Document:

<PAGE>

                                                                   Exhibit 10.3

                            INDEMNIFICATION AGREEMENT

         THIS INDEMNIFICATION AGREEMENT (the "Agreement") is effective as of the
____ day of _________, 2000, by and between Embarcadero Technologies, Inc., a
Delaware corporation (the "Company"), and ___________________, an individual
("Indemnitee").

                                   BACKGROUND

         A. Indemnitee is a member of the Board of Directors of the Company and,
in that capacity, performs a valuable service for the Company. For a variety of
reasons, including the frequency, magnitude and often baseless nature of claims
and actions brought against corporate directors and officers generally, it is
difficult for corporations to attract and retain highly competent persons as
directors and officers. In addition, there exists uncertainty, both as to
matters of "substance" and "procedure," about the protection against such claims
provided by statutory, charter and bylaw provisions and through "director and
officer" insurance.

        B. The Company's Certificate of Incorporation also provides for
indemnification of, and advancement of expenses to, the directors and officers
of the Company to the maximum extent authorized by the Delaware General
Corporation Law, as amended (the "DGCL"), and, together with the DGCL, permits,
by its nonexclusive nature, the establishment of indemnification agreements
between the Company and its directors and officers.

         C. In order to induce Indemnitee to continue to serve as a member of
the Board of Directors and to clarify the specific procedure for addressing
indemnification matters if and as they arise, the Company and the Indemnitee
hereby agree to contractual indemnification arrangements on the terms set forth
in this Agreement.

         THE PARTIES AGREE AS FOLLOWS:

         1. DEFINITIONS. For purposes of this Agreement, the following terms
have the following meanings:

               a. "Agent" means any person (i) who is or was a director,
officer, employee or other agent of the Company or (ii) who is or was serving at
the request of the Company, or otherwise as a result of that person's
relationship with the Company, as a director, officer, employee or other agent
of another foreign or domestic corporation or of any partnership, joint venture,
trust or other enterprise (including, without limitation, service with respect
to employee benefit plans).

               b. "Change in Control" shall be deemed to have occurred if (i)
any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing 20% or more of
the total voting power represented by

<PAGE>

the Company's then outstanding Voting Securities, or (ii) during any period of
two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Company and any new director whose
election by the Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof, or (iii) the stockholders
of the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into Voting Securities of the surviving entity) at least 80% of the total voting
power represented by the Voting Securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company (in one
transaction or a series of transactions) of all or substantially all of the
Company's assets.

               c. "Disinterested Director" means a director of the Company who
neither is nor was a party to the Proceeding in respect of which indemnification
is sought under this Agreement or otherwise.

               d. "Expenses" includes any and all direct and indirect costs
(including, without limitation, attorneys' fees and disbursements, court costs,
fees and expenses of witnesses, experts, professional advisers and private
investigators, arbitration expenses, costs of attachment, appeal or similar
bonds, travel expenses, duplicating, printing and binding costs, telephone
charges, postage, delivery service fees, and any and all other disbursements or
out-of-pocket expenses) actually and reasonably incurred by or on behalf of
Indemnitee in connection with either (i) the investigation, defense, settlement
or appeal of, or being a witness or participant in, a Proceeding (including
preparing for any of the foregoing) or (ii) the establishment or enforcement of
any right to indemnification under this Agreement or otherwise or any right to
recovery under any liability insurance policy maintained by the Company;
PROVIDED, HOWEVER, that "Expenses" shall not include any judgments, fines or
amounts paid in settlement.

               e. "Independent Counsel" means a law firm or attorney that
neither is presently nor in the past two years has been retained to represent:
(i) the Company or Indemnitee in any matter material to the Company or
Indemnitee, or (ii) any other party to the Proceeding in respect of which
indemnification is sought under this Agreement or otherwise. In addition, the
term "Independent Counsel" does not include any law firm or attorney who, under
the applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Company or Indemnitee in an
action to determine Indemnitee's right to indemnification under this Agreement
or otherwise.

               f. "Liabilities" means liabilities and losses of any type
whatsoever, including, without limitation, judgments, fines, excise taxes and
penalties (including, without limitation, ERISA excise taxes and penalties) and
amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such

                                      -2-

<PAGE>

liabilities and losses), actually incurred by Indemnitee in connection with or
as a result of a Proceeding.

               g. "Potential Change in Control" shall be deemed to have occurred
if (i) the Company enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control; (ii) any person (including the
Company) publicly announces an intention to take or to consider taking actions
which, if consummated, would constitute a Change in Control; (iii) any person,
other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, who is or becomes the beneficial owner,
directly or indirectly, of securities of the Company representing 9.5% or more
of the combined voting power of the Company's then outstanding Voting
Securities, increases such person's beneficial ownership of such securities by
five percentage points or more over the initial percentage of such securities
equal to or exceeding 9.5% so owned by such person; or (iv) the Board of
Directors of the Company adopts a resolution to the effect that, for purposes of
this Agreement, a Potential Change in Control has occurred.

               h. "Proceeding" means any threatened, pending or completed
action, suit or proceeding (including any inquiry, hearing, arbitration
proceeding or alternative dispute resolution mechanism), whether civil,
criminal, administrative or investigative (including any action by or in the
right of the Company), to which Indemnitee is or was a party, witness or other
participant, or is threatened to be made a party, witness or other participant,
by reason of the fact that Indemnitee is or was an Agent, or by reason of
anything done or not done by Indemnitee in that capacity or in any other
capacity while serving as an Agent, whether before or after the date of this
Agreement. "Proceeding" shall not include any Proceeding initiated by Indemnitee
(other than as contemplated by Sections 3(d) or 6 of this Agreement) unless such
Proceeding was authorized or consented to by the Board of Directors of the
Company.

               i. "Voting Securities" means any securities of the Company which
vote generally in the election of directors.

         2. AGREEMENT TO INDEMNIFY. Subject to the terms and conditions of, and
in accordance with the procedures set forth in, this Agreement, the Company
shall hold Indemnitee harmless and indemnify Indemnitee (and Indemnitee's spouse
as provided below), to the fullest extent permitted by the provisions of the
DGCL and other applicable law, from and against all Expenses and Liabilities,
including, without limitation, Expenses and Liabilities arising from any
Proceeding brought by or in the right of the Company or its stockholders. The
Company and Indemnitee intend that this Agreement provide for indemnification in
excess of that expressly required, granted or permitted by statute, including,
without limitation, any indemnification provided by the Company's Certificate of
Incorporation or Bylaws, or by vote of its stockholders or directors, or by
applicable law. If, after the date hereof, the DGCL or any other applicable law
is amended to permit or authorize indemnification of, or advancement of defense
expenses to, Indemnitee to a greater extent than is permitted on the date
hereof, references in this Agreement

                                      -3-

<PAGE>

to the DGCL or any other applicable law shall be deemed to refer to the DGCL or
such applicable law as so amended.

         3.       PROCEDURAL MATTERS.

               a. INITIAL REQUEST. Whenever Indemnitee believes that, in a
specific case, Indemnitee is then entitled to indemnification under this
Agreement or under the Company's Certificate of Incorporation or Bylaws, the
DGCL or otherwise, Indemnitee shall submit a written notice to the Company
requesting an authorization and determination by the Company to that effect. The
notice shall describe the matter giving rise to the request and be accompanied
by all appropriate supporting documentation reasonably available to Indemnitee.

               b. DETERMINATION AND PAYMENT. The Company shall make a
determination about Indemnitee's entitlement to indemnification in the specific
case no later than 90 days after receipt of Indemnitee's request. In making that
determination, the person or persons making the determination shall presume that
Indemnitee met any applicable standard of conduct required for indemnification,
unless the Company shall have affirmatively shown by clear and convincing
evidence that Indemnitee did not meet that standard. The determination shall be
made by the Board of Directors by a majority vote of a quorum consisting of
Disinterested Directors. If such a quorum is not obtainable, or, even if
obtainable, a quorum of Disinterested Directors so directs, the determination
shall be made by Independent Counsel in a written opinion obtained at the
Company's expense. Notwithstanding the foregoing, if there has been a Change in
Control (other than a Change in Control which has been approved by a majority of
the Company's Board of Directors who were directors immediately prior to such
Change in Control), the determination shall be made by Independent Counsel in a
written opinion obtained at the Company's expense. If the person or persons
empowered to make the determination either: (i) affirmatively makes a
determination of Indemnitee's entitlement to indemnification or (ii) fails to
make any determination at all within the 90-day period, indemnification shall be
considered as authorized and proper in the circumstances, and Indemnitee shall
be absolutely entitled to such indemnification, and shall receive payment as
promptly as practicable, in the absence of any misrepresentation of a material
fact by Indemnitee in the request for indemnification, or a specific
determination by a court of competent jurisdiction that all or any part of such
indemnification is prohibited by applicable law. If the person or persons
empowered to make the determination find that the Indemnitee is not entitled to
indemnification, the Indemnitee shall have the right to apply to a court of
competent jurisdiction for the purpose of enforcing Indemnitee's right to
indemnification pursuant to this Agreement. The termination of any Proceeding by
judgment, order, settlement, arbitration award, conviction or upon a plea of
NOLO CONTENDERE or its equivalent shall not, of itself, create a presumption
that Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, or that, with respect to any criminal Proceeding, Indemnitee had
reasonable cause to believe Indemnitee's conduct was unlawful.

                  c. ADVANCEMENT OF EXPENSES. If so requested in a writing by
Indemnitee accompanied by appropriate supporting documentation, the Company
shall, within ten days after receipt of the request, advance funds for the
payment of Expenses, whether that request is made

                                      -4-

<PAGE>

before or after the final disposition of a Proceeding (including, without
limitation, any criminal Proceeding or any Proceeding brought by or in the right
of the Company or its stockholders), unless there has been a final determination
that Indemnitee is not entitled to indemnification for those Expenses. If
required by law at the time of the advance, the payment of the advance shall be
conditioned upon the receipt from Indemnitee of an undertaking (which need not
be secured) to repay the advance to the extent that it is ultimately determined
that Indemnitee is not entitled to such indemnification by the Company. Any
dispute concerning the advancement of Expenses may, at the election of the
Indemnitee, be resolved by arbitration before an arbitrator selected by
Indemnitee and approved by the Company. If the parties cannot agree on a single
arbitrator, then the claim shall be heard by a panel of three arbitrators, with
one selected by Indemnitee, one selected by the Company and one selected jointly
by the foregoing two arbitrators. Each of the arbitrators shall be a litigation
or corporate attorney with experience in the field of officer and director
indemnification. The arbitrators shall be selected within (15) days after demand
for arbitration and shall render a decision within (45) days after selection,
unless good cause is shown for requiring a longer decision period. The Company
shall act in utmost good faith to provide timely information to the arbitrators
and to insure Indemnitee a full opportunity to defend against the Company's
claim that Indemnitee is not entitled to an advance of Expenses. The Company
shall indemnify Indemnitee against all Expenses incurred by Indemnitee under the
dispute resolutions proceedings set forth in this Subsection 3(c), unless a
court of competent jurisdiction finds that each of the claims and/or defenses by
Indemnitee in the action or proceeding for which an advance is sought was
frivolous or made in bad faith.

                  d. ENFORCEMENT. If Indemnitee has not received a determination
of entitlement to indemnification or an advance, as the case may be, within the
applicable time periods for such actions specified in this Agreement, or if it
has been determined that Indemnitee substantively would not be permitted to be
indemnified in whole or in part under applicable law, Indemnitee shall be
entitled to commence an action in any court of competent jurisdiction (including
the court in which the Proceeding (as to which Indemnitee seeks indemnification)
is or was pending) (i) in the former case, seeking enforcement of Indemnitee's
rights under this Agreement or otherwise, or seeking an initial determination by
the court, or (ii) in the latter case, challenging any such determination or any
aspect thereof, including the legal or factual bases therefor. The Company
hereby consents to service of process and to appear generally in any such
proceeding. It shall be a defense to any such action that applicable law does
not permit the Company to indemnify Indemnitee for the amount claimed. In any
such action, the Company shall have the burden of proving that indemnification
or advances are not proper in the circumstances of the specific case. Neither
the failure of the Company to have made a determination prior to the
commencement of such action that indemnification is proper under the
circumstances because Indemnitee has met the standard of conduct under
applicable law, nor an actual determination by the Company that Indemnitee has
not met such standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met that standard of conduct. The Company
shall indemnify Indemnitee for Expenses incurred by Indemnitee in connection
with the successful establishment or enforcement, in whole or in part, by
Indemnitee of Indemnitee's right to indemnification or advances.

                                      -5-

<PAGE>

                  e. NOTICE BY INDEMNITEE AND DEFENSE OF PROCEEDINGS. Indemnitee
shall promptly notify the Company in writing upon being served with any summons,
citation, subpoena, complaint, indictment, information or other document
relating to any matter which may give rise to a claim for indemnification under
this Agreement or otherwise; PROVIDED, HOWEVER, that a failure of Indemnitee to
provide that notice shall relieve the Company from liability only if and to the
extent that the failure materially prejudices the Company's ability to
adequately defend Indemnitee in the Proceeding. With respect to any Proceeding
as to which Indemnitee so notifies the Company:

                         i. The Company shall be entitled to participate at its
own expense.

                         ii. Except as otherwise provided below, the Company,
jointly with any other indemnifying party similarly notified, shall be entitled
to assume the defense of such Proceeding, with counsel reasonably satisfactory
to Indemnitee. After notice from the Company to Indemnitee of the Company's
election to assume the defense, the Company shall not be liable to Indemnitee
under this Agreement for any Expenses subsequently incurred by Indemnitee, other
than as provided below. Indemnitee shall have the right to employ Indemnitee's
own counsel in that Proceeding, but the fees and expenses of such counsel
incurred after notice from the Company of its election so to assume the defense
shall be borne by Indemnitee, except to the extent that (x) the employment of
counsel by Indemnitee has been authorized by the Company, (y) Indemnitee has
reasonably concluded that there may be a conflict of interest between the
Company and Indemnitee in the conduct of the defense of such Proceeding or that
counsel selected by the Company may not be adequately representing Indemnitee,
or (z) the Company has not in fact employed counsel to assume the defense of
such Proceeding. In those cases, the fees and expenses of Indemnitee's own
counsel shall be paid by the Company.

                         iii. Neither the Company nor Indemnitee shall
unreasonably withhold its or his or her consent to any proposed settlement. The
Company has no obligation to indemnify and hold Indemnitee harmless under this
Agreement for any amounts paid in settlement of any Proceeding effected without
its written consent. The Company shall not settle any Proceeding in any manner
which would impose any penalty or limitation on Indemnitee without Indemnitee's
written consent.

                  f. CHANGE IN CONTROL. If there is a Change in Control (other
than a Change in Control which has been approved by a majority of the Company's
Board of Directors who were directors immediately prior to such Change in
Control), then with respect to all matters thereafter arising concerning the
rights of Indemnitee to indemnification and advances under this Agreement or
otherwise, the Company shall seek legal advice only from Independent Counsel
selected by Indemnitee and approved by the Company, which approval shall not be
unreasonably withheld. Such Independent Counsel, among other things, shall
render its written opinion to the Company and Indemnitee as to whether and to
what extent Indemnitee would be permitted to be

                                      -6-

<PAGE>

indemnified under applicable law. The Company shall pay the reasonable fees and
expenses of such Independent Counsel.

         4. NONEXCLUSIVITY. The indemnification provided by this Agreement is
not exclusive of or inconsistent with any rights to which Indemnitee may be
entitled under the Company's Certificate of Incorporation or Bylaws, any other
agreement, any vote of stockholders or directors, the DGCL, or otherwise, both
as to action in Indemnitee's official capacity and otherwise. If and to the
extent that a change in the DGCL (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded currently
under the Company's Certificate of Incorporation or Bylaws or under this
Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by
this Agreement the greater benefits so afforded by such change.

         5. PARTIAL INDEMNIFICATION. If Indemnitee is entitled to
indemnification by the Company for some or a portion of Expenses or Liabilities
but not for the total amount, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses and Liabilities to which Indemnitee
is entitled to be indemnified. Moreover, notwithstanding any other provision of
this Agreement, to the extent that Indemnitee has been successful on the merits
or otherwise in defense of any Proceeding or in defense of any claim, issue or
matter therein, including dismissal without prejudice, Indemnitee shall be
indemnified against all Expenses incurred by Indemnitee in connection therewith.

         6. LIABILITY INSURANCE. To the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by such policy or policies, in accordance
with its or their terms, to the maximum extent of the coverage available for any
Company director or officer, as the case may be. If Indemnitee serves as a
fiduciary of any employee benefit plan of the Company or any of its subsidiary
or affiliated corporations, then to the extent that the Company maintains an
insurance policy or policies providing fiduciaries' liability insurance,
Indemnitee shall be covered by such policy or policies in accordance with its or
their terms, to the maximum extent of the coverage available for any fiduciary.
In the event of a Potential Change in Control, the Company shall maintain in
force any and all insurance policies then maintained by the Company providing
directors' and officers' liability insurance or fiduciaries' liability
insurance, in respect of Indemnitee, for a period of six years thereafter. Upon
notice to the Company, either from Indemnitee or from any other source, of the
commencement or threat of commencement of any Proceeding or matter which may
give rise to a claim for indemnification of Indemnitee and which may be covered
by any insurance policy maintained by the Company, the Company shall promptly
give notice to the insurer in accordance with the procedures prescribed by such
policy and shall thereafter take all necessary or appropriate action to cause
such insurer to pay, to or on behalf of Indemnitee all Liabilities and Expenses
payable under such policy with respect to such Proceeding or matter. The Company
shall indemnify Indemnitee for Expenses incurred by Indemnitee in connection
with any successful action brought by Indemnitee for recovery under any
insurance policy referred to in this Section 6 and shall advance to Indemnitee
the Expenses of such action in the manner provided in Section 3(c) above.

                                      -7-

<PAGE>

         7. OTHER SOURCES. Indemnitee shall not be required to exercise any
rights Indemnitee may have against any other parties (for example, under an
insurance policy purchased by Indemnitee, the Company or any other person or
entity) before Indemnitee exercises or enforces Indemnitee's rights under this
Agreement. However, to the extent the Company actually indemnifies Indemnitee or
advances Indemnitee funds in respect of Expenses, the Company shall be entitled
to enforce any such rights which Indemnitee may have against third parties.
Indemnitee shall assist the Company in enforcing those rights if it pays
Indemnitee's costs and expenses of doing so. If Indemnitee is actually
indemnified or advanced Expenses by any such third party, then, for so long as
Indemnitee is not required to disgorge the amounts so received, to that extent
the Company shall be relieved of its obligation to indemnify Indemnitee or to
advance Expenses.

         8. CERTAIN RELATIONSHIPS. The obligations and rights created under this
Agreement shall not be affected by any amendment to the Company's Certificate of
Incorporation or Bylaws or any other agreement or instrument to which Indemnitee
is not a party, and shall not diminish any other rights which Indemnitee now or
in the future has against the Company or any other person or entity.

         9. SEVERABILITY. If any provision of this Agreement is determined to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the Company and Indemnitee. In any
event, the remaining provisions of this Agreement shall remain enforceable to
the maximum extent possible.

         10. CONTRIBUTION. If the indemnification provided in Section 2 of this
Agreement is unavailable, then, in respect of any Proceeding in which the
Company is jointly liable with Indemnitee (or would be if joined in the
Proceeding), the Company shall contribute to the amount of Expenses and
Liabilities as appropriate to reflect: (i) the relative benefits received by the
Company, on the one hand, and Indemnitee, on the other hand, from the
transaction from which the Proceeding arose, and (ii) the relative fault of the
Company, on the one hand, and of Indemnitee, on the other, in connection with
the events which resulted in such Expenses and Liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company, on the one
hand, and of Indemnitee, on the other, shall be determined by reference to,
among other things, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent the circumstances resulting in
such Expenses and Liabilities. The Company agrees that it would not be just and
equitable if contribution pursuant to this Section 10 were determined by pro
rata allocation or any other method of allocation which does not take account of
the equitable considerations described in this Section 10.

         11. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws. This Agreement is intended to be an agreement
of the type contemplated by Section 145(f) of the DGCL.

                                      -8-

<PAGE>

         12. NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be given by personal or courier delivery,
confirmed facsimile or telex transmission or first class mail, and shall be
deemed to have been duly given upon receipt if personally delivered or delivered
by courier, on the date of transmission if transmitted by facsimile or telex, or
three days after mailing if mailed, to the addresses set forth below:

                  If to Indemnitee:

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

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

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

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

                  If to the Company:

                  Embarcadero Technologies, Inc.
                  425 Market Street
                  Suite 425
                  San Francisco, California 94105
                  Attn:  President

or to such other address as either party may designate by notice to the other
from time to time.

         13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.

         14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company and its successors and assigns, and shall inure to the benefit of
Indemnitee and Indemnitee's spouse, estate, heirs, executors, administrators,
personal or legal representatives and assigns. The Company shall require any
successor corporation (whether by merger, consolidation, or otherwise) by
written agreement in form and substance satisfactory to Indemnitee, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place.

         15. AMENDMENT AND WAIVER. This Agreement may not be amended except by a
writing executed by both the Company and Indemnitee. No waiver of any provision
of this Agreement shall be effective unless in writing and signed by the party
to be charged therewith. A waiver of, or a failure to insist on, complete
compliance with any provision of this Agreement shall not be construed as a
waiver of a subsequent or different non-compliance, breach or default of that or
any other provision of this Agreement.

         16. ACKNOWLEDGMENT. The Company expressly acknowledges that it has
entered into this Agreement and assumed the obligations imposed on the Company
under this Agreement in order to induce Indemnitee to serve or to continue to
serve as a director or officer and acknowledges that Indemnitee is relying on
this Agreement in serving or continuing to serve in

                                      -9-

<PAGE>

such capacity. The Company further agrees to stipulate in any court proceeding
that the Company is bound by all of the provisions of this Agreement.

         17. PERIOD OF LIMITATIONS. No legal action shall be brought and no
cause of action shall be asserted by or in the right of the Company against
Indemnitee, estate, heirs, executors, administrators or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two-year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.

         18. DURATION OF AGREEMENT. This Agreement shall continue in effect for
so long as Indemnitee is subject to any possible Proceeding, regardless of
whether Indemnitee continues to serve as an Agent.

         19. ENTIRE AGREEMENT. This document contains the final, complete and
exclusive statement of the agreement between the Company and Indemnitee with
respect to the subject matter of this Agreement and supersedes any prior or
contemporaneous understandings, agreements, communications, correspondence or
representations by or between the parties, whether written or oral, relating to
the subject matter of this Agreement.

                                      -10-

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date set forth in its first paragraph.

                                      EMBARCADERO TECHNOLOGIES, INC.

