered at Tenant's expense (or as a cost deducted from the
          Landlord's  Contribution  for Tenant Improvements). Electric power for
          the HVAC system within the Leased Premises shall be separately metered
          to  Tenant through Landlord's energy management system for the Project
          and billed directly to Tenant by Landlord (without profit or mark-up).

                (5)  Building  Standard lamps, bulbs, starters and ballasts used
          in  the  Leased  Premises.

                (6)  Public  and handicap elevator service serving the floors on
          which  the  Leased  Premises  are situated, including freight elevator
          service  when  prearranged  with  Landlord,  subject to such rules and
          regulations  as  Landlord  shall  promulgate  from  time  to  time.

          (c)  Landlord  shall  not  be  liable  for damages to either person or
      property,  nor  shall Landlord be deemed to have evicted Tenant, nor shall
      there  be  any  abatement  of  Rent,  nor  shall  Tenant  be relieved from
      performance  of  any covenant on its part to be performed under this Lease
      by  reason  of any (i) deficiency in the provision of basic services; (ii)
      breakdown  of  equipment  or  machinery utilized in supplying services; or
      (iii)  curtailment or cessation of services due to causes or circumstances
      beyond  the

                                       14
<PAGE>
      reasonable  control  of Landlord or by the making of the necessary repairs
      or  improvements,  unless  such  deficiency,  breakdown,  curtailment  or
      cessation  is  due to the active gross negligence or willful misconduct of
      Landlord;  provided,  however,  there shall be an abatement of Net Rent in
      the  event  and  to  the  extent  that there is a material diminishment in
      Tenant's  ability  to  conduct  its  business  at the Leased Premises as a
      result  of  the  presence of any Hazardous Materials which does not result
      from  Tenant's or Tenant's agents', employees', contractors', invitees' or
      licensees'  release  or emission of such Hazardous Material persisting for
      more  than  eleven (11) consecutive days, or as a result of the absence of
      (A)  electrical lighting services and/or electrical facilities or services
      for  more  than  forty-eight  (48)  hours,  or  (B)  water  for  more than
      seventy-two  (72)  hours,  and in the event said interference persists for
      one  hundred  eighty (180) days, Tenant may, at its option, terminate this
      Lease  by  written  notice  to  Landlord.  Landlord  shall  use reasonable
      diligence  to  make  such  repairs  as  may  be  required  to machinery or
      equipment within the Project to provide restoration of services and, where
      the cessation or interruption of service has occurred due to circumstances
      or conditions beyond Project boundaries, to cause the same to be restored,
      by  diligent  application  or request to the provider thereof. In no event
      shall any mortgagee or the beneficiary under any deed of trust referred to
      in Section 5.12 be or become liable for any default of Landlord under this
      Section  4.01(c).

     4.02.     EXTRA  SERVICES.  Landlord  shall  provide  to Tenant at Tenant's
sole cost and expense (and subject to the limitations hereinafter set forth) the
following  extra  services:

          (a)  If  Tenant  does not elect to provide its own janitorial services
      for  the  Leased  Premises,  such  extra  cleaning and janitorial services
      required  if Tenant Improvements necessitate extra cleaning efforts or are
      not consistent in quality and quantity with Building Standard Improvements
      (provided,  however,  that Landlord has notified Tenant in connection with
      approvals  of  Tenant's  plans  and  specifications  under  EXHIBIT B that
      Landlord's  approval  is  conditioned upon the application of this Section
      4.02(a));

          (b)  Additional  air conditioning and ventilating capacity required by
      reason  of  any electrical, data processing or other equipment, facilities
      or  services  required  to  support  the  same,  in  excess of the amounts
      provided  for in Section 4.01(b)(4) above, when prearranged with Landlord;

          (c) Heating, ventilation, air conditioning or extra electrical service
      provided  by  Landlord  to Tenant (i) during hours other than the Building
      hours  of operation specified in the rules and regulations for the Project
      adopted  pursuant  to Section 5.17, which shall provide for Building hours
      of  operation  of  not  less  than  7:00 A.M. to 6:00 P.M., Monday through
      Friday  (excluding  holidays) and from 8:00 A.M. to 1:00 P.M. on Saturday,
      or  (ii)  on  Saturdays  after  1:00  P.M., Sundays, or holidays, all said
      heating,  ventilation  and air conditioning or extra electrical service to
      be  furnished  pursuant  to  such uniform procedures as may be established
      from  time  to  time by Landlord for the Building; provided, however, that
      because  Tenant  will be billed by Landlord for Tenant's actual use of the
      air  conditioning  system  within the Leased Premises, the only additional
      charge  for  air  conditioning under this Section 4.02(c) (i.e. other than
      the  additional  direct

                                       15
<PAGE>
      charges  for  actual  use)  shall  be the five percent (5%) management fee
      referenced  in the last sentence of this Section 4.02 which is intended to
      compensate  Landlord  for  use of the air conditioning system during hours
      other  than  the  Building hours of operation and shall be applied against
      the  additional  direct  charges  for  actual  use.

          (d)  Maintaining  and  replacing  non-Building  Standard lamps, bulbs,
      starters and ballasts (whether or not the light fixtures were installed by
      Landlord  as  part  of  the  Tenant  Improvements);

          (e)  Repair  and maintenance service which is the obligation of Tenant
      under  this Lease, where either Tenant requests that the same be performed
      by  Landlord  or  where  Tenant  has failed to perform its obligation in a
      timely  manner;

          (f)  Repair, maintenance or janitorial service to the Leased Premises,
      the Common Areas or the Project parking area which is required as a result
      of  the  acts  or omissions of Tenant, its agents, employees, contractors,
      invitees  or  licensees;  and

          (g)  Any basic service in amounts determined by Landlord to exceed the
      amounts  required  to  be  provided  under  Section  4.01(b),  but only if
      Landlord  elects  to  provide  such  additional  or  excess  service.

          For  the  purposes  of this Section 4.02, if, in Landlord's reasonable
opinion,  Tenant's use of electrical and/or water service at the Leased Premises
is excessive, Landlord may install a separate meter(s) at the Leased Premises to
measure  the  amount  of  electricity  and/or  water consumed by Tenant therein;
provided,  however,  that  Tenant's  use  of  electrical  services  shall not be
excessive  if  it  does  not  exceed  the  total  amount provided for in Section
4.01(b)(4).  The cost of such installation and of such excess electricity and/or
water (at the rates charged for such services by the local public utility) shall
be  paid  by  Tenant  to  Landlord  upon  receipt  by Tenant of a bill therefor.

          The  cost chargeable to Tenant for all extra services shall constitute
Additional  Rent  and shall include a management fee payable to Landlord of five
percent  (5%).  Additional  Rent  shall  be  paid  monthly by Tenant to Landlord
concurrently  with  the  payment  of  Base  Rent.

     4.03.     WINDOW  COVERINGS.  All  window coverings for the Leased Premises
shall  be  provided by Landlord as Building Standard Improvements.  Tenant shall
not  place  or  maintain any window coverings, blinds, curtains or drapes on any
exterior  window without Landlord's prior written approval, which Landlord shall
have  the  right  to  grant  or  withhold  in  its absolute and sole discretion.

     4.04.     GRAPHICS  AND  SIGNAGE.  Landlord shall provide identification of
Tenant's  name  and  suite  numerals (i) on a building directory in the Building
lobby  and  (ii)  at  the  main  entrance door to the Leased Premises.  Landlord
reserves  the right to exclude any other names from the building directory.  All
signs,  notices, advertisements and graphics of every kind or character, visible
in  or  from  the  Common  Areas or the exterior of the Leased Premises shall be
subject  to  Landlord's  prior  written  approval, which Landlord shall have the
right  to  withhold  in  its absolute and sole discretion.  Landlord may remove,
without  notice to and at the expense of Tenant, any

                                       16
<PAGE>
sign,  notice,  advertisement  or  graphic  of  any kind inscribed, displayed or
affixed  in violation of the foregoing requirement. All approved signs, notices,
advertisements  or  graphics  shall be printed, affixed or inscribed at Tenant's
expense  by  a person selected by Landlord. Landlord shall be entitled to revise
the Project graphics and signage standards at any time at Tenant's sole cost and
expense;  provided,  however,  after  the  initial  such  revision,  any further
revision  shall  be  at  Landlord's  sole  cost and expense. Notwithstanding the
foregoing,  Tenant  shall  have  exterior signage on the southeast corner of the
East-Hi-Bay  of  the Building and on the West-Hi-Bay of the Building (facing the
railroad  tracks)  subject  to Landlord's reasonable approval (which may require
that  such signage is commensurate with Tenant's proportionate share of space in
the  Project)  and  any  government  approvals.  Such  signage  may be of a size
comparable  to  the  artist  renderings  of the Building in the Project brochure
furnished  to  Tenant.  Tenant shall be responsible for the cost of any exterior
signage.

     4.05.     TENANT EXTRA IMPROVEMENTS. All Tenant Extra Improvements (if any)
shall  be  installed at Tenant's cost, such installation to be made and paid for
pursuant  to  the  provisions  of EXHIBIT B and EXHIBIT G.  For purposes hereof,
                                  ---------     ---------
"costs"  shall  include, without limitation, all building permit fees for Tenant
Extra Improvements (not already included in the permit fees paid with respect to
the  Landlord's  or  Tenant Improvements); payments to architects, engineers and
other  design  consultants  for  services and disbursements; and such reasonable
inspection  fees as Landlord may incur.  Landlord shall not seek the benefits of
depreciation  deductions  or  income  tax credit allowances for federal or state
income  tax reporting purposes with respect to any Tenant Extra Improvements for
which  Tenant  has  fully  reimbursed  Landlord  under  this  Section  4.05.

     4.06.     REPAIR OBLIGATION.  Subject to Tenant's obligations under Section
3.04 to pay Tenant's Proportionate Share of Basic Operating Cost, Landlord shall
maintain  and  repair,  in a manner consistent with the Comparable Buildings (as
defined  in  Section  8.01(a)(2)),  all elements of the Project that are not the
express  obligation of Tenant or other tenants of the Project, including without
limitation: (i) the structural portions of the Building; (ii) the exterior walls
of the Building, including exterior glass and glazing; (iii) the roof (including
both  membrane  and structure); (iv) all mechanical (including the HVAC system),
electrical,  plumbing  and  life  safety systems; (v) the Common Areas; (vi) the
Project  parking  area;  and (vii) landscaped areas (if any).  However, Landlord
shall  not  have  any  obligation to repair damage caused by Tenant, its agents,
employees,  contractors,  invitees or licensees.  Landlord shall have the right,
but  not the obligation, to undertake work of repair which Tenant is required to
perform under this Lease and which Tenant defaults in its obligation to perform.
Tenant  shall  reimburse Landlord upon demand, as Additional Rent, for all costs
reasonably  incurred  by  Landlord in performing any such repair for the account
of  Tenant,  together with an amount equal to five percent (5%) of such costs to
reimburse  Landlord  for  its  administration  and managerial effort.  Except as
specifically  set  forth  in  this  Lease,  Landlord  shall  have  no obligation
whatsoever  to  maintain or repair the Leased Premises.  The parties intend that
the  terms  of  this  Lease  govern  their  respective  maintenance  and  repair
obligations.  Tenant  expressly  waives  the  benefit  of  any  statute  now  or
hereafter  in  effect  to  the  extent it is inconsistent with the terms of this
Lease with respect to such obligations or which affords Tenant the right to make
repairs  at  the  expense  of  Landlord or terminate this Lease by reason of the
condition  of  the  Leased  Premises  or  any  needed repairs.    Landlord shall
perform  and  construct,  and  Tenant shall have no responsibility to perform or

                                       17
<PAGE>
construct,  any repair, maintenance or improvements (a) necessitated by the acts
or  omissions  of  Landlord  or  any  other  occupant  of the Building, or their
respective  agents, employees or contractors, (b) for which Landlord has a right
of  reimbursement  from  others,  and  (c)  which could be treated as a "capital
expenditure"  under  generally  accepted accounting principles.  Notwithstanding
the  foregoing,  Tenant  shall  pay  for  its  share of the repairs described in
subsection (c) to the extent such costs are properly included in Basic Operating
Costs.

     4.07.     PEACEFUL  ENJOYMENT.  Landlord  covenants  with  Tenant that upon
Tenant  paying  the  Rent  and  all  other charges required under this Lease and
performing  all  of  Tenant's  covenants  and agreements herein contained within
applicable notice and cure periods, Tenant shall peacefully have, hold and enjoy
the Leased Premises subject to all of the terms of this Lease and to any deed of
trust, mortgage or other agreement to which this Lease may be subordinate.  This
covenant  and  the  other covenants of Landlord contained in this Lease shall be
binding upon Landlord and its successors only with respect to breaches occurring
during  its  or  their  respective  ownerships of Landlord's interest hereunder.

                                   ARTICLE 5.
                               TENANT'S COVENANTS

     5.01.     PAYMENTS  BY  TENANT.  Tenant  shall pay Rent at the times and in
the  manner provided in this Lease.  All obligations of Tenant hereunder to make
payments  to Landlord shall constitute Rent and failure to pay the same when due
shall  give  rise  to  the rights and remedies provided for in Section 7.08.  If
there  is  more  than  one Tenant, the obligations imposed under this Lease upon
Tenant  shall  be  joint  and  several.

     5.02.     TENANT  IMPROVEMENTS.  The  Tenant  Improvements for the Existing
Premises  shall  be installed and constructed by Landlord pursuant to EXHIBIT B.
                                                                      ---------
The  Tenant  Improvements  for  the  Expansion  Premises  shall be installed and
constructed  by  Tenant pursuant to EXHIBIT G.  All Landlord's Work shall become
                                    ---------
the  property of Landlord upon installation and shall be surrendered to Landlord
without  compensation  to Tenant upon termination of this Lease by lapse of time
or  otherwise.  All  Tenant Extra Improvements permanently installed pursuant to
Section  4.05  (if  any) shall become the property of Landlord upon installation
and  shall  be  surrendered  to  Landlord  without  compensation  to Tenant upon
termination  of  this  Lease  by  lapse  of  time  or  otherwise.

     5.03.     TAXES  ON  PERSONAL  PROPERTY  AND TENANT EXTRA IMPROVEMENTS.  In
addition  to, and wholly apart from its obligation to pay Tenant's Proportionate
Share  of  Basic Operating Costs, Tenant shall be responsible for, and shall pay
prior  to  delinquency,  all  taxes  or  governmental  service  fees, possessory
interest  taxes,  fees or charges in lieu of any such taxes, capital levies, and
any  other  charges  imposed  upon,  levied with respect to, or assessed against
Tenant's  personal  property,  on the value of its Tenant Extra Improvements (if
any)  and  on  its interest pursuant to this Lease.  To the extent that any such
taxes  are  not  separately  assessed  or billed to Tenant, Tenant shall pay the
amount  thereof  as  invoiced  to Tenant by Landlord.   In no event shall Tenant
have  to pay any portion of taxes, capital levies, and any other charges imposed
upon,  levied  with respect to, or assessed against the personal property or the
improvements  of  other  tenants  in  the  Project.

                                       18
<PAGE>
     5.04.     REPAIRS  BY  TENANT.  Subject  to  Section  4.06, Tenant shall be
obligated  to  maintain  and repair the Leased Premises, to keep the same at all
times  in good order, condition and repair, and, upon expiration of the Term, to
surrender  the  same to Landlord in the same condition as on the applicable Term
Commencement  Date  for  the Existing Premises or the Expansion Premises, as the
case  may  be,  reasonable  wear  and  tear,  the Tenant Improvements, taking by
condemnation,  and  damage that is Landlord's responsibility under Section 7.07.
Tenant's  obligations  shall  include,  without  limitation,  the  obligation to
maintain  and  repair all walls, floors, ceilings and fixtures and to repair all
damage caused by Tenant, its agents, employees, contractors, invitees and others
using the Leased Premises with Tenant's expressed or implied permission.  At the
request  of  Tenant,  Landlord  shall perform the work of maintenance and repair
constituting  Tenant's  obligation under this Section 5.04 at Tenant's sole cost
and  expense and as an extra service to be rendered pursuant to Section 4.02(e).
Any  work of repair and maintenance performed by or for the account of Tenant by
persons  other  than  Landlord  shall  be  performed  by contractors approved by
Landlord,  which  approval shall not be unreasonably withheld, and in accordance
with  procedures  Landlord shall from time to time establish.  Tenant shall give
Landlord  prompt  notice  of any damage to or defective condition in any part of
the  Building's  mechanical,  electrical,  plumbing, life safety or other system
servicing, located in or passing through the Leased Premises of which Tenant has
actual  notice.

     5.05.     WASTE.  Tenant  shall  not commit or allow its agents, employees,
contractors,  invitees or licensees to commit any waste or damage in any portion
of  the  Leased  Premises  or  the  Project.

     5.06.     ASSIGNMENT  OR  SUBLEASE.

          (a)  Tenant  shall  not  voluntarily  or  by  operation of law assign,
transfer  or  encumber  (collectively  "Assign")  or  sublet  all or any part of
Tenant's  interest  in  this  Lease or in the Leased Premises without Landlord's
prior written consent given under and subject to the terms of this Section 5.06.
Notwithstanding  anything  to the contrary contained in this Lease, Landlord and
Tenant  agree  as  follows,  Tenant  may  assign this Lease or sublet the Leased
Premises,  or  any portion thereof, without Landlord's consent and without being
subjected  to  Section  5.06(c)  or  (e) below (but with prior written notice to
Landlord  as discussed below): (i) an entity controlling, controlled by or under
common control with Tenant, (ii) a successor entity related to Tenant by merger,
consolidation,  reorganization  or  government  action,  or (iii) a purchaser of
substantially  all  of  Tenant's  assets  located  in  the  Leased  Premises.

          (b)  If  Tenant desires to Assign this Lease or any interest herein or
sublet  the  Leased  Premises  or  any  part thereof, Tenant shall give Landlord
written  notice  of  such  intent.  Tenant's  notice  shall specify the date the
proposed  assignment  or  sublease  would  be  effective  and  be accompanied by
information  pertinent  to  Landlord's  determination  as  to  the financial and
operational  responsibility  and  appropriateness  of  the  proposed assignee or
subtenant,  including,  without  limitation,  its  name,  business and financial
condition,  financial  details  of  the  proposed  transfer,  the  intended  use
(including  any modification) of the Leased Premises, and exact copies of all of
the proposed agreement(s) between Tenant and the proposed assignee or subtenant.
Tenant  shall  promptly  provide  Landlord  with  (i)  such  other or additional
information  or  documents  reasonably  requested  (within  ten  (10) days after
receiving  Tenant's  notice)  by

                                       19
<PAGE>
Landlord, and (ii) an opportunity to meet and interview the proposed assignee or
subtenant,  if  requested  by  Landlord.

          (c)  Landlord  shall have a period of ten (10) business days following
such  interview  and  receipt  of  such  additional information (or fifteen (15)
business  days  from  the  date of Tenant's original notice if Landlord does not
request additional information or an interview) within which to notify Tenant in
writing  that Landlord elects either (i) to terminate this Lease as to the space
so  affected as of the effective date specified by Tenant, in which event Tenant
will  be relieved of all further obligations hereunder as to such space, or (ii)
to permit Tenant to Assign this Lease or sublet such space, subject, however, to
prior  written  approval of the proposed assignee or sublessee by Landlord, such
consent  not  to  be  unreasonably  withheld  so  long  as the use of the Leased
Premises by such proposed assignee or sublessee would be a Permitted Use (unless
otherwise  approved by Landlord), the proposed assignee or sublessee is of sound
financial  condition as determined by Landlord in its reasonable discretion, the
proposed  assignee executes such reasonable assumption documentation as Landlord
shall require, and the proposed assignee or sublessee is not already a tenant in
the  Building.  Notwithstanding  the  foregoing,  if  Landlord elects option (i)
above,  Tenant  may  elect to withdraw Tenant's request to sublet or assign such
portion  of the Leased Premises by written notice to Landlord given on or before
the  date  which is five (5) business days following Landlord's notice to Tenant
of  its  intent  to recapture such space. Upon such notice by Tenant, Landlord's
election  to recapture the subject space in that instance shall be null and void
and  Tenant  shall retain possession of such subject space. If Landlord fails to
notify  Tenant in writing of such election within said period, Landlord shall be
deemed  to have waived option (i) above, but written approval by Landlord of the
proposed  assignee  or sublessee shall still be required. Failure by Landlord to
approve  a  proposed subtenant or assignee shall not cause a termination of this
Lease.

          (d)  In  the event Tenant shall request the consent of Landlord to any
assignment  or  subletting hereunder, Tenant shall pay Landlord a processing fee
of  $250.00  and  shall  reimburse Landlord for Landlord's reasonable attorneys'
fees  incurred in connection therewith not to exceed $1,000. All such fees shall
be  deemed  Additional  Rent  under  this  Lease.

          (e)  Any rent or other consideration realized by Tenant under any such
sublease  or  assignment in excess of the Rent payable hereunder, after recovery
of  the  reasonable  cost of Tenant Extra Improvements for which Tenant has paid
and reasonable subletting and assignment costs, including without limitation any
broker's  commissions,  attorneys' fees and remodeling fees shall be divided and
paid  as  follows:  forty  percent  (40%)  to  Tenant and sixty percent (60%) to
Landlord.

          (f)  In  any event in which Landlord has no right to recapture, Tenant
shall  diligently seek to obtain not less than fair market rent for the space to
sublet.  In  any assignment of this Lease in whole or in part, Tenant shall seek
to  obtain  from  the assignee consideration reflecting a value of not less than
fair  market  rent  for  the  space  subject  to  such  assignment.

          (g)  The consent of Landlord to any assignment or subletting shall not
constitute  a consent to any subsequent assignment or subletting by Tenant or to
any  subsequent  or  successive  assignment  or  subletting  by  the assignee or
subtenant.  However,  Landlord  may  consent  to  subsequent  assignments  and
sublettings  of  the  Lease  or  sublease  or  amendments  or

                                       20
<PAGE>
modifications thereto, without notifying Tenant or any other party liable on the
Lease  or  sublease  and  without obtaining their consent. Such action shall not
relieve  Tenant  or  any  such  other party from liability under this Lease or a
sublease.

          (h)  No assignment or subletting by Tenant shall relieve Tenant of any
obligation under this Lease. In the event of default by an assignee or subtenant
of  Tenant  or  any  successor  of Tenant in the performance of any of the terms
hereof,  Landlord  may  proceed directly against Tenant without the necessity of
exhausting  remedies  against  such  assignee,  subtenant  or  successor.  Any
assignment  or  subletting  which  conflicts with the provisions hereof shall be
void  and,  at  Landlord's  option, shall constitute a default under this Lease.

          (i)  Notwithstanding  any  other provision of this Section 5.06 (other
than  Section  5.06(i)),  Tenant  shall  have the right to sublease up to 15,896
square  feet of space within the Existing Premises for a sublease term that does
not  exceed  the  first  twenty-four (24) months following the Term Commencement
Date  of  the  Existing Premises, and Tenant shall be allowed to keep any excess
rent  derived  from  such  sublease  and  Landlord  shall  not have the right to
recapture  the  subleased  premises  during  such initial twenty-four (24) month
period.  Tenant  shall also have the right to sublease all or any portion of the
Expansion  Premises for a sublease term that does not extend beyond the last day
of  the  eighteenth  (18th)  month  of  the Term for the Expansion Premises, and
Tenant  shall  be allowed to keep any excess rent derived from such sublease and
Landlord  shall  not  have  the right to recapture the subleased premises during
such  initial  eighteen  (18)  month  period.

     5.07.     ALTERATIONS,  ADDITIONS  AND  IMPROVEMENTS.

          (a)  Tenant  shall  not  make  or  allow to be made any alterations or
additions  in  or  to  the  Leased  Premises without first obtaining the written
consent  of Landlord; provided, however, Tenant may, without Landlord's consent,
perform  interior non-structural alterations or additions not involving material
modifications  to  the  Building  and  its mechanical, electrical, HVAC and life
safety  systems so long as (i) for alterations or additions requiring government
permits,  the cost thereof during any calendar year does not exceed Ten Thousand
Dollars  ($10,000.00)  during  any  calendar  year,  or  (ii) for alterations or
additions not requiring government permits, the cost thereof during any calendar
year  does  not  exceed  Forty Thousand Dollars ($40,000.00). Landlord's consent
will  not  be  unreasonably  withheld  with  respect to proposed alterations and
additions  which  (i)  comply  with  all  applicable laws, ordinances, rules and
regulations; (ii) are compatible with and does not adversely affect the Building
and  its  mechanical,  electrical,  HVAC and life safety systems; (iii) will not
affect the structural portions of the Building; (iv) will not interfere with the
use  and occupancy of any other portion of the Building by any other tenant, its
employees  or  invitees;  and  (v)  will  not  trigger  any  additional costs to
Landlord.  Specifically,  but  without limiting the generality of the foregoing,
Landlord's  right  of  consent  shall encompass plans and specifications for the
proposed  alterations or additions, construction means and methods, the identity
of  any contractor or subcontractor to be employed on the work of alterations or
additions,  and  the  time  for performance of such work. Tenant shall supply to
Landlord  any  additional  documents  and  information  requested by Landlord in
connection with Tenant's request for consent hereunder. Notwithstanding anything
to  the  contrary contained in the paragraph, in connection with any request for
consent hereunder, Tenant may request that Landlord advise Tenant whether or not
Landlord  will  require Tenant to

                                       21
<PAGE>
remove  the  alteration  at the expiration of the Lease. Unless Landlord advises
Tenant  in  writing  that  Landlord  will  not  require  Tenant  to  remove such
alteration  at  the expiration of the Lease, the parties agree that Tenant shall
be  obligated to remove such alteration at the expiration of the Lease. Further,
Landlord  acknowledges  that  Tenant  will  not be required to remove any Tenant
Improvements  to  the  Leased  Premises.

          (b)  Any  consent  given  by Landlord under this Section 5.07 shall be
deemed  conditioned upon: (i) Tenant's acquiring all applicable permits required
by governmental authorities; (ii) Tenant's furnishing to Landlord copies of such
permits, together with copies of the approved plans and specifications, prior to
commencement  of  the  work thereon; and (iii) the compliance by Tenant with the
conditions  of  all applicable permits and approvals in a prompt and expeditious
manner.

          (c) Tenant shall provide Landlord with not less than fifteen (15) days
prior  written  notice  of  commencement of the work so as to enable Landlord to
post  and  record appropriate notices of non-responsibility. All alterations and
additions permitted hereunder shall be made and performed by Tenant without cost
or  expense  to  Landlord.  Tenant  shall  pay the contractors and suppliers all
amounts  due  to them when due and keep the Leased Premises and the Project free
from  any  and  all mechanics', materialmen's and other liens and claims arising
out of any work performed, materials furnished or obligations incurred by or for
Tenant.  In  the  event  any alterations or additions to the Leased Premises are
performed  by  Landlord  hereunder,  whether  by  prearrangement  or  otherwise,
Landlord  shall  be entitled to charge Tenant a five percent (5%) administration
fee  in addition to the actual costs of labor and materials provided. Such costs
and  fees  shall  be deemed Additional Rent under this Lease, and may be charged
and  payable  prior  to  commencement  of  the  work.

          (d)  Any  and  all  alterations, additions or improvements made to the
Leased  Premises  by  Tenant  shall  become  the  property  of  Landlord  upon
installation and shall be surrendered to Landlord without compensation to Tenant
upon  the  termination  of  this  Lease by lapse of time or otherwise unless (i)
Landlord conditioned its approval of such alterations, additions or improvements
on  Tenant's agreement to remove them, or (ii) Landlord notifies Tenant prior to
(or  promptly  after)  the  Term Expiration Date that the alterations, additions
and/or  improvements  must  be  removed, in which case Tenant shall, by the Term
Expiration Date (or promptly thereafter), remove such alterations, additions and
improvements,  repair  any  damage  resulting  from such removal and restore the
Leased Premises to their condition existing prior to the date of installation of
such  alterations,  additions  and improvements. Notwithstanding anything to the
contrary  set  forth  above,  this  clause  shall  not apply to equipment, trade
fixtures  or  furniture  owned  by  Tenant.  Tenant's trade fixtures, furniture,
equipment  and other personal property shall at all times be and remain Tenant's
Property  ("Tenant's  Property").  Except for alterations that cannot be removed
without  structural injury to the Leased Premises, at any time Tenant may remove
Tenant's  Property  from  the  Leased  Premises.

          Tenant  shall repair at its sole cost and expense all damage caused to
the  Leased Premises and the Project by removal of Tenant's movable equipment or
furniture and such other alterations, additions and improvements as Tenant shall
be  required  or  allowed  by  Landlord  to  remove  from  the  Leased Premises.

                                       22
<PAGE>
          All  alterations,  additions  and  improvements  permitted  under this
Section  5.07  shall be constructed diligently, in a good and workmanlike manner
with  new,  good  and sufficient materials and in compliance with all applicable
laws, ordinances, rules and regulations (including, without limitation, building
codes  and  those  related  to  accessibility  and  use  by  individuals  with
disabilities).  Tenant  shall,  promptly  upon  completion  of the work, furnish
Landlord with "as built" drawings for any alterations, additions or improvements
performed  under  this  Section  5.07.

     5.08.     COMPLIANCE  WITH  LAWS  AND  INSURANCE  STANDARDS.  Landlord
represents  and  warrants  that,  at  the Term Commencement Date of the Existing
Premises,  all  elements  of  the Building encompassed within a "warm shell" (as
defined in EXHIBIT B) are in compliance with all applicable laws, ordinances and
           ---------
other legal requirements.  Tenant shall not occupy or use, or permit any portion
of  the  Leased  Premises  to  be occupied or used in a manner that violates any
applicable  law,  ordinance, rule, regulation, order, permit, covenant, easement
or  restriction  of  record,  or  the recommendations of Landlord's engineers or
consultants,  relating  in  any  manner  to  the Project, or for any business or
purpose  which  is  disreputable,  objectionable  or  productive of fire hazard.
Tenant  shall  not  do  or  permit anything to be done which would result in the
cancellation  of  the all risk property insurance coverage on the Project and/or
its contents.  If Tenant does or permits anything to be done which increases the
cost  of  any  insurance  covering  or  affecting the Project, then Tenant shall
reimburse  Landlord, upon demand, as Additional Rent, for such additional costs.
Landlord shall deliver to Tenant a written statement setting forth the amount of
any  such insurance cost increase and showing in reasonable detail the manner in
which  it  has  been computed.  Tenant shall, at Tenant's sole cost and expense,
comply with all laws, ordinances, rules, regulations and orders (state, federal,
municipal  or  promulgated  by  other  agencies  or  bodies  having  or claiming
jurisdiction)  related to the use, condition or occupancy of the Leased Premises
now in effect or which may hereafter come into effect including, but not limited
to, (a) accessibility and use by individuals with disabilities, but only insofar
as  the  same require work within the Leased Premises or work outside the Leased
Premises  that  Tenant  is  responsible for pursuant to other provisions of this
Lease,  and  (b)  environmental  conditions  in, on or about the Leased Premises
caused  by  Tenant or its agents, employees or contractors.  If anything done by
Tenant  in  its use or occupancy of the Leased Premises shall create, require or
cause  imposition  of  any requirement by any public authority for structural or
other upgrading of or alteration or improvement to the Project, Tenant shall, at
Landlord's  option,  either  perform  the  upgrade, alteration or improvement at
Tenant's  sole cost and expense or reimburse Landlord upon demand, as Additional
Rent,  for  the  cost  to Landlord of performing such work.  The judgment of any
court of competent jurisdiction or the admission by Tenant in any action against
Tenant, whether Landlord is a party thereto or not, that Tenant has violated any
law,  ordinance,  rule,  regulation,  order,  permit,  covenant,  easement  or
restriction  shall  be  conclusive  of that fact as between Landlord and Tenant.
Notwithstanding  the  foregoing,  Tenant  shall  not  be  obligated  to make any
structural repairs or alterations to the Leased Premises or any modifications to
the  mechanical, electrical, plumbing and life safety systems of the Building to
comply  with such laws, ordinances, rules, regulations or orders unless the need
for  such  compliance arises exclusively by virtue of Tenant's particular use of
the  Leased  Premises  or  Tenant's  alterations, additions or improvements made
subsequent  to  the  Term  Commencement  Date.

                                       23
<PAGE>
     5.09.   NO NUISANCE; NO OVERLOADING. Tenant shall use and occupy the Leased
Premises,  and control its agents, employees, contractors, invitees and visitors
in such manner so as not to create any nuisance, or unreasonably interfere with,
annoy  or  disturb  (whether  by  noise, odor, vibration or otherwise) any other
tenant  or  occupant of the Project or Landlord in its operation of the Project.
Tenant  shall  not place or permit to be placed any loads upon the floors, walls
or  ceilings  in  excess  of  the maximum designed load specified by Landlord or
which  might  damage  the Leased Premises, the Building, or any portion thereof.

     5.10.   FURNISHING  OF  FINANCIAL  STATEMENTS; TENANT'S REPRESENTATIONS. In
order  to  induce Landlord to enter into this Lease, Tenant agrees that it shall
promptly  furnish  Landlord, from time to time, within ten (10) business days of
receipt  of  Landlord's  written  request  therefor,  with  Tenant's most recent
financial  statements  in  Tenant's customary form reflecting Tenant's financial
condition as of the date of such statements. Tenant represents and warrants that
all  financial  statements,  records  and  information  furnished  by  Tenant to
Landlord  in  connection  with  this Lease are true, correct and complete in all
respects.  Prior  to Tenant's providing Landlord with any financial information,
Landlord  agrees  that  it will execute a Nondisclosure Agreement in the form of
EXHIBIT  D  hereto  which  is  made  a part hereof. If Tenant or its parent is a
public  company,  Tenant's obligation under this Section 5.10 shall be satisfied
by  delivery  to  Landlord  of Tenant's most recent publicly disclosed financial
information.

     5.11.   ENTRY BY LANDLORD. Landlord, its employees, agents and consultants,
shall  have  the  right to enter the Leased Premises at any time, in cases of an
emergency,  and otherwise at reasonable times upon twenty-four (24) hours' prior
written  notice  to  inspect  the same, to clean, to perform such work as may be
permitted or required under this Lease, to make repairs to or alterations of the
Leased  Premises  or other portions of the Project, to deal with emergencies, to
post  such  notices  as  may  be  permitted  or  required  by law to prevent the
perfection  of  liens  against Landlord's interest in the Project or to show the
Leased  Premises to prospective tenants (but only during the last six (6) months
of  the Term) , purchasers, encumbrancers or others, or for any other purpose as
Landlord  may  reasonably  deem  necessary or desirable; provided, however, that
Tenant  may  require  that  an  employee of Tenant accompany Landlord during any
non-emergency  entry  and  Landlord  shall  use  its  best  efforts  to minimize
interference  with  Tenant's  business operations in the Leased Premises. Tenant
shall  not  be  entitled  to  any  abatement of Rent or damages by reason of the
exercise  of  any  such  right  of  entry.  Any such entry shall comply with the
Tenant's  reasonable  security  measures.

     5.12.   NONDISTURBANCE  AND  ATTORNMENT.

          (a) This Lease and the rights of Tenant hereunder shall be subject and
subordinate to the lien of any deed of trust, mortgage or other hypothecation or
security  instrument  (collectively,  "Security Device") now or hereafter placed
upon,  affecting  or  encumbering  the  Project  or any part thereof or interest
therein,  and to any and all advances made thereunder, interest thereon or costs
incurred  and  any  modifications,  renewals,  supplements,  consolidations,
replacements and extensions thereof. With respect to any Security Device entered
into  by  Landlord  after  execution  of  this  Lease,  such  subordination  is
conditioned  on Landlord's obtaining assurance in a commercially reasonable form
(a  "nondisturbance  agreement")  from  the  holder of or beneficiary under such
encumbrance  that  Tenant's  possession  of  the  Leased  Premises  will  not be
disturbed,  and  Tenant's rights under this Lease will be

                                       24
<PAGE>
recognized,  so  long  as  Tenant  is  not  in  default  under this Lease (after
expiration  of  applicable  notice  and  cure periods) and attorns to the record
owner  of  the  Leased  Premises  and  any  subordination of this Lease shall be
conditioned  on  Tenant's  receipt  of such an agreement. Without the consent of
Tenant,  the  holder  of  any such Security Device or the beneficiary thereunder
shall  have the right to elect to be subject and subordinate to this Lease, such
subordination  to  be effective upon such terms and conditions as such holder or
beneficiary  may  direct  which are not inconsistent with the provisions hereof.
Tenant  agrees  to  attorn to and recognize as the Landlord under this Lease the
holder  or  beneficiary under a Security Device or any other party that acquires
ownership  of  the  Leased Premises by reason of a foreclosure or sale under any
Security  Device (or deed in lieu thereof), provided such holder, beneficiary or
other  party  has  become bound by a nondisturbance agreement as of the date the
Security  Device  gained  priority over this Lease. The new owner following such
foreclosure,  sale or deed shall be responsible for the completion of the Tenant
Improvements  and shall be responsible for the Security Deposit but shall not be
(i)  liable  for  any  act  or omission of any prior landlord or with respect to
events  occurring  prior  to  acquisition  of  ownership  except  relating  to a
continuing  default;  (ii) subject to any offsets or defenses which Tenant might
have  against  any prior landlord; or (iii) bound by prepayment of more than one
(1)  month's  Rent  unless actually received. Landlord shall, in good faith, use
its best efforts to cause the current holder of a Security Device on the Project
to  execute  and deliver a nondisturbance agreement to Tenant within thirty (30)
days  of  execution  of  this  Lease.  Landlord  shall,  however,  obtain  such
nondisturbance agreement from the holders of all existing Security Devices prior
to  the  Term  Commencement  Date.

          (b)  Tenant  shall not unreasonably withhold its consent to changes or
amendments to this Lease requested by the holder of a Security Device so long as
these  changes  do not alter the basic business terms of this Lease or otherwise
materially  diminish any rights or materially increase any obligations of Tenant
hereunder.  In  connection  with any amendment to this Lease required under this
paragraph,  Landlord  shall  reimburse  Tenant's  reasonable attorneys' fees and
costs,  not  to  exceed  $1,000.00  in  any single instance. If, within ten (10)
business  days  after  notice  from Landlord, Tenant fails or refuses to execute
with  Landlord  the  amendment(s)  to  this Lease accomplishing the change(s) or
amendment(s)  which  are requested by such holder, Landlord, at its sole option,
shall  have  the right to do either or both of the following: (i) to execute any
instrument for or on behalf of Tenant as its attorney-in-fact (in acknowledgment
thereof,  Tenant  hereby  appoints  Landlord as its irrevocable attorney-in-fact
solely  to  execute  any  instruments  required  to carry out the intent of this
Section  5.12(b)  on  behalf  of  Tenant);  and/or (ii) to provide Tenant with a
further notice and if Tenant fails or refuses to execute the amendment(s) within
five  (5) business days of such additional notice, Landlord shall have the right
to  terminate  this  Lease.

     5.13.     ESTOPPEL  CERTIFICATE.  Within ten (10) days following Landlord's
request,  Tenant  shall  execute,  acknowledge  and  deliver  written  estoppel
certificates  addressed  to  (i)  any  mortgagee  or  prospective  mortgagee  of
Landlord,  or  (ii) any purchaser or prospective purchaser of all or any portion
of,  or interest in, the Project, on a form specified by Landlord, certifying as
to such facts (if true) and agreeing to such notice provisions and other matters
(provided, however that such notice provisions and other matters shall not alter
the  basic  business  terms  of  this Lease or otherwise materially diminish any
rights  or  materially increase any obligations of

                                       25
<PAGE>
Tenant  hereunder,  and  if  such  estoppel certificate includes any matters not
strictly  of  a  factual  nature,  Tenant shall have a right to reimbursement of
reasonable  attorney's fees in connection with the review thereof, in accordance
with  Section  5.12  above)  as such mortgagee(s) or purchaser(s) may reasonably
require,  including,  without  limitation, the following: (a) that this Lease is
unmodified  and  in  full  force  and  effect  (or  in  full force and effect as
modified,  and  stating the modifications); (b) the amount of, and date to which
Rent and other charges have been paid in advance; (c) the amount of any Security
Deposit;  and (d) acknowledging that Landlord is not in default under this Lease
(or,  if Landlord is claimed to be in default, stating the nature of the alleged
default).  However,  in  no event shall any such estoppel certificate require an
amendment  of  the  provisions  of  this  Lease  or  otherwise affect or abridge
Tenant's  rights  hereunder. Any such estoppel certificate may be relied upon by
any  such  mortgagee  or purchaser. Failure by Tenant to execute and deliver any
such  estoppel  certificate  within  the time requested shall be conclusive upon
Tenant that (1) this Lease is in full force and effect and has not been modified
except  as  represented by Landlord; (2) not more than one month's Rent has been
paid in advance; and (3) Landlord is not in default under this Lease. Failure by
Tenant  to execute and deliver any such estoppel certificate within five days of
Landlord's  further  notice  to  Tenant  that  Tenant  has failed to execute and
deliver  any  such  estoppel  certificate within the initial ten (10) day notice
period, shall constitute a default under this Lease. If requested by Tenant upon
reasonable  written  notice,  Landlord  shall  execute  and  deliver an estoppel
certificate  covering  the  factual  matters outlined in clauses (a) through (d)
above  (except  in  case  of  (d) certifying as to the absence of any default by
Tenant or identifying any such claimed default), which may be relied upon solely
for  purposes  of  Tenant's  obtaining  financial  accommodations.

5.14.     SECURITY  DEPOSIT.

          (a)  On  December 2, 1999, Tenant delivered to Landlord an Irrevocable
Standby  Letter  of  Credit No. OSF99000883 from Imperial Bank for the amount of
$2,000,000.00.  Upon  delivery of the Expansion Premises to Tenant, Tenant shall
pay  the  additional security deposit to Landlord of $901,127.03 ($78,279.25 for
the  Existing Premises and $822,847.78 for the Expansion Premises) as additional
security  for  the  full  and faithful performance of Tenant's obligations under
this  Lease.  If  at any time during the Term, Tenant shall be in default in the
payment  of  Rent  or  in  default  for  any  other  reason  after expiration of
applicable  notice  and  cure  periods, Landlord may use, apply or retain all or
part  of  the Security Deposit for payment of any amount due Landlord or to cure
such  default  or  to  reimburse or compensate Landlord for any liability, loss,
cost, expense or damage (including attorneys' fees) which Landlord may suffer or
incur  by  reason  of  Tenant's defaults. If Landlord uses or applies all or any
part  of  the  Security  Deposit, Tenant shall, on demand, pay to Landlord a sum
sufficient  to  restore the Security Deposit to the full amount required by this
Lease.  Upon  expiration  of  the  Term or earlier termination of this Lease and
after Tenant has vacated the Leased Premises, Landlord shall return the Security
Deposit  to  Tenant,  reduced  by such amounts as may be required by Landlord to
remedy  defaults on the part of Tenant in the payment of Rent, to repair damages
to  the  Leased  Premises caused by Tenant and to clean the Leased Premises. The
portion  of  the  deposit  not  so required shall be paid over to Tenant (or, at
Landlord's  option,  to  the  last  assignee of Tenant's interest in this Lease)
within  thirty  (30)  days  after  expiration of the Term or earlier termination
hereof.  Landlord  shall  hold  the Security Deposit for the foregoing purposes;
provided,  however,  that  Landlord  shall  have  no obligation to segregate the
Security  Deposit  from

                                       26
<PAGE>
its general funds or to pay interest in respect thereof. No part of the Security
Deposit  shall  be  considered  to  be held in trust, or to be prepayment of any
monies  to  be  paid  by  Tenant  under  this  Lease.

          (b)  The  Security  Deposit  shall  increase  proportionally  with any
increase  in  Base  Rent  resulting from Landlord's funding of additional Tenant
Improvements  in  accordance with paragraph 5(c) of EXHIBIT B to this Lease, and
                                                    ---------
such  funding  being repaid through amortization payments made to Landlord along
with Base Rent in accordance with paragraph 5(c) of EXHIBIT B to this Lease. The
                                                    ---------
amount  of  the  Security  Deposit  shall decrease twenty percent (20%) per year
beginning  on  the second (2nd) anniversary of the Term Commencement Date of the
Existing  Premises;  provided, however, the amount of the Security Deposit shall
not  be  less  than  $218,000.00  at  any  time  during  the Term of this Lease.
Accordingly,  the  Security  Deposit  shall  be  reduced  as  follows:

                                                AMOUNT OF
            DATE              REDUCTION      SECURITY DEPOSIT
            ----              ---------      ----------------
       July  21,  2002     $  580,225.41     $   2,320,901.62
       ---------------     -------------     ----------------
       July  21,  2003     $  580,225.41     $   1,740,676.21
       ---------------     -------------     ----------------
       July  21,  2004     $  580,225.41     $   1,160,450.80
       ---------------     -------------     ----------------
       July  21,  2005     $  580,225.41     $     580,225.39
       ---------------     -------------     ----------------
       July  21,  2006     $  362,225.39     $     218,000.00
       ---------------     -------------     ----------------

          (c) In lieu of a cash deposit, Tenant may deliver the Security Deposit
to Landlord in the form of a clean and irrevocable letter of credit (the "Letter
of  Credit")  issued  by and drawable upon (said issuer being referred to as the
"Issuing  Bank")  a  financial  institution which is approved by Landlord in its
sole  discretion,  provided  that  Landlord  shall not unreasonably withhold its
consent  to  an  Issuing  Bank  which  has  outstanding unsecured, uninsured and
unguaranteed  indebtedness,  or  shall  have  issued a letter of credit or other
credit  facility  that  constitutes  the  primary  security  for any outstanding
indebtedness  (which  is  otherwise  uninsured  and  unguaranteed), that is then
rated,  without regard to qualification of such rating by symbols such as "+" or
"-"  or numerical notation, "Aa" or better by Moody's Investors Service and "AA"
or better by Standard & Poor's Rating Service, and has combined capital, surplus
and undivided profits of not less than $100,000,000. Such Letter of Credit shall
(a)  name Landlord as beneficiary, (b) be in the amount of the Security Deposit,
(c)  have a term of not less than one year, (d) permit multiple drawings, (e) be
fully  transferable  by  Landlord,  and  (f)  otherwise  be  in form and content
reasonably  satisfactory  to  Landlord.  If  upon  any transfer of the Letter of
Credit, any fees or charges shall be so imposed, then such fees or charges shall
be  payable  solely  by  Tenant  and  the Letter of Credit shall so specify. The
Letter  of  Credit  shall provide that it shall be deemed automatically renewed,
without  amendment,  for  consecutive periods of one year each

                                       27
<PAGE>
thereafter  during  the  Term  unless  the  Issuing  Bank  sends  a  notice (the
"Non-Renewal  Notice")  to Landlord by certified mail, return receipt requested,
not  less  than 45 days next preceding the then expiration date of the Letter of
Credit  stating  that  the  Issuing  Bank has elected not to renew the Letter of
Credit.  Landlord  shall have the right, upon receipt of the Non-Renewal Notice,
to  draw  the full amount of the Letter of Credit, by sight draft on the Issuing
Bank,  and  shall  thereafter  hold  or apply the cash proceeds of the Letter of
Credit  pursuant  to  the  terms of this Article. Notwithstanding the foregoing,
Tenant  shall  thereafter  have the right to provide Landlord with a replacement
Letter  of  Credit in compliance with this Section, in which case Landlord shall
provide  Tenant  such  cash sums drawn on the Letter of Credit. The Issuing Bank
shall  agree with all drawers, endorsers and bona fide holders that drafts drawn
under  and  in  compliance  with  the terms of the Letter of Credit will be duly
honored  upon  presentation  to  the  Issuing  Bank at an office location in San
Francisco.  The Letter of Credit shall be subject in all respects to the Uniform
Customs  and  Practice  for  Documentary  Credits (1993 revision), International
Chamber of Commerce Publication No. 500. Tenant shall have the right at any time
to  replace  the  Letter  of  Credit  with  a  (i) cash security deposit, (ii) a
replacement  Letter  of  Credit that meets all of the conditions of this Section
5.14,  or  (iii)  a  combination  of  items  (i)  and  (ii).

     5.15.     SURRENDER.  Subject  to the provisions of Section 5.07 hereof, on
the  Term  Expiration  Date (or earlier termination of this Lease), Tenant shall
quit  and  surrender  possession  of  the Leased Premises to Landlord in as good
order  and  condition  as they were in on the applicable Term Commencement Date,
reasonable  wear  and  tear,  the  Tenant  Improvements,  casualties,  taking by
condemnation  and  repairs  which  are  Landlord's  responsibility  excepted.
Reasonable  wear  and  tear  shall  not include any damage or deterioration that
would  have  been prevented by good maintenance practice or by Tenant performing
all  of  its  obligations  under  this  Lease.  Tenant  shall,  without  cost to
Landlord,  remove  all furniture, equipment, trade fixtures, debris and articles
of  personal  property  owned by Tenant in the Leased Premises, and shall repair
any  damage  to  the Project resulting from such removal.  Any such property not
removed  by  Tenant  by the Term Expiration Date (or earlier termination of this
Lease) shall be considered abandoned, and Landlord may remove any or all of such
items  and  dispose  of  same  in  any  lawful  manner or store same in a public
warehouse  or  elsewhere  for the account and at the expense and risk of Tenant.
If  Tenant shall fail to pay the cost of storing any such property after storage
for  thirty  (30) days or more, Landlord may sell any or all of such property at
public  or private sale, in such manner and at such times and places as Landlord
may  deem  proper in accordance with applicable law, without notice to or demand
upon  Tenant.  Landlord  shall  apply  the proceeds of any such sale as follows:
first,  to  the  costs  of  such  sale; second, to the costs of storing any such
property;  third,  to  the  payment of any other sums of money which may then or
thereafter  be due to Landlord from Tenant under any of the terms of this Lease;
and  fourth,  the  balance,  if  any,  to  Tenant.

     5.16.    TENANT'S REMEDIES.  Landlord shall not be deemed in breach of this
Lease  unless  Landlord  fails within a reasonable time to perform an obligation
required  to  be  performed  by  Landlord.  For purposes of this Section 5.16, a
reasonable  time  shall in no event, be less than thirty (30) days after receipt
by  Landlord,  and by the holders of any ground lease, deed of trust or mortgage
covering  the  Leased  Premises whose name and address shall have been furnished
Tenant  in  writing  for such purpose, of written notice specifying wherein such
obligation  of  Landlord  has not been performed; provided, however, that if the
nature  of  Landlord's  obligation

                                       28
<PAGE>
is  such  that  more  than  thirty  (30)  days  after such notice are reasonably
required for its performance, then Landlord shall not be in breach of this Lease
if  performance  is  commenced within said thirty (30)-day period and thereafter
diligently  pursued to completion. If Landlord fails to cure such default within
the  time  provided for in this Lease, the holder of any such ground lease, deed
of  trust  or  mortgage  shall  have an additional thirty (30) days to cure such
default;  provided  that  if such default cannot reasonably be cured within that
thirty (30) day period, then such holder shall have such additional time to cure
the  default  as  is  reasonably necessary under the circumstances. Tenant shall
look  solely  to  Landlord's  interest  in  the  Project,  insurance  proceeds,
condemnation  awards  and the proceeds thereof for recovery of any judgment from
Landlord. Neither Landlord nor any of its trustees, directors, officers, agents,
employees  or  representatives  (or, if Landlord is a partnership, its partners,
whether  general  or  limited)  shall  ever  be  personally  liable for any such
judgment.  Any  lien  obtained  to  enforce  any  such  judgment and any levy of
execution thereon shall be subject and subordinate to any lien, deed of trust or
mortgage  to  which  Section  5.12  applies  or  may  apply. Except as otherwise
specifically  provided  for  in  this  Lease, Tenant shall not have the right to
terminate  this  Lease  or  withhold,  reduce  or  offset any amount against any
payments  of Rent due and payable under this Lease by reason of a breach of this
Lease  by  Landlord.

     5.17.   CC&RS/RULES AND REGULATIONS. Tenant shall comply with (i) the rules
and  regulations  for  the  Project  attached  as  EXHIBIT E and such reasonable
                                                   ---------
amendments  thereto as Landlord may adopt from time to time with prior notice to
Tenant,  and (ii) such reasonable covenants, conditions and restrictions for the
Project  ("CC&Rs")  as Landlord may adopt from time to time with prior notice to
Tenant.  Tenant  shall not be required to comply with any new rule or regulation
or  CC&Rs  unless  the same applies non-discriminatorily to all occupants of the
Project,  does  not  unreasonably  interfere  with  Tenant's  use  of the Leased
Premises and does not materially increase the obligations or decrease the rights
of  Tenant  under  the  Lease. In case of any conflict between (i) the rules and
regulations and/or CC&Rs and (ii) the provisions of this Lease, this Lease shall
control.

                                   ARTICLE 6.
                              ENVIRONMENTAL MATTERS

     6.01.     HAZARDOUS  MATERIALS  PROHIBITED.

          (a)  Except  with  Landlord's  prior written consent, Tenant shall not
cause or permit any Hazardous Materials (as defined in Section 6.01(c) below) to
be  brought,  kept, used, generated, released or disposed in, on, under or about
the Leased Premises or the Project by Tenant, its agents, employees, contractors
or  invitees;  provided,  however, that Tenant may use, store and dispose of, in
accordance  with  applicable  Laws,  limited  quantities  of standard office and
janitorial  supplies,  but  only to the extent reasonably necessary for Tenant's
operations  in  the Leased Premises. Tenant hereby indemnifies Landlord from and
against  (i)  any  breach  by  Tenant of the obligations stated in the preceding
sentence, (ii) any breach of the obligations stated in Section 6.01(b) below, or
(iii) any claims or liability resulting from Tenant's use of Hazardous Materials
in  violation  of  applicable laws or provisions hereof. Tenant hereby agrees to
defend  and  hold  Landlord  harmless  from  and  against  any  and  all claims,
liability,  losses,  damages,  costs  and/or  expenses  (including,  without
limitation,  diminution in value of the Project, or any portion thereof, damages
for the loss or restriction on use of rentable or usable space or of any amenity
of

                                       29
<PAGE>
the Project, damages arising from any adverse impact on marketing of space in
the Project, and sums paid in settlement of claims, fines, penalties, attorneys'
fees, consultants' fees and experts' fees) which are caused by any breach of the
obligations  stated  in  Sections 6.01(a) or 6.01(b) or otherwise resulting from
Tenant's  use  of  Hazardous Materials in the Project in violation of applicable
laws  or provisions hereof. This indemnification of Landlord by Tenant includes,
without  limitation, death of or injury to person, damage to any property or the
environment  and  costs  incurred  in  connection with any investigation of site
conditions  or  any  cleanup, remedial, removal, or restoration work required by
any federal, state or local governmental agency or political subdivision because
of  any Hazardous Material present in, on, under or about the Leased Premises or
the  Project  (including soil and ground water contamination) which results from
such  a breach. Without limiting the foregoing, if the presence of any Hazardous
Material  in,  on,  under  or about the Leased Premises or the Project caused or
permitted  by  Tenant results in any contamination of the Leased Premises or the
Project,  Tenant  shall  promptly  take  all  actions at its sole expense as are
necessary to return the same to the condition existing prior to the introduction
of  such  Hazardous  Material  as  required under applicable laws; provided that
Landlord's approval of such actions, and the contractors to be used by Tenant in
connection  therewith, shall first be obtained. This indemnification of Landlord
by  Tenant  shall  survive  the  expiration or sooner termination of this Lease.

          (b)  Tenant  covenants  and  agrees  that Tenant shall at all times be
responsible and liable for, and be in compliance with, all federal, state, local
and  regional  laws,  ordinances,  rules, codes and regulations, as amended from
time  to  time  ("Governmental Requirements"), relating to health and safety and
environmental  matters,  arising, directly or indirectly, out of Tenant's use of
Hazardous Materials (as defined in Section 6.01(c) below) in the Project. Health
and  safety and environmental matters for which Tenant is responsible under this
paragraph  include,  without  limitation  (i)  notification  and  reporting  to
governmental  agencies,  (ii) the provision of warnings of potential exposure to
Hazardous  Materials  to  Landlord  and  Tenant's  agents, employees, licensees,
contractors  and  others,  (iii)  the payment of taxes and fees, (iv) the proper
off-site  transportation  and  disposal  of  Hazardous  Materials,  and  (v) all
requirements,  including training, relating to the use of equipment. Immediately
upon  discovery  of  a  release  of Hazardous Materials associated with Tenant's
activities,  Tenant  shall  give written notice to Landlord, whether or not such
release  is  subject  to  reporting  under Governmental Requirements. The notice
shall  include  information  on  the  nature  and  conditions of the release and
Tenant's  planned  response. Tenant shall be liable for the cost of any clean-up
of  the  release  of  any  Hazardous  Materials  by  Tenant  on  the  Project.

          (c)  As  used  in  this Lease, the term "Hazardous Material" means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any  local  governmental authority, the State of California or the United States
Government.  The  term  "Hazardous  Material"  includes, without limitation, any
substance,  material  or  waste  which  is (i) defined as a "hazardous waste" or
similar  term  under  the laws of the jurisdiction where the Project is located;
(ii)  designated  as  a  "hazardous  substance"  pursuant  to Section 311 of the
Federal  Water  Pollution  Control Act (33 U.S.C. Sec. 1317); (iii) defined as a
"hazardous waste" pursuant to Section 1004 of the Federal Resource, Conservation
and  Recovery  Act,  42  U.S.C.  Sec.  6901  et seq. (42 U.S.C. Sec. 6903); (iv)
                                             -- ---
defined  as a "hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental  Response,  Compensation and Liability Act, 42 U.S.C.

                                       30
<PAGE>
Sec.  9601 et seq. (42 U.S.C. Sec. 9601); (v) hydrocarbons, petroleum, gasoline,
           -- ---
crude oil or any products, by-products or fractions thereof; or (vi) asbestos in
any  form  or  condition.

          (d)  As  used  in this Article 6, the term "Laws" means any applicable
federal,  state  or local laws, ordinances, rules or regulations relating to any
Hazardous  Material  affecting  the  Project, including, without limitation, the
specific  laws, ordinances and regulations referred to in Section 6.01(c) above.
References  to  specific Laws shall also be references to any amendments thereto
and  to  any  applicable  successor  Laws.

          (e)  To  the  best of Landlord's knowledge, except as disclosed in the
environmental reports (the "Environmental Reports") provided to Tenant (i) there
are no Hazardous Materials, PCB transformers or underground storage tanks on the
Project,  and  (ii)  the  Project is in compliance with all Laws relating to any
Hazardous  Material.  Tenant  acknowledges  its  receipt  and  review  of  the
Environmental Reports prior to entering into this Lease. Landlord represents and
warrants  that  (i)  during  the period of its ownership of the Project prior to
entering  into this Lease, neither it nor its agents, employees, contractors, or
invitees  have  released or authorized the release of any Hazardous Materials on
the  Project, and (ii) after entering into this Lease, Landlord will not release
any  Hazardous  Materials  on  the Project. Landlord hereby agrees to indemnify,
protect,  defend  and  hold  the Tenant harmless of and from any and all claims,
liability,  costs,  penalties,  fines,  damages,  injury, judgments, forfeiture,
losses  or  expenses  (including  without limitation reasonable attorneys' fees)
arising  out  of  or  in  any  way  related  to  or resulting from any Hazardous
Materials  discovered  in  the  Leased Premises or on the Project which were not
brought,  kept, used, generated, released or disposed in, on, under or about the
Leased  Premises or the Project by Tenant, its agents, employees, contractors or
invitees.  This  Section  6.01  of the Lease constitutes the entire agreement of
Landlord  and  Tenant  regarding  Hazardous  Materials.

     6.02.     LIMITATIONS  ON  ASSIGNMENT  AND  SUBLETTING.  It  shall  not  be
unreasonable  for Landlord to withhold its consent to any proposed assignment or
subletting  of  the  Leased  Premises  if the proposed assignee's or sublessee's
anticipated  use  of  the Leased Premises involves the generation, storage, use,
treatment,  or  disposal  of  Hazardous  Material (excluding standard office and
janitorial  supplies;  in  limited  quantities  as  hereinabove  provided).

     6.03.     RIGHT OF ENTRY.  Landlord, its employees, agents and consultants,
shall  have  the  right  to enter the Leased Premises at any time, in case of an
emergency,  and  otherwise during reasonable hours and upon reasonable notice to
Tenant,  in  order  to  conduct  periodic environmental inspections and tests to
determine whether any Hazardous Materials are present. The costs and expenses of
such  inspections  shall  be paid by Landlord unless a default or breach of this
Lease, violation of Laws or contamination caused or permitted by Tenant is found
to  exist.  In  such  event,  Tenant  shall  reimburse  Landlord upon demand, as
Additional Rent, for the reasonable costs and expenses of such inspections if it
is determined that Tenant has failed to perform its obligations under this Lease
with  regard  to  Hazardous  Materials.

     6.04.     NOTICE  TO  LANDLORD.  Tenant  shall  promptly notify Landlord in
writing  of:  (i)  any  enforcement,  clean-up, removal or other governmental or
regulatory  action instituted or threatened regarding the Leased Premises or the
Project  pursuant  to  any  Laws  caused by Tenant's use or storage of Hazardous
Materials; (ii) any claim made or threatened by any person against

                                       31
<PAGE>
Tenant  or  the Leased Premises relating to damage, contribution, cost recovery,
compensation,  loss  or injury resulting from or claimed to result from Tenant's
use  or  storage  of  any  Hazardous  Material; and (iii) any reports made to or
received  from  any governmental agency arising out of or in connection with any
Hazardous  Material  in  or  removed  from  the  Leased Premises or the Project,
including any complaints, notices, warnings or asserted violations in connection
therewith.  Tenant shall also supply to Landlord as promptly as possible, and in
any  event  within  three (3) business days after Tenant first receives or sends
the same, copies of all claims, reports, complaints, notices, warnings, asserted
violations or other communications relating in any way to the Leased Premises or
Tenant's  use  thereof.

                                   ARTICLE 7.
             INSURANCE, INDEMNITY, CONDEMNATION, DAMAGE AND DEFAULT

     7.01.     LANDLORD'S  INSURANCE.  Landlord  shall  secure  and  maintain
policies  of  insurance for the Project (including the Leased Premises) covering
loss of or damage to the Project, including the Tenant Improvements (as shown on
the  "as-built"  plans  provided to Landlord after completion of construction of
the  Tenant  Improvements)  and  all  subsequent  alterations,  additions  and
improvements  to  the Leased Premises approved by Landlord in writing, with loss
payable  to  Landlord  and  to  the  holders of any deeds of trust, mortgages or
ground  leases  on  the  Project.  Landlord  shall  not  be  obligated to obtain
insurance  for  Tenant's  trade  fixtures,  equipment, furnishings, machinery or
other  property.  Such  policies  shall  provide  protection  against  fire  and
extended  coverage perils and such additional perils as Landlord deems suitable,
in  the  amount  of  the  estimated  replacement  cost  thereof  and  with  such
deductible(s)  as  Landlord  shall  deem reasonably appropriate.  Landlord shall
further  secure and maintain commercial general liability insurance with respect
to  the Project in such amount as Landlord shall determine, such insurance to be
in  addition  to,  and  not  in  lieu of, the liability insurance required to be
maintained  by  Tenant.  In  addition,  Landlord  may secure and maintain rental
income insurance.  If the annual cost to Landlord for any such insurance exceeds
the  standard  rates because of the nature of Tenant's operations, Tenant shall,
upon  receipt  of appropriate invoices, reimburse Landlord for such increases in
cost, which amounts shall be deemed Additional Rent hereunder.  Tenant shall not
be  named  as  an  additional  insured  on any policy of insurance maintained by
Landlord.

     7.02.     TENANT'S  LIABILITY  INSURANCE.

          (a)  Tenant  (with  respect to both the Leased Premises and the Common
Areas)  shall  secure  and maintain, at its own expense, at all times during the
Term,  a  policy  or policies of commercial general liability insurance with the
premiums  thereon  fully paid in advance, protecting Tenant and naming Landlord,
the  holders  of  any deeds of trust, mortgages or ground leases on the Project,
and  Landlord's  representatives  (which  term, whenever used in this Article 7,
shall  be  deemed  to include Landlord's partners, trustees, ancillary trustees,
officers,  directors,  shareholders,  beneficiaries,  agents,  employees  and
independent  contractors)  as  additional  insureds  against  claims  for bodily
injury,  personal  injury,  advertising  injury  and  property damage (including
attorneys'  fees)  based  upon, involving or arising out of Tenant's operations,
assumed  liabilities  or  Tenant's  use,  occupancy or maintenance of the Leased
Premises and the Common Areas of the Project. Such insurance shall provide for a
minimum  amount  of  Two  Million Dollars ($2,000,000.00) for property damage or
injury  to  or  death  of  one  or  more  than one person in any one accident or
occurrence,  with  an  annual  aggregate  limit of at least Four Million Dollars

                                       32
<PAGE>
($4,000,000.00).  The  coverage  required to be carried shall include fire legal
liability,  blanket  contractual  liability,  personal  injury liability (libel,
slander,  false  arrest  and  wrongful  eviction),  broad  form  property damage
liability,  products  liability  and  completed  operations coverage (as well as
owned,  non-owned  and hired automobile liability if an exposure exists) and the
policy  shall  contain  an  exception  to  any pollution exclusion which insures
damage  or  injury arising out of heat, smoke or fumes from a hostile fire. Such
insurance  shall  be  written on an occurrence basis and contain a separation of
insureds provision or cross-liability endorsement acceptable to Landlord. Tenant
shall  provide  Landlord  with a certificate evidencing such insurance coverage.
The  certificate  shall  indicate  that  the  insurance  provided  specifically
recognizes  the  liability assumed by Tenant under this Lease (including without
limitation performance by Tenant under Section 7.04) and that Tenant's insurance
is  primary  to  and  not  contributory  with  any other insurance maintained by
Landlord,  whose  insurance shall be considered excess insurance only. Following
the initial Term of the Lease, not more frequently that every two (2) years, if,
in  the opinion of any mortgagee of Landlord or of the insurance broker retained
by  Landlord,  the  amount  of  liability insurance coverage at that time is not
adequate,  then  Tenant  shall  increase  its  liability  insurance  coverage as
reasonably  required by either any mortgagee of Landlord or Landlord's insurance
broker.

          (b)  Subject  to Section 5.08 of this Lease, Tenant shall, at Tenant's
expense,  comply  with  (i) all insurance company requirements pertaining to the
use  of  the  Leased  Premises  and  (ii)  all  rules,  orders,  regulations  or
requirements  of the American Insurance Association (formerly the National Board
of  Fire  Underwriters)  and  with  any  similar  body.