                                      By:
                                          -----------------------------
                                      Name:
                                            ---------------------------
                                      Title:
                                             --------------------------

                                      ---------------------------------
                                                           , Indemnitee
                                      ---------------------

                                      -11-<PAGE>

                                                                    Exhibit 10.4

                                  OFFICE LEASE

                                     BETWEEN

                 METROPOLITAN LIFE INSURANCE COMPANY (LANDLORD)

                                       AND

                     EMBARCADERO TECHNOLOGIES, INC. (TENANT)

                                425 MARKET STREET

                            SAN FRANCISCO, CALIFORNIA

<PAGE>

                              TABLE OF CONTENTS

                                                                         PAGE

ARTICLE ONE - BASIC LEASE PROVISIONS.......................................1
         1.01     BASIC LEASE PROVISIONS...................................1
         1.02     ENUMERATION OF EXHIBITS & RIDER(S).......................2
         1.03     DEFINITIONS..............................................2

ARTICLE TWO - PREMISES, TERM, FAILURE TO GIVE POSSESSION, AND PARKING......6
         2.01     LEASE OF PREMISES........................................6
         2.02     TERM.....................................................7
         2.03     FAILURE TO GIVE POSSESSION...............................7
         2.04     AREA OF PREMISES.........................................7
         2.05     CONDITION OF PREMISES....................................7

ARTICLE THREE - RENT.......................................................7

ARTICLE FOUR - RENT ADJUSTMENTS AND PAYMENTS...............................7
         4.01     RENT ADJUSTMENTS.........................................7
         4.02     STATEMENT OF LANDLORD....................................8
         4.03     BOOKS AND RECORDS........................................8
         4.04     PARTIAL OCCUPANCY........................................8
         4.05     TENANT OR LEASE SPECIFIC TAXES...........................9

ARTICLE FIVE - SECURITY DEPOSIT............................................9

ARTICLE SIX - SERVICES....................................................10
         6.01     LANDLORD'S GENERAL SERVICES.............................10
         6.02     ELECTRICAL SERVICES.....................................10
         6.03     ADDITIONAL AND AFTER-HOUR SERVICES......................11
         6.04     TELEPHONE SERVICES......................................11
         6.05     DELAYS IN FURNISHING SERVICES...........................12
         6.06     CHOICE OF SERVICE PROVIDER..............................12
         6.07     SIGNAGE.................................................13

ARTICLE SEVEN - POSSESSION, USE AND CONDITION OF PREMISES.................13
         7.01     POSSESSION AND USE OF PREMISES..........................13
         7.02     LANDLORD ACCESS TO PREMISES; APPROVALS..................14
         7.03     QUIET ENJOYMENT.........................................15

ARTICLE EIGHT - MAINTENANCE...............................................15
         8.01     LANDLORD'S MAINTENANCE..................................15
         8.02     TENANT'S MAINTENANCE....................................16

ARTICLE NINE - ALTERATIONS AND IMPROVEMENTS...............................16
         9.01     TENANT ALTERATIONS......................................16
         9.02     LIENS...................................................17

ARTICLE TEN - ASSIGNMENT AND SUBLETTING...................................18
         10.01    ASSIGNMENT AND SUBLETTING...............................18
         10.02    RECAPTURE...............................................20
         10.03    EXCESS RENT.............................................20

                                       i
<PAGE>

         10.04    TENANT LIABILITY........................................20
         10.05    ASSUMPTION AND ATTORNMENT...............................20

ARTICLE ELEVEN - DEFAULT AND REMEDIES.....................................21
         11.01    EVENTS OF DEFAULT.......................................21
         11.02    LANDLORD'S REMEDIES.....................................21
         11.03    ATTORNEY'S FEES.........................................23
         11.04    BANKRUPTCY..............................................23
         11.05    LANDLORD'S DEFAULT......................................24

ARTICLE TWELVE - SURRENDER OF PREMISES....................................24
         12.01    IN GENERAL..............................................24
         12.02    LANDLORD'S RIGHTS.......................................25

ARTICLE THIRTEEN - HOLDING OVER...........................................25

ARTICLE FOURTEEN - DAMAGE BY FIRE OR OTHER CASUALTY.......................25
         14.01    SUBSTANTIAL UNTENANTABILITY.............................25
         14.02    INSUBSTANTIAL UNTENANTABILITY...........................27
         14.03    RENT ABATEMENT..........................................27
         14.04    WAIVER OF STATUTORY REMEDIES............................27

ARTICLE FIFTEEN - EMINENT DOMAIN..........................................27
         15.01    TAKING OF WHOLE OR SUBSTANTIAL PART.....................27
         15.02    TAKING OF PART..........................................27
         15.03    COMPENSATION............................................28

ARTICLE SIXTEEN - INSURANCE...............................................28
         16.01    TENANT'S INSURANCE......................................28
         16.02    FORM OF POLICIES........................................28
         16.03    LANDLORD'S INSURANCE....................................29
         16.04    WAIVER OF SUBROGATION...................................29
         16.05    NOTICE OF CASUALTY......................................30

ARTICLE SEVENTEEN - WAIVER OF CLAIMS AND INDEMNITY........................30
         17.01    WAIVER OF CLAIMS........................................30
         17.02    INDEMNITY BY TENANT.....................................30

ARTICLE EIGHTEEN - RULES AND REGULATIONS..................................31
         18.01    RULES...................................................31
         18.02    ENFORCEMENT.............................................31

ARTICLE NINETEEN - LANDLORD'S RESERVED RIGHTS.............................31

ARTICLE TWENTY - ESTOPPEL CERTIFICATE.....................................32
         20.01    IN GENERAL..............................................32
         20.02    ENFORCEMENT.............................................32

ARTICLE TWENTY-ONE - RELOCATION OF TENANT.................................32

ARTICLE TWENTY-TWO - REAL ESTATE BROKERS..................................32

ARTICLE TWENTY-THREE - MORTGAGEE PROTECTION...............................32
         23.01    SUBORDINATION AND ATTORNMENT............................32

                                      ii

<PAGE>

         23.02    MORTGAGEE PROTECTION....................................33

ARTICLE TWENTY-FOUR - NOTICES.............................................33

ARTICLE TWENTY-FIVE - MISCELLANEOUS.......................................34
         25.01    LATE CHARGES............................................34
         25.02    NO JURY TRIAL; VENUE; JURISDICTION......................34
         25.03    DEFAULT UNDER OTHER LEASE...............................35
         25.04    OPTION..................................................35
         25.05    TENANT AUTHORITY........................................35
         25.06    ENTIRE AGREEMENT........................................35
         25.07    MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE..........35
         25.08    EXCULPATION.............................................35
         25.09    ACCORD AND SATISFACTION.................................36
         25.10    LANDLORD'S OBLIGATIONS ON SALE OF BUILDING..............36
         25.11    BINDING EFFECT..........................................36
         25.12    CAPTIONS................................................36
         25.13    TIME; APPLICABLE LAW; CONSTRUCTION......................36
         25.14    ABANDONMENT.............................................37
         25.15    LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES.............37
         25.16    SECURITY SYSTEM.........................................37
         25.17    NO LIGHT, AIR OR VIEW EASEMENTS.........................37
         25.18    RECORDATION.............................................37
         25.19    SURVIVAL................................................37
         25.20    RIDERS..................................................37

ARTICLE TWENTY-SIX - HAZARDOUS SUBSTANCES DISCLOSURE......................38

                                     iii

<PAGE>

                                  OFFICE LEASE

                                   ARTICLE ONE
                             BASIC LEASE PROVISIONS

1.01     BASIC LEASE PROVISIONS - In the event of any conflict between these
         Basic Lease Provisions and any other Lease provision, such other Lease
         provision shall control.

(1)      PROJECT AND ADDRESS:

         425 Market Street
         San Francisco, California 94105

(2)      LANDLORD AND ADDRESS:

         Metropolitan Life Insurance Company,
         a New York corporation

         Notices to Landlord shall be addressed:

                  Metropolitan Life Insurance Company
                  c/o The Shorenstein Company, LP
                  425 Market Street
                  San Francisco, California 94105

                  with copies to the following:

                           Metropolitan Life Insurance Company
                           101 Lincoln Centre Drive, Suite 600
                           Foster City, CA  94404
                           Attention:  Assistant Vice President

                                            and

                           Metropolitan Life Insurance Company
                           101 Lincoln Centre Drive, Suite 600
                           Foster City, CA  94404
                           Attention:  Associate General Counsel

(3)      TENANT AND CURRENT ADDRESS:

         Name:                      Embarcadero Technologies, Inc.
         State of incorporation:    a California corporation

         Notices to Tenant shall be addressed:

                  Embarcadero Technologies, Inc.
                  At the address of the Premises

(4)      DATE OF LEASE:  as of April 23, 1999

(5)      LEASE TERM:   Five (5) years

(6)      PROJECTED COMMENCEMENT DATE:   June 15, 1999

                                      1

<PAGE>

(7)      PROJECTED EXPIRATION DATE:  Sixty (60) months after the Commencement
         Date

(8)      MONTHLY BASE RENT:

<TABLE>
<CAPTION>
         PERIOD FROM/TO              MONTHLY       ANNUAL RATE/SF OF RENTABLE AREA
         --------------              -------       -------------------------------
         <S>                         <C>           <C>
         Months 01 - 24              $27,520       $32.00 per rentable square foot
         Months 25 - 36              $29,240       $34.00 per rentable square foot
         Months 37 - 60              $30,960       $36.00 per rentable square foot

</TABLE>

(9)      RENTABLE AREA OF THE BUILDING:     289,909 square feet

(10)     RENTABLE AREA OF THE PREMISES:     10,320 square feet

(11)     SECURITY DEPOSIT:                  Thirty Thousand Nine Hundred Sixty
                                            Dollars ($30,960.00)

(12)     SUITE NUMBER OF PREMISES:          _______________

(13)     TENANT'S SHARE:                    3.5597%

(14)     OPERATING EXPENSES BASE YEAR:      The calendar year 1999

(15)     TAXES BASE YEAR:  The City of San Francisco fiscal year beginning July
                           1, 1999 and ending June 30, 2000.

(16)     TENANT'S USE OF PREMISES:          General office use.

(17)     BROKERS:

         Landlord's Broker:         Shorenstein Asset Services, L.P.

         Tenant's Broker:           Aegis Realty Partners

1.02     ENUMERATION OF EXHIBITS & RIDER(S)

The Exhibits and Rider(s) set forth below and attached to this Lease are
incorporated in this Lease by this reference:

EXHIBIT A  Plan of Premises
EXHIBIT B  Workletter Agreement (intentionally omitted)
EXHIBIT C  Rules and Regulations
RIDER 1    Commencement Date Agreement
RIDER 2    Additional Provisions

1.03     DEFINITIONS

For purposes hereof, the following terms shall have the following meanings:

ADJUSTMENT YEAR: The applicable calendar year or any portion thereof after the
Operating Expenses Base Year and Taxes Base Year for which a Rent Adjustment
computation is being made.

AFFILIATE:  As defined in Section 10.01(f).

                                       2

<PAGE>

BUILDING: That certain condominium unit (the "Unit") consisting of space on
floors four through fifteen inclusive of the office building located at the
Project, together with those easements appurtenant to the condominium unit
and that certain undivided interest in the Project Areas appurtenant to the
Unit as set forth in the Declaration. For purposes of this Lease, Project
Areas means all Land and any portions of the Real Property located on the
Land and not a part of Landlord's or any other condominium units in the
Project, and includes but is not limited to Common Areas as defined for
purposes of this Lease.

COMMENCEMENT DATE: The date specified in Section 1.01(6) as the Projected
Commencement Date, unless changed by operation of Rider 2.

COMMON AREAS: All areas of the Building made available from time to time for
the general common use or benefit of the tenants of the Building, and their
employees and invitees, or the public, as such areas currently exist and as
they may be changed from time to time.

DECLARATION: The "Declaration of Covenants, Conditions and Restrictions of
the Metropolitan Life Building Condominium Project, San Francisco,
California" dated October 12, 1973 as recorded October 12, 1973 at Book B817,
Page 164 in the Official Records of the City and County of San Francisco,
California as amended by "First Amendment to Declaration of Covenants,
Conditions and Restriction" dated November 1, 1988 as recorded in the San
Francisco, California Recorder's Office May 9, 1989 as Document E362737 in
Reel E866 Image 1302 as hereafter amended from time to time, together with
the "Map of Condominium Plan of the Metropolitan Life Building a Condominium
Project" consisting of 29 pages and recorded October 12, 1973 under
Recorder's Series No. W25240, San Francisco, California.

DECORATION: Tenant Alterations which do not require a building permit and
which do not involve any of the structural elements of the Building, or any
of the Building's systems, including its electrical, mechanical, plumbing,
security, heating, ventilating, air-conditioning, communication, and fire and
life safety systems.

DEFAULT RATE: Two (2) percentage points above the rate then most recently
announced by Bank of America N.T.& S.A. at its San Francisco headquarters as
its corporate base lending rate, from time to time announced, but in no event
higher than the maximum rate permitted by Law. In the event the foregoing
rate is no longer announced, Landlord shall choose a reasonably equivalent
rate.

DELIVERY DATE: The date for Landlord's delivery to Tenant of possession of
the Premises, if different from the Commencement Date, as provided in Rider 2.

ENVIRONMENTAL LAWS: All Laws governing the use, storage, disposal or
generation of any Hazardous Material, including the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended,
and the Resource Conservation and Recovery Act of 1976, as amended.

EXPIRATION DATE: The date specified in Section 1.01(7) unless changed by
operation of Article Two.

FORCE MAJEURE: Any accident, casualty, act of God, war or civil commotion,
strike or labor troubles, or any cause whatsoever beyond the reasonable
control of Landlord, including water shortages, energy shortages or
governmental preemption in connection with an act of God, a national
emergency, or by reason of Law, or by reason of the conditions of supply and
demand which have been or are affected by act of God, war or other emergency.

HAZARDOUS MATERIAL: Such substances, material and wastes which are or become
regulated under any Environmental Law; or which are classified as hazardous
or toxic under any Environmental Law; and explosives and firearms,
radioactive material, asbestos, and polychlorinated biphenyls.

                                       3

<PAGE>

INDEMNITEES: Collectively, Landlord, any Mortgagee or ground lessor of the
Property, the property manager and the leasing manager for the Property and
their respective directors, officers, agents and employees.

LAND:  The parcel(s) of real estate on which the Building and Project are
located.

LANDLORD WORK: The construction or installation of improvements to be
furnished by Landlord, if any, specifically described in Rider 2 attached
hereto.

LAWS OR LAW: All laws, ordinances, rules, regulations, other requirements,
orders, rulings or decisions adopted or made by any governmental body,
agency, department or judicial authority having jurisdiction over the
Property, the Premises or Tenant's activities at the Premises and any
covenants, conditions or restrictions of record which affect the Property.

LEASE: This instrument and all exhibits and riders attached hereto, as may be
amended from time to time.

LEASE YEAR: The twelve month period beginning on the first day of the first
month following the Commencement Date (unless the Commencement Date is the
first day of a calendar month in which case beginning on the Commencement
Date), and each subsequent twelve month, or shorter, period until the
Expiration Date.

MONTHLY BASE RENT:  The monthly rent specified in Section 1.01(8).

MORTGAGEE: Any holder of a mortgage, deed of trust or other security
instrument encumbering the Property.

NATIONAL HOLIDAYS: New Year's Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day and other holidays recognized by the
Landlord and the janitorial and other unions servicing the Building in
accordance with their contracts.

OPERATING EXPENSES: All costs, expenses and disbursements of every kind and
nature which Landlord shall pay or become obligated to pay in connection with
the ownership, management, operation, maintenance, replacement and repair of
the Building, including all of its components and the Building's share of
such costs and expenses due from owners of condominium units pursuant to the
Declaration and including the amortized portion of any capital expenditure or
improvement, together with interest thereon and the costs of changing utility
service providers. Operating Expenses shall not include, (i) costs of
alterations of the premises of tenants of the Building, (ii) depreciation
charges, (iii) interest and principal payments on loans (except for loans for
capital improvements which Landlord is allowed to include in Operating
Expenses as provided above), (iv) ground rental payments, (v) real estate
brokerage and leasing commissions, (vi) advertising and marketing expenses,
(vii) costs of Landlord reimbursed by insurance proceeds, (viii) expenses
incurred in negotiating leases of other tenants in the Building or enforcing
lease obligations of other tenants in the Building and (ix) Landlord's or
Landlord's property manager's corporate general overhead or corporate general
administrative expenses. If any Operating Expense, though paid in one year,
relates to more than one calendar year, at the option of Landlord such
expense may be proportionately allocated among such related calendar years.

OPERATING EXPENSES BASE YEAR:  The calendar year designated in Section
1.01(14).

PREMISES: The space located in the Building at the Suite Number listed in
Section 1.01(12) and depicted on EXHIBIT A attached hereto, excluding Project
Areas on the floor(s) on which the Premises is located.

PROJECT or PROPERTY: The Project consists of the office building located at the
address specified in Section 1.01(1), together with any and all areas,
improvements, parking garage, sidewalks, landscaping and improvements, included
as part of the condominium established pursuant to the Declaration, and the
Land,

                                       4
<PAGE>

any associated interests in real property, and the personal property,
fixtures, machinery, equipment, systems and apparatus located in or used in
conjunction with any of the foregoing. The Project may also be referred to as
the Property.

PROJECT AREAS:  As defined under the definition of Building above.

REAL PROPERTY:  The Property excluding any personal property.

RENT: Collectively, Monthly Base Rent, Rent Adjustments and Rent Adjustment
Deposits, and all other charges, payments, late fees or other amounts
required to be paid by Tenant under this Lease.

RENT ADJUSTMENT: Any amounts owed by Tenant for payment of Operating Expenses
or Taxes. The Rent Adjustments shall be determined and paid as provided in
Article Four.

RENT ADJUSTMENT DEPOSIT: An amount equal to Landlord's estimate of the Rent
Adjustment attributable to each month of the applicable Adjustment Year. On
or before the beginning of each Adjustment Year or with Landlord's Statement
(defined in Article Four), Landlord may estimate and notify Tenant in writing
of its estimate of the excess, if any, of Operating Expenses over those for
the Operating Expenses Base Year and of Taxes over those for the Taxes Base
Year. Prior to the first determination by Landlord of the amount of Operating
Expenses for the Operating Expenses Base Year and of Taxes for the Taxes Base
Year, Landlord may estimate such amounts in the foregoing calculation. The
last estimate by Landlord shall remain in effect as the applicable Rent
Adjustment Deposit unless and until Landlord notifies Tenant in writing of a
change.

RENTABLE AREA OF THE BUILDING: The amount of square footage set forth in
Section 1.01(9). which represents the sum of the rentable area of all space
intended for occupancy in the Building.

RENTABLE AREA OF THE PREMISES:  The amount of square footage set forth in
Section 1.01(10).

SECURITY DEPOSIT: The funds specified in Section 1.01(11), if any, deposited
by Tenant with Landlord as security for Tenant's performance of its
obligations under this Lease.

STANDARD OPERATING HOURS: Monday through Friday from 7:00 A.M. to 6:00 P.M.,
excluding National Holidays.

SUBSTANTIALLY COMPLETE OR SUBSTANTIAL COMPLETION: The completion of the
Landlord Work or Tenant Work, as the case may be, except for minor
insubstantial details of construction, decoration or mechanical adjustments
which remain to be done.

TAXES: All federal, state and local governmental taxes, assessments and
charges of every kind or nature, whether general, special, ordinary or
extraordinary, which Landlord shall pay or become obligated to pay because of
or in connection with the ownership, leasing, management, control or
operation of the Building (including any personal property used in connection
therewith), including all of its components and the Building's share of such
taxes, assessments and charges of the Project Areas, which may also include
any rental or similar taxes levied in lieu of or in addition to general real
and/or personal property taxes. For purposes hereof, Taxes for any year shall
be Taxes which are assessed for any period of such year, whether or not such
Taxes are billed and payable in a subsequent calendar year. There shall be
included in Taxes for any year the amount of all fees, costs and expenses
(including reasonable attorneys' fees) paid by Landlord during such year in
seeking or obtaining any refund or reduction of Taxes. Taxes for any year
shall be reduced by the net amount of any tax refund received by Landlord
attributable to such year. If a special assessment payable in installments is
levied against any part of the Building, Taxes for any year shall include
only the installment of such assessment and any interest payable or paid
during such year. Taxes shall not include any federal or state inheritance,
general income, gift or estate taxes, except that if a change occurs in the
method of taxation resulting in whole or in part in the substitution of any
such taxes, or any

                                       5

<PAGE>

other assessment, for any Taxes as above defined, such substituted taxes or
assessments shall be included in the Taxes.

TAXES BASE YEAR:  The year designated in Section 1.01(15).

TENANT ADDITIONS: Collectively, Landlord Work, Tenant Work and Tenant
Alterations.

TENANT ALTERATIONS: Any alterations, improvements, additions, installations
or construction in or to the Premises or any Real Property systems serving
the Premises done or caused to be done by Tenant after the date hereof,
whether prior to or after the Commencement Date (including Tenant Work, but
excluding Landlord Work); and any supplementary air-conditioning systems
installed by Landlord or by Tenant at Landlord's request pursuant to Section
6.01(b).

TENANT DELAY: Any event or occurrence which delays the completion of the
Landlord Work which is caused by or is described as follows:

         (i) special work, changes, alterations or additions requested or made
         by Tenant in the design or finish in any part of the Premises after
         approval of the plans and specifications (as described in Rider 2);

         (ii) Tenant's delay in submitting plans, supplying information,
         approving plans, specifications or estimates, giving authorizations or
         otherwise;

         (iii) failure to approve and pay for such work as Landlord undertakes
         to complete at Tenant's expense;

         (iv) the performance or completion by Tenant or any person engaged by
         Tenant of any work in or about the Premises; or

         (v) failure to perform or comply with any obligation or condition
         binding upon Tenant pursuant to Rider 2, including the failure to
         approve and pay for such Landlord Work or other items if and to the
         extent Rider 2 provides they are to be approved or paid by Tenant.

TENANT WORK: All work installed or furnished to the Premises by Tenant in
connection with Tenant's initial occupancy pursuant to Rider 2.

TENANT'S SHARE: The percentage specified in Section 1.01(13) which represents
the ratio of the Rentable Area of the Premises to the Rentable Area of the
Building.

TERM: The term of this Lease which shall commence on the Commencement Date and
expire on the Expiration Date.

TERMINATION DATE: The Expiration Date or such earlier date as this Lease
terminates or Tenant's right to possession of the Premises terminates.

WORKLETTER:  (intentionally omitted)

                                   ARTICLE TWO
             PREMISES, TERM, FAILURE TO GIVE POSSESSION, AND PARKING

2.01     LEASE OF PREMISES

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
Premises for the Term and upon the terms, covenants and conditions provided in
this Lease.

                                       6

<PAGE>

2.02     TERM

The Commencement Date shall be the date specified as the Projected Commencement
Date, unless changed by operation of Rider 2.

2.03     FAILURE TO GIVE POSSESSION

(intentionally omitted; see Rider 2)

2.04     AREA OF PREMISES

Landlord and Tenant agree that for all purposes of this Lease the Rentable Area
of the Premises and the Rentable Area of the Building as set forth in Article
One are controlling, and are not subject to revision after the date of this
Lease.

2.05     CONDITION OF PREMISES

The Premises shall be delivered and leased in the condition provided in Rider 2.