     7.03.     TENANT'S  ADDITIONAL  INSURANCE  REQUIREMENTS.

          (a)  Tenant  shall  secure  and  maintain, at Tenant's expense, at all
times  during the Term, a policy of physical damage insurance on all of Tenant's
fixtures,  furnishings,  equipment, machinery, merchandise and personal property
in the Leased Premises and alterations, additions or improvements made by or for
Tenant  upon  the  Leased  Premises,  all  for the full replacement cost thereof
without deduction for depreciation of the covered items and in amounts that meet
any  co-insurance  clauses  of  the  policies of insurance. Such insurance shall
insure  against  those  risks  customarily  covered  in  an "all risk" policy of
insurance  covering  physical  loss  or damage. Tenant may use the proceeds from
such  insurance  for  the  replacement  of  fixtures, furnishings, equipment and
personal  property and for restoration of alterations, additions or improvements
to the Leased Premises after the Term Commencement Date. Landlord shall be named
as loss payee to the extent of the value of any such improvements after the Term
Commencement  Date.  In addition, Tenant shall secure and maintain, at all times
during  the  Term,  loss  of  income,  business  interruption  and extra expense
insurance  in  such amounts as will reimburse Tenant for direct or indirect loss
of  earnings  and  incurred  costs  attributable  to all perils commonly insured
against by prudent tenants or attributable to prevention of access to the Leased
Premises  or to the Building as a result of such perils; such insurance shall be
maintained  with  Tenant's  property  insurance  carrier.  Further, Tenant shall
secure and maintain at all times during the Term workers' compensation insurance
in  such  amounts  as are required by law, employer's liability insurance in the
amount of One Million Dollars ($1,000,000.00) per occurrence, and all such other
insurance  as may be required by applicable law or as may be reasonably required
by  Landlord.  In  the  event  Tenant  makes  any

                                       33
<PAGE>
alterations,  additions  or  improvements  to  the  Leased  Premises,  prior  to
commencing  any  work in the Leased Premises, Tenant shall secure "builder's all
risk" insurance which shall be maintained throughout the course of construction,
such  policy being an all risk builder's risk completed value form, in an amount
approved  by  Landlord,  but  not  less  than  the  total contract price for the
construction  of  such  alterations,  additions or improvements and covering the
construction  of  such  alterations,  additions  or improvements, and such other
insurance  as  Landlord  may require, it being understood and agreed that all of
such  alterations, additions or improvements shall be insured by Tenant pursuant
to  this  Section 7.03 immediately upon completion thereof. Tenant shall provide
Landlord  with  certificates  of  all  such  insurance.  The  property insurance
certificate shall confirm that the waiver of subrogation required to be obtained
pursuant  to  Section  7.05  is permitted by the insurer. Tenant shall, at least
thirty  (30) days prior to the expiration of any policy of insurance required to
be  maintained  by  Tenant under this Lease, furnish Landlord with an "insurance
binder"  or  other  satisfactory  evidence  of  renewal  thereof.

          (b)  All  policies  required  to be carried by Tenant under this Lease
shall  be  issued  by  and  binding  upon  a reputable insurance company of good
financial  standing  licensed  to  do business in the State of California with a
rating  of  at  least A-VII, or such other rating as may be required by a lender
having  a lien on the Project, as set forth in the most current issue of "Best's
Insurance Reports." Tenant shall not do or permit anything to be done that would
invalidate  the  insurance  policies  referred to in this Article 7. Evidence of
insurance  provided  to  Landlord  shall  include  an  endorsement  showing that
Landlord,  its  representatives and the holders of any deeds of trust, mortgages
or  ground  leases on the Project are included as additional insureds on general
liability  insurance,  and  as loss payees for property insurance, to the extent
required hereunder, and an endorsement whereby the insurer agrees not to cancel,
non-renew or materially alter the policy without at least thirty (30) days prior
written  notice  to Landlord, its representatives and any mortgagee of Landlord.

          (c)  In  the  event that Tenant fails to provide evidence of insurance
required to be provided by Tenant under this Lease, prior to commencement of the
Term,  and thereafter during the Term, within ten (10) days following Landlord's
request  therefor, and thirty (30) days prior to the expiration date of any such
coverage,  Landlord  shall be authorized (but not required), after giving Tenant
two  (2)  business  days advance written notice of Landlord's intention to do so
(which  notice  may  be  included in the ten (10) day notice referenced above in
this  subparagraph  (c)) to procure such coverage in the amounts stated with all
costs  thereof (plus a five percent (5%) administrative fee) to be chargeable to
Tenant  and payable upon written invoice therefor, which amounts shall be deemed
Additional  Rent  hereunder.

          (d)  The  minimum  limits  of  insurance required by this Lease, or as
carried by Tenant, shall not limit the liability of Tenant nor relieve Tenant of
any  obligation  hereunder.

     7.04.     INDEMNITY  AND  EXONERATION.

          (a)  To  the extent not prohibited by law, except to the extent due to
the  gross  negligence or willful misconduct of Landlord, its employees, agents,
contractors  or  invitees,  or  Landlord's  breach  of  this Lease, Landlord and
Landlord's representatives shall not be liable for any loss, injury or damage to
person  or property of Tenant, Tenant's agents, employees, contractors, invitees
or  any  other  person,  whether  caused by theft, fire, act of God, acts of the

                                       34
<PAGE>
public enemy, riot, strike, insurrection, war, court order, requisition or order
of  governmental body or authority or which may arise through repair, alteration
or  maintenance of any part of the Project or failure to make any such repair or
from  any  other  cause  whatsoever,  except  as expressly otherwise provided in
Sections  7.06  and  7.07.  Landlord shall not be liable for any loss, injury or
damage  arising  from any act or omission of any other tenant or occupant of the
Project,  nor  shall  Landlord  be  liable under any circumstances for damage or
inconvenience to Tenant's business or for any loss of income or profit therefrom

          (b)  Tenant  shall  indemnify,  protect,  defend and hold the Project,
Landlord  and  its  representatives,  harmless  of  and from any and all claims,
liability,  costs,  penalties,  fines,  damages,  injury, judgments, forfeiture,
losses  (including  without  limitation  diminution  in  the value of the Leased
Premises)  or expenses (including without limitation attorneys' fees, consultant
fees,  testing  and investigation fees, expert fees and court costs) arising out
of or in any way related to or resulting directly or indirectly from (i) the use
or  occupancy of the Leased Premises, (ii) the activities of Tenant, its agents,
employees,  contractors  or  invitees  in  or  about  the Leased Premises or the
Project (where not covered by Landlord's insurance), (iii) any failure to comply
with  any  applicable law to the extent required hereunder, and (iv) any default
or  breach  by  Tenant in the performance of any obligation of Tenant under this
Lease;  provided,  however, that the foregoing indemnity shall not be applicable
to  claims  to  the  extent due to the gross negligence or willful misconduct of
Landlord,  its  employees, agents, contractors or invitees, or Landlord's breach
of  this  Lease.

          (c)  Tenant  shall  indemnify,  protect,  defend and hold the Project,
Landlord  and  its  representatives,  harmless  of  and from any and all claims,
liability,  costs,  penalties,  fines,  damages,  injury, judgments, forfeiture,
losses  (including  without  limitation  diminution  in  the value of the Leased
Premises)  or expenses (including without limitation attorneys' fees, consultant
fees,  testing  and investigation fees, expert fees and court costs) arising out
of  or  in  any  way related to or resulting directly or indirectly from work or
labor  performed, materials or supplies furnished to or at the request of Tenant
or  in  connection  with obligations incurred by or performance of any work done
for  the  account  of  Tenant  in the Leased Premises or the Project, excluding,
however,  any  work  to  be  performed  by  or  under the direction of Landlord.

          (d)  The  provisions of this Section 7.04 shall survive the expiration
or  sooner  termination  of  this  Lease.  BY SIGNING ITS INITIALS BELOW, TENANT
ACKNOWLEDGES  THAT  IT HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF
THE PROVISIONS SET FORTH IN THIS SECTION 7.04 AND FURTHER ACKNOWLEDGES THAT SUCH
PROVISIONS  WERE  SPECIFICALLY  NEGOTIATED.

________________________

Tenant's  Initials

          (e)  To  the  extent not prohibited by law, Tenant shall not be liable
for  any  loss,  injury  or  damage in or about the Project, nor shall Tenant be
liable for any damage or inconvenience to Landlord or Landlord's business or for
any loss of income or profit therefrom to the extent such loss, injury or damage
arises  from  any  gross  negligence  or  willful  misconduct of Landlord or its
employees,  agents, contractors or invitees, or Landlord's breach of this Lease.

                                       35
<PAGE>
          (f)  To  the  extent  not prohibited by law, Landlord shall indemnify,
protect,  defend  and  hold Tenant and its representatives, harmless of and from
any  and  all  claims,  liability,  costs,  penalties,  fines,  damages, injury,
judgments,  forfeiture,  losses  or  expenses  (including  without  limitation
reasonable  attorneys'  fees,  consultant  fees, testing and investigation fees,
expert  fees and court costs) by reason of (i) any damage or injury occurring on
the Project to the extent that such damage or injury shall be caused by or arise
from  any  gross  negligence  or  willful misconduct by Landlord, its employees,
agents,  contractors  or  invitees,  or  Landlord's  breach  of this Lease, (ii)
Landlord's  failure  to  comply  with  any  governmental  laws,  ordinances  and
regulations applicable to the Project, or (iii) any default or breach beyond the
expiration  of  the  applicable  cure  period  on  the  part  of Landlord in the
performance  of  any  obligation  of  Landlord  to be performed pursuant to this
Lease; provided however, that the foregoing indemnity shall not be applicable to
claims  to  the extent arising by reason of any negligence or willful misconduct
of  Tenant.

     7.05.     WAIVER  OF  SUBROGATION.  Anything  in this Lease to the contrary
notwithstanding,  Landlord and Tenant each waives all rights of recovery, claim,
action  or  cause  of  action against the other, its agents (including partners,
both general and limited), trustees, officers, directors, and employees, for any
loss  or  damage  that  may  occur  to  the Leased Premises, or any improvements
thereto,  or  the  Project  or  any  personal property of such party therein, by
reason  of any cause required to be insured against under this Lease, regardless
of  cause  or  origin,  including negligence of the other party hereto, and each
party  covenants  that, to the fullest extent permitted by law, no insurer shall
hold any right of subrogation against such other party.  Tenant shall advise its
insurers  of  the  foregoing  and  such  waiver  shall  be a part of each policy
maintained  by  Tenant  which  applies  to  the Leased Premises, any part of the
Project  or  Tenant's  use  and  occupancy  of  any  part  thereof.

     7.06.     CONDEMNATION.

          (a) If the Leased Premises are taken under the power of eminent domain
or  sold  under  the  threat  of  the  exercise  of such power (all of which are
referred to herein as "condemnation"), this Lease shall terminate as to the part
so  taken  as  of  the  date the condemning authority takes title or possession,
whichever  first  occurs  (the  "date of taking"). If the Leased Premises or any
portion  of  the Project is taken by condemnation to such an extent as to render
the  Leased  Premises  untenantable  as  reasonably  determined  by  Tenant  and
Landlord,  this  Lease  shall,  at the option of either party to be exercised in
writing  within thirty (30) days after receipt of written notice of such taking,
forthwith  cease  and  terminate as of the date of taking. All proceeds from any
condemnation  of  the  Leased  Premises  shall  belong  and be paid to Landlord,
subject  to the rights of any mortgagee of Landlord's interest in the Project or
the  beneficiary  of any deed of trust which constitutes an encumbrance thereon;
provided that Tenant shall be entitled to any compensation separately awarded to
Tenant  for  Tenant's relocation expenses, loss of business goodwill and loss of
Tenant's  trade  fixtures  and the unamortized value of improvements made to the
Leased Premises at Tenant's expense. If this Lease continues in effect after the
date  of  taking  pursuant  to  the provisions of this Section 7.06(a), Landlord
shall proceed with reasonable diligence to repair, at its expense, the remaining
parts  of  the  Project  and  the  Leased Premises to substantially their former
condition to the extent that the same is feasible (subject to reasonable changes
which  Landlord  shall  deem  desirable)  and so as to constitute a complete and
tenantable

                                       36
<PAGE>
Project  and  Leased  Premises.  Net  Rent shall abate to the extent appropriate
during  the  period  of  restoration, and Net Rent shall thereafter be equitably
adjusted according to the remaining Rentable Area of the Leased Premises and the
Building.

          (b)  In  the  event  of  a temporary taking of all or a portion of the
Leased  Premises  for  the period of ninety (90) days or less, there shall be no
abatement of Rent and Tenant shall remain fully obligated for performance of all
of  the  covenants  and  obligations on its part to be performed pursuant to the
terms  of  this  Lease.  All proceeds awarded or paid with respect thereto shall
belong  to  Tenant.

     7.07.     DAMAGE  OR DESTRUCTION.  In the event of a fire or other casualty
in  the  Leased  Premises,  Tenant  shall  immediately  give  notice  thereof to
Landlord.  The  following  provisions  shall  then  apply:

          (a)  If  the  damage  is limited solely to the Leased Premises and the
      Leased  Premises can, in Landlord's reasonable opinion, be made tenantable
      with  all  damage  repaired  within  twelve  (12)  months from the date of
      damage,  then  Landlord  shall  be  obligated  to  rebuild  the  same  to
      substantially  their  former  condition  to  the  extent  that the same is
      feasible  (subject  to  reasonable  changes  which  Landlord  shall  deem
      desirable and such changes as may be required by applicable law) and shall
      proceed  with reasonable diligence to do so and this Lease shall remain in
      full  force  and  effect.

          (b)  If  portions  of the Project outside the boundaries of the Leased
      Premises  are damaged or destroyed (whether or not the Leased Premises are
      also damaged or destroyed) and the Leased Premises and the Project can, in
      Landlord's  opinion,  both  be  made  tenantable  with all damage repaired
      within six (6) months from the date of damage or destruction, and provided
      that  Landlord  determines that it is economically feasible, then Landlord
      shall  be  obligated  to  rebuild  the  same to substantially their former
      condition  to  the extent that the same is feasible (subject to reasonable
      changes  which  Landlord  shall  deem desirable and such changes as may be
      required by applicable law) and shall proceed with reasonable diligence to
      do  so  and  this  Lease  shall remain in full force and effect; provided,
      however,  that  Landlord shall not terminate this Lease if it rebuilds the
      Project  and/or  the  Leased  Premises.

          (c)  Notwithstanding  anything  to  the contrary contained in Sections
      7.07(a)  or  7.07(b)  above,  Landlord  shall  not  have  any  obligation
      whatsoever  to  repair,  reconstruct  or  restore  the Leased Premises and
      Tenant  shall have the right to terminate this Lease, when any substantial
      damage thereto or to the Project occurs during the last nine (9) months of
      the  Term  and  Tenant has not effectively exercised any option granted to
      Tenant  to  extend  the  Term.  Under  such  circumstances, Landlord shall
      promptly notify Tenant of its decision not to rebuild, whereupon the Lease
      shall  terminate  as  of  the  date  of  such  notice.

          (d)  If  neither  Section  7.07(a) nor 7.07(b) above applies, Landlord
      shall so notify Tenant within sixty (60) days after the date of the damage
      or  destruction  and  either  Tenant  or Landlord may terminate this Lease
      within  thirty  (30)  days after the date of such notice, such termination
      notice to be immediately effective; provided, however, that Landlord shall
      have  the  right  to  elect  to  reconstruct  the  Project  and the Leased
      Premises,

                                       37
<PAGE>
      in  which  event  (i) Landlord shall notify Tenant of such election within
      said  sixty  (60)  day  period and Tenant shall thereupon have no right to
      terminate  this  Lease,  and  (ii)  Landlord shall proceed with reasonable
      diligence  to rebuild the Project and the Leased Premises to substantially
      their former condition to the extent that the same is feasible (subject to
      reasonable changes which Landlord shall reasonably deem desirable and such
      changes  as  may  be  required  by  applicable  law).

          (e)  During  any  period  when  Tenant's use of the Leased Premises is
      significantly  impaired  by damage or destruction, Net Rent shall abate in
      proportion  to  the degree to which Tenant's use of the Leased Premises is
      impaired  until  such  time  as the Leased Premises are made tenantable as
      reasonably  determined  by Landlord. If the Leased Premises are damaged by
      any  peril  and  Landlord  does not terminate the Lease, then Tenant shall
      have  the  option to terminate the Lease if the Leased Premises cannot be,
      or  are  not  in  fact,  substantially restored by Landlord to their prior
      condition  within 180 days after the condemnation or damage, with such 180
      day  period  extended  (up  to 60 additional days) for periods of delay as
      provided  under  Section  9.12 and periods of delays beyond the reasonable
      control  of  Landlord  (including  any  delays  in  obtaining  permits).

          (f)  The  proceeds  from  any insurance paid by reason of damage to or
      destruction  of  the Project or any part thereof insured by Landlord shall
      belong  to and be paid to Landlord, subject to the rights of any mortgagee
      of  Landlord's  interest  in the Project or the beneficiary of any deed of
      trust  which  constitutes  an  encumbrance  thereon.  Tenant  shall  be
      responsible  at  its sole cost and expense for the repair, restoration and
      replacement  of  (i)  its  fixtures,  furnishings,  equipment,  machinery,
      merchandise  and  personal  property  in the Leased Premises, and (ii) its
      alteration,  additions  and  improvements.

          (g)  Landlord's  repair and restoration obligations under this Section
      7.07  shall  not  impair or otherwise affect the rights and obligations of
      the parties set forth elsewhere in this Lease. Subject to Section 7.07(e),
      Landlord shall not be liable for any inconvenience or annoyance to Tenant,
      its  employees,  agents,  contractors  or  invitees, or injury to Tenant's
      business  resulting  in  any  way  from such damage or the repair thereof.
      Landlord  and  Tenant  agree that the terms of this Lease shall govern the
      effect  of  any  damage  to  or  destruction of the Leased Premises or the
      Project with respect to the termination of this Lease and hereby waive the
      provisions  of  any  present  or  future  statute  or  law  to  the extent
      inconsistent  therewith.

     7.08.     DEFAULT  BY  TENANT.

          (a)  Events  Of  Default. The occurrence of any of the following shall
               -------------------
constitute  an  event  of  default  on  the  part  of  Tenant:

                (1)  Abandonment.  Abandonment  of  the  Leased  Premises  for a
                     -----------
          continuous  period  of  sixty  (60)  days;

                (2)  Nonpayment  Of Rent. Failure to pay any installment of Rent
                     -------------------
          due  and  payable  hereunder  on  the  date  when payment is due, such
          failure  continuing

                                       38
<PAGE>
          for  a  period of three (3) business days after written notice of such
          failure;  provided,  however,  that  Landlord shall not be required to
          provide  such  notice  more than two (2) times in a calendar year with
          respect  to non-payment of Net Rent or Additional Rent, the third such
          non-payment  in  a  calendar  year  constituting  default  without
          requirement  of  notice; furthermore, if Tenant shall be served with a
          demand  for  the  payment  of  past  due Rent, any payment(s) tendered
          thereafter  to  cure  any  default  by  Tenant  shall  be made only by
          cashier's  check,  wire-transfer  or  direct  deposit  of  immediately
          available  funds;

                (3)  Other  Obligations.  Failure  to  perform  any  obligation,
                     ------------------
          agreement  or  covenant  under  this  Lease  other  than those matters
          specified  in  Sections  7.08(a)(1)  and  7.08(a)(2),  such  failure
          continuing  for  a  period of thirty (30) days after written notice of
          such  failure  (or  such  longer  period as is reasonably necessary to
          remedy  such default, provided that Tenant commences the remedy within
          such  thirty  (30)-day  period and continuously and diligently pursues
          such  remedy  at  all  times  until  such  default  is  cured);

                (4) General Assignment. Any general arrangement or assignment by
                    ------------------
          Tenant  for  the  benefit  of  creditors;

                (5)  Bankruptcy.  The  filing  of  any  voluntary  petition  in
                     ----------
          bankruptcy by Tenant, or the filing of an involuntary petition against
          Tenant,  which  involuntary petition remains undischarged for a period
          of sixty (60) days. In the event that under applicable law the trustee
          in  bankruptcy  or  Tenant  has  the  right  to  affirm this Lease and
          continue  to perform the obligations of Tenant hereunder, such trustee
          or  Tenant  shall,  within such time period as may be permitted by the
          bankruptcy  court  having  jurisdiction,  cure  all defaults of Tenant
          hereunder  outstanding  as of the date of the affirmance of this Lease
          and  provide  to Landlord such adequate assurances as may be necessary
          to  ensure  Landlord  of  the  continued  performance  of  Tenant's
          obligations  under  this  Lease;

                (6)  Receivership.  The  appointment of a trustee or receiver to
                     ------------
          take  possession of all or substantially all of Tenant's assets or the
          Leased Premises, where possession is not restored to Tenant within ten
          (10)  business  days;

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

                (8)  Insolvency.  The  admission  by  Tenant  in  writing of its
                     ----------
          inability to pay its debts as they become due; the filing by Tenant of
          a  petition  seeking  any  reorganization,  arrangement,  composition,
          readjustment,  liquidation,  dissolution  or  similar relief under any
          present  or future statute, law or regulation; the filing by Tenant of
          an answer admitting or failing timely to contest a material allegation
          of  a  petition  filed  against  Tenant in any such proceeding; or, if
          within  sixty  (60)  days  after  the  commencement  of any proceeding
          against  Tenant  seeking any

                                       39
<PAGE>
          reorganization,  arrangement,  composition, readjustment, liquidation,
          dissolution or similar relief under any present or future statute, law
          or  regulation,  such  proceeding  shall  not  have  been  dismissed;

                (9)  [Intentionally  Deleted.]

                (10)  Partner.  If  Tenant  is a partnership or consists of more
                      -------
          than  one  (1)  person or entity, if any partner of the partnership or
          any  person  or  entity  constituting Tenant is involved in any of the
          events  or  acts  described  in subsections 7.08(a)(4) through (8); or

                (11)  Misrepresentation.  The  discovery  by  Landlord  that any
                      -----------------
          representation, warranty or financial statement intentionally given to
          Landlord by Tenant or any guarantor of Tenant's obligations under this
          Lease  was  materially  false  or  misleading.

          (b)     Remedies  Upon  Default:

                (1)  Termination.  If an event of default occurs, Landlord shall
                     -----------
          have  the  right, with or without notice or demand, immediately (after
          expiration  of  any  applicable  grace  period  specified  herein)  to
          terminate this Lease, and at any time thereafter recover possession of
          the Leased Premises or any part thereof and expel and remove therefrom
          Tenant  and  any other person occupying the same, by any lawful means,
          and again repossess and enjoy the Leased Premises without prejudice to
          any of the remedies that Landlord may have under this Lease, or at law
          or  in  equity  by  reason of Tenant's default or of such termination.

                (2)  Continuation After Default. Even though Tenant has breached
                     --------------------------
          this  Lease  and/or  abandoned  the  Leased Premises, this Lease shall
          continue in effect for so long as Landlord does not terminate Tenant's
          right to possession under subsection 7.08(b)(1) hereof in writing, and
          Landlord  may enforce all of its rights and remedies under this Lease,
          including  (but  without  limitation)  the right to recover Rent as it
          becomes  due,  and  Landlord,  without  terminating  this  Lease,  may
          exercise  all  of  the rights and remedies of a landlord under Section
          1951.4  of the Civil Code of the State of California or any amended or
          successor  code  section. Acts of maintenance or preservation, efforts
          to  relet  the  Leased  Premises or the appointment of a receiver upon
          application  of  Landlord  to  protect  Landlord's interest under this
          Lease  shall not constitute an election to terminate Tenant's right to
          possession.

                (3)  Damages  Upon  Termination.  Should Landlord terminate this
                     --------------------------
          Lease  pursuant  to  the  provisions  of subsection 7.08(b)(1) hereof,
          Landlord shall have all the rights and remedies of a landlord provided
          by  Section  1951.2 of the Civil Code of the State of California. Upon
          such  termination,  in  addition  to  any other rights and remedies to
          which Landlord may be entitled under applicable law, Landlord shall be
          entitled to recover from Tenant: (i) the worth at the time of award of
          the unpaid Rent and other amounts which had been earned at the time of

                                       40
<PAGE>
          termination;  (ii)  the  worth  at  the time of award of the amount by
          which  the  unpaid Rent which would have been earned after termination
          until  the  time  of  award  exceeds the amount of such Rent loss that
          Tenant  proves  could have been reasonably avoided; (iii) 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 such
          Rent loss that Tenant proves could be reasonably avoided; and (iv) any
          other  amount  necessary  to compensate Landlord for all the detriment
          proximately  caused  by  Tenant's  failure  to perform its obligations
          under  this Lease or which, in the ordinary course of things, would be
          likely  to  result  therefrom. The "worth at the time of award" of the
          amounts  referred  to  in  clauses (i) and (ii) shall be computed with
          interest  at  the  lesser  of  twelve  percent  (12%) per annum or the
          maximum  rate then allowed by law. The "worth at the time of award" of
          the  amount  referred  to  in  clause  (iii)  shall  be  computed  by
          discounting  such  amount  at the discount rate of the Federal Reserve
          Bank  of San Francisco at the time of the award plus one percent (1%).

                (4) Computation of Rent for Purposes of Default. For purposes of
                    -------------------------------------------
          computing  unpaid  Rent  which  would  have accrued and become payable
          under this Lease pursuant to the provisions of Section 7.08(c), unpaid
          Rent  shall  consist  of  the  sum  of:

                     (i)  the  total Base Rent for the balance of the Term, plus

                     (ii) a computation of Tenant's Proportionate Share of Basic
          Operating Cost for the balance of the Term, the assumed amount for the
          Computation  Year  of  the default and each future Computation Year in
          the  Term  to  be  equal  to  Tenant's  Proportionate  Share  of Basic
          Operating  Cost for the Computation Year immediately prior to the year
          in  which  default occurs, compounded at a per annum rate equal to the
          mean  average  rate  of  inflation for the preceding five (5) calendar
          years  as  determined by the United States Department of Labor, Bureau
          of  Labor  Statistics  Consumer  Price Index (All Urban Consumers, all
          items  (1982-84=100)) for the Metropolitan Area or Region in which the
          Project  is  located.  If  such  Index is discontinued or revised, the
          average  rate  of  inflation  shall  be determined by reference to the
          index  designated  as  the  successor  or  substitute  index  by  the
          government  of  the  United  States.

                (5)  Late  Charge.  If any payment required to be made by Tenant
                     ------------
          under  this  Lease  is  not  received by Landlord within five (5) days
          after  the  same  is  due  (or  following  written  notice if required
          hereunder),  Tenant  shall  pay  to  Landlord  an amount equal to five
          percent (5%) of the delinquency. The parties agree that Landlord would
          incur  costs  not  contemplated  by  this  Lease  by  virtue  of  such
          delinquencies,  including  without  limitation  administrative,
          collection,  processing  and  accounting expenses, the amount of which
          would  be extremely difficult to compute, and the amount stated herein
          represents  a  reasonable  estimate  thereof.  Acceptance of such late
          charge  by  Landlord shall in no event constitute a waiver of Tenant's
          breach  or  default  with  respect  to  such  delinquency,  or prevent
          Landlord  from exercising any of Landlord's other rights and remedies.

                                       41
<PAGE>
                (6)  Interest  on  Past-Due  Obligations.  Except  as  expressly
                     -----------------------------------
          otherwise  provided  in  this  Lease, any Rent due Landlord hereunder,
          other than late charges, which is not received by Landlord on the date
          on which it was due, shall bear interest from the day after it was due
          at  the  lesser of maximum rate then allowed by law, or twelve percent
          (12%)  per  annum,  in  addition  to  the  late charge provided for in
          Section  7.08(e).

                (7) Landlord's Right to Perform. Notwithstanding anything to the
                    ---------------------------
          contrary  set forth elsewhere in this Lease, in the event Tenant fails
          to  perform  any  affirmative  duty or obligation of Tenant under this
          Lease,  then  within  the  periods set forth in Section 7.08(a) hereof
          (and  without  notice in case of an emergency) Landlord may (but shall
          not  be  obligated  to)  perform  such  duty or obligation on Tenant's
          behalf,  including,  without  limitation,  the  obtaining of insurance
          policies  or governmental licenses, permits or approvals. Tenant shall
          reimburse  Landlord upon demand for the costs and expenses of any such
          performance  (including  penalties,  interest  and  attorneys'  fees
          incurred  in connection therewith). Such reasonable costs and expenses
          incurred  by  Landlord  shall  be  deemed  Additional  Rent hereunder.

                (8) Remedies Cumulative. All rights, privileges and elections or
                    -------------------
          remedies of Landlord are cumulative and not alternative with all other
          rights  and  remedies  at  law  or  in  equity  to  the fullest extent
          permitted  by  law.

                                   ARTICLE 8.
                                 OPTION TO RENEW

     8.01.     OPTION  TO  RENEW.

          (a)  Landlord hereby grants to Tenant one (1) option (the "Option") to
extend  the  term  of this Lease for an additional period of five (5) years (the
"Option  Term"),  all  on  the  following  terms  and  conditions:

                (1)  The  Option must be exercised, if at all, by written notice
          irrevocably  exercising  the  Option  ("Option  Notice")  delivered by
          Tenant  to  Landlord  not later than nine (9) months prior to the Term
          Expiration  Date.  Further,  the  Option  shall  not  be  deemed to be
          properly  exercised  if, as of the date of the Option Notice or at the
          Term  Expiration Date, (i) Tenant is in default under this Lease after
          the  delivery  of  any  notice  required  hereunder and passage of any
          applicable  cure  period,  (ii)  Tenant has assigned this Lease or its
          interest  therein  (other  than  an  assignment  for  which Landlord's
          consent  is  not  required), or (iii) Tenant, or Tenant's affiliate or
          subsidiary,  is  in possession of less than fifty percent (50%) of the
          square  footage  of  the Leased Premises. Provided Tenant has properly
          and  timely  exercised  the  Option,  the  term of this Lease shall be
          extended  for  the period of the Option Term, and all terms, covenants
          and conditions of this Lease shall remain unmodified and in full force
          and  effect,  except that the Base Rent shall be modified as set forth
          in  subsection  8.01(a)(2)  below.

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<PAGE>
                (2)  The  Base  Rent  payable  for  the Option Term shall be the
          then-current  rental rate per rentable square foot (as further defined
          below, "FMRR") being agreed to in new leases by the Landlord and other
          landlords  of  buildings  in the Emeryville, California area which are
          comparable  in  quality,  location  and  prestige  to  the  Building
          ("Comparable  Buildings") and tenants leasing space in the Building or
          Comparable  Buildings.  As  used  herein, "FMRR" shall mean the rental
          rate  per  rentable square foot for which Landlord and other landlords
          are entering into new leases (excluding the value of improvements made
          at  Tenant's  expense)  within  the time period of nine (9) to six (6)
          months  prior  to  the  Term  Expiration  Date  ("Market Determination
          Period"),  with  new  tenants  leasing  from  Landlord  and/or  other
          landlords  office  space  in  the Building and/or Comparable Buildings
          ("Comparative  Transactions").  Landlord  shall  provide  its
          determina-tion  of  the  FMRR  to Tenant within twenty (20) days after
          Landlord  receives  the  Option Notice. Tenant shall have fifteen (15)
          days  ("Tenant's Review Period") after receipt of Landlord's notice of
          the  FMRR  within  which  to  accept such FMRR or to reasonably object
          thereto  in writing. In the event Tenant objects to the FMRR submitted
          by  Landlord,  Landlord  and  Tenant  shall attempt to agree upon such
          FMRR.  If  Landlord  and  Tenant  fail to reach agreement on such FMRR
          within  fifteen  (15)  days  following  Tenant's  Review  Period  (the
          "Outside  Agreement  Date"), then each party shall place in a separate
          sealed  envelope its final proposal as to FMRR and such determina-tion
          shall  be  submitted  to  arbitration  in accordance with subparagraph
          8.01(b)  below.

          (b)  Landlord  and  Tenant  shall meet with each other within five (5)
business  days  of  the Outside Agreement Date and exchange the sealed envelopes
and then open such envelopes in each other's presence. If Landlord and Tenant do
not mutually agree upon the FMRR within one (1) business day of the exchange and
opening  of  envelopes,  then, within ten (10) business days of the exchange and
opening  of  envelopes, Landlord and Tenant shall agree upon and jointly appoint
one  arbitrator  who shall be by profession be a real estate appraiser or broker
who  shall  have been active over the five (5) year period ending on the date of
such  appointment  in  the  leasing  of  comparable commercial properties in the
vicinity  of  the  Building. Neither Landlord nor Tenant shall consult with such
broker  or  appraiser  as  to  his  or  her  opinion  as  to  FMRR  prior to the
appointment.  The  deter-mina-tion of the arbitra-tor shall be limited solely to
the  issue  of whether Landlord's or Tenant's submitted FMRR for the Premises is
the  closer  to  the FMRR for the Leased Premises. Such arbitrator may hold such
hearings  and  require  such  briefs  as  the  arbitrator,  in  his  or her sole
discretion,  determines is necessary. In addition, Landlord or Tenant may submit
to  the  arbitrator with a copy to the other party within five (5) business days
after  the  appoint-ment  of the arbitrator any data and additional informa-tion
that  such  party deems relevant to the determination by the arbitrator ("Data")
and  the other party may submit a reply in writing within five (5) business days
after  receipt  of  such  Data.

                (1)  The arbitrator shall, within thirty (30) days of his or her
          appointment,  reach  a  decision  as  to whether the parties shall use
          Landlord's  or  Tenant's submitted FMRR, and shall notify Landlord and
          Tenant  of  such  determination.

                                       43
<PAGE>
                (2)  The  decision  of  the  arbitrator  shall  be bind-ing upon
          Landlord  and  Tenant.

                (3)  If  Landlord and Tenant fail to agree upon and appoint such
          arbitrator,  then  the appointment of the arbi-trator shall be made by
          the  American  Arbitration  Association.