                                  ARTICLE THREE
                                      RENT

Tenant agrees to pay to Landlord at the first office specified in Section
1.01(2), or to such other persons, or at such other places designated by
Landlord, without any prior demand therefor in immediately available funds
and without any deduction or offset whatsoever, Rent, including Monthly Base
Rent and Rent Adjustments in accordance with Article Four, during the Term.
Monthly Base Rent shall be paid monthly in advance on the first day of each
month of the Term, except that the first installment of Monthly Base Rent
shall be paid by Tenant to Landlord concurrently with execution of this
Lease. Monthly Base Rent shall be prorated for partial months within the
Term. Unpaid Rent shall bear interest at the Default Rate from the date due
until paid. Tenant's covenant to pay Rent shall be independent of every other
covenant in this Lease.

                                  ARTICLE FOUR
                          RENT ADJUSTMENTS AND PAYMENTS

4.01     RENT ADJUSTMENTS

Tenant shall pay to Landlord Rent Adjustments with respect to each Adjustment
Year as follows:

             (i)     The Rent Adjustment Deposit representing Tenant's Share of
         Operating Expenses for the applicable Adjustment Year in excess of
         Operating Expenses for the Operating Expenses Base Year, monthly during
         the Term with the payment of Monthly Base Rent; and

             (ii)    The Rent Adjustment Deposit representing Tenant's Share
         of Taxes for the applicable Adjustment Year in excess of Taxes for the
         Taxes Base Year, monthly during the Term with the payment of Monthly
         Base Rent; and

             (iii)   Any Rent Adjustments due in excess of the Rent
         Adjustment Deposits in accordance with Section 4.02. Rent Adjustments
         due from Tenant to Landlord for any Adjustment Year shall be Tenant's
         Share of Operating Expenses for such year in excess of Operating
         Expenses for the Operating Expenses Base Year and Tenant's Share of
         Taxes for such year in excess of Taxes for the Taxes Base Year.

                                       7

<PAGE>

4.02     STATEMENT OF LANDLORD

As soon as feasible after the expiration of the Operating Expenses Base Year
and the Taxes Base Year, and each Adjustment Year thereafter, Landlord will
furnish Tenant a statement ("Landlord's Statement") showing the following:

             (i)     Operating Expenses and Taxes for the Operating Expenses
         Base Year and Taxes Base Year and thereafter for the last Adjustment
         Year;

             (ii)    The amount of Rent Adjustments due Landlord for the last
         Adjustment Year, less credit for Rent Adjustment Deposits paid, if any;
         and

             (iii)   Any change in the Rent Adjustment Deposit due monthly in
         the current Adjustment Year, including the amount or revised amount due
         for months preceding any such change pursuant to Landlord's Statement.

Tenant shall pay to Landlord within ten (10) days after receipt of such
statement any amounts for Rent Adjustments then due in accordance with
Landlord's Statement. Any amounts due from Landlord to Tenant pursuant to
this Section shall be credited to the Rent Adjustment Deposit next coming
due, or refunded to Tenant if the Term has already expired provided Tenant is
not in default hereunder. No interest or penalties shall accrue on any
amounts which Landlord is obligated to credit or refund to Tenant by reason
of this Section 4.02. Landlord's failure to deliver Landlord's Statement or
to compute the amount of the Rent Adjustments shall not constitute a waiver
by Landlord of its right to deliver such items nor constitute a waiver or
release of Tenant's obligations to pay such amounts. The Rent Adjustment
Deposit shall be credited against Rent Adjustments due for the applicable
Adjustment Year. During the last complete calendar year or during any partial
calendar year in which the Lease terminates, Landlord may include in the Rent
Adjustment Deposit its estimate of Rent Adjustments which may not be finally
determined until after the termination of this Lease. Tenant's obligation to
pay Rent Adjustments survives the expiration or termination of the Lease.
Notwithstanding the foregoing, in no event shall the sum of Monthly Base Rent
and the Rent Adjustments be less than the Monthly Base Rent payable.

4.03     BOOKS AND RECORDS

Landlord shall maintain books and records showing Operating Expenses and
Taxes in accordance with sound accounting and management practices,
consistently applied. The Tenant or its representative (which representative
shall be a certified public accountant licensed to do business in the state
in which the Property is located and whose primary business is certified
public accounting) shall have the right, for a period of thirty (30) days
following the date upon which Landlord's Statement is delivered to Tenant, to
examine the Landlord's books and records with respect to the items in the
foregoing statement of Operating Expenses and Taxes during normal business
hours, upon written notice, delivered at least three (3) business days in
advance. If Tenant does not object in writing to Landlord's Statement within
sixty (60) days of Tenant's receipt thereof, specifying the nature of the
item in dispute and the reasons therefor, then Landlord's Statement shall be
considered final and accepted by Tenant. Any amount due to the Landlord as
shown on Landlord's Statement, whether or not disputed by Tenant as provided
herein shall be paid by Tenant when due as provided above, without prejudice
to any such written exception.

4.04     PARTIAL OCCUPANCY

For purposes of determining Rent Adjustments, if the Project is not fully
occupied during all or a portion of any year during the Term, Landlord may make
appropriate adjustments to the Operating Expenses for such year employing sound
accounting and management principles consistently applied, to determine the
amount of Operating Expenses that would have been paid or incurred by Landlord
had the Project been 100% occupied, and the amount so determined shall be deemed
to have been the amount of Operating Expenses for such year. In the event that
the Real Property is not fully assessed for all or a portion of any year during

                                       8

<PAGE>

the Term, then Taxes shall be adjusted to an amount which would have been
payable in such year if the Real Property had been fully assessed. In the
event any other tenant in the Building provides itself with a service of a
type which Landlord would supply under the Lease without an additional or
separate charge to Tenant, then Operating Expenses shall be deemed to include
the cost Landlord would have incurred had Landlord provided such service to
such other tenant.

4.05     TENANT OR LEASE SPECIFIC TAXES

In addition to Monthly Base Rent, Rent Adjustments, Rent Adjustment Deposits
and other charges to be paid by Tenant, Tenant shall pay to Landlord, upon
demand, any and all taxes payable by Landlord (other than federal or state
inheritance, general income, gift or estate taxes) whether or not now
customary or within the contemplation of the parties hereto: (a) upon,
allocable to, or measured by the Rent payable hereunder, including any gross
receipts tax or excise tax levied by any governmental or taxing body with
respect to the receipt of such rent; or (b) upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair,
use or occupancy by Tenant of the Premises or any portion thereof; or (c)
upon the measured value of Tenant's personal property located in the Premises
or in any storeroom or any other place in the Premises or the Property, or
the areas used in connection with the operation of the Property, it being the
intention of Landlord and Tenant that, to the extent possible, such personal
property taxes shall be billed to and paid directly by Tenant; or (d)
resulting from Landlord Work, Tenant Work or Tenant Alterations to the
Premises, whether title thereto is in Landlord or Tenant; or (e) upon this
transaction. Taxes paid by Tenant pursuant to this Section 4.05 shall not be
included in any computation of Taxes payable pursuant to Sections 4.01 and
4.02.

                                  ARTICLE FIVE
                                SECURITY DEPOSIT

Tenant concurrently with the execution of this Lease shall pay to Landlord in
immediately available funds the Security Deposit. The Security Deposit may be
applied by Landlord to cure, in whole or part, any default of Tenant under
this Lease, and upon notice by Landlord of such application, Tenant shall
replenish the Security Deposit in full by paying to Landlord within ten (10)
days of demand the amount so applied. Landlord's application of the Security
Deposit shall not constitute a waiver of Tenant's default to the extent that
the Security Deposit does not fully compensate Landlord for all losses,
damages, costs and expenses incurred by Landlord in connection with such
default and shall not prejudice any other rights or remedies available to
Landlord under this Lease or by Law. Landlord shall not pay any interest on
the Security Deposit. Landlord shall not be required to keep the Security
Deposit separate from its general accounts. The Security Deposit shall not be
deemed an advance payment of Rent, nor a measure of damages for any default
by Tenant under this Lease, nor shall it be a bar or defense of any action
which Landlord may at any time commence against Tenant. In the absence of
evidence satisfactory to Landlord of an assignment of the right to receive
the Security Deposit or the remaining balance thereof, Landlord may return
the Security Deposit to the original Tenant, regardless of one or more
assignments of this Lease. Upon the transfer of Landlord's interest under
this Lease, Landlord's obligation to Tenant with respect to the Security
Deposit shall terminate upon transfer to the transferee of the Security
Deposit, or any balance thereof. If Tenant shall fully and faithfully comply
with all the terms, provisions, covenants, and conditions of this Lease, the
Security Deposit, or any balance thereof, shall be returned to Tenant within
thirty (30) days after Landlord recovers possession of the Premises or such
longer time as may be permissible under Law. Tenant hereby waives any and all
rights of Tenant under the provisions of Section 1950.7 of the California
Civil Code or other Law regarding security deposits.

                                       9

<PAGE>

                                   ARTICLE SIX
                                    SERVICES

6.01     LANDLORD'S GENERAL SERVICES

         (a) So long as the Lease is in full force and effect and Tenant has
paid all Rent then due, Landlord shall furnish or cause the following services
to be furnished to Tenant:

(1)      heat, ventilation and air-conditioning ("HVAC") in the Premises during
         Standard Operating Hours, as necessary in Landlord's reasonable
         judgment for the comfortable occupancy of the Premises under normal
         business operations, subject to compliance with all applicable
         voluntary and mandatory regulations and Laws;

(2)      tempered and cold water for use in restrooms and lavatories in common
         with other tenants from the regular supply of the Building;

(3)      customary cleaning and janitorial services in the Premises five (5)
         days per week, excluding National Holidays;

(4)      washing of the outside windows in the Premises weather permitting at
         intervals determined by Landlord;

(5)      automatic passenger elevator service in common with other tenants of
         the Building and, subject to reasonable scheduling by Landlord and
         payment of the standard charges (without mark-up by Landlord), freight
         elevator service;

         (b) If Tenant uses heat generating machines or equipment in the
Premises to an extent which adversely affects the temperature otherwise
maintained by the air-cooling system or whenever the occupancy or electrical
load adversely affects the temperature otherwise maintained by the air-cooling
system, Landlord reserves the right to install or to require Tenant to install
supplementary air-conditioning units in the Premises. Tenant shall bear all
costs and expenses related to the installation, maintenance and operation of
such units.

         (c) Tenant shall pay Landlord at rates fixed by Landlord for all
tenants in the Building, charges for all water furnished to the Premises beyond
that described in Section 6.01(a)(2), including the expenses of installation of
a water line, meter and fixtures.

6.02     ELECTRICAL SERVICES

         (a) So long as the Lease is in full force and effect and Tenant has
paid all Rent then due, Landlord shall furnish or cause to be furnished to the
Premises electric current for general business office use, including normal
lighting, normal business office machines, customary janitorial service, and
making alterations or repairs (whether by Landlord or Tenant). Notwithstanding
any provision of the Lease to the contrary, without, in each instance, the prior
written consent of Landlord, which may be withheld in Landlord's sole
discretion, Tenant shall not: (i) make any alterations or additions to the
electric equipment or systems; or (ii) install or use or permit the installation
or use of any computer or electronic data processing equipment in the Premises
other than personal computers, lap-top computers and ancillary equipment.
Tenant's use of electric current shall at no time exceed the lesser of (x) the
capacity of the wiring, feeders and risers providing electric current to the
Premises or the Building; or (y) a connected electrical load for lighting
purposes in excess of the wattage per square foot of Rentable Area of the
Premises required for Building standard amounts of lighting plus a connected
load for all other power requirements of three (3) watts per square foot of
Rentable Area of the Premises. The consent of Landlord to the installation of
electric equipment shall not relieve Tenant from the obligation to limit usage
of electricity to no more than such capacity.

                                       10

<PAGE>

         (b) If and to the extent electric current is furnished to the
Premises in excess of the amount of electric current normally used during
Standard Operating Hours in a general business office in a first class office
building with the type of electrical equipment and normal business office
machines described in subparagraph (a) above, Tenant shall pay Landlord upon
notice from Landlord the cost of such excess electric current, as additional
Rent. The cost of such excess use and all additional costs separately billed
to Tenant pursuant to this Section shall not be included as part of Operating
Expenses. At any time and from time to time, Landlord may in its sole
discretion either (i) install one or more meters to measure electric current
furnished to the Premises or (ii) reasonably estimate electric current
furnished to the Premises. Upon notice from Landlord, Tenant shall pay
Landlord the cost of installing and maintaining all such meters and of any
electrical engineering or consulting firm, if Landlord retains such firm to
estimate the electric current furnished to the Premises in lieu of
installation of a meter. Tenant shall pay Landlord for such excess electric
current at the then current rates charged to Landlord for such electricity
provided to the Property by the utility provider chosen by Landlord plus any
additional cost of Landlord in keeping account of the electric current so
consumed. Landlord's notice shall specify whether such excess use shall be
payable (i) in advance as reasonably estimated by Landlord in monthly
installments at the time prescribed for monthly installments of Monthly Base
Rent or (ii) within ten days after notice from Landlord given from time to
time of the amount due for prior excess use as metered or reasonably
estimated by Landlord.

         (c) So long as the Lease is in full force and effect and Tenant has
paid all Rent then due, Landlord shall furnish or cause to be furnished to the
Premises replacement lamps, bulbs, ballasts and starters used in any normal
Building lighting installed in the Premises, except that if the replacement or
repair of such items is a result of negligence of Tenant, its employees, agents,
servants, licensees, subtenants, contractors or invitees, such cost shall be
paid by Tenant within ten days after notice from Landlord and shall not be
included as part of Operating Expenses.

6.03     ADDITIONAL AND AFTER-HOUR SERVICES

At Tenant's written request, Landlord shall request that the condominium
association of the Project furnish additional quantities of any of the services
or utilities specified in Section 6.01on the terms set forth herein. For HVAC:
(a) for service after Standard Operating Hours on Monday through Friday (except
National Holidays), Tenant shall deliver to Landlord a written request before
2:00 P.M. of such day, and (b) for service on a Saturday, Sunday or National
Holiday, Tenant shall deliver to Landlord a written request before 2:00 P.M. on
the last business day prior to the requested service. For services or utilities
requested by Tenant and furnished by Landlord, Tenant shall pay to Landlord as a
charge therefor Landlord's prevailing rates charged from time to time for such
services and utilities. Without limiting the generality of the foregoing, for
HVAC service beyond Standard Operating Hours, as of the date of this Lease, a
two (2) hour minimum usage is required per activation. If Tenant shall fail to
make any such payment, Landlord may, upon notice to Tenant and in addition to
Landlord's other remedies under this Lease, discontinue any or all of such
additional services.

6.04     TELEPHONE SERVICES

All telegraph, telephone, and communication connections which Tenant may desire
shall be subject to Landlord's prior written approval, in Landlord's sole
discretion, and the location of all wires and the work in connection therewith
shall be performed by contractors approved by Landlord and shall be subject to
the direction of Landlord, except that such approval is not required as to
Tenant's telephone equipment (including cabling) within the Premises and from
the Premises in a route designated by Landlord to any telephone cabinet or panel
provided (as existing or as installed as part of Landlord's Work, if any) on
Tenant's floor for Tenant's connection to the telephone cable serving the
Building so long as Tenant's equipment does not require connections different
than or additional to those to the telephone cabinet or panel provided. Except
to the extent of such cabling within the Premises or from the Premises to such
telephone cabinet or panel, Landlord reserves the right to designate and control
the entity or entities providing telephone or other communication cable
installation, removal, repair and maintenance in the Building and to

                                      11
<PAGE>

restrict and control access to telephone cabinets or panels. In the event
Landlord designates a particular vendor or vendors to provide such cable
installation, removal, repair and maintenance for the Building, Tenant agrees
to abide by and participate in such program. Tenant shall be responsible for
and shall pay all costs incurred in connection with the installation of
telephone cables and communication wiring in the Premises, including any
hook-up, access and maintenance fees related to the installation of such
wires and cables in the Premises and the commencement of service therein, and
the maintenance thereafter of such wire and cables; and there shall be
included in Operating Expenses for the Building all installation, removal,
hook-up or maintenance costs incurred by Landlord in connection with
telephone cables and communication wiring serving the Building which are not
allocable to any individual users of such service but are allocable to the
Building generally. If Tenant fails to maintain all telephone cables and
communication wiring in the Premises and such failure affects or interferes
with the operation or maintenance of any other telephone cables or
communication wiring serving the Building, Landlord or any vendor hired by
Landlord may enter into and upon the Premises forthwith and perform such
repairs, restorations or alterations as Landlord deems necessary in order to
eliminate any such interference (and Landlord may recover from Tenant all of
Landlord's costs in connection therewith). No later than the Termination
Date, Tenant agrees to remove all telephone cables and communication wiring
installed by Tenant for and during Tenant's occupancy, which Landlord shall
request Tenant to remove. Tenant agrees that neither Landlord nor any of its
agents or employees shall be liable to Tenant, or any of Tenant's employees,
agents, customers or invitees or anyone claiming through, by or under Tenant,
for any damages, injuries, losses, expenses, claims or causes of action
because of any interruption, diminution, delay or discontinuance at any time
for any reason in the furnishing of any telephone or other communication
service to the Premises and the Building.

6.05     DELAYS IN FURNISHING SERVICES

         (a) Tenant agrees that Landlord shall not be in breach of this Lease
nor be liable to Tenant for damages or otherwise, for any failure to furnish, or
a delay in furnishing, or a change in the quantity or character of any service
when such failure, delay or change is occasioned, in whole or in part, by
repairs, improvements or mechanical breakdowns by the act or default of Tenant
or other parties or by an event of Force Majeure. No such failure, delay or
change shall be deemed to be an eviction or disturbance of Tenant's use and
possession of the Premises, or relieve Tenant from paying Rent or from
performing any other obligations of Tenant under this Lease, without any
deduction or offset. Failure to any extent to make available, or any slowdown,
stoppage, or interruption of, the specified utility services resulting from any
cause, including changes in service provider or Landlord's compliance with any
voluntary or similar governmental or business guidelines now or hereafter
published or any requirements now or hereafter established by any governmental
agency, board, or bureau having jurisdiction over the operation of the Property,
shall not render Landlord liable in any respect for damages to either persons,
property, or business, nor be construed as an eviction of Tenant or work an
abatement of Rent, nor relieve Tenant of Tenant's obligations for fulfillment of
any covenant or agreement hereof. Should any equipment or machinery furnished by
Landlord break down or for any cause cease to function properly, Landlord shall
use reasonable diligence to repair same promptly, but Tenant shall have no claim
for abatement of Rent or damages on account of any interruption of service
occasioned thereby or resulting therefrom.

         (b) Tenant acknowledges that all of Landlord's covenants and obligation
under this Article Six are subject to the requirements of the governing
documents for the Project of which the Premises form a part. Accordingly,
Landlord shall have no liability hereunder if the Project fails to provide a
service required to be provided to Tenant hereunder so long as Landlord uses
commercially reasonable efforts, at Landlord's sole expense, to cause the
Project to do so.

6.06       CHOICE OF SERVICE PROVIDER

Tenant acknowledges that Landlord may, at Landlord's sole option, to the extent
permitted by applicable law, elect to change, from time to time, the company or
companies which provide services (including electrical service, gas service,
water, telephone and technical services) to the Building, the Premises and/or
its occupants Notwithstanding anything to the contrary set forth in this Lease,
Tenant acknowledges that

                                      12

<PAGE>

Landlord has not and does not make any representations or warranties
concerning the identity or identities of the company or companies which
provide services to the Building and the Premises or its occupants and Tenant
acknowledges that the choice of service providers and matters concerning the
engagement and termination thereof shall be solely that of Landlord. The
foregoing provision is not intended to modify, amend, change or otherwise
derogate from any provision of this Lease concerning the nature or type of
service to be provided or any specific information concerning the amount
thereof to be provided. Tenant agrees to cooperate with Landlord and each of
its service providers in connection with any change in service or provider.

6.07     SIGNAGE

Initial Project standard signage will be installed by Landlord in the directory
in the main lobby of the Project and in the directory in the elevator lobby of
the floor on which the Premises is located. Tenant may, at Tenant's sole cost
and expense and in accordance with the Project standard signage, install a sign
identifying Tenant's business at Tenant's main entry door to the Premises. Any
change in such initial signage shall be only with Landlord's prior written
consent, shall conform to Project standard signage and shall be at Tenant's sole
cost and expense.

                                  ARTICLE SEVEN
                    POSSESSION, USE AND CONDITION OF PREMISES

7.01     POSSESSION AND USE OF PREMISES

         (a) Tenant shall occupy and use the Premises only for the uses
specified in Section 1.01(16) to conduct Tenant's business. Tenant shall not
occupy or use the Premises (or permit the use or occupancy of the Premises)
for any purpose or in any manner which: (1) is unlawful or in violation of
any Law or Environmental Law; (2) may be dangerous to persons or property or
which may invalidate any policy of insurance carried on the Building or
Project or covering its operations or which may increase the cost of any such
insurance or insurance carried by any other occupant of the Project unless
such increased cost is paid by Tenant as provided in the rules and
regulations of the Building described in Article Eighteen; (3) is contrary to
or prohibited by the terms and conditions of this Lease or the rules and
regulations of the Building set forth in Article Eighteen; or (4) would tend
to create or continue a nuisance.

         (b) Tenant shall comply with all Environmental Laws pertaining to
Tenant's occupancy and use of the Premises and concerning the proper storage,
handling and disposal of any Hazardous Material introduced to the Premises,
the Building or the Property by Tenant or other occupants of the Premises, or
their employees, servants, agents, contractors, customers or invitees.
Landlord shall comply with all Environmental Laws applicable to the Property
other than those to be complied with by Tenant pursuant to the preceding
sentence. Tenant shall not generate, store, handle or dispose of any
Hazardous Material in, on, or about the Property without the prior written
consent of Landlord, which may be withheld in Landlord's sole discretion,
except that such consent shall not be required to the extent of Hazardous
Material packaged and contained in office products for consumer use in
general business offices in quantities for ordinary day-to-day use provided
such use does not give rise to, or pose a risk of, exposure to or release of
Hazardous Material. In the event that Tenant is notified of any investigation
or violation of any Environmental Law arising from Tenant's activities at the
Premises, Tenant shall immediately deliver to Landlord a copy of such notice.
In such event or in the event Landlord reasonably believes that a violation
of Environmental Law exists, Landlord may conduct such tests and studies
relating to compliance by Tenant with Environmental Laws or the alleged
presence of Hazardous Materials upon the Premises as Landlord deems
desirable, all of which shall be completed at Tenant's expense. Landlord's
inspection and testing rights are for Landlord's own protection only, and
Landlord has not, and shall not be deemed to have assumed any responsibility
to Tenant or any other party for compliance with Environmental Laws, as a
result of the exercise, or non-exercise of such rights. Tenant hereby
indemnifies, and agrees to defend, protect and hold harmless, the Indemnitees
from any and all loss, claim, demand, action, expense, liability and cost
(including attorneys' fees and expenses) arising out of or in any way related
to the presence of any Hazardous Material

                                      13

<PAGE>

introduced to the Premises during the Lease Term by Tenant or other occupants
of the Premises, or their employees, servants, agents, contractors, customers
or invitees. In case of any action or proceeding brought against the
Indemnitees by reason of any such claim, upon notice from Landlord, Tenant
covenants to defend such action or proceeding by counsel chosen by Landlord,
in Landlord's sole discretion. Landlord reserves the right to settle,
compromise or dispose of any and all actions, claims and demands related to
the foregoing indemnity. If any Hazardous Material is released, discharged or
disposed of on or about the Property and such release, discharge or disposal
is not caused by Tenant or other occupants of the Premises, or their
employees, servants, agents, contractors customers or invitees, such release,
discharge or disposal shall be deemed casualty damage under Article Fourteen
to the extent that the Premises are affected thereby; in such case, Landlord
and Tenant shall have the obligations and rights respecting such casualty
damage provided under such Article.

         (c) Landlord and Tenant acknowledge that the Americans With
Disabilities Act of 1990 (42 U.S.C. Section 12101 et seq.) and regulations and
guidelines promulgated thereunder, as all of the same may be amended and
supplemented from time to time (collectively referred to herein as the "ADA")
establish requirements for business operations, accessibility and barrier
removal, and that such requirements may or may not apply to the Premises, the
Building and the Project depending on, among other things: (1) whether Tenant's
business is deemed a "public accommodation" or "commercial facility", (2)
whether such requirements are "readily achievable", and (3) whether a given
alteration affects a "primary function area" or triggers "path of travel"
requirements. The parties hereby agree that: (a) Landlord shall be responsible
for ADA Title III compliance in the Common Areas, except as provided below, (b)
Tenant shall be responsible for ADA Title III compliance in the Premises,
including any leasehold improvements or other work to be performed in the
Premises under or in connection with this Lease, (c) Landlord may perform, or
require that Tenant perform, and Tenant shall be responsible for the cost of,
ADA Title III "path of travel" requirements in the Common Areas triggered by
Tenant Alterations in the Premises subsequent to the Tenant Work described in
Rider 2, and (d) Landlord may perform, or require Tenant to perform, and Tenant
shall be responsible for the cost of, ADA Title III compliance in the Common
Areas necessitated by the Building being deemed to be a "public accommodation"
instead of a "commercial facility" as a result of Tenant's use of the Premises.
Tenant shall be solely responsible for requirements under Title I of the ADA
relating to Tenant's employees. To the extent Tenant shall occupy a full floor
in the Building, all ADA requirements relating to the restrooms, elevator
lobbies and corridors on such floor shall be the responsibility of Tenant. All
matters relating to "life safety" on such floors shall also be the
responsibility of Tenant.

         (d) Landlord and Tenant agree to cooperate and use commercially
reasonable efforts to participate in traffic management programs generally
applicable to businesses located in or about the area and Tenant shall encourage
and support van and car pooling by, and staggered and flexible working hours
for, its office workers and service employees to the extent reasonably permitted
by the requirements of Tenant's business. Neither this Section or any other
provision of this Lease is intended to or shall create any rights or benefits in
any other person, firm, company, governmental entity or the public.

         (e) Tenant agrees to cooperate with Landlord and to comply with any and
all guidelines or controls concerning energy management imposed upon Landlord by
federal or state governmental organizations or by any energy conservation
association to which Landlord is a party or which is applicable to the Building.

7.02     LANDLORD ACCESS TO PREMISES; APPROVALS

         (a) Tenant shall permit Landlord to erect, use and maintain pipes,
ducts, wiring and conduits in and through the Premises, so long as Tenant's use,
layout or design of the Premises is not materially affected or altered. Landlord
or Landlord's agents shall have the right to enter upon the Premises in the
event of an emergency, or to inspect the Premises, to perform janitorial and
other services, to conduct safety and other testing in the Premises and to make
such repairs, alterations, improvements or additions to the Premises or the
Building or other parts of the Property as Landlord may deem necessary or
desirable (including all alterations, improvements and additions in connection
with a change in service provider

                                      14

<PAGE>

or providers). Janitorial and cleaning services shall be performed after
normal business hours. Any entry or work by Landlord may be during normal
business hours and Landlord shall use reasonable efforts to ensure that any
entry or work shall not materially interfere with Tenant's occupancy of the
Premises.

         (b) If Tenant shall not be personally present to permit an entry into
the Premises when for any reason an entry therein shall be necessary or
permissible, Landlord (or Landlord's agents), after attempting to notify Tenant
(unless Landlord believes an emergency situation exists), may enter the Premises
without rendering Landlord or its agents liable therefor, and without relieving
Tenant of any obligations under this Lease.

         (c) Landlord may enter the Premises for the purpose of conducting such
inspections, tests and studies as Landlord may deem desirable or necessary to
confirm Tenant's compliance with all Laws and Environmental Laws or for other
purposes necessary in Landlord's reasonable judgment to ensure the sound
condition of the Property and the systems serving the Property. Landlord shall
give tenant twenty-four (24) hours prior verbal or written notice of any entry
under this Section 7.02(c), except in the event of an emergency no such notice
shall be required. Any such entry may be during normal business hours and
Landlord shall use reasonable efforts to ensure that any entry shall not
materially interfere with Tenant's occupancy of the Premises. Landlord's rights
under this Section 7.02(c) are for Landlord's own protection only, and Landlord
has not, and shall not be deemed to have assumed, any responsibility to Tenant
or any other party as a result of the exercise or non-exercise of such rights,
for compliance with Laws or Environmental Laws or for the accuracy or
sufficiency of any item or the quality or suitability of any item for its
intended use.

         (d) Landlord may do any of the foregoing, or undertake any of the
inspection or work described in the preceding paragraphs without such action
constituting an actual or constructive eviction of Tenant, in whole or in part,
or giving rise to an abatement of Rent by reason of loss or interruption of
business of the Tenant, or otherwise.

         (e) The review, approval or consent of Landlord with respect to any
item required or permitted under this Lease is for Landlord's own protection
only, and Landlord has not, and shall not be deemed to have assumed, any
responsibility to Tenant or any other party, as a result of the exercise or
non-exercise of such rights, for compliance with Laws or Environmental Laws or
for the accuracy or sufficiency of any item or the quality or suitability of any
item for its intended use.

         (f) To the extent Tenant shall occupy a full floor in the Building, all
ADA requirements relating to the bathrooms, elevator lobbies and corridors on
such floor shall be the responsibility of Tenant. All matters relating to "life
safety" on such floors shall also be the responsibility of Tenant.

7.03     QUIET ENJOYMENT

Landlord covenants, in lieu of any implied covenant of quiet possession or quiet
enjoyment, that so long as Tenant is in compliance with the covenants and
conditions set forth in this Lease, Tenant shall have the right to quiet
enjoyment of the Premises without hindrance or interference from Landlord or
those claiming through Landlord, and subject to the covenants and conditions set
forth in the Lease and to the rights of any Mortgagee or ground lessor.

                                  ARTICLE EIGHT
                                   MAINTENANCE

8.01     LANDLORD'S MAINTENANCE

Subject to the provisions of Articles Seven and Fourteen, Landlord shall perform
(or shall cause to be performed) maintenance and necessary repairs to the
foundations, roofs, exterior walls, and the structural elements of the Building
(and Project, as appropriate), the electrical, plumbing, heating, ventilating,

                                      15
<PAGE>

air-conditioning, mechanical, communication, security and the fire and life
safety systems of the Building and those corridors, washrooms and lobbies
which are Common Areas of the Building, except that: (a) Landlord shall not
be responsible for the maintenance or repair of any floor or wall coverings
in the Premises (or Project, as appropriate) or any of such systems which are
located within the Premises (or Project, as appropriate) and are supplemental
or special to the Building's (or Project, as appropriate) standard systems;
and (b) the cost of performing any of said maintenance or repairs whether to
the Premises or to the Building (or Project as appropriate) caused by the
negligence of Tenant, its employees, agents, servants, licensees, subtenants,
contractors or invitees, shall be paid by Tenant, subject to the waivers set
forth in Section 16.04. Landlord shall not be liable to Tenant for any
expense, injury, loss or damage resulting from work done in or upon, or in
connection with the use of, any adjacent or nearby building, land, street, or
alley.

8.02     TENANT'S MAINTENANCE

Subject to the provisions of Article Fourteen, Tenant, at its expense, shall
keep and maintain the Premises and all Tenant Additions thereto in good order,
condition and repair and in accordance with all Laws and Environmental Laws.
Tenant shall not permit waste and shall promptly and adequately repair all
damages to the Premises and replace or repair all damaged or broken glass in the
interior of the Premises, fixtures or appurtenances. Any repairs or maintenance
shall be completed with materials of similar quality to the original materials,
all such work to be completed under the supervision of Landlord. Any such
repairs or maintenance shall be performed only by contractors or mechanics
approved by Landlord, which approval shall not be unreasonably withheld, and
whose work will not cause or threaten to cause disharmony or interference with
Landlord or other tenants in the Building and their respective agents and
contractors performing work in or about the Building. If Tenant fails to perform
any of its obligations set forth in this Section 8.02, Landlord may, in its sole
discretion and upon 24 hours prior notice to Tenant (except without notice in
the case of emergencies), perform the same, and Tenant shall pay to Landlord any
costs or expenses incurred by Landlord upon demand.

                                  ARTICLE NINE
                          ALTERATIONS AND IMPROVEMENTS

9.01     TENANT ALTERATIONS

         (a) The following provisions shall apply to the completion of any
         Tenant Alterations:

(1)      Tenant shall not, except as provided herein, without the prior written
         consent of Landlord, which consent shall not be unreasonably withheld,
         make or cause to be made any Tenant Alterations in or to the Premises
         or any Property systems serving the Premises. Prior to making any
         Tenant Alterations, Tenant shall give Landlord ten (10) days prior
         written notice (or such earlier notice as would be necessary pursuant
         to applicable Law) to permit Landlord sufficient time to post
         appropriate notices of non-responsibility. Subject to all other
         requirements of this Article Nine, Tenant may undertake Decoration work
         without Landlord's prior written consent. Tenant shall furnish Landlord
         with the names and addresses of all contractors and subcontractors and
         copies of all contracts. All Tenant Alterations shall be completed at
         such time and in such manner as Landlord may from time to time
         designate, and only by contractors or mechanics approved by Landlord,
         which approval shall not be unreasonably withheld, provided, however,
         that Landlord may, in its sole discretion, specify the engineers and
         contractors to perform all work relating to the Building's systems
         (including the mechanical, heating, plumbing, security, ventilating,
         air-conditioning, electrical, communication and the fire and life
         safety systems in the Building). The contractors, mechanics and
         engineers who may be used are further limited to those whose work will
         not cause or threaten to cause disharmony or interference with Landlord
         or other tenants in the Building and their respective agents and
         contractors performing work in or about the Building. Landlord may
         further condition its consent upon Tenant furnishing to Landlord and
         Landlord approving prior to the commencement of any work or delivery of
         materials to the Premises related to the Tenant Alterations such of the
         following as specified by Landlord: architectural plans and

                                      16

<PAGE>

         specifications, opinions from Landlord's engineers stating that the
         Tenant Alterations will not in any way adversely affect the Building's
         systems, necessary permits and licenses, certificates of insurance, and
         such other documents in such form reasonably requested by Landlord.
         Landlord may, in the exercise of reasonable judgment, request that
         Tenant provide Landlord with appropriate evidence of Tenant's ability
         to complete and pay for the completion of the Tenant Alterations such
         as a performance bond or letter of credit. Upon completion of the
         Tenant Alterations (other than Decorations), Tenant shall deliver to
         Landlord an as-built mylar and digitized (if available) set of plans
         and specifications for the Tenant Alterations.

(2)      Tenant shall pay the cost of all Tenant Alterations and the cost of
         decorating the Premises and any work to the Property occasioned
         thereby. In connection with completion of any Tenant Alterations,
         Tenant shall pay Landlord a construction fee and all elevator and
         hoisting charges at Landlord's then standard rate. Upon completion of
         Tenant Alterations, Tenant shall furnish Landlord with contractors'
         affidavits and full and final waivers of lien and receipted bills
         covering all labor and materials expended and used in connection
         therewith and such other documentation reasonably requested by Landlord
         or Mortgagee.

(3)      Tenant agrees to complete all Tenant Alterations (i) in accordance with
         all Laws, Environmental Laws, all requirements of applicable insurance
         companies and in accordance with Landlord's standard construction rules
         and regulations, and (ii) in a good and workmanlike manner with the use
         of good grades of materials. Tenant shall notify Landlord immediately
         if Tenant receives any notice of violation of any Law in connection
         with completion of any Tenant Alterations and shall immediately take
         such steps as are necessary to remedy such violation. In no event shall
         such supervision or right to supervise by Landlord nor shall any
         approvals given by Landlord under this Lease constitute any warranty by
         Landlord to Tenant of the adequacy of the design, workmanship or
         quality of such work or materials for Tenant's intended use or of
         compliance with the requirements of Section 9.01(a)(3)(i) and (ii)
         above or impose any liability upon Landlord in connection with the
         performance of such work.

         (b) All Tenant Additions to the Premises, whether installed by Landlord
or Tenant, shall without compensation or credit to Tenant, become part of the
Premises and the property of Landlord at the time of their installation and
shall remain in the Premises, unless pursuant to Article Twelve, Tenant may
remove them or is required to remove them at Landlord's request.

9.02     LIENS

Tenant shall not permit any lien or claim for lien of any mechanic, laborer
or supplier or any other lien to be filed against the Building, the Land, the
Premises, or any other part of the Property arising out of work performed, or
alleged to have been performed by, or at the direction of, or on behalf of
Tenant. If any such lien or claim for lien is filed, Tenant shall within ten
(10) days of receiving notice of such lien or claim (a) have such lien or
claim for lien released of record or (b) deliver to Landlord a bond in form,
content, amount, and issued by surety, satisfactory to Landlord,
indemnifying, protecting, defending and holding harmless the Indemnitees
against all costs and liabilities resulting from such lien or claim for lien
and the foreclosure or attempted foreclosure thereof. If Tenant fails to take
any of the above actions, Landlord, in addition to its rights and remedies
under Article Eleven, without investigating the validity of such lien or
claim for lien, may pay or discharge the same and Tenant shall, as payment of
additional Rent hereunder, reimburse Landlord upon demand for the amount so
paid by Landlord, including Landlord's expenses and attorneys' fees.

                                       17

<PAGE>

                                   ARTICLE TEN
                            ASSIGNMENT AND SUBLETTING

10.01    ASSIGNMENT AND SUBLETTING

         (a) Without the prior written consent of Landlord, which may be
withheld in Landlord's sole discretion, Tenant may not sublease, assign,
mortgage, pledge, hypothecate or otherwise transfer or permit the transfer of
this Lease or the encumbering of Tenant's interest therein in whole or in part,
by operation of Law or otherwise or permit the use or occupancy of the Premises,
or any part thereof, by anyone other than Tenant, provided, however, if Landlord
chooses not to recapture the space proposed to be subleased or assigned as
provided in Section 10.02, Landlord shall not unreasonably withhold its consent
to a subletting or assignment under this Section 10.01. Tenant agrees that the
provisions governing sublease and assignment set forth in this Article Ten shall
be deemed to be reasonable. If Tenant desires to enter into any sublease of the
Premises or assignment of this Lease, Tenant shall deliver written notice
thereof to Landlord ("Tenant's Notice"), together with the identity of the
proposed subtenant or assignee (and certified financial statements thereof for
the prior three (3) years) and the proposed principal terms thereof and further
financial and other information sufficient for Landlord to make an informed
judgment with respect to such proposed subtenant or assignee at least sixty (60)
days prior to the commencement date of the term of the proposed sublease or
assignment. If Tenant proposes to sublease less than all of the Rentable Area of
the Premises, the space proposed to be sublet and the space retained by Tenant
must each be a marketable unit as reasonably determined by Landlord and
otherwise in compliance with all Laws. Landlord shall notify Tenant in writing
of its approval or disapproval of the proposed sublease or assignment or its
decision to exercise its rights under Section 10.02 within thirty (30) days
after receipt of Tenant's Notice (and all required information). In no event may
Tenant sublease any portion of the Premises or assign the Lease to any other
tenant of the Building. Tenant shall submit for Landlord's approval (which
approval shall not be unreasonably withheld) any advertising which Tenant or its
agents intend to use with respect to the space proposed to be sublet.

         (b) With respect to Landlord's consent to an assignment or sublease,
Landlord may take into consideration any factors which Landlord may deem
relevant, and the reasons for which Landlord's denial shall be deemed to be
reasonable shall include the following:

         (i)    the business reputation or creditworthiness of any proposed
         subtenant or assignee is not acceptable to Landlord; or

         (ii)   in Landlord's reasonable judgment the proposed assignee or
         subtenant would diminish the value or reputation of the Building or
         Landlord; or

         (iii)  any proposed assignee's or subtenant's use of the Premises
         would violate Section 7.01 of the Lease or would violate the
         provisions of any other leases of tenants in the Project;

         (iv)   the proposed assignee or subtenant is either a governmental
         agency, a school or similar operation, or a medical related practice;
         or

         (v)    the proposed subtenant or assignee is a bona fide prospective
         tenant of Landlord in the Project as demonstrated by a written proposal
         dated within ninety (90) days prior to the date of Tenant's request; or

         (vi)   the proposed subtenant or assignee would materially increase the
         estimated pedestrian and vehicular traffic to and from the Premises and
         the Building.

In no event shall Landlord be obligated to consider a consent to any proposed
assignment of the Lease which would assign less than the entire Premises. In
the event Landlord wrongfully withholds its consent to any proposed sublease
of the Premises or assignment of the Lease, Tenant's sole and exclusive
remedy

                                      18

<PAGE>

therefor shall be to seek specific performance of Landlord's obligations to
consent to such sublease or assignment.

         (c) Any sublease or assignment shall be expressly subject to the terms
and conditions of this Lease. Any subtenant or assignee shall execute such
documents as Landlord may reasonably require to evidence such subtenant or
assignee's assumption of the obligations and liabilities of Tenant under this
Lease. Tenant shall deliver to Landlord a copy of all agreements executed by
Tenant and the proposed subtenant and assignee with respect to the Premises.
Landlord's approval of a sublease, assignment, hypothecation, transfer or third
party use or occupancy shall not constitute a waiver of Tenant's obligation to
obtain Landlord's consent to further assignments or subleases, hypothecations,
transfers or third party use or occupancy.

         (d) For purposes of this Article Ten, an assignment shall be deemed to
include a change in the majority control of Tenant, resulting from any transfer,
sale or assignment of shares of stock or membership interests of Tenant
occurring by operation of Law or otherwise, and includes any merger,
acquisition, consolidation or reorganization, except as otherwise provided
below. Notwithstanding any provision of this Section to the contrary, an
assignment for purposes of this Article does not include any transfer of control
of the stock or membership interests of Tenant through (i) any public offering
of shares of stock in Tenant in accordance with applicable State and Federal
law, rules, regulations and orders if thereafter the stock shall be listed and
publicly traded through the New York Stock Exchange, American Stock Exchange or
Pacific Stock Exchange, or listed and publicly traded through the NASDAQ
national market and its price listed at least daily in the WALL STREET JOURNAL;
or (ii) public sale of such stock effected through such Exchanges or the NASDAQ
national market. If Tenant is a partnership, any change in the partners of
Tenant shall be deemed to be an assignment.

         (e) Notwithstanding anything to the contrary in Sections 10.01(a) and
10.02, but subject to Section 10.03, Tenant shall have the right, without the
prior written consent of Landlord, to assign this Lease to an Affiliate or to
sublease the Premises or any part thereof to an Affiliate (defined below)
provided that (i) Landlord receives thirty (30) days prior written notice of an
assignment or sublease; (ii) the Affiliate's net worth after the assignment or
subletting is not less than Tenant's net worth immediately prior to the
assignment or subletting; (iii) the Affiliate has proven experience in the
operation of a first-class business of a type consistent with the use of the
Building as a first class office Building; (iv) the Affiliate remains an
Affiliate for the duration of the sublease or the balance of the Term in the
event of an assignment; (v) the Affiliate assumes (except in the event of a
sublease) in writing satisfactory to Landlord all of Tenant's obligations and
liability under this Lease and delivers to Landlord a proposed assumption no
later than fifteen (15) days prior to the effective date of the assignment and a
fully executed original of such assumption promptly after the effective date;
(vii) Landlord receives a fully executed copy of an assignment or sublease
agreement between Tenant and the Affiliate; and (viii) promptly after Landlord's
written request, Tenant and the Affiliate provide such reasonable documents or
information which Landlord reasonably requests for the purpose of substantiating
whether or not the assignment or sublease is to an Affiliate.

         (f) For purposes of this Lease, Affiliate shall mean any Person (as
defined below) which: (i) is controlled by, controls, or is under common control
with Tenant; or (ii) is the corporation or other entity (the "Successor")
resulting from a merger, consolidation or non-bankruptcy reorganization with
Tenant; or (iii) purchases substantially all the assets of Tenant as a going
concern. The word Person means an individual, corporation, limited liability
company, partnership, trust, firm or other entity. For purposes of this
definition, the word "control," shall mean, with respect to a Person that is a
corporation or a limited liability company, the right to exercise, directly or
indirectly, more than fifty percent (50%) of the voting rights attributable to
the shares or membership interests of the controlled Person and, with respect to
a Person that is not a corporation, the possession, directly or indirectly, of
the power at all times to direct or cause the direction of the management of the
controlled Person.

                                      19
<PAGE>

10.02    RECAPTURE

Except as provided in Section 10.01(e) Landlord shall have the option to exclude
from the Premises covered by this Lease ("recapture"), the space proposed to be
sublet or subject to the assignment, effective as of the proposed commencement
date of such sublease or assignment. If Landlord elects to recapture, Tenant
shall surrender possession of the space proposed to be subleased or subject to
the assignment to Landlord on the effective date of recapture of such space from
the Premises, such date being the Termination Date for such space. Effective as
of the date of recapture of any portion of the Premises pursuant to this
section, the Monthly Base Rent, Rentable Area of the Premises and Tenant's Share
shall be adjusted accordingly.

10.03    EXCESS RENT

Tenant shall pay Landlord on the first day of each month during the term of the
sublease or assignment, one hundred percent (100%) of the amount by which the
sum of all rent and other consideration (direct or indirect) due from the
subtenant or assignee for such month exceeds: (i) that portion of the Monthly
Base Rent and Rent Adjustments due under this Lease for said month which is
allocable to the space sublet or assigned; and (ii) the following costs and
expenses for the subletting or assignment of such space: (1) brokerage
commissions and attorneys' fees and expenses, (2) the actual costs paid in
making any improvements or substitutions in the Premises required by any
sublease or assignment; and (3) "free rent" periods, costs of any inducements or
concessions given to subtenant or assignee, moving costs, and other amounts in
respect of such subtenant's or assignee's other leases or occupancy
arrangements. All such costs and expenses shall be amortized over the term of
the sublease or assignment pursuant to sound accounting principles.