                (4)  The  cost  of  arbitration shall be paid by the party whose
          submitted  FMRR  is  not  selected  by  the  arbitrator.

                (5)  The  arbitration  proceeding  and  all  evidence  given  or
          discovered  pursuant  thereto shall be maintained in confidence by all
          parties.

          Notwithstanding anything to the contrary contained in this Section, if
the  rent  during  any  extended term is determined by arbitration and if Tenant
does  not, in its sole discretion, approve the rental amount established by such
appraisal,  Tenant  may  rescind  its  exercise of the Option by giving Landlord
written notice of such election to rescind within ten (10) days after receipt of
the  arbitrator's  decision. If Tenant rescinds its exercise of the Option, then
(i)  the  Lease shall terminate, at Landlord's election, either on the date that
is  two hundred seventy (270) days after Tenant's notice of rescission or on the
date  the  Lease would have otherwise terminated absent Tenant's exercise of the
Option;  and  (ii)  Tenant  shall pay all costs and expenses of the arbitration.

                                   ARTICLE 9.
                              MISCELLANEOUS MATTERS

     9.01.     PARKING.  Landlord  agrees  to  provide  Tenant  for  use  by the
employees, agents, customers and invitees of Tenant the number of parking spaces
designated  on the Basic Lease Information sheet on an unreserved and unassigned
basis  on those portions of the Project designated by Landlord for parking.  One
hundred  fifty-three  (153) of the parking spaces shall be free of charge during
the  Term  or  any  extension  thereof (the "Free Parking Spaces").  At any time
before  the  ninetieth  (90th)  day  after  the  Term  Commencement Date for the
Expansion  Premises,  Tenant  may  elect  to lease an additional sixty-four (64)
parking  stalls (Tenant must elect to lease all 64 parking stalls or none of the
parking  stalls;  Tenant may not elect to lease only a portion of the 64 parking
stalls)  at  the rate of fifty-five dollars ($55.00) per month per parking stall
with  annual  increases of three percent (3%) per annum over the prior year.  At
any  time before July 20, 2001, Tenant may elect to lease, for a period from the
date  of  such  election  to  the  end  of the initial Term, up to an additional
forty-six  (46)  parking  stalls  at the rate of fifty-five dollars ($55.00) per
month  per  parking  stall  with  annual  increases  of the lesser of (i) market
increases,  or  (ii)  three  percent (3%) per annum over the prior year.  Tenant
shall  pay Landlord for all of its monthly parking fees at the time Tenant makes
its  regular  payment of Base Rent.  During the Option Term, the monthly parking
fees  (except  for  the  Free  Parking Spaces which shall remain free of charge)
shall  be  the  prevailing  market parking rental rate at such time, with annual
increases  equal  to  the  prevailing annual market increases at such time.  The
parking  spaces  will  not  be  separately identified and Landlord shall have no
obligation  to  monitor  the  use  of  the parking area; provided,  however, the
entrance  to  the Building garage shall be through a card-key system implemented
by  Landlord.  If  a  parking  density  problem occurs during the Term,

                                       44
<PAGE>
Landlord shall address the problem, in its reasonable discretion, which solution
may  include initiating a parking permit system or a reserved parking system and
any  costs  associated  therewith  (including,  without  limitation,  costs  of
patrolling  the  Building garage and/or parking area outside of the Building for
compliance with the parking system) shall constitute a Basic Operating Cost. All
parking  shall  be  subject  to  any  and  all  rules and regulations adopted by
Landlord  in  its  reasonable  discretion from time to time. Only automobiles no
larger  than  full  size  passenger  automobiles  or  pick-up trucks or standard
business use vehicles (which do not require parking spaces larger than full size
passenger  automobiles)  may be parked in the Project parking area. Tenant shall
not  permit  or allow any vehicles that belong to or are controlled by Tenant or
Tenant's  employees,  agents,  customers  or  invitees to be loaded, unloaded or
parked  in  areas other then those designated by Landlord for such activities. A
failure  by  Tenant  or  any  of its employees, agents, customers or invitees to
comply  with  the  foregoing provisions shall afford Landlord the right, but not
the  obligation,  without  notice,  in addition to any other rights and remedies
available  under this Lease, to remove and to tow away the vehicles involved and
to  charge  the  cost to Tenant, which cost shall be immediately due and payable
upon  demand  by  Landlord.

     9.02.  BROKERS.  Landlord  has  been  represented  in  this  transaction by
Landlord's  Broker.  Tenant has been represented in this transaction by Tenant's
Broker. Upon full execution of this Lease by both parties, Landlord shall pay to
(i)  Landlord's  Broker  a  fee  for  brokerage  services rendered by it in this
transaction if provided for in a separate written agreement between Landlord and
Landlord's  Broker,  and  (ii)  Tenant's broker pursuant to Landlord's published
commission  schedule  or,  in  the  event no such schedule exists, pursuant to a
separate  agreement  by and between Landlord and Tenant's broker. Landlord shall
pay  no  brokerage  fees  with respect to the leasing of the Expansion Premises.
Tenant  represents  and warrants to Landlord that the brokers named in the Basic
Lease  Information  sheet are the only agents, brokers, finders or other similar
parties with whom Tenant has had any dealings in connection with the negotiation
of  this  Lease  and  the  consummation  of the transaction contemplated hereby.
Tenant  hereby  agrees  to indemnify, defend and hold Landlord free and harmless
from  and  against liability for compensation or charges which may be claimed by
any other agent, broker, finder or other similar party by reason of any dealings
with  or  actions of Tenant in connection with the negotiation of this Lease and
the  consummation  of  this  transaction,  including  any  costs,  expenses  and
attorneys'  fees  incurred  with  respect  thereto. Tenant hereby agrees to also
indemnify, defend and hold Landlord free and harmless from and against liability
for compensation or charges which may be claimed by any agent, broker, finder or
other  similar  party  by  reason  of  any dealings with or actions of Tenant in
connection  with  the  negotiation  of  the  leasing  of the Expansion Premises,
including any costs, expenses and attorneys' fees incurred with respect thereto.

     9.03.  NO WAIVER. No waiver by either party of the default or breach of any
term,  covenant or condition of this Lease by the other shall be deemed a waiver
of any other term, covenant or condition hereof, or of any subsequent default or
breach  by  the  other  of  the same or of any other term, covenant or condition
hereof.  Landlord's  consent  to, or approval of, any act shall not be deemed to
render  unnecessary  the obtaining of Landlord's consent to, or approval of, any
subsequent or similar act by Tenant, or be construed as the basis of an estoppel
to  enforce  the  provision  or provisions of this Lease requiring such consent.
Regardless  of  Landlord's

                                       45
<PAGE>
knowledge  of  a default or breach at the time of accepting Rent, the acceptance
of  Rent by Landlord shall not be a waiver of any preceding default or breach by
Tenant  of  any  provision  hereof,  other than the failure of Tenant to pay the
particular  Rent  so  accepted.  Any  payment  given  Landlord  by Tenant may be
accepted  by  Landlord  on  account  of  monies  or  damages  due  Landlord,
notwithstanding  any  qualifying  statements  or  conditions  made  by Tenant in
connection therewith, which statements and/or conditions shall be of no force or
effect  whatsoever  unless  specifically  agreed to in writing by Landlord at or
before  the  time  of  deposit  of  such  payment.

     9.04.  RECORDING.  Neither  this  Lease  nor  a memorandum thereof shall be
recorded  without  the  prior  written consent of Landlord, which consent may be
withheld  in  Landlord's  sole  discretion.

     9.05. HOLDING OVER. If Tenant holds over after expiration or termination of
this  Lease,  Tenant  shall  pay for each month of hold-over tenancy one hundred
fifty  percent  (150%) times the Base Rent which Tenant was obligated to pay for
the  month  immediately preceding the end of the Term for each month or any part
thereof  of  any  such hold-over period, together with such other amounts as may
become  due hereunder. No holding over by Tenant after the Term shall operate to
extend  the  Term.  In  the event of any unauthorized holding over, Tenant shall
indemnify,  defend  and  hold  Landlord  harmless  from  and against all claims,
demands,  liabilities,  losses,  costs,  expenses  (including  attorneys' fees),
injury  and  damages  incurred  by  Landlord  as  a  result of Tenant's delay in
vacating  the  Leased  Premises.

     9.06.  TRANSFERS  BY  LANDLORD.  The  term "Landlord" as used in this Lease
shall  mean  the owner(s) at the time in question of the fee title to the Leased
Premises  or,  if  this  is  a  sublease, of the Tenant's interest in the master
lease.  If  Landlord  transfers, in whole or in part, its rights and obligations
under  this  Lease  or  in  the  Project,  upon  its  transferee's assumption of
Landlord's  obligations  hereunder and delivery to such transferee of any unused
Security  Deposit  then  held  by  Landlord, no further liability or obligations
shall thereafter accrue against the transferring or assigning person as Landlord
hereunder.  Subject  to  the foregoing, the obligations and/or covenants in this
Lease to be performed by the Landlord shall be binding only upon the Landlord as
defined  in  this  Section  9.06.

     9.07.  ATTORNEYS' FEES. In the event either party places the enforcement of
this  Lease,  or any part of it, or the collection of any Rent due, or to become
due,  hereunder,  or  recovery  of the possession of the Leased Premises, in the
hands  of  an  attorney, or files suit upon the same, the prevailing party shall
recover  its  reasonable  attorneys'  fees,  costs and expenses, including those
which  may  be  incurred on appeal. Such fees may be awarded in the same suit or
recovered  in a separate suit, whether or not suit is filed or any suit that may
be  filed  is pursued to decision or judgment. The term "prevailing party" shall
include,  without  limitation,  a party who substantially obtains or defeats the
relief  sought, as the case may be, whether by compromise, settlement, judgment,
or  the  abandonment  by the other party of its claim or defense. The attorneys'
fee  award  shall not be computed in accordance with any court fee schedule, but
shall  be  such  as  to fully reimburse all attorneys' fees reasonably incurred.

     9.08.  TERMINATION;  MERGER.  No  act  or  conduct  of Landlord, including,
without  limitation,  the  acceptance  of  keys  to  the  Leased Premises, shall
constitute  an  acceptance  of  the  surrender  of the Leased Premises by Tenant
before  the  scheduled Term Expiration Date. Only a

                                       46
<PAGE>
written  notice  from  Landlord  to  Tenant  shall  constitute acceptance of the
surrender  of  the  Leased  Premises and accomplish a termination of this Lease.
Unless  specifically  stated  otherwise in writing by Landlord, the voluntary or
other  surrender of this Lease by Tenant, the mutual termination or cancellation
hereof,  or  a  termination  hereof  by  Landlord  for  default by Tenant, shall
automatically  terminate  any  sublease or lesser estate in the Leased Premises;
provided,  however,  Landlord  shall,  in  the  event  of  any  such  surrender,
termination  or  cancellation, have the option to continue any one or all of any
existing  subtenancies. Landlord's failure within thirty (30) days following any
such event to make any written election to the contrary by written notice to the
holder of any such lesser interest, shall constitute Landlord's election to have
such  event  constitute  the  termination  of  such  interest.

     9.09. AMENDMENTS; INTERPRETATION. This Lease may not be altered, changed or
amended, except by an instrument in writing signed by the parties in interest at
the  time  of  the  modification. The captions of this Lease are for convenience
only  and  shall  not  be  used  to  define  or  limit  any  of  its provisions.

     9.10.  SEVERABILITY.  If  any  term  or  provision  of  this  Lease, or the
application  thereof  to  any  person  or  circumstances, shall to any extent be
invalid  or  unenforceable,  the  remainder of this Lease, or the application of
such  provision  to  persons or circumstances other than those as to which it is
invalid  or  unenforceable, shall not be affected thereby, and each provision of
this  Lease  shall  be  valid  and  shall  be  enforceable to the fullest extent
permitted  by  law.

     9.11.  NOTICES.  All  notices,  demands,  consents  and approvals which are
required  or  permitted  by  this Lease to be given by either party to the other
shall  be  in  writing  and shall be deemed to have been fully given by personal
delivery  or  by  recognized  overnight courier service or when deposited in the
United States mail, certified or registered, with postage prepaid, and addressed
to the party to be notified at the address for such party specified on the Basic
Lease  Information sheet, or to such other place as the party to be notified may
from  time  to  time  designate  by  at  least  fifteen (15) days' notice to the
notifying  party  given  in  accordance with this Section 9.11, except that upon
Tenant's  taking  possession  of  the Leased Premises, the Leased Premises shall
constitute  Tenant's address for notice purposes. A copy of all notices given to
Landlord  under  this  Lease  shall be concurrently transmitted to such party or
parties  at such addresses as Landlord may from time to time hereafter designate
by  notice  to  Tenant.

          Any  notice  sent  by  registered  or  certified  mail, return receipt
requested,  shall  be  deemed given on the date of delivery shown on the receipt
card,  or  if no delivery date is shown, the postmark thereon. Notices delivered
by  recognized  overnight  courier  shall be deemed given twenty-four (24) hours
after  delivery of the same to the courier. If notice is received on a Saturday,
Sunday  or  legal holiday, it shall be deemed received on the next business day.

     9.12.     FORCE  MAJEURE.  Any  prevention, delay or stoppage of work to be
performed  by  Landlord  or  Tenant  which  is  due  to strikes, labor disputes,
inability  to  obtain  labor,  materials,  equipment  or  reasonable substitutes
therefor,  acts  of  God,  governmental restrictions or regulations or controls,
judicial  orders, enemy or hostile government actions, civil commotion, or other
causes  beyond  the  reasonable  control  of  the  party  obligated  to  perform
hereunder, shall excuse performance of the work by that party for a period equal
to  the duration of that

                                       47
<PAGE>
prevention,  delay  or  stoppage.  Nothing  in this Section 9.12 shall excuse or
delay  Tenant's  obligation  to  pay Rent or other charges due under this Lease.

     9.13.  GUARANTOR.  NONE.

     9.14. SUCCESSORS AND ASSIGNS. This Lease shall be binding upon and inure to
the  benefit  of Landlord, its successors and assigns (subject to the provisions
hereof,  including, without limitation, Section 5.15), and shall be binding upon
and inure to the benefit of Tenant, its successors, and to the extent assignment
or  subletting,  may  be  approved  by  Landlord  hereunder, Tenant's assigns or
subtenants.

     9.15.  FURTHER  ASSURANCES. Landlord and Tenant each agree to promptly sign
all  documents  reasonably  requested  to  give effect to the provisions of this
Lease.

     9.16. INCORPORATION OF PRIOR AGREEMENTS. This Lease, including the exhibits
and  addenda attached to it, contains all agreements of Landlord and Tenant with
respect  to  any  matter referred to herein. No prior agreement or understanding
pertaining  to  such  matters  shall  be  effective.

     9.17.  APPLICABLE  LAW.  This  Lease  shall  be  governed by, construed and
enforced  in  accordance  with  the  laws  of  the  State  of  California.

     9.18.  TIME  OF  THE  ESSENCE.  Time  is  of  the essence of each and every
covenant of this Lease. Each and every covenant, agreement or other provision of
this  Lease  on Tenant's part to be performed shall be deemed and construed as a
separate  and  independent  covenant  of  Tenant,  not  dependent  on  any other
provision  of this Lease or on any other covenant or agreement set forth herein.

     9.19.  NO  JOINT  VENTURE.  This  Lease shall not be deemed or construed to
create  or establish any relationship of partnership or joint venture or similar
relationship  or  arrangement  between  Landlord  and  Tenant  hereunder.

     9.20.  AUTHORITY.  If  Tenant is a corporation, trust or general or limited
partnership, each individual executing this Lease on behalf of Tenant represents
and warrants that he or she is duly authorized to execute and deliver this Lease
on Tenant's behalf and that this Lease is binding upon Tenant in accordance with
its  terms.  If  Tenant  is  a  corporation, trust or partnership, Tenant shall,
within  ten  (10)  business  days after request by Landlord, deliver to Landlord
evidence  satisfactory  to  Landlord  of  such  authority.

     9.21.  DECLARATION  OF  COVENANTS,  CONDITIONS  AND  RESTRICTIONS.  Tenant
acknowledges  that  it has received and read any CC&Rs for the Project that have
been  recorded  as of the date hereof, and agrees to comply with and be bound by
all  terms,  conditions  and provisions thereof. Tenant further acknowledges and
agrees  that  a  default  by  Tenant  under the CC&Rs shall constitute a default
hereunder.  All obligations of Landlord hereunder shall be limited to the extent
performance  of  same  is  prohibited,  restricted  or  limited under the CC&Rs.

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<PAGE>
     9.22.  OFFER. Preparation of this Lease by Landlord or Landlord's agent and
submission  of  same  to Tenant shall not be deemed an offer to lease to Tenant.
This  Lease is not intended to be binding and shall not be effective until fully
executed  by  both  Landlord  and  Tenant.

     9.23.  BUILDING  ACCESS.  Tenant  shall  have access to the Leased Premises
twenty-four  (24)  hours per day, seven (7) days per week. The Building shall be
open  from  7:00  a.m. to 6:00 p.m. Monday through Friday, and from 8:00 a.m. to
1:00  p.m.  Saturday.  Landlord shall provide a cardkey system for access to the
Building  and  the  adjacent  garage  after  such  hours. Landlord shall provide
security  measures  in and around the Building that will include, but may not be
limited  to,  security  cameras  and  roving  security  patrols.

     9.24.   EXHIBITS; ADDENDA. The  following Exhibits and addenda are attached
 to, incorporated in and made a part of this Lease: EXHIBIT A-1 Site Plan of the
                                                    -----------
Building;  EXHIBIT  A-2  Floor  Plan  of the Leased Premises;  EXHIBIT B Initial
           ------------                                        ---------
Improvement  of the Leased Premises (Existing Premises); EXHIBIT B-1 Preliminary
                                                         -----------
Plans;  EXHIBIT B-2 Warm Shell Specifications; EXHIBIT C Confirmation of Term of
        -----------                            ---------
Lease;  EXHIBIT  D  Confidentiality  Agreement;  EXHIBIT  E  Building  Rules and
        ----------                               ----------
Regulations;  EXHIBIT  F  Estimated Budget; and EXHIBIT G Initial Improvement of
              ----------                        ---------
the  Leased  Premises  (Expansion  Premises).

     9.25.  APPROVALS.  Unless  otherwise  specified in this Lease, whenever the
Lease  requires  an  approval,  consent, determination, selection or judgment by
either  Landlord  or Tenant, such approval, consent, determination, selection or
judgment and any conditions imposed thereby shall be reasonable and shall not be
unreasonably  withheld  or  delayed  and,  in  exercising  any  regret or remedy
hereunder,  each  party  shall  at  all  times act reasonably and in good faith.

     9.26.  DEPRECIATION. For all tax purposes, Landlord shall have the right to
depreciate  the  cost of Landlord's Work and the Tenant Improvements (except for
the  cost  of  Tenant  Improvements  in excess of Landlord's Contribution (which
Landlord's Contribution shall include the amount referenced in Paragraph 5(c) of
EXHIBIT  B);  and  Tenant  shall  have  the right to depreciate all Tenant Extra
Improvements  and  all  alterations  to  the Leased Premises paid for by Tenant.

     [BALANCE  OF  PAGE  HAS  BEEN  INTENTIONALLY  LEFT  BLANK.]

                                       49
<PAGE>

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

                               "LANDLORD":

                               BEP-EMERYVILLE,  L.P.,
                               a  Delaware  limited  partnership

                               By:     EPI  Investors  103  LLC.,
                                       a California limited liability company
                                       Its:  General  Partner

                                       By:     Ellis  Partners,  Inc.,
                                               a  California  corporation
                                               Its:  Managing  Member

                                       By:     /s/  James F Ellis
                                          ------------------------------------
                                       Name:   James F Ellis
                                            ----------------------------------
                                       Title:  Vice President
                                             ---------------------------------

                               "TENANT":

                               EVOLVE  SOFTWARE,  INC.,
                               a  Delaware  corporation

                               By:     /s/ Doug Sinclair
                                   ---------------------------------
                               Name:   Doug Sinclair
                                    --------------------------------
                               Title:  CFO
                                     -------------------------------

                                       50
<PAGE>
                                   EXHIBIT  A-1

                                [Graphic Omitted]
                                    SITE PLAN
                                     OF THE
                                    BUILDING

                                       1
<PAGE>

                                   EXHIBIT  A-2

                                [Graphic Omitted]

                                   FLOOR  PLAN
                                     OF  THE
                                LEASED  PREMISES

<PAGE>
                                    EXHIBIT  B
                 INITIAL  IMPROVEMENT  OF  THE  LEASED  PREMISES
                               (EXISTING PREMISES)

     1.     Tenant  Improvements.  Landlord  shall  construct  and  install  the
            --------------------
Tenant  Improvements  in  the  Leased Premises, substantially in accordance with
plans,  working  drawings  and  specifications  ("Tenant's  Plans")  prepared by
Landlord's architect, Kava Massih Architects, Inc., in consultation with Tenant.
Tenant's  Plans  shall  include design build mechanical, electrical and plumbing
plans  and specifications.  The costs of preparing Tenant's Plans and performing
the  Tenant  Improvements  shall be allocated between, and paid by, Landlord and
Tenant  as  set forth in this EXHIBIT B.  Landlord shall use its best efforts to
                              ---------
minimize  the  cost  of  preparing  the Tenant's Plans and performing the Tenant
Improvements.

     2.     Tenant's  Plans.
            ---------------

     As  soon  as reasonably possible Tenant and Landlord shall approve Tenant's
Plans.  Landlord  shall  cause Landlord's architect to cause Tenant's Plan's (i)
to  comply  with  all applicable codes, laws, ordinances, rules and regulations,
(ii)  not adversely affect the Building shell or core or any systems, components
or  elements  of  the  Building,  (iii)  be  in  a form sufficient to secure the
approval  of all government authorities with jurisdiction over the Building, and
(iv)  be otherwise satisfactory to Landlord in Landlord's reasonable discretion.
Tenant's  Plans shall be complete plans, working drawings and specifications for
the  layout,  improvement  and finish of the Leased Premises consistent with the
design  and  construction  of  the Building, including mechanical and electrical
drawings  and  decorating  plans,  showing as many of the following as possible:

          (a)  Location  and  type  of  all  partitions;

          (b) Location and type of all doors, with hardware and keying schedule;

          (c)  Ceiling  plans,  including  light  fixtures;

          (d)  Location of telephone equipment room, with all special electrical
      and  cooling  requirements;

          (e)  Location  and type of all electrical outlets, switches, telephone
      outlets,  and  lights;

          (f)  Location  of  all  sprinklers;

          (g)  Location  and  type of all equipment requiring special electrical
      requirements;

                                        1
<PAGE>
          (h)  Location,  weight  per  square  foot and description of any heavy
      equipment  or  filing  system  exceeding fifty (50) pounds per square foot
      live  and  dead  load;

          (i)  Requirements  for  special  air  conditioning  or  ventilation;

          (j)  Type  and  color  of  floor  covering;

          (k)  Location,  type  and  color  of  wall  covering;

          (l)  Location,  type  and  color  of  paint  or  finishes;

          (m)  Location  and  type  of  plumbing;

          (n)  Location  and  type  of  kitchen  equipment;

          (o)  Indicate  critical  dimensions  necessary  for  construction;

          (p)  Details  showing  all  millwork  with  verified  dimensions  and
      dimensions of all equipment to be built in, corridor entrances, bracing or
      support  of  special  walls  or  glass  partitions, and any other items or
      information  requested  by  Landlord;  and

          (q)  Location  of  all  cabling.

     3.     Landlord  shall  cause  to  be prepared, as quickly as possible, the
Tenant's  Plans,  as  well  as  an  estimate  of  the  total  cost of the Tenant
Improvements  ("Cost  Estimate"),  all  of  which  shall conform to or represent
logical evolutions of or developments from the preliminary plans attached hereto
as EXHIBIT B-1 (the "Initial Preliminary Plans").  The parties intend to replace
   -----------
the  Initial Preliminary Plans with a final space plan within sixty (60) days of
execution of this Lease (the "Final Preliminary Plans"); provided, however, that
the  failure  of  the  parties to replace the Initial Preliminary Plans with the
Final  Preliminary Plans shall not affect the enforceability of this Lease.  The
Tenant's  Plans  and Cost Estimate shall be delivered to Tenant immediately upon
completion.  Within  three  (3)  business  days  after  receipt  thereof, at its
election  (a)  Tenant  may  approve the Tenant's Plans and Cost Estimate, or (b)
Tenant  may  deliver to Landlord the specific written changes to such plans that
are  necessary,  in  Tenant's  opinion,  to  conform  such  plans  to  the Final
Preliminary Plans or to reduce costs.  If Tenant desires changes, Landlord shall
not  unreasonably  withhold  its  approval of such changes and the parties shall
confer  and  negotiate  in good faith to reach agreement on modifications to the
Tenant's  Plans  and the Cost Estimate as a consequence of such change.  As soon
as  approved by Landlord and Tenant, Landlord shall submit the Tenant's Plans to
all  appropriate governmental agencies and thereafter the Landlord shall use its
best  efforts  to obtain required governmental approvals as soon as practicable.

                                        2
<PAGE>
     4.     Construction.
            ------------

          (a)  Landlord, at its sole cost and expense and with no deduction from
Landlord's  Contribution  (as  defined below), shall provide the "warm shell" of
the  Leased  Premises  as  further shown on EXHIBIT B-2 (the "Landlord's Work"),
                                            -----------
which  shall  include  the following: (i) windows, side walls and an entry door;
(ii)  the  restroom  core;  (iii)  HVAC  on  the roof, but not distributed; (iv)
insulation;  (v)  line  for  plumbing,  but not distributed; (vi) main sprinkler
lines,  but  not  distributed;  and  (vii)  Common  Areas  servicing  the Leased
Premises.

          (b)  Landlord  shall  complete  the  Landlord's  Work  and  the Tenant
Improvements  in  the  Leased Premises substantially in accordance with Tenant's
Plans and in a good and workmanlike manner and in compliance with all applicable
codes,  laws,  ordinances,  rules and regulations. Landlord shall be entitled to
charge  a  construction  supervision  fee  equal  to the lesser of (i) three and
one-half  percent  (3.5%) of the total costs of the Tenant Improvements, or (ii)
$1.00  per  square  foot  of  the  Rentable  Area  of  the Leased Premises. Such
administration  fee  shall  be  deducted  from Landlord's Contribution. Landlord
shall  pay Landlord's Contribution directly to the Contractor in installments as
the  Tenant  Improvements  are constructed, upon Landlord's receipt of a written
request  for  payment accompanied by written invoices and other written evidence
reasonably satisfactory to Landlord showing the costs incurred, until Landlord's
Contribution  is  exhausted.  Notwithstanding  the foregoing, Landlord's payment
with respect to any invoice submitted by the Contractor shall not exceed a fixed
percentage  of  the amount of such invoice, such fixed percentage to be equal to
the  ratio  of  Landlord's  Contribution  to  the  contract price for the Tenant
Improvements.  Within  ten (10) days of Tenant's receipt from Landlord of a copy
of  a  written  invoice  showing  Tenant's share of such invoice (i.e. the total
amount  of  such  invoice  less  Landlord's share as determined by the preceding
sentence), Tenant shall pay to Landlord the balance of such invoice and Landlord
shall pay to the Contractor the full amount of such invoice. Landlord shall have
no  liability  to  Tenant  if  the Leased Premises are not suitable for Tenant's
occupancy  so  long  as  the  Leased Premises are constructed in accordance with
Tenant's  Plans.  Landlord  represents  and  warrants  that  the entire Landlord
Contribution  shall  be  available  to  Tenant  for its intended use and that no
portion  of  the Landlord Contribution has been previously committed by Landlord
for  items  already  constructed  or  currently being constructed except for the
following:  (i)  sprinkler  distribution  laterals  and  heads  that  have  been
installed,  and  (ii)  telecom conduit and cable that has been extended from the
north  electrical  distribution  room to the south electrical distribution room.

          (c)  Landlord  shall  enter  into  a  construction  contract  (the
"Construction Contract") for the Tenant's Improvements with a general contractor
(the  "Contractor") selected on a competitive bid basis from the following group
of  general  contractors:  (i)  Hillhouse  Construction,  (ii) DPR, (iii) Pankow
Construction,  and  (iv)  at  Tenant's  option, a general contractor proposed by
Tenant  subject  to  Landlord's  reasonable  approval. The Construction Contract
shall  be written on a "guaranteed maximum price" basis (the "Guaranteed Maximum
Price")  and  will be subject to Tenant's prior written approval, which will not
be  unreasonably withheld. The Construction Contract shall require Contractor to
seek  competitive  bids  from subcontractors in each of the major trades, with a
minimum  of  three  bids  where  possible.  Pricing below the guaranteed maximum
amount  shall be based upon the actual hard costs of construction (calculated on
an  open  book  basis)  with  a mark-up for the Contractor's general conditions,

                                        3
<PAGE>
overhead  and  profit  not to exceed the lesser of the mark-up charged for other
tenant  improvements  at  the  Project  or  a  commercially  reasonable mark-up.

          (d)  Notwithstanding  anything  to the contrary in the Lease, Landlord
shall  solely  be responsible for, the cost of the Tenant Improvements shall not
include and the Landlord's Contribution shall not be used for the following: (i)
costs for improvements which are not shown on or described in the final Tenant's
Plans  or  the  general  construction  contract  documents  relating  to  the
Construction  Contract  unless otherwise approved by Tenant; (ii) costs incurred
to  remove Hazardous Materials from the Leased Premises or the surrounding area;
(iii)  attorneys'  fees  incurred in connection with negotiation of construction
contracts  including the Construction Contract; (iv) interest and other costs of
financing construction costs not caused by Tenant's failure to make any payments
required  under  Paragraphs  4  or  5 of this EXHIBIT B; (v) costs incurred as a
                                              ---------
consequence  of  construction  defects  during the course of construction of the
Tenant  Improvements  (provided,  however, that this clause (v) shall not expand
the  scope  of  any  warranty  set forth in this Lease); (vi) costs recovered by
Landlord  on  account of warranties and insurance (and Landlord hereby agrees to
act in a commercially reasonable manner to exercise all rights it has to recover
costs  under  such  warranties  and  insurance);  (vii)  restoration  costs as a
consequence  of  casualties where the restoration costs are in excess of the sum
of insurance proceeds plus any applicable deductibles (with such deductibles not
to  exceed $10,000.00) under the applicable insurance policies; (viii) penalties
and  late  charges  attributable to Landlord's failure to pay construction costs
unless caused by Tenant's failure to make any payments required under Paragraphs
4  or  5  of  this  EXHIBIT B; (ix) costs to bring any item which is part of the
                    ---------
"warm  shell"  set forth on EXHIBIT B-2 into compliance with applicable laws and
                            -----------
restrictions, including, without limitation, the Americans with Disabilities Act
and  environmental  laws; (x) wages, labor and overhead for overtime and premium
time  unless  otherwise  agreed  by  the  parties;  (xi)  offsite  management,
supervision fees or other general overhead costs incurred by Landlord other than
the fee set forth in Paragraph 4(b) of this EXHIBIT B; and (xii) costs exceeding
                                            ---------
those  authorized  pursuant  to  the  terms  of  the  Construction  Contract.

     5.     Landlord's  and  Tenant's  Contributions.
            ----------------------------------------

          (a)  Landlord  shall  pay  for  Landlord's  Work.

          (b)  As  Landlord's contribution for the costs of Tenant Improvements,
Landlord  shall  give  Tenant  an  allowance in the maximum amount of $25.00 per
square  foot  of  Rentable  Area,  which  equals $1,281,525.00 based upon 51,261
rentable square feet ("Landlord's Contribution"). Landlord's Contribution may be
used  only  for  direct  hard  and  soft  costs,  including  construction costs,
architect  fees, and consultant fees; provided, however, that, in the event that
a  portion  of  Landlord's  Contribution  remains  after payment in full for the
Tenant Improvements, such portion shall be a credit against Base Rent. Any costs
of  preparing  Tenant's Plans and constructing the Tenant Improvements in excess
of Landlord's Contribution shall be paid by Tenant and shall constitute Tenant's
Extra  Improvements.

          (c)  In  the  event  that  the  actual cost of the Tenant Improvements
exceeds  $1,281,525.00,  Landlord  shall  make  available  up  to  an additional
$256,305.00  for  the  Tenant  Improvements. Tenant may pay such actual costs in
cash  or may elect to have any portion of

                                        4
<PAGE>
such  amount  amortized  over  the initial lease Term and paid monthly with Base
Rent  along  with interest calculate d at the lesser of the maximum rate allowed
by  law  or  11.5%.

     6.     Changes.  Except  for  minor  and  immaterial  changes,  if  Tenant
            -------
requests  any  change in Tenant's Plans after final approval thereof by Landlord
and  Tenant,  Tenant  shall request such change in a written notice to Landlord.
Each  such  request  shall  be  accompanied  by  proper plans and specifications
prepared  by  Tenant,  at  Tenant's  expense, necessary to show and explain such
change  from  the  previously  approved Tenant's Plans.  All changes in Tenant's
Plans  (except  for  minor and immaterial changes) shall be subject to the prior
written  approval of Landlord which shall be given within five (5) business days
(which  shall  not  be  unreasonably  withheld).

     7.     Other  Work  by Tenant.  All work not within the scope of the normal
            ----------------------
construction  trades  employed  on  the  Building,  such  as  the furnishing and
installing of furniture, telephone equipment, office equipment and wiring, shall
be  furnished  and  installed  by  Tenant  at  Tenant's  expense.