10.04    TENANT LIABILITY

In the event of any sublease or assignment, whether or not with Landlord's
consent, Tenant shall not be released or discharged from any liability, whether
past, present or future, under this Lease, including any liability arising from
the exercise of any renewal or expansion option, to the extent such exercise is
expressly permitted by Landlord. Tenant's liability shall remain primary, and in
the event of default by any subtenant, assignee or successor of Tenant in
performance or observance of any of the covenants or conditions of this Lease,
Landlord may proceed directly against Tenant without the necessity of exhausting
remedies against said subtenant, assignee or successor. After any assignment,
Landlord may consent to subsequent assignments or subletting of this Lease, or
amendments or modifications of this Lease with assignees of Tenant, without
notifying Tenant, or any successor of Tenant, and without obtaining its or their
consent thereto, and such action shall not relieve Tenant or any successor of
Tenant of liability under this Lease. If Landlord grants consent to such
sublease or assignment, Tenant shall pay all reasonable attorneys' fees and
expenses incurred by Landlord with respect to such assignment or sublease. In
addition, if Tenant has any options to extend the term of this Lease or to add
other space to the Premises, such options shall not be available to any
subtenant or assignee, directly or indirectly without Landlord's express written
consent, which may be withheld in Landlord's sole discretion.

10.05    ASSUMPTION AND ATTORNMENT

If Tenant shall assign this Lease as permitted herein, the assignee shall
expressly assume all of the obligations of Tenant hereunder in a written
instrument satisfactory to Landlord and furnished to Landlord not later than
fifteen (15) days prior to the effective date of the assignment. If Tenant shall
sublease the Premises as permitted herein, Tenant shall, at Landlord's option,
within fifteen (15) days following any request by Landlord, obtain and furnish
to Landlord the written agreement of such subtenant to the effect that the
subtenant will attorn to Landlord and will pay all subrent directly to Landlord.

                                      20
<PAGE>

                                 ARTICLE ELEVEN
                              DEFAULT AND REMEDIES

11.01    EVENTS OF DEFAULT

The occurrence or existence of any one or more of the following shall constitute
a "Default" by Tenant under this Lease:

               (i)    Tenant fails to pay any installment or other payment of
         Rent including Rent Adjustment Deposits or Rent Adjustments within
         three (3) days after the date when due;

               (ii)   Tenant fails to observe or perform any of the other
         covenants, conditions or provisions of this Lease or the Workletter and
         fails to cure such default within fifteen (15) days after written
         notice thereof to Tenant, unless the default involves a hazardous
         condition, which shall be cured forthwith or unless the failure to
         perform is a Default for which this Lease specifies there is no cure or
         grace period;

               (iii)  the interest of Tenant in this Lease is levied upon
         under execution or other legal process;

               (iv)   a petition is filed by or against Tenant to declare
         Tenant bankrupt or seeking a plan of reorganization or arrangement
         under any Chapter of the Bankruptcy Act, or any amendment, replacement
         or substitution therefor, or to delay payment of, reduce or modify
         Tenant's debts, which in the case of an involuntary action is not
         discharged within thirty (30) days;

               (v)    Tenant is declared insolvent by Law or any assignment of
         Tenant's property is made for the benefit of creditors;

               (vi)   a receiver is appointed for Tenant or Tenant's property,
         which appointment is not discharged within thirty (30) days;

               (vii)  any action taken by or against Tenant to reorganize or
         modify Tenant's capital structure in a materially adverse way which in
         the case of an involuntary action is not discharged within thirty (30)
         days;

               (viii) upon the dissolution of Tenant; or

               (ix)   upon the third occurrence within any Lease Year that
         Tenant fails to pay Rent when due or has breached a particular covenant
         of this Lease (whether or not such failure or breach is thereafter
         cured within any stated cure or grace period or statutory period).

11.02    LANDLORD'S REMEDIES

         (a) A Default shall constitute a breach of the Lease for which
Landlord shall have the rights and remedies set forth in this Section 11.02
and all other rights and remedies set forth in this Lease or now or hereafter
allowed by Law, whether legal or equitable, and all rights and remedies of
Landlord shall be cumulative and none shall exclude any other right or remedy.

         (b) With respect to a Default, at any time Landlord may terminate
Tenant's right to possession by written notice to Tenant stating such
election. Any written notice required pursuant to Section 11.01 shall
constitute notice of unlawful detainer pursuant to California Code of Civil
Procedure Section 1161 if, at Landlord's sole discretion, it states
Landlord's election that Tenant's right to possession is terminated after
expiration of any period required by Law or any longer period required by
Section 11.01. Upon the expiration of the period stated in Landlord's written
notice of termination (and unless such notice provides an option to

                                      21

<PAGE>

cure within such period and Tenant cures the Default within such period),
Tenant's right to possession shall terminate and this Lease shall terminate,
and Tenant shall remain liable as hereinafter provided. Upon such termination
in writing of Tenant's right to possession, Landlord shall have the right,
subject to applicable Law, to re-enter the Premises and dispossess Tenant and
the legal representatives of Tenant and all other occupants of the Premises
by unlawful detainer or other summary proceedings, or otherwise as permitted
by Law, regain possession of the Premises and remove their property
(including their trade fixtures, personal property and those Tenant Additions
which Tenant is required or permitted to remove under Article Twelve), but
Landlord shall not be obligated to effect such removal, and such property
may, at Landlord's option, be stored elsewhere, sold or otherwise dealt with
as permitted by Law, at the risk of, expense of and for the account of
Tenant, and the proceeds of any sale shall be applied pursuant to Law.
Landlord shall in no event be responsible for the value, preservation or
safekeeping of any such property. Tenant hereby waives all claims for damages
that may be caused by Landlord's removing or storing Tenant's personal
property pursuant to this Section or Section 12.01, and Tenant hereby
indemnifies, and agrees to defend, protect and hold harmless, the Indemnitees
from any and all loss, claims, demands, actions, expenses, liability and cost
(including attorneys' fees and expenses) arising out of or in any way related
to such removal or storage. Upon such written termination of Tenant's right
to possession and this Lease, Landlord shall have the right to recover
damages for Tenant's Default as provided herein or by Law, including the
following damages provided by California Civil Code Section 1951.2:

                  (1) the worth at the time of award of the unpaid Rent which
         had been earned at the time of termination;

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

                  (3) the worth at the time of award of the amount by which the
         unpaid Rent for the balance of the term of this Lease after the time of
         award exceeds the amount of such Rent loss that Tenant proves could be
         reasonably avoided; and

                  (4) 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 word "rent" as used in this
         Section 11.02 shall have the same meaning as the defined term Rent in
         this Lease. The "worth at the time of award" of the amount referred to
         in clauses (1) and (2) above is computed by allowing interest at the
         Default Rate. The worth at the time of award of the amount referred to
         in clause (3) above is computed by discounting such amount at the
         discount rate of the Federal Reserve Bank of San Francisco at the time
         of award plus one percent (1%). For the purpose of determining unpaid
         Rent under clause (3) above, the monthly Rent reserved in this Lease
         shall be deemed to be the sum of the Monthly Base Rent, monthly storage
         space rent, if any, and the amounts last payable by Tenant as Rent
         Adjustments for the calendar year in which Landlord terminated this
         Lease as provided hereinabove.

         (c) Even if Tenant is in Default and/or has abandoned the Premises,
this Lease shall continue in effect for so long as Landlord does not terminate
Tenant's right to possession by written notice as provided in Section 11.02(b)
above, and Landlord may enforce all its rights and remedies under this Lease,
including the right to recover Rent as it becomes due under this Lease. In such
event, Landlord shall have all of the rights and remedies of a landlord under
California Civil Code Section 1951.4 (lessor may continue Lease in effect after
Tenant's Default and abandonment and recover Rent as it becomes due, if Tenant
has the right to sublet or assign, subject only to reasonable limitations), or
any successor statute. During such time as Tenant is in Default, if Landlord has
not terminated this Lease by written notice and if Tenant requests Landlord's
consent to an assignment of this Lease or a sublease of the Premises, subject to
Landlord's option to recapture pursuant to Section 10.02, Landlord shall not
unreasonably withhold its consent to such assignment or sublease. Tenant
acknowledges and agrees that the provisions of Article Ten shall be deemed to
constitute reasonable limitations of Tenant's right to assign or sublet. Tenant
acknowledges and

                                      22

<PAGE>

agrees that in the absence of written notice pursuant to Section 11.02(b)
above terminating Tenant's right to possession, no other act of Landlord
shall constitute a termination of Tenant's right to possession or an
acceptance of Tenant's surrender of the Premises, including acts of
maintenance or preservation or efforts to relet the Premises or the
appointment of a receiver upon initiative of Landlord to protect Landlord's
interest under this Lease or the withholding of consent to a subletting or
assignment, or terminating a subletting or assignment, if in accordance with
other provisions of this Lease.

         (d) In the event that Landlord seeks an injunction with respect to a
breach or threatened breach by Tenant of any of the covenants, conditions or
provisions of this Lease, Tenant agrees to pay the premium for any bond required
in connection with such injunction.

         (e) Tenant hereby waives any and all rights to relief from forfeiture,
redemption or reinstatement granted by Law (including California Civil Code of
Procedure Sections 1174 and 1179) in the event of Tenant being evicted or
dispossessed for any cause or in the event of Landlord obtaining possession of
the Premises by reason of Tenant's Default or otherwise;

         (f) When this Lease requires giving or service of a notice, that notice
shall replace rather than supplement any equivalent or similar statutory notice,
including any notices required by California Code of Civil Procedure Section
1161 or any similar or successor statute. When a statute requires service of a
notice in a particular manner, service of that notice (or a similar notice
required by this Lease) in the manner required by Article Twenty-four shall
replace and satisfy the statutory service-of-notice procedures, including those
required by Code of Civil Procedure section 1162 or any similar or successor
statute.

         (g) The voluntary or other surrender or termination of this Lease, or a
mutual termination or cancellation thereof, shall not work a merger and shall
terminate all or any existing assignments, subleases, subtenancies or
occupancies permitted by Tenant, except if and as otherwise specified in writing
by Landlord.

         (h) No delay or omission in the exercise of any right or remedy of
Landlord upon any default by Tenant, and no exercise by Landlord of its rights
pursuant to Section 25.15 to perform any duty which Tenant fails timely to
perform, shall impair any right or remedy or be construed as a waiver. No
provision of this Lease shall be deemed waived by Landlord unless such waiver is
in a writing signed by Landlord. The waiver by Landlord of any breach of any
provision of this Lease shall not be deemed a waiver of any subsequent breach of
the same or any other provision of this Lease.

11.03    ATTORNEY'S FEES

In the event any party brings any suit or other proceeding with respect to the
subject matter or enforcement of this Lease, the prevailing party (as determined
by the court, agency or other authority before which such suit or proceeding is
commenced) shall, in addition to such other relief as may be awarded, be
entitled to recover attorneys' fees, expenses and costs of investigation as
actually incurred, including court costs, expert witness fees, costs and
expenses of investigation, and all attorneys' fees, costs and expenses in any
such suit or proceeding (including in any action or participation in or in
connection with any case or proceeding under the Bankruptcy Code, 11 United
States Code Sections 101 ET SEQ., or any successor statutes, in establishing or
enforcing the right to indemnification, in appellate proceedings, or in
connection with the enforcement or collection of any judgment obtained in any
such suit or proceeding).

11.04    BANKRUPTCY

The following provisions shall apply in the event of the bankruptcy or
insolvency of Tenant:

         (a) In connection with any proceeding under Chapter 7 of the Bankruptcy
Code where the trustee of Tenant elects to assume this Lease for the purposes of
assigning it, such election or assignment,

                                      23

<PAGE>

may only be made upon compliance with the provisions of (b) and (c) below,
which conditions Landlord and Tenant acknowledge to be commercially
reasonable. In the event the trustee elects to reject this Lease then
Landlord shall immediately be entitled to possession of the Premises without
further obligation to Tenant or the trustee.

         (b) Any election to assume this Lease under Chapter 11 or 13 of the
Bankruptcy Code by Tenant as debtor-in-possession or by Tenant's trustee (the
"Electing Party") must provide for:

         The Electing Party to cure or provide to Landlord adequate assurance
         that it will cure all monetary defaults under this Lease within fifteen
         (15) days from the date of assumption and it will cure all nonmonetary
         defaults under this Lease within thirty (30) days from the date of
         assumption. Landlord and Tenant acknowledge such condition to be
         commercially reasonable.

         (c) If the Electing Party has assumed this Lease or elects to assign
Tenant's interest under this Lease to any other person, such interest may be
assigned only if the intended assignee has provided adequate assurance of future
performance (as herein defined), of all of the obligations imposed on Tenant
under this Lease.

         For the purposes hereof, "adequate assurance of future performance"
         means that Landlord has ascertained that each of the following
         conditions has been satisfied:

              (i)     The assignee has submitted a current financial statement,
         certified by its chief financial officer, which shows a net worth and
         working capital in amounts sufficient to assure the future performance
         by the assignee of Tenant's obligations under this Lease; and

              (ii)    Landlord has obtained consents or waivers from any third
         parties which may be required under a lease, mortgage, financing
         arrangement, or other agreement by which Landlord is bound, to enable
         Landlord to permit such assignment.

         (d) Landlord's acceptance of rent or any other payment from any
trustee, receiver, assignee, person, or other entity will not be deemed to
have waived, or waive, the requirement of Landlord's consent, Landlord's
right to terminate this Lease for any transfer of Tenant's interest under
this Lease without such consent, or Landlord's claim for any amount of Rent
due from Tenant.

11.05      LANDLORD'S DEFAULT

Landlord shall be in default hereunder in the event Landlord has not begun and
pursued with reasonable diligence the cure of any failure of Landlord to meet
its obligations hereunder within thirty (30) days after the receipt by Landlord
of written notice from Tenant of the alleged failure to perform. In no event
shall Tenant have the right to terminate or rescind this Lease as a result of
Landlord's default as to any covenant or agreement contained in this Lease.
Tenant hereby waives such remedies of termination and rescission and hereby
agrees that Tenant's remedies for default hereunder and for breach of any
promise or inducement shall be limited to a suit for damages and/or injunction.
In addition, Tenant hereby covenants that, prior to the exercise of any such
remedies, it will give the Mortgagee notice and a reasonable time to cure any
default by Landlord.

                                 ARTICLE TWELVE
                              SURRENDER OF PREMISES

12.01    IN GENERAL

Upon the Termination Date, Tenant shall surrender and vacate the Premises
immediately and deliver possession thereof to Landlord in a clean, good and
tenantable condition, ordinary wear and tear, and damage caused by Landlord
excepted. Tenant shall deliver to Landlord all keys to the Premises. Tenant

                                      24

<PAGE>

shall remove from the Premises all movable personal property of Tenant and
Tenant's trade fixtures, including, subject to Section 6.04, cabling for any of
the foregoing. Tenant shall be entitled to remove such Tenant Additions which at
the time of their installation Landlord and Tenant agreed may be removed by
Tenant. Tenant shall also remove such other Tenant Additions as required by
Landlord, including any Tenant Additions containing Hazardous Materials. Tenant
immediately shall repair all damage resulting from removal of any of Tenant's
property, furnishings or Tenant Additions, shall close all floor, ceiling and
roof openings and shall restore the Premises to a tenantable condition as
reasonably determined by Landlord. If any of the Tenant Additions which were
installed by Tenant involved the lowering of ceilings, raising of floors or the
installation of specialized wall or floor coverings or lights, then Tenant shall
also be obligated to return such surfaces to their condition prior to the
commencement of this Lease. Tenant shall also be required to close any
staircases or other openings between floors. In the event possession of the
Premises is not delivered to Landlord when required hereunder, or if Tenant
shall fail to remove those items described above, Landlord may (but shall not be
obligated to), at Tenant's expense, remove any of such property and store, sell
or otherwise deal with such property as provided in Section 11.02(b), including
the waiver and indemnity obligations provided in that Section, and undertake, at
Tenant's expense, such restoration work as Landlord deems necessary or
advisable.

12.02    LANDLORD'S RIGHTS

All property which may be removed from the Premises by Landlord shall be
conclusively presumed to have been abandoned by Tenant and Landlord may deal
with such property as provided in Section 11.02(b), including the waiver and
indemnity obligations provided in that Section. Tenant shall also reimburse
Landlord for all costs and expenses incurred by Landlord in removing any of
Tenant Additions and in restoring the Premises to the condition required by this
Lease at the Termination Date.

                                ARTICLE THIRTEEN
                                  HOLDING OVER

Tenant shall pay Landlord the greater of (i) one hundred and fifty percent
(150%) of the monthly Rent payable for the month immediately preceding the
holding over (including increases for Rent Adjustments which Landlord may
reasonably estimate) or, (ii) one hundred and fifty percent (150%) of the fair
market rental value of the Premises as reasonably determined by Landlord for
each month or portion thereof that Tenant retains possession of the Premises, or
any portion thereof, after the Termination Date (without reduction for any
partial month that Tenant retains possession). Tenant shall also pay all damages
sustained by Landlord by reason of such retention of possession. The provisions
of this Article shall not constitute a waiver by Landlord of any re-entry rights
of Landlord and Tenant's continued occupancy of the Premises shall be as a
tenancy in sufferance. If Tenant retains possession of the Premises, or any part
thereof for thirty (30) days after the Termination Date then at the sole option
of Landlord expressed by written notice to Tenant, but not otherwise, such
holding over shall constitute an extension of the Term of this Lease for a
period of one (1) year on the same terms and conditions (including those with
respect to the payment of Rent) as provided in this Lease, except that the
Monthly Base Rent for such period shall be equal to the greater of (i) 150% of
the Monthly Base Rent payable during the month preceding the Termination Date,
or (ii) 150% of the monthly base rent then being quoted by Landlord for similar
space in the Building.

                                ARTICLE FOURTEEN
                        DAMAGE BY FIRE OR OTHER CASUALTY

14.01    SUBSTANTIAL UNTENANTABILITY

         (a) If any fire or other casualty (whether insured or uninsured)
renders all or a substantial portion of the Premises, the Building or the
Project untenantable, Landlord shall, with reasonable promptness after the
occurrence of such damage, estimate the length of time that will be required to
substantially complete the repair and restoration and shall by notice advise
Tenant of such estimate ("Landlord's Notice"). If Landlord estimates that the
amount of time required to substantially complete such repair and restoration

                                      25

<PAGE>

will exceed one hundred eighty (180) days from the date such damage occurred,
then Landlord, or Tenant if all or a substantial portion of the Premises is
rendered untenantable, shall have the right to terminate this Lease as of the
date of such damage upon giving written notice to the other at any time within
twenty (20) days after delivery of Landlord's Notice, provided that if Landlord
so chooses, Landlord's Notice may also constitute such notice of termination.

         (b) Tenant acknowledges that Landlord shall be entitled to the full
proceeds of any insurance coverage, whether carried by Landlord or Tenant, for
damages to the Premises, except for those proceeds of Tenant's insurance of its
own personal property and equipment which would be removable by Tenant at the
Termination Date. All such insurance proceeds shall be payable to Landlord
whether or not the Premises are to be repaired and restored, provided, however,
if this Lease is not terminated and the parties proceed to repair and restore
Tenant Additions at Tenant's cost, to the extent Landlord received proceeds of
Tenant's insurance covering Tenant Additions, such proceeds shall be applied to
reimburse Tenant for its cost of repairing and restoring Tenant Additions.

         (c) Notwithstanding anything to the contrary herein set forth: (i)
Landlord shall have no duty pursuant to this Section to repair or restore any
portion of any Tenant Additions or to expend for any repair or restoration of
the Premises or Building or Project amounts in excess of insurance proceeds
payable and available for repair or restoration, and if such proceeds are
insufficient Landlord shall have the right to terminate this Lease upon giving
written notice to Tenant within a reasonable time after determining such
proceeds will be insufficient; and (ii) Tenant shall not have the right to
terminate this Lease pursuant to this Section if any damage or destruction was
caused by the act or neglect of Tenant, its agent or employees. Whether or not
the Lease is terminated pursuant to this Article Fourteen, in no event shall
Tenant be entitled to any compensation or damages for loss of the use of the
whole or any part of the Premises or for any inconvenience or annoyance
occasioned by any such damage, destruction, rebuilding or restoration of the
Premises or the Building or access thereto.

         (d) Unless this Lease is terminated as provided in the preceding
subparagraphs, Landlord shall proceed with reasonable promptness to repair and
restore the Premises to its condition as existed prior to such casualty, subject
to reasonable delays for insurance adjustments and Force Majeure delays, and
also subject to zoning Laws and building codes then in effect. Landlord shall
have no liability to Tenant, and Tenant shall not be entitled to terminate this
Lease if such repairs and restoration are not in fact completed within the time
period estimated by Landlord so long as Landlord shall proceed with reasonable
diligence to complete such repairs and restoration.

         (e) Any repair or restoration of the Premises performed by Tenant shall
be in accordance with the provisions of Article Nine hereof.

         (f) The provisions of this Article Fourteen are subject and subordinate
to the provisions of the Declaration.

         (g) Notwithstanding anything to the contrary provided herein, Landlord
shall have no obligation to repair the Premises, the Building or Project in the
event of a decision of the owners of the condominium units in the Building,
pursuant to the provisions of the Declaration not to repair or restore following
any damage or destruction. In such event, Landlord shall encourage the owners of
the condominium units to make a prompt decision to repair and restore or not (a
"Repair Decision") , and Landlord shall give prompt written notice of such
Repair Decision to Tenant and this Lease shall automatically terminate upon the
date of any such decision not to repair or restore. Tenant may from time to time
inquire whether a Repair Decision has been made, and Landlord shall promptly
respond to any such inquiry. If Landlord has not notified Tenant of the Repair
Decision within ninety (90) days of the date of the damage, then, at any time
until Landlord informs Tenant of the Repair Decision, Tenant may notify Landlord
in writing of Tenant's election to terminate this Lease if Tenant does not
receive notice of the Repair Decision by the date (the "Potential Termination
Date") which is ten (10) business days after the date Landlord receives Tenant's
notice. If Landlord does not inform Tenant of the Repair Decision on or before
the Potential Termination

                                      26
<PAGE>

Date, this Lease shall terminate on the Potential Termination Date.

14.02    INSUBSTANTIAL UNTENANTABILITY

If the Premises or the Building is damaged by a casualty but neither is rendered
substantially untenantable and Landlord estimates that the time to substantially
complete the repair or restoration will not exceed one hundred eighty (180) days
from the date such damage occurred, then Landlord shall proceed to repair and
restore the Building or the Premises other than Tenant Additions, with
reasonable promptness, unless such damage is to the Premises and occurs during
the last six (6) months of the Term, in which event either Tenant or Landlord
shall have the right to terminate this Lease as of the date of such casualty by
giving written notice thereof to the other within twenty (20) days after the
date of such casualty. Notwithstanding the foregoing, Landlord's obligation to
repair shall be limited in accordance with the provisions of Section 14.01
above.

14.03    RENT ABATEMENT

If all or any part of the Premises are rendered untenantable by fire or other
casualty and this Lease is not terminated, Monthly Base Rent and Rent
Adjustments shall abate for that part of the Premises which is untenantable on a
per diem basis from the date of the casualty until Landlord has Substantially
Completed the repair and restoration work in the Premises which it is required
to perform, provided, that as a result of such casualty, Tenant does not occupy
the portion of the Premises which is untenantable during such period. The
foregoing rent abatement shall not apply in the event the Premises are rendered
untenantable by reason of a fire or other casualty caused in whole or in part by
the negligence or willful act of Tenant or its agents, employees, contractors or
invitees if such abatement would adversely affect Landlord's or Tenant's ability
to collect under any of its insurance policies providing coverage for rental or
business interruptions.

14.04    WAIVER OF STATUTORY REMEDIES

The provisions of this Lease, including this Article Fourteen, constitute an
express agreement between Landlord and Tenant with respect to any and all damage
to, or destruction of, the Premises or the Property or any part of either, and
any Law, including Sections 1932(2), 1933(4), 1941 and 1942 of the California
Civil Code, with respect to any rights or obligations concerning damage or
destruction shall have no application to this Lease or to any damage to or
destruction of all or any part of the Premises or the Property or any part of
either, and are hereby waived.

                                 ARTICLE FIFTEEN
                                 EMINENT DOMAIN

15.01    TAKING OF WHOLE OR SUBSTANTIAL PART

In the event the whole or any substantial part of the Premises, the Building or
the Project is taken or condemned by any competent authority for any public use
or purpose (including a deed given in lieu of condemnation) and is thereby
rendered untenantable, this Lease shall terminate as of the date title vests in
such authority, and Monthly Base Rent and Rent Adjustments shall be apportioned
as of the Termination Date. Notwithstanding anything to the contrary herein set
forth, in the event the taking is temporary (for less than the remaining term of
the Lease), Landlord may elect either (i) to terminate this Lease or (ii) permit
Tenant to receive the entire award attributable to the Premises in which case
Tenant shall continue to pay Rent and this Lease shall not terminate.

15.02    TAKING OF PART

In the event a part of the Building or the Premises is taken or condemned by any
competent authority (or a deed is delivered in lieu of condemnation) and this
Lease is not terminated, the Lease shall be amended to reduce or increase, as
the case may be, the Monthly Base Rent and Tenant's Proportionate Share to
reflect

                                      27

<PAGE>

the Rentable Area of the Premises or Building, as the case may be, remaining
after any such taking or condemnation. Landlord, upon receipt and to the
extent of the award in condemnation (or proceeds of sale) shall make
necessary repairs and restorations to the Premises (exclusive of Tenant
Additions) and to the Building to the extent necessary to constitute the
portion of the Building not so taken or condemned as a complete architectural
and economically efficient unit. Notwithstanding the foregoing, if as a
result of any taking, or a governmental order that the grade of any street or
alley adjacent to the Building is to be changed and such taking or change of
grade makes it necessary or desirable to substantially remodel or restore the
Building or Project or prevents the economical operation of the Building or
Project, Landlord shall have the right to terminate this Lease upon ninety
(90) days prior written notice to Tenant.

15.03    COMPENSATION

Landlord shall be entitled to receive the entire award (or sale proceeds) from
any such taking, condemnation or sale without any payment to Tenant, and Tenant
hereby assigns to Landlord Tenant's interest, if any, in such award; provided,
however, Tenant shall have the right separately to pursue against the condemning
authority a separate award in respect of the loss, if any, to Tenant Additions
paid for by Tenant without any credit or allowance from Landlord so long as
there is no diminution of Landlord's award as a result.

                                 ARTICLE SIXTEEN
                                    INSURANCE

16.01    TENANT'S INSURANCE

Tenant, at Tenant's expense, agrees to maintain in force, with a company or
companies acceptable to Landlord, during the Term: (a) Commercial General
Liability Insurance on a primary basis and without any right of contribution
from any insurance carried by Landlord covering the Premises on an occurrence
basis against all claims for personal injury, bodily injury, death and property
damage, including contractual liability covering the indemnification provisions
in this Lease. Such insurance shall be for such limits that are reasonably
required by Landlord from time to time but not less than a combined single limit
of Five Million and No/100 Dollars ($5,000,000.00); (b) Workers' Compensation
and Employers' Liability Insurance to the extent required by and in accordance
with the Laws of the State of California; (c) "All Risks" property insurance in
an amount adequate to cover the full replacement cost of all Tenant Additions to
the Premises, equipment, installations, fixtures and contents of the Premises in
the event of loss; (d) In the event a motor vehicle is to be used by Tenant in
connection with its business operation from the Premises, Comprehensive
Automobile Liability Insurance coverage with limits of not less than Three
Million and No/100 Dollars ($3,000,000.00) combined single limit coverage
against bodily injury liability and property damage liability arising out of the
use by or on behalf of Tenant, its agents and employees in connection with this
Lease, of any owned, non-owned or hired motor vehicles; and (e) such other
insurance or coverages as Landlord reasonably requires.

16.02    FORM OF POLICIES

Each policy referred to in 16.01 shall satisfy the following requirements. Each
policy shall (i) name Landlord and the Indemnitees as additional insureds
(except Workers' Compensation and Employers' Liability Insurance), (ii) be
issued by one or more responsible insurance companies licensed to do business in
the State of California reasonably satisfactory to Landlord, (iii) where
applicable, provide for deductible amounts satisfactory to Landlord and not
permit co-insurance, (iv) shall provide that such insurance may not be canceled
or amended without thirty (30) days' prior written notice to the Landlord, and
(v) each policy of "All-Risks" property insurance shall provide that the policy
shall not be invalidated should the insured waive in writing prior to a loss,
any or all rights of recovery against any other party for losses covered by such
policies. Tenant shall deliver to Landlord, certificates of insurance and at
Landlord's request, copies of all policies and renewals thereof to be maintained
by Tenant hereunder, not less than ten (10) days prior to the Commencement Date
and not less than ten (10) days prior to the expiration date of each policy.

                                      28

<PAGE>

16.03    LANDLORD'S INSURANCE

Landlord agrees to purchase (or cause to be purchased) and keep in full force
and effect (or cause to be kept in effect) during the Term hereof, including
any extensions or renewals thereof, insurance under policies issued by
insurers of recognized responsibility, qualified to do business in the State
of California on the Building in amounts not less than the greater of eighty
(80%) percent of the then full replacement cost (without depreciation) of the
Building (above foundations and excluding Tenant Additions to the Premises)
or an amount sufficient to prevent Landlord from becoming a co-insurer under
the terms of the applicable policies, against fire and such other risks as
may be included in standard forms of all risk coverage insurance reasonably
available from time to time. Landlord agrees to maintain in force during the
Term, Commercial General Liability Insurance covering the Building on an
occurrence basis against all claims for personal injury, bodily injury, death
and property damage. Such insurance shall be for a combined single limit of
Five Million and No/100 Dollars ($5,000,000.00). Neither Landlord's
obligation to carry such insurance nor the carrying of such insurance shall
be deemed to be an indemnity by Landlord with respect to any claim,
liability, loss, cost or expense due, in whole or in part, to Tenant's
negligent acts or omissions or willful misconduct. Without obligation to do
so, Landlord may, in its sole discretion from time to time, carry insurance
in amounts greater and/or for coverage additional to the coverage and amounts
set forth above.

16.04    WAIVER OF SUBROGATION

         (a) Landlord agrees that, if obtainable at no, or minimal, additional
cost, and so long as the same is permitted under the laws of the State of
California, it will include in its "All Risks" policies appropriate clauses
pursuant to which the insurance companies (i) waive all right of subrogation
against Tenant with respect to losses payable under such policies and/or (ii)
agree that such policies shall not be invalidated should the insured waive in
writing prior to a loss any or all right of recovery against any party for
losses covered by such policies.

         (b) Tenant agrees to include, if obtainable at no, or minimal,
additional cost, and so long as the same is permitted under the laws of the
State of California, in its "All Risks" insurance policy or policies on Tenant
Additions to the Premises, whether or not removable, and on Tenant's furniture,
furnishings, fixtures and other property removable by Tenant under the
provisions of this Lease appropriate clauses pursuant to which the insurance
company or companies (i) waive the right of subrogation against Landlord and/or
any tenant of space in the Building with respect to losses payable under such
policy or policies and/or (ii) agree that such policy or policies shall not be
invalidated should the insured waive in writing prior to a loss any or all right
of recovery against any party for losses covered by such policy or policies. If
Tenant is unable to obtain in such policy or policies either of the clauses
described in the preceding sentence, Tenant shall, if legally possible and
without necessitating a change in insurance carriers, have Landlord named in
such policy or policies as an additional insured. If Landlord shall be named as
an additional insured in accordance with the foregoing, Landlord agrees to
endorse promptly to the order of Tenant, without recourse, any check, draft, or
order for the payment of money representing the proceeds of any such policy or
representing any other payment growing out of or connected with said policies,
and Landlord does hereby irrevocably waive any and all rights in and to such
proceeds and payments.

         (c) Provided that Landlord's right of full recovery under its policy or
policies aforesaid is not adversely affected or prejudiced thereby, Landlord
hereby waives any and all right of recovery which it might otherwise have
against Tenant, its servants, agents and employees, for loss or damage occurring
to the Real Property and the fixtures, appurtenances and equipment therein, to
the extent the same is covered by Landlord's insurance, notwithstanding that
such loss or damage may result from the negligence or fault of Tenant, its
servants, agents or employees. Provided that Tenant's right of full recovery
under its aforesaid policy or policies is not adversely affected or prejudiced
thereby, Tenant hereby waives any and all right of recovery which it might
otherwise have against Landlord, its servants, and employees and against every
other tenant of the Real Property who shall have executed a similar waiver as
set forth in this Section 16.04 (c) for loss or damage to Tenant Additions,
whether or not removable, and to Tenant's furniture, furnishings, fixtures and
other property removable by Tenant under the provisions hereof to the extent the
same is

                                      29

<PAGE>

coverable by Tenant's insurance required under this Lease, notwithstanding
that such loss or damage may result from the negligence or fault of Landlord,
its servants, agents or employees, or such other tenant and the servants,
agents or employees thereof.

         (d) Landlord and Tenant hereby agree to advise the other promptly if
the clauses to be included in their respective insurance policies pursuant to
subparagraphs (a) and (b) above cannot be obtained on the terms hereinbefore
provided and thereafter to furnish the other with a certificate of insurance or
copy of such policies showing the naming of the other as an additional insured,
as aforesaid. Landlord and Tenant hereby also agree to notify the other promptly
of any cancellation or change of the terms of any such policy which would affect
such clauses or naming. All such policies which name both Landlord and Tenant as
additional insureds shall, to the extent obtainable, contain agreements by the
insurers to the effect that no act or omission of any additional insured will
invalidate the policy as to the other additional insureds.

16.05    NOTICE OF CASUALTY

Tenant shall give Landlord notice in case of a fire or accident in the Premises
promptly after Tenant is aware of such event.

                                ARTICLE SEVENTEEN
                         WAIVER OF CLAIMS AND INDEMNITY

17.01    WAIVER OF CLAIMS

To the extent permitted by Law, Tenant releases the Indemnitees from, and waives
all claims for, damage to person or property sustained by the Tenant or any
occupant of the Premises or the Property resulting directly or indirectly from
any existing or future condition, defect, matter or thing in and about the
Premises or the Property or any part of either or any equipment or appurtenance
therein, or resulting from any accident in or about the Premises or the
Property, or resulting directly or indirectly from any act or neglect of any
tenant or occupant of the Property or of any other person, including Landlord's
agents and servants, except to the extent caused by the willful and wrongful act
of any of the Indemnitees. To the extent permitted by Law, Tenant hereby waives
any consequential damages, compensation or claims for inconvenience or loss of
business, rents, or profits as a result of such injury or damage, whether or not
caused by the willful and wrongful act of any of the Indemnitees. If any such
damage, whether to the Premises or the Property or any part of either, or
whether to Landlord or to other tenants in the Property, results from any act or
neglect of Tenant, its employees, servants, agents, contractors, invitees or
customers, Tenant shall be liable therefor and Landlord may, at Landlord's
option, repair such damage and Tenant shall, upon demand by Landlord, as payment
of additional Rent hereunder, reimburse Landlord within ten (10) days of demand
for the total cost of such repairs, in excess of amounts, if any, paid to
Landlord under insurance covering such damages. Tenant shall not be liable for
any such damage caused by its acts or neglect if Landlord or a tenant has
recovered the full amount of the damage from proceeds of insurance policies and
the insurance company has waived its right of subrogation against Tenant.

17.02    INDEMNITY BY TENANT

To the extent permitted by Law, Tenant hereby indemnifies, and agrees to
protect, defend and hold the Indemnitees harmless, against any and all actions,
claims, demands, liability, costs and expenses, including attorneys' fees and
expenses for the defense thereof, arising from Tenant's occupancy of the
Premises, from the undertaking of any Tenant Additions or repairs to the
Premises, from the conduct of Tenant's business on the Premises, or from any
breach or default on the part of Tenant in the performance of any covenant or
agreement on the part of Tenant to be performed pursuant to the terms of this
Lease, or from any willful act or negligence of Tenant, its agents, contractors,
servants, employees, customers or invitees, in or about the Premises or the
Property or any part of either. In case of any action or proceeding brought
against the Indemnitees by reason of any such claim, upon notice from Landlord,
Tenant covenants to defend such

                                      30

<PAGE>

action or proceeding by counsel chosen by Landlord, in Landlord's sole
discretion. Landlord reserves the right to settle, compromise or dispose of
any and all actions, claims and demands related to the foregoing indemnity.
The foregoing indemnity shall not operate to relieve Indemnitees of liability
to the extent such liability is caused by the willful and wrongful act of
Indemnitees. Further, the foregoing indemnity is subject to and shall not
diminish any waivers in effect in accordance with Section 16.04 by Landlord
or its insurers to the extent of amounts, if any, paid to Landlord under its
"All-Risks" property insurance.

                                ARTICLE EIGHTEEN
                              RULES AND REGULATIONS

18.01    RULES

Tenant agrees for itself and for its subtenants, employees, agents, and invitees
to comply with the rules and regulations listed on EXHIBIT C attached hereto and
with all modifications and additions thereto which Landlord may make from time
to time.

18.02    ENFORCEMENT

Nothing in this Lease shall be construed to impose upon the Landlord any duty or
obligation to enforce the rules and regulations as set forth on EXHIBIT C or as
hereafter adopted, or the terms, covenants or conditions of any other lease as
against any other tenant, and the Landlord shall not be liable to the Tenant for
violation of the same by any other tenant, its servants, employees, agents,
visitors or licensees. Landlord shall use reasonable efforts to enforce the
rules and regulations of the Building in a uniform and non-discriminatory
manner.

                                ARTICLE NINETEEN
                           LANDLORD'S RESERVED RIGHTS

Landlord shall have the following rights exercisable without notice to Tenant
and without liability to Tenant for damage or injury to persons, property or
business and without being deemed an eviction or disturbance of Tenant's use or
possession of the Premises or giving rise to any claim for offset or abatement
of Rent: (1) to change the Project's name or street address upon thirty (30)
days' prior written notice to Tenant; (2) to install, affix and maintain all
signs on the exterior and/or interior of the Building or Project; (3) to
designate and/or approve prior to installation, all types of signs, window
shades, blinds, drapes, awnings or other similar items, and all internal
lighting that may be visible from the exterior of the Premises; (4) upon
reasonable notice to Tenant, to display the Premises to prospective purchasers
at reasonable hours at any time during the Term and to prospective tenants at
reasonable hours during the last twelve (12) months of the Term; (5) to grant to
any party the exclusive right to conduct any business or render any service in
or to the Building or Project, provided such exclusive right shall not operate
to prohibit Tenant from using the Premises for the purpose permitted hereunder;
(6) to change the arrangement and/or location of entrances or passageways, doors
and doorways, corridors, elevators, stairs, washrooms or public portions of the
Building or Project, and to close entrances, doors, corridors, elevators or
other facilities, provided that such action shall not materially and adversely
interfere with Tenant's access to the Premises or the Building; (7) to have
access for Landlord and other tenants of the Project to any mail chutes and
boxes located in or on the Premises as required by any applicable rules of the
United States Post Office; and (8) to close the Project after Standard Operating
Hours, except that Tenant and its employees and invitees shall be entitled to
admission at all times, under such regulations as Landlord prescribes for
security purposes.

                                      31

<PAGE>

                                 ARTICLE TWENTY
                              ESTOPPEL CERTIFICATE

20.01    IN GENERAL

Within fifteen (15) days after request therefor by Landlord, Mortgagee or any
prospective mortgagee or owner, Tenant agrees as directed in such request to
execute an Estoppel Certificate in recordable form, binding upon Tenant,
certifying (i) that this Lease is unmodified and in full force and effect (or
if there have been modifications, a description of such modifications and
that this Lease as modified is in full force and effect); (ii) the dates to
which Rent has been paid; (iii) that Tenant is in the possession of the
Premises if that is the case; (iv) that Landlord is not in default under this
Lease, or, if Tenant believes Landlord is in default, the nature thereof in
detail; (v) that Tenant has no offsets or defenses to the performance of its
obligations under this Lease (or if Tenant believes there are any offsets or
defenses, a full and complete explanation thereof); (vi) that the Premises
have been completed in accordance with the terms and provisions hereof, that
Tenant has accepted the Premises and the condition thereof and of all
improvements thereto and has no claims against Landlord or any other party
with respect thereto; (vii) that if an assignment of rents or leases has been
served upon the Tenant by a Mortgagee, Tenant will acknowledge receipt
thereof and agree to be bound by the provisions thereof; (viii) that Tenant
will give to the Mortgagee copies of all notices required or permitted to be
given by Tenant to Landlord; and (ix) to any other information reasonably
requested.

20.02    ENFORCEMENT

In the event that Tenant fails to deliver an Estoppel Certificate, then such
failure shall be a Default for which there shall be no cure or grace period.
In addition to any other remedy available to Landlord, Landlord may impose a
charge equal to $500.00 for each day that Tenant fails to deliver an Estoppel
Certificate and Tenant shall be deemed to have irrevocably appointed Landlord
as Tenant's attorney-in-fact to execute and deliver such Estoppel Certificate.

                               ARTICLE TWENTY-ONE
                              RELOCATION OF TENANT

(Intentionally omitted.)

                               ARTICLE TWENTY-TWO
                               REAL ESTATE BROKERS

Tenant represents that, except for the broker(s) listed in Section 1.01(17),
Tenant has not dealt with any real estate broker, sales person, or finder in
connection with this Lease, and no such person initiated or participated in
the negotiation of this Lease, or showed the Premises to Tenant. Tenant
hereby agrees to indemnify, protect, defend and hold Landlord and the
Indemnitees, harmless from and against any and all liabilities and claims for
commissions and fees arising out of a breach of the foregoing representation.
Landlord agrees to pay any commission to which Landlord's Broker listed in
Section 1.01(17) is entitled in connection with this Lease pursuant to
Landlord's written agreement with such broker. Landlord and Tenant agree that
any commission payable to Tenant's Broker shall be paid by Tenant except to
the extent Tenant's Broker and Landlord's Broker have entered into a separate
agreement between themselves to share the commission paid to Landlord's
Broker by Landlord.

                              ARTICLE TWENTY-THREE
                              MORTGAGEE PROTECTION

23.01    SUBORDINATION AND ATTORNMENT

This Lease is and shall be expressly subject and subordinate at all times to the
Declaration and all other documents relating to the condominium of which the
Building forms a part and to (i) any ground or underlying

                                      32

<PAGE>

lease of the Real Property, now or hereafter existing, and all amendments,
extensions, renewals and modifications to any such lease, and (ii) the lien
of any mortgage or trust deed now or hereafter encumbering fee title to the
Real Property and/or the leasehold estate under any such lease, and all
amendments, extensions, renewals, replacements and modifications of such
mortgage or trust deed and/or the obligation secured thereby, unless such
ground lease or ground lessor, or mortgage, trust deed or Mortgagee,
expressly provides or elects that the Lease shall be superior to such lease
or mortgage or trust deed. If any such mortgage or trust deed is foreclosed
(including any sale of the Real Property pursuant to a power of sale), or if
any such lease is terminated, upon request of the Mortgagee or ground lessor,
as the case may be, Tenant shall attorn to the purchaser at the foreclosure
sale or to the ground lessor under such lease, as the case may be, provided,
however, that such purchaser or ground lessor shall not be (i) bound by any
payment of Rent for more than one month in advance except payments in the
nature of security for the performance by Tenant of its obligations under
this Lease; (ii) subject to any offset, defense or damages arising out of a
default of any obligations of any preceding Landlord; or (iii) bound by any
amendment or modification of this Lease made without the written consent of
the Mortgagee or ground lessor; or (iv) liable for any security deposits not
actually received in cash by such purchaser or ground lessor. This
subordination shall be self-operative and no further certificate or
instrument of subordination need be required by any such Mortgagee or ground
lessor. In confirmation of such subordination, however, Tenant shall execute
promptly any reasonable certificate or instrument that Landlord, Mortgagee or
ground lessor may request. Tenant hereby constitutes Landlord as Tenant's
attorney-in-fact to execute such certificate or instrument for and on behalf
of Tenant upon Tenant's failure to do so within fifteen (15) days of a
request to do so. Upon request by such successor in interest, Tenant shall
execute and deliver reasonable instruments confirming the attornment provided
for herein.

23.02    MORTGAGEE PROTECTION

Tenant agrees to give any Mortgagee or ground lessor, by registered or certified
mail, a copy of any notice of default served upon the Landlord by Tenant,
provided that prior to such notice Tenant has received notice (by way of service
on Tenant of a copy of an assignment of rents and leases, or otherwise) of the
address of such Mortgagee or ground lessor. Tenant further agrees that if
Landlord shall have failed to cure such default within the time provided for in
this Lease, then the Mortgagee or ground lessor shall have an additional thirty
(30) days after receipt of notice thereof within which to cure such default or
if such default cannot be cured within that time, then such additional notice
time as may be necessary, if, within such thirty (30) days, any Mortgagee or
ground lessor has commenced and is diligently pursuing the remedies necessary to
cure such default (including commencement of foreclosure proceedings or other
proceedings to acquire possession of the Real Property, if necessary to effect
such cure). Such period of time shall be extended by any period within which
such Mortgagee or ground lessor is prevented from commencing or pursuing such
foreclosure proceedings or other proceedings to acquire possession of the Real
Property by reason of Landlord's bankruptcy. Until the time allowed as aforesaid
for Mortgagee or ground lessor to cure such defaults has expired without cure,
Tenant shall have no right to, and shall not, terminate this Lease on account of
default. This Lease may not be modified or amended so as to reduce the Rent or
shorten the Term, or so as to adversely affect in any other respect to any
material extent the rights of the Landlord, nor shall this Lease be canceled or
surrendered, without the prior written consent, in each instance, of the ground
lessor or the Mortgagee.

                               ARTICLE TWENTY-FOUR
                                     NOTICES

         (a) All notices, demands or requests provided for or permitted to be
given pursuant to this Lease must be in writing and shall be personally
delivered, sent by Federal Express or other reputable overnight courier service,
or mailed by first class, registered or certified United States mail, return
receipt requested, postage prepaid.