     8.     Requirements  for  Work  Performed by Tenant.  All work performed at
            --------------------------------------------
the  Building  or  in  the  Project  by  Tenant  or  Tenant's  contractor  or
subcontractors  shall  be  subject  to  the  following  additional requirements:

          a. Such work shall not proceed until Landlord has approved in writing:
      (i)  Tenant's contractor, (ii) the amount and coverage of public liability
      and  property  damage  insurance,  with  Landlord  named  as an additional
      insured, carried by Tenant's contractor, (iii) complete and detailed plans
      and  specifications  for  such  work,  and  (iv)  a schedule for the work.

          b.  All  work  shall  be  done  in conformity with a valid permit when
      required,  a copy of which shall be furnished to Landlord before such work
      is  commenced. In any case, all such work shall be performed in accordance
      with  all  applicable  laws.  Notwithstanding  any  failure by Landlord to
      object  to  any  such  work,  Landlord  shall  have  no responsibility for
      Tenant's  failure  to  comply  with  applicable  laws.

          c.  Tenant or Tenant's contractor shall arrange for necessary utility,
      hoisting  and  elevator  service,  on a nonexclusive basis, with Landlord.
      Landlord  shall  have  the  right  to  require  any  necessary movement of
      materials  by  the  elevator  to  be  done  after  regular  working hours.

          d.  Tenant  shall be responsible for cleaning the Leased Premises, the
      Building  and  the  Project and removing all debris in connection with the
      Tenant  Improvements  and  its  other  work.  All  completed work shall be
      subject  to  inspection and acceptance by Landlord. Tenant shall reimburse
      Landlord  for  the  cost of third party supervision of construction of the
      Tenant  Improvements  (which  may  be deducted by Landlord from Landlord's
      Contribution)  upon  demand and for all extra expense incurred by Landlord
      by  reason  of  faulty  work  done  by Tenant or Tenant's contractor or by
      reason  of  inadequate  cleanup by Tenant or Tenant's contractor. Landlord
      will  provide Tenant with copies of

                                        5
<PAGE>
      third  party consultant invoices within five (5) business days of Tenant's
      request  for  such  invoices.

          e.     Tenant shall be responsible for the cost of separately metering
electrical  utilities  to  the  Leased  Premises  (or  such cost may be paid and
deducted  from  Landlord's  Contribution.

     9.     Tenant  Delay.  If  the  completion  of  the  Tenant Improvements is
            -------------
delayed  (i)  at  the request of Tenant, (ii) by Tenant's failure to comply with
the  foregoing  provisions  (including failure to pay any sums payable by Tenant
within  the  time  periods  specified  herein), (iii) by changes in the Tenant's
Plans  ordered  by  Tenant  after  such  Tenant's Plans were already approved by
Landlord  and  Tenant  or  by  extra work ordered by Tenant, (iv) because Tenant
chooses  to  have  additional  work performed by Landlord, or (v) because of any
other  act  or omission of Tenant not within Tenant's specific rights under this
Lease  (collectively,  "Tenant Delay"), then Tenant shall be responsible for all
costs  and  any  expenses  occasioned  by  such  Tenant Delay including, without
limitation,  any  costs  and  expenses  attributable  to  increases  in labor or
materials  (but  only  where such increased costs exceed Landlord's Contribution
under  paragraph 5(b)); and, if such delay actually delays the Term Commencement
Date,  then  Tenant shall pay Lessor the Base Rent for the entire period of such
delay.

     10.     Binding  Arbitration.  Any  dispute ("Dispute") between the parties
             --------------------
with  respect  to  the  Tenant's Plans and/or the Construction Contract shall be
resolved  in  accordance  with  the  following  procedures.   Either  party  may
commence  arbitration  with  respect  to a Dispute by giving notice to the other
party  ("Arbitration  Notice").  Within ten (10) days of the Arbitration Notice,
Landlord and Tenant shall jointly select an arbitrator, or if they are unable to
reach  agreement  on  the  arbitrator,  in  accordance  with  the  then  current
arbitration rules and procedures (the "Rules") of JAMS-Endispute ("JAMS") from a
list  of qualified people maintained by JAMS.  Neither Landlord nor Tenant shall
consult with such arbitrator as to his or her opinion as to the Dispute prior to
the appointment.  The determination of the arbitrator shall be limited solely to
the  Dispute.  The arbitration shall take place in San Francisco, California and
all  expedited  procedures prescribed by the Rules shall apply.  Such arbitrator
may  hold hearings and require such briefs as the arbitrator, in his or her sole
discretion, determines is necessary.  In addition, Landlord or Tenant may submit
to the arbitrator, with a copy to the other party, within five (5) business days
after the appointment of the arbitrator any data and additional information that
such  party  deems relevant to the determination by the arbitrator and the other
party  may submit a reply in writing within five (5) business days after receipt
of  such  data  and  additional  information.  The arbitrator shall conduct such
evidentiary  hearings  as  the  arbitrator  deems  necessary  or  appropriate.

          (a)  The  arbitrator  shall, within twenty-one (21) days of his or her
appointment,  reach  a decision as to the Dispute, and shall notify Landlord and
Tenant  of  such  determination.

          (b)  The decision of the arbitrator shall be binding upon Landlord and
Tenant.

          (c)  If  Landlord and Tenant fail to agree upon other matters relating
to  the  arbitration,  then  the  Rules  shall  govern  such  arbitration.

                                        6
<PAGE>
          (d)  The  cost  of  the arbitration shall be paid by the substantially
unsuccessful  party.

          (e)  The  arbitration  proceeding and all evidence given or discovered
pursuant  thereto  shall  be  maintained  in  confidence  by  all  parties.

          (f)  Judgment upon the award rendered by the arbitrator may be entered
by  either party in any court having jurisdiction, or application may be made to
such  court  for  a judicial recognition of the award or an order of enforcement
thereof,  as  the  case  may  be.

                                        7
<PAGE>
                                   EXHIBIT  C

                       CONFIRMATION  OF  TERM  OF  LEASE

     This  Confirmation  of Term of Lease is made by and between BEP-EMERYVILLE,
L.P.,  a Delaware limited partnership, as Landlord, and, a, as Tenant, who agree
as  follows:

     1.     Landlord and Tenant entered into a Lease dated ____________________,
19_____ (the "Lease"), in which Landlord leased to Tenant and Tenant leased from
Landlord  the  Leased Premises described in the Basic Lease Information sheet of
the  Lease  (the  "Leased  Premises").

     2.     Pursuant  to Section 3.01 of the Lease, Landlord and Tenant agree to
confirm  the  commencement  date and expiration date of the Term of the Lease as
follows:

          a.  _________________________, 20_____, is the Term Commencement Date;

          b.  _________________________,  20_____,  is the Term Expiration Date;

          c.  _________________________,  20_____,  is  the commencement date of
Rent  under  the  Lease.

     3.     Tenant  hereby  confirms  that the Lease is in full force and effect
and:

          a.  It  has  accepted possession of the Leased Premises as provided in
the  Lease;

          b.  The  improvements  and  space required to be furnished by Landlord
              under  the  Lease  have  been  furnished;

          c.  Landlord  has  fulfilled  all  its duties of an inducement nature;

          d.  The  Lease  has  not  been modified, altered or amended, except as
              follows:__________________________________________________________
              ______________________;  and

          e.  There  are  no  setoffs  or  credits  against Rent and no security
              deposit  has  been paid except as expressly provided by the Lease.

                                        1
<PAGE>
     4.     The  provisions of this Confirmation of Term of Lease shall inure to
the  benefit  of,  or  bind,  as  the  case  may  require, the parties and their
respective  successors, subject to the restrictions on assignment and subleasing
contained  in  the  Lease.

     DATED:  _________________________,  20_____

<PAGE>
"LANDLORD":                                "TENANT":

BEP-EMERYVILLE,  L.P.,                     EVOLVE  SOFTWARE,  INC.,
a  Delaware  limited  partnership          a  Delaware  corporation

By:  EPI  Investors  103  LLC,
 a California limited liability company
 Its:  General  Partner                    By:____________________________
                                           Name:__________________________
     By:  Ellis  Partners,  Inc.,          Title:_________________________
          a  California  corporation
          Its:  Managing  Member

        By:____________________________
        Name:__________________________
        Title:_________________________

        By:____________________________
        Name:__________________________
        Title:_________________________

                                        2
<PAGE>
                                    EXHIBIT  D
                            CONFIDENTIALITY  AGREEMENT

<PAGE>
                                    EXHIBIT  E
                         BUILDING  RULES  AND  REGULATIONS

     1.     The  sidewalks,  doorways,  halls,  stairways,  vestibules and other
similar  areas  shall  not be obstructed by Tenant or used by it for any purpose
other  than  ingress  to and egress from the Leased Premises, and for going from
one  part  of  the  Building  to another part.  Corridor doors, when not in use,
shall  be  kept  closed.  Before  leaving  the  Building,  Tenant  shall  make
commercially  reasonable efforts to ensure that all doors to the Leased Premises
are  securely  locked  and  all  water  faucets  and  electricity  are shut off.

     2.     Plumbing  fixtures  shall be used only for their designated purpose,
and no foreign substances of any kind shall be deposited therein.  Damage to any
such  fixtures  resulting  from  misuse  by Tenant or any employee or invitee of
Tenant  shall  be  repaired  at  the  expense  of  Tenant.

     3.     Nails,  screws  and  other attachments to the Building require prior
written  consent  from  Landlord, except for the routine hanging of pictures and
diplomas  or certifications.  Tenant shall not mar or deface the Leased Premises
in any way.  Tenant shall not place anything on or near the glass of any window,
door  or  wall  which  may  appear  unsightly  from outside the Leased Premises.

     4.     All  contractors  and technicians rendering any installation service
to  Tenant  shall  be  subject  to  Landlord's approval and supervision prior to
performing  services.  This  applies  to  all  work  performed  in the Building,
including,  but not limited to, installation of telephones, telegraph equipment,
wiring  of  any  kind,  and  electrical  devices,  as  well as all installations
affecting  floors,  walls,  woodwork,  windows,  ceilings and any other physical
portion  of  the  Building.

     5.     Movement  in  or out of the Building of furniture, office equipment,
safes or other bulky material which requires the use of elevators, stairways, or
the  Building  entrance  and  lobby  shall be restricted to hours established by
Landlord.  All  such movement shall be under Landlord's supervision, and the use
of  an elevator for such movements shall be restricted to the Building's freight
elevator.  Arrangements shall be made at least 24 hours in advance with Landlord
regarding the time, method, and routing of such movements.  Tenant shall pay for
the  services  of  the  employees  of the elevator service company employed when
safes  and  other heavy articles are moved into or from the Building, and Tenant
shall  assume  all  risks  of  damage and pay the cost of repairing or providing
compensation for damage to the Building, to articles moved and injury to persons
or  property  resulting  from  such moves.  Landlord shall not be liable for any
acts  or  damages  resulting  from  any  such  activity.

     6.     Landlord  shall  have the right to limit the weight and size of, and
to  designate  the  location of, all safes and other heavy property brought into
the  Building.

     7.     Tenant  shall  cooperate  with  Landlord  in  maintaining the Leased
Premises.  Tenant  shall  not  employ any person for the purpose of cleaning the
Leased  Premises  other  than the

                                        1
<PAGE>
Building's  cleaning and maintenance personnel. Window, carpet and wall cleaning
shall  be  done only by Landlord's agents at such times and during such hours as
Landlord  shall  elect  but  in  no  event  less  than once per year. Janitorial
services  will  not  be  furnished  on nights when rooms are locked and occupied
after  7:00  P.M.

     8.     Deliveries  of water, soft drinks, newspapers or other such items to
the  Leased  Premises  shall  be restricted to hours established by Landlord and
made  by  use  of  the  freight  elevator  if  Landlord  so  directs.

     9.     Nothing shall be swept or thrown into the corridors, halls, elevator
shafts  or  stairways.  No  birds,  fish or animals of any kind shall be brought
into  or  kept  in, on or about the Leased Premises, with the exception of guide
dogs  where  necessary.

     10.     No  cooking  shall  be  done  in  the  Leased  Premises  except  in
connection  with  a  convenience  lunch  room  for the sole use of employees and
guests  (on  a  non-commercial basis) in a manner which complies with all of the
provisions  of  the  Lease  and  which  does  not  produce  fumes  or  odors.

     11.     Food,  soft  drink  or  other  vending machines shall not be placed
within  the  Leased  Premises  without  Landlord's  prior  written  consent.

     12.     Tenant  shall  not  install  or  operate on the Leased Premises any
electric  heater,  stove  or  similar equipment without Landlord's prior written
consent.  Tenant  shall  not  use  or  keep on the Leased Premises any kerosene,
gasoline,  or  inflammable  or  combustible fluid or material other than limited
quantities  reasonably  necessary  for  the  operation and maintenance of office
equipment  utilized at the Leased Premises.  No explosives shall be brought onto
the  Project  at  any  time.

     13.     Tenant  shall  not waste electricity, water or air conditioning and
agrees  to  reasonably cooperate with Landlord to assure the effective operation
of  the  Building's  heating  and  air  conditioning  and  to  comply  with  any
governmental energy-saving rules, laws or regulations of which Tenant has actual
notice.  Tenant  shall  not tamper with or attempt to adjust temperature control
thermostats  in  the Leased Premises; Landlord shall make reasonable adjustments
in  thermostats  upon  request  from  Tenant.

     14.     The Building air conditioning system is designed for operation only
with  all outside Building windows closed; accordingly, Tenant shall not open or
allow  any  outside  window  to  be  opened  at  any  time.

     15.     Tenant,  its  employees, agents and invitees shall each comply with
all  requirements  necessary for the security of the Leased Premises, including,
if  implemented  by  Landlord,  the use of service passes issued by Landlord for
after-hours movement of office equipment/packages, and the signing of a security
register  in  the  Building  lobby  after hours.  Landlord reserves the right to
refuse  entry  to  the  Building  after  normal  business  hours  to Tenant, its
employees,  agents  or  invitees,  or  any  other  person  without  satisfactory
identification  showing his or her right of access to the Building at such time.
Landlord  shall not be liable for any damages resulting from

                                        2
<PAGE>
any  error  in  regard  to  any such identification or from such admission to or
exclusion  from  the Building. Landlord shall not be liable to Tenant for losses
due  to theft or burglary, or for damage by unauthorized persons in, on or about
the  Project,  and  Tenant assumes full responsibility for protecting the Leased
Premises  from theft, robbery and pilferage, which includes keeping doors locked
and  other  means  of  entry  closed.

     16.     Landlord  will  furnish  Tenant with one hundred (100) initial keys
for  entrance  doors  into  the  Leased  Premises,  and  may  charge  Tenant for
additional  keys  thereafter.  All  such  keys  shall  remain  the  property  of
Landlord.  No  additional  locks  are allowed on any door of the Leased Premises
without Landlord's prior written consent and Tenant shall not make any duplicate
keys.  Upon  termination  of  this Lease, Tenant shall surrender to Landlord all
keys  to  the Leased Premises, and give to Landlord the combination of all locks
for  safes  and  vault  doors,  if  any,  in  the  Leased  Premises.

     17.     Tenant  shall  not  bring  into  (or permit to be brought into) the
Building  any  bicycle  or  other  type  of  vehicle.

     18.     Landlord  retains  the  right  at  any  time,  without liability to
Tenant,  to  change  the  name  and  street  address  of the Building, except as
otherwise  expressly  provided  in  the Lease with respect to signage; provided,
however,  that after an initial such change, Landlord shall reimburse Tenant its
actual  reasonable  costs  thereof.

     19.     Canvassing,  peddling, soliciting, and distribution of handbills in
or  at  the  Project  are  prohibited and Tenant will cooperate to prevent these
activities.

     20.     The Building hours of operation are 7:00 A.M.  to 6:00 P.M., Monday
through  Friday,  excluding  holidays.  Landlord reserves the right to close and
keep  locked  all  entrance and exit doors of the Building on Saturdays, Sundays
and  legal holidays, and between the hours of 6:00 P.M. of any day and 7:00 A.M.
of the following day, and during such other hours as Landlord may deem advisable
for  the protection of the Building and the tenants thereof.  Card key access to
the  Building  will  be  provided  to  Tenant  during  such  closed  hours.

     21.     The  requirements  of  Tenant  will  be  attended  to  only  upon
application  to  the Project manager.  Employees will not perform any work or do
anything  outside of their regular duties unless under specific instruction from
the  Project  manager.

     22.     Tenant  shall  cooperate  fully with the life safety program of the
Building  as  established  and  administered  by  Landlord.  This  shall include
participation by Tenant and its employees in exit drills, fire inspections, life
safety orientations and other programs relating to fire and life safety that may
be  established  by  Landlord.

     23.     No  smoking  shall  be  permitted  in  the  Building.

     24.     Subject  to  the  provisions  of  this Lease, Landlord reserves the
right  to  rescind  any  of  these  rules  and  regulations  and  to make future
reasonable  rules  and  regulations  required  for  the  safety,  protection and
maintenance  of  the  Project,  the operation and preservation of the good

                                        3
<PAGE>
order thereof, and the protection and comfort of the tenants and their employees
and  visitors.  Such rules and regulations, when made and written notice thereof
given  to  Tenant,  shall  be binding as if originally included herein. Landlord
shall  not be responsible to Tenant for the non-observance or violation of these
rules and regulations by any other tenant of the Building. Landlord reserves the
right  to  exclude  or  expel  from  the  Project  any person who, in Landlord's
judgment,  is under the influence of liquor or drugs, or who shall in any manner
do  any  act  in  violation  of  any  of  these  rules  and  regulations.

                                        4
<PAGE>
                                   EXHIBIT  F

                               ESTIMATED  BUDGET

                                        1
<PAGE>
                                    EXHIBIT G
                INITIAL  IMPROVEMENT  OF  THE  LEASED  PREMISES
                              (EXPANSION  PREMISES)

     1. Tenant Improvements. Tenant shall select a contractor (the "Contractor")
        --------------------
to  construct  and  install  the  Tenant  Improvements  (as  defined below). The
Contractor  must  be  approved  by  Landlord,  which  approval  shall  not  be
unreasonably  withheld.  Landlord  hereby  approves  of  all  of  the  following
contractors: Hillhouse Construction, South Bay Construction, Carli Construction,
DPR, Charles Pankow Builders, Rudolph & Sletten and Webcor. The Contractor shall
construct and install the tenant improvements (the "Tenant Improvements") in the
Leased  Premises,  substantially  in accordance with plans, working drawings and
specifications  ("Tenant's  Plans")  prepared  by  Tenant's  architect  (the
"Architect")  and  the  Tenant's  Plans  shall  be  approved  by Landlord, which
approval shall not be unreasonably withheld. As part of the Tenant Improvements,
Tenant  shall  be  allowed to construct a staircase (the "Staircase") connecting
the Existing Premises with the Expansion Premises, subject to Landlord approval,
which  approval  shall  not  be  unreasonably  withheld.

     2.  Tenant's  Plans.  Tenant  and  Landlord shall mutually approve Tenant's
         ---------------
Plans  in  writing,  each  party's  approval shall not be unreasonably withheld.
Tenant's  Plan's shall comply with all applicable codes, laws, ordinances, rules
and  regulations,  shall  not adversely affect the Building shell or core or any
systems,  components  or elements of the Building, shall be in a form sufficient
to  secure the approval of all government authorities with jurisdiction over the
Building,  and  shall  be  otherwise  satisfactory  to  Landlord  in  Landlord's
reasonable  discretion. Tenant's Plans shall be complete plans, working drawings
and specifications for the layout, improvement and finish of the Leased Premises
consistent  with  the  design  and  construction  of  the  Building,  including
mechanical  and electrical drawings and decorating plans, showing as many of the
following  as  possible:

          (a)  Location  and  type  of  all  partitions;

          (b) Location and type of all doors, with hardware and keying schedule;

          (c)  Ceiling  plans,  including  light  fixtures;

          (d)  Location of telephone equipment room, with all special electrical
      and  cooling  requirements;

          (e)  Location  and type of all electrical outlets, switches, telephone
      outlets,  and  lights;

          (f)  Location  of  all  sprinklers;

          (g)  Location  and  type of all equipment requiring special electrical
      requirements;

                                        1
<PAGE>
          (h)  Location,  weight  per  square  foot and description of any heavy
      equipment  or  filing  system  exceeding fifty (50) pounds per square foot
      live  and  dead  load;

          (i)  Requirements  for  air  conditioning  or  special  ventilation;

          (j)  Type  and  color  of  floor  covering;

          (k)  Location,  type  and  color  of  wall  covering;

          (l)  Location,  type  and  color  of  paint  or  finishes;

          (m)  Location  and  type  of  plumbing;

          (n)  Location  and  type  of  kitchen  equipment;

          (o)  Indicate  critical  dimensions  necessary  for  construction;

          (p)  Details  showing  all  millwork  with  verified  dimensions  and
      dimensions of all equipment to be built in, corridor entrances, bracing or
      support  of  special  walls  or  glass  partitions, and any other items or
      information  requested  by  Landlord;  and

          (q)  Location  of  all  cabling.

     3.     Landlord's Review.  Landlord's review and approval of Tenant's Plans
            -----------------
shall  not  constitute,  and  Landlord  shall  not  be  deemed to have made, any
representation  or warranty as to the compliance of the Tenant Improvements with
any  laws  or  as  to  the  suitability  of  the  Leased  Premises or the Tenant
Improvements  for  Tenant's  needs.

     4.     Construction.     The  Tenant  Improvements  in  the Leased Premises
            ------------
shall  be  completed  substantially  in  accordance  with  Tenant's Plans by the
Contractor  in  a  good  and  workmanlike  manner.  Subject to Section 5 of this
EXHIBIT  G,  Tenant  shall  promptly  pay when due the entire cost of all of the
----------
Tenant  Improvements (including the cost of all utilities, permits, fees, taxes,
and  property  and  liability  insurance  in  connection  therewith) required by
Tenant's  Plans.  Except  as otherwise expressly provided herein, Landlord shall
have  no liability to Tenant if the Leased Premises is not suitable for Tenant's
occupancy  or if Tenant has not obtained all the necessary permits for Tenant to
occupy  the  Leased  Premises  by  the  rent  commencement  date.

     5.     Landlord's  and  Tenant's Contributions.  Landlord shall not pay for
            ---------------------------------------
costs  of  Tenant  Plans  and  for  any  of the costs of constructing the Tenant
Improvements.  Any  and  all  costs of preparing Tenant's Plans and constructing
the  Tenant  Improvements  shall  be  paid  by  Tenant.

     6.     Changes.  Except  for  minor  and  immaterial  changes,  if  Tenant
            -------
requests  any  change  in  Tenant's Plans, Tenant shall request such change in a
written  notice  to  Landlord.

                                        2
<PAGE>
     7.     Other  Work  by Tenant.  All work not within the scope of the normal
            ----------------------
construction  trades  employed  on  the  Building,  such  as  the furnishing and
installing of furniture, telephone equipment, office equipment and wiring, shall
be  furnished  and  installed  by  Tenant  at  Tenant's  expense.

     8.     Requirements for Work Performed by Tenant.  All other work performed
            -----------------------------------------
at  the  Building  or  in  the  Project  by  Tenant  or  Tenant's  contractor or
subcontractors  shall  be  subject  to  the  following  additional requirements:

          (a)  Such  work  shall  not  proceed  until  Landlord  has approved in
      writing:  (i)  Tenant's contractor, (ii) the amount and coverage of public
      liability  and  property  damage  insurance,  with  Landlord  named  as an
      additional  insured,  carried  by  Tenant's contractor, (iii) complete and
      detailed  plans  and specifications for such work, and (iv) a schedule for
      the  work.

          (b)  All  work  shall  be  done in conformity with a valid permit when
      required,  a copy of which shall be furnished to Landlord before such work
      is  commenced. In any case, all such work shall be performed in accordance
      with  all  applicable  laws.  Notwithstanding  any  failure by Landlord to
      object  to  any  such  work,  Landlord  shall  have  no responsibility for
      Tenant's  failure  to  comply  with  applicable  laws.

          (c) Tenant or Tenant's contractor shall arrange for necessary utility,
      hoisting  and  elevator  service,  on a nonexclusive basis, with Landlord.
      Landlord  shall  have  the  right  to  require  any  necessary movement of
      materials  by  the  elevator  to  be  done  after  regular  working hours.

          (d)  Tenant shall be responsible for cleaning the Leased Premises, the
      Building  and  the  Project and removing all debris in connection with the
      its work. All completed work shall be subject to inspection and acceptance
      by  Landlord.  Tenant  shall  reimburse  Landlord  for  the cost all extra
      expense  incurred  by  Landlord by reason of faulty work done by Tenant or
      Tenant's  contractor  or  by  reason  of  inadequate  cleanup by Tenant or
      Tenant's  contractor.  Landlord  will  provide Tenant with copies of third
      party  consultant  invoices  within  five  (5)  business  days of Tenant's
      request  for  such  invoices.

          (e)  Landlord  shall  not unreasonably withhold, delay or condition to
      any  consent,  approval  or  acceptance  that  is  required  hereunder.

                                        3
<PAGE>EXHIBIT 10.17

                              EVOLVE SOFTWARE, INC.
                           LOAN AND SECURITY AGREEMENT

<PAGE>
                           LOAN AND SECURITY AGREEMENT

     THIS  LOAN  AND SECURITY AGREEMENT (this "AGREEMENT") is entered into as of
January  31,  2001,  by  and between IMPERIAL BANK ("BANK") and EVOLVE SOFTWARE,
INC.  ("BORROWER").

                                    RECITALS

     Borrower  wishes  to  obtain  credit  from time to time from Bank, and Bank
desires  to  extend credit to Borrower.  This Agreement sets forth the terms and
conditions  on  which  Bank  will  advance credit to Borrower, and Borrower will
repay  the  amounts  owing  to  Bank.

                                    AGREEMENT

     The  parties  agree  as  follows:

     1.   DEFINITIONS  AND  CONSTRUCTION.

          1.1  DEFINITIONS.  Capitalized  terms  used  in this Agreement without
definitions  shall  have  the  meanings  set  forth  on  Exhibit  A  hereto.

          1.2 ACCOUNTING TERMS. All accounting terms not specifically defined on
Exhibit  A shall be construed in accordance with GAAP and all calculations shall
be  made  in accordance with GAAP. The term "FINANCIAL STATEMENTS" shall include
the  accompanying  notes  and  schedules.

     2.   LOAN  AND  TERMS  OF  PAYMENT.

          2.1  CREDIT  EXTENSIONS.

               (a)  Borrower  promises  to  pay  to Bank, in lawful money of the
United  States  of  America, the aggregate unpaid principal amount of all Credit
Extensions  made  by  Bank  to  Borrower,  together  with interest on the unpaid
principal amount of such Credit Extensions at rates in accordance with the terms
hereof.

               (b)  REVOLVING  ADVANCES.

                    (i)  Subject  to  and  upon the terms and conditions of this
Agreement  (1) Borrower may request Revolving Advances and Letters of Credit (as
defined  below),  subject  to  Section  2.1(b)(ii),  in an aggregate outstanding
amount  not to exceed the lesser of (A) the Committed Revolving Line and (B) the
Borrowing  Base  (each  a  "REVOLVING  ADVANCE" and collectively, the "REVOLVING
ADVANCES")  and  (2)  amounts  borrowed  pursuant  to this Section 2.1(b) may be
repaid  and  reborrowed  at  any  time  prior to the earlier to occur of (a) the
Revolving  Maturity Date and (b) the termination of Bank's obligation to advance
money  pursuant  to  Section  9.1(b), at which time all Revolving Advances under
this  Section  2.1(b)  shall be immediately due and payable. Borrower may prepay
any  Revolving  Advances  at  any  time, in whole or in part, without penalty or
premium.  Revolving  Advances  may  be used for Revolving Advance Permitted Uses
only.

                    (ii) Whenever Borrower desires a Revolving Advance, Borrower
will  notify Bank by facsimile transmission or telephone no later than 3:00 p.m.
Pacific  Standard  Time, on the Business Day that the Revolving Advance is to be
made.  Each  such  notification shall be promptly confirmed by a Payment/Advance
Form  in  substantially  the  form  of  Exhibit  C.  Bank  is authorized to make
Revolving Advances under this Agreement, based upon instructions received from a
Responsible  Officer  or  a  designee  of  a  Responsible  Officer,  or  without
instructions  if  in  Bank's discretion such Revolving Advances are necessary to
meet Obligations which have become due and remain unpaid. Bank shall be entitled
to  rely on any telephonic notice given by a person who Bank reasonably believes
to  be a Responsible Officer or a designee thereof, and Borrower shall indemnify
and hold Bank harmless for any damages or losses suffered by Bank as a result of
such reliance. Bank will credit the amount of Revolving Advances made under this
Section  2.1(b)  to  Borrower's  deposit  account  maintained  with  Bank.

<PAGE>
                    (iii)  LETTERS  OF CREDIT. Subject to the availability under
the  Committed  Revolving  Line,  and  in  reliance  on  the representations and
warranties  of Borrower set forth herein, at any time and from time to time from
the  date  hereof  through  the  Business Day immediately prior to the Revolving
Maturity  Date,  Bank  shall  issue  for the account of Borrower such commercial
and/or  standby letters of credit ("LETTERS OF CREDIT") as Borrower may request,
which  request  shall  be  made  by delivering to Bank a duly executed letter of
credit  application  on  Bank's  standard  form;  provided,  however,  that  the
outstanding  and  undrawn  amounts  under  all  such Letters of Credit shall not
exceed  the lesser of (a) the Borrowing Base less the aggregate of all Revolving
Advances  outstanding  and  (b)  $5,000,000,  and  shall be deemed to constitute
Revolving  Advances  for  the  purpose  of  calculating  availability  under the
Committed  Revolving  Line.  Unless Borrower shall have deposited with Bank cash
collateral  in an amount sufficient to cover all undrawn amounts under each such
Letter  of  Credit  and  Bank  shall have agreed in writing, no Letter of Credit
shall  have  an  expiration date that is later than the Revolving Maturity Date.
All  Letters  of Credit shall be in form and substance acceptable to Bank in its
sole  discretion and shall be subject to the terms and conditions of Bank's form
application  and  letter  of  credit  agreement.  Borrower will pay any standard
issuance  and other fees that Bank notifies Borrower will be charged for issuing
and  processing  Letters  of  Credit  for  Borrower.

                    (iv)  Interest  shall accrue from the date of each Revolving
Advance at the rate specified in Section 2.3(a), and shall be payable monthly on
the  first  day  of  each  month  through  the  Revolving  Maturity  Date.

               (c)  EQUIPMENT  ADVANCES.

                    (i)  Subject  to  and  upon the terms and conditions of this
Agreement,  at  any time from the date hereof through the Tranche A Availability
End  Date or Tranche B Availability End Date, as applicable, Bank agrees to make
advances  to  Borrower  in  two  tranches,  Tranche  A  and  Tranche  B (each an
"EQUIPMENT  ADVANCE"  and  collectively, the "EQUIPMENT ADVANCES"). Borrower may
request  Equipment  Advances  under  Tranche  A at any time from the date hereof
through  the earlier to occur of (a) the Tranche A Availability End Date and (b)
the  termination  of  Bank's  obligation  to  advance  money pursuant to Section
9.1(b). Borrower may request Equipment Advances under Tranche B at any time from
the  Tranche  A  Availability  End  Date through the earlier to occur of (a) the
Tranche  B Availability End Date and (b) the termination of Bank's obligation to
advance  money  pursuant  to Section 9.1(b). The aggregate outstanding amount of
Tranche  A  Equipment Advances and Tranche B Equipment Advances shall not at any
time  exceed  the  Committed  Equipment  Line.  Each Equipment Advance shall not
exceed  100%  of  the  invoiced  amount  of  equipment,  furniture  and software
(excluding taxes, shipping, warranty charges, freight discounts and installation
expense),  which items Borrower shall have purchased within 90 days prior to the
date  of the corresponding Equipment Advance; provided, however, that during and
until  the date thirty (30) days after the Closing Date, Borrower may request an
Equipment Advance against invoices for equipment and furniture dated on or after
June 1, 2000 (a "SPECIAL TRANCHE A EQUIPMENT ADVANCE"). Amounts allocated to the
purchase  of software shall be limited to $1,500,000 in the aggregate. Equipment
Advances  may  be  used  for  Equipment  Advance  Permitted  Uses  only.

                    (ii)  Interest  shall accrue from the date of each Equipment
Advance at the rate specified in Section 2.3(a), and shall be payable monthly on
the  first  day  of  each month through the First Equipment Maturity Date or the
Second  Equipment  Maturity  Date,  as  applicable.

                              A.  SPECIAL  TRANCHE  A  EQUIPMENT  ADVANCES.  Any
Special  Tranche  A  Equipment  Advances  that  are outstanding on the Tranche A
Availability  End Date shall be due and payable in 24 equal monthly installments
of  principal,  plus all accrued and unpaid interest, beginning on the first day
of  the  month  following the Tranche A Availability End Date, and continuing on
the  first  day  of  each  month thereafter through the First Equipment Maturity
Date,  at  which  time  all amounts due in connection with the Special Equipment
Advances  made  under  this Section 2.1(c) shall be immediately due and payable.

                              B.  TRANCHE  A  EQUIPMENT  ADVANCES. Any Equipment
Advances  that are outstanding under Tranche A on the Tranche A Availability End
Date  shall be due and payable in 30 equal monthly installments of principal and
interest,  beginning  on  the  first  day  of  the month following the Tranche A
Availability  End Date, and continuing on the first day of each month thereafter

<PAGE>
through  the  Second  Equipment  Maturity Date, at which time all amounts due in
connection  with  Tranche  A  Equipment  Advances made under this Section 2.1(c)
shall  be  immediately  due  and  payable.