                                      33
<PAGE>

         (b) All notices, demands or requests to be sent pursuant to this
Lease shall be deemed to have been properly given or served by delivering or
sending the same in accordance with this Section, addressed to the parties
hereto at their respective addresses listed in Sections 1.01(2) and (3).

         (c) Notices, demands or requests sent by mail or overnight courier
service as described above shall be effective upon deposit in the mail or
with such courier service. However, the time period in which a response to
any such notice, demand or request must be given shall commence to run from
(i) in the case of delivery by mail, the date of receipt on the return
receipt of the notice, demand or request by the addressee thereof, or (ii) in
the case of delivery by Federal Express or other overnight courier service,
the date of acceptance of delivery by an employee, officer, director or
partner of Landlord or Tenant. Rejection or other refusal to accept or the
inability to deliver because of changed address of which no notice was given,
as indicated by advice from Federal Express or other overnight courier
service or by mail return receipt, shall be deemed to be receipt of notice,
demand or request sent. Notices may also be served by personal service upon
any officer, director or partner of Landlord or Tenant, and shall be
effective upon such service.

         (d) By giving to the other party at least thirty (30) days written
notice thereof, either party shall have the right from time to time during
the term of this Lease to change their respective addresses for notices,
statements, demands and requests, provided such new address shall be within
the United States of America.

                               ARTICLE TWENTY-FIVE
                                  MISCELLANEOUS

25.01    LATE CHARGES

         (a) All payments required hereunder (other than the Monthly Base
Rent, Rent Adjustments, and Rent Adjustment Deposits, which shall be due as
hereinbefore provided) to Landlord shall be paid within ten (10) days after
Landlord's demand therefor. All such amounts (including Monthly Base Rent,
Rent Adjustments, and Rent Adjustment Deposits) not paid when due shall bear
interest from the date due until the date paid at the Default Rate in effect
on the date such payment was due.

         (b) In the event Tenant is more than five (5) days late in paying
any installment of Rent due under this Lease, Tenant shall pay Landlord a
late charge equal to five percent (5%) of the delinquent installment of Rent.
The parties agree that (i) such delinquency will cause Landlord to incur
costs and expenses not contemplated herein, the exact amount of which will be
difficult to calculate, including the cost and expense that will be incurred
by Landlord in processing each delinquent payment of rent by Tenant, (b) the
amount of such late charge represents a reasonable estimate of such costs and
expenses and that such late charge shall be paid to Landlord for each
delinquent payment in addition to all Rent otherwise due hereunder. The
parties further agree that the payment of late charges and the payment of
interest provided for in subparagraph (a) above are distinct and separate
from one another in that the payment of interest is to compensate Landlord
for its inability to use the money improperly withheld by Tenant, while the
payment of late charges is to compensate Landlord for its additional
administrative expenses in handling and processing delinquent payments.

         (c) Payment of interest at the Default Rate and/or of late charges
shall not excuse or cure any default by Tenant under this Lease, nor shall
the foregoing provisions of this Article or any such payments prevent
Landlord from exercising any right or remedy available to Landlord upon
Tenant's failure to pay Rent when due, including the right to terminate this
Lease.

25.02    NO JURY TRIAL; VENUE; JURISDICTION

Each party hereto (which includes any assignee, successor, heir or personal
representative of a party) shall not seek a jury trial, hereby waives trial
by jury, and hereby further waives any objection to venue in the County in
which the Building is located, and agrees and consents to personal
jurisdiction of the courts of the

                                      34

<PAGE>

State of California, in any action or proceeding or counterclaim brought by
any party hereto against the other on any matter whatsoever arising out of or
in any way connected with this Lease, the relationship of Landlord and
Tenant, Tenant's use or occupancy of the Premises, or any claim of injury or
damage, or the enforcement of any remedy under any statute, emergency or
otherwise, whether any of the foregoing is based on this Lease or on tort
law. No party will seek to consolidate any such action in which a jury has
been waived with any other action in which a jury trial cannot or has not
been waived. It is the intention of the parties that these provisions shall
be subject to no exceptions. By execution of this Lease the parties agree
that this provision may be filed by any party hereto with the clerk or judge
before whom any action is instituted, which filing shall constitute the
written consent to a waiver of jury trial pursuant to and in accordance with
Section 631 of the California Code of Civil Procedure. No party has in any
way agreed with or represented to any other party that the provisions of this
Section will not be fully enforced in all instances. The provisions of this
Section shall survive the expiration or earlier termination of this Lease.

25.03    DEFAULT UNDER OTHER LEASE

It shall be a Default under this Lease if Tenant or any Affiliate holding any
other lease with Landlord for premises in the Building defaults under such
lease and as a result thereof such lease is terminated or terminable.

25.04    OPTION

This Lease shall not become effective as a lease or otherwise until executed
and delivered by both Landlord and Tenant. The submission of the Lease to
Tenant does not constitute a reservation of or option for the Premises, but
when executed by Tenant and delivered to Landlord, the Lease shall constitute
an irrevocable offer by Tenant in effect for fifteen (15) days to lease the
Premises on the terms and conditions herein contained.

25.05    TENANT AUTHORITY

Tenant represents and warrants to Landlord that it has full authority and
power to enter into and perform its obligations under this Lease, that the
person executing this Lease is fully empowered to do so, and that no consent
or authorization is necessary from any third party. Landlord may request that
Tenant provide Landlord evidence of Tenant's authority.

25.06    ENTIRE AGREEMENT

This Lease, the Exhibits and Rider(s) attached hereto contain the entire
agreement between Landlord and Tenant concerning the Premises and there are
no other agreements, either oral or written, and no other representations or
statements, either oral or written, on which Tenant has relied. This Lease
shall not be modified except by a writing executed by Landlord and Tenant.

25.07    MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE

If Mortgagee of Landlord requires a modification of this Lease which shall
not result in any increased cost or expense to Tenant or in any other
substantial and adverse change in the rights and obligations of Tenant
hereunder, then Tenant agrees that the Lease may be so modified.

25.08    EXCULPATION

Tenant agrees, on its behalf and on behalf of its successors and assigns,
that any liability or obligation under this Lease shall only be enforced
against Landlord's equity interest in the Property up to a maximum of Five
Million Dollars ($5,000,000.00) and in no event against any other assets of
the Landlord, or Landlord's officers or directors or partners, and that any
liability of Landlord with respect to this Lease shall be so limited and
Tenant shall not be entitled to any judgment in excess of such amount.

                                      35
<PAGE>

25.09    ACCORD AND SATISFACTION

No payment by Tenant or receipt by Landlord of a lesser amount than any
installment or payment of Rent due shall be deemed to be other than on account
of the amount due, and no endorsement or statement on any check or any letter
accompanying any check or payment of Rent shall be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such installment or payment of Rent
or pursue any other remedies available to Landlord. No receipt of money by
Landlord from Tenant after the termination of this Lease or Tenant's right of
possession of the Premises shall reinstate, continue or extend the Term. Receipt
or acceptance of payment from anyone other than Tenant, including an assignee of
Tenant, is not a waiver of any breach of Article Ten, and Landlord may accept
such payment on account of the amount due without prejudice to Landlord's right
to pursue any remedies available to Landlord.

25.10    LANDLORD'S OBLIGATIONS ON SALE OF BUILDING

In the event of any sale or other transfer of the Building, Landlord shall be
entirely freed and relieved of all agreements and obligations of Landlord
hereunder accruing or to be performed after the date of such sale or transfer,
and any remaining liability of Landlord with respect to this Lease shall be
limited to the dollar amount specified in Section 25.08 and Tenant shall not be
entitled to any judgment in excess of such amount.

25.11    BINDING EFFECT

Subject to the provisions of Article Ten, this Lease shall be binding upon and
inure to the benefit of Landlord and Tenant and their respective heirs, legal
representatives, successors and permitted assigns.

25.12    CAPTIONS

The Article and Section captions in this Lease are inserted only as a matter of
convenience and in no way define, limit, construe, or describe the scope or
intent of such Articles and Sections.

25.13    TIME; APPLICABLE LAW; CONSTRUCTION

Time is of the essence of this Lease and each and all of its provisions. This
Lease shall be construed in accordance with the Laws of the State of California.
If more than one person signs this Lease as Tenant, the obligations hereunder
imposed shall be joint and several. If any term, covenant or condition of this
Lease or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term, covenant or condition to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each item, covenant or condition of this Lease shall be
valid and be enforced to the fullest extent permitted by Law. Wherever the term
"including" or "includes" is used in this Lease, it shall have the same meaning
as if followed by the phrase "but not limited to". The language in all parts of
this Lease shall be construed according to its normal and usual meaning and not
strictly for or against either Landlord or Tenant.

25.14    ABANDONMENT

In the event Tenant vacates or abandons the Premises but is otherwise in
compliance with all the terms, covenants and conditions of this Lease, Landlord
shall (i) have the right to enter into the Premises in order to show the space
to prospective tenants, (ii) have the right to reduce the services provided to
Tenant pursuant to the terms of this Lease to such levels as Landlord reasonably
determines to be adequate services for an unoccupied premises and (iii) during
the last six (6) months of the Term, have the right to prepare the Premises for
occupancy by another tenant upon the end of the Term. Tenant expressly
acknowledges that in the absence of written notice pursuant to Section 11.02(b)
or pursuant to California Civil Code Section

                                      36
<PAGE>

1951.3 terminating Tenant's right to possession, none of the foregoing acts
of Landlord or any other act of Landlord shall constitute a termination of
Tenant's right to possession or an acceptance of Tenant's surrender of the
Premises, and the Lease shall continue in effect.

25.15    LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES

If Tenant fails timely to perform any of its duties under this Lease,
Landlord shall have the right (but not the obligation), to perform such duty
on behalf and at the expense of Tenant without prior notice to Tenant, and
all sums expended or expenses incurred by Landlord in performing such duty
shall be deemed to be additional Rent under this Lease and shall be due and
payable upon demand by Landlord.

25.16    SECURITY SYSTEM

Landlord shall not be obligated to provide or maintain any security patrol or
security system. Landlord shall not be responsible for the quality of any
such patrol or system which may be provided hereunder or for damage or injury
to Tenant, its employees, invitees or others due to the failure, action or
inaction of such patrol or system.

25.17    NO LIGHT, AIR OR VIEW EASEMENTS

Any diminution or shutting off of light, air or view by any structure which
may be erected on lands of or adjacent to the Project shall in no way affect
this Lease or impose any liability on Landlord.

25.18    RECORDATION

Neither this Lease, nor any notice nor memorandum regarding the terms hereof,
shall be recorded by Tenant. Any such unauthorized recording shall be a
Default for which there shall be no cure or grace period. Tenant agrees to
execute and acknowledge, at the request of Landlord, a memorandum of this
Lease, in recordable form.

25.19    SURVIVAL

The waivers of the right of jury trial, the other waivers of claims or
rights, the releases and the obligations of Tenant under this Lease to
indemnify, protect, defend and hold harmless Landlord and/or Indemnitees
shall survive the expiration or termination of this Lease, and so shall all
other obligations or agreements which by their terms survive expiration or
termination of the Lease.

25.20    RIDERS

All Riders attached hereto and executed both by Landlord and Tenant shall be
deemed to be a part hereof and hereby incorporated herein.

                                      37

<PAGE>

                               ARTICLE TWENTY-SIX
                         HAZARDOUS SUBSTANCES DISCLOSURE

California law requires landlords to disclose to tenants the existence of
certain hazardous substances. Accordingly, Tenant is hereby notified of the
existence of asbestos containing materials ("ACM"). Certain areas of the
Building contain ACM, but these areas are generally inaccessible to tenants,
such as machinery rooms, the inside of sealed walls and above suspended
ceilings. Tenant agrees not to expose or disturb any ACM unless Landlord has
given Tenant prior written consent thereto and Tenant complies with all
applicable legal requirements and the Building's written procedures for
handling ACM. Tenant may obtain a copy of the Building's written procedures
for handling asbestos from the Building office.

IN WITNESS WHEREOF, this Lease has been executed as of the date set forth in
Section 1.01(4) hereof.

TENANT:                                    LANDLORD:

Embarcadero Technologies, Inc.,            Metropolitan Life Insurance Company,
a California corporation                   a New York corporation

By  /s/ Stephen Wong                       By  /s/ Edward J. Hayes
    ---------------------------------          ---------------------------------

    Stephen Wong                               Edward J. Hayes
    ---------------------------------          ---------------------------------
             Print name                               Print name
Its Chairman                               Its Assistant Vice President
    ---------------------------------          ---------------------------------
(Chairman of Board, President or
Vice President)

By  /s/ Ann M. Roesch
    ---------------------------------

    Ann M. Roesch
    ---------------------------------
             Print name

Its Assistant Secretary
    ---------------------------------
(Secretary, Assistant Secretary, CFO or Assistant Treasurer)

                                      38
<PAGE>

                                    EXHIBIT A
                                PLAN OF PREMISES

                               Exhibit A - Page 1
<PAGE>

                                    EXHIBIT B
                              WORKLETTER AGREEMENT
                             (intentionally omitted)

                               Exhibit B - Page 1

<PAGE>

                                    EXHIBIT C
                              RULES AND REGULATIONS

         As used here, all capitalized terms, including, for example, Premises,
Landlord, Tenant, Building and Project, shall have the meanings set forth in the
Lease of which these Rules and Regulations form a part.

         1. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed, printed or affixed on or to any part of the outside or
inside of the Building or Project or elsewhere on or within the Premises, except
in the interior of the Premises, unless approved by the Landlord. Nothing shall
be placed near the glass of any window, door, partition, or wall which may
appear unsightly from outside the Project and no curtains, draperies, blinds,
shutters, shades, screens or other coverings, hangings or decorations shall be
attached to, hung or placed in, or used in connection with, any window in the
Premises unless approved by the Landlord. In any event, where approved by the
Landlord, all such items shall be installed inboard of the standard draperies
provided for the Premises and shall in no way be visible from the exterior of
the Project. The doors, windows, light fixtures and any lights or skylights that
reflect or admit light into the halls or other places of the Building shall not
be covered or obstructed.

         2. Except for any food and/or beverage services and except for any
vending machine services approved by the Landlord for operation in the Project,
no part of the Premises shall be used to manufacture any commodity or to prepare
or dispense any food or beverage, nor shall any cooking be done or permitted in
or about the Premises, and no vending machine or machines of any description
which dispense or sell any food, beverage or product shall be installed,
maintained or operated in or about the Premises.

         3. Nothing shall be done or permitted in or about the Premises, or
brought or kept therein, which shall in any way increase the rate of or cause a
cancellation of or otherwise affect any fire or other insurance upon the
Building, the Project or any property kept therein, or conflict with any fire
laws or regulations or with any insurance policy upon the Premises or any part
thereof. Unless approved by the Landlord, no kerosene, gasoline or inflammable
or combustible fluid or material shall be used or kept in or about the Premises;
nor shall any method of heating or air conditioning be used for the Premises
other than that supplied by the Landlord. The Tenant shall comply with all fire
regulations that may be approved by the Landlord. In the event any use or
activity shall lead to an increase in fire or other insurance premiums payable
on the insurance obtained by the Landlord, or insurance covering Project Areas
for which the Building pays a share, or insurance procured by an individual
tenant, the party causing such increase shall be liable for payment of the same
to the Landlord, the owners of the Project or such individual tenant, as the
case may be. The party so charged with increasing premium costs shall have the
right to contest the validity of such increase.

         4. Nothing shall be done or permitted in or about the Premises which
shall in any way obstruct or interfere with the use of the Premises for their
intended purposes, or obstruct or interfere with the rights of any Tenant or
occupant of the Project, or injure or annoy them, nor shall the Premises or any
part thereof be used for any immoral, unlawful, disorderly or extra-hazardous
purpose, or for lodging or sleeping, nor shall any nuisance be caused,
maintained or permitted in or about the Premises, nor shall any animals or birds
be brought or kept in or about the Premises.

         5. The floors of the Building shall not be overloaded, nor shall any
safe or other heavy object be installed in the Premises without sufficient
provision being made for the proper distribution of the weight thereof.

         6. Tenant shall not install any radio or television antenna,
loudspeaker or any other device on the exterior of the office building of which
the Building is a part.

         7. Tenant shall keep its Premises in a good state of preservation and
cleanliness. It shall not allow anything whatever to fall from the windows or
doors of the Premises, nor shall it sweep or throw from the Premises any dirt or
other substance into any of the corridors or halls, elevators, ventilators or
elsewhere

                               Exhibit C - Page 1

<PAGE>

in the Building or the Project. Refuse shall be placed in containers in such
manner and at such times and places as may be directed by the Landlord, the
manager of the Building or Project, or its agents.

         8. The sidewalks, entrances, elevators, vestibules, stairways,
corridors, halls, landings and fire exits must not be obstructed or
encumbered or used for any purpose other than ingress and egress to and from
the Premises, the Building and the Project.

         9. Tenant and occupants shall not cause or permit any disturbing
noises or objectionable odors to be produced upon or to emanate from the
Premises.

         10. Water closets and other water apparatus in the Building shall
not be used for any purpose other than those for which they were designed,
nor shall any sweepings, rubbish, rags or other articles be thrown into same.
Any damage resulting from misuse of any water closets or other apparatus in
the Premises shall be repaired and paid for by Tenant.

         11. No vehicle belonging to a Tenant or to an employee, licensee,
invitee, contractor, agent, client or visitor of a Tenant or occupant shall
be parked in such manner as to impede or prevent ready access by any other
vehicle to any entrance to or exit from the Building, Project or parking
garage.

         12. Tenant and occupants and employees, licensees, invitees,
contractor, agents, clients or visitors shall not at any time or for any
reason whatsoever enter upon or attempt to enter upon the roof of the office
building of which the Building is a part.

         13. Canvassing, soliciting and peddling in or about the Premises
shall be prohibited and Tenant and occupants of the Premises shall cooperate
to prevent the same.

         14. Unless approved by the Landlord, no hand trucks, except those
equipped with rubber tires and side guards, shall be used in or about the
Project, and no other carts or vehicles of any kind shall be used in or about
the Building except for those which are permitted to be used in the Project's
parking garage.

         15. No furniture, freight, or equipment of any kind shall be brought
into or received in the Project or carried in the elevators, except at such
time and in such manner as shall be approved by the Landlord or by the
manager of the Building or Project.

         16. The bulletin board or directory of the Project shall be used
exclusively for the display of the names and locations of the tenants and
occupants of the Project, and Landlord reserves the right to exclude any
other names therefrom, to limit the number of names associated with
particular occupants of the Building to be identified thereon, and to charge
for names associated with such occupants at rates applicable to all occupants
of the Building.

         17. Tenant shall see that the exterior doors of its Premises are
closed and securely locked on Saturdays, Sundays and legal holidays and not
later than 7:00 P.M. of each other day. Tenant shall exercise care and
caution that all water faucets or water apparatus are entirely shut off
before Tenant or its employees leave the Premises, and that all utilities,
electricity, gas or air, shall likewise be carefully shut off so as to
prevent waste or damage.

         18. Tenant shall comply with such security measures and procedures
as may be approved by Landlord for the operation of the Building and the
conduct of business therein.

         19. Complaints regarding services or operation of the Building shall
be made in writing to Landlord or the manager of the Building.

         20. All work performance by or on behalf of Tenant shall be
performed in compliance with the 425 Market Street Tenant Construction
Standards and in accordance with the Conditions for Construction

                               Exhibit C - Page 2

<PAGE>

and Asbestos Procedures.

         21. These rules and regulations and any consent or approval given
hereunder may be added to, amended or repealed at any time by Landlord.

                               Exhibit C - Page 3
<PAGE>

                                     RIDER 1
                           COMMENCEMENT DATE AGREEMENT

Metropolitan Life Insurance Company, a New York corporation ("Landlord"), and
Embarcadero Technologies, Inc., a California corporation ("Tenant"), have
entered into a certain Office Lease dated as of __________________, 1999 (the
"Lease").

WHEREAS, Landlord and Tenant wish to confirm and memorialize the Commencement
Date and Expiration Date of the Lease as provided for in Section 2.02(b) of the
Lease;

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and in the Lease, Landlord and Tenant agree as follows:

         1. Unless otherwise defined herein, all capitalized terms shall have
the same meaning ascribed to them in the Lease.

         2. The Commencement Date (as defined in the Lease) of the Lease
is _______________.

         3. The Expiration Date (as defined in the Lease) of the Lease
is ______________.

         4. Tenant hereby confirms the following:

            (a) That it has accepted possession of the premises pursuant
                to the terms of the Lease;

            (b) That the Landlord Work, if any, is Substantially Complete;
                and

            (c) That the Lease is in full force and effect.

         5. Except as expressly modified hereby, all terms and provisions of the
Lease are hereby ratified and confirmed and shall remain in full force and
effect and binding on the parties hereto.

         6. The Lease and this Commencement Date Agreement contain all of the
terms, covenants, conditions and agreements between the Landlord and the Tenant
relating to the subject matter herein. No prior other agreements or
understandings pertaining to such matters are valid or of any force and effect.

TENANT:                                    LANDLORD:
------                                     --------

Embarcadero Technologies, Inc.,            Metropolitan Life Insurance Company,
a California corporation                   a New York corporation

By                                         By
    --------------------------------           ---------------------------------
             Print name                                    Print name
Its                                        Its
    --------------------------------           ---------------------------------
(Chairman of Board, President or
Vice President)

By
    --------------------------------

                                Rider 1 - Page 1
<PAGE>

    --------------------------------
             Print name
Its
    --------------------------------
(Secretary, Assistant Secretary, CFO or Assistant Treasurer)

                                Rider 1 - Page 2

<PAGE>

                                     RIDER 2
                              ADDITIONAL PROVISIONS

         This Rider 2 ("Rider") is attached to and a part of a certain Office
Lease dated as of ____________, 1999 executed concurrently herewith by
Metropolitan Life Insurance Company, a New York corporation, as Landlord, and
Embarcadero Technologies, Inc., a California corporation, as Tenant, for the
Premises as described therein (the "Lease").

SECTION 1.        DEFINED TERMS; FORCE AND EFFECT

Capitalized terms used in this Rider shall have the same meanings set forth in
the Lease except as otherwise specified herein and except for terms capitalized
in the ordinary course of punctuation. This Rider forms a part of the Lease.
Without limiting the generality of the foregoing, any default by any party
hereunder shall have the same force and effect as a default under the Lease.
Should any inconsistency arise between this Rider and any other provision of the
Lease as to the specific matters which are the subject of this Rider, the terms
and conditions of this Rider shall control.

SECTION 2. PREMISES LEASED "AS-IS"; DELIVERY; COMMENCEMENT DATE; AND
           CONSTRUCTION

         2.1. AS-IS; DELIVERY; COMMENCEMENT DATE. Notwithstanding any provision
of the Lease to the contrary:

              (a)     AS-IS. Except to the extent of any Landlord Work and
Landlord Maximum Contribution described below: (i) Landlord shall deliver the
Premises to Tenant in its AS IS condition, without any express or implied
representations or warranties of any kind by Landlord, its brokers, manager or
agents, or the employees of any of them regarding the Premises; and (ii)
Landlord shall not have any obligation to construct or install any tenant
improvements or alterations or to pay for any such construction or installation.