                              C.  TRANCHE  B  EQUIPMENT  ADVANCES. Any Equipment
Advances  that are outstanding under Tranche B on the Tranche B Availability End
Date  shall be due and payable in 24 equal monthly installments of principal and
interest,  beginning  on  the  first  day  of  the month following the Tranche B
Availability  End Date, and continuing on the first day of each month thereafter
through  the  Second  Equipment  Maturity Date, at which time all amounts due in
connection  with  Tranche  B  Equipment  Advances made under this Section 2.1(c)
shall  be  immediately  due  and  payable.

                    (iii)  Equipment  Advances,  once  repaid,  may  not  be
reborrowed.  Borrower may prepay any Equipment Advances at any time, in whole or
in  part,  without  penalty  or  premium.

                    (iv)  When  Borrower desires to obtain an Equipment Advance,
Borrower  shall  notify  Bank  (which  notice shall be irrevocable) by facsimile
transmission  to  be  received no later than 3:00 p.m. Pacific Standard Time one
Business  Day  before the day on which the Equipment Advance is to be made. Such
notice  shall  be  substantially  in  the form of Exhibit C. The notice shall be
signed  by  a  Responsible  Officer  or  its  designee and include a copy of the
invoice  for  any equipment, furniture and/or software to be financed, and shall
include  the  serial  numbers  of  such  items.

          2.2 OVERADVANCES. If the aggregate amount of the outstanding Revolving
Advances  (including  outstanding  and  undrawn  Letters  of Credit) exceeds the
lesser  of  the  Committed  Revolving  Line  or  the Borrowing Base at any time,
Borrower  shall  promptly  pay  to  Bank,  in  cash,  the amount of such excess.

          2.3  INTEREST  RATES,  PAYMENTS,  AND  CALCULATIONS.

               (a)     INTEREST  RATES.

                    (i)  REVOLVING  ADVANCES.  Except  as  set  forth in Section
2.3(b),  the  Revolving  Advances  shall bear interest, on the outstanding daily
balance  thereof,  at  a  rate  equal  to  .75%  above  the  Prime  Rate.

                    (ii)  EQUIPMENT  ADVANCES.  Except  as  set forth in Section
2.3(b),  the  Equipment  Advances  shall bear interest, on the outstanding daily
balance  thereof,  at  a  rate  equal  to  1.00%  above  the  Prime  Rate.

               (b) LATE FEE; DEFAULT RATE. If any payment is not made within ten
days  after  the  date  such  payment is due, Borrower shall pay Bank a late fee
equal  to  the  lesser of (i) 5% of the amount of such unpaid amount or (ii) the
maximum  amount  permitted  to  be charged under applicable law. All Obligations
shall bear interest, from and after the occurrence and during the continuance of
an Event of Default, at a rate equal to the lesser of (y) five percentage points
above  the  interest  rate applicable immediately prior to the occurrence of the
Event  of  Default  or  (z)  the  maximum  amount  permitted to be charged under
applicable  law.

               (c)  PAYMENTS. Bank shall, at its option, charge any interest due
hereunder,  all  Bank  Expenses,  and  all  Periodic  Payments  against  any  of
Borrower's  deposit  accounts  or against the Committed Revolving Line, in which
case  those amounts shall thereafter accrue interest at the rate then applicable
hereunder. Any interest not paid when due shall be compounded by becoming a part
of  the  Obligations,  and such interest shall thereafter accrue interest at the
rate  then  applicable  hereunder.

               (d) COMPUTATION. In the event the Prime Rate is changed from time
to  time hereafter, the applicable rate of interest hereunder shall be increased
or  decreased,  effective  as of the day the Prime Rate is changed, by an amount
equal  to  such change in the Prime Rate. All interest chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual number
of  days  elapsed.

<PAGE>
          2.4  CREDITING  PAYMENTS.  Prior  to  the  occurrence  of  an Event of
Default,  Bank  shall  credit  a  wire transfer of funds, check or other item of
payment  to  such deposit account or Obligation as Borrower specifies. After the
occurrence  of  an Event of Default, the receipt by Bank of any wire transfer of
funds,  check,  or  other  item  of  payment  shall  be  immediately  applied to
conditionally  reduce  the Obligations, but shall not be considered a payment on
account  unless such payment is of immediately available federal funds or unless
and  until  such  check  or  other item of payment is honored when presented for
payment.  Notwithstanding  anything  to  the contrary contained herein, any wire
transfer  or  payment  received  by  Bank after 12:00 noon Pacific Standard Time
shall  be  deemed to have been received by Bank as of the opening of business on
the  immediately  following Business Day. Whenever any payment to Bank under the
Loan  Documents  would  otherwise be due (except by reason of acceleration) on a
date  that  is not a Business Day, such payment shall instead be due on the next
Business  Day, and additional fees or interest, as the case may be, shall accrue
and  be  payable  for  the  period  of  such  extension.

          2.5  FEES.  Borrower  shall  pay  to  Bank  the  following:

               (a)  FACILITY  FEE.  On the Closing Date, a facility fee equal to
$45,000 ($18,750 with respect to the Revolving Facility and $26,250 with respect
to  the  Equipment  Facility),  which  fee  shall  be  nonrefundable;

               (b)  BANK  EXPENSES.  On  the  Closing  Date,  all  Bank Expenses
incurred  through  the  Closing  Date,  including reasonable attorneys' fees and
expenses  and,  after  the Closing Date, all Bank Expenses, including reasonable
attorneys'  fees  and  expenses,  as  and  when  they  become  due.

          2.6  TERM.  This  Agreement shall become effective on the Closing Date
and, subject to Section 12.7, shall continue in full force and effect for a term
ending  on  the  Second  Equipment  Maturity  Date.

     3.   CONDITIONS  OF  LOANS.

          3.1  CONDITIONS  PRECEDENT TO INITIAL CREDIT EXTENSION. The obligation
of  Bank  to  make  the  initial  Credit  Extension  is subject to the condition
precedent  that  Bank shall have received, in form and substance satisfactory to
Bank,  the  following:

               (a)  this  Agreement,  duly  executed;

               (b)  a  duly  executed  officer's  certificate  of  Borrower with
respect  to incumbency and resolutions authorizing the execution and delivery of
this  Agreement;

               (c)  a  duly executed Itemization of Amount Financed Disbursement
Instructions;

               (d)  a  duly  executed  Automatic  Debit  Authorization;

               (e)  duly  executed  financing  statements  (Forms UCC-1) as Bank
deems  necessary  or  appropriate;

               (f)  a  duly  executed  Intellectual Property Security Agreement;

               (g)  a  duly  executed  agreement  to  provide  insurance;

               (h)  payment  of the fees and Bank Expenses then due specified in
Section  2.5;

               (i)  at Bank's option, an audit of the Collateral, the results of
which  shall  be  satisfactory  to  Bank, such audit to be completed, if at all,
within  ten  days  after  the  date  hereof;

               (j)  current financial statements in accordance with Section 6.2;
and

<PAGE>
               (k)  such  other documents, and completion of such other matters,
as  Bank  may  reasonably  deem  necessary  or  appropriate.

          3.2  POST-CLOSING  CONDITIONS.  As soon as available, but in any event
within  45  calendar  days from the date hereof, Borrower shall deliver to Bank:

               (a)  a  fully-executed  termination statement terminating Silicon
Valley  Bank's  lien  evidenced  by  UCC-1  financing  statement 9607560795; and

               (b)  with  respect  to the existing real property leases covering
Borrower's  locations  in  Emeryville, California and Santa Clara, California, a
landlord agreement, in form and substance satisfactory to Bank, duly executed by
Borrower  and  its  applicable  landlord.

          3.3  CONDITIONS  PRECEDENT TO ALL CREDIT EXTENSIONS. The obligation of
Bank  to  make each Credit Extension, including the initial Credit Extension, is
further  subject  to  the  following  conditions:

               (a)  timely  receipt  by  Bank  of  the  Payment/Advance  Form as
provided  in  Section  2.1;  and

               (b)  the  representations  and  warranties contained in Section 5
shall be true and correct in all material respects on and as of the date of such
Payment/Advance  Form  and  on  the  effective  date of each Credit Extension as
though  made  at  and  as  of each such date, and no Event of Default shall have
occurred  and  be  continuing, or would exist after giving effect to such Credit
Extension  (provided,  however,  that  those  representations  and  warranties
expressly  referring  to another date shall be true, correct and complete in all
material respects as of such date). The making of each Credit Extension shall be
deemed  to  be  a  representation  and  warranty by Borrower on the date of such
Credit  Extension  as  to  the accuracy of the facts referred to in this Section
3.2.

     4.   CREATION  OF  SECURITY  INTEREST.

          4.1  GRANT OF SECURITY INTEREST. Borrower grants and pledges to Bank a
continuing security interest in all presently existing and hereafter acquired or
arising  Collateral to secure prompt repayment of any and all Obligations and to
secure  prompt performance by Borrower of each of its covenants and duties under
the  Loan Documents. Except as set forth in the Schedule, such security interest
constitutes  a valid, first priority security interest in the presently-existing
Collateral,  and  will  constitute  a valid, first priority security interest in
later-acquired  Collateral.  Notwithstanding any termination, Bank's Lien on the
Collateral  shall  remain  in  effect  for  so  long  as  any  Obligations  are
outstanding.

          4.2 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. Borrower shall from
time to time execute and deliver to Bank, at the reasonable request of Bank, all
Negotiable  Collateral,  all  financing statements and other documents that Bank
may  reasonably  request,  in form satisfactory to Bank, to perfect and continue
perfected  Bank's  security  interests  in  the Collateral and in order to fully
consummate  all  of  the  transactions  contemplated  under  the Loan Documents.

          4.3 RIGHT TO INSPECT. Bank (through any of its officers, employees, or
agents)  shall  have  the right, upon reasonable prior notice, from time to time
during  Borrower's  usual business hours but no more than once a year (unless an
Event  of  Default  has occurred and is continuing), to inspect Borrower's Books
and  to  make  copies thereof and to check, test, and appraise the Collateral in
order  to  verify Borrower's financial condition or the amount, condition of, or
any  other  matter  relating  to,  the  Collateral.

          4.4  REVISED  ARTICLE  9.  Borrower  and Bank acknowledge that revised
Article  9 of the UCC, in the form or substantially in the form approved in 1998
by  the  American  Law Institute and the National Conference of Commissioners on
Uniform  State  Law  ("REVISED  ARTICLE  9"),  has  been adopted in the State of
California  and  elsewhere,  and  hereby  agree  to  the following provisions in
anticipation  of the possible application thereof, in one or more jurisdictions,
to  the  transactions  contemplated  hereby.  Upon  such  application of Revised

<PAGE>
Article  9  to  the  transactions  contemplated  hereby,  all references in this
Agreement  to  sections  of  the  UCC shall be deemed to refer to the equivalent
corresponding  sections  of  Revised  Article  9.

               (a)  ATTACHMENT. In applying the law of any jurisdiction in which
Revised  Article  9  is in effect, the Collateral is all assets of the Borrower,
whether  or  not  within  the  scope  of Revised Article 9. The Collateral shall
include,  without  limitation,  the following categories of assets as defined in
Revised  Article  9:  goods  (including  inventory, equipment and any accessions
thereto),  instruments  (including  promissory  notes),  documents,  accounts
(including  health-care-insurance  receivables), chattel paper (whether tangible
or  electronic),  deposit  accounts, letter-of-credit rights (whether or not the
letter  of credit is evidenced by a writing), commercial tort claims, securities
and  all  other  investment  property, general intangibles (including payment on
intangibles  and  software),  supporting obligations and any and all proceeds of
any  thereof,  wherever  located,  whether  now  owned or hereafter acquired. If
Borrower shall at any time, whether or not Revised Article 9 is in effect in any
particular  jurisdiction, acquire a commercial tort claim, as defined in Revised
Article  9,  such  Borrower shall immediately notify Bank in a writing signed by
Borrower  of  the  brief  details  thereof  and  grant to Bank in such writing a
security  interest  therein  and  in the proceeds thereof, all upon the terms of
this  Agreement,  with  such writing to be in form and substance satisfactory to
Bank.

               (b)  PERFECTION  BY FILING. Bank may at any time and from time to
time  file  financing statements, continuation statements and amendments thereto
that  describe  the Collateral as all assets of the Borrower or words of similar
effect  and  which  contain  any other information required by Part 5 of Revised
Article  9  for  the  sufficiency  or  filing office acceptance of any financing
statement, continuation statement or amendment, including whether Borrower is an
organization,  the  type  of  organization  and  any organization identification
number  issued to such Borrower. Borrower agrees to furnish any such information
to  Bank  promptly  upon  request.  Any  such financing statements, continuation
statements  or amendments may be signed by Bank on behalf of Borrower and may be
filed  at  any time in any jurisdiction whether or not Revised Article 9 is then
in  effect  in  that  jurisdiction.

               (c)  OTHER  PERFECTION,  ETC. Borrower shall at any time and from
time  to  time,  whether or not Revised Article 9 is in effect in any particular
jurisdiction,  take  such  steps  as Bank may reasonably request for Bank (a) to
obtain  an  acknowledgement,  in form and substance satisfactory to Bank, of any
bailee  having  possession  of any of the Collateral, that the bailee holds such
Collateral for Bank, (b) to obtain "control" of any investment property, deposit
accounts, letter-of-credit rights or electronic chatter paper (as such terms are
defined  in  Revised  Article 9 with corresponding provisions in Sections 9-104,
9-105,  9-106  and  9-107  of  Revised  Article  9  relating to what constitutes
"control"  for  such  items  of  Collateral),  with  any agreements establishing
control  to  be in form and substance satisfactory to Bank, and (c) otherwise to
insure  the continued perfection and priority of the Bank's security interest in
any  of the Collateral and of the preservation of its rights therein, whether in
anticipation,  and  following  the  effectiveness,  of  Revised Article 9 in any
jurisdiction.

               (d)  SAVINGS  CLAUSE. Nothing contained in this SECTION 4.4 shall
be  construed  to  narrow  the  scope  of Bank's security interest in any of the
Collateral,  or  the  perfection  or priority thereof, or to impair or otherwise
limit  any  of  the  rights,  powers,  privileges or remedies of Bank hereunder,
except  as  mandated  by  Revised Article 9, but only to the extent so mandated.

     5.   REPRESENTATIONS  AND  WARRANTIES.

          Borrower  represents  and  warrants  as  follows:

          5.1  DUE  ORGANIZATION AND QUALIFICATION. Borrower and each Subsidiary
is  a corporation duly existing under the laws of its state of incorporation and
qualified  and  licensed to do business in any state in which the conduct of its
business  or  its ownership of property requires that it be so qualified, except
where  the failure to do so could not reasonably be expected to cause a Material
Adverse  Effect.

          5.2  DUE  AUTHORIZATION;  NO  CONFLICT.  The  execution, delivery, and
performance  of  the Loan Documents are within Borrower's powers, have been duly
authorized,  and  are  not  in  conflict  with  nor  constitute  a breach of any
provision  contained  in  Borrower's Certificate of Incorporation or Bylaws, nor
will  they  constitute an event of default under any material agreement by which
Borrower is bound. Borrower is not in default under any agreement by which it is
bound,  which  default  could  have  a  Material  Adverse  Effect.

<PAGE>
          5.3  COLLATERAL.  Borrower  has good title to the Collateral, free and
clear  of Liens, except for Permitted Liens. The Eligible Accounts are bona fide
existing  obligations.  The  property  giving rise to such Eligible Accounts has
been  delivered to the account debtor or its agent for immediate shipment to and
unconditional acceptance by the account debtor. Borrower has not received notice
of  an  actual  or  imminent  Insolvency  Proceeding of any account debtor whose
accounts  are included in any Borrowing Base Certificate as an Eligible Account.
All  Inventory  is in all material respects of good and marketable quality, free
from all material defects, except for Inventory for which adequate reserves have
been  made.

          5.4  INTELLECTUAL  PROPERTY  COLLATERAL. Borrower is the sole owner of
the Intellectual Property Collateral, except for Licenses granted by Borrower to
its  customers  in  the  ordinary  course  of  business. Each of the Copyrights,
Trademarks  and  Patents is, to Borrower's knowledge, valid and enforceable, and
no  part  of  the  Intellectual  Property  Collateral has been judged invalid or
unenforceable,  in whole or in part, and no claim has been made that any part of
the  Intellectual  Property  Collateral  violates  the rights of any third party
except  to  the  extent  such  claim could not reasonably be expected to cause a
Material  Adverse Effect. Except as set forth in the Schedule, Borrower's rights
as  a  licensee  and  reseller of intellectual property do not give rise to more
than  5% of its gross revenue in any given month, including, without limitation,
revenue  derived  from  the  sale,  licensing,  rendering  or disposition of any
product  or  service.

          5.5 NAME; LOCATION OF CHIEF EXECUTIVE OFFICE AND COLLATERAL. Except as
disclosed  in  the Schedule, Borrower has not done business under any name other
than  that specified on the signature page hereof. The chief executive office of
Borrower  is  located  at  the  address  indicated  in  Section  10  hereof. The
Collateral  is  presently  located  at  the addresses set forth on the Schedule.

          5.6  LITIGATION.  Except  as  set  forth in the Schedule, there are no
actions  or  proceedings pending by or against Borrower or any Subsidiary before
any  court  or  administrative  agency  in which a likely adverse decision could
reasonably  be expected to have a Material Adverse Effect, or a material adverse
effect  on  Borrower's  interest  or Bank's security interest in the Collateral.

          5.7  NO  MATERIAL  ADVERSE  CHANGE  IN  FINANCIAL  STATEMENTS.  All
consolidated  financial  statements  related to Borrower and any Subsidiary that
are  delivered  by  Borrower  to  Bank  fairly  present in all material respects
Borrower's  consolidated  financial  condition  as  of  the  date  thereof  and
Borrower's  consolidated  results of operations for the period then ended. There
has  not  been a material adverse change in the consolidated financial condition
of  Borrower  since  the  date  of  the most recent of such financial statements
submitted  to  Bank.

          5.8  SOLVENCY,  PAYMENT  OF  DEBTS.  Borrower is able to pay its debts
(including  trade  debts)  as they mature; the fair saleable value of Borrower's
Assets  (including  goodwill  minus disposition costs) exceeds the fair value of
its  liabilities  less  its deferred maintenance and royalties and other revenue
derived  from Licenses; and Borrower is not left with unreasonably small capital
after  the  transactions  contemplated  by  this  Agreement.

          5.9 COMPLIANCE WITH LAWS AND REGULATIONS. Borrower and each Subsidiary
have  met the minimum funding requirements of ERISA with respect to any employee
benefit  plans subject to ERISA. No event has occurred resulting from Borrower's
failure  to  comply with ERISA that is reasonably likely to result in Borrower's
incurring  any  liability that could have a Material Adverse Effect. Borrower is
not an "INVESTMENT COMPANY" or a company "CONTROLLED" by an "INVESTMENT COMPANY"
within  the  meaning  of  the  Investment  Company  Act of 1940. Borrower is not
engaged  principally,  or as one of the important activities, in the business of
extending  credit for the purpose of purchasing or carrying margin stock (within
the  meaning  of  Regulations  T  and U of the Board of Governors of the Federal
Reserve  System).  Borrower  has  complied in all material respects with all the
provisions  of  the  Federal Fair Labor Standards Act. Borrower is in compliance
with all environmental laws, regulations and ordinances except where the failure
to  comply  is not reasonably likely to have a Material Adverse Effect. Borrower
has  not  violated  any  statutes,  laws,  ordinances or rules applicable to it,
violation  of  which  could  have  a  Material Adverse Effect. Borrower and each
Subsidiary  have  filed  or  caused  to  be filed all tax returns required to be
filed,  and  have  paid, or have made adequate provision for the payment of, all
taxes reflected therein except those being contested in good faith with adequate
reserves  under  GAAP.

          5.10  SUBSIDIARIES.  Borrower  does  not  own  any  stock, partnership
interest  or  other  equity  securities  of  any  Person,  except  for Permitted
Investments.

<PAGE>
          5.11  GOVERNMENT  CONSENTS. Borrower and each Subsidiary have obtained
all  consents, approvals and authorizations of, made all declarations or filings
with,  and given all notices to, all governmental authorities that are necessary
for  the  continued  operation  of  Borrower's  business as currently conducted,
except  where  the  failure to do so could not reasonably be expected to cause a
Material  Adverse  Effect.

          5.12  INBOUND  LICENSES. Except as disclosed on the Schedule, Borrower
is  not  a  party  to,  nor  is  bound  by,  any License or other agreement that
prohibits  or  otherwise restricts Borrower from granting a security interest in
Borrower's  interest  in  such  License  or  agreement  or  any  other property.

          5.13  FULL  DISCLOSURE. No representation, warranty or other statement
made by Borrower in any certificate or written statement furnished to Bank taken
together  with  all  such  certificates and written statements furnished to Bank
contains  any  untrue  statement of a material fact or omits to state a material
fact necessary in order to make the statements contained in such certificates or
statements  not misleading, it being recognized by Bank that the projections and
forecasts  provided  by  Borrower  in  good  faith  and  based  upon  reasonable
assumptions  are  not  to  be viewed as facts and that actual results during the
period  or periods covered by any such projections and forecasts may differ from
the  projected  or  forecasted  results.

     6.   AFFIRMATIVE  COVENANTS.

          Borrower  covenants  that,  until  payment  in full of all outstanding
Obligations,  and  for  so long as Bank may have any commitment to make a Credit
Extension  hereunder,  Borrower  shall  do  all  of  the  following:

          6.1  GOOD  STANDING AND GOVERNMENT COMPLIANCE. Borrower shall maintain
its  and  each  of  its Subsidiaries' corporate existence in its jurisdiction of
incorporation  and  maintain  qualification  in  each  jurisdiction in which the
failure to so qualify could have a Material Adverse Effect. Borrower shall meet,
and  shall  cause  each  Subsidiary to meet, the minimum funding requirements of
ERISA  with  respect  to  any  employee benefit plans subject to ERISA. Borrower
shall  comply,  and  shall  cause  each Subsidiary to comply, with all statutes,
laws,  ordinances  and  government rules and regulations to which it is subject,
and  shall  maintain,  and  shall cause each of its Subsidiaries to maintain, in
force  all  licenses,  approvals and agreements, the loss of which or failure to
comply  with  which  could have a Material Adverse Effect, or a material adverse
effect  on  the  Collateral  or  the  priority of Bank's Lien on the Collateral.

          6.2  FINANCIAL  STATEMENTS,  REPORTS,  CERTIFICATES.  Borrower  shall
deliver  to  Bank: (a) as soon as available, but in any event within 20 Business
Days  after  the  end  of  each  calendar month, a company-prepared consolidated
balance  sheet  and income statement covering Borrower's consolidated operations
during  such period, in a form acceptable to Bank and certified by a Responsible
Officer; (b) as soon as available, but in any event within 90 days after the end
of Borrower's fiscal year, audited consolidated financial statements of Borrower
prepared in accordance with GAAP, consistently applied, together with an opinion
which  is  unqualified  or  otherwise  consented  to  in writing by Bank on such
financial  statements  of  an  independent  certified  public  accounting  firm
reasonably  acceptable  to  Bank; (c) promptly upon receipt of notice thereof, a
report  of  any  legal  actions  pending  or  threatened against Borrower or any
Subsidiary  that  could result in damages or costs to Borrower or any Subsidiary
of  $250,000  or  more;  (d) such budgets, sales projections, operating plans or
other  financial  information  generally  prepared  by  Borrower in the ordinary
course  of  business  as  Bank may reasonably request from time to time; and (e)
within  30  days  of  the  last  day  of each fiscal quarter, a report signed by
Borrower,  in  form  reasonably  acceptable to Bank, listing any applications or
registrations  that  Borrower  has  made  or  filed  in  respect of any Patents,
Copyrights  or  Trademarks  and  the  status  of any outstanding applications or
registrations,  as  well  as  any  material  change  in  Borrower's Intellectual
Property  Collateral,  including,  but  not limited to, any subsequent ownership
right  of  Borrower in or to any Trademark, Patent or Copyright not specified in
Exhibits  A,  B, and C of the Intellectual Property Security Agreement delivered
to  Bank  by  Borrower  in  connection  with  this  Agreement.

               (a)  Within  10  Business  Days after the last day of each month,
Borrower  shall  deliver  to  Bank  a  Borrowing  Base  Certificate  signed by a
Responsible Officer in substantially the form of Exhibit D hereto, together with
aged  listings  of  accounts  receivable  and  accounts  payable.

<PAGE>
               (c)  Within  20  Business  Days after the last day of each month,
Borrower  shall  deliver  to  Bank,  with  the  monthly  financial statements, a
Compliance Certificate signed by a Responsible Officer in substantially the form
of  Exhibit  E  hereto.

               (c)  Bank shall have a right from time to time hereafter to audit
Borrower's Accounts and appraise Collateral at Borrower's expense, provided that
such audits will be conducted no more often than every 12 months unless an Event
of  Default  has  occurred  and  is  continuing. Notwithstanding anything to the
contrary  herein,  if  there  is no continuing Event of Default at the time Bank
verifies  Accounts,  Bank  shall  not  identify  itself  as  Bank to the Account
debtors.

          6.3 INVENTORY; RETURNS. Borrower does not currently maintain Inventory
of  any significant magnitude, however, Borrower shall keep the Inventory it has
in  good  and  marketable  condition,  free from all material defects except for
Inventory for which adequate reserves have been made. Returns and allowances, if
any,  as between Borrower and its account debtors shall be on the same basis and
in  accordance  with the usual customary practices of Borrower, as they exist on
the  Closing  Date.  Borrower  shall  promptly  notify  Bank  of all returns and
recoveries  of Inventory and of all disputes and claims involving Inventory with
an  amount  of  more  than  $100,000.

          6.4 TAXES. Borrower shall make, and cause each Subsidiary to make, due
and  timely  payment or deposit of all material federal, state, and local taxes,
assessments,  or contributions required of it by law, including, but not limited
to, those laws concerning income taxes, F.I.C.A., F.U.T.A. and state disability,
and  will  execute  and  deliver  to Bank, on demand, proof satisfactory to Bank
indicating  that Borrower or a Subsidiary has made such payments or deposits and
any  appropriate  certificates  attesting  to  the  payment  or deposit thereof;
provided  that  Borrower or a Subsidiary need not make any payment if the amount
or  validity  of  such  payment  is  contested  in  good  faith  by  appropriate
proceedings  and  is  reserved  against  (to  the  extent  required  by GAAP) by
Borrower.

          6.5  INSURANCE.

               (a)  Borrower,  at its expense, shall keep the Collateral insured
against  loss  or  damage  by  fire, theft, explosion, sprinklers, and all other
hazards  and  risks, and in such amounts, as ordinarily insured against by other
owners  in  similar  businesses  conducted  in  the  locations  where Borrower's
business is conducted on the date hereof. Borrower shall also maintain liability
and  other  insurance  in amounts and of a type that are customary to businesses
similar  to  Borrower's.

               (b)  All  such  policies of insurance shall be in such form, with
such  companies,  and  in  such  amounts as reasonably satisfactory to Bank. All
policies  of  property  insurance  shall  contain  a  lender's  loss  payable
endorsement,  in a form satisfactory to Bank, showing Bank as an additional loss
payee,  and  all  liability  insurance policies shall show Bank as an additional
insured  and  specify that the insurer must give at least 20 days notice to Bank
before  canceling its policy for any reason. Upon Bank's request, Borrower shall
deliver  to  Bank  certified copies of the policies of insurance and evidence of
all  premium  payments.  If  no Event of Default has occurred and is continuing,
proceeds  payable  under  any  casualty  policy  will,  at Borrower's option, be
payable  to Borrower to replace the property subject to the claim, provided that
any  such replacement property shall be deemed Collateral in which Bank has been
granted  a first priority security interest. If an Event of Default has occurred
and  is  continuing, all proceeds payable under any such policy shall, at Bank's
option,  be  payable  to  Bank  to  be  applied  on  account of the Obligations.

          6.6 PRIMARY DEPOSITORY. Borrower shall maintain its primary depositary
account  and  banking relationship with Bank. Notwithstanding the foregoing, (i)
Borrower  may maintain investment accounts with institutions other than Bank (so
long  as  Borrower  shall  deliver  a  control  agreement, in form and substance
satisfactory  to  Bank, executed by such other institutions within 30 days after
Bank's  request  therefor)  and  (ii)  Borrower's  Subsidiaries  may  maintain
depository  and  operating  accounts  with  institutions  other  than  Bank.

          6.7  FINANCIAL  COVENANTS. Borrower shall maintain, as of the last day
of  each  calendar  month:

<PAGE>
               (a)  QUICK  RATIO.  A  ratio  of (i) Quick Assets to (ii) Current
Liabilities  less  deferred  maintenance and royalties and other revenue derived
from  Licenses,  of  at  least  1.75  to  1.00.

               (b)  LIQUIDITY RATIO. A ratio of the sum of (i) unrestricted cash
plus (ii) the amount available under the Committed Revolving Line, to the sum of
(x)  Borrower's  total  Indebtedness  to  Bank  plus  (y)  all  other  secured
Indebtedness  of  Borrower,  of  at  least  1.75  to  1.00.

               (c)  MINIMUM  REVENUE. Gross revenue in an amount greater than or
equal  to 80% of Borrower's projected gross revenue pursuant to its revenue plan
attached  hereto  as  Exhibit  F.

          6.8  REGISTRATION  OF  INTELLECTUAL  PROPERTY  RIGHTS.

               (a)  Borrower  shall  register  or  cause  to be registered on an
expedited  basis  (to  the extent not already registered) with the United States
Patent  and  Trademark  Office  or  the  United  States  Copyright  Office,  as
applicable: (i) those intellectual property rights listed on Exhibits A, B and C
to the Intellectual Property Security Agreement delivered to Bank by Borrower in
connection  with  this  Agreement, within 30 days of the date of this Agreement,
(ii)  all  material  registrable  intellectual  property  rights  Borrower  has
developed  as  of  the date of this Agreement but heretofore failed to register,
within  30  days  of  the  date  of  this  Agreement, and (iii) those additional
material  intellectual  property  rights  developed or acquired by Borrower from
time  to  time in connection with any product, prior to the sale or licensing of
such  product  to  any  third party, and prior to Borrower's use of such product
(including  without  limitation major revisions or additions which significantly
improve  the  functionality  of  the intellectual property rights listed on such
Exhibits  A,  B and C). Borrower shall give Bank notice of all such applications
or  registrations.

               (b)  Borrower  shall  execute  and  deliver  such  additional
instruments  and documents from time to time as Bank shall reasonably request to
perfect  Bank's  security  interest  in  the  Intellectual  Property Collateral.

               (c)  Borrower shall (i) protect, defend and maintain the validity
and  enforceability of the Trademarks, Patents and Copyrights, (ii) use its best
efforts  to  detect  infringements of the Trademarks, Patents and Copyrights and
promptly advise Bank in writing of material infringements detected and (iii) not
allow  any  Trademarks,  Patents  or  Copyrights  material to Borrower's ongoing
operations  to  be  abandoned,  forfeited or dedicated to the public without the
written  consent  of  Bank,  which  shall  not  be  unreasonably  withheld.

               (d) Bank may audit Borrower's Intellectual Property Collateral to
confirm compliance with this Section 6.8, provided such audit may not occur more
often  than  twice  per  twelve-month  period,  unless  an  Event of Default has
occurred  and  is continuing. Bank shall have the right, but not the obligation,
to take, at Borrower's sole expense, any actions that Borrower is required under
this  Section  6.8  to  take  but  which  Borrower fails to take, after 15 days'
written  notice to Borrower. Borrower shall reimburse and indemnify Bank for all
reasonable  costs and reasonable expenses incurred in the reasonable exercise of
its  rights  under  this  Section  6.8.

          6.9  CONSENT  OF INBOUND LICENSORS. Prior to entering into or becoming
bound  by  any License or agreement that is reasonably likely to have a material
impact  on  Borrower's  business  or  financial  condition,  Borrower shall: (i)
provide  written  notice  to  Bank  of  the  material  terms  of such License or
agreement  with  a  description  of  its likely impact on Borrower's business or
financial  condition;  and  (ii)  take such steps as Bank requests to obtain the
consent  of,  or  waiver by, any person whose consent or waiver is necessary for
Borrower's  interest in such Licenses or contract rights to be deemed Collateral
and  for  Bank  to  have  a  security  interest  in  it  that might otherwise be
restricted  by  the  terms  of  the applicable License or agreement, whether now
existing  or  entered  into  in  the  future.

          6.10  FURTHER  ASSURANCES.  At any time and from time to time Borrower
shall  execute and deliver such further instruments and take such further action
as may reasonably be requested by Bank to effect the purposes of this Agreement.

     7.   NEGATIVE  COVENANTS.

<PAGE>
          Borrower  covenants  and  agrees that, so long as any credit hereunder
shall  be  available and until payment in full of the outstanding Obligations or
for  so  long  as  Bank  may  have any commitment to make any Credit Extensions,
Borrower  will not do any of the following without Bank's prior written consent:

          7.1  DISPOSITIONS.  Convey, sell, lease, transfer or otherwise dispose
of (collectively, to "TRANSFER"), or permit any of its Subsidiaries to Transfer,
all  or  any  part  of its business or property, other than Permitted Transfers.

          7.2  CHANGE IN BUSINESS; CHANGE IN CONTROL OR EXECUTIVE OFFICE. Engage
in  any  business,  or permit any of its Subsidiaries to engage in any business,
other  than  or  reasonably  related  or  incidental to the businesses currently
engaged in by Borrower. Borrower will not have a Change in Control and will not,
without 30 days prior written notification to Bank, relocate its chief executive
office.

          7.3  MERGERS  OR  ACQUISITIONS.  Other than in the normal and ordinary
course  of  Borrower's  business,  merge  or  consolidate,  or permit any of its
Subsidiaries  to merge or consolidate, with or into any other Person (other than
mergers  or  consolidations  of  a  Subsidiary  into  another Subsidiary or into
Borrower),  or  acquire,  or  permit  any of its Subsidiaries to acquire, all or
substantially  all  of  the  capital  stock or property of another Person except
where,  upon  the  prior  written  consent  of  Bank, which consent shall not be
unreasonably  withheld  (i)  the  Borrower  or Subsidiary, as applicable, is the
surviving  entity  after such merger or acquisition and (ii) no Event of Default
has  occurred,  is  continuing  or  would  exist  after  giving  effect  to  the
transactions.

          7.4  INDEBTEDNESS.  Create,  incur, assume or be or remain liable with
respect  to  any  Indebtedness,  or  permit  any Subsidiary so to do, other than
Permitted  Indebtedness.

          7.5 ENCUMBRANCES. Create, incur, assume or allow any Lien with respect
to  any  of  its  property,  or  assign or otherwise convey any right to receive
income, including the sale of any Accounts, or permit any of its Subsidiaries so
to do, except for Permitted Liens, or covenant to any other Person that Borrower
in  the  future  will refrain from creating, incurring, assuming or allowing any
Lien  with  respect  to  any  of  Borrower's  property.

          7.6 DISTRIBUTIONS. Pay any dividends or make any other distribution or
payment  on  account  of or in redemption, retirement or purchase of any capital
stock,  except  that  Borrower  may  repurchase  the  stock of former employees,
consultants  and independent contractors pursuant to stock repurchase agreements
as  long  as  (a)  the market value of such stock is greater than the repurchase
price,  and  (b)  an Event of Default does not exist prior to such repurchase or
would  not  exist  after  giving  effect  to  such  repurchase.

          7.7  INVESTMENTS.  Other  than  in  the  normal and ordinary course of
Borrower's  business,  directly  or  indirectly  acquire  or  own,  or  make any
Investment  in  or  to  any  Person, or permit any of its Subsidiaries so to do,
other  than  Permitted  Investments.

          7.8 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit  to  exist any material transaction with any Affiliate of Borrower except
(a)  transactions  that  are in the ordinary course of Borrower's business, upon
fair  and  reasonable terms that are no less favorable to Borrower than would be
obtained in an arm's length transaction with a non-affiliated Person, and (b) as
set  forth  in  paragraph  (e)  of  the  definition of "Permitted Indebtedness."

          7.9 SUBORDINATED DEBT. Make any payment in respect of any Subordinated
Debt,  or  permit  any  of  its Subsidiaries to make any such payment, except in
compliance  with  the  terms  of  such Subordinated Debt, or amend any provision
contained  in any documentation relating to the Subordinated Debt without Bank's
prior  written  consent,  which  consent  shall  not  be  unreasonably withheld.

          7.10  INVENTORY  AND  EQUIPMENT.  Store the Inventory or the Equipment
with  a bailee, warehouseman, or similar party unless Bank has received a pledge
of  the  warehouse receipt covering such Inventory. Except for Inventory sold in
the  ordinary course of business and except for such other locations as Bank may
approve  in writing, Borrower shall keep the Inventory and Equipment only at the

<PAGE>
locations  set  forth on the Schedule and such other locations of which Borrower
gives  Bank  prior  written  notice  and  as to which Borrower signs and files a
financing  statement  where  needed  to  perfect  Bank's  security  interest.

          7.11  COMPLIANCE.  Become or be controlled by an "INVESTMENT COMPANY,"
within  the meaning of the Investment Company Act of 1940, or become principally
engaged  in,  or  undertake  as one of its important activities, the business of
extending  credit for the purpose of purchasing or carrying margin stock, or use
the  proceeds of any Credit Extension for such purpose. Fail to meet the minimum
funding  requirements  of  ERISA,  permit  a  Reportable  Event  or  Prohibited
Transaction, as defined in ERISA, to occur, fail to comply with the Federal Fair
Labor  Standards  Act  or  violate  any law or regulation, which violation could
reasonably  be expected to have a Material Adverse Effect, or a material adverse
effect  on  the  Collateral or the priority of Bank's Lien on the Collateral, or
permit  any  of  its  Subsidiaries  to  do  any  of  the  foregoing.

     8.   EVENTS  OF  DEFAULT.

          Any  one  or more of the following events shall constitute an Event of
Default  by  Borrower  under  this  Agreement:

          8.1  PAYMENT  DEFAULT. If Borrower fails to pay any of the Obligations
and  such  failure  continues  for  3  Business Days or more after the due date,
provided  that  within such 3 Business Day cure period, the failure to pay shall
not  be  deemed  an  Event  of  Default,  but no Credit Extensions will be made;

          8.2  COVENANT  DEFAULT.  If  Borrower  fails to perform any obligation
under  Article 6 or violates any of the covenants contained in Article 7 of this
Agreement,  or  fails or neglects to perform or observe any other material term,
provision,  condition,  covenant contained in this Agreement, in any of the Loan
Documents, or in any other present or future agreement between Borrower and Bank
and  as  to  any default under such other term, provision, condition or covenant
that  can  be  cured,  has  failed  to  cure  such default within ten days after
Borrower  receives  notice  thereof  or  any  officer  of Borrower becomes aware
thereof;  provided,  however,  that if the default cannot by its nature be cured
within the ten day period or cannot after diligent attempts by Borrower be cured
within  such  ten  day  period,  and such default is likely to be cured within a
reasonable time, then Borrower shall have an additional reasonable period (which
shall  not  in  any  case  exceed  30 days) to attempt to cure such default, and
within  such reasonable time period the failure to have cured such default shall
not  be  deemed  an  Event  of  Default  but  no Credit Extensions will be made;

          8.3 MATERIAL ADVERSE CHANGE. If there occurs a material adverse change
in Borrower's business or financial condition taken as a whole, or if there is a
material  impairment  of  the  prospect  of  repayment  of  any  portion  of the
Obligations or a material impairment of the value or priority of Bank's security
interests  in  the  Collateral;

          8.4  ATTACHMENT.  If  any  material  portion  of  Borrower's assets is
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any trustee, receiver or person acting in a similar
capacity  and such attachment, seizure, writ or distress warrant or levy has not
been  removed,  discharged  or  rescinded  within  ten  days,  or if Borrower is
enjoined,  restrained, or in any way prevented by court order from continuing to
conduct  all  or  any material part of its business affairs, or if a judgment or
other  claim  becomes  a  lien  or  encumbrance  upon  any  material  portion of
Borrower's  assets,  or  if  a  notice  of lien, levy, or assessment is filed of
record with respect to any of Borrower's assets by the United States Government,
or  any department, agency, or instrumentality thereof, or by any state, county,
municipal,  or  governmental  agency,  and  the same is not paid within ten days
after  Borrower  receives  notice  thereof,  provided that none of the foregoing
shall  constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending a good faith contest by Borrower (provided
that  no Credit Extensions will be required to be made during such cure period);

          8.5  INSOLVENCY.  If  Borrower  becomes insolvent, or if an Insolvency
Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced
against Borrower and is not dismissed or stayed within 30 days (provided that no
Credit  Extensions  will  be  made  prior  to  the  dismissal of such Insolvency
Proceeding);

<PAGE>
          8.6  OTHER AGREEMENTS. If there is a default in any agreement to which
Borrower  is  a party with a third party or parties resulting in a right by such
third  party or parties, whether or not exercised, to accelerate the maturity of
any  Indebtedness  in  an  amount  in  excess  of  $250,000 or that could have a
Material Adverse Effect; provided, however, that the Event of Default under this
Section  8.6  caused  by  the  occurrence  of  a default under another agreement
described in this Section shall be cured for purposes of this Agreement upon the
receipt  of  proof by Bank of the cure or waiver of the default under such other
agreement;

          8.7  SUBORDINATED  DEBT.  If  Borrower makes any payment on account of
Subordinated  Debt,  except  to  the  extent  the  payment  is allowed under any
subordination  agreement  entered  into  with  Bank;

          8.8  JUDGMENTS. If a judgment or judgments for the payment of money in
an  amount,  individually  or  in  the  aggregate, of at least $250,000 shall be
rendered against Borrower and shall remain unsatisfied and unstayed for a period
of  10  Business  Days (provided that no Credit Extensions will be made prior to
the  satisfaction  or  stay  of  the  judgment);  or

          8.9  MISREPRESENTATIONS. If any material misrepresentation or material
misstatement exists now or hereafter in any warranty or representation set forth
herein  or  in  any  certificate  delivered  to  Bank by any Responsible Officer
pursuant to this Agreement or to induce Bank to enter into this Agreement or any
other  Loan  Document.

     9.   BANK'S  RIGHTS  AND  REMEDIES.

          9.1  RIGHTS  AND  REMEDIES.  Upon  the  occurrence  and  during  the
continuance of an Event of Default, Bank may, at its election, without notice of
its  election  and  without  demand, do any one or more of the following, all of
which  are  authorized  by  Borrower:

               (a) Declare all Obligations, whether evidenced by this Agreement,
by  any  of  the other Loan Documents, or otherwise, immediately due and payable
(provided  that  upon the occurrence of an Event of Default described in Section
8.5, all Obligations shall become immediately due and payable without any action
by  Bank);

               (b)  Cease  advancing  money  or  extending  credit to or for the
benefit  of  Borrower  under this Agreement or under any other agreement between
Borrower  and  Bank;

               (c)  Demand that Borrower (i) deposit cash with Bank in an amount
equal  to  the  amount of any Letters of Credit remaining undrawn, as collateral
security  for the repayment of any future drawings under such Letters of Credit,
and  Borrower  shall  forthwith  deposit  and  pay such amounts, and (ii) pay in
advance  all  Letters  of  Credit  fees scheduled to be paid or payable over the
remaining  term  of  the  Letters  of  Credit;

               (d)  Settle  or  adjust disputes and claims directly with account
debtors  for  amounts,  upon  terms  and  in whatever order that Bank reasonably
considers  advisable;

               (e)  Make  such  payments  and  do  such  acts  as Bank considers
necessary  or  reasonable  to  protect  its security interest in the Collateral.
Borrower  agrees to assemble the Collateral if Bank so requires, and to make the
Collateral  available to Bank as Bank may designate. Borrower authorizes Bank to
enter  the  premises  where  the  Collateral  is  located,  to take and maintain
possession  of the Collateral, or any part of it, and to pay, purchase, contest,
or  compromise  any  encumbrance,  charge, or lien which in Bank's determination
appears to be prior or superior to its security interest and to pay all expenses
incurred  in  connection  therewith.  With  respect  to  any of Borrower's owned
premises, Borrower hereby grants Bank a license to enter into possession of such
premises  and  to  occupy  the same, without charge, in order to exercise any of
Bank's  rights  or  remedies  provided  herein, at law, in equity, or otherwise;

               (f) Set off and apply to the Obligations any and all (i) balances
and deposits of Borrower held by Bank, or (ii) indebtedness at any time owing to
or  for  the  credit  or  the  account  of  Borrower  held  by  Bank;

<PAGE>
               (g)  Ship,  reclaim,  recover,  store,  finish, maintain, repair,
prepare  for  sale,  advertise  for  sale,  and sell (in the manner provided for
herein)  the Collateral. Bank is hereby granted a license or other right, solely
pursuant  to  the  provisions  of  this  Section  9.1,  to  use, without charge,
Borrower's  labels,  patents,  copyrights,  rights  of  use  of  any name, trade
secrets,  trade names, trademarks, service marks, and advertising matter, or any
property  of  a  similar nature, as it pertains to the Collateral, in completing
production  of,  advertising  for  sale,  and  selling  any  Collateral  and, in
connection with Bank's exercise of its rights under this Section 9.1, Borrower's
rights  under  all  licenses  and all franchise agreements shall inure to Bank's
benefit;

               (h)  Sell  the  Collateral at either a public or private sale, or
both,  by way of one or more contracts or transactions, for cash or on terms, in
such  manner  and  at  such  places  (including  Borrower's  premises)  as  Bank
determines is commercially reasonable, and apply any proceeds to the Obligations
in  whatever  manner  or  order  Bank  deems  appropriate;

               (i)  Bank  may  credit  bid  and purchase at any public sale; and

               (j)  Any  deficiency  that  exists  after  disposition  of  the
Collateral  as  provided  above  will  be  paid  immediately  by  Borrower.

          9.2  POWER  OF ATTORNEY. Effective only upon the occurrence and during
the  continuance  of  an  Event of Default, Borrower hereby irrevocably appoints
Bank  (and  any  of Bank's designated officers, or employees) as Borrower's true
and lawful attorney to: (a) send requests for verification of Accounts or notify
account  debtors  of  Bank's  security  interest  in  the  Accounts; (b) endorse
Borrower's  name  on  any  checks or other forms of payment or security that may
come  into Bank's possession; (c) sign Borrower's name on any invoice or bill of
lading  relating  to  any Account, drafts against account debtors, schedules and
assignments  of  Accounts,  verifications  of  Accounts,  and notices to account
debtors;  (d) dispose of any Collateral; (e) make, settle, and adjust all claims
under and decisions with respect to Borrower's policies of insurance; (f) settle
and  adjust  disputes  and  claims respecting the accounts directly with account
debtors,  for amounts and upon terms which Bank determines to be reasonable; (g)
to  modify, in its sole discretion, any intellectual property security agreement
entered  into  between  Borrower  and  Bank  without  first obtaining Borrower's
approval  of or signature to such modification by amending Exhibits A, B, and C,
thereof, as appropriate, to include reference to any right, title or interest in
any  Copyrights,  Patents or Trademarks acquired by Borrower after the execution
hereof  or  to  delete  any  reference  to  any  right, title or interest in any
Copyrights,  Patents  or Trademarks in which Borrower no longer has or claims to
have  any  right, title or interest; (h) to file, in its sole discretion, one or
more  financing  or  continuation statements and amendments thereto, relative to
any  of the Collateral without the signature of Borrower where permitted by law;
and  (i)  to transfer the Intellectual Property Collateral into the name of Bank
or  a  third  party  to  the  extent  permitted under the UCC; provided Bank may
exercise  such  power  of  attorney  to  sign the name of Borrower on any of the
documents described in Section 4.2 regardless of whether an Event of Default has
occurred.  The  appointment of Bank as Borrower's attorney in fact, and each and
every  one  of  Bank's  rights  and  powers,  being coupled with an interest, is
irrevocable  until  the earlier of the cure or waiver of the Event of Default or
such  time  as  all  of the Obligations have been fully repaid and performed and
Bank's  obligation  to  provide  advances  hereunder  is  terminated.

          9.3  ACCOUNTS  COLLECTION.  At  any  time  during  the  term  of  this
Agreement, Bank may notify any Person owing funds to Borrower of Bank's security
interest  in  such  funds  and verify the amount of such Account. Borrower shall
collect all amounts owing to Borrower for Bank, receive in trust all payments as
Bank's  trustee, and immediately deliver such payments to Bank in their original
form  as received from the account debtor, with proper endorsements for deposit.

          9.4 BANK EXPENSES. If Borrower fails to pay any amounts or furnish any
required  proof  of  payment due to third persons or entities, as required under
the  terms of this Agreement, then Bank may do any or all of the following after
reasonable notice to Borrower: (a) make payment of the same or any part thereof;
(b) set up such reserves under the Revolving Facility as Bank deems necessary to
protect  Bank  from  the  exposure  created  by  such failure; or (c) obtain and
maintain  insurance  policies  of  the  type  discussed  in  Section 6.5 of this
Agreement,  and  take  any  action  with  respect to such policies as Bank deems
prudent.  Any  amounts  so  paid  or  deposited  by  Bank  shall constitute Bank
Expenses,  shall  be immediately due and payable, and shall bear interest at the
then  applicable  rate  hereinabove  provided,  and  shall  be  secured  by  the
Collateral.  Any payments made by Bank shall not constitute an agreement by Bank

<PAGE>
to  make  similar  payments  in  the  future or a waiver by Bank of any Event of
Default  under  this  Agreement.

          9.5  BANK'S  LIABILITY  FOR  COLLATERAL. So long as Bank complies with
reasonable banking practices and Section 9-207 of the UCC, Bank shall not in any
way  or  manner  be  liable  or  responsible  for:  (a)  the  safekeeping of the
Collateral; (b) any loss or damage thereto occurring or arising in any manner or
fashion  from any cause; (c) any diminution in the value thereof; or (d) any act
or  default  of  any  carrier, warehouseman, bailee, forwarding agency, or other
person  whomsoever.  All  risk  of loss, damage or destruction of the Collateral
shall  be  borne  by  Borrower,  except  where  such loss, damage or destruction
results  from  the  gross  negligence  or  willful  misconduct of Bank or Bank's
failure  to  comply  with  Section  9-207  of  the  UCC.

          9.6  REMEDIES  CUMULATIVE.  Bank's  rights  and  remedies  under  this
Agreement,  the  Loan  Documents,  and all other agreements shall be cumulative.
Bank  shall  have  all  other  rights  and remedies not inconsistent herewith as
provided  under  the UCC, by law, or in equity. No exercise by Bank of one right
or  remedy  shall  be  deemed an election, and no waiver by Bank of any Event of
Default on Borrower's part shall be deemed a continuing waiver. No delay by Bank
shall  constitute  a  waiver, election, or acquiescence by it. No waiver by Bank
shall  be  effective  unless made in a written document signed on behalf of Bank
and  then  shall be effective only in the specific instance and for the specific
purpose  for  which  it  was  given.

          9.7  DEMAND;  PROTEST.  Borrower  waives  demand,  protest,  notice of
protest, notice of default or dishonor, notice of payment and nonpayment, notice
of  any  default,  nonpayment  at  maturity,  release,  compromise,  settlement,
extension,  or  renewal  of accounts, documents, Instruments, Chattel Paper, and
guarantees  at any time held by Bank on which Borrower may in any way be liable.

     10.  NOTICES.

          Unless otherwise provided in this Agreement, all notices or demands by
any  party  relating  to  this  Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements and
other  informational  documents  which  may be sent by first-class mail, postage
prepaid)  shall  be  personally  delivered  or  sent  by  a recognized overnight
delivery  service, certified mail, postage prepaid, return receipt requested, or
by  telefacsimile  to  Borrower or to Bank, as the case may be, at its addresses
set  forth  below:

     If to Borrower:         Evolve  Software,  Inc.
                             1400  65th  Street,  Suite  100
                             Emeryville,  CA  94608
                             Attn:   Douglas Sinclair, Chief Financial Officer
                             Fax:    (510)  428-6902

     If  to  Bank:           Imperial  Bank
                             Emerging  Growth  Division
                             555  California  Street,  Suite  3160
                             San  Francisco,  CA  94104
                             Attn:   Benjermin  Colombo
                             Fax:    (415)  705-5818

     with a copy to:         Imperial  Bank
                             226  Airport  Parkway
                             San  Jose,  CA  95110
                             Attn:  Corporate  Banking  Center
                             Fax:  (408)  451-8586

     The  parties  hereto  may  change  the address at which they are to receive
notices  hereunder,  by  notice  in writing in the foregoing manner given to the
other.

<PAGE>
     11.  CHOICE  OF  LAW  AND  VENUE;  JURY  TRIAL  WAIVER.

          This Agreement shall be governed by, and construed in accordance with,
the  internal  laws  of the State of California, without regard to principles of
conflicts  of  law.  Each  of  Borrower and Bank hereby submits to the exclusive
jurisdiction  of  the  state  and  Federal courts located in the County of Santa
Clara, State of California. BORROWER AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF  ANY  OF  THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING  CONTRACT  CLAIMS,  TORT  CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON  LAW  OR  STATUTORY  CLAIMS.  EACH  PARTY  RECOGNIZES AND AGREES THAT THE
FOREGOING  WAIVER  CONSTITUTES  A  MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT.  EACH  PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER
WITH  ITS  LEGAL  COUNSEL  AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL  RIGHTS  FOLLOWING  CONSULTATION  WITH  LEGAL  COUNSEL.

     12.  GENERAL  PROVISIONS.

          12.1  SUCCESSORS  AND  ASSIGNS. This Agreement shall bind and inure to
the  benefit  of  the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder
may  be assigned by Borrower without Bank's prior written consent, which consent
may  be granted or withheld in Bank's sole discretion. Bank shall have the right
without  the  consent  of or notice to Borrower to sell, transfer, negotiate, or
grant  participation  in  all  or  any  part  of,  or  any  interest  in, Bank's
obligations,  rights  and  benefits  hereunder.

          12.2  INDEMNIFICATION.  Borrower  shall  defend,  indemnify  and  hold
harmless  Bank  and  its  officers,  employees,  and  agents  against:  (a)  all
obligations,  demands,  claims, and liabilities claimed or asserted by any other
party  in  connection  with the transactions contemplated by this Agreement; and
(b)  all  losses or Bank Expenses in any way suffered, incurred, or paid by Bank
as  a  result  of  or  in any way arising out of, following, or consequential to
transactions  between  Bank  and  Borrower  whether  under  this  Agreement,  or
otherwise (including without limitation reasonable attorneys fees and expenses),
except  for losses caused by Bank's gross negligence or willful misconduct. Bank
may  not enter into any settlement or other compromise with respect to any claim
covered  by  the  indemnity set forth in this Section 12.2 without giving notice
thereof  to Borrower. If Bank or any other indemnified party obtains recovery of
any  of the amounts that Borrower has paid to them pursuant to the indemnity set
forth in this Section, then Bank or such other indemnified party, as applicable,
shall  promptly  pay  to  Borrower  such  amounts  paid  by  Borrower.

          12.3  TIME  OF  ESSENCE. Time is of the essence for the performance of
all  obligations  set  forth  in  this  Agreement.

          12.4  SEVERABILITY  OF  PROVISIONS.  Each  provision of this Agreement
shall  be severable from every other provision of this Agreement for the purpose
of  determining  the  legal  enforceability  of  any  specific  provision.

          12.5  AMENDMENTS  IN  WRITING,  INTEGRATION.  All  amendments  to  or
terminations  of  this  Agreement  must  be  in  writing.  All prior agreements,
understandings,  representations,  warranties,  and  negotiations  between  the
parties hereto with respect to the subject matter of this Agreement, if any, are
merged  into  this  Agreement  and  the  Loan  Documents.

          12.6  COUNTERPARTS.  This  Agreement  may be executed in any number of
counterparts  and  by different parties on separate counterparts, each of which,
when  executed  and  delivered,  shall  be  deemed to be an original, and all of
which,  when  taken  together,  shall constitute but one and the same Agreement.

          12.7  SURVIVAL.  All covenants, representations and warranties made in
this  Agreement  shall  continue  in  full  force  and  effect  so  long  as any
Obligations  remain  outstanding.  The obligations of Borrower to indemnify Bank
with  respect  to the expenses, damages, losses, costs and liabilities described

<PAGE>
in  Section  12.2  shall  survive  until  all  applicable statute of limitations
periods  with  respect  to  actions  that  may be brought against Bank have run.

          12.8  CONFIDENTIALITY.  In  handling any confidential information Bank
and all employees and agents of Bank shall exercise the same degree of care that
Bank exercises with respect to its own proprietary information of the same types
to  maintain  the confidentiality of any non-public information thereby received
or  received  pursuant  to  this  Agreement  except  that  disclosure  of  such
information  may  be  made  (i)  to  the  subsidiaries  or affiliates of Bank in
connection  with  their present or prospective business relations with Borrower,
(ii)  to  prospective  transferees  or  purchasers of any interest in the Loans,
provided  that  they have entered into a comparable confidentiality agreement in
favor  of  Borrower  and have delivered a copy to Borrower, (iii) as required by
law,  regulations,  rule  or  order,  subpoena, judicial order or similar order,
provided  that  Bank shall, if permitted by applicable law, use its best efforts
to notify Borrower in advance of any such disclosure; (iv) as may be required in
connection  with the examination, audit or similar investigation of Bank and (v)
as  Bank  may  determine  in  connection  with  the  enforcement of any remedies
hereunder. Confidential information hereunder shall not include information that
either:  (a)  is  in the public domain or in the knowledge or possession of Bank
when disclosed to Bank, or becomes part of the public domain after disclosure to
Bank  through  no  fault  of Bank; or (b) is disclosed to Bank by a third party,
provided Bank does not have actual knowledge that such third party is prohibited
from  disclosing  such  information.

                          [The signature page follows.]

<PAGE>
     IN  WITNESS  WHEREOF,  the  parties hereto have caused this Agreement to be
executed  as  of  the  date  first  above  written.

                                           EVOLVE  SOFTWARE,  INC.

                                           By:
                                                --------------------------------

                                           Name:
                                                 -------------------------------

                                           Title:
                                                  ------------------------------

                                           IMPERIAL  BANK

                                           By:
                                                --------------------------------

                                           Name:
                                                 -------------------------------

                                           Title:
                                                  ------------------------------

<PAGE>
                                    EXHIBIT A

                                   DEFINITIONS

     "ACCOUNTS"  means  all  presently  existing and hereafter arising accounts,
contract  rights,  and  all other forms of obligations owing to Borrower arising
out  of the sale or lease of goods (including, without limitation, the licensing
of  software  and  other  technology)  or the rendering of services by Borrower,
whether  or  not  earned  by  performance,  and  any  and  all credit insurance,
guaranties,  and other security therefor, as well as all merchandise returned to
or  reclaimed by Borrower and Borrower's Books relating to any of the foregoing.

     "AFFILIATE"  means,  with  respect  to  any Person, any Person that owns or
controls  directly  or  indirectly  such  Person, any Person that controls or is
controlled  by  or  is  under  common control with such Person, and each of such
Person's  senior  executive  officers,  directors,  and  partners.

     "ASSETS"  means all assets that should be characterized as such pursuant to
GAAP.

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

     "BORROWER'S  BOOKS"  means  all  of Borrower's books and records including:
ledgers;  records  concerning  Borrower's assets or liabilities, the Collateral,
business  operations  or financial condition; and all computer programs, or tape
files,  and  the  equipment,  containing  such  information.

     "BORROWING  BASE"  means, through and until March 31, 2001, an amount equal
to  80%  of  Eligible Accounts, as determined by Bank with reference to the most
recent Borrowing Base Certificate delivered by Borrower, plus $3,000,000; on and
after  March  31, 2001, "BORROWING BASE" shall mean 80% of Eligible Accounts, as
determined  by Bank with reference to the most recent Borrowing Base Certificate
delivered  by  Borrower.

     "BORROWING  BASE  CERTIFICATE" has the meaning set forth in Section 6.2(a).

     "BUSINESS  DAY"  means any day that is not a Saturday, Sunday, or other day
on  which  banks in the State of California are authorized or required to close.

     "CHANGE  IN  CONTROL"  shall  mean  a  transaction in which any "person" or
"group"  (within  the  meaning  of  Section 13(d) and 14(d)(2) of the Securities
Exchange  Act  of 1934) becomes the "beneficial owner" (as defined in Rule 13d-3
under  the  Securities  Exchange  Act  of  1932),  directly  or indirectly, of a
sufficient number of shares of all classes of stock then outstanding of Borrower
ordinarily  entitled  to  vote  in  the  election  of directors, empowering such
"person"  or  "group" to elect a majority of the Board of Directors of Borrower,
who  did  not  have  such  power  before  such  transaction.

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

     "CLOSING  DATE"  means  the  date  of  this  Agreement.

     "COLLATERAL"  means the property described on Exhibit B attached hereto and
all Negotiable Collateral and Intellectual Property Collateral to the extent not
described on Exhibit B, except to the extent any such property or rights (i) are
nonassignable  by  law  or  by  their  terms without the consent of the licensor
thereof or another party (but only to the extent such prohibition on transfer is
enforceable under applicable law, including, without limitation, Section 9318(4)
of  the UCC), or (ii) the granting of a security interest therein is contrary to
applicable  law  or  the  terms of the agreement pursuant to which the rights or
property  is  acquired, provided that upon the cessation of any such restriction
or prohibition, such property shall automatically become part of the Collateral.

<PAGE>
     "COMMITTED EQUIPMENT LINE" means a Credit Extension in the principal amount
of  up  to  $7,500,000.

     "COMMITTED REVOLVING LINE" means a Credit Extension in the principal amount
of  up  to  $7,500,000.

     "CONTINGENT  OBLIGATION"  means,  as  applied  to any Person, any direct or
indirect  liability, contingent or otherwise, of that Person with respect to (i)
any  indebtedness,  lease,  dividend,  letter  of  credit or other obligation of
another,  including,  without  limitation,  any  such  obligation  directly  or
indirectly  guaranteed, endorsed, co-made or discounted or sold with recourse by
that  Person,  or  in  respect  of  which  that  Person is otherwise directly or
indirectly  liable;  (ii)  any  obligations  with  respect to undrawn letters of
credit  issued for the account of that Person; and (iii) all obligations arising
under any interest rate, currency or commodity swap agreement, interest rate cap
agreement,  interest  rate  collar  agreement, or other agreement or arrangement
designated  to  protect a Person against fluctuation in interest rates, currency
exchange rates or commodity prices; provided, however, that the term "CONTINGENT
OBLIGATION"  shall  not  include  endorsements  for collection or deposit in the
ordinary  course  of  business. The amount of any Contingent Obligation shall be
deemed  to  be an amount equal to the stated or determined amount of the primary
obligation  in  respect  of  which such Contingent Obligation is made or, if not
stated  or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith; provided, however, that such
amount shall not in any event exceed the maximum amount of the obligations under
the  guarantee  or  other  support  arrangement.

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

     "COPYRIGHT  LICENSE"  means  any  agreement  granting  any right to use any
Copyright  or  Copyright  registration  (whether Borrower is the licensee or the
licensor  thereunder),  now  owned or hereafter acquired by Borrower, including,
without  limitation,  licenses  pursuant  to  which  Borrower  has  obtained the
exclusive  right  to  use  a  copyright  owned  by  a  third  party.

     "COPYRIGHTS"  means  any  and all copyright rights, copyright applications,
copyright  registrations  and  like  protections  in each work or authorship and
derivative work thereof, whether published or unpublished and whether or not the
same  also  constitutes  a  trade  secret,  now  or hereafter existing, created,
acquired  or  held.

     "CREDIT EXTENSION" means each Revolving Advance, Equipment Advance, and any
other  extension  of  credit  by  Bank  for  the  benefit of Borrower hereunder.

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

     "DEPOSIT  ACCOUNTS"  means any "deposit account" as such term is defined in
Section  9105(1)(e)  of  the  UCC,  and  should include, without limitation, any
demand,  time,  savings passbook or like account, now or hereafter maintained by
or  for  the  benefit  of  Borrower, or in which Borrower now holds or hereafter
acquires  any  interest, with a bank, savings and loan association, credit union
or like organization (including Bank) and all funds and amounts therein, whether
or  not  restricted  or  designated  for  a  particular  purpose.

     "ELIGIBLE  ACCOUNTS" means those Accounts that arise in the ordinary course
of  Borrower's  business  that comply with all of Borrower's representations and
warranties  to Bank set forth in Section 5.3; provided, that Bank may change the

<PAGE>
standards of eligibility by giving Borrower 30 days prior written notice. Unless
otherwise  agreed to by Bank, Eligible Accounts shall not include the following:

     (a)  Accounts  that  the account debtor has failed to pay within 90 days of
invoice  date;

     (b)  Accounts  with respect to an account debtor, 25% of whose Accounts the
account  debtor  has  failed  to  pay  within  90  days  of  invoice  date;

     (c)  Accounts  with  respect  to  which  the  account debtor is an officer,
employee,  or  agent  of  Borrower;

     (d)  Accounts  with  respect  to  which  goods  are  placed on consignment,
guaranteed sale, sale or return, sale on approval, bill and hold, or other terms
by  reason  of  which  the  payment  by  the  account debtor may be conditional;

     (e)  Accounts  with  respect to which the account debtor is an Affiliate of
Borrower;

     (f)  Accounts  with  respect  to which the account debtor does not have its
principal  place  of  business  in  the  United  States;

     (g)  Accounts with respect to which the account debtor is the United States
or  any  department,  agency,  or  instrumentality  of  the  United  States;

     (h) Accounts with respect to which Borrower is liable to the account debtor
for  goods sold or services rendered by the account debtor to Borrower, but only
to the extent of any amounts owing to the account debtor against amounts owed to
Borrower;

     (i)  Accounts with respect to an account debtor, including Subsidiaries and
Affiliates,  whose  total obligations to Borrower exceed 25% of all Accounts, to
the  extent  such  obligations  exceed  the aforementioned percentage, except as
approved  in  writing  by  Bank;

     (j) Accounts with respect to which the account debtor disputes liability or
makes  any  claim  with  respect  thereto as to which Bank believes, in its sole
discretion, that there may be a basis for dispute (but only to the extent of the
amount  subject  to  such  dispute  or  claim),  or is subject to any Insolvency
Proceeding,  or  becomes  insolvent,  or  goes  out  of  business;  and

     (k)  Accounts  the  collection  of  which  Bank reasonably determines after
inquiry  and  consultation  with  Borrower  to  be  doubtful.

     "EQUIPMENT"  means  all  present  and  future  machinery, equipment, tenant
improvements,  furniture,  fixtures,  vehicles,  tools, parts and attachments in
which  Borrower  has  any  interest.

     "EQUIPMENT  ADVANCE" and "EQUIPMENT ADVANCES" have the meaning set forth in
Section  2.1(c).

     "EQUIPMENT  ADVANCE  PERMITTED  USES" means, subject to Section 2.1(c), the
purchase  of  equipment,  furniture  and  software.