              (b)     DELIVERY & COMMENCEMENT DATE. Landlord shall tender to
Tenant possession of the Premises June 1, 1999 (the "Delivery Date"). Possession
will be adequately tendered to Tenant by Landlord either delivering the keys (or
other means of access) to Tenant or Tenant's Broker, or by Landlord giving
written notice that the keys (or other means of access) to the Premises are
available for Tenant or its representative to pick up at the office of Landlord
or of the Property Manager of the Building. Tenant's possession from the
Delivery Date (or from any earlier date Tenant takes possession in the event
that Landlord, in its sole discretion, tenders possession earlier) to the
Commencement Date may be referred to as the Interim Term, and is to provide some
time for purposes of design and construction of Tenant Work and Landlord Work,
fixturing and moving. Tenant's possession of the space shall be subject to all
of the terms, covenants and conditions of this Lease, including any amounts
payable under this Lease, except that Monthly Base Rent shall not be payable by
Tenant and the initial Term shall not commence until the Commencement Date. The
Commencement Date shall be the date specified as the Projected Commencement
Date.

              (c)    DELAY IN DELIVERY. If Landlord does not obtain and tender
possession of the Premises by the Delivery Date by reason of the following: (i)
the holding over or retention of possession of any tenant, tenants or occupants,
or (ii) for any other reason, then Landlord shall not be subject to any
liability for the failure to give possession on said date. Under such
circumstances the Commencement Date shall be delayed by a number of days equal
to the days of delay in Landlord's delivery of possession to Tenant. No such
failure to give possession shall affect the validity of this Lease or the
obligations of the Tenant hereunder. Within thirty (30) days following the
occurrence of the Commencement Date, Landlord and Tenant shall enter into an
agreement (which is attached to this Lease as RIDER 1) confirming the

                                Rider 2 - Page 1
<PAGE>

Commencement Date and the Expiration Date. If Tenant fails to enter into such
agreement, then the Commencement Date and the Expiration Date shall be the
dates designated by Landlord in such agreement.

         2.2 LANDLORD WORK. Notwithstanding any provision of the Lease to the
contrary:

              (a)     DEFINITION. Landlord shall be responsible for, but may
include in Operating Expenses the cost of, the following (the "Landlord's
Work"): upgrades and modifications if and to the extent necessary so that the
existing core restrooms on the floor on which the Premises is located and a path
of travel through the Common Areas to the Premises comply with Title 24
accessibility standards, as applicable and as interpreted at the time of
execution of this Lease.

              (b)     RIGHT OF ENTRY; TENANT'S RESPONSIBILITIES. Landlord shall
select a general contractor who shall commence the Landlord Work within a
reasonable time after the Delivery Date and thereafter shall complete it with
reasonable diligence. To the extent that design and construction of any or all
of the Landlord Work pursuant to this Rider will require access, work or
construction within or through the Premises, Landlord and Landlord's
representatives and contractors shall have the right to enter the Premises to
perform such work, and Tenant agrees that such entry and work shall not
constitute an eviction of Tenant in whole or in part and that rent and other
sums due and payable by Tenant under the Lease with respect to the Premises
after the Commencement Date shall in no way be abated or reduced by reason of
inconvenience, annoyance, disturbance or injury to the business of Tenant due to
such access, work or construction. Tenant shall cooperate with Landlord and
Landlord's contractors(s) to allow such access and any necessary coordination of
construction.

              (c)     ACCEPTANCE OF LANDLORD WORK. Tenant shall notify Landlord
in writing within thirty (30) days after the Commencement Date of any defects
claimed by Tenant in the Landlord Work. Except for defects stated in such thirty
(30) day notice and Latent Defects (defined below) (collectively, "Defects") of
which Tenant gives Landlord notice ten (10) months after Substantial Completion
of the Landlord Work, Tenant shall be conclusively deemed to have accepted the
Landlord Work "AS IS" in the condition existing on the date Tenant first takes
possession, and to have waived all claims relating to its condition. Landlord
shall proceed diligently to correct the Defects stated in the applicable notice
unless Landlord disputes the existence of any such Defects. For purposes of this
Lease, "Latent Defects" shall mean defects in Landlord Work which were not
readily apparent when the thirty (30) day notice was due.

         2.3. TENANT WORK GENERALLY. Landlord and Tenant acknowledge and
agree that notwithstanding any provisions of the Lease to the contrary: (a)
Tenant shall be responsible for all design, demolition, repair, remodeling,
improvement or alteration in connection with its initial occupancy, which for
purposes of this Lease is referred to as the Tenant Work; (b) all Tenant
Work, if any, shall be done as Tenant Alterations within the meaning of
Article Nine of the Lease, subject to and in compliance with all conditions
and provisions of the Lease applicable to Tenant Alterations, except as
otherwise expressly provided in this Rider; (c) without limiting the
generality of any provisions of Article Nine, Tenant's selection of Tenant's
space planner and/or architect and Tenant's selection of contractor(s) shall
be subject to Landlord's prior written approval, which shall not unreasonably
be withheld; (d) if the Tenant Work does not exceed the amount of Landlord's
Maximum Contribution, Tenant shall not be required to obtain a completion and
lien indemnity bond for the Tenant Work; (e) such work, including all design,
plan review, obtaining all approvals and permits, and construction shall be
at Tenant's sole cost and expense (subject to reimbursement from Landlord's
Maximum Contribution), including delivery to Landlord of plans and
specifications of such Tenant Work (including 3 mylar copies of as-built
plans and specifications upon completion); and (f) Tenant shall pay Landlord
a fee ("Construction Monitoring Fee") equal to five percent (5%) of the
construction costs (exclusive of Soft Costs, as defined below) for the review
and approval of Tenant's plans and specifications, monitoring related to the
Tenant Work, access, elevator usage during normal business hours and power.
Landlord shall be entitled to deduct and retain such portions of the
Construction Monitoring Fee as are payable from time to time to the extent
funds are available out of Landlord's Maximum Contribution. Notwithstanding
the foregoing, in the event the Tenant shall select and engage Shorenstein
Company L. P. as Tenant's general contractor for the Tenant Work, no
Construction Monitoring Fee shall be due as long as such company

                                Rider 2 - Page 2
<PAGE>

performs the Tenant Work noted above.

         2.4. DESIGN & CONSTRUCTION RESPONSIBILITY FOR ANY TENANT WORK.
Tenant shall be responsible for the suitability for the Tenant's needs and
business of the design and function of all Tenant Work and for its
construction in compliance with all Law as applicable and as interpreted at
the time of construction of the Tenant Work, including all building codes and
the ADA (as defined in the Lease). In the event that this Lease or any
improvements or alterations in connection herewith triggers any upgrades or
modifications of existing improvements in the Premises to comply with Law,
Tenant shall also be responsible for such upgrades and modifications, except
to the extent of any Landlord Work and Landlord Maximum Contribution. Tenant,
through its architects and/or space planners ("Tenant's Architect"), shall
prepare all architectural plans and specifications, and engineering plans and
specifications, for the real property improvements to be constructed by
Tenant in the Premises in sufficient detail to be submitted to Landlord for
approval, as required pursuant to Article Nine of the Lease, and to be
submitted by Tenant for governmental approvals and building permits and to
serve as the detailed construction drawings and specifications for the
contractor, and shall include, among other things, all partitions, doors,
heating, ventilating and air conditioning installation and distribution,
ceiling systems, light fixtures, plumbing installations, electrical
installations and outlets, telephone installations and outlets, any other
installations required by Tenant, fire and life-safety systems, wall finishes
and floor coverings, whether to be newly installed or requiring changes from
the as-is condition of the Premises as of the date of execution of the Lease.
Tenant shall be responsible for the oversight, supervision and construction
of all Tenant Work in compliance with this Lease, including compliance with
all Law as applicable and as interpreted at the time of construction,
including all building codes and the ADA.

         2.5. LANDLORD'S MAXIMUM CONTRIBUTION: AMOUNT; REIMBURSABLE COSTS &
PAYMENT. Landlord's Maximum Contribution means an amount up to a maximum of
Seventy-two Thousand Two Hundred and Forty Dollars ($72,240.00) to reimburse
Tenant for the actual costs of design, engineering, plan review, obtaining all
approvals and permits, and construction of Tenant Work in the Premises, and
shall be payable as provided below. Landlord's Maximum Contribution may not be
used to reimburse or pay soft costs ("Soft Costs") associated with the Tenant
Work, including costs for design, plans, and obtaining approvals or permits for
the real property improvements which constitute the Tenant Work except up to a
maximum of Twenty Thousand Six Hundred and Forty Dollars ($20,640.00) ("Soft
Costs Maximum") and except for any additional amount in payment of the
Construction Monitoring Fee. In no event shall the Landlord's Maximum
Contribution be used to reimburse any costs of designing, procuring or
installing in the Premises any trade fixtures, signage, movable equipment,
furniture, furnishings, telephone equipment, cabling for any of the foregoing,
or other personal property (collectively "Personal Property" for purposes of
this Rider), and the cost of such Personal Property shall be paid by Tenant.
Landlord's Maximum Contribution shall be paid to Tenant within 30 days after the
later of final completion of the Tenant Work and Landlord's receipt of (i) a
certificate of occupancy (if applicable), (ii) final as-built plans and
specifications, (iii) full, final, unconditional lien releases, and (iv)
reasonable substantiation of costs incurred by Tenant with respect to the Tenant
Work.

                                Rider 2 - Page 3
<PAGE>

         2.6. CERTAIN CONTRACTOR MATTERS. Subject to the approval and other
requirements of Article Nine of the Lease, Tenant may select the general
contractor to construct the Tenant Work and Tenant shall competitively bid the
Tenant Work to a sufficient number of contractors, all of which contractors
shall be from an approved list of contractors provided by Landlord. Tenant may
in writing submit additional contractors and subcontractors (except that the
subcontractors for work relating to Building systems, including the mechanical,
heating, plumbing, security, ventilating, air-conditioning, electrical,
communication and fire and life safety systems of the Building may be specified
by Landlord, in its sole discretion) to Landlord for Landlord's prior written
approval for use by Tenant for the Tenant Work, which approval shall not
unreasonably be withheld, and Tenant shall include with such request information
concerning such contractors and subcontractors qualifications, necessary
licenses and references for evaluation by Landlord, and Tenant shall provide
such further information as Landlord may reasonably request.

         IN WITNESS WHEREOF, the parties hereto have executed this Rider 2 as of
the date first set forth in the Lease.

TENANT:                                    LANDLORD:

Embarcadero Technologies, Inc.,            Metropolitan Life Insurance Company,
a California corporation                   a New York corporation

By  /s/ Stephen Wong                       By  /s/ Edward J. Hayes
    ---------------------------------          ---------------------------------

    Stephen Wong                               Edward J. Hayes
    ---------------------------------          ---------------------------------
             Print name                               Print name
Its Chairman                               Its Assistant Vice President
    ---------------------------------          ---------------------------------
(Chairman of Board, President or
Vice President)

By  /s/ Ann M. Roesch
    ---------------------------------

    Ann M. Roesch
    ---------------------------------
             Print name

Its Assistant Secretary
    ---------------------------------
(Secretary, Assistant Secretary, CFO or Assistant Treasurer)

                                Rider 2 - Page 4
<PAGE>

                         FIRST AMENDMENT TO OFFICE LEASE

         This First Amendment to Office Lease ("First Amendment") is dated as
of December 22, 1999 by and between METROPOLITAN LIFE INSURANCE COMPANY, a
New York corporation (herein referred to as "Metropolitan" or "Landlord"), as
Landlord, and EMBARCADERO TECHNOLOGIES, INC., a California corporation
(herein referred to as "Tenant"), as tenant, with reference to the following
facts:

                                    RECITALS

         A. Landlord and Tenant entered into that certain lease dated as of
April 23, 1999 (the "Original Lease") for the Premises referred to therein.

         B. Landlord and Tenant desire to provide for the lease to Tenant of the
Expansion Space (defined below) for the extended term specified herein, all
subject to al of the conditions, terms, covenants and agreements provided in
this First Amendment.

         NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants set forth herein and of other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:

         Section 1. DEFINED TERMS. All capitalized terms not otherwise defined
herein have the meanings set forth in the Original Lease unless the context
clearly requires otherwise. The Original Lease, as amended by this First
Amendment, is hereinafter referred to as the "Lease."

         Section 2. CONFIRMATION OF TERM. Landlord and Tenant acknowledge and
agree that notwithstanding any provision of the Lease to the contrary, the
Expiration Date of the Lease including with respect to the Expansion space, is
June 14, 2004.

         Section 3. LEASE OF THE EXPANSION SPACE.

         (a) Effective as of January 1, 2000 (the "Effective Date") Landlord
hereby leases to Tenant and Tenant hereby hires from Landlord the Expansion
Space (defined below) upon and subject to all of the terms, covenants and
conditions of the Lease except as expressly provided herein. The "Expansion
Space" is located on the northeast corner of the fifth (5th) floor of the
Building as shown on EXHIBIT A to this First Amendment. Landlord and Tenant
hereby agree that (i) the Expansion Space is conclusively presumed to be 4,197
rentable square feet; and (ii) this First Amendment contains all rights and
obligations of the parties with respect to expansion of the Premises, whether or
not in accordance with any other expansion rights previously granted to Tenant;
and upon

<PAGE>

execution hereof, any and all other rights to expand are null, void and of no
force or effect.

         (b) CONSTRUCTION, COMMENCEMENT DATE; TERM; RENT; OTHER PROVISIONS.
Notwithstanding any provision of the Lease to the contrary, the following
provisions shall govern the Expansion Space:

               (1) CONDITION; CONSTRUCTION; TERM. Landlord shall deliver the
Expansion Space to Tenant in its AS IS condition, without any express or implied
representations or warranties of any kind by Landlord, its brokers, managers or
agents, or the employees of any of them regarding the Expansion Space, and
Landlord shall not have any obligation to construct or install any tenant
improvements or alterations or to pay for any such construction or installation.
Tenant shall perform any improvements to the Expansion Space (the "Expansion
Space Improvements") as Tenant Alterations in accordance with the terms of the
Original Lease, including Article 9 thereof. Within thirty (30) days following
Tenant's satisfaction of all conditions of Article 9 with respect to the
Expansion Space Improvements, Landlord shall reimburse the cost of the Expansion
Space Improvements up to the amount of Fifty-Eight Thousand Seven Hundred
Fifty-Eight Dollars ($58,758.00). Landlord shall not be obligated to pay any
amount in excess of Fifty-Eight Thousand Seven Hundred Fifty-Eight Dollars
($58,758.00) on account of the Expansion Space Improvements. Landlord shall
deliver possession of the Expansion Space to Tenant for occupancy upon the
Effective Date, and, upon such delivery, the Expansion Space shall become part
of the Premises, and Tenant's obligation to pay rent with respect to the
Expansion Space shall commence as of the Effective Date. The term of the Lease
of the Expansion Space shall continue until the Effective Date of the Term of
the Lease of the Original Premises.

               (2) DELAYED OR EARLY DELIVERY OF POSSESSION. If Landlord shall be
unable to give possession of the Expansion Space on the Effective Date by reason
of the following: (i) the holding over or retention of possession of any tenant,
tenants or occupants, or (ii) for any other reason, then Landlord shall not be
subject to any liability for the failure to give possession on said date. Under
such circumstances the Lease and rent with respect to the Expansion Space shall
not commence until the Expansion Space is made available to Tenant by Landlord,
and no such failure to give possession on the Effective Date shall affect the
validity of this First Amendment, the Lease or the obligations of the Tenant
under either The Expansion Space shall be deemed to be ready for Tenant's
occupancy in the event any delay in the availability of the Premises for
occupancy shall be due to any default on the part of Tenant and/or its subtenant
or subtenants. If Landlord delivers possession of the Expansion Space later or
earlier than the Effective Date, within thirty (30) days following such earlier
or later delivery of possession, Landlord and Tenant shall enter into an
agreement (which is attached hereto

                                     -2-

<PAGE>

as EXHIBIT B) confirming such date. If Tenant fails to enter into such
agreement, then the actual date of commencement of the Lease with respect to
the Expansion Space shall be the date designated by Landlord in such
agreement.

         (c) MONTHLY RENT FOR REMAINING TERM COMMENCING UPON THE EFFECTIVE
DATE. Notwithstanding any provision of the Lease to the contrary, in addition
to rent payable for the Original Premises, the amount of Monthly Installments
of Base Annual Rent due and payable by Tenant for the Expansion Space,
accruing on and after the Effective Date and monthly thereafter for the Term
shall be as follows:

<TABLE>
             <S>                       <C>                                                   <C>
             Months 1-2                $0.00 per rentable square foot per year               $             0

             Months 3-29               $39.00 per rentable square foot per year              $     13,640.25
                                                                                                   per month

             Months                    $41.00 per rentable square foot per year              $     14,339.75
             30-Expiration Date                                                                    per month

</TABLE>

         (d) BASE YEAR; TENANT'S SHARE OF OPERATING EXPENSES & OF TAX EXPENSES.
Notwithstanding any provision of the Lease to the contrary, with respect to the
Expansion Space, Tenant shall pay Tenant's Share of increase over Operating
Costs for the Base Year and of increases over Taxes for the Base Year accruing
on and after the Effective Date, and for such purposes Tenant's Share is
conclusively agreed to be a total of 1.3977% with respect to the Expansion Space
for an aggregate of 4.8345% with respect to all of the Premises leased by Tenant
under the Lease, as amended hereby.

         (e) SECURITY DEPOSIT. Notwithstanding anything in the Original Lease to
the contrary, Tenant shall deliver an additional security deposit in the amount
of Fourteen Thousand Three Hundred Thirty-Nine Dollars and Seventy-Five Cents
($14,339.75), which, together with the original security deposit in the amount
of Thirty Thousand Nine Hundred Sixty Dollars ($30,960), shall constitute a
Security Deposit in the aggregate amount of Forty-Five Thousand Two Hundred
Ninety-Nine Dollars and Seventy-Five Cents ($45,299.75).

         Section 4. TIME OF ESSENCE. Without limiting the generality of any
other provision of the Lease, time is of the essence to each and every term and
condition of this First Amendment.

         Section 5. BROKERS. Notwithstanding any other provision of the Lease to
the contrary, Tenant represents and warrants to the Landlord that Shorenstein
Realty Services, L.P. is the sole broker who negotiated and brought about the
consummation of this First Amendment and that no discussions or negotiations
were had with any other

                                     -3-
<PAGE>

broker concerning this First Amendment other than Shorenstein Realty
Services, L.P. Based on the foregoing representation and warranty, Landlord
has agreed to pay any commission or fee owed Shorenstein Realty Services,
L.P. pursuant to Landlord's agreement between Landlord and such broker.
Tenant hereby indemnifies and agrees to protect, defend and hold Landlord
harmless from and against any claims of brokerage commissions arising out of
any discussions or negotiations allegedly had by Tenant with any other broker
in connection with the Building and the Premises. The foregoing obligations
of Tenant shall survive the expiration or sooner of the Lease.

         Section 6. GENERAL. The titles or headings of the various parts or
sections hereof are intended solely for convenience and are not intended and
shall not be deemed to or in any way be used to modify, explain or place any
construction upon any of the provisions of this First Amendment. Except as
modified by this First Amendment, the terms and provisions of the Lease are
hereby ratified and confirmed and shall remain in full force and effect. Should
any inconsistency arise between this First Amendment and the Lease as to the
specific matters which are the subject of this First Amendment, the terms and
conditions of this First Amendment shall control. This First Amendment shall be
construed to be a part of the Lease and shall be deemed incorporated in the
Lease by this reference. The Lease as amended by this First Amendment
constitutes the full and complete agreement and understanding between the
parties hereto and shall supersede all prior communications, representations,
understandings or agreements, if any, whether oral or written, concerning the
subject matter contained in the Lease as so amended, in whole or in part, except
by a written instrument executed by all of the parties hereto. Each party
represents and warrants to the other that it ahs full authority and power to
enter into and perform its obligations under this First Amendment, that the
person executing this First Amendment is fully empowered to do so, and that no
consent or authorization is necessary from any third party. Landlord may request
that Tenant provide Landlord evidence of Tenant's authority. This First
Amendment may be executed in duplicates or counterparts, or both, and such
duplicates or counterparts together shall constitute but one original of the
First Amendment. Each duplicate and counterpart shall be equally admissible in
evidence, and each original shall fully bind each party who has executed it.

                                     -4-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as of the date first set forth above.

                                        Metropolitan Life Insurance Company,
                                        a New York corporation

                                        By:  /s/ Edward J. Hayes
                                             -----------------------------------
                                        Its:  Assistant Vice President
                                             -----------------------------------

                                        Embarcadero Technologies, Inc.,
                                        a California corporation

                                        By:  /s/ Stephen Wong
                                             -----------------------------------
                                        Its:  Chairman
                                             -----------------------------------

                                     -5-

<PAGE>

                                    EXHIBIT B

                           COMMENCEMENT DATE AGREEMENT

         METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation
("Landlord"), and EMBARCADERO TECHNOLOGIES, INC., a California corporation
("Tenant"), have entered into a certain First Amendment to Office Lease, which
First Amendment is dated as of December ___, 1999 (the "First Amendment"). The
original Office Lease, as amended by the First Amendment, may be referred to as
the "Lease."

         WHEREAS, Landlord and Tenant wish to confirm and memorialize the actual
date as of which the Lease and all of Tenant's obligations thereunder has become
effective with respect to the Expansion Space as provided for in the First
Amendment;

         NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein and in the First Amendment, Landlord and Tenant agree
as follows:

     1. Unless otherwise defined herein, all capitalized terms shall have the
same meaning ascribed to them in the First Amendment and the Lease.

     2. The actual date as of which the Lease and all of Tenant's obligations
thereunder has become effective with respect to the Expansion Space is
___________.

     3. The Effective Date of the Lease, as extended by the First Amendment,
is ___________.

     4. Tenant hereby confirms the following:

         (a) that it has accepted possession of the Expansion Space pursuant to
the terms of the First Amendment; and

         (b) that the Lease is in full force and effect.

     5. Except as expressly modified hereby, all terms and provisions of the
Lease are hereby ratified and confirmed and shall remain in full force and
effect and binding on the parties hereto.

                                     -1-

<PAGE>

     6. The Lease and this Expansion Space Commencement Date Agreement
contain all of the terms, covenants, conditions and agreements between the
Landlord and the Tenant relating to the subject matter herein. No prior other
agreements or understandings pertaining to such matters are valid or of any
force and effect.

                                        Metropolitan Life Insurance Company,
                                        a New York corporation

                                        By:
                                             -----------------------------------
                                        Its:
                                             -----------------------------------

                                        Embarcadero Technologies, Inc.,
                                        a California corporation

                                        By:
                                             -----------------------------------
                                        Its:
                                             -----------------------------------

                                     -2-

<PAGE>

                                    EXHIBIT A

                                 EXPANSION SPACE

                                     -3-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00002-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00002-of-00352.parquet"}]]