     "EQUIPMENT  FACILITY"  means  the facility under which Borrower may request
Bank  to  issue  Equipment  Advances,  as  specified  in  Section 2.1(c) hereof.

     "ERISA"  means  the  Employee  Retirement  Income  Security Act of 1974, as
amended,  and  the  regulations  thereunder.

     "EVENT  OF  DEFAULT"  has  the  meaning  set  forth  in  Article  8.

     "FIRST  EQUIPMENT  MATURITY  DATE"  means  July  31,  2003.

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

     "GENERAL  INTANGIBLES"  means  any  "general  intangibles," as such term is
defined  in Section 9106 of the UCC, now owned or hereafter acquired by Borrower
or  in  which  Borrower now holds or hereafter acquires an interest, and, in any
event,  shall  include,  without limitation, all right, title and interest which
Borrower  may  now  or hereafter have in or under any Contract, all Intellectual
Property,  interests  in  partnerships,  joint  ventures  and  other  business
associations,  Licenses,  permits,  goodwill (including, without limitation, the
goodwill  associated  with  any  Trademark,  Trademark registration or Trademark
licensed  under  any  Trademark License), claims in or under insurance policies,
including  unearned  premiums,  uncertificated  securities,  deposit  accounts
(including  as  defined in Section 9105(1)(e) of the UCC), rights to receive tax
refunds  and  other  payments  and  rights  of  indemnification.

     "INDEBTEDNESS"  means  (a)  all  indebtedness  for  borrowed  money  or the
deferred  purchase  price  of property or services, including without limitation
reimbursement  and other obligations with respect to surety bonds and letters of
credit,  (b)  all  obligations  evidenced by notes, bonds, debentures or similar
Instruments,  (c)  all  capital  lease  obligations  and  (d)  all  Contingent
Obligations.

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

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

     "INTELLECTUAL  PROPERTY  COLLATERAL"  means all of Borrower's right, title,
and  interest  in  and  to  the  following:

     (a)  Copyrights,  Trademarks  and  Patents;

     (b) Any and all trade secrets, and any and all intellectual property rights
in  computer  software and Software Products now or hereafter existing, created,
acquired  or  held;

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

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

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

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

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

     "INTELLECTUAL  PROPERTY  SECURITY AGREEMENT" means an Intellectual Property
Security  Agreement  in form and substance satisfactory to Bank, dated as of the
Closing  Date,  by  and  between  Borrower  and  Bank.

     "INVENTORY"  means  all  present and future inventory in which Borrower has
any interest, including merchandise, raw materials, parts, supplies, packing and
shipping  materials,  work in process and finished products intended for sale or
lease  or  to  be  furnished  under  a  contract  of  service, of every kind and
description  now  or  at  any  time  hereafter  owned  by  or  in the custody or
possession,  actual or constructive, of Borrower, including such inventory as is

<PAGE>
temporarily  out  of  its  custody or possession or in transit and including any
returns  upon  any  accounts  or  other  proceeds, including insurance proceeds,
resulting from the sale or disposition of any of the foregoing and any documents
of  title representing any of the above, and Borrower's Books relating to any of
the  foregoing.

     "INVESTMENT"  means  any  beneficial  ownership  of  (including  stock,
partnership  interest  or  other securities) any Person, or any loan, advance or
capital  contribution  to  any  Person.

     "IRC"  means  the  Internal  Revenue  Code  of  1986,  as  amended, and the
regulations  thereunder.

     "LICENSE" means any Copyright License, Patent License, Trademark License or
any  other  license  of  rights  or  interests now held or hereafter acquired by
Borrower  or  in which Borrower now holds or hereafter acquires an interest, and
any  renewals  or  extensions  thereof.

     "LIEN"  means  any  mortgage, lien, deed of trust, charge, pledge, security
interest  or  other  encumbrance.

     "LOAN  DOCUMENTS"  means,  collectively,  this  Agreement, the Intellectual
Property  Security  Agreement,  any  note  or notes executed by Borrower and any
other  agreement  entered into between Borrower and Bank in connection with this
Agreement,  all  as  amended  or  extended  from  time  to  time.

     "MATERIAL  ADVERSE  EFFECT"  means  a  material  adverse  effect on (i) the
business  operations  or  condition (financial or otherwise) of Borrower and its
Subsidiaries  taken  as  a  whole  or  (ii) the ability of Borrower to repay the
Obligations  or  otherwise  perform  its  obligations  under the Loan Documents.

     "NEGOTIABLE  COLLATERAL" means all of Borrower's present and future letters
of  credit of which it is a beneficiary, notes, drafts, Instruments, securities,
documents  of  title, and Chattel Paper, and Borrower's Books relating to any of
the  foregoing.

     "OBLIGATIONS"  means all debt, principal, interest, Bank Expenses and other
amounts  owed  to  Bank  by  Borrower  pursuant  to  this Agreement or any other
agreement, whether absolute or contingent, due or to become due, now existing or
hereafter arising, including any interest that accrues after the commencement of
an  Insolvency Proceeding and including any debt, liability, or obligation owing
from  Borrower to others that Bank may have obtained by assignment or otherwise.

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

     "PATENTS"  means  all  patents,  patent  applications  and like protections
including  without  limitation improvements, divisions, continuations, renewals,
reissues,  extensions  and  continuations-in-part  of  the  same.

     "PERIODIC  PAYMENTS"  means  all installments or similar recurring payments
that  Borrower  may now or hereafter become obligated to pay to Bank pursuant to
the  terms  and  provisions  of any instrument, or agreement now or hereafter in
existence  between  Borrower  and  Bank.

     "PERMITTED  INDEBTEDNESS"  means:

     (a)  Indebtedness of Borrower in favor of Bank arising under this Agreement
or  any  other  Loan  Document;

     (b)  Indebtedness  existing  on  the  Closing  Date  and  disclosed  in the
Schedule,  and  any  extensions,  refinancings,  modifications,  amendments  and
restatements  thereof,  provided  that  the  principal  amount  thereof  is  not
increased  or the terms thereof are not modified to impose more burdensome terms
upon  Borrower  or  its  Subsidiaries,  as  the  case  may  be;

<PAGE>
     (c)  Indebtedness  secured by a lien described in clause (c) of the defined
term "PERMITTED LIENS," provided such Indebtedness does not exceed the lesser of
the  cost or fair market value of the equipment financed with such Indebtedness;

     (d)  Indebtedness  arising  from  the  endorsement  of  instruments  in the
ordinary  course  of  business;

     (e)     Indebtedness  incurred  within  6  months  from  the date hereof by
Evolve  Software  Limited,  a UK corporation and Evolve Software (India) Private
Limited,  an India corporation, in an aggregate amount not to exceed $5,000,000.

     (f)  Subordinated  Debt;

     (g)  Extensions,  renewals  or  refinancings of Borrower's Obligations; and

     (h)  Trade  debt  incurred  in  the  ordinary  course  of  business.

     "PERMITTED  INVESTMENT"  means:

     (a)  Investments  existing  on  the Closing Date disclosed in the Schedule;

     (b)  (i) Marketable direct obligations issued or unconditionally guaranteed
by  the  United  States  of  America or any agency or any State thereof maturing
within  one  year  from  the  date of acquisition thereof, (ii) commercial paper
maturing  no  more than one year from the date of creation thereof and currently
having  rating  of at least A-2 or P-2 from either Standard & Poor's Corporation
or  Moody's  Investors Service, (iii) Bank's certificates of deposit maturing no
more  than  one  year from the date of investment therein, and (iv) Bank's money
market  accounts;

     (c)  Repurchases  of  stock  from former employees or directors of Borrower
under  the  terms  of applicable repurchase agreements, provided that the market
value  of such stock is greater than the repurchase price, and provided further,
that no Event of Default has occurred, is continuing or remains unwaived by Bank
or  would  exist  after  giving  effect  to  the  repurchases;

     (d)  Investments  accepted  in  connection  with  Permitted  Transfers;

     (e) Investments of Subsidiaries in or to other Subsidiaries or Borrower and
Investments  by Borrower in Subsidiaries not to exceed $250,000 in the aggregate
in  any  fiscal  year;

     (f)  Investments  consisting of (i) travel advances and employee relocation
loans  and other employee loans and advances in the ordinary course of business,
and  (ii)  loans to employees, officers or directors relating to the purchase of
equity  securities  of  Borrower  or its Subsidiaries pursuant to employee stock
purchase  plan  agreements  approved  by  Borrower's  Board  of  Directors;

     (g)  Investments  (including  debt obligations) received in connection with
the  bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent  obligations  of,  and  other  disputes  with, customers or suppliers
arising  in  the  ordinary  course  of  Borrower's  business;

     (h) Investments consisting of notes receivable of, or prepaid royalties and
other  credit  extensions, to customers and suppliers who are not Affiliates, in
the  ordinary  course of business, provided that this subparagraph (h) shall not
apply  to  Investments  of  Borrower  in  any  Subsidiary;

     (i)  Joint  ventures  or  strategic  alliances  in  the  ordinary course of
Borrower's business consisting of the non-exclusive licensing of technology, the
development  of  technology or the providing of technical support, provided that
any  cash Investments by Borrower do not exceed $250,000 in the aggregate in any
fiscal  year;  and

<PAGE>
     (j)  Investments  by  Borrower  pursuant  to  Borrower's written investment
policy  approved  by  Borrower's  Board  of  Directors  on  October 13, 2000 and
attached  hereto  as  Exhibit  G.

     "PERMITTED  LIENS"  means  the  following:

     (a) Any Liens existing on the Closing Date and disclosed in the Schedule or
arising  under  this  Agreement  or  the  other  Loan  Documents;

     (b)  Liens  for  taxes,  fees, assessments or other governmental charges or
levies,  either  not  delinquent or being contested in good faith by appropriate
proceedings  and  for  which  Borrower maintains adequate reserves in accordance
with  GAAP,  provided  the  same  have  no  priority over any of Bank's security
interests;

     (c)  Liens,  not  to  exceed  $100,000  in the aggregate (i) upon or in any
Equipment  and  related software, if any, acquired or held by Borrower or any of
its  Subsidiaries  to  secure  the purchase price of such Equipment (which shall
include,  for  purposes  of  this  paragraph (c), shipping, tax and installation
charges  financed by the Person holding the security interest) of such Equipment
and  related  software  or  indebtedness  incurred  solely  for  the  purpose of
financing  the  acquisition  and  installation  of  such  Equipment  and related
software,  (ii)  existing  on such Equipment and related Software at the time of
its  acquisition,  provided  that the Lien is confined solely to the property so
acquired  and improvements thereon, and the proceeds of such Equipment; or (iii)
liens  securing  lease  obligations  on  assets  subject  to  such  leases

     (d) Liens to secure payment of workers' compensation, employment insurance,
old  age  pensions,  social  security  or other like obligations incurred in the
ordinary  course  of  business;

     (e) Liens incurred in connection with the extension, renewal or refinancing
of  the  indebtedness  secured  by  Liens  of  the type described in clauses (a)
through  (c)  above,  provided  that  any extension, renewal or replacement Lien
shall  be  limited  to  the  property  encumbered  by  the existing Lien and the
principal  amount of the indebtedness being extended, renewed or refinanced does
not  increase;

     (f)  Liens  arising from judgments, decrees or attachments in circumstances
not  constituting  an  Event  of  Default  under  Sections  8.4  or  8.8;

     (g)  Liens  in  favor of other financial institutions arising in connection
with  Borrower's  Deposit Accounts held at such institutions, provided that Bank
has  a perfected security interest in the amounts held in such Deposit Accounts;
and

     (h)  Other  Liens  not  described  above  arising in the ordinary course of
business  and  not  having  or  not reasonably likely to have a Material Adverse
Effect  on  Borrower  and  its  Subsidiaries  taken  as  a  whole.

     "PERMITTED  TRANSFER"  means  the  conveyance,  sale,  lease,  transfer  or
disposition  by  Borrower  or  any  Subsidiary  of:

     (a)  Inventory  in  the  ordinary  course  of  business;

     (b)  licenses  and  similar  arrangements  for  the  use of the property of
Borrower  or  its  Subsidiaries  in  the  ordinary  course  of  business;

     (c)  surplus,  worn-out  or  obsolete  Equipment;  or

     (d)  other  assets  of  Borrower  or  its  Subsidiaries which do not in the
aggregate  exceed  $250,000  per  fiscal  year.

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

<PAGE>
     "PRIME  RATE" means the variable rate of interest, per annum, most recently
announced  by  Bank,  as its "PRIME RATE," whether or not such announced rate is
the  lowest  rate  available  from  Bank.

     "QUICK  ASSETS"  means, at any date as of which the amount thereof shall be
determined,  Borrower's  unrestricted  cash and cash-equivalents plus Borrower's
net  book  accounts  receivable,  determined  in  accordance  with  GAAP.

     "RESPONSIBLE  OFFICER" means each of the Chief Executive Officer, the Chief
Operating  Officer,  the Chief Financial Officer and the Controller of Borrower.

     "REVOLVING  ADVANCE"  and REVOLVING ADVANCES" have the meaning set forth in
Section  2.1(b)(i).

     "REVOLVING  ADVANCE  PERMITTED  USES"  means  the  support  of  Borrower's
short-term  working  capital requirements and the issuance by Bank of Letters of
Credit.

     "REVOLVING  FACILITY"  means  the facility under which Borrower may request
Bank  to  issue  Revolving  Advances,  as  specified  in  Section 2.1(b) hereof.

     "REVOLVING  MATURITY  DATE"  means  January  31,  2002.

     "SCHEDULE"  means  the  schedule  of  exceptions  attached  hereto.

     "SECOND  EQUIPMENT  MATURITY  DATE"  means  January  31,  2004.

     "SOFTWARE  PRODUCTS"  means  all  software, computer source codes and other
computer  programs,  and  all  common law and statutory copyrights and copyright
registrations, applications for registration, now existing or hereafter arising,
United  States  of  America  and  foreign,  obtained  or to be obtained on or in
connection with the Software Products, or any parts thereof or any underlying or
component elements of the Software Products together with the right to copyright
and  all  rights  to  renew or extend such copyrights and the right (but not the
obligation)  of  Bank to sue in its own name and/or the name of the Borrower for
past,  present  and  future  infringements  of  copyright.

     "SUBORDINATED  DEBT"  means  any  debt  incurred  by  Borrower  that  is
subordinated  to  the debt owing by Borrower to Bank on terms acceptable to Bank
in  its  sole  discretion.

     "SUBSIDIARY"  means any corporation or partnership in which (i) any general
partnership  interest  or  (ii) more than 50% of the stock of which by the terms
thereof  ordinary  voting  power  to  elect  the Board of Directors, managers or
trustees of the entity, at the time as of which any determination is being made,
is  owned  by  Borrower,  either  directly  or  through  an  Affiliate.

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

     "TRADEMARKS" means any trademark and servicemark rights, whether registered
or  not,  applications  to  register  and  registrations  of  the  same and like
protections,  and the entire goodwill of the business of Borrower connected with
and  symbolized  by  such  trademarks.

     "TRANCHE  A"  has  the  meaning  set  forth  in  Section  2.1(c)(i).

     "TRANCHE  B"  has  the  meaning  set  forth  in  Section  2.1(c)(i).

     "TRANCHE  A  EQUIPMENT ADVANCE" or "TRANCHE A EQUIPMENT ADVANCES" means any
Equipment  Advance(s)  made  under  Tranche  A.

<PAGE>
     "TRANCHE  B  EQUIPMENT ADVANCE" or "TRANCHE B EQUIPMENT ADVANCES" means any
Equipment  Advance(s)  made  under  Tranche  B.

     "TRANCHE  A  AVAILABILITY  END  DATE"  means  July  31,  2001.

     "TRANCHE  B  AVAILABILITY  END  DATE"  means  January  31,  2002.

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

<PAGE>
                                    EXHIBIT B

                              COLLATERAL DEFINITION

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

A.        All  Accounts  of  Borrower;

B.        All  Chattel  Paper  of  Borrower;

C.        All  Copyrights  of  Borrower;

D.        All  Contracts  of  Borrower;

E.        All  Deposit  Accounts  of  Borrower;

F.        All  Equipment  of  Borrower;

G.        All  General  Intangibles  of  Borrower;

H.        All  Instruments  of  Borrower;

I.        All  Inventory  of  Borrower;

J.        All  Licenses  of  Borrower;

K.        All  Patents  of  Borrower;

L.        All  Software  Products  of  Borrower;

M.        All  Trademarks  of  Borrower;

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

O.        All  other goods and personal property of Borrower, including, without
limitation, returns, repossessions, books and records, Equipment containing such
books  and  records, whether tangible or intangible and whether now or hereafter
owned  or  existing,  leased,  consigned  by or to, or acquired by, Borrower and
wherever  located;  and

P.        To  the  extent  not  otherwise included, all Proceeds  of each of the
foregoing  and all accessions to, substitutions and replacements for, and rents,
profits  and  products  of  each  of  the  foregoing.

     Notwithstanding  the foregoing, the grant of the security interest provided
for herein shall not extend to, and the term "Collateral" shall not include, any
property  rights or licenses to the extent that the grant of a security interest
therein,  or  an  assignment  thereof, would be contrary to applicable law or is
prohibited  by  or  would  constitute  a default under any agreement or document
governing  such  property  (but  only  to  the  extent  that such prohibition is
enforceable  under  applicable  law).

<PAGE>
                                    EXHIBIT C

                   LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM

LOAN  PAYMENT/ADVANCE  TELEPHONE  REQUEST  FORM
DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., P.S.T.
TO:        [_______________]                            DATE:  _______________
FAX  #:  [_______________]                              TIME:  _______________
FROM:  EVOLVE  SOFTWARE,  INC.
       -------------------------------------------------------------------------
CLIENT  NAME
REQUESTED  BY:
               -----------------------------------------------------------------
AUTHORIZED  SIGNER'S  NAME

AUTHORIZED  SIGNATURE:
                       ---------------------------------------------------------

PHONE  NUMBER:
               -----------------------------------------------------------------

FROM ACCOUNT # ______________________     TO ACCOUNT # _________________________

REQUESTED TRANSACTION TYPE                REQUEST  DOLLAR  AMOUNT
--------------------------                -----------------------
                                          $_____________________________________
PRINCIPAL INCREASE (ADVANCE)              $_____________________________________
PRINCIPAL PAYMENT (ONLY)                  $_____________________________________
INTEREST PAYMENT (ONLY)                   $_____________________________________
PRINCIPAL AND INTEREST (PAYMENT)          $_____________________________________

OTHER  INSTRUCTIONS:____________________________________________________________
________________________________________________________________________________
All  representations  and warranties of Borrower stated in the Loan and Security
Agreement are true, correct and complete in all material respects as of the date
of the telephone request for an Advance confirmed by this Borrowing Certificate;
provided, however, that those representations and warranties expressly referring
to  another date shall be true, correct and complete in all material respects as
of  such  date.
________________________________________________________________________________

________________________________________________________________________________
BANK  USE  ONLY
TELEPHONE  REQUEST:
------------------

The  following  person  is  authorized to request the loan payment transfer/loan
advance  on  the  advance  designated  account  and  is  known  to  me.

_________________________________                  _____________________________
Authorized  Requester                              Phone  #

_________________________________                  _____________________________
Received By (Bank)                                 Phone  #

_________________________________
Authorized Signature (Bank)

<PAGE>
                                    EXHIBIT D

                           BORROWING BASE CERTIFICATE

Borrower:  Evolve Software, Inc.                          Lender:  Imperial Bank

Commitment  Amount:  $15,000,000

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

ACCOUNTS  RECEIVABLE  DEDUCTIONS  (without  duplication)
     4.   Amounts  over  90  days  due                    $________
     5.   Balance  of  25%  over  90 day accounts         $________
     6.   Concentration  Limits                           $________
     7.   Foreign  Accounts                               $________
     8.   Governmental  Accounts                          $________
     9.   Contra  Accounts                                $________
     10.  Demo  Accounts                                  $________
     11.  Intercompany/Employee  Accounts                 $________
     12.  Other  (please  explain  on  reverse)           $________
     13.  TOTAL  ACCOUNTS  RECEIVABLE  DEDUCTIONS                      $________
     14.  Eligible  Accounts  (#3  minus  #13)                         $________
     15.  LOAN VALUE OF ACCOUNTS (__% of #14)             $________

BALANCES
     16.  Maximum  Loan  Amount                                        $________
     17.  Total  Funds  Available  [Lesser of #16 or #15] $________
     18.  Present  balance owing on Line of Credit                     $________
     19.  Outstanding under Sublimits (Letters of Credit) $________
     20.  RESERVE POSITION (#17 minus #18 and #19)        $________

     The  undersigned  represents  and  warrants  that  the  foregoing  is true,
complete  and correct, and that the information reflected in this Borrowing Base
Certificate  complies  with  the representations and warranties set forth in the
Loan  and  Security  Agreement  between  the  undersigned  and  Imperial  Bank.

EVOLVE  SOFTWARE,  INC.

By:
     --------------------------------
          Authorized  Signer

<PAGE>
                                    EXHIBIT E

                             COMPLIANCE CERTIFICATE

TO:    IMPERIAL  BANK

FROM:  EVOLVE  SOFTWARE,  INC.

The  undersigned  authorized  officer of EVOLVE SOFTWARE, INC., hereby certifies
that  in  accordance  with  the  terms  and  conditions of the Loan and Security
Agreement  between  Borrower  and  Bank  (the  "AGREEMENT"),  (i) Borrower is in
complete  compliance  for  the  period  ending _______________ with all required
covenants,  including  without limitation Section 6.8, except as noted below and
(ii)  all representations and warranties of Borrower stated in the Agreement are
true  and  correct  in  all  material  respects as of the date hereof.  Attached
herewith  are  the  required  documents supporting the above certification.  The
Officer  further  certifies that these are prepared in accordance with Generally
Accepted  Accounting  Principles  (GAAP)  and  are consistently applied from one
period  to  the next except as explained in an accompanying letter or footnotes.

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

<TABLE>
<CAPTION>
REPORTING COVENANT                       REQUIRED                                  COMPLIES
------------------                       --------                                  --------
<S>                                      <C>                                       <C>
Monthly financial statements             Monthly within 20 days                    Yes          No
Annual (CPA Audited)                     FYE within 90 days                        Yes          No
10K and 10Q                              Quarterly within 5 days of filing         Yes          No
A/R & A/P Agings, Borrowing Base Cert.   Monthly within 10 days                    Yes          No
Collateral Audit                         Initial and annually                      Yes          No
IP Report                                Quarterly within 30 days                  Yes          No

FINANCIAL COVENANT                       REQUIRED                     ACTUAL       COMPLIES
------------------                       --------                     ------       --------

Maintain on a Monthly  Basis:
   Minimum Quick Ratio                   1.75:1.00                    _____:1.00   Yes          No
   Minimum Liquidity Ratio               1.75:1.00                    _____:1.00   Yes          No

Minimum Revenue                          80% of amount listed         $  ______    Yes          No
                                         on existing revenue
                                         plan ($______)
</TABLE>

COMMENTS REGARDING EXCEPTIONS:  See Attached.    BANK USE ONLY

                                                 Received by:
                                                             -------------------
Sincerely,                                       AUTHORIZED SIGNER

                                                 Date:
                                                      --------------------------

------------------------------------------       Verified:
SIGNATURE                                                 ----------------------
                                                 AUTHORIZED SIGNER

------------------------------------------       Date:
TITLE                                                ---------------------------

                                                 Compliance Status    Yes    No
------------------------------------------
DATE

<PAGE>
                                    EXHIBIT F

                             BORROWER'S REVENUE PLAN

<PAGE>
                                    EXHIBIT G

                          BORROWER'S INVESTMENT POLICY

<PAGE>
                             SCHEDULE OF EXCEPTIONS

PERMITTED  INDEBTEDNESS  (Exhibit  A)

PERMITTED  INVESTMENTS  (Exhibit  A)

     1.   Evolve  International,  Inc.,  a  Delaware  corporation
     2.   Evolve  Software  Limited,  a  UK  corporation  (Chertsey,  England)
     3.   Evolve  Software  (India)  Private  Limited,  an  Indian corporation
          (Chennai (Madras),  India)

PERMITTED  LIENS  (Exhibit  A)

PRIOR  NAMES  (Section  5.5)

          Cortez  Software  International,  Inc.

COLLATERAL  LOCATIONS  (Section  5.5)

     1.   1400-65th  Street
          Suite  100
          Emeryville,  CA  94608

     2.   2855  Kifer  Road,  Suite  204
          Santa  Clara,  CA  95051

     3.   895  Dove  Street,  3rd  Floor
          Newport  Beach,  CA  92660

     4.   7799  Leesburg  Pike
          Suite  900-N
          Falls  Church,  VA  22043

     5.   15305 Dallas Parkway,  Suite 300
          Addison,  TX  75001

     6.   3525  Piedmont  Road
          7  Piedmont  Center,  Suite 300
          Atlanta,  GA  30305

     7.   Two Mid America Plaza, Suite 800
          Oak  Brook  Terrace,  IL  60181

     8.   Park  80  West,  Plaza  2,  Suite  200
          Saddle  Brook,  NJ  07663-5836

     9.   25  Burlington  Mall  Road,  Suite  300
          Burlington,  MA  01803

     10.  9800 Mount Pyramid Court, Suite 400
          Englewood,  CO  80112

     11.  3000  Hillswood  Drive

<PAGE>
          Hillswood  Business  Park
          Chertsey,  KT16  ORS
          UNITED  KINGDOM

     12.  No.  4,  Canal  Bank  Road
          Taramani,  Chennai  600  113
          INDIA

LITIGATION  (Section  5.6)

     1.     In  January 2000, PeopleSoft, Inc. filed an action in the California
Superior  Court,  Alameda  County,  alleging  claims  arising  out of Borrower's
employment  of  former  employees  of  PeopleSoft,  and  seeking preliminary and
permanent  injunctions  to  preclude  additional hiring of PeopleSoft employees.
PeopleSoft's  claims include inducing breach of contract and unfair competition.
PeopleSoft filed a motion for preliminary injunction enjoining the Borrower from
recruiting  additional  PeopleSoft  employees or disclosing any PeopleSoft trade
secrets.  The  court  denied the motion in July 2000 due to PeopleSoft's failure
to  show  that  it was likely to succeed in the litigation on the merits or show
that  it  would  be  harmed  if  the  injunction  did not issue.  PeopleSoft has
appealed  the  court's ruling on the motion.  Borrower does not believe that the
motion,  even if granted on appeal, will have a material impact on its business.
The  parties conducted a mediation in September 2000 but were unable to reach an
agreeable settlement. Borrower is now in settlement discussions with PeopleSoft,
and  the  current  proposal contains a cash settlement amount of between $50,000
(Borrower's  offer)  and  $75,000  (PeopleSoft's  offer), along with a number of
non-monetary  demands  (non-recruitment,  non-solicitation,  etc.).

     2.     In  September 2000, Albert Lucas, the former Vice President of Sales
for  Borrower,  filed a wrongful termination suit against Borrower in California
Superior  Court,  Alameda  County,  claiming  unspecified  monetary damages. The
parties  are  meeting in a mediation in early February 2001 to settle the claim.

INBOUND  LICENSES  (Section  5.12)

     1.     Software  OEM  License  Agreement  by  and  between  POET  Software
Corporation  and  Borrower,  dated November 20, 1997, as amended by Amendment to
Software  OEM  License Agreement between POET Software Corporation and Borrower,
dated  December  29,  2000

     2.     Value  Added  Reseller  Agreement  for  Visigenic  Products  with
Manufacturing  Rights  by  and  between Inprise Borland (formerly Visigenic) and
Borrower,  dated  March  31,  1998

     3.     License Agreement by and between Paradigm  Software Technologies and
Borrower,  dated  March  22,  1999,  as  amended  by  First Amendment to License
Agreement dated July 29, 1999, as further amended by letter agreements dated May
24,  1999  and  December  22,  1999,  as  amended by Second Amendment to License
Agreement  dated  August  25,  2000

     4.     E.Business  Application  Partner  Software  License Agreement by and
between  Actuate  Corporation  and  Borrower,  dated  May  16,  2000

     5.     Commercial  Software  License  Agreement  by and between ICEsoft and
Borrower,  dated  August  4,  2000

     6.     Silver  Support  Agreement  by and  between  Allaire Corporation and
Borrower, dated  December  20,  2000

<PAGE>
                              OFFICER'S CERTIFICATE

Borrower:     EVOLVE  SOFTWARE,  INC.
Date:         January  31,  2001

     I,  the  undersigned  officer of EVOLVE SOFTWARE, INC. (the "CORPORATION"),
HEREBY  CERTIFY  that  the  Corporation  is  organized and existing under and by
virtue  of  the  laws  of  the  State  of  Delaware.

     I  FURTHER CERTIFY that attached hereto as Attachments 1 and 2 are true and
complete  copies  of  the  Certificate  of  Incorporation  and the Bylaws of the
Corporation,  each  of  which  as amended and as in full force and effect on the
date  hereof.

     I  FURTHER  CERTIFY  that  attached  hereto  as  Attachment 3 is a true and
complete  copy  of  the  resolutions  duly  adopted  by  the  Corporation by the
unanimous  written  consent  of  the  Corporation's board of directors, and such
resolutions  have  not  been  amended,  modified or rescinded and remain in full
force  and effect as of the date hereof, and such resolutions stand of record on
the  books  of  the  Corporation.

          I  FURTHER  CERTIFY  that  the following named persons, whose original
signatures  are  shown below, are duly elected, qualified and acting officers of
the Corporation and have the positions set forth opposite their respective names
and the authority to execute the documents described in the attached resolutions
on  behalf  of  the  Corporation:

          NAME                  OFFICE                       SIGNATURE

Douglas Sinclair           Chief Financial Officer      ________________________

John  Bantleman            President  &  CEO            ________________________

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

                                            CERTIFIED  AND  ATTESTED  BY:

                                            X    _______________________________

<PAGE>
                                  IMPERIAL BANK
                                   MEMBER FDIC

                         ITEMIZATION OF AMOUNT FINANCED
                            DISBURSEMENT INSTRUCTIONS

NAME:  EVOLVE SOFTWARE, INC.     DATE:

$                   credited to deposit account No. __________ when Advances are
                    requested or disbursed to Borrower by cashiers check or wire
                    transfer

Amounts paid to others on your behalf:

     $              to Imperial  Bank  for  Loan  Fee

     $              to Imperial  Bank  for  Document  Fee

     $              to Imperial Bank for accounts receivable audit (estimate)

     $              to  Bank  counsel  fees  and  expenses

     $              to  _______________

     $              to  _______________

     $              TOTAL  (AMOUNT  FINANCED)

Upon  consummation  of  this  transaction,  this document will also serve as the
authorization  for  Imperial Bank to disburse the loan proceeds as stated above.

--------------------------------                --------------------------------
Signature                                       Signature

<PAGE>
                         AGREEMENT TO PROVIDE INSURANCE

TO:  IMPERIAL  BANK                             Date:  January 31, 2001
     c/o Insurance Services
     Post Office Box  8061
     Walnut Creek, CA 94596-8061

     Borrower:  EVOLVE  SOFTWARE,  INC.

     In  consideration  of  a  loan in the amount of $15,000,000, secured by all
personal  property  including  inventory  and  equipment.

     I/We  agree to obtain adequate insurance coverage to remain in force during
the  term  of  the  loan.

     I/We  also  agree  to  advise the below named agent to add Imperial Bank as
lender's  loss  payable  on the new or existing insurance policy, and to furnish
Bank at above address with a copy of said policy/endorsements and any subsequent
renewal  policies.

     I/We  understand  that  the  policy  must  contain:

     1.   Fire and  extended  coverage  in  an  amount sufficient to cover:

          (a)     The  amount  of  the  loan,  OR

          (b)     All  existing  encumbrances,  whichever  is  greater,

          but  not in excess of the replacement value of the improvements on the
          real  property.

     2.   Lender's  "LOSS  PAYABLE"  Endorsement  Form  438  BFU  in  favor  of
Imperial  Bank,  or  any  other  form  acceptable  to  Bank.

INSURANCE  INFORMATION

     Insurance  Co./Agent                        Telephone  No.:

     Agent's  Address:

                        Signature of Obligor:
                                                 ---------------------------

                        Signature of Obligor:
                                                 ---------------------------

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                        FOR  BANK  USE  ONLY

                        INSURANCE  VERIFICATION:  Date:
                                                       ------------------
                        Person  Spoken  to:
                                                  -----------------------
                        Policy  Number:
                                                  -----------------------
                        Effective From:           To:
                                       ---           --------------------
                        Verified  by:
                                                  -----------------------

<PAGE>
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IMPERIAL  BANK
CALIFORNIA'S  BUSINESS  BANKS     AUTOMATIC  DEBIT  AUTHORIZATION
MEMBER  FDIC
--------------------------------------------------------------------------------

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To:  IMPERIAL  BANK

Re:  LOAN  #  ___________________________________

You are hereby authorized and instructed to charge account No.__________________
in  the  name  of
EVOLVE  SOFTWARE,  INC.
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for  principal  and  interest payments due on above referenced loan as set forth
below  and  credit  the  loan  referenced  above.

          ____  Debit  each  interest payment as it becomes due according to the
          terms  of  the  Loan  and  Security  Agreement  and  any  renewals  or
          amendments  thereof.

          ____  Debit  each principal payment is at becomes due according to the
          terms  of  the  Loan  and  Security  Agreement  and  any  renewals  or
          amendments  thereof.

This  Authorization  is  to  remain  in  full  force and effect until revoked in
writing.

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

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     Borrower Signature                     |   Date
--------------------------------------------------------------------------------
                                            |
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                                            |
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<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00030-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00030-of-00352.parquet"}]